Attached files
| file | filename |
|---|---|
| 8-K/A - AMENDMENT NO. 1 TO FORM 8-K - LOCAL Corp | d235827d8ka.htm |
| EX-99.2 - FINANCIAL STATEMENTS OF BUSINESS ACQUIRED, SCREAMIN MEDIA GROUP, INC. - LOCAL Corp | d235827dex992.htm |
| EX-99.4 - UNAUDITED FINANCIAL STATEMENTS OF BUSINESS ACQUIRED, SCREAMIN MEDIA GROUP, INC. - LOCAL Corp | d235827dex994.htm |
| EX-23.1 - CONSENT OF HASKELL & WHITE LLP - LOCAL Corp | d235827dex231.htm |
Exhibit 99.3
LOCAL.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements give the effect to the acquisition of Screamin Media Group, Inc., a Delaware corporation, following our execution on July 8, 2011, of an Agreement and Plan of Merger (the “Merger Agreement”) by and among Local.com Corporation (“Local.com” or “Company”), Screamin Media Group, Inc. (“SMG”), Agile Acquisition Corporation, a Delaware corporation and wholly-owned subsidiary of the Company (“Subcorp”), and Dan Griffith, as Stockholders’ Agent (the “Stockholders’ Agent”) pursuant to which Subcorp was merged with and into SMG and SMG became our wholly-owned subsidiary (the “Merger”). As consideration for the Merger, we paid upfront consideration of $5,000,000 in cash, 727,360 shares of Local.com common stock, $0.00001 par value (the “Shares”), and $5,000,000 in secured promissory notes (the “Notes”) bearing interest at 10% per annum.
The unaudited pro forma condensed consolidated financial statements are based upon the estimates and assumptions set forth herein. The unaudited pro forma information has been prepared utilizing the historical financial statements and notes thereto, for which Local.com Corporation and Screamin Media Group, Inc. are included herein. The unaudited pro forma financial data does not purport to be indicative of the results which actually would have been obtained had the purchase been effected on the dates indicated or of the results which may be obtained in the future. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of Local.com Corporation and the historical financial statements of Screamin Media Group, Inc. included herein. The pro forma adjustments are based on estimates, available information and certain assumptions and may be revised as additional information becomes available. The unaudited pro forma condensed consolidated balance sheet gives effect to the merger which is accounted for as an acquisition of Screamin Media Group, Inc. by Local.com Corporation as if it had occurred on June 30, 2011. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2010, and for the three and six months ended June 30, 2011, give effect to the merger as if it had occurred as of the first day of each such period.
The pro forma data presented herein is for informational purposes only and is not intended to represent or be indicative of the results of operations or financial condition of the combined entities that would have been reported had the proposed transaction been completed as of the dates presented, and should not be taken as representative of future results of operations or financial condition of the combined group.
1
LOCAL.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
| Local.com June 30, 2011 |
SMG June 30, 2011 |
Pro Forma Adjustments |
Combined Pro Forma June 30, 2011 |
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| ASSETS | ||||||||||||||||
| Current assets: |
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| Cash and cash equivalents |
$ | 13,482 | $ | 634 | $ | (5,000 | )(B) | $ | 9,116 | |||||||
| Restricted cash |
10 | — | — | 10 | ||||||||||||
| Accounts receivable, net of allowances |
10,981 | 79 | — | 11,060 | ||||||||||||
| Notes receivable - current portion |
749 | — | (500 | )(A) | 249 | |||||||||||
| Prepaid expenses and other current assets |
913 | 9 | — | 922 | ||||||||||||
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| Total current assets |
26,135 | 722 | (5,500 | ) | 21,357 | |||||||||||
| Property and equipment, net |
7,792 | 59 | — | 7,851 | ||||||||||||
| Goodwill |
20,340 | — | 14,425 | (B) | 34,765 | |||||||||||
| Intangible assets, net |
10,585 | 58 | — | 10,643 | ||||||||||||
| Long-term portion of note receivable |
637 | — | — | 637 | ||||||||||||
| Deposits |
57 | — | — | 57 | ||||||||||||
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| Total assets |
$ | 65,546 | $ | 839 | $ | 8,925 | $ | 75,310 | ||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current liabilities: |
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| Accounts payable |
$ | 8,047 | $ | 887 | $ | — | 8,934 | |||||||||
| Accrued compensation |
2,118 | — | — | 2,118 | ||||||||||||
| Deferred rent |
602 | — | — | 602 | ||||||||||||
| Warrant liability |
870 | — | — | 870 | ||||||||||||
| Other accrued liabilities |
525 | 802 | — | 1,327 | ||||||||||||
| Revolving line of credit |
— | — | — | — | ||||||||||||
| Deferred revenue |
381 | — | 381 | |||||||||||||
| Notes payable |
— | 1,075 | 4,500 | (A)(B) | 5,575 | |||||||||||
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| Total current liabilities |
12,543 | 2,764 | 4,500 | 19,807 | ||||||||||||
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| Deferred income taxes |
188 | — | — | 188 | ||||||||||||
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| Total liabilities |
12,731 | 2,764 | 4,500 | 19,995 | ||||||||||||
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| Commitments and contingencies |
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| Stockholders’ equity: |
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| Preferred stock |
— | — | — | — | ||||||||||||
| Common stock |
— | 1 | (1 | ) | — | |||||||||||
| Additional paid-in capital |
114,338 | 840 | 1,660 | 116,838 | ||||||||||||
| Accumulated deficit |
(61,523 | ) | (2,766 | ) | 2,766 | (61,523 | ) | |||||||||
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| Stockholders’ equity |
52,815 | (1,925 | ) | 4,425 | 55,315 | |||||||||||
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| Total liabilities and stockholders’ equity |
$ | 65,546 | $ | 839 | $ | 8,925 | $ | 75,310 | ||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
2
LOCAL.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
| Three Months Ended June 30, 2011 | ||||||||||||||||
| Local.com | SMG | Pro Forma Adjustments |
Combined Pro Forma |
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| Revenue |
$ | 15,584 | $ | 2,238 | $ | — | $ | 17,822 | ||||||||
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| Operating Expenses: |
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| Cost of revenues |
10,812 | 2,027 | — | 12,839 | ||||||||||||
| Sales and marketing |
4,646 | 514 | — | 5,160 | ||||||||||||
| General and administrative |
3,291 | 1,092 | — | 4,383 | ||||||||||||
| Research and development |
1,359 | — | — | 1,359 | ||||||||||||
| Amortization of intangibles |
1,210 | — | — | 1,210 | ||||||||||||
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| Total operating expenses |
21,318 | 3,633 | — | 24,951 | ||||||||||||
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| Operating income (loss) |
(5,734 | ) | (1,395 | ) | — | (7,129 | ) | |||||||||
| Interest and other income (expense), net |
(30 | ) | — | (125 | )(C) | (155 | ) | |||||||||
| Change in fair value of warrant liability |
411 | — | — | 411 | ||||||||||||
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| Income (loss) before income taxes |
(5,353 | ) | (1,395 | ) | (125 | ) | (6,873 | ) | ||||||||
| Provision for income taxes |
51 | — | — | 51 | ||||||||||||
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| Net income (loss) |
$ | (5,404 | ) | $ | (1,395 | ) | $ | (125 | ) | $ | (6,924 | ) | ||||
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| Per share data: |
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| Basic net income (loss) per share |
$ | (0.25 | ) | $ | (0.31 | ) | ||||||||||
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| Diluted net income (loss) per share |
$ | (0.25 | ) | $ | (0.31 | ) | ||||||||||
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| Basic weighted average shares outstanding |
21,254 | 21,981 | ||||||||||||||
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| Diluted weighted average shares outstanding |
21,254 | 21,981 | ||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
3
LOCAL.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
| Six Months Ended June 30, 2011 | ||||||||||||||||
| Local.com | SMG | Pro Forma Adjustments |
Combined Pro Forma |
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| Revenue |
$ | 32,379 | $ | 4,068 | $ | — | $ | 36,447 | ||||||||
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| Operating Expenses: |
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| Cost of revenues |
21,800 | 3,695 | — | 25,495 | ||||||||||||
| Sales and marketing |
7,928 | 630 | — | 8,558 | ||||||||||||
| General and administrative |
5,901 | 1,581 | — | 7,482 | ||||||||||||
| Research and development |
2,887 | — | — | 2,887 | ||||||||||||
| Amortization of intangibles |
2,408 | — | — | 2,408 | ||||||||||||
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| Total operating expenses |
40,924 | 5,906 | — | 46,830 | ||||||||||||
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| Operating income (loss) |
(8,545 | ) | (1,838 | ) | — | (10,383 | ) | |||||||||
| Interest and other income (expense), net |
(85 | ) | — | (250 | )(C) | (335 | ) | |||||||||
| Change in fair value of warrant liability |
1,970 | — | — | 1,970 | ||||||||||||
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| Income (loss) before income taxes |
(6,660 | ) | (1,838 | ) | (250 | ) | (8,748 | ) | ||||||||
| Provision for income taxes |
62 | — | — | 62 | ||||||||||||
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| Net income (loss) |
$ | (6,722 | ) | $ | (1,838 | ) | $ | (250 | ) | $ | (8,810 | ) | ||||
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| Per share data: |
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| Basic net income (loss) per share |
$ | (0.32 | ) | $ | (0.41 | ) | ||||||||||
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| Diluted net income (loss) per share |
$ | (0.32 | ) | $ | (0.41 | ) | ||||||||||
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| Basic weighted average shares outstanding |
20,750 | 21,478 | ||||||||||||||
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| Diluted weighted average shares outstanding |
20,750 | 21,478 | ||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
4
LOCAL.COM CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
| The Year Ended December 31, 2010 | ||||||||||||||||
| Local.com | SMG | Pro Forma Adjustments |
Combined Pro Forma |
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| Revenue |
$ | 84,137 | $ | 2,375 | $ | — | $ | 86,512 | ||||||||
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| Operating Expenses: |
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| Cost of revenues |
46,517 | 2,046 | — | 48,563 | ||||||||||||
| Sales and marketing |
14,356 | 264 | — | 14,620 | ||||||||||||
| General and administrative |
8,685 | 973 | — | 9,658 | ||||||||||||
| Research and development |
5,133 | — | — | 5,133 | ||||||||||||
| Amortization of intangibles |
5,734 | — | — | 5,734 | ||||||||||||
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| Total operating expenses |
80,425 | 3,283 | — | 83,708 | ||||||||||||
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| Operating income (loss) |
3,712 | (908 | ) | — | 2,804 | |||||||||||
| Interest and other income (expense), net |
(275 | ) | — | (500 | )(C) | (775 | ) | |||||||||
| Change in fair value of warrant liability |
887 | — | — | 887 | ||||||||||||
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| Income (loss) before income taxes |
4,324 | (908 | ) | (500 | ) | 2,916 | ||||||||||
| Provision for income taxes |
102 | — | — | 102 | ||||||||||||
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| Net income (loss) |
$ | 4,222 | $ | (908 | ) | $ | (500 | ) | $ | 2,814 | ||||||
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| Per share data: |
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| Basic net income (loss) per share |
$ | 0.26 | $ | 0.13 | ||||||||||||
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| Diluted net income (loss) per share |
$ | 0.25 | $ | 0.13 | ||||||||||||
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| Basic weighted average shares outstanding |
15,966 | 21,478 | ||||||||||||||
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| Diluted weighted average shares outstanding |
16,788 | 21,478 | ||||||||||||||
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See accompanying notes to unaudited pro forma condensed consolidated financial statements
5
LOCAL.COM CORPORATION
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| (A) | To reflect the elimination of intercompany transactions between the Company and SMG. |
| (B) | To reflect the elimination of SMG’s equity accounts and the allocation of the initial purchase price of $12.5 million as follows: |
| Purchase price calculation: |
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| Cash paid |
$ | 5,000 | ||
| Promissory notes issued |
5,000 | |||
| Common stock issued |
2,500 | |||
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| 12,500 | ||||
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| Allocation of purchase price: |
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| Current assets |
722 | |||
| Equipment and other assets |
117 | |||
| Accounts payable and accrued expenses |
(1,689 | ) | ||
| Notes payable |
(1,075 | ) | ||
| Goodwill (1) |
14,425 | |||
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| Total allocated purchase price |
$ | 12,500 | ||
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| (1) | SMG’s intangible assets have not been determined as of the date of this report and therefore the allocation of the purchase price in excess of SMG’s net assets is shown entirely as goodwill. |
| (C) | To reflect interest expense related to the $5 million promissory notes issued to acquire SMG as if the notes were issued as of the first day of each such period. |
6