Helios And Matheson Losing $21 Million In Cash Monthly

Through a regulatory filing, Helios and Matheson disclosed on Tuesday (May 8) that it has been losing an average of $21.7 million in cash on a monthly basis between September and April. Shares in Helios and Matheson, which is the parent company of MoviePass, plummeted by almost 30 percent on the news, TechCrunch reported.

The company does have $27.9 million in accounts receivables, the company told investors, but it can’t use that money toward current expenses due to accounting regulations. The company also disclosed that it has $15.5 million in available cash.

Still, Helios and Matheson may need to keep on selling shares to investors to fund its negative cash flow. Otherwise, the company may be forced to adjust its business model.

“We may be required to reduce the scope of our planned growth or otherwise alter our business model, objectives and operations, which could harm our business, financial condition and operating results,” the company said in a filing.

But the company believes that it can decrease its cash loss on the service by 35 percent over the first week in May. The savings would be the result of product changes, such as verifying that movie tickets were used by subscribers and not by other individuals.

The news comes after MoviePass, which briefly removed its movie-a-day monthly subscription from its website, will start allowing customers to sign up for it again. Variety, citing CEO Mitch Lowe, reported the company never intended to give up on its popular plan, in which customers can access a movie-a-day monthly subscription package.

“We never planned to abandon the flagship product that everybody loves,” Lowe told Variety. “Anytime we’ve done a promotional package, we’ve taken the monthly plan off our site.”

The executive was referring to a promotion MoviePass has been offering since April 13, in which customers pay $29.95 for a three-month plan and get to view four movies a month. The promo also included a free trial of iHeartRadio’s All Access on-demand streaming package, noted Variety.