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EX-99.1 - EX-99.1 - HIPCRICKET, INC.a11-29828_3ex99d1.htm

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): January 9, 2012

 

Augme Technologies, Inc.

(Exact name of registrant as specified in Charter)

 

Delaware

 

333-57818

 

20-0122076

(State or other
jurisdiction of
incorporation)

 

(Commission
File
No.)

 

(IRS Employer
Identification
No.)

 

350 7th Avenue, 2nd Floor

New York, NY 10001

(Address of Principal Executive Offices)

 

(855) 423-5433

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

ITEM 2.02                                       RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

On December 22, 2011, based on the recommendation of the Audit Committee, the Board of Directors determined that the Company should restate its consolidated financial statements for the fiscal years ended February 28, 2011 and 2010, for each of the quarterly periods of fiscal year 2011 and 2010, and for the first and second quarterly periods of fiscal year 2012, ending May 31, 2011 and August 31, 2011. Accordingly, on December 29, 2011, the Company announced that its previously released financial statements for these periods should not be relied upon. The Company identified the following errors within its previously issued financial statements for the periods noted.

 

Accounting for share-based payments and warrants - The Company corrected errors in the recognition and valuation of share-based payments. The Company incorrectly recognized warrant expense using the contractual term of the warrant rather than the vesting or service period. A substantial number of warrants issued were fully vested upon issuance.  Additionally, for certain warrants issued in connection with equity financings or issued in connection with the issuance of common stock, the Company incorrectly recognized warrant expense during the period, instead of classifying the amount as an adjustment to paid in capital.  Furthermore, in calculating the grant date fair value of stock options the Company used an expected life that was inconsistent with historical experience and expectations, and did not adjust the related expense for the expected pre-vesting forfeitures. The errors related to the share-based payments impact the fiscal years ended February 28, 2011 and 2010, including the quarterly interim periods of 2011 and 2010, as well as the quarterly interim periods ended May 31, 2011 and August 31, 2011.

 

Accounting for business combinations — The Company corrected errors in the accounting for its business acquisitions of Hipcricket, Inc. (“Hipcricket”) and JAGTAG, Inc. (“JAGTAG”).  To correct the error related to the acquisition of Hipcricket, the Company has recorded, as of the date of the acquisition, an increase in the amount of $23,284,000 to goodwill and to acquisition related contingent consideration to reflect the fair value of the contingent consideration related to the earn-out.  The Company also incorrectly capitalized acquisition related transaction costs for the Hipcricket and JAGTAG business acquisitions, which should be expensed as incurred.  This change resulted in additional transaction expense of $696,616 during the six month period ended August 31, 2011.  These acquisitions were consummated during the Company’s second quarter ended August 31, 2011.

 

The following tables summarize the affect of the restatement on the Company’s consolidated financial statements as of February 28, 2011 and for the three and nine month periods ended November 30, 2010, and the three and six month periods ended August 31, 2011.  While the errors described above affected periods other than those discussed in this Current Report, the information relating to the three and nine month periods ended November 30, 2010 and the three month period ended August 31, 2011 is being included for purposes of comparison to the press release we issued on January 9, 2012, which is attached to this Current Report as exhibit 99.1.

 

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The following tables set forth summary financial data as originally reported and as restated:

 

 

 

Three Months Ended November 30, 2010

 

Nine Months Ended November 30, 2010

 

 

 

As Previously
Reported

 

Adjustments

 

As Restated

 

As Previously
Reported

 

Adjustments

 

As Restated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

853,169

 

$

 

 

$

853,169

 

$

1,858,209

 

 

 

$

1,858,209

 

Cost of revenue

 

361,349

 

 

 

361,349

 

846,387

 

 

 

846,387

 

Gross profit

 

491,820

 

 

 

491,820

 

1,011,822

 

 

 

1,011,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

2,232,188

 

 

 

2,232,188

 

4,534,121

 

 

 

4,534,121

 

Stock, option and warrant expense

 

832,358

 

216,977

 

615,381

 

2,246,656

 

2,743,625

 

4,990,281

 

Depreciation and amortization

 

261,209

 

 

 

261,209

 

752,925

 

 

 

752,925

 

Total operating expenses

 

3,325,755

 

 

 

3,108,778

 

7,533,703

 

 

 

10,277,327

 

Loss from operations

 

(2,833,935

)

 

 

(2,616,958

)

(6,521,881

)

 

 

(9,265,506

)

Interest and other income

 

7

 

 

 

7

 

23

 

 

 

23

 

NET LOSS

 

$

(2,833,928

)

 

 

$

(2,616,951

)

$

(6,521,858

)

 

 

$

(9,265,483

)

NET LOSS PER SHARE — basic and diluted

 

$

(.05

)

 

 

$

(.04

)

$

(.11

)

 

 

$

(.16

)

WEIGHTED AVERAGE SHARES OUTSTANDING — basic and diluted

 

60,412,028

 

 

 

60,412,028

 

58,549,934

 

 

 

58,549,934

 

 

 

 

As of February 28, 2011

 

 

 

As Previously
Reported

 

Adjustments

 

As Restated

 

 

 

(In thousands)

 

Condensed Consolidated Balance Sheet Data:

 

 

 

 

 

 

 

Goodwill

 

$

13,106,969

 

 

 

$

13,106,969

 

Total assets

 

32,030,876

 

 

 

32,030,876

 

Contingent Liabilities

 

 

 

 

 

Accumulated Deficit

 

(39,953,047

)

1,197,820

 

(38,755,227

)

Additional Paid in Capital

 

70,046,761

 

(1,197,820

)

68,848,941

 

Total liabilities & shareholders’ equity

 

$

32,030,876

 

$

 

$

32,030,876

 

 

3



 

 

 

Three Months Ended August 31. 2011

 

 

 

As Previously
Reported

 

Adjustments

 

As Restated

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Income:

 

 

 

 

 

 

 

Revenue

 

$

1,287,122

 

$

 

 

$

1,287,122

 

Cost of revenue

 

412,347

 

 

 

412,347

 

Gross profit

 

874,775

 

 

 

874,775

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

4,028,062

 

697,439

 

4,725,501

 

Stock, option and warrant expense

 

2,158,113

 

(125,159

)

2.032,954

 

Depreciation and amortization

 

300,724

 

 

 

300,724

 

Total operating expenses

 

6,486,899

 

 

 

7,059,179

 

Loss from operations

 

(5,612,124

)

 

 

(6,184,404

)

Interest and other income

 

5,156

 

 

 

5,156

 

NET LOSS

 

$

(5,606,968

)

 

 

$

(6,179,248

)

NET LOSS PER SHARE — basic and diluted

 

$

(.08

)

 

 

$

(.09

)

WEIGHTED AVERAGE SHARES OUTSTANDING — basic and diluted

 

71,189,143

 

 

 

71,189,143

 

 

ITEM 7.01             REGULATION FD DISCLOSURE

 

Please see the information in Item 2.02 above, which is incorporated herein by this reference.

 

ITEM 9.01             FINANCIAL STATEMENTS AND EXHIBITS

 

                99.1         Press release issued January 9, 2012

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

Augme Technologies, Inc.

 

 

(Registrant)

 

 

 

 

Date: January 9, 2012

 

By:

/s/ Thomas J. Virgin

 

 

 

Thomas J. Virgin

 

 

 

Chief Financial Officer

 

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