MoviePass couldn't afford to pay for movie tickets on Thursday

MoviePass couldn't afford to pay for movie tickets on Thursday

MoviePass says it has more than 3 million subscribers. MoviePass reportedly burns through $22 million per month.

The shutdown was forced when the parent company behind the money-losing subscription plan ran out of cash, the company admitted on Friday.

In a regulatory filing with the Securities and Exchange Commission, the company admitted the brief shutdown was because it was unable to make certain payments, and that it had borrowed $5 million cash in order to pay its "merchant and fulfillment processors".

According to Bloomberg, MoviePass was unable to pay their processors on Thursday, leading the company to temporarily shut down. "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. "In the interim e-ticketing is working", MoviePass tweeted late Thursday.

Hours later MoviePass updated subscribers, apologizing for the inconvenience and blaming "technical" issues.

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Helios & Matheson had previously said in May that it had enough cash to sustain its operations for at least a year.

Confidence has been waning for MoviePass for a while, with investors and industry insiders expressing doubt that their business model is one that could actually survive long-term.

Earlier this week, HMNY did a reverse stock split, which got the stock from 9 cents to around $14 on Wednesday.

It's market cap is still below the minimum $50 million.

And here's what really went wrong: today the company's parent corporation, Helios & Matheson, said in an SEC filing that they had to borrow $5 million just to keep their service from shutting down any more than it already had.

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