The lights at MoviePass will stay on — for now.

In a filing with the Securities and Exchange Commission on Friday, the embattled US movie theatre subscription company said it has taken out an emergency loan of $6 million (Dh22 million), $5 million of which will be used to pay its partners and iron out a week of service snags.

How long that money will last, however, remains to be seen.

“The $5 million cash proceeds received from the demand note will be used by the company to pay [its] merchant and fulfilment processors,” Helios and Matheson, MoviePass’ primary owner, said in the SEC filing. “If the company is unable to make required payments ... the merchant and fulfilment processors may cease processing payments for MoviePass, which would cause a MoviePass service interruption.”

That’s the kind of interruption that happened to MoviePass on Thursday, the filing said.

Users had been complaining on social media all week that the MoviePass app was not working properly and theatre admissions were not being processed. Those concerns reached their peak Thursday, particularly for those using MoviePass’ card-based system. (The company also operates a separate e-ticketing system.)

MoviePass sought to reassure subscribers who expressed their frustration via Twitter. “To our subscribers — we are aware an investigating an issue that is preventing users from checking-in to movies this evening. We ask for your patience as we look into this and recommend waiting for further updates before heading to the theatre,” the New York-based company tweeted Thursday.

Not all customers were happy with the social-media communication.

“I’m at the theatre and only now saw this message tweet. Am I to check Twitter every time I want to use your service?!?” one user wrote on Twitter.

On Friday, MoviePass steered customers toward its e-ticketing service until the issues are resolved.

The loan, which comes from the investment firm Hudson Bay Capital, should put an end to the check-in and service issues for the moment, the company said. But how long the cash will tide it over is an open question. Hudson Bay requires a payment of $3 million by Aug. 1 and the repayment of the entire loan several days later; if it misses the deadlines, Helios and Matheson will face stiff financial penalties.

The company’s chief executive, Ted Farnsworth, told The Washington Post in May that MoviePass had more than a year’s worth of cash available because it could sell stock. He did not reply to a message seeking comment Friday.

Burn rate

MoviePass has enchanted moviegoers — and sent ripples of fear through the traditional theatre business — since lowering its price to $10 for a wide-ranging monthly subscription last summer. More than two million people subscribe to the service, and executives have said they aim to reach five million by the end of the year.

But as MoviePass has become more popular, its cash reserves have been depleted. The company revealed in May that it had just $43 million in the bank but had a burn rate of more than $20 million a month.

Helios, which owns more than 90 per cent of MoviePass stock, has continued to tout the service’s potential to upset the traditional industry, even through the cash crunch. “Make no bones about it, it is a full-blown war going on, especially with AMC,” Farnsworth told investors Monday, referring to the American cinema giant. “The theatres don’t like us because we’re too powerful too quick.”

But outside observers have questioned the company’s business model, which requires paying full price to theatres on the bet that subscribers will see few movies each month. Wall Street in particular has been sceptical of MoviePass’ economic viability, sending the company stock down as low as 8 cents per share this month after a 12-month high of nearly $32 in October.

Helios and Matheson several days ago conducted a reverse stock split to avoid sinking further into penny-stock oblivion. That caused the share price to bounce back above $10, though it has since lost more than half its value. The stock ended the week down nearly 71 per cent Friday, closing at $2.05 a share.

Yet the firm has certainly had an impact on the larger market. It has prompted theatre chains to change from a single-ticket model that had been in place for decades, and rival AMC and other theatres have recently been forced to launch their own subscription services to compete.