The hits just keep coming for MoviePass. Its parent company, Helios and Matheson Analytics, has restated the financial results it previously reported for the quarter ending last September 30 to reflect lower revenue and a wider net loss.
In a succinct SEC filing, the owner of the wayward movie ticketing firm said its management “has determined that a material weakness relating to subscription management existed in the company’s internal control over financial reporting.”
As a result, the actual quarterly revenue figure should have been $74.7 million, 8% lower than the $81.3 million that was reported. Net losses of $146.7 million were 7% higher than the figure that was reported.
The quarterly numbers “should no longer be relied upon,” the company said. It also noted that it has not yet completed a review of the accounting, so even the impact of the restated results “is preliminary and may be subject to change at any time.” An updated earnings release will be issued after the review is finished.
One main culprit was “erroneous recognition of up to $5.9 million in revenue. That bogus figure derived from certain MoviePass subscriptions that had been suspended “due to changes made to the MoviePass subscription service that had not yet been consented to by the applicable subscribers. These errors resulted in an understatement of the net loss by approximately $6.6 million.”
Starting January 1, the company’s filing said, Helios implemented a new software solution to automate and provide information for managing and accounting for subscriptions.
Helios was delisted from the Nasdaq earlier this year after it stock traded for just pennies. The formerly high-flying data firm surged past $30 a share in the fall of 2017 as investors and moviegoers greeted MoviePass as the movie theater version of Uber. Soon, its ambitions overwhelmed the systems and the balance sheet, with widespread outages sending many customers fleeing and the company shifting from one business model to the next.
After today’s news, shares in Helios fell 3.5% to $0.0121 in over-the-counter trading.