EX-99.2 3 ilinc_8kex99-2.txt UNAUDITED PRO FORMA FINANCIAL INFORMATION EXHIBIT 99.2 ILINC COMMUNICATIONS, INC. AND SUBSIDIARIES PRO FORMA UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET (IN THOUSANDS) December 31, Pro Forma Pro Forma 2007 Adjustments As Adjusted --------------------------------------- Assets Current assets: Cash and cash equivalents $ 1,085 $ 4,903 (A) $ 5,988 Certificate of deposit 368 -- 368 Accounts receivable, net 2,415 (1,106) (A) 1,309 Prepaid and other current assets 592 (16) (A) 576 --------------------------------------- Total current assets 4,460 3,781 8,241 Property and equipment, net 807 (210) (A) 597 Goodwill 11,206 (1,119) (A) 10,087 Intangible assets, net 1,428 (482) (A) 946 Other assets 14 -- 14 --------------------------------------- Total assets $ 17,915 $ 1,970 $ 19,885 ======================================= Liabilities and Shareholders' Equity Current liabilities: Current portion of long term debt $ 95 $ -- $ 95 Accounts payable trade 1,270 (573) (A) 697 Accrued liabilities 1,038 (44) (A) 994 Current portion of capital lease liabilities 117 -- 117 Deferred revenue 1,572 -- 1,572 --------------------------------------- Total current liabilities 4,092 (617) 3,475 Long term debt, less current maturities, net of discount and beneficial conversion feature 7,504 (24) (A) 7,480 Capital lease liabilities, less current maturities 287 -- 287 Deferred tax liability 363 -- 363 --------------------------------------- Total liabilities 12,246 (641) 11,605 --------------------------------------- Shareholders' Equity Preferred stock series A & B, 10,000,000. shares authorized: Series A preferred stock, .001 par value, 105,000 shares outstanding -- -- -- Series B preferred stock, .001 par value, 59,500 shares outstanding -- -- -- Common Stock 35 -- 35 Additional paid-in capital 46,673 -- 46,673 Accumulated deficit (39,631) 2,611 (A) (37,020) Less: 1,432,412 treasury shares at cost (1,408) -- (1,408) --------------------------------------- Total shareholders' equity 5,669 2,611 8,280 --------------------------------------- Total liabilities and shareholders' equity $ 17,915 $ 1,969 $19,885 ======================================= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 1 ILINC COMMUNICATIONS, INC. PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 2007 (IN THOUSANDS, EXCEPT PER SHARE DATA) Nine months ended Pro Forma Pro Forma December 31, 2007 Adjustments As Adjusted ------------------------------------------------------- Revenues Software licenses $ 3,029 $ -- $ 3,029 Subscription licenses 2,140 -- 2,140 Audio services 4,153 (3,006) (B) 1,147 Maintenance and professional services 2,071 -- 2,071 ------------------------------------------------------- TOTAL REVENUES 11,393 (3,006) 8,387 ------------------------------------------------------- Cost of revenues Software licenses 125 -- 125 Subscription licenses 284 -- 284 Audio services 2,593 (2,339) (C) 254 Maintenance and professional services 593 -- 593 Amortization of technology 150 (45) 105 ------------------------------------------------------- TOTAL COST OF REVENUES 3,745 (2,384) 1,361 ------------------------------------------------------- GROSS PROFIT 7,648 (622) 7,026 ------------------------------------------------------- Operating expenses Research and development 1,596 (8) (C) 1,588 Sales and marketing 3,671 (100) (C) 3,571 General and administrative 1,999 (20) (C) 1,979 ------------------------------------------------------- Total operating expenses 7,266 (128) 7,138 ------------------------------------------------------- Earnings (loss) from operations 382 (494) (112) Interest expense (794) 2 (D) (792) Amortization of beneficial debt conversion (243) -- (243) ------------------------------------------------------- Total interest expense (1,037) 2 (1,035) Interest charges and other (21) -- (21) Loss from continuing operations before income taxes (676) (492) (1,168) Income tax expense (64) 64 -- ------------------------------------------------------- Loss from continuing operations (740) (428) (1,168) Income from discontinued operations -- -- -- ------------------------------------------------------- Net loss (740) (428) (1,168) Series A and B preferred stock dividends (101) -- (101) ------------------------------------------------------- ------------------------------------------------------- Loss available to common shareholders $ (841) $ (428) $ (1,269) ======================================================= Income (loss) per common share, basic and diluted From continuing operations $ (0.02) $ (0.03) From discontinued operations -- -- ---------------- ------------ Loss per common share $ (0.02) $ (0.03) ================ ============ Number of shares used in calculation of loss Per share: Basic 33,717 33,717 Diluted 33,717 33,717 ================ ============= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 2 ILINC COMMUNICATIONS, INC. PRO FORMA UNAUDITED CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED MARCH 31, 2007 (IN THOUSANDS, EXCEPT PER SHARE DATA) Twelve months ended Pro Forma Pro Forma March 31, 2007 Adjustments As Adjusted ------------------------------------------------------ Revenues Software licenses $ 4,177 $ -- $ 4,177 Subscription licenses 2,044 -- 2,044 Audio services 5,457 (3,999) (B) 1,458 Maintenance and professional services 2,517 -- 2,517 ------------------------------------------------------ TOTAL REVENUES 14,195 (3,999) 10,196 ------------------------------------------------------ Cost of revenues Software licenses 131 -- 131 Subscription licenses 309 -- 309 Audio services 3,333 (3,008) (C) 325 Maintenance and professional services 787 -- 787 Amortization of technology 269 (269) -- ------------------------------------------------------ TOTAL COST OF REVENUES 4,829 (3,277) 1,552 ------------------------------------------------------ GROSS PROFIT 9,366 (722) 8,644 ------------------------------------------------------ Operating expenses Research and development 1,276 (24) (C) 1,252 Sales and marketing 3,696 (96) (C) 3,600 General and administrative 2,571 (44) (C) 2,527 ------------------------------------------------------ Total operating expenses 7,543 (164) 7,379 ------------------------------------------------------ Earnings (loss) from operations 1,823 (558) 1,265 Interest expense (993) 3 (D) (990) Amortization of beneficial debt conversion (531) -- (531) ------------------------------------------------------ Total interest expense (1,524) 3 (1,521) Net gain on settlement of debt and other obligations 8 -- 8 Loss on extinguishment of debt (162) -- (162) Interest charges and other (14) -- (14) ------------------------------------------------------ Income (loss) from continuing operations before income taxes 131 (555) (424) Income tax expense (85) 85 -- ------------------------------------------------------ Income (loss) from continuing operations 46 (470) (424) Income from discontinued operations 10 -- 10 ------------------------------------------------------ Net income (loss) 56 (470) (414) Series A and B preferred stock dividends (153) -- (153) ------------------------------------------------------ ------------------------------------------------------ (Loss) available to common shareholders $ (97) $ (470) $ (567) ====================================================== Income (loss) per common share, basic and diluted From continuing operations $ 0.00 $ (0.01) From discontinued operations 0.00 -- ------------- ------------- Income (loss) per common share $ 0.00 $ (0.01) ============= ============= Number of shares used in calculation of loss per share: Basic and diluted 32,110 32,110 ============= ============= THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. 3
NOTES TO PRO FORMA UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS The purchase price of the audio conferencing business has been initially allocated as if the purchase was consummated on April 30, 2008 as follows (in thousands): Cash Proceeds $ 4,903 Less: Receivables (1,016) Goodwill (1,119) Intangibles assets (482) Property and equipment, net (210) Liabilities related to transaction (352) ------- Gain on sale $ 1,724 ======= (A) The total purchase price has initially been allocated to assets sold and liabilities extinguished based upon their estimated fair values in accordance with Statement of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." The excess purchase price over the estimated fair value of the tangible and identifiable assets sold and liabilities extinguished has been included in retained earnings on the balance sheet. (B) Reflects the elimination of actual sales related to audio conferencing. (C) Reflects the elimination of actual expenses, primarily for salaries and benefits, telecommunications costs, rent and depreciation and miscellaneous office costs directly related to the audio conferencing operations. (D) Reflects the elimination of interest related to a line of credit directly related to the audio conferencing operations. 4