Reverse Merger Transaction and Accounting
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9 Months Ended |
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Sep. 30, 2012
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Notes to Financial Statements | |
NOTE 1 - Reverse Merger Transaction and Accounting |
Reverse Merger Transaction
Mobivity Holdings Corp. (the Company) was incorporated as Ares Ventures Corporation in Nevada in 2008. On November 2, 2010, the Company acquired CommerceTel, Inc., which was wholly-owned by CommerceTel Canada Corporation (CTel Canada or our former parent), in a reverse merger, or the Merger. Pursuant to the Merger, all of the issued and outstanding shares of CommerceTel, Inc. common stock were converted, at an exchange ratio of 0.7268-for-1, into an aggregate of 10,000,000 shares of the Companys common stock, and CommerceTel, Inc. became a wholly owned subsidiary of the Company. In connection with the Merger, the Company changed its corporate name to CommerceTel Corporation on October 5, 2010. The accompanying condensed consolidated financial statements, common share and weighted average common share basic and diluted information has been retroactively adjusted to reflect the exchange ratio in the Merger. In connection with the Companys acquisition of assets from Mobivity, LLC (See note 3 below), and the Company changed its corporate name to Mobivity Holdings Corp. and its operating company (CommerceTel, Inc) to Mobivity, Inc, on August 23, 2012.
Reverse Merger Accounting
Immediately following the consummation of the Merger, the: (i) former security holders of Mobivity, Inc. common stock had an approximate 56% voting interest in the Company and the Company stockholders retained an approximate 44% voting interest, (ii) former executive management team of Mobivity, Inc. remained as the only continuing executive management team for the Company, and (iii) Companys ongoing operations consist solely of the ongoing operations of Mobivity, Inc. Based primarily on these factors, the Merger was accounted for as a reverse merger and a recapitalization in accordance with generally accepted accounting principles in the United States of America, or GAAP. As a result, these condensed financial statements reflect the: (i) historical results of Mobivity, Inc. prior to the Merger, (ii) combined results of the Company following the Merger, and (iii) acquired assets and liabilities at their historical cost. In connection with the Merger, the Company received net assets of $16,496.
On December 7, 2010, the Board of Directors of the Company resolved to change the Companys fiscal year end from September 30 to December 31, effective immediately, to coincide with the fiscal year end of its wholly owned subsidiary Mobivity, Inc. |