Perk.com to Refile Previously Issued 2014 Financial Statements

Perk.com Inc.’s (TSXV:MVI.P) 2014 audited financial statements must be restated.
According to the press release:

[This is] as a result of an error in the disclosure and valuation of liabilities associated with Series A preferred shares and preferred share warrants, which liabilities were fully eliminated upon conversion of such preferred shares and warrants to common shares as part of the July, 2015, reverse takeover transaction.
The restatement will have no impact on Perk’s cash balance or total assets as at December 31, 2015. In addition, Perk’s 2014 and 2015 revenues, gross profit, operating expenses and adjusted EBITDA as previously reported will be unaffected by this change.
The restatement is being made upon the recommendation of the Company’s new auditors, Deloitte LLP, (the “Auditors”) following an in-depth review by the Auditors of the terms of the Series A Preferred Shares (the “Preferred Shares”) and Preferred Share Warrants (the “Warrants”) that were issued in 2011 and converted to common shares of Perk on July 10, 2015. The restatement will result in certain amounts which were recorded as equity in the Company’s Statement of Financial Position as at December 31, 2014, March 31, 2015, and June 30, 2015, being reclassified as a liability and will also result in certain non-cash losses being recorded on the Company’s Consolidated Statements Income and Comprehensive Income, Stockholder’s Equity and Cash Flows for the periods up to June 30, 2015.
The review indicated that the Preferred Shares conversion option and the Warrants contained features which the Auditors advise, under International Financial Reporting Standards (“IFRS”), should have been accounted for as a liability at fair value and re-valued as at December 31, 2014, March 31, 2015 and June 30, 2015, with any changes in fair value recorded as a charge to net income. Also, due to certain terms associated with the Preferred Shares, the Preferred Shares and Warrants should have been classified as a liability. As a result, liabilities for the Warrants, Preferred Shares and the fair value of the derivative liability related to the Preferred Shares should have been recorded. At the end of each reporting period, fair value of both the derivative liability related to the Preferred Shares and Warrants should have been reviewed and a gain and/or loss on the revaluations recorded which would have impacted the Consolidated Statement of Income and Comprehensive Income. There is no impact to the number of Preferred Shares and Warrants which converted to common shares of Perk on a one for one basis pursuant to the RTO on July 10, 2015.

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