Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements have been prepared to give effect to the reverse-merger and recapitalization pursuant to the Share Exchange Agreement and the adjustments described in the notes to the unaudited pro forma combined financial statements. IZEA, Inc. is the acquirer for financial reporting purposes and Rapid Holdings, Inc. is the acquired company. The pro forma information is based upon the historical audited financial statements of Rapid Holdings, Inc. for the period from inception (March 22, 2010) through May 31, 2010 and IZEA, Inc for the year ended December 31, 2010 and the adjustments have been made solely for purposes of developing such pro forma information.
1
RAPID HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
Rapid Holdings, Inc | IZEA Holdings, Inc. | Pro Forma | ||||||||||||||||||
May 31, 2010 | December 31, 2010 | Notes | Adjustments | Pro Forma | ||||||||||||||||
Assets | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Cash and cash equivalents | $ | 40,890 | $ | 1,503,105 | $ | - | $ | 1,543,995 | ||||||||||||
Accounts receivable | - | 391,114 | - | 391,114 | ||||||||||||||||
Other receivables | - | 39,105 | - | 39,105 | ||||||||||||||||
Prepaid expenses | - | 24,568 | - | 24,568 | ||||||||||||||||
Total current assets | 40,890 | 1,957,892 | - | 1,998,782 | ||||||||||||||||
Property and equipment, net | - | 140,918 | - | 140,918 | ||||||||||||||||
Other assets: | ||||||||||||||||||||
Loan costs | - | 3,795 | - | 3,795 | ||||||||||||||||
Security deposits | - | 8,340 | - | 8,340 | ||||||||||||||||
- | ||||||||||||||||||||
$ | 40,890 | $ | 2,110,945 | $ | - | $ | 2,151,835 | |||||||||||||
Liabilities and Stockholders’ Equity (Deficit) | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | - | $ | 633,506 | $ | - | $ | 633,506 | ||||||||||||
Related party payable | - | 3,358 | - | 3,358 | ||||||||||||||||
Accrued expenses | 1,275 | 81,014 | - | 82,289 | ||||||||||||||||
Unearned revenue | - | 1,097,466 | - | 1,097,466 | ||||||||||||||||
Current portion of notes payable | - | 351,568 | - | 351,568 | ||||||||||||||||
- | ||||||||||||||||||||
Total current liabilities | 1,275 | 2,166,912 | - | 2,168,187 | ||||||||||||||||
- | ||||||||||||||||||||
Notes payable, less current portion | - | 10,569 | - | 10,569 | ||||||||||||||||
Deferred rent | - | 9,220 | - | 9,220 | ||||||||||||||||
- | ||||||||||||||||||||
Total liabilities | 1,275 | 2,186,701 | - | 2,187,976 | ||||||||||||||||
Stockholders’ equity (deficit) | ||||||||||||||||||||
Preferred Stock | - | 1,380 | (3 | ) | (1,380 | ) | - | |||||||||||||
Common Stock | 282 | 100 | (1 | ) | 4,024 | 3,500 | ||||||||||||||
(2 | ) | (3056 | ) | |||||||||||||||||
(3 | ) | (100 | ) | |||||||||||||||||
(4 | ) | 2,250 | ||||||||||||||||||
Additional paid-in capital | 40,743 | 14,074,956 | (1 | ) | (4,024 | ) | 14,112,551 | |||||||||||||
(2 | ) | 3,056 | ||||||||||||||||||
(3 | ) | 1,480 | ||||||||||||||||||
(4 | ) | (2,250 | ) | |||||||||||||||||
(5 | ) | (1,410 | ) | |||||||||||||||||
Accumulated deficit | (1,410 | ) | (14,152,192 | ) | (5 | ) | 1,410 | (14,152,192 | ) | |||||||||||
- | ||||||||||||||||||||
Total stockholders’ equity (deficit) | 39,615 | (75,756 | ) | - | (36,141 | ) | ||||||||||||||
- | ||||||||||||||||||||
$ | 40,890 | $ | 2,110,945 | $ | - | $ | 2,151,835 |
2
RAPID HOLDINGS INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
Rapid Holdings | IZEA Holdings, Inc. | ||||||||||||||||
Period from inception (March 22, 2010) through May 31, 2010 | Year Ended December 31, 2010 | Notes | Pro Forma Adjustments | Pro Forma | |||||||||||||
Revenue | $ | - | $ | 3,821,538 | $ | - | $ | 3,821,538 | |||||||||
Cost of sales | - | 1,819,031 | - | 1,819,031 | |||||||||||||
Gross profit | - | 2,002,507 | - | 2,002,507 | |||||||||||||
Operating expenses: | |||||||||||||||||
General and administrative | 1,410 | 3,048,221 | - | 3,049,631 | |||||||||||||
Sales and marketing | - | 766,946 | - | 766,946 | |||||||||||||
Licenses and subscriptions | - | 270,480 | - | 270,480 | |||||||||||||
Total operating expenses | 1,410 | 4,085,647 | - | 4,087,057 | |||||||||||||
Loss from operations | (1,410 | ) | (2,083,140 | ) | - | (2,084,550 | ) | ||||||||||
Other income (expense): | |||||||||||||||||
Interest income | - | 133 | - | 133 | |||||||||||||
Interest expense | - | (74,644 | ) | - | (74,644 | ) | |||||||||||
Other income (expense), net | - | (108 | ) | - | (108 | ) | |||||||||||
Total other income (expense) | - | (74,619 | ) | - | (74,619 | ) | |||||||||||
Net loss | $ | (1,410 | ) | $ | (2,157,759 | ) | $ | - | $ | (2,159,169 | ) |
Notes to Pro Forma Combined Financial Statements | |
(1) | Issuance of 40,244,337 common shares to Rapid Holdings, Inc. shareholders on May 11, 2011 pursuant to a 15.28117-for-one forward split of outstanding common stock |
(2) | Cancellation of 30,562,337 shares of common stock held by Rapid Holdings, Inc. shareholders on May 12, 2011 pursuant to the Conveyance Agreement and Stock Purchase Agreement |
(3) | Elimination of common and preferred stock of Izea Holdings, Inc. pursuant to Share Exchange Agreement |
(4) | Issuance of 22,500,000 shares of common stock to Izea Holdings, Inc. shareholders pursuant to Share Exchange Agreement |
(5) | Elimination of accumulated deficit of Rapid Holdings, Inc. related to reverse merger and recapitalization pursuant to Share Exchange Agreement |
3