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| DKAM.OB > SEC Filings for DKAM.OB > Form 8-K/A on 31-Mar-2009 | All Recent SEC Filings |
31-Mar-2009
Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
(i) The financial statements of Olifant as of February 29, 2008 are incorporated by reference to our 10Q filed March 23, 2009.
(ii) The unaudited financial statements of Olifant as of November 30, 2008 and 2007 and for each of the nine month periods ended November 30, 2008 and 2007 are incorporated by reference to our 10Q filed on March 23, 2009
(b) Pro Forma Financial Statements
Pro Forma balance sheets as of January 31, 2009 and April 30, 2008 have not been provided as the acquisition has been reflected on our January 31, 2009 balance sheet included with our 10Q filed on March 23, 2009.
What these pro forma statements show
The unaudited pro forma combined statements of operations give effect to the acquisition using the purchase method of accounting. The unaudited pro forma combined statement of operations for the year ended April 30, 2008 and nine months ended January 31, 2009 assume the merger took place on March 1, 2007.
The unaudited pro forma combined statement of operations for the year ended April 30, 2008 combine the Company's historical results of operations for the year ended April 30, 2008 with Olifant's historical results of operation for the year ended February 29, 2008. The unaudited pro forma combined statement of operations for the nine months ended January 31, 2009 combine the Company's historical results of operations for the nine months ended January 31, 2009 with Olifant's historical results of operations for the nine months ended November 30, 2008.
Basis of Presentation
The unaudited pro forma combined statements of operations reflect the Olifant acquisition accounted for using the purchase method of accounting and have been prepared on the basis of assumptions described in the notes thereto.
The unaudited pro forma combined financial data should be read in conjunction with the related notes included herein in this Current Report on Form 8-K/A and the consolidated audited and consolidated unaudited financial statements of the Company and the audited and unaudited financial statements of Olifant, which are incorporated by reference in this Current Report on Form 8-K/A. The unaudited pro forma combined financial data are not necessarily indicative of what the actual results of operations would have been had the Olifant acquisition taken place on March 1, 2007 and are not indicative of future results of operations.
UNAUDITED PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
For the Nine Months Ended January 31, 2009
Historical
----------------------------
Pro-forma Pro-forma
Company Olifant Adjustments Combined
------------ ------------ ------------ ------------
Net sales $ 2,214,710 $ 534,759 $ -- $ 2,749,469
Cost of sales 1,689,835 354,133 -- 2,043,968
------------ ------------ ------------ ------------
Gross profit 524,874 180,626 -- 705,500
Selling, general and administrative expenses 4,366,543 239,005 -- 4,605,548
------------ ------------ ------------ ------------
Loss before other income (expense) and income tax
expense (3,841,669) (58,379) -- (3,900,048)
Other income (expenses):
Interest expense (122,515) (13,655) -- (136,170)
Other income 409,000 -- -- 409,000
------------ ------------ ------------ ------------
Total other income (expenses) 286,485 (13,655) -- 272,830
------------ ------------ ------------ ------------
Loss before income taxes (3,555,184) (72,034) -- (3,627,218)
Income tax expense -- -- -- --
------------ ------------ ------------ ------------
Net loss $ (3,555,184) $ (72,034) $ -- $ (3,627,218)
============ ============ ============ ============
Net loss per share (basic and diluted) $ (0.04) $ (0.04)
============ ============
Weighted average number of common shares (basic
and diluted) 82,924,616 82,924,616
============ ============
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UNAUDITED PRO FORMA COMBINED
STATEMENTS OF OPERATIONS
For the Year Ended April 30, 2008
Historical
----------------------------
Pro-forma Pro-Forma
Company Olifant Adjustments Combined
------------ ------------ ------------ ------------
Net sales $ 4,509,070 $ 992,726 $ -- $ 5,501,796
Cost of sales 2,824,237 689,307 -- 3,513,544
------------ ------------ ------------ ------------
Gross profit 1,684,833 303,419 -- 1,988,252
Selling, general and administrative expenses 7,838,481 498,098 -- 8,336,579
------------ ------------ ------------ ------------
Loss before other income (expense) and income
expense (6,153,648) (194,679) -- (6,348,327)
Other income (expenses):
Interest expense (164,205) (13,655) -- (177,860)
Other income 6,905 -- -- 6,905
------------ ------------ ------------ ------------
Total other income (expenses) (157,300) (13,655) -- (170,955)
------------ ------------ ------------ ------------
Loss before income taxes (6,310,948) (208,334) -- (6,519,282)
Income tax expense -- -- -- --
------------ ------------ ------------ ------------
Net loss $ (6,310,948) $ (208,334) $ -- $ (6,519,282)
============ ============ ============ ============
Net loss per share (basic and diluted) $ (0.08) $ (0.08)
============ ============
Weighted average number of common shares (basic
and diluted) 80,014,601 80,014,601
============ ============
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NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
The unaudited pro forma combined financial statements give effect to The Company's acquisition of 90% of the outstanding capital stock of Olifant. The transaction was accounted for as a business combination using the purchase method of accounting under the provisions of SFAS 141.
The unaudited pro forma combined statement of operations for the year ended February 29, 2008 combine the Company's historical results of operations for the year ended April 30, 2008 with Olifant's historical results of operation for the year ended February 29, 2008. The unaudited pro forma combined statement of operations for the nine months ended January 31, 2009 combine the Company's historical results of operations for the nine months ended January 31, 2009 with Olifant's historical results of operations for the nine months ended November 30, 2008.
These unaudited pro forma combined financial statements should be read in conjunction with the historical annual and interim consolidated financial statements of the Company's filed with the Securities and Exchange Commission and the annual and interim financial statements of Olifant which are incorporated by reference within this document.
2. Purchase Price Allocation
The Company has agreed to pay the sellers $1,200,000 for its 90% interest:
$300,000 in cash and Company common stock valued at $100,000 to be paid 90 days
from the Closing date. The initial cash payment of $300,000 was reduced by
$138,000 because Olifant's liabilities exceeded the amount provided for in the
Purchase Agreement. The Company issued a promissory note for the $800,000
balance. The promissory note is payable in four annual installments, the first
payment is due one year from Closing. Each $200,000 installment is payable
$100,000 in cash and Company common stock valued at $100, with the stock value
based on the 30 trading days immediately prior to the installment date. The cash
portion of the note accrues interest at a rate of 5% per annum. The Company will
also pay contingent consideration to the sellers based on the financial
performance of Olifant. The contingent consideration terminates at the later of
(i) full payment of the promissory note or (ii) second year following Closing.
The cost of the acquisition was allocated based on management's estimates as follows:
Cash $ 17,150
Accounts receivable 87,850
Inventory 217,770
Other current assets 27,070
Trademarks and brand names 1,333,333
----------
Total assets 1,683,173
Accounts payable 483,173
----------
Net assets acquired $1,200,000
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Standard valuation procedures were used in determining the fair value of the
acquired trademarks and brand names which were determined to have lives of 15
years.
3. Pro Forma Net Loss Per Share
The unaudited pro forma combined statements of operations have been prepared as if the transaction had occurred at the beginning of the periods presented. For the year ended April 30, 2008 and for the nine months ended November 30, 2008, the pro forma net loss per share is based on the weighted average number of shares of The Company's common stock outstanding each period plus the number of shares of The Company's common stock to be issued had the transaction occurred on January 31, 2009.
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