Attached files
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8-K/A - FORM 8-K/A - Global Eagle Entertainment Inc. | v338142_8ka.htm |
EX-99.2 - AUDITED FINANCIAL STATEMENTS OF AIA - Global Eagle Entertainment Inc. | v338142_ex99-2.htm |
EX-99.1 - AUDITED FINANCIAL STATEMENTS OF ROW 44 - Global Eagle Entertainment Inc. | v338142_ex99-1.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined balance sheet as of December 31, 2012 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2012 are based on the historical financial statements of Row 44, the Company, and AIA after giving effect to the Business Combination. The Company, Row 44, and AIA are collectively referred to herein as “the Companies.” The Companies, subsequent to the Business Combination, are referred to as “the Combined Company.”
The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2012 give pro forma effect to the Business Combination as if it had occurred on January 1, 2012. The unaudited pro forma condensed combined balance sheet as of December 31, 2012 assumes that the Business Combination was completed on December 31, 2012.
The unaudited pro forma condensed combined balance sheet and statement of operations as of and for the year ended December 31, 2012 were derived from Row 44’s audited financial statements, the Company’s audited financial statements, and AIA’s audited consolidated financial statements, in each case, as of and for the year ended December 31, 2012.
The Business Combination was accounted for as a reverse merger of Row 44 and the Company and a concurrent acquisition of the shares of AIA. Row 44 has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:
• | Row 44 has the greatest enterprise value of the Companies based on the consideration paid by the Company to acquire Row 44; |
• | The composition of officers of the newly Combined Company is derived primarily of existing Row 44 executives, including the principal executive officer, chief financial officer and general counsel; |
• | The proposed board of directors of the Company after the Business Combination consists of two GEAC representatives, who will be deemed to be independent following the closing under Nasdaq listing standards, one AIA representative, two Row 44 representatives, and two independent members who were not members of the respective boards of directors of any of Row 44, AIA, or GEAC. The proposed composition of the board of directors does not result in the ability of any of the companies being able to appoint, elect, or remove a majority of the board of directors. Therefore, the composition of the board of directors does not negate the evidence that Row 44 is the accounting acquirer; |
• | The Company paid a premium over the market value of AIA’s shares prior to the public announcement of the AIA Stock Purchase Agreement, which indicates that AIA is not the accounting acquirer; and |
• | The headquarters location of the Combined Company is in the Los Angeles metropolitan area. |
A preponderance of the evidence discussed above supports the conclusion that Row 44 is the accounting acquirer in the Business Combination.
Since Row 44 is determined to be the accounting acquirer in the reverse merger with the Company, the accounting for the Row 44 Merger will be similar to that of a capital infusion as the only pre-combination asset of the Company is cash held in trust. The assets and liabilities of the Company will be carried at historical cost and Row 44 will not record any step-up in basis or any intangible assets or goodwill as a result of the Row 44 Merger.
-1- |
Concurrently with the Row 44 Merger, the Company, pursuant to the AIA Stock Purchase Agreement, acquired 86% of the issued and outstanding shares of AIA held by PAR. AIA constitutes a business, with inputs, processes, and outputs. Accordingly, the acquisition of the AIA shares constitutes the acquisition of a business for purposes of Financial Accounting Standards Board’s Accounting Standard Codification 805, “Business Combinations,” or ASC 805, and due to the change in control, is accounted for using the acquisition method.
The pro forma financial statements assume the PAR Backstop Agreement fee of $11.9 million is paid as of December 31, 2012. The PAR Backstop Agreement fee will be paid by Row 44 to PAR and will reduce the consideration payable by the Company to Row 44 stockholders in the Row 44 Merger. The PAR Backstop Agreement fee is treated as an expense in the pro forma financial statements.
The following summarizes the merger consideration issued in the Business Combination and the Company’s capital stock ownership subsequent to the Business Combination.
Merger Consideration | ||||
Merger Consideration Issuable to Row 44 Equity holders | ||||
Base consideration | $ | 250,000,000 | ||
Net working capital adjustment (1) | 2,588,450 | |||
Estimated indebtedness (2) | (52,612 | ) | ||
Backstop fee (3) | (11,875,000 | ) | ||
Aggregate warrant value (4) | (6,602,984 | ) | ||
$ | 234,057,854 | |||
Shares | ||||
Closing total merger shares – issuable to Row 44 equity holders | 23,405,785 | |||
Shares issuable to PAR (6) | 14,368,233 | |||
Shares issuable per the Backstop Agreements/Purchase Option | 7,125,000 | |||
Shares held by current GEAC shareholders | 12,997 504 | |||
Total | 57,896,522 |
-2- |
Post Combination Shares and Ownership Interests | ||||||||||||||||
Voting | Non-Voting | Total | % (5) | |||||||||||||
GEAC public shareholders and warrant holders | 8,828,419 | — | 8,828,419 | 16 | % | |||||||||||
GEAC founders | 4,169,085 | 4,169,085 | 8 | % | ||||||||||||
PAR | 9,850,266 | 19,118,233 | 28,968,499 | 53 | % | |||||||||||
Former Row 44 stockholders other than PAR and AIA | 10,501,885 | — | 10,501,885 | 19 | % | |||||||||||
Putnam | 2,375,000 | — | 2,375,000 | 4 | % | |||||||||||
Total | 35,724,655 | 19,118,233 | 54,842,888 | 100 | % |
Shares | ||||
Overhang (7) | ||||
Rolled Row 44 Warrants | 2,181,462 | |||
Total Row 44 Overhang | 2,181,462 | |||
GEAC Warrants (8) | 26,659,167 | |||
Total Overhang | 28,840,629 |
Footnotes:
(1) | Amount from actual working capital according to Row 44 financial records. |
(2) | Based on the indebtedness of Row 44. |
(3) | Backstop fee is paid by Row 44 to PAR as the first investor to commit to a backstop investment. |
(4) | The estimated aggregate warrant value as defined per the Row 44 Merger Agreement. |
(5) | Percentage calculations exclude 3,053,634 shares to be issued to AIA that are deemed to be treasury stock. |
(6) | Represents the shares issued to Par in exchange for approximately 86% of AIA. |
(7) | Overhang represents shares that are potentially issuable subsequent to the transaction date. |
(8) | Consists of 18,992,500 warrants originally sold as part of units in the Company’s initial public offering, 7,000,000 sponsor warrants that were sold to the Sponsor in a private sale simultaneously with the Company’s initial public offering, and 666,667 sponsor warrants expected to be issued to the Sponsor pursuant to the Sponsor’s conversion at closing of amounts outstanding under a convertible note issued by the Company to the Sponsor in November 2012. |
-3- |
Global Eagle Entertainment Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
as of December 31, 2012
Balance Sheet as of December 31, 2012 | Row 44 (Historical) | GEAC (Historical) | AIA (U.S. GAAP) * | Reclassifications (A) | Combined | Pro Forma Adjustments | Combined Pro Forma | |||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||
Current Assets | ||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 2,087,958 | $ | 180,494 | $ | 21,520,061 | $ | - | $ | 23,788,513 | $ | 189,645,089 | D | $ | 149,328,570 | |||||||||||||
(101,286,084 | )O | |||||||||||||||||||||||||||
47,500,000 | P | |||||||||||||||||||||||||||
23,750,000 | V | |||||||||||||||||||||||||||
(6,647,375 | )E | |||||||||||||||||||||||||||
(14,250,000 | )I | |||||||||||||||||||||||||||
(11,875,000 | )Q | |||||||||||||||||||||||||||
(1,296,573 | )U | |||||||||||||||||||||||||||
Accounts receivable, net | 7,797,265 | 30,253,467 | 38,050,732 | 38,050,732 | ||||||||||||||||||||||||
Income tax receivable | 4,989,896 | 4,989,896 | 4,989,896 | |||||||||||||||||||||||||
Receivable from related parties | 22,562 | 22,562 | 22,562 | |||||||||||||||||||||||||
Film rights short-term | 12,425,302 | 12,425,302 | 12,425,302 | |||||||||||||||||||||||||
Inventories | 4,310,569 | 14,568,415 | (12,425,302 | ) | 6,453,682 | 6,453,682 | ||||||||||||||||||||||
Deferred tax assets short-term | 752,873 | - | 752,873 | 752,873 | ||||||||||||||||||||||||
Other current assets | 237,308 | 1,398,080 | 1,635,388 | 1,635,388 | ||||||||||||||||||||||||
Prepaid expenses | 3,106,842 | 1,143,824 | 4,250,666 | 4,250,666 | ||||||||||||||||||||||||
Trade receivables | 30,253,467 | (30,253,467 | ) | - | - | |||||||||||||||||||||||
Financial assets | 22,562 | (22,562 | ) | - | - | |||||||||||||||||||||||
Current income tax assets | 4,989,896 | (4,989,896 | ) | - | - | |||||||||||||||||||||||
Investment, AFS | 26,193,122 | 26,193,122 | (26,193,122 | )W | - | |||||||||||||||||||||||
Other assets | 2,541,904 | (1,398,080 | ) | - | - | |||||||||||||||||||||||
(1,143,824 | ) | |||||||||||||||||||||||||||
Total current assets | 17,539,942 | 180,494 | 100,842,300 | - | 118,562,736 | 99,346,935 | 217,909,671 | |||||||||||||||||||||
Deposits and other assets | 614,177 | 614,177 | 614,177 | |||||||||||||||||||||||||
Property plant, and equipment, net | 4,639,127 | 2,137,027 | 6,776,154 | 6,776,154 | ||||||||||||||||||||||||
Goodwill | 50,256,266 | 50,256,266 | (50,256,266 | )M | 73,408,390 | |||||||||||||||||||||||
73,408,390 | N | |||||||||||||||||||||||||||
Customer relationships | 68,400,000 | L | 68,400,000 | |||||||||||||||||||||||||
Intangible assets, net | 49,073 | 22,582,373 | (21,224,373 | )K | 47,132,000 | |||||||||||||||||||||||
22,533,300 | 45,774,000 | L | ||||||||||||||||||||||||||
Long-term marketable securities | 5,905,513 | 5,905,513 | 5,905,513 | |||||||||||||||||||||||||
Other non-current assets | 305,830 | 305,830 | 305,830 | |||||||||||||||||||||||||
Film rights | 49,073 | (49,073 | ) | - | - | |||||||||||||||||||||||
Other intangible assets | 22,533,300 | (22,533,300 | ) | - | - | |||||||||||||||||||||||
Financial assets | 5,905,513 | (5,905,513 | ) | - | - | |||||||||||||||||||||||
Investments held in trust | 189,645,089 | 189,645,089 | (189,645,089 | )D | - | |||||||||||||||||||||||
Total assets | $ | 22,793,246 | $ | 189,825,583 | $ | 182,029,309 | $ | - | $ | 394,648,138 | $ | 25,803,597 | $ | 420,451,735 | ||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||||||||||
Accounts payable and accrued expenses | $ | 7,789,267 | $ | - | $ | - | $ | 6,574,972 | $ | 60,369,703 | $ | - | $ | 60,369,703 | ||||||||||||||
45,337,336 | ||||||||||||||||||||||||||||
668,128 | ||||||||||||||||||||||||||||
Short-term obligations | 6,081,698 | 11,450,396 | 11,450,396 | |||||||||||||||||||||||||
5,368,698 | ||||||||||||||||||||||||||||
Deferred revenue | 4,592,602 | 4,592,602 | 4,592,602 | |||||||||||||||||||||||||
Derivative liabilities | 8,178,099 | 8,178,099 | 8,178,099 | |||||||||||||||||||||||||
Income tax payable | 4,263,905 | 187,417 | 4,451,322 | 4,451,322 | ||||||||||||||||||||||||
Accrued employee paid time-off | 389,016 | 389,016 | 389,016 | |||||||||||||||||||||||||
Notes payable and accrued interest, current portion | 14,343 | 14,343 | 14,343 | |||||||||||||||||||||||||
Accrued operating expenses and accounts payable | 253,353 | 253,353 | (253,353 | )U | - | |||||||||||||||||||||||
Other liabilities | 6,574,972 | (6,574,972 | ) | - | - | |||||||||||||||||||||||
Sponsor loan | 750,000 | 750,000 | (750,000 | )U | - | |||||||||||||||||||||||
Franchise tax payable | 293,220 | 293,220 | (293,220 | )U | - | |||||||||||||||||||||||
Interest bearing loans and borrowings | 5,368,698 | (5,368,698 | ) | - | - | |||||||||||||||||||||||
Trade payable | 45,337,336 | (45,337,336 | ) | - | - | |||||||||||||||||||||||
Financial liabilities | 668,128 | (668,128 | ) | - | - | |||||||||||||||||||||||
Accrued transaction expenses | 4,950,000 | 4,950,000 | (4,950,000 | )I | - | |||||||||||||||||||||||
Deferred tax liability | 1,232,597 | - | 1,232,597 | 1,232,597 | ||||||||||||||||||||||||
Other provisions | 187,417 | (187,417 | ) | - | - | |||||||||||||||||||||||
Total current liabilities | 20,963,327 | 6,246,573 | 63,633,053 | 6,081,698 | 96,924,651 | (6,246,573 | ) | 90,678,078 | ||||||||||||||||||||
Accrued liabilities | 4,334,293 | 4,334,293 | 4,334,293 | |||||||||||||||||||||||||
Other long-term liabilities | - | 305,378 | 305,378 | 305,378 | ||||||||||||||||||||||||
Note payable and accrued interest, non-current portion | 38,269 | 38,269 | 38,269 | |||||||||||||||||||||||||
Interest bearing loans and borrowings | 6,081,698 | (6,081,698 | ) | - | - | |||||||||||||||||||||||
Financial liabilities | 4,334,293 | (4,334,293 | ) | - | - | |||||||||||||||||||||||
Deferred underwriter compensation | 6,647,375 | 6,647,375 | (6,647,375 | )E | - | |||||||||||||||||||||||
Warrant liability | 19,234,450 | 19,234,450 | 19,234,450 | |||||||||||||||||||||||||
Deferred tax liabilities | 4,494,262 | 4,494,262 | (5,802,593 | )R | 30,362,669 | |||||||||||||||||||||||
31,671,000 | S | |||||||||||||||||||||||||||
Other liabilities | 305,378 | (305,378 | ) | - | - | |||||||||||||||||||||||
Total liabilities | 21,001,596 | 32,128,398 | 78,848,684 | - | 131,978,678 | 12,974,459 | 144,953,137 | |||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||
Common stock subject to possible redemption | 152,697,184 | 152,697,184 | (152,697,184 | )F | - | |||||||||||||||||||||||
Redeemable preferred stock | 122,540,318 | 122,540,318 | (122,540,318 | )G | - | |||||||||||||||||||||||
Stockholders' Equity | ||||||||||||||||||||||||||||
Common stock | 15,672 | 789 | 16,461 | (13,641 | )T | 3,572 | ||||||||||||||||||||||
1,527 | F | |||||||||||||||||||||||||||
238 | V | |||||||||||||||||||||||||||
(1,013 | )O | |||||||||||||||||||||||||||
Non voting common stock, $0.0001 par value | 1,437 | H | 1,912 | |||||||||||||||||||||||||
475 | P | |||||||||||||||||||||||||||
Treasury stock, 4,241,493 shares in treasury | (789,598 | ) | (789,598 | ) | 789,598 | B | (305 | ) | ||||||||||||||||||||
(305 | )X | |||||||||||||||||||||||||||
Additional paid-in capital | 9,014,707 | 4,999,212 | 14,013,919 | 13,641 | T | 401,544,622 | ||||||||||||||||||||||
(101,285,071 | )O | |||||||||||||||||||||||||||
47,499,525 | P | |||||||||||||||||||||||||||
23,749,762 | V | |||||||||||||||||||||||||||
152,695,657 | F | |||||||||||||||||||||||||||
143,106,164 | H | |||||||||||||||||||||||||||
(789,598 | )B | |||||||||||||||||||||||||||
122,540,318 | G | |||||||||||||||||||||||||||
305 | X | |||||||||||||||||||||||||||
Subscriptions receivable | (453,205 | ) | (453,205 | ) | (453,205 | ) | ||||||||||||||||||||||
Accumulated deficit | (128,536,244 | ) | (128,536,244 | ) | (11,875,000 | )Q | (149,711,244 | ) | ||||||||||||||||||||
(9,300,000 | )I | |||||||||||||||||||||||||||
Subscribed capital | 31,552,341 | 31,552,341 | (31,552,341 | )C | - | |||||||||||||||||||||||
Capital reserves | 40,159,732 | 40,159,732 | (40,159,732 | )C | - | |||||||||||||||||||||||
Retained earnings | 26,994,570 | 26,994,570 | (26,994,570 | )C | - | |||||||||||||||||||||||
Other components of equity | 4,473,982 | 4,473,982 | (4,473,982 | )C | - | |||||||||||||||||||||||
Non-Controlling interest | - | 24,113,246 | J | 24,113,246 | ||||||||||||||||||||||||
Total stockholders' equity | (120,748,668 | ) | 5,000,001 | 103,180,625 | - | (12,568,042 | ) | 288,066,640 | 275,498,598 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 22,793,246 | $ | 189,825,583 | $ | 182,029,309 | $ | - | $ | 394,648,138 | $ | 25,803,597 | $ | 420,451,735 |
* | Represents the historical AIA financial information reconciled from IFRS EU to U.S. GAAP and translated from Euros to U.S. Dollars. See “Footnote 5. Reconciliation and Translation of AIA Financial Information.” |
See accompanying notes to the unaudited pro forma condensed combined financial statements.
-4- |
Global Eagle Entertainment Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
for the Year Ended December 31, 2012
Statement of Operations for the twelve months ended December 31, 2012 | Row 44 (Historical) | GEAC (Historical) | AIA (U.S. GAAP) | Reclassification (A) | Combined | Pro Forma Adjustments | Combined Pro Forma | |||||||||||||||||||||
Revenues | $ | - | $ | - | $ | 167,391,253 | $ | (115,059,865 | ) | $ | - | $ | - | $ | - | |||||||||||||
(52,331,388 | ) | |||||||||||||||||||||||||||
Other operating income | 2,061,801 | (2,061,801 | ) | - | - | |||||||||||||||||||||||
Licensing revenues | 115,059,865 | 115,059,865 | 115,059,865 | |||||||||||||||||||||||||
Equipment revenue | 60,993,035 | 60,993,035 | 60,993,035 | |||||||||||||||||||||||||
Service revenue | 11,364,727 | 52,331,388 | 63,696,115 | 63,696,115 | ||||||||||||||||||||||||
Total revenue | 72,357,762 | - | 169,453,054 | (2,061,801 | ) | 239,749,015 | - | 239,749,015 | ||||||||||||||||||||
Cost of materials | 101,685,415 | (101,685,415 | ) | - | - | |||||||||||||||||||||||
Equipment cost of sales | 57,758,594 | 101,685,415 | 182,318,207 | 12,627,000 | B | 191,734,642 | ||||||||||||||||||||||
17,286,549 | (3,210,565 | )E | ||||||||||||||||||||||||||
3,210,565 | ||||||||||||||||||||||||||||
2,377,084 | ||||||||||||||||||||||||||||
Cost of services | 22,326,596 | 22,326,596 | 22,326,596 | |||||||||||||||||||||||||
Gross Profit (loss) | (7,727,428 | ) | - | 67,767,639 | (24,935,999 | ) | 35,104,212 | (9,416,435 | ) | 25,687,777 | ||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||
Personnel | 8,113,373 | 13,109,233 | 21,748,134 | 21,748,134 | ||||||||||||||||||||||||
525,528 | ||||||||||||||||||||||||||||
Selling, general and administrative | 10,389,280 | 1,143,129 | 12,656,283 | 22,959,389 | 2,370,750 | F | 25,330,139 | |||||||||||||||||||||
(1,229,303 | ) | |||||||||||||||||||||||||||
Research and development | 3,140,884 | - | 6,394,609 | 6,394,609 | ||||||||||||||||||||||||
155,443 | ||||||||||||||||||||||||||||
3,098,282 | ||||||||||||||||||||||||||||
Other operating (income) expense | 17,284,256 | (12,656,283 | ) | (717,602 | ) | (717,602 | ) | |||||||||||||||||||||
(155,443 | ) | |||||||||||||||||||||||||||
(2,061,801 | ) | |||||||||||||||||||||||||||
(525,528 | ) | |||||||||||||||||||||||||||
(2,377,084 | ) | |||||||||||||||||||||||||||
(664 | ) | |||||||||||||||||||||||||||
(225,055 | ) | |||||||||||||||||||||||||||
Depreciation, amortization and impairment losses | 5,960,822 | 1,229,303 | 3,979,560 | (1,682,547 | )E | 2,406,768 | ||||||||||||||||||||||
(3,210,565 | ) | 109,755 | B | |||||||||||||||||||||||||
Transaction costs | 5,214,155 | - | 5,214,155 | (5,214,155 | )G | - | ||||||||||||||||||||||
Staff costs | 33,494,064 | (13,109,233 | ) | - | - | |||||||||||||||||||||||
(3,098,282 | ) | |||||||||||||||||||||||||||
(17,286,549 | ) | |||||||||||||||||||||||||||
Total operating costs and expenses | 21,643,537 | 6,357,284 | 56,739,142 | (25,161,718 | ) | 59,578,245 | (4,416,197 | ) | 55,162,048 | |||||||||||||||||||
Income (Loss) from operations | (29,370,965 | ) | (6,357,284 | ) | 11,028,497 | 225,719 | (24,474,033 | ) | (5,000,238 | ) | (29,474,271 | ) | ||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||
Interest expense | (10,433,201 | ) | (1,930,839 | ) | (12,589,095 | ) | (12,589,095 | ) | ||||||||||||||||||||
(225,055 | ) | |||||||||||||||||||||||||||
Interest income | 64,685 | 10,549 | 67,708 | 142,942 | 142,942 | |||||||||||||||||||||||
Other income (expense) | - | - | - | |||||||||||||||||||||||||
Loss on disposal of asset | (23,909 | ) | (664 | ) | (24,573 | ) | (24,573 | ) | ||||||||||||||||||||
Change in value of derivative financial instruments | (3,575,830 | ) | (4,158,800 | ) | (7,734,630 | ) | (7,734,630 | ) | ||||||||||||||||||||
Finance income | 67,708 | (67,708 | ) | - | - | |||||||||||||||||||||||
Finance costs | (1,930,839 | ) | 1,930,839 | - | - | |||||||||||||||||||||||
Total other income (expense) | (13,968,255 | ) | (4,148,251 | ) | (1,863,131 | ) | (225,719 | ) | (20,205,356 | ) | - | (20,205,356 | ) | |||||||||||||||
Income (loss) before income taxes | (43,339,220 | ) | (10,505,535 | ) | 9,165,366 | - | (44,679,389 | ) | (5,000,238 | ) | (49,679,627 | ) | ||||||||||||||||
Income tax | 4,044,653 | 4,044,653 | (1,944,360 | )C | 2,100,293 | |||||||||||||||||||||||
Net income (loss) | (43,339,220 | ) | (10,505,535 | ) | 5,120,713 | - | (48,724,042 | ) | (3,055,878 | ) | (51,779,920 | ) | ||||||||||||||||
Net income (loss) attributable to Non-Controlling interest | - | - | - | - | 639,611 | D | 639,611 | |||||||||||||||||||||
Net income (loss) attributable to the Company | $ | (43,339,220 | ) | $ | (10,505,535 | ) | $ | 5,120,713 | $ | - | $ | (48,724,042 | ) | $ | (3,695,489 | ) | $ | (52,419,531 | ) | |||||||||
Net loss per common share: | ||||||||||||||||||||||||||||
Basic and diluted | $ | (0.96 | ) | |||||||||||||||||||||||||
Weighted-average shares outstanding | ||||||||||||||||||||||||||||
Basic and diluted | 54,842,888 |
* | Represents the historical AIA financial information reconciled from IFRS EU to U.S. GAAP and translated from Euros to U.S. Dollars. See “Footnote 5. Reconciliation and Translation of AIA Financial Information.” |
See accompanying notes to the unaudited pro forma condensed combined financial statements.
-5- |
1. Description of the Business Combination and Basis of Presentation
Description of the Business Combination
The Row 44 Merger Agreement provided for the combination of the Company and Row 44 through a merger of GEAC Merger Sub (a newly formed wholly owned subsidiary of the Company) with and into Row 44, whereby Row 44 became a wholly owned subsidiary of the Company. As a result of the Row 44 Merger, former equity holders of Row 44 became stockholders of the Company. Concurrently with the closing of the Row 44 Merger, the Company acquired a controlling interest in AIA from PAR pursuant to the AIA Stock Purchase Agreement, consisting of 20,464,581 shares of AIA, or approximately 86% of the issued and outstanding shares of AIA. After consummation of the Business Combination, approximately 14% of the issued and outstanding shares of AIA are held by stockholders other than the Company, and AIA’s shares will continue to be traded on the Frankfurt Stock Exchange Xetra.
Pursuant to the Row 44 Merger Agreement, upon the effectiveness of the Row 44 Merger, all shares of capital stock (including common and preferred stock) of Row 44 then outstanding were converted into the right to receive shares of common stock of the Company (collectively, the Closing Net Merger Shares), and all options to purchase common stock of Row 44 were net stock settled for shares of common stock of the Company (collectively, the Row 44 Option Settlement Shares). The aggregate number of Closing Net Merger Shares and Row 44 Option Settlement Shares, taken together, that were issued at closing of the Row 44 Merger was calculated by (a) dividing (i) $250.0 million, (A) plus Row 44’s working capital surplus , (B) minus the estimated indebtedness of Row 44 at closing, including (1) the amount of $11.9 million payable to PAR under the Backstop Fee Agreement and (2) any obligations of Row 44 under any note or other agreement to repurchase shares of capital stock of Row 44 (which in the aggregate may not exceed $13.1 million) and (C) minus the aggregate Black-Scholes value of certain warrants of Row 44 being assumed by the Company at closing, by (ii) $10.00, and then (b) subtracting the number of shares of common stock of the Company into which (i) the vested portion of a certain performance warrant of Row 44 and (ii) any unexercised Row 44 penny warrants will be exercisable from and after the Row 44 Merger. The Company issued at closing 23,405,785 shares of GEAC common stock to the Row 44 equity holders and paid approximately $12.0 million of Row 44 indebtedness (including the amount payable to PAR pursuant to the Backstop Fee Agreement) and assumed certain Row 44 warrants.
Ten percent (10%) of the Closing Net Merger Shares was placed in escrow to secure (1) any post-closing purchase price adjustment due to the Company from Row 44 pursuant to the terms of the Row 44 Merger Agreement and (2) Row 44’s indemnification obligations under the Row 44 Merger Agreement. Any shares in escrow which are not subject to pending claims as of the date 18 months after the closing will be released to the Row 44 stockholders. No portion of the Row 44 Option Settlement Shares will be placed in or subject to escrow.
In addition to the Company shares issued in respect of Row's outstanding shares of capital stock and options, as a result of the Row 44 Merger the Company assumed all outstanding warrants of Row 44, other than those penny warrants of Row 44 which were exercised prior to closing.
-6- |
Pursuant to the terms of the AIA Stock Purchase Agreement, the Company purchased AIA Shares from PAR for a $143.1 million purchase price consisting of 14,368,233 shares of the Company non-voting common stock.
Basis of Presentation
The Business Combination was accounted for as a reverse merger of Row 44 and the Company and a concurrent acquisition of the shares of AIA. Row 44 was determined to be the accounting acquirer based on the following evaluation of the facts and circumstances:
• | Row 44 has the greatest enterprise value of the Companies based on the consideration paid by the Company; |
• | The composition of officers of the newly Combined Company is derived primarily of existing Row 44 executives, including the chief operating officer (principal executive officer), chief financial officer and general counsel; |
• | The proposed board of directors of the Company after the Business Combination consists of two GEAC representatives, who will be deemed to be independent following closing under Nasdaq listing standards, one AIA representative, two Row 44 representatives, and two independent members who were not members of the respective boards of directors of any of Row 44, AIA, or GEAC. The proposed composition of the board of directors does not result in the ability of any of the companies being able to appoint, elect, or remove a majority of the board of directors. Therefore, the composition of the board of directors does not negate the evidence that Row 44 is the accounting acquirer; |
• | The Company paid a premium over the market value of the AIA issued and outstanding shares prior to the public announcement of the AIA Stock Purchase Agreement, which indicates that AIA is not the accounting acquirer; and |
• | The headquarters location of the Combined Company is in the Los Angeles metropolitan area. |
A preponderance of the evidence discussed above supports the conclusion that Row 44 is the accounting acquirer in the Business Combination.
Since Row 44 is determined to be the accounting acquirer in the reverse merger with the Company, the accounting for the Row 44 Merger is similar to that of a capital infusion as the only pre-combination asset of the Company is cash held in trust. The assets and liabilities of the Company are carried at historical cost and Row 44 did not record any step-up in basis or any intangible assets or goodwill as a result of the Row 44 Merger.
Concurrently with the Row 44 Merger, the Company, pursuant to the AIA Stock Purchase Agreement, acquired 86% of the issued and outstanding shares of AIA held by PAR. AIA constitutes a business, with inputs, processes, and outputs. Accordingly, the acquisition of the AIA shares constitutes the acquisition of a business for purposes of Financial Accounting Standards Board’s Accounting Standard Codification 805, “ Business Combinations ,” or ASC 805, and due to the change in control, is accounted for using the acquisition method.
Under the acquisition method, the acquisition-date fair value of the gross consideration transferred to affect the AIA Purchase Agreement, as described in Note 4, is allocated to the assets acquired, the liabilities assumed, and non-controlling interest based on their estimated fair values. Management of the Combined Company has made significant estimates and assumptions in determining the preliminary allocation of the gross consideration transferred in the unaudited pro forma condensed combined financial statements. As the unaudited pro forma condensed combined financial statements have been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented.
-7- |
Under ASC 805, acquisition-related costs (such as advisory, legal, valuation, other professional fees) that are not expected to recur are expensed. Row 44, the Company, and AIA expect to incur total acquisition-related costs of $20.9 million.
The unaudited pro forma condensed combined balance sheet as of December 31, 2012 assumes the Business Combination was completed on December 31, 2012. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2012, assume the Business Combination was completed on January 1, 2012. The unaudited pro forma condensed combined financial statements are based on the historical consolidated financial statements of the Companies and related adjustments.
The unaudited pro forma condensed combined financial statements do not give effect to any anticipated synergies, operating efficiencies or cost savings that may be associated with the business combination. Certain reclassification adjustments have been made in the unaudited pro forma condensed combined financial statements to conform the Company’s and AIA’s historical basis of presentation to that of Row 44’s.
The AIA financial statements used to prepare the pro forma adjustments were converted from International Financial Reporting Standards (“IFRS”) as adopted by the EU to United States generally accepted accounting principles (“U.S. GAAP”).
The pro forma adjustments are based on the information currently available. The assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. In accordance with ASC 805, any subsequent changes to the allocation of consideration transferred that result in material changes to the consolidated financial statements during the measurement period will be adjusted retrospectively.
The unaudited pro forma condensed combined statements of operations are not necessarily indicative of what the actual results of operations would have been had the Business Combination taken place on the date indicated, nor are they indicative of the future consolidated results of operations of the Combined Company. They should be read in conjunction with the historical consolidated financial statements and notes thereto of the Companies.
2. Accounting Policies
Upon consummation of the Business Combination, Row 44 will complete a detailed review of the Company and AIA accounting policies. As a result of that review, Row 44 may identify differences between the accounting policies among the Companies that, when conformed, could have a material impact on the consolidated financial statements of the Combined Company.
3. Adjustments to Unaudited Pro Forma Combined Financial Statements
The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and has been prepared for informational purposes only. The unaudited pro forma condensed combined financial information is based upon the historical consolidated financial statements of the Companies and should be read in conjunction with their historical financial statements.
The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the Business Combination, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the results of the Combined Company.
There were no significant intercompany balances or transactions between the Companies as of the dates and for the periods of these unaudited pro forma combined financial statements.
The pro forma combined consolidated provision for income taxes does not necessarily reflect the amounts that would have resulted had the Companies filed consolidated income tax returns during the periods presented.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of the Company’s shares outstanding, assuming the transaction occurred on January 1, 2012.
-8- |
Adjustments to Unaudited Pro Forma Combined Balance Sheet
The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2012 are as follows:
A. | Reflects the reclassification of AIA amounts to present financial information of the Combined Company in conformity with the presentation and format of Row 44. |
B. | To remove the historical treasury stock of Row 44. |
C. | To remove the historical equity accounts of AIA. |
D. | Reflects the reclassification of $189.6 million of cash and cash equivalents held in the GEAC trust account that is available for transaction consideration, transaction expenses, redemption of public shares and the operating activities of the Company following the Business Combination. |
E. | Reflects the payment of $6.6 million of deferred underwriters' compensation which was charged to capital at the time of the Company’s initial public offering of its shares of common stock but not payable until the consummation of Business Combination. |
F. | Reflects the reclassification redeemable of common stock subject to possible redemption to permanent equity. |
G. | Reflects the exercise/conversion of redeemable preferred stock to common stock per the Row 44 Merger Agreement upon the consummation of the Business Combination. |
H. | Reflects the issuance of shares to purchase 86% of the AIA outstanding shares held by PAR. |
I. | Reflects the adjustment to record the estimated cash payments related to acquisition related costs. |
J. | Reflects the recording of the 14% AIA non-controlling interest. |
K. | To eliminate AIA's historical intangible assets. |
L. | To record the estimated fair value of AIA's intangible assets. |
M. | To eliminate AIA's historical goodwill. |
N. | To record goodwill for the excess purchase price of AIA over the fair value of assets acquired and liabilities assumed. |
O. | Reflects the redemption of 10,164,081 shares of GEAC for $101.3 million ($9.97 per share). |
P. | Reflects the exercise of the PAR Backstop Agreement and PAR’s purchase of 4,750,000 shares of non-voting common stock of GEAC for $47.5 million. |
Q. | Reflects the payment of $11.9 million to PAR in association with the Backstop Agreement. |
R. | Reflects the elimination of historical AIA deferred tax liabilities related to the historical intangibles. |
S. | Reflects the recognition of deferred tax liabilities related to the step-up of intangibles during purchase accounting for the purchase of the AIA shares. |
T. | Reflects the re-capitalization of common stock of Row 44. |
U. | Reflects the payment of accrued liabilities, accounts payable, Sponsor loan and franchise tax payable of GEAC at closing. |
V. | Reflects the exercise of the Putnam Backstop Agreement whereby Putnam purchased 2,375,000 shares of GEAC common stock for $23.8 million. |
W. | Reflects the consolidation adjustment to eliminate AIA’s investment in 3,053,634 shares of Global Eagle Entertainment Inc. stock, per ASC 810. |
-9- |
X. | To present the recording of treasury stock related to AIA’s 3,053,634 shares held in Global Eagle Entertainment Inc. |
Adjustments to Unaudited Pro Forma Combined Statements of Operations
The pro forma adjustments included in the unaudited pro forma condensed statement of operations for the year ended December 31, 2012 are as follows:
A. | Reflects the reclassification of AIA amounts to present financial information of the combined entity in conformity with the presentation and format of Row 44. |
B. | Reflects amortization expense associated with the step-up of definite lived intangibles in purchase accounting of AIA. |
C. | Reflects the adjustment to record the provision for tax expense on pretax adjustments. |
D. | Reflects the income attributable to the non-controlling interest. |
E. | Reflects amortization expense associated with historical intangibles eliminated as a result of AIA purchase accounting. |
F. | The pro forma adjustment reflects a stock compensation charge related to options granted to employees as a direct result of the Business Combination. |
G. | Reflects the elimination of non-recurring transaction costs related to the Business Combination. |
4. AIA Stock Purchase Agreement and Estimated Fair Value of Assets Acquired and Liabilities Assumed
The total gross consideration transferred pursuant to the AIA Stock Purchase Agreement to acquire 86% of the issued and outstanding shares of AIA currently owned by PAR was $143.1 million.
-10- |
The preliminary allocation of the consideration to the tangible and definite-lived intangible assets acquired, liabilities assumed, and non-controlling interest is based on various preliminary estimates. Since these unaudited pro forma condensed combined financial statements have been prepared based on preliminary estimates the actual amounts recorded for the acquisition may differ from the information presented.
Allocation of Consideration | ||||
Cash and cash equivalents | $ | 21,520,061 | ||
Inventories | 14,568,415 | |||
Trade receivables | 30,253,467 | |||
Financial assets | 22,562 | |||
Current income tax assets | 4,989,896 | |||
Other assets | 2,541,904 | |||
Total current assets | 73,896,305 | |||
Property plant, and equipment, net | 2,137,027 | |||
Customer relationships | 68,400,000 | |||
Definite-lived intangible assets | 47,132,000 | |||
Other non-current assets | 305,830 | |||
Financial assets | 5,905,513 | |||
Total identifiable assets acquired | 197,776,675 | |||
Current liabilities | 62,880,180 | |||
Deferred tax liabilities and other non-current liabilities | 41,084,038 | |||
Net identifiable assets acquired | 93,812,457 | |||
Goodwill | 73,408,390 | |||
Net assets acquired | 167,220,847 | |||
Non-controlling interest | (24,113,246 | ) | ||
Total gross consideration | $ | 143,107,601 |
Details of acquired definite-lived intangibles are as follows:
Fair Value | Useful life | |||||
Customer relationships | $ | 68,400,000 | 9 | |||
Existing technology | 37,800,000 | 9 | ||||
Tradenames | 7,900,000 | 10 | ||||
Film rights | 74,000 | 2 | ||||
Non-competition agreements | 1,358,000 | * | ||||
Total definite-lived intangibles | $ | 115,532,000 | ||||
Weighted average life of definite-lived intangibles | 9 |
* | The non-competition agreements are to be amortized over the lives of the respective agreements. |
The amortization of the definite-lived identifiable intangible assets for the first five years after acquisition and thereafter is as follows:
Amortization Expense | ||||
2013 | 12,736,755 | |||
2014 | 12,709,005 | |||
2015 | 12,699,755 | |||
2016 | 12,834,626 | |||
2017 | 12,969,496 | |||
Thereafter | 51,582,363 | |||
Total future amortization | $ | 115,532,000 |
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Definite-lived intangible assets — Customer relationships represent existing contractual relationships with airline customers. Existing technology relates to the software and games that are developed and licensed by AIA. Tradenames are the names that AIA owns and utilizes. Non-competition agreements relate to contracts entered into with certain individuals related to historical business acquisitions undertaken by AIA. All of the definite-lived intangible assets will be amortized on a straight-line basis over their estimated useful lives which the Combined Company management believes are the best representations of their expected impact on related cash flows. The estimated useful lives of customer relationships, existing technology, and film rights were based on the relative contributions of the cash flows over the forecast used to determine the fair value of the asset. The estimated useful life of tradenames was based on the historical operating life of AIA as well as the fact that its key customer relationships and technology assets tended to have relatively long useful lives.
To estimate the fair value of the customer relationships and existing technology, the Combined Company management applied the income approach. The key inputs were: (i) the projected revenue and earnings generated by the asset; (ii) the expected life of the asset; (iii) a discount rate of 26% that reflects the level of risk associated with receiving future cash flow; and (iv) effective tax rates ranging from 26% to 45%. The estimated discount rate is what management of the Combined Company believes to be a reasonable rate of return that a market participant would expect to receive from a similar asset.
To estimate the fair value of the tradenames, management applied the royalty savings method. The method is a variation of the income approach. It is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. The royalty rate is tax affected and then applied to the projected revenue over the expected remaining life of the intangible asset to estimate the royalty savings. The net after-tax royalty savings is then discounted at 26%. Management of the Combined Company estimated the after-tax royalty rate for the tradename to be approximately 1.0% based on the profit split method.
The acquisition was be treated for tax purposes as a non-taxable transaction and, as such, the historical tax bases of the acquired assets and assumed liabilities, net operating losses, and other tax attributes of AIA will carryover. As a result, no new tax-deductible goodwill will be created in connection with the acquisition as there is no step-up to fair value of the underlying tax bases of the acquired net assets. Acquisition accounting includes the establishment of net deferred tax assets and liabilities resulting from book-tax basis differences related to assets acquired and liabilities assumed on the date of acquisition.
Goodwill — Approximately $73.4 million has been allocated to goodwill. Goodwill represents the excess of the gross consideration transferred over the fair value of the underlying net tangible and identifiable definite-lived intangible assets acquired.
Qualitative factors that contribute to the recognition of goodwill include certain intangible assets that are not recognized as separate identifiable intangible assets apart from goodwill. Intangible assets not recognized apart from goodwill consist primarily of the assembled workforces at AIA.
In accordance with ASC Topic 350, Goodwill and Other Intangible Assets , goodwill will not be amortized, but instead will be tested for impairment at least annually or more frequently if certain indicators are present. In the event management of the Combined Company determines that the value of goodwill has become impaired, an accounting charge for the amount of impairment during the quarter in which the determination is made may be recognized.
5. Reconciliation and Translation of Historical AIA Financial Information
The AIA audited financial information was prepared in accordance with IFRS as adopted by the EU. The following schedules convert AIA financial information from IFRS as adopted by the EU to U.S. GAAP and are translated from Euros into U.S. Dollars, only for purposes of the unaudited pro forma condensed financial statements.
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AIA Unaudited U.S. GAAP Balance Sheet As of December 31, 2012
AIA (Euros) | Translation Rate | AIA (U.S. $) | Conversion Adjustments | AIA (U.S. $) US GAAP | ||||||||||||||||
Non-current assets | ||||||||||||||||||||
Intangible assets: | ||||||||||||||||||||
Goodwill | 38,090,242 | 1.3194 | 50,256,266 | 50,256,266 | ||||||||||||||||
Film rights | 37,193 | 1.3194 | 49,073 | 49,073 | ||||||||||||||||
Other intangible assets | 21,742,233 | 1.3194 | 28,686,702 | (6,153,402 | ) | 22,533,300 | ||||||||||||||
Property, plant and equipment | ||||||||||||||||||||
Land and buildings | 160,913 | 1.3194 | 212,309 | 212,309 | ||||||||||||||||
Operating and office equipment | 1,458,783 | 1.3194 | 1,924,718 | 1,924,718 | ||||||||||||||||
Financial assets | 4,475,908 | 1.3194 | 5,905,513 | 5,905,513 | ||||||||||||||||
Deferred tax assets | 88,570 | 1.3194 | 116,859 | (116,859 | ) | - | ||||||||||||||
Other long-term assets | 143,816 | 1.3194 | 189,751 | 116,079 | 305,830 | |||||||||||||||
Total non-current assets | 66,197,658 | 87,341,191 | (6,154,182 | ) | 81,187,009 | |||||||||||||||
Current assets | ||||||||||||||||||||
Inventories | 11,041,697 | 1.3194 | 14,568,415 | (12,425,302 | ) | 2,143,113 | ||||||||||||||
Short-term film rights | - | 1.3194 | - | 12,425,302 | 12,425,302 | |||||||||||||||
Trade receivables | 22,929,716 | 1.3194 | 30,253,467 | 30,253,467 | ||||||||||||||||
Financial assets | 17,101 | 1.3194 | 22,563 | 22,563 | ||||||||||||||||
Current income tax benefits | 3,781,943 | 1.3194 | 4,989,896 | 4,989,896 | ||||||||||||||||
Cash and equivalents | 16,310,491 | 1.3194 | 21,520,061 | 21,520,061 | ||||||||||||||||
Available-for-sale financial assest, current | 21,201,228 | 1.3194 | 27,972,902 | (1,779,780 | ) | 26,193,122 | ||||||||||||||
Deferred tax asset | - | 1.3194 | - | 752,873 | 752,873 | |||||||||||||||
Other assets | 1,926,560 | 1.3194 | 2,541,903 | 2,541,903 | ||||||||||||||||
Total current assets | 77,208,736 | 101,869,207 | (1,026,907 | ) | 100,842,300 | |||||||||||||||
Total assets | 143,406,394 | 189,210,398 | (7,181,089 | ) | 182,029,309 | |||||||||||||||
Equity attributable to the equity holders of the parent | ||||||||||||||||||||
Subscribed capital | 23,914,159 | 1.3194 | 31,552,341 | 31,552,341 | ||||||||||||||||
Capital reserves | 30,437,875 | 1.3194 | 40,159,732 | 40,159,732 | ||||||||||||||||
Retained earnings | 24,119,682 | 1.3194 | 31,823,508 | (4,828,938 | ) | 26,994,570 | ||||||||||||||
Other components of equity | 4,374,165 | 1.3194 | 5,771,273 | (1,297,291 | ) | 4,473,982 | ||||||||||||||
Total equity | 82,845,881 | 109,306,854 | (6,126,229 | ) | 103,180,625 | |||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Interest bearing loans and borrowings | 4,521,464 | 1.3194 | 5,965,620 | 116,078 | 6,081,698 | |||||||||||||||
Financial liabilities | 3,285,048 | 1.3194 | 4,334,293 | 4,334,293 | ||||||||||||||||
Other liabilities | 231,452 | 1.3194 | 305,378 | 305,378 | ||||||||||||||||
Deferred tax liabilities | 5,227,980 | 1.3194 | 6,897,797 | (2,403,535 | ) | 4,494,262 | ||||||||||||||
Total non-current liabilities | 13,265,944 | 17,503,088 | (2,287,457 | ) | 15,215,631 | |||||||||||||||
Current liabilities | ||||||||||||||||||||
Interest bearing loans and borrowings | 4,069,045 | 1.3194 | 5,368,698 | 5,368,698 | ||||||||||||||||
Trade payables | 34,362,085 | 1.3194 | 45,337,336 | 45,337,336 | ||||||||||||||||
Income tax payable | 3,231,700 | 1.3194 | 4,263,905 | 4,263,905 | ||||||||||||||||
Other provisions | 142,047 | 1.3194 | 187,417 | 187,417 | ||||||||||||||||
Financial liabilities | 506,388 | 1.3194 | 668,128 | 668,128 | ||||||||||||||||
Deferred tax liability | 1.3194 | 1,232,597 | 1,232,597 | |||||||||||||||||
Other liabilities | 4,983,305 | 1.3194 | 6,574,972 | 6,574,972 | ||||||||||||||||
Total current liabilities | 47,294,571 | 62,400,456 | 1,232,597 | 63,633,053 | ||||||||||||||||
Total equity and liabilities | 143,406,394 | 189,210,398 | (7,181,089 | ) | 182,029,309 |
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AIA Unaudited U.S. GAAP Income Statement for Year Ended December 31, 2012
AIA (Euros) | Translation Rate | AIA (U.S. $) | Conversion Adjustments | AIA (U.S. $) US GAAP | ||||||||||||||||
Revenue | 130,280,774 | 1.2849 | 167,391,252 | 167,391,252 | ||||||||||||||||
Other operating income | 1,604,702 | 1.2849 | 2,061,801 | 2,061,801 | ||||||||||||||||
Cost of materials | 80,244,845 | 1.2849 | 103,102,589 | (1,417,174 | ) | 101,685,415 | ||||||||||||||
Staff costs | 24,296,864 | 1.2849 | 31,217,826 | 2,276,238 | 33,494,064 | |||||||||||||||
Depreciation, amortization and impairment losses | 4,639,313 | 1.2849 | 5,960,822 | 5,960,822 | ||||||||||||||||
Other operating expenses | 12,757,840 | 1.2849 | 16,391,911 | 892,344 | 17,284,255 | |||||||||||||||
Income from operating activities | 9,946,614 | 12,779,905 | (1,751,408 | ) | 11,028,497 | |||||||||||||||
Finance income | 52,697 | 1.2849 | 67,708 | 67,708 | ||||||||||||||||
Finance costs | (1,543,686 | ) | 1.2849 | (1,983,405 | ) | 52,566 | (1,930,839 | ) | ||||||||||||
Earnings before income taxes | 8,455,625 | 10,864,208 | (1,698,842 | ) | 9,165,366 | |||||||||||||||
Income taxes | 3,543,371 | 1.2849 | 4,552,699 | (508,046 | ) | 4,044,653 | ||||||||||||||
Net income | 4,912,254 | 6,311,509 | (1,190,796 | ) | 5,120,713 |
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