Super League Enterprise, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 12 - Restatement of Quarterly Financial Information (Unaudited)

Note 12 - Restatement of Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2023

12. RESTATEMENT OF QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following tables contain unaudited quarterly financial information for the quarterly period ended September 30, 2023 that has been updated to reflect the restatement of the Company’s financial statements as of and for the three and nine months ended September 30, 2023, arising from the exclusion of the calculated noncash value of the effect of the down round feature on the Company’s Series AA Preferred stock, triggered in August 2023, which should have been recorded as a noncash charge directly to accumulated deficit and a noncash reduction to income available to common stockholders in the computation of earnings per share. In connection with the Company’s year-end 2023 closing procedures, management reassessed the guidance set forth in ASC 260, “Earnings Per Share” and determined that the noncash value of the effect of a down round feature that is triggered on preferred stock should be recognized as a noncash charge to accumulated deficit and a noncash reduction to income available to common stockholders in the computation of earnings per share, in the period that the down round feature is triggered. As a result: (i) management has noted an error affecting additional paid in capital and accumulated deficit, with no impact to total equity, and a noncash error with respect to the computation of loss per share as reported in the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 (“2023 Third Quarter 10-Q”); and (ii) in connection with the Company’s 2023 year-end closing procedures, on March 26, 2024, due to the material error to loss per share originally reported in the 2023 Third Quarter 10-Q, the Company’s management and the Audit Committee determined that the Company’s consolidated interim financial statements for the three and nine months ended September 30, 2023 should be restated to reflect the modifications described above.

The changes described above did not have any impact on total assets, total liabilities, total equity, revenues, cost of revenues, operating expense, net loss or cash flows as reported for the three and nine months ended September 30, 2023. No financial statements or disclosures prior to the financial statements for the quarterly periods ended September 30, 2023 were affected by the changes described above.

The Company has not amended its previously filed Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023. The financial information that has been previously filed or otherwise reported for the quarterly periods ended September 30, 2023 is superseded by the information in this Annual Report, and the consolidated financial statements and related financial information for the quarterly periods ended September 30, 2023 contained in such previously filed report should no longer be relied upon. The Company filed a current report on form 8-K pursuant to Item 4.02 on May 27, 2024, disclosing the matter described above.

	As of September 30, 2023
	As Previously			Restatement
	Reported			Adjustment			As Restated
Unaudited Condensed Balance Sheet
Total assets	$	27,242,000			-		$	27,242,000
Liabilities and shareholders ’ equity (deficit)
Total liabilities		10,627,000			-			10,627,000
Preferred stock, par value $0.001 per share;		-			-			-
Common stock, par value $0.001 per share;		81,000			-			81,000
Additional paid-in-capital		244,333,000			6,446,000	⁽¹⁾		250,779,000
Accumulated deficit		(227,799,000	)		(6,446,000	)⁽¹⁾		(234,245,000	)
Total shareholders ’ equity (deficit)		16,615,000			-			16,615,000
Total liabilities and shareholders ’ equity (deficit)	$	27,242,000		$	-		$	27,242,000

	Three Months Ended September 30, 2023
	As Previously			Restatement
	Reported			Adjustment			As Restated
Unaudited Condensed Statement of Operations
Net loss attributable to common stockholders used in computation of loss per share – basic and diluted	$	(2,984,000	)	$	(6,446,000	)⁽¹⁾	$	(9,430,000	)
Basic and diluted net loss per common share	$	(1.01	)	$	(2.18	)	$	(3.19	)
Weighted-average number of shares outstanding, basic and diluted		2,957,271			2,957,271			2,957,271

	Nine Months Ended September 30, 2023
	As Previously			Restatement
	Reported			Adjustment			As Restated
Unaudited Condensed Statement of Operations
Net loss attributable to common stockholders used in computation of loss per share – basic and diluted	$	(17,056,000	)	$	(6,446,000	)⁽¹⁾	$	(23,502,000	)
Basic and diluted net loss per common share	$	(7.44	)		(2.81	)	$	(10.25	)
Weighted-average number of shares outstanding, basic and diluted		2,293,191			2,293,191			2,293,191

	Three and Nine Months Ended September 30, 2023
	As Previously			Restatement
	Reported			Adjustment			As Restated
Statement of Changes in Shareholders’ Equity (Deficit)
Additional paid-in-capital:	$	244,333,000		$	6,446,000	⁽¹⁾	$	250,779,000
Accumulated Deficit:	$	(227,799,000	)	$	(6,446,000	)⁽¹⁾	$	(234,245,000	)

(1)

Represents noncash value of the effect of the down round feature on the Company’s Series AA Preferred stock, triggered in August 2023, and the related adjustments to additional paid in capital and accumulated deficit, with no impact to total equity, and a noncash adjustment to the computation of loss per share as reported in the Company’s 2023 Third Quarter 10-Q. The adjustments did not have any impact on total assets, total liabilities, total equity, revenues, cost of revenues, operating expense, net loss or cash flows as reported for the three and nine months ended September 30, 2023, as reported in the 2023 Third Quarter 10-Q.