Where Food Comes From, Inc. - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - CURRENT REPORT - Where Food Comes From, Inc.	imi-8k_022912.htm
EX-99.2 - CONDENSED CONSOLIDATED FINANCIAL STATEMENT - Where Food Comes From, Inc.	ex-99_2.htm

HEADNOTE TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION

On February 29, 2012, Integrated Management Information, Inc. (“IMI” or the “Company”) entered into a Purchase and Exchange Agreement (the “Purchase Agreement”), dated February 29, 2012 but effective as of the close of business on December 31, 2011, by and among IMI and International Certification Services, Inc. (ICS), and other shareholders as individually named in the Agreement (collectively the “Sellers”).

Pursuant to the Purchase Agreement, on February 29, 2012 (the “Closing”) the Company acquired 60% of the issued and outstanding common stock of ICS (the “Acquisition”) in exchange for aggregate consideration of $427,778, which includes $350,000 in cash and 172,840 shares (the “Shares”) of common stock of IMI valued at approximately $77,800 based upon the closing price of our common stock on February 29, 2012, of $0.45 per share.

A preliminary allocation of the purchase price has been made to major categories of assets and liabilities in the accompanying pro forma condensed consolidated financial statements. The actual allocation of the purchase price and the resulting effect on income from operations may differ from the pro forma amounts included herein. The pro forma adjustments represent the Company’s provisional allocation of acquisition accounting adjustments and are based upon available information and certain assumptions that the Company believes to be reasonable. Consequently, the amounts reflected in the unaudited pro forma condensed consolidated financial statements are subject to change, and the final amounts may differ substantially from the provisional amounts.

The accompanying pro forma condensed consolidated balance sheet as of December 31, 2011, gives effect to the acquisition as if it had been consummated on that date. The accompanying pro forma condensed consolidated statement of operations for the year ended December 31, 2011, gives effect to the acquisition as if it had been consummated at the beginning of the period presented.

The pro forma financial information should be read in conjunction with our historical consolidated financial statements used in the presentation of the pro forma financial information. THE PRO FORMA INFORMATION PRESENTED IS NOT NECESSARILY INDICATIVE OF THAT WHICH WOULD HAVE BEEN ATTAINED HAD THE TRANSACTION OCCURRED AT THE DATES INCLUDED IN THE PRO FORMA FINANCIAL INFORMATION.

Integrated Management Information, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

	IMI			ICS
	as of			as of							Pro Forma
	December 31,			December 31,			Pro Forma				December 31,
	2011			2011			Adjustments			Notes	2011
Assets	(historical)			(historical)
Current assets:
Cash and cash equivalents	$	969,020		$	13,506		$	(350,000	)	(a)	$	632,526
Accounts receivable, net		226,760			33,192			-				259,952
Investment in marketable securities		283,511			-			-				283,511
Prepaid expenses and other current assets		36,776			13,952			-				50,728
Deferred tax assets		224,350			8,000			-				232,350
Total current assets		1,740,417			68,650			(350,000	)			1,459,067
Property and equipment, net		57,354			62,668			-				120,022
Deferred tax assets, noncurrent		-			13,349							13,349
Intangible assets, net		9,205			-			706,070		(c)		715,275
Other assets		-			867			-				867
Total assets	$	1,806,976		$	145,534		$	356,070			$	2,308,580

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	148,384		$	9,461		$	-			$	157,845
Accrued expenses and other current liabilities		42,960			16,213			-				59,173
Customer deposits		-			14,945			-				14,945
Deferred revenue		-			90,529							90,529
Short-term debt and current portion of notes payable		25,644			-			-				25,644
Current portion of capital lease obligations		-			5,947			-				5,947
Total current liabilities		216,988			137,095			-				354,083
Capital lease obligations, net of current portion		-			1,546			-				1,546
Notes payable and other long-term debt		176,201			-			-				176,201
Notes payable, related party		250,000			-			-				250,000
Total liabilities		643,189			138,641			-				781,830

Stockholders’ equity:
Common stock		21,049			116,766			(116,766	)	(b)		21,222
Common stock issued in acquisition		-			-			173		(a)		-
Additional paid-in-capital		3,416,343			-			77,605		(a)		3,493,948
Treasury stock		(109,014	)		-			-				(109,014	)
Accumulated other comprehensive loss		(6,693	)		-			-				(6,693	)
Accumulated deficit		(2,157,898	)		(109,873	)		109,873		(b)		(2,157,898	)
Total stockholders’ equity		1,163,787			6,893			70,885				1,241,565
Non-controlling interest		-			-			(285,185	)	(d)		(285,185	)
Total liabilities and stockholders’ equity	$	1,806,976		$	145,534		$	356,070			$	2,308,580

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

Integrated Management Information, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

	IMI			ICS							Pro Forma
	Year ended			Year ended							Year ended
	December 31,			December 31,			Pro Forma				December 31,
	2011			2011			Adjustments			Notes	2011
	(historical)			(historical)
Revenues:
Service revenues	$	3,329,615		$	1,163,565		$	-			$	4,493,180
Product sales		843,098			-			-				843,098
Other revenue		60,036			-			-				60,036
Total revenues		4,232,749			1,163,565			-				5,396,314

Costs of revenues:
Labor and other costs of services		1,282,342			594,096			-				1,876,438
Costs of products		602,049			-			-				602,049
Total costs of revenues		1,884,391			594,096			-				2,478,487
Gross profit		2,348,358			569,469			-				2,917,827
Selling, general and administrative expenses		1,671,835			550,874			71,296		(e)		2,294,005
Income from operations		676,523			18,595			(71,296	)			623,822
Other expense (income):
Interest expense		29,539			1,224			-				30,763
Loss on sale of marketable securities		13,597			-			-				13,597
Other income, net		(6,715	)		(3,752	)		-				(10,467	)
Income before income taxes		640,102			21,123			(71,296	)			589,929
Income tax expense (benefit)		(224,350	)		8,376			-				(215,974	)
Net income		864,452			12,747			(71,296	)			805,903
Adjustment to net income for non-controlling interest		-			-			(5,099	)	(d)		(5,099	)
Net income attributable to IMI common shareholders	$	864,452		$	12,747		$	(76,395	)		$	800,804

Net income per share:
Basic	$	0.04									$	0.04
Diluted	$	0.04									$	0.04

Weighted average number of common shares outstanding:
Basic		20,674,739						172,840		(f)		20,847,579
Diluted		21,008,549						172,840		(f)		21,181,389

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

Where Food Comes From, Inc. - FORM 8-K - EX-99.1 - May 14, 2012

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