Attached files
| file | filename |
|---|---|
| 8-K/A - Life Clips, Inc. | form8-ka.htm |
| EX-99.2 - Life Clips, Inc. | ex99-2.htm |
| EX-99.1 - Life Clips, Inc. | ex99-1.htm |
Life Clips Inc.
Introduction to Pro Forma Condensed Combined Financial Statements
The following unaudited pro forma condensed combined financial statements are presented to illustrate the estimated effects of the Reverse Merger Agreement between Life Clips, Inc.(f/k/a Blue Sky Media Corporation) and Klear Kapture, Inc., on the historical financial position and results of operations of Life Clips, Inc.
The pro forma balance sheet as of September 30, 2015 is based on the unaudited balance sheet of Life Clips, Inc.(f/k/a Blue Sky Media Corporation) and the unaudited balance sheet of Klear Kapture, Inc. The pro forma statement of operations for the three months ended September 30, 2015 is based on the unaudited statement of operations of Life Clips, Inc.(f/k/a Blue Sky Media Corporation) and the unaudited statement of operations of Klear Kapture, Inc for the three months ended September 30, 2015. The pro forma statement of operations for the year ended June 30, 2015 is based on the audited statement of operations of Life Clips, Inc. (f/k/a Blue Sky Media Corporation) for the year ended June 30, 2015 and the audited statement of operations of Klear Kapture, Inc for the period from July 1, 2014 through December 31, 2014 and the unaudited statement of operations of Klear Kapture, Inc for the period from January 1, 2015 through June 30, 2015.
The unaudited pro forma condensed combined statement of operations for the three months ended September 30, 2015 and for the year ended June 30, 2015 assumes that the transaction was consummated on July 1, 2014. The unaudited pro forma condensed combined balance sheet as of September 30, 2015 assumes the transaction was consummated on that date.
The information presented in the unaudited pro forma condensed combined financial statements does not purport to represent what the financial position or results of operations of Life Clips, Inc. would have been had the transaction occurred as of the dates indicated, nor is it indicative of the future financial position or results of operations for any period of Life Clips, Inc.
The pro forma adjustments are based upon available information and certain assumptions that the management of Life Clips, Inc. believes are reasonable under the circumstances.
These unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and assumptions and the historical financial statements and related notes of Life Clips, Inc.(f/k/a Blue Sky Media Corporation) and Klear Kapture, Inc.
| -1- |
Life Clips Inc f/k/a Blue Sky Media Corp
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2015
| Life Clips Inc | Pro Forma | Pro
Forma Combined | ||||||||||||||||
| f/k/a Blue Sky Media Corp | Klear Kapture, Inc | Adjustment | Total | |||||||||||||||
| ASSETS | ||||||||||||||||||
| Current Assets | ||||||||||||||||||
| Cash | $ | 5,230 | $ | (136 | ) | $ | 267,348 | A B E | $ | 272,442 | ||||||||
| Accounts receivable | ||||||||||||||||||
| Payroll Advance | 12,713 | 12,713 | ||||||||||||||||
| Total Current Assets | 5,230 | 12,577 | 267,348 | 285,155 | ||||||||||||||
| Fixed Assets | ||||||||||||||||||
| Furniture and Equipment less depreciation of $49 for September 30, 2015 | 740 | 740 | ||||||||||||||||
| Total Fixed Assets | 740 | 740 | ||||||||||||||||
| Other Assets | ||||||||||||||||||
| Developed Software | 50,600 | 50,600 | ||||||||||||||||
| Film Assets less amortization of $1,368 for September 30, 2015 | 24,168 | 24,168 | ||||||||||||||||
| Film Equipment less depreciation of $141 for September 30, 2015 | 2,382 | 2,382 | ||||||||||||||||
| Total Other Assets | 26,550 | 50,600 | 77,150 | |||||||||||||||
| Total Assets | $ | 32,520 | $ | 63,177 | 267,348 | $ | 363,045 | |||||||||||
| Liabilities And Stockholders’ Equity (Deficit) | ||||||||||||||||||
| Current Liabilities | $ | $ | $ | |||||||||||||||
| Accounts payable | ||||||||||||||||||
| Credit Cards Payable | 4,999 | 4,999 | ||||||||||||||||
| Loans Payable | 85,500 | 85,500 | ||||||||||||||||
| Discount on Loans | (14,379 | ) | (617,578 | ) | F | (631,957 | ) | |||||||||||
| Notes Payable | 75,000 | 617,578 | A | 692,578 | ||||||||||||||
| Total Current Liabilities | 151,120 | (0 | ) | 151,120 | ||||||||||||||
| Derivative Liabilities - Convertible Notes | 1,808,866 | F | 1,808,866 | |||||||||||||||
| Total Liabilities | 151,120 | 1,808,866 | F | 1,959,986 | ||||||||||||||
| Stockholders’ Equity (Deficit) | ||||||||||||||||||
| Common stock $0.001 par value 75,000,000 shares authorized 4,848,420 shares issued and outstanding at September 30, 2015 | 10,852 | 100 | (6,104 | ) | B C D | 4,848 | ||||||||||||
| Additional paid in capital | 136,048 | 702,950 | (328,636 | ) | B C D | 510,362 | ||||||||||||
| Accumulated Deficit | (114,380 | ) | (790,993 | ) | (1,206,778 | ) | C E F | (2,112,151 | ) | |||||||||
| Total Stockholders’ Equity (Deficit) | 32,520 | (87,943 | ) | (1,541,518 | ) | (1,596,941 | ) | |||||||||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | 32,520 | $ | 63,177 | 267,348 | $ | 363,045 | |||||||||||
See accompanying notes to (unaudited) pro forma financial statements.
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Life Clips Inc f/k/a Blue Sky Media Corp
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Three Months Ended September 30, 2015
| Life Clips Inc | Pro Forma | |||||||||||||||||
| f/k/a Blue Sky | Pro Forma | Combined | ||||||||||||||||
| Media Corp | Klear Kapture, Inc | Adjustment | Total | |||||||||||||||
| Revenue | ||||||||||||||||||
| Sales | $ | 15,500 | $ | $ | 15,500 | |||||||||||||
| Total Revenue | 15,500 | 15,500 | ||||||||||||||||
| Gross Profit | 15,500 | 15,500 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||
| Common Stock Issued for Services | 10,260 | C | 10,260 | |||||||||||||||
| Depreciation and amortization | 1,559 | 1,559 | ||||||||||||||||
| Film Production | 8,000 | 8,000 | ||||||||||||||||
| Equipment/Filming | 256 | 256 | ||||||||||||||||
| Consulting Fees | 5,300 | 380 | 5,230 | E | 10,910 | |||||||||||||
| Professional Fees | 8,700 | 250 | 8,950 | |||||||||||||||
| Marketing Expense | 71 | 46,142 | 46,213 | |||||||||||||||
| Contract Labor | 2,880 | 2,880 | ||||||||||||||||
| Travel Expense | 6,940 | 6,940 | ||||||||||||||||
| Office & Administrative Expense | 1,518 | 2,299 | 3,817 | |||||||||||||||
| Total Expenses | 25,404 | 58,891 | 15,490 | 99,785 | ||||||||||||||
| Net Operating Income/Loss | (9,904 | ) | (58,891 | ) | (15,490 | ) | (84,285 | ) | ||||||||||
| Other Income/Expense | - | |||||||||||||||||
| Interest Expense | (31,750 | ) | (83,245 | ) | F G | (114,995 | ) | |||||||||||
| Loss on Changes in Derivative Liability | 1,688 | F | 1,688 | |||||||||||||||
| Net Income/Loss | $ | (9,904 | ) | $ | (90,641 | ) | (97,047 | ) | $ | (197,592 | ) | |||||||
| Basic and Diluted Income/Loss Per Common Share | $ | N/A | $ | N/A | N/A | $ | (0.04 | ) | ||||||||||
| Weighted Average Shares Outstanding | N/A | N/A | N/A | 4,848,420 | ||||||||||||||
See accompanying notes to (unaudited) pro forma financial statements.
| -3- |
Life Clips Inc f/k/a Blue Sky Media Corp
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Fiscal Year & Period Ended June 30, 2015
| Life
Clips Inc f/k/a Blue Sky | ||||||||||||||||||
| Media Corp | Klear Kapture, Inc | |||||||||||||||||
| Fiscal
Year Ended | Twelve Months Ended | Pro Forma | Pro
Forma Combined | |||||||||||||||
| 30-Jun-15 | 30-Jun-15 | Adjustment | Total | |||||||||||||||
| Revenues | ||||||||||||||||||
| Revenue | ||||||||||||||||||
| Sales | $ | 81,550 | $ | 2,783 | $ | 84,333 | ||||||||||||
| Total Revenue | 81,550 | 2,783 | 84,333 | |||||||||||||||
| Cost of Goods Sold | 18,000 | 1,513 | 19,513 | |||||||||||||||
| Gross Profit | 63,550 | 1,270 | 64,820 | |||||||||||||||
| Operating Expenses | ||||||||||||||||||
| Common Stock Issued for Services | 581,943 | 10,260 | C | 592,204 | ||||||||||||||
| Depreciation and amortization | 2,302 | 2,302 | ||||||||||||||||
| Equipment/Filming | 32 | 32 | ||||||||||||||||
| Fees | 200 | 5,230 | E | 200 | ||||||||||||||
| Consulting Fees | 22,000 | 2,500 | 24,500 | |||||||||||||||
| Professional Fees | 44,193 | 15,853 | 60,046 | |||||||||||||||
| Marketing Expense | 2,730 | 39,573 | 42,303 | |||||||||||||||
| Contract Labor | 8,848 | 8,848 | ||||||||||||||||
| APP Development | 18,000 | 18,000 | ||||||||||||||||
| Travel | 2,258 | 18,516 | 20,774 | |||||||||||||||
| Office expenses | 12,804 | 9,423 | 22,227 | |||||||||||||||
| Total Expenses | 104,519 | 676,656 | 15,490 | 791,436 | ||||||||||||||
| Net Operating Income/Loss | (40,969 | ) | (675,386 | ) | (15,490 | ) | (726,616 | ) | ||||||||||
| Other Income/Expense | 5 | 5 | ||||||||||||||||
| Interest Expense | (24,871 | ) | (331,885 | ) | F G | (356,756 | ) | |||||||||||
| Loss on Changes in Derivative Liability | (1,191,288 | ) | F | (1,191,288 | ) | |||||||||||||
| Net Income/Loss | $ | (40,964 | ) | $ | (700,257 | ) | (1,538,663 | ) | $ | (2,274,655 | ) | |||||||
| Basic and Diluted Loss Per Common Share | $ | N/A | $ | N/A | N/A | $ | (0.47 | ) | ||||||||||
| Weighted Average Shares Outstanding | N/A | N/A | N/A | 4,848,420 |
See accompanying notes to (unaudited) pro forma financial statements.
| -4- |
Life Clips Inc.
Notes to Pro Forma Condensed Combined Financial Statements
On October 2, 2015 (the “Effective Date”) Life Clips, Inc. (f/k/a Blue Sky Media Corp.) entered into and closed on a merger and exchange agreement (the “Share Exchange Agreement”) with Klear Kapture, Inc. (“Klear Kapture”) in an effort to expand its current line of business. Klear Kapture has developed a body camera and software that it intends to produce, market and sell. Following the closing of the Share Exchange Agreement, Life Clips intends to continue Klear Kapture’s historical business and proposed business and has entered into a services agreement with their former executive officers and directors to operate the film marketing, distribution and production video and APP development businesses pursuant to the terms of a Services Agreement dated October 2, 2015 (the “Services Agreement”).
Pursuant to the terms of the Share Exchange Agreement, as of the Effective Date, Life Clips agreed to issue 3,457,920 shares of their unregistered common stock to the shareholders of Klear Kapture in exchange for 10,000 shares of its common stock, representing 100% of its issued and outstanding common stock (the “Share Exchange”). As part of the Share Exchange, Life Clips purchased 9,751,000 shares of our common stock from its former executive officers and directors for a price of approximately $ 0.035 per share (an aggregate of $345,000). Upon the Effective Date, Klear Kapture became a wholly owned subsidiary of Life Clips and our pro-forma shares of common stock outstanding, giving effect to the repurchase of shares from its former executive officers and directors, is 4,848,420.
Concurrent with the closing of the Share Exchange on October 2, 2015, LIfe Clips issued to three accredited investors, a $617,578 aggregate principal amount 3.75% Convertible Note (the “Convertible Note”) (the “Private Placement”). The Convertible Note was not registered under the Securities Act at the time of sale and, therefore, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The aggregated Notes are entitled to convert to an additional 2,402,420 shares of common stock.
The Company identified conversion features embedded within the Convertible Notes issued on October 2, 2015. The Company has determined that the features associated with the embedded conversion option, in the form of a ratchet provision, should be accounted for at fair value, as a derivative liability, as teh Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.
As a result of the application of ASC No. 815, the fair value of the ratchet feature related to the Convertible Notes is summarized as follows:
| 2015 | ||||
| Fair value at the commitment date - Convertible Notes | $ | 617,578 | ||
| Fair value mark to market adjustment - Convertible Notes | (1,808,872 | ) | ||
| Total | (1,191,294 | ) | ||
The fair value at the commitment date and re-measurement dates or the Company’s derivative liabilities were based upon the following management assumptions as of September 30, 2015.
| Commitment Date | Re-measurement Date | |||||||
| Expected dividends | 0 | % | 0 | % | ||||
| Expected volatility | 25.23 | % | 25.23 | % | ||||
| Expected term | 2 years | 2 years | ||||||
| Risk free interest rate | 0.94 | % | 0.94 | % | ||||
| A | = | Subsequently issue 3.75% interest Convertible Notes for $617,577.88 to three investors |
| B | = | Repurchased 9,751,000 shares of common stock for $345,000 from former officers and directors |
| C | = | Subsequently issued 290,000 shares of common stock pursuant to a consulting contract with NewBridge Financial Inc valued at $0.035 per share |
| D | = | Subsequently issued 3,457,920 shares of Life Clips common stock in exchange for 100% of Klear Kapture’s 10,000 shares of outstanding common stock |
| E | = | Subsequently entered into a Services Agreement with former executives for post merger services |
| F | = | Subsequently recorded a derivate liability and debt discount associated with the conversion features of the $617,577.88 Convertible Notes in the form of a ratchet provision |
| G | = | Subsequently recorded interest expense associated with the $617,577.88 Convertible Notes at 3.75% |
| -5- |