Slide 1: Assets
Assets 2019 2018 (as restated) (as restated) Current assets Cash and cash equivalents $ 3,078,823 $ 9,322,369 Accounts receivable 12,911,803 9,750,284 Prepaid expenses and other current assets 1,128,647 755,625 Total current assets 17,119,273 19,828,278 Property, equipment, and software development
Slide 2: Statement of income (as restated)
2019 2018 (as restated) (as restated) Revenue, net $ 59,126,699 $ 44,603,117 Cost of revenue 30,603,583 24,374,682 Gross margin 28,523,116 20,228,435 Operating expenses Sales and marketing 5,219,521 3,740,403 Research and development 7,363,220 4,611,229 General and administrative 3,118,371 2,042,692
Slide 3: Statement of stockholder's equity
Balance at April 3, 2018 Net incomags restated Balance at December 31, 2Qik8;estated Net incomegs restated Balance at December 31, 2Qi9;estated Common Stock Shares 100 Amount Total Additional paid- Retained stockholder's in capital earnings equity $ 1,676,839 $ - $ 1,676,839 - 346,009 346,009 1,676,
Slide 4: Statement of cash flows (as restated)
2019 2018 (as restated) (as restated) Cash flows from operating activities Net income $ 4,664,285 $ 346,009 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 483,538 266,427 Amortization 2,484,526 1,851,483 Amortization of debt issuance costs 152,597 171,9
Slide 5: Note - Nature of business and organization
Note 1 - Nature of business and organization Mobile Posse, Inc. ("Mobile Posse", or the "Company") was incorporated in the State of Delaware on October 25, 2005 and is headquartered in Arlington, Virginia. On April 3, 2018 (the "Acquisition Date"), ACME Mobile, LLC ("ACME Mobile") consummated a busi
Slide 6: Intangible assets identified in the acquisition
The Company has identified intangible assets consisting of technology and trade names and trademarks totaling $7,240,000 using the valuation methods listed below and their estimated useful lives at the date of the Acquisition:
Slide 7: Fair value of technology and trade names
The fair value of technology was measured based upon significant inputs that were not observable in the market and, therefore, classified as Level 3 assets. The fair value was provided by an independent valuation firm; key assumptions included (a) management's projections of future cash flows based
Slide 8: Amortization expense of intangibles
Amortization expense totaled $1,448,000 for the year ended December 31, 2019 and $1,079,058 for the period ended December 31, 2018. The expected annual amortization expense for the next four years is listed in the table below:
Slide 9: Note - Goodwill
Note 5 - Goodwill Goodwill consists of the following as of December 31, 2019 and 2018:
Slide 10: Goodwill amortization expense
Amortization expense totaled $1,036,526 for the year ended December 31, 2019 and $772,425 for the period ended December 31, 2018. The expected annual amortization expense for goodwill is listed in the table below:
Slide 11: Note - Property and equipment
Note 6 - Property and equipment Property and equipment consist of the following as of December 31, 2019 and 2018:
Slide 12: Depreciation expense and Note 7 - Debt
Depreciation and amortization expense on property and equipment was $483,538 for the year ended December 31, 2019 and $266,427 for the period ended December 31, 2018. Note 7 - Debt Long-term debt is summarized as follows:
Slide 13: Prospect Term Loan
Prospect Term Loan On April 3, 2018 (the "Prospect Closing Date"), Mobile Posse, as borrower, and ACME Mobile, as guarantor, entered into a loan agreement (the "Prospect Term Loan Agreement") with the lenders from time to time party thereto and Prospect Capital Corporation ("Prospect") as administra
Slide 14: Interest expense and Note 8 - Income taxes
Interest expense totaled $2,221,511 for the year ended December 31, 2019 and $2,260,834 for the period ended December 31, 2018. Note 8 - Income taxes The reconciliations of the reported estimated income tax expense to the amount that would result by applying the U.S. federal statutory tax rate to th
Slide 15: Components of income taxes
The components of income taxes for the year ended December 31, 2019 and period ended December 31, 2018 are as follows:
Slide 16: Deferred tax assets and liabilities
Deferred income taxes reflect net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts reported for income tax purposes. Components of the Company's deferred tax assets and liabilities as of December 31, 2019 and 201
Slide 17: Net operating loss carryforwards
The Company has available as of December 31, 2019, approximately $1,104,000 of unused operating loss carryforwards that expire in various years through 2043 if not utilized, and that may be applied against future taxable income. Utilization of these carryforwards may be subject to a substantial annu
Slide 18: Equity awards and profits interests
The aggregate fair value of the Awards issued during the year ended December 31 2019 and period ended December 31, 2018, as determined by the Board of Managers, was approximately $3,700 and $55,000, respectively. No compensation expense related to the issuance of Awards was incurred for the year end
Slide 19: Rent, employment agreements and litigation
Rent expense totaled $536,638 and $370,624 for the year ended December 31, 2019 and period ended December 31, 2018, respectively. Employment agreement The Company has entered into employment agreements with its chief executive officer and chief financial officer. The agreements provide for a base sa
Slide 20: Restatement: balance sheet December 31, 2019
December 31, 2019 As previously reported Correction As restated Prepaid expenses and other current assets $ 304,145 $ 824,502 $ 1,128,647 Total current assets 16,294,771 824,502 17,119,273 Goodwill, net 9,631,211 (1,074,902) 8,556,309 Deferred tax asset 301,766 610,849 912,615 Total assets 33,100,08
Slide 21: Effects of errors on statements of income
The effects of these errors on the statements of income are as follows:
Slide 22: Restatement: income statement year
Year ended December 31, 2019 As previously reported Correction As restated Depreciation and amortization $ 3,099,773 $ (130,216) $ 2,969,557 Total operating expenses 18,800,885 (130,216) 18,670,669 Income from operations 9,722,231 130,216 9,852,447 Income before provision for income taxes 6,758,387
Slide 23: Effects of errors on statements of cash flows
The effects of these errors on the statements of cash flows are as follows:
Slide 24: Restatement: cash flows year
Year ended December 31, 2019 As previously reported Net income $ 4,522,681 $ Amortization 2,614,742 Change in deferred taxes (383,694) Prepaid expenses and other current assets 39,787 Accounts payable and accrued expenses 149,417 Net cash provided by operating activities 5,079,796 Net cash used in i
Slide 25: Restatement: cash flows April 3 to December 31, 2018
Period from April 3, 2018 to December 31, 2018 As previously reported Net income $ 58,260 Amortization 1,948,520 Change in deferred taxes (245,953) Prepaid expenses and other current assets 289,322 Net cash provided by operating activities 2,531,767 Net cash used in investing activities (19,441,331)