Attached files
| file | filename |
|---|---|
| EX-99.1 - EX-99.1 - Telaria, Inc. | a17-19107_1ex99d1.htm |
| EX-2.1 - EX-2.1 - Telaria, Inc. | a17-19107_1ex2d1.htm |
| 8-K - 8-K - Telaria, Inc. | a17-19107_18k.htm |
Exhibit 99.2
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Financial Statements
On August 7, 2017, Tremor Video, Inc. (the “Company”) and ScanScout, Inc. (the “Subsidiary”) completed the sale to Taptica Ltd. (“Buyer”), an affiliate of Taptica International Ltd, of certain assets and certain liabilities primarily related to the Company’s buyer platform, through which buyers of digital video advertising are able to buy, optimize, and measure the effectiveness of their video advertising campaigns across internet connected devices and screens (the “Business”), pursuant to an Asset Purchase Agreement (“Buy Side Transaction”), by and between the Company, the Subsidiary and the Buyer, dated August 4, 2017.
The following unaudited pro forma consolidated statement of operations for the three-month period ended March 31, 2017, and the unaudited pro forma consolidated statements of operations for each of the years ended December 31, 2016, December 31, 2015 and December 31, 2014 are presented as if the Buy Side Transaction had occurred on January 1, 2014. The following unaudited consolidated balance sheet as of March 31, 2017 is presented as if the Buy Side Transaction had occurred on March 31, 2017.
The unaudited consolidated pro forma financial statements have been derived from historical financial statements prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and are presented based on information currently available. They are intended for informational purposes only and are not intended to represent the Company’s financial position or results of operations had the Buy Side Transaction and related events occurred on the dates indicated, or to project the Company’s financial performance for any future period. Beginning in the third quarter of fiscal 2017, the historical financial results attributable to the Buy Side Transaction for periods prior to the transaction will be reflected in the Company’s consolidated financial statements as discontinued operations.
The unaudited pro forma consolidated financial statements and the accompanying notes should be read in conjunction with the following: (i) the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-K for the years ended December 31, 2016, December 31, 2015 and December 31, 2014 and (ii) the unaudited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Form 10-Q for the three months ended March 31, 2017.
The unaudited pro forma consolidated financial statements include information, statements, and assumptions that are or may be considered “forward-looking” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be
identified by the use of words such as “may”, “should”, “will”, “expect”, “anticipate”, “continue”. “estimate”, “project”, “believe”, “plan”, or similar expressions. Statements that describe objectives, plans, or goals are also forward-looking statements. These forward-looking statements involve risks and uncertainties, and actual results may differ materially from those contemplated by the forward- looking statements due to, among others, the risks and uncertainties described under the heading “Risk Factors: in our Annual Report on Form 10-K for the year ended December 31, 2016. For any forward-looking statements contained herein, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and the Company undertakes no obligation to update publicly or revise and forward-looking statements in light of new information or future events.
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Three Months Ended March 31, 2017
(in thousands, except per share data)
|
|
|
Tremor |
|
Pro Forma |
|
|
|
Tremor |
| |||
|
|
|
Historical (a) |
|
Adjustments |
|
Notes |
|
Operations |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Revenue |
|
$ |
41,400 |
|
$ |
(35,261 |
) |
(b) |
|
$ |
6,139 |
|
|
Cost of revenue |
|
22,023 |
|
(21,259 |
) |
(b) |
|
764 |
| |||
|
Gross profit |
|
19,377 |
|
(14,002 |
) |
|
|
5,375 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
|
Technology & development |
|
5,661 |
|
(3,238 |
) |
(b) |
|
|
2,423 |
| ||
|
Sales & marketing |
|
13,053 |
|
(6,926 |
) |
(b) |
|
|
6,127 |
| ||
|
General & administrative |
|
5,083 |
|
(294 |
) |
(b) |
|
|
4,789 |
| ||
|
Depreciation |
|
1,269 |
|
(337 |
) |
(b) |
|
|
932 |
| ||
|
Amortization |
|
1,080 |
|
(991 |
) |
(b) |
|
|
89 |
| ||
|
Mark to market |
|
55 |
|
— |
|
|
|
|
55 |
| ||
|
Total operating expenses |
|
26,201 |
|
(11,786 |
) |
|
|
14,415 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss from operations |
|
(6,824 |
) |
(2,216 |
) |
|
|
(9,040 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Interest & other income, net: |
|
|
|
|
|
|
|
|
| |||
|
Interest expense |
|
(52 |
) |
— |
|
|
|
(52 |
) | |||
|
Other income, net |
|
25 |
|
— |
|
|
|
25 |
| |||
|
Total interest and other income, net |
|
(27 |
) |
— |
|
|
|
(27 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss before provision for income taxes |
|
(6,851 |
) |
(2,216 |
) |
|
|
(9,067 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Provision for income taxes |
|
9 |
|
(19 |
) |
(c) |
|
(10 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(6,860 |
) |
$ |
(2,197 |
) |
|
|
$ |
(9,057 |
) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted-average number of shares of common stock outstanding: |
|
49,998,547 |
|
49,998,547 |
|
|
|
49,998,547 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss per share attributable to common stockholders: |
|
$ |
(0.14 |
) |
$ |
(0.04 |
) |
|
|
$ |
(0.18 |
) |
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2016
(in thousands, except per share data)
|
|
|
Tremor |
|
Pro Forma |
|
|
|
Tremor |
| |||
|
|
|
Historical ( a ) |
|
Adjustments |
|
Notes |
|
Operations |
| |||
|
Revenue |
|
$ |
166,761 |
|
$ |
(137,640 |
) |
(b) |
|
$ |
29,121 |
|
|
Cost of revenue |
|
90,488 |
|
(88,277 |
) |
(b) |
|
2,211 |
| |||
|
Gross profit |
|
76,273 |
|
(49,363 |
) |
|
|
26,910 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
|
Technology & development |
|
21,045 |
|
(13,951 |
) |
(b) |
|
7,094 |
| |||
|
Sales & marketing |
|
48,361 |
|
(26,218 |
) |
(b) |
|
22,143 |
| |||
|
General & administrative |
|
17,010 |
|
(920 |
) |
(b) |
|
16,090 |
| |||
|
Depreciation |
|
4,649 |
|
(1,232 |
) |
(b) |
|
3,417 |
| |||
|
Amortization |
|
4,524 |
|
(4,187 |
) |
(b) |
|
337 |
| |||
|
Mark to market |
|
1,263 |
|
— |
|
|
|
1,263 |
| |||
|
Total operating expenses |
|
96,852 |
|
(46,508 |
) |
|
|
50,344 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss from operations |
|
(20,579 |
) |
(2,855 |
) |
|
|
(23,434 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Interest & other income, net: |
|
|
|
|
|
|
|
|
| |||
|
Interest expense |
|
(129 |
) |
— |
|
|
|
(129 |
) | |||
|
Other income, net |
|
(123 |
) |
— |
|
|
|
(123 |
) | |||
|
Total interest and other income, net |
|
(252 |
) |
— |
|
|
|
(252 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss before provision for income taxes |
|
(20,831 |
) |
(2,855 |
) |
|
|
(23,686 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Provision for income taxes |
|
116 |
|
48 |
|
(c) |
|
164 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(20,947 |
) |
$ |
(2,903 |
) |
|
|
$ |
(23,850 |
) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted-average number of shares of common stock outstanding: |
|
52,279,738 |
|
52,279,738 |
|
|
|
52,279,738 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss per share attributable to common stockholders: |
|
$ |
(0.40 |
) |
$ |
(0.06 |
) |
|
|
$ |
(0.46 |
) |
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2015
(in thousands, except per share data)
|
|
|
Tremor |
|
Pro Forma |
|
|
|
Tremor |
| |||
|
|
|
Historical (a) |
|
Adjustments |
|
Notes |
|
Operations |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Revenue |
|
$ |
173,837 |
|
$ |
(164,226 |
) |
(b) |
|
$ |
9,611 |
|
|
Cost of revenue |
|
99,266 |
|
(98,321 |
) |
(b) |
|
945 |
| |||
|
Gross profit |
|
74,571 |
|
(65,905 |
) |
|
|
8,666 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
|
Technology & development |
|
20,171 |
|
(15,274 |
) |
(b) |
|
4,897 |
| |||
|
Sales & marketing |
|
48,879 |
|
(35,180 |
) |
(b) |
|
13,699 |
| |||
|
General & administrative |
|
17,279 |
|
(1,193 |
) |
(b) |
|
16,086 |
| |||
|
Depreciation |
|
3,404 |
|
(1,390 |
) |
(b) |
|
2,014 |
| |||
|
Amortization |
|
4,940 |
|
(4,777 |
) |
(b) |
|
163 |
| |||
|
Mark to market |
|
22,665 |
|
(22,665 |
) |
(b) |
|
— |
| |||
|
Total operating expenses |
|
117,338 |
|
(80,479 |
) |
|
|
36,859 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss from operations |
|
(42,767 |
) |
14,574 |
|
|
|
(28,193 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Interest & other income, net: |
|
|
|
|
|
|
|
|
| |||
|
Interest expense |
|
(10 |
) |
— |
|
|
|
(10 |
) | |||
|
Other income, net |
|
30 |
|
— |
|
|
|
30 |
| |||
|
Total interest and other income, net |
|
20 |
|
— |
|
|
|
20 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss before provision for income taxes |
|
(42,747 |
) |
14,574 |
|
|
|
(28,173 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Provision for income taxes |
|
483 |
|
(283 |
) |
(c) |
|
200 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(43,230 |
) |
$ |
14,857 |
|
|
|
$ |
(28,372 |
) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted-average number of shares of common stock outstanding: |
|
51,684,397 |
|
51,684,397 |
|
|
|
51,684,397 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss per share attributable to common stockholders: |
|
$ |
(0.84 |
) |
$ |
0.29 |
|
|
|
$ |
(0.55 |
) |
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2014
(in thousands, except per share data)
|
|
|
Tremor |
|
Pro Forma |
|
|
|
Tremor |
| |||
|
|
|
Historical (a) |
|
Adjustments |
|
Notes |
|
Operations |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Revenue |
|
$ |
159,487 |
|
$ |
(159,487 |
) |
(b) |
|
$ |
— |
|
|
Cost of revenue |
|
101,673 |
|
(101,673 |
) |
(b) |
|
— |
| |||
|
Gross profit |
|
57,814 |
|
(57,814 |
) |
|
|
— |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Operating expenses: |
|
|
|
|
|
|
|
|
| |||
|
Technology & development |
|
16,992 |
|
(13,711 |
) |
(b) |
|
3,281 |
| |||
|
Sales & marketing |
|
42,623 |
|
(37,299 |
) |
(b) |
|
5,324 |
| |||
|
General & administrative |
|
14,712 |
|
(240 |
) |
(b) |
|
14,472 |
| |||
|
Depreciation |
|
1,840 |
|
(1,001 |
) |
(b) |
|
839 |
| |||
|
Amortization |
|
4,835 |
|
(4,835 |
) |
(b) |
|
— |
| |||
|
Total operating expenses |
|
81,002 |
|
(57,086 |
) |
|
|
23,916 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss from operations |
|
(23,188 |
) |
(728 |
) |
|
|
(23,916 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Interest & other income, net: |
|
|
|
|
|
|
|
|
| |||
|
Interest expense |
|
(4 |
) |
— |
|
|
|
(4 |
) | |||
|
Other income, net |
|
46 |
|
— |
|
|
|
46 |
| |||
|
Total interest and other income, net |
|
42 |
|
— |
|
|
|
42 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Loss before provision for income taxes |
|
(23,146 |
) |
(728 |
) |
|
|
(23,874 |
) | |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Provision for income taxes |
|
343 |
|
(342 |
) |
(c) |
|
1 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss |
|
$ |
(23,489 |
) |
$ |
(386 |
) |
|
|
$ |
(23,875 |
) |
|
|
|
|
|
|
|
|
|
|
| |||
|
Weighted-average number of shares of common stock outstanding: |
|
50,637,541 |
|
50,637,541 |
|
|
|
50,637,541 |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Net loss per share attributable to common stockholders: |
|
$ |
(0.46 |
) |
$ |
(0.01 |
) |
|
|
$ |
(0.47 |
) |
Tremor Video, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2017
(in thousands)
|
|
|
Tremor |
|
Pro Forma |
|
|
|
Tremor |
| |||
|
|
|
Historical |
|
Adjustments |
|
Notes |
|
Operations |
| |||
|
Assets |
|
|
|
|
|
|
|
|
| |||
|
Current assets: |
|
|
|
|
|
|
|
|
| |||
|
Cash and cash equivalents |
|
$ |
28,032 |
|
$ |
27,400 |
|
(d) |
|
$ |
55,432 |
|
|
Accounts recievable, net of allowance for doubtful accounts |
|
67,665 |
|
(44,107 |
) |
(e) |
|
23,558 |
| |||
|
Secured promissory note |
|
— |
|
20,000 |
|
(d) |
|
20,000 |
| |||
|
Prepaid expenses and other current assets |
|
3,114 |
|
(729 |
) |
(e) |
|
2,385 |
| |||
|
Total current assets |
|
98,811 |
|
|
2,564 |
|
|
|
101,375 |
| ||
|
|
|
|
|
|
|
|
|
|
| |||
|
Property & equipment, net of accumulated depreciation |
|
9,209 |
|
(2,387 |
) |
(e) |
|
6,822 |
| |||
|
Intangible assets, net of accumulated amortization |
|
5,933 |
|
(4,386 |
) |
(e) |
|
1,547 |
| |||
|
Goodwill |
|
10,871 |
|
(4,577 |
) |
(e) |
|
6,294 |
| |||
|
Other assets |
|
1,596 |
|
(303 |
) |
(e) |
|
1,293 |
| |||
|
Total long - term assets |
|
27,609 |
|
(11,653 |
) |
|
|
15,956 |
| |||
|
Total assets |
|
$ |
126,420 |
|
$ |
(9,089 |
) |
|
|
$ |
117,331 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
|
| |||
|
Current liabilities: |
|
|
|
|
|
|
|
|
| |||
|
Accounts payable and accrued expenses |
|
$ |
44,653 |
|
$ |
19,947 |
|
(e) |
|
$ |
24,706 |
|
|
Deferred rent, short - term |
|
880 |
|
(6 |
) |
(e) |
|
874 |
| |||
|
Contingent consideration on acquisition, short term |
|
3,517 |
|
— |
|
|
|
3,517 |
| |||
|
Defered revenue |
|
27 |
|
640 |
|
(e) (f) |
|
667 |
| |||
|
Capital leases, short - term |
|
352 |
|
(352 |
) |
(e) |
|
— |
| |||
|
Other current liabilities |
|
100 |
|
|
|
|
|
100 |
| |||
|
Total current liabilities |
|
49,529 |
|
(19,665 |
) |
|
|
29,864 |
| |||
|
Long term liabilities: |
|
|
|
|
|
|
|
|
| |||
|
Deferred Revenue - long term |
|
— |
|
333 |
|
(f) |
|
333 |
| |||
|
Deferred rent, long |
|
5,778 |
|
(76 |
) |
(e) |
|
5,702 |
| |||
|
Defered tax liabilities |
|
446 |
|
— |
|
|
|
446 |
| |||
|
Capital leases |
|
668 |
|
(668 |
) |
(e) |
|
— |
| |||
|
Total liabilities |
|
56,421 |
|
(20,076 |
) |
|
|
36,345 |
| |||
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
| |||
|
Common stock |
|
5 |
|
|
|
|
|
5 |
| |||
|
Treasury stock |
|
(8,443 |
) |
|
|
|
|
(8,443 |
) | |||
|
Additional paid in capital |
|
284,237 |
|
|
|
|
|
284,237 |
| |||
|
Accumulated other comprehensive loss |
|
(245 |
) |
|
|
|
|
(245 |
) | |||
|
Accumulated deficit |
|
(205,555 |
) |
10,987 |
|
(g) |
|
(194,568 |
) | |||
|
Total stockholders’ equity |
|
69,999 |
|
10,987 |
|
|
|
80,986 |
| |||
|
Total liabilities and stockholders’ equity |
|
$ |
126,420 |
|
$ |
(9,089 |
) |
|
|
$ |
117,331 |
|
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The Company’s historical consolidated financial statements have been adjusted in the unaudited consolidated pro forma financial statements to present events that are (i) directly attributable to the Buy Side Transaction, (ii) factually supportable and (iii) with respect to adjustments to the pro forma consolidated statement of operations, are expected to have a continuing impact on the Company’s consolidated results following the Buy Side Transaction. The pro forma consolidated statements of operations do not reflect the estimated gain on the sale of the Buy Side Transaction as it is not expected to have a continuing impact.
Transition Services Agreement
Pursuant to a Transition Services Agreement entered into and effective on the closing of the Buy Side Transaction, the Company will supply certain services to Taptica. No pro forma adjustments have been made associated with this agreement as services to be provided and related payments are not expected to have a continuing impact on our pro forma consolidated statement of operations. The terms of the Transition Services Agreement does not extend past six months.
Note 2. Pro Forma Adjustments
The following adjustments have been reflected in the unaudited pro forma consolidated financial statements:
(a) Reflects the Company’s historical US GAAP consolidated financial statements, as reported, before pro forma adjustments related to the Buy Side Transaction.
(b) Reflects the elimination of revenues and expenses representing the historical operating results of the Business. For each of the years ended December 31, 2016, December 31, 2015 and December 31, 2014 the Business was included in the consolidated results of operations in the Company’s respective Form 10-K’s filed for each of those years. For the three months ended March 31, 2017 the Business was included in the consolidated results of operations in the Company’s Form 10-Q as previously filed.
(c) Includes the impact on the Company’s global consolidated estimated tax computation at the applicable statutory rate for the Business.
(d) Reflects estimated net proceeds from the Buy Side Transaction representing the gross sale price of $50.0 million less certain transaction costs of $2.6 million. The pro forma adjustment is reflected as an increase to cash and cash equivalents of $27.4 million and an increase to secured promissory note of $20.0 million.
(e) Represents the assets and liabilities that are adjusted to reflect the discontinued operations of the business.
(f) Represents allocation of approximately $1.0 million of the cash received to deferred income relating to a licensing agreement entered into as part of the Asset Purchase Agreement that provides the Buyer the right to use the Tremor Video trademark for a period not to exceed 18 months. The fair value of the trademark license was included as part of the gross sales price. The Company expects to recognize this income over the license period. The amount will be included in the statement of operations in the future, but is not reflected in the Pro Forma Consolidated Statement of Operations.
(g) Represents the estimated effect on retained earnings from the gain, net of tax, on the sale of the Business.