PRELIMINARY UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
The transactions contemplated by the Share Purchase Agreement (the "Agreement"),
by Empire Global Corp. (the "Company" or "Empire") and Multigioco Srl.
("Multigioco") was consummated on August 15, 2014.
The unaudited pro forma condensed balance sheet at June 30, 2014, presents the
balance sheets of Empire and Multigioco, giving effect to the acquisition, the
stock issuance and related transactions, which we refer to in this section,
collectively, as the "Transactions," as if they had been consummated on January
1, 2013. The preliminary unaudited pro forma condensed balance sheet and income
statement for the six months ended June 30, 2014, presents the statements of
income of Empire and Multigioco giving effect to the Transactions as if they had
occurred on January 1, 2013. We have adjusted the historical financial
information to give effect to pro forma events that are (1) attributable
directly to the Transactions, (2) factually supportable, and (3) with respect to
the statement of operations, expected to have a continuing impact on the
results.
We have adjusted the historical financial statements to give effect to the
following events in connection with the Transactions:
- The issuance of 2,000,000 shares of Common Stock to the shareholders of
Multigioco.
- The elimination of historical transactions between Empire and Multigioco.
- Translation of Empire financial statement into euros.
The transactions contemplated by the Purchase Agreement will be accounted for
under the acquisition method of accounting in accordance with the authoritative
guidance of the Financial Accounting Standards Board for generally accepted
accounting principles in the United States with Empire treated as the accounting
acquirer. Accordingly, Empire's cost to acquire Multigioco has been allocated to
the acquired assets, liabilities and commitments based upon their estimated fair
values at June 30, 2014. The allocation of the purchase price is preliminary and
is dependent upon certain valuations that have not progressed to a stage where
there is sufficient information to make a final allocation. Accordingly, the
final acquisition accounting adjustments may be materially different from the
preliminary unaudited pro forma adjustments presented herein.
You should read this information in conjunction with:
- the accompanying notes to the preliminary unaudited pro forma condensed
financial information;
- Empire separate historical audited financial statements as of and for the
year ended December 31, 2013 and its unaudited financial statements as of
and for the six months ended June 30, 2014, included in Empire's Quarterly
Report on form 10-Q for the quarter ended June 30, 2014; and
- Multigioco separate historical audited financial statements as of and for
the year ended December 31, 2013 included in Exhibit 99.1 hereto and it's
unaudited financial statements as of and for the six months ended
June 30, 2014.
The preliminary unaudited pro forma condensed financial information has been
prepared for informational purposes only. The preliminary unaudited pro forma
adjustments represent management's estimates based on information available at
this time. The preliminary unaudited pro forma condensed financial information
is not necessarily indicative of what the financial position or results of
operations actually would have been had the Transactions been completed at the
dates indicated. In addition, the preliminary unaudited pro forma condensed
financial information does not purport to project the future financial position
or operating results of the combined company.
F-1
MULTIGIOCO SRL.
Proforma Balance Sheet
(Unaudited)
MULTIGIOCO EMPIRE PROFORMA
December 31, 2013 December 31, 2013 Proforma Balance Sheet
Historical Historical Adjustments December 31, 2013
----------------- ----------------- ----------- -----------------
US$ US$ US$ US$
<c> <c> <c> <c>
Assets
Current assets:
Cash and cash equivalents - - - -
Gaming account debits 298,306 - - 298,306
AAMS tax credit 377 - - 377
Other current assets 20,009 - - 20,009
----------------- ----------------- ----------- -----------------
Total current assets 318,692 - - 318,692
Non - current assets:
Property, plant and equipment (Net) 20,504 - - 20,504
Intangible assets 376,467 - 2,056,150 2,432,617
Investments 482,264 - - 482,264
----------------- ----------------- ----------- -----------------
Total non - current assets 879,235 - 2,056,150 2,935,385
Total assets 1,197,927 - 2,056,150 3,254,077
----------------- ----------------- ----------- -----------------
Liabilities and stockholders' equity
Current liabilities:
Bank overdrafts 1,604 - - 1,604
Accounts payable and accrued liabilities 393,539 8,265 - 401,804
Short term portion of debt 183,877 - - 183,877
Gaming account credits 389,060 - - 389,060
Taxes payable 148,874 - - 148,874
Advances from stockholders 52,191 165,971 - 218,162
Other current liabilities 26,542 - - 26,542
----------------- ----------------- ----------- -----------------
Total current liabilities 1,195,687 174,236 - 1,369,923
Long term loans and capital leases 100,232 - - 100,232
----------------- ----------------- ----------- -----------------
Total liabilities 1,295,919 174,236 1,470,155
Stockholders' equity
Common stocks 13,779 1,868 (13,579) 2,068
Additional paid in capital 378,534 4,924,844 2,069,729 7,373,107
Retained earnings / (accumulated loss) (490,305) (4,958,280) - (5,448,585)
Deficit accumulated during the development stage - (142,668) - (142,668)
----------------- ----------------- ----------- -----------------
Total stockholders' equity (97,992) (174,236) 2,056,150 1,783,922
----------------- ----------------- ----------- -----------------
Total liabilities and stockholders' equity 1,197,927 - 2,056,150 3,254,078
----------------- ----------------- ----------- -----------------
(see Notes to the Unaudited Proforma Consolidated Financial Statements)
F-2
MULTIGIOCO SRL.
Proforma Statement of Operations
(Unaudited)
MULTIGIOCO EMPIRE PROFORMA
December 31, 2013 December 31, 2013 Proforma Balance Sheet
Historical Historical Adjustments December 31, 2013
----------------- ----------------- ----------- -----------------
US$ US$ US$ US$
<c> <c> <c> <c>
Revenue from operations
Net gaming revenue 4,658,425 - - 4,658,425
Rebate of bank and credit card fees 21,251 - - 21,251
Other income 9,984 - - 9,984
----------------- ----------------- ----------- -----------------
Gross revenue 4,689,660 - - 4,689,660
Direct operating and selling, general and administrative costs
Direct operating costs 3,729,821 - - 3,729,821
Selling, general and administrative costs 888,518 8,411 - 896,929
Amortization and depreciation 55,251 - - 55,251
Interest expense - stockholders - 8,244 - 8,244
----------------- ----------------- ----------- -----------------
Total direct operating, selling,
and administrative costs 4,673,590 16,655 - 4,690,245
----------------- ----------------- ----------- -----------------
Operating income / (loss) 16,070 (16,655) - (585)
Interest expenses (21,328) - - (21,328)
Interest income 1,416 - - 1,416
Other income 11,545 - - 11,545
Gains on bond investments 15,449 - - 15,449
Loss on investments (4,813) - - (4,813)
----------------- ----------------- ----------- -----------------
Income / (loss) before income taxes 18,340 (16,655) - 1,685
Income taxes 3,443 - - 3,443
----------------- ----------------- ----------- -----------------
Net loss for the year 14,897 (16,655) - (1,758)
Other comprehensive income / (loss)
Foreign currency translation differences (21,259) - - (21,259)
----------------- ----------------- ----------- -----------------
Total comprehensive (loss) for the year (6,362) (16,655) - (23,017)
----------------- ----------------- ----------- -----------------
Gain / (loss) per common share (0.001)
-------------
Weighted average shares outstanding 20,675,800
-------------
(see Notes to the Unaudited Proforma Consolidated Financial Statements)
F-3
MULTIGIOCO SRL.
Proforma Balance Sheet
(Unaudited)
MULTIGIOCO EMPIRE PROFORMA
June 30, 2014 June 30, 2014 Proforma Balance Sheet
Historical Historical Adjustments June 30, 2014
----------------- ----------------- ----------- -------------
US$ US$ US$ US$
<c> <c> <c> <c>
Assets
Current assets:
Cash and cash equivalents 8,185 266 - 8,451
Deposits for acquisitions - 50,000(a) (50,000) -
Gaming account debits 352,336 - - 352,336
Prepaid expenses - 25,000 - 25,000
Other current assets 14,259 - - 14,259
----------------- ----------------- ----------- -----------------
Total current assets 374,780 75,266 (50,000) 400,046
Non - current assets:
Property, plant and equipment (Net) 23,661 - - 23,661
Intangible assets 363,354 -(c) 1,716,657 2,080,011
Investments 479,151 - - 479,151
----------------- ----------------- ----------- -----------------
Total non - current assets 866,166 - 1,716,657 2,258,823
Total assets 1,240,946 75,266 1,666,657 2,982,869
----------------- ----------------- ----------- -----------------
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued liabilities 428,505 12,642(a) (50,000) 391,147
Short term portion of debt 156,007 - - 156,007
Gaming account credits 422,919 - - 422,919
Taxes payable 108,599 - - 108,599
Advances from stockholders 53,977 302,183 - 356,160
Other current liabilities 276,038 - - 276,038
----------------- ----------------- ----------- -----------------
Total current liabilities 1,446,045 314,825 (50,000) 1,710,870
Long term loans and capital leases - - - -
Total liabilities 1,446,045 314,825 (50,000) 1,710,870
Stockholders' equity
Common stocks 13,690 1,868(b) (13,490) 2,068
Additional paid in capital 376,089 4,931,014(b),(c) 1,730,147 7,037,250
Retained earnings / (accumulated loss) (594,878) (4,958,280) - (5,553,158)
Deficit accumulated during the development stage - (214,161) - (214,161)
----------------- ----------------- ----------- -----------------
Total stockholders' equity (205,099) (239,559) 1,716,657 1,271,999
----------------- ----------------- ----------- -----------------
Total liabilities and stockholders' equity 1,240,946 75,266 1,666,657 2,982,869
----------------- ----------------- ----------- -----------------
(see Notes to the Unaudited Proforma Consolidated Financial Statements)
F-4
MULTIGIOCO SRL.
Proforma Statement of Operations
(Unaudited)
MULTIGIOCO EMPIRE PROFORMA
June 30, 2014 June 30, 2014 Proforma Balance Sheet
Historical Historical Adjustments June 30, 2014
----------------- ----------------- ----------- -------------
US$ US$ US$ US$
<c> <c> <c> <c>
Revenue from operations
Net gaming revenue 2,575,787 - - 2,575,787
Rebate of bank and credit card fees 10,733 - - 10,733
Other income - - - 9,984
----------------- ----------------- ----------- -------------
Gross revenue 2,586,520 - - 2,586,520
Direct operating and selling, general and administrative costs
Direct operating costs 2,150,828 - - 2,150,828
Selling, general and administrative costs 521,208 65,323 - 586,531
Amortization and depreciation 28,354 - - 28,354
Interest expense - stockholders - 6,170 - 6,170
----------------- ----------------- ----------- -------------
Total direct operating, selling,
and administrative costs 2,700,391 71,493 - 2,771,884
----------------- ----------------- ----------- -------------
Operating income / (loss) (113,871) (71,493) - (185,364)
Interest expenses - - - -
Interest income - - - -
Other income 786 - - 786
Gains on bond investments 5,195 - - 5,195
Loss on investments - - - -
----------------- ----------------- ----------- -----------------
Income / (loss) before income taxes (107,890) (71,493) - (179,383)
Income taxes - - - -
----------------- ----------------- ----------- -----------------
Net loss for the period (107,890) (71,493) - (179,383)
Other comprehensive Income
Foreign currency translation differences 3,317 - - 3,317
----------------- ----------------- ----------- -------------
Total comprehensive (loss) for the period (52,287) (71,493) - (176,066)
----------------- ----------------- ----------- -------------
Gain / (loss) per common share (0.009)
-------------
Weighted average shares outstanding 20,675,800
-------------
(see Notes to the Unaudited Proforma Consolidated Financial Statements)
F-5
Multigioco SRL
Notes to the Unaudited Proforma Consolidated Financial Statements
For the period ending June 30, 2014
Unaudited
Note 1 - Basis of presentation for proforma financial statements
On August 15, 2014, Empire Global Corp (the "Company"), acquired 100% of the
outstanding common shares of Multigioco Srl, a, Italian corporation, in exchange
for a total of 2,000,000 restricted shares of Empire Global Corp common stock.
The Company issued 2,000,000 shares upon Closing of acquisition.
The unaudited proforma financial statements have been developed from the audited
records of Empire Global Corp for the year ended Dec 31, 2013 and period ended
June 30, 2014, and the audited records of Multigioco Srl for the year ended
December 31, 2013 and June 30, 2014.
The unaudited proforma condensed consolidated statement of operations is based
upon the historical financial statements of Empire Global Corp and
Multigioco Srl, after giving effect to the acquisition. The unaudited proforma
condensed consolidated statement of operations is presented as if the
acquisition had occurred at the beginning of the period.
Note 2 - Proforma adjustments
The proforma adjustments included in the unaudited condensed consolidated
financial statements are as follows:
(a) Net effect of the elimination of all of the intercompany assets,
liabilities, equity, and operations and retained earnings of
Multigioco Srl.
(b) Issuance of the 2,000,000 shares of Empire Global Corp in exchange for
100% of the issued common shares of Multigioco Srl.
(c) Reflects the allocation of the purchase price of US$ 2,056,350 in shares
of Empire Global Corp common stock to the fair value of the assets
acquired. The allocation of the purchase price is preliminary and
therefore subject to change. The allocation of the purchase price to the
fair value of the assets acquired is as follows:
Total Purchase Price US$ 2,056,350
Less: Net assets acquired
Property, plant, and equipment 23,661
Intangible assets 363,354
-------------
Goodwill US$ 1,716,657
-------------
F-6