Tag: SEC filing

F.Y.E. Parent Delays 10K Fiscal Report Filing, Cites Business Operation Concerns

The corporate parent of home entertainment retailer f.y.e. (For Your Entertainment) May 6 disclosed it has sought a delay in its 10K fiscal-year filing (ended Feb. 2) with the Securities and Exchange Commission (SEC).

In the filing, Trans World Entertainment Corp. said the delay from May 3 to May 20 was due in part to apprehensions by its accounting firm (KMPG) about the company’s ability to “continue as a going concern.”

The company ended the fiscal period with just $4.3 million in cash – down from more than $31 million a year ago.

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The company’s shares, which closed at 34 cents per share, are on notice of being delisted by Nasdaq for failing to meet the trading board’s $1-per-share minimum threshold.

New York-based TWEC operates more than 200 mall-based f.y.e. home entertainment retail stores – down from 540 stores in 2010.

The chain saw store revenue drop 15% to $78.8 million from $92.4 million in the previous-year period. Operating losses narrowed to $1 million from a $2.4 million during the previous-year period.

Store revenue declined 14% to $231.2 million from $268.3 million during the previous-year period.

To offset ongoing declines in packaged media sales, including DVD/Blu-ray Disc movies and music CDs, f.y.e has pushed trend items such as collectibles, action figures, posters, T-shirts and related merchandise.

Meanwhile, Spokane, Wash.-based e-commerce middleman Etailz.com, which Trans World acquired in 2016 for $75 million, reported a $62 million loss from operations.

 

MoviePass Lost More Money Than Originally Reported

In another blow to fiscally-challenged theatrical ticket subscription service MoviePass, parent Helios and Matheson Analytics March 12 issued a revised financial statement revealing the service lost millions more than originally reported.

HMNY said its revised third-quarter (ended Sept. 30, 2018) net loss topped $146.6 million — nearly 7% more than a net loss of $137 million originally reported. For nine months of the fiscal year, HMNY lost $256.3 million, 3.8% more than a loss of $246.7 million.

HMNY attributed the error to overstatement of subscription revenue, including $700,000 of revenue from terminated MoviePass subscriptions by Costco; false recognition of about $5.9 million of revenue from certain suspended subscriptions that had not yet been consented to by subscribers.

The company also identified a non-cash error related to the accounting of derivative securities, which resulted in an understatement of net loss of approximately $2.9 million. HMNY said the error underscored a “material weakness” relating to subscription management.

CEO Ted Farnsworth and CFO Stuart Benson said measures have been taken to avoid future accounting issues, including implementation of software upgrades to provide “real-time” information for managing and accounting for subscriptions, including subscriptions that are terminated or in a suspended state.

“Members of the company’s management have discussed the matters with Rosenberg Rich Baker Berman, P.A., [HMNY’s] accounting firm,” Benson wrote in the filing.

HMNY, which had its stock delisted by Nasdaq for failing to meet the $1 minimum share value, has struggled to sustain the MoviePass business  model that enabled subscribers daily access to a theatrical screening for $9.95 monthly fee.