MoviePass owner posts massive loss, investors file suit

Helios And Matheson Again Warns There's 'Substantial Doubt' It'll Be In Business Summer Without More Cash

Helios And Matheson Again Warns There's 'Substantial Doubt' It'll Be In Business Summer Without More Cash

Helios and Matheson warned that "without raising additional capital, there is substantial doubt about the company's ability to continue as a going concern".

Additionally, Helios & Matheson reported an operating loss of $126.6 million in the three-month period ending June 30, versus a $2.74 million loss in the year-ago quarter, underlining its uphill battle in turning the business around.

MoviePass' parent company lost a whopping $104 million in the second fiscal quarter, according to its most recent quarterly report filed Tuesday.

It's been a rough few weeks for MoviePass, and its parent company Helios and Matheson (HMNY), but it looks like things aren't going to be getting easier any time soon.

The company's latest government filing also presented a picture of just how rapidly Helios and Matheson is spending money on the service.

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According to Deadline, shareholder Jeffrey Braxton filed in NY federal district court on behalf of the investors who have lost money because of allegedly misleading information about the company, its prospects, and its business practices. Helios & Matheson said that without additional funding, it "will not have sufficient funds to meet its obligations" by August 14, 2019.

Earlier this month, MoviePass quoted Mark Twain in a release that declared, "talk of our demise is greatly exaggerated". Instead, the company focused on its subscriber growth and contributions to the domestic box office.

The company recently had a reverse 250-to-1 stock split in an effort to raise its price and avoid being delisted from the Nasdaq.

To that end, MoviePass, which had promoted its "unlimited" service, this month replaced its $9.95-a-month movie-a-day offer with one that lets customers attend three films a month for the same fee.

"Both of the individual defendants are liable as participants in a fraudulent course of business that operated as a fraud or deceit on purchasers of Helios common stock by disseminating materially false and misleading statements and/or concealing material adverse facts", it continues. By Wednesday morning, it was trading at about 4 cents per share.

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