Ubiquity 8-K Entry into a Material Definitive Agreement

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

On March 5, 2013, Ubiquity Broadcasting Corp. (formerly Fermo Group, Inc.) a Nevada corporation, (“UBC” or the “Company”), Ubiquity Acquisition Corporation, a Nevada corporation and wholly-owned subsidiary of the Company (“Ubiquity Acquisition”), and Ubiquity Broadcasting Corp., a Delaware corporation (“UBC-DE”)  entered into a Merger Agreement (the “Merger Agreement”) pursuant to which Ubiquity Acquisition will merge with and into UBC-DE in a statutory reverse triangular merger, with UBC-DE surviving as a wholly-owned subsidiary of the Company.  Prior to the merger, the Company increased the authorized shares of common stock from 75,000,000 to 200,000,000. The merger closed on September 20, 2013.

The following unaudited pro forma combined balance sheets and income statements are based on historical financial statements ofUbiquity Broadcasting Corp. (formerly Fermo Group, Inc.) a Nevada corporation, Ubiquity Acquisition Corporation, a Nevada corporation and wholly-owned subsidiary of the Company, and Ubiquity Broadcasting Corp., a Delaware corporation.  The unaudited pro forma combined financial statements are provided for information purposes only. The pro forma financial statements are not necessarily indicative of what the financial position or results of operations actually would have been had the acquisition been completed at the dates indicated below.  In addition, the unaudited pro forma combined financial statements do not purport to project the future financial position or operating results of the combined company.  The unaudited pro forma combined financial information has been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. For pro forma purposes:

·            The unaudited Pro Forma Combined Balance Sheets as of December 31, 2012 of the companies give effect to the Transaction as if it had occurred at the beginning of the 2012.

·            The unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2012 combines the income statements of the companies for the indicated periods, giving effect to the Transaction as if it had occurred at the beginning of 2012.

·            The unaudited Pro Forma Combined Balance Sheets as of December 31, 2011 of the companies give effect to the Transaction as if it had occurred at the beginning of 2011.

·            The unaudited Pro Forma Combined Statement of Operations for the year ended December 31, 2011 combines the income statements of the companies for the indicated periods, giving effect to the Transaction as if it had occurred at the beginning of 2011.

·            The unaudited Pro Forma Combined Balance Sheets as of June 30, 2013 of the companies give effect to the Transaction as if it had occurred at the beginning of 2013.

·            The unaudited Pro Forma Combined Statement of Operations for the six months ended June 30, 2013 combines the income statements of the companies for the indicated periods, giving effect to the Transaction as if it had occurred at the beginning of 2013.

UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED BALANCE SHEETS (Unaudited)

AS OF DECEMBER 31, 2012

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments			Total
ASSETS
Current Assets
Cash and cash equivalents	$	118,663		$	75					$	118,738
Accounts receivable, net		29,600			0						29,600
Prepaid expenses		160,994			4,000						164,994
Notes receivable, net		216,439			0						216,439
Equipment deposit		0			1,500						1,500
Total Current Assets		525,696			5,575						531,271
Property and equipment, net		990,676			0						990,676
Other Assets
Intangible assets, net		8,527,252			0						8,527,252
TOTAL ASSETS	$	10,043,624		$	5,575					$	10,049,199
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accounts Payable	$	831,026		$	0					$	831,026
Accrued expenses		1,809,015			4,600						1,813,615
Credit cards payable		455,174			0						455,174
Loans/leases payable		12,500			6,900						19,400
Total Liabilities		3,107,715			11,500						3,119,215
Stockholders’ Equity (Deficit)
Common stock		48,650			3,740			a7,480			59,870
Preferred stock		600			0						600
Additional paid-in capital		68,407,133			21,460			a(7,480	)		68,421,113
Accumulated deficit		(61,520,474	)		(31,125	)					(61,551,599	)
Total Stockholders’ Equity (Deficit)		6,935,909			(5,925	)					6,929,984
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	10,043,624		$	5,575					$	10,049,199

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED STATEMENTS OF OPERATIONS (Unaudited)

YEAR ENDED DECEMBER 31, 2012

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments	Total
REVENUES	$	224,967		$	0			$	224,967
COST OF SALES		161,150			0				161,150
GROSS MARGIN		63,817			0				63,817
OPERATING EXPENSES
Meals and entertainment		57,709			0				57,709
Marketing		29,517			0				29,517
Outside services		258,660			0				258,660
Payroll expense		1,381,167			0				1,381,167
Stock-based compensation		6,986,061			0				6,986,061
Office and computer		140,820			0				140,820
Professional fees		685,517			9,700				695,217
Rent		466,030			0				466,030
Travel		105,691			0				105,691
Taxes		8,993			0				8,993
Charitable contributions		67,500			0				67,500
Bad debt expense		1,500			0				1,500
Depreciation and amortization		821,579			0				821,579
Other operating expenses		458,949			17,350				476,299
TOTAL OPERATING EXPENSES		11,469,693			27,050				11,496,743
LOSS FROM OPERATIONS		(11,405,876	)		(27,050	)			(11,423,926	)
OTHER INCOME (EXPENSES)
Interest income		18			0				18
Other income		22,380			0				22,380
TOTAL OTHER INCOME (EXPENSES)		22,398			0				22,398
LOSS BEFORE PROVISION FOR INCOME TAXES		(11,383,478	)		(27,050	)			(11,410,528	)
PROVISION FOR INCOME TAXES		0			0				0
NET LOSS	$	(11,383,478	)	$	(27,050	)		$	(11,410,528	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		44,909,879			3,393,877				48,303,756
NET LOSS PER SHARE	$	(0.25	)	$	(0.01	)		$	(0.26	)

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED BALANCE SHEETS (Unaudited)

AS OF DECEMBER 31, 2011

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments			Total
ASSETS
Current Assets
Cash and cash equivalents	$	300,671		$	3,000					$	303,671
Accounts receivable, net		33,350			0						33,350
Prepaid expenses		192,935			0						192,935
Notes receivable, net		647,721			0						647,721
Total Current Assets		1,174,677			3,000						1,177,677
Property and equipment, net		1,169,734			0						1,169,734
Other Assets
Intangible assets, net		5,816,272			0						8,527,252
TOTAL ASSETS	$	8,160,683		$	3,000					$	8,163,683
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accounts Payable	$	1,000,841		$	0					$	1,000,841
Accrued expenses		1,673,300			4,000						1,677,300
Credit cards payable		446,107			0						446,107
Loans/leases payable		71,072			75						71,147
Total Liabilities		3,191,320			4,075						3,195,395
Stockholders’ Equity (Deficit)
Common stock		41,305			3,000			a6,000			50,305
Preferred stock		600			0						600
Additional paid-in capital		55,064,454			0			a(6,000	)		55,058,454
Accumulated deficit		(50,136,996	)		(4,075	)					(50,141,071	)
Total Stockholders’ Equity (Deficit)		4,969,363			(1,075	)					4,968,288
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	8,160,683		$	3,000					$	8,163,683

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED STATEMENTS OF OPERATIONS (Unaudited)

YEAR ENDED DECEMBER 31, 2011

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments	Total
REVENUES	$	692,777		$	0			$	692,777
COST OF SALES		412,269			0				412,269
GROSS MARGIN		280,508			0				280,508
OPERATING EXPENSES
Meals and entertainment		57,872			0				57,872
Marketing		136,027			0				136,027
Outside services		151,913			0				151,913
Payroll expense		1,299,561			0				1,299,561
Stock-based compensation		7,567,122			0				7,567,122
Office and computer		191,219			0				191,219
Professional fees		611,018			4,000				615,018
Rent		424,552			0				424,552
Travel		193,383			0				193,383
Taxes		420,738			0				420,738
Charitable contributions		29,805			0				29,805
Bad debt expense		105,145			0				105,145
Depreciation and amortization		769,093			0				769,093
Other operating expenses		474,375			75				474,450
TOTAL OPERATING EXPENSES		12,431,823			4,075				12,435,898
LOSS FROM OPERATIONS		(12,151,315	)		(4,075	)			(12,155,390	)
OTHER INCOME (EXPENSES)
Interest income		419			0				419
TOTAL OTHER INCOME (EXPENSES)		419			0				419
LOSS BEFORE PROVISION FOR INCOME TAXES		(12,150,896	)		(4,075	)			(12,155,390	)
PROVISION FOR INCOME TAXES		0			0				0
NET LOSS	$	(12,150,896	)	$	(4,075	)		$	(12,154,971	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		38,494,873			3,000,000				41,494,873
NET LOSS PER SHARE	$	(0.32	)	$	(0.00	)		$	(0.32	)

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED BALANCE SHEETS (Unaudited)

AS OF JUNE 30, 2013

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments			Total
ASSETS
Current Assets
Cash and cash equivalents	$	99,144		$	0					$	99,144
Accounts receivable, net		33,350			0						33,350
Prepaid expenses		187,426			0						187,426
Notes receivable, net		313,485			0						313,485
Total Current Assets		633,405			0						633,405
Property and equipment, net		1,028,983			0						1,028,983
Other Assets
Intangible assets, net		8,365,446			0						8,365,446
TOTAL ASSETS	$	10,027,834		$	0					$	10,027,834
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accounts Payable	$	534,420		$	0					$	534,420
Accrued expenses		2,156,926			7,531						2,164,457
Credit cards payable		455,305			0						455,305
Loans/leases payable		273,499			2,350						275,849
Total Liabilities		3,420,150			9,881						3,430,031
Stockholders’ Equity (Deficit)
Common stock		54,415			3,740			a7,480			65,635
Additional paid-in capital		71,927,931			29,160						71,949,611
Accumulated deficit		(63,374,662	)		(42,781	)		a(7,480	)		(65,417,443	)
Total Stockholders’ Equity (Deficit)		6,607,684			(9,881	)					6,597,803
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	10,027,834		$	0					$	10,027,834

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

PRO FORMA COMBINED STATEMENTS OF OPERATIONS (Unaudited)

SIX MONTHS ENDED JUNE 30, 2013

	Ubiquity Broadcasting Corporation			Ubiquity Broadcasting Corporation (formerly Fermo Group Inc.)			Pro Forma Adjustments	Total
REVENUES	$	38,987		$	0			$	38,987
COST OF SALES		25,382			0				25,382
GROSS MARGIN		13,605			0				13,605
OPERATING EXPENSES
Meals and entertainment		22,308			0				22,308
Marketing		36,026			0				36,026
Outside services		411,302			0				411,302
Payroll expense		1,081,924			0				1,081,924
Stock-based compensation		726,710			0				726,710
Office and computer		81,022			0				81,022
Professional fees		552,132			11,594				563,726
Rent		210,378			0				210,378
Travel		31,550			0				31,550
Charitable contributions		5,000			0				5,000
Depreciation and amortization		547,791			0				547,791
Other operating expenses		161,650			62				161,712
TOTAL OPERATING EXPENSES		3,867,793			11,656				3,879,449
LOSS FROM OPERATIONS		(3,854,188	)		(11,656	)			(3,865,844	)
LOSS BEFORE PROVISION FOR INCOME TAXES		(3,854,188	)		(11,656	)			(3,865,844	)
PROVISION FOR INCOME TAXES		0			0				0
NET LOSS	$	(3,854,188	)	$	(11,656	)		$	(3,865,844	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		52,230,686			11,220,000				63,450,686
NET LOSS PER SHARE	$	(0.07	)	$	(0.00	)		$	(0.07	)

See accompanying notes to the Pro Forma financial statements.

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UBIQUITY BROADCASTING CORPORATION

UBIQUITY BROADCASTING CORPORATION (FORMERLY FERMO GROUP, INC.)

NOTES TO THE PRO FORMA ADJUSTMENTS

a)         3-to-1 forward stock split of Ubiquity Broadcasting Corp. (formerly Fermo Group, Inc.) common stock

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