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SRAX Announces Non-Reliance on Previously Issued Financial Statements

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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 Company’s previously issued quarterly and year-to-date unaudited consolidated financial statements for March 31, 2017June 30, 2017September 30, 2017December 31, 2017March 31, 2018June 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 Company’s financial statements for these periods should no longer be relied upon. The errors identified are all non-cash and primarily related to the Company’s 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

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NINE MONTH PERIOD ENDED SEPTEMBER 30, 2018

(Unaudited)

AS 
REPORTED

Restated

YTD 
September

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YTD 
September

2018

Adjustments

2018

Revenues 

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$                8,823,592

$        8,823,592

Cost of revenue

2,902,179

2,902,179

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Gross profit 

$                 5,921,413

$        5,921,413

Loss from operations 

$               (8,492,866)

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$       (8,492,866)

Other income (expense) 

Total interest expense

$               (2,772,448)

$       (2,772,448)

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Loss on repricing of Series A warrants 

$                               –

$                   –

Accretion of put warrants

$            800,000

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$           800,000

Accretion of debenture warrants 

$            800,000

$           800,000

Accretion of Leapfrog warrants

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$            600,000

$           600,000

    Loss (Gain) on Sale of Fixed Assets 

$             23,978,389

$      23,978,389

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Other Income

$             21,210,439

$         2,200,000

$      23,410,439

Net Income (loss)

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$             12,717,573

$         2,200,000

$      14,917,573

Net (loss) income pershare, basic 

$                        1.59

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$                1.86

Net (loss) income pershare, diluted 

$                        1.59

$                1.86

Weighted average shares outstanding, basic 

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8,008,717

8,008,717

Weighted average shares outstanding, diluted 

8,008,717

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8,008,717

SOCIAL REALITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2017

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AS 
REPORTED

Restated

Full Year

Full Year

2017

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Adjustments

2017

Revenues 

$              23,348,714

$      23,348,714

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Cost of revenue

9,328,893

9,328,893

Gross profit 

$              14,019,821

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$      14,019,821

Loss from operations 

$               (3,843,679)

$       (3,843,679)

Other income (expense) 

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      Total interest expense

$               (2,815,203)

$       (2,815,203)

Loss on repricing of Series A warrants 

$                           –

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$           (100,000)

$          (100,000)

Accretion of put warrants

$            500,000

$           500,000

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Accretion of debenture warrants 

$           (700,000)

$          (700,000)

Accretion of Leapfrog warrants

$        (1,500,000)

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$       (1,500,000)

    Loss (Gain) on Sale of Fixed Assets 

$                           –

$                   –

Other Income

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$               (2,815,203)

$        (1,800,000)

$       (4,615,203)

Net Income (loss)

$               (6,658,882)

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$        (1,800,000)

$       (8,458,882)

Net (loss) income pershare, basic 

$                       (0.81)

$               (1.02)

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Weighted average shares outstanding, basic 

8,253,851

8,253,851

SOCIAL REALITY, INC.

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CONDENSED AND CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2018

(Unaudited)

September 30

September 30

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2018

2018

As Reported

Adjustments

As Restated

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Total assets

34,341,324

34,341,324

Liabilities and stockholders’ equity

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Current liabilities:

   Accounts payable and accrued expenses

2,475,229

2,475,229

    Leapfrog warrant liability

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1,000,000

1,000,000

   Warrant liability – Series A

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1,300,000

1,300,000

    Debenture warrant liability

1,600,000

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1,600,000

     Total current liabilities

2,475,229

3,900,000

6,375,229

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Secured convertible debentures, net

2,943,109

2,943,109

      Total liabilities

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5,418,338

3,900,000

9,318,338

Total stockholders’ equity 

28,922,886

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(3,900,000)

25,022,886

Total liabilities and stockholders’ equity

34,341,224

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34,341,224

SOCIAL REALITY, INC.

CONDENSED AND CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2017

Restated

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December 31,

December

2017

Adjustments

2017

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 Total assets

23,605,699

23,605,699

Liabilities and stockholders’ equity

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Current liabilities:

   Accounts payable and accrued expenses

5,010,815

5,010,815

    Leapfrog warrant liability

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1,700,000

1,700,000

   Warrant liability – Series A

2,100,000

2,100,000

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    Debenture warrant liability

2,500,000

2,500,000

     Total current liabilities

5,010,815

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6,300,000

11,310,815

Secured convertible debentures, net

1,711,146

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1,711,146

      Total liabilities

6,721,961

6,300,000

13,021,961

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Total stockholders’ equity 

16,883,738

(6,300,000)

10,583,738

Total liabilities and stockholders’ equity

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23,605,699

23,605,699

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 Company’s internal control over financial reporting existed for the periods from March 31, 2017 through December 31, 2018. The Company’s chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures were not effective at the reasonable assurance level as of March 31, 2017 through December 31, 2018, and the Company’s management has concluded that its internal control over financial reporting was not effective as of December 31, 2018.

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The Company anticipates that it will file amended Quarterly Reports on Form 10-Q for the periods ended March 31, 2018June 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. SRAX’s 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. SRAX’s 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.

 

SOURCE SRAX

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Blockchain

LCT Secures VARA In-Principle Approval, Defining Its Role in Dubai’s Crypto Landscape

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Bybit One-Click Buy Offers a Winning Chance in First-Time Deposits Lucky Draws

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Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin)

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blocks-&-headlines:-today-in-blockchain-(blackrock,-plume,-sealsq,-hedera,-deutsche-bank,-kucoin)

 

Blockchain technology continues to drive innovation across industries, reshaping finance, infrastructure, and philanthropy. Today’s news roundup explores exciting developments in blockchain ETFs, tokenization funding, quantum-resistant chips, public blockchain initiatives, and impactful social projects. Here’s a deep dive into the latest blockchain headlines:

BlackRock ETF Embraces Blockchain with First Muni Bond Purchase

BlackRock’s blockchain-focused ETF has made its first foray into municipal bonds, signaling increased confidence in integrating blockchain technology with traditional finance. The ETF’s strategic investment demonstrates how blockchain can enhance transparency and efficiency in bond markets.

By tokenizing municipal bonds, BlackRock aims to simplify trading and settlement processes while reducing associated costs. This development underscores the growing role of blockchain in transforming financial instruments and fostering greater market accessibility.

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Source: Yahoo Finance

Plume Secures Funding for Tokenization Platform

Blockchain fintech company Plume has raised significant funding to advance its tokenization platform. The company’s innovative approach enables businesses to convert real-world assets into digital tokens, streamlining asset management and unlocking liquidity.

Tokenization is rapidly gaining traction as a game-changer in sectors such as real estate, art, and commodities. Plume’s success reflects a broader trend of investment in blockchain solutions that bridge the gap between traditional assets and decentralized technologies.

Source: Fortune

SEALSQ and Hedera Partner for Quantum-Resistant Blockchain Chips

SEALSQ and Hedera have announced a groundbreaking collaboration to develop quantum-resistant chips designed to secure blockchain infrastructure. These advanced chips will provide robust protection against future quantum computing threats, ensuring the integrity of blockchain networks.

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As quantum computing capabilities evolve, safeguarding blockchain ecosystems becomes increasingly critical. This partnership highlights the importance of proactive measures in maintaining the resilience and trustworthiness of decentralized systems.

Source: The Quantum Insider

Deutsche Bank’s Public, Permissioned Blockchain Initiative

Deutsche Bank’s Layer 2 blockchain solution is set to go public and operate as a permissioned network, according to its tech partner. This initiative aims to strike a balance between accessibility and security, leveraging blockchain to streamline financial services and enhance operational efficiency.

The decision to adopt a public, permissioned model reflects a growing trend among enterprises seeking to harness the benefits of decentralization while maintaining control over sensitive data. Deutsche Bank’s approach could serve as a blueprint for other financial institutions exploring blockchain adoption.

Source: CoinDesk

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KuCoin’s “Light Up Africa” Initiative Brings Hope to Thousands

Cryptocurrency exchange KuCoin has made a significant impact through its “Light Up Africa” donation ceremony in Ghana, benefiting 36,000 children across the continent. The initiative combines blockchain technology with philanthropy to address energy poverty and support education.

By leveraging blockchain for transparency in charitable contributions, KuCoin sets an example of how the crypto industry can drive meaningful social change. The project demonstrates the potential of blockchain to empower communities and foster sustainable development.

Source: PR Newswire

Industry Implications and Key Takeaways

Today’s developments highlight the transformative potential of blockchain across multiple domains:

  1. Integration with Traditional Finance: BlackRock’s ETF underscores the synergy between blockchain and established financial systems.
  2. Tokenization Trends: Plume’s funding success reflects the growing demand for digital asset solutions.
  3. Quantum-Resistant Technologies: SEALSQ and Hedera’s partnership addresses emerging cybersecurity challenges.
  4. Enterprise Blockchain Adoption: Deutsche Bank’s public, permissioned network showcases the adaptability of blockchain in financial services.
  5. Social Impact: KuCoin’s philanthropic efforts illustrate blockchain’s capacity to drive positive societal outcomes.

The post Blocks & Headlines: Today in Blockchain (BlackRock, Plume, SEALSQ, Hedera, Deutsche Bank, KuCoin) appeared first on News, Events, Advertising Options.

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