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MoviePass parent Helios & Matheson losses widen after restatement resulting from 'erroneous recognition' of revenue

Tomi Kilgore

MoviePass parent Helios & Matheson Analytics Inc. disclosed Tuesday that its financial statements for quarter ended Sept. 30, 2018 "should no longer be relied upon" give accounting errors related to the overstatement of subscription revenue. As a result, the company's preliminary restated net loss for the quarter widened to $146.7 million from $137.2 million, and the restated revenue declined to $74.7 million from $81.3 million. The company said the previous results included "erroneous recognition" of about $700,000 in revenue from MoviePass subscriptions that had been terminated through refunds of subscriptions by Costco Wholesale Corp. and up to about $5.9 million in revenue from subscriptions that were in a suspended state given changes made to the service that had not yet been consented to by subscribers. Helios & Matheson said it has determined that a "material weakness" existed in its internal control over financial reporting. The stock, which trades over the counter, was down slightly at an effective price of about a penny. It has lost virtually all of its value over the past 12 months, while the S&P 500 has edged up 0.35.