Attached files
| file | filename |
|---|---|
| 8-K/A - VASO Corp | vaso8ka-sept42011.htm |
| EX-99.1.4 - PJM UNAUDITED FINANCIALS 6/30/11 - VASO Corp | vaso8ka-pjm2011ex9914.htm |
| EX-99.1.2 - PJM AUDITED FINANCIALS 12/31/10 - VASO Corp | vaso8ka-pjm2010ex9912.htm |
| EX-99.1.1 - BIOX AUDITED FINANCIALS 12/31/10 - VASO Corp | vaso8ka-biox2010ex9911.htm |
| EX-99.1.3 - BIOX UNAUDITED FINANCIALS 6/30/11 - VASO Corp | vaso8ka-biox2011ex9913.htm |
Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On September 2, 2011, Vasomedical, Inc. (“Vasomedical”) completed the purchase (the “Acquisition”) of all the outstanding capital stock of privately held Fast Growth Enterprises Limited, a British Virgin Islands company that owns Peace Joy Management Ltd. (“PJM”), which owns Life Enhancement Technology Limited (“LET”), and Biox Instruments Co. Ltd. (“Biox”), as per the stock purchase agreement reported on August 23, 2011. The consideration of this acquisition includes a cash payment of $1 million, issuance of 5,000,000 shares of common stock of Vasomedical, as well as the issuance of warrants to purchase 1,500,000 shares of Vasomedical common stock and up to 1,900,000 additional common shares to be issued contingent on the acquired entities meeting certain performance goals.
LET, based in Foshan, Guangdong, China, has been Vasomedical’s supplier for its proprietary Enhanced External Counterpulsation (EECP®) systems, including certain Lumenair systems and all AngioNew® systems. Biox, a leading developer and manufacturer of ambulatory monitoring devices in China, is located in Wuxi, Jiangsu, China, and has been Vasomedical’s manufacturer of the Biox series ECG Holter recorder and analysis software as well as ambulatory blood pressure monitoring systems for distribution in the United States. Vasomedical has obtained FDA clearance to market these products in the United States.
The Unaudited Pro Forma Financial Information gives effect to the Acquisition using the acquisition method of accounting, after giving effect to the pro forma adjustments discussed in the accompanying notes. This financial information has been prepared from, and should be read in conjunction with, the historical consolidated financial statements and notes thereto of Vasomedical, PJM and Biox included elsewhere in this report.
The financial periods required to be presented in this Form 8K/A are based on our fiscal periods. Vasomedical, PJM and Biox have different fiscal year ends. For the purpose of presenting these pro forma financial statements, we used the financial statements for our fiscal year ended May 31, 2011, as filed with the Securities and Exchange Commission (“SEC”) in our most recent Annual Report on Form 10-K, and the financial statements for the three months ended August 31, 2011, in our most recent Quarterly Report on Form 10-Q. To meet the SEC’s pro forma requirements of combining operating results for PJM and Biox for an annual period that ends within 93 days of the end of our latest annual fiscal period as filed with the SEC, we combined PJM’s and Biox’s twelve months ended June 30, 2011 with our fiscal year ended May 31, 2011. For the operating results for the three months ended August 31, 2011 we combined PJM’s and Biox’s three months ended June 30, 2011 with our three months ended August 31, 2011.
The Pro Forma Combined Balance Sheet gives effect to the Acquisition as if it had occurred on August 31, 2011, combining the historical balance sheet of Vasomedical as of that date with the balance sheets of PJM and Biox as of June 30, 2011. The Pro Forma Statements of Operations for the twelve month period ending May 31, 2011 and for the three month period ended August 31, 2011 gives effect to the Acquisition as if it had occurred at the beginning of the respective periods.
The consolidated financial statements of Vasomedical presented in the Pro Forma Financial information utilize United States Generally Accepted Accounting Principles (“US GAAP”). These statements therefore reflect the impact of US GAAP adjustments made to th historical financial statements of PJM and Biox. The financial statements were translated from Chinese Yuan to US dollars using the following exchange rates of Yuan per US Dollar: 6.47 with respect to the Balance Sheet at August 31, 2011; 6.63 with respect to the Statement of Operations for the twelve months ended May 31, 2011; and 6.51 for the statement of operations for the 3 months ended August 31, 2011.
The Pro Forma Combined Financial Information is unaudited, and is not necessarily indicative of the consolidated results that actually would have occurred if the Acquisition had been consummated at the beginning of the periods presented, nor does it purport to present the future financial position and results of operations for future periods.
1
| Exhibit 99.2.1 | |||||||||||||||||||||||
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PRO-FORMA COMBINED STATEMENT OF OPERATIONS
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|||||||||||||||||||||||
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FOR THE TWELVE MONTHS ENDED MAY 31, 2011
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Fast Growth Enterprises, Ltd.
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Vasomedical, Inc.
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BIOX Instruments Co. Ltd.
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Peace Joy Management Ltd.
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Consolidation Adjustments
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Combined Proforma
|
|||||||||||||||||||
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Revenues
|
|||||||||||||||||||||||
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Equipment sales
|
$ | 3,029,177 | $ | 1,111,923 | $ | 978,849 | $ | (926,673 | ) | (4 | ) | $ | 4,193,276 | ||||||||||
|
Equipment rentals and services
|
2,231,114 | - | - | 2,231,114 | |||||||||||||||||||
|
Commissions
|
11,113,133 | - | - | 11,113,133 | |||||||||||||||||||
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Total revenues
|
16,373,424 | 1,111,923 | 978,849 | 17,537,523 | |||||||||||||||||||
|
Cost of revenues
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|||||||||||||||||||||||
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Cost of sales, equipment
|
1,937,903 | 256,722 | 431,390 | $ | (926,673 | ) | (4 | ) | 1,699,342 | ||||||||||||||
|
Cost of equipment rentals and services
|
909,044 | - | - | 909,044 | |||||||||||||||||||
|
Cost of commissions
|
2,613,625 | - | - | 2,613,625 | |||||||||||||||||||
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Total cost of revenues
|
5,460,572 | 256,722 | 431,390 | 5,222,011 | |||||||||||||||||||
|
Gross profit
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10,912,852 | 855,201 | 547,459 | 12,315,512 | |||||||||||||||||||
| 76.9 | % | 55.9 | % | ||||||||||||||||||||
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Operating expenses
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|||||||||||||||||||||||
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Selling, general and administrative
|
14,383,380 | 509,010 | 167,466 | 15,059,856 | |||||||||||||||||||
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Research and development
|
462,110 | - | - | 462,110 | |||||||||||||||||||
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Total operating expenses
|
14,845,490 | 509,010 | 167,466 | 15,521,966 | |||||||||||||||||||
|
Operating loss (income)
|
(3,932,638 | ) | 346,191 | 379,993 | (3,206,454 | ) | |||||||||||||||||
|
Other income (expenses)
|
|||||||||||||||||||||||
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Interest and financing costs
|
(32,220 | ) | 763 | (5,282 | ) | (36,739 | ) | ||||||||||||||||
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Interest and other income, net
|
27,839 | 35,750 | 352 | 63,941 | |||||||||||||||||||
|
Amortization of deferred gain on
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|||||||||||||||||||||||
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sale-leaseback of building
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53,245 | - | - | 53,245 | |||||||||||||||||||
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Total other income, net
|
48,864 | 36,513 | (4,930 | ) | 80,447 | ||||||||||||||||||
|
Loss (income) before income taxes
|
(3,883,774 | ) | 382,704 | 375,063 | (3,126,007 | ) | |||||||||||||||||
|
Income tax benefit/(expense), net
|
(6,755 | ) | (13,698 | ) | (27,327 | ) | (47,780 | ) | |||||||||||||||
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Net loss (income)
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(3,890,529 | ) | 369,006 | 347,736 | (3,173,787 | ) | |||||||||||||||||
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Preferred stock dividends
|
(428,603 | ) | - | - | (428,603 | ) | |||||||||||||||||
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Net loss applicable to common stockholders
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$ | (4,319,132 | ) | $ | 369,006 | $ | 347,736 | $ | (3,602,390 | ) | |||||||||||||
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Loss per common share
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|||||||||||||||||||||||
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- basic
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$ | (0.04 | ) | $ | (0.03 | ) | |||||||||||||||||
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-diluted
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$ | (0.04 | ) | $ | (0.03 | ) | |||||||||||||||||
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Weighted average common shares outstanding
|
|||||||||||||||||||||||
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- basic
|
111,978,478 | 5,000,000 | (1 | ) | 116,978,478 | ||||||||||||||||||
|
-diluted
|
111,978,478 | 5,000,000 | (1 | ) | 116,978,478 | ||||||||||||||||||
2
| Exhibit 99.2.2 | |||||||||||||||||||||||
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PRO-FORMA COMBINED STATEMENT OF OPERATIONS
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FOR THE THREE MONTHS ENDED AUGUST 31, 2011
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Fast Growth Enterprises, Ltd.
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|||||||||||||||||||||||
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Vasomedical, Inc.
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BIOX Instruments Co. Ltd.
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Peace Joy Management Ltd.
|
Consolidation Adjustments
|
Combined Proforma
|
|||||||||||||||||||
|
Revenues
|
|||||||||||||||||||||||
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Equipment sales
|
$ | 274,960 | $ | 398,420 | $ | 317,347 | (126,564 | ) | (4 | ) | $ | 864,163 | |||||||||||
|
Equipment rentals and services
|
486,988 | - | - | 486,988 | |||||||||||||||||||
|
Commissions
|
3,566,488 | - | - | 3,566,488 | |||||||||||||||||||
|
Total revenues
|
4,328,436 | 398,420 | 317,347 | 4,917,639 | |||||||||||||||||||
|
Cost of revenues
|
|||||||||||||||||||||||
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Cost of sales, equipment
|
160,954 | 77,886 | 124,100 | (126,564 | ) | (4 | ) | 236,376 | |||||||||||||||
|
Cost of equipment rentals and services
|
238,847 | - | - | 238,847 | |||||||||||||||||||
|
Cost of commissions
|
1,102,108 | - | - | 1,102,108 | |||||||||||||||||||
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Total cost of revenues
|
1,501,909 | 77,886 | 124,100 | 1,577,331 | |||||||||||||||||||
|
Gross profit
|
2,826,527 | 320,534 | 193,247 | 3,340,308 | |||||||||||||||||||
| 80.5 | % | 60.9 | % | ||||||||||||||||||||
|
Operating expenses
|
|||||||||||||||||||||||
|
Selling, general and administrative
|
4,374,885 | 103,046 | 52,676 | 4,530,607 | |||||||||||||||||||
|
Research and development
|
135,129 | - | - | 135,129 | |||||||||||||||||||
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Total operating expenses
|
4,510,014 | 103,046 | 52,676 | 4,665,736 | |||||||||||||||||||
|
Operating loss (income)
|
(1,683,487 | ) | 217,488 | 140,571 | (1,325,428 | ) | |||||||||||||||||
|
Other income (expenses)
|
|||||||||||||||||||||||
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Interest and financing costs
|
(2,260 | ) | 217 | (4,854 | ) | (6,897 | ) | ||||||||||||||||
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Interest and other income, net
|
21,185 | 7,365 | 115 | 28,665 | |||||||||||||||||||
|
Amortization of deferred gain on
|
|||||||||||||||||||||||
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sale-leaseback of building
|
13,311 | - | - | 13,311 | |||||||||||||||||||
|
Total other income, net
|
32,236 | 7,582 | (4,739 | ) | 35,079 | ||||||||||||||||||
|
Loss (income) before income taxes
|
(1,651,251 | ) | 225,070 | 135,832 | (1,290,349 | ) | |||||||||||||||||
|
Income tax benefit/(expense), net
|
(1,800 | ) | (5,062 | ) | (11,993 | ) | (18,855 | ) | |||||||||||||||
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Net loss (income)
|
(1,653,051 | ) | 220,008 | 123,839 | (1,309,204 | ) | |||||||||||||||||
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Preferred stock dividends
|
(85,493 | ) | - | - | (85,493 | ) | |||||||||||||||||
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Net loss applicable to common stockholders
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$ | (1,738,544 | ) | $ | 220,008 | $ | 123,839 | $ | (1,394,697 | ) | |||||||||||||
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Loss per common share
|
|||||||||||||||||||||||
|
- basic
|
$ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||||
|
-diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | |||||||||||||||||
|
Weighted average common shares outstanding
|
|||||||||||||||||||||||
|
- basic
|
116,986,095 | 5,000,000 | (1 | ) | 121,986,095 | ||||||||||||||||||
|
-diluted
|
116,986,095 | 5,000,000 | (1 | ) | 121,986,095 | ||||||||||||||||||
3
| Exhibit 99.2.3 | |||||||||||||||||||||||
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PRO-FORMA COMBINED BALANCE SHEET
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|
August 31, 2011
|
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Fast Growth Enterprises, Ltd.
|
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ASSETS
|
Vasomedical, Inc.
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BIOX Instruments Co. Ltd.
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Peace Joy Management Ltd.
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Acquisition adjustments
|
Pro-forma Combined Balance Sheet
|
||||||||||||||||||
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CURRENT ASSETS
|
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Cash and cash equivalents
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$ | 6,274,740 | 446,264 | 92,088 | (1,000,000 | ) | (1 | ) | $ | 5,813,092 | |||||||||||||
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Short-term investments
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110,148 | 110,148 | |||||||||||||||||||||
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Accounts and other receivables, net of allowance
|
|||||||||||||||||||||||
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for doubtful accounts
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4,451,658 | 164,077 | 451,838 | (45,869 | ) | (3 | ) | 5,021,704 | |||||||||||||||
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Inventories, net
|
1,941,223 | 297,943 | 277,118 | (189,966 | ) | (2 | ) | 2,326,318 | |||||||||||||||
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Financing receivables, net
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18,821 | 18,821 | |||||||||||||||||||||
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Deferred commission expense
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2,855,776 | 2,855,776 | |||||||||||||||||||||
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Deferred related party consulting expense
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510,000 | 510,000 | |||||||||||||||||||||
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Other current assets
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316,938 | 316,938 | |||||||||||||||||||||
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Total current assets
|
16,479,304 | 908,284 | 821,044 | (1,235,835 | ) | 16,972,797 | |||||||||||||||||
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PROPERTY AND EQUIPMENT, net of
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accumulated depreciation
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383,335 | 14,984 | 9,582 | 407,901 | |||||||||||||||||||
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FINANCING RECEIVABLES, net
|
22,277 | 22,277 | |||||||||||||||||||||
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DEFERRED RELATED PARTY CONSULTING EXPENSE
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255,000 | 255,000 | |||||||||||||||||||||
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GOODWILL
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3,190,708 | (1 | ) | 3,190,708 | |||||||||||||||||||
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OTHER ASSETS
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300,066 | 300,066 | |||||||||||||||||||||
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TOTAL ASSETS
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$ | 17,439,982 | 923,268 | 830,626 | 1,954,873 | $ | 21,148,749 | ||||||||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITES
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Accounts payable
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$ | 324,294 | 13,892 | 87,937 | (45,869 | ) | (3 | ) | 380,254 | ||||||||||||||
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Accrued commissions
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2,165,054 | 2,165,054 | |||||||||||||||||||||
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Accrued expenses and other liabilities
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974,594 | 425,432 | 251,530 | 1,651,556 | |||||||||||||||||||
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Sales tax payable
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164,226 | 186,411 | 350,637 | ||||||||||||||||||||
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Deferred revenue - current portion
|
10,999,294 | 10,999,294 | |||||||||||||||||||||
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Deferred gain on sale-leaseback of building
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48,808 | 48,808 | |||||||||||||||||||||
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Accrued professional fees
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143,443 | 143,443 | |||||||||||||||||||||
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Trade payable due to related party
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3,359 | 3,359 | |||||||||||||||||||||
| 14,823,072 | 439,324 | 525,878 | (45,869 | ) | 15,742,405 | ||||||||||||||||||
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LONG-TERM LIABILITIES
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Deferred revenue
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1,129,068 | 1,129,068 | |||||||||||||||||||||
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Other long-term liabilities
|
151,385 | 151,385 | |||||||||||||||||||||
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Total long-term liabilites
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1,280,453 | - | - | - | 1,280,453 | ||||||||||||||||||
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TOTAL LIABILITIES
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16,103,525 | 439,324 | 525,878 | (45,869 | ) | 17,022,858 | |||||||||||||||||
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COMMITMENTS AND CONTINGENCIES
|
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STOCKHOLDERS' EQUITY
|
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Preferred stock, $.01 par value, 1,000,000 shares authorized,
|
|||||||||||||||||||||||
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299,024 issued and outstanding
|
2,990 | 2,990 | |||||||||||||||||||||
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Common stock, $.001 par value, 250,000,000 shares authorized,
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|||||||||||||||||||||||
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117,253,704 shares issued and outstanding before acquistion,
|
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122,253,704 shares issued and outstanding after acquisition
|
117,253 | 120,000 | 3,000 | (118,000 | ) | (1 | ) | 122,253 | |||||||||||||||
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Additional paid in capital
|
55,910,342 | 2,974,400 | (1 | ) | 58,884,742 | ||||||||||||||||||
|
Accumulated deficit and comprehensive income
|
(54,694,128 | ) | 363,944 | 301,748 | (855,658 | ) | (1 | ), (2) | (54,884,094 | ) | |||||||||||||
|
Total stockholders'equity
|
1,336,457 | 483,944 | 304,748 | 2,000,742 | 4,125,891 | ||||||||||||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 17,439,982 | $ | 923,268 | $ | 830,626 | $ | 1,954,873 | $ | 21,148,749 | |||||||||||||
4
| Exhibit 99.2.4 | |||||||||||
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NOTES TO PRO-FORMA COMBINED FINANCIAL STATEMENTS (unaudited)
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The pro-forma adjustments are preliminary and are based on our estimate of the fair values and useful lives of the assets
|
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acquired and liabilities assumed and have been prepared to illustrate the estimated effect of the acquisition.
|
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In accordance with Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"), the total
|
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purchase consideration is allocated to the net tangible and identifiable intangible assets acquired and liabilities assumed
|
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based on their estimated fair values as of September 2, 2011 (the acquisition date). The purchase price was allocated based
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on the information currently available, and may be adjusted after obtaining more information regarding, among other things,
|
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asset valuations, liabilities assumed, and revisions of preliminary estimates.
|
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The following notes explain the adjustments made.
|
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1. To reflect the acquisition of Fast Growth Enterprises ("FGE") and its subsidiaries Peace Joy Management, Ltd. and BIOX
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Instruments Company, Ltd. and the allocation of the purchase price on the basis of the fair values of the assets acquired
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and the liabilities assumed, the components of the purchase price and allocation to the assets and liabilities are as follows:
|
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Components of the purchase price:
|
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Vasomedical, Inc. common stock
|
$ 2,100,000
|
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Vasomedical, Inc. warrants to purchase common stock
|
304,000
|
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|
Vasomedical common stock to be contingently issued
|
575,400
|
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Cash
|
1,000,000
|
||||||||||
|
Total purchase price
|
$ 3,979,400
|
||||||||||
|
Preliminary allocation of purchase price:
|
|||||||||||
|
Cash and cash equivalents
|
$ 538,352
|
||||||||||
|
Accounts receivable and other current assets
|
615,915
|
||||||||||
|
Inventories
|
575,061
|
||||||||||
|
Property and equipment
|
24,566
|
||||||||||
|
Goodwill
|
3,190,708
|
||||||||||
|
Accounts payable and other current liabilities
|
(965,202)
|
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|
Net assets acquired
|
$ 3,979,400
|
||||||||||
|
The fair value of the common shares issued and the contingently issuable common shares was based on the closing
|
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|
price of the shares on September 2, 2011 as quoted on the Nasdaq OTC. pink sheets which was $0.42.
|
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The fair value of the warrants issued was computed using the Black-Scholes option pricing model, using the following
|
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|
assumptions: expected term of 2 years which is the contractual term of the warrants; risk free rate of .2%; expected
|
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|
dividend yield of $0.0; expected volatility of 101.0%; exercise price of $0.50; and the stock price of $0.42.
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2. To eliminate the inter-company profit in inventory
|
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3. To eliminate inter-company receivables and payables between Vasomedical and the acquired entities.
|
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4. To eliminate intercompany sales by the acquired entities to Vasomedical.
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5