Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - root9B Holdings, Inc. | pag04302010_8ka.htm |
| EX-99.1 - ISG FINANCIAL STATEMENTS - root9B Holdings, Inc. | isgaudit.htm |
EXHIBIT 99.2
PREMIER ALLIANCE GROUP, INC.
INTRODUCTION TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
AS OF
MARCH 31 2010, AND THE THREE MONTHS ENDED MARCH 31, 2010 AND THE YEAR ENDED DECEMBER 31, 2009
The following unaudited pro-forma consolidated balance sheet, pro-forma income statements and the explanatory notes give effect to the asset purchase of Intronic Solution Group, LLC. by Premier Alliance Group, Inc.
The pro-forma consolidated balance sheet, pro-forma consolidated income statements and explanatory notes are based on the estimates and assumptions set forth in the explanatory notes. These pro-forma consolidated balance sheet and pro-forma consolidated income statements have been prepared utilizing the historical financial statements of Premier Alliance Group, Inc., and. Intronic Solution Group, LLC. and should be read in conjunction with the historical financial statements and notes thereto included elsewhere in this filing.
The pro-forma consolidated income statements have been prepared as if the asset purchase had been consummated on January 1, 2009 under the purchase method
of accounting and carried through to March 31, 2010. The pro-forma consolidated balance sheet has been prepared as if the acquisition was consummated on March 31, 2010.
This pro-forma consolidated financial data is provided for comparative purposes only, and does not purport to be indicative of the actual financial position or results of operations had the acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of the results of future operations.
PREMIER ALLIANCE GROUP, INC.
PRO FORMA BALANCE SHEET
MARCH 31, 2010
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ASSETS
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Historical
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unaudited
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unaudited
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unaudited
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Premier Alliance
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Intronic Solutions
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adjustments
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combined pro forma
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CURRENT ASSETS:
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Cash
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$ | 9,000.00 | $ | 195,904 | $ | (195,904.00 | ) | $ | 9,000.00 | |||||||
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Accounts receivable
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1,428,714 | 140,955 | (140,955 | ) | 1,428,714 | |||||||||||
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Marketable securities
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31,273 | 0 | 31,273 | |||||||||||||
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Deferred tax asset - current portion
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24,000 | 0 | 24,000 | |||||||||||||
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Prepaid expenses and
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other current assets
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21,745 | 14,866 | (14,866 | ) | 21,745 | |||||||||||
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Total current assets
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1,514,732 | 351,725 | (351,725 | ) | 1,514,732 | |||||||||||
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PROPERTY AND EQUIPMENT - at
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cost less accumulated depreciation & fees
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10,536 | 255,469 | (235,469 | ) | 30,536 | |||||||||||
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OTHER ASSETS:
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Goodwill
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1,450,578 | 0 | 913,000 | 2,363,578 | ||||||||||||
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Intangibles
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75,600 | 67,000 | 142,600 | |||||||||||||
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Investment in equity-method investee
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182,359 | 0 | 182,359 | |||||||||||||
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Investment in cost-method investee
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100,000 | 0 | 100,000 | |||||||||||||
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Cash surrender value of officers'
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||||||||||||||||
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life insurance
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387,112 | 0 | 387,112 | |||||||||||||
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Deferred tax asset
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50,000 | 0 | 50,000 | |||||||||||||
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Deposits and other assets
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6,100 | - | - | 6,100 | ||||||||||||
| 2,251,749 | - | 980,000 | 3,231,749 | |||||||||||||
| $ | 3,777,017 | $ | 607,194 | $ | 392,806 | $ | 4,777,017 | |||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
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Note payable
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$ | 385,000 | $ | 146,153 | (146,153 | ) | $ | 385,000 | ||||||||
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Current portion of long-term debt
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133,152 | 28,272 | (28,272 | ) | 133,152 | |||||||||||
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Accounts payable
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359,915 | 264,846 | (264,846 | ) | 359,915 | |||||||||||
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Accrued expenses
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508,264 | - | - | 508,264 | ||||||||||||
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Income taxes payable
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7,903 | - | - | 7,903 | ||||||||||||
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Total current liabilities
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1,394,234.00 | 439,271.00 | (439,271.00 | ) | 1,394,234.00 | |||||||||||
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LONG-TERM DEBT
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$ | 114,606 | 196,324.00 | (196,324.00 | ) | $ | 114,606 | |||||||||
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COMMITMENTS AND CONTINGENCIES
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- | - | - | - | ||||||||||||
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STOCKHOLDERS' EQUITY:
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Class A convertible preferred stock,
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liquidation preference of $0.05 per share,
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$.001 par value, 5,000,000 shares authorized,
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95,613 shares issued and outstanding
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96 | 96 | ||||||||||||||
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Common stock, $.001 par value, 45,000,000
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shares authorized, 7,332,379 shares
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issued and outstanding
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6,537 | 1,000 | (205 | ) | 7,332 | |||||||||||
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Additional paid-in capital
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3,414,635 | 0 | 699,205 | 4,113,840 | ||||||||||||
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Accumulated deficit
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(1,153,091 | ) | (29,401 | ) | 29,401 | (1,153,091 | ) | |||||||||
| 2,268,177 | (28,401 | ) | 728,401 | 2,968,177 | ||||||||||||
| $ | 3,777,017 | $ | 607,194 | $ | 92,805 | $ | 4,477,017 | |||||||||
PREMIER ALLIANCE GROUP, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 2010
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Historical
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unaudited
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unaudited
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unaudited
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Premier Alliance
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Intronic Solutions
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adjustments
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Combined Pro forma
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NET REVENUES
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$ | 2,875,359 | $ | 1,374,058 | $ | 4,249,417 | ||||||||||
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OPERATING EXPENSES:
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Cost of revenues
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2,276,733 | 961,781 | 3,238,514 | |||||||||||||
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Selling, general and administrative
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611,393 | 330,087 | 941,480 | |||||||||||||
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Depreciation
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1,191 | 2,906 | 1,444 | 5,541 | ||||||||||||
| 2,889,317 | 1,294,774 | 1,444 | 4,185,535 | |||||||||||||
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INCOME FROM OPERATIONS
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(13,958 | ) | 79,284 | (1,444 | ) | 63,882 | ||||||||||
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OTHER INCOME (EXPENSE):
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Interest expense, net
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(2,287 | ) | (21,038 | ) | - | (23,325 | ) | |||||||||
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Goodwill impairment loss
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- | - | - | - | ||||||||||||
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Gain (Loss) on marketable securities
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354 | - | - | 354 | ||||||||||||
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Officers' life insurance income
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17,080 | - | - | 17,080 | ||||||||||||
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Equity in net loss of equity-method investee
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(8,073 | ) | - | - | (8,073 | ) | ||||||||||
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Other income
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2,475 | - | - | 2,475 | ||||||||||||
| 9,008 | (21,038 | ) | - | (12,030 | ) | |||||||||||
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NET INCOME BEFORE INCOME TAXES
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(4,950 | ) | 58,246 | (1,444 | ) | 51,852 | ||||||||||
| - | ||||||||||||||||
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INCOME TAX BENEFIT (EXPENSE)
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10,998 | - | (22,153 | ) | (11,155 | ) | ||||||||||
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NET INCOME (LOSS)
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6,048 | 58,246 | (23,597 | ) | 40,697 | |||||||||||
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PREFERRED STOCK DIVIDEND
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- | - | - | - | ||||||||||||
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NET INCOME AVAILABLE FOR
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COMMON STOCKHOLDERS
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$ | 6,048 | $ | 58,246 | $ | (23,597 | ) | $ | 40,697 | |||||||
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Net Income (loss) per share
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basic
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$ | 0.00 | $ | 0.04 | ||||||||||||
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diluted
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$ | - | $ | 0.03 | ||||||||||||
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Weighted average number of shares,
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basic
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6,142,422 | 795,455 | 6,937,877 | |||||||||||||
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diluted
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6,238,035 | - | 795,455 | 7,033,490 | ||||||||||||
PREMIER ALLIANCE GROUP, INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
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Historical
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Historical | |||||||||||||||
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Premier Alliance
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Intronic Solutions
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adjustments
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Combined Pro forma
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NET REVENUES
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$ | 9,347,993 | $ | 3,779,521 | $ | 13,127,514 | ||||||||||
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OPERATING EXPENSES:
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Cost of revenues
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6,926,166 | 2,646,151 | 9,572,317 | |||||||||||||
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Selling, general and administrative
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2,117,122 | 1,169,787 | 3,286,909 | |||||||||||||
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Depreciation
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9,699 | 11,058 | 6,342 | 27,099 | ||||||||||||
| 9,052,987 | 3,826,996 | 6,342 | 12,886,325 | |||||||||||||
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INCOME FROM OPERATIONS
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295,006 | (47,475 | ) | (6,342.00 | ) | 241,189 | ||||||||||
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OTHER INCOME (EXPENSE):
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Interest expense, net
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(12,232 | ) | (64,590 | ) | (76,822 | ) | ||||||||||
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Goodwill impairment loss
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- | - | ||||||||||||||
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Gain/(Loss) on marketable securities
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12,522 | - | 12,522 | |||||||||||||
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Officers' life insurance income
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76,274 | - | 76,274 | |||||||||||||
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Equity in net loss of equity-method investee
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(9,607 | ) | - | (9,607 | ) | |||||||||||
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Other income
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4,800 | - | - | 4,800 | ||||||||||||
| 71,757 | (64,590 | ) | - | 7,167 | ||||||||||||
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NET INCOME BEFORE INCOME TAXES
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366,763 | (112,065 | ) | (6,342 | ) | 248,356 | ||||||||||
| - | ||||||||||||||||
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INCOME TAX BENEFIT (EXPENSE)
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(115,175 | ) | - | 46,179 | (68,996 | ) | ||||||||||
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NET INCOME (LOSS)
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251,588 | (112,065 | ) | 39,837 | 179,360 | |||||||||||
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PREFERRED STOCK DIVIDEND
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- | - | - | - | ||||||||||||
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NET INCOME AVAILABLE FOR
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COMMON STOCKHOLDERS
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$ | 251,588 | $ | (112,065 | ) | $ | 39,837 | $ | 179,360 | |||||||
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Net Income (loss) per share
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basic
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$ | 0.04 | $ | 0.03 | ||||||||||||
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diluted
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$ | 0.03 | $ | 0.02 | ||||||||||||
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Weighted average number of shares,
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basic
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5,926,438 | 795,455 | 6,721,893 | |||||||||||||
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diluted
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6,487,184 | - | 795,455 | 7,272,639 | ||||||||||||
Notes and assumptions to Pro-Forma Consolidated Financial Statements
Organization and basis of presentation:
The unaudited pro-forma consolidated balance sheet and consolidated income statements have been based on historical financial information, using accounting
principles generally accepted in the United States of America, of Premier Alliance Group, Inc. and Intronic Solutions Group LLC. for the three months ended March 31, 2010 and the year ended December 31, 2009, considering the effects of the asset purchase of Intronic Solutions Group LLC. by Premier Alliance Group, Inc. was completed effective January 1, 2009 in the case of the pro-forma consolidated income statements, and effective April 01, 2010 in the case of the pro-forma consolidated balance sheet.
On April 30, 2010 Premier Alliance Group, Inc. purchased the specific assets of Intronic Solutions Group LLC. The assets purchased included fixed assets in the amount of $20,000, goodwill in the amount of $913,000, and intangibles in the amount of $67,000. All other assets and liabilities remained with the seller and have been backed out in the adjustment section.
Pro-Forma adjustments:
The intangibles acquired from the purchase of Intronic Solutions Group LLC. are being amortized for book purposes over a period of five years. Fixed assets purchased are being depreciated over five years. No impairment of Goodwill has occurred.
Intangibles consisted of Intronic Solutions Group LLC’s customer lists and was valued using the Discounted Cash Flow method, the value was determined to be $67,000. Fixed assets were valued based on Fair Makret Value and were valued at $20,000.
Provision for income taxes has been provided for Intronic Solutions Group LLC. which assumes a corporate tax rate for year ended December 31, 2009 and three months ended March 31, 2010 respectively.
Stock Issuance: In consideration of the Purchased Assets, the Registrant paid to Intronic Solutions Group (a) the sum of $300,000 in cash at closing; and (b) issued to Intronic Solutions Group 795,455 shares of Registrant's common stock, equal to $700,000 based on the five-day average closing price of the common stock 5 days prior to the closing of $0.88, delivered within 10 days after Closing.