Perk.com Inc. Announces Intention to Restate Fiscal 2014 Financial Statements to Reflect Incorrect Recording of Non-Cash Amount; No Impact on Perk’s 2014 or 2015 Revenues, Gross Profit, Operating Expenses and Adjusted EBITDA

AUSTIN, Texas--()--Perk.com Inc. (TSX:PER) (“Perk” or the “Company”), today announced that the Company’s previously issued 2014 audited financial statements must be restated 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 Take-Over (“RTO”) 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.

The restatement will impact the Consolidated Balance Sheets for previous periods and the Consolidated Statements of Income and Comprehensive Income, Stockholder’s Equity and Cash Flows for the periods up to June 30, 2015. Accordingly, investors should no longer rely upon the Company’s previously issued financial statements, as well as the corresponding Management Discussion & Analysis (“MD&A”), and other financial data relating to this period and prior periods.

The Company has dedicated substantial resources to complete this review of the impact of the adjustments with the Auditors and expects to issue its audited financial results as at and for the year ended December 31, 2015 with restated comparative figures as at and for the year ended December 31, 2014 on or before March 21, 2016. Additional information regarding the restatement of the December 31, 2014 financial statements will be provided in the Company’s 2015 audited financial statements and 2015 MD&A.

About Perk

As a leading mobile rewards platform, Perk brings together the interests of consumers, advertisers, and publishers by offering consumers rewards such as Perk Points and other digital goods. Perk Points can be redeemed for gift cards, cash, or loaded on to Perk Plastik, a re-loadable branded debit card. Perk works with brands and publishers to reach consumers through truly engaging and innovative formats using rewards as a way to achieve maximum engagement of their brands and products.

Perk currently owns and operates 15 mobile applications that allow members to earn rewards such as Perk Points and digital goods. Perk also operates numerous websites as well as AppTrailers, a leading mobile video rewards app. In addition to offering rewards to members through its own mobile applications and websites, Perk launched its Perk Platform, Appsaholic which allows mobile and desktop publishers to utilize rewards to engage and entice users through the publisher’s own applications and websites. The Perk Platform was further expanded through the acquisitions of SuperRewards, a rewards and alternative payments platform for publishers and developers as well as Corona Labs, an app development platform that allows developers to develop apps for both iOS & Android.

Additional information about Perk can be found at its corporate website: ir.perk.com.

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements, including with respect to Perk’s business: the anticipated benefits of the Acquisition; the anticipated effect of the Acquisition on Perk’s strategy, operations and financial performance; user and advertiser engagement; Perk’s ability to establish new marketing partnerships; Perk’s ability to expand into new markets; and Perk’s ability to acquire and integrate new businesses and technologies. Such forward-looking statements reflect Perk’s expectations about its future operating results, performance and opportunities that involve substantial risks and uncertainties. When used herein, the words “anticipate”, “believe”, “estimate”, “upcoming”, “plan”, “target”, “intend” and “expect” and similar expressions, as they relate to Perk or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to Perk and are subject to a number of risks, uncertainties, and other factors that could cause Perk’s actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements, including, but not limited to: maintenance by Perk of relationships with advertising network providers and partners before and following the Acquisition; successful development of the “Perk” brand; Perk’s ability to keep up with rapid technology developments in Perk’s markets; Perk’s ability to avoid defects in products and services delivered by Perk; Perk’s ability to attract app and website developers to its Appsaholic SDK; and Perk’s ability to successfully enter new business areas and geographic markets, including integration of the acquired business from Viggle; success of new products developed by Perk and Perk’s ability to retain key members of its management team. Perk’s Management does not undertake to update any forward-looking statement, except as required by law.

Contacts

Perk.com Inc.
Ted Hastings, 519-827-1999
Chief Executive Officer
ted@perk.com
or
Jeff Collins, 519-827-1999, x2226
Chief Financial Officer
jeff@perk.com
or
Investor Relations:
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
aprior@equityny.com
or
Terry Downs, 212-836-9615
Associate
tdowns@equityny.com

Contacts

Perk.com Inc.
Ted Hastings, 519-827-1999
Chief Executive Officer
ted@perk.com
or
Jeff Collins, 519-827-1999, x2226
Chief Financial Officer
jeff@perk.com
or
Investor Relations:
The Equity Group Inc.
Adam Prior, 212-836-9606
Senior Vice President
aprior@equityny.com
or
Terry Downs, 212-836-9615
Associate
tdowns@equityny.com