ZERO GRAVITY SOLUTIONS, INC. (OTCMKTS:ZGSI) Files An 8-K Regulation FD Disclosure
Item 7.01Regulation FD Disclosure.
During the course of the Companys preparation of its Annual
Report on Form 10-K for the year ended December 31, 2016, the
Companys management identified certain areas in the Companys
previously issued unaudited financial statements for the quarters
ended March 31, 2016, June 30, 2016 and September 30, 2016
(collectively, the Previously Issued Financial Statements), that
require adjustment as described below and in more detail in the
Companys annual report on Form 10-K for the fiscal year ended
December 31, 2016 (Form 10-K), to be filed with the U.S.
Securities and Exchange Commission (SEC).
In preparing the Companys December 31, 2016 consolidated
financial statements,the Company determined thatan error was
madein thecalculation of stock-based compensation expense under
ASC 718for certain awards granted after January 1, 2016. The
error related to managements estimate of the fair value of the
Companys common stock used in its Black-Scholes option pricing
model. The Company hadrecorded non-cashcompensation expense based
upon the then current private placement price of $1.25 per share.
The $1.25 price that was used during 2016 did not fully consider
other observable inputs and valuation techniques to determine a
supportable price per share; therefore, management re-evaluated
such inputs and determinedthat the per common share fair
valueshould have been a range of$0.63 – $0.68for those awards
throughout the first quarter of 2016;$0.69 – $0.78to awards
granted in the second quarter of 2016 and $0.78 for awards
granted for the third qurter of 2016. The error resulted in an
approximate overstatement of stock-based compensation expense of
$776,000 in the first quarter of 2016, $565,000 in the
secondquarter of 2016and $263,000 in the third quarter of2016.
The Company assessed the materiality of this misstatement in the
2016 interim period financial statements in accordance with the
SECs Staff Accounting Bulletin (SAB) No. 99, Materiality,
codified in ASC No. 250, Presentation of Financial Statements,
and concluded that the misstatement was not material to any
interim period. In accordance with SAB 108, the Company has
adjusted the year ended December 31, 2016 financial statements.
There was no impact to total stockholders equity or cash flows.
The adjustments will include:
|
Three Months Ended March 31, 2016 |
Three Months Ended June 30, 2016 |
Three Months Ended September 30, 2016 |
||||||||||||||||||||||||||||||||||
|
As Originally Reported |
Preliminary Adjustment |
As Corrected |
As Originally Reported |
Preliminary Adjustment |
As Corrected |
As Originally Reported |
Preliminary Adjustment |
As Corrected |
||||||||||||||||||||||||||||
|
General and administrative expenses |
$ | 2,705,000 | $ | (776,000 |
) |
$ | 1,929,000 | $ | 2,089,000 | $ | (565,000 |
) |
$ | 1,524,000 | $ | 1,846,000 | $ | (263,000 |
) |
$ | 1,583,000 | |||||||||||||||
|
Loss from operations |
$ | (2,808,000 |
) |
$ | 776,000 | $ | (2,032,000 |
) |
$ | (2,183,000 |
) |
$ | 565,000 | $ | (1,618,000 |
) |
$ | (1,965,000 |
) |
$ | 263,000 | $ | (1,702,000 |
) |
||||||||||||
|
Net loss |
$ | (2,876,000 |
) |
$ | 776,000 | $ | (2,100,000 |
) |
$ | (2,252,000 |
) |
$ | 565,000 | $ | (1,687,000 |
) |
$ | (1,986,000 |
) |
$ | 263,000 | $ | (1,723,000 |
) |
||||||||||||
|
Basic and diluted earnings (loss)per share |
$ | (0.07 |
) |
$ | 0.02 | $ | (0.05 |
) |
$ | (0.06 |
) |
$ | 0.02 | $ | (0.04 |
) |
$ | (0.05 |
) |
$ | 0.01 | $ | (0.04 |
) |
||||||||||||
|
Six Months Ended June 30, 2016 |
Nine Months Ended September 30, 2016 |
|||||||||||||||||||||||||||||||||||
|
As Originally Reported |
Preliminary Adjustment |
As Corrected |
As Originally Reported |
Preliminary Adjustment |
As Corrected |
|||||||||||||||||||||||||||||||
|
General and administrative expenses |
$ | 4,794,000 | $ | (1,341,000 |
) |
$ | 3,453,000 | $ | 6,640,000 | $ | (1,604,000 |
) |
$ | 5,036,000 | ||||||||||||||||||||||
|
Loss from operations |
$ | (4,991,000 |
) |
$ | 1,341,000 | $ | (3,650,000 |
) |
$ | (6,956,000 |
) |
$ | 1,604,000 | $ | (5,352,000 |
) |
||||||||||||||||||||
|
Net loss |
$ | (5,127,000 |
) |
$ | 1,341,000 | $ | (3,786,000 |
) |
$ | (7,114,000 |
) |
$ | 1,604,000 | $ | (5,510,000 |
) |
||||||||||||||||||||
|
Basic and diluted earnings (loss) per share |
$ | (0.13 |
) |
$ | 0.03 | $ | (0.10 |
) |
$ | (0.18 |
) |
$ | 0.04 | $ | (0.14 |
) |
||||||||||||||||||||
|
As of March 31, 2016 |
As of June 31, 2016 |
As of September 30, 2016 |
||||||||||||||||||||||||||||||||||
|
Additional paid in capital |
$ | 15,295,000 | $ | (776,000 |
) |
$ | 14,519,000 | $ | 16,385,000 | $ | (1,341,000 |
) |
$ | 15,044,000 | $ | 17,013,000 | $ | (1,604,000 |
) |
$ | 15,409,000 | |||||||||||||||
|
Accumulated deficit |
$ | (12,267,000 |
) |
$ | 776,000 | $ | (11,491,000 |
) |
$ | (14,519,000 |
) |
$ | 1,341,000 | $ | (13,178,000 |
) |
$ | (16,505,000 |
) |
$ | 1,604,000 | $ | (14,901,000 |
) |
||||||||||||
Caution Regarding Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, that relate to future events or
performance. These forward-looking statements are based on the
Companys current beliefs, assumptions and expectations regarding
future events, which in turn are based on information currently
available to the Company. Such forward-looking statements include
statements regarding materiality or significance, the
quantitative effects of the adjustments, and any anticipated
conclusions of the Board or the Companys management with respect
to the matters relating to the Companys accounting. By their
nature, forward-looking statements address matters that are
subject to risks and uncertainties. A variety of factors could
cause actual events and results, as well as the Companys
expectations regarding materiality or significance, the
adjustments quantitative effects, the effectiveness of the
Companys disclosure controls and procedures and the effectiveness
of the Companys internal control over financial reporting, to
differ materially from those expressed in or contemplated by the
forward-looking statements. These factors include, without
limitation, the risk that additional information may become known
prior to the expected filing with the SEC of the Form 10-K, or
that other subsequent events may occur that would require Company
to make additional adjustments to its financial statements. Other
risk factors affecting the Company are discussed in detail in the
Companys filings with the SEC, including its Annual Reports on
Form 10-K. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise, except to
the extent required by applicable securities laws.
About ZERO GRAVITY SOLUTIONS, INC. (OTCMKTS:ZGSI)
Zero Gravity Solutions, Inc. is a biotechnology company. The Company is focused on commercializing technology derived from, and designed for spaceflight with applications on Earth. These technologies are focused on improving world agriculture by providing solutions to challenges facing humanity, including threats to world agriculture and the ability to feed the growing population. The Company’s segments include BAM-FX and Directed Selection. BAM-FX is an ionic micro-nutrient delivery system for food crops. It is a formulation of zinc and copper in a precise ratio used to treat plant mineral deficiencies by providing a delivery system to move mineral ions to the mineral deficient areas in plants. Directed Selection relates to the production and alteration of a range of stem cells with characteristics in the prolonged zero/micro gravity environment of the International Space Station. ZERO GRAVITY SOLUTIONS, INC. (OTCMKTS:ZGSI) Recent Trading Information
ZERO GRAVITY SOLUTIONS, INC. (OTCMKTS:ZGSI) closed its last trading session 00.00 at 13.50 with 300 shares trading hands.
