PRO FORMA FINANCIAL INFORMATION LISTED IN ITEM 9.01(B)
Published on August 5, 2013
Exhibit 99.2
Mobivity Holdings Corp.
Unaudited Pro Forma Condensed Consolidated Financial Statements
On May 20, 2013, Mobivity Holdings Corp. (the “Company”) completed its acquisition of substantially all of the assets of Front Door Insights LLC (“FDI”). The following unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the completed acquisition, which was accounted for as a purchase.
The unaudited pro forma condensed consolidated balance sheet as of March 31, 2013, and the unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2013 and the year ended December 31, 2012, are presented herein. The unaudited pro forma condensed consolidated balance sheet was prepared using the historical balance sheets of the Company and FDI as of March 31, 2013. The unaudited pro forma condensed consolidated statements of operations were prepared using the historical statements of operations of the Company and FDI for the three months ended March 31, 2013 and for the year ended December 31, 2012.
The unaudited pro forma condensed consolidated balance sheet gives effect to the acquisition as if it had been completed on March 31, 2013, and consolidates the unaudited condensed balance sheets of the Company and FDI. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2013 and for the year ended December 31, 2012 give effect to the acquisition as if it had occurred on the first day of each respective period.
The unaudited pro forma condensed consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed 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 unaudited pro forma condensed consolidated financial statements, and the accompanying notes, are based upon the respective historical consolidated financial statements of the Company and FDI, and should be read in conjunction with the Company’s historical financial statements and related notes, and 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, 2012, and FDI’s financial statements presented herein.
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Mobivity Holdings Corp.
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Unaudited Pro Forma Condensed Consolidated Balance Sheets
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As of March 31, 2013
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Mobivity
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FDI
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Pro forma adjustments
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Pro forma combined
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ASSETS
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Current assets
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Cash
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$ | 44,182 | $ | 15,180 | $ | 100,000 |
(a)
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$ | 49,682 | ||||||||
| 5,500 |
(b)
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| (100,000 | ) |
(b)
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| (15,180 | ) |
(c)
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Other current assets
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496,142 | 32,207 | 27,467 |
(b)
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523,609 | ||||||||||||
| (32,207 | ) |
(c)
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Total current assets
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540,324 | 47,387 | (14,420 | ) | 573,291 | ||||||||||||
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Goodwill
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2,259,624 | - | 1,574,325 |
(b)
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3,833,949 | ||||||||||||
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Intangible assets, net
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412,155 | - | 1,055,000 |
(b)
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1,467,155 | ||||||||||||
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Other assets
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46,055 | - | - | 46,055 | |||||||||||||
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TOTAL ASSETS
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$ | 3,258,158 | $ | 47,387 | $ | 2,614,905 | $ | 5,920,450 | |||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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Current liabilities
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Accounts payable
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$ | 608,114 | $ | 40,702 | $ | 46,219 |
(b)
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$ | 654,333 | ||||||||
| (40,702 | ) |
(c)
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Accrued interest
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429,399 | - | - | 429,399 | |||||||||||||
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Convertible notes payable, net of discount
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4,237,633 | - | 1,400,885 |
(a)
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5,638,518 | ||||||||||||
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Notes payable, net of discount
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171,984 | 202,501 | (202,501 | ) |
(c)
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171,984 | |||||||||||
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Derivative liabilities
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4,194,373 | - | 64,211 |
(a)
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4,258,584 | ||||||||||||
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Other current liabilities
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609,491 | 160,833 | 116,667 |
(b)
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726,158 | ||||||||||||
| (160,833 | ) |
(c)
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Total current liabilities
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10,250,994 | 404,036 | 1,223,946 | 11,878,976 | |||||||||||||
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Commitments and Contingencies
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Stockholders' equity (deficit)
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Common Stock
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23,218 | 7,000 |
(b)
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30,218 | |||||||||||||
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Common stock payable
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1,711,490 | - | 1,711,490 | ||||||||||||||
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Additional paid-in capital
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25,521,840 | 625,877 | 1,027,310 |
(b)
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26,549,150 | ||||||||||||
| (625,877 | ) |
(c)
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Accumulated deficit
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(34,249,384 | ) | (982,526 | ) | 982,526 |
(c)
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(34,249,384 | ) | |||||||||
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Total stockholders' equity (deficit)
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(6,992,836 | ) | (356,649 | ) | 1,390,959 | (5,958,526 | ) | ||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$ | 3,258,158 | $ | 47,387 | $ | 2,614,905 | $ | 5,920,450 | |||||||||
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See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
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Mobivity Holdings Corp.
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Unaudited Pro Forma Condensed Consolidated Statement of Operations
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For the three months ended March 31, 2013
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Mobivity
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FDI
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Pro forma adjustments
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Pro forma combined
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Revenues
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Revenues
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$ | 1,027,993 | $ | 104,084 | $ | - | $ | 1,132,077 | |||||||||
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Cost of revenues
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284,622 | 37,260 | - | 321,882 | |||||||||||||
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Gross margin
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743,371 | 66,824 | - | 810,195 | |||||||||||||
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Operating expenses
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General and administrative
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532,628 | 37,892 | - | 570,520 | |||||||||||||
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Sales and marketing
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362,896 | 3,687 | 1,175,425 |
(e)
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1,542,008 | ||||||||||||
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Engineering, research, and development
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94,055 | 61,414 | - | 155,469 | |||||||||||||
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Depreciation and amortization
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33,813 | - | 44,016 |
(f)
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77,829 | ||||||||||||
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Total operating expenses
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1,023,392 | 102,993 | 1,219,441 | 2,345,826 | |||||||||||||
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Loss from operations
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(280,021 | ) | (36,169 | ) | (1,219,441 | ) | (1,535,631 | ) | |||||||||
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Other income/(expense)
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Interest income
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3 | - | - | 3 | |||||||||||||
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Interest expense
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(1,447,359 | ) | (3,674 | ) | (92,408 | ) |
(d))
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(1,543,441 | ) | ||||||||
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Change in fair value of derivative liabilities
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(1,001,550 | ) | - | - | (1,001,550 | ) | |||||||||||
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Gain on adjustment in contingent consideration
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305,712 | - | - | 305,712 | |||||||||||||
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Total other income/(expense)
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(2,143,194 | ) | (3,674 | ) | (92,408 | ) | (2,239,276 | ) | |||||||||
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Loss before income taxes
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(2,423,215 | ) | (39,843 | ) | (1,311,849 | ) | (3,774,907 | ) | |||||||||
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Income tax expense
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- | - | - | - | |||||||||||||
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Net loss
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$ | (2,423,215 | ) | $ | (39,843 | ) | $ | (1,311,849 | ) | $ | (3,774,907 | ) | |||||
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Net loss per share - basic and diluted
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$ | (0.10 | ) | $ | (0.12 | ) | |||||||||||
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Weighted average number of shares
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during the period - basic and diluted
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23,218,117 | 30,218,117 | |||||||||||||||
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See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
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Mobivity Holdings Corp.
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Unaudited Pro Forma Condensed Consolidated Statement of Operations
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For the year ended December 31, 2012
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Mobivity
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FDI
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Pro forma adjustments
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Pro forma combined
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Revenues
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Revenues
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$ | 4,079,745 | $ | 347,797 | $ | - | $ | 4,427,542 | |||||||||
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Cost of revenues
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1,300,325 | 183,819 | - | 1,484,144 | |||||||||||||
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Gross margin
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2,779,420 | 163,978 | - | 2,943,398 | |||||||||||||
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Operating expenses
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General and administrative
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2,984,531 | 155,568 | - | 3,140,099 | |||||||||||||
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Sales and marketing
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1,562,520 | 45,292 | 1,541,050 |
(e)
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3,148,862 | ||||||||||||
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Engineering, research, and development
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562,459 | 199,953 | - | 762,412 | |||||||||||||
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Depreciation and amortization
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549,151 | - | - | 549,151 | |||||||||||||
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Goodwill impairment
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742,446 | - | - | 742,446 | |||||||||||||
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Intangible asset impairment
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145,396 | - | 178,509 |
(f)
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323,905 | ||||||||||||
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Total operating expenses
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6,546,503 | 400,813 | 1,719,559 | 8,666,875 | |||||||||||||
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Loss from operations
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(3,767,083 | ) | (236,835 | ) | (1,719,559 | ) | (5,723,477 | ) | |||||||||
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Other income/(expense)
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Interest income
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2,833 | - | - | 2,833 | |||||||||||||
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Interest expense
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(4,559,564 | ) | (4,105 | ) | (234,115 | ) |
(d)
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(4,797,784 | ) | ||||||||
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Change in fair value of derivative liabilities
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359,530 | - | - | 359,530 | |||||||||||||
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Gain on adjustment in contingent consideration
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625,357 | - | - | 625,357 | |||||||||||||
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Total other income/(expense)
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(3,571,844 | ) | (4,105 | ) | (234,115 | ) | (3,810,064 | ) | |||||||||
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Loss before income taxes
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(7,338,927 | ) | (240,940 | ) | (1,953,674 | ) | (9,533,541 | ) | |||||||||
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Income tax expense
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- | - | - | - | |||||||||||||
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Net loss
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$ | (7,338,927 | ) | $ | (240,940 | ) | $ | (1,953,674 | ) | $ | (9,533,541 | ) | |||||
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Net loss per share - basic and diluted
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$ | (0.32 | ) | $ | (0.32 | ) | |||||||||||
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Weighted average number of shares
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during the period - basic and diluted
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23,069,669 | 30,069,669 | |||||||||||||||
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See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
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Mobivity Holdings Corp.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note 1. Basis of Presentation
The unaudited pro forma condensed consolidated statements of operations of Mobivity Holdings Corp. (the “Company”) for the three months ended March 31, 2013 and the year ended December 31, 2012 give effect to the acquisition of substantially all of the assets of Front Door Insights LLC (“FDI”) as if the transaction had been completed on the first day of each respective period. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2013 gives effect to the acquisition of substantially all of the assets of FDI as if the transaction had occurred on March 31, 2013.
The unaudited pro forma condensed consolidated statements of operations and unaudited pro forma condensed consolidated balance sheet were derived by adjusting the Company’s historical financial statements for the acquisition of substantially all of the assets of FDI. The unaudited pro forma condensed consolidated balance sheet and unaudited pro forma condensed consolidated statement of operations are provided for informational purposes only and should not be construed to be indicative of the Company’s financial position or results of operations had the transaction been consummated on the dates indicated and do not project the Company’s financial position or results of operations for any future period or date.
The unaudited pro forma condensed consolidated balance sheet and unaudited condensed consolidated statements of operations and accompanying notes should be read in conjunction with the Company’s historical financial statements and related notes, and 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, 2012, and FDI’s financial statements presented herein.
Note 2. Purchase Price Allocation
The unaudited pro forma condensed consolidated financial statements reflect a purchase price of $2,499,406. The Company paid $100,000 of the purchase price in cash, paid $1,400,000 of the purchase price with the issuance of a non-interest bearing note payable, and paid the remainder of the purchase price through the issuance of 7,000,000 shares of the Company’s common stock valued at $0.17, which was the closing price per share of such common stock on May 20, 2013.
The purchase price allocation as of March 31, 2013 is as follows:
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Cash
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$ | 5,500 | ||
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Accounts receivable
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27,467 | |||
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Contracts
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813,000 | |||
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Customer relationships
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22,000 | |||
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Developed technology
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96,000 | |||
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Non-compete agreement
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124,000 | |||
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Goodwill
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1,574,325 | |||
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Total assets acquired
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2,662,292 | |||
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Liabilities assumed
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(162,886 | ) | ||
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Net assets acquired
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$ | 2,499,406 |
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Contracts are being amortized on a straight-line basis over seven years. Customer relationships are being amortized on a straight-line basis over twelve years. Developed technology is being amortized on a straight-line basis over five years. The non-compete agreement is being amortized on a straight-line basis over three years.
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Note 3. Pro Forma Adjustments
The following pro forma adjustments are based upon the value of the tangible and intangible assets acquired as determined by an outside, independent valuation firm.
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(a)
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Represents additional financing obtained by the Company to complete the acquisition transaction.
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(b)
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Represents the purchase price and allocation of the purchase price to the assets and liabilities acquired in the transaction, as if the transaction had occurred March 31, 2013.
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(c)
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Represents the elimination of FDI’s assets, liabilities and deficit not acquired in the transaction.
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(d)
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Represents interest expense and note discount amortization for notes payable issued in conjunction with the transaction.
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(e)
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Represents salary, bonus and stock based compensation for headcount added in conjunction with the transaction.
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(f)
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Represents amortization of intangible assets for the period.
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