Ecoark Holdings, Inc. (OTCMKTS:EARK) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
Item 4.02
On July 19, 2019, the Audit Committee of the Board of Directors of Ecoark Holdings, Inc., a Nevada corporation (the “Company”) concluded and the Company concurred that the Company’s previously issued quarterly and year-to-date audited consolidated financial statements for the year ended March 31, 2018 and unaudited financial statements for the periods ended June 30, 2018, September 30, 2018 and December 31, 2018 (the “Initial Filings”) should no longer be relied upon. Similarly, related press releases and investor communications describing the Company’s financial statements for the aforementioned periods should no longer be relied upon.
Members of the Company’s management have discussed the matters disclosed in this Item 4.02 with RBSM, LLP, the Company’s independent registered public accounting firm. On July 22, 2019, RBSM LLP sent a formal notice to the Company, reiterating the aforesaid conclusions of the Audit Committee of the Board of Directors of the Company.
The errors identified by the Audit Committee and RBSM LLP are all non-cash and primarily related to the Company’s classification of certain outstanding warrants which have provisions that allow the warrant holder to acquire the Company’s common stock. These warrants should have been classified as liabilities under ASC 815. The Company is expected to make adjustments by booking a long-term contingency related to derivative liabilities, to make adjustments to the accumulated deficit and additional paid-in capital on the balance sheet, and to recognize changes in the fair value of derivative liabilities on the income statement in each of the Initial Filings.
Accordingly, shortly after the filing of this Current Report on Form 8-K, the Company anticipates that it will file amendments to the Initial Filings, as soon as practicable, to amend and restate the previously-issued financial statements to correct those errors therein.
Forward-Looking Statements
This report contains forward-looking statements, and any statements other than statements of historical fact could be deemed to be forward-looking statements. These forward-looking statements include, among other things, statements regarding the Company’s intention to restate its prior consolidated financial statements, and the anticipated timing of filing the Company’s periodic reports. These statements are subject to risks and uncertainties, including the risk that the preparation of the restated consolidated financial statements or other subsequent events may require the Company to make additional adjustments to its financial statements or may delay future filings, and actual results may differ materially from these statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date hereof.
About Ecoark Holdings, Inc. (OTCMKTS:EARK)
Ecoark Holdings, Inc. is a technology solutions company. The Company offers technologies to fight waste in operations, logistics, and supply chains worldwide. It provides pallet-level time and temperature tracking, pre-cool prioritization and monitoring, pallet routing, real-time in-transit monitoring, remote visibility, and quality management solutions. The Company also offers Point Clouds, which creates two dimensional (2d) and three dimensional (3d) digital replications; High definition (HD) photos, a 360 degree rotational bubble image from various project perspectives; 2d Plans that plan and elevates views in CAD/PDF; and 3d models, such as Revit, CAD, Cyclone, 3dS, and others; as well as provides training and consultation services on laser scan and/or creates 2d as-builts or 3d models. In addition, it provides tech driven consumer products.