September 10, 2012
VIA FACSIMILE AND OVERNIGHT COURIER
Ms. Louise Dorsey
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549-7010
Re: | Empire State Realty Trust, Inc. |
Empire State Realty OP, L.P. |
Amendment No. 3 to Registration Statement on Form S-4 |
Filed August 13, 2012 |
Amendment No. 2 to Registration Statement on Form S-11 |
Filed July 3, 2012 |
File Nos. 333-179486; 333-179486-01 |
Dear Ms. Dorsey:
On behalf of Empire State Realty Trust, Inc., a Maryland corporation (the Company) and Empire State Realty OP, L.P. (the Operating Partnership), we are responding to the September 7, 2012 oral request by the staff of the Division of Corporation Finance of the Commission (the Staff) for supplemental information providing additional analysis related to the determination by Duff & Phelps, LLC, our independent appraiser, of the value of goodwill attributed to the acquisition of the controlling interests in Empire State Building Company, L.LC. (ESBC), which is the operating lessee of the Empire State Building, relating to the Companys Registration Statements on Form S-4 (Registration No. 333-179486) and S-11 (Registration Statement No. 333-179485).
The acquisition by the Company of the controlling interest in ESBC will be accounted for as an acquisition under the acquisition method of accounting in accordance with Accounting Standards Codification 805-10, Business Combinations (ASC 805). The Company will recognize the estimated fair value of the assets and liabilities of ESBC acquired at the time of the consummation of the formation transactions. When the Company acquires such controlling interest, the operating lease will be cancelled as the operations of ESBC will be consolidated into the Companys operations. The purchase price will be allocated to any identified tangible or intangible assets the Company acquires. Since the operating lessee is an operating company and has no interest in the land and base building of the Empire State Building, the excess of the purchase price over any identified tangible and intangible asset for ESBC will be recognized as goodwill on the Companys balance sheet.
The amount of goodwill that will be recognized by the Company with respect to its acquisition of the controlling interest of ESBC on the Companys pro forma financial statements was calculated utilizing the exchange value of EBSC calculated by the Companys independent appraiser. In the Companys forthcoming amendments to its registration statements the Company is updating the exchange value information presented from the preliminary exchange values determined as of
Page 1 of 3
July 1, 2011 to the final exchange values calculated as of June 30, 2012, in each case by our independent appraiser. In addition, the Company is updating its pro forma financial statements to reflect financial information as of, and for the six months ended June 30, 2012. As a result of these updates, the amount of goodwill [and the gain on cancellation of the operating lease] the Company recognizes in its pro forma financial statements decreases. There are two primary reasons for this decrease: (i) changes in the market assumptions used to calculate the purchase price allocations and (ii) an increase in the tangible assets of ESBC resulting from increased leasing activity.
The exchange value for ESBC decreased but did not decrease materially. However, many of the elements used to calculate this exchange value did change. First, projected cash flow for ESBC was lowered as compared to the cash flows underlying the preliminary exchange value. These cash flows are based on the terms of the operating lease between ESBC, the operating lessee, and Empire State Building Associates, L.L.C. (ESBA), the lessor. Overage rent constitutes the material portion of rent paid by ESBC to ESBA. Overage rent payable by ESBC is reduced by leasing commissions, tenant improvement costs and other costs associated with leasing activities. As a result of significant leasing activities at the Empire State Building during the past year and a slower projected cash flow from property operations, projected cash flows declined and therefore caused a reduction in the net present value of the operating lease as calculated by the independent appraiser. However, market conditions improved over the past year which resulted in lower discount rates and market capitalization rates utilized by the independent appraiser which offset much of the impact of the lower projected cash flows. Therefore, there was not a material change between the preliminary and final exchange values for ESBC.
The independent appraiser then compared the value of the operating lease to an estimated market value. The value of the operating lease was determined by the independent appraiser to be higher than the market value resulting in an above-market lease. The estimated market value stayed relatively constant in the calculation of the preliminary and final exchange values. Therefore, since the value of the operating lease declined, the amount of the above-market lease liability declined as well resulting in less goodwill recognized.
In addition, as a result of the increased dollars spent in connection with the Companys leasing activities and capital expenditures over the past year, the tangible and intangible assets (tenant improvements, leasing commissions, leases in-place and leasehold improvements) of ESBC increased. Therefore, more of the purchase price for EBSC was allocated to tangible and intangible assets resulting in less goodwill.
We thank you for your prompt attention and look forward to hearing from you at your earliest convenience. Please direct any questions concerning this response to our counsel Larry Medvinsky, Esq. at (212) 878-8149 or Steven Fishman, Esq. at (212) 969-3025.
Yours truly, |
/s/ Andrew Prentice |
Andrew Prentice |
Chief Accounting Officer |
Malkin Holdings LLC |
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cc: | Jessica Barberich |
Eric McPhee
Angela McHale
David L. Orlic
Tom Kluck
Anthony E. Malkin
David A. Karp
Larry Medvinsky
Steven Fishman
Page 3 of 3
September 10, 2012
VIA FACSIMILE AND OVERNIGHT COURIER
Ms. Louise Dorsey
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549-7010
Re: | Empire State Realty Trust, Inc. |
Empire State Realty OP, L.P.
Amendment No. 3 to Registration Statement on Form S-4
Filed August 13, 2012
File Nos. 333-179486; 333-179486-01
Dear Ms. Dorsey:
On behalf of Empire State Realty Trust, Inc., a Maryland corporation (the Company) and Empire State Realty OP, L.P. (the Operating Partnership), we are resubmitting our letter dated August 27, 2012 to reflect the requested clarifications based on our discussions with the staff of the Division of Corporation Finance of the Commission (the Staff) on August 30, 2012 and September 5, 2012. These clarifications are as follows:
(1) | Whether Malkin Holdings LLC would consolidate entities other than Empire State Building Associates L.L.C., |
(2) | Whether Malkin Holdings LLC can be kicked-out as the supervisor for the non-controlled entities, and |
(3) | Our variable entity interest analysis related to the non-controlled entities. |
On behalf of the Company and the Operating Partnership, we are responding to the August 21, 2012 oral request by the Staff for supplemental information, as follows:
(1) | Provide additional analysis related to common control and the determination of non-controlled entities, |
(2) | Provide additional analysis surrounding our identification of Malkin Holdings LLC as the accounting acquirer, |
all relating to the Companys Registration Statements on Form S-4 (Registration No. 333-179486) and S-11 (Registration Statement No. 333-179485).
In addition, in accordance with the Staffs request, we are providing supplementally, an analysis as Exhibit A showing how the $1.65 million referenced in our response # 26 in the August 13, 2012 S-4 amendment was calculated.
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Following is an expanded discussion on the Companys control rights for both the Controlled and Non-Controlled Entities:
Common Control Related to the Combined Entities:
We determined that Peter L. Malkin (father) and Anthony E. Malkin (son) (collectively, the Sponsors) constitute the Control Group of the combined entities. For purposes of this analysis we applied the concepts in EITF 02-05 (not codified), Definition of Common Control, which states that common control exists in situations where immediate family members hold a controlling interest in an entity. We evaluated each entity being contributed to the formation transactions and the initial public offering to determine whether the entities are under the common control of the Sponsors.
Pre-1988 entities |
Position |
Control Through | ||
One Grand Central Place, New York, New York |
||||
60 East 42nd St. Associates L.L.C. |
Fee owner | Supervisor | ||
Lincoln Building Associates L.L.C. |
Operating lessee | Supervisor | ||
250 West 57th Street, New York, New York |
||||
250 West 57th St. Associates L.L.C. |
Fee owner | Supervisor | ||
Fisk Building Associates L.L.C. |
Operating lessee | Supervisor | ||
1359 Broadway, New York, New York |
||||
Marlboro Building Associates L.L.C. |
Owner / Operator | Supervisor | ||
First Stamford Place, Stamford, Connecticut |
||||
Fairfax First Stamford L.L.C. |
Fee owner | Supervisor | ||
Merrifield First Stamford L.L.C. |
Operating lessee | Supervisor | ||
350 Fifth Avenue (Empire State Building), |
||||
Empire State Building Associates L.L.C. |
Fee owner | Supervisor | ||
501 Seventh Avenue, New York, New York |
||||
Seventh & 37th Building Associates L.L.C. |
Fee owner | Supervisor |
The entities listed above have governing documents that pre-date the advent of the typical modern limited partnership or limited liability company agreement. Accordingly, the organizational documents do not provide for a general partner; rather they stipulate that Malkin Holdings LLC will supervise the operations of the partnership agreement. In its position as supervisor, Malkin Holdings LLCs role in the management of these entities is essentially the same as that of a general partner or managing member, except Malkin Holdings LLC is not a holder of common equity interests in these older entities. All of the investors in these entities, including the Sponsors with respect to their interests outside the supervisor, have only protective rights that are similar to that of a limited partner or non-managing member. Excluding parties related to the supervisor, no single investor or group of affiliated investors owns 50% or more of these entities. Furthermore, the agreements do not provide any organized procedure for the investors to easily unite to exercise any consent rights that they have to block any action by the supervisor.
The Sponsors, through Malkin Holdings LLC as the supervisor, direct the activities of the limited liability companies listed above with no substantive participation from the other investors. Further, such investors do not have substantive kick-out rights with respect to Malkin Holdings LLC, as the supervisor. As a result, we concluded that the entities listed above are controlled entities within the combined predecessor financial statements in accordance with ASC 810.
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Post-1988 entities |
Position | Control Through | ||
First Stamford Place, Stamford, Connecticut |
||||
First Stamford Place L.L.C. |
Owner / Operator | Managing Member | ||
Metro Center, Stamford, Connecticut |
||||
One Station Place Limited Partnership. |
Owner / Operator | General Partner | ||
383 Main Avenue, Norwalk, Connecticut |
||||
Fairfield Merrifield Associates L.L.C. |
Owner / Operator | Managing Member | ||
500 Mamaroneck Avenue, Harrison, New York |
||||
500 Mamaroneck Avenue L.P. and |
Co-tenant Owner / Operators |
General Partner | ||
10 Bank Street, White Plains, New York |
||||
1185 Bank Street L.L.C. |
Owner / Operator | Managing Member | ||
10 Union Square, New York, New York |
||||
New York Union Square Retail L.P. |
Owner / Operator | General Partner | ||
1010 Third Avenue, New York, New York |
||||
East West Manhattan Retail L.L.C. |
Owner / Operator | Managing Member | ||
77 West 55th Street, New York, New York |
||||
East West Manhattan Retail L.L.C. |
Owner / Operator | Managing Member | ||
1542 Third Avenue, New York, New York |
||||
1185 Gotham L.L.C. |
Owner / Operator | Managing Member | ||
69-97 Main Street, Westport, Connecticut |
||||
Westport Retail Co-Investors L.L.C. |
Owner / Operator | Managing Member | ||
103-107 Main Street, Westport, Connecticut |
||||
Westport Main Street Retail L.L.C. |
Owner / Operator | Managing Member | ||
Certain land parcels in Stamford, Connecticut |
||||
BBSF LLC |
Owner / Operator | Managing Member |
The above entities are governed by a typical centralized-management limited partnership / limited liability company agreement whereby the general partner or managing member has complete and exclusive discretion to manage and control the business of the partnership or limited liability company and cannot be kicked out. The only substantive rights afforded to the other investors are protective rights. For these entities, the Sponsors own and control such general partner or managing member and directly or indirectly hold common equity interests. The Sponsors have equity at risk and exercise power through such general partner or managing member rights. Since the above entities are therefore voting interest entities, we considered the control framework in ASC 810-20-25. We concluded that the entities listed above are controlled entities within the combined predecessor financial statements in accordance with EITF 04-05 and ASC 810-20-25.
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Evaluation of Non-Controlled Entities:
Non-controlled entities: |
Position | Control split between | ||
350 Fifth Avenue (Empire State Building), |
||||
Empire State Building Company L.L.C. |
Operating lessee | Supervisor / Helmsley estate 1 | ||
1333 Broadway, New York, New York |
||||
1333 Broadway Associates L.L.C. |
Owner / operator | Supervisor / Helmsley estate 2 | ||
1350 Broadway, New York, New York |
||||
1350 Broadway Associates L.L.C. |
Operating lessee | Supervisor / David M. Baldwin 3 | ||
501 Seventh Avenue, New York, New York |
||||
501 Seventh Avenue Associates L.L.C. |
Operating lessee | Supervisor / Helmsley estate 4 |
1 | Helmsley estate owns a 63.75% interest in the company. |
2 | Helmsley estate owns a 50% interest in the company. |
3 | David M. Baldwin, who is unrelated to the Sponsors, holds a 50% interest in the company as agent for a participating group of investors unrelated to the Sponsors. |
4 | Helmsley estate owns a 59.375% interest in the company. |
The non-controlled entities listed above each have a similar legal structure to the pre-1988 entities discussed above, since they too are governed by older agreements that pre-date the advent of the typical modern limited partnership or limited liability company agreement and do not designate a managing general partner or managing member. Rather, the partnership agreements convey to Malkin Holdings LLC the authority to supervise the operations of the partnership agreement, which allows Malkin Holdings LLC to direct the activities that most significantly impact the non-controlled entities economic performance. Malkin Holdings LLC has this ability despite having no equity at risk in any of the non-controlled entities. Malkin Holdings LLC is contractually entitled to receive a specified percentage of the additional amounts distributed directly from the entities or certain of the participating groups within the entities after they have received a specified rate of return on their cash investment without specifying the source of the distributions.
Interpretive Guidance:
ASC 810-10-05-8
ASC 810-10-05-8 indicates that an entity is a variable interest entity if as a group, the holders of the equity investment at risk lack the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entitys economic performance.
Analysis:
For an entity not to be a VIE, the Variable Interest Model requires that, as a group, the holders of the equity investment at risk must have the power, through voting rights or similar rights held through their equity interests, to direct the activities of an entity that most significantly impact the entitys economic performance.
The non-controlled entities are VIEs because the equity holders of the non-controlled entities (i.e., the Sponsors, the Helmsley Estate and other minority investors) do not have the power, through voting rights or similar rights held through their equity interests, to direct the activities of an entity that most significantly impact the entitys economic performance.
Page 4 of 9
ASC 810-10-25-38A
ASC 810-10-25-38A indicates that a reporting entity with a variable interest in a VIE shall assess whether the reporting entity has a controlling financial interest in the VIE and, thus, is the VIEs primary beneficiary. This shall include an assessment of the characteristics of the reporting entitys variable interest(s) and other involvements (including involvement of related parties and de facto agents), if any, in the VIE, as well as the involvement of other variable interest holders. A reporting entity shall be deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:
a. | The power to direct the activities of a VIE that most significantly impact the VIEs economic performance |
b. | The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The quantitative approach described in the definitions of the terms expected losses, expected residual returns, and expected variability is not required and shall not be the sole determinant as to whether a reporting entity has these obligations or rights. |
ASC 810-10-25-38D
ASC 810-10-25-38D indicates that if a reporting entity determines that power is, in fact, shared among multiple unrelated parties such that no one party has the power to direct the activities of a VIE that most significantly impact the VIEs economic performance, then no party is the primary beneficiary. Power is shared if two or more unrelated parties together have the power to direct the activities of a VIE that most significantly impact the VIEs economic performance and if decisions about those activities require the consent of each of the parties sharing power.
Analysis:
We note that the partnership agreements are not specific as to the types of day-to-day decisions afforded to Malkin Holdings LLC. In a typical real estate limited partnership/liability corporation, such rights are typically held by the general partner/managing member and explicitly stated in the agreement. However, this is not the case for these older vintage partnership agreements. Accordingly, as part of our evaluation under ASC 810-10, in order to determine which party has power over the partnerships i.e., the Sponsors or Malkin Holdings LLC, both of which are combined within the reporting entity, or an unrelated third party (the Helmsley Estate or David Baldwin) it was necessary for us to look to New York State general partnership law to determine which party, if any has the power to make decisions that most significantly impact the entitys economic performance given the lack of specificity within the partnership agreements.
Malkin Holdings LLCs ability to direct the activities that most significantly impact the non-controlled entities economic performance is limited by the unilateral approval right of the unrelated third parties holding a 50% or greater interest in the entities. In the event of a
Page 5 of 9
disagreement, there is no governing mechanism to resolve the disagreement and there are no substantive kick-out rights in the governing documents. Under New York general partnership law (which is applicable to these entities, because they were originally formed as partnerships, and their limited liability company conversion provided that partnership law would continue to govern the relations of the members among themselves), any unrelated party holding a 50% or greater equity interest has the rights to participate in the control of the entities. Therefore, a party holding 50% or more of the equity can prevent the Supervisor from having unilateral control over the partnership but itself cannot take control over the respective partnership. The key distinction between the non-controlled entities and the pre-1988 controlled entities is that no single investor within the controlled entities controls a 50% or greater interest. Additionally, it has been reaffirmed in writing (the Reaffirmations) with the Helmsley Estate and David Baldwin, an unrelated third party, that as the holders of the member interests in the respective non-controlled entities, they have had, and for so long as they continue to hold member interests in the entities, they will continue to have, all of the rights under New York State law of a holder of at least 50% of the interests in a partnership, including but not limited to rights to participate in the control of respective entities, all subject to the right of Malkin Holdings, LLC to exercise joint control.
Based on (1) our understanding of New York State partnership law and (2) the Reaffirmations, we have concluded that no one party has power over these partnerships and that power is shared by Malkin Holdings LLC and the unrelated parties. Accordingly, the non-controlled entities are not included as part of the historical combined group.
Following is an expanded discussion of or identification of Malkin Holdings LLC as the accounting acquirer:
For our identification of the accounting acquirer we considered the guidance in ASC 805 which requires the identification of an acquiring entity in all business combinations that are required to be accounted for using the acquisition method of accounting.
As discussed in our response dated July 3, 2012, ASC 805 provides that if a business combination has occurred but applying that guidance does not clearly indicate which of the combining entities is the accounting acquirer, then paragraph 805-10-25-5 requires the factors in paragraphs 805-10-55-11 through 55-15 to be considered in making that determination. Included within these sub-paragraphs are multiple considerations including: which entity transferred consideration, the relative voting rights in the entity after the business combination, the composition of the governing body of the combined entity, the composition of senior management of the combined entity, the terms of exchange of the equity interests and the relative size of a combining entity.
For each entity included within the Predecessor, Malkin Holdings LLC organized such entity at inception, was appointed and has served as supervisor of its operation, and is now initiating and organizing the formation transactions for the business combination and initial public offering, including coordination and oversight of the process by which consideration is allocated to all the contributing entities. The Sponsors both serve as principals of Malkin Holdings LLC, and the management team of Malkin Holdings LLC will be the Companys management team upon completion of the formation transactions and IPO.
Page 6 of 9
The formation of Malkin Holdings LLC, the Companys identified accounting acquirer, preceded the formation of all of the other entities in our Predecessor. The selection of Malkin Holdings LLC is consistent with Leslie Overtons remarks at the 2006 AICPA National Conference on Current SEC and PCAOB Developments, stating that the predecessor entity in a common control transaction is generally the entity that was first controlled by the parent, which in our case is Malkin Holdings LLC.
In determining the entity that should be the accounting acquirer, we examined all of the entities in the Predecessor. The largest, Empire State Building Associates L.L.C. (ESBA), is a limited liability company which owns through a wholly owned subsidiary the fee title to the Empire State Building and the land thereunder. ESBA does not operate the building but subleases it to Empire State Building Company L.L.C. (ESBC) pursuant to a net operating sublease. ESBAs members include the Sponsors as well as Thomas N. Keltner, Jr., an employee of Malkin Holdings LLC, which is controlled by Messrs. Malkin. Each of the Sponsors and Mr. Keltner acts as agent for participants in his respective participating group in ESBA. As discussed in the above section, ESBA is a pre-1988 entity controlled by Malkin Holdings LLC as its supervisor. Since Malkin Holdings LLC controls ESBA and was established prior to ESBA, we concluded that Malkin Holdings LLC was the most appropriate and logical entity to be the identified accounting acquirer, rather than ESBA.
Malkin Holdings LLC, as the supervisor for ESBA and the other entities in the Predecessor, directs the activities of their respective properties without participation from their other investors. If Malkin Holdings LLC were to prepare consolidated US GAAP financial statements, then ESBA and the other pre-1988 entities in the Predecessor would be a consolidated entity. ESBA and the other pre-1988 entities meet the criteria to be variable interest entities under ASC 810; and Malkin Holdings LLC, which directs the activities most significant to ESBAs and the other pre-1988 entities economic performance, is the primary beneficiary. The post-1988 entities in the Predecessor would not be included in US GAAP consolidated financial statements for Malkin Holdings LLC. Malkin Holdings LLC is neither the general partner nor the managing member nor the primary beneficiary. The Sponsors, not Malkin Holdings LLC, are the general partner or the managing member of the entities and are presumed to control in accordance with ASC 810-20-25.
Finally, we believe the selection of either Malkin Holdings LLC or ESBA would result in the same accounting treatment for our subsequent accounting post-IPO, since both Malkin Holdings and ESBA are under common control of the Sponsors. We view each of the steps relating to the formation transactions and IPO as a reorganization of entities that are (and have always been during all periods presented in the combined financial statements) under the common control of the Sponsors. Pursuant to ASC 805-50-30-5, when accounting for the transfer of assets between entities under common control, the entity that receives the net assets and liabilities transferred shall initially recognize the assets and liabilities transferred at their carrying amounts or carry-over basis. Because the Predecessor consists of the accounting acquirer and other entities, all of which are under the common control of the Sponsors, any interests contributed in the formation transactions by Messrs. Malkin or by entities which they control will be recorded at historical carrying amounts.
Page 7 of 9
We thank you for your prompt attention and look forward to hearing from you at your earliest convenience. Please direct any questions concerning this response to our counsel Larry Medvinsky, Esq. at (212) 878-8149 or Steven Fishman, Esq. at (212) 969-3025.
Yours truly, |
/s/ Andrew Prentice |
Andrew Prentice |
Chief Accounting Officer |
Malkin Holdings LLC |
cc: | Jessica Barberich |
Eric McPhee
Angela McHale
David L. Orlic
Tom Kluck
Anthony E. Malkin
David A. Karp
Larry Medvinsky
Steven Fishman
Page 8 of 9
Exhibit A
In our letter of August 13, 2012, we advised the Staff that in connection with reimbursements of other expenses and fees totaling $5.0 million received from the Helmsley Estate during 2011, approximately $1.65 million related to Controlled Entities and Non-Controlled Entities in which the Predecessor has an interest. The $1.65 million is comprised as follows:
Amount received from Helmsley Estate |
Predecessor interest % |
Predecessor interest |
||||||||||
Controlled entities |
||||||||||||
60 East 42nd St. Associates L.L.C. |
$ | 6,707 | 100 | % | $ | 6,707 | ||||||
Lincoln Building Associates L.L.C. |
469,479 | 100 | % | 469,479 | ||||||||
250 West 57th St. Associates L.L.C. |
1,929 | 100 | % | 1,929 | ||||||||
Fisk Building Associates L.L.C. |
243,071 | 100 | % | 243,071 | ||||||||
Marlboro Building Associates L.L.C. |
13,663 | 100 | % | 13,663 | ||||||||
Empire State Building Associates L.L.C. |
2,894 | 100 | % | 2,894 | ||||||||
|
|
|||||||||||
737,743 | ||||||||||||
|
|
|||||||||||
Non-Controlled entities |
||||||||||||
Empire State Building Company L.L.C. |
2,008,696 | 23.750 | % | 477,065 | ||||||||
1333 Broadway Associates L.L.C. |
401,632 | 50.000 | % | 200,816 | ||||||||
1350 Broadway Associates L.L.C. |
319,220 | 50.000 | % | 159,610 | ||||||||
501 Seventh Avenue Associates L.L.C. |
383,589 | 20.469 | % | 78,517 | ||||||||
|
|
|||||||||||
916,008 | ||||||||||||
|
|
|||||||||||
Total controlled and non-controlled |
$ | 1,653,751 | ||||||||||
|
|
Page 9 of 9
EXHIBIT A
Incremental accounting costs related to the Companys S-4 and S-11 filings for the period January 1, 2010 through March 31, 2012:
Service provider |
Total consolidation expenses |
Accounting services - expensed |
S-4 and S-11 services - deferred |
Description of services | ||||||||||
Anchin Block Anchin | $ | 2,457,921 | $ | 1,720,545 | $ | 737,376 | 3-14 financial statements, assistance with MD&A and pro forma, financial statement compilation | |||||||
Margolin Winer Evens | 4,953,380 | 3,467,366 | 1,486,014 | 3-14 financial statements, assistance with MD&A and pro forma, financial statement compilation | ||||||||||
Mark Paneth & Shron | 2,953,000 | 2,362,400 | 590,600 | Combined financial statements and assistance with MD&A | ||||||||||
Ernst & Young | 8,612,800 | 1,750,000 | 6,862,800 | Audit, S-4/S-11 assistance, and tax advisory services in connection with IPO | ||||||||||
Berdon | 425,626 | | 425,626 | Preparation of initial MD&A and analyses to include in the S-4 and S-11 | ||||||||||
Lewis Braff & Co. | 73,995 | 73,995 | | Accounting preparation work | ||||||||||
Rogoff & Company | 57,624 | 57,624 | | Accounting preparation work | ||||||||||
Deloitte | 50,000 | 50,000 | | Financial systems consulting | ||||||||||
Other | 33,670 | 33,670 | | |||||||||||
|
|
|
|
|
|
|||||||||
$ | 19,618,016 | $ | 9,515,600 | $ | 10,102,416 | |||||||||
|
|
|
|
|
|
Note: The above amounts do not include $6.9 million of accounting and auditing costs that have been expensed in Marketing, General, and Administrative. Included in the $6.9 million is $1.2 million of audit fees paid to Ernst & Young.