Exhibit 99.2
Exhibit 99.2Unaudited Pro Forma Condensed Consolidated Balance Sheet as at December 31, 2014
The following unaudited pro forma consolidated balance sheet gives effect to the sale of our ChemFree Corporation subsidiary in accordance with Article 8 of Regulation S-X and is based upon currently available information and certain assumptions management considered reasonable under the circumstances. Based on the carrying value of the assets and liabilities involved in the ChemFree sale on the closing date and the estimated costs and expenses incurred in connection with the sale, the Company anticipates that it will record a gain, net of taxes, of $19,054,000 on the ChemFree sale.
The unaudited pro forma consolidated balance sheet assumes the ChemFree sale occurred on December 31, 2014. Such pro forma information is based on the consolidated historical audited balance sheet data of the Company and ChemFree as of December 31, 2014. The unaudited pro forma balance sheet is not necessarily indicative of the results that would have been reported had the ChemFree sale actually occurred on that date, nor is it necessarily indicative of the Company’s future financial position. The unaudited pro forma financial statements provided herein do not include any amounts related to potential post-closing adjustments for working capital adjustments or other claims that may be asserted during the escrow period since such amounts, if any, are not determinable at this time.
INTELLIGENT SYSTEMS CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(in thousands)
| | | | | | | Divestiture | | | | | | |
As of December 31, 2014 | | As Reported | | | Adjustments | | | | Pro forma | |
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash | | $ | 2,624 | | | $ | 18,222 | | a | | $ | 20,846 | |
Marketable securities | | | 463 | | | | -- | | | | | 463 | |
Escrow restricted cash, current | | | -- | | | | 1,100 | | a | | | 1,100 | |
Accounts receivable, net | | | 1,777 | | | | (1,276 | ) | b | | | 501 | |
Inventories, net | | | 1,042 | | | | (1,042 | ) | b | | | -- | |
Other current assets | | | 509 | | | | (172 | ) | b | | | 337 | |
Total current assets | | | 6,415 | | | | 16,832 | | | | | 23,247 | |
Investments | | | 1,605 | | | | -- | | | | | 1,605 | |
Property and equipment, at cost less accumulated depreciation | | | 1,069 | | | | (488 | ) | b | | | 581 | |
Patents, net | | | 19 | | | | (19 | ) | b | | | -- | |
Escrow restricted cash, net of current portion | | | -- | | | | 2,200 | | a | | | 2,200 | |
Other long-term assets | | | 97 | | | | (16 | ) | b | | | 81 | |
Total assets | | $ | 9,205 | | | $ | 18,509 | | | | $ | 27,714 | |
| | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable | | $ | 280 | | | $ | (190 | ) | b | | $ | 90 | |
Deferred revenue, current portion | | | 636 | | | | (26 | ) | b | | | 610 | |
Accrued payroll | | | 734 | | | | (152 | ) | b | | | 582 | |
Accrued expenses | | | 282 | | | | (258 | ) | b | | | 24 | |
Accrued transaction expenses | | | -- | | | | 106 | | c | | | 106 | |
Other current liabilities | | | 274 | | | | 187 | | d | | | 461 | |
Total current liabilities | | | 2,206 | | | | (333 | ) | | | | 1,873 | |
Deferred revenue, net of current portion | | | 191 | | | | -- | | | | | 191 | |
Other long-term liabilities | | | 230 | | | | (212 | ) | b | | | 18 | |
Intelligent Systems Corporation stockholders’ equity: | | | | | | | | | | | | | |
Common stock, $0.01 par value | | | 90 | | | | -- | | | | | 90 | |
Additional paid-in capital | | | 21,537 | | | | -- | | | | | 21,537 | |
Accumulated other comprehensive loss | | | (110 | ) | | | -- | | | | | (110 | ) |
Accumulated earnings (deficit) | | | (12,750 | ) | | | 19,054 | | e | | | 6,304 | |
Total Intelligent Systems Corporation stockholders’ equity | | | 8,767 | | | | 19,054 | | | | | 27,821 | |
Noncontrolling interest | | | (2,189 | ) | | | -- | | | | | (2,189 | ) |
Total stockholders’ equity | | | 6,578 | | | | | | | | | 25,031 | |
Total liabilities and stockholders’ equity | | $ | 9,205 | | | $ | 18,509 | | | | $ | 27,714 | |
The accompanying notes are an integral part of the consolidated balance sheets.
Notes to Unaudited Pro FormaBalance Sheet
1. Basis of Presentation: The historical financial information for the Company as of December 31, 2014 presented herein has been derived from the audited consolidated financial statements included in the Company’s Form 10-K/A for the year ended December 31, 2014.
The unaudited pro forma consolidated balance sheet is based on and should be read in conjunction with, and are qualified in their entirety by, the historical audited consolidated financial statements and notes thereto of the Company.
2.Divestiture Adjustments:
a. | To record proceeds received in the ChemFree sale consisting of $18,222,000 cash and $3,300,000 escrow restricted cash, of which $1,100,000 is classified as current and $2,200,000 is classified as non-current. Such amounts are subject to certain post-closing adjustments which are not estimable at this time. |
b. | To remove assets and liabilities of ChemFree that are no longer consolidated after the sale. |
c. | To record actual and accrued transaction related expenses consisting of legal, accounting and other anticipated expenses aggregating approximately $106,000. Such amounts are based on management’s current information and reasonable judgment. Actual expenses could be more or less than estimated. |
d. | To accrue for estimated taxes on the gain on sale, net of utilization of operating and capital loss carryforwards. |
e. | To record the pro forma gain on the ChemFree sale. Actual gain on the sale may differ from the pro forma gain shown due to differences in the carrying values of the assets and liabilities at December 31, 2014 compared to the carrying values on the actual transaction date and the effect of any post-closing adjustments. |
