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According to Business Insider (This article and its images were originally posted on Business Insider July 27, 2018 at 10:21AM.)
- On Friday, MoviePass’ owner, Helios and Matheson Analytics, disclosed in a Securities and Exchange Commission filing that it had borrowed $5 million in cash.
- The reason was to get the service working again after the app could no longer take ticket orders on Thursday night.
- As of Friday morning, many MoviePass subscribers still could not use the full functionality of the app.
In a Securities and Exchange Commission filing on Friday, the owner of MoviePass, Helios and Matheson Analytics, disclosed that it had borrowed $5 million in cash following a “service interruption” on Thursday because the company was unable to make certain required payments.
In other words: On Thursday it ran out of cash, at least temporarily.
“The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company’s merchant and fulfillment processors,” the filing said. “If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. (‘MoviePass’), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018.”
On Thursday evening, MoviePass began tweeting about what it said was “an issue that is preventing users from checking-in to movies.”
Later, it said it was “still experiencing technical issues with our card-based check-in process.”
We are still experiencing technical issues with our card-based check-in process and we are diligently working to resolve the issue. In the interim e-ticketing is working. We apologize for the inconvenience and appreciate your patience while we resolve this issue.
— MoviePass (@MoviePass) July 27, 2018
As of Friday morning, many MoviePass subscribers still couldn’t use the full functionality of the app.
Helios and Matheson borrowed the cash from Hudson Bay Capital Management, according to the filing. The total demand note was for $6,200,000, “which includes $5.0 million in cash borrowed by the Company from the Holder and $1.2 million of original issue discount.”
Earlier this week, Helios and Matheson did a reverse stock split, bumping shares to about $14 from $0.09 on Wednesday. The company was at risk of being delisted from the Nasdaq by mid-December if it continued to trade below $1 with a market cap under $50 million. At the start of trading on Friday, the stock was about $6.
Helios and Matheson was not immediately available to comment to Business Insider.
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