EX-99.2 2 c00052a2exv99w2.txt AMENDED UNAUDITED PRO FORMA COMBINED BALANCE SHEET EXHIBIT 99.2 BROADVIEW MEDIA, INC. AND SUBSIDIARIES UNAUDITED PROFORMA COMBINED FINANCIAL STATEMENTS On July 1, 2005, Broadview Media, Inc., ( the "Company" or "Broadview") entered into a Stock Exchange Agreement (the "Exchange Agreement") among the Company, C Square Educational Enterprises ("C Square"), which is a Utah corporation doing business as Utah Career College("UCC") , a for-profit post-secondary institution, in West Jordan, Utah, Terry L. Myhre ("Myhre"), Roger C. Kuhl ("Kuhl") and two trusts established by Norman H. Winer (the "Winer Trusts"). Messrs. Myhre and Kuhl and the Winer Trusts (collectively, the "Sellers") were the owners of 100% of the issued and outstanding common stock of C Square. Pursuant to the Exchange Agreement on July 1, 2005, Sellers transferred all of their shares of C Square common stock to the Company in exchange for five million shares of the Company's common stock. Mr. Myhre is a major stockholder, director, Chairman and Chief Executive Officer of the Company, and he also was the majority shareholder, and a director and officer of C Square. In accordance with Financial Accounting Standards Board, Statement of Financial Accounting Standards No. 141, "Business Combinations," the acquisition of C Square has been accounted for as a merger of an entity under common control. Accordingly, the assets and liabilities acquired attributable to the controlling interest are transferred at carrying value. A portion of the purchase price has been allocated to assets and liabilities assumed of the minority interests based on fair values on the acquisition date. There being no identifiable intangible assets, the excess of the net assets acquired and the purchase price of the minority interests was allocated to goodwill. Goodwill will be reviewed annually for impairment in accordance with Statement of Financial Accounting Standards No. 142. The allocation of the aggregate purchase price reflected in the Pro Forma Financial Information is preliminary. The final allocation of the purchase price is subject to change. However, that allocation is not expected to differ materially from the preliminary allocation. The following unaudited Pro Forma Combined Balance Sheet is derived by combining the balance sheets of Broadview and C Square as of June 30, 2005, and assumes the merger took place as of June 30, 2005. The following unaudited Pro Forma Combined Statement of Operations for the three months ended June 30, 2005 is derived from the Statement of Operations of Broadview for the quarter ended June 30, 2005, combined with the Statement of Operations of C Square for the quarter ended June 30, 2005. The unaudited Pro Forma Combined Statement of Operations for the fiscal year ended March 31, 2005 is derived from combining Broadview's Statement of Operations for the fiscal year ended March 31, 2005 with the unaudited Statement of Operations of C Square for the twelve months ended March 31, 2005, to reflect the merger of C Square as if it had occurred at April 1, 2004. The unaudited Pro Forma Combined Balance Sheet and Statements of Operations should be read in conjunction with the historical financial statements of Broadview Media and C Square and the related notes thereto. The unaudited Pro Forma Combined Statements of Operations are not necessarily indicative of the results of operations that may have actually occurred had the acquisition occurred on the dates specified, or of the future results of the combined companies. The pro forma adjustments are based on available information and certain adjustments that the Company believes are reasonable. 1 EXHIBIT 99.2 BROADVIEW MEDIA, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET JUNE 30, 2005
BROADVIEW PRO FORMA PRO FORMA MEDIA C SQUARE ADJUSTMENTS COMBINED ----------- ------------ ------------ ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 72,528 $ 712,052 $ -- $ 784,580 Contract and trade receivables 435,574 208,833 -- 644,407 Estimate revenue in excess of billings on uncompleted contracts 514,994 -- -- 514,994 Inventory -- 191,307 -- 191,307 Prepaid expenses 147,025 23,487 -- 170,512 ----------- ------------ ------------ ------------ TOTAL CURRENT ASSETS 1,170,121 1,135,679 2,305,800 PROPERTY AND EQUIPMENT, NET 424,751 503,765 16,131 2 944,647 DEPOSITS 53,828 -- -- 53,828 UCC ACQUISITION FEES 49,928 -- (49,928) 3 -- GOODWILL -- -- 622,016 1,3 622,016 ----------- ------------ ------------ ------------ $ 1,698,628 $ 1,639,444 $ 588,219 $ 3,926,291 =========== ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current maturities of long-term and short-term debt $ 197,819 $ -- $ -- $ 197,819 Student credit balances -- 130,534 130,534 Accounts payable 133,372 401,414 -- 534,786 Commissions, salaries, and withholdings payable 117,536 -- -- 117,536 Accrued expenses 36,538 -- -- 36,538 Deferred gain from sale of building 16,232 -- -- 16,232 ----------- ------------ ------------ ------------ TOTAL CURRENT LIABILITIES 501,497 531,948 -- 1,033,445 ----------- ------------ ------------ ------------ LONG TERM DEBT, less current maturities 832,826 -- -- 832,826 ----------- ------------ ------------ ------------ COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock 5,000 -- -- 5,000 Common stock 27,207 70,336 (20,336) 1,4 77,207 Additional paid-in capital 2,258,497 258,338 857,194 1,4 3,374,029 Retained earnings (accumulated deficit) (1,926,399) 778,822 (248,639) 1,4 (1,396,216) ----------- ------------ ------------ ------------ 364,305 1,107,496 588,219 2,060,020 ----------- ------------ ------------ ------------ $ 1,698,628 $ 1,639,444 $ 588,219 $ 3,926,291 =========== ============ ============ ============
See notes to unaudited proforma combined financial statements. 2 EXHIBIT 99.2 BROADVIEW MEDIA, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2005
BROADVIEW PRO FORMA PRO FORMA MEDIA C SQUARE ADJUSTMENTS COMBINED ----------- ----------- ------------- ------------ REVENUES $ 708,032 $ 1,637,014 $ -- $ 2,345,046 COST OF PRODUCTS AND SERVICES SOLD 686,142 -- -- 686,142 ----------- ----------- ------------- ------------ GROSS PROFIT 21,890 1,637,014 1,658,904 OPERATING EXPENSES 297,614 1633,498 -- 1,931,112 ----------- ----------- ------------- ------------ OPERATING INCOME (LOSS) (275,724) 3,516 -- (272,208) ----------- ----------- ------------- ------------ OTHER EXPENSE Interest expense (15,403) -- -- (15,403) Other expense (106,462) -- -- (106,462) ----------- ----------- ------------- ------------ (121,865) -- -- (121,865) ----------- ----------- ------------- ------------ INCOME (LOSS) BEFORE TAXES (397,589) 3,516 -- (394,073) INCOME TAX PROVISION -- 1,300 -- 1,300 ----------- ----------- ------------- ------------ NET INCOME (LOSS) $ (397,589) $ 2,216 -- $ (395,373) =========== =========== ============= ============ NET INCOME (LOSS) PER COMMON SHARE -- BASIC AND DILUTED $ (.15) $ (.05) =========== ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -- BASIC AND DILUTED 2,720,747 5,000,000 7,720,747
See notes to unaudited proforma combined financial statements. 3 EXHIBIT 99.2 BROADVIEW MEDIA, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS YEAR ENDED MARCH 31, 2005
BROADVIEW PRO FORMA PRO FORMA MEDIA C SQUARE ADJUSTMENTS COMBINED ------------- ------------- ------------- ------------- REVENUES $ 3,347,568 $ 5,893,394 $ -- $ 9,240,962 COST OF PRODUCTS AND SERVICES SOLD 2,923,660 -- -- 2,923,660 ------------- ------------- ------------- ------------- GROSS PROFIT 423,908 5,893,394 -- 6,317,302 OPERATING EXPENSES 1,120,986 5,463,419 -- 6,584,405 ------------- ------------- ------------- ------------- OPERATING INCOME (LOSS) (697,078) 429,975 -- (267,103) ------------- ------------- ------------- ------------- OTHER INCOME (EXPENSE) Interest expense (60,475) -- -- (60,475) Interest income 196 -- -- 196 ------------- ------------- ------------- ------------- (60,279) -- -- (60,279) ------------- ------------- ------------- ------------- INCOME (LOSS) BEFORE TAXES (757,357) 429,975 -- (327,382) INCOME TAX PROVISION -- 207,586 -- 207,586 ------------- ------------- ------------- ------------- NET INCOME (LOSS) $ (757,357) $ 222,389 $ -- $ (534,968) ============= ============= ============= ============= NET INCOME (LOSS) PER COMMON SHARE -- BASIC AND DILUTED $ (.32) $ (.07) ============= ============= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -- BASIC AND DILUTED 2,345,281 5,000,000 7,345,281
See notes to unaudited proforma combined financial statements. 4 EXHIBIT 99.2 Broadview Media, Inc. and Subsidiaries Notes to Unaudited Pro Forma Combined Financial Statements 1. The issuance purchase consideration of 5,000,000 common shares estimated at $.59 per share based on third party valuations and management's estimate, adjusted to reflect goodwill on minority interest of $572,088. 2. Adjustment to increase the C Square property and equipment balance to reflect the $16,131 difference between the minority interest's book value and the estimated fair market value as of the date of merger. 3. UCC acquisition fees of $49,928 attributable to the minority interest adjusted to goodwill. 4. Adjustment of combined common shares to actual outstanding and retained earnings for the minority interest acquired. For purposes of the Pro Forma Statements of Operations, depreciation on the increase in C Square property and equipment to reflect fair value attributable to the minority interest is deemed immaterial 5