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MoviePass parent drops 31% on impending financial crisis

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The big question in the media world today is whether the parent company of MoviePass Helios and Matheson, can stem the bleeding from its cash flow before it becomes insolvent .

In a new case filed today with the SEC, Helios advised investors that it had $ 15.5 million in available cash, and an additional $ 27.9 million in cash. Accounts receivable from MoviePass members on longer term subscriptions. According to accounting rules, these dollars can not be used to finance current expenses. The company said it lost $ 21.7 million a month between September and April of this year.

Investors were dumped after the deposit, and the stock was down 31% at the close of the stock market today.

While linear mathematics seems to indicate that the company is on the road to insolvency in a few days, the filing and its CEO are maintaining an optimistic line. The company said that following a series of product changes, including more verification that a subscriber actually watched a movie itself, he should reduce his cash loss on service by 35% during the first week of May.

In an interview with TechCrunch, MoviePass CEO Mitch Lowe gave a positive opinion on the future of the company. He argued that, contrary to what was the case in the past, when a new application or service created venture capital and then invested it in the business, you can simply manage Capital issues according to your needs. "Today, what you are doing is that you are hoarding enough money month after month to basically fund this negative cash flow," he said. "We are 100% convinced that we have the funding to do it."

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To avoid the insolvency of the company, the company will have to continue selling its common shares regularly to investors in order to finance this negative cash flow. The company said sales of its common shares will start this month to fund operations. If the company is unable to do so, "we may need to reduce the scope of our planned growth or change our business model, objectives and activities, which could adversely impact our business, financial condition and results of operations. " deposit.

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