Attached files
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8-K/A - FORM 8-K/A - Development Capital Group, Inc. | dlpm0516148ka.htm |
EX-23 - EXHIBIT 23 - Development Capital Group, Inc. | exhibit23.htm |
EX-99.1 - EXHIBIT 99.1 - Development Capital Group, Inc. | exhibit991.htm |
Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information presents the unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of operations as of and for the nine months ended December 31, 2013, based upon the historical financial statements of Development Capital Group, Inc. (the Company) and Clearance.co.
On March 31, 2014, Development Capital Group, Inc. (the "Company"), a Florida corporation and Clearance.co, a California corporation entered into and completed an Agreement and Plan of Reorganization (Agreement), effective as of March 31, 2014, whereby Development Capital Group, Inc. issued a total of 77,527,735 shares of its restricted common stock in exchange for all of the issued and outstanding shares of Clearance.co. Immediately prior to the closing, the Company had approximately 24,460,000 shares issued and outstanding. Post closing, the Company will have approximately 101,987,000 shares of common stock issued and outstanding. After giving effect to the closing, the shares of common of the Company are owned as follows: 1) Former shareholders of Clearance.co hold approximately 76.0%, 2) exisiting holders of the Company's common stock will continue to hold 24,460,000 shares of the Company's common stock or 24.0%. For financial reporting purposes, the transaction represents a reverse merger rather than a business combination and Clearance.co is deemed to be the accounting acquirer in the transaction. Consequently, the assets and liabilities and the historical operations that will be reflected in the Companys future financial statements will be those of Clearance.co. The Companys assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of Clearance.co after consummation of the Agreement, and the historical financial statements of the Company before the Merger will be replaced with the historical financial statements of Clearance.co before the Merger in all future filings with the SEC. These Pro forma Condensed Combined Financial Statements show the financial position of Development Capital Group, Inc., Clearance.co, and the two companies combined as of December 31, 2013. These financial statements also present the results of operations of Development Capital Group, Inc. for the nine month period ending December 31, 2013, the results of operations of Clearance.co from inception on April 22, 2013 through December 31, 2013, and the results of operations for these two companies combined for these periods. The financial statements for Development Capital Group, Inc. were originally issued in the Company's 10-Q filing issued February 13, 2014 and the audited financial statements for Clearance.co have been included in this report as Exhibit 99.1.
The unaudited pro forma condensed combined financial information has been prepared based upon currently available information and assumptions deemed appropriate by the Companys management and is provided for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the transaction had been completed as of the dates set forth above, nor is it indicative of the future results or current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs. Furthermore, the unaudited pro forma condensed combined statements of operations do not include certain nonrecurring charges and the related tax effects which resulted directly from the Agreement. The unaudited pro forma condensed combined financial information should be read in conjunction with the separate historical financial statements and accompanying notes of Development Capital Group, Inc. and Clearance.co.
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Pro Forma Condensed Combined Balance Sheets | ||||||||
(Unaudited) | ||||||||
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| Historical Information |
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| Development Capital |
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| Pro Forma |
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| Clearance.co |
| Group, Inc. |
| Pro Forma |
| Combined |
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| December 31, 2013 |
| December 31, 2013 |
| Adjustments |
| December 31, 2013 | |
Current assets: | ||||||||
Cash and cash equivalents | $ 103,875 |
| $ 315,077 |
| - |
| $ 418,952 |
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Inventory | 153,989 |
| - |
| - |
| 153,989 |
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Receivables, related parties | 349,097 |
| 70,000 |
| - |
| 419,097 |
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Prepaid expenses | - |
| 7,200 |
| - |
| 7,200 |
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Accrued Interest receivable | - |
| 329 |
| - |
| 329 |
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Total current assets | 606,961 |
| 392,606 |
| - |
| 999,567 |
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Fixed assets: office equipment, net of |
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accumulated depreciation of $407 | 4,049 |
| - |
| - |
| 4,049 |
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Other assets: |
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Capitalized software development costs | - |
| 43,888 |
| - |
| 43,888 |
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Deposits held | 2,520 |
| - |
| - |
| 2,520 |
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Restricted cash - reserves | 69,382 |
| - |
| - |
| 69,382 |
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Total other assets | 71,902 |
| 43,888 |
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| 115,790 |
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Total Assets | $ 682,912 |
| $ 436,494 |
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| $ 1,119,406 |
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Liabilities and Stockholders' (Deficit) |
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Current liabilities: |
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Accounts payable and accrued expenses | $ 1,625,150 |
| $ 11,807 |
| - |
| $ 1,636,957 |
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Accounts payable related parties | - |
| 9,500 |
| - |
| 9,500 |
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Accrued interest | 14,531 |
| - |
| - |
| 14,531 |
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Reserve for returns and allowances | 50,000 |
| - |
| - |
| 50,000 |
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Total current liabilities | 1,689,681 |
| 21,307 |
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| 1,710,988 |
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Long-term liabilities: |
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Convertible notes payable | 503,000 |
| - |
| - |
| 503,000 |
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Total long-term liabilities | 503,000 |
| - |
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| 503,000 |
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Total Liabilities | 2,192,681 |
| 21,307 |
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| 2,213,988 |
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Stockholders' (deficit) |
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Common stock | 10,000 |
| 24,460 | 1 | (10,000) |
| 24,460 |
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Common stock payable | - |
| - | 3 | 77,528 |
| 77,528 |
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Additional paid-in capital | - |
| 612,564 | 2 | (612,564) |
| - |
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Accumulated (deficit) | (1,519,769) |
| (221,837) | 1 | 10,000 |
| (1,196,570) |
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| 2 | 612,564 |
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| 3 | (77,528) |
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Total stockholders' (deficit) | (1,509,769) |
| 415,187 |
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| (1,094,582) |
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Total Liabilities and Stockholders' (Deficit) | $ 682,912 |
| $ 436,494 |
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| $ 1,119,406 | |
See notes to the unaudited condensed consolidated Pro Forma financial statements | ||||||||
2 |
Development Capital Group, Inc. and Clearance.co | ||||||||
Pro Forma Condensed Combined Statements of Operations | ||||||||
(Unaudited) | ||||||||
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| Historical Information |
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| Development Capital |
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| Pro Forma |
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| Clearance.co |
| Group, Inc. |
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| Combined |
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| For the Period |
| For the Period |
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| For the Period |
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| April 22, 2013 - |
| April 1, 2013 - |
| Pro Forma |
| April 1, 2013 - |
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| December 31, 2013 |
| December 31, 2013 |
| Adjustments |
| December 31, 2013 | |
Revenue: |
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Sales, net of allowances | $ 2,075,003 |
| $ - |
| - |
| $ 2,075,003 |
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Cost of goods sold | 1,320,750 |
| - |
| - |
| 1,320,750 |
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Gross Margin | 754,253 |
| - |
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| 754,253 |
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Operating Expenses: |
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Selling expenses | 167,596 |
| - |
| - |
| 167,596 |
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Promotional and marketing expenses | 1,832,502 |
| - |
| - |
| 1,832,502 |
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General & administrative | 70,089 |
| 83,470 |
| - |
| 153,559 |
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Salaries and wages | 187,904 |
| - |
| - |
| 187,904 |
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Consulting - related parties | - |
| 57,500 |
| - |
| 57,500 |
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Research and development | - |
| 14,153 |
| - |
| 14,153 |
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Total Operating Expenses | 2,258,091 |
| 155,123 |
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| 2,413,214 |
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Loss From Operations | (1,503,838) |
| (155,123) |
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| (1,658,961) |
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Other Income (Expense): |
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Interest income (expense) | (15,931) |
| 329 |
| - |
| (15,602) |
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Other Income (Expense) | (15,931) |
| 329 |
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| (15,602) |
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Net (Loss) | $ (1,519,769) |
| $ (154,794) |
| - |
| $ (1,674,563) |
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3 |
Notes to Pro Forma Condensed Consolidated Financial Statement | |||||||||
Note - 1 | |||||||||
To reflect the elimination of Clearance.Co common stock for the effects of the recapitalization of Clearance. | |||||||||
Note - 2 | |||||||||
To refect the elimination of the additional paid-in capital of the Company in connection with the recapitalization of Clearance.Co | |||||||||
Note - 3 | |||||||||
To reflect the issuance of 77,7527,735 shares of the Company's common stock in connection with the consumation of the Agreement and Plan of Reorganization. | |||||||||
4 |