Helios and Matheson Analytics Inc (NASDAQ:HMNY), the parent company of MoviePass, saw its share value drop sharply as the future of the movie ticket subscription service remains uncertain.
The company announced the pricing of a US$30mln public share offering, sinking its shares in early Thursday trading.
For a monthly fee of US$9.95, MoviePass subscribers can see as many movies as they’d like in most US theaters, but only once a day.
READ: Helios & Matheson shares surge premarket after MoviePass hits 1.5mln paid subscribers
The New York-based company announced in its annual report that its primary business will be the integration and development of MoviePass.
According to the regulatory filing, MoviePass usually pays theaters the full amount for the ticket, calling into question the profitability of its business model.
“It is possible that we may not achieve profitability with our MoviePass business. Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing,” the company said in its filing.
Shares of the information technology company fell 11% in pre-market trading on Monday.