Delaware | 001-33105 | 86-0879433 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
100 Union Square Drive New Hope, Pennsylvania | 18938 | |
(Address of principal executive offices) | (Zip Code) |
Not Applicable |
(Former name or former address if changed since last report.) |
Exhibit No. | Description | |
Consent of KPMG AG Wirtschaftsprüfungsgesellschaft, independent auditor of Lovoo | ||
The financial statements of Lovoo comprised of the statements of financial position as of December 31, 2016, December 31, 2015, January 1, 2015, and the related statements of comprehensive loss, changes in equity, and cash flows for the two years ended December 31, 2016 and December 31, 2015 and the related notes to the financial statements | ||
The interim financial statements of Lovoo as of September 30, 2017 and December 31, 2016, and for the nine months ended September 30, 2017 and 2016 | ||
Unaudited pro forma condensed combined financial statements as of September 30, 2017, for the nine months ended September 30, 2017 and for the years ended December 31, 2016 and 2015 |
THE MEET GROUP, INC. | ||
Date: | December 20, 2017 | By: /s/ Jim Bugden |
Name: Jim Bugden Title: Interim Chief Financial Officer |
LOVOO GmbH | ||
Year end financial statements | December 31, 2016 | |
Contents | Page | |
Independent auditors' opinion | ||
Statements of financial position | ||
Statements of comprehensive loss | ||
Statements of changes in equity | ||
Statements of cash flows | ||
Notes to the financial statements | ||
1. | Company information | |
2. | General Principles | |
3. | Accounting and valuation methods | |
3.1. | Intangible assets | |
3.2. | Property, plant and equipment | |
3.3. | Leases | |
3.4. | Impairment of non-financial assets | |
3.5. | Current versus non-current classification | |
3.6. | Financial instruments | |
3.7. | Provisions | |
3.8. | Share-based payment programs | |
3.9. | Foreign currency translation | |
3.10. | Revenue recognition | |
3.11. | Cost of sales | |
3.12. | Income taxes | |
3.13. | Estimates and assumptions | |
3.14. | New accounting standards | |
4. | First-time adoption of IFRS | |
5. | Notes to the statements of financial position | |
5.1. | Intangible assets | |
5.2. | Property, plant and equipment | |
5.3. | Other non-current financial assets | |
5.4. | Trade receivables | |
5.5. | Other current financial assets | |
5.6. | Other current assets | |
5.7. | Cash and cash equivalents |
LOVOO GmbH | ||
Year end financial statements | December 31, 2016 | |
Contents | Page | |
5.8. | Deferred tax assets and liabilities | |
5.9. | Equity | |
5.10. | Non-current provisions | |
5.11. | Non-current loans | |
5.12. | Other non-current financial liabilities | |
5.13. | Current provisions | |
5.14. | Current loans | |
5.15. | Trade payables | |
5.16. | Current payments received on account of orders | |
5.17. | Advance payments received on customer orders | |
5.18. | Current tax liabilities | |
5.19. | Other current financial liabilities | |
5.20. | Other current liabilities | |
5.21. | Maturity analysis of financial liabilities | |
6. | Notes to the statements of comprehensive income | |
6.1. | Net sales | |
6.2. | Cost of sales | |
6.3. | Other income | |
6.4. | Selling and marketing expenses | |
6.5. | General and administrative expenses | |
6.6. | Product development expenses | |
6.7. | Other expenses | |
6.8. | Finance income | |
6.9. | Finance expenses | |
6.10. | Income taxes | |
7. | Notes to the statements of cash flows | |
8. | Other notes | |
8.1. | Capital management | |
8.2. | Further information on financial instruments | |
8.3. | Financial risk management | |
8.4. | Information about related parties | |
8.5. | Contingent liabilities | |
8.6. | Operating lease commitments | |
8.7. | Subsequent events |
LOVOO GmbH | ||
Statements of financial position | December 31, 2016 | |
LOVOO GmbH | ||||
Statements of financial position | ||||
Note | December 31, 2016 | December 31, 2015 | January 1, 2015 | |
EURk | EURk | EURk | ||
Assets | ||||
Non-current assets | ||||
Intangible assets | 5.1 | 658 | 209 | 88 |
Property, plant and equipment | 5.2 | 1,890 | 1,813 | 643 |
Other financial assets | 5.3 | 8,336 | 111 | 24 |
Deferred tax assets | 5.8 | 1,484 | 0 | 0 |
12,368 | 2,133 | 755 | ||
Current assets | ||||
Trade and other receivables | 5.4 | 2,132 | 3,362 | 3,312 |
Other financial assets | 5.5 | 1,270 | 661 | 260 |
Other assets | 5.6 | 99 | 310 | 41 |
Cash and cash equivalents | 5.7 | 7,052 | 26,311 | 3,930 |
10,553 | 30,644 | 7,543 | ||
22,921 | 32,777 | 8,298 | ||
Equity and liabilities | ||||
Equity | ||||
Subscribed capital | 5.9 | 25 | 25 | 25 |
Accumulated retained earnings | 5.9 | 837 | 1,168 | 1,168 |
Profit or loss for the year | 5.9 | -4,113 | -331 | 0 |
-3,251 | 862 | 1,193 | ||
Non-current liabilities | ||||
Provisions | 5.10 | 486 | 237 | 99 |
Loans | 5.11 | 19,954 | 22,985 | 1,000 |
Other financial liabilities | 5.12 | 0 | 1,800 | 0 |
Other liabilities | 5.13 | 359 | 464 | 7 |
Deferred tax liabilities | 5.8 | 0 | 229 | 285 |
20,799 | 25,715 | 1,391 | ||
Current liabilities | ||||
Provisions | 5.14 | 551 | 68 | 31 |
Loans | 5.15 | 0 | 1,000 | 0 |
Trade and other payables | 5.16 | 1,828 | 2,407 | 3,336 |
Advance payments received on account orders | 5.17 | 781 | 781 | 863 |
Tax liabilities | 5.18 | 0 | 136 | 255 |
Other financial liabilities | 5.19 | 750 | 430 | 527 |
Other liabilities | 5.20 | 1,463 | 1,378 | 702 |
5,373 | 6,200 | 5,714 | ||
22,921 | 32,777 | 8,298 |
LOVOO GmbH | ||
Statements of comprehensive loss | December 31, 2016 | |
LOVOO GmbH | |||
Statements of comprehensive loss | |||
Year ended December 31, | Year ended December 31, | ||
Note | 2016 | 2015 | |
EURk | EURk | ||
Net sales | 6.1 | 30,142 | 35,571 |
Cost of sales | 6.2 | -8,711 | -9,077 |
Gross profit | 21,431 | 26,494 | |
Other income | 6.3 | 542 | 836 |
Selling and marketing expenses | 6.4 | -15,002 | -19,586 |
General and administrative expenses | 6.5 | -4,830 | -2,730 |
Product development expenses | 6.6 | -5,314 | -4,282 |
Other expenses | 6.7 | -1,537 | -613 |
Operating profit or loss | -4,710 | 119 | |
Finance income | 6.8 | 562 | 2 |
Finance expenses | 6.9 | -1,640 | -566 |
Profit or loss before income taxes | -5,788 | -445 | |
Income taxes | 6.10 | 1,675 | 114 |
Profit or loss | -4,113 | -331 | |
Other comprehensive income | 0 | 0 | |
Total comprehensive loss | -4,113 | -331 |
LOVOO GmbH | ||
Statements of changes in equity | December 31, 2016 | |
LOVOO GmbH | |||||
Statements of changes in equity | |||||
Subscribed capital | Accumulated retained earnings | Total equity | |||
EURk | EURk | EURk | |||
January 1, 2015 | 25 | 1,168 | 1,193 | ||
Profit or loss for the year | 0 | -331 | -331 | ||
December 31, 2015 | 25 | 837 | 862 | ||
Profit or loss for the year | 0 | -4,113 | -4,113 | ||
December 31, 2016 | 25 | -3,276 | -3,251 |
LOVOO GmbH | ||
Statements of cash flows | December 31, 2016 | |
LOVOO GmbH | |||
Statements of cash flows | |||
Year ended | Year ended | ||
Note | December 31, 2016 | December 31, 2015 | |
EURk | EURk | ||
Profit or loss | -4,113 | -331 | |
Adjustments for: | |||
Finance income | 6.8 | -562 | -2 |
Finance expenses | 6.9 | 1,850 | 566 |
Income taxes | 6.10 | -1,674 | -121 |
Depreciation, amortization and impairments | 5.1, 5.2 | 864 | 504 |
Impairment and write offs of current assets | 5.4 | 56 | 0 |
Results from disposal of fixed assets | 5.1, 5.2 | -5 | -263 |
Changes due to foreign currency changes | -12 | 85 | |
Changes in provisions | 5.10, 5.13 | 731 | 175 |
Changes in trade and other receivables | 5.4 | 1,174 | -50 |
Changes in trade and other payables | 5.15 | -579 | -1,011 |
Changes in other financial assets and liabilities | -925 | -1,391 | |
Changes in other assets and liabilities | 192 | 865 | |
Income taxes paid or received | 6.10 | -136 | -119 |
Interest received | 6.8 | 10 | 2 |
Interest paid | 6.9 | -685 | -228 |
Cash flow from operating activities | -3,814 | -1,319 | |
Cash-outflow from loans given to related parties | 5.5 | -5,220 | 0 |
Payment to escrow account | 5.5 | -3,000 | 0 |
Purchases of intangible assets and property, plant, equipment | 5.1, 5.2 | -1,038 | -958 |
Proceeds from disposals of intangible assets and property, plant, equipment | 5.1, 5.2 | 11 | 270 |
Cash flow from investing activities | -9,247 | -688 | |
Repayments of interest-bearing loans | 5.14 | -1,000 | 0 |
Cash-inflow from convertible bond issuance | 5.11 | 0 | 25,000 |
Partial repayment of convertible bond | 5.11 | -5,000 | 0 |
Transaction cost of convertible bond | 5.11 | 0 | -527 |
Transaction cost of new loan | 5.11 | -210 | 0 |
Cash flow from financing activities | -6,210 | 24,473 | |
Cash flow-related changes in cash and cash equivalents | -19,271 | 22,466 | |
Cash and cash equivalents due Rates to exchange | 12 | -85 | |
Cash and cash equivalents at the beginning of the year | 5.7 | 26,311 | 3,930 |
Cash and cash equivalents at the end of the period | 5.7 | 7,052 | 26,311 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
1. | Company information |
2. | General principles |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
3. | Accounting and valuation methods |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | ownership of the asset is transferred to the lessee by the end of the lease term, |
• | the lessee has the option to purchase the asset at a price which is expected to be sufficiently lower than fair value at the date the option becomes exercisable and it is reasonably certain that this option will be exercised, |
• | the lease term is for the major part of the economic life of the asset, |
• | at the inception of the lease, the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset. |
• | it is expected to be realized or intended to be sold or consumed within the normal operating cycle, |
• | it is expected to be realized within 12 months after the end of the reporting period or |
• | it qualifies as cash or cash equivalent, unless the asset is restricted from being exchanged or used to settle a liability for a period of at least 12 months. |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | it is expected to be settled within the normal operating cycle, |
• | it is expected to be settled within 12 months after the end of the reporting period or |
• | the company does not have an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period. |
• | Level 1: Quoted (unadjusted) prices in active markets for identical instruments (e.g. stock market prices). |
• | Level 2: Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly (e.g. interest yield curves). |
• | Level 3: Unobservable inputs for the assets and liabilities (e.g. estimated future results). |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | First Month September: €4,95 (€30 minus €25,05 [30/91*76]) |
• | Second Month October: €10,21 (amortization of accrual from €25,05 to €14,84 [30/91*45]) |
• | Third Month November: €9,89 (amortization of accrual from €14,84 to €4,95 [30/91*15]) |
• | Fourth Month December: €4,95 (no accrual, recognition of the remaining revenue of €4,95) |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | standardized approach for classification and measurement of financial assets and liabilities which is primarily based on the company’s business model and the cash flows of the financial instruments, |
• | new impairment model which demands the recording of expected losses in addition to incurred losses, |
• | new guidelines for the use of hedge accounting, aiming at better illustration of the respective risk management activities of the company and the monitoring of non-financial risks. |
• | revenue recognition, when the customer obtains control over the agreed goods and services and can derive benefits from these, |
• | revenue recognition in the amount of the consideration that the company will presumably receive, |
• | five step process to determine the volume of sales and the time or the period of implementation (identification of the customer contract, identification of the individual performance obligations, determination of the transaction price, allocation of the transaction price to the separate contractual obligations, realization of revenue when individual contractual obligations are fulfilled, |
• | requirements for future qualitative and quantitative disclosures. |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | leasing contract exists if the fulfilment of the contract depends on the use of identifiable asset and the customer simultaneously acquires control of this asset, |
• | lessees are required to account for all leasing contracts in the form of a right of use, to be depreciated in a linear manner, and a corresponding leasing liability, to be updated using the effective interest method, |
• | exceptions for contracts with a total term of maximum 12 months or so-called low-value assets (below USD 5,000.00). |
4. | First-time adoption of IFRS |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
January 1, 2015 | Subscribed capital | Capital reserve | Accumulated retained earnings | Profit or loss for the year | Total equity | |
Note | ||||||
EURk | EURk | EURk | EURk | EURk | ||
Equity reported under local GAAP | 25 | 0 | 648 | 0 | 673 | |
Adjustment related to the provision for ESOP | 5.10 | 0 | 0 | 8 | 0 | 8 |
Adjustment related to payments received for credits | 6.1 | 0 | 0 | 512 | 0 | 512 |
Equity reported under IFRS | 25 | 0 | 1,168 | 0 | 1,193 |
December 31, 2015 | Subscribed capital | Capital reserve | Accumulated retained earnings | Profit or loss for the year | Total equity | |
Note | ||||||
EURk | EURk | EURk | EURk | EURk | ||
Equity reported under local GAAP | 25 | 2,843 | 648 | -307 | 3,209 | |
Adjustment related to the convertible bond conversion option | 5.11 | 0 | -2,843 | 0 | 507 | -2,336 |
Adjustment related to the provision for ESOP | 5.10 | 0 | 0 | 8 | 6 | 14 |
Adjustment related to payments received for credits | 6.1 | 0 | 0 | 512 | -402 | 110 |
Adjustment related to finance lease adjustments | 5.13 5.20 | 0 | 0 | 0 | -135 | -135 |
Equity reported under IFRS | 25 | 0 | 1,168 | -331 | 862 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
Note | Year ended December 31, 2015 | |
EURk | ||
Profit or loss reported under HGB | -307 | |
Reversal of convertible bond transaction cost expensed | 5.11 | 528 |
Adjustment related to payments received for credits | 6.1 | -402 |
Reversal of operating expenses related to finance leasing | 5.13, 5.20 | 169 |
Depreciation of finance lease assets | 5.13, 5.20 | -151 |
Finance lease interest and deferred tax expenses | 6.9 | -153 |
Convertible bond accrued interest | 5.11 | -21 |
Adjustment of provision for ESOP (including deferred tax) | 5.10 | 6 |
Profit or loss reported under IFRS | -331 |
• | In the financial statements prepared under local GAAP all lease agreements were classified as operate lease contracts. Under IFRS, finance leases for various equipment were identified and accounted for. |
• | According to HGB, the provision relating to the granted virtual stock options is calculated based on the discounted estimated amount to be paid to the employees while under IFRS, the provision is calculated based on the estimated fair value of the options granted, resulting in different amounts to be provided for and different deferred tax adjustments. |
• | In the financial statements as of December 31, 2015 prepared under local GAAP the conversion right of the convertible bond is accounted for as an equity instrument, calculated as the present value of the interest rate differential between the nominal interest rate and a market-based rate for the loan. Under IFRS, the conversion right does not meet the definition of an equity instrument in the meaning of IAS 32, but accounted for a as an embedded derivative measured at fair value within the financial liabilities. The option is not measured at the residual value as done under HGB, but measured using an option pricing model. The loan contract is initially measured at the residual value after deducting the option value from the initial value of the entire contract. |
• | Provisions under local GAAP which meet the criteria for accruals according to IFRS are shown in the other financial liabilities. |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
• | Under IFRS, the calculation and cut off of the payments received from LOVOO’s customers for credits that have not yet been used, which are recorded as liabilities from advance payments received under local GAAP, is based on a different calculation model than the model used under local GAAP. |
5. | Notes to the statements of financial position |
Acquired software licences | ||
EURk | ||
Cost at January 1, 2015 | 124 | |
Accumulated amortisation | 36 | |
Carrying amount at January 1, 2015 | 88 | |
Additions | 175 | |
Disposals | 8 | |
Amortisation charge | 46 | |
Carrying amount at December 31, 2015 | 209 | |
Additions | 540 | |
Amortisation charge | 91 | |
Carrying amount at December 31, 2016 | 658 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
Other equipment, operational and office equipment | ||
EURk | ||
Cost at January 1, 2015 | 888 | |
Accumulated depreciation | 245 | |
Carrying amount at January 1, 2015 | 643 | |
Additions | 1,629 | |
Depreciation charge | 459 | |
Carrying amount at December 31, 2015 | 1,813 | |
Additions | 856 | |
Disposals | 6 | |
Depreciation charge | 773 | |
Carrying amount at December 31, 2016 | 1,890 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | |||
EURk | EURk | |||
Receivable due from shareholder | 3,800 | 0 | ||
Escrow receivable | 3,000 | 0 | ||
Receivables due from other related parties | 1,420 | 0 | ||
Advance payments | 82 | 76 | ||
Deposits | 34 | 35 | ||
8,336 | 111 |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Trade receivables | 2,148 | 3,394 | |
Accumulated bad debt allowances | 16 | 32 | |
2,132 | 3,362 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Short-term deposits | 506 | 0 | |
Advance payments | 229 | 119 | |
VAT receivable | 219 | 463 | |
Suppliers with debit balances | 141 | 0 | |
Income tax receivable | 53 | 52 | |
Accrued interest | 39 | 0 | |
Other assets | 83 | 27 | |
1,270 | 661 |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Cash in bank | 7,051 | 26,309 | |
Cash on hand | 1 | 2 | |
7,052 | 26,311 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
5.8. | Deferred tax assets and liabilities |
December 31, 2016 | December 31, 2015 | January 1, 2015 | ||||||
DTA | DTL | DTA | DTL | DTA | DTL | |||
EURk | EURk | EURk | EURk | EURk | EURk | |||
Property, plant and equipment | 0 | 242 | 0 | 269 | 0 | 52 | ||
Trade Receivables | 0 | 2 | 0 | 0 | 0 | 0 | ||
Other financial assets | 0 | 0 | 6 | 0 | 0 | 0 | ||
Other assets | 0 | 0 | 806 | 0 | 0 | 0 | ||
Provisions | 116 | 0 | 0 | 0 | 0 | 3 | ||
Loans | 0 | 0 | 0 | 819 | 0 | 0 | ||
Trade payables | 0 | 0 | 0 | 6 | 0 | 0 | ||
Payments from customers | 0 | 132 | 0 | 50 | 0 | 235 | ||
Other financial liabilities | 20 | 0 | 0 | 0 | 5 | 0 | ||
Other liabilities | 10 | 0 | 78 | 0 | 0 | 0 | ||
Temporary differences | 146 | 376 | 890 | 1,144 | 5 | 290 | ||
TLCF | 1,714 | 0 | 25 | 0 | 0 | 0 | ||
Total | 1,860 | 376 | 915 | 1,144 | 5 | 290 | ||
Offsetting | -376 | -376 | -915 | -915 | -5 | -5 | ||
1,484 | 0 | 0 | 229 | 0 | 285 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||
EUR | EUR | ||
DTA as of January 1 | 915 | 5 | |
DTL as of January 1 | -1,144 | -290 | |
Net tax position as of January 1 | -229 | -285 | |
Deferred tax income | 1,713 | 56 | |
Net tax position as of December 31 | 1,484 | -229 | |
DTA as of December 31 | 1,860 | 915 | |
DTL as of December 31 | -376 | -1144 |
ESOP | Litigation | Storage requirements | Total provisions | ||
EURk | EURk | EURk | EURk | ||
Carrying amount at January 1, 2015 | 88 | 0 | 11 | 99 | |
Additions | 110 | 28 | 0 | 138 | |
Carrying amount at December 31, 2015 | 198 | 28 | 11 | 237 | |
Additions | 53 | 153 | 43 | 249 | |
Carrying amount at December 31, 2016 | 251 | 181 | 54 | 486 |
– | Expected legal costs in connection with one trademark litigation in an amount of EURk 55 |
– | Legal fees connected to the adaptation of the loan agreement between LOVOO GmbH and Larmant LLC made in December 2016 in an amount of EURk 43 |
– | Expected legal costs in connection with various cases where LOVOO GmbH disputed the invoices from various user acquisition service providers, because of alleged fraudulent activities of the respective service providers in an amount of EURk 70 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
– | Expected costs for legal advice connected to answer third party requests related to the proceedings, terminated in 2016 in an amount of EURk 13. |
2016 | 2015 | |||
Outstanding options as of January 1 | 295 | 377 | ||
Granted during the year | 59 | 30 | ||
Forfeited during the year | 69 | 112 | ||
Outstanding options as of December 31 | 285 | 295 |
2016 | 2015 | ||
Parameters for new options: | |||
Grant date fair value (EUR) | 1,595 | 1,606 | |
Exercise price (EUR) | 1.00 | 1.00 | |
Expected volatility (%) | 37.12 | 37.70 | |
Expected maturity (years) | 3 | 3 | |
Expected dividends (%) | - | - | |
Risk-free interest rate (%) | -0.76 | -0.26 | |
Fair value per option (EUR) | 1,367 | 1,373 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||||
Fair value conversion option (EURk) | 1,287 | 1,800 | |||
Equity value (EURk) | 40,328 | 40,838 | |||
Risk free interest rate (%) | -0.76 | -0.14 | |||
Time to maturity | 3 years | 4 years | |||
Volatility (%) | 37 | 38 | |||
Weighting qualified financing scenario (%) | 35 | 50 | |||
Weighting maturity scenario (%) | 65 | 50 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
EURk | ||
Nominal value | 25,000 | |
Transaction cost | -527 | |
Conversion option (financial liability) | -1,785 | |
Extension option (financial asset) | 68 | |
Host instrument as of July 21, 2015 | 22,756 | |
Effective interest 2015 | 428 | |
Interest payments 2015 | -200 | |
Fair value loss 2015 on conversion option | 15 | |
Fair value loss 2015 on extension option | 68 | |
Carrying amount as of December 31, 2015 | 24,784 | |
thereof host instrument (loan) | 22,984 | |
thereof conversion option | 1,800 | |
Effective interest 2016 | 914 | |
Interest payments 2016 | -458 | |
Fair value gain 2016 on conversion option | -513 | |
Carrying amount as of December 8, 2016 | 24,727 | |
thereof host instrument (loan) | 23,440 | |
thereof conversion option | 1,287 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
EURk | ||
Nominal value | 20,000 | |
Host instrument as of December 8, 2016 | 20,000 | |
Effective interest 2016 | 161 | |
Interest payments 2016 | -207 | |
Carrying amount as of December 31, 2016 | 19,954 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Future minimum lease payments | 701 | 758 | |
Less than one year | 350 | 282 | |
1-5 years | 351 | 476 | |
Future interest expenses on lease liabilities | -22 | -46 | |
Present value of future minimum lease payments | 679 | 712 | |
Less than one year | 320 | 248 | |
1-5 years | 359 | 464 |
Restructuring | Financial statement preparation and audit | Total provisions | ||
EURk | EURk | EURk | ||
Carrying amount at January 1, 2015 | 0 | 31 | 31 | |
Usage | 0 | 26 | 26 | |
Additions | 0 | 63 | 63 | |
Carrying amount at December 31, 2015 | 0 | 68 | 68 | |
Usage | 0 | 57 | 57 | |
Additions | 447 | 93 | 540 | |
Carrying amount at December 31, 2016 | 447 | 104 | 551 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Trade payables | 1,142 | 2,204 | |
Other payables | 686 | 203 | |
1,828 | 2,407 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Other tax liabilities | 410 | 179 | |
Accrued liabilities | 255 | 181 | |
Cash in transit | 64 | 61 | |
Other financial liabilities | 21 | 9 | |
750 | 430 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
Carrying amount | Undiscounted cash outflows | ||||||
December 31, 2016 | 2017 | 2018-2021 | 2022 and longer | ||||
EURk | EURk | EURk | EURk | ||||
Non-current loans | 19,954 | 2,400 | 22,253 | — | |||
Trade and other payables | 1,828 | 1,828 | — | — | |||
Other current financial liabilities | 750 | 750 | — | — |
Carrying amount | Undiscounted cash outflows | |||||||
December 31, 2015 | 2016 | 2017-2020 | 2021 and longer | |||||
EURk | EURk | EURk | EURk | |||||
Non-current loans | 22,985 | 500 | 26,500 | — | ||||
Other non-current financial liabilities | 1,800 | — | 1,800 | — | ||||
Current loans | 1,000 | 1,020 | — | — | ||||
Trade and other payables | 2,407 | 2,407 | — | — | ||||
Other current financial liabilities | 430 | 430 | — | — |
6. | Notes to the statements of comprehensive income |
2016 | 2015 | ||
EURk | EURk | ||
Purchased credits | 7,668 | 10,259 | |
Subscriptions | 13,455 | 12,608 | |
Advertising | 9,019 | 12,704 | |
30,142 | 35,571 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||
EURk | EURk | ||
Transaction cost | 5,599 | 6,229 | |
Server cost | 1,015 | 958 | |
Personnel cost | 943 | 1,303 | |
Office cost | 140 | 108 | |
Professional service cost | 376 | 306 | |
Depreciation | 355 | 81 | |
Other cost of sales | 283 | 92 | |
8,711 | 9,077 |
2016 | 2015 | ||
EURk | EURk | ||
Rental income | 190 | 0 | |
Release of provisions / Write-off of liabilities | 163 | 49 | |
Foreign exchange gains | 93 | 368 | |
Income from previous years | 24 | 73 | |
Sale of assets | 5 | 263 | |
Reimbursements | 0 | 72 | |
Other income | 67 | 11 | |
542 | 836 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||
EURk | EURk | ||
Direct marketing cost (performance and branding) | 12,014 | 17,138 | |
Personnel cost | 2,031 | 1,609 | |
Office cost | 236 | 186 | |
Professional service cost | 452 | 380 | |
Depreciation | 126 | 116 | |
Other cost | 143 | 157 | |
15,002 | 19,586 |
2016 | 2015 | ||
EURk | EURk | ||
Personnel cost | 2,376 | 1,851 | |
Office cost | 416 | 268 | |
Professional service cost | 1,382 | 191 | |
Depreciation | 152 | 118 | |
Other cost | 504 | 302 | |
4,830 | 2,730 |
2016 | 2015 | ||
EURk | EURk | ||
Personnel cost | 4,268 | 3,375 | |
Office cost | 378 | 291 | |
Professional service cost | 283 | 276 | |
Depreciation | 228 | 189 | |
Other cost | 157 | 151 | |
5,314 | 4,282 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||
EURk | EUR | ||
Restructuring cost | 1,198 | 0 | |
Other taxes | 125 | 0 | |
Foreign exchange losses | 66 | 299 | |
Bad debt | 56 | 0 | |
Operating supplies | 0 | 281 | |
Others | 92 | 33 | |
1,537 | 613 |
2016 | 2015 | ||
EURk | EURk | ||
Fair value gain conversion component convertible bond | 513 | 0 | |
Interest income from related parties | 40 | 0 | |
Other finance income | 9 | 2 | |
562 | 2 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
2016 | 2015 | ||
EURk | EURk | ||
Effective interest on convertible bond | 914 | 429 | |
Conversion loss convertible bond | 273 | 0 | |
Transaction costs on Larmant loan (for modification) | 210 | 0 | |
Effective interest on Larmant loan | 161 | 0 | |
Interest on lease liabilities | 48 | 26 | |
Fair value loss conversion component convertible bond | 0 | 15 | |
Fair value loss extension component convertible bond | 0 | 68 | |
Interest on investment loan | 20 | 24 | |
Others | 14 | 4 | |
1,640 | 566 |
2016 | 2015 | ||
EURk | EURk | ||
Income taxes | -38 | 58 | |
Deferred taxes | 1,713 | 56 | |
1,675 | 114 |
2016 | 2015 | ||||
EURk | EURk | ||||
Income before income taxes | -5,788 | -445 | |||
Tax rate | 31.28 | % | 31.58 | % | |
Expected tax income | 1,810 | 141 | |||
Trade tax add-backs and reductions | -29 | -26 | |||
Other | -106 | -1 | |||
Income taxes | 1,675 | 114 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
7. | Notes to the statements of cash flows |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
8. | Other notes |
December 31, 2016 | December 31, 2015 | |||
EURk | EURk | |||
Equity | ||||
Subscribed capital | 25 | 25 | ||
Retained earnings | 837 | 1,168 | ||
Profit or loss for the year | -4,113 | -331 | ||
-3,251 | 862 | |||
Liabilities | ||||
Non-current liabilities | 20,799 | 25,715 | ||
Current liabilities | 5,373 | 6,200 | ||
26,172 | 31,915 | |||
Equity and liabilities | 22,921 | 32,777 | ||
Equity ratio in % | -14.2 | 2.6 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | ||||||||
Carrying amount | Loans and receivables | Financial liabilities measured at amortized cost | Financial assets and liabilities at fair value through profit or loss | No category according to IAS 39 and Non-financial assets and liabilities | ||||
EURk | EURk | EURk | EURk | EURk | ||||
Assets | ||||||||
Trade receivables | 2,132 | 2,132 | ||||||
Other financial assets | 9,607 | 9,607 | ||||||
Other assets | 99 | 99 | ||||||
Cash and cash equivalents | 7,052 | 7,052 | ||||||
Liabilities | ||||||||
Loans | 19,744 | 19,744 | ||||||
Trade and other payables | 1,828 | 1,828 | ||||||
Advance payments received on account of orders | 780 | 780 | ||||||
Other financial liabilities | 750 | 750 | ||||||
Tax and other liabilities | 1,823 | 1,823 |
December 31, 2015 | ||||||||
Carrying amount | Loans and receivables | Financial liabilities measured at amortized cost | Financial assets and liabilities at fair value through profit or loss | No category according to IAS 39 and Non-financial assets and liabilities | ||||
EURk | EURk | EURk | EURk | EURk | ||||
Assets | ||||||||
Trade receivables | 3,362 | 3,362 | ||||||
Other financial assets | 771 | 771 | ||||||
Other assets | 310 | 310 | ||||||
Cash and cash equivalents | 26,311 | 26,311 | ||||||
Liabilities | ||||||||
Loans | 23,985 | 23,985 | ||||||
Trade and other payables | 2,407 | 2,407 | ||||||
Advance payments received on account of orders | 780 | 780 | ||||||
Other financial liabilities | 2,229 | 429 | 1,800 | |||||
Tax and other liabilities | 1,978 | 1,823 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | |||||
Carrying amount | Fair value | Carrying amount | Fair value | |||
EURk | EURk | EURk | EURk | |||
Assets | ||||||
Trade receivables | 2,132 | 2,132 | 3,362 | 3,362 | ||
Other financial assets | 9,607 | 9,607 | 771 | 771 | ||
Cash and cash equivalents | 7,052 | 7,052 | 26,311 | 26,311 | ||
Liabilities | ||||||
Loans | 19,954 | 19,954 | 23,985 | 23,846 | ||
Trade and other payables | 1,828 | 1,828 | 2,407 | 2,407 | ||
Other financial liabilities | 750 | 750 | 2,230 | 2,230 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||||
EURk | EURk | ||||
Trade receivables not due | 2,028 | 3,012 | |||
Trade receivables due | 120 | 382 | |||
up to 30 days | 63 | 88 | |||
31 to 90 days | 40 | 244 | |||
91 to 180 days | 7 | 4 | |||
181 to 360 days | 9 | 11 | |||
361 days and more | 1 | 35 | |||
Trade receivables total | 2,148 | 3,394 | |||
Less: Accumulated bad debt allowances | -16 | -32 | |||
Trade receivables net | 2,132 | 3,362 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EURk | EURk | ||
Cash and cash equivalents | 7,052 | 26,311 | |
thereof in EURk | 5,740 | 24,842 | |
thereof in USDk | 1,312 | 1,469 | |
Trade receivables | 2,148 | 3,393 | |
thereof in EURk | 1,913 | 2,832 | |
thereof in USDk | 233 | 561 | |
thereof in other foreign currencies | 2 | 0 | |
Trade payables | 1,828 | 2,407 | |
thereof in EURk | 1,480 | 1,674 | |
thereof in USDk | 315 | 675 | |
thereof in other foreign currencies | 33 | 58 |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
LOVOO GmbH | ||
Notes to the financial statements | December 31, 2016 | |
December 31, 2016 | December 31, 2015 | ||
EUR | EUR | ||
Less than one year | 258 | 121 | |
1 to 5 years | 183 | 31 | |
More than 5 years | 0 | 0 | |
441 | 152 |
LOVOO GmbH | ||
Interim financial statements | September 30, 2017 | |
Contents | Page | |
Statements of financial position | ||
Statements of comprehensive income | ||
Statements of changes in equity | ||
Statements of cash flows | ||
Selected notes to the financial statements | ||
1. | General information | |
2. | Accounting and valuation and methods | |
2.1. | Estimates and assumptions | |
2.2. | New accounting standards | |
2.3. | Seasonality of operations | |
3. | Selected notes to the statement of financial position | |
3.1. | Other financial assets | |
3.2. | Loans | |
3.3. | Current provisions | |
3.4. | Current financial liabilities | |
4. | Selected notes to the statements of comprehensive income | |
5. | Selected notes to the statements of cash flows | |
6. | Other selected notes | |
6.1. | Further information on financial instruments | |
6.2. | Information on related parties | |
6.3. | Subsequent events |
LOVOO GmbH | ||
Statements of financial position | September 30, 2017 | |
LOVOO GmbH | |||
Statements of financial position | |||
Note | September 30, 2017 | December 31, 2016 | |
EURk | EURk | ||
Assets | |||
Non-current assets | |||
Intangible assets | 808 | 658 | |
Property, plant and equipment | 1,320 | 1,890 | |
Other financial assets | 3.1 | 162 | 8,336 |
Deferred tax assets | 826 | 1,484 | |
3,116 | 12,368 | ||
Current assets | |||
Trade and other receivables | 3,862 | 2,132 | |
Other financial assets | 5,603 | 1,270 | |
Other non-financial assets | 71 | 99 | |
Cash and cash equivalents | 10,260 | 7,052 | |
19,796 | 10,553 | ||
22,912 | 22,921 | ||
Equity and liabilities | |||
Equity | |||
Subscribed capital | 25 | 25 | |
Accumulated retained losses/earnings | -3,276 | 837 | |
Profit or loss for the period | 2,163 | -4,113 | |
-1,088 | -3,251 | ||
Non-current liabilities | |||
Provisions | 457 | 486 | |
Loans | 3.2 | 0 | 19,954 |
Other financial liabilities | 209 | 359 | |
666 | 20,799 | ||
Current liabilities | |||
Provisions | 3.3 | 193 | 551 |
Loans | 3.2 | 16,973 | 0 |
Trade and other payables | 1,962 | 1,828 | |
Advance payments received on account of orders | 486 | 781 | |
Tax liabilities | 262 | 0 | |
Other financial liabilities | 3.4 | 1,766 | 750 |
Other non-financial liabilities | 1,692 | 1,463 | |
23,334 | 5,373 | ||
22,912 | 22,921 |
LOVOO GmbH | ||
Statements of comprehensive income/loss | September 30, 2017 | |
LOVOO GmbH | ||||
Statements of comprehensive income/loss | ||||
Period from January 1 to September 30, | Period from January 1 to September 30, | |||
Note | 2017 | 2016 | ||
EURk | EURk | |||
Net sales | 22,805 | 23,720 | ||
Cost of sales | -6,992 | -6,590 | ||
Gross profit | 15,813 | 17,130 | ||
Other income | 80 | 65 | ||
Selling and marketing expenses | 4 | -6,895 | -12,970 | |
General and administrative expenses | 4 | -1,799 | -3,360 | |
Product development expenses | 4 | -2,837 | -4,336 | |
Other expenses | -23 | -203 | ||
Operating profit or loss | 4,339 | -3,674 | ||
Finance income | 434 | 487 | ||
Finance expenses | -1,669 | -785 | ||
Profit or loss before income taxes | 3,104 | -3,972 | ||
Income taxes | 4 | -941 | 1,185 | |
Profit or loss for the period | 2,163 | -2,787 | ||
Other comprehensive income | 0 | 0 | ||
Total comprehensive income/loss | 2,163 | -2,787 |
LOVOO GmbH | ||
Statements of changes in equity | September 30, 2017 | |
LOVOO GmbH | |||||
Statements of changes in equity | |||||
Subscribed capital | Accumulated retained losses/earnings | Total equity | |||
EURk | EURk | EURk | |||
December 31, 2016 | 25 | -3,276 | -3,251 | ||
Profit or loss for the period | 0 | 2,163 | 2,163 | ||
September 30, 2017 | 25 | -1,113 | -1,088 | ||
Subscribed capital | Accumulated retained losses/earnings | Total equity | |||
EURk | EURk | EURk | |||
December 31, 2015 | 25 | 837 | 862 | ||
Profit or loss for the period | 0 | -2,787 | -2,787 | ||
September 30, 2016 | 25 | -1,950 | -1,925 |
LOVOO GmbH | ||
Statements of cash flows | September 30, 2017 | |
LOVOO GmbH | ||||
Statements of cash flows | ||||
Note | Period from January 1 to September 30, | Period from January 1 to September 30, | ||
2017 | 2016 | |||
EURk | EURk | |||
Profit or loss | 2,163 | -2,787 | ||
Adjustments for: | ||||
Finance income | -434 | -487 | ||
Finance expenses | 1,669 | 785 | ||
Income taxes | 941 | -1,045 | ||
Depreciation, amortization and impairments | 710 | 427 | ||
Impairment and write offs of current assets | 29 | 0 | ||
Results from disposal of fixed assets | -28 | -2 | ||
Changes due to foreign currency changes | 77 | 56 | ||
Changes in provisions | -136 | 560 | ||
Changes in trade and other receivables | -1,760 | 764 | ||
Changes in trade and other payables | -160 | 24 | ||
Changes in other financial assets and liabilities | 1,108 | -1,066 | ||
Changes in other assets and liabilities | 107 | -85 | ||
Income taxes paid | -20 | -136 | ||
Interest received | 333 | 2 | ||
Interest paid | -1,651 | -947 | ||
Cash flow from operating activities | 2,948 | -3,937 | ||
Proceeds from loans given to related parties | 3.1 | 600 | 0 | |
Proceeds from repayment of escrow account | 3.1 | 3,000 | 0 | |
Purchases of intangible assets and property, plant, equipment | -299 | -498 | ||
Proceeds from disposals of intangible assets and property, plant, equipment | 36 | 2 | ||
Cash flow from investing activities | 3,337 | -496 | ||
Repayments of interest-bearing loans and borrowings received | 3.2 | -3,000 | 0 | |
Cash flow from financing activities | -3,000 | 0 | ||
Cash flow-related changes in cash and cash equivalents | 3,285 | -4,433 | ||
Changes in cash and cash equivalents due to exchange rates | -77 | -56 | ||
Cash and cash equivalents at the beginning of the year | 7,052 | 26,311 | ||
Cash and cash equivalents at the end of the period | 10,260 | 21,822 |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
1. | General information |
2.1. | Estimates and assumptions |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
2.2. | New accounting standards |
Standard | Effective Date | |
• Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses | January 1, 2017 | |
• Amendments to IAS 7: Disclosure Initiative | January 1, 2017 |
Standard or interpretation | Effective Date | |
• IFRS 9 “Financial Instruments” | January 1, 2018 | |
• IFRS 15 “Revenue from Contracts with Customers” | January 1, 2018 | |
• IFRS 16 “Leases” | January 1, 2019 |
• | standardized approach for classification and measurement of financial assets and liabilities which is primarily based on the company’s business model and the cash flows of the financial instruments, |
• | new impairment model which demands the recording of expected losses in addition to incurred losses, |
• | new guidelines for the use of hedge accounting, aiming at better illustration of the respective risk management activities of the company and the monitoring of non-financial risks. |
• | revenue recognition, when the customer obtains control over the agreed goods and services and can derive benefits from these, |
• | revenue recognition in the amount of the consideration that the company will presumably receive, |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
• | five step process to determine the volume of sales and the time or the period of implementation (identification of the customer contract, identification of the individual performance obligations, determination of the transaction price, allocation of the transaction price to the separate contractual obligations, realization of revenue when individual contractual obligations are fulfilled, |
• | requirements for future qualitative and quantitative disclosures. |
• | leasing contract exists if the fulfilment of the contract depends on the use of identifiable asset and the customer simultaneously acquires control of this asset, |
• | lessees are required to account for all leasing contracts in the form of a right of use, to be depreciated in a linear manner, and a corresponding leasing liability, to be updated using the effective interest method, |
• | exceptions for contracts with a total term of maximum 12 months or so-called low-value assets (below USD 5,000.00). |
2.3. | Seasonality of operations |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
3.1. | Other financial assets |
3.2. | Loans |
EURk | ||
Carrying amount as of December 31, 2016 | 19,954 | |
Repayments 2017 | -3,000 | |
Effective interest 2017 | 1,682 | |
Interest payments 2017 | -1,663 | |
Carrying amount as of September 30, 2017 | 16,973 |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
3.3. | Current provisions |
3.4. | Current financial liabilities |
January 1 to September 30, 2017 | January 1 – December 31, 2016 | January 1 to September 30, 2016 | ||
Outstanding options at the beginning of the period | 285 | 295 | 295 | |
Granted during the year | 40.5 | 59 | 59 | |
Deleted during the year | 30 | 69 | 25 | |
Outstanding options at the end of the period | 295.5 | 285 | 329 |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
6.1. | Further information on financial instruments |
September 30, 2017 | December 31, 2016 | |||||
Carrying amount | Fair value | Carrying amount | Fair value | |||
EURk | EURk | EURk | EURk | |||
Assets | ||||||
Trade receivables | 3,862 | 3,862 | 2,132 | 2,132 | ||
Other financial assets | 5,603 | 5,603 | 8,336 | 8,336 | ||
Cash and cash equivalents | 10,260 | 10,260 | 7,052 | 7,052 | ||
Liabilities | ||||||
Loans | 16,973 | 16,973 | 19,954 | 19,954 | ||
Trade and other payables | 1,962 | 1,962 | 1,828 | 1,828 | ||
Other financial liabilities | 1,766 | 1,766 | 750 | 750 |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
6.2. | Information on related parties |
LOVOO GmbH | ||
Selected explanatory notes to the interim financial statements | September 30, 2017 | |
6.3. | Subsequent events |
• | the accompanying notes to the unaudited pro forma condensed combined financial statements; |
• | The Meet Group’s audited financial statements and related notes contained within The Meet Group’s Annual Report on Form 10-K for the year ended December 31, 2016; |
• | The Meet Group’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017; and |
• | Lovoo’s financial statements filed within this Current Report on Form 8-K/A. |
Historical The Meet Group | Historical Lovoo | Pro Forma Adjustments (Note 4) | Pro Forma The Meet Group Combined | ||||||||||||
ASSETS | |||||||||||||||
CURRENT ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 24,642,002 | $ | 12,046,968 | $ | (81,148,750 | ) | 4a | $ | 15,540,220 | |||||
60,000,000 | 4b | ||||||||||||||
Accounts receivable, net | 22,680,468 | 4,472,716 | — | 27,153,184 | |||||||||||
Prepaid expenses and other current assets | 2,131,095 | 1,168,732 | — | 3,299,827 | |||||||||||
Total current assets | 49,453,565 | 17,688,416 | (21,148,750 | ) | 45,993,231 | ||||||||||
Restricted cash | 894,305 | — | — | 894,305 | |||||||||||
Goodwill | 150,088,783 | — | 57,002,565 | 4c | 207,091,348 | ||||||||||
Property and equipment, net | 3,360,015 | 1,674,156 | (645,596 | ) | 4d | 4,388,575 | |||||||||
Intangible assets, net | 34,858,106 | 161,852 | 16,803,148 | 4e | 51,823,106 | ||||||||||
Deferred taxes | 32,501,672 | 1,019,144 | — | 33,520,816 | |||||||||||
Other assets | 918,248 | 5,587,855 | (5,587,855 | ) | 4f | 918,248 | |||||||||
Total assets | $ | 272,074,694 | $ | 26,131,423 | $ | 46,423,512 | $ | 344,629,629 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||
Accounts payable | $ | 4,904,223 | $ | 2,304,127 | $ | — | $ | 7,208,350 | |||||||
Accrued liabilities | 13,926,046 | 3,143,958 | — | 17,070,004 | |||||||||||
Current portion of long-term debt | — | — | 15,000,000 | 4g | 15,000,000 | ||||||||||
Current portion of capital lease obligations | 18,901 | 267,110 | — | 286,011 | |||||||||||
Deferred revenue | 1,127,610 | 2,291,468 | (696,827 | ) | 4h | 2,722,251 | |||||||||
Contingent consideration | — | — | 5,000,000 | 4i | 5,000,000 | ||||||||||
Total current liabilities | 19,976,780 | 8,006,663 | 19,303,173 | 47,286,616 | |||||||||||
Long-term capital lease obligations | 245,098 | — | 245,098 | ||||||||||||
Long-term debt | — | 19,928,258 | (19,928,258 | ) | 4j | $ | 45,000,000 | ||||||||
— | — | 45,000,000 | 4g | ||||||||||||
Total liabilities | 19,976,780 | 28,180,019 | 44,374,915 | 92,531,714 | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||||||
Preferred Stock | — | — | — | — | |||||||||||
Common Stock | 71,808 | 29,354 | (29,354 | ) | 4k | 71,808 | |||||||||
Additional paid-in capital | 405,345,104 | (2,077,951 | ) | 2,077,951 | 4k | 405,345,104 | |||||||||
Accumulated deficit | (153,318,998 | ) | — | — | (153,318,998 | ) | |||||||||
Total stockholders’ equity | 252,097,914 | (2,048,597 | ) | 2,048,597 | 252,097,914 | ||||||||||
Total liabilities and stockholders’ equity | $ | 272,074,694 | $ | 26,131,422 | $ | 46,423,512 | $ | 344,629,628 |
Historical The Meet Group | Historical Lovoo | Pro Forma Adjustments (Note 4) | Pro Forma The Meet Group Combined | ||||||||||||
Revenues | $ | 83,634,737 | $ | 25,394,456 | $ | — | $ | 109,029,193 | |||||||
Operating costs and expenses: | |||||||||||||||
Sales and marketing | 14,305,498 | 7,546,441 | — | 21,851,939 | |||||||||||
Product development and content | 41,006,376 | 10,430,331 | — | 51,436,707 | |||||||||||
General and administrative | 13,044,965 | 1,596,102 | — | 14,641,067 | |||||||||||
Depreciation and amortization | 7,619,584 | 887,012 | 1,679,954 | 4l | 10,186,550 | ||||||||||
Acquisition and restructuring | 8,648,692 | 321,539 | (1,612,790 | ) | 4m | 7,357,441 | |||||||||
Total operating costs and expenses | 84,625,115 | 20,781,425 | 67,164 | 105,473,704 | |||||||||||
Income (loss) from operations | (990,378 | ) | 4,613,031 | (67,164 | ) | 3,555,489 | |||||||||
Other income (expense): | |||||||||||||||
Interest income | 5,344 | 482,765 | (481,130 | ) | 4n | 6,979 | |||||||||
Interest expense | (421,947 | ) | (1,783,757 | ) | (631,891 | ) | 4o | (2,837,595 | ) | ||||||
Loss on foreign currency adjustment | (2,072 | ) | (66,044 | ) | — | (68,116 | ) | ||||||||
Other income | — | 54,803 | — | 54,803 | |||||||||||
Total other expense | (418,675 | ) | (1,312,233 | ) | (1,113,021 | ) | (2,843,929 | ) | |||||||
Income (loss) before income tax (provision) benefit | (1,409,053 | ) | 3,300,798 | (1,180,185 | ) | 711,560 | |||||||||
Benefit (provision) from income taxes | 4,934,216 | (1,000,243 | ) | — | 3,933,973 | ||||||||||
Net income | $ | 3,525,163 | $ | 2,300,555 | $ | (1,180,185 | ) | $ | 4,645,533 | ||||||
Basic and diluted net income per common stockholders: | |||||||||||||||
Basic net income per common stockholders | $ | 0.05 | $ | 0.07 | |||||||||||
Diluted net income per common stockholders | $ | 0.05 | $ | 0.06 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 67,711,324 | 67,711,324 | |||||||||||||
Diluted | 72,425,863 | 72,425,863 |
Historical The Meet Group | Historical Lovoo | Pro Forma Adjustments (Note 4) | Pro Forma The Meet Group Combined | ||||||||||||
Revenues | $ | 76,124,109 | $ | 33,370,892 | $ | — | $ | 109,495,001 | |||||||
Operating costs and expenses: | |||||||||||||||
Sales and marketing | 15,089,987 | 16,468,978 | — | 31,558,965 | |||||||||||
Product development and content | 25,790,173 | 14,888,242 | — | 40,678,415 | |||||||||||
General and administrative | 9,494,804 | 4,570,756 | — | 14,065,560 | |||||||||||
Depreciation and amortization | 4,069,211 | 1,089,866 | 1,875,959 | 4l | 7,035,036 | ||||||||||
Acquisition and restructuring | 2,457,295 | 2,009,193 | — | 4,466,488 | |||||||||||
Total operating costs and expenses | 56,901,470 | 39,027,035 | 1,875,959 | 97,804,464 | |||||||||||
Income (loss) from operations | 19,222,639 | (5,656,143 | ) | (1,875,959 | ) | 11,690,537 | |||||||||
Other income (expense): | |||||||||||||||
Interest income | 21,185 | 1,393,334 | (43,738 | ) | 4n | 1,370,781 | |||||||||
Interest expense | (19,388 | ) | (2,589,125 | ) | (728,556 | ) | 4o | (3,337,069 | ) | ||||||
Change in warrant liability | (864,596 | ) | — | — | (864,596 | ) | |||||||||
Gain on foreign currency adjustment | 33,416 | 29,806 | — | 63,222 | |||||||||||
Other income | — | 271,842 | — | 271,842 | |||||||||||
Total other expense | (829,383 | ) | (1,165,985 | ) | (772,294 | ) | (2,767,662 | ) | |||||||
Income (loss) before benefit from income taxes | 18,393,256 | (6,822,128 | ) | (2,648,253 | ) | 8,922,875 | |||||||||
Benefit from income taxes | 27,875,362 | 1,895,211 | — | 29,770,573 | |||||||||||
Net income (loss) | $ | 46,268,618 | $ | (4,926,917 | ) | $ | (2,648,253 | ) | $ | 38,693,448 | |||||
Basic and diluted net income per common stockholders: | |||||||||||||||
Basic net income per common stockholders | $ | 0.89 | $ | 0.74 | |||||||||||
Diluted net income per common stockholders | $ | 0.80 | $ | 0.67 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 51,963,702 | 51,963,702 | |||||||||||||
Diluted | 57,745,652 | 57,745,652 |
Historical The Meet Group | Historical Lovoo | Pro Forma Adjustments (Note 4) | Pro Forma The Meet Group Combined | ||||||||||||
Revenues | $ | 56,903,773 | $ | 39,511,786 | $ | — | $ | 96,415,559 | |||||||
Operating costs and expenses: | |||||||||||||||
Sales and marketing | 6,618,837 | 21,626,415 | — | 28,245,252 | |||||||||||
Product development and content | 24,615,304 | 14,548,454 | — | 39,163,758 | |||||||||||
General and administrative | 14,534,861 | 2,900,492 | — | 17,435,353 | |||||||||||
Depreciation and amortization | 3,140,205 | 650,974 | 2,890,871 | 4l | 6,682,050 | ||||||||||
Acquisition and restructuring | — | — | — | — | |||||||||||
Total operating costs and expenses | 48,909,207 | 39,726,335 | 2,890,871 | 91,526,413 | |||||||||||
Income (loss) from operations | 7,994,566 | (214,549 | ) | (2,890,871 | ) | 4,889,146 | |||||||||
Other income (expense): | |||||||||||||||
Interest income | 21,037 | 1,843 | — | 4n | 22,880 | ||||||||||
Interest expense | (459,962 | ) | (628,888 | ) | (1,603,050 | ) | 4o | (2,691,900 | ) | ||||||
Change in warrant liability | (616,607 | ) | — | — | (616,607 | ) | |||||||||
Gain (loss) on foreign currency adjustment | (856,438 | ) | 76,349 | — | (780,089 | ) | |||||||||
Gain on sale of asset | 163,333 | — | — | ||||||||||||
Other income | — | 171,111 | — | 171,111 | |||||||||||
Total other expense | (1,748,637 | ) | (379,585 | ) | (1,603,050 | ) | (3,894,605 | ) | |||||||
Income (loss) before income tax (provision) benefit | 6,245,929 | (594,134 | ) | (4,493,921 | ) | 994,541 | |||||||||
(Provision) benefit from income taxes | (276,301 | ) | 152,490 | — | (123,811 | ) | |||||||||
Net income (loss) | $ | 5,969,628 | $ | (441,644 | ) | $ | (4,493,921 | ) | $ | 870,730 | |||||
Basic and diluted net income per common stockholders: | |||||||||||||||
Basic net income per common stockholders | $ | 0.13 | $ | 0.02 | |||||||||||
Diluted net income per common stockholders | $ | 0.12 | $ | 0.02 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 45,419,175 | 45,419,175 | |||||||||||||
Diluted | 49,535,826 | 49,535,826 |
Cash consideration (1) | $ | 65,400,000 | |
Net working capital adjustment | 15,748,750 | ||
Contingent consideration | 5,000,000 | ||
Total estimated consideration | $ | 86,148,750 |
Cash and cash equivalents | $ | 12,046,968 | |
Accounts receivable | 4,472,716 | ||
Prepaid expenses and other current assets | 1,168,732 | ||
Property and equipment | 1,028,559 | ||
Deferred tax assets | 1,019,144 | ||
Intangible assets | 16,965,000 | ||
Accounts payable | (2,304,127 | ) | |
Accrued expenses and other current liabilities | (3,143,958 | ) | |
Deferred revenue | (1,594,641 | ) | |
Capital lease obligations | (512,208 | ) | |
Net assets acquired | $ | 29,146,185 | |
Goodwill | 57,002,565 | ||
Total consideration | $ | 86,148,750 |
Fair Value | |||
Software | $ | 523,229 | |
Office furniture and equipment | 226,607 | ||
IT equipment | 204,296 | ||
Leasehold improvements | 74,427 | ||
Total property and equipment | $ | 1,028,559 |
Fair Value | |||
Trademarks | $ | 12,090,000 | |
Software | 1,335,000 | ||
Customer relationships | 3,540,000 | ||
Total identifiable intangible assets | $ | 16,965,000 |
Estimated useful life (months) | Preliminary fair value | Depreciation expense for the nine months ended September 30, 2017 | Depreciation expense for the year ended December 31, 2016 | Depreciation expense for the year ended December 31, 2015 | |||||||||||||
Software | 36 | $ | 523,229 | $ | 130,807 | $ | 174,410 | $ | 174,410 | ||||||||
Office furniture and equipment | 60 | 226,607 | 33,991 | 45,321 | 45,321 | ||||||||||||
IT equipment | 36 | 204,296 | 51,074 | 68,099 | 68,099 | ||||||||||||
Leasehold improvements | 60 | 74,427 | 11,164 | 14,885 | 14,885 | ||||||||||||
Total pro forma adjustment | $ | 1,028,559 | $ | 227,036 | $ | 302,715 | $ | 302,715 |
Estimated useful life (months) | Preliminary fair value | Amortization expense for the nine months ended September 30, 2017 | Amortization expense for the year ended December 31, 2016 | Amortization expense for the year ended December 31, 2015 | |||||||||||||
Trademarks | 120 | $ | 12,090,000 | $ | 1,505,840 | $ | 1,460,970 | $ | 1,403,360 | ||||||||
Software | 24 | 1,335,000 | — | 603,780 | 731,220 | ||||||||||||
Customer relationships - subscriptions | 12 | 505,000 | — | — | 505,000 | ||||||||||||
Customer relationships - advertisers | 120 | 3,035,000 | 834,090 | 598,360 | 599,550 | ||||||||||||
Total pro forma adjustment | $ | 16,965,000 | $ | 2,339,930 | $ | 2,663,110 | $ | 3,239,130 |
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