UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C., 20549
Amendment
No. 1 to
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
April
28, 2008
Date
of
Report (Date of earliest event reported)
MOBIVENTURES
INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
|
000-51855
|
|
Not
Applicable
|
|
(State
or other jurisdiction
of
incorporation)
|
|
(Commission
File Number)
|
|
(IRS
Employer Identification No.)
|
|
Sunnyside,
Brinkworth, Chippenham
Wiltshire,
England SN15 5BY
|
|
(Address
of principal executive offices)
|
+44
(0) 7740 611 413
(
Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions:
|
o
|
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
o
|
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
o
|
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
|
EXPLANATORY
NOTE
On
May 2,
2008, Mobiventures Inc., a Nevada corporation (the “
Company
”)
filed
its original Current Report on Form 8-K with the U.S. Securities and Exchange
Commission (the “
Original
Report
”)
disclosing, among other things, the Company’s acquisition of Purepromoter Ltd.,
a United Kingdom company ("
Purepromoter
"),
as
such Original Report is reproduced herein below. The Company is filing this
Amendment No. 1 to the Original Report (this “
Report
”)
in
order to disclose those financial statements of Purepromoter Ltd. as required
to
be disclosed by the Company pursuant to Items 9.01(a) and (b) of Form
8-K.
FORWARD-LOOKING
STATEMENTS
Much
of
the information included in this Report includes or is based upon estimates,
projections or other "forward looking statements". Such forward looking
statements include any projections or estimates made by us and our management
in
connection with our business operations. These statements relate to future
events or our future financial performance. In some cases you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue or the negative of those terms or other comparable terminology. While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein. Such estimates, projections or other forward
looking statements involve various risks and uncertainties and other factors,
including the risks in the section titled "Risk Factors" below, that may cause
our or our Company's actual results, levels of activities, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. We caution the reader that important factors in
some
cases have affected and, in the future, could materially affect actual results
and cause actual results to differ materially from the results expressed in
any
such estimates, projections or other forward looking statements. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform those statements to actual results.
SECTION
2 - FINANCIAL INFORMATION
Item
2.01 Completion of
Acquisition or Disposition of Assets.
References
As
used
in this Report: (i) the terms the "
Company
",
"
our
company
",
"
we
",
"
us
",
"
our
"
and
"
MobiVentures
"
refer
to MobiVentures Inc., a Nevada corporation, and its subsidiaries, unless the
context requires otherwise; (ii) all references to currency are to British
pounds, the official currency of the United Kingdom, unless otherwise indicated,
and (iii)(A) the exchange rate for the British pound to the United States dollar
on April 28, 2008, the date of the closing of the acquisition of Purepromoter
Ltd., was UK£1=US$1.9908;(B) the exchange rate for the British pound to the
United States dollar at the end of March 2007, the fiscal year end of
Purepromoter Ltd., was UK£1=US$1.9685; (C) the average exchange rate for the
British pound to the United States dollar for the fiscal year ended March 31,
2007 was UK£1=US$1.8922; (D) the exchange rate for the British pound to the
United States dollar at the end of December 2007 was UK£1=US$2.0074; and (E) the
average exchange rate for the British pound to the United States dollar for
the
nine month period ended December 31, 2007 was UK£1=US$2.0178.
Acquisition
of Purepromoter Ltd.
On
April
28, 2008, we completed the acquisition of all of the issued share capital of
Purepromoter, comprised of 100 A Ordinary Shares at £1.00 per share and 365 B
Ordinary Shares at £1.00 per share, pursuant to the terms of a share purchase
agreement dated April 4, 2008 between our company and the shareholders of
Purepromoter (the "
Share
Purchase Agreement
").
The
aggregate consideration paid by us for the share capital of Purepromoter at
closing was comprised of:
|
|
·
|
cash
in the amount of £1,290,000 (US$2,568,132), and
|
|
|
·
|
share
consideration in the amount of £1,675,000 (US$3,350,000) paid by the
issuance of 33,500,000 shares of our common stock on the basis of
a share
price of $0.10 per share.
|
Further
consideration to be paid under the Share Purchase Agreement consists
of:
|
|
·
|
additional
cash consideration in the amount of £556,400 (US$1,107,681) payable on the
six month anniversary of the closing of the acquisition, and
|
|
|
·
|
earn
out consideration payable pursuant to a formula prescribed in the
Share
Purchase Agreement, which is based on the profit realized by Purepromoter
in the 2009 and 2010 fiscal years.
|
However,
the maximum consideration payable under the Share Purchase Agreement cannot
exceed £3,883,922.
In
connection with the closing of the acquisition of Purepromoter, we have issued
400,000 shares of our common stock to a third party broker for £20,000
(US$40,000) and we will issue shares of our common stock worth £118,250 and pay
£30,000 in cash as a finder's fee.
At
closing, we issued debentures in the amount of $2,000,000 to finance the
acquisition as described below. We will need additional financing beyond the
proceeds of the convertible debenture financing described below to pursue the
plan of operations of Purepromoter. In that regard, on April 25, 2008, we
obtained a loan from Peter Åhman, a director and officer of our Company, in the
amount of 612,000 Euros (US$954,475) due May 30, 2008, which bears interest
at
10% per annum and is secured by the assets of our Company but subordinated
to
the interest of Trafalgar Capital Specialized Investment Fund, Luxembourg and
Stuart Hobbs. In addition, in the event of default, all outstanding amounts
under the loan are immediately repayable, and on any amount unpaid after the
due
date we are required to pay an additional penalty interest of 10% per annum
until fully repaid. We expect we will need further financing in the future
to
pursue our plans for Purepromoter, however, there is no assurance that we will
be able to raise any additional financing.
Debenture
Financing
In
connection with the acquisition of Purepromoter, on April 28, 2008, we issued
to
Trafalgar Capital Specialized Investment Fund, Luxembourg ("
Trafalgar
")
a
total of $2,000,000 of secured convertible redeemable debentures (the
"
Debentures
")
for a
total purchase price of $2,000,000 (the "
Purchase
Price
")
pursuant to a securities purchase agreement (the "
Securities
Purchase Agreement
")
we
entered into with Trafalgar dated March 31, 2008. The Debentures mature on
March
31, 2010 and if we default on our mandatory redemption obligation under the
Debentures, Trafalgar will have the right to convert the Debentures into shares
of our common stock at a conversion price equal to 85% of the market price
at
the time of conversion.
The
Purchase Price was held in escrow by Trafalgar's counsel and escrow agent and
was disbursed to us by the escrow agent upon closing of the acquisition of
Purepromoter. The completion of the acquisition of Purepromoter was a key
condition precedent to the closing of the debenture financing. Pursuant to
the
Securities Purchase Agreement, we used the proceeds of the debenture financing
to pay a substantial portion of the purchase price under the Share Purchase
Agreement.
Under
the
terms of the Securities Purchase Agreement, we had executed and delivered
certain transaction documents (the "
Transaction
Documents
"),
in
substantially the forms attached as exhibits to the Securities Purchase
Agreement, as follows:
|
|
·
|
Registration
Rights Agreement;
|
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|
·
|
Irrevocable
Transfer Agent Instructions;
|
|
|
·
|
Security
Agreement; and
|
In
addition, a Composite Guarantee and Debenture and a Share Charge was executed
by
us pursuant to the Security Agreement as further security for our obligations
under the Transaction Documents.
As
provided by the Securities Purchase Agreement:
|
|
·
|
we
paid a structuring fee to Trafalgar of Seventeen Thousand Five Hundred
Dollars ($17,500), of which Twelve Thousand Five Hundred Dollars
($12,500)
was paid directly from the proceeds of the closing of the Debenture
financing,
|
|
|
·
|
we
paid a due diligence fee to Trafalgar of Ten Thousand Dollars ($10,000),
one-half of which was paid directly from the proceeds of such
closing,
|
|
|
·
|
in
lieu of issuing warrants to Trafalgar, we paid Trafalgar a fee equal
to
two percent (2%) of the principal amount of the Debentures directly
from
the proceeds of such closing,
|
|
|
·
|
we
paid to Trafalgar a commitment fee equal to six percent (6%) of the
principal amount of the Debentures directly from the proceeds of
such
closing, and
|
|
|
·
|
we
paid Trafalgar a loan commitment fee equal to two percent (2%) of
the
principal amount of the Debentures directly from the proceeds of
such
closing.
|
The
Debentures have the following terms and are subject to the following
conditions:
|
|
·
|
the
Debentures are secured by a pledge by us of all of our assets, including
the shares of Move2Mobile Limited and OY Tracebit AB held by us,
and
$6,000,000 worth of shares of our common stock,
|
|
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·
|
the
Debentures bear interest at the rate of 10% per annum, compounded
monthly,
|
|
|
·
|
the
Debentures are repayable in full on March 31, 2010,
|
|
|
·
|
we
are obligated to repay the principal amount of the Debentures in
equal
monthly instalments of principal plus interest and a 15% redemption
premium, and
|
|
|
·
|
Trafalgar
is entitled to exchange rate protection in the event the Euro strengthens
in relation to the U.S. dollar.
|
The
Registration Rights Agreement provides that we will file a registration
statement with the United States Securities and Exchange Commission to register
the resale of the shares issuable upon conversion of the
Debentures.
In
connection with the issuance of the Debentures and closing of the acquisition
of
Purepromoter, we also will pay finders fees to two finders in the total amount
of 7% of the amount of the Debentures in cash, and we will issue to them (i)
warrants to purchase up to 1,250,000
shares
of
our common stock
at
an
exercise price of US$0.04 per share and (ii) shares of our common stock
equalling 1.99% of our outstanding shares, which contain anti dilution rights
for one year.
Copies
of
the Share Purchase Agreement, Securities Purchase Agreement and related
Transactional Documents have been filed with the SEC.
Consultant
Agreement
On
April
26, 2008, Purepromoter entered into a consulting agreement (the "
Hobbs
Agreement
")
with
Stuart Hobbs, a director and principal shareholder of Purepromoter, whereby
Mr.
Hobbs was retained to provide consulting services to Purepromoter and us
pursuant to the terms and subject to the conditions of the Hobbs Agreement.
The
following summary of the Hobbs Agreement does not purport to be complete and
is
qualified in its entirety by reference to the Hobbs Agreement, a copy of which
was attached as an exhibit to the Original Report.
Under
the
Hobbs Agreement, Mr. Hobbs has agreed to act as the Managing Director of
Purepromoter and to act as a member of the Board of Directors of the Company
for
a term of at least 24 months from the date of the acquisition of Purepromoter,
subject to termination. In consideration for his services, we agreed to pay
Mr.
Hobbs £4,166.66 per month and to grant to him warrants to acquire up to 600,000
shares of our common stock (to be issued 24 months from the date of the
agreement), exercisable at a price of US$0.10 per share for a term of five
years. Mr. Hobbs is also entitled to a cash or equity bonus at the discretion
of
our Board of Directors. The Hobbs Agreement may be terminated at any time by
us
in the event that (i) Mr. Hobbs commits an act of fraud, theft or embezzlement,
(ii) the neglect or breach by him of any material obligation under the
agreement, or (iii) his refusal to follow direction from our Board of Directors,
provided Mr. Hobbs fails to remedy any such default within 30 days of notice
thereof. We may also terminate the Hobbs Agreement in the absence of an event
of
default by delivering notice of termination to him and paying an amount equal
to
one month of his fee in a lump sum. In addition, Mr. Hobbs may terminate the
agreement at any time upon one months' prior written notice to the Company,
or
in the event of any breach of any material term of the agreement by us, provided
that such default has not been remedied within 30 days of notice thereof. The
agreement also contains provisions relating to proprietary information and
developments, as well as non-compete and non-hire clauses.
Business
of Purepromoter
Purepromoter
was organized under the laws of the United Kingdom on August 7, 2001 and
provides low cost e-mail and text messaging (SMS) marketing campaigns to
businesses and agencies, including clients such as Emap, The FT, Economist
Conferences, Littlewoods, ultimatepoker.com and innocent drinks. Through its
agency channel, Purepromoter works and has worked with companies including
Halifax, Barclaycard, Levis Europe, Pepsi, O2, Redbull and Starbucks.
Purepromoter offers a complete and flexible software solution to add power
to
email marketing and SMS advertising: PureResponse. Purepromoter helps its
clients develop the most effective way to display their email marketing
messages, and focuses on its clients getting the highest send rates and lowest
number of opt-outs as possible.
Electronic
forms of communication, which includes Email, Electronic Brochures, Mobile
Text
Messaging (SMS) offer significant cost savings over traditional paper based
alternatives. They also can provide better feedback statistics and, with
detailed analysis of these statistics, the marketer normally can get better
responses from marketing campaigns.
The
core
component of Purepromoter's e-marketing solutions is a software application
which is developed and wholly owned by Purepromoter and forms the intellectual
property of the company. The software allows customers to create, manage and
deliver branded electronic sales, marketing and information messages.
Purepromoter derives income from the provision of the software application
(either on a rental basis, or via an outright sale and maintenance agreement)
plus associated message delivery commissions and design / consultancy services.
As an example, a typical or average customer might purchase the ability for
three employees to access the Purepromoter on-line software and this would
allow
that customer to create, manage and deliver between 1,000 to 2,000,000 email
messages per month. The customer might also ask Purepromoter to design email
templates and seek consultancy as to how best to use electronic communications
within its marketing mix.
Once
a
customer has been acquired, the company benefits from a continuous on-going
revenue stream from software rental (and/or maintenance) plus message delivery
commissions.
Purepromoter
is operating in a rapidly expanding marketplace that is substantial and has
core
products that have been proven, together with a significant and expanding
customer base. The company has detailed and fully researched sales and marketing
plans as to how best to grow the company.
The
nature of Purepromoter's business is that it is of a repeat nature, which
underpins the projected increase in revenues. There is a strong correlation
between the number of sales people engaged in the business and the revenues
generated. Sales people are incentivised to bring new clients to the company.
Purepromoter has been able to generate approximately 20 to 30 new clients every
month whilst retaining a high proportion of existing clients.
To
date,
Purepromoter has focused on the software and support for Email and Electronic
Brochures, which currently provides approximately 95% of its revenues. Mobile
text messaging, which we believe to be an emerging area of business, currently
accounts for only approximately 5% of its revenues. We believe this provides
for
a synergy with Mobiventures.
Purepromoter
currently has a client base of around 800 customers, which has grown from around
400 since December 2006. The client base continues to grow by around 20 to
30
new clients each month. Purepromoter has organized itself in three sales teams,
Major Accounts, SME Accounts and Agencies. Of the approximately 50 customers
considered to be Major Accounts, the top 5 generate around 8 to 12% of total
revenues, but no customer contributes more than 3% of revenues.
The
number of electronic marketing messages overtook that of paper based
alternatives in 2005 and is growing rapidly. Mobile marketing is still in its
infancy but we believe it offers significant opportunities and is likely to
outstrip Email messaging in the next few years.
We
believe that Purepromoter is now one of the largest UK based e-marketing service
providers. It has a strong and varied client base spanning multiple industry
sectors, comprised of small and large companies and a growing number of new
media design agencies.
We
believe that Purepromoter is in a strategic position to exploit this fast
growing marketplace. Furthermore, we believe Mobiventures will be able to
leverage the customer base of Purepromoter in order to market and sell its
mobile applications and services.
In
addition, we expect that Purepromoter will be able to attract more customers
by
offering a fuller mobile service to new and existing customers.
Plan
of Operations
Purepromoter's
objective is to build value for shareholders through continuing to expand its
operational base and hence its revenue growth and earnings. In that regard,
Purepromoter plans to:
|
|
·
|
Increase
its sales staff to 20 people by March 2009, with the objective
of
increasing revenues and earnings.
|
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|
·
|
Begin
to offer the Mobiventure's applications to existing major account
and
marketing agencies customers in addition to the Purepromoter email
messaging software, with the objective of increasing the revenue
generated
from each of these customers.
|
|
|
·
|
Begin
to market Purepromoter services through Mobiventure's existing channels,
with the objective of developing Purepromoter's business outside
the UK.
|
Results
of Operations
The
following table sets forth selected financial information relating to
Purepromoter for the periods indicated. The financial information presented
is
derived from unaudited financial statements of Purepromoter.
|
|
|
Nine
Months Ended
December 31
(unaudited)
|
|
Year
Ended March 31 (unaudited)
|
|
|
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
|
Revenues
|
|
£
|
1,735,404
|
|
£
|
939,645
|
|
£
|
1,442,089
|
|
£
|
569,553
|
|
|
Cost
of sales
|
|
|
(272,513
|
)
|
|
(183,557
|
)
|
|
(235,553
|
)
|
|
(57,726
|
)
|
|
Gross
profit
|
|
|
1,462,890
|
|
|
756,087
|
|
|
1,206,536
|
|
|
511,827
|
|
|
Administrative
costs
|
|
|
(949,725
|
)
|
|
(504,766
|
)
|
|
(860,671
|
)
|
|
(396,121
|
)
|
|
Other
operating income
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
Income
from operations
|
|
|
513,165
|
|
|
251,321
|
|
|
345,874
|
|
|
115,706
|
|
|
Finance
costs
|
|
|
—
|
|
|
—
|
|
|
(6,037
|
)
|
|
(6,972
|
)
|
|
Profit
before taxation
|
|
|
513,165
|
|
|
251,321
|
|
|
339,837
|
|
|
108,734
|
|
|
UK
income tax
|
|
|
—
|
|
|
—
|
|
|
(69,805
|
)
|
|
(20,698
|
)
|
|
Net
income
|
|
|
513,165
|
|
|
251,321
|
|
|
270,032
|
|
|
88,036
|
|
Nine
Months Ended December 31, 2007 Compared to Nine Months Ended December 31,
2006
Revenues
for the nine months ended December 31, 2007 increased to £1,735,404 from
£939,645 in the prior period of 2006, primarily due to an increase in the
customer base.
Administrative
costs increased to £949,725 in the nine months ended December 31, 2007 from
£504,766 in the prior period of 2006, primarily as a result of the hiring of
additional people to serve the expanding customer base.
The
operating income for the nine months ended December 31, 2007 was £513,165,
compared to £251,321 in the prior period of 2006.
Year
Ended March 31, 2007 Compared to Year Ended March 31,
2006
Revenues
for the year ended March 31, 2007 increased to £1,442,089 from £569,553 in the
year ended March 31, 2006, primarily due to an increase in the customer base.
Administrative
costs in the year ended March 31, 2007 increased to £860,671 from £396,121 in
the year ended March 31, 2006, primarily as a result of more people hired to
serve the expanding the customer base.
Finance
costs in the year ended March 31, 2007 were £6,037 compared to £6,972 in the
year ended March 31, 2006 as a result of borrowings.
The
net
income for the year ended March 31, 2007 was £278,032, compared to £88,036 in
the year ended March 31, 2006.
Liquidity
and Capital Resources
|
|
|
As
at
December
31, 2007
|
|
As
at
March
31, 2007
|
|
|
Cash
|
|
£
|
647,821
|
|
£
|
230,885
|
|
|
Working
capital
|
|
|
698,896
|
|
|
330,933
|
|
|
Total
assets
|
|
|
1,038,330
|
|
|
603,681
|
|
|
Total
liabilities
|
|
|
283,787
|
|
|
344,956
|
|
|
Stockholders'
equity
|
|
|
793,793
|
|
|
258,725
|
|
Total
expenditures over the next 12 months are estimated to be approximately
£1,600,000. This amount may be offset by any gross profits earned by
Purepromoter from revenues and, accordingly, it is anticipated that
Purepromoter's cash and working capital will be sufficient to enable it to
undertake its plan of operations over the next 12 months without obtaining
additional financing. However, there can be no assurance of this and additional
financing may be required. There can be no assurance that we will be able to
obtain any additional financing.
Off-Balance
Sheet Arrangements
As
of the
date of the Original Report, Purepromoter did not have any off balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on its financial condition, changes in financial condition, revenues
or
expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
Employees
Purepromoter
currently has 35 full-time employees and one part-time employee, and has
retained one associate on a consulting agreement basis.
Facilities
Purepromoter
maintains an office at Unit A-D, Level Seven South, New England House, New
England Street, Brighton, BN1 4GH, United Kingdom having recently moved from
an
office at 11 Old Steine, Brighton, BN1 1E5 United Kingdom.
Directors
And Executive Officers, Promoters and Control Persons
Our
executive officers and directors as of April 28, 2008 following the acquisition
of Purepromoter are as follows:
|
Directors:
|
|
|
|
Name
of Director
|
|
Office
|
|
Peter
Åhman
|
|
President,
Chief Financial Officer, Secretary and Treasurer
|
|
Nigel
Nicholas
|
|
Chief
Executive Officer and Director of Operations
|
|
Miro
Wikgren
|
|
Chief
Technical Officer
|
|
Gary
Flint
|
|
-
|
|
Danny
Wootton
|
|
-
|
|
Stuart
Hobbs
|
|
-
|
The
following describes the business experience of our directors and executive
officers. None of our directors and executive officers have been directors
of
any reporting company under the United States Securities Exchange Act of 1934,
as amended or any other publicly traded company.
Nigel
Nicholas
Mr.
Nicholas was appointed as one of our directors on March 9, 2007. Mr. Nicholas
was appointed as our chief executive officer effective November 1, 2007. Mr.
Nicholas has over 25 years experience in developing strategy and implementing
operational plans in both large global telecommunication companies and also
within small start-ups within E-commerce, Internet and Mobile
Telecommunications.
He
is a
Chartered Certified Accountant with previous experience as Chief Financial
Officer of AT&T (UK and Ireland) for six years and as Director of Strategy
and Operations for the Mobile Infrastructure business unit within Lucent
Technologies where revenues grew from almost nothing to over $1.2 billion within
his business unit. He was a member of the DTI Consultative Committee on 3rd
Generation Mobile Licences.
In
2000,
he left corporate life and worked within "Business Accelerators" growing small
start up companies in the eCommerce, Internet and Mobile Telecoms industry
in
roles such as Chief Operations Officer, Chief Business Development Officer
and
Chief Financial Officer.
In
2002,
he co-founded Move2Mobile which is a virtual mobile telecoms incubator and
business accelerator and has worked with over 120 start-ups and SME's to
accelerate their growth into the mobile telecoms space. He has been the Chief
Executive Officer of Move2Mobile since October 2002 and is also a member of
the
advisory board for incubation within the South West region of the
UK.
He
has
assisted numerous small companies to develop their business plans; raise
finance; develop strategies; manage their rapid growth and prepared companies
for IPO's. He has developed extensive business relationships with over 100
major
customers and has negotiated and executed content and service agreements with
major customers including Ericsson, Lucent, Telenor, Vodafone, Orange, T-Mobile,
KPN, BT, and Granada.
Peter
Åhman
Peter
Åhman was appointed our president, chief executive officer, chief financial
officer and secretary in connection with the acquisition of Tracebit. Concurrent
with Mr. Nicholas's appointment as our chief executive officer, Peter Åhman
resigned as our chief executive officer effective November 1, 2007.
Peter
Åhman
is
the chairman of the board for Tracebit and one of the founders of Tracebit.
He
is a Certified Public Accountant and also a partner of Grant Thornton Finland
where he has worked over 10 years as an audit partner for a number of
international and domestic clients. He is also director of Grant Thornton
Finland's Corporate Finance department. Mr. Åhman holds a Master of
Economics from the Swedish School of Economics and Business
Administration.
Gary
Flint
Gary
Flint is one of our directors. Gary Flint was appointed to our board of
directors and as our president and chief executive officer on August 31, 2005
concurrently with the closing of our acquisition of MobileMail UK. In connection
with the acquisition of Tracebit, he resigned as president, chief executive
officer and secretary. Mr. Flint was appointed as our director of business
of
development subsequent to the Tracebit acquisition and resigned from this
position effective November 1, 2007.
Mr. Flint
was appointed as the managing director of MobileMail UK in August 2004 and
is
currently a co-director with Nigel Nicholas of MobileMail UK. From December
2000 until August 2004, Mr. Flint was employed by JP Morgan Chase on
secondment to Schroders Investment Management. Between May 2001 and August
2004,
Mr. Flint was employed as a systems analyst within the operation project
team, whereby he was responsible for the design, build, implementation and
analysis of back and middle office information technology systems. From December
2000 to May 2001, Mr. Flint was a fund accountant in institutional fund
management. During the period of July 2000 to December 2000, Mr. Flint was
a financial assistant with HSBC Bank working within the financial operations
department controlling and monitoring local and international inter-bank
transactions. Between January 2000 and July 2000, Mr. Flint was employed by
Anheuser-Busch in a capacity as an Account Assistant within the European
headquarters in London. Prior to employment Mr. Flint studied for his BSc
(Hons) Degree in Economics with Human Geography at Loughborough University,
in
the United Kingdom.
Miro
Wikgren
Miro
Wikgren
was appointed our chief technical officer in connection with our Acquisition
of
Tracebit. Miro
Wikgren
is responsible for architecture, design and implementation of Tracebit's mobile
games. He has worked for Tracebit for over five years and has been in charge
of
product development from the beginning. Prior to joining Tracebit,
Mr. Wikgren was with Svensk-Finland Insurance Company where he was in
charge of design, development and production of in-house data management and
interconnection systems. He has also worked at the IT department of the Swedish
School of Economics and Business Administration during his studies.
Mr. Wikgren has more than 10 years of experience in application design and
development.
Danny
Wootton
Danny
Wootton was appointed as a director of the Company effective March 31, 2008.
Mr.
Wootton is Senior Commercial Executive who has successfully operated at Director
level in Solution and Product Management, Commercial Management, Product
Marketing and Finance for global Mobile and Fixed Line Telecoms companies and
other industry sector start-ups. Mr. Wootton is currently a Director of
Innovation and Alliances for Logica, a leading system integrator in the Telecoms
and Media market.
Mr.
Wootton is a Chartered Management Accountant with previous experience as Senior
Management Accountant of AT&T (UK and Ireland) for three years, followed by
Director of Commercial Management for the start up of Lucent Technologies new
Mobile Infrastructure business unit.
For
the
last three years Mr. Wootton has been Director of Offer and Product Management
for Lucent's Mobility business unit, with responsibility for the overall GSM
program, the UMTS product strategy and programme requirements, and overall
product management and product marketing responsibility for Lucent Mobility's
Application and Content solutions.
His
knowledge of the mobile market covers both consumer and enterprise end users,
network operators and MVNOs, across technologies including 2G, 2.5G and 3G
infrastructure (Access and Core for GSM, CDMA, wCDMA), Messaging, Location
Based
Services, Secure data Solutions, Text to Voice / Voice to Text, Service Level
Management and OSS. In addition to this, he has also acted as business mentor
to
several spin off / start-up organisations within the application
space.
His
earlier career was spent in an array of financial and general management
positions in the distribution, wholesale and retail industries.
In
addition to his extensive knowledge of the mobile telecoms markets, his
principle strengths include considerable customer and end-user engagement within
a business development and contract negotiation environment, extensive product
and offer management experience ranging from single product/application through
to complex end to end solutions, excellent leadership, man-management and team
building skills and a proven commercial track record in a global / $100m+
environment.
Stuart
Hobbs
Stuart
Hobbs was appointed a director of our company on April 28, 2008 in connection
with our acquisition of Purepromoter. Mr. Hobbs was an original investor in
Purepromoter and was appointed as its Managing Director in August
2005.
Prior
to
his involvement with Purepromoter, Mr. Hobbs' last full-time role was as
the owner/manager of a specialist recruitment software company called Dillistone
Systems Ltd. from January 1998 to January 2003. Having acquired the company
in
1998, Mr Hobbs grew revenues from £200,000 to just under £2,000,000 per year and
expanded the company globally to operate from offices in London, New York,
Sydney and Frankfurt.
Term
of Office
Our
directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors and hold
office until removed by the board.
Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
The
following table sets forth certain information with respect to the beneficial
ownership of our common stock as of April 28, 2008 by each stockholder known
by
us to be the beneficial owner of more than 5% of our common stock and by each
of
our current directors and executive officers. Each person has sole voting and
investment power with respect to the shares of common stock held by him, except
as otherwise indicated.
|
Name and Address of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership
(1)
|
|
Percentage of Beneficial
Ownership
(2)
|
|
|
|
|
|
|
|
|
|
Directors
and Officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary
Flint
|
|
|
3,931,867
|
(3)
|
|
3.59
|
%
|
|
|
|
|
|
|
|
|
|
|
Peter
Åhman
|
|
|
9,407,803
|
(4)
|
|
8.75
|
%
|
|
|
|
|
|
|
|
|
|
|
Miro
Wikgren
|
|
|
4,169,930
|
(5)
|
|
3.90
|
%
|
|
|
|
|
|
|
|
|
|
|
Nigel
Nicholas
|
|
|
10,749,091
|
(6)
|
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
Danny
Wootton
|
|
|
7,572,295
|
(7)
|
|
7.07
|
%
|
|
|
|
|
|
|
|
|
|
|
Stuart
Hobbs
|
|
|
20,000,000
|
(8)
|
|
18.71
|
%
|
|
|
|
|
|
|
|
|
|
|
All
executive officers and directors as a group
(6
persons)
|
|
|
55,830,986
|
(9)
|
|
50.30
|
%
|
|
|
|
|
|
|
|
|
|
|
Major
Shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tracebit
Holding OY
|
|
|
8,807,803
|
(10)
|
|
8.24
|
%
|
|
|
|
|
|
|
|
|
|
|
The
Mobilemail Technology Partnership LLP
(11)
|
|
|
10,000,000
|
|
|
9.36
|
%
|
*
Less
than one percent.
(1)
Under Rule 13d-3, a beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes
the
power to vote, or to direct the voting of shares; and (ii) investment power,
which includes the power to dispose or direct the disposition of shares. Certain
shares may be deemed to be beneficially owned by more than one person (if,
for
example, persons share the power to vote or the power to dispose of the shares).
In addition, shares are deemed to be beneficially owned by a person if the
person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided.
In
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by
such
person (and only such person) by reason of these acquisition rights.
(2)
Based on 106,874,903 shares of our common stock outstanding as of April 28,
2008.
(3)
This amount represents 1,416,867 shares and warrants to acquire up to 2,515,000
shares.
(4)
This
amount represents 8,782,803 shares held by Tracebit Holding OY and warrants
to
acquire up to 625,000 shares of which warrants to acquire up to 25,000 shares
are held by Tracebit Holding OY. Mr. Åhman is the sole director and a
significant shareholder of Tracebit Holding OY and, accordingly, he may be
deemed to be the beneficial owner of these shares.
(5)
This
amount includes 4,169,930 shares held by Pollux OU of which Mr. Wikgren is
the
sole director and shareholder. Accordingly, Mr. Wikgren may be deemed to be
the
beneficial owner of these shares.
(6)
This amount represents 10,069,256 shares, options to acquire up to 29,423
shares and warrants to acquire up to 650,412 shares.
(7)
This amount represents 7,272,295 shares and warrants to acquire up to
300,000 shares.
(8)
This amount represents shares of our common stock.
(9)
This amount represents 51,711,151 shares, options to acquire up to 29,423
shares and warrants to acquire up to 4,090,412 shares.
(10)
This amount represents 8,782,803 shares and warrants to acquire up to
25,000 shares.
(11)
The MobileMail Technology Partnership LLP is a limited liability
partnership comprised of eighty nine equity partners and two designated
partners, each of whom is a limited partner. Mr. Paul Carter is a
designated partner and is the administrator of the partnership pursuant to
a
services agreement between Mr. Carter and the partnership. The
administrator is responsible for the administration of the business of the
partnership and, subject to the partnership's operating agreement, makes
decisions regarding management of the business of the partnership. Accordingly,
Mr. Carter exercises voting and investment control over the securities held
by The MobileMail Technology Partnership LLP.
RISK
FACTORS
The
following sets forth some of the risks relating to Purepromoter's business.
If
any of the following risks occurs, Purepromoter's business, financial condition
or results of operations could be seriously harmed. We face additional risks
as
disclosed in our Annual Report on Form 10-KSB for the year ended September
30,
2007 and our other filings with the SEC.
Risks
Related to Purepromoter's Business
Purepromoter
has a limited operating history, which may make it difficult to evaluate its
business.
Purepromoter
has only a five year history of generating revenues. Although revenue growth
each year has been high in percentage terms, a consequence of the relatively
short operating history is that there is only limited financial data which
can
be used to evaluate Purepromoter's business. Any evaluation of Purepromoter's
business and prospects must be considered in light of Purepromoter's limited
operating history and the risks and uncertainties encountered by companies
in
its stage of development. As an early stage company, Purepromoter faces
increased risks, uncertainties, expenses and difficulties, any of which could
materially harm its business, operating results and financial
condition.
Purepromoter
has supplier, computer hardware and internet reliability related
risks.
To
run
the software and services it suppliers, Purepromoter rents servers located
at
hosting centers and purchases SMS bandwidth from portals in the UK.
Although,
it spreads the risk of computer hardware failure across multiple servers in
multiple hosting centers and, to date, its supplier's records have been good,
there is no assurance of continuity of supply. An event resulting in a hosting
centre going off-line for any significant period of time may result in
significant loss of revenues and therefore materially harm Purepromoter's
business, operating results and financial condition.
Similarly,
events stopping the servers from communicating over the internet will also
have
the same consequences.
Purepromoter
faces ISP reputation related risks.
By
far
the largest proportion of Purepromoter's revenue is currently derived by
charging a price per email for sending marketing emails on behalf of commercial
marketing departments. The largest volume senders of emails tend to be companies
sending to consumers. Consequently some of Purepromoter's largest customers
send
large numbers of emails to consumers.
The
EU
anti-spam regulations and US CAN_SPAM laws place restrictions on what and when
companies are allowed to send marketing emails to consumers. Purepromoter rents
the use of its software and servers for customers to upload their own email
lists and send their own email marketing campaigns. Purepromoter does not own
lists or process other people's data and is therefore not directly liable for
any breaches of the EU or US anti-spam regulations. However, where customers
are
considered by email recipients to be sending unwanted emails, there is an
inherent mechanism within most email clients to make a complaint against the
sender. The level or number of complaints is recorded by the larger ISP's
(Hotmail, Yahoo, etc) against the IP address of the server sending the email.
This record of complaint rate acts as a "reputation" for the IP
address.
Purepromoter
closely audits the complaint rates for each of its customers and reacts quickly
and accordingly to stop rogue campaigns. However if too many new customers
were
to create and send campaigns which attracted high complaint rates, the
reputation of its sending servers could be diminished. This diminished
reputation could affect Purepromoter's ability to win large new customers and
therefore significantly affect its planned growth in revenues.
Purepromoter's
financial results could vary from quarter to quarter and are difficult to
accurately predict.
Purepromoter's
revenues and operating results largely depend on the number of emails and SMS
messages sent by the marketing departments of its customers. Although marketing
spent on email is predicted to increase, any downturn in marketing budgets
could
significantly affect Purepromoters revenues
As
a
result, comparing Purepromoter's operating results on a period-to-period basis
may not provide an accurate financial picture of its results and financial
condition. In addition, we may not be able to accurately predict Purepromoter's
future revenues or results of operations.
The
markets in which Purepromoter operates are highly competitive, and many of
its
competitors have significantly greater resource.
Although
Purepromoter has consistently grown revenues, it competes in a very competitive
business environment. Some of its competitors and potential competitors have
advantages over it in software development and globally in terms of coverage
of
geographic markets. There are number of competitors who generate significantly
greater revenues, have larger financial resources and stronger brand
recognition. Their capacity to leverage their marketing expenditures across
a
broader range of potential customers, form relationships with brand owners
or
make acquisitions of complimentary products inherently increases the risk to
Purepromoter's business model.
If
Purepromoter is unable to compete effectively or it is not as successful as
its
competitors in its target markets, sales growth could fall short of
expectations, margins could decline and it could lose market share, any of
which
would materially harm its business, operating results and financial condition.
The
business and growth of Purepromoter may suffer if it is unable to hire and
retain key personnel, who are in high demand.
Purepromoter
depends on the continued contributions of Purepromoter's senior management
and
other key personnel. The loss of the services of any of these executive officers
or other key employees could harm Purepromoter's business. Purepromoter does
not
maintain a key-person life insurance policy on any of its officers or other
employees.
The
future success of Purepromoter also depends on its ability to identify, attract
and retain highly skilled technical, managerial and sales personnel.
Purepromoter faces intense competition for qualified individuals from numerous
technology and marketing companies. Qualified individuals are in high demand,
and Purepromoter may incur significant costs to attract them. Purepromoter
may
be unable to attract and retain suitably qualified individuals who are capable
of meeting growing operational and managerial requirements, or may be required
to pay increased compensation in order to do so.
Although,
to date, Purepromoter has a good record of attracting staff at fair salary
levels, if it is unable to attract and retain the qualified personnel needed
to
succeed, its business would suffer.
SECTION
3 - SECURITIES AND TRADING MARKETS
Item
3.02 - Unregistered Sales of Equity Securities.
We
have
completed the following sales of equity securities in transactions that have
not
been registered under the United States Securities Act of 1933, as amended
(the
"US Securities Act") and that have not been reported on our previously filed
periodic reports filed under the United States Securities Exchange Act of 1934,
as amended:
On
April 28, 2008, we issued 33,500,000 shares of our common stock as
partial consideration for the acquisition of Purepromoter. To finance the
acquisition, on April 28, 2008, we also issued secured convertible redeemable
debentures in an aggregate amount of $2,000,000, which are convertible into
shares of our common stock at a conversion price equal to 85% of the market
price at the time of conversion if our company defaults on its mandatory
redemption obligation in respect of the debentures. In addition, in connection
with the acquisition and financing, we issued 400,000 shares of our common
stock
to a third party and will issue shares of our common stock worth £118,250 and a
cash fee of £30,000, warrants to purchase up to 1,250,000 shares of our common
stock and shares of our common stock equaling 1.99% of our outstanding shares,
as finder's fees. The debentures were issued pursuant to Rule 506 under
Regulation D under the US Securities Act to "accredited investors" (as defined
in Rule 501 of Regulation D), based upon representations made to us. The shares
issued in connection with the acquisition, the shares issued to the third party
and the finders' fee warrants and shares were or will be issued pursuant to
Rule 903 of Regulation S under the US Securities Act on the basis that
the sale of the securities was completed in an "off-shore transaction" (as
defined in Rule 902(h) of Regulation S), based upon representations
made to us.
SECTION
5 - CORPORATE GOVERNANCE AND MANAGEMENT
Item
5.02 Election and Resignation of Directors.
We
have
appointed Stuart Hobbs as a director of the Company effective
April 28, 2008 concurrent with the closing of our acquisition of
Purepromoter. Mr. Hobbs was a principal shareholder and a director of
Purepromoter and, as a result of our acquisition of Purepromoter, Mr. Hobbs
became a principal shareholder of the Company. Information relating to Mr.
Hobbs's work experience is set forth under Item 2.01 of this Report and is
incorporated by reference in this Item 5.02.
Following
the appointment of Mr. Hobbs as a director of the Company, the number of
directors of the Company increased to six and the current directors of the
Company are as follows:
|
Name
of Director
|
|
|
|
1.
|
Gary
Flint
|
|
|
|
|
2.
|
Peter
Åhman
|
|
|
|
|
3.
|
Miro
Wikgren
|
|
|
|
|
4.
|
Nigel
Nicholas
|
|
|
|
|
5.
|
Danny
Wootton
|
|
|
|
|
6.
|
Stuart
Hobbs
|
Information
relating to our directors and officers is set forth under Item 2.01 of this
Report and is incorporated by reference in this Item 5.02.
SECTION
9 - FINANCIAL STATEMENTS AND EXHIBITS
Item
9.01 Financial Statements and Exhibits.
(a)
Financial statements of businesses acquired.
Provided
herewith.
(b)
Pro Forma Consolidated Financial Statements.
Provided
herewith.
(c)
Not applicable.
(d)
Exhibit No. Description:
|
Exhibit
Number
|
|
Description
of Exhibit
|
|
Location
|
|
|
|
|
|
|
|
10.1
|
|
Agreement
for the Sale and Purchase of the Entire Issued Share Capital of
Purepromoter Limited between Mobiventures Inc. and the shareholders
of
Purepromoter Limited
|
|
Incorporated
by reference to the Company’s Current Report on Form 8-K as filed with the
SEC on April 4, 2008
|
|
|
|
|
|
|
|
10.2
|
|
Securities
Purchase Agreement between the Company and Trafalgar Capital Specialized
Investment Fund, Luxembourg, dated March 31, 2008, with exhibits
and form
of secured convertible debenture
|
|
Incorporated
by reference to the Company’s Current Report on Form 8-K as filed with the
SEC on April 4, 2008
|
|
|
|
|
|
|
|
10.3
|
|
Consultant
Agreement between the Company and Stuart Hobbs dated April 18,
2008
|
|
Incorporated
by reference to the Company’s Current Report on Form 8-K as filed with the
SEC on May 2, 2008
|
|
|
|
|
|
|
|
10.4
|
|
Promissory
Note
|
|
Incorporated
by reference to the Company’s Current Report on Form 8-K as filed with the
SEC on May 2, 2008
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
MOBIVENTURES
INC.
|
|
|
|
|
Date:
July 14, 2008
|
|
|
|
Nigel
Nicholas
Chief
Executive Officer
|
Item
9.01(b)
MOBIVENTURES,
INC.
UNAUDITED
PRO FORMA CONDENSED COMBINED
CONSOLIDATED
FINANCIAL STATEMENTS
Introduction
to Unaudited Pro Forma Condensed Combined Consolidated Financial Statements
The
following Unaudited Pro Forma Condensed Combined Consolidated Financial
Statements combine the historical consolidated balance sheets and statements
of
operations of Mobiventures, Inc. and Purepromoter Ltd, giving effect to the
acquisition using the purchase method of accounting.
On
April
28, 2008, Mobiventures Inc. (the “Company”) (OTC BB:MBLV.OB) entered into an
Equity Share Purchase Agreement (the “Agreement”) with all of the stockholders
of Purepromoter Ltd, a corporation organized under the laws of United Kingdom
(“Pure”). Pursuant to the Agreement, at the closing, the Company will purchase
all of the issued and outstanding shares of capital stock of Pure (the
“Shares”).
The
consideration to be paid at closing and on certain days after closing of the
Agreement for the Shares will consist of shares of Common Stock of the Company
with a fair value corresponding to $3,350,000, a cash payment of $2,580,000
and
Promissory Notes with a value of $1,112,800. The $7,042,800 does not include
any
earn out components as it is not possible to predict if those objectives will
be
achieved.
The
acquisition has been completed effective April 28, 2008.
Summary
Selected Unaudited Pro Forma Condensed Combined Consolidated Financial Data
The
Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
for
the year ended September 30, 2007 and the 6 months ended March 31, 2008 and
the Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet as of
March 31, 2008 are based on the historical financial statements of Mobiventures
and Pure, after giving effect to the acquisition of Pure.
The
Unaudited Pro Forma Condensed Combined Consolidated Statements of Operations
are
presented as if the combination had taken place on October 1, 2006 and
October 1, 2007. The Unaudited Pro Forma Condensed Combined Consolidated Balance
Sheet is presented to give effect to the acquisition as if it occurred on March
31, 2008, and combines the balance sheet for Mobiventures as of March 31, 2008
with the balance sheet of Pure as of March 31, 2008 and reflects the allocation
of the purchase price to the Pure assets acquired and liabilities assumed.
The
Unaudited Pro Forma Condensed Combined Consolidated Financial Statements are
based on the estimates and assumptions set forth in the accompanying notes
to
such statements. The Unaudited Pro Forma Condensed Combined Consolidated
Financial Statements are prepared for illustrative purposes only and are not
necessarily indicative of the results that would have been achieved had the
transaction been consummated as of the date indicated or that may be achieved
in
the future.
The
Unaudited Pro Forma Condensed Combined Consolidated Financial Statements should
be read in conjunction with the historical financial statements of Mobiventures
included in Mobiventures’ audited Form 10-KSB for the year ended
September 30, 2007 and unaudited quarterly report on Form 10-Q for the 6
months ended March 31, 2008 and the audited historical financial statements
of
Pure for the years ended March 31, 2007 and March 31, 2008.
Pure’s
financial year is different from Mobiventures' and therefore Pure’s Income
statement is changed to reflect 12 months ending September 30, 2007 and 6 months
ended March 31, 2008.
|
Unaudited
Pro Forma Condensed Combined Consolidated Balance Sheet as of March
31,
2008
|
|
|
|
|
Historical
MobiVentures
|
|
Historical
Purepromoter
|
|
Pro
Forma
adjustments
|
|
Pro
Forma
Combined
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
2,025,954
|
|
|
1,332,386
|
|
|
(2,580,000
|
)(a)
|
|
778,340
|
|
|
Accounts
receivable
|
|
|
84,694
|
|
|
683,760
|
|
|
|
|
|
768,454
|
|
|
Taxes
receivable
|
|
|
23,145
|
|
|
0
|
|
|
|
|
|
23,145
|
|
|
Prepaids
and other current assets
|
|
|
22,266
|
|
|
0
|
|
|
|
|
|
22,266
|
|
|
Total
current assets
|
|
|
2,156,059
|
|
|
2,016,146
|
|
|
(2,580,000
|
)
|
|
1,592,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
4,555,000
|
|
|
|
|
|
|
|
|
4,555,000
|
|
|
Goodwill
|
|
|
1,127,754
|
|
|
|
|
|
4,450,018
|
(b)
|
|
5,577,772
|
|
|
Other
Intangibles
|
|
|
|
|
|
|
|
|
1,600,000
|
(b)
|
|
1,600,000
|
|
|
Equipment,
software and furniture, net
|
|
|
2,941
|
|
|
284,192
|
|
|
|
|
|
287,133
|
|
|
Total
assets
|
|
|
7,841,754
|
|
|
2,300,338
|
|
|
3,470,018
|
|
|
13,612,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and stockholders’ equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
724,003
|
|
|
806,488
|
|
|
|
|
|
1,530,491
|
|
|
Accrued
liabilities
|
|
|
412,970
|
|
|
0
|
|
|
485,214
|
(c)
|
|
898,184
|
|
|
Obligation
to issue shares, current portion
|
|
|
2,521,000
|
|
|
0
|
|
|
|
|
|
2,521,000
|
|
|
Due
to related party
|
|
|
601,538
|
|
|
0
|
|
|
|
|
|
601,538
|
|
|
Loan
payable, current portion
|
|
|
8,192
|
|
|
0
|
|
|
|
|
|
8,192
|
|
|
Promissory
Notes Payable, current portion
|
|
|
1,000,000
|
|
|
0
|
|
|
1,112,800
|
(a)
|
|
2,112,800
|
|
|
Total
current liabilities
|
|
|
5,267,703
|
|
|
806,488
|
|
|
1,598,014
|
|
|
7,672,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan
payable, less current portion
|
|
|
25,507
|
|
|
|
|
|
|
|
|
25,507
|
|
|
Obligation
to issue shares, less current portion
|
|
|
200,000
|
|
|
|
|
|
|
|
|
200,000
|
|
|
Deferred
tax
|
|
|
1,152,488
|
|
|
15,854
|
|
|
|
|
|
1,168,342
|
|
|
Promissory
Notes Payable, less current portion
|
|
|
500,000
|
|
|
|
|
|
|
|
|
500,000
|
|
|
Convertible
debenture
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
2,000,000
|
|
|
Total
liabilities
|
|
|
9,145,698
|
|
|
822,342
|
|
|
1,598,014
|
|
|
11,566,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity (deficit):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
48,026
|
|
|
930
|
|
|
(930
|
)(d)
|
|
81,526
|
|
|
|
|
|
|
|
|
|
|
|
33,500
|
(c)
|
|
|
|
|
Additional
paid-in capital
|
|
|
3,954,612
|
|
|
19,950
|
|
|
(19,950
|
|
|
7,271,112
|
|
|
|
|
|
|
|
|
|
|
|
3,316,500
|
(c)
|
|
|
|
|
Share
subscription received
|
|
|
155,042
|
|
|
|
|
|
|
|
|
155,042
|
|
|
Accumulated
Comprehensive Gain (Loss)
|
|
|
(45,583
|
)
|
|
|
|
|
|
|
|
(45,583
|
)
|
|
Accumulated
deficit/surplus
|
|
|
(5,416,041
|
)
|
|
1,457,116
|
|
|
(1,457,116
|
|
|
(5,416,041
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders’ equity (deficit)
|
|
|
(1,303,944
|
)
|
|
1,477,996
|
|
|
1,872,004
|
|
|
2,046,056
|
|
|
Total
liabilities and stockholders’ equity (deficit)
|
|
|
7,841,754
|
|
|
2,300,338
|
|
|
3,470,018
|
|
|
13,612,110
|
|
Unaudited
Pro Forma Condensed Combined Consolidated Statement of Operations
for
the Year Ended September 30, 2007
|
|
|
Historical
MobiVentures
|
|
Historical
Purepromoter
|
|
Pro
Forma
adjustments
|
|
Pro
Forma
Combined
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Wireless
applications and contracts
|
|
$
|
92,078.00
|
|
|
|
|
|
|
|
$
|
92,078.00
|
|
|
Email
and SMS Marketing
|
|
|
|
|
|
3,980,710
|
|
|
|
|
|
3,980,710
|
|
|
Other
consulting
|
|
|
|
|
|
0
|
|
|
|
|
|
0
|
|
|
Total
revenues
|
|
|
92,078
|
|
|
3,980,710
|
|
|
0
|
|
|
4,072,788
|
|
|
Cost
of sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases
|
|
|
(25,001
|
)
|
|
(561,114
|
)
|
|
|
|
|
(586,115
|
)
|
|
Total
cost of sales
|
|
|
(25,001
|
)
|
|
(561,114
|
)
|
|
0
|
|
|
(586,115
|
)
|
|
Gross
profit
|
|
|
67,077
|
|
|
3,419,596
|
|
|
0
|
|
|
3,486,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
(1,197,929
|
)
|
|
(506,109
|
)
|
|
|
|
|
(1,704,038
|
)
|
|
Research
and development
|
|
|
(71,669
|
)
|
|
(514,876
|
)
|
|
|
|
|
(586,545
|
)
|
|
Sales
and marketing
|
|
|
(64,586
|
)
|
|
(1,241,984
|
)
|
|
|
|
|
(1,306,570
|
)
|
|
Depreciation
and amortization
|
|
|
(77,953
|
)
|
|
(14,328
|
)
|
|
(320,000
|
)(e)
|
|
(412,281
|
)
|
|
Other
Income/Expense
|
|
|
(14,834
|
)
|
|
18
|
|
|
|
|
|
(14,816
|
)
|
|
Total
operating expenses
|
|
|
(1,426,971
|
)
|
|
(2,277,279
|
)
|
|
(320,000
|
)
|
|
(4,024,250
|
)
|
|
(Loss)
income from operations
|
|
|
(1,359,894
|
)
|
|
1,142,316
|
|
|
(320,000
|
)
|
|
(537,578
|
)
|
|
Interest
income (expense), net
|
|
|
(4,038
|
)
|
|
(1,928
|
)
|
|
|
|
|
(5,966
|
)
|
|
Tax
|
|
|
|
|
|
(271,674
|
)
|
|
|
|
|
(271,674
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income
|
|
$
|
(1,363,932
|
)
|
$
|
868,713
|
|
$
|
(320,000
|
)
|
$
|
(815,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) income applicable to common stockholders
|
|
|
(1,363,932
|
)
|
|
868,713
|
|
|
|
|
|
(815,219
|
)
|
|
Per
share amounts (basic and diluted)
|
|
$
|
(0.04
|
)
|
$
|
1,868.20
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding
|
|
|
37,621,402
|
|
|
465
|
|
|
33,500,000
|
|
|
71,121,402
|
|
Unaudited
Pro Forma Condensed Combined Consolidated Statement of Operations
for
the 6 months ended March 31, 2008
|
|
|
Historical
MobiVentures
|
|
Historical
Purepromoter
|
|
Pro
Forma
adjustments
|
|
Pro
Forma
Combined
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Wireless
applications and contracts
|
|
$
|
86,442
|
|
$
|
-
|
|
|
|
|
$
|
86,442
|
|
|
Email
and SMS Marketing
|
|
|
|
|
|
2,360,947
|
|
|
|
|
|
2,360,947
|
|
|
Other
consulting
|
|
|
|
|
|
0
|
|
|
|
|
|
0
|
|
|
Total
revenues
|
|
|
86,442
|
|
|
2,360,947
|
|
|
0
|
|
|
2,447,389
|
|
|
Cost
of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wireless
applications and contracts
|
|
|
(18,465
|
)
|
|
(257,611
|
)
|
|
|
|
|
(276,076
|
)
|
|
Total
cost of revenues
|
|
|
(18,465
|
)
|
|
(257,611
|
)
|
|
0
|
|
|
(276,076
|
)
|
|
Gross
profit
|
|
|
67,977
|
|
|
2,103,337
|
|
|
0
|
|
|
2,171,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
(1,000,060
|
)
|
|
(439,464
|
)
|
|
|
|
|
(1,439,524
|
)
|
|
Research
and development
|
|
|
(10,583
|
)
|
|
(314,535
|
)
|
|
|
|
|
(325,118
|
)
|
|
Sales
and marketing
|
|
|
(25,725
|
)
|
|
(772,762
|
)
|
|
|
|
|
(798,487
|
)
|
|
Depreciation
and amortization
|
|
|
|
|
|
(16,156
|
)
|
|
(160,000
|
)(e)
|
|
(176,156
|
)
|
|
Other
Income/Expense
|
|
|
(13,631
|
)
|
|
0
|
|
|
|
|
|
(13,631
|
)
|
|
Total
operating expenses
|
|
|
(1,049,999
|
)
|
|
(1,542,916
|
)
|
|
(160,000
|
)
|
|
(2,752,915
|
)
|
|
Loss
from operations
|
|
|
(982,022
|
)
|
|
560,421
|
|
|
(160,000
|
)
|
|
(581,601
|
)
|
|
Interest
income (expense), net
|
|
|
(34,773
|
)
|
|
19,562
|
|
|
|
|
|
(15,211
|
)
|
|
Tax
|
|
|
|
|
|
(156,166
|
)
|
|
|
|
|
(156,166
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(1,016,795
|
)
|
$
|
423,816
|
|
$
|
(160,000
|
)
|
$
|
(752,979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss applicable to common stockholders
|
|
|
(1,016,795
|
)
|
|
423,816
|
|
|
|
|
|
(752,979
|
)
|
|
Per
share amounts (basic and diluted)
|
|
$
|
(0.02
|
)
|
$
|
911.43
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares of common stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding
|
|
|
48,025,021
|
|
|
465
|
|
|
33,500,000
|
|
|
81,525,021
|
|
NOTES
TO UNAUDITED PRO FORMA CONDENSED COMBINED
CONSOLIDATED
FINANCIAL STATEMENTS
Purchase
Price Allocation
The
estimated purchase price corresponding to the net assets value of Pure (assumed
fair value) consists of shares of Common Stock of the Company with a value
of
$3,350,000, cash payment of $2,580,000 and Promissory Notes with a value of
$1,112,800. Estimated direct transaction costs of $450,000 relate
principally to finders fees, legal and audit fees associated with the
acquisition.
The
purchase price will be allocated to Pure’s assets acquired and liabilities
assumed based upon their respective fair values at the date of acquisition.
The
allocation will also take into consideration intangible assets, and
pre-acquisition contingencies, if any, acquired at closing. Any remaining
unallocated acquisition cost will be considered goodwill.
The
pro
forma components and allocation of the estimated purchase price, based on
presumed fair values at March 31, 2008, is as follows:
Consideration
and direct transaction costs:
|
Cash
Payment
|
|
$
|
2,580,000
|
(i)
|
|
Mobiventures
common stock issued
|
|
|
3,350,000
|
|
|
Promissory
notes
|
|
|
1,112,800
|
|
|
Stamp
Duty
|
|
|
35,214
|
|
|
Estimated
direct transaction costs
|
|
|
450,000
|
|
|
Total
purchase price
|
|
$
|
7,528,014
|
|
Preliminary
estimate of the allocation of purchase price:
|
Cash
and cash equivalents
|
|
$
|
1,332,386
|
(iii)
|
|
Current
assets
|
|
|
683,760
|
(iii)
|
|
Equipment,
software and furniture, net
|
|
|
284,192
|
(iii)
|
|
Liabilities
assumed
|
|
|
(822,342
|
)(iii
)
|
|
Intangible
assets
|
|
|
1,600,000
|
(iv)
|
|
Goodwill
|
|
|
4,450,018
|
(iv),
(v)
|
|
Total
purchase price
|
|
$
|
7,528,014
|
|
Assumptions:
|
(i)
|
The
pro forma presentation reflects the issuance of approx. 33,500,000
shares
of Mobiventures’ common stock valued at $0.10 (as fixed in the Share
Purchase Agreement), which corresponds to $3,350,000, a cash payment
of
2,580,000 and the issuance of Promissory notes valued at $1,112,800.
The
$7,042,800 does not include any earn out components as it is not
possible
to predict if those objectives will be achieved. A Stamp Duty of
0.5% is
to be paid on the purchase price.
|
|
(ii)
|
Estimated
direct transaction costs of $450,000 to be incurred by Mobiventures
relate
principally to finders fees, legal and audit fees associated with
the
acquisition.
|
|
(iii)
|
Assets
acquired and liabilities assumed are based on estimated fair values
and
assumptions as of March 31 2008, the assumed acquisition date.
For
purposes of this pro forma presentation, recorded book values are
assumed
to approximate fair values, except for the intagibles of PurePromoter
as
below (see assumption (iv)). Actual fair values to be assigned
to assets
and liabilities will likely differ as of the date of closing of
the
transaction, and recorded assets and liabilities will likely differ
from
their recorded values.
|
|
(iv)
|
The
intangible assets of $1,600,000 that are assumed for purposes of
the pro
forma presentation are assumed to be amortised over a 5 year life
on a
straight-line basis. The amount attributed to intangible assets
represents
a preliminary estimate only as Mobiventures has not completed its
valuation assessment of intangible assets. Acquired intangible
assets are
expected to primarily relate to software and brand value all being
subject
to final valuation determination. Mobiventures attributes goodwill
that
will be recorded to several principal factors including the potential
of
Mobiventures to generate future economic benefit not otherwise
captured in
the measurement of Pure’s developed products, intellectual property, and
other identified intangibles.
|
|
(v)
|
In
accordance with the provisions of Statement of Financial Accounting
Standard No. 142 “Goodwill and Other Intangible Assets,” the estimated
excess of purchase consideration over net identifiable assets acquired
(the “Goodwill”) is not amortized in the accompanying unaudited pro forma
condensed combined consolidated financial
statements.
|
Pro
Forma Adjustments
Pro
forma
adjustments giving effect to the acquisition in the unaudited pro forma
condensed combined consolidated financial statements are as follows:
|
|
(a)
|
To
reflect the consideration paid at closing of $2,580,000 in cash.
An
additional cash payment of $1,112,800 will be paid to the Stockholders
on
October 31, 2008
|
|
|
(b)
|
To
reflect the goodwill origination and the allocation of
intangibles
|
|
|
(c)
|
To
reflect the purchase price adjustments resulting from the par value
and
additional paid-in capital related to the issuance of common stock,
issuance of Promissory Notes, stamp duty and the estimated transactions
costs related to the acquisition.
|
|
|
(d)
|
To
eliminate Pure’s stockholders’ equity.
|
|
|
(e)
|
To
reflect amortization for intangibles with a 5 year life acquired
by
Mobiventures
|
MobiVentures (CE) (USOTC:MBLV)
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De Nov 2024 a Dic 2024
MobiVentures (CE) (USOTC:MBLV)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024
