Business Combinations

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. Business Combinations

There were no business combinations during the six month period ended June 30, 2015.

Soft-ex Communications Limited

On May 1, 2014, WidePoint Global Solutions, Inc. (“WGS”), a wholly-owned subsidiary of the Company entered into a Share Sale and Purchase Agreement (the “Agreement”), with Gutteridge Limited (“Gutteridge”), a wholly-owned subsidiary of Soft-Ex Holdings Limited (“SHL”), and the shareholders of Soft-Ex Holdings Limited, pursuant to which WGS purchased all of the outstanding equity of Soft-ex Communications Limited (“SCL”). As a result of this transaction, SCL became a wholly-owned subsidiary of WidePoint. WidePoint acquired all of the outstanding equity of SCL for $6.0 million. The purchase price for the outstanding equity of SCL consisted of (i) the payment at closing of cash in the amount of $5 million, subject to a post-closing net working capital adjustment, and (ii) the delivery of a contingent subordinated unsecured loan note in the principal amount of $1.0 million (the “Contingent Note”). The Company’s outstanding Contingent Note was paid in full on May 30, 2015 as further described in Note 8. See Note 4 for additional information regarding the fair value of the Contingent Note.

Supplemental Unaudited Pro Forma Information

The following unaudited pro forma condensed consolidated statements of operations of WidePoint for the three and six month periods ended June 30, 2014 have been prepared as if the acquisition of SCL had occurred at January 1, 2014:

	THREE			SIX
	MONTHS ENDED			MONTHS ENDED
	JUNE 30,			JUNE 30,
	2014			2014
	(a)			(a)
	(Unaudited)
Revenues, net	$	12,871,000		$	23,930,000
Net (loss) income	$	(943,000)	(b)	$	(1,741,000)
Basic (loss) earnings per share	$	(0.013)		$	(0.025)
Diluted (loss) earnings per share	$	(0.013)		$	(0.025)

(a) To reflect on a pro forma basis unaudited consolidated financial information for the three and six month periods ended June 30, 2014 for WidePoint. The unaudited financial information presented herein were derived from historical internally prepared financial statements for SCL and WidePoint’s Form 10-Q quarterly unaudited financial statements. SCL’s financial statements are prepared in accordance with Irish GAAP, as such additional adjustments were made to convert SCL Irish GAAP presentation to a US GAAP presentation to align with WidePoint’s accounting policies. SCL’s reporting currency unit is the Euro. SCL’s US GAAP unaudited historical statement of operations for the three and six month period ended June 30, 2014 were translated into WidePoint’s reporting currency using an average USD/EURO rate of $1.3715 and $1.3709, respectively.

(b) As more fully described above under “purchase consideration”, in conjunction with the share sale and purchase agreement with SCL, WidePoint issued a subordinated unsecured loan Note in the principal amount of $1.0 million. Pro forma interest expense was calculated for this Contingent Note under the assumption that the probability of failing to generate adequate gross revenues is considered remote at this time based on projection available at the time of the transaction. Pro forma interest expense adjustments included for each of the three and six month period ended June 30, 2014 was approximately $7,500 and $15,000, respectively.