Attached files
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| 8-K/A - Pulse Network, Inc. | g6951.htm |
Exhibit 99.2
The Pulse Network, Inc.
(formerly Isoft International Inc.)
Notes to the Pro Forma Consolidated Financial Statements
1. Basis of Presentation
On March 29, 2013, the Pulse Network, Inc. (formerly iSoft International Inc.), a Nevada corporation (“Pubco”), entered into a Share Exchange Agreement with The Pulse Network, Inc., a Massachusetts corporation (“Target”), and the holders of common stock of the Target. Under the terms and conditions of the Share Exchange Agreement, Pubco sold 75,000,000 shares of common stock, 1,000 shares of Series A Preferred Stock and 15,000,000 shares of Series B Preferred Stock of the Pubco in consideration for all the issued and outstanding shares in the Target. Each share of Series A Preferred Stock is convertible into one share of common stock of the Pubco and requires the consent of the majority of the holders of Series A Preferred Stock to change the composition of the board of directors or President and Chief Executive Officer of the Pubco, change the Articles of Incorporation or Bylaws of the Pubco, or engage in merger, sale of assets, share exchange or other reorganization of the Pubco. Each share of Series B Preferred Stock is convertible into 5 shares of common stock and equal to 100 votes of common stock of the Pubco.
Concurrent with the share exchange agreement, Mr. Mohamad Ayad, who served as President and Chief Executive Officer, Secretary, Treasurer and Director from March 9, 2011 until March 29, 2013, tendered 75,000,000 shares of common stock of the Pubco for redemption, for an aggregate redemption price of $7.50.
The share exchange transaction with the Target was treated as a reverse acquisition and as a result, the Target became a wholly owned subsidiary. The former shareholders of the Target became the controlling stockholders of the Pubco (holding approximately 90.9% of the outstanding common shares, subsequent to the redemption of Mr. Ayad’s shares).
These unaudited pro forma consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in US dollars. These pro forma financial statements do not contain all of the information required for annual financial statements. Accordingly, they should be read in conjunction with the most recent annual and interim financial statements of the Pubco.
These pro forma financial statements have been compiled from and include:
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1.
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unaudited pro forma balance sheet combining the unaudited interim balance sheet of the Pubco and the Target as at December 31, 2012, giving effect to the transaction as if it occurred on the respective balance sheet date, and an unaudited pro forma statement of operations combining the unaudited interim statement of operations of the Pubco and the Target for the nine months ended December 31, 2012.
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2.
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unaudited pro forma balance sheet combining the audited balance sheets of the Pubco and the Target as at March 31, 2012, giving effect to the transaction as if it occurred on the respective balance sheet date, and an unaudited pro forma statement of operations combining the audited statements of operations of the Pubco and the Target for the fiscal year ended March 31, 2012.
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2. Pro Forma Adjustments
The unaudited pro forma financial statements reflect the retroactive restatement of the 15 for 1 stock split of the Pubco’s common shares effective March 14, 2103 and incorporate the following pro forma assumptions and adjustments:
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Target
Common
Shares
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Pubco
Series A
Preferred
Shares
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Pubco
Series B
Preferred
Shares
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Pubco
Common
Shares
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Par
Value (a)
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Additional
Paid In
Capital
12/31/12
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Additional
Paid In
Capital
03/31/12
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||||||||||||||||||||||
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Outstanding Shares prior to transaction
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||||||||||||||||||||||||||||
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Pubco
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90,000,000 | $ | 90,000 | $ | (33,672 | ) | $ | (34,347 | ) | |||||||||||||||||||
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Target
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90,000 | 900 | 240,830 | 240,830 | ||||||||||||||||||||||||
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Pubco issues the following in exchange for all of the outstanding Target shares:
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||||||||||||||||||||||||||||
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Series A Preferred
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1,000 | 1 | (1 | ) | (1 | ) | ||||||||||||||||||||||
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Series B Preferred
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15,000,000 | 15,000 | (15,000 | ) | (15,000 | ) | ||||||||||||||||||||||
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Common
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75,000,000 | 75,000 | (75,000 | ) | (75,000 | ) | ||||||||||||||||||||||
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Target share exchange
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(90,000 | ) | (900 | ) | 900 | 900 | ||||||||||||||||||||||
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Eliminate Pubco accumulated deficit as at transaction date (b)
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(47,633 | ) | (9,734 | ) | ||||||||||||||||||||||||
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Redemption of Pubco shares – M. Ayad for $7.50 (c)
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(75,000,000 | ) | (75,000 | ) | 74,993 | 74,993 | ||||||||||||||||||||||
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Pro forma balance
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- | 1,000 | 15,000,000 | 90,000,000 | $ | 105,001 | (d) | $ | 145,417 | $ | 182,641 | |||||||||||||||||
(a) Par value of all Pubco shares is $0.001. Par value of all Target shares is $0.01
(b) offsetting adjusting entry is a credit to the pro forma accumulated deficit
(c ) redemption price of $7.50was payable to M. Ayad as at the transaction date
(d) the resultant pro forma par value balance consists of:
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1,000 Series A Preferred Shares
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$ | 1 | ||
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15,000,000 Series B Preferred Shares
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15,000 | |||
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90,000,000 Common Shares
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90,000 | |||
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Total
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$ | 105,001 |
The Pulse Network, Inc.
(Formerly Isoft International Inc.)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
As Of December 31, 2012
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Target
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Pubco
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Adjustments
(Note 2)
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Pro-Forma
Combined
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|||||||||||||
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
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Assets
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Current Assets
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||||||||||||||||
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Cash & bank accounts
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$ | - | $ | 8,855 | $ | - | $ | 8,855 | ||||||||
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Accounts receivable net of allowance for doubtful accounts
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517,474 | - | - | 517,474 | ||||||||||||
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Prepaid expenses
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43,506 | - | - | 43,506 | ||||||||||||
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Total Current Assets
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560,980 | 8,855 | 569,835 | |||||||||||||
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Property, plant and equipment net of accumulated amortization
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202,884 | - | 202,884 | |||||||||||||
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Other Assets
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||||||||||||||||
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Due from stockholder
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76,044 | - | 76,044 | |||||||||||||
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Other assets
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31,085 | - | 31,085 | |||||||||||||
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Total Other Assets
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107,129 | - | 107,129 | |||||||||||||
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Total Assets
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$ | 870,993 | $ | 8,855 | $ | - | $ | 879,848 | ||||||||
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Liabilities and Stockholders’ Equity (Deficit)
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Current Liabilities
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Accounts payable and accrued liabilities
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$ | 470,656 | $ | 160 | $ | 7 | $ | 470,823 | ||||||||
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Note payable
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250,000 | - | 250,000 | |||||||||||||
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Current maturities capital leases
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15,729 | - | 15,729 | |||||||||||||
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Deferred revenue
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428,877 | - | 428,877 | |||||||||||||
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Advances from stockholders
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595,515 | - | 595,515 | |||||||||||||
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Due to affiliates
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73,554 | - | 73,554 | |||||||||||||
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Deferred compensation – current portion
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56,251 | - | 56,251 | |||||||||||||
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Total Current Liabilities
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1,887,582 | 160 | 7 | 1,887,749 | ||||||||||||
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Deferred compensation
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870,718 | 870,718 | ||||||||||||||
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Capital leases
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31,824 | 31,824 | ||||||||||||||
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Total Liabilities
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2,790,124 | 160 | 7 | 2,790,291 | ||||||||||||
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Stockholders’ Equity (Deficit)
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Share Capital
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Authorized: 25,000,000 preferred shares $0.001 PV
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200,000,000 common shares $0.001 PV
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Issued:
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1,000 Series A voting convertible preferred shares
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1 | 1 | ||||||||||||||
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15,000,000 Series B voting convertible preferred shares
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15,000 | 15,000 | ||||||||||||||
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90,000,000 common shares
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900 | 90,000 | (900 | ) | 90,000 | |||||||||||
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Additional paid-in-capital (deficiency)
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240,830 | (33,672 | ) | (61,741 | ) | 145,417 | ||||||||||
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Accumulated deficit
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(2,160,861 | ) | (47,633 | ) | 47,633 | (2,160,861 | ) | |||||||||
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Total Stockholders’ Equity (Deficit)
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(1,919,131 | ) | 8,695 | (7 | ) | (1,910,443 | ) | |||||||||
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Total Liabilities and Stockholders’ Equity (Deficit)
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$ | 870,993 | $ | 8,855 | $ | - | $ | 879,848 | ||||||||
The Pulse Network, Inc.
(Formerly Isoft International Inc.)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
As Of March 31, 2012
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Target
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Pubco
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Adjustments
(Note 2)
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Pro-Forma
Combined
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|||||||||||||
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(Audited)
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(Audited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
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Assets
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Current Assets
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Cash & bank accounts
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$ | 10,727 | $ | 45,729 | $ | - | $ | 56,456 | ||||||||
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Accounts receivable net of allowance for doubtful accounts
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253,362 | - | - | 253,362 | ||||||||||||
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Prepaid expenses
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70,230 | 350 | - | 70,580 | ||||||||||||
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Total Current Assets
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334,319 | 46,079 | 380,398 | |||||||||||||
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Property, plant and equipment net of accumulated amortization
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231,307 | - | - | 231,307 | ||||||||||||
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Other Assets
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Due from stockholder
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47,808 | - | - | 47,808 | ||||||||||||
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Due from affiliates
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74,400 | - | - | 74,400 | ||||||||||||
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Other assets
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29,273 | - | - | 29,273 | ||||||||||||
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Total Other Assets
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151,481 | - | - | 151,481 | ||||||||||||
| - | ||||||||||||||||
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Total Assets
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$ | 717,107 | $ | 46,079 | $ | - | $ | 763,186 | ||||||||
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Liabilities and Stockholders’ Equity (Deficit)
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||||||||||||||||
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Current Liabilities
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Accounts payable and accrued liabilities
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$ | 418,702 | $ | 160 | $ | 7 | $ | 418,869 | ||||||||
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Current maturities of capital leases
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10,614 | - | 10,614 | |||||||||||||
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Deferred revenue
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826,006 | - | - | 826,006 | ||||||||||||
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Advances from stockholders
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10,044 | - | - | 10,044 | ||||||||||||
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Deferred compensation – current portion
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54,183 | - | - | 54,183 | ||||||||||||
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Total Current Liabilities
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1,319,549 | 160 | 7 | 1,319,716 | ||||||||||||
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Deferred compensation
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913,169 | - | 913,169 | |||||||||||||
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Capital leases
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22,759 | - | 22,759 | |||||||||||||
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Total Liabilities
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2,255,477 | 160 | 7 | 2,255,644 | ||||||||||||
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Stockholders’ Equity (Deficit)
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Share capital
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Authorized: 25,000,000 preferred shares $0.001 PV
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200,000,000 common shares $0.001 PV
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Issued:
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||||||||||||||||
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1,000 Series A voting convertible preferred shares
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1 | 1 | ||||||||||||||
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15,000,000 Series B voting convertible preferred shares
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15,000 | 15,000 | ||||||||||||||
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90,000,000 common shares
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900 | 90,000 | (900 | ) | 90,000 | |||||||||||
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Additional paid-in-capital (deficiency)
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240,830 | (34,347 | ) | (23,842 | ) | 182,641 | ||||||||||
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Accumulated deficit
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(1,780,100 | ) | (9,734 | ) | 9,734 | (1,780,100 | ) | |||||||||
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Total Stockholders’ Equity (Deficit)
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(1,538,370 | ) | 45,919 | (7 | ) | (1,492,458 | ) | |||||||||
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Total Liabilities and Stockholders’ Equity (Deficit)
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$ | 717,107 | $ | 46,079 | $ | - | $ | 763,186 | ||||||||
The Pulse Network, Inc.
(Formerly Isoft International Inc.)
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
NINE MONTH INTERIM PERIOD ENDED December 31, 2012
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Target
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Pubco
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Adjustments
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Pro-Forma
Combined
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|||||||||||||
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(Unaudited)
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(Unaudited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
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Revenues
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Net revenues
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$ | 3,162,375 | $ | - | $ | - | $ | 3,162,375 | ||||||||
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Cost of net revenues
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1,239,131 | - | - | 1,239,131 | ||||||||||||
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Gross Profit
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1,923,244 | 1,923,244 | ||||||||||||||
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Operating Expenses
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||||||||||||||||
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General and administration
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1,917,619 | 37,899 | - | 1,955,518 | ||||||||||||
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Marketing and selling expense
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328,886 | - | - | 328,886 | ||||||||||||
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Total Operating Loss
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(323,261 | ) | (37,899 | ) | - | (361,160 | ) | |||||||||
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Income Taxes
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||||||||||||||||
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Net Loss
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(323,261 | ) | (37,899 | ) | - | (361,160 | ) | |||||||||
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Comprehensive Loss
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$ | (323,261 | ) | $ | (37,899 | ) | $ | - | $ | (361,160 | ) | |||||
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Net Loss per Share (1)
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||||||||||||||||
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Weighted average shares outstanding
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165,001,000 | |||||||||||||||
(1) Less than $0.01 basic and diluted
The Pulse Network, Inc.
(Formerly Isoft International Inc.)
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Fiscal Year Ended March 31, 2012
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Target
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Pubco
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Adjustments
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Pro-Forma
Combined
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|||||||||||||
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(Audited)
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(Audited)
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(Unaudited)
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(Unaudited)
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|||||||||||||
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Revenues
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||||||||||||||||
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Net revenues
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$ | 4,157,757 | $ | - | $ | - | $ | 4,157,757 | ||||||||
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Cost of net revenues
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1,231,897 | - | - | 1,231,897 | ||||||||||||
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Gross Profit
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2,925,860 | 2,925,860 | ||||||||||||||
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Operating Expenses
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||||||||||||||||
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General and administration
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2,307,352 | 9,294 | - | 2,316,646 | ||||||||||||
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Marketing and selling expense
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655,851 | - | - | 655,851 | ||||||||||||
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Total Operating Loss
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(37,343 | ) | (9,294 | ) | - | (46,637 | ) | |||||||||
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Income Taxes
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||||||||||||||||
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Net Loss
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(37,343 | ) | (9,294 | ) | - | (46,637 | ) | |||||||||
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Comprehensive Loss
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$ | (37,343 | ) | $ | (9,294 | ) | $ | - | $ | (46,637 | ) | |||||
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Net Loss per Share (1)
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||||||||||||||||
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Weighted average shares outstanding
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165,001,000 | |||||||||||||||
(1) Less than $0.01 basic and diluted