Attached files
| file | filename |
|---|---|
| EX-2.1 - DEFINITIVE PURCHASE AGREEMENT, DATED APRIL 30, 2016, BETWEEN PAYPROTEC OREGON LLC AND CHYP LLC - Excel Corp | f8k043016ex2i_excelcorp.htm |
| 8-K - CURRENT REPORT - Excel Corp | f8k043016_excelcorp.htm |
| EX-99.1 - PRESS RELEASE, DATED MAY 2, 2016 - Excel Corp | f8k043016ex99i_excelcorp.htm |
Exhibit 99.2
EXCEL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
| Historical | Pro Forma | |||||||||||||||
| Excel Corporation | Adjustment A | Adjustment B | Pro Forma | |||||||||||||
| Revenues | ||||||||||||||||
| Equipment lease revenue | $ | 7,295,419 | $ | (7,295,419 | ) | $ | - | $ | - | |||||||
| Transaction and processing fees | 2,228,878 | - | - | 2,228,878 | ||||||||||||
| Other | 40,942 | (40,942 | ) | - | - | |||||||||||
| Total revenues | $ | 9,565,239 | $ | (7,336,361 | ) | $ | - | $ | 2,228,878 | |||||||
| Costs and expenses | ||||||||||||||||
| Equipment and other merchant acquisition costs | $ | 1,422,013 | $ | (1,419,703 | ) | $ | - | $ | 2,310 | |||||||
| Merchant refund | 453,347 | (453,347 | ) | - | - | |||||||||||
| Salaries and wages | 7,412,124 | (5,812,938 | ) | - | 1,599,186 | |||||||||||
| Outside commissions | 1,281,595 | (1,281,595 | ) | 305,489 | 305,489 | |||||||||||
| Other selling general and administrative expenses | 2,017,067 | (1,492,420 | ) | 550,000 | 1,074,647 | |||||||||||
| Total costs and expenses | $ | 12,586,146 | $ | (10,460,003 | ) | $ | 855,489 | $ | 2,981,632 | |||||||
| Net income (loss) from operations | $ | (3,020,907 | ) | $ | 3,123,642 | $ | (855,489 | ) | $ | (752,754 | ) | |||||
| Other income | ||||||||||||||||
| Gain on sale of residual portfolio | 2,800,000 | - | - | 2,800,000 | ||||||||||||
| Gain on settlement of debt | 175,101 | - | - | 175,101 | ||||||||||||
| Total other income | $ | 2,975,101 | $ | - | $ | - | $ | 2,975,101 | ||||||||
| Interest expense | 391,075 | - | - | 391,075 | ||||||||||||
| Net income (loss) before income taxes | (436,881 | ) | 3,123,642 | (855,489 | ) | 1,831,272 | ||||||||||
| Income tax expense (benefit) | ||||||||||||||||
| Current | (490,605 | ) | 1,155,748 | (316,531 | ) | 348,612 | ||||||||||
| Deferred | 490,605 | (1,020,521 | ) | - | (529,916 | ) | ||||||||||
| Total income tax expense (benefit) | - | 135,227 | (316,531 | ) | (181,304 | ) | ||||||||||
| Net Income (loss) | $ | (436,881 | ) | $ | 3,258,869 | $ | (1,172,020 | ) | $ | 1,649,968 | ||||||
| Net income (loss) per share -basic and diluted | $ | (0.005 | ) | $ | 0.018 | |||||||||||
| Weighted average shares outstanding -basic and diluted | 94,009,760 | 94,009,760 | ||||||||||||||
EXCEL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
| Historical | Pro Forma | |||||||||||||||
| Excel Corporation | Adjustment A | Adjustment B | Pro Forma | |||||||||||||
| Revenues | ||||||||||||||||
| Equipment lease revenue | $ | 11,950,253 | $ | (11,950,253 | ) | $ | - | $ | - | |||||||
| Transaction and processing fees | 5,549,482 | - | - | 5,549,482 | ||||||||||||
| Merchant cash advance revenue and other | 99,597 | (19,839 | ) | - | 79,758 | |||||||||||
| Total revenues | $ | 17,599,332 | $ | (11,970,092 | ) | $ | - | $ | 5,629,240 | |||||||
| Costs and expenses | ||||||||||||||||
| Equipment and other merchant acquisition costs | $ | 2,365,300 | $ | (2,365,300 | ) | $ | - | $ | - | |||||||
| Merchant refund | 1,135,213 | (1,135,213 | ) | - | - | |||||||||||
| Processing and servicing costs | 674,175 | - | - | 674,175 | ||||||||||||
| Salaries and wages | 11,280,640 | (9,098,076 | ) | - | 2,182,564 | |||||||||||
| Outside commissions | 1,600,815 | (1,583,847 | ) | 516,951 | 533,919 | |||||||||||
| Other selling general and administrative expenses | 2,239,829 | (1,487,726 | ) | - | 752,103 | |||||||||||
| Total costs and expenses | $ | 19,295,972 | $ | (15,670,162 | ) | $ | 516,951 | $ | 4,142,761 | |||||||
| Net income (loss) from operations | $ | (1,696,640 | ) | $ | 3,700,070 | $ | (516,951 | ) | $ | 1,486,479 | ||||||
| Other income | ||||||||||||||||
| Gain on sale of residual portfolio | 445,742 | - | - | 445,742 | ||||||||||||
| Total other income | 445,742 | - | - | 445,742 | ||||||||||||
| Interest expense | $ | 371,596 | $ | - | $ | - | $ | 371,596 | ||||||||
| Net income (loss) before income taxes | $ | (1,622,494 | ) | $ | 3,700,070 | $ | (516,951 | ) | $ | 1,560,625 | ||||||
| Income tax expense (benefit) | ||||||||||||||||
| Current | (714,560 | ) | 1,369,026 | (191,272 | ) | 463,194 | ||||||||||
| Deferred | 714,560 | - | - | 714,560 | ||||||||||||
| Total income tax expense (benefit) | - | 1,369,026 | (191,272 | ) | 1,177,754 | |||||||||||
| Net income (loss) | $ | (1,622,494 | ) | $ | 2,331,044 | $ | (325,679 | ) | $ | 382,871 | ||||||
| Net income (loss) per share -basic and diluted | $ | (0.017 | ) | $ | 0.004 | |||||||||||
| weighted average shares outstanding -basic and diluted | 98,261,810 | 98,261,810 | ||||||||||||||
| 2 |
EXCEL CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2015
| Historical | Pro Forma | |||||||||||
| Excel Corporation | Adjustment A | Pro Forma | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 362,130 | $ | - | $ | 362,130 | ||||||
| Accounts receivable | 1,174,141 | (158,000 | ) | 1,016,141 | ||||||||
| Prepaid expenses | 45,218 | (2,144 | ) | 43,074 | ||||||||
| Inventory | 7,262 | (7,262 | ) | - | ||||||||
| Other current assets | 83,545 | - | 83,545 | |||||||||
| Total current assets | $ | 1,672,296 | $ | (167,406 | ) | $ | 1,504,890 | |||||
| Other Assets | ||||||||||||
| Fixed assets, net of depreciation | 468,068 | (283,108 | ) | 184,960 | ||||||||
| Goodwill | 7,914,269 | - | 7,914,269 | |||||||||
| Note receivable | 675,000 | - | 675,000 | |||||||||
| Equity investment | 164,790 | - | 164,790 | |||||||||
| Residual portfolios | 2,505,164 | - | 2,505,164 | |||||||||
| Other long term assets | 613,683 | (19,790 | ) | 593,893 | ||||||||
| Total other assets | 12,340,974 | (302,898 | ) | 12,038,076 | ||||||||
| Total assets | $ | 14,013,270 | $ | (470,304 | ) | $ | 13,542,966 | |||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ | 1,374,878 | $ | - | $ | 1,374,878 | ||||||
| Accrued compensation | 1,508,531 | - | 1,508,531 | |||||||||
| Other accrued liabilities | 839,308 | - | 839,308 | |||||||||
| Notes payable - current portion | 8,984,544 | - | 8,984,544 | |||||||||
| Total current liabilities | $ | 12,707,261 | $ | - | $ | 12,707,261 | ||||||
| Long-term liabilities | ||||||||||||
| Notes payable - long term portion | 226,733 | - | 226,733 | |||||||||
| Other long term liabilities | 41,692 | - | 41,692 | |||||||||
| Total long term liabilities | $ | 268,425 | $ | - | $ | 268,425 | ||||||
| Commitments and contingencies | ||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||
| Preferred stock, $.0001 par value, 10,000,000 shares authorized, none issued and outstanding | - | - | ||||||||||
| Series A preferred stock, $.001 par value 2 shares issued and outstanding as of December 31, 2015 | - | - | ||||||||||
| Common stock, $.0001 par value, 200,000,000 shares authorized 98,259,070 and 97,259,070 shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively. | 9,826 | 9,826 | ||||||||||
| Additional paid-in capital | 4,428,391 | 4,428,391 | ||||||||||
| Accumulated deficit | (3,400,633 | ) | (470,304 | ) | (3,870,937 | ) | ||||||
| Total stockholders' equity | $ | 1,037,584 | $ | (470,304 | ) | $ | 567,280 | |||||
| Total Liabilities and Stockholders' Equity | $ | 14,013,270 | $ | (470,304 | ) | $ | 13,542,966 | |||||
The accompanying notes are an integral part of the Unaudited Pro Forma Combined Financial Statements.
| 3 |
Excel Corporation
Notes to Unaudited Pro Forma Combined Financial Statements
Note 1. Basis of Presentation
The accompanying Unaudited Pro Forma Condensed Consolidated Financial Statements (“Pro Forma Statements”) present the pro forma condensed consolidated financial position and results of operations of Excel after giving effect to the acquisition and the adjustments described in the footnotes.
The pro forma amounts have been developed from (a) the audited consolidated financial statements of Excel contained in its Annual Report on Form 10-K for the year ended December 31, 2015, and (b) the unaudited financial statements of Payprotec Oregon LLC dba Securus Payments (“Securus”) for the years ended December 31, 2014 and 2015.
The Pro Forma Statements have been prepared to reflect adjustments to our historical consolidated financial information that are directly attributable to the transaction with Chyp LLC and factually supportable.
The Pro Forma Statements are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or the consolidated financial position of Excel would have been had the transaction with Chyp occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.
The Pro Forma Statements do not include the realization of cost savings from operating efficiencies, revenue synergies or other potential operating impacts from the transaction. In particular, they do not include any revenues or costs resulting from the preferred marketing agreement between Chyp and Excel and its subsidiaries.
The Pro Forma Statements should be read in conjunction with the historical consolidated financial statements and accompanying notes of Excel.
Note 2. Pro Forma Adjustments
Statements of Operations
Adjustment A. This adjustment eliminates the historical costs and expenses and expenses associated with the operations sold to Chyp. For the year ended December 31, 2014, income tax expense reflected a benefit of $1,020,521 from the use of net operating loss carryforwards.
Adjustment B. This adjustment reflects the financial support Securus will provide Chyp pursuant to the terms of the Purchase Agreement.
Balance Sheet
Adjustment A. This adjustment eliminates the assets sold to Chyp.
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