MoviePass experienced a temporary service outage Thursday night and for some users, the app continues to have functionality problems on Friday.
Why? The company ran out of cash.
MoviePass reported in a Securities and Exchange Commission filing Friday that it borrowed $5 million to pay it’s “merchant and fulfillment processors” to correct the service interruption.
The company said in its filing that it is “unable to make required payments,” which resulted in Thursday’s service interruption.
MoviePass is a service that allows subscribers to pay a flat fee every months to see multiple movies. For $9.95 a month, the service promises that movie fans can see a movie a day, and they can cancel their subscriptions any time.
MoviePass says it has more than 3 million subscribers.
The floundering ticketing app took to Twitter to address the issue. On Thursday afternoon, it tweeted that it is “investigating” the issue and promised updates, but didn’t state the cause.
To our subscribers – we are aware an investigating an issue that is preventing users from checking-in to movies this evening. We ask for your patience as we look into this and recommend waiting for further updates before heading to the theater.
However some users continue to experience difficulty processing payments on the app.
Helios and Matheson, MoviePass’ parent company, borrowed the money to try to keep operating from Hudson Bay Capital Management, according to the filing.
All this comes following MoviePass’ 1-to-250 reverse stock split earlier this week. The stock has fallen dramatically since then, down 50 percent and dropping.
The movie-theater subscription service also recently began charging surge pricing for popular movies, in which subscribers pay extra for in-demand movies.
