Exhibit 99.2
Excel Corporation and Subsidiaries | |||||||
and Payprotec Oregon LLC dba Securus Payments | |||||||
Proforma Condensed Combined Balance Sheet | |||||||
December 31, 2013 | |||||||
(Unaudited) | |||||||
Assets |
Excel Corporation and Subsidiaries (Parent) | Payprotec Oregon LLC dba Securus Payments (Subsidiary) | Proforma Increase (Decrease) | Proforma (Combined) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 8,328 | $ | 394,750 | $ | 403,078 | |||||||||||
Accounts receivable | 2,250 | 288,261 | 290,511 | ||||||||||||||
Prepaid expenses and other current assets | 32,979 | 153,949 | 186,928 | ||||||||||||||
Total current assets | 43,557 | 836,960 | - | 880,517 | |||||||||||||
Other Assets | |||||||||||||||||
Property and equipment - net | 420,841 | 420,841 | |||||||||||||||
Security deposits | 7,939 | 21,101 | 29,040 | ||||||||||||||
Investment in subsidiary | 708,082 | (A) | |||||||||||||||
(708,082 | ) | (B) | |||||||||||||||
Advances to related party | 106,366 | 106,366 | |||||||||||||||
Total other assets | 7,939 | 548,308 | - | 556,247 | |||||||||||||
Total assets | 51,496 | 1,385,268 | - | 1,436,764 | |||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||
Current Liabilities | |||||||||||||||||
Accounts payable | 146,949 | 184,743 | 331,692 | ||||||||||||||
Accrued payroll and payroll liabilities | 66,113 | 66,113 | |||||||||||||||
Accrued expenses | 232,224 | 232,224 | |||||||||||||||
Other accrued liabilities | 12,039 | 12,039 | |||||||||||||||
Advance | 150,000 | 150,000 | |||||||||||||||
Accrued members' distributions | - | 71,999 | 71,999 | ||||||||||||||
Current portion of notes payable to related parties | - | 29,406 | 29,406 | ||||||||||||||
Total current liabilities | 375,101 | 518,372 | - | 893,473 | |||||||||||||
Other Liabilities | |||||||||||||||||
Deferred rent | 19,472 | 19,472 | |||||||||||||||
Notes payable to related parties | 139,342 | 139,342 | |||||||||||||||
Total other liabilities | - | 158,814 | - | 158,814 | |||||||||||||
Total liabilities | 375,101 | 677,186 | - | 1,052,287 | |||||||||||||
STOCKHOLDERS' EQUITY | |||||||||||||||||
Preferred stock | |||||||||||||||||
Common stock | 6,706 | 2,240 | (A) | 8,946 | |||||||||||||
Additional paid-in capital | 1,010,947 | 705,842 | (A) | 1,716,789 | |||||||||||||
Accumulated equity (deficit) | (1,341,258 | ) | 708,082 | (708,082 | ) | (B) | (1,341,258 | ) | |||||||||
Total stockholders' equity (deficit) | (323,605 | ) | 708,082 | - | 384,477 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 51,496 | $ | 1,385,268 | $ | - | $ | 1,436,764 |
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Excel Corporation and Subsidiaries | |||||||
and Payprotec Oregon LLC dba Securus Payments | |||||||
Proforma Condensed Combined Balance Sheet | |||||||
January 1, 2013 - December 31, 2013 | |||||||
(Unaudited) |
Excel Corporation and Subsidiaries (Parent) | Payprotec Oregon LLC dba Securus Payments (Subsidiary) | Proforma Increase (Decrease) | Proforma (Combined) | |||||||||||||
Revenues | ||||||||||||||||
Advance commission income | $ | 33,015 | 33,015 | |||||||||||||
Management fee income | 209,750 | 209,750 | ||||||||||||||
Residual income | 92,092 | 92,092 | ||||||||||||||
Lease income | 11,104 | 11,104 | ||||||||||||||
Service fee income | 86,500 | 86,500 | ||||||||||||||
Payprotec income | 12,397,247 | 12,397,247 | ||||||||||||||
Total revenues | 432,461 | 12,397,247 | - | 12,829,708 | ||||||||||||
Cost of Sales | ||||||||||||||||
Commissions and other merchant costs | 45,070 | 45,070 | ||||||||||||||
Payprotec cost of sales | 7,917,067 | 7,917,067 | ||||||||||||||
Total Cost of Sales | 45,070 | 7,917,067 | - | 7,962,137 | ||||||||||||
Gross Profit | 387,391 | 4,480,180 | - | 4,867,571 | ||||||||||||
Sales, General and Administrative Expense | ||||||||||||||||
Payroll | 687,037 | 687,037 | ||||||||||||||
Legal & professional fees | 164,321 | 164,321 | ||||||||||||||
Outside services | 127,322 | 127,322 | ||||||||||||||
Rent | 36,000 | 36,000 | ||||||||||||||
Bad debt | 33,281 | 33,281 | ||||||||||||||
Travel | 31,181 | 31,181 | ||||||||||||||
Marketing & advertising | 29,782 | 29,782 | ||||||||||||||
Insurance | 28,441 | 28,441 | ||||||||||||||
Miscellaneous SG&A expense | 53,667 | 53,667 | ||||||||||||||
Payprotec SG&A expense | 2,889,361 | 2,889,361 | ||||||||||||||
Total SG&A Expense | 1,191,032 | 2,889,361 | - | 4,080,393 | ||||||||||||
Net loss before other income and income taxes | (803,641 | ) | 1,590,819 | - | 787,178 | |||||||||||
Other Income | ||||||||||||||||
Interest income (writeoff for uncollectible interest) | (1,515 | ) | (1,515 | ) | ||||||||||||
Miscellaneous other income | 450 | 24,183 | 24,633 | |||||||||||||
Total other income | (1,065 | ) | 24,183 | - | 23,118 | |||||||||||
Other Expense | ||||||||||||||||
Acquisition of subsidiary | 20,868 | 20,868 | ||||||||||||||
Interest expense | 4,433 | 4,433 | ||||||||||||||
Miscellaneous other expense | 115,005 | 115,005 | ||||||||||||||
Total other expense | 135,873 | 4,433 | - | 140,306 | ||||||||||||
Net income (loss) before income taxes | (940,579 | ) | 1,610,569 | - | 669,990 | |||||||||||
Income Taxes | ||||||||||||||||
Current | - | |||||||||||||||
Deferred | - | |||||||||||||||
Total income taxes | ||||||||||||||||
Net income (loss) | $ | (940,579 | ) | $ | 1,610,569 | $ | - | $ | 669,990 | |||||||
Earnings Per Share | ||||||||||||||||
Basic & Diluted | $ | 0.00762 | ||||||||||||||
Weighted Average Shares Outstanding | ||||||||||||||||
Basic & Diluted | 87,948,471 |
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NOTE 1: EXCEL CORPORATION AND SUBSIDIARIES
We were incorporated in the state of Delaware in November 2010 as Ruby Worldwide, Ltd. for the purpose of commencing a licensing business. In November 2010 we amended our Articles of Incorporation to amend our authorized capital from a non-stock corporation to its present authorized capital of 200,000,000 shares of common stock, $.0001 par value and 10,000,000 shares of preferred stock, $.0001 par value. In January 2011 we again amended our Articles of Incorporation to change our corporate name from Ruby Worldwide, Ltd. to Excel Corporation (the “Parent”).
On January 14, 2013, we entered into an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”) with Excel Business Solutions, Inc., a Delaware corporation (“EBSI”), and ECB Acquisition Corp., our newly formed, wholly-owned Delaware subsidiary (“Acquisition Sub”). Upon closing of the transaction contemplated under the Merger Agreement (the “Merger”), Acquisition Sub merged with and into EBSI, and EBSI, as the surviving corporation, became a wholly-owned subsidiary of the Company.
Pursuant to the terms and conditions of the Merger Agreement, at the closing of the Merger, each share of EBSI’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive an aggregate of 33,532,446 shares of common stock, par value $0.0001 per share, of the Company, with fractional shares of the Company’s common stock rounded up or down to the nearest whole share.
On August 19, 2013, Excel Cash Solutions, Inc. (“ECSI”) was formed as a wholly owned subsidiary of Excel Business Solutions, Inc.
On September 25, 2013, Excel Capital Solutions, LLC (“ECap”) was formed as a wholly owned subsidiary of Excel Cash Solutions, Inc.
On March 20, 2014, 420 Solutions Corporation (“420”) was formed as a wholly owned subsidiary of the Company.
Our business and main focus is now concentrated on the merchant servicing business, which began when we acquired with EBSI, and continued with the formations of ECSI, Ecap and 420.
NOTE 2: PAYPROTEC OREGON LLC dba SECURUS PAYMENTS
Payprotec Oregon, LLC dba Securus Payments (Payments) was formed in 2009 in the state of Oregon. The consolidated financial statements include the accounts of Payments and its 98 percent-owned subsidiary, Securus Consulting, LLC (Consulting) (collectively referred to as "the Subsidiary"). All significant intercompany balances and transactions have been eliminated upon consolidation. The noncontrolling interest in Consulting is not significant and therefore is not presented in the accompanying consolidated financial statements.
The Company initiates lease transactions for credit and debit card processing equipment and other merchant services to merchants throughout the United States through its offices in Oregon, California, and beginning in 2014, Florida. The Company primarily initiates such transactions on behalf of First Data Merchant Services Corporation (First Data).
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NOTE 3: PROFORMA ADJUSTMENTS
On February 17, 2014, Excel Corporation (the “Company”), entered into a Securities Exchange Agreement (the “Agreement”) with Payprotec Oregon, LLC (d/b/a Securus Payments) (“Payprotec”), Mychol Robirds and Steven Lemma, to effectuate the purchase of 90% of the membership interests of Payprotec and its subsidiary Securus Consultants, LLC (“Securus”). On April 10, 2014, the Parties entered into an amendment (the “Amendment”) to the Agreement that extended the termination date to April 21, 2014. On April 21, 2014, the parties to the Agreement closed the transaction (the “Transaction”).
In exchange for the membership interests in Payprotec and Securus, the Company issued to Messrs. Robirds and Lemma a total of 20,400,000 shares of the Company’s Common Stock and two shares of the Company’s Series A Preferred Stock. Payprotec also entered into three year employment agreements (the “Employment Agreements”) with each of Messrs. Robirds and Lemma.
Also on April 21, 2014, pursuant to a Securities and Exchange Agreement ("E-Cig Agreement") dated April 21, 2014 between the Company and E-Cig Ventures, LLC ("E-Cig"), the Company acquired an additional 10% of the membership interests of Payprotec in exchange for the issuance of 2,000,000 shares of the Company's common stock and the agreement to guaranty a $1.5 million loan (the “Guaranty”) from Shadow Tree Income Fund A LP (“Shadow Tree”) to E-Cig (the "E-Cig Transaction"). As a result, the Company now owns 100% of the membership interests of Payprotec.
Proforma adjustments on the attached financial statements include the following:
(A) To record the acquisition of 100% interest in Subsidiary by Parent through the issuance of 22,400,000 shares of common stock
(B) To record elimination of investment in Subsidiary and equity of Subsidiary
NOTE 4: PROFORMA EARNINGS PER SHARE
The proforma earnings per share is computed based on the number of shares outstanding, after adjustment for shares issued in the acquisition as though all shares issued in the acquisition had been outstanding from the beginning of the period presented.
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