Summary
Early last week, Helios and Matheson announced the first of its equity capital raises in an attempt to shore up the company's balance sheet.
The raise connected to a "shelf registration" filed on July 2 that permits Helios and Matheson to issue up to $1.2 billion in equity and debt over three years.
With only $42.5 million of cash remaining for a business that is producing net losses at a rate of approximately -$25 million per quarter, this capital raise is key.
New investors buying into the share offering are far more likely to see a bankruptcy than to recoup a gain on their investment.
It's been a tremendously bloody month for Helios and Matheson (HMNY), the parent company behind the popular movie-subscription service MoviePass. For $9.95 per month (at current pricing), MoviePass lets you see an unlimited number of movies (capped to one per day). The company has been ablaze with news over the past few months - with AMC (AMC) entering the fray with its own competing subscription service, to introducing summer surge pricingthat is certain to fire up unhappy subscribers.
But perhaps one of the biggest announcements that Helios and Matheson made over the past few weeks was a $1.2 billion "universal shelf registration" that the company filed on July 2. The company made the news public via a press release on its website. Essentially, the shelf registration gives Helios and Matheson carte blanche to issue a mix of debt and equity securities (up to a maximum of $1.2 billion) for the duration of three years.
