MoviePass Losses Higher Than Previously Disclosed
The parent company of the subscription movie service restated its third-quarter financial report.
MoviePass parent Helios and Matheson Analytics said Tuesday that the money-losing subscription service has fewer subscribers than previously disclosed, causing the firm to restate its revenue downward by 8.2 percent and its losses upward by 7.7 percent.
Helios and Matheson said in a regulatory filing that in the quarter ending Sept. 30 its revenue was $74.7 million, down from the $81.3 million it had previously reported. Its loss from operations was $93.1 million, while it previously stated the loss was $86.4 million.
The company's net loss in the quarter soared 6.9 percent to $146.7 million, up from the $137.2 million loss it had previously reported.
Helios and Matheson said $700,000 of the restated revenue was caused by refunds and about $5.9 million came from subscriptions "that were in a suspended state due to changes made to the MoviePass subscription service that had not yet been consented to by the applicable subscribers."
In addition, there was a non-cash error in accounting that contributed to a net loss of about $2.9 million.
"The company's previously issued quarterly and year-to-date unaudited consolidated financial statements for September 30, 2018, should no longer be relied upon," Helios and Matheson said in its filing.
Management added that it "has implemented a new software solution to automate and provide real-time information for managing and accounting for subscriptions."
MoviePass was a sensation for a brief time when it offered a movie ticket a day for just $10 a month, though the service proved unsustainable as it was purchasing most of the tickets for full price.
The service changed prices and rules many times in the past couple of years, and the pioneer of the movie-subscription business has a lot more competition than before as theater chains have created their own services.
Tuesday's filing did not disclose the number of paying MoviePass subscribers.
Shares of Helios and Matheson are off more than 99 percent and traded for a little over a penny a share on Tuesday.