Exhibit 99.1
TOWERSTREAM CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS
| | | As Reported September30, 2015 (unaudited)(a) | | | Pro Forma Adjustments | | | Pro Forma September30, 2015 | |
Assets | | | | | | | | | | | | |
Current Assets | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 20,308,551 | | | $ | 690,278 | | | $ | 20,998,829 | |
Accounts receivable, net | | | 959,057 | | | | (458,300 | ) | | | 500,757 | |
Prepaid expenses and other current assets | | | 1,169,648 | | | | - | | | | 1,169,648 | |
Total Current Assets | | | 22,437,256 | | | | 231,978 | | | | 22,669,234 | |
| | | | | | | | | | | | | |
Property and equipment, net | | | 30,040,784 | | | | (3,288,660 | ) | | | 26,752,124 | |
| | | | | | | | | | | | | |
Intangible assets, net | | | 1,905,654 | | | | 3,288,660 | | | | 5,194,314 | |
Goodwill | | | 1,674,281 | | | | - | | | | 1,674,281 | |
Other assets | | | 3,200,142 | | | | (231,978 | ) | | | 2,968,164 | |
Total Assets | | $ | 59,258,117 | | | $ | - | | | $ | 59,258,117 | |
| | | | | | | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Current Liabilities | | | | | | | | | | | | |
Accounts payable | | $ | 1,005,813 | | | $ | - | | | $ | 1,005,813 | |
Accrued expenses | | | 2,470,314 | | | | - | | | | 2,470,314 | |
Deferred revenues | | | 1,233,981 | | | | - | | | | 1,233,981 | |
Current maturities of capital lease obligations | | | 998,986 | | | | - | | | | 998,986 | |
Other | | | 63,040 | | | | - | | | | 63,040 | |
Total Current Liabilities | | | 5,772,134 | | | | - | | | | 5,772,134 | |
| | | | | | | | | | | | | |
Long-Term Liabilities | | | | | | | | | | | | |
Long-term debt, net of debt discount of $2,316,486 | | | 34,060,563 | | | | - | | | | 34,060,563 | |
Capital lease obligations, net of current maturities | | | 1,183,172 | | | | - | | | | 1,183,172 | |
Other | | | 1,916,694 | | | | - | | | | 1,916,694 | |
Total Long-Term Liabilities | | | 37,160,429 | | | | - | | | | 37,160,429 | |
Total Liabilities | | | 42,932,563 | | | | - | | | | 42,932,563 | |
| | | | | | | | | | | | | |
Stockholders' Equity | | | | | | | | | | | | |
Common stock | | | 66,778 | | | | - | | | | 66,778 | |
Additional paid-in-capital | | | 158,278,008 | | | | - | | | | 158,278,008 | |
Accumulated deficit | | | (142,019,232 | ) | | | - | | | | (142,019,232 | ) |
Total Stockholders' Equity | | | 16,325,554 | | | | - | | | | 16,325,554 | |
Total Liabilities and Stockholders' Equity | | $ | 59,258,117 | | | $ | - | | | $ | 59,258,117 | |
| | (a) | As reported in the Company’s 10-Q for thenine months endedSeptember30, 2015, as filed onNovember 9, 2015. |
TOWERSTREAM CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2015
| | | As Reported(a) | | | Pro Forma Adjustments | | | Pro Forma | |
| | | | | | | | | | | | | |
Revenues | | $ | 23,614,519 | | | $ | (850,200 | ) | | $ | 22,764,319 | |
| | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation) | | | 18,906,738 | | | | (5,179,914 | ) | | | 13,726,824 | |
Depreciation and amortization | | | 10,224,131 | | | | (1,125,948 | ) | | | 9,098,183 | |
Customer support services | | | 3,884,506 | | | | - | | | | 3,884,506 | |
Sales and marketing | | | 4,390,560 | | | | - | | | | 4,390,560 | |
General and administrative | | | 7,491,513 | | | | - | | | | 7,491,513 | |
Total Operating Expenses | | | 44,897,448 | | | | (6,305,862 | ) | | | 38,591,586 | |
Operating (Loss) Income | | | (21,282,929 | ) | | | 5,455,662 | | | | (15,827,267 | ) |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense, net | | | (5,000,374 | ) | | | - | | | | (5,000,374 | ) |
Total Other Income/(Expense) | | | (5,000,374 | ) | | | - | | | | (5,000,374 | ) |
Net(Loss) Income | | $ | (26,283,303 | ) | | $ | 5,455,662 | | | $ | (20,827,641 | ) |
| | | | | | | | | | | | | |
Net (Loss) Income per share – basic and diluted | | $ | (0.39 | ) | | $ | 0.08 | | | $ | (0.31 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | 67,916,211 | | | | 67,916,211 | | | | 67,916,211 | |
| | (a) | As reported in the Company’s 10-Q for thenine months endedSeptember30, 2015, as filed onNovember 9, 2015. |
TOWERSTREAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2014
| | | As Reported(b) | | | Pro Forma Adjustments | | | Pro Forma | |
| | | | | | | | | | | | | |
Revenues | | $ | 33,036,153 | | | $ | (996,600 | ) | | $ | 32,039,553 | |
| | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation) | | | 24,520,028 | | | | (6,065,586 | ) | | | 18,454,442 | |
Depreciation and amortization | | | 13,639,415 | | | | 235,937 | | | | 13,875,352 | |
Customer support services | | | 4,796,038 | | | | - | | | | 4,796,038 | |
Sales and marketing | | | 5,570,191 | | | | - | | | | 5,570,191 | |
General and administrative | | | 10,336,504 | | | | - | | | | 10,336,504 | |
Total Operating Expenses | | | 58,862,176 | | | | (5,829,649 | ) | | | 53,032,527 | |
Operating (Loss) Income | | | (25,826,023 | ) | | | 4,833,049 | | | | (20,992,974 | ) |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense, net | | | (1,672,846 | ) | | | - | | | | (1,672,846 | ) |
Other income (expense) net | | | (14,349 | ) | | | - | | | | (14,349 | ) |
Total Other Income/(Expense) | | | (1,687,195 | ) | | | - | | | | (1,687,195 | ) |
(Loss) income before income taxes | | | (27,513,218 | ) | | | 4,833,049 | | | | (22,680,169 | ) |
Provision for income taxes | | | (78,532 | ) | | | - | | | | (78,532 | ) |
Net(Loss) Income | | $ | (27,591,750 | ) | | $ | 4,833,049 | | | $ | (22,758,701 | ) |
| | | | | | | | | | | | | |
Net (loss) income per share – basic and diluted | | $ | (0.41 | ) | | $ | 0.07 | | | $ | (0.34 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | 66,803,767 | | | | 66,803,767 | | | | 66,803,767 | |
| | (b) | As reported in the Company’s 10-K for the fiscal year ended December 31, 2014, as filed on March 12, 2015. |
TOWERSTREAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2013
| | | As Reported(b) | | | Pro Forma Adjustments | | | Pro Forma | |
| | | | | | | | | | | | | |
Revenues | | $ | 33,433,284 | | | $ | 239,000 | | | $ | 33,672,284 | |
| | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation) | | | 21,854,163 | | | | (4,604,024 | ) | | | 17,250,139 | |
Depreciation and amortization | | | 15,351,441 | | | | 75,998 | | | | 15,427,439 | |
Customer support services | | | 4,883,219 | | | | - | | | | 4,883,219 | |
Sales and marketing | | | 5,779,500 | | | | - | | | | 5,779,500 | |
General and administrative | | | 11,033,057 | | | | - | | | | 11,033,057 | |
Total Operating Expenses | | | 58,901,380 | | | | (4,528,026 | ) | | | 54,373,354 | |
Operating Loss | | | (25,468,096 | ) | | | 4,767,026 | | | | (20,701,070 | ) |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense, net | | | (217,741 | ) | | | - | | | | (217,741 | ) |
Gain on business acquisition | | | 1,004,099 | | | | - | | | | 1,004,099 | |
Other income (expense) net | | | (15,020 | ) | | | - | | | | (15,020 | ) |
Total Other Income/(Expense) | | | 771,338 | | | | - | | | | 771,338 | |
(Loss) income before income taxes | | | (24,696,758 | ) | | | 4,767,026 | | | | (19,929,732 | ) |
Provision for income taxes | | | (78,531 | ) | | | - | | | | (78,531 | ) |
Net(Loss) Income | | $ | (24,775,289 | ) | | $ | 4,767,026 | | | $ | (20,008,263 | ) |
| | | | | | | | | | | | | |
Net (loss) income per share – basic and diluted | | $ | (0.38 | ) | | $ | 0.07 | | | $ | (0.31 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | 65,181,310 | | | | 65,181,310 | | | | 65,181,310 | |
| | (b) | As reported in the Company’s 10-K for the fiscal year ended December 31, 2014, as filed on March 12, 2015. |
TOWERSTREAM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2012
| | | As Reported(b) | | | Pro Forma Adjustments | | | Pro Forma | |
| | | | | | | | | | | | | |
Revenues | | $ | 32,279,430 | | | $ | 662,400 | | | $ | 32,941,830 | |
| | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | |
Cost of revenues (exclusive of depreciation) | | | 15,376,136 | | | | (2,723,205 | ) | | | 12,652,931 | |
Depreciation and amortization | | | 13,634,294 | | | | 47,030 | | | | 13,681,324 | |
Customer support services | | | 5,712,463 | | | | - | | | | 5,712,463 | |
Sales and marketing | | | 6,134,020 | | | | - | | | | 6,134,020 | |
General and administrative | | | 12,168,183 | | | | - | | | | 12,168,183 | |
Total Operating Expenses | | | 53,025,096 | | | | (2,676,175 | ) | | | 50,348,921 | |
Operating Loss | | | (20,745,666 | ) | | | 3,338,575 | | | | (17,407,091 | ) |
Other Income/(Expense) | | | | | | | | | | | | |
Interest expense, net | | | (63,714 | ) | | | - | | | | (63,714 | ) |
Gain on business acquisition | | | (40,079 | ) | | | - | | | | (40,079 | ) |
Other income (expense) net | | | (13,860 | ) | | | - | | | | (13,860 | ) |
Total Other Income/(Expense) | | | (117,653 | ) | | | - | | | | (117,653 | ) |
(Loss) income before income taxes | | | (20,863,319 | ) | | | 3,338,575 | | | | (17,524,744 | ) |
Provision for income taxes | | | (126,256 | ) | | | - | | | | (126,256 | ) |
Net(Loss) Income | | $ | (20,989,575 | ) | | $ | 3,338,575 | | | $ | (17,651,000 | ) |
| | | | | | | | | | | | | |
Net (loss) income per share – basic and diluted | | $ | (0.39 | ) | | $ | 0.06 | | | $ | (0.32 | ) |
| | | | | | | | | | | | | |
Weighted average common shares outstanding – basic and diluted | | | 54,434,173 | | | | 54,434,173 | | | | 54,434,173 | |
| | (b) | As reported in the Company’s 10-K for the fiscal year ended December 31, 2014, as filed on March 12, 2015. |
Notes to Pro Forma Financial Statements
Towerstream Corporation
For the Nine Months Ended September 30, 2015 and Years Ended December 31, 2014, December 31, 2013 and December 31, 2012
Note 1 – Pro Forma Condensed Consolidated Balance Sheets Adjustments
The following adjustments to the consolidated balance sheet as of September 30, 2015 reflect the transfer of certain assets, the transfer of certain lease agreements, the termination of an existing service agreement and the execution of a new service agreement pursuant to the Asset Purchase Agreement dated March 9, 2016.
Cash and cash equivalents | (a) | | $ | 690,278 | |
Accounts receivable | (b) | | $ | (458,300 | ) |
Property and equipment, net | (c) | | $ | (3,288,660 | ) |
Intangible assets, net | (d) | | $ | 3,288,660 | |
Other assets | (e) | | $ | (231,978 | ) |
(a) Represents cash receipts from receivables and security deposits from Time Warner Cable ("TWC"). |
| |
(b) Represents payment of receivables by TWC related to internet access agreement. |
| |
(c) Represents net book value of property and equipment sold to TWC. |
| |
(d) Represents the carrying value of the backhaul agreement with TWC as of September 30, 2015. |
| |
(e) Represents reimbursement for security deposits on lease agreements to be assumed by TWC. |
Note 2 – Pro Forma Condensed Consolidated Statements of Operations Adjustment
Pro Forma condensed consolidated statements of operations for the nine months ended September 30, 2015 and for the years ended December 31, 2014, 2013 and 2012, assume that the Asset Purchase Agreement was entered into on December 31, 2011.
| | | Revenue Adjustments | |
| | | Backhaul | | | Internet Access | | | Pro Forma | |
| | | Agreement(a) | | | Agreement(b) | | | Adjustment, net | |
Period | | | | | | | | | | | | |
Nine months ended September 30, 2015 | | $ | 1,213,200 | | | $ | (2,063,400 | ) | | $ | (850,200 | ) |
Year ended December 31, 2014 | | $ | 1,420,800 | | | $ | (2,417,400 | ) | | $ | (996,600 | ) |
Year ended December 31, 2013 | | $ | 1,070,400 | | | $ | (831,400 | ) | | $ | 239,000 | |
Year ended December 31, 2012 | | $ | 662,400 | | | $ | - | | | $ | 662,400 | |
| | | | | | | Depreciation & Amortization | |
| | | Cost of | | | Property & | | | Intangible | | | Pro Forma | |
| | | Revenues (c) | | | Equipment (d) | | | Assets (e) | | | Adjustment, net | |
| | | | | | | | | | | | | | | | | |
Period | | | | | | | | | | | | | | | | |
Nine months ended September 30, 2015 | | $ | 5,179,914 | | | $ | 1,125,948 | | | $ | - | | | $ | 1,125,948 | |
Year ended December 31, 2014 | | $ | 6,065,586 | | | $ | 1,319,923 | | | $ | (1,555,860 | ) | | $ | (235,937 | ) |
Year ended December 31, 2013 | | $ | 4,604,024 | | | $ | 994,402 | | | $ | (1,070,400 | ) | | $ | (75,998 | ) |
Year ended December 31, 2012 | | $ | 2,723,205 | | | $ | 615,370 | | | $ | (662,400 | ) | | $ | (47,030 | ) |
(a) Represents revenue that would have been generated if the backhaul agreement had been entered into as of January 1, 2012 based on the number of locations connected during the periods presented above. The backhaul agreement has an initial term of three years and is subject to renewal for two successive one-year periods. The Company expects that the backhaul agreement will continue for at least the periods presented above. |
| |
(b) Represents revenue that would not have been generated if the internet access agreement had been terminated as of January 1, 2012. |
| |
(c) Represents rooftop rent expense that would not have been incurred if the Asset Purchase Agreement had been entered into as of January 1, 2012. |
| |
(d) Represents depreciation expense that would not have been incurred if the Asset Purchase Agreement had been entered into as of January 1, 2012. |
| |
(e) Represents amortization for the backhaul agreement over the initial term of the agreement that would have been recognized if the Asset Purchase Agreement had been entered into as of January 1, 2012. |
