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Moatable, Inc. (OTC Pink:MTBLY), a provider of prepackaged software services with a market capitalization of $28.59 million, announced on Friday that it will restate financial statements from 2023 and 2024 due to errors in sales tax liability accounting. Despite recent challenges, InvestingPro data shows the company maintains impressive gross profit margins of 76.7% and has achieved significant revenue growth of 17.62% in the last twelve months. The company’s CEO, CFO, and Board of Directors concluded that the financial statements for the year ended December 31, 2023, and quarterly periods in 2023 and 2024 should not be relied upon.
The errors, identified during a recent review, led to an understatement of sales tax liability totaling approximately $3.6 million, including tax and interest. Of this, $2.3 million pertains to the years 2021 through 2023, and $0.9 million to the nine months ending September 30, 2024. As a result, Moatable has also acknowledged a material weakness in its internal control over financial reporting, deeming those controls ineffective. According to InvestingPro analysis, the company maintains a healthy current ratio of 1.98, indicating sufficient liquid assets to meet short-term obligations.
The company is actively working to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which will include restated audited consolidated financial statements for the year ended December 31, 2023. The restatement will correct financials for the periods ending March 31, June 30, and September 30 for both 2023 and 2024. Future 2025 quarterly reports will also reflect the corrected 2024 interim financial statements.
Moatable’s management has communicated with its independent registered public accounting firm, Marcum Asia CPAs LLP, regarding the restatements. The company has developed a remediation plan to address the identified material weakness.
Investors are advised not to rely on previous earnings releases and other communications concerning the financial statements for the impacted periods. While the stock has experienced a 9.6% decline over the past week, InvestingPro analysis suggests the company is currently undervalued, with 15 additional ProTips available to subscribers covering various aspects of the company’s performance and potential. The company’s forward-looking statements caution that actual results could differ materially from those projected due to the resolution of these issues, including any potential delays in filing required periodic reports.
The information provided in this article is based on a press release statement from Moatable, Inc.
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