8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): January 29, 2016

Control4 Corporation

(Exact name of registrant as specified in its charter)

Delaware	001-36017	42-1583209
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

11734 S. Election Road

Salt Lake City, Utah 84020

(Address of principal executive offices) (Zip code)

(801) 523-3100

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This 8-K/A is filed as an amendment (“Amendment No. 1”) to the Current Report on Form 8-K filed by Control4 Corporation (“Control4”) on February 4, 2016, (the “8-K”).  As previously reported in the 8-K, on January 29, 2016 Control4 completed its acquisition of all of the outstanding common stockof Pakedge Device & Software Inc., a California corporation (“Pakedge”), pursuant to a Stock Purchase Agreement dated January 29, 2016, by and among Control4 and all of the shareholders of Pakedge (the “Purchase Agreement”).

Pursuant to Instruction 4 to Item 9.01(a) and Instruction 2 to Item 9.01(b) of Form 8-K, in the 8-K Control4 stated that it intended to file the financial information required under parts (a) and (b) of Item 9.01 not later than 71 calendar days after the date that the 8-K was required to be filed with the SEC. Control4 hereby files this Amendment No. 1 to amend and supplement Item 9.01 of the 8-K in order to include the required financial statements of Pakedge and unaudited pro forma financial information of Control4 in connection with its acquisition of Pakedge, which financial statements and unaudited pro forma financial information are filed as exhibits hereto and are incorporated by reference herein.  Except for the foregoing, this Amendment No. 1 does not amend the 8-K in any way and does not modify or update any other disclosures contained in the 8-K, which remain the same and are hereby incorporated by reference into this Amendment No. 1. Accordingly, this Amendment No. 1 should be read in conjunction with the 8-K.

Item 9.01. Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired.

The audited financial statements of Pakedge as of and for the years ended December 31, 2015 and 2014 are attached as Exhibit 99.1 to this Amendment No. 1.

(b)Pro Forma Financial Information.

The unaudited pro forma condensed financial statements as of and for the year ended December 31, 2015, giving effect to Control4’s acquisition of Pakedge, are attached as Exhibit 99.2 to this Amendment No. 1.

(d)Exhibits.

Exhibit Number	Description of Exhibits
23.1	Consent of Independent Auditors for Pakedge Device & Software Inc. (WSRP, LLC).
99.1	Audited financial statements of Pakedge Device & Software Inc. as of and for the years ended December 31, 2015 and 2014.
99.2	Unaudited Pro Forma Condensed Financial Statements for Control4 Corporation and Pakedge Device & Software Inc. as of and for the year ended December 31, 2015.

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: April 13, 2016		Control4 Corporation
	By:	/s/ Mark Novakovich
		Mark Novakovich
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description of Exhibits
23.1	Consent of Independent Auditors for Pakedge Device & Software Inc.  (WSRP, LLC).
99.1	Audited financial statements of Pakedge Device & Software Inc. as of and for the years ended December 31, 2015 and 2014.
99.2	Unaudited Pro Forma Condensed Financial Statements for Control4 Corporation and Pakedge Device & Software Inc. as of and for the year ended December 31, 2015.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements (Form S-8 No.’s 333-190326 and 333-197836) of the Control4 Corporation 2013 Stock Option and Incentive Plan and the Control4 Corporation 2003 Equity Incentive Plan of our report dated March 30, 2016, with respect to the financial statements of Pakedge Device & Software, Inc. included in this Current Report on Form 8-K/A of Control4 Corporation.

/s/ WSRP, LLC

Salt Lake City, Utah

April 13, 2016

EX-99.1

Exhibit 99.1

PAKEDGE DEVICE & SOFTWARE, INC

FINANCIAL STATEMENTS

December 31, 2015and 2014

CONTENTS

INDEPENDENT AUDITORS' REPORT	3
BALANCESHEETS	5
STATEMENTS OF OPERATIONS	6
STATEMENTS OF STOCKHOLDERS' EQUITY	7
STATEMENTS OF CASH FLOWS	8
NOTES  TO  FINANCIALSTATEMENTS	9

INDEPENDENT AUDITORS' REPORT

To the Stockholders

Pakedge Device & Software, Inc.

Hayward, California

We have audited the accompanying financial statements of Pakedge Device & Software, Inc. (a California corporation), which comprise the balance sheets as of December 31, 2015 and 2014, and the related statement of operations, stockholders' equity, and cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of the accounting policies used and reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Pakedge Device & Software, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Salt Lake City, Utah

March 30, 2016

PAKEDGE DEVICE & SOFTWARE, INC

BALANCE SHEETS

December 31,2015 and2014

	2015		2014
ASSETS
CURRENT ASSETS
Cashandcashequivalents	$	1,901,165	$	2,036,945
Accountsreceivable,net		492,339		579,560
Inventories		3,259,662		2,102,590
Prepaidinventory		516,987		950,338
Prepaidexpensesandother currentassets		97,055		35,138
TOTALCURRENT ASSETS		6,267,208		5,704,571
PROPERTY AND EQUIPMENT,NET		417,788		183,220
DEPOSITS		48,019		41,007
TOTALASSETS	$	6,733,015	$	5,928,798
LIABILITIESAND STOCKHOLDER'SEQUITY
CURRENT LIABILITIES
Accountspayable	$	676,333	$	292,199
Accruedexpenses		1,495,493		1,184,456
Currentportion of warrantyaccruals		165,007		72,331
Other currentliabilities		183,942		223,517
Relatedpartyloans		1,041,193		924,007
TOTALCURRENT LIABILITIES		3,561,968		2,696,510
WARRANTY ACCRUALS,NET CURRENT PORTION		204,797		126,901
TOTALLIABILITIES		3,766,765		2,823,411
COMMITMENTSAND CONTINGENCIES(NOTE 8)		-		-
STOCKHOLDERS'EQUITY
Common stock, no par value, 1,000,000 sharesauthorized, 453,367 sharesissuedandoutstandingatDecember 31, 2015 and 2014		10,976		10,976
Retainedearnings		2,955,274		3,094,411
TOTALSTOCKHOLDERS'EQUITY		2,966,250		3,105,387
TOTALLIABILITIESANDSTOCKHOLDERS'EQUITY	$	6,733,015	$	5,928,798

Theaccompanying notes arean integralpartof thefinancialstatements

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PAKEDGE DEVICE & SOFTWARE, INC

STATEMENTS OFOPERATIONS

Yearsended December 31,2015 and2014

	2015		2014
Revenue	$	18,586,987	$	18,549,231
Cost of revenue		7,913,463		7,215,947
GROSSPROFIT		10,673,524		11,333,284
EXPENSES
Salesandmarketing		4,378,671		4,153,067
Researchanddevelopment		3,642,828		3,307,809
Generalandadministrative		2,085,787		1,691,850
TOTALOPERATING EXPENSES		10,107,286		9,152,726
OPERATINGINCOME		566,238		2,180,558
OTHERINCOME (EXPENSE)
Interestincome		949		1,637
Other income		19,733		-
Other expense		-		(469)
TOTALOTHERINCOME (EXPENSE)		20,682		1,168
NET INCOME	$	586,920	$	2,181,726

Theaccompanying notes arean integralpartof thefinancialstatements

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PAKEDGE DEVICE & SOFTWARE, INC

STATEMENTS OFSTOCKHOLDERS'EQUITY

Yearsended December 31,2015 and2014

	Common Stock
	Number of			Retained
	Shares	Amount		Earnings		Total
December 31, 2013	453,367	$	10,976	$	3,492,479	$	3,503,455
Net income	-		-		2,181,726		2,181,726
Distributions	-		-		(2,579,794)		(2,579,794)
December 31, 2014	453,367		10,976		3,094,411		3,105,387
Net income	-		-		586,920		586,920
Distributions	-		-		(726,057)		(726,057)
December 31, 2015	453,367	$	10,976	$	2,955,274	$	2,966,250

The accompanying notes are an integral part of the financial statements

7

PAKEDGE DEVICE & SOFTWARE, INC

STATEMENTS OFCASH FLOWS

Yearsended December 31,2015 and2014

	2015		2014
CASH FLOWSFROMOPERATINGACTIVITIES
Netincome	$	586,920	$	2,181,726
Adjustments to reconcile netincome tonetcashflowsfromoperatingactivities:
Depreciation		158,301		23,907
Changes in assetsandliabilities:
Accountsreceivable		87,221		(83,051)
Inventories		(1,157,072)		168,807
Prepaidinventory		433,351		(295,469)
Prepaidexpensesandother currentassets		(61,917)		(40,629)
Deposits		(7,012)		3,029
Accountspayable		384,134		(82,748)
Accruedexpenses		311,037		211,161
Warrantyaccrual		170,572		101,390
Other currentliabilities		(39,575)		85,281
Netcashflowsprovided byoperatingactivities		865,960		2,273,404
CASH FLOWSFROMINVESTINGACTIVITIES
Purchases of propertyandequipment		(392,869)		(184,606)
Netcashflowsused in investingactivities		(392,869)		(184,606)
CASH FLOWSFROMFINANCINGACTIVITIES
Repayment of relatedpartyloans		(245,435)		-
Proceedsfromissuance of relatedpartyloans		362,621		374,626
Distributions to stockholders		(726,057)		(2,579,794)
Netcashflowsused in financingactivities		(608,871)		(2,205,168)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(135,780)		(116,370)
CASH AND CASH EQUIVALENTS AT BEGINNING OFYEAR		2,036,945		2,153,315
CASH AND CASH EQUIVALENTS AT END OFYEAR	$	1,901,165	$	2,036,945
SUPPLEMENTALCASH FLOWINFORMATION:
Cashpaidfor interest	$	-	$	-
Cashpaidfor income taxes	$	-	$	-

The accompanying notes are an integral part of the financial statements

8

PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Activity

Pakedge is an industry leading manufacturer of high performance end-to-end networking platforms for residential and commercial audiovisual applications. Pakedge specializes in integrating high performance engineering innovations, operational simplicity, and systems engineering to develop technology that enables customers to unleash the power of their network.

Pakedge Device & Software, Inc. (Pakedge or the Company) was incorporated in the State of California on July 12, 2004. On July 1, 2011 the Company, with the consent of its stockholders, elected under the Internal Revenue Code to be an S corporation. In January 2016, the Company was acquired by Control4 Corporation (“Control4”). See Note 1, "Subsequent Events ", for further discussion.

Basis of Accounting

The financial statements of the Company have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America.

Concentrations of Credit Risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash balances in banks and trade accounts receivable.

The Company maintains its cash balances at one financial institution. At times cash balances may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash.

The Company believes it is not exposed to any significant credit risk on trade accounts receivable due to the large number of customers comprising the Company's customer base and because the Company routinely assesses the financial strength of its customers before extending credit.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates including those related to sales returns, provisions for

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

doubtful accounts, product warranty, inventory obsolescence, depreciation and litigation. Actual results could differ from those estimates.

Warranties

The Company provides its customers a limited product warranty of three years, which requires the company, at its option, to repair or replace defective products and records a reserve at the time revenue is recognized. The Company assesses the adequacy of its recorded warranty liability each period and makes adjustments to the liability as necessary. Warranty costs accrued include amounts accrued for parts and labor.

The following table presents the changes in the product warranty accrual:

	2015		2014
Balance at the beginning of year	$	199,232	$	97,842
Warranty costs accrued		501,165		403,908
Warranty claims		(330,593)		(302,518)
Balance at the end of year	$	369,804	$	199,232

Revenue Recognition

The Company’s products include embedded software that is essential to the functionality of the hardware. Accordingly, the hardware and embedded software are accounted for as a single deliverable. The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) shipment of the product has taken place, (iii) collectability is reasonably assured, and (iv) sales price is fixed and determinable. Certain judgments affect the application of its revenue policy. Revenue consists of the sale of high performance end- to-end networking platforms for residential and commercial audio/visual applications. Revenue on the sale of hardware is recognized upon shipment.

We recognize revenue, net of estimated sales returns, sales incentives, discounts, volume incentive rebates and sales tax. We account for shipping and handling fees billed to customers as revenue. Sales taxes collected from customers are remitted to governmental authorities, are not included in revenue, and are reflected as a liability on our balance sheet.

Under certain circumstances, we offer refunds and rights of return with our customers and end-users. Below is a summary of the general provisions of such policies and programs:

- Full refund when the product is returned within 30 days of purchase

- Partial credit when the product is returned within 6 months at the demonstration purchase price value

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

Accordingly, the Company maintains a reserve for such returns based on the Company's historical return experience.

Cost of Revenue

Cost of revenue includes the following: the cost of inventory sold during the period, inventory write-down costs, payroll, purchasing costs, shipping and handling expenses to customers and warehousing costs, which include inbound freight costs from manufacturers, rent and payroll benefit costs and depreciation.

Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company places its cash deposits and cash investments with financial institutions.

Allowance for Doubtful Accounts

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts to reserve for potential uncollectible receivables. The allowance is based upon the credit worthiness of the Company's customers and their historical payment experience, the age of the receivables and current market and economic conditions. The Company writes off accounts receivable balances to the allowance for doubtful accounts when it becomes likely that they will not be collected. As of December 31, 2015 and 2014 the allowance for doubtful accounts was $10,000.

The following table presents the changes in the allowance for doubtful accounts:

	2015		2014
Balance at the beginning of year	$	10,000	$	10,000
Provision		5,748		703
Deductions		(5,748)		(703)
Balance at the end of year	$	10,000	$	10,000

Inventories

Inventories consist of hardware and related component parts and are stated at the lower of cost or market using the first-in, first-out method. The company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write-downs for excess, defective and obsolete inventory are recorded as a cost of revenue.

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

The following table presents the changes in the reserve for excess and obsolete inventory:

	2015		2014
Balance at the beginning of year	$	192,130	$	223,630
Additions charged to cost of revenue		305,468		312,793
Write-offs		(227,378)		(344,293)
Balance at the end of year	$	270,220	$	192,130

The Company makes partial deposits on inventory prior to inventory entering production. These deposits range from 20% to 50% and are recorded as prepaid inventory assets on the balance sheet.

Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Expenditures that increase values or extend useful lives are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Depreciation begins in the month of acquisition or when constructed or developed assets are ready for their intended use.

Furniture, fixtures and computer equipment	5 - 7 years
Manufacturing and tooling	2 - 4 years

Maintenance and repairs that do not extend the life of or improve the asset are expensed in the year incurred. Leasehold improvements are depreciated over the estimated useful life (usually 3-15 years) or the life of the associated lease, whichever is less.

Impairment of Long-Lived Assets

The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis.

Income Taxes

The Company has elected S corporation status for Federal and State income tax purposes and is disregarded for U.S. federal income tax purposes. Federal and some State income taxes on the earnings of an S corporation are payable by the individual stockholders rather

12

PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

than the corporation. Accordingly, no provision or liability for federal or state income taxes has been included in the financial statements.

The Company follows the provisions of FASB ASC 740-10 relating to accounting for uncertainty in income taxes. The Company recognizes uncertain income tax positions taken on income tax returns at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of operating expense. There was no impact to the results of operations and financial positions as a result of these provisions. For the years prior to 2011 the Company is no longer subject to federal, state and local income tax examinations.

Research and Development

Research and development expenses consist primarily of personnel costs, including incentive compensation, depreciation associated with research and development equipment, contract labor and consulting services, facilities, and travel. Research and development costs are expensed as incurred.

Advertising and Promotion

All costs associated with advertising and promoting the Company's goods and services are expensed in the year incurred. Advertising expense totaled $56,693 and $74,301 for the years ended December 31, 2015 and 2014, respectively.

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under current guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration included in the transaction price and allocating the transaction price to each separate performance obligation. At its July 9, 2015 meeting, the FASB affirmed its proposal to defer the effective date of this ASU for reporting periods beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning on or after December 15, 2016. The Company is currently in the process of evaluating the impact of adoption of this ASU on its financial statements.

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

In August 2014, the FASB issued ASU 2014-15, ‘‘Presentation of Financial Statements - Going Concern (Subtopic 205-40).’’ The amended guidance requires an entity to prepare financial statements under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting, if liquidation of the entity becomes imminent. The guidance is effective for the annual period ending on December 31, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance will not have an impact on the Company’s results of operations, financial position, or cash flows.

In July 2015, the FASB issued ASU 2015-11, “Inventory (Subtopic 330) – Simplifying the Measurement of Inventory.” This update requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and the retail inventory method (RIM) are not impacted by the new guidance. The guidance is effective in fiscal years beginning after December 15, 2016. Prospective application is required. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently in the process of evaluating the impact of adoption of this ASU on its financial statements.

Recently Issued Accounting Standards (continued)

In February 2016, the FASB issued ASU 2016-02, “Leases” which provides guidance for leases. The standard’s core principle is to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information. This standard is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on its financial statements.

There were no other new accounting standards that had a material impact on the Company’s financial statements during Fiscal 2015, and there were no other new accounting standards or pronouncements that were issued but not yet effective that the Company expects to have a material impact on its financial position or results of operations upon becoming effective.

Subsequent Events

Management of the Company has evaluated subsequent events through March 30, 2016, which is also the date the financial statements were available to be issued. During this period the Company made distributions to the stockholders of $126,020 and on January 29, 2016, the Company entered into a Stock Purchase Agreement (the "Purchase Agreement") with Control4 Corporation. In accordance with the terms of the Purchase Agreement, Control4 agreed to acquire all of the outstanding shares of common stock of the Company for a price of $32.0 million. After customary working capital adjustments and net of cash in the Company as of the closing date, the total purchase price is expected to be approximately $32.7 million.

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

No additional subsequent events were noted that required recognition or disclosure.

NOTE 2 - INVENTORIES

	2015		2014
Finished goods	$	1,689,306	$	1,056,671
Component parts		1,840,576		1,238,049
Reserve for excess and obsolete inventory		(270,220)		(192,130)
Balance at the end of year	$	3,259,662	$	2,102,590

NOTE 3 - PROPERTY AND EQUIPMENT

	2015		2014
Manufacturing tooling and test equipment	$	434,736	$	88,788
Furniture, fixtures and computer equipment		275,115		246,409
Leasehold improvements		1,447		1,447
		711,298		336,644
Less accumulated depreciation		(293,510)		(153,424)
Net book value	$	417,788	$	183,220

NOTE 4 - STOCKHOLDERS' EQUITY

The Company has one class of common stock, no par value and is authorized to issue 1,000,000 shares. Each share of common stock is entitled to one vote. The stockholders, also the three directors of the Company, are the registered and beneficial holders of the following numbers of shares of the Company:

Stockholder 1	335,400
Stockholder 2	94,600
Stockholder 3	23,367
	453,367

As of December 31, 2015 and 2014, there were 1,000,000 shares authorized and 453,367 issued and outstanding.

NOTE 5 - RELATED PARTY TRANSACTIONS

At December 31, 2015 and 2014, the Company had loans and cash advances with officers and stockholders of $1,041,193 and $924,007, respectively. These loans and cash advances carry no interest and are payable upon demand.

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

The Company receives software consulting services from an entity controlled by a stockholder. During the years ended December 31, 2015 and 2014, expense for these services were $283,686 and $541,429, respectively.

During the years ending December 31, 2015 and 2014, the Company made distributions to stockholders of $726,057 and $2,579,794, respectively.

NOTE 6 - ACCRUED EXPENSES

	2015		2014
Sales returns	$	406,818	$	395,730
Compensation accruals		663,924		711,678
Regulatory accrual (Note 8)		300,000		-
Other accrued liabilities		124,751		77,048
	$	1,495,493	$	1,184,456

NOTE 7 - LINE OF CREDIT

The Company has a $1,200,000 line of credit with a financial institution. The line of credit carries a floating interest rate at the greater of the prime index rate (3.5% at December 31, 2015), which is set by the financial institution, plus 1.0%, or the floor rate of 5.0% and is collateralized by the Company's inventory and equipment. At December 31, 2015 and 2014, there were no outstanding balances on the line of credit.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

The Company entered into a verbal unit commitment with a vendor to purchase 30,000 units by May 2017 and 15,000 units by November 2017. If the Company does not meet the required minimum quantities they will be required to pay tooling costs of approximately

$30,000.

The Company accrued approximately $300,000 as a reserve against potential costs associated with regulatory compliance issues, which were unresolved at the time of the sale of the business.

In the normal course of business, the Company is party to various claims, actions, and complaints. In the opinion of management, other than the items outlined in these financial statements, the resolution of these matters will not have a material adverse effect on the Company's financial position.

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PAKEDGE DEVICE & SOFTWARE, INC

NOTES TOFINANCIAL STATEMENTS

December 31,2015 and2014

NOTE 9 - OPERATING LEASES

The Company leases office and warehouse space under operating leases that expire between 2018 and 2020. The terms of the leases include escalating payments and a rent holiday. The lease includes options for the Company to extend the leases. The Company recognizes rental expense under these operating leases on a straight-line basis over the lives of the leases and has accrued for rental expense recorded but not paid. Rental expense for the years ended December 31, 2015 and 2014 was $479,484 and $397,300, respectively.

Future minimum rental payments required under the operating leases consist of the following as of December 31, 2015.

2016	$	322,361
2017		383,257
2018		268,267
2019		213,062
2020		72,795
	$	1,259,742

NOTE 10 - DEFINED CONTRIBUTION PLAN

The Company has a Simple IRA plan through Charles Schwab which covers full-time employees. The Company matches the employee contributions 100% up to 3% of the employee’s salary. Total contributions to the plan for the years ended December 31, 2015 and 2014 were $100,814 and $71,135, respectively.

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EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On January 29, 2016, Control4 Corporation (“Control4” or the “Company”) completed the acquisition of Pakedge Device & Software, Inc., a California corporation (“Pakedge”), for $33.0 million in cash after giving effect to final working capital adjustments, pursuant to a Stock Purchase Agreement dated January 29, 2016, by and among Control4 and all of the shareholders of Pakedge (the “Purchase Agreement”).

The unaudited pro forma condensed combined balance sheet for the year ended December 31, 2015 is based on the historical financial statements of the Company and Pakedge after giving effect to the Company’s acquisition of Pakedge and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015, combines the Company’s historical results with Pakedge’s historical results for the calendar year ended December 31, 2015 after giving effect to the Company’s acquisition of Pakedge and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined balance sheet is presented as if the acquisition of Pakedge had occurred on December 31, 2015. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015 is presented as if the acquisition of Pakedge had occurred on January 1, 2015.

The preliminary allocation of the consideration transferred used in the unaudited pro forma condensed combined financial statements is based upon preliminary estimates. The preliminary allocation of consideration transferred is subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition.  

The unaudited pro forma condensed combined financial statements, including the notes thereto, do not reflect any potential cost savings or other synergies that could result from the acquisition. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations for future periods or the results that would have been achieved if the acquisition had been consummated on the dates indicated. The pro forma adjustments are based upon information and assumptions available at the time of filing this Current Report on Form 8-K/A.

The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company and other financial information pertaining to the Company contained in its Annual Report on Form 10-K for the year ended December 31, 2015 and the Cautionary Note Regarding Forward-Looking Statements provided therein, and Pakedge’s historical financial statements and notes thereto as of and for the year ended December 31, 2015, included as Exhibit 99.1 in this Current Report on Form 8–K/A.

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CONTROL4 CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2015

(in thousands)

	Historical				Pro Forma		Adjustment	Pro Forma
	Control4		Pakedge		Adjustments		Reference	Combined
Assets
Current assets:
Cash and cash equivalents	$	29,530	$	1,901	$	(27,999)	(A)	$	3,432
Restricted cash		296		—		—			296
Short-term investments		37,761		—		—			37,761
Accounts receivable, net		21,322		492		—			21,814
Inventories		19,855		3,260		2,700	(B)		25,815
Prepaid expenses and other current assets		3,842		614		89	(C)		4,545
Total current assets		112,606		6,267		(25,210)			93,663
Property and equipment, net		6,584		418		(17)	(D)		6,985
Long-term investments		13,716		—		—			13,716
Intangible assets, net		4,547		—		23,156	(E)		27,703
Goodwill		2,760		—		13,949	(F)		16,709
Other assets		1,650		48		—			1,698
Total assets	$	141,863	$	6,733	$	11,878		$	160,474
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	17,588	$	676	$	—		$	18,264
Accrued liabilities		5,880		1,845		1,335	(G)		9,060
Deferred revenue		1,099		—		—			1,099
Related party loans		—		1,041		—			1,041
Current portion of notes payable		727		—		—			727
Total current liabilities		25,294		3,562		1,335			30,191
Revolving credit line		—		—		5,000	(A)		5,000
Notes payable		186		—		—			186
Other long-term liabilities		938		205		9,844	(H)		10,987
Total liabilities		26,418		3,767		16,179			46,364
Commitments and contingencies		—		—		—			—
Stockholders’ equity:
Common stock		2		11		(11)	(I)		2
Treasury stock		(9,020)		—		—			(9,020)
Additional paid-in capital		220,782		—		—			220,782
Accumulated deficit		(95,580)		2,955		(4,290)	(G), (I)		(96,915)
Accumulated other comprehensive loss		(739)		—		—			(739)
Total stockholders’ equity		115,445		2,966		(4,301)			114,110
Total liabilities and stockholders’ equity	$	141,863	$	6,733	$	11,878		$	160,474

See accompanying notes to unaudited pro forma condensed combined financial statements.

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CONTROL4 CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(in thousands, except per share data)

	Historical				Pro Forma		Adjustment	Pro Forma
	Control4		Pakedge		Adjustments		Reference	Combined
Revenue	$	163,179	$	18,587	$	—		$	181,766
Cost of revenue		81,645		7,913		1,936	(J)		91,494
Gross margin		81,534		10,674		(1,936)			90,272
Operating expenses:
Research and development		32,385		3,643		433	(J), (K)		36,461
Sales and marketing		32,594		4,379		1,741	(J), (K)		38,714
General and administrative		17,355		2,086		149	(K), (L), (M)		19,590
Litigation settlement		21		—		—			21
Total operating expenses		82,355		10,108		2,323			94,786
Loss from operations		(821)		566		(4,259)			(4,514)
Other income (expense):
Interest, net		202		1		(175)	(N)		28
Other expense		(765)		20		—			(745)
Total other income (expense)		(563)		21		(175)			(717)
Loss before income taxes		(1,384)		587		(4,434)			(5,231)
Income tax expense (benefit)		268		—		(1,507)	(O)		(1,239)
Net loss	$	(1,652)	$	587	$	(2,927)		$	(3,992)
Net loss per common share:
Basic	$	(0.07)						$	(0.17)
Diluted	$	(0.07)						$	(0.17)
Weighted-average number of shares:
Basic		24,121							24,121
Diluted		24,121							24,121

See accompanying notes to unaudited pro forma condensed combined financial statements.

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Control4 Corporation

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

1. Basis of Pro Forma Presentation

The unaudited pro forma condensed combined financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.

The Company accounts for business combinations pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. In accordance with ASC 805, the Company recognizes separately from goodwill, the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree, generally at the acquisition date fair value as defined by ASC 820, Fair Value Measurements and Disclosures. Goodwill as of the acquisition date is measured as the excess of the fair value of consideration transferred over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date.

The Company has made significant assumptions and estimates in determining the consideration transferred and the preliminary allocation of the consideration transferred in the unaudited pro forma condensed combined financial statements. These preliminary estimates and assumptions are subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition. These changes could result in material variances between the Company’s future financial results and the amounts presented in these unaudited pro forma condensed combined financial statements, including variances in fair values recorded, as well as expenses and cash flows associated with these items.

The unaudited pro forma condensed combined financial statements are not intended to represent or be indicative of the Company’s consolidated results of operations or financial position that would have been reported had the Pakedge acquisition been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operations or financial position. The unaudited pro forma condensed combined financial statements have been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisitions, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results. The unaudited pro forma condensed combined financial statements do not reflect any operating efficiencies and associated cost savings that the Company may achieve with respect to the combined companies. The unaudited pro forma condensed combined financial statements should be read in conjunction with the Company’s historical consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2015 and Pakedge’s historical financial statements and notes thereto as of and for the year ended December 31, 2015.

2. Pakedge Acquisition

On January 29, 2016, Control4 Corporation (“Control4” or the “Company”) completed the acquisition of Pakedge Device & Software, Inc., a California corporation (“Pakedge”), pursuant to a Stock Purchase Agreement dated January 29, 2016, by and among Control4 and all of the shareholders of Pakedge (the “Purchase Agreement”).

The total purchase price for Control4’s acquisition of Pakedge was $33.0 million in cash, which included a base purchase price of $32.0 million and $1.0 million in customary final working capital adjustments (together, the “Purchase Price”). The Purchase Price was funded as follows: (i) $5.0 million was financed by Control4 pursuant to its line of credit with Silicon Valley Bank and (ii) the balance of the Purchase Price was funded by Control4’s cash and cash equivalents.

Preliminary Allocation of Consideration Transferred

Total consideration transferred was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their preliminary fair values at the acquisition date as set forth below, with such preliminary fair values being subject to final review and analysis and consideration of the tax implications of the fair value allocations. The Company believes that the acquisition of Pakedge will allow the Company to offer innovative,

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integrated networking capabilities, which ensures Control4 consumers have a foundational system of connectivity that enables the seamless integration of connected devices throughout the home. Management estimated the fair values of tangible and intangible asset and liabilities in accordance with the applicable accounting guidance for business combinations. The preliminary amount of consideration transferred is subject to change during the measurement period (up to one year from the acquisition date) as the Company finalizes the valuation of certain tangible and intangible assets acquired and liabilities assumed in connection with the acquisition. The Company expects the allocation of the consideration transferred to be final within the measurement period (up to one year from the acquisition date).

The Company’s preliminary allocation of consideration transferred for Pakedge is as follows (in thousands):

	Estimated Fair Value
Cash	$	843
Accounts receivable		470
Inventory		5,784
Other assets acquired		754
Property and equipment, net		384
Intangible assets		23,156
Goodwill		13,511
Total assets acquired		44,902
Deferred tax liability		9,824
Other liabilities assumed		2,079
Total net assets acquired	$	32,999

3. Pro Forma Adjustments

The unaudited pro forma condensed combined balance sheet and statement of operations give effect to the following pro forma adjustments:

(A)         Adjustment to record the cash consideration transferred to the former Pakedge stockholders.

Cash paid	$	27,999,000
Revolving credit line		5,000,000
Total purchase price	$	32,999,000

(B)         Adjustment to re-measure the acquired inventory to fair value and to conform to Control4’s accounting policies. The fair value was determined based on the estimated selling price of the inventory, less selling costs and a normal profit margin.

(C)         Adjustment to reflect debt issuance costs associated with the revolving credit line used to finance the acquisition of Pakedge.

(D)         Adjustment to re-measure the acquired property and equipment to fair value and to conform to Control4’s accounting policies.

(E)         Adjustment to record the preliminary fair value of the following identifiable intangible assets:

	Intangible Asset
	Amount
Dealer network	$	8,825,000
Trademark/tradename		4,410,000
Developed technology		9,679,000
Non-compete agreements		242,000
Total	$	23,156,000

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(F)         Adjustment to record goodwill.

(G)         Adjustment to accrue for estimated transaction costs expected to be incurred in closing the transaction that have not been expensed in the historical income statement.

(H)         Adjustment to record the deferred tax liability resulting from Control4’s acquisition of Pakedge.

(I)Adjustments to record the elimination of Pakedge’s historical stockholders’ equity.

(J)Adjustments to record the amortization expense related to the intangible assets acquired as if the acquisition had occurred on January 1, 2015. Estimated amortization expense by intangible asset category and the respective estimated useful life of each intangible asset category are shown below:

	Intangible Asset		Estimated	Estimated
	Amount		Useful Life	Amortization Expense
Dealer network	$	8,825,000	8 years	$	1,103,125
Trademark/tradename		4,410,000	12 years		367,500
Developed technology		9,679,000	5 years		1,935,800
Non-compete agreements		242,000	2 years		121,000
Total	$	23,156,000		$	3,527,425

(K)         Adjustment to record stock-based compensation expense associated with RSU grants issued to continuing employees of Pakedge as part of the Purchase Agreement as if the acquisition had occurred on January 1, 2015.

	Stock-based
	Compensation
Research and development	$	312,000
Sales and marketing		270,000
General and administrative		97,500
Total	$	679,500

(L)         Adjustments to record additional depreciation expense of $44,000 had the acquisition occurred on January 1, 2015.

(M)        Adjustment to record amortization expense of $7,000 related to debt issuance costs had the acquisition occurred on January 1, 2015.

(N)Adjustment to record interest expense related to interest on the revolving credit line to finance the acquisition of Pakedge had the acquisition occurred on January 1, 2015. Advances made pursuant to the line of credit are either (i) Prime Rate Advances, which bear interest at the Prime Rate plus a Prime Rate Margin of either 0% or 0.25%, depending on Control4’s leverage ratio for the subject quarter, or (ii) LIBOR Rate Advances, which bear interest at the LIBOR Rate plus a LIBOR Rate Margin of either 2.50% or 2.75%, depending on Control4’s leverage ratio for the subject quarter. The effect of a 1/8 percent variance in the interest rate on net income is $6,000.

(O)         Reflects the estimated tax benefit that would have been recognized as a result of the assumed reduction of taxable income.

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