MoivePass stopped working on the evening of July 26 because it ran out of money. Helios and Matheson (HMNY), who owns MoviPass, had to borrow $5M to turn the service back on.

WHAT'S NEW: Helios and Matheson disclosed in a regulatory filing that on July 27, the company issued a demand note in the amount of $6.2M, which includes $5M in cash. The $5M cash proceeds received from the demand note will be used by the company to pay the company's merchant and fulfillment processors. If the company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, which would cause a MoviePass service interruption. Such a service interruption occurred on July 26. Such service interruptions could have a material adverse effect on MoviePass' ability to retain its subscribers. This would have an adverse effect on the company's financial position and results of operations.

WHAT'S NOTABLE: Helios and Matheson announced a 1-for-250 share reverse stock split on July 24. The reverse stock split was approved by shareholders on July 23 and the common stock began trading on a split-adjusted basis on Wednesday, July 25. The reason for the stock split was that the company was at risk of being delisted from the Nasdaq if it continued to trade below $1 with a market cap under $50M.

PRICE ACTION: Shares of Helios and Matheson plummeted 53% following the disclosure. Shares are trading at $3.21 at mid-day after opening at $6.83.