The following selected unaudited financial data should be read in conjunction with the historical consolidated financial statements of Access Integrated Technologies, Inc. (“AccessIT”) and FiberSat Global Services, LLC (“FiberSat”), including the notes thereto. The unaudited pro forma condensed combined information is presented for illustrative purposes only and is not necessarily indicative of the results of operations or financial position that would have occurred if the transactions had been actually completed at the dates indicated, nor is it necessarily indicative of future results of operations or financial position of the combined companies. The unaudited pro forma condensed combined balance sheet has been prepared to reflect the acquisition of FiberSat by AccessIT as if the acquisition had occurred as of September 30, 2004 by combining the separate balance sheets of AccessIT and FiberSat as of that date. The unaudited pro forma condensed combined statement of operations for the year ended March 31, 2004 has been prepared to reflect the acquisition of FiberSat as if the transaction had occurred as of April 1, 2003 by combining the separate historical statements of operations of FiberSat for the fiscal year ended December 31, 2003 and AccessIT for the fiscal year ended March 31, 2004. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2004 has been prepared to reflect the acquisition of FiberSat as if the acquisition had occurred as of the beginning of the period presented by combining the separate historical statements of operations of FiberSat for the nine months ended September 30, 2004 and AccessIT for the six months ended September 30, 2004.
On November 17, 2004, AccessIT completed the acquisition of FiberSat by issuing 540,000 shares of restricted Class A Common Stock and paying approximately $381 in cash. We also incurred direct transaction costs of approximately $180 related to the FiberSat acquisition. In addition, AccessIT may be required to pay a contingent purchase price for any of the three years following the acquisition in which certain earnings targets are achieved. The Company has also agreed to a one-time issuance of up to additional 100,000 Class A Shares if, in accordance with an agreed upon formula, the market value of the Company’s Class A Shares is less than 80% of the closing trading price on the closing date.
The acquisition of FiberSat will be accounted for using the purchase method of accounting and, accordingly, the assets, liabilities and results of operations of FiberSat will be included in the company’s consolidated financial statements subsequent to the acquisition date. The unaudited pro forma condensed combined financial statements include adjustments, which are based upon preliminary estimates, to reflect the allocation of the purchase price to the acquired assets and assumed liabilities of FiberSat.
Exhibit 99.4
| Historical |
Pro Forma | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AccessIT |
FiberSat |
Pre-Acquisition Adjustments |
Acquisition Adjustment |
Combined | |||||||||||||
| ASSETS | |||||||||||||||||
| CURRENT ASSETS | |||||||||||||||||
| Cash and cash equivalents | $ | 2,778 | $ | 421 | $ | (75) | (1) | $ | (560) | (2) | $ | 2,564 | |||||
| Accounts receivable | 775 | 49 | -- | 824 | |||||||||||||
| Prepaids and other current assets | 500 | 61 | -- | 561 | |||||||||||||
| Unbilled revenue | 38 | -- | -- | 38 | |||||||||||||
| Total current assets | 4,091 | 531 | (75) | (560) | 3,987 | ||||||||||||
Property and equipment, net | 6,318 | 2,693 | (200) | (1) | (329) | (6) | 8,482 | ||||||||||
| Intangible assets, net | 3,495 | -- | 560 | (3) | 4,055 | ||||||||||||
| Capitalized software costs, net | 1,605 | -- | -- | 1,605 | |||||||||||||
| Goodwill | 5,371 | -- | -- | 97 | 5,468 | ||||||||||||
| Deferred costs | 199 | -- | -- | 199 | |||||||||||||
| Unbilled revenue, net of current portion | 82 | -- | -- | 82 | |||||||||||||
| Security deposits | 326 | 4 | -- | 330 | |||||||||||||
| Total assets | $ | 21,487 | $ | 3,228 | $ | (275 | ) | $ | (232 | ) | $ | 24,208 | |||||
| LIABILITIES, REDEEMABLE STOCK AND | |||||||||||||||||
| STOCKHOLDERS' EQUITY CURRENT LIABILITIES | |||||||||||||||||
| Accounts payable and accrued expenses | $ | 1,241 | $ | 834 | $ | (55) | (1) | -- | $ | 2,020 | |||||||
| $ | (449) | (7) | $ | (449) | (7) | ||||||||||||
| Current portion of notes payable | 999 | 171 | (171) | (1) | -- | 999 | |||||||||||
| Advances payable | -- | 63 | (63) | (1) | -- | -- | |||||||||||
| Current portion due to contractor | -- | 150 | (150) | (1) | -- | -- | |||||||||||
| Current portion of customer security deposits | 40 | 82 | -- | -- | 122 | ||||||||||||
| Current portion of capital leases | 12 | 773 | (301) | (1) | -- | 484 | |||||||||||
| Current portion of deferred revenue | 476 | 56 | -- | -- | 532 | ||||||||||||
| Current portion of deferred rent expense | 41 | -- | -- | -- | 41 | ||||||||||||
| Total current liabilities | 2,809 | 2,129 | (1,189) | -- | 3,749 | ||||||||||||
| Notes payable, net of current portion | 4,904 | -- | -- | -- | 4,904 | ||||||||||||
| Other long term liabilities | -- | 77 | (77) | (1) | -- | -- | |||||||||||
| Customer security deposits, net of current portion | 119 | 30 | -- | -- | 149 | ||||||||||||
| Deferred revenue, net of current portion | 243 | -- | -- | -- | 243 | ||||||||||||
| Capital leases, net of current portion | 25 | 181 | (55) | (1) | -- | 151 | |||||||||||
| Deferred rent expense | 927 | -- | -- | -- | 927 | ||||||||||||
| Deferred tax liability | 1,364 | -- | -- | -- | 1,364 | ||||||||||||
| Total liabilities | 10,391 | 2,417 | (1,321) | -- | (11,487) | ||||||||||||
| Redeemable Class A common stock, issued and outstanding, | |||||||||||||||||
| 53,534 shares | 244 | -- | -- | -- | 244 | ||||||||||||
| Stockholders' Equity: | |||||||||||||||||
| Class A common stock, $0.001 par value per share; | |||||||||||||||||
|
40,000,000 shares authorized; 8,530,552 shares issued and outstanding, 9,070,552 shares on a pro forma basis | 9 | -- | -- | 1 | (5) | 10 | |||||||||||
P-1
| Historical |
Pro Forma | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| AccessIT |
FiberSat |
Pre-Acquisition Adjustments |
Acquisition Adjustment |
Combined | |||||||||||||
| Class B common stock, $0.001 par value per share; 15,000,000 shares authorized; shares issued and outstanding, 1,005,811 shares |
1 | -- | -- | -- | 1 | ||||||||||||
| Treasury stock, at cost; 9,140 shares | (32 | ) | -- | -- | -- | (32 | ) | ||||||||||
| Additional paid-in capital | 28,242 | -- | -- | 1,624 | (5) | 29,866 | |||||||||||
| Deferred stock-based compensation | -- | -- | -- | -- | -- | ||||||||||||
| Accumulated deficit / retained earnings | (17,368 | ) | 811 | 1,046 | (1) | (1,857 | ) (4) | (17,368 | ) | ||||||||
| Total stockholders' equity | 11,096 | 811 | 1,046 | (232 | ) | 12,721 | |||||||||||
| Total liabilities, redeemable stock and stockholders' equity |
$ | 21,487 | $ | 3,228 | $ | (275 | ) | $ | (232 | ) | $ | 24,208 | |||||
Footnotes to Unaudited Proforma Condensed Combined Balance Sheet
(1) Represents assets and liabilities to be retained by FiberSat Global Services, LLC
(2) Represents cash paid to the owners of FiberSat Global Services LLC of $380 and AccessIT’s estimated fees and expenses in connection with the acquisition of $180
(3) Represents the approximate and preliminary value of acquired intangible assets, such as Federal Communications Commission licenses and trade name.
(4) Represents the elimination of FiberSat Global Services, LLC’s historical retained earnings
(5) Represents the issuance 540,000 shares of restricted Class A common stock to the members of FiberSat Global Services, LLC at a preliminary appraised value of $3.01 per share.
(6) Represents purchase accounting adjustment to reflect the approximate appraised value of fixed assets.
(7) Represents an adjustment for liabilities to be retained by the seller pursuant to the Asset Purchase Agreement clause which provides that AccessIT will not acquire liabilities that cause the current ratio to be less than 1, after certain adjustments are made.
P-2