BREAKING: MoviePass parent company Helios and Matheson (HMNY) reported an operating loss of $126.6 million for the most recent quarter ending June 30. This follows a July of woes including their stock plummeting (again) under $1 after a 250-to-1 reverse stock split, and the service stalling on numerous occasions including the Thursday night before Mission: Impossible – Fallout opened when it looked like MoviePass ran out of money, and needed to take a $6M-plus loan.

But that’s not all. A class action lawsuit was made public as shareholders seek compensation after losing a significant amount of money. HMNY closed today at $0.05. The suit was filed against Helios and Matheson, CEO Ted Farnsworth and CFO Stuart Benson.

Shareholder Jeffrey Braxton filed suit Monday in federal district court in New York on behalf of hundreds, or potentially thousands, of investors who suffered losses because they were misled about the company’s business and its prospects.

Despite press releases touting MoviePass’ subscriber growth, the suit contends its business model was unsustainable and that it was inevitable that the parent company Helios would “run out of cash” or lose so much money as to raise questions about whether it could remain a viable business.

“MoviePass’ business model was not sustainable because there was no reasonable basis to believe MoviePass could monetize the model to a degree that could be maintained before being too buried in debt to survive,” wrote attorney Mark Levine on behalf of Braxton. (Read the full suit here.)

The turning point came on July 27, when Helios disclosed in a regulatory filing that it couldn’t make payments to its merchants, and that resulted in a service interruption. Helios’ stock plummeted, losing 96% of its value since that SEC filing.

“False and misleading statements or material omissions … caused the damages suffered by [Braxton] and the other class embers,” the suit contends.

Braxton asks the court to certify the complaint as a class action suit and to hold a trial, where he and others could seek to recover their losses.

A year ago in the quarter ending June 30, HMNY recorded a loss of $2.7 million — that’s before they attempted to revive the monthly movie ticket subscription service MoviePass last August with a $9.99/month one movie ticket a day plan.

MoviePass, in the wake of the Mission:Impossible debacle has been erratic in regards to its change-up of subscription plans, first saying that it would not service big studio movies, and then announcing a three movies a month for $14.99.

For the three months ended June 30, HMNY showed subscription revenues at $72.4M and $119.5M for the last six months, but it’s their respective cost of revenue at $178.7M over three, and $314.7M over six that’s dragging them down (remember their business is covering the cost of movie tickets).