Attached files
| file | filename |
|---|---|
| 8-K/A - AMENDMENT NO. 1 TO FORM 8-K - LOGIQ, INC. | ea142384-8ka1_logiqinc.htm |
| EX-99.1 - AUDITED FINANCIAL STATEMENTS OF REBEL AI, INC., AS OF DECEMBER 31, 2020 AND 2019 - LOGIQ, INC. | ea142384ex99-1_logiqinc.htm |
Exhibit 99.2
UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma combined condensed consolidated balance sheet as of December 31, 2020 is presented as if the proposed acquisition had occurred as of December 31, 2020. The unaudited pro forma combined condensed consolidated statements of operations for the year ended December 31, 2020 is presented as if the acquisition had occurred on January 1, 2020. The unaudited pro forma consolidated financial statements of Logiq, Inc. (“Logiq”) and Rebel AI Inc. (“Rebel”) have been adjusted to reflect certain reclassifications in order to conform Rebel’s historical financial statement presentation to Logiq’s financial statement presentation for the combined company.
The unaudited pro forma combined condensed consolidated financial statements give effect to the acquisition under the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, which we refer to as ASC 805, with Logiq treated as the acquirer. As of the date of this document, Logiq has not identified all adjustments necessary to conform Rebel’s accounting policies to Logiq’s accounting policies. A final determination of the estimated fair value of Rebel’s assets and liabilities, including intangible assets with both indefinite or finite lives, will be based on the actual net tangible and intangible assets and liabilities of Rebel that exist as of the closing date of the acquisition and, therefore, cannot be made prior to the completion of the acquisition. In addition, the value of the consideration was determined based on the closing price per share of Logiq common stock on the closing date of the acquisition and cash consideration. The preliminary pro forma adjustments have been made solely for the purpose of presenting the unaudited pro forma combined condensed consolidated financial statements.
Assumptions and estimates underlying the unaudited adjustments to the pro forma combined condensed consolidated financial statements are described in the accompanying notes, which should be read in conjunction with the unaudited pro forma combined condensed consolidated financial statements. The historical consolidated financial statements have been adjusted in the unaudited pro forma combined condensed consolidated financial statements to give effect to pro forma events that are: (1) directly attributable to the acquisition; (2) factually supportable; and (3) with respect to the unaudited pro forma combined condensed consolidated statements of operations, expected to have a continuing impact on the combined results of Logiq and Rebel following the acquisition.
In connection with the plan to integrate the operations of Logiq and Rebel, Logiq anticipates that non-recurring charges, such as costs associated with systems implementation, relocation expenses, severance and other costs related to closing the transaction, will be incurred. Logiq is not able to determine the timing, nature and amount of these charges as of the date of this prospectus. However, these charges could affect the combined results of operations of Logiq and Rebel, as well as those of the combined company following the acquisition, in the period in which they are recorded. The unaudited pro forma combined condensed consolidated financial statements do not include the effects of the costs associated with any restructuring or integration activities resulting from the transaction, as they are non-recurring in nature and not factually supportable at the time that the unaudited pro forma combined condensed consolidated financial statements were prepared. Additionally, these adjustments do not give effect to any synergies that may be realized as a result of the acquisition, nor do they give effect to any nonrecurring or unusual restructuring charges that may be incurred as a result of the integration of the two companies.
The pro forma information presented is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisitions had been completed on the dates indicated, nor is it indicative of future operating results or financial position. The pro forma adjustments represent Logiq’s management’s best estimate and are based upon currently available information and certain assumptions that Logiq believes are reasonable under the circumstances. The final valuation may materially change the allocation of the purchase consideration, which could materially affect the fair values assigned to the assets and liabilities and could result in a material change to the unaudited pro forma condensed combined financial information. Refer to footnote 1 to the unaudited pro forma condensed combined financial information for more information on the basis of preparation.
UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEETS OF
LOGIQ, INC. AND REBEL AI INC.
AS OF DECEMBER 31, 2020
Historical Logiq, Inc. | Historical Rebel AI Inc. | Pro Forma Adjustments (a) | Pro Forma Amounts | |||||||||||||
| Intangible assets, net | 11,736,540 | – | 6,789,969 | 18,526,509 | ||||||||||||
| Property and equipment, net | 178,561 | 30,702 | – | 209,263 | ||||||||||||
| Goodwill | 5,078,090 | – | 444,589 | 5,522,679 | ||||||||||||
| Total non-current assets | 16,993,191 | 30,702 | 7,234,558 | 24,258,451 | ||||||||||||
| Amount due from associate | 5,673,700 | – | – | 5,673,700 | ||||||||||||
| Accounts receivable, net | 2,618,494 | 9,900 | – | 2,628,394 | ||||||||||||
| Rights to use assets – operating lease | 364,234 | – | – | 364,234 | ||||||||||||
| Prepayment, deposit and other receivables | 206,443 | 14,617 | – | 221,060 | ||||||||||||
| Financial assets held for resale | 594,263 | – | – | 594,263 | ||||||||||||
| Restricted cash | 10,889 | – | – | 10,889 | ||||||||||||
| Cash and cash equivalents | 3,478,889 | 77,927 | – | 3,556,816 | ||||||||||||
| Total current assets | 12,946,912 | 102,444 | – | 13,049,356 | ||||||||||||
| Total Assets | 29,940,103 | 133,146 | 7,234,558 | 37,307,807 | ||||||||||||
| Accounts payable | 1,009,204 | 14,829 | – | 1,024,033 | ||||||||||||
| Accruals and other payables | 1,110,732 | 34,539 | – | 1,145,271 | ||||||||||||
| Deferred revenue | 46,857 | – | – | 46,857 | ||||||||||||
| Lease liability – operating use | 364,234 | – | – | 364,234 | ||||||||||||
| Convertible promissory note | 2,911,000 | – | – | 2,911,000 | ||||||||||||
| Amount due to director | 77,500 | – | – | 77,500 | ||||||||||||
| Total current liabilities | 5,519,527 | 49,368 | – | 5,568,895 | ||||||||||||
| Other loan | 10,000 | – | – | 10,000 | ||||||||||||
| Notes payable | 507,068 | 326,400 | (326,400 | ) | 507,068 | |||||||||||
| Total non-current liabilities | 517,068 | 326,400 | (326,400 | ) | 517,068 | |||||||||||
| Total Liabilities | 6,036,595 | 375,768 | (326,400 | ) | 6,085,963 | |||||||||||
| Common stock | 1,556 | 193,500 | (193,500 | ) | 1,556 | |||||||||||
| Additional paid-in capital | 66,739,895 | (1,755 | ) | 1,755 | 66,739,895 | |||||||||||
| Capital reserves | 19,285,383 | – | 7,318,336 | 26,603,719 | ||||||||||||
| Accumulated deficit | (62,123,326 | ) | (434,367 | ) | 434,367 | (62,123,326 | ) | |||||||||
| Total Stockholders’ Equity | 23,903,508 | (242,622 | ) | 7,560,958 | 31,221,844 | |||||||||||
| Total Liabilities and Stockholders’ Equity | 29,940,103 | 133,146 | 7,234,558 | 37,307,807 | ||||||||||||
The accompanying notes are an integral part of these unaudited pro forma combined condensed consolidated financial statements
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UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF
LOGIQ, INC. AND REBEL AI INC.
For the year ended December 31, 2020
Historical Logiq, Inc. | Historical Rebel AI Inc. | Pro Forma Adjustments (c) | Notes | Pro Forma Amounts | ||||||||||||||||
| Service revenues | $ | 37,910,393 | $ | 420,630 | $ | – | $ | 38,331,023 | ||||||||||||
| Cost of revenues | 31,546,948 | 23,050 | – | 31,569,998 | ||||||||||||||||
| Gross profit | 6,363,445 | 397,580 | – | 6,761,025 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| General and administrative | 10,994,815 | 1,306,124 | – | (b) | 12,300,939 | |||||||||||||||
| Research and development | 6,244,704 | – | – | 6,244,704 | ||||||||||||||||
| Sales and marketing | 1,423,909 | – | – | 1,423,909 | ||||||||||||||||
| Depreciation and amortization | 1,966,045 | – | 1,357,994 | (c) | 3,324,039 | |||||||||||||||
| Total operating expenses | 20,629,473 | 1,306,124 | 1,357,994 | 23,293,591 | ||||||||||||||||
| Loss from operations | (14,266,028 | ) | (908,544 | ) | (1,357,994 | ) | (16,532,566 | ) | ||||||||||||
| Other Income/(Expenses) | (243,641 | ) | 10,788 | – | (232,853 | ) | ||||||||||||||
| Net loss before income tax | (14,509,669 | ) | (897,756 | ) | (1,357,994 | ) | (16,765,416 | ) | ||||||||||||
| Income tax expense (benefit) | – | (85,193 | ) | – | (d) | (85,193 | ) | |||||||||||||
| Net loss | $ | (14,509,669 | ) | $ | (812,563 | ) | $ | (1,357,994 | ) | $ | (16,680,226 | ) | ||||||||
| Net loss per share, basic and diluted | $ | (1.1444 | ) | $ | (1.2166 | ) | ||||||||||||||
| Weighted-average shares outstanding, basic and diluted | 12,678,904 | 13,710,960 | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited pro forma combined condensed consolidated financial statements
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NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Basis of Presentation |
The unaudited pro forma combined condensed consolidated financial statements are prepared under the acquisition accounting method in accordance with ASC 805, with Logiq treated as the acquirer. Under the acquisition accounting method, the total estimated purchase price allocation is calculated as described in Note 4. In accordance with ASC 805, the assets acquired and the liabilities assumed have been measured at fair value based on various preliminary estimates, and these estimates are subject to change pending further review of the fair value of assets acquired and liabilities assumed. The final amounts recorded for the acquisition may differ materially from the information presented herein.
The unaudited pro forma combined condensed consolidated financial statements were prepared in accordance with GAAP, and present the pro forma financial position and results of operations of the combined companies based upon the historical information after giving effect to the acquisition and adjustments described in these Notes to the unaudited pro forma combined condensed consolidated financial statements. The unaudited pro forma combined condensed consolidated balance sheet is presented as if the acquisition had occurred on December 31, 2020; and the unaudited pro forma combined condensed consolidated statement of operations for the year ended December 31, 2020 is presented as if the acquisition had occurred on January 1, 2020.
Certain reclassifications have been made relative to Rebel’s historical financial statements to conform to the financial statement presentation of Logiq. Such reclassifications are described in further detail in Note 5 to the unaudited pro forma combined condensed consolidated financial statements.
| 2. | Accounting Policies |
As a result of the continuing review of Rebel’s accounting policies, Logiq may identify differences between the accounting policies of the two businesses that, when conformed, could have a material impact on the combined financial statements. The unaudited pro forma combined condensed consolidated financial statements do not assume any differences in accounting policies other than the reclassification of certain Rebel’s operating expenses to conform with Logiq’s operating expenses (see Note 5).
| 3. | Preliminary Purchase Price Consideration |
Subject to the terms and conditions of the acquisition agreement, Logiq will issue 1,032,056 common shares to seller at a price per share of $6.00, which was its price per share at the time of closing the acquisition and will pay a cash consideration of $1,126,000.
The requirement to determine the final purchase price using the number of Logiq shares to be issued as part of the closing and the closing price of Logiq’s common stock as of the closing date could result in a total purchase price different from the price assumed in these unaudited pro forma combined condensed consolidated financial statements, and that difference may be material. Therefore, the estimated consideration expected to be transferred reflected in these unaudited pro forma combined condensed consolidated financial statements does not purport to represent what the actual consideration transferred will be when the acquisition is completed.
For purposes of these unaudited pro forma combined condensed consolidated financial statements, the estimated purchase price has been allocated among Rebel’s tangible and intangible assets and liabilities assumed based on their estimated fair value as of December 31, 2020. The final determination of the allocation of the purchase price will be based on the estimated fair value of such assets and assumed liabilities as of the date of closing of the acquisition. Such final determination of the purchase price allocation may be significantly different from the preliminary estimates used in these unaudited pro forma combined condensed consolidated financial statements.
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| 4. | Preliminary Estimated Purchase Price Allocation |
The following allocation of the preliminary estimated purchase price assumes, with the exception of goodwill and other identifiable intangible assets, carrying values approximate estimated fair value. The calculation of the purchase price consideration to acquire Rebel is as follows:
| Logiq common stock consideration | 1,032,056 | |||
| Estimated Logiq common stock price at closing | $ | 6.00 | ||
| Total common stock purchase price consideration | $ | 6,192,336 | ||
| Estimated cash consideration | $ | 1,126,000 | ||
| Total purchase price consideration | $ | 7,318,336 |
Based upon these assumptions, the total purchase price consideration was allocated to Rebel’s assets and assumed liabilities, as of December 31, 2020, as follows:
Estimated Fair Value | ||||
| Cash and cash equivalents | $ | 77,927 | ||
| Accounts receivable, net | 9,900 | |||
| Prepaid expenses and other current assets | 14,617 | |||
| Total current assets | 102,444 | |||
| Property and equipment, net | 30,702 | |||
| Identifiable intangible assets, net | 6,789,969 | |||
| Goodwill | 444,589 | |||
| Total Assets Acquired | 7,367,704 | |||
| Accounts payable | $ | 14,829 | ||
| Accrued expenses and other current liabilities | 34,539 | |||
| Total current liabilities | 49,368 | |||
| Total Liabilities Assumed | 49,368 | |||
| Net Assets Acquired | 7,318,336 | |||
| Total Estimated Purchase Price | $ | 7,318,336 | ||
The preliminary amounts assigned to identifiable intangible assets and estimated weighted average useful lives are as follows:
Range
of | Estimated | |||||||
| Technology | 5 | $ | 6,789,969 | |||||
| Identifiable intangible assets, net | $ | 6,789,969 | ||||||
The identifiable intangible assets are amortized using a straight-line method.
The final determination of the purchase price allocation will be based on the actual net tangible and intangible assets of Rebel that will exist on the date of the acquisition and completion of the valuation of the fair value of such net assets. Logiq anticipates that the ultimate purchase price allocation of balance sheet accounts such as current assets and assumed liabilities, property and equipment, intangible assets and long-term assets and assumed liabilities will differ from the preliminary assessment outlined above. Any changes to the initial estimates of the fair value of the acquired assets and assumed liabilities will be recorded as adjustments to those assets and liabilities.
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| 5. | Preliminary Pro Forma Financial Statement Adjustments |
Adjustments included in the column under the heading “Pro Forma Adjustments” represent the following:
Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet
| a) | To record the preliminary purchase price allocation. |
Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations
Conforming Reclassifications Between Logiq and Rebel:
The following adjustments have been made to the presentation of Rebel’s historical consolidated financial statements to conform to US GAAP presentation:
| b) | The compensation and selling, general and administrative expenses were reclassified to general and administrative expenses to conform to Logiq operating expense presentation. |
Pro Forma Adjustments
| c) | Represents estimated increase in depreciation and amortization of $1,357,994 related to the fair value adjustment of intangible assets acquired. |
| d) | No net income tax benefit because of the full valuation allowance. |
| 6. | Pro Forma Combined Net Income (Loss) per Share |
The pro forma basic and diluted net income (loss) per share presented in the unaudited pro forma combined condensed consolidated statements of operations is computed based on the weighted-average number of shares outstanding:
| Year Ended December 31, 2020 | ||||
| Pro Forma net loss available to common stockholders, as combined | $ | (16,680,226 | ) | |
| Logiq’s weighted-average shares, Basic and Diluted | 12,678,904 | |||
| Shares expected to be issued upon acquisition of Rebel | 1,032,056 | |||
| Pro Forma weighted-average shares, Basic and Diluted | 13,710,960 | |||
| Pro Forma net loss per share, Basic and Diluted | $ | (1.2166 | ) | |
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