UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
EXHIBIT 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Sports Media Entertainment Corp. Merger
On January 9, 2015, Multimedia Platforms, Inc. (formerly Sports Media Entertainment Corp.) (the “Company”, “Registrant” and “Legal Acquirer”) entered into a Share Exchange Agreement (the “Merger”), between and among the Company and Multimedia Platforms, LLC, a Florida Limited Liability Corporation (“Accounting Acquirer”), all the members of MMP LLC (the "Members"), Xxxxxxxx Holdings, LLC and Amalfi Coast Capital (collectively, the "Debt Holders"). Pursuant to the Merger, the Registrant was (i) to issue to the Debt Holders a total of 4,000,000 shares of Series B Convertible Preferred stock in exchange for all the indebtedness of the Company totaling approximately $688,138 as of December 31, 2014; issue (ii) 21,320,832 shares of restricted common stock and (iii) 34,390,199 shares of Series A Convertible Preferred stock (collectively, the “Merger Shares”) to the Members in exchange for 100% of the Members interest in MMP LLC. The Merger Shares were adjusted such that 30,748,969 shares of restricted common stock and 27,212,694 shares of Series A Convertible Preferred stock and 4,000,000 shares of Series B Convertible Preferred stock were ultimately issued. The share issuances represent approximately 97.6% of the total issued and outstanding shares of preferred and common stock of the Registrant post-closing. As a result, the Company (i) became the 100% parent of MMP LLC; (ii) assumed the operations of MMP LLC; (iii) changed its name from Sports Media Entertainment Corp. to Multimedia Platforms, Inc.; and (iv) experienced a change in control.
Columbia Funmap, Inc. Acquisition
On February 27, 2015, the Company entered into a Securities Purchase Agreement with, Columbia Funmap, Inc., a New Jersey Corporation, and Xxxx X. Xxxx, the President of FUNMAP for the purchase of 100% of common stock issued and outstanding of FUNMAP (the “Acquisition”).
The table below summarizes the preliminary estimates of fair value of the FUNMAP assets acquired and liabilities assumed as of the acquisition date. The net enterprise value of FUNMAP was valued at $3,479,834 which represented both the restricted common stock and notes issued by the Company for its 100% interest. Upon closing, the final purchase price consisted of the assumption of $93,968 of liabilities, issuance of 2,160,000 shares of restricted common stock to Xx. Xxxx, repayment of related party debt of $87,888 by issuing 92,250 shares of restricted common stock to Xx. Xxxx, and note to Xx. Xxxx totaling $10,000. Additionally, the Company entered into a consulting agreement with Xx. Xxxx under which Xx. Xxxx will act as a national sales manager. The agreement has a term of 36 months, provides compensation of $5,000 per month plus 15% of cash collected for print sales sold directly by Consultant; plus a 3% override on print sales of FunMaps™; plus 20% of collected online sales made by Consultant, personally.
|
1
|
The preliminary purchase price allocation is as follows:
| The allocation of the purchase price, is as follows: | |||||||||||
| Net tangible assets acquired and liabilities assumed: | |||||||||||
| Cash and cash equivalents | $ | 17,240 | |||||||||
| Accounts receivable | 64,382 | ||||||||||
| Accounts payable | (22,193 | ) | |||||||||
| Loans | (3,000 | ) | |||||||||
| Credit cards | (6,830 | ) | |||||||||
| Line of credit | (61,945 | ) | |||||||||
| Subtotal Funmap net liabilities assumed | (12,346 | ) | |||||||||
| Amount of purchase price allocated to goodwill | 3,479,834 | ||||||||||
| Net assets acquired | $ | 3,467,488 | |||||||||
| Consideration paid: | |||||||||||
| 2,160,000 shares of common stock | 1) | $ | 3,369,600 | ||||||||
| 92,250 shares of common stock issued for related party loans | 87,888 | ||||||||||
| Issuance of note | 10,000 | ||||||||||
| Total consideration | $ | 3,467,488 | |||||||||
1) The fair value of the 2,160,000 ordinary shares issued as part of the consideration paid for FUNMAP was determined on the basis of the closing price of the Company's ordinary shares of $1.84 on the acquisition date discounted 15% for lack of marketability (DLOM).
The following unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the of MMP, LLC Merger, and the Columbia Funmap, Inc. Acquisition, and the following related transactions: the issuance of preferred and restricted common stock and the repayments of notes payable (the “Related Transactions”). The unaudited pro forma condensed consolidated balance sheet as of December 31, 2014 gives effect to the MMP LLC reverse merger and Columbia Funmap, Inc. Acquisition and Related Transactions as if they had occurred on January 1, 2014. The unaudited pro forma condensed consolidated balance sheet is derived from the audited historical financial statements of Sports Media Entertainment Corp., MMP, LLC, and Columbia Funmap, Inc. as of December 31, 2014.
The following unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2014 gives effect to the MMP LLC Merger, and the Columbia Funmap, Inc. Acquisition and Related Transactions as if they had occurred on January 1, 2014. The unaudited pro forma condensed consolidated statement of operations is derived from the audited historical financial statements of Sports Media Entertainment Corp., MMP, LLC, and Columbia Funmap, Inc. as of and for the year ended December 31, 2014.
|
2
|
The MMP, LLC Merger was accounted for as a reverse merger. Under reverse merger accounting, MMP LLC is deemed the acquirer for accounting purposes. Consequently, the assets and liabilities and the historical operations of MMP LLC prior to the Merger are reflected in the financial statements and have been recorded at the historical cost basis of MMP LLC. The balance sheet includes the assets and liabilities of both the Sports Media Entertainment Corp. and MMP LLC. However, the equity of MMP LLC is presented as the equity of the combined enterprise and the capital account of MMP LLC is adjusted to reflect the par value of the outstanding stock of the Legal Acquirer after giving effect to the number of shares issued in the Merger (27,212,694 Series A Preferred, 4,000,000 Series B Preferred and 30,748,969 restricted common shares). Shares retained by the Legal Acquirer (1,502,477 common shares) are reflected as an issuance as of the reverse merger date (February 2, 2015) for the historical amount of the net liabilities of the Company.
The Columbia Funmap, Inc. acquisition was accounted for under the acquisition method of accounting. Under the acquisition method of accounting, the total estimated purchase price, calculated as described above, to the unaudited pro forma condensed consolidated financial statements, is allocated to the tangible and intangible assets acquired and liabilities assumed in connection with the acquisition, based on their estimated fair values as of the effective date of the acquisition. The preliminary allocation of the purchase price was based upon management’s preliminary valuation of the fair value of assets acquired and liabilities assumed and such estimates and assumptions are subject to change.
The unaudited pro forma condensed consolidated financial statements do not include any adjustments regarding liabilities incurred or cost savings achieved resulting from the integration of the companies, as management is in the process of assessing what, if any, future actions are necessary. The unaudited pro forma condensed consolidated financial statements are not intended to represent or be indicative of the consolidated results of operations or financial condition of the Company that would have been reported had the Merger and Acquisition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with (i) the historical audited and unaudited financial statements and related notes of the Company and the sections entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed on March 31, 2015, and (ii) the audited historical financial statements and related notes of MMP, LLC as of December 31, 2014 and 2013 and for the year then ended, which were previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K/A, filed on May 22, 2015.
The unaudited pro forma condensed results of operations for the years ended December 31, 2014 is as follows:
|
3
|
Multimedia Platforms, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
For the Year Ended December 31, 2014
| Multimedia | ||||||||||||||||||
| Platforms, Inc. | ||||||||||||||||||
| Multimedia Platforms, LLC Actual | (fka Sports Media | Columbia Funmap, Inc. Actual | ||||||||||||||||
| Entertainment, Inc.) | ||||||||||||||||||
| Actual | Pro Forma | |||||||||||||||||
| Income | ||||||||||||||||||
| Net Revenue | $ | 642,586 | $ | 9,543 | $ | 479,023 | $ | 1,131,152 | ||||||||||
| Cost of sales | 355,841 | - | 162,239 | 518,080 | ||||||||||||||
| Gross profit | 286,745 | 9,543 | 316,784 | 613,072 | ||||||||||||||
| Operating expenses | ||||||||||||||||||
| General and administrative | 484,932 | 617,782 | 279,270 | 1,381,984 | ||||||||||||||
| Sales and marketing | 31,373 | 19,830 | 60,311 | 111,514 | ||||||||||||||
| Research and development | - | 2,319 | - | 2,319 | ||||||||||||||
| Total operating expenses | 516,305 | 639,931 | 339,581 | 1,495,817 | ||||||||||||||
| Loss from operations | (229,560 | ) | (630,388 | ) | (22,797 | ) | (882,745 | ) | ||||||||||
| Other Income and (Expense) | ||||||||||||||||||
| Interest expense | - | (42,344 | ) | - | (42,344 | ) | ||||||||||||
| Interest expense - accretion of debt discount | - | (29,402 | ) | - | (29,402 | ) | ||||||||||||
| Total non-operating expense | - | (71,746 | ) | - | (71,746 | ) | ||||||||||||
| Earnings before taxes | (229,560 | ) | (702,134 | ) | (22,797 | ) | (954,491 | ) | ||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| Net loss | $ | (229,560 | ) | $ | (702,134 | ) | $ | (22,797 | ) | $ | (954,491 | ) | ||||||
| Shares outstanding: | ||||||||||||||||||
| Series A Preferred stock | 27,212,694 | |||||||||||||||||
| Series B Preferred stock | 4,000,000 | |||||||||||||||||
| Common stock outstanding | 30,748,969 | 30,748,969 | ||||||||||||||||
| Common stock issued in Merger | 1,502,477 | 1,502,477 | ||||||||||||||||
| Common stock issued in Acquisition of Funmap | 2,252,250 | 2,252,250 | ||||||||||||||||
| Total common shares outstanding - basic | 34,503,696 | |||||||||||||||||
| Net income (loss) per common share - basic | $ | (0.028 | ) | |||||||||||||||
|
1) |
Preferred shares issued in the Merger; not included in the calculation of earnings per share because to do so would be antidilutive. |
|
|
|
|
2) |
Ccommon shares issued in the Merger; not included in the calculation of earnings per share because to do so would be antidilutive. |
|
|
|
|
3) |
Registrant's pre merger shares outstanding, or the shares of the Legal Acquirer prior to the Merger. |
|
|
|
|
4) |
Shares issued for the acquisiton of Columbia Funmap. Inc. |
|
4
|
The unaudited pro forma condensed balance sheet as of December 31, 2014 is as follows:
Multimedia Platforms, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of December 31, 2014
| Multimedia | Pro Forma Adjustments | |||||||||||||||||||||||||||||
| Multimedia | Platforms, Inc.(fka Sports Media |
Columbia | ||||||||||||||||||||||||||||
| Platforms, | Entertainment, | Columbia | SMEC | Funmap, Inc. | ||||||||||||||||||||||||||
| LLC | Inc.) | Funmap, Inc. | Merger | Acquisition | ||||||||||||||||||||||||||
| Actual | Actual | Actual | Adjustments | Adjustments | Pro Forma | |||||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||||||
| Current Assets | ||||||||||||||||||||||||||||||
| Cash | $ | 6,929 | $ | 2,303 |
$ |
- |
$ |
- |
$ |
- | $ | 9,232 | ||||||||||||||||||
| Accounts receivable | 38,866 | - | 158,146 | - | - | 197,012 | ||||||||||||||||||||||||
| Other current assets | - | 1,321,081 | 52,287 | - | - | 1,373,368 | ||||||||||||||||||||||||
| Total current assets | 45,795 | 1,323,384 | 210,433 | - | - | 1,579,612 | ||||||||||||||||||||||||
| Property and equipment, net | - | - | 1,901 | - | (1,901 | ) | 8) | - | ||||||||||||||||||||||
| Goodwill | 3,457,488 | 3,484,635 | ||||||||||||||||||||||||||||
| 103,134 | 7) | |||||||||||||||||||||||||||||
| 1,901 | 8) | |||||||||||||||||||||||||||||
| (87,888 | ) | 9) | ||||||||||||||||||||||||||||
| 10,000 | 10) | |||||||||||||||||||||||||||||
| Total assets | $ | 45,795 | $ | 1,323,384 | $ | 212,334 |
$ |
- | $ | 3,482,734 | $ | 5,064,247 | ||||||||||||||||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||||||||||
| Bank overdraft |
$ |
- |
$ |
- | $ | 7,349 |
$ |
- |
$ |
- | $ | 7,349 | ||||||||||||||||||
| Accounts payable & accrued expenses | 104,161 | 107,310 | 93,642 | - | - | 305,113 | ||||||||||||||||||||||||
| Deferred revenue | - | 1,889 | - | - | - | 1,889 | ||||||||||||||||||||||||
| Line of credit | - | - | 59,262 | - | - | 59,262 | ||||||||||||||||||||||||
| Loan payable - related party | 116,175 | - | 155,215 | - | (87,888 | ) | 9) | 183,502 | ||||||||||||||||||||||
| Due to related parties | 195,575 | - | - | - | 10,000 | 10) | 205,575 | |||||||||||||||||||||||
| Accrued interest payable | - | 140,900 | - | (140,900 | ) | 5) | - | - | ||||||||||||||||||||||
| Promissory notes | - | 364,727 | - | (364,727 | ) | 5) | - | - | ||||||||||||||||||||||
| Convertible promissory notes | - | 182,511 | - | (182,511 | ) | 5) | - | - | ||||||||||||||||||||||
| Total Current Liabilities | 415,911 | 797,337 | 315,468 | (688,138 | ) | (77,888 | ) | 762,690 | ||||||||||||||||||||||
| Total liabilities | 415,911 | 797,337 | 315,468 | (688,138 | ) | (77,888 | ) | 762,690 | ||||||||||||||||||||||
| Stockholders' Equity (Deficit) | ||||||||||||||||||||||||||||||
| Series A Preferred stock, $0.001 par value | - | - | - | 27,213 | - | 27,213 | ||||||||||||||||||||||||
| Series B Preferred stock, $0.001 par value | - | - | - | 4,000 | 5) | - | 4,000 | |||||||||||||||||||||||
| Common stock, $0.001 par value | - | 1,502 | 2,500 | 30,749 | 6) | (2,500 | ) | 7) | ||||||||||||||||||||||
| - | - | - | - | 2,252 | 11) | 34,503 | ||||||||||||||||||||||||
| Additional-paid-in-capital | - | 4,210,696 | - | (3,059,975 | ) | 5) | 3,455,236 | 11) | 4,605,957 | |||||||||||||||||||||
| Accumulated earnings (deficit) | (370,116 | ) | (3,686,151 | ) | (105,634 | ) | 3,686,151 | 105,634 | 7) | (370,116 | ) | |||||||||||||||||||
| Total stockholders' equity (deficit) | (370,116 | ) | 526,047 | (103,134 | ) | 688,138 | 3,560,622 | 4,301,557 | ||||||||||||||||||||||
| Total liabilities and stockholders' equity (deficit) | $ | 45,795 | $ | 1,323,384 | $ | 212,334 |
$ |
- | $ | 3,482,734 | $ | 5,064,247 | ||||||||||||||||||
|
5) |
All the promissory notes of the Registrant - totaling $688,138 above - were converted as part of the Merger into 4,000,000 shares of Series B Preferred stock. The par value of $0.001, or $4,000 is reflected under Series B Preferred Stock with the remaining $684,138 reflected as additional paid-in-capital. |
|
|
|
|
6) |
We have accounted for the Merger under recapitalization accounting whereby the equity of MMP LLC is presented as the equity of the combined enterprise adjusted to reflect the par value of the outstanding stock of the Registrant after giving effect to the number of existing shares as-if issued in the Merger (1,502,477 common shares). Shares retained by the Registrant (1,502,477 shares) are reflected as an issuance as of the reverse merger date (February 2, 2015) for the historical amount of the net equity of the Registrant. |
|
|
|
|
7) |
To eliminate Columbia Funmap, Inc.’s common stock and retained earnings, in connection with the Columbia Funmap, Inc. Acquisition. |
|
|
|
|
8) |
To record the estimated adjustment of Columbia Funmap, Inc.’s property and equipment’s net book value to fair value of $0 in connection with the purchase of Columbia Funmap, Inc. |
|
|
|
|
9) |
To reflect the conversion of related party debt of $92,250. |
|
|
|
|
10) |
To reflect the issuance of a $10,000 note due to Mr. Xxxx Xxxx in connection with the acquisition of Columbia Funmap, Inc. |
|
|
|
|
11) |
To reflect the issuance of a 2,252,250 shares of restricted common stock issued to Mr. Xxxx Xxxx in connection with the acquisition of Columbia Funmap, Inc. |
5
