To The Stars Academy has $37 million deficit
1/4 We've noticed some reports that we are “in debt” in some astronomical amount. The reports are highly misleading and grossly mischaracterize statements in an SEC filing. It looks like people are misunderstanding the difference between debt and stockholders’ equity.
2/4 “Debt” is what we owe. The number that is getting the attention is actually the “Stockholders’ equity/deficit” number. That looks like a big number but we don’t “owe” it to anyone and it's not related to the operational results of the company.
3/4 It just reflects the fact that we’ve been paying our people, like many start-ups, in stock as opposed to paying them in dollars. When we do that, the notional value of the stock awards is based on the amount that we have received from the public for selling our shares.
4/4 If you want further details, you can look at the footnotes to our financial statements, where the calculation of stock-based compensation is explained in Note 3 under “Stock-Based Compensation." https://www.sec.gov/Archives/edgar/data/1710274/000114420418050766/tv503167_1sa.htm
We appreciate the professionalism of most media channels who have taken the steps to update their articles and inform their readers of their mistake.
I also want to mention that I appreciate those who are taking the time to reach out for comment. It is unacceptable that all this started because a journalist couldn’t be bothered to clarify what he clearly did not understand. That is unacceptable both legally and ethically.