UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Introduction

 

The following unaudited pro forma condensed combined financial information gives effect to the acquisition (the “Acquisition”) of Sensis Holding Limited (“the Acquiree” or “Sensis”) by Thryv Holdings, Inc. (“the Company” or “the Acquirer”) and gives effect to the settlement of the Company’s senior term loan, the new term loan credit agreement entered into, and amendment of the asset-based lending facility. The unaudited pro forma condensed combined financial information consists of the pro forma combined statements of operations for the three months ended March 31, 2021 and for the year ended December 31, 2020.

 

Under the terms and subject to the conditions set forth in the Purchase Agreement, at closing, Thryv acquired, directly or indirectly, all of the issued and outstanding shares of Sensis as of March 1, 2021. As a result, Thryv will account for the Acquisition of Sensis using the acquisition method of accounting. Accordingly, Sensis’s tangible and identifiable intangible assets acquired and liabilities assumed will be recorded at fair value as of March 1, 2021, with the excess of the purchase consideration over the fair value of Sensis’s net assets recorded as goodwill. The fair values of property, plant and equipment and intangible and other assets acquired and liabilities assumed, have been prepared on a preliminary basis with information currently available.  Management is still reviewing the characteristics and assumptions related to Sensis’s assets acquired and liabilities assumed. Estimates and assumptions are subject to change upon finalization of these preliminary valuations. The completion of the valuation work could result in significantly different depreciation and amortization expenses and balance sheet measurement.

 

The unaudited pro forma condensed combined statements of operations have been prepared to give effect to the Acquisition as if it had been completed on January 1, 2020. As the transaction has been reflected in the historical balance sheet of the Company as of March 31, 2021, a pro forma balance sheet has not been presented. The unaudited pro forma condensed combined financial statements are based on the historical audited and unaudited consolidated results of operations of the Company and Sensis. The unaudited pro forma condensed combined financial statements should be read in conjunction with the following:

 

 

 

 

 

 

The unaudited pro forma condensed combined financial statements were prepared in accordance with Article 11 of SEC Regulation S-X using the assumptions set forth in the notes to the unaudited pro forma condensed combined financial statements. The pro forma adjustments reflecting completion of the Acquisition are based upon the acquisition method of accounting in accordance with U.S. GAAP and upon the assumptions set forth in the notes to the unaudited pro forma condensed combined financial statements.

 

The unaudited pro forma condensed combined financial statements are presented to reflect the Acquisition and do not represent what the combined Company’s results of operations would have been had the Acquisition occurred on the date noted above, nor do they project the results of operations of Thryv following the Acquisition. The unaudited pro forma condensed combined financial statements are intended to provide information about the impact of the Acquisition as if it had been consummated earlier. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on Thryv’s results of operations, with the exception of certain non-recurring charges to be incurred in connection with the Acquisition.

 

The pro forma adjustments included in this unaudited pro forma condensed combined  financial information are subject to modification as additional information becomes available and as additional analyses are performed depending on changes in interest rates, changes in foreign currency rates, and the final fair value determination of the assets acquired and liabilities assumed. The final allocation of the total purchase accounting will be determined after the completion of thorough analyses to determine the fair value of Sensis’s tangible and identifiable intangible assets acquired and liabilities assumed as of the Acquisition date.

 

						Notes 2 and 4				Note 5
		Historical Thryv				Historical Adjusted Sensis				Transaction Adjustments				Notes				Pro Forma
Revenue			280,606				30,207				7,939				5(a	)			318,752
Cost of services			98,160				13,609				2,359				5(b	)			114,128
Gross Profit			182,446				16,598				5,580								204,624
Operating expenses:
Sales and marketing			76,540				4,360				755				5(b	)			81,655
General and administrative			41,279				7,366				1,277				5(b	)			49,922
Impairment charges			-				-				-								-
Total operating expenses			117,819				11,726				2,032								131,577
Operating income			64,627				4,872				3,548								73,047
Other income (expense):
Interest expense			(11,607	)			(2,155	)			3,768				5(c	)			(9,994	)
Interest expense, related party			(4,065	)			-				(2,267	)			5(c	)			(6,332	)
Other components of net periodic pension cost			453				-				-								453
Other income (expense)			(1,093	)			3,713				-								2,620
Income before benefit (provision) for income taxes			48,315				6,430				5,049								59,794
Benefit (provision) for income taxes			(11,809	)			(1,108	)			(1,545	)			5(d	)			(14,462	)
Net income			36,506				5,322				3,504								45,332
Net income per common share:
Basic		$	1.10															$	1.37
Diluted		$	1.07															$	1.33
Weighted-average shares used in computing basic and diluted net income per common share:
Basic			33,108,422																33,108,422
Diluted			34,013,480																34,013,480

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

 

THRYV HOLDINGS, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2020

(U.S. Dollars In Thousands, Except Per Share Amounts)

 

						Notes 2 and 4				Note 5
		Historical Thryv				Historical Adjusted Sensis				Transaction Adjustments				Notes				Pro Forma
Revenue			1,109,435				220,558				(28,945	)			5(a	)			1,301,048
Cost of services			440,433				61,185				14,254				5(b	)			515,872
Gross Profit			669,002				159,373				(43,199	)							785,176
Operating expenses:
Sales and marketing			315,390				34,577				8,056				5(b	)			358,023
General and administrative			176,688				58,180				14,814				5(b	)			249,682
Impairment charges			24,911				5,410				-								30,321
Total operating expenses			516,989				98,167				22,870								638,026
Operating income			152,013				61,206				(66,069	)							147,150
Other income (expense):
Interest expense			(51,537	)			(4,578	)			11,621				5(c	)			(44,494	)
Interest expense, related party			(17,002	)			-				(10,089	)			5(c	)			(27,091	)
Other components of net periodic pension cost			(42,236	)			-				-								(42,236	)
Other income (expense)			-				2,534				-								2,534
Income before benefit (provision) for income taxes			41,238				59,162				(64,537	)							35,863
Benefit (provision) for income taxes			107,983				(19,670	)			19,237				5(d	)			107,550
Net income			149,221				39,492				(45,300	)							143,413
Net income per common share:
Basic		$	4.73															$	4.55
Diluted		$	4.42															$	4.24
Weighted-average shares used in computing basic and diluted net income per common share:
Basic			31,522,845																31,522,845
Diluted			33,795,594																33,795,594

See accompanying Notes to the Unaudited Pro Forma Condensed Combined Financial Information.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Note 1 - Description of Acquisition

 

On March 1, 2021, Thryv completed its previously announced Acquisition of Sensis to acquire all of the issued and outstanding shares of Sensis. In order to finance the Acquisition, the Company (as original guarantor and original borrower) entered into a term loan agreement of $700 million and an agreement to amend the ABL Facility. Proceeds from the new term loan agreement were used to finance the Acquisition, refinance in full Thryv’s existing term loan, and pay fees and expenses related to the Acquisition and related financing. For the three months ending March 31, 2021, Thryv recognized $10.5 million in transaction costs attributable to the Acquisition, which are nonrecurring in nature. Total consideration transferred, subject to customary adjustments for working capital, was cash of $215 million US dollars (USD).

 

The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of Sensis based on Thryv management’s best estimate of fair value. The final purchase price allocation may vary based on final valuations and analyses of fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes.

 

The following table summarizes the consideration transferred and the preliminary purchase price  of the fair values of the Sensis assets acquired and liabilities assumed at the Acquisition Date (in thousands).

 

Note 2 - Basis of Presentation

 

The unaudited pro forma condensed combined financial statements are based on the historical consolidated financial statements of Thryv and Sensis as adjusted to give pro forma effect to the Acquisition. Thryv’s fiscal year-end is December 31, 2020, whereas Sensis’s fiscal year-end is June 30, 2020. Thryv’s historical consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (U.S. GAAP) and are presented in USD. The historical financial statements of Sensis have been prepared in accordance with generally accepted accounting principles in the U.K. (U.K. GAAP) and are presented in AUD. The unaudited pro forma condensed combined financial statements as of March 31, 2021, and for the year ended December 31, 2020, have been prepared using calculated historical results of Sensis (“Historical Adjusted Sensis”) (see Note 4).

 

As the transaction occurred on March 1, 2021, Thryv accounted for all Sensis transactions as of that date and has consolidated Sensis financial results for the month of March. Sensis results for the months of January and February have been reflected in the Sensis unaudited historical adjusted statement of operations for the two months ended February 28, 2021 (see Note 4). In order to calculate the historical adjusted results for Sensis in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2020, the interim six months ended December 31, 2019 historical results have been deducted from the twelve months ended June 30, 2020, which produced the six months ended June 30, 2020, with the six months ended December 31, 2020 then added to this six month period to calculate the financial results for the twelve month period ended December 31, 2020 for Sensis.

 

The historical adjusted results used in the preparation of the unaudited pro forma condensed combined financial statements includes adjustments and reclassifications to convert the statements of operations of Sensis from U.K. GAAP to U.S. GAAP and to translate the financial statements from Australian dollars to U.S. dollars (see Note 4).

 

The unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction (“Transaction Accounting Adjustments”) and present the reasonably estimable synergies and other transaction effects that have occurred or reasonably expected to occur (“Management’s Adjustments”). Thryv has elected not to present Management’s Adjustments and has only presented Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. The pro forma adjustments are preliminary and based on estimates of the fair value and useful lives of the assets acquired and liabilities assumed and have been prepared by Thryv management to illustrate the estimated effect of the Acquisition and certain other adjustments. The unaudited pro forma condensed combined financial statements of operations give effect to the Acquisition of Sensis as if it had occurred on January 1, 2020.

 

Note 3 - Significant Accounting Policies

 

The accounting policies under U.S. GAAP used in the preparation of the unaudited pro forma condensed combined financial statements are those set forth in Thryv’s financial statements included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, and Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

The accounting policies of Sensis under U.K. GAAP are as described in Note 2 to its historical consolidated financial statements which have been included in this Form 8-K/A. The conversion of the Sensis historical consolidated financial statements from U.K. GAAP to U.S. GAAP, including the impact of conforming to U.S. GAAP accounting policies as applied by Thryv, and the translation from Australian dollar amounts into U.S. dollars is discussed further in Note 4 below.

 

Note 4 – Adjustments to Sensis Historical Financial Statements to Conform to U.S. GAAP

 

The historical financial statements of Sensis have been prepared in accordance with U.K. GAAP, which differs in certain material respects from U.S. GAAP. In order to prepare unaudited pro forma condensed combined financial statements, the historical financial statements of Sensis have been adjusted to reflect a U.S. GAAP basis of accounting.

 

SENSIS HOLDING LIMITED

UNAUDITED HISTORICAL ADJUSTED STATEMENT OF OPERATIONS

TWO MONTHS ENDED FEBRUARY 28, 2021

(In Thousands U.S. Dollars (“USD”) and Australian Dollars (“AUD”))

						Notes 2 and 4								Note 6								Note 7
		Historical Sensis				U.K. GAAP to U.S. GAAP Conversion Adjustments				Notes				Reclassification Adjustments				Historical Adjusted Sensis				Historical Adjusted Sensis
		AUD				AUD								AUD				AUD				USD
Turnover		$	49,784			$	(10,714	)			4(a	)		$	(39,070	)		$	-			$	-
Revenue			-				-								39,070				39,070				30,207
Costs of services			-				-								(17,602	)			17,602				13,609
Gross Profit															(17,602	)			21,468				16,598
Cost of printing and digital advertising			(7,926	)			1,463				4(a	)			6,463				-				-
Labour expense			(11,255	)			(345	)			4(c	)			11,600				-				-
Service contracts and other agreements			(631	)			-								631				-				-
Information technology costs			(4,396	)			-								4,396				-				-
Facilities expense			(432	)			(951	)			4(b	)			1,383				-				-
Customer compensation			(588	)			588				4(a	)			-				-				-
Promotion and advertising			(502	)			-								502				-				-
Bad debts/recovery costs			107				(923	)			4(d	)			816				-				-
Other operating expenses			(2,169	)			32				4(b	)			2,137				-				-
Operating expenses:
Sales and marketing			-				-								(5,639	)			5,639				4,360
General and administrative			-				-								(9,527	)			9,527				7,366
Impairment charges			-				-								-				-				-
Total operating expenses			-				-								12,762				15,166				11,726
Depreciation and amortisation			(4,978	)			138				4(b	)			4,840				-				-
Operating income			-				-								-				6,302				4,872
Other income			4,802				-								(4,802	)			-				-
Finance costs (net)			(1,816	)			(971	)			4 (b, e	)			2,787				-				-
Other income (expense):
Interest expense			-				-								(2,787	)			(2,787	)			(2,155	)
Interest expense, related party			-				-								-				-				-
Other components of net periodic pension cost			-				-								-				-				-
Other income (expense)			-				-								4,802				4,802				3,713
Income before benefit (provision) for income taxes			-				-								-				8,317				6,430
Tax on profit on ordinary activities			(6,022	)			4,589				4 (f	)			1,433				-				-
Benefit (provision) for income taxes			-				-								(1,433	)			(1,433	)			(1,108	)
Net income		$	13,978			$	(7,094	)						$	-			$	6,884			$	5,322

SENSIS HOLDING LIMITED

UNAUDITED HISTORICAL ADJUSTED STATEMENT OF OPERATIONS

TWELVE MONTHS ENDED DECEMBER 31, 2020

(In Thousands U.S. Dollars (“USD”) and Australian Dollars (“AUD”))

						Notes 2 and 4								Note 6								Note 7
		Historical Sensis				U.K. GAAP to U.S. GAAP Conversion Adjustments				Notes				Reclassification Adjustments				Historical Adjusted Sensis				Historical Adjusted Sensis
		AUD				AUD								AUD				AUD				USD
Turnover		$	323,570			$	(4,155	)			4(a	)		$	(319,415	)		$	-			$	-
Revenue			-				-								319,415				319,415				220,558
Costs of services			-				-								(88,609	)			88,609				61,185
Gross Profit			-				-								(88,609	)			230,806				159,373
Cost of printing and digital advertising			(46,993	)			-								46,993				-
Labour expense			(82,594	)			217				4(c	)			82,377				-				-
Service contracts and other agreements			(6,736	)			-								6,736				-				-
Information technology costs			(29,158	)			-								29,158				-				-
Facilities expense			(9,755	)			671				4(b	)			9,084				-				-
Customer compensation			(3,932	)			3,932				4(a	)			-				-				-
Promotion and advertising			(3,795	)			-								3,795				-				-
Bad debts/recovery costs			(2,392	)			(1,882	)			4(d	)			4,274				-				-
Other operating expenses			(12,026	)			57				4(b	)			11,969				-				-
Operating expenses:
Sales and marketing			-				-								(50,075	)			50,075				34,577
General and administrative			-				-								(84,257	)			84,257				58,180
Impairment charges			-				-								(7,835	)			7,835				5,410
Total operating expenses			-				-								52,219				142,167				98,167
Depreciation and amortisation			(36,531	)			141				4(b	)			36,390				-				-
Operating income			-				-								-				88,639				61,206
Other income			3,670				-								(3,670	)			-				-
Finance costs (net)			1,782				(8,412	)			4 (b, e	)			6,630				-				-
Other income (expense):
Interest expense			-				-								(6,630	)			(6,630	)			(4,578	)
Interest expense, related party			-				-								-				-				-
Other components of net periodic pension cost			-				-								-				-				-
Other income (expense)			-				-								3,670				3,670				2,534
Income before benefit (provision) for income taxes			-				-								-				85,679				59,162
Tax on profit on ordinary activities			(30,859	)			2,373				4 (f	)			28,486				-				-
Benefit (provision) for income taxes			-				-								(28,486	)			(28,486	)			(19,670	)
Net income		$	64,251			$	(7,058	)						$	-			$	57,193			$	39,492

Summary of significant differences between U.K. GAAP and U.S. GAAP

 

The consolidated financial statements of Sensis and its subsidiaries have been prepared in accordance with U.K. GAAP, which differs in certain significant respects from U.S. GAAP. A description of the differences and their effects on the unaudited pro forma condensed combined financial statements are set out below (amounts presented in AUD unless specified otherwise):

 

 

Under U.K. GAAP, revenue is recognized to the extent that it is probable that the economic benefits will flow to Sensis and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. Under U.S. GAAP ASC 606, revenue is recognized when or as performance obligations are satisfied by transferring control of a promised good or service to a customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. Judgment may be needed in some circumstances to determine when control transfers. Various methods can be used to measure the progress toward satisfying a performance obligation when revenue is recognized over time. The difference in the timing of revenue recognition results in decreases to revenue of $0.7 million and $4.2 million for the two months ended February 28, 2021, and the year ended December 31, 2020, respectively.

 

Under U.K. GAAP, Sensis recognized print revenue at a point in time when the directories under a given contract are 60% delivered. Thryv recognizes revenue for print contracts at a point in time when the delivery of the related directories is substantially complete. The difference in the timing of revenue recognition between Thryv and Senses resulted in an adjustment to revenue of $10.0 million and to cost of printing and digital advertising of $1.5 million for the two months ended February 28, 2021. Sensis completed the delivery of all print contracts prior to December 31, 2020, and as such, no adjustment was required for the year ended December 31, 2020.

 

 

Under U.K. GAAP, Sensis recognized all leases as operating leases. As operating leases, the related expenses are treated as annual rental expenses on a straight-line basis, with no obligation recognized on the balance sheet.  Under U.S. GAAP, the leases also are classified as operating leases, however, ASC 842 requires that a lease liability and right of use asset are recognised on the balance sheet for such operating leases. Where the related right of use asset has been impaired, the lease cost recognized as expense is calculated as the amortization of the remaining balance of the right of use asset after the impairment and accretion of the lease liability. An impairment expense amounting to $7.8 million was recorded for the year ended December 31, 2020. The difference in the models resulted in a decrease of profit of $0.8 million and an increase of $0.9 million for the two months ended February 28, 2021 and the year ended December 31, 2020, respectively. The following table is a summary of the Sensis line items impacted by the conversion from U.K. GAAP to U.S. GAAP (in $thousands):

 

Under U.K. GAAP, a liability for annual leave and long service leave benefits is recognised and measured at the present value of expected future payments to be paid. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service in the calculation of the present value. Under U.S. GAAP, a liability is recognised and measured at the total amount to be paid without considering future wages or the time-value of money. The adjustments for long service leave and annual leave provision resulted in a decrease of $0.3 million to profit for the two months ended February 28, 2021 and an increase of $0.2 million for the year ended December 31, 2020 which is reflected as an adjustment to Labour expense.

 

 

U.K. GAAP does not have an equivalent new accounting standard that resembles the U.S. GAAP Current Expected Credit Loss (CECL) model. Under U.K. GAAP, receivables (and the related allowances) have been measured using an approach similar to U.S. GAAP ASC 326 prior to the adoption of the CECL model, measured based on specifically identifiable allowances for bad debts. For U.S. GAAP purposes, the CECL model became effective for years beginning on or after January 1, 2020. Therefore, for the year ended December 31, 2020, accounts receivable reserves were determined using a CECL model to determine an equivalent U.S. GAAP value. The adjustment amounted to decreases of $0.9 million and $1.8 million in profit for the two months ended February 28, 2021 and the year ended December 31, 2020 which is reflected as an adjustment to Bad debts/recovery costs.

 

 

Under U.K. GAAP, a receivable from a shareholder is recognised if the entity has a contractual right to receive cash or another financial asset. However, under U.S. GAAP, public companies are required to record notes or other receivables from a parent or another affiliate as contra-equity. This adjustment reflects the elimination of previously recognized interest income upon reclassification of the related shareholder loan receivable.   For pro forma presentation purposes, this adjustment resulted in decreases of $1.0 million and $8.4 million to profit for the two months ended February 28, 2021 and the year ended December 31, 2020, respectively, which is reflected as an adjustment to Finance costs (net).

 

 

 

Note 5 – Transaction Adjustments

 

The unaudited pro forma condensed combined financial statements have been adjusted to reflect the following transaction adjustments:

 

a.

Deferred Revenue Step Down Amortization

Represents the amortization of the step-down in basis of the deferred revenue liabilities from the preliminary purchase price allocation at the closing of the Acquisition on March 1, 2021. The step-down in basis of the deferred revenue is amortized into income over the period over which the related performance obligation is performed, which is estimated to be a period of less than one year. This resulted in a decrease of revenue of $28.9 million for the year ended December 31, 2020. As the full impact of the step-down in the value of the deferred revenue is expected to be realized over a period of less than one year, there is no remaining impact to be reflected in the pro forma statement of operations for the three month period ended March 31, 2021. For the three months ended March 31, 2021, this resulted in an increase of revenue of $7.9 million to reflect the removal of amortization of the deferred revenue step down that is fully amortized prior to January 1, 2021 for pro forma purposes.

 

Amortization of the deferred revenue step-down is nonrecurring in nature and not anticipated to affect the combined statements of operations beyond twelve months after the acquisition date.

 

 

Represents the elimination of historical depreciation and amortization related to Sensis’ intangible assets and property plant and equipment, and adjustments to incorporate depreciation and amortization for the fair value of the tangible and intangible assets acquired based on preliminary purchase price accounting at the closing of the Acquisition on March 1, 2021. The following table is a summary of detail related to certain intangible and tangible assets acquired, including relevant information used to calculate the pro forma change in amortization and depreciation expense that is included as an adjustment to Costs of services, Sales and marketing, and General and administrative expenses:

 

 

(1) Fair value has been translated from Australian dollars to U.S. dollars using the exchange rates of 0.7777 as of the acquisition date.

(2) The Company amortizes Trade names and Customer relationships using the income forecast method.

(3) The amortization and depreciation amounts are presented as of February 28, 2021, therefore excludes activity for the month of March, as that activity is already captured in the Company’s Statement of Operations for the three month period then ended.

 

Represents the elimination of historical interest expenses as it relates to (1) the Sensis’ debt obligation settled as part of the Acquisition, and (2) debt restructuring for Thryv’s existing term loan, including the term loan with related parties (“Existing Term Loan”) and asset-based lending facility (“ABL Facility”).

 

Sensis settled all of its debt obligations just prior to closing of the Acquisition, and therefore the Company eliminated all interest expenses related to historical debt, including the Telstra shareholder loan payable. As described in Note 1, Thryv entered into a new Term Loan Credit Agreement (“New Term Loan”) of $700 million on March 1, 2021, as part of the effort to finance the Acquisition of Sensis. The proceeds of the New Term Loan are used to pay off in full the Existing Term Loan facility agented by Wilmington Trust, National Association. The New Term Loan matures on March 1, 2026 and borrowings under the New Term Loan will bear interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The proceeds from the New Term Loan were net of original issue discount costs of $21 million and third-party fees of $4.1 million. In addition, the Company amended the ABL Facility to expand its borrowing capacity and reduce its interest rate per annum from 4% to 3% (for LIBOR loans). Historical interest expenses related to the Existing Term Loan and the original ABL Facility before the amendment were eliminated as part of the pro forma adjustments. Of the aggregate principal outstanding under the New Term Loan, 38.4% was held by related parties who are equity holders of the Company.

 

Represents pro forma adjustments relating to additional indebtedness incurred in connection with the Acquisition and repayment of existing indebtedness, as follows (in $ thousands):

 

 

 

 

The tax effects of the adjustments described above is calculated as an adjustment to consolidated net income at the estimated blended statutory rate of 30% for the year ended December 31, 2020 and the three months ended March 31, 2021.

 

Note 6 – Reclassifications

 

Reclassification of historical Sensis financial statement line items was required as of the two months ended February 28, 2021 and the year ended December 31, 2020 to conform to the expected financial statement line items of the combined company following the Acquisition.

 

Pro Forma Combined Statement of Operations reclassification adjustments for the two month period ended February 28, 2021 included the following:

 

 

 

 

 

 

Pro Forma Combined Statement of Operations reclassification adjustments for the year ended December 31, 2020 included the following:

 

 

 

 

 

Note 7 – Foreign Currency Translation

 

The adjusted historical results have been translated from Australian dollars to U.S. dollars using the average exchange rates of 0.7732 and 0.6905 during the three months ended March 31, 2021 and the year ended December 31, 2020, respectively.