UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 2011
ZOO ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-34796 | 71-1033391 |
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3805 Edwards Road, Suite 400
Cincinnati, OH 45209
(513) 824-8297
(Address of principal executive offices including zip code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
This Amendment No. 1 to the Current Report on Form 8-K (this “Form 8-K/A”) is being filed to incorporate changes to the Current Report on Form 8-K filed by Zoo Entertainment, Inc. (the “Company”) on April 13, 2011 (the “Form 8-K”) in response to comments received from the Securities and Exchange Commission (the “Commission”) as a result of the Commission’s review of the Form 8-K. This Form 8-K/A amends and restates the Form 8-K in its entirety.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On April 13, 2011, Management of the Company, in consultation with the Audit Committee of the Board of Directors (the “Audit Committee”), concluded that there were errors in recording certain transactions in the Company’s previously filed unaudited consolidated financial statements for each of the following periods, the three months ended March 31, 2010, the three and six months ended June 30, 2010 and the three and nine months ended September 30, 2010, and that such statements should no longer be relied upon. These errors were identified while the Company was completing its analyses in connection with the 2010 fiscal year-end audit. Specifically, these errors relate to revenue recognition, including royalty income, certain sales volume rebates earned by one customer and revenue recorded in connection with sales to one distributor. In addition, the Company is reclassifying certain selling costs from cost of goods sold to selling and marketing expense, as well as reclassifying certain product financings costs from costs of goods sold to interest expense.
Management and the Audit Committee has determined that the effect of such errors are material per Staff Accounting Bulletin No. 108, and as a result, the Company has determined that it will amend and restate its previously filed unaudited consolidated financial statements for the three months ended March 31, 2010, the three and six months ended June 30, 2010 and the three and nine months ended September 30, 2010 on Form 10-Q/A for each period prior to filing the Form 10-Q for the three months ended March 31, 2011.
As previously reported, the Company has identified material weaknesses in its internal control over financial reporting related to not having a sufficient number of personnel with the appropriate level of experience and technical expertise to appropriately resolve non-routine and complex accounting matters or to evaluate the impact of new and existing accounting pronouncements on the Company’s consolidated financial statements while completing the financial statement close process.
Management and the Audit Committee have discussed the matters disclosed in this Form 8-K/A with EisnerAmper LLP.
The effects of the Company’s restatement, including the tax impact, on previously reported unaudited consolidated financial statements are summarized as follows, in thousands, except share and per share amounts:
Three Months Ended March 31, 2010
| Unaudited Consolidated Balance Sheet | | March 31, 2010 | | | March 31, 2010 | |
| | | | | | | |
| | | As Reported | | | As Adjusted | |
| Total current assets | | $ | 16,789 | | | $ | 16,319 | |
| Total assets | | | 32,242 | | | | 31,772 | |
| Total current liabilities | | | 10,035 | | | | 9,933 | |
| Total liabilities | | | 16,193 | | | | 15,975 | |
| Total stockholders’ equity | | | 16,049 | | | | 15,797 | |
| Total liabilities and stockholders’ equity | | | 32,242 | | | | 31,772 | |
Unaudited Consolidated Statement of Operations | | Three Months Ended March 31, 2010 | | | Three Months Ended March 31, 2010 | |
| | | | | | | |
| | | As Reported | | | As Adjusted | |
| Revenue | | $ | 17,132 | | | | 16,662 | |
| Cost of goods sold | | | 13,515 | | | | 12,930 | |
| Gross profit | | | 3,617 | | | | 3,732 | |
| Selling and marketing | | | 836 | | | | 1,116 | |
| Total operating expenses | | | 2,941 | | | | 3,221 | |
| Income from operations | | | 676 | | | | 511 | |
| Interest expense | | | (253 | ) | | | (456 | ) |
| Income from operations before income taxes | | | 423 | | | | 55 | |
| Income tax expense | | | 133 | | | | (17 | ) |
| Net income | | | 290 | | | | 38 | |
| | | | | | | | | |
| Basic net income per common share | | $ | 0.26 | | | $ | 0.03 | |
| Diluted net income per common share | | $ | 0.10 | | | $ | 0.01 | |
Three and Six Months Ended June 30, 2010
| Unaudited Consolidated Balance Sheet | | | | | | | | June 30, 2010 | | | June 30, 2010 | |
| | | | | | | | | | | | | |
| | | | | | | | | As Reported | | | As Adjusted | |
| Total current assets | | | | | | | | $ | 17,304 | | | $ | 16,772 | |
| Total assets | | | | | | | | | 33,125 | | | | 32,593 | |
| Total current liabilities | | | | | | | | | 13,628 | | | | 14,273 | |
| Total liabilities | | | | | | | | | 17,435 | | | | 17,667 | |
| Total stockholders’ equity | | | | | | | | | 15,690 | | | | 14,926 | |
| Total liabilities and stockholders’ equity | | | | | | | | | 33,125 | | | | 32,593 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Unaudited Consolidated Statement of Operations | | Three Months Ended June 30, 2010 | | | Three Months Ended June 30, 2010 | | | Six Months Ended June 30, 2010 | | | Six Months Ended June 30, 2010 | |
| | | | | | | | | | | | | | | |
| | | As Reported | | | As Adjusted | | | As Reported | | | As Adjusted | |
| Revenue | | $ | 10,470 | | | $ | 9,776 | | | $ | 27,602 | | | $ | 26,438 | |
| Cost of goods sold | | | 7,957 | | | | 7,907 | | | | 21,472 | | | | 20,838 | |
| Gross profit | | | 2,513 | | | | 1,869 | | | | 6,130 | | | | 5,601 | |
| Selling and marketing | | | 1,217 | | | | 1,233 | | | | 2,053 | | | | 2,349 | |
| Total operating expenses | | | 2,898 | | | | 2,914 | | | | 5,839 | | | | 6,135 | |
| (Loss) income from operations | | | (385 | ) | | | (1,045 | ) | | | 291 | | | | (534 | ) |
| Interest expense | | | (368 | ) | | | (517 | ) | | | (621 | ) | | | (973 | ) |
| Loss from operations before income taxes | | | (753 | ) | | | (1,562 | ) | | | (330 | ) | | | (1,507 | ) |
| Income tax benefit | | | 277 | | | | 575 | | | | 144 | | | | 557 | |
| Net loss | | | (476 | ) | | | (987 | ) | | | (186 | ) | | | (950 | ) |
| | | | | | | | | | | | | | | | | |
| Basic and diluted net loss per common share | | $ | (0.11 | ) | | $ | (0.22 | ) | | $ | (0.07 | ) | | $ | (0.34 | ) |
| Unaudited Consolidated Balance Sheet | | | | | | | | September 30, 2010 | | | September 30, 2010 | |
| | | | | | | | | | | | | |
| | | | | | | | | As Reported | | | As Adjusted | |
| Total current assets | | | | | | | | $ | 33,638 | | | $ | 32,778 | |
| Total assets | | | | | | | | | 48,190 | | | | 47,330 | |
| Total current liabilities | | | | | | | | | 21,611 | | | | 22,256 | |
| Total liabilities | | | | | | | | | 24,467 | | | | 24,586 | |
| Total stockholders’ equity | | | | | | | | | 23,723 | | | | 22,744 | |
| Total liabilities and stockholders’ equity | | | | | | | | | 48,190 | | | | 47,330 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Unaudited Consolidated Statement of Operations | | Three Months Ended September 30, 2010 | | | Three Months Ended September 30, 2010 | | | Nine Months Ended September 30, 2010 | | | Nine Months Ended September 30, 2010 | |
| | | | | | | | | | | | | | | |
| | | As Reported | | | As Adjusted | | | As Reported | | | As Adjusted | |
| Revenue | | $ | 17,581 | | | $ | 17,253 | | | $ | 45,183 | | | $ | 43,691 | |
| Cost of goods sold | | | 13,894 | | | | 13,579 | | | | 35,366 | | | | 34,417 | |
| Gross profit | | | 3,687 | | | | 3,674 | | | | 9,817 | | | | 9,275 | |
| Selling and marketing | | | 1,307 | | | | 1,307 | | | | 3,360 | | | | 3,656 | |
| Total operating expenses | | | 2,865 | | | | 2,865 | | | | 8,704 | | | | 9,000 | |
| Income from operations | | | 822 | | | | 809 | | | | 1,113 | | | | 275 | |
| Interest expense | | | (343 | ) | | | (658 | ) | | | (964 | ) | | | (1,631 | ) |
| Income (loss) from operations before income taxes | | | 479 | | | | 151 | | | | 149 | | | | (1,356 | ) |
| Income tax (expense) benefit | | | (165 | ) | | | (52 | ) | | | (21 | ) | | | 505 | |
| Net income (loss) | | | 314 | | | | 99 | | | | 128 | | | | (851 | ) |
| | | | | | | | | | | | | | | | | |
| Basic net income (loss) per common share | | $ | 0.05 | | | $ | 0.02 | | | $ | 0.03 | | | $ | (0.22 | ) |
| Diluted net income (loss) per common share | | $ | 0 04 | | | $ | 0.01 | | | $ | 0.02 | | | $ | (0.22 | ) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | ZOO ENTERTAINMENT, INC. | |
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| By: | /s/ David Fremed | |
| | Name: | David Fremed | |
| | Title: | Chief Financial Officer | |
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