LOG ON AMERICA, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
Log on cyberTours, Pro Forma
America Inc. Adjustments Total
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Revenue $ 483,911 $2,311,629 $ - $ 2,795,540
Operating Expenses
Cost of revenues 243,225 935,723 1,178,948
Selling, general and administrative expense 990,413 1,476,677 2,467,090
Depreciation and amortization 42,964 199,224 950,986(3) 1,193,174
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Total Operating Expenses 1,276,602 2,611,624 950,986 4,839,212
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Operating Loss (792,691) (299,995) (950,986) (2,043,672)
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Other income (expense)
Interest income (expense) net 145,728 (77,954) - 67,774
Other income - 7,832 - 7,832
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Total other income (expense) net 145,728 (70,122) - 75,606
Benefit from income taxes - 50,000 (50,000)(4) -
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Net loss $ (646,963) $ (320,117) $(1,000,986) $(1,968,066)
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Weighted average shares outstanding -- basic and diluted 5,575,191 506,667 6,081,858
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Loss per common share -- basic and diluted $ (0.12) $ (0.32)
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LOG ON AMERICA, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1999 (UNAUDITED)
Historical
ASSETS ------------------------ Pro Forma
Log on cyberTours, Pro Forma Consolidated
America Inc. Adjustments Total
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CURRENT ASSETS
Cash and cash equivalents $21,280,959 $ 16,260 $21,297,219
Accounts receivable, net 147,373 128,585 275,958
Other current assets 108,009 3,445 111,454
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TOTAL CURRENT ASSETS 21,536,341 148,290 21,684,631
PROPERTY & EQUIPMENT, net 545,062 1,128,286 1,673,348
OTHER ASSETS
Goodwill, net 215,149 2,824,384 (1) 3,039,533
Customer lists, net 323,916 5,976,084 (1) 6,300,000
Non-compete agreements, net 500,000 (1) 500,000
Notes receivable 282,843 (200,000)(2) 82,843
Deferred taxes on income 190,000 (190,000)(4)
Other assets 17,816 50,332 (150)(1) 67,998
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TOTAL OTHER ASSETS 515,808 564,248 8,910,318 9,990,374
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TOTAL ASSETS $22,597,211 $1,840,824 $ 8,910,318 $33,348,353
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LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
CURRENT LIABILITIES
Note payable $ 13,512 $ 200,000 $ (200,000)(2) $ 13,512
Current portion of long term debt 57,000 57,000
Current portion of capital lease 256,000 256,000
Accounts payable 526,775 359,700 545,000 (1) 1,431,475
Customer advances 29,832 29,832
Accrued expenses 153,434 77,880 10,000 (1) 241,314
Deferred revenue 59,251 669,431 728,682
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TOTAL CURRENT LIABILITIES 752,972 1,649,843 355,000 2,757,815
LONG-TERM LIABILITIES
Long-term Debt 651,240 651,240
Capital leases payable 495,059 495,059
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TOTAL LONG-TERM LIABILITIES 1,146,299 1,146,299
TOTAL LIABILITIES 752,972 2,796,142 355,000 3,904,114
STOCKHOLDERS' EQUITY
Common Stock, $.01 par value 47,063 4,000 1,067 (1) 52,130
Additional paid-in capital 22,866,200 9,673 7,585,260 (1) 30,461,133
Accumulated deficit (1,069,024) (948,991) 948,991 (1) (1,069,024)
Treasury stock (20,000) 20,000 (1)
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TOTAL STOCKHOLDERS' EQUITY 21,844,239 (955,318) 8,555,318 29,444,239
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $22,597,211 $1,840,824 $ 8,910,318 $33,348,353
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LOG ON AMERICA, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 (UNAUDITED)
Log on cyberTours, Pro Forma
America Inc. Adjustments Total
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Revenue $ 759,878 $2,945,428 $ - $ 3,705,306
Operating Expenses
Cost of revenues 403,508 1,167,613 1,571,121
Selling, general and administrative expense 696,867 2,094,103 2,790,970
Depreciation and amortization 79,522 255,011 1,937,851 (3) 2,272,384
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Total Operating 1,179,897 3,516,727 1,937,851 6,634,475
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Expenses
Operating Loss (420,019) (571,299) (1,937,851) (2,929,169)
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Other income (expense)
Interest income (expense) net (2,044) (83,539) - (85,583)
Other income - - - -
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Total interest and other income (expense) net (2,044) (83,539) - (85,583)
Benefit from income taxes - 121,000 (121,000)(4) -
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Net loss $ (422,063) $ (533,838) $(2,058,851) $(3,014,752)
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Weighted average shares outstanding -- basic and diluted 3,853,265 506,667 4,359,932
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Loss per common share -- basic and diluted $ (0.11) $ (0.69)
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BASIS OF PRESENTATION
The acquisition of cyberTours will be accounted for using the purchase method of
accounting. The total consideration for this acquisition has been allocated as
follows:
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CyberTours
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Current assets $ 148,290
Equipment 1,128,286
Goodwill 2,824,384
Customer lists 6,300,000
Other intangibles 500,000
Other assets 50,182
Liabilities (2,796,142)
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$ 8,155,000
The unaudited condensed combined statements of operations for the year ended
December 31, 1998 and the six months ended June 30, 1999 include historical
results of operations of Log on America and cyberTours adjusted for the pro
forma effects of the acquisitions.
PRO FORMA ADJUSTMENTS
The following pro forma adjustments have been made to the consolidated balance
sheet as of June 30, 1999 and December 31, 1998 and the consolidated statement
of operations for the year ended December 31, 1998 and the six months ended June
30, 1999.
(1) To reflect the purchase accounting entry net of eliminations for the
acquisiton of cyberTours, Inc for $7,600,000 in common stock or 506,667
shares.
(2) To reflect the elimination intercompany notes payable and receivables.
(3) To adjust amortization expense due to increase in carrying value of
goodwill, customer lists, and other intangibles resulting from the August
3, 1999 completed cyberTours acquisition. Goodwill and customer lists are
amortized over a five year life, and the other intangibles are amortized
over a period of two to five years.
(4) To eliminate income tax benefit of the acquired business due to the
consolidated net operating loss for the year ended December 31, 1998 and
the six months ended June 30, 1999.