UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 8, 2019 (April 7, 2019)
SOCIAL REALITY, INC. |
(Exact name of registrant as specified in its charter) |
Delaware | 001-37916 | 45-2925231 |
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer |
456 Seaton Street, Los Angeles, CA | 90013 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: | (323) 694-9800 |
not applicable |
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨ |
|
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
On April 7, 2019, management of Social Reality, Inc. (the Company) concluded and the audit committee of the Company has concurred that the Companys previously issued quarterly and year-to-date unaudited consolidated financial statements for March 31, 2017, June 30, 2017, September 30, 2017, December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018 and that its audited consolidated financial statements for the year ending December 31, 2017 should no longer be relied upon. Similarly, related press releases, earnings releases, and investor communications describing the Companys financial statements for these periods should no longer be relied upon. The errors identified are all non-cash and primarily related to the Companys classification of certain outstanding warrants with provisions that allow the warrant holder to force cash redemption under certain circumstances.
Based on its preliminary assessment, the Company is providing the following estimates regarding the aggregate impact of these errors on consolidated total current liabilities, total liabilities, equity, other income, net income (loss) and income (loss) per share, calculated in accordance with accounting principles generally accepted in the U.S., for each of the periods presented:
SOCIAL REALITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018
(Unaudited)
|
| AS REPORTED |
|
|
|
|
| Restated |
| |||
|
| YTD September |
|
|
|
|
| YTD September |
| |||
|
| 2018 |
|
| Adjustments |
|
| 2018 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Revenues |
| $ | 8,823,592 |
|
|
|
|
| $ | 8,823,592 |
| |
Cost of revenue |
|
| 2,902,179 |
|
|
|
|
|
| 2,902,179 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Gross profit |
| $ | 5,921,413 |
|
|
|
|
| $ | 5,921,413 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Loss from operations |
| $ | (8,492,866 | ) |
|
|
|
| $ | (8,492,866 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
| |
Total interest expense |
| $ | (2,772,448 | ) |
|
|
|
| $ | (2,772,448 | ) | |
Loss on repricing of Series A warrants |
| $ | - |
|
|
|
|
| $ | - |
| |
Accretion of put warrants |
|
|
|
|
| $ | 800,000 |
|
| $ | 800,000 |
|
Accretion of debenture warrants |
|
|
|
|
| $ | 800,000 |
|
| $ | 800,000 |
|
Accretion of Leapfrog warrants |
|
|
|
|
| $ | 600,000 |
|
| $ | 600,000 |
|
Loss (Gain) on Sale of Fixed Assets |
| $ | 23,978,389 |
|
|
|
|
|
| $ | 23,978,389 |
|
Other Income |
| $ | 21,205,941 |
|
| $ | 2,200,000 |
|
| $ | 23,410,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
| $ | 12,717,573 |
|
| $ | 2,200,000 |
|
| $ | 14,917,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share, basic |
| $ | 1.59 |
|
|
|
|
|
| $ | 1.86 |
|
Net (loss) income per share, diluted |
|
| 1.59 |
|
|
|
|
|
| $ | 1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
| 8,008,717 |
|
|
| - |
|
|
| 8,008,717 |
|
Weighted average shares outstanding, diluted |
|
| 8,008,717 |
|
|
| - |
|
|
| 8,008,717 |
|
SOCIAL REALITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2017
|
| AS REPORTED |
|
|
|
|
| Restated |
| |||
|
| Full Year |
|
|
|
|
| Full Year |
| |||
|
| 2017 |
|
| Adjustments |
|
| 2017 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Revenues |
| $ | 23,348,714 |
|
|
|
|
| $ | 23,348,714 |
| |
Cost of revenue |
|
| 9,328,893 |
|
|
|
|
|
| 9,328,893 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Gross profit |
| $ | 14,019,821 |
|
|
|
|
| $ | 14,019,821 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Loss from operations |
| $ | (3,843,679 | ) |
|
|
|
| $ | (3,843,679 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
| |
Total interest expense |
| $ | (2,815,203 | ) |
|
|
|
| $ | (2,815,203 | ) | |
Loss on repricing of Series A warrants |
| $ | - |
|
| $ | (100,000 | ) |
| $ | (100,000 | ) |
Accretion of put warrants |
|
|
|
|
| $ | 500,000 |
|
| $ | 500,000 |
|
Accretion of debenture warrants |
|
|
|
|
| $ | (700,000 | ) |
| $ | (700,000 | ) |
Accretion of Leapfrog warrants |
|
|
|
|
| $ | (1,500,000 | ) |
| $ | (1,500,000 | ) |
Loss (Gain) on Sale of Fixed Assets |
| $ | - |
|
|
|
|
|
| $ | - |
|
Other Income |
| $ | (2,815,203 | ) |
| $ | (1,800,000 | ) |
| $ | (4,615,203 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
| $ | (6,658,882 | ) |
| $ | (1,800,000 | ) |
| $ | (8,458,882 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share, basic |
| $ | (0.81 | ) |
|
|
|
|
| $ | (1.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
| 8,253,851 |
|
|
| - |
|
|
| 8,253,851 |
|
SOCIAL REALITY, INC.
CONDENSED AND CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2018
(Unaudited)
|
| September 30 |
|
|
|
|
| September 30 |
| |||
|
| 2018 |
|
|
|
|
| 2018 |
| |||
|
| As Reported |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total assets |
|
| 34,341,324 |
|
|
| - |
|
|
| 34,341,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
| 2,475,229 |
|
|
|
|
|
|
| 2,475,229 |
|
Leapfrog warrant liability |
|
| - |
|
|
| 1,000,000 |
|
|
| 1,000,000 |
|
Warrant liability - Series A |
|
| - |
|
|
| 1,300,000 |
|
|
| 1,300,000 |
|
Debenture warrant liability |
|
| - |
|
|
| 1,600,000 |
|
|
| 1,600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
| 2,475,229 |
|
|
| 3,900,000 |
|
|
| 6,375,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured convertible debentures, net |
|
| 2,943,109 |
|
|
| - |
|
|
| 2,943,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 5,418,338 |
|
|
| 3,900,000 |
|
|
| 9,318,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
| 28,922,886 |
|
|
| (3,900,000 | ) |
|
| 25,022,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
| 34,341,224 |
|
|
| - |
|
|
| 34,341,224 |
|
SOCIAL REALITY, INC.
CONDENSED AND CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2017
|
| As Reported |
|
|
|
|
| Restated |
| |||
|
| December 31, |
|
|
|
|
| December |
| |||
|
| 2017 |
|
| Adjustments |
|
| 2017 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total assets |
|
| 23,605,699 |
|
|
| - |
|
|
| 23,605,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
| 5,010,815 |
|
|
|
|
|
|
| 5,010,815 |
|
Leapfrog warrant liability |
|
|
|
|
|
| 1,700,000 |
|
|
| 1,700,000 |
|
Warrant liability - Series A |
|
|
|
|
|
| 2,100,000 |
|
|
| 2,100,000 |
|
Debenture warrant liability |
|
|
|
|
|
| 2,500,000 |
|
|
| 2,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
| 5,010,815 |
|
|
| 6,300,000 |
|
|
| 11,310,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured convertible debentures, net |
|
| 1,711,146 |
|
|
| - |
|
|
| 1,711,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 6,721,961 |
|
|
| 6,300,000 |
|
|
| 13,021,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
| 16,883,738 |
|
|
| (6,300,000 | ) |
|
| 10,583,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
| 23,605,699 |
|
|
| - |
|
|
| 33,358,527 |
|
Since the Company has not yet fully completed its review, the estimates regarding the impact set forth above are preliminary and remain subject to change.
In connection with the restatement, management has determined that a material weakness related to the accounting for financing transactions in the Companys internal control over financial reporting existed for the periods from March 31, 2017 through December 31, 2018. The Companys chief executive officer and chief financial officer have concluded that the Companys disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2017 through December 31, 2018, and the Companys management has concluded that its internal control over financial reporting was not effective as of December 31, 2018.
The Company anticipates that it will file amended Quarterly Reports on Form 10-Q for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018, to amend and restate its financial condition and financial results for the affected periods as soon as practicable.
Members of the Companys management have discussed the matters disclosed in this Item 4.02 with RBSM, LLP, the Companys independent registered public accounting firm.
Cautionary Statement on Forward-looking Information
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 or under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, forward-looking statements) that may not be based on historical fact, but instead relate to future events, including without limitation statements containing the words believe, may, plan, will, estimate, continue, anticipate, intend, expect and similar expressions. All statements other than statements of historical fact included in this communication are forward-looking statements.
Such forward-looking statements are based on a number of assumptions. Although the Companys management believes that the assumptions made and expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement contained herein will prove to be accurate. Actual results and developments may differ significantly from those expressed or implied by the forward-looking statements contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. These risks include, among other things: the ability to complete the restatement of the affected financial statements and address any material weaknesses; the timing of completion of necessary restatements, interim reviews and audits by the Company’s independent registered public accounting firm; risks relating to the substantial costs and diversion of personnel’s attention and resources deployed to address the restatement of the affected financial statements and internal control matters; the risk of litigation or regulatory action arising from the restatement of the affected financial statements; the timing of the review by, and the conclusions of, the Company’s independent auditor regarding the restatement ; the ability of the Company to remediate any material weaknesses in internal control over financial reporting; potential reputational damage that the Company may suffer as a result of the restatement of the affected financial statements; the impact of the restatement of the affected financial statements on the value of the Company’s common stock; the risk that the filing of the restatement of the affected financial statements will take longer than anticipated; and the risk factors described in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2017, its quarterly reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018, including subsequent current and periodic reports, information statements and registration statements filed with the U.S. Securities and Exchange Commission. You are cautioned to review such reports and other filings at www.sec.gov.
Given these risks, uncertainties and factors, you are cautioned not to place undue reliance on such forward-looking statements and information, which are qualified in their entirety by this cautionary statement. All forward-looking statements and information made herein are based on the Companys current expectations and the Company does not undertake an obligation to revise or update such forward-looking statements and information to reflect subsequent events or circumstances, except as required by law.
Item 9.01
Financial Statements and Exhibits.
Exhibit No. |
| Description |
|
|
99.01 |
|
|
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| Social Reality, Inc. | |
|
|
|
Date: April 8, 2019 | By: | /s/ Michael Malone |
|
| Michael Malone Chief Financial Officer |
EXHIBIT 99.1
SRAX Announces Non-Reliance on Previously Issued Financial Statements
LOS ANGELES, CA April 8, 2019 Social Reality, Inc. (NASDAQ: SRAX), a digital marketing and consumer data management technology company, today announced that on April 7, 2019, management of Social Reality, Inc. (the Company) concluded and the audit committee of the Company has concurred that the Companys previously issued quarterly and year-to-date unaudited consolidated financial statements for March 31, 2017, June 30, 2017, September 30, 2017, December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018 and that its audited consolidated financial statements for the year ending December 31, 2017 should no longer be relied upon. Similarly, related press releases, earnings releases, and investor communications describing the Companys financial statements for these periods should no longer be relied upon. The errors identified are all non-cash and primarily related to the Companys classification of certain outstanding warrants with provisions that allow the warrant holder to force cash redemption under certain circumstances.
Based on its preliminary assessment, the Company is providing the following estimates regarding the aggregate impact of these errors on consolidated total current liabilities, total liabilities, equity, other income, net income (loss) and income (loss) per share, calculated in accordance with accounting principles generally accepted in the U.S., for each of the periods presented:
SOCIAL REALITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTH PERIODS ENDED SEPTEMBER 30, 2018
(Unaudited)
|
| AS REPORTED |
|
|
|
|
| Restated |
| |||
|
| YTD September |
|
|
|
|
| YTD September |
| |||
|
| 2018 |
|
| Adjustments |
|
| 2018 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Revenues |
| $ | 8,823,592 |
|
|
|
|
| $ | 8,823,592 |
| |
Cost of revenue |
|
| 2,902,179 |
|
|
|
|
|
| 2,902,179 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Gross profit |
| $ | 5,921,413 |
|
|
|
|
| $ | 5,921,413 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Loss from operations |
| $ | (8,492,866 | ) |
|
|
|
| $ | (8,492,866 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
| |
Total interest expense |
| $ | (2,772,448 | ) |
|
|
|
| $ | (2,772,448 | ) | |
Loss on repricing of Series A warrants |
| $ | - |
|
|
|
|
| $ | - |
| |
Accretion of put warrants |
|
|
|
|
| $ | 800,000 |
|
| $ | 800,000 |
|
Accretion of debenture warrants |
|
|
|
|
| $ | 800,000 |
|
| $ | 800,000 |
|
Accretion of Leapfrog warrants |
|
|
|
|
| $ | 600,000 |
|
| $ | 600,000 |
|
Loss (Gain) on Sale of Fixed Assets |
| $ | 23,978,389 |
|
|
|
|
|
| $ | 23,978,389 |
|
Other Income |
| $ | 21,205,941 |
|
| $ | 2,200,000 |
|
| $ | 23,410,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
| $ | 12,717,573 |
|
| $ | 2,200,000 |
|
| $ | 14,917,573 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share, basic |
| $ | 1.59 |
|
|
|
|
|
| $ | 1.86 |
|
Net (loss) income per share, diluted |
|
| 1.59 |
|
|
|
|
|
| $ | 1.86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
| 8,008,717 |
|
|
| - |
|
|
| 8,008,717 |
|
Weighted average shares outstanding, diluted |
|
| 8,008,717 |
|
|
| - |
|
|
| 8,008,717 |
|
SOCIAL REALITY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2017
|
| AS REPORTED |
|
|
|
|
| Restated |
| |||
|
| Full Year |
|
|
|
|
| Full Year |
| |||
|
| 2017 |
|
| Adjustments |
|
| 2017 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Revenues |
| $ | 23,348,714 |
|
|
|
|
| $ | 23,348,714 |
| |
Cost of revenue |
|
| 9,328,893 |
|
|
|
|
|
| 9,328,893 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Gross profit |
| $ | 14,019,821 |
|
|
|
|
| $ | 14,019,821 |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
Loss from operations |
| $ | (3,843,679 | ) |
|
|
|
| $ | (3,843,679 | ) | |
|
|
|
|
|
|
|
|
|
|
|
| |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
| |
Total interest expense |
| $ | (2,815,203 | ) |
|
|
|
| $ | (2,815,203 | ) | |
Loss on repricing of Series A warrants |
| $ | - |
|
| $ | (100,000 | ) |
| $ | (100,000 | ) |
Accretion of put warrants |
|
|
|
|
| $ | 500,000 |
|
| $ | 500,000 |
|
Accretion of debenture warrants |
|
|
|
|
| $ | (700,000 | ) |
| $ | (700,000 | ) |
Accretion of Leapfrog warrants |
|
|
|
|
| $ | (1,500,000 | ) |
| $ | (1,500,000 | ) |
Loss (Gain) on Sale of Fixed Assets |
| $ | - |
|
|
|
|
|
| $ | - |
|
Other Income |
| $ | (2,815,203 | ) |
| $ | (1,800,000 | ) |
| $ | (4,615,203 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss) |
| $ | (6,658,882 | ) |
| $ | (1,800,000 | ) |
| $ | (8,458,882 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share, basic |
| $ | (0.81 | ) |
|
|
|
|
| $ | (1.02 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic |
|
| 8,253,851 |
|
|
| - |
|
|
| 8,253,851 |
|
SOCIAL REALITY, INC.
CONDENSED AND CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2018
(Unaudited)
|
| September 30 |
|
|
|
|
| September 30 |
| |||
|
| 2018 |
|
|
|
|
| 2018 |
| |||
|
| As Reported |
|
| Adjustments |
|
| As Restated |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total assets |
|
| 34,341,324 |
|
|
| - |
|
|
| 34,341,324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
| 2,475,229 |
|
|
|
|
|
|
| 2,475,229 |
|
Leapfrog warrant liability |
|
| - |
|
|
| 1,000,000 |
|
|
| 1,000,000 |
|
Warrant liability - Series A |
|
| - |
|
|
| 1,300,000 |
|
|
| 1,300,000 |
|
Debenture warrant liability |
|
| - |
|
|
| 1,600,000 |
|
|
| 1,600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
| 2,475,229 |
|
|
| 3,900,000 |
|
|
| 6,375,229 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured convertible debentures, net |
|
| 2,943,109 |
|
|
| - |
|
|
| 2,943,109 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 5,418,338 |
|
|
| 3,900,000 |
|
|
| 9,318,338 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
| 28,922,886 |
|
|
| (3,900,000 | ) |
|
| 25,022,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
| 34,341,224 |
|
|
| - |
|
|
| 34,341,224 |
|
SOCIAL REALITY, INC.
CONDENSED AND CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2017
|
| As Reported |
|
|
|
|
| Restated |
| |||
|
| December 31, |
|
|
|
|
| December |
| |||
|
| 2017 |
|
| Adjustments |
|
| 2017 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Total assets |
|
| 23,605,699 |
|
|
| - |
|
|
| 23,605,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
| 5,010,815 |
|
|
|
|
|
|
| 5,010,815 |
|
Leapfrog warrant liability |
|
|
|
|
|
| 1,700,000 |
|
|
| 1,700,000 |
|
Warrant liability - Series A |
|
|
|
|
|
| 2,100,000 |
|
|
| 2,100,000 |
|
Debenture warrant liability |
|
|
|
|
|
| 2,500,000 |
|
|
| 2,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
| 5,010,815 |
|
|
| 6,300,000 |
|
|
| 11,310,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured convertible debentures, net |
|
| 1,711,146 |
|
|
| - |
|
|
| 1,711,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 6,721,961 |
|
|
| 6,300,000 |
|
|
| 13,021,961 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity |
|
| 16,883,738 |
|
|
| (6,300,000 | ) |
|
| 10,583,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity |
|
| 23,605,699 |
|
|
| - |
|
|
| 33,358,527 |
|
Since the Company has not yet fully completed its review, the estimates regarding the impact set forth above are preliminary and remain subject to change.
In connection with the restatement, management has determined that a material weakness related to the accounting for financing transactions in the Companys internal control over financial reporting existed for the periods from March 31, 2017 through December 31, 2018. The Companys chief executive officer and chief financial officer have concluded that the Companys disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2017 through December 31, 2018, and the Companys management has concluded that its internal control over financial reporting was not effective as of December 31, 2018.
The Company anticipates that it will file amended Quarterly Reports on Form 10-Q for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018, to amend and restate its financial condition and financial results for the affected periods as soon as practicable.
About SRAX
Social Reality, Inc. (NASDAQ: SRAX) is a digital marketing and consumer data management technology company. SRAXs technology delivers the tools to unlock data to reveal brands core consumers and their characteristics across marketing channels. Through its blockchain identification graph technology platform, BIGtoken, SRAX has developed a consumer-managed data marketplace where people can own and earn from their data thereby providing everyone in the Internet ecosystem choice, transparency, and compensation. SRAXs technology and tools deliver a digital competitive advantage for brands in the CPG, automotive, investor relations and lifestyle verticals by integrating all aspects of the advertising experience, including verified consumer participation, into one platform. For more information on SRAX, visit www.srax.com.
About BIGtoken
BIGtoken, built by SRAX (NASDAQ: SRAX), is a consumer data management and distribution system. BIG is the first consumer managed data marketplace where people can own and earn from their data. Through a transparent blockchain platform and consumer reward systems, BIG provides consumers choice, transparency and compensation for their data. Participating consumers earn rewards, and developers are able to build pro-consumer online experiences on top of the BIG platform. The system also provides advertisers and media companies access to transparent, verified consumer data to better reach and serve audiences. For more information on BIGtoken, visit www.bigtoken.com.
Safe Harbor Statement
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate," "plan," "will," "intend," "believe" or "expect'" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including, without limitation, statements made with respect to expectations of our ability to increase our revenues, satisfy our obligations as they become due, report profitable operations and other risks and uncertainties, as set forth in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of Social Reality and are difficult to predict. Social Reality undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACTS:
Kirsten Chapman/Mary Magnani, LHA Investor Relations, 415-433-3777, srax@lhai.com
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