UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 9, 2012
Augme Technologies, Inc.
(Exact name of registrant as specified in Charter)
Delaware | | 333-57818 | | 20-0122076 |
(State or other
jurisdiction of
incorporation) | | (Commission
File
No.) | | (IRS Employer
Identification
No.) |
350 7th Avenue, 2nd Floor
New York, NY 10001
(Address of Principal Executive Offices)
(855) 423-5433
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On December 22, 2011, based on the recommendation of the Audit Committee, the Board of Directors determined that the Company should restate its consolidated financial statements for the fiscal years ended February 28, 2011 and 2010, for each of the quarterly periods of fiscal year 2011 and 2010, and for the first and second quarterly periods of fiscal year 2012, ending May 31, 2011 and August 31, 2011. Accordingly, on December 29, 2011, the Company announced that its previously released financial statements for these periods should not be relied upon. The Company identified the following errors within its previously issued financial statements for the periods noted.
Accounting for share-based payments and warrants - The Company corrected errors in the recognition and valuation of share-based payments. The Company incorrectly recognized warrant expense using the contractual term of the warrant rather than the vesting or service period. A substantial number of warrants issued were fully vested upon issuance. Additionally, for certain warrants issued in connection with equity financings or issued in connection with the issuance of common stock, the Company incorrectly recognized warrant expense during the period, instead of classifying the amount as an adjustment to paid in capital. Furthermore, in calculating the grant date fair value of stock options the Company used an expected life that was inconsistent with historical experience and expectations, and did not adjust the related expense for the expected pre-vesting forfeitures. The errors related to the share-based payments impact the fiscal years ended February 28, 2011 and 2010, including the quarterly interim periods of 2011 and 2010, as well as the quarterly interim periods ended May 31, 2011 and August 31, 2011.
Accounting for business combinations — The Company corrected errors in the accounting for its business acquisitions of Hipcricket, Inc. (“Hipcricket”) and JAGTAG, Inc. (“JAGTAG”). To correct the error related to the acquisition of Hipcricket, the Company has recorded, as of the date of the acquisition, an increase in the amount of $23,284,000 to goodwill and to acquisition related contingent consideration to reflect the fair value of the contingent consideration related to the earn-out. The Company also incorrectly capitalized acquisition related transaction costs for the Hipcricket and JAGTAG business acquisitions, which should be expensed as incurred. This change resulted in additional transaction expense of $696,616 during the six month period ended August 31, 2011. These acquisitions were consummated during the Company’s second quarter ended August 31, 2011.
The following tables summarize the affect of the restatement on the Company’s consolidated financial statements as of February 28, 2011 and for the three and nine month periods ended November 30, 2010, and the three and six month periods ended August 31, 2011. While the errors described above affected periods other than those discussed in this Current Report, the information relating to the three and nine month periods ended November 30, 2010 and the three month period ended August 31, 2011 is being included for purposes of comparison to the press release we issued on January 9, 2012, which is attached to this Current Report as exhibit 99.1.
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The following tables set forth summary financial data as originally reported and as restated:
| | Three Months Ended November 30, 2010 | | Nine Months Ended November 30, 2010 | |
| | As Previously
Reported | | Adjustments | | As Restated | | As Previously
Reported | | Adjustments | | As Restated | |
| | | | | | | | | | | | | |
Condensed Consolidated Statement of Income: | | | | | | | | | | | | | |
Revenue | | $ | 853,169 | | $ | | | $ | 853,169 | | $ | 1,858,209 | | | | $ | 1,858,209 | |
Cost of revenue | | 361,349 | | | | 361,349 | | 846,387 | | | | 846,387 | |
Gross profit | | 491,820 | | | | 491,820 | | 1,011,822 | | | | 1,011,822 | |
| | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | |
Selling, general and administrative | | 2,232,188 | | | | 2,232,188 | | 4,534,121 | | | | 4,534,121 | |
Stock, option and warrant expense | | 832,358 | | 216,977 | | 615,381 | | 2,246,656 | | 2,743,625 | | 4,990,281 | |
Depreciation and amortization | | 261,209 | | | | 261,209 | | 752,925 | | | | 752,925 | |
Total operating expenses | | 3,325,755 | | | | 3,108,778 | | 7,533,703 | | | | 10,277,327 | |
Loss from operations | | (2,833,935 | ) | | | (2,616,958 | ) | (6,521,881 | ) | | | (9,265,506 | ) |
Interest and other income | | 7 | | | | 7 | | 23 | | | | 23 | |
NET LOSS | | $ | (2,833,928 | ) | | | $ | (2,616,951 | ) | $ | (6,521,858 | ) | | | $ | (9,265,483 | ) |
NET LOSS PER SHARE — basic and diluted | | $ | (.05 | ) | | | $ | (.04 | ) | $ | (.11 | ) | | | $ | (.16 | ) |
WEIGHTED AVERAGE SHARES OUTSTANDING — basic and diluted | | 60,412,028 | | | | 60,412,028 | | 58,549,934 | | | | 58,549,934 | |
| | | | | | | | | | | | | | | | | | |
| | As of February 28, 2011 | |
| | As Previously
Reported | | Adjustments | | As Restated | |
| | (In thousands) | |
Condensed Consolidated Balance Sheet Data: | | | | | | | |
Goodwill | | $ | 13,106,969 | | | | $ | 13,106,969 | |
Total assets | | 32,030,876 | | | | 32,030,876 | |
Contingent Liabilities | | — | | | | — | |
Accumulated Deficit | | (39,953,047 | ) | 1,197,820 | | (38,755,227 | ) |
Additional Paid in Capital | | 70,046,761 | | (1,197,820 | ) | 68,848,941 | |
Total liabilities & shareholders’ equity | | $ | 32,030,876 | | $ | — | | $ | 32,030,876 | |
| | | | | | | | | | |
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| | Three Months Ended August 31. 2011 | |
| | As Previously
Reported | | Adjustments | | As Restated | |
| | | | | | | |
Condensed Consolidated Statement of Income: | | | | | | | |
Revenue | | $ | 1,287,122 | | $ | | | $ | 1,287,122 | |
Cost of revenue | | 412,347 | | | | 412,347 | |
Gross profit | | 874,775 | | | | 874,775 | |
| | | | | | | |
Operating expenses: | | | | | | | |
Selling, general and administrative | | 4,028,062 | | 697,439 | | 4,725,501 | |
Stock, option and warrant expense | | 2,158,113 | | (125,159 | ) | 2.032,954 | |
Depreciation and amortization | | 300,724 | | | | 300,724 | |
Total operating expenses | | 6,486,899 | | | | 7,059,179 | |
Loss from operations | | (5,612,124 | ) | | | (6,184,404 | ) |
Interest and other income | | 5,156 | | | | 5,156 | |
NET LOSS | | $ | (5,606,968 | ) | | | $ | (6,179,248 | ) |
NET LOSS PER SHARE — basic and diluted | | $ | (.08 | ) | | | $ | (.09 | ) |
WEIGHTED AVERAGE SHARES OUTSTANDING — basic and diluted | | 71,189,143 | | | | 71,189,143 | |
| | | | | | | | | | |
ITEM 7.01 REGULATION FD DISCLOSURE
Please see the information in Item 2.02 above, which is incorporated herein by this reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
99.1 Press release issued January 9, 2012
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| | Augme Technologies, Inc. |
| | (Registrant) |
| | | |
Date: January 9, 2012 | | By: | /s/ Thomas J. Virgin |
| | | Thomas J. Virgin |
| | | Chief Financial Officer |
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