Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A CURRENT REPORT - XCel Brands, Inc. | v243012_8ka.htm |
| EX-99.1 - EXHIBIT 99.1 - XCel Brands, Inc. | v243012_ex99-1.htm |
Unaudited Pro Forma Condensed Combined Financial Statements
Introduction
The following unaudited pro forma combined financial statements give effect to the acquisition by Xcel Brands, Inc. (“Xcel”) of IM Licensing Business (A division of IM Ready-Made, LLC) under the purchase method of accounting, and immediately after the acquisition, Xcel shall reverse merge into NetFabric Holdings, Inc (combined, the “Company”, by reference the “Merger”). The Merger is being accounted for as a reverse acquisition presented as a recapitalization, except no goodwill or other intangible assets are recorded. Accordingly, the financial statements of XCel will become the historical financial statements of the Company. These pro forma statements are presented for illustrative purpose only. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable. The pro forma combined condensed financial statements do not purport to represent what the results of operations of Xcel would actually have been if the acquisition had in fact occurred at the beginning of the periods presented, nor do they purport to project the results of operations of Xcel for any future period. The IM License Business is not a separate legal entity and the net income reported on the Financial Statements of the IM Licensing Business is not necessarily indicative of the results of operations that would have occurred if the IM License Business had been operated as a separate entity.
Under the purchase method of accounting, the total purchase price was allocated to the net tangible and intangible assets of the IM License Business acquired in connection with the Asset Purchase Agreement, based on the estimated fair values as of the completion of the acquisition. Xcel is determining the estimated fair value of certain assets acquired and liabilities assumed with the assistance of a third party valuation specialist. The purchase price allocations set forth in the following unaudited pro forma condensed combined financial statements are based on preliminary estimates of the IM License Business’s intangible and tangible assets acquired. The final valuations, and any interim updated preliminary valuation estimates, may differ materially from these preliminary valuation estimates, and as a result the final allocation of the purchase price may result in reclassifications of the allocated amounts that are materially different from the purchase price allocations reflected herewith. Any material change in the valuation estimates and related allocation of the purchase price would materially impact Xcel’s depreciation and amortization expenses, the unaudited pro forma condensed combined financial statements and Xcel’s results of operations after the acquisition.
The pro forma combined balance sheet assumes that the acquisition had occurred as of June 30, 2011. The pro forma combined statement of operations for the six months ended June 30, 2011 and the year ended December 31, 2010 assumes that the acquisition occurred at the beginning of January 1, 2010.
The historical financial statements of Xcel are derived from Xcel’s audited financial statements from September 23, 2010, the Company’s inception, through December 31, 2010 and Xcel’s unaudited financial statements for the six months ended June 30, 2011. The financial statements’ of IM Licensing Business is derived from IM Licensing Business audited financial statements for the year ended December 31, 2010 and the unaudited financial statements for the six months ended June 30, 2011.
Xcel Brands, Inc
Unaudited Pro Forma Condensed Combined Balance Sheet
June 30, 2011
|
Xcel Brands,
Inc
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IM Licensing
Business
|
Note I
|
Note II
|
Pro Forma
Combined
|
||||||||||||||||
|
Assets
|
||||||||||||||||||||
|
Cash
|
$ | 100 | $ | 17,000 | (a) | (10,174,000 | )(z) | $ | (17,000 | ) | $ | 3,872,100 | ||||||||
| (c) | 3,837,000 | (x) | $ | (200,000 | ) | |||||||||||||||
| (d) | 12,920,000 | |||||||||||||||||||
| (e) | (2,511,000 | ) | ||||||||||||||||||
|
Restricted cash
|
(e) | 175,000 | 175,000 | |||||||||||||||||
|
Accounts receivable
|
$ | 1,858,000 | (z) | $ | (1,858,000 | ) | - | |||||||||||||
|
Prepaid expenses
|
177,100 | 1,273,000 | (e) | 122,000 | (y) | (176,100 | ) | 123,000 | ||||||||||||
| (z) | (1,273,000 | ) | ||||||||||||||||||
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Other current assets
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15,000 | (z) | (15,000 | ) | - | |||||||||||||||
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Deferred finance costs
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(d) | 580,000 | 580,000 | |||||||||||||||||
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Trademarks
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(b) | 47,700,000 | 47,700,000 | |||||||||||||||||
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License contracts
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(b) | 530,000 | 530,000 | |||||||||||||||||
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Goodwill
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(b) | - | - | |||||||||||||||||
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Property and equipment, net of accumulated depreciation of $1,441,000
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- | 1,294,000 | (b) | 1,233,000 | (z) | (1,294,000 | ) | 1,233,000 | ||||||||||||
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Total Assets
|
$ | 177,200 | $ | 4,457,000 | $ | 54,412,000 | $ | (4,833,100 | ) | $ | 54,213,100 | |||||||||
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Liabilities and Shareholders' Equity
|
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Current Liabilities
|
||||||||||||||||||||
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Accounts payable & accrued expenses
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$ | 510,900 | $ | 2,893,000 | (a) | $ | 1,500,000 | (z) | $ | (2,893,000 | ) | $ | 200 | |||||||
| (e) | $ | (1,500,000 | )(y) | $ | (510,700 | ) | ||||||||||||||
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Due to affiliates
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77,200 | - | (y) | (77,200 | ) | - | ||||||||||||||
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Installment obligation - current portion
|
- | - | (a) | 30,000 | - | 30,000 | ||||||||||||||
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Total current liabilities
|
588,100 | 2,893,000 | 30,000 | (3,480,900 | ) | 30,200 | ||||||||||||||
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Long term liabilities
|
||||||||||||||||||||
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Installment Obligation, net of current portion
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(a) | 1,102,000 | 1,102,000 | |||||||||||||||||
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Deferred payment obligation - Seller
|
(a) | 1,858,000 | 1,858,000 | |||||||||||||||||
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Deferred royalty payments
|
7,871,000 | (z) | (7,871,000 | ) | - | |||||||||||||||
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Seller Note
|
(a) | 5,595,000 | 5,595,000 | |||||||||||||||||
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Contingent consideration obligation
|
(a) | 16,400,000 | 16,400,000 | |||||||||||||||||
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Senior debt
|
(d) | 13,500,000 | - | 12,283,000 | ||||||||||||||||
| - | - | (d) | (1,217,000 | ) | - | - | ||||||||||||||
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Total long term liabilities
|
- | 7,871,000 | 37,238,000 | (7,871,000 | ) | 37,238,000 | ||||||||||||||
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Total Liabilities
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588,100 | 10,764,000 | 37,268,000 | (11,351,900 | ) | 37,268,200 | ||||||||||||||
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Stockholders Equity
|
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Common stock
|
- | - | (a) | 4,000 | 5,000 | |||||||||||||||
| (c.) | 1,000 | |||||||||||||||||||
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Paid in capital
|
1,000 | (a) | 12,367,000 | 17,421,000 | ||||||||||||||||
| (c.) | 4,299,000 | |||||||||||||||||||
| (c.) | (463,000 | ) | ||||||||||||||||||
| (d) | 1,217,000 | |||||||||||||||||||
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Member's Equity
|
(6,307,000 | ) | (z) | 6,307,000 | - | |||||||||||||||
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Retained earnings (deficit)
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(411,900 | ) | (e) | (714,000 | )(y) | 411,800 | (481,100 | ) | ||||||||||||
| (a) | 433,000 | |||||||||||||||||||
| - | - | - | (x) | (200,000 | ) | - | ||||||||||||||
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Total stockholders equity
|
(410,900 | ) | (6,307,000 | ) | 17,144,000 | 6,518,800 | 16,944,900 | |||||||||||||
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Total liabilities and stockholders equity
|
$ | 177,200 | $ | 4,457,000 | $ | 54,412,000 | $ | (4,833,100 | ) | $ | 54,213,100 | |||||||||
Xcel Brands, Inc
Unaudited Pro Forma Condensed Combined Statement of Operations
|
For the Six Months Ended June 30, 2011
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Xcel Brands, Inc
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IM Licensing
Business
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Note III
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Note IV
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Pro Forma
Combined
|
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|
Revenues
|
$ | - | $ | 5,789,000 | $ | - | $ | - | $ | 5,789,000 | ||||||||||
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Expenses
|
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Operating & administrative
|
2,200 | 2,810,000 | 2,812,200 | |||||||||||||||||
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Non-recurring expenses
|
388,100 | (x) | $ | (388,100 | ) | - | ||||||||||||||
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Depreciation & amortization
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- | 141,000 | (a) | 76,000 | (z) | (18,000 | ) | 199,000 | ||||||||||||
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Total expenses
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390,300 | 2,951,000 | 76,000 | (406,100 | ) | 3,011,200 | ||||||||||||||
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Operating Income (Loss)
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(390,300 | ) | 2,838,000 | (76,000 | ) | 406,100 | 2,777,800 | |||||||||||||
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Finance charges
|
||||||||||||||||||||
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Interest expense - Senior Notes
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(c.) | 573,800 | 573,800 | |||||||||||||||||
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Interest expense - OID Senior Notes
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(c.) | 117,400 | 117,400 | |||||||||||||||||
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Interest expense - Imputed charges
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(d) | 434,600 | 434,600 | |||||||||||||||||
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Deferred finance charges
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- | - | (b) | 58,000 | - | 58,000 | ||||||||||||||
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Total Finance Charges
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- | - | 1,183,800 | - | 1,183,800 | |||||||||||||||
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Net income (loss) before provision for income taxes
|
(390,300 | ) | 2,838,000 | (1,259,800 | ) | 406,100 | 1,594,000 | |||||||||||||
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Provision for Income taxes
|
200 | - | (e) | (456,863 | )(y) | 1,029,193 | 572,530 | |||||||||||||
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Net Income (loss)
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$ | (390,500 | ) | $ | 2,838,000 | $ | (802,937 | ) | $ | (623,093 | ) | $ | 1,021,470 | |||||||
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Earnings (loss) per Common Share:
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||||||||||||||||||||
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Basic
|
$ | (5,386 | ) | $ | 0.18 | |||||||||||||||
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Fully Diluted:
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$ | (5,386 | ) | $ | 0.16 | |||||||||||||||
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Weighted average number of common shares outstanding:
|
||||||||||||||||||||
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Basic
|
72.50 | (f) | 5,683,000 | (72.50 | ) | 5,683,000 | ||||||||||||||
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Fully Diluted:
|
72.50 | (f) | 6,446,000 | (72.50 | ) | 6,446,000 | ||||||||||||||
Xcel Brands, Inc
Unaudited Pro Forma Condensed Combined Statement of Operations
|
For the Year Ended December 31, 2010
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||||||||||||||||||||
|
Xcel Brands, Inc
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IM Licensing
Business
|
Note III
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Note IV
|
Pro Forma
Combined
|
||||||||||||||||
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Revenues
|
$ | - | $ | 9,796,000 | $ | - | $ | - | $ | 9,796,000 | ||||||||||
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Expenses
|
||||||||||||||||||||
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Operating & administrative
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- | 4,443,000 | 4,443,000 | |||||||||||||||||
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Non-recurring expenses
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21,200 | (x) | $ | (21,200 | ) | - | ||||||||||||||
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Depreciation & amortization
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- | 281,000 | (a) | 151,000 | (z) | (34,000 | ) | 398,000 | ||||||||||||
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Total expenses
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21,200 | 4,724,000 | 151,000 | (55,200 | ) | 4,841,000 | ||||||||||||||
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Operating Income (Loss)
|
(21,200 | ) | 5,072,000 | (151,000 | ) | 55,200 | 4,955,000 | |||||||||||||
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Finance charges
|
||||||||||||||||||||
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Interest expense - Senior Notes
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(c.) | 1,147,500 | 1,147,500 | |||||||||||||||||
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Interest expense - OID Senior Notes
|
(c.) | 231,500 | 231,500 | |||||||||||||||||
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Interest expense - Imputed charges
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(d) | 823,300 | 823,300 | |||||||||||||||||
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Deferred finance charges
|
- | - | (b) | 116,000 | - | 116,000 | ||||||||||||||
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Total Finance Charges
|
- | - | 2,318,300 | - | 2,318,300 | |||||||||||||||
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Net income (loss) before provision for income taxes
|
(21,200 | ) | 5,072,000 | (2,469,300 | ) | 55,200 | 2,636,700 | |||||||||||||
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Provision for Income taxes
|
200 | - | (e) | (895,485 | )(y) | 1,839,347 | 944,062 | |||||||||||||
|
Net Income (loss)
|
$ | (21,400 | ) | $ | 5,072,000 | $ | (1,573,815 | ) | $ | (1,784,147 | ) | $ | 1,692,638 | |||||||
|
Earnings (loss) per Common Share:
|
||||||||||||||||||||
|
Basic
|
$ | (295 | ) | $ | 0.30 | |||||||||||||||
|
Fully Diluted:
|
$ | (295 | ) | $ | 0.26 | |||||||||||||||
|
Weighted average number of common shares outstanding:
|
||||||||||||||||||||
|
Basic
|
72.50 | (f) | 5,683,000 | (72.50 | ) | 5,683,000 | ||||||||||||||
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Fully Diluted:
|
72.50 | (f) | 6,446,000 | (72.50 | ) | 6,446,000 | ||||||||||||||
Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
Note I
Reflects the allocation of costs associated with the acquisition of IM Licensing Business assets and the assumption of its liabilities under the purchase method of accounting as though the acquisition occurred on June 30, 2011 and the impact of the financing associated with the acquisition.
Adjustment (a)
Total purchase price and consideration to IM Ready-Made, LLC (the “Seller”) was determined as follows:
|
3,704,000 shares of $.001 par value common stock at
|
$ | 4,000 | ||
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Fair value of 3,704,000 shares of $.001 par value common stock at $3.34 per share, less stated par value(see Note below)
|
12,367,000 | |||
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Total equity value
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12,371,000 | |||
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Cash paid at closing
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10,174,000 | |||
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Assumption of vendor payable
|
1,500,000 | |||
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Assumption of installment obligation ($124,000 current portion) (ii)
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1,132,000 | |||
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Deferred payment obligation to Seller
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1,858,000 | |||
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Bargain purchase price gain
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433,000 | |||
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Fair market value Seller Note, (face amount $7,377,000)
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5,595,000 | |||
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Contingent consideration obligation (i)
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16,400,000 | |||
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Total cost of acquisition
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$ | 49,463,000 |
|
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(i)
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Contingent consideration obligation represents the net present value of estimated additional consideration due to the Seller in accordance with the terms and conditions of the acquisition.
|
|
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(ii)
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As part of the consideration to the Seller, Xcel shall assume a non-interest bearing $1.5 million installment obligation of the Seller payable over the next five years. The annual payment amounts are year 1, $150,000; year 2, $325,000; year 3, $325,000; year 4, $350,000; and year 5, $350,000. The net present value of $1.132 million is recorded using a discount rate of 9.25%, the estimated borrowing rate cost of Xcel.
|
Adjustment (b)
The purchase price was allocated to the fair value of the assets acquired and liabilities assumed as follows:
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Property and equipment
|
$ | 1,233,000 | ||
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Isaac Mizrahi trademarks
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47,700,000 | |||
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License contracts
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530,000 | |||
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Total allocated purchase price
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$ | 49,463,000 |
Adjustment (c)
Financing of the acquisition is funded through (i) the issuance of 861,000 shares of common stock plus 431,000 warrants excisable at $.01valued at $5.00 per unit through a private placement simultaneously with the acquisition and (ii) proceeds from a $13.5 million senior term loan secured with the Isaac Mizrahi trademarks and other assets of IM Brands, LLC, (“IM Brands”) a wholly owned subsidiary of Xcel.
The fair market value per share is an estimate based on shares of common stock issued to Investors that includes 1 common share and ½ warrant exercisable at $.01 for $5.00 per unit. This results in a $3.34 common share price. The bifurcation of the fair value of the warrants resulted in a consideration value of $3.34 per common share.
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861,000 shares of $.001 par value common stock at
|
$ | 1,000 | ||
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861,000 shares of $.001common stock and 431,000 warrants exercisable issued at $5.00 per share less stated par value, in a private placement.
|
4,299,000 | |||
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Costs related to the issuance of common stock
|
(463,000 | ) | ||
|
Net cash received from financing activities
|
$ | 3,837,000 |
Adjustment (d)
IM Brands entered into a five year senior secured term facility (the “Loan”) with MidMarket Capital Partners, LLC (“MidMarket”) in the aggregate principal amount of $13,500,000. The Loan is secured by all of the assets and membership interests of IM Brands, and is guaranteed by Xcel. The principal amount of the Loan will be payable as follows: 0% following the closing until December 31, 2012, 2.5% on January 1, 2013 and at the end of each quarter thereafter for one year; 3.75% at the end of each quarter from January 1, 2014 through December 31, 2014; 6.25% at the end of each quarter from January 1, 2015 through December 31, 2015; 12.5% at the end of each quarter from January 1, 2016 through December 31, 2016 and the entire unpaid principal amount on the January 1, 2017. The loan shall bear interest at 8.5% per annum.
|
Senior Loan proceeds
|
$ | 13,500,000 | ||
|
Deferred finance costs (i)
|
(580,000 | ) | ||
|
Net Senior Loan proceeds
|
$ | 12,920,000 | ||
|
Senior Loan
|
$ | 13,500,000 | ||
|
Discount from issuance of warrants. (ii)
|
1,217,000 | |||
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Net Senior Loan
|
$ | 12,283,000 |
|
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(i)
|
Xcel incurred approximately $580,000 of costs related directly to the financing, including closing fee of $405,000 to MidMarket equal to 3% of the committed amount.
|
|
|
(ii)
|
In addition, the Company is issuing 364,428 warrants to the lender exercisable at $0.01 per share, exercisable up to 7 years from the date of the grant.
|
Adjustment (e)
The terms and conditions of the acquisition required certain disbursements be made by Xcel in conjunction with the acquisition and prepaid interest to the Seller of $122,000. In addition, the following presents other uses of cash relating to the acquisition:
|
Vendor payment (i)
|
$ | 1,500,000 | ||
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Prepaid interest - Seller note (ii)
|
122,000 | |||
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Other costs relating to the acquisition (iii)
|
714,000 | |||
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Restricted cash (iv)
|
175,000 | |||
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Total other uses of cash relating to the acquisition
|
$ | 2,511,000 |
|
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(i)
|
Xcel is assuming a vendor payable in the amount of $1.5 million, and was paid to the vendor at closing.
|
|
|
(ii)
|
Xcel prepayed to the Seller interest relating to the Seller Note. The Seller Note has a 3 year term and is payable in cash or common stock, at the option of Xcel.
|
|
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(iii)
|
Xcel incurred acquisition costs that are treated as expenses in the ordinary course of business and accordingly is reflected in the retained earnings (deficit) on the balance sheet. These estimated costs consist of legal and professional fees of $463,000 and estimated due diligence costs of $251,000.
|
|
|
(iv)
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Xcel shall provide either a letter of credit secured with cash or cash for the benefit of the landlord in accordance with the assumed lease of the Seller.
|
Note II -
Adjustment (z)
Represents the elimination of historical values of IM Licensing Business already reflected in Note I entries.
Adjustment (y)
This represents the elimination of assets and liabilities of Excel that have been eliminated in conjunction with the acquisition. These include prepaid expense and accounts payable relating solely to the acquisition.
Adjustment (x)
On September 29, 2011, NetFabric Holdings, Inc., a Delaware corporation (the “NetFabric”), XCel Brands, Inc., a Delaware corporation (“XCel”), Netfabric Acquisition Corp., a Delaware corporation (“Acquisition Corp.”) and wholly-owned subsidiary of NetFabric and certain stockholders of NetFabric entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) pursuant to which Acquisition Corp. was merged with and XCel, with XCel surviving as a wholly-owned subsidiary of NetFabric (the “Merger”). Immediately following the Merger, Xcel was merged with and into NetFabric (the “Short Form Merger”) and the Company changed its name to Xcel Brands, Inc. Pursuant to the Merger, NetFabric acquired all of the outstanding capital stock of XCel in exchange for issuing an aggregate of 944,688 shares of Common Stock, par value $0.001 per share (the “Common Stock”) to XCel’s stockholders at a ratio of 9,446.88 shares of Common Stock for each share of XCel common stock outstanding at the effective time of the Merger.
On September 28, 2011, NetFabric filed an amendment to its certificate of incorporation and effected a 1 for 520.5479607 reverse stock split such that holders of Common Stock prior to the Merger held a total of 186,444 shares of Common Stock and options immediately prior to the Merger. In addition, 47,132 shares of Common Stock shall be owned by Mr. Stephen J. Cole-Hatchard or his designees, a director of Netfabric. These shares combined with 944,688 shares issued to Xcel’s management represent 1,178,264 shares of common stock at par value that shall be owned by Xcel shareholders and the old shareholders of NetFabrics.
Notes to Unaudited Pro Forma Combined Statement of Operations
Note III
Adjustment (a)
This represents the amortization of acquired intangible assets (licensed contracts) on a straight line basis over the remaining weighted average contract period of 3.5 years.
Trademarks are considered indefinite life assets and accordingly are not amortized. The Company tests and measures at least annually trademarks for the possibility of impairment.
Adjustment (b)
Represents the deferred finance costs incurred relating to closing on the Loan and shall be amortized on a straight line basis over the 5-year term and classified as interest expense.
Adjustment (c)
Represents the interest expense at a rate of 8.5% for the six months ended June 30, 2011 and the year ended December 31, 2010, that would have been incurred under the terms of the Loan incurred as part of the acquisition.
The discount to the Loan attributable to the estimated fair value of the warrant consideration to the senior lender has been recorded as a discount to the Loan. The amount of the discount is amortized using the effective interest method over the term of the Loan.
Adjustment (d)
Represents the imputed interest at a rate of 9.25% per annum related to (i) Seller Note, (ii) deferred payment due to the Seller and (iii) the installment obligation assumed that would have been incurred as part of the acquisition. The interest rate is based on the estimated borrowing cost of the Company.
Adjustment (e)
This represents the income tax provision (benefit) that is related to the adjustments in Note III using the Company’s estimated effective tax rate.
Adjustment (f)
Weighted average number of common shares - The aggregate number of shares to issued by the Company in connection with the acquisition is 4,698,000 shares plus an additional 1,045,000 shares to old Xcel shareholders combining to equal 5,743,000 outstanding shares.
Fully diluted shares – in connection with the acquisition, the Company issued 797,000 warrants below fair market value, whereby the warrant holders are entitled to exercise each warrant for one common share. These warrants are included in the calculation of fully diluted shares. The following table illustrates fully diluted shares that consist of the total of (i) outstanding shares and (ii) convertible securities that have an exercise price below the estimated current fair market value.
|
Security
|
Number of
Shares
|
Estimated Fair
Market Value per
Share
|
Exercise
Price
|
|||||||||
|
Common Shares
|
5,743,000 | $ | 3.34 | N/A | ||||||||
|
Senior lender warrants (i)
|
364,000 | $ | 3.34 | $ | .01 | |||||||
|
Investors warrants (ii)
|
431,000 | $ | 3.34 | $ | .01 | |||||||
|
Shell Co holders
|
2,000 | $ | 3.34 | $ | 0.001 | |||||||
| 6,540,000 | ||||||||||||
|
|
(i)
|
The Company will issue 364,428 warrants exercisable at $0.01 per share to its senior lender. The warrants are exercisable at any time from the date of the acquisition for 7 years. Warrants issued with the Senior Loan were valued at $1,217,000 and has been recorded as a discount to the Loan and an increase in additional paid in capital. The amount of the discount is amortized using the effective interest method over the 5-year term of the debt. The value of the warrants were determined using a black-scholes pricing model in accordance with the provisions of ASC 18 that assumes a $3.34 per share current stock value. A volatility rate of 41.7%, risk free investment rate of 3.75%.
|
|
|
(ii)
|
The amount of investor warrants to be issued is based on the Company issuing 861,000 new investor shares at $3.34 per share equaling $4,300,000 in proceeds. Investors shall receive 1 warrant for each 2 shares subscribed, exercisable at $.01 per share.
|
Total Warrants – in addition to 797,000 warrants and options issued in as stated in the fully diluted table above, the Company expects to issue an additional 748,000 warrants and options. Combining with warrants and options included in the fully diluted table, the aggregate amount of warrants and options issued is 1,546,000. The following table presents the combined warrants and options expected to be issued upon closing of the acquisition.
|
Warrant holder
|
Number
|
Exercise Price
|
Term
|
||||||
|
Senior Lender
|
364,000 | $ | .01 |
7 years
|
|||||
|
Investors
|
431,000 | $ | .01 |
5 years
|
|||||
|
Shell Co holders
|
2,000 | $ | 0.001 |
4 years
|
|||||
|
Employees
|
464,000 | $ | 5.00 |
10-Years
|
|||||
|
Directors
|
250,000 | $ | 5.00 |
5-years
|
|||||
|
Other
|
25,000 | $ | 5.00 |
5-years
|
|||||
|
Placement agent
|
10,000 | $ | 5.50 |
5 years
|
|||||
| 1,546,000 | |||||||||
Note IV
Adjustment (z)
Represents the adjusted difference of depreciation expense that would have been incurred as a result of the acquisition and the amount recorded by IM Licensing Business.
Adjustment (y)
IM licensing Business is a not a reporting entity for income tax purposes. This adjustment represents income tax expense that would be recorded against earnings generated from the acquired IM Licensing Business using the Company’s estimated tax rate.
Adjustment (x)
This represents non-recurring expenses of Xcel that, relate exclusively to the acquisition of the Seller.