EXHIBIT 99.2
BROADVIEW MEDIA, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA COMBINED FINANCIAL STATEMENTS
On July 1, 2005, Broadview Media, Inc., ( the "Company" or "Broadview") entered
into a Stock Exchange Agreement (the "Exchange Agreement") among the Company, C
Square Educational Enterprises ("C Square"), which is a Utah corporation doing
business as Utah Career College("UCC") , a for-profit post-secondary
institution, in West Jordan, Utah, Xxxxx X. Xxxxx ("Xxxxx"), Xxxxx X. Xxxx
("Xxxx") and two trusts established by Xxxxxx X. Xxxxx (the "Xxxxx Trusts").
Messrs. Xxxxx and Xxxx and the Xxxxx Trusts (collectively, the "Sellers") were
the owners of 100% of the issued and outstanding common stock of C Square.
Pursuant to the Exchange Agreement on July 1, 2005, Sellers transferred all of
their shares of C Square common stock to the Company in exchange for five
million shares of the Company's common stock. Xx. Xxxxx is a major stockholder,
director, Chairman and Chief Executive Officer of the Company, and he also was
the majority shareholder, and a director and officer of C Square.
In accordance with Financial Accounting Standards Board, Statement of Financial
Accounting Standards No. 141, "Business Combinations," the acquisition of C
Square has been accounted for as a merger of an entity under common control.
Accordingly, the assets and liabilities acquired attributable to the controlling
interest are transferred at carrying value. A portion of the purchase price has
been allocated to assets and liabilities assumed of the minority interests based
on fair values on the acquisition date. There being no identifiable intangible
assets, the excess of the net assets acquired and the purchase price of the
minority interests was allocated to goodwill. Goodwill will be reviewed annually
for impairment in accordance with Statement of Financial Accounting Standards
No. 142. The allocation of the aggregate purchase price reflected in the Pro
Forma Financial Information is preliminary. The final allocation of the purchase
price is subject to change. However, that allocation is not expected to differ
materially from the preliminary allocation.
The following unaudited Pro Forma Combined Balance Sheet is derived by combining
the balance sheets of Broadview and C Square as of June 30, 2005, and assumes
the merger took place as of June 30, 2005. The following unaudited Pro Forma
Combined Statement of Operations for the three months ended June 30, 2005 is
derived from the Statement of Operations of Broadview for the quarter ended June
30, 2005, combined with the Statement of Operations of C Square for the quarter
ended June 30, 2005. The unaudited Pro Forma Combined Statement of Operations
for the fiscal year ended March 31, 2005 is derived from combining Broadview's
Statement of Operations for the fiscal year ended March 31, 2005 with the
unaudited Statement of Operations of C Square for the twelve months ended March
31, 2005, to reflect the merger of C Square as if it had occurred at April 1,
2004.
The unaudited Pro Forma Combined Balance Sheet and Statements of Operations
should be read in conjunction with the historical financial statements of
Broadview Media and C Square and the related notes thereto. The unaudited Pro
Forma Combined Statements of Operations are not necessarily indicative of the
results of operations that may have actually occurred had the acquisition
occurred on the dates specified, or of the future results of the combined
companies. The pro forma adjustments are based on available information and
certain adjustments that the Company believes are reasonable.
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EXHIBIT 99.2
BROADVIEW MEDIA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 2005
BROADVIEW PRO FORMA PRO FORMA
MEDIA C SQUARE ADJUSTMENTS COMBINED
----------- ------------ ------------ -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 72,528 $ 712,052 $ -- $ 784,580
Contract and trade receivables 435,574 208,833 -- 644,407
Estimate revenue in excess of xxxxxxxx on
uncompleted contracts 514,994 -- -- 514,994
Inventory -- 191,307 -- 191,307
Prepaid expenses 147,025 23,487 -- 170,512
----------- ------------ ------------ ------------
TOTAL CURRENT ASSETS 1,170,121 1,135,679 2,305,800
PROPERTY AND EQUIPMENT, NET 424,751 503,765 16,131 2 944,647
DEPOSITS 53,828 -- -- 53,828
UCC ACQUISITION FEES 49,928 -- (49,928) 3 --
GOODWILL -- -- 622,016 1,3 622,016
----------- ------------ ------------ ------------
$ 1,698,628 $ 1,639,444 $ 588,219 $ 3,926,291
=========== ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term and short-term debt $ 197,819 $ -- $ -- $ 197,819
Student credit balances -- 130,534 130,534
Accounts payable 133,372 401,414 -- 534,786
Commissions, salaries, and withholdings payable 117,536 -- -- 117,536
Accrued expenses 36,538 -- -- 36,538
Deferred gain from sale of building 16,232 -- -- 16,232
----------- ------------ ------------ ------------
TOTAL CURRENT LIABILITIES 501,497 531,948 -- 1,033,445
----------- ------------ ------------ ------------
LONG TERM DEBT, less current maturities 832,826 -- -- 832,826
----------- ------------ ------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock 5,000 -- -- 5,000
Common stock 27,207 70,336 (20,336) 1,4 77,207
Additional paid-in capital 2,258,497 258,338 857,194 1,4 3,374,029
Retained earnings (accumulated deficit) (1,926,399) 778,822 (248,639) 1,4 (1,396,216)
----------- ------------ ------------ ------------
364,305 1,107,496 588,219 2,060,020
----------- ------------ ------------ ------------
$ 1,698,628 $ 1,639,444 $ 588,219 $ 3,926,291
=========== ============ ============ ============
See notes to unaudited proforma combined financial statements.
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EXHIBIT 99.2
BROADVIEW MEDIA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2005
BROADVIEW PRO FORMA PRO FORMA
MEDIA C SQUARE ADJUSTMENTS COMBINED
----------- ----------- ------------- ------------
REVENUES $ 708,032 $ 1,637,014 $ -- $ 2,345,046
COST OF PRODUCTS AND SERVICES SOLD 686,142 -- -- 686,142
----------- ----------- ------------- ------------
GROSS PROFIT 21,890 1,637,014 1,658,904
OPERATING EXPENSES 297,614 1633,498 -- 1,931,112
----------- ----------- ------------- ------------
OPERATING INCOME (LOSS) (275,724) 3,516 -- (272,208)
----------- ----------- ------------- ------------
OTHER EXPENSE
Interest expense (15,403) -- -- (15,403)
Other expense (106,462) -- -- (106,462)
----------- ----------- ------------- ------------
(121,865) -- -- (121,865)
----------- ----------- ------------- ------------
INCOME (LOSS) BEFORE TAXES (397,589) 3,516 -- (394,073)
INCOME TAX PROVISION -- 1,300 -- 1,300
----------- ----------- ------------- ------------
NET INCOME (LOSS) $ (397,589) $ 2,216 -- $ (395,373)
=========== =========== ============= ============
NET INCOME (LOSS) PER COMMON SHARE -- BASIC AND DILUTED $ (.15) $ (.05)
=========== ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -- BASIC AND
DILUTED 2,720,747 5,000,000 7,720,747
See notes to unaudited proforma combined financial statements.
3
EXHIBIT 99.2
BROADVIEW MEDIA, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 2005
BROADVIEW PRO FORMA PRO FORMA
MEDIA C SQUARE ADJUSTMENTS COMBINED
------------- ------------- ------------- -------------
REVENUES $ 3,347,568 $ 5,893,394 $ -- $ 9,240,962
COST OF PRODUCTS AND SERVICES SOLD 2,923,660 -- -- 2,923,660
------------- ------------- ------------- -------------
GROSS PROFIT 423,908 5,893,394 -- 6,317,302
OPERATING EXPENSES 1,120,986 5,463,419 -- 6,584,405
------------- ------------- ------------- -------------
OPERATING INCOME (LOSS) (697,078) 429,975 -- (267,103)
------------- ------------- ------------- -------------
OTHER INCOME (EXPENSE)
Interest expense (60,475) -- -- (60,475)
Interest income 196 -- -- 196
------------- ------------- ------------- -------------
(60,279) -- -- (60,279)
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE TAXES (757,357) 429,975 -- (327,382)
INCOME TAX PROVISION -- 207,586 -- 207,586
------------- ------------- ------------- -------------
NET INCOME (LOSS) $ (757,357) $ 222,389 $ -- $ (534,968)
============= ============= ============= =============
NET INCOME (LOSS) PER COMMON SHARE -- BASIC AND DILUTED $ (.32) $ (.07)
============= =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -- BASIC AND
DILUTED 2,345,281 5,000,000 7,345,281
See notes to unaudited proforma combined financial statements.
4
EXHIBIT 99.2
Broadview Media, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Combined Financial Statements
1. The issuance purchase consideration of 5,000,000 common shares estimated
at $.59 per share based on third party valuations and management's
estimate, adjusted to reflect goodwill on minority interest of $572,088.
2. Adjustment to increase the C Square property and equipment balance to
reflect the $16,131 difference between the minority interest's book value
and the estimated fair market value as of the date of merger.
3. UCC acquisition fees of $49,928 attributable to the minority interest
adjusted to goodwill.
4. Adjustment of combined common shares to actual outstanding and retained
earnings for the minority interest acquired.
For purposes of the Pro Forma Statements of Operations, depreciation on
the increase in C Square property and equipment to reflect fair value
attributable to the minority interest is deemed immaterial
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