Wire One Technologies, Inc. and Advanced Acoustical Concepts, Inc. Pro Forma Financial Information Related to Asset Acquisition

Contract Categories: Mergers & Acquisitions › Plan of Reorganization Agreements
Summary

Wire One Technologies, Inc. acquired the assets and certain liabilities of Advanced Acoustical Concepts, Inc. (AAC) in July 2001 for $793,750 in company stock. This document presents unaudited pro forma financial statements combining both companies’ financials as if the acquisition had occurred earlier, showing the impact on balance sheets and operations. The statements are based on preliminary estimates and may change after a full review. The information is intended to help stakeholders understand the financial effects of the acquisition but does not represent actual or future results.

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EX-2.3 5 d27071_ex2-3.txt PRO-FORMA FINANCIAL INFORMATION Exhibit 2.3 Wire One Technologies, Inc Unaudited Pro Forma Financial Information In July, 2001, Wire One Technologies, Inc. ("Wire One") acquired the assets and certain liabilities of Advanced Acoustical Concepts, Inc. ("AAC"), an Ohio-based designer of audiovisual conferencing systems. The total consideration was $793,750, which was paid in the form of Company common stock valued at the time of acquisition. On the date of the acquisition, the assets and certain liabilities of AAC were recorded at their fair values, with the excess purchase consideration allocated to goodwill. The following unaudited pro forma combined financial statements include the historical financial statements of Wire One and AAC as of and for the six months ended June 30, 2001 and for the year ended December 31, 2000. The unaudited pro forma combined financial statements give effect to the acquisition as if it had occurred on June 30, 2001 for purposes of the unaudited pro forma combined balance sheet, and on January 1, 2000 for purposes of the unaudited pro forma combined statement of operations. The pro forma adjustments are based on preliminary estimates and certain assumptions that Wire One and AAC believe are reasonable under the circumstances. With respect to the acquisition, the preliminary allocation of the purchase price to assets and liabilities of AAC reflects the assumption that assets and liabilities are carried at historical amounts which approximate fair market value. The actual allocation of the purchase price may differ from that reflected in the unaudited pro forma financial statements after a more extensive review of the fair market values of the assets and liabilities has been completed as of the acquisition date. When such a review is completed, a portion of the purchase price may be ascribed to intangible assets (other than goodwill) that have amortization lives as opposed to goodwill, which will not be amortized. Thus, the resulting amortization charges, if any, from that portion of the purchase price ascribed to other intangible assets could be different. Severance, office closings and other exit costs related to or arising from the acquisition were not material. The following unaudited pro forma combined financial statements are based on assumptions and include adjustments as explained in the accompanying notes. These unaudited pro forma combined financial statements are not necessarily indicative of the actual financial results that would have occurred if the transaction described above had been effective on and as of the dates indicated and may not be indicative of operations in future periods or as of future dates. WIRE ONE TECHNOLOGIES, INC. UNAUDITED PRO FORMA COMBINED BALANCE SHEET JUNE 30, 2001
Historical Pro Forma ---------------------------- Pro Forma Combined Wire One AAC Adjustments Company ------------ ------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 983,781 $ 64,270 $ 1,048,051 Accounts receivable-net 30,411,374 726,977 31,138,351 Inventory 10,613,891 413,289 11,027,180 Deferred income taxes 200,000 -- 200,000 Other current assets 1,772,187 118,431 1,890,618 ------------ ------------ ------------ ------------ Total current assets 43,981,233 1,322,967 -- 45,304,200 Furniture, equipment and leasehold improvements-net 9,394,660 362,039 9,756,699 Goodwill-net 37,439,341 -- 2,419,557(1) 39,858,898 Other assets 373,826 4,409 378,235 ------------ ------------ ------------ ------------ Total assets $ 91,189,060 $ 1,689,415 $ 2,419,557 $ 95,298,032 ============ ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loan payable $ 6,878,433 $ -- $ 6,878,433 Accounts payable 12,811,257 2,358,657 15,169,914 Accrued expenses 1,761,427 168,985 1,930,411 Deferred revenue 7,810,096 312,897 8,122,993 Customer deposits 112,958 220,254 333,212 Current portion of long term debt and capital lease obligations 65,063 225,766 290,830 ------------ ------------ ------------ ------------ Total current liabilities 29,439,234 3,286,559 -- 32,725,793 ------------ ------------ ------------ ------------ Capital lease obligations, less current portion -- 28,663 -- 28,663 ------------ ------------ ------------ ------------ Total liabilities 29,439,234 3,315,222 -- 32,754,456 Commitments Stockholders' Equity: Common stock 2,140 50,000 (49,985)(1) 2,155 Additional paid-in capital 86,772,047 143,581 650,154(1) 87,565,782 Accumulated deficit (25,024,361) (1,819,388) 1,819,388(1) (25,024,361) ------------ ------------ ------------ ------------ Total stockholders' equity 61,749,826 (1,625,807) 2,419,557 62,543,576 ------------ ------------ ------------ ------------ Total liabilities and stockholders' equity $ 91,189,060 $ 1,689,415 $ 2,419,557 $ 95,298,032 ============ ============ ============ ============
The accompanying notes are an integral part of these unaudited pro forma financial statements. Wire One Technologies, Inc Unaudited Pro Forma Combined Statement of Operations For The Year Ended December 31, 2000
Historical Pro Forma ----------------------------- Pro Forma Combined Wire One AAC Adjustments Company ------------ ------------ ------------ ------------ Net revenues $ 56,033,239 $ 10,199,099 $ -- $ 66,232,338 Cost of revenues 37,773,624 7,436,456 -- 45,210,080 ------------ ------------ ------------ ------------ Gross margin 18,259,615 2,762,643 -- 21,022,258 ------------ ------------ ------------ ------------ Operating expenses: Selling 14,551,283 2,595,396 -- 17,146,679 General & administrative 4,121,303 917,919 -- 5,039,222 Amortization of goodwill 1,500,857 -- -- 1,500,857 ------------ ------------ ------------ ------------ Total operating expenses 20,173,443 3,513,315 -- 23,686,758 ------------ ------------ ------------ ------------ Loss from operations (1,913,828) (750,672) -- (2,664,500) ------------ ------------ ------------ ------------ Other (income) expense: Net interest (income) expense (236,930) 369,860 -- 132,930 Other 343,792 20,818 -- 364,610 ------------ ------------ ------------ ------------ Total other expenses, net 106,862 390,678 -- 497,540 ------------ ------------ ------------ ------------ Loss before income taxes (2,020,690) (1,141,350) -- (3,162,040) Income tax provision 511,239 -- -- 511,239 ------------ ------------ ------------ ------------ Net loss (2,531,929) (1,141,350) -- (3,673,279) ------------ ------------ ------------ ------------ Deemed dividends on Series A convertible perferred stock 13,723,206 -- -- 13,723,206 ------------ ------------ ------------ ------------ Net loss attributable to common stockholders $(16,255,135) $ (1,141,350) $ -- $(17,396,485) ============ ============ ============ ============ Net loss per share: Basic $ (1.27) $ (1.04) $ -- $ (1.34) ============ ============ ============ ============ Diluted $ (1.27) $ (1.04) $ -- $ (1.34) ============ ============ ============ ============ Weighted average shares outstanding: Basic 12,817,158 1,100,000 (954,571) 12,962,587 ============ ============ ============ ============ Diluted 12,817,158 1,100,000 (954,571) 12,962,587 ============ ============ ============ ============
The accompanying notes are an integral part of these unaudited pro forma financial statements. Wire One Technologies, Inc Unaudited Pro Forma Combined Statement of Operations For The Six Months Ended June 30, 2001
Historical Pro Forma ----------------------------- Pro Forma Combined Wire One AAC Adjustments Company ------------ ------------ ------------ ------------ Net revenues $ 40,707,108 $ 4,287,328 $ -- $ 44,994,436 Cost of revenues 27,810,639 3,157,541 -- 30,968,180 ------------ ------------ ------------ ------------ Gross margin 12,896,469 1,129,787 -- 14,026,256 ------------ ------------ ------------ ------------ Operating expenses: Selling 11,977,120 1,094,129 -- 13,071,249 General & administrative 3,159,693 389,479 -- 3,549,172 Amortization of goodwill 1,270,722 -- -- 1,270,722 ------------ ------------ ------------ ------------ Total operating expenses 16,407,535 1,483,608 -- 17,891,143 ------------ ------------ ------------ ------------ Loss from operations (3,511,066) (353,821) -- (3,864,887) ------------ ------------ ------------ ------------ Other expense: Net interest expense 277,814 285,928 563,742 Other 21,761 1,559 23,320 ------------ ------------ ------------ ------------ Total other expenses, net 299,575 287,487 -- 587,062 ------------ ------------ ------------ ------------ Loss before income taxes (3,810,641) (641,308) -- (4,451,949) Income tax provision -- -- -- -- ------------ ------------ ------------ ------------ Net loss (3,810,641) (641,308) -- (4,451,949) ------------ ------------ ------------ ------------ Deemed dividends on Series A convertible perferred stock 4,433,904 -- -- 4,433,904 ------------ ------------ ------------ ------------ Net loss attributable to common stockholders $ (8,244,545) $ (641,308) $ -- $ (8,885,853) ============ ============ ============ ============ Net loss per share: Basic $ (0.46) $ (0.58) $ -- $ (0.49) ============ ============ ============ ============ Diluted $ (0.46) $ (0.58) $ -- $ (0.49) ============ ============ ============ ============ Weighted average shares outstanding: Basic 17,752,240 1,100,000 (954,571) 17,897,669 ============ ============ ============ ============ Diluted 17,752,240 1,100,000 (954,571) 17,897,669 ============ ============ ============ ============
The accompanying notes are an integral part of these unaudited pro forma financial statements. Wire One Technologies, Inc Notes to Unaudited Pro Forma Combined Financial Statements (1) Records the goodwill associated with the acquisition of AAC as the sum of the purchase consideration of $793,750 and the stockholders' deficit of AAC as of June 30, 2001 which totaled ($1,625,807).