MoviePass Parent Company Under Investigation in New York After Fraud Accusation
Shareholder accused Helios and Matheson Analytics of fraud and presenting misleading information about its financial standing in August lawsuit
Trey Williams | October 17, 2018 @ 5:59 PM
Last Updated: October 18, 2018 @ 11:06 AM
Photo by Ted Soqui
The New York Attorney General’s office has opened a probe into Helios and Matheson Analytics Inc, owner of MoviePass, to determine if the company misled investors about its finances.
CNBC reports that the investigation is still in early stages. A spokesperson for the New York Attorney general’s office declined to comment, but told TheWrap a statement is forthcoming, likely before Friday.
“We are aware of the New York Attorney General’s inquiry and are fully cooperating,” Helios and Matheson said in a statement provided to TheWrap. “We believe our public disclosures have been complete, timely and truthful and we have not misled investors. We look forward to the opportunity to demonstrate that to the New York Attorney General.”
Helios and Matheson was accused in August of defrauding shareholders with misleading information about the company’s financial standing in a lawsuit filed by Jeffrey Braxton against CEO Ted Farnsworth and CFO Stuart Benson.
Later that same month Helios and Matheson board member Carl J. Schramm resigned from his seat, saying that the ticketing company withheld important financial information and made influential decisions without the board’s input.
Helios and Matheson stock has fallen more than 99 percent in the last three months (It has rebounded slightly, gaining 35 percent in the last 30 days). In the company’s most recent second quarter earnings report, it reported a loss of more than $100 million during the quarter.
The company has borrowed millions a dollars to keep afloat since cutting the price of MoviePass to just $10 in August of 2017.
In a SEC filing earlier this month, the company said it raised $65 million in August and September through sales of Helios and Matheson common stock pursuant to its at-the-market offering under the equity distribution agreement and prepayments by investors of existing investor notes.
Shares of Helios and Matheson still sit below $1, dangerous territory for a publicly traded company. If Helios & Matheson isn’t able to lift the share price above $1 by Dec. 18, it will be delisted from the Nasdaq exchange. And though there’s not a one-to-one causation for delisted companies going bankrupt, according to the SEC website, “In most instances, companies that file under Chapter 11 of the Bankruptcy Code are generally unable to meet the listing standards to continue to trade on Nasdaq or the New York Stock Exchange.”
Shareholders will vote Tuesday on whether to approve a reverse stock split — its second in a matter of months — in an attempt to bolster the company’s shares and put off being delisted.
Pamela Chelin contributed to this report.
10 Worst Reviewed Films on Rotten Tomatoes, From 'Ridiculous 6' to 'Gotti' (Photos)
"Gotti" made headlines this year when it got a zero percent score on Rotten Tomatoes -- but there are worse films out there. Click through TheWrap's gallery of worst reviewed films of all time on RT, ranked by number of reviews.
Sony
"Ballistic: Ecks vs. Sever" (2002)
# of Reviews: 117
Tomatometer: 0
Cast: Antonio Banderas, Lucy Liu
What It's About: An FBI agent and a rogue DIA agent are tasked to kill each other, but they soon realize they aren't each other's biggest enemy.
What Critics Said: AV Club's Keith Phipps said it "looks like a video-game promo," while Associated Press' Jocelyn Noveck asked, "Why am I sitting here, anyway?"
Warner Bros.
"One Missed Call" (2008)
# of Reviews: 80
Tomatometer: 0
Cast: Shannyn Sossamon, Edwards Burns
What It's About: People start receiving calls from their future selves -- with details of their deaths.
What Critics Said: Atlanta Journal-Constitution's Bob Longino said the film was "one big miss of a horror movie," while Toronto Star's Philip Marchand said the best part about the movie is that it is "mercifully short."
Warner Bros.
"A Thousand Words" (2012)
# of Reviews: 56
Tomatometer: 0
Cast: Eddie Murphy, Kerry Washington, Allison Janney
What It's About: A literary agent finds a Bodhi tree on his property which is shaped by the consequences of every word he speaks.
What Critics Said: We Got This Covered critic Kristal Cooper simply wrote, "Try two words: stay away." Meanwhile The National's James Luxford wrote, "a poorly conceived and startling miscast comedy."
Paramount Pictures
"Pinocchio" (2002)
# of Reviews: 54
Tomatometer: 0
Cast: Roberto Benigni, Nicoletta Braschi
What It's About: A wooden puppet disregards advice from the Blue Fairy and his father and goes on one adventure after another.
What Critics Said: Chicago Reader's Jonathan Rosenbaum said the film was "truly awful," while L.A. Weekly's Dan Fienberg said, "Visually sumptuous but intellectually stultifying."
Miramax
"Superbabies: Baby Geniuses 2" (2004)
# of Reviews: 45
Tomatometer: 0
Cast: Jon Voight, Scott Baio
What It's About: Media moguls try to crack the code to baby talk, while the babies of the world try to stop them.
What Critics Said: The Wall Street Journal's Joanne Kaufman wrote, "unspeakably ghastly," while Chicago Reader's J. R. Jones simply said "excruciating."
Triumph Films
"Gotti" (2018)
# of Reviews: 44
Tomatometer: 0
Cast: John Travolta, Kelly Preston
What It's About: It's the story about crime boss John Gotti and his son.
What Critics Said: New York Post's Johnny Oleksinski wrote bluntly: "I'd rather wake up next to a severed horse head than ever watch 'Gotti' again."
Vertical Entertainment
"National Lampoon's Gold Diggers" (2004)
# of Reviews: 44
Tomatometer: 0
Cast: Will Friedle, Chris Owen
What It's About: Two losers marry two elderly sisters, hoping they'll inherit their fortune.
What Critics Said: Washington Post's Jen Chaney said the film was "stupefyingly hideous," while Seattle Times' Erik Lundegaard begged people to not "waste your money."
P& Releasing
"Bucky Larson: Born to Be a Star" (2011)
# of Reviews: 35
Tomatometer: 0
Cast: Nick Swardson, Christina Ricci
What It's About: A kid from the midwest moves to Hollywood to become a porn star.
What Critics Said: Time Out's Matt Singer described the film as "dire" and "soul-crushing," while Newsday's Rafer Guzman said it was "icky and repellent."
Columbia Pictures
"The Ridiculous 6" (2015)
# of Reviews: 35
Tomatometer: 0
Cast: Adam Sandler, Taylor Lautner, Rob Schneider
What It's About: When an outlaw raised by Native Americans realizes he has five half-brothers, they all band together to find their dad.
What Critics Said: "Thanks for nothing, Netflix," is what Chicago Sun-Times critic Richard Roeper wrote. TheWrap's own Debbie Day added that the film is "everything wrong with Hollywood for the past two decades."
Netflix
"Dark Crimes" (2018)
# of Reviews: 34
Tomatometer: 0
Cast: Jim Carrey, Martin Csokas, Charlotte Gainsbourg
What It's About: Clues to a murder of a businessman are laid out in a book about a similar crime.
What Critics Said: New York Post's Johnny Oleksinski said "that this exercise in vulgarity was made at all is shameful," while Chicago Sun-Times' Richard Roeper said the film "leaves a sour taste."
Saban Films
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Which movie is the worst-reviewed of all time?
"Gotti" made headlines this year when it got a zero percent score on Rotten Tomatoes -- but there are worse films out there. Click through TheWrap's gallery of worst reviewed films of all time on RT, ranked by number of reviews.