HEADNOTE TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION
On February 29, 2012, Integrated Management Information, Inc. (“IMI” or the “Company”) entered into a Purchase and Exchange Agreement (the “Purchase Agreement”), dated February 29, 2012 but effective as of the close of business on December 31, 2011, by and among IMI and International Certification Services, Inc. (ICS), and other shareholders as individually named in the Agreement (collectively the “Sellers”).
Pursuant to the Purchase Agreement, on February 29, 2012 (the “Closing”) the Company acquired 60% of the issued and outstanding common stock of ICS (the “Acquisition”) in exchange for aggregate consideration of $427,778, which includes $350,000 in cash and 172,840 shares (the “Shares”) of common stock of IMI valued at approximately $77,800 based upon the closing price of our common stock on February 29, 2012, of $0.45 per share.
A preliminary allocation of the purchase price has been made to major categories of assets and liabilities in the accompanying pro forma condensed consolidated financial statements. The actual allocation of the purchase price and the resulting effect on income from operations may differ from the pro forma amounts included herein. The pro forma adjustments represent the Company’s provisional allocation of acquisition accounting adjustments and are based upon available information and certain assumptions that the Company believes to be reasonable. Consequently, the amounts reflected in the unaudited pro forma condensed consolidated financial statements are subject to change, and the final amounts may differ substantially from the provisional amounts.
The accompanying pro forma condensed consolidated balance sheet as of December 31, 2011, gives effect to the acquisition as if it had been consummated on that date. The accompanying pro forma condensed consolidated statement of operations for the year ended December 31, 2011, gives effect to the acquisition as if it had been consummated at the beginning of the period presented.
The pro forma financial information should be read in conjunction with our historical consolidated financial statements used in the presentation of the pro forma financial information. THE PRO FORMA INFORMATION PRESENTED IS NOT NECESSARILY INDICATIVE OF THAT WHICH WOULD HAVE BEEN ATTAINED HAD THE TRANSACTION OCCURRED AT THE DATES INCLUDED IN THE PRO FORMA FINANCIAL INFORMATION.
Integrated Management Information, Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheet
IMI ICS as of as of Pro Forma December 31, December 31, Pro Forma December 31, 2011 2011 Adjustments Notes 2011 Assets (historical) (historical) Current assets: Cash and cash equivalents $ 969,020 $ 13,506 $ (350,000 ) (a) $ 632,526 Accounts receivable, net 226,760 33,192 - 259,952 Investment in marketable securities 283,511 - - 283,511 Prepaid expenses and other current assets 36,776 13,952 - 50,728 Deferred tax assets 224,350 8,000 - 232,350 Total current assets 1,740,417 68,650 (350,000 ) 1,459,067 Property and equipment, net 57,354 62,668 - 120,022 Deferred tax assets, noncurrent - 13,349 13,349 Intangible assets, net 9,205 - 706,070 (c) 715,275 Other assets - 867 - 867 Total assets $ 1,806,976 $ 145,534 $ 356,070 $ 2,308,580
Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 148,384 $ 9,461 $ - $ 157,845 Accrued expenses and other current liabilities 42,960 16,213 - 59,173 Customer deposits - 14,945 - 14,945 Deferred revenue - 90,529 90,529 Short-term debt and current portion of notes payable 25,644 - - 25,644 Current portion of capital lease obligations - 5,947 - 5,947 Total current liabilities 216,988 137,095 - 354,083 Capital lease obligations, net of current portion - 1,546 - 1,546 Notes payable and other long-term debt 176,201 - - 176,201 Notes payable, related party 250,000 - - 250,000 Total liabilities 643,189 138,641 - 781,830
Integrated Management Information, Inc. Unaudited Pro Forma Condensed Consolidated Statement of Operations
IMI ICS Pro Forma Year ended Year ended Year ended December 31, December 31, Pro Forma December 31, 2011 2011 Adjustments Notes 2011 (historical) (historical) Revenues: Service revenues $ 3,329,615 $ 1,163,565 $ - $ 4,493,180 Product sales 843,098 - - 843,098 Other revenue 60,036 - - 60,036 Total revenues 4,232,749 1,163,565 - 5,396,314
Costs of revenues: Labor and other costs of services 1,282,342 594,096 - 1,876,438 Costs of products 602,049 - - 602,049 Total costs of revenues 1,884,391 594,096 - 2,478,487 Gross profit 2,348,358 569,469 - 2,917,827 Selling, general and administrative expenses 1,671,835 550,874 71,296 (e) 2,294,005 Income from operations 676,523 18,595 (71,296 ) 623,822 Other expense (income): Interest expense 29,539 1,224 - 30,763 Loss on sale of marketable securities 13,597 - - 13,597 Other income, net (6,715 ) (3,752 ) - (10,467 ) Income before income taxes 640,102 21,123 (71,296 ) 589,929 Income tax expense (benefit) (224,350 ) 8,376 - (215,974 ) Net income 864,452 12,747 (71,296 ) 805,903 Adjustment to net income for non-controlling interest - - (5,099 ) (d) (5,099 ) Net income attributable to IMI common shareholders $ 864,452 $ 12,747 $ (76,395 ) $ 800,804
Net income per share: Basic $ 0.04 $ 0.04 Diluted $ 0.04 $ 0.04
Weighted average number of common shares outstanding: Basic 20,674,739 172,840 (f) 20,847,579 Diluted 21,008,549 172,840 (f) 21,181,389
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
Market Data 
Markets 
AI
