EXHIBIT 99.2
Published on October 12, 2012
Exhibit 99.2
Mobivity Holdings Corp.
Unaudited Pro Forma Consolidated Financial Statements
On April 8, 2011, Mobivity Holdings Corp. a Nevada corporation formerly known as CommerceTel Corporation (the “Company”) and its wholly owned subsidiary, CommerceTel, Inc. (“CTel”), entered into an acquisition agreement, effective as of April 1, 2011 (the “Agreement”), with Mobile Visions Inc., Mobivity, LLC (“Mobivity”) and the controlling owners of these two entities. Under the terms of the Agreement, the Company acquired from Mobivity, LLC and Mobile Visions, Inc. their Mobivity interactive mobile marketing platform and services business.
The aggregate purchase price for the acquisition was 1,000,000 shares of common stock of the Company (the “Shares”), $64,969 in cash paid at the closing of the transaction and the issuance by the Company to Mobivity of a secured subordinated promissory note in the principal amount of $606,064. The promissory note earns interest at 6.25% per annum; is payable in six quarterly installments of $105,526 (inclusive of interest) starting May 1, 2011; matures on August 1, 2012; is secured by the acquired assets of the Mobivity business; and is subordinated to the Company’s obligations under its outstanding 10% Senior Secured Convertible Bridge Notes Due November 3, 2011.
The acquisition has been accounted for as a business combination and the Company valued all assets and liabilities acquired at their fair values on the date of acquisition. Accordingly, the assets and liabilities of the acquired entity were recorded at their estimated fair values at the date of the acquisition.
The allocation of the purchase price to assets and liabilities based upon fair value determinations was as follows:
|
Customer relationships
|
$ | 814,000 | ||
|
Trade name
|
65,000 | |||
|
Technology
|
217,000 | |||
|
Non-competition agreement
|
5,000 | |||
|
Goodwill
|
2,690,033 | |||
|
Total purchase price
|
$ | 3,791,033 |
The purchase price consists of the following:
|
Cash
|
$ | 64,969 | ||
|
Notes payable
|
606,064 | |||
|
Shares issued
|
3,120,000 | |||
|
Total purchase price
|
$ | 3,791,033 |
The following unaudited pro forma consolidated financial statements have been prepared to give effect to the completed acquisition, which was accounted for as a purchase.
The unaudited pro forma consolidated balance sheet as of December 31, 2010, and the unaudited pro forma consolidated statement of operations for the year ended December 31, 2010, are presented herein. The unaudited pro forma consolidated balance sheet was prepared using the historical balance sheets of the Company and Mobivity as of December 31, 2010. The unaudited pro forma consolidated statement of operations was prepared using the historical statements of operations of the Company and Mobivity for the year ended December 31, 2010.
The unaudited pro forma consolidated balance sheet gives effect to the acquisition as if it had been completed on December 31, 2010, and consolidates the unaudited balance sheets of the Company and the assets and liabilities acquired from Mobivity. The unaudited pro forma consolidated statements of operations for the year ended December 31, 2010, gives effect to the acquisition as if it had occurred on January 1, 2010.
The unaudited pro forma consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma consolidated financial statements are presented for illustrative purposes and do not purport to represent what the financial position or results of operations actually would have been if the events described above occurred as of the dates indicated or what such financial position or results would be for any future periods. The pro forma information does not reflect cost savings expected to be realized from the elimination of certain expenses and from synergies expected to be created or the costs to achieve such cost savings or synergies. No assurance can be given that cost savings or synergies will be realized. The unaudited pro forma consolidated financial statements, and the accompanying notes, are based upon the respective historical consolidated financial statements of the Company and Mobivity, and should be read in conjunction with the Company’s historical financial statements and related notes, the Company’s "Management's Discussion and Analysis of Financial Condition and Results of Operation" contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and 2011, and Mobivity’s financial statements presented as Exhibit 99.1 to this Current Report Form 8K/A.
Mobivity Holdings Corp.
Unaudited Pro Forma Consolidated Balance Sheet
As of December 31, 2010
|
Historical
|
|||||||||||||||||
|
Mobivity Holdings Corp.
|
Mobile Visions, Inc.
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||||||
|
Current assets
|
|||||||||||||||||
|
Cash
|
$ | 373,439 | $ | 6,945 | $ | (71,914 | ) |
(a)
|
$ | 308,470 | |||||||
|
Accounts receivable
|
49,215 | 12,417 | (12,417 | ) |
(b)
|
49,215 | |||||||||||
|
Other current assets
|
68,030 | - | - | 68,030 | |||||||||||||
|
Total current assets
|
490,684 | 19,362 | (84,331 | ) | 425,715 | ||||||||||||
|
Equipment, net
|
1,609 | 5,993 | (5,993 | ) |
(b)
|
1,609 | |||||||||||
|
Goodwill
|
- | - | 2,690,033 |
(c)
|
2,690,033 | ||||||||||||
|
Intangible assets, net
|
- | 24,625 | 1,076,375 |
(d)
|
1,101,000 | ||||||||||||
|
Other assets
|
46,317 | - | - | 46,317 | |||||||||||||
|
Total Assets
|
$ | 538,610 | $ | 49,980 | $ | 3,676,084 | $ | 4,264,674 | |||||||||
|
Current liabilities
|
|||||||||||||||||
|
Accounts payable
|
$ | 151,943 | $ | 88,180 | $ | (88,180 | ) |
(b)
|
$ | 151,943 | |||||||
|
Accrued interest
|
37,901 | 13,775 | (13,775 | ) |
(b)
|
37,901 | |||||||||||
|
Accrued and deferred personnel compensation
|
119,641 | - | - | 119,641 | |||||||||||||
|
Deferred revenue and customer deposits
|
233,318 | 4,692 | (4,692 | ) |
(b)
|
233,318 | |||||||||||
|
Notes payable, net of discount
|
803,156 | - | 606,064 |
(e)
|
1,409,220 | ||||||||||||
|
Derivative liabilities
|
334,478 | - | - | 334,478 | |||||||||||||
|
Other current liabilities
|
69,142 | - | - | 69,142 | |||||||||||||
|
Total current liabilities
|
1,749,579 | 106,647 | 499,417 | 2,355,643 | |||||||||||||
|
Non-current liabilities
|
|||||||||||||||||
|
Notes payable - related parties
|
- | 64,000 | (64,000 | ) |
(b)
|
- | |||||||||||
|
Total non-current liabilities
|
- | 64,000 | (64,000 | ) | - | ||||||||||||
|
Total liabilities
|
1,749,579 | 170,647 | 435,417 | 2,355,643 | |||||||||||||
|
Stockholders' equity (deficit)
|
|||||||||||||||||
|
Common stock
|
17,700 | - | 1,000 |
(f)
|
18,700 | ||||||||||||
|
Additional paid-in capital
|
6,945,584 | - | 3,119,000 |
(f)
|
10,064,584 | ||||||||||||
|
Accumulated deficit
|
(8,174,253 | ) | (120,667 | ) | 120,667 |
(b)
|
(8,174,253 | ) | |||||||||
|
Total stockholders' equity (deficit)
|
(1,210,969 | ) | (120,667 | ) | 3,240,667 | 1,909,031 | |||||||||||
|
Total liabilities and stockholders' equity (deficit)
|
$ | 538,610 | $ | 49,980 | $ | 3,676,084 | $ | 4,264,674 | |||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
Mobivity Holdings Corp.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2010
|
Historical
|
|||||||||||||||||
|
Mobivity Holdings Corp.
|
Mobile Visions, Inc.
|
Pro Forma Adjustments
|
Pro Forma
|
||||||||||||||
|
Revenues
|
|||||||||||||||||
|
Revenues
|
$ | 919,216 | $ | 673,618 | $ | - | $ | 1,592,834 | |||||||||
|
Cost of revenues
|
417,870 | 243,564 | - | 661,434 | |||||||||||||
|
Gross margin
|
501,346 | 430,054 | - | 931,400 | |||||||||||||
|
Operating expenses
|
|||||||||||||||||
|
General & administrative
|
1,163,479 | 428,755 | - | 1,592,234 | |||||||||||||
|
Sales & marketing
|
225,783 | - | - | 225,783 | |||||||||||||
|
Engineering, research, & development
|
405,819 | - | - | 405,819 | |||||||||||||
|
Depreciation & amortization
|
- | 5,464 | 215,736 |
(g),(h)
|
221,200 | ||||||||||||
|
Total operating expenses
|
1,795,081 | 434,219 | 215,736 | 2,445,036 | |||||||||||||
|
Income/(Loss) from operations
|
(1,293,735 | ) | (4,165 | ) | (215,736 | ) | (1,513,636 | ) | |||||||||
|
Other income/(expense)
|
|||||||||||||||||
|
Interest expense
|
(120,388 | ) | (4,000 | ) | (20,398 | ) |
(i),(j)
|
(144,786 | ) | ||||||||
|
Change in fair market value of derivative liabilities
|
(14,861 | ) | - | - | (14,861 | ) | |||||||||||
|
Gain on debt extinguishment
|
199,401 | - | - | 199,401 | |||||||||||||
|
Total other income/(expense)
|
64,152 | (4,000 | ) | (20,398 | ) | 39,754 | |||||||||||
|
Income tax benefit/(expense)
|
- | - | - | - | |||||||||||||
|
Net income/(loss)
|
$ | (1,229,583 | ) | $ | (8,165 | ) | $ | (236,134 | ) | $ | (1,473,882 | ) | |||||
|
Net loss per share - basic and diluted
|
$ | (0.14 | ) | $ | (0.15 | ) | |||||||||||
| Weighted average number of shares during the period - basic and diluted | $ | 8,950,585 | 1,000,000 | (k) | 9,950,585 | ||||||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements.
Mobivity Holdings Corp.
Notes to Unaudited Pro Forma Consolidated Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited pro forma consolidated financial statements present the pro forma results of operations and financial position of the Company and Mobivity on a combined basis based on the historical financial information of each company and after giving effect to the acquisition of Mobivity by the Company. The acquisition was recorded using the acquisition method of accounting.
The unaudited pro forma combined consolidated balance sheet as of December 30, 2010 combines the historical results for the Company and Mobivity as of December 31, 2010, as if the acquisition had occurred on December 31, 2010. The unaudited pro forma consolidated statement of operations for the year ended December 31, 2010 combines the historical results for the Company and Mobivity for the twelve months ended December 31, 2010, as if the acquisition had occurred on January 1, 2010.
Note 2. Pro Forma Adjustments
There were no inter-company balances and transactions between the Company and the Mobivity as of the dates and for the periods of these pro forma combined financial statements.
The pro forma adjustments included in the unaudited pro forma combined financial statements are as follows:
|
(a) Represents the $64,969 cash paid at closing of the acquisition plus the cash not acquired.
|
|
(b) Represents elimination of the assets, liabilities and equity that were not acquired in the transaction.
|
|
(c) To reflect the estimated amount of goodwill resulting from the excess of the purchase price over the fair value of net tangible and identifiable intangible assets acquired.
|
|
(d) To reflect the estimated fair value of identifiable intangible assets acquired in the acquisition net of intangible assets not acquired.
|
|
(e) Represents the secured subordinated promissory note of $606,064 issued in connection with the acquisition.
|
|
(f) To reflect the common stock issued as consideration in the acquisition of Mobile Visions, Inc.
|
|
(g) Represents the elimination of depreciation and amortization expense of $3,089 and $2,375, respectively, within the Mobile Visions, Inc. historical financial statements for the year ended December 31, 2010.
|
|
(h) Represents the amortization of $221,200, related to the fair value of amortizable identifiable intangible assets acquired in the transaction, as if the acquisition had been completed on January 1, 2010.
(i) Represents the elimination of interest expense of $4,000, within Mobile Visions, Inc. historical financial statement for the year ended December 31, 2010.
(j) Represents interest expense as if the notes payable issued in the transaction were issued January 1, 2010.
(k) To reflect the issuance of 1,000,000 shares of common stock on the date of acquisition (See Note 3).
|
Note 3. Pro Forma Net Loss Per Share
The pro forma basic and diluted net loss per share are based on the number shares of the Company’s’ common stock issued and outstanding during the period, and assumes the 1,000,000 shares of common stock issued in the acquisition were issued as of January 1, 2010.