The owner of MoviePass spikes after its CEO says it won't need cash for 17 months

Business Insider

MoviePass owner Helios & Matheson Analytics (HMNY) is up more than 4% ahead of Tuesday’s opening bell after CEO Ted Farnsworth said concerns about his company’s financial situation are overblown. Even with the gain, shares are trading at just $US0.71 apiece.

“You’re going to see,” Farnsworth told Variety. “We’re doing more acquisitions of movies and companies.”

Farnsworth said his company has about $US300 million available from an equity line of credit. “We’ve got 17 months’ worth of cash without further raises of capital,” he continued.

Shares of HMNY crashed 70% last week, bottoming out at $US0.55, after an 8-K filing showed it had “approximately $US15.5 million in available cash and approximately $US27.9 million on deposit with our merchant processors for a total of approximately $US43.4 million.” The company estimates that it has seen an average cash deficit of $US21.7 million per month from September to April.

HMNY has taken measures to shore up its balance sheet in recent weeks after an independent auditor raised “substantial doubt” about its ability to stay in business. In late April, the company enhanced its technology to prevent subscribers from sharing accounts with non-subscribers, and stopped allowing subscribers to see a movie title more than once while using the service.

Still, Monday’s comments from Farnsworth are a bit surprising considering the company warned in last week’s 8-K, “If we are unable to obtain sufficient amounts of additional capital, whether through our Equity Distribution Agreement or otherwise, we may be required to reduce the scope of our planned growth or otherwise alter our business model, objectives and operations, which could harm our business, financial condition and operating results.”

HMNY shares are 98% below their October all-time high of $US32.90, hit shortly after the company acquired MoviePass.

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