Delaware
|
0-5576
|
52-0849320
|
||
(State or other jurisdiction
of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
7927 Jones Branch Drive, Suite 3125
Tysons Corner, VA
|
22102
|
|||
(Address of principal executive offices)
|
(Zip Code)
|
Exhibit No.
|
Description
|
10.1
|
Form of Indemnification Agreement*
|
99.1
|
Press Release dated September 10, 2013*
|
99.2
|
Audited Financial Statements for the period ended December 31, 2012 and Unaudited Financial Statements for the six-months ended June 30, 2013**
|
99.3
|
Pro Forma Financial Information**
|
SPHERIX INCORPORATED
|
|
By:
|
/s/ Anthony Hayes
|
Name: Anthony Hayes
|
|
Title: Chief Executive Officer
|
Page | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 |
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2012 AND JUNE 30, 2013 (Unaudited) | 2 |
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, AND FOR THE SIX MONTHS ENDED JUNE 30, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH JUNE 30, 2013 (Unaudited) | 3 |
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, AND FOR THE SIX MONTHS ENDED JUNE 30, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH JUNE 30, 2013 (Unaudited) | 4 |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH DECEMBER 31, 2012, AND FOR THE SIX MONTHS ENDED JUNE 30, 2013 (Unaudited), AND FOR THE PERIOD FROM NOVEMBER 9, 2012 (INCEPTION) THROUGH JUNE 30, 2013 (Unaudited) | 5 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 6 |
NORTH SOUTH HOLDINGS INC. AND SUBSIDIARY
|
||||
(A COMPANY IN THE DEVELOPMENT STAGE )
|
||||
CONSOLIDATED BALANCE SHEETS
|
June 30,
|
||||||||
ASSETS
|
2013
|
December 31,
|
||||||
(Unaudited)
|
2012
|
|||||||
Current assets:
|
||||||||
Cash
|
$ | 1,630,166 | $ | 549,047 | ||||
Accounts receivable
|
94,000 | - | ||||||
Prepaid expenses
|
29,425 | - | ||||||
Total current assets
|
1,753,591 | 549,047 | ||||||
Other assets:
|
||||||||
Patent portfolio, net
|
792,370 | 415,000 | ||||||
Investment in Spherix Corp.
|
500,000 | - | ||||||
Total other assets
|
1,292,370 | 415,000 | ||||||
Total assets
|
$ | 3,045,961 | $ | 964,047 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued expenses
|
$ | 24,000 | $ | - | ||||
Patent settlement and inventor royalty payables
|
47,648 | - | ||||||
Total current liabilities
|
71,648 | - | ||||||
Commitments and Contingencies
|
||||||||
Stockholders' Equity:
|
||||||||
Preferred stock, par value $ 0.0001 per share; 1,000 shares authorized; Series A Convertible Preferred Stock; 500 shares, issued and outstanding at June 30, 2013 and December 31, 2012
|
- | - | ||||||
Series B Convertible Preferred Stock; 128 and no shares, issued and outstanding at June 30, 2013 and December 31, 2012
|
- | - | ||||||
Common Stock, par value $0.0001 per share; 75,000 shares authorized, 500 shares issued and outstanding at June 30, 2013 and December 31, 2012
|
- | - | ||||||
Additional paid in capital
|
3,234,880 | 1,000,000 | ||||||
Deficit accumulated during the development stage
|
(260,567 | ) | (35,953 | ) | ||||
Total stockholders' equity
|
2,974,313 | 964,047 | ||||||
Total liabilities and stockholders' equity
|
$ | 3,045,961 | $ | 964,047 |
For the
|
||||||||||||
For the
|
For the
|
Period from
|
||||||||||
Six Months
|
Period from
|
November 9, 2012
|
||||||||||
Ended
|
November 9, 2012
|
through
|
||||||||||
June 30, 2013
|
through
|
June 30, 2013
|
||||||||||
(Unaudited)
|
December 31, 2012
|
(Unaudited)
|
||||||||||
Revenue
|
$ | 94,000 | $ | - | $ | 94,000 | ||||||
Operating cost and expenses
|
||||||||||||
Cost of revenues
|
||||||||||||
Legal settlement and maintenance fees
|
125,347 | - | 125,347 | |||||||||
Inventor royalty fees
|
30,208 | - | 30,208 | |||||||||
Amortization of patents
|
34,514 | - | 34,514 | |||||||||
Director's fees
|
35,460 | 5,100 | 40,560 | |||||||||
Legal fees
|
27,743 | 30,853 | 58,596 | |||||||||
Professional fees
|
55,480 | - | 55,480 | |||||||||
Other fees and expenses
|
9,862 | - | 9,862 | |||||||||
Total operating expenses
|
318,614 | 35,953 | 354,567 | |||||||||
Net loss
|
$ | (224,614 | ) | $ | (35,953 | ) | $ | (260,567 | ) |
Series A Convertible Preferred Stock
|
Series B Convertible Preferred Stock
|
Common Stock
|
Deficit Accumulated
|
|||||||||||||||||||||||||||||||||
Additional Paid | During the Development | |||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
In Capital
|
Stage
|
Total
|
||||||||||||||||||||||||||||
Balance at November 9, 2012
|
- | $ | - | - | $ | - | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||
Issuance of shares to founders in exchange for intial capital contributions (500 shares of common stock at $0.0001 per share and 500 shares of convertible preferred stock at $2,000 per share)
|
500 | - | - | - | 500 | - | 1,000,000 | - | 1,000,000 | |||||||||||||||||||||||||||
Net loss
|
- | - | - | - | - | - | - | (35,953 | ) | (35,953 | ) | |||||||||||||||||||||||||
Balance at December 31, 2012
|
500 | - | - | - | 500 | - | 1,000,000 | (35,953 | ) | 964,047 | ||||||||||||||||||||||||||
Issuance of Series B convertible preferred stock (unaudited)
|
- | - | 128 | - | - | - | 2,234,880 | - | 2,234,880 | |||||||||||||||||||||||||||
Net loss (unaudited)
|
- | - | - | - | - | - | - | (224,614 | ) | (224,614 | ) | |||||||||||||||||||||||||
Balance at June 30, 2013 (Unaudited)
|
500 | $ | - | 128 | $ | - | 500 | $ | - | $ | 3,234,880 | $ | (260,567 | ) | $ | 2,974,313 |
For the
|
||||||||||||
For the
|
For the
|
Period from
|
||||||||||
Six Months
|
Period from
|
November 9, 2012
|
||||||||||
Ended
|
November 9, 2012
|
through
|
||||||||||
June 30, 2013
|
through
|
June 30, 2013
|
||||||||||
(Unaudited)
|
December 31, 2012
|
(Unaudited)
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
$ | (224,614 | ) | $ | (35,953 | ) | $ | (260,567 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Amortization
|
34,514 | - | 34,514 | |||||||||
Changes in assets and liabilities which used cash:
|
||||||||||||
Changes in accounts receivable
|
(94,000 | ) | - | (94,000 | ) | |||||||
Changes in prepaid expenses
|
(29,425 | ) | - | (29,425 | ) | |||||||
Changes in accrued expenses
|
71,648 | - | 71,648 | |||||||||
Net cash used in operating activities
|
(241,877 | ) | (35,953 | ) | (277,830 | ) | ||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of patent portfolios
|
(411,884 | ) | (415,000 | ) | (826,884 | ) | ||||||
Investment in Spherix Corp.
|
(500,000 | ) | - | (500,000 | ) | |||||||
Net cash used in investing activities
|
(911,884 | ) | (415,000 | ) | (1,326,884 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Issuance of shares to founders in exchange for initial capital contributions
|
- | 1,000,000 | 1,000,000 | |||||||||
Issuance of Series B convertible preferred stock
|
2,234,880 | - | 2,234,880 | |||||||||
Net cash provided by financing activities
|
2,234,880 | 1,000,000 | 3,234,880 | |||||||||
Net increase in cash
|
1,081,119 | 549,047 | 1,630,166 | |||||||||
Cash, beginning of period
|
549,047 | - | - | |||||||||
Cash, end of period
|
$ | 1,630,166 | $ | 549,047 | $ | 1,630,166 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | - | $ | - | $ | - | ||||||
Income taxes
|
$ | - | $ | - | $ | - |
(A)
|
Use of Estimates
|
(B)
|
Principles of Consolidation
|
(C)
|
Intangible Assets – Patent Portfolios
|
(B)
|
CompuFill Purchase
|
For the Years Ending
December 31
|
Harris
Patent Portfolio
|
CompuFill
Patent Portfolio
|
Other Costs
|
Total
Amortization
|
||||||||||||||
2013 | * | 23,529 | 20,588 | 4,523 | 48,640 | |||||||||||||
2014 | 47,059 | 41,176 | 9,045 | 97,280 | ||||||||||||||
2015 | 47,059 | 41,176 | 9,045 | 97,280 | ||||||||||||||
2016 | 47,059 | 41,176 | 9,045 | 97,280 | ||||||||||||||
2017 | 47,059 | 41,176 | 9,045 | 97,280 | ||||||||||||||
Thereafter
|
164,706 | 156,130 | 33,774 | 354,610 | ||||||||||||||
Total
|
376,471 | 341,422 | 74,477 | 792,370 |
Current
|
December 31, 2012
|
|||
Federal
|
$ | – | ||
State
|
– | |||
– | ||||
Deferred
|
||||
Federal
|
(12,224 | ) | ||
State
|
(1,798 | ) | ||
(14,022 | ) | |||
Change in valuation allowance
|
14,022 | |||
Total income tax provision
|
$ | – |
U.S. federal statutory rate
|
(34)%
|
|||
State income tax rate, net of federal benefit
|
(5)
|
|||
Less: valuation allowance
|
39
|
|||
Provision for income taxes
|
– %
|
Deferred tax assets:
|
||||
Net operating loss carryforward
|
$
|
2,200
|
||
Deferred start-up and organizational expenses
|
11,822
|
|||
Valuation allowance
|
(14,022)
|
|||
Net deferred tax asset
|
$
|
–
|
•
|
the acquisition of North South by Spherix
|
•
|
separate audited consolidated financial statements of Spherix as of and for the year ended December 31, 2012 and the related notes, included in Spherix’s Annual Report on Form 10-K for the year ended December 31, 2012;
|
•
|
audited financial statements of North South as of and for the period ended December 31, 2012 and the related notes included herein;
|
•
|
separate unaudited consolidated financial statements of Spherix as of and for the six months ended June 30, 2013, and the related notes, included in Spherix’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013; and
|
•
|
unaudited financial statements of North South as of and for the six months ended June 30, 2013, and the related notes included herein.
|
Historical
|
||||||||||||||||||||||||
Spherix
|
North South
|
Rockstar
|
North South
|
Pro Forma
|
Pro Forma
|
|||||||||||||||||||
ASSETS
|
Incorporated
|
Holdings, Inc.
|
July 2013 (6)
|
August 2013 (1)
|
Adjustments (2,5)
|
Consolidated
|
||||||||||||||||||
Current assets
|
||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 3,019,894 | $ | 1,630,166 | $ | (2,000,000 | ) | $ | 1,801,060 | $ | - | $ | 4,451,120 | |||||||||||
Accounts receivable
|
- | 94,000 | - | - | - | 94,000 | ||||||||||||||||||
Other receivables
|
67 | - | - | - | - | 67 | ||||||||||||||||||
Prepaid expenses and other assets
|
70,102 | 29,425 | - | - | - | 99,527 | ||||||||||||||||||
Total current assets
|
3,090,063 | 1,753,591 | (2,000,000 | ) | 1,801,060 | - | 4,644,714 | |||||||||||||||||
Investment in Spherix by North South
|
- | 500,000 | - | - | (500,000 | ) | - | |||||||||||||||||
Property and equipment, net of accumulated depreciation
|
2,519 | - | - | - | 2,519 | |||||||||||||||||||
Patent portfolios, net
|
- | 792,370 | 3,000,000 | - | 307,630 | 4,100,000 | ||||||||||||||||||
Goodwill
|
- | - | - | - | 2,728,806 | 2,728,806 | ||||||||||||||||||
Deposit
|
29,505 | - | - | - | - | 29,505 | ||||||||||||||||||
Total assets
|
$ | 3,122,087 | $ | 3,045,961 | $ | 1,000,000 | $ | 1,801,060 | $ | 2,536,436 | $ | 11,505,544 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
Current liabilities
|
||||||||||||||||||||||||
Accounts payable and accrued expenses
|
$ | 373,768 | $ | 24,000 | $ | - | $ | - | $ | 450,000 | $ | 847,768 | ||||||||||||
Patent settlement payable
|
- | 47,648 | - | - | - | 47,648 | ||||||||||||||||||
Accrued salaries and benefits
|
67,368 | - | - | - | - | 67,368 | ||||||||||||||||||
Liabilities of segment held for sale
|
5,102 | - | - | - | - | 5,102 | ||||||||||||||||||
Total current liabilities
|
446,238 | 71,648 | - | - | 450,000 | 967,886 | ||||||||||||||||||
Deferred rent
|
44,312 | - | - | - | - | 44,312 | ||||||||||||||||||
Warrant liabilities
|
76,506 | - | - | - | - | 76,506 | ||||||||||||||||||
Total liabilities
|
567,056 | 71,648 | - | - | 450,000 | 1,088,704 | ||||||||||||||||||
Commitments and contingencies
|
||||||||||||||||||||||||
Stockholders' equity
|
||||||||||||||||||||||||
Convertible preferred stock, $0.0001 par value, 500 shares authorized; Series A: 500 shares issued and outstanding at June 30, 2013;
|
- | - | - | - | - | - | ||||||||||||||||||
Convertible preferred stock, $0.0001 par value, 5,000,000 shares authorized; Series B: 1 share issued and outstanding at June 30, 2013; liquidation preference $1,000 per share
|
- | - | - | - | - | - | ||||||||||||||||||
Series C: 158,944 shares issued and outstanding at June 30, 2013; liquidation preference $0.0001 per share
|
16 | - | - | - | - | 16 | ||||||||||||||||||
Series D: no shares issued and outstanding at June 30, 2013; liquidation preference $0.0001 per share
|
- | - | - | - | 138 | 138 | ||||||||||||||||||
Series E: 100,000 shares issued and outstanding at June 30, 2013; liquidation preference $0.0001 per share
|
10 | - | - | - | - | 10 | ||||||||||||||||||
Common stock, $0.0001 par value, 50,000,000 shares authorized; 884,507 issued at at June 30, 2013 and 884,106 outstanding at June 30, 2013
|
89 | - | 18 | - | 120 | 227 | ||||||||||||||||||
Paid-in capital in excess of par value
|
42,834,595 | 3,234,880 | 999,982 | 1,801,060 | 2,275,611 | 51,146,128 | ||||||||||||||||||
Treasury stock, at cost, 401 shares at June 30, 2013
|
(464,786 | ) | - | - | - | - | (464,786 | ) | ||||||||||||||||
Accumulated deficit
|
(39,814,893 | ) | (260,567 | ) | - | - | 260,567 | (40,264,893 | ) | |||||||||||||||
(450,000 | ) | |||||||||||||||||||||||
Total stockholders' equity
|
2,555,031 | 2,974,313 | 1,000,000 | 1,801,060 | 2,086,436 | 10,416,840 | ||||||||||||||||||
Total liabilities and stockholders' equity
|
$ | 3,122,087 | $ | 3,045,961 | $ | 1,000,000 | $ | 1,801,060 | $ | 2,536,436 | $ | 11,505,544 |
Historical
|
Discontinued
|
|||||||||||||||||||
Spherix
|
North South
|
Operations
|
Pro Forma
|
Pro Forma
|
||||||||||||||||
Incorporated
|
Holdings, Inc.
|
Eliminated
|
Adjustments (3,7)
|
Consolidated
|
||||||||||||||||
Revenue
|
$ | 19,922 | $ | - | $ | - | $ | - | $ | 19,922 | ||||||||||
Costs of Revenues
|
||||||||||||||||||||
Amortization of patents
|
- | - | - | 129,412 | 868,849 | |||||||||||||||
739,437 | ||||||||||||||||||||
Legal fees settlement
|
- | - | - | - | - | |||||||||||||||
Patent maintenance fees
|
- | - | - | - | - | |||||||||||||||
Royalty fees - inventor
|
- | - | - | - | - | |||||||||||||||
Research and development
|
727,091 | - | - | - | 727,091 | |||||||||||||||
Selling, general and administrative
|
2,764,836 | 35,953 | - | - | 2,800,789 | |||||||||||||||
Total operating expenses
|
3,491,927 | 35,953 | - | 868,849 | 4,396,729 | |||||||||||||||
Loss from operations
|
(3,472,005 | ) | (35,953 | ) | - | (868,849 | ) | (4,376,807 | ) | |||||||||||
Other Income from Change in Fair Value of Warrants
|
1,202,489 | - | - | - | 1,202,489 | |||||||||||||||
Loss on issuance of warrants
|
(621,983 | ) | - | - | - | (621,983 | ) | |||||||||||||
Interest income
|
3,466 | - | - | - | 3,466 | |||||||||||||||
(Loss) from continuing operations before taxes
|
(2,888,033 | ) | (35,953 | ) | - | (868,849 | ) | (3,792,835 | ) | |||||||||||
Income tax expense
|
- | - | - | - | - | |||||||||||||||
(Loss) from continuing operations
|
(2,888,033 | ) | (35,953 | ) | - | (868,849 | ) | (3,792,835 | ) | |||||||||||
Discontinued operations
|
||||||||||||||||||||
Loss from discontinued operations
|
(968,991 | ) | - | 968,991 | - | - | ||||||||||||||
Income tax expense
|
- | - | - | - | - | |||||||||||||||
Loss from discontinued operations
|
(968,991 | ) | - | 968,991 | - | - | ||||||||||||||
Net (loss)
|
$ | (3,857,024 | ) | $ | (35,953 | ) | $ | 968,991 | $ | (868,849 | ) | $ | (3,792,835 | ) | ||||||
Net loss per share, basic and diluted
|
||||||||||||||||||||
Continuing operations
|
$ | (10.56 | ) | $ | (71.91 | ) | $ | - | $ | (2.29 | ) | |||||||||
Discontinued operations
|
$ | (3.54 | ) | $ | - | $ | 3.54 | $ | - | |||||||||||
Basic and diluted net loss per share
|
$ | (14.10 | ) | $ | (71.91 | ) | $ | 3.54 | $ | (2.29 | ) | |||||||||
Weighted average number of shares outstanding,
|
||||||||||||||||||||
Basic and diluted
|
273,567 | 500 | 273,567 | 1,653,711 | ||||||||||||||||
No dividends declared or paid
|
$ | - | $ | - | $ | - | ||||||||||||||
Book value per share,
|
||||||||||||||||||||
Basic
|
$ | 3.12 | $ | 1,928.09 | $ | 5.27 | ||||||||||||||
Diluted
|
$ | 1.12 | $ | 19.09 | $ | 0.49 | ||||||||||||||
Weighted average number of shares outstanding, book value per share purposes only (9)
|
||||||||||||||||||||
Basic
|
273,567 | 500 | 1,653,711 | |||||||||||||||||
Diluted
|
764,388 | 50,500 | 17,946,882 |
Historical
|
Discontinued
|
|||||||||||||||||||
Spherix
|
North South
|
Operations
|
Pro Forma
|
Pro Forma
|
||||||||||||||||
Incorporated
|
Holdings, Inc.
|
Eliminated
|
Adjustments (4,8)
|
Consolidated
|
||||||||||||||||
Revenues
|
$ | 5,974 | $ | 94,000 | $ | - | $ | - | $ | 99,974 | ||||||||||
Costs of Revenues
|
||||||||||||||||||||
Amortization of patents
|
- | 34,514 | - | 30,192 | 434,425 | |||||||||||||||
369,719 | ||||||||||||||||||||
Legal fees settlement
|
- | 17,440 | - | - | 17,440 | |||||||||||||||
Patent maintenance fees
|
- | 111,567 | - | - | 111,567 | |||||||||||||||
Royalty fees - inventor
|
- | 30,208 | - | - | 30,208 | |||||||||||||||
Research and development
|
49,368 | - | - | - | 49,368 | |||||||||||||||
Selling, general and administrative
|
1,813,770 | 124,885 | - | - | 1,938,655 | |||||||||||||||
Total operating expenses
|
1,863,138 | 318,614 | - | 399,911 | 2,581,663 | |||||||||||||||
Loss from operations
|
(1,857,164 | ) | (224,614 | ) | - | (399,911 | ) | (2,481,689 | ) | |||||||||||
Unrealized (loss) gain on the change in fair value of warrant liabilities
|
(2,647,048 | ) | - | - | - | (2,647,048 | ) | |||||||||||||
Interest income
|
537 | - | - | - | 537 | |||||||||||||||
Loss from continuing operations
|
(4,503,675 | ) | (224,614 | ) | - | (399,911 | ) | (5,128,200 | ) | |||||||||||
Income tax expense
|
- | - | - | - | - | |||||||||||||||
Loss from continuing operations
|
(4,503,675 | ) | (224,614 | ) | - | (399,911 | ) | (5,128,200 | ) | |||||||||||
Discontinued operations
|
||||||||||||||||||||
Loss from discontinued operations
|
- | - | - | - | - | |||||||||||||||
Income tax expense
|
- | - | - | - | - | |||||||||||||||
Loss from discontinued operations
|
- | - | - | - | - | |||||||||||||||
Net loss
|
$ | (4,503,675 | ) | $ | (224,614 | ) | $ | - | $ | (399,911 | ) | $ | (5,128,200 | ) | ||||||
Net loss per share, basic and diluted
|
||||||||||||||||||||
Continuing operations
|
$ | (6.44 | ) | $ | (449.23 | ) | $ | - | $ | (2.47 | ) | |||||||||
Discontinued operations
|
$ | - | $ | - | $ | - | $ | - | ||||||||||||
Basic and diluted net loss per share
|
$ | (6.44 | ) | $ | (449.23 | ) | $ | - | $ | (2.47 | ) | |||||||||
Weighted average number of shares outstanding,
|
||||||||||||||||||||
Basic and diluted
|
699,614 | 500 | 699,614 | 2,079,758 | ||||||||||||||||
No dividends declared or paid
|
$ | - | $ | - | $ | - | ||||||||||||||
Book value per share,
|
||||||||||||||||||||
Basic
|
$ | 3.65 | $ | 5,948.63 | $ | 5.01 | ||||||||||||||
Diluted
|
$ | 2.41 | $ | 58.90 | $ | 0.57 | ||||||||||||||
Weighted average number of shares outstanding, book value per
share purposes only (9)
|
||||||||||||||||||||
Basic
|
699,614 | 500 | 2,079,758 | |||||||||||||||||
Diluted
|
1,061,229 | 50,500 | 18,243,723 |
Payment for North South’s Cash Balance
|
$
|
2,684,363
|
||
Payment for North South’s Prepaid Expenses and Other Assets
|
14,503
|
|||
Payment for Patent Portfolios
|
1,100,000
|
|||
Estimated Purchase Price
|
$
|
3,798,866
|
Fair value of Common Stock
|
$
|
473,101
|
||
Fair value of Series D Convertible Preferred Stock
|
5,037,648
|
|||
Fair value of consideration for North South
|
$
|
5,510,749
|
Patent Portfolios
|
$
|
1,100,000
|
|
(1) To record August 2013, issuance of 1,689 shares of common stock for net proceeds of $1,801,060 as of June 30, 2013.
|
DR
|
CR
|
|||||||
Cash and cash equivalents
|
1,801,060 | |||||||
Additional paid in capital
|
1,801,060 |
|
(2) To record Spherix’s issuance of 1,203,153 shares of Spherix’s common stock and 1,379,685 shares of Spherix’s Series D Convertible Preferred Stock as consideration to North South Shareholders in connection with the completion of the acquisition of North South as of June 30, 2013. The fair value of the identifiable intangible assets is a preliminary estimate based on an independent appraiser’s report.
|
|
DR
|
CR
|
|||||||
Patent portfolios, net
|
307,630
|
|||||||
Goodwill
|
2,728,806
|
|||||||
Series D Convertible Preferred Stock
|
138
|
|||||||
Common Stock
|
120
|
|||||||
Accumulated deficit
|
260,567
|
|||||||
Investment in Spherix
|
500,000
|
|||||||
Additional paid in capital
|
2,275,611
|
|
(3) To record amortization expense of the patent portfolios for the year ended December 31, 2012.
|
DR
|
CR
|
|||||||
Amortization expense
|
129,412
|
|||||||
Accumulated amortization
|
129,412
|
(4) To adjust amortization expense of the patent portfolios for the six months ended June 30, 2013. |
DR
|
CR
|
|||||||
Amortization expense
|
30,192
|
|||||||
Accumulated amortization
|
30,192
|
(5) To accrue for transaction costs on the merger with North South for the quarter ended September 30, 2013. |
DR
|
CR
|
|||||||
Accumulated deficit
|
450,000
|
|||||||
Accrued expenses
|
450,000
|
|
(6) To record Spherix’s issuance of 176,991 shares of Spherix’s common stock and cash of $2,000,000 as consideration to Rockstar Consortium US LP for the purchase of a portfolio of patents as of June 30, 2013.
|
DR
|
CR
|
|||||||
Patent portfolios, net
|
3,000,000 | |||||||
Cash
|
2,000,000 | |||||||
Common stock
|
18 | |||||||
Paid-in capital
|
999,982 |
|
(7) To record amortization expense of Rockstar patent portfolios for the year ended December 31, 2012.
|
DR
|
CR
|
|||||||
Amortization expense
|
739,437 | |||||||
Accumulated amortization
|
739,437 |
(8) To record amortization expense of Rockstar patent portfolios for the six months ended June 30, 2013. |
DR
|
CR
|
|||||||
Amortization expense
|
369,719 | |||||||
Accumulated amortization
|
369,719 |
(9) To present Spherix’s common share equivalents for book value per share purposes only at December 31, 2012 and June 30, 2013.
|
Spherix
|
Historical
December 31, 2012
|
Historical
June 30, 2013
|
Pro Forma
December 31, 2012
|
Pro Forma
June 30, 2013
|
||||||||||||
Weighted average shares outstanding – basic
|
273,567 | 699,614 | 1,653,711 | 2,079,758 | ||||||||||||
Common Stock Equivalents:
|
||||||||||||||||
Convertible Preferred Stk. – Series B
|
1 | 1 | 1 | 1 | ||||||||||||
Convertible Preferred Stk. – Series C
|
- | 158,944 | - | 158,944 | ||||||||||||
Convertible Preferred Stk. – Series D
|
- | - | 13,796,850 | 13,796,850 | ||||||||||||
Warrants
|
483,657 | 75,757 | 483,657 | 75,757 | ||||||||||||
Restrictive Stock Awards
|
- | 120,250 | - | 120,250 | ||||||||||||
Options
|
7,163 | 6,663 | 7,163 | 6,663 | ||||||||||||
2013 Option Plan
|
- | - | 2,005,500 | 2,005,500 | ||||||||||||
Weighted-average shares outstanding – Diluted
|
764,388 | 1,061,229 | 17,946,882 | 18,243,723 |