Quarterly report pursuant to Section 13 or 15(d)

Acquisition of Verb Direct (Tables)

v3.19.3
Acquisition of Verb Direct (Tables)
9 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Schedule of Fair Value of Assets Assumed and Liabilities Acquired

The following table summarizes the provisional fair value of the assets assumed and liabilities acquired on the date of acquisition:

 

Assets Acquired:                
Other current assets   $ 2,004,000          
Property and equipment     58,000          
Other assets     1,302,000     $ 3,364,000  
Liabilities Assumed:                
Current liabilities     (2,153,000 )        
Long-term liabilities     (1,068,000 )     (3,221,000 )
Intangible assets (provisional)             10,330,000  
Goodwill (provisional)             12,347,000  
Purchase Price           $ 22,820,000  

Schedule of Pro Forma Statements of Operations

The unaudited pro forma statements of operations for the three and nine months ended September 30, 2019 and 2018 give effect to the transaction to the merger as if it had occurred on January 1, 2018.

 

    Statement of Operations  
    (Unaudited)  
   

Three Months Ended

September 30, 2019

   

Three Months Ended

September 30, 2018

   

Nine Months Ended

September 30, 2019

   

Nine Months Ended

September 30, 2018

 
    (Actual)     (Proforma)     (Proforma)     (Proforma)  
Revenue                                
Digital   $ 1,438,000     $ 1,120,000     $ 3,951,000     $ 2,970,000  
Welcome kits & fulfillment     1,164,000       1,868,000       5,213,000       5,242,000  
Shipping     271,000       479,000       1,443,000       1,128,000  
      2,873,000       3,467,000       10,607,000       9,340,000  
                                 
Cost of revenue                                
Digital     221,000       113,000       564,000       376,000  
Welcome kits & fulfillment     990,000       1,494,000       3,850,000       3,554,000  
Shipping     280,000       493,000       1,367,000       1,137,000  
      1,491,000       2,100,000       5,781,000       5,067,000  
                                 
Gross margin     1,382,000       1,367,000       4,826,000       4,273,000  
                                 
Operating Expenses:                                
Research & development     1,214,000       758,000       3,804,000       2,005,000  
Depreciation & amortization     518,000       510,000       1,530,000       1,528,000  
General & administrative     3,293,000       1,055,000       9,823,000       7,285,000  
Total operating expenses     5,025,000       2,323,000       15,157,000       10,818,000  
                                 
Loss from operations     (3,643,000 )     (956,000 )     (10,331,000 )     (6,545,000 )
                                 
Other income (expense), net                                
Other expense     (10,000 )     (24,000 )     (27,000 )     (16,000 )
Financing costs     (1,486,000 )     -       (1,625,000 )     (172,000 )
Interest expense - amortization of debt discount     (21,000 )     -       (1,647,000 )     (748,000 )
Change in fair value of derivative liability     2,802,000       341,000       3,320,000       (840,000 )
Gain on extinguishment of debt, net     (691,000 )     (1,075,000 )     1,536,000       (423,000 )
Interest expense     (68,000 )     (59,000 )     (151,000 )     (322,000 )
Total other income/ (expense), net     526,000       (817,000 )     1,406,000       (2,521,000 )
                                 
Net loss   $ (3,117,000 )   $ (1,773,000 )   $ (8,925,000 )   $ (9,066,000 )
                                 
Loss per share   $ (0.13 )   $ (0.13 )   $ (0.44 )   $ (0.69 )
Weighted average number of common shares outstanding - basic and diluted     23,155,801       13,549,270       20,300,163       13,072,089  

Schedule of Results of Operation of Subsidiary

Results of operation of Verb Direct subsequent to the acquisition are as follows:

 

    Three Months Ended
September 30, 2019
    Nine Months
Ended
September 30, 2019
 
             
Revenue   $ 2,858,000     $ 10,562,000  
Cost of revenue     1,467,000       5,705,000  
Operating expenses     2,157,000       6,174,000  
Other expenses     9,000       26,000  
Net income / (loss)   $ (775,000 )   $ (1,343,000 )