SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February 22, 2018
One Horizon Group, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
| Delaware | 001-36530 | 46-3561419 | ||
(STATE OR OTHER INCORPORATION OR | (COMMISSION FILE NO.) | (IRS EMPLOYER IDENTIFICATION NO.)
|
34 South Molton Street, London W1K 5RG, United Kingdom
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
+44(0)20 7409 5248
(ISSUER TELEPHONE NUMBER)
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 (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business acquired
Report of Independent Registered Public Accounting Firm
To the Members of Once in a Lifetime, LLC
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Once in a Lifetime, LLC (the “Company”) as of December 31, 2017, and the related statements of operations, members’ deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
Substantial Doubt about the Company's Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. Management’s evaluations of the events and conditions and management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit.Weare a public accounting firm registered with the Public Company Accounting Oversight Board of the United States of America (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.
We have served as the Company’s auditors since 2018.
/s/ Cherry Bekaert LLP
Tampa, Florida
April 30, 2018
| ONCE IN A LIFETIME, LLC |
| Balance Sheet |
| December 31, 2017 |
| Assets | ||||
| Current assets: | ||||
| Cash | $ | 154 | ||
| Total current assets | 154 | |||
| Total assets | $ | 154 | ||
| Liabilities and Members’ Deficit | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 22,100 | ||
| Total current liabilities | 22,100 | |||
| Total liabilities | 22,100 | |||
| Members’ Deficit | (21,946 | ) | ||
| Total liabilities and members’ deficit | $ | 154 | ||
See accompanying notes to the financial statements.
ONCE IN A LIFETIME, LLC
Statement of Operations
For the year ended December 31, 2017
| Revenue | $ | 9,234 | ||
| General and administrative expense | 40,945 | |||
| Research and development expense | 74,050 | |||
| 114,995 | ||||
| Net loss | $ | (105,761 | ) |
See accompanying notes to the financial statements.
ONCE IN A LIFETIME, LLC
Statement of Members’ Deficit
For the year ended December 31, 2017
| Balance January 1, 2017 | $ | 624 | ||
| Member Contributions | 94,650 | |||
| Member Distributions | (11,459 | ) | ||
| Net loss | (105,761 | ) | ||
| Balance December 31, 2017 | $ | (21,946 | ) |
See accompanying notes to the financial statements.
ONCE IN A LIFETIME, LLC
Statement of Cash Flows
For the year ended December 31, 2017
| Operating activities: | ||||
| Net loss | $ | (105,761 | ) | |
| Increase in cash resulting from changes in: | ||||
| Accounts payable and accrued expenses | 22,100 | |||
| Net cash flows from operating activities | (83,661 | ) | ||
| Financing Activities | ||||
| Member Contributions | 94,650 | |||
| Member Distributions | (11,459 | ) | ||
| Cash flow from financing activities: | 83,191 | |||
| Decrease in cash during the year | (470 | ) | ||
| Cash at beginning of the year | 624 | |||
| Cash at end of year | $ | 154 |
See accompanying notes to the financial statements.
ONCE IN A LIFETIME, LLC
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 1. Description of Business and Summary of Significant Accounting Policies
Organization
Once in a Lifetime, LLC (the “Company”) is organized under the laws of the State of Florida. The Company is in the business of developing and marketing innovative, internet based social media technology.
Revenue Recognition
The Company earns revenue on a transactional basis through the internet and global App stores. Revenue is recognized upon purchase by and delivery to customers.
Research and Development
Under the guidelines of Accounting Standards Codification Topic 985, the cost of the Company’s social media marketplace app was expensed as it was developed during 2016 and 2017 and the software reached technical feasibility in April 2018, when it became marketable and was made available to subscribers. When technical feasibility is achieved, development costs will be capitalized in 2018 and subsequently amortized over the estimated useful life of the software.
Income Taxes
The Company was formed as a Florida limited liability company and elected to be taxed as a partnership for federal income tax purposes. Taxable income or losses are reportable on the tax returns of the individual members. Therefore, no provision has been made for income taxes related to the Company’s operations in the accompanying financial statements.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the fiscal year. The Company bases its estimates on historical experience, current conditions and on other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions.
Note 2.Liquidity and Managements’ Plans
The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. At December 31, 2017 the Company had cash totaling $154 and negative working capital of $21,946. For the year ended December 31, 2017 the Company had a net loss of $105,761. Continued losses may adversely affect the future liquidity of the Company in the future. Therefore, the factors noted raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continued existence is dependent upon management’s ability to develop profitable operations and resolve its liquidity problems.
Note 3. Related Party Transactions
During the year ended December 31, 2017, the Company incurred approximately $74,000 of expenses for research and development services provided by an entity partially owned by a member of Company. As of December 31, 2017, payables for these services totaled approximately $17,000 and are included in accounts payable in the accompanying 2017 balance sheet.
Note 4. Subsequent Event
In January 2018, the Company converted to a corporation, 123 Wish, Inc., incorporated in the State of Delaware. Concurrent with the conversion the then members of the Company sold 51% of their ownership interests to One Horizon Group, Inc. whom has since begun to finance the operations of the entity.
(b) Pro Forma Financial Information
The following tables represent the Company’s balance sheet and statement of operations as of and for the year ended December 31, 2017 on a pro-forma basis to reflect the impact of the acquisition of Once in a Lifetime, LLC as if it occurred on January 1, 2017:
| One Horizon Group, Inc. |
and Once in a Lifetime LLC d/b/a 123Wish. Consolidated balance sheets December 31, 2017 |
| (unaudited) |
| In $ thousands | One Horizon Group, Inc. as reported | Once in a Lifetime LLC | Pro forma consolidated | |||||||||
| Current assets | $ | 1,443 | $ | — | $ | 1,443 | ||||||
| Non-current assets | 7,359 | 1,493 | 8,852 | |||||||||
| Total assets | $ | 8,802 | $ | 1,493 | $ | 10,295 | ||||||
| Current liabilities | 550 | 22 | 572 | |||||||||
| Long-term liabilities | 1,000 | — | 1,000 | |||||||||
| Total liabilities | $ | 1,550 | $ | 22 | $ | 1,572 | ||||||
| Stockholders’ equity: | ||||||||||||
| Common stock outstanding | 3 | — | 3 | |||||||||
| Additional paid-in capital | 48,356 | 1,493 | 49,849 | |||||||||
| Accumulated (Deficit) | (41,085 | ) | — | (41,085 | ) | |||||||
| Accumulated other loss | (22 | ) | — | (22 | ) | |||||||
| Membership deficit | — | (22 | ) | (22 | ) | |||||||
| Stockholders’ equity | $ | 7,252 | $ | 1,471 | $ | 8,723 | ||||||
| Total liabilities and stockholders’ equity | $ | 8,802 | $ | 1,493 | $ | 10,295 | ||||||
| One Horizon Group, Inc. |
| and Once in a Lifetime LLC d/b/a 123Wish. |
| Pro forma Consolidated Statement of Operations |
| For the Year Ended December 31, 2017 |
| (unaudited) |
| In $ thousands | One Horizon Group, Inc. as reported | Once in a Lifetime LLC | Pro forma consolidated | |||||||||
| Revenue | $ | 714 | $ | 9 | $ | 723 | ||||||
| Less: | ||||||||||||
| Cost of revenue | (855 | ) | (— | ) | (855 | ) | ||||||
| Gross margin/(deficit) | (141 | ) | 9 | (132 | ) | |||||||
| Expenses: | ||||||||||||
| General and administrative | 4,236 | 41 | 4,277 | |||||||||
| Research and Development | — | 74 | 74 | |||||||||
| Depreciation | 17 | — | 17 | |||||||||
| 4,253 | 115 | 4,368 | ||||||||||
| Loss from operations | (4,394 | ) | (106 | ) | (4,500 | ) | ||||||
| Other income and expense | (665 | ) | — | (665 | ) | |||||||
| Loss from continuing operations before and after tax | (5,059 | ) | (106 | ) | (5,165 | ) | ||||||
| Loss from discontinued operations | (2,375 | ) | — | (2,375 | ) | |||||||
| Loss attributable to One Horizon Group, Inc. stockholders | $ | (7,434 | ) | $ | (106 | ) | $ | (7,540 | ) | |||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to this report to be signed on its behalf by the undersigned hereunto duly authorized.
| April 30, 2018 | One Horizon Group, Inc. | |
| By: | /s/ Martin Ward | |
| Martin Ward | ||
| Chief Financial Officer | ||