In context: MoviePass made waves when it cut its theater subscription fee to just $9.95 per month last summer. Critics said the offer was untenable and would only set consumers up for disappointment down the road. Based on recent developments, that may very well come to pass.
MoviePass on Thursday suffered a service disruption that left some card-based customers unable to check into their movies.
MoviePass said on Twitter around 4:00 p.m. Eastern Thursday that it was investigating an issue that prevented some users from checking into movies. The company in a follow-up tweet said its e-ticketing theater partners were unaffected by the issue, suggesting users take that route instead.
We've determined this issue is not with our card processor partners and will be continuing to work on a fix throughout this evening and night. If you have not headed to the theater yet, we recommend waiting for a resolution or utilizing e-ticketing which is not impacted.— MoviePass (@MoviePass) July 27, 2018
A few hours later, MoviePass said it was still experiencing technical issues with the card-based check-in process but noted that it had determined the issue was not with their card processor partners.
A regulatory filing from parent company Helios and Matheson Analytics Inc., however, suggests otherwise.
In a Form 8-K filed with the Securities and Exchange Commission on Friday, Helios and Matheson revealed it took out a $6.2 million loan to help remedy the situation.
The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company’s merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, Inc. (“MoviePass”), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018.
In the filing, Helios and Matheson clearly state that a missed payment to its payment processor was the reason for yesterday’s service interruption yet on Twitter, MoviePass said the issue was not with their card processor partner. Did someone get caught in a lie?
Share value in Helios and Matheson Analytics Inc., parent company of MoviePass, is down more than 63 percent on the day as of writing.