Attached files
| file | filename |
|---|---|
| 8-K/A - Global Gate Property Corp. | gloabl8kitem402_3242011.htm |
| EX-23.1 - Global Gate Property Corp. | gloabl8kitem402x231_3242011.htm |
| EX-99.1 - Global Gate Property Corp. | gloabl8kitem402x991_3242011.htm |
Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On October 22, 2010, Global Gate Property Corp. (“Global Gate”) closed on the purchased of 51% of the outstanding shares of common stock of Macoy Capital Partners, Inc. (“Macoy Capital”) pursuant to a Stock Purchase Agreement with Mitch Ohlbaum, Macoy Capital’s sole shareholder. Under the terms of the Stock Purchase Agreement, Global Gate paid an aggregate purchase price of $10,333, which was paid in a combination of the issuance of 33,333 shares of Global Gate common stock valued at $333 and $10,000 in cash.
The total purchase price was as follows:
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Value of Global Gate common stock
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$ | 333 | ||
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Cash
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10,000 | |||
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Total purchase price
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$ | 10,333 |
We have recorded a preliminary allocation of the purchase price to Macoy Capital tangible and identifiable intangible assets acquired, liabilities assumed and noncontrolling interest based on their fair values as of June 30, 2010. Goodwill has been recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired. The preliminary purchase price allocation is as follows:
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Cash
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$ | 1,197 | ||
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Goodwill
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28,150 | |||
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Liabilities assumed
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(9,086 | ) | ||
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Noncontrolling interest
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(9,928 | ) | ||
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Total purchase price
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$ | 10,333 |
The unaudited pro forma combined balance sheet as of June 30, 2010 was prepared as if the acquisition had occurred on that date and combines the historical consolidated balance sheets of Global Gate and Macoy Capital as of June 30, 2010. The unaudited pro forma combined statements of operations were prepared as if the acquisition had occurred on January 1, 2009. The unaudited pro forma combined statement of operations for the year ended December 31, 2009 combines the historical consolidated statement of operations of Global Gate and Macoy Capital for the twelve months ended December 31, 2009. The unaudited pro forma combined statement of operations for the six months ended June 30, 2010 combines the historical consolidated statements of operations of Global Gate and Macoy Capital for the six months ended June 30, 2010.
The unaudited pro forma combined financial statements have been prepared for informational purposes only, to show the effect of the combination of Global Gate and Macoy Capital on a historical basis. These financial statements do not purport to be indicative of the financial position or results of operations that would have actually occurred had the business combination been in effect at those dates, nor do they project the results of operations or financial position for any future period or date. The unaudited pro forma combined financial statements do not reflect any adjustments for non-recurring items or anticipated synergies resulting from the acquisition. The accounting treatment of business combinations requires the acquirer to measure a noncontrolling interest in the acquiree at its fair value at the acquisition date. Accordingly, the pro forma financial statements include adjustments to reflect the noncontrolling interest at a preliminary estimate of fair value. The preliminary fair value measurements utilize estimates based on key assumptions of the acquisition, including prior acquisition experience, benchmarking of similar acquisitions and historical and current market data.
These statements and accompanying notes should be read in conjunction with, and are qualified by, the consolidated financial statements of Global Gate contained in the Global Gate Annual Report on Form 10-K/A and Quarterly Reports on Form 10-Q/A as filed with the Securities and Exchange Commission on March 28, 2010, and the financial statements of Macoy Capital included herein.
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See accompanying notes to unaudited pro forma combined financial statements.
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SIX MONTHS ENDED JUNE 30, 2010
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Historical
Global Gate |
Historical
Macoy Capital |
Pro Forma
Adjustments |
Pro Forma
Combined |
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Sales
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$ | 182,065 | $ | 30,079 | $ | - | $ | 212,144 | |||||||||
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Cost of goods sold
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81,698 | - | - | 81,698 | |||||||||||||
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Gross profit
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100,367 | 30,079 | - | 130,446 | |||||||||||||
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Operating expenses:
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|||||||||||||||||
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Amortization & depreciation
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4,897 | - | - | 4,897 | |||||||||||||
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General and administrative
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97,352 | 49,996 | - | 147,348 | |||||||||||||
| 102,249 | 49,996 | - | 152,245 | ||||||||||||||
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Loss from operations
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(1,882 | ) | (19,917 | ) | - | (21,799 | ) | ||||||||||
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Other income (expense):
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|||||||||||||||||
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Interest expense
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(9,367 | ) | - | - | (9,367 | ) | |||||||||||
| (9,367 | ) | - | - | (9,367 | ) | ||||||||||||
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Loss before
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|||||||||||||||||
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provision for (benefit from) income taxes
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(11,249 | ) | (19,917 | ) | - | (31,166 | ) | ||||||||||
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Provision for (benefit from) income tax
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- | (2,483 | ) | - | (2,483 | ) | |||||||||||
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Net loss
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(11,249 | ) | (17,434 | ) | - | (28,683 | ) | ||||||||||
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Less: Net (income) loss attributable to
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|||||||||||||||||
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noncontrolling interest
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(10,053 | ) | - | 8,543 |
(A)
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(1,510 | ) | ||||||||||
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Net loss attributable
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to common stockholders
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$ | (21,302 | ) | $ | (17,434 | ) | $ | 8,543 | $ | (30,193 | ) | ||||||
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Net loss per share
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(Basic and fully diluted)
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$ | (0.00 | ) | $ | (0.00 | ) | |||||||||||
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Weighted average number of
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common shares outstanding
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12,597,985 | 33,333 |
(B)
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12,631,318 | |||||||||||||
See accompanying notes to unaudited pro forma combined financial statements.
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YEAR ENDED DECEMBER 31, 2009
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Historical
Global Gate |
Historical
Macoy Capital |
Pro Forma
Adjustments |
Pro Forma
Combined |
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Sales
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$ | 283,881 | $ | 19,660 | $ | - | $ | 303,541 | |||||||||
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Cost of goods sold
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173,156 | - | - | 173,156 | |||||||||||||
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Gross profit
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110,725 | 19,660 | - | 130,385 | |||||||||||||
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Operating expenses:
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Amortization & depreciation
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9,793 | - | - | 9,793 | |||||||||||||
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General and administrative
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91,698 | 6,223 | - | 97,921 | |||||||||||||
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Write offs - inventory
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31,523 | - | - | 31,523 | |||||||||||||
| 133,014 | 6,223 | - | 139,237 | ||||||||||||||
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Other operating items:
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Collection of previously written off receivables
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49,407 | - | - | 49,407 | |||||||||||||
| 49,407 | - | - | 49,407 | ||||||||||||||
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Income from operations
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27,118 | 13,437 | - | 40,555 | |||||||||||||
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Other income (expense):
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Interest expense
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(20,695 | ) | 8 | - | (20,687 | ) | |||||||||||
| (20,695 | ) | 8 | - | (20,687 | ) | ||||||||||||
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Income before
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provision for income taxes
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6,423 | 13,445 | - | 19,868 | |||||||||||||
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Provision for income tax
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- | 2,483 | - | - | |||||||||||||
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Net income
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6,423 | 10,962 | - | 19,868 | |||||||||||||
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Less: Net (income) loss attributable to
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noncontrolling interest
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(20,567 | ) | - | (5,371 | ) |
(A)
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(25,938 | ) | |||||||||
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Net income (loss) attributable
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to common stockholders
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$ | (14,144 | ) | $ | 10,962 | $ | (5,371 | ) | $ | (6,070 | ) | ||||||
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Net income (loss) per share
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(Basic and fully diluted)
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$ | (0.00 | ) | $ | (0.00 | ) | |||||||||||
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Weighted average number of
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common shares outstanding
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9,197,802 | 33,333 |
(B)
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9,231,135 | |||||||||||||
See accompanying notes to unaudited pro forma combined financial statements.
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NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Pro Forma Adjustments:
The following pro forma adjustments are included in the unaudited pro forma combined balance sheet:
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(A)
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To reflect activity related to the acquisition and the allocation of purchase price:
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•
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Goodwill of $28,150. The pro forma adjustments do not include an adjustment to record a deferred tax asset since the Company would have taken a full valuation allowance against this deferred tax asset based on the uncertainty as to the utilization of that asset.
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•
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Cash portion of purchase price ($10,000) was not paid until March 27, 2011, therefore this balance is included as an increase in accounts payable.
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•
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The issuance of 33,333 shares of Global Gate common stock valued at approximately $333. Since Global Gate’s stock is thinly traded on the OTC Bulletin Board, the Company determined the closing price per share of Global Gate common stock of $0.75 on October 22, 2010 is not representative of the fair value of the shares. The most significant transaction involving the issuance of the Company’s shares was the issuance of 40,802,198 shares to unaffiliated investors on June 24, 2010 for approximately $0.01 per share which the Company believes represents the fair value of the shares issued on October 22, 2010. Although Global Gate had 50,000,000 common shares authorized and issued at June 30, 2010, the authorized shares were increased to 500,000,000 on August 20, 2010, supporting the issuance of the additional 33,333 shares to purchase Macoy Capital on October 22, 2010.
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(B)
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To record the elimination of the historical stockholders’ equity of Macoy Capital.
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(C)
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Reflects an increase to record the noncontrolling interest at fair value.
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The following pro forma adjustments are included in the unaudited pro forma combined statement of operations:
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(A)
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To reflect an adjustment to record the noncontrolling interest in Macoy Capital’s net income (loss).
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(B)
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To reflect the issuance of 33,333 shares of Global Gate common stock at closing.
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