Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99-1 - Ipsidy Inc. | s105683_ex99-1.htm |
| 8-K/A - 8-K/A - Ipsidy Inc. | s105683_8k.htm |
Exhibit 99.2
The unaudited pro forma consolidated financial statements of Ipsidiy Inc. (f/k/a ID Global Solutions Inc.) and Multipay S.A. reflect pro forma adjustments for certain transactions as if such transactions had occurred as of December 31, 2014 for purposes of the unaudited pro forma consolidated condensed balance sheet and the consolidated statements of operations.
Ipsidy Inc., Formerly Known As ID Global Solutions Corporation
Index to Unaudited Pro Forma Condensed Combined Financial Information
December 31, 2014
| Pages | |
| Introduction to Unaudited Proforma Condensed Combined Financial Statements | 2 |
| Unaudited Proforma Condensed Combine Balance Sheet as of December 31, 2014 | 3 |
| Unaudited Proforma Condensed Combined Statement of Operations for the Year Ended December 31, 2014 | 4 |
| Notes to Unaudited Proforma Condensed Combined Financial Statements | 5 |
| 1 |
Ipsidy Inc., Formerly Known As ID Global Solutions Corporation
Introduction to Unaudited Pro Forma Condensed Combined Financial Information
Multipay S.A.
On April 6, 2015 (the "Closing Date"), the Company and all of the shareholders (the "Multipay Shareholders") of Multipay S.A., a Colombian corporation ("Multipay"), closed (the "Closing") on the Share Purchase Agreement entered into between the parties on March 6, 2015. As a result of the Closing, the Company acquired 100% of the issued and outstanding shares of Multipay (the "Multipay Shares") from the Multipay Shareholders on a fully diluted basis. In consideration for the Multipay Shares, the Company agreed to issue to the Multipay Shareholders up to an aggregate of 7,600,000 shares of common stock of the Company. Under the terms of the initial agreement, within ten days of the Closing Date, the Company was required to issue 7,000,000 shares of common stock. Upon the Multipay Shareholders paying certain liabilities in the approximate amount of $370,000, the Company was required to deliver the balance of 600,000 shares of common stock to the Multipay Shareholders. In the event the Multipay Shareholders do not pay the entire amount of the certain liabilities by the 12-month anniversary of the Closing Date, the Company will not be required to deliver the remaining shares of common stock. On May 7, 2015, the Company and Multipay executed an amendment to the Share Purchase Agreement to 1) amend the number of shares to be issued within ten days of the Closing Date from 7,000,000 shares to 6,101,517 shares; and 2) to amend the balance of shares to be delivered from 600,000 shares to 1,498,483 shares, upon the payment of certain liabilities by the Multipay Shareholders. The payment of these shares has been extended by six months to November 7, 2016. The 6,101,517 shares were issued on May 18, 2015. The Company has recorded a contingent liability of approximately $370,000 because of the contingency of the shares to be issued and debt to be released upon the payment of certain liabilities by the Multipay Shareholders.
In accordance with ASC 805, “Business Combinations,” the Company accounted for the acquisition of Multipay as a business combination using the acquisition method of accounting. The purchase price was allocated to specific identifiable tangible and intangible assets at their respective fair values at the date of the acquisition.
The following table summarizes the total fair value of consideration transferred as well as the fair values of the assets acquired and liabilities assumed.
| Common stock consideration | $ | 860,491 | ||
| Liabilities assumed | 909,721 | |||
| Total purchase consideration | 1,770,212 | |||
| Current assets | (295,654 | ) | ||
| Property and equipment | (20,000 | ) | ||
| Customer relationships | (14,087 | ) | ||
| Intellectual property | (1,273,781 | ) | ||
| Goodwill | $ | 166,689 |
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company, which are further described above. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. See Notes 1 and 3 for additional information about goodwill and other intangible assets. The recognized goodwill related to MultiPay is directly attributable to its payment gateway platform.
As noted above, control was obtained on April 6, 2015, pursuant to the Share Purchase Agreement at which time the management of IDGS took over the operations of MultiPay. Control was achieved with IDGS personnel in Colombia and a restructuring of the reporting hierarchy to IDGS management.
| 2 |
The following unaudited pro forma condensed consolidated statement of operations
The information presented in the unaudited proforma combined financial statements does not purport to represent what our financial positions or results of operations would have been had the Share Purchase Agreement been consummated nor is it indicative of our future financial positon or results of operations for any period. You should rely on this information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience after the Share Exchange Agreement.
Ipsidy Inc.
Formerly know as ID Global Solutions Corporation
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Ipsidy Inc. December 31, | Multipay SAS | subtotal | Pro Forma Adjustments | Proforma | ||||||||||||||||||||
| 2014 | 2014 | 2014 | Dr. | Cr. | Balances | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| Revenues, net | $ | 735,364 | $ | 732,137 | $ | 1,467,501 | - | - | $ | 2,935,002 | ||||||||||||||
| Cost of Sales | 445,779 | 445,779 | - | - | 891,558 | |||||||||||||||||||
| Gross profit (loss) | 735,364 | 286,358 | 1,021,722 | - | - | 2,043,444 | ||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||
| General and administrative | 9,003,143 | 477,465 | 9,480,608 | - | - | 9,480,608 | ||||||||||||||||||
| Research and development | 480,789 | - | 480,789 | - | - | 480,789 | ||||||||||||||||||
| Depreciation and amortization | 147,052 | - | 147,052 | 130,787 | - | 277,839 | ||||||||||||||||||
| Total operating expenses | 9,630,984 | 477,465 | 10,108,449 | 130,787 | - | 10,239,236 | ||||||||||||||||||
| Loss from operations | (8,895,620 | ) | (191,107 | ) | (9,086,727 | ) | 130,787 | - | (18,042,667 | ) | ||||||||||||||
| Other Income (Expense): | ||||||||||||||||||||||||
| Gain (loss) on derivative liabilities | (26,647,021 | ) | - | (26,647,021 | ) | - | (26,647,021 | ) | ||||||||||||||||
| Interest income (expense) - net | (1,136,528 | ) | (142,594 | ) | (1,279,122 | ) | - | 142,594 | (1,136,528 | ) | ||||||||||||||
| Other income (expense) -net | (8,620 | ) | (8,620 | ) | - | - | (8,620 | ) | ||||||||||||||||
| Other income (expense), net | (27,783,549 | ) | (151,214 | ) | (27,934,763 | ) | 142,594 | (27,792,169 | ) | |||||||||||||||
| Loss before income taxes | (36,679,169 | ) | (342,321 | ) | (37,021,490 | ) | 130,787 | 142,594 | (37,009,683 | ) | ||||||||||||||
| Income Taxes | - | - | - | |||||||||||||||||||||
| Net loss | $ | (36,679,169 | ) | $ | (342,321 | ) | $ | (37,021,490 | ) | $ | 130,787 | $ | 142,594 | $ | (37,009,683 | ) | ||||||||
| Net Loss Per Share - Basic and diluted | $ | (0.21 | ) | $ | - | $ | - | N/A | N/A | $ | (0.20 | ) | ||||||||||||
| Weighted Average Shares Outstanding - Basic and diluted | 175,696,214 | N/A | N/A | 6,101,517 | 181,797,731 | |||||||||||||||||||
| 3 |
Ipsidy Inc.
Formerly known as ID Global Solutions Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
| Ipsidy Inc. |
| |||||||||||||||||||||||
| December 31, | Multipay SAS | Pro Forma Adjustments | Proforma | |||||||||||||||||||||
| 2014 | 2014 | sub-total | Dr. | Cr. | Balances | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Current Assets: | ||||||||||||||||||||||||
| Cash | $ | 159,296 | $ | 2,871 | $ | 162,167 | 987 | $ | 163,154 | |||||||||||||||
| Accounts receivable, net | - | 205,863 | 205,863 | 60,673 | 205,863 | 60,673 | ||||||||||||||||||
| Inventory | 62,861 | 62,861 | ||||||||||||||||||||||
| Total current assets | 159,296 | 208,734 | 368,030 | 124,521 | 205,863 | 286,688 | ||||||||||||||||||
| Property and Equipment, net | 21,582 | 22,041 | 43,623 | 20,000 | 22,041 | 41,582 | ||||||||||||||||||
| Other Assets | 174,387 | 174,387 | 171,133 | 345,520 | ||||||||||||||||||||
| Intangible Assets, net | 421,774 | 572,944 | 994,718 | 1,287,868 | 572,944 | 1,709,642 | ||||||||||||||||||
| Goodwill | - | - | 166,689 | 166,689 | ||||||||||||||||||||
| Total assets | $ | 777,039 | $ | 803,719 | $ | 1,580,758 | 1,770,211 | $ | 800,848 | $ | 2,550,121 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 150,228 | $ | 206,244 | $ | 356,472 | 206,244 | 454,181 | $ | 604,409 | ||||||||||||||
| Financial obligations | - | 496,715 | 496,715 | 496,715 | $ | - | ||||||||||||||||||
| Taxes and encumbrances | - | 68,019 | 68,019 | 68,019 | 65,137 | $ | 65,137 | |||||||||||||||||
| Contingent purchase consideration (Note 10) | - | - | - | - | 370,125 | $ | 370,125 | |||||||||||||||||
| Note payable related party | 48,417 | - | 48,417 | - | - | $ | 48,417 | |||||||||||||||||
| Related party payables | 60,200 | 334,136 | 394,336 | 334,136 | - | $ | 60,200 | |||||||||||||||||
| Other liabilities | - | 13,512 | 13,512 | 13,512 | 22,538 | $ | 22,538 | |||||||||||||||||
| Total current liabilities | 258,845 | 1,118,626 | 1,377,471 | 1,118,626 | 911,981 | 1,170,826 | ||||||||||||||||||
| Commitments and Contingencies (Note 10) | ||||||||||||||||||||||||
| Stockholders' Equity: | ||||||||||||||||||||||||
| Common stock, $0.001 par value, 500,000,000 shares authorized; 214,196,550 and 187,854,139 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively | 16,354 | 1,385,728 | 1,402,082 | 1,385,728 | 610 | 16,964 | ||||||||||||||||||
| Additional paid in capital | 2,897,261 | - | 2,897,261 | - | 860,491 | 3,757,752 | ||||||||||||||||||
| Accumulated deficit | (2,395,421 | ) | (1,706,048 | ) | (4,101,469 | ) | - | 1,706,048 | (2,395,421 | ) | ||||||||||||||
| Reserves | - | 5,413 | 5,413 | 5,413 | - | - | ||||||||||||||||||
| Total stockholders' equity | 518,194 | (314,907 | ) | 203,287 | 1,391,141 | 2,567,149 | 1,379,295 | |||||||||||||||||
| Total liabilities and stockholders' equity | $ | 777,039 | $ | 803,719 | $ | 1,580,758 | $ | 2,509,767 | $ | 3,479,130 | $ | 2,550,121 | ||||||||||||
| 4 |
Ipsidy Inc., Formerly Known As ID Global Solutions Corporation
Notes to Unaudited Pro Forma Condensed Combined Financial Information
| 1) | Basis of Presentation. |
The unaudited proforma condensed combined financial statements have been prepared in order to present combined financial position and results of operations of Ipsidy Inc.(formerly known as ID Solutions Corporation) and the Multipay acquisition had occurred as of December 31, 2014.
The financial statements of Multipay S.A.S. is as of its reporting period which ended on December 31. These financial statements have been prepared in accordance with Generally Accepted Accounting Principles. The audit report of Multipay S.A.S is intended to meet the requirement of a non-issuer entity who financial statements are filed to satisfy S-X 3-05 or 3-14 and are not required to be audited or have an auditor’s report of a firm registered with the PCOAB.
2) The consummation of the Share Purchase Agreement is deemed to be an acquisition. Ipsidy Inc. is considered to be the acquirer. The financial statements of the combined entities is intended to provide a fair representation of the combined entities financial statements in substance would been had the acquisition prior to the December 2014 Form 10K filing. We have included the fair value of assets related to the Multipay acquisition. As the valuation was completed as of the acquisition date, the amounts could vary from the actual entries ultimately recorded on the books.
| 3) | The following adjustment have been recorded to reflect the acquisition: |
Balance Sheet:
| a. | Amounts were recorded for the fair valuation of intellectual property, non-compete agreement, fixed assets and goodwill per the third party independent valuation report. |
| b. | Elimination of note payable and notes payable related party. |
| c. | Elimination of retained earnings of acquired entities. |
| d. | Recording of the issuance of common stock for the acquisition cost. |
Statement of Operations:
| a. | Reversal of interest expense on the financial obligations eliminated. |
| b. | Recording of depreciation and amortization expense for the assets recorded as noted above. |
| 5 |