MoviePass's Rod Vanderbilt (left), CEO Mitch Lowe and parent company Helios & Matheson CEO Ted Farnsworth, at the premiere of Gotti, starring John Travolta/Dave Kotinsky/Getty Images
Helios & Matheson Analytics, the data company that owns subscription movie-going service MoviePass, said in filing with the Securities and Exchange Commission on Tuesday that it suffered a net loss of $63.4 million for the three months ending June 30. Adding insult to ever-increasing injury, shareholders are now suing the company as well.
The lawsuit, filed in New York against Helios & Matheson CEO Ted Farnsworth and CFO Stuart Benson, accuses them of defrauding shareholders by presenting misleading information about the company’s financial standing.
“Defendants carried out a plan, scheme and course of conduct which was intended to and did, deceive the investing public and cause the plaintiff and other members of the class to purchase Helios common stock at artificially inflated prices,” the suit, filed by shareholder Jeffrey Braxton’s lawyers, reads.
“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,” the suit continues.
Braxton and his lawyers said they reviewed SEC filings, analysts’ reports, press releases and other public statements issued by Helios & Matheson, as well as media reports about the company to determine they were misleading investors and withholding material information.
Helios & Matheson said in its most recent SEC quarterly filing on Tuesday that it had substantial doubt about its ability to continue as a going concern through Aug. 14, 2019, without raising additional capital.
As of June 30 Helios & Matheson had $15.5 million cash on hand.
The company also said that on June 21 it received a letter from the Nasdaq, warning that with shares trading below $1, the company is in danger of being de-listed, one of the first warning signs of bankruptcy for a public company. Helios & Matheson has until Dec. 18 to boost its shares back above $1.
Shareholders, just a few weeks ago, had approved a remarkable 1-to-250 reverse stock split to prevent the company from being de-listed from the Nasdaq. The plan helped briefly boost Helios & Matheson shares before they fell back below $1 one week later.
There’s not a one-to-one causation for delisted companies going bankrupt. But 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.”
Shares of Helios & Matheson were down more than 28 percent in after-hours trading on Tuesday after the company reported a gross loss of $104.6 million and a net loss of $63.3 million in the quarter. Shares of Helios & Matheson closed at 5 cents.
Since acquiring MoviePass last August, Helios & Matheson has poured tens of millions of dollars into the monthly subscription moviegoing service, fueling its ability to sign up 3 million-plus users in less than a year.
However, that subscriber growth has proven costly since the company pays movie theaters full price for every ticket its subscribers purchase, meaning that even occasional MoviePass users have driven the company further into the red. Plans to dredge up additional revenue by selling user data or investing in its own films have yet to generate significant revenue.
Pamela Chelin contributed to this report.
The 12 Best Trash Movies of 2018 So Far, from 'Den of Thieves' to 'Skyscraper'
From me, the "trash" moniker is high praise. These are movies that are not appreciated by the greater culture -- none have earned a Fresh rating on Rotten Tomatoes -- but which instead are B-style flicks that are more concerned with delivering feels, thrills and titillation than with "respectability." For me, this is the good stuff -- the very best of Hollywood's delightful blue collar flicks.
12. "Proud Mary" -- This is the story of a depressed assassin (Taraji P. Henson) who wants to get out of the dangerous life but is just too damn tired to take the initiative. It's a weird story for a movie, but one that is probably the most relatable movie about a hitman ever.
Sony
11. "The Hurricane Heist" -- This one is surprisingly topical. It's got climate change, economic anxiety, corrupt trigger-happy cops, and a situation too dire for anyone not in the immediate area to be able to help.
Entertainment Studios
10. "Skyscraper" -- I really appreciate any movie that can give me vertigo without making me watch in 3D. I also appreciate any movie that makes The Rock into a shy, nervous guy. And, lastly, I appreciate Hanna Quinlivan being such a badass -- she needs to become a movie star like yesterday.
9. "Pacific Rim: Uprising" -- I'm not much of a fan of the new "Star Wars" movies, and I dislike them a little bit more every time I see John Boyega totally own every other movie he's in. Anyway, Boyega is a delight, as is Charlie Day as the manic villain. The ridiculous scale of the robot-on-monster carnage is still wonderful, and it's made even better by "Uprising" actually being a real movie, unlike its predecessor.
Universal
8. "Breaking In" -- An excellent example of the underrated home invasion thriller subgenre. Also a reminder of how criminal it is that Hollywood has spent the last two decades not giving Gabrielle Union piles of leading roles.
Universal
7. "Tyler Perry's Acrimony" -- Sometimes I enjoy a movie just for its sheer audacity, and this is definitely one of those instances. Tyler Perry's dramas have always been pretty wild, but "Acrimony" is on a whole other level of madness. This thing makes "Temptation" look like a bog-standard romantic drama by comparison.
Lionsgate
6. "Red Sparrow" -- Folks were preoccupied with complaining about its overly long running time, dour tone and Jennifer Lawrence's stone face, but I think all of those things are what make it good. Plus, it's got a few moments that make me physically ill whenever I watch it.
20th Century Fox
5. "Fifty Shades Freed" -- I could convincingly argue that these movies are making fun of the books they're based on. "Freed" especially, because the entire movie is about how rich people should use the considerable resources at their disposal to take care of orphans -- except Ana and Christian brazenly ignore that message because that's the joke. Anyway, "Freed" stuck the landing for our generation's greatest trash trilogy.
Universal
4. "Rampage" -- Is Dwayne Johnson the patron saint of trash movies? He seems to aspire only to participate in the most fun and awesome projects, and "Rampage" is as fun as any other movie that's come out in 2018.
3. "Gringo" -- This dark comedy is extremely relatable, with a message about how awful rich people and capitalism are. "Gringo" feels extremely right in 2018. And also David Oyelowo is hilarious.
Amazon Studios
2. "The Commuter" -- Jaume Collet-Serra and Liam Neeson team up for yet another trash masterpiece, this time to deliver a screed about how corporations and cops suck. All of that is good.
Lionsgate
1. "Den of Thieves" -- A movie that will leave you thoroughly dirty by the end, while also being a major crowd-pleaser. That's a rare and wonderful combination.
STXFilms
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These are the best movies of the year that got no respect
From me, the "trash" moniker is high praise. These are movies that are not appreciated by the greater culture -- none have earned a Fresh rating on Rotten Tomatoes -- but which instead are B-style flicks that are more concerned with delivering feels, thrills and titillation than with "respectability." For me, this is the good stuff -- the very best of Hollywood's delightful blue collar flicks.