Exhibit 99.2

 

The following unaudited pro forma financial information for the year ended December 31, 2010 and as of and for the nine months ended September 30, 2011 are based on the historical financial statements of Lenco Mobile Inc. (the "Company") and iLoop Mobile, Inc. ("iLoop") after giving effect to the Company's acquisition of iLoop and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma financial information. The effective date of the acquisition was December 27, 2011.

 

The unaudited pro forma condensed consolidated balance sheet as of September 30, 2011 is presented as if the acquisition had occurred on September 30, 2011. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2011 is presented as if the acquisition had occurred on January 1, 2011. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2010 is presented as if the acquisition had occurred at January 1, 2010. The pro forma adjustments are based upon available information and certain assumptions that we believe are reasonable.

 

The unaudited pro forma financial information is for informational purposes only and does not purport to present what our results would actually have been had these transactions actually occurred on the dates presented or to project our results of operations or financial position for any future period. You should read the information set forth below together with (i) the Lenco Mobile Inc. consolidated financial statements as of December 31, 2010 and 2009 and for each of the years in the three-year period ended December 31, 2010, including the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission on March 29, 2011, (ii) the Lenco Mobile Inc. unaudited consolidated financial statements as of September 30, 2011 and for the nine-month period ended September 30, 2011, including the notes thereto, included in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 7, 2011, and (iii) the historical financial statements of iLoop included in Exhibit 99.1 of this Form 8-K/A.

 

 

 

 

 

 

Lenco Mobile Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

Nine months ended September 30, 2011

                   

 

	(A)			(B)			(C )			(D)
	Lenco			iLoop			Pro Forma			Consolidated
	(unaudited)			(unaudited)			Adjustments			Pro Forma
ASSETS
Current assets:
Cash and cash equivalents	$	580,356		$	1,069,129		$	-		$	1,649,485
Accounts receivable, net of allowances		2,158,217			964,176			-			3,122,393
Other current assets		116,280			76,565			-			192,845
Income taxes receivable		231,917			-			-			231,917
Net assets related to current discontinued operations		456,099			-			-			456,099
Total current assets		3,542,869			2,109,870			-			5,652,739
Property and equipment, net		416,276			111,681			-			527,957
Other noncurrent assets:
Intangible assets - goodwill		810,104			-			25,448,992			26,259,096
Intangible assets - other, net		1,506,068			118,750			4,000,000			5,624,818
Other noncurrent assets		9,744			19,013			-			28,757
Total other noncurrent assets		2,325,916			137,763			29,448,992			31,912,671
Total assets	$	6,285,061		$	2,359,314		$	29,448,992		$	38,093,367
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Line of credit	$	-		$	276,715		$	-		$	276,715
Accounts payable and accrued expenses		1,963,885			2,803,397			1,732,140			6,499,422
Deferred revenue		0			612,271			-			612,271
Current portion of long-term obligations, net of debt discount		353,400			4,128,561			335,427			4,817,388
Preferred dividend payable		667,587			-			-			667,587
Net liabilities related to current discontinued operations		722,749			-			-			722,749
Total current liabilities		3,707,621			7,820,944			2,067,567			13,596,132
Long-term obligations, less current portion		10,323			2,208,425			5,115,705			7,334,453
Total liabilities		3,717,944			10,029,369			7,183,272			20,930,585
Shareholders' equity:
Preferred Stock, Series A Lenco, 107,500 shares outstanding $.001 par value,		108			1,666			(1,666	)		108
Preferred Stock Series B1, 87,715 shares outstanding, $.001 par value		-			-			88			88
Preferred Stock Series B2, 58,131 shares outstanding, $.001 par value		-			-			58			58
Common stock, 250,000,000 shares authorized, $.001 par value, 71,145,699 shares and  81,888,647 shares outstanding pre and post merger respectively		71,145			167			10,576			81,888
Additional paid in capital		60,671,560			25,867,752			(11,282,976	)		75,256,336
Accumulated other comprehensive income		80,893			(8,776	)		8,776			80,893
Accumulated deficit		(57,945,081	)		(33,530,864	)		33,530,864			(57,945,081	)
Total Lenco Mobile Inc. shareholders' equity		2,878,625			(7,670,055	)		22,265,720			17,474,290
Noncontrolling deficit		(311,508	)		-			-			(311,508	)
Total equity		2,567,117			(7,670,055	)		22,265,720			17,162,782
Total liabilities and shareholders' equity	$	6,285,061		$	2,359,314		$	29,448,992		$	38,093,367

 

    See accompanying notes to pro forma financial information              

 

 

 

 

                    

    Notes to above pro forma financial information:              

                   

    (A) This column represents the unaudited, consolidated Balance Sheet for Lenco Mobile Inc. as of September 30, 2011.

         

    (B) This column represents the unaudited Balance Sheet for iLoop Mobile, Inc. as of September 30, 2011.              

                   

    (C) This column contains pro forma adjustments estimating the application of ASC 805 ("Business Combinations") for the acquisition of iLoop Mobile, Inc. into QLP Acquisition Corp., a Delaware corporation and wholly owned subsidiary of Lenco Mobile Inc. Inherent in the application of ASC 805, there are pro forma adjustments reflecting estimates of the fair market value of the assets acquired, goodwill, and adjustments to shareholders' equity and liabilities to provide a pro forma consolidated balance (as per column D) as if the acquisition had occurred on September 30, 2011.  Note that since both Lenco Mobile Inc. and iLoop Mobile, Inc. continue to have pre-tax losses, no tax benefit from the historical losses of either entity have been reflected on the Balance Sheets contained in this pro forma analysis              

                   

    (D) This column represents the pro forma, consolidated Balance Sheet as if the acquisition of Lenco Mobile Inc. and iLoop Mobile, Inc. had occurred as of September 30, 2011.              

 

 

 

Lenco Mobile Inc.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Nine months ended September 30, 2011

 

               

 

	(A)			(B)			(C )			(D)
	Lenco			iLoop			Pro Forma			Consolidated
	(unaudited)			(unaudited)			Adjustments			Pro Forma
Net Revenue	$	7,206,161		$	4,687,076		$	-		$	11,893,237
Cost of sales		2,250,763			2,246,731			-			4,497,494
Gross profit		4,955,398			2,440,345			0			7,395,743
Operating expense:
Sales and marketing		807,114			895,314			-			1,702,428
General and administrative		6,458,370			5,529,024			-			11,987,394
Stock compensation expense		1,670,675			-			-			1,670,675
Depreciation and amortization		1,018,706			64,896			1,000,000			2,083,602
Impairment loss		924,636			-			-			924,636
Total operating expense		10,879,501			6,489,234			1,000,000			18,368,735
Loss from operations		(5,924,103	)		(4,048,889	)		(1,000,000	)		(10,972,992	)
Other income (expense):
Interest expense, net		(26,967	)		(265,049	)		(490,602	)		(782,618	)
Other income		66,301			-			-			66,301
Total other income (expense)		39,334			(265,049	)		(490,602	)		(716,317	)
Loss from operations before provision for (benefit from) income taxes		(5,884,769	)		(4,313,938	)		(1,490,602	)		(11,689,309	)
Provision for (benefit from) income taxes		166,597			4,192			-			170,789
Loss from continuing operations		(6,051,366	)		(4,318,130	)		(1,490,602	)		(11,860,098	)
Loss from discontinued operations, net of taxes of $1,900,565		(21,167,694	)		-			-			(21,167,694	)
Net loss		(27,219,060	)		(4,318,130	)		(1,490,602	)		(33,027,792	)
Net loss attributable to noncontrolling interest		(239,894	)		-			-			(239,894	)
Net loss attributable to Lenco Mobile Inc.		(26,979,166	)		(4,318,130	)		(1,490,602	)		(32,787,898	)
Preferred stock dividends		(502,394	)		-			-			(502,394	)
Series A Preferred Stock accretion of beneficial conversion feature		(4,007,779	)		-			-			(4,007,779	)
Net loss attributable to common stockholders	$	(31,489,339	)	$	(4,318,130	)	$	(1,490,602	)	$	(37,298,071	)
Basic and diluted net loss per share applicable to common stockholders
Continuing operations	$	(0.08	)		-			-		$	(0.14	)
Discontinued operations	$	(0.30	)		-			-		$	(0.26	)
Net loss per share applicable to common stockholders	$	(0.38	)		-			-		$	(0.40	)
Weighted average shares used in per share calculation - basic and diluted		71,145,659			-			10,742,988			81,888,647
Net loss	$	(27,219,060	)	$	(4,318,130	)	$	(1,490,602	)	$	(33,027,792	)
Foreign currency translation adjustment		(631,388	)		10,536			-			(620,852	)
Unrealized gains on investments		143,750			-			-			143,750
Total comprehensive loss	$	(27,706,698	)	$	(4,307,594	)	$	(1,490,602	)	$	(33,504,894	)

 

See accompanying notes to pro forma financial information              

               

Notes to above pro forma financial information:              

               

(A) This column represents the unaudited, consolidated Statement of Operations for Lenco Mobile Inc. for the period January 1, 2011 through September 30, 2011.

 

(B) This column represents the unaudited Statement of Operations for iLoop Mobile, Inc. for the period January 1, 2011 through September 30, 2011.              

 

(C) This column represents the pro forma adjustments to the combined Statement of Operations assuming that the acquisition of iLoop Mobile, Inc. into QLP Acquisiton Corp., a wholly owned subsidiary of Lenco Mobile Inc., had occurred on January 1, 2011 and operated by Lenco Mobile Inc. through September 30, 2011. Adjustments have been made for amortization of the amortizable intangible assets during this time frame value, as well as additional interest expense based on the increase in debt levels stemming from the acquisition. Note that since combined entities would have continued to have pre-tax losses, no tax benefit of the losses shown on the acquisition entities herein, would have been recognized in this pro forma analysis.              

 

(D) This column represents the pro forma, consolidated Statement of Operations as if the merger of Lenco Mobile Inc. and iLoop Mobile, Inc. had occurred as of January 1, 2011.  

 

 

 

 

 

Lenco Mobile Inc.

Unaudited Pro Forma Condensed Consolidated Statements of Operations

Fiscal Year Ended December 31, 2010

 

	(A)			(B)			(C )			(D)
	Lenco			iLoop			Pro Forma			Consolidated
	(unaudited)			(unaudited)			Adjustments			Pro Forma
Net Revenue	$	8,357,331		$	6,533,439			-		$	14,890,770
Cost of sales		2,614,363			2,766,172			-			5,380,535
Gross profit		5,742,968			3,767,267			0			9,510,235
Operating expense:
Sales and marketing		926,977			2,620,315			-			3,547,292
General and administrative		9,163,201			3,037,290			-			12,200,491
Stock compensation expense		-			142,942			-			142,942
Research and development		532,538			1,584,668			-			2,117,206
Depreciation and amortization		3,937,268			96,017			1,333,333			5,366,618
Impairment loss		875,960			-			-			875,960
Total operating expense		15,435,944			7,481,232			1,333,333			24,250,509
Loss from operations		(9,692,976	)		(3,713,965	)		(1,333,333	)		(14,740,274	)
Other income (expense):
Interest expense, net		(722,104	)		(311,288	)		(654,136	)		(1,687,528	)
Other income		631,360			-			-			631,360
Total other income (expense)		(90,744	)		(311,288	)		(654,136	)		(1,056,168	)
Loss from operations before provision for (benefit from) income taxes		(9,783,720	)		(4,025,253	)		(1,987,469	)		(15,796,442	)
Provision for (benefit from) income taxes		(58,302	)		-			-			(58,302	)
Loss from continuing operations		(9,725,418	)		(4,025,253	)		(1,987,469	)		(15,738,140	)
Income from discontinued operations		232,595			-			-			232,595
Gain on sale of discontinued operations		1,916,771			-			-			1,916,771
Net loss		(7,576,053	)		(4,025,253	)		(1,987,469	)		(13,588,774	)
Net loss attributable to noncontrolling interest		(71,613	)		-			-			(71,613	)
Net loss attributable to Lenco Mobile Inc.		(7,504,440	)		(4,025,253	)		(1,987,469	)		(13,517,161	)
Preferred stock dividends		(165,193	)		-			-			(165,193	)
Series A Preferred Stock accretion of beneficial conversion feature		(1,458,236	)		-			-			(1,458,236	)
Net loss attributable to common stockholders	$	(9,127,869	)	$	(4,025,253	)	$	(1,987,469	)	$	(15,140,590	)
Basic and diluted net loss per share applicable to common stockholders
Continuing operations	$	(0.14	)							$	(0.20	)
Discontinued operations	$	0.03								$	0.03
Net loss per share applicable to common stockholders	$	(0.11	)							$	(0.17	)
Weighted average shares used in per share calculation - basic and diluted		66,778,400						10,742,988			77,521,387
Net loss	$	(7,576,053	)	$	(4,025,253	)	$	(1,987,469	)	$	(13,588,774	)
Foreign currency translation adjustment		341,076			4,037			-			345,113
Unrealized gains on investments		(143,750	)		-						(143,750	)
Total comprehensive loss	$	(7,378,727	)	$	(4,021,216	)	$	(1,987,469	)	$	(13,387,411	)
See accompanying notes to pro forma financial information

  

 

 

Notes to above pro forma financial information:

 

(A) This column represents the unaudited, consolidated Statement of Operations for Lenco Mobile Inc. for the period January 1, 2010 through December 31, 2010.

 

(B) This column represents the unaudited Statement of Operations for iLoop Mobile, Inc. for the period January 1, 2010 through December 31, 2011.

 

(C) This column represents the pro forma adjustments to the combined Statement of Operations assuming that the acquisition of iLoop Mobile, Inc. into QLP Acquisiton Corp., a wholly owned subsidiary of Lenco Mobile Inc., had occurred on January 1, 2010 and operated by Lenco Mobile Inc. through December 310, 2010. Adjustments have been made for amortization of the amortizable intangible assets during this time frame value, as well as additional interest expense based on the increase in debt levels stemming from the acquisition. Note that since combined entities would have continued to have pre-tax losses, no tax benefit of the losses shown on the acquisition entities herein, would have been recognized in this pro forma analysis.

 

(D) This column represents the pro forma, consolidated Statement of Operations as if the acquisition of iLoop Mobile, Inc. had occurred as of January 1, 2010.

 

 

 

 

 

 

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