MoviePass set out to revolutionize the theater business by giving its subscribers a movie ticket per day for just $10 a month. At its height, more than five million subscribers signed up. Then came the crash as MoviePass' cash shortfall precipitated a 99 percent slide in its stock price. On Monday, facing shareholder claims that "there was no reasonable basis to even imply that the MoviePass business model could lead to profitability," parent Helios and Matheson Analytics took a crack at dismissing the lawsuit.

According to Helios, these shareholder gripes ignore the company's 8-K securities filing on Oct. 11, 2017.

Helios says it sufficiently identified the risks of being a money-losing new business that would need to tap capital markets at some point, leading to "significant" shareholder dilution.

"As a result of MoviePass’ growing subscriber base, Helios and MoviePass hoped that movie theater chains would share with MoviePass their increased ticket and concessions revenue, and that the data gathered by the MoviePass app could be monetized to sell digital advertising and data analytics services to the movie studios and distributors," writes attorneys at Greenberg Traurig. "But the October 2017 8-K also said that these were aspirational goals, and it warned potential investors that there were as yet no contracts with major theater chains or movie studios, that theater chains might be reluctant to share their revenue, that there could be competition from established industry players, and that Helios might not be able to monetize the data collected by the MoviePass app."

The dismissal motion (read here) adds that by July 27, 2018, when the "truth" emerged that it needed new capital, when the company put out a new 8-K that sent stock into free fall, Helios’ stock price had already lost 99.92% of its value measured from its class period high. Helios' lawyers also argue there were no misstatements, that certain alleged false ones constituted "opinions or puffery," and that the plaintiffs' lawyers gain nothing by referencing an investigation by the New York Attorney General's office or making "ad hominem attacks" how the Helios CEO has registered "over 50 different companies with the state of Florida” and that since 2010 he or “his affiliated companies have been sued at least 8 times.”

Despite all the gloom, the company's newest filing does contain a small measure of hope.

As stated in the brief, "Where MoviePass fits within the spectrum of business models time will tell. Many businesses lose substantial amounts of money at first (e.g., Amazon, Netflix, Uber) only to become considered among the world’s most valuable companies."