Ex-Helios and Matheson Analytics CEO Looking to Buy MoviePass Assets

Former Helios and Matheson Analytics CEO Ted Farnsworth just doesn’t know when to quit.

A day after stepping down as CEO of the parent to shuttered MoviePass ticket subscription service and related businesses (MoviePass Films, Moviefone), Farnsworth reportedly is cobbling together a group of investors to buy select MoviePass assets.

According to The Wall Street Journal, which cited HMNY internal documents, including Farnsworth’s resignation letter, the executive eyes continuing MoviePass Films, which generated several original releases starring Bruce Willis.

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Whether Farnsworth — a longtime MoviePass cheerleader along with the service’s CEO Mitch Lowe — would bring back MoviePass is unclear.

Ted Farnsworth

Launched in 2017, the $9.95 monthly ticket service offered subscribers daily access to a non-3D theatrical screening. At its peak, MoviePass had more than 3 million subscribers eager to take advantage of a business model that hemorrhaged money.

The service sought to make deals with exhibitors who were paid face value by MoviePass for every ticket used by subscribers in exchange for user data.

Chains such as AMC Theatres, Regal Cinemas and others wouldn’t bite, opting instead to launch competing ticket services.

Despite several attempts to re-invent the MoviePass business model, investors pulled the plug on HMNY shares — especially after two reverse-stock option split attempts.

Whether investors would line up behind Farnsworth for another edition of MoviePass remains to be seen. HMNY could also sell the assets to a third party.

Moviefone Hires Former Rotten Tomatoes Editor to Reboot Brand

Moviefone, the 1990s-era movie ticket/recommendation telephone service owned by Helios and Matheson Analytics March 28 announced that former Rotten Tomatoes senior editor Grae Drake has assumed the role of “Ms. Moviefone” to serve as the brand’s personality.

The announcement comes as Moviefone launches a new initiative seeking to become a consumer destination for content, reviews and commentary for movies.

Grae Drake

Competition includes online movie ratings platform Rotten Tomatoes, which is owned and operated by NBC Universal subsidiary Fandango.

In a nod to the former “Mr. Moviefone” telephone character, Drake will provide “go-to” commentary on the entertainment industry, in addition to movie recommendations.

Drake will interview filmmakers, celebrities and appear at industry events to provide an inside look at the movies.

She will be responsible for producing and hosting a series of original video content on the Moviefone site. Drake will also oversee the evolution of existing video content, such as the “Unscripted” series, providing Moviefone with the flexibility to continue creating and growing its video library.

Developing dynamic video content will allow viewers to form a bond with Ms. Moviefone and have a more engaging experience with the brand.

“Having a female voice of authority about movies is really important. It’s making the change I want to see regarding representation and gender parity in film media, which is still overwhelmingly male,” Matt Atchity, GM of Moviefone (and former editor-in-chief at Rotten Tomatoes), said in a statement.

Drake is most well-known as a Rotten Tomatoes editor and film critic, which included guest appearances on NBC’s “Today Show”and ABC’s “20/20”and “World News Tonight.”

She is also the recipient of the 2017 Press Award from the International Cinematographers Guild. In this new role, Drake reunites with Atchity and will be working with Drew Taylor, recently promoted to managing editor at Moviefone.

“Ms. Moviefone is the perfect way to connect with moviegoers and strengthen our brand recognition,” said Ted Farnsworth, CEO of Helios and Matheson Analytics. “Moviefone has a bright future ahead, and I know Grae is the perfect person to help make our vision a reality.”

 

MoviePass Raises $6 Million in Funding

Helios and Matheson Analytics, the cash-strapped parent to MoviePass and MoviePass Films March 26 announced it has raised a $6 million in financing.

Helios plans to use the proceeds to accelerate MoviePass’ product development, fine tune its subscription technology, and increase MoviePass Films’ investment in new content.

In addition to working capital purposes, Helios will use the net proceeds to redeem approximately $870,000 of Helios’ outstanding non-convertible senior notes that were issued on Oct. 4, 2018 and Dec. 18, 2018, and to pay certain fees due to the placement agent and financial advisor and other transaction expenses.

“We are building the infrastructure, data and tools that we believe will power the next generation of MoviePass,” CEO Ted Farnsworth said in a statement. “We believe this new funding will allow us to double down on our development of transformative technology, while fueling our continued expansion.”

In connection with the financing, Helios agreed to convert the 60,000 shares of preferred stock to 1 million shares of common stock, among other stock warrants. As a result, each share of preferred stock is convertible into 16,667 shares of Helios’ common stock – or more than 666 million shares of common stock priced at a penny each.

The financing comes as Helios cited user fraud for ongoing financial challenges to its theatrical subscription ticket service MoviePass. The service has hemorrhaged hundreds of millions of dollars, contributing to Helios’ shares’ being delisted by Nasdaq.

 

 

MoviePass Parent Names Consultant as Interim CFO

Helios and Matheson Analytics March 22 announced the appointment of Robert Damon as CFO, replacing Stuart Benson, who resigned from the parent of the MoviePass theatrical ticket subscription service March 15 to take another job.

Robert Damon

Benson’s departure followed the disclosure HMNY had incorrectly recognized about $5.9 million in revenue from MoviePass subscriptions that had been suspended.

Damon, who has worked as a consultant to HMNY for a year, was chief accounting officer for SFX Entertainment for three years through 2016. Previously,  he was Katz Media Group CFO for 17 years.

HMNY earlier this month revised its third-quarter net loss to $146.6 million — nearly 7% more than a 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.

CEO Ted Farnsworth and 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 suspended.

“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.

 

 

MoviePass Restores $9.95 Daily Screening Plan

With senior management exiting and its parent’s stock de-listed, fiscally challenged MoviePass is bringing back the infamous daily theatrical access plan for $9.95 monthly that helped generate millions of subscribers — and generate hundreds of millions of dollars in losses.

Of course there’s a catch. Subscribers who pay upfront for a year get the same $9.95 rate MoviePass allows users to one theatrical screening daily. The rate increases to $14.95 on a month-to-month basis. MoviePass also offers a $19.95 plan with fewer screening limitations.

“We are — and have been — listening to our subscribers every day, and we understand that an uncapped subscription plan at the $9.95 price point is the most appealing option to our subscribers,” Ted Farnsworth, CEO of parent Helios and Matheson Analytics, said in a statement.“While we’ve had to modify our service a number of times in order to continue delivering a movie-going experience to our subscribers, with this new offering we are doing everything we can to bring people a version of the service that originally won their hearts.”

Whether the service can sustain the old pricing remains to be seen. MoviePass pays exhibitors face value for every screening subscribers attend. Without breaks on ticket fees or some sort of revenue sharing, MoviePass loses money when subs regularly go to the movies.

 

Khalid Itum Departs MoviePass; CTO and Human Resources Executives Transition to Consultants

MoviePass March 13 disclosed that Khalid Itum, hired last December to oversee daily operations at the fiscally-challenged movie theater subscription service, is leaving the company.

Khalid Itum

“Itum will be leaving MoviePass to pursue his entrepreneurial and travel pursuits,” a spokesperson told Business Insider in a statement.

The departure comes as chief technology officer Joey Adarkway and Jake Peterson, head of human resources, transition from fulltime employees to consultants.

The personnel moves come the day after corporate parent Helios and Matheson Analytics disclosed, in a regulatory filing, that MoviePass lost nearly $10 million more ($146.6 million) in the most-recent fiscal filing than was originally disclosed.

Meanwhile, HMNY appears to be successfully churning out content through its MoviePass Films unit headed by co-founders Randall Emmett and George Furla. The company’s content include dramas with Bruce Willis (10 Minutes Gone) — the first of three titles with the actor, and Al Pacino and Meadow Williams in current production, Axis Sally.

In addition, Border, a Cannes-winning film MoviePass Films co-distributed with Neon Rated, was nominated for an Academy Award for Best Makeup and Hairstyling.

“As previously stated, MoviePass has moved in a new strategic direction, and will be refocusing our business model to create a more closely connected relationship between our subscription service and original content production unit, MoviePass Films,” said the spokesperson.

 

 

MoviePass Reinventing Business Model — Again

With its corporate (Helios and Matheson Analytics) parent’s stock delisted, theatrical ticket subscription service MoviePass is again attempting to reinvent its business model and relevance — this time without relying on exhibitor cooperation and revenue.

Following the previously announced MoviePass Entertainment Holdings integrating film production and exhibition, MoviePass said it plans to implement a new business model that prioritizes “self-generated” revenue.

Specifically, the fiscally-challenged ticket service plans to focus on “technological innovation” and “high-quality” content production through MoviePass (theatrical subscription service); MoviePass Films (original content production company) and Moviefone (multimedia media information and advertising service).

“Spending the last several months analyzing the many different aspects of our prior business model, in terms of what worked and what didn’t, I believe we’ve been able to illuminate the path forward,” Ted Farnsworth, CEO of HMNY, said in a statement.

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MoviePass CEO Mitch Lowe said the ticket service has gained a “tremendous amount” of insight into moviegoers and the industry over the past 18 months.

Indeed, the service, which launched to much fanfare offering consumers daily access to a theatrical screening for a monthly $9.95 fee, could never financially pay for the loss leader business model without exhibitor help — which the service never received.

As the fiscal losses mounted, HMNY’s stock plummeted. Exhibitors AMC Theatres and Cineworld launched their own ticket subscription services.

MoviePass, however, has apparently been successful in content production.

MoviePass Films, through co-founders co-founders Randall Emmett and George Furla, continue to generate films, including dramas with Bruce Willis (10 Minutes Gone) — the first of three titles with the actor, and Al Pacino and Meadow Williams in current production, Axis Sally.

In addition, Border, a Cannes-winning film MoviePass Films co-distributed with Neon Rated, was nominated for an Academy Award for Best Makeup and Hairstyling.

“We now have a winning combination that we believe will drive consumers to our films and re-energize casual moviegoers to go more often and see great films in local theaters,” said Lowe.

 

Report: MoviePass Parent Expected to Delist

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.

MoviePass Parent Schedules Second Reverse-Stock Split Vote

Helios and Matheson Analytics, parent of fiscally-challenged theatrical subscription ticket service MoviePass, Jan. 30 announced it plans to hold a special shareholder meeting March 15 in Los Angeles to vote on a second reverse stock split.

The proposed one-share-for-500 shares, which if passed would affect shareholders of record on Jan. 16, follows a previous reverse stock split (1-for-250 shares) eight months ago.

That split resulted in the HMNY stock briefly reaching $22.50 per share, before plummeting below Nasdaq’s $1 minimum threshold in less than a week. HMNY’s stock currently trades at about a penny.

The company in November canceled a vote for the second split after it couldn’t muster enough shareholder support. Apparently that sentiment has changed.

HMNY has until the summer to regain compliance or face the risk of delisting.

 

 

Helios and Matheson Files With SEC for MoviePass Spinoff

Helios and Matheson Analytics announced Jan. 17 that it has filed confidentially with the Securities and Exchange Commission to spin off its theatrical ticket subscription service MoviePass as a new subsidiary, MoviePass Entertainment Holdings.

Helios will spin off shares by listing on Nasdaq or an alternative exchange and distribute some of the shares as a dividend to shareholders as of a record date yet to be selected, according the announcement.

The company will retain a controlling stake in MoviePass.