EX-99.5 5 d455682dex995.htm UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS Unaudited Pro Forma Condensed Combined Financial Statements

Exhibit 99.5

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

On October 23, 2012 (the “Closing Date”), Yelp Inc. (“Yelp” or the “Company”) through its wholly-owned subsidiary Yelp Ireland Ltd., completed the acquisition of all the outstanding equity interests of Qype GmbH (“Qype”) for approximately $24.3 million in cash and Yelp common stock with an approximate fair value of $23.3 million.

The following unaudited pro forma condensed combined financial statements have been derived by the application of pro forma adjustments to our historical consolidated financial statements. The unaudited pro forma condensed combined balance sheet as of September 30, 2012 is presented as if the acquisition had occurred on September 30, 2012. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2011 and the nine months ended September 30, 2012 for Yelp and Qype are presented as if the acquisition had occurred on January 1, 2011. The historical unaudited financial information for Qype has been reformatted from an international financial reporting standards (“IFRS”) presentation to conform to the Company’s financial statement presentation. The unaudited pro forma condensed consolidated financial statements do not purport to represent what our results of operations or financial position would have been if the transaction had occurred on the dates indicated and are not intended to project our results of operations or financial position for any future period or date.

The acquisition has been accounted for using the purchase method of accounting. Under the purchase method of accounting, the total purchase price presented in the accompanying unaudited pro forma condensed combined financial statements was allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase price over the net of the amount assigned to tangible and identifiable intangible assets acquired and liabilities assumed is considered goodwill.

All historical Qype financial data included in the pro forma condensed combined financial statements is presented in accordance with accounting principles generally accepted in the United States. For purposes of the following unaudited pro forma condensed combined financial statements, the Qype consolidated balance sheet as of September 30, 2012 has been converted at an exchange rate of $1.2855/€1, the Qype consolidated statement of operations for the twelve months ended December 31, 2011 has been converted at an average exchange rate of $1.3924/€1 and the Qype consolidated statement of operations for the nine months ended September 30, 2012 has been converted at an average exchange rate of $1.2820 /€1.

The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that we believe are reasonable. The pro forma adjustments and primary assumptions are described in the accompanying notes. The unaudited pro forma condensed combined financial statements and the related notes should be read in conjunction with the historical consolidated financial statements and the related notes of Qype included in Exhibits 99.3 and 99.4 of this Current Report on Form 8-K/A and the historical consolidated financial statements and accompanying notes of Yelp included in the Company’s prospectus filed on March 2, 2012 and 10-Q for the nine months ended September 30, 2012, respectively.


Yelp Inc.

Unaudited Pro Forma Condensed Combined Balance Sheet

September 30, 2012

(In thousands, except share and per share data)

 

     Yelp     Qype     Pro Forma
Adjustments
     Notes    Pro Forma  

Assets

              

Current assets:

              

Cash and cash equivalents

   $ 123,083      $ 266      $ (24,236   $ —         a    $ 99,113   

Restricted cash

     29        —          —          —              29   

Accounts receivable, net

     10,722        2,722        —          —              13,444   

Prepaid expenses and other current assets

     2,867        420        —          —              3,287   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total current assets

     136,701        3,407        (24,236     —              115,872   

Property, equipment and software, net

     12,623        547        —          —              13,170   

Restricted cash

     6,401        —          —          —              6,401   

Goodwill

     —          243        (243     43,830       b      43,830   

Other assets

     807        315        —          5,913       c      7,036   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total assets

   $ 156,532      $ 4,513      $ (24,479   $ 49,743          $ 186,309   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Liabilities and stockholders’ equity (deficit)

              

Current liabilities:

              

Accounts payable

     2,221        2,122        —          —              4,343   

Accrued liabilities

     10,110        2,607        (341     414       d,e      12,790   

Notes payable

     —          1,095        —          —              1,095   

Deferred revenue

     1,243        584        —          —              1,827   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total current liabilities

     13,574        6,408        (341     414            20,055   

Long term liabilities

     2        42        —          —              44   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total liabilities

     13,576        6,450        (341     414            20,099   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Commitments and contingencies

              

Shareholder Notes

     —          8,205        (8,205     —         f      —     
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Stockholders’ equity (deficit)

              

Common stock

     —          —               

Additional paid-in capital

     197,872        26,217        (26,217     23,254       g,h      221,126   

Accumulated other comprehensive income

     152        (74     —          74       g      152   

Accumulated deficit

     (55,068     (36,285     (6,068     42,354       g      (55,068
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total stockholders’ equity (deficit)

     142,956        (10,142     (32,211     65,608            166,210   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

Total liabilities and stockholders’ equity (deficit)

   $ 156,532      $ 4,513      $ (40,757   $ 66,021          $ 186,309   
  

 

 

   

 

 

   

 

 

   

 

 

       

 

 

 

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.


Yelp Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

Nine Months ended September 30, 2012

(In thousands, except per share data)

 

     Yelp     Qype     Pro Forma
Adjustments
    Notes    Pro Forma  

Net revenue

   $ 96,410      $ 8,136      $ —        $ —           $ 104,546   

Costs and expenses

             

Cost of revenue (exclusive of depreciation and amortization shown separately below)

     6,925        428        —          —             7,353   

Sales and marketing

     60,404        6,757        —          —             67,161   

Product development

     14,230        2,619        —          —             16,849   

General and administrative

     23,679        1,960        (642     —        i      24,997   

Depreciation and amortization

     4,802        102        —          1,523      j      6,427   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Total costs and expenses

     110,040        11,867        (642     1,523           122,788   

Loss from operations

     (13,630     (3,731     642        (1,523        (18,242

Other income (expense), net

     (23     (391     —          567      k      153   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Loss before income taxes

     (13,653     (4,122     642        (957        (18,089

Provision for income taxes

     (142     71        —          —             (71
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss

     (13,795     (4,051     642        (957        (18,160

Accretion of redeemable convertible preferred stock

     (31     —          —          —             (31
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss attributable to common stockholders (Class A and B)

   $ (13,826   $ (4,051   $ 642      $ (957      $ (18,191
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss per share attributable to common stockholders

             

Basic

   $ (0.27            $ (0.35
  

 

 

            

 

 

 

Diluted

   $ (0.27            $ (0.35
  

 

 

            

 

 

 

Weighted-average shares used to compute net loss per share attributable to common stockholders (Class A and B)

             

Basic

     51,176          —          969      h      52,145   
  

 

 

     

 

 

   

 

 

      

 

 

 

Diluted

     51,176          —          969           52,145   
  

 

 

     

 

 

   

 

 

      

 

 

 

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.


Yelp Inc.

Unaudited Pro Forma Condensed Combined Statement of Operations

Year ended December 31, 2011

(In thousands, except per share data)

 

     Yelp     Qype     Pro Forma
Adjustments
    Notes    Pro Forma  

Net revenue

   $ 83,285      $ 9,018      $ —        $ —           $ 92,303   

Costs and expenses

             

Cost of revenue (exclusive of depreciation and amortization shown separately below)

     5,931        656        —          —             6,587   

Sales and marketing

     54,539        10,341        —          —             64,880   

Product development

     11,586        4,009        —          —             15,595   

General and administrative

     17,234        3,000        1,067        —        i      21,301   

Contribution to the Yelp Foundation

     5,928        —          —          —          

Depreciation and amortization

     4,238        128        —          2,031      j      6,397   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Total costs and expenses

     99,456        18,134        1,067        2,031           120,688   

Loss from operations

     (16,171     (9,116     (1,067     (2,031        (28,385

Other income (expense), net

     (395     (125     —          188      k      (332
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Loss before income taxes

     (16,566     (9,241     (1,067     (1,843        (28,717

Provision for income taxes

     (102     115        —          —             13   
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss

     (16,668     (9,126     (1,067     (1,843        (28,703

Accretion of redeemable convertible preferred stock

     (189     —          —          —             (189
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss attributable to common stockholders (Class A and B)

   $ (16,857   $ (9,126   $ (1,067   $ (1,843      $ (28,892
  

 

 

   

 

 

   

 

 

   

 

 

      

 

 

 

Net loss per share attributable to common stockholders

             

Basic

   $ (1.10            $ (1.78
  

 

 

            

 

 

 

Diluted

   $ (1.10            $ (1.78
  

 

 

            

 

 

 

Weighted-average shares used to compute net loss per share attributable to common stockholders (Class A and B)

             

Basic

     15,291          —          969      h      16,260   
  

 

 

     

 

 

   

 

 

      

 

 

 

Diluted

     15,291          —          969           16,260   
  

 

 

     

 

 

   

 

 

      

 

 

 

The accompanying notes are an integral part of the unaudited pro forma condensed combined financial statements.


NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL INFORMATION

Adjustments to the unaudited pro forma consolidated balance sheet as of September 30, 2012 and consolidated statements of operations for the year ended December 31, 2011 and nine months ended September 30, 2011 for Yelp and Qype, respectively, are presented below:

 

  (a) Adjustment to reflect the cash payment to the former Qype shareholders as part of the acquisition.
  (b) Adjustments to eliminate historical Qype goodwill of approximately $0.2 million and record preliminary goodwill created as a result of the acquisition of approximately $43.7 million.
  (c) Adjustment to record preliminary fair market value estimates of content, advertisers, technology, and trade name intangible assets resulting from the acquisition.
  (d) Adjustment to eliminate the carrying amount of Qype share appreciation rights waived as a condition of the acquisition.
  (e) Adjustment to record the additional income tax liability incurred as a result of a gain recorded on the waiver of Qype shareholder notes payable waived as a condition of the acquisition, calculated based on statutory rates in effect at the balance sheet date.
  (f) Adjustment to eliminate the carrying amount of Qype shareholder notes payable waived as a condition of the acquisition.
  (g) Adjustment to eliminate Qype’s historical shareholders’ equity and reflect Yelp’s capitalization of Qype.
  (h) Adjustment to reflect the issuance of Yelp common stock to the former Qype shareholders as part of the acquisition.
  (i) Adjustment to reflect the elimination of the fair value adjustments relating to Qype’s share appreciation rights in connection with the acquisition.
  (j) Adjustment to reflect amortization expense related to content, advertisers, technology, and trade name intangible assets which are amortized on a straight line basis over 2-5 years.
  (k) Adjustment to reflect the elimination of interest expense related to Qype shareholder notes in connection with the acquisition.