Things are going from bad to worse for MoviePass.
The movie theater subscription service experienced an outage on Thursday that prevented some users from being able to check into movies. Now, we know the reason for the disruption: MoviePass didn't have enough money to pay its bills.
As Business Insider first reported, MoviePass borrowed $5 million in cash from hedge fund Hudson Bay Capital Management to rectify the situation (for now), parent company Helios & Matheson Analytics revealed in a Friday filing with the Securities and Exchange Commission.
"The $5.0 million cash proceeds received from the Demand Note will be used by the Company to pay the Company's merchant and fulfillment processors," the filing reads, according to the report. "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, Inc. ('MoviePass'), which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018."
MoviePass did not immediately respond to PCMag's request for comment. The company acknowledged the issue in a series of tweets Thursday evening.
"We are still experiencing technical issues with our card-based check-in process and we are diligently working to resolve the issue," the company wrote. "In the interim e-ticketing is working. We apologize for the inconvenience and appreciate your patience while we resolve this issue."
MoviePass users were, of course, less than thrilled about the service disruption.
I'm at the theatre and only now saw this message tweet. Am I to check Twitter every time I want to use your service?!? — Anthony Snitker (@AnthonySnitker) July 27, 2018
I cancelled my subscription after this BS. Tried two different dates and app didnt work. I dont like looking like an idiot in front of ppll, especially when I'm trying to put them onto an app that doesn't work smh — Salted Caramel (@ItsSalted) July 27, 2018
I drove an hour to my theater that accepts Movie Pass only to find out that I had to pay for my ticket???!!!! I better be getting reimbursed!!! — Dustin Auspland (@AusplandDustin) July 27, 2018
I am AT the theatre right now and spent way too much time trying to figure out why your app wouldn't let me check in. Are you kidding me? I drove all the way here and there's no offer to reimburse?? I can't even see the movie now bc it's TOO LATE! — Meghan Freeman (@meghanfreeman) July 26, 2018
Just last month, Helios & Matheson announced a $164 million bond sale to fund the app's expenses, which totaled $21.7 million per month according to a recent filing.