Form: 8-K/A

Current report filing

May 23, 2014

Exhibit 99.2

SmartReceipt, Inc
 
Mobivity Holdings Corp.
Unaudited Pro Forma Condensed Consolidated Financial Statements

On March 12, 2014, Mobivity Holdings Corp. (the “Company”) completed its acquisition of substantially all of the assets of SmartReceipt, Inc (“SmartReceipt”). 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 December 31, 2013, and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2013, are presented herein. The unaudited pro forma condensed consolidated balance sheet was prepared using the historical balance sheets of the Company and SmartReceipt as of December 31, 2013. The unaudited pro forma condensed consolidated statements of operations were prepared using the historical statements of operations of the Company and SmartReceipt for the year ended December 31, 2013.

The unaudited pro forma condensed consolidated balance sheet gives effect to the acquisition as if it had been completed on January 1, 2013, and consolidates the audited balance sheets of the Company and SmartReceipt. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2013 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 SmartReceipt 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, 2013, and SmartReceipt’s financial statements presented herein.

 
 

 


Mobivity Holdings Corp.
 
Unaudited Pro Forma Condensed Consolidated Balance Sheets
 
As of December 31, 2013
 
                           
   
Mobivity
   
SmartReceipt
   
Pro forma adjustments
     
Pro forma combined
 
ASSETS
                         
Current assets
                         
Cash
  $ 2,572,685     $ 96,921     $ (96,921 )
(a)
  $ 2,572,685  
                      (2,368,019 )
(b)
    (2,368,019 )
                                   
Accounts receivable, net of allowance for doubtful accounts
    280,667       124,318       -         404,985  
Other current assets
    140,114       5,383       (5,383 )
(a)
    140,114  
Total current assets
    2,993,466       226,622       (2,470,323 )       749,765  
                                   
Goodwill
    3,108,964       -       2,890,801  
(b)
    5,999,765  
Intangible assets, net
    935,316       -       2,446,000  
(b)
    3,381,316  
Other assets
    63,944       9,336       -         73,280  
       TOTAL ASSETS
  $ 7,101,690     $ 235,958     $ 2,866,478       $ 10,204,126  
                                   
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                 
Current liabilities
                                 
Accounts payable
  $ 543,648     $ 359,292     $ (359,292 )
(a)
  $ 543,648  
Accrued interest
    16,943       478       (478 )
(a)
    16,943  
Accrued and deferred personnel compensation
    191,041       59,699       (59,699 )
(a)
    191,041  
Deferred revenue and customer deposits
    136,523       194,506       -         331,029  
Notes payable
    20,000       343,065       (343,065 )
(a)
    20,000  
Derivative liabilities
    106,176       -       -         106,176  
Other current liabilities
    36,372       292,690       (292,690 )
(a)
    36,372  
Earn-out payable
    34,755       -       -         34,755  
Total current liabilities
    1,085,458       1,249,730       (1,055,224 )       1,279,964  
                                   
Non-current liabilities
                                 
    Earn-out payable
    24,245       -       2,273,000  
(b)
    2,297,245  
Total non-current liabilities
    24,245       -       2,273,000         2,297,245  
Total liabilities
    1,109,703       1,249,730       1,217,776         3,577,209  
                                   
Commitments and Contingencies (See Note 9)
                                 
                                   
Stockholders' equity (deficit)
                                 
 
                                 
     Common stock
    16,320       134       505  
(b)
    16,959  
     Preferred stock
    -       36,109       -         36,109  
     Equity payable
    108,170       -       -         108,170  
     Additional paid-in capital
    54,452,697       14,101,326       672,000  
(b)
    69,226,023  
     Accumulated deficit
    (48,585,200 )     (15,151,341 )     976,197  
(a)
    (62,760,344 )
Total stockholders' equity (deficit)
    5,991,987       (1,013,772 )     1,648,702         6,626,917  
       TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 7,101,690     $ 235,958     $ 2,866,478       $ 10,204,126  

 
 

 
 
                         
Mobivity Holdings Corp.
 
Unaudited Pro Forma Condensed Consolidated Statement of Operations
 
For the year ended December 31, 2013
 
                         
   
Mobivity
   
SR
   
Pro forma adjustments
   
Pro forma combined
 
Revenues
                       
Revenues
  $ 4,093,667     $ 832,960     $ -     $ 4,926,627  
Cost of revenues
    1,122,037       74,011       -       1,196,048  
Gross margin
    2,971,630       758,949       -       3,730,579  
                                 
Operating expenses
                               
General and administrative
    3,416,850       221,515       -       3,638,365  
Sales and marketing
    3,469,383       474,674       -       3,944,057  
Engineering, research, and development
    824,653       886,059       -       1,710,712  
Depreciation and amortization
    270,579       4,902       -       275,481  
Goodwill impairment
    1,066,068       -       -       1,066,068  
Intangible asset impairment
    644,170       -       -       644,170  
Total operating expenses
    9,691,703       1,587,150       -       11,278,853  
                                 
Loss from operations
    (6,720,073 )     (828,201 )     -       (7,548,274 )
                                 
Other income/(expense)
                               
Interest income
    747       -       -       747  
Interest expense
    (6,348,186 )     (797,240 )     -       (7,145,426 )
Change in fair value of derivative liabilities
    (3,766,231 )     235,690       -       (3,530,541 )
Gain on Debt Extinguishment
    103,177       -               103,177  
Gain on adjustment in contingent consideration
    (28,465 )     -       -       (28,465 )
Total other income/(expense)
    (10,038,958 )     (561,550 )     -       (10,600,508 )
                                 
Loss before income taxes
    (16,759,031 )     (1,389,751 )     -       (18,148,782 )
                                 
Income tax expense
    -       -       -       -  
                                 
Net loss
  $ (16,759,031 )   $ (1,389,751 )   $ -     $ (18,148,782 )
                                 
Net loss per share - basic and diluted
  $ (1.58 )                   $ (1.63 )
                                 
Weighted average number of shares during the period - basic and diluted
    10,612,007                       11,116,891  
 
 
 

 

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 year ended December 31, 2013 give effect to the acquisition of substantially all of the assets of SmartReceipt, Inc (“SmartReceipt”) as if the transaction had been completed on January 1, 2013. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2013 gives effect to the acquisition of substantially all of the assets of SmartReceipt as if the transaction had occurred on January 1, 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 SmartReceipt. 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, 2013, and SmartReceipt’s financial statements presented herein.

Note 2.                      Purchase Price Allocation

The unaudited pro forma condensed consolidated financial statements reflect a purchase price of $5,313,524. Pursuant to the Asset Purchase Agreement, the Company acquired all of the assets of SmartReceipt in exchange for:
 
·  
the Company’s payment at closing of $2.212 million of cash, net of a $150,000 loan made by the Company to SmartReceipt in January 2014;

·  
the Company’s issuance of 504,884 shares of its $0.001 par value common stock; and

·  
The Company’s earn-out payment of 200% of the “eligible revenue” of the Company over the 12 month period following the close of the transaction (“earn-out period”).  The “eligible revenue” will consist of: 100% of Company revenue derived during the earn out period from the sale of SmartReceipt products and services to certain SmartReceipt clients as of the close (the “designated SmartReceipt clients”); plus 50% of Company revenue derived during the earn out period from the sale of Company products and services to the designated SmartReceipt clients, plus 50% of the Company revenue derived during the earn out period from the sale of SmartReceipt products and services to Company clients who are not designated SmartReceipt clients.  The earn-out payment will be payable in common shares of the Company (valued at the Closing VWAP) no later than the 90th day following the end of the earn-out period.  For purposes of the foregoing, the “Closing VWAP” means the volume weighted average trading price of the Company’s common stock for the 90 trading days preceding the initial close of the transactions under the Asset Purchase Agreement.

Pursuant to the Asset Purchase Agreement, SmartReceipt has agreed that 50% of the shares issuable to SmartReceipt or its shareholders at the initial closing will be held back by the Company for a period of 12 months and will be subject to cancellation based on indemnification claims of the Company.


 
 

 

The allocation of the purchase price to assets and liabilities based upon fair value determinations was as follows:

Accounts receivable, net
  $
161,664
 
Other assets
   
6,620
 
Customer relationships
   
2,010,000
 
Developed technology
   
260,000
 
Trade name
   
176,000
 
Goodwill
   
2,890,801
 
  Total assets acquired
   
5,505,085
 
Liabilities assumed
   
(191,561
)
  Net assets acquired
 
$
5,313,524
 
 
Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Customer relationships are being amortized on a straight-line basis over five years. Developed technology is being amortized on a straight-line basis over ten years. The trade name agreement is being amortized on a straight-line basis over ten years.
 
Note 3.                      Pro Forma Adjustments
 
Pro Forma Adjustments

The following pro forma adjustments are based upon the value of the tangible and intangible assets acquired as determined by an independent valuation firm.

(a)  
Represents the elimination of SmartReceipt’s assets, liabilities and deficit not acquired in the transaction.
(b)  
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 December 31, 2013.