EX-99.4 5 a06-13340_1ex99d4.htm EX-99.4

Exhibit 99.4

 

Unaudited Combined Pro Forma Financial Data

 

The following unaudited pro forma combined financial information has been prepared to give effect to the acquisition of Morex Marketing Group, LLC by Think Partnership Inc. The transaction is being accounted for as a purchase business combination.

 

On January 20, 2006, Think Partnership Inc. completed the acquisition of MorexMarketing Group, LLC. for an initial purchase price of $21.45 million. In addition, acquisition-related closing expenses of approximately $125,000 were incurred.

 

The acquisition has been accounted for using purchase price accounting in accordance with Financial Accounting Standard No.141 - Business Combinations. The unaudited pro forma combined statement of financial position as of December 31, 2005 gives effect to the acquisition as if the acquisition had occurred on that date. The unaudited pro forma combined balance sheet includes the balance sheets of Think Partnership Inc. and Morex Marketing Group, LLC as of December 31, 2005.

 

The unaudited pro forma combined statements of income for the year ended December 31, 2005 and 2004 give effect to the acquisition as if the acquisition had occurred on January 1, 2004. The unaudited pro forma combined statements of income presented for the year ended December 31, 2005 and 2004 include historical financial results of Think Partnership Inc. and Morex Marketing Group, LLC for the years ended December 31, 2005 and 2004. Any savings or additional costs, which may be realized through the integration of the operations have not been estimated or included in the unaudited pro forma combined statements of income.

 

The unaudited pro forma financial information includes the adjustments that have a continuing impact to the combined company to reflect the transaction using purchase accounting. The pro forma adjustments are described in the notes to the unaudited pro forma financial information. The adjustments are based upon preliminary information and certain management judgments and estimates. The purchase accounting adjustments are subject to revisions, which will be reflected in future periods. Revisions, if any, are not expected to have a material effect on the statement of income or financial position of Think Partnership Inc.

 

The unaudited pro forma financial information and accompanying notes are presented for illustrative purposes only and do not purport to be indicative of, and should not be relied upon as indicative of, the financial position or operating results that may occur in the future or that would have occurred if the acquisition had been consummated on January 1, 2004 or December 31, 2005, as applicable. The unaudited pro forma financial information should be read in conjunction with:

 

(1) Think Partnership Inc.’s consolidated financial statements and notes thereto and management’s discussion and analysis for the year ended December 31, 2005 filed as part of Think Partnership Inc’s Annual Report on Form 10-KSB.

 

 


 

(2) Morex Marketing Group LLC’s audited financial statements and notes thereto as of and for the years ended December 31, 2005 and 2004, included with this Form 8-K filing.

 

(3) Catamount Group LLC, Catamount Management LLC and Plan Bee, LLC. Audited balance sheets as of December 31, 2005 and 2004 and the related statement of operations, member’s equity and  cash flows for the period then ended, included with this Form 8-K filing.

 

(4) Think Partnership Inc.s’ Current Report on Form 8-K previously filed on January 25, 2006.

 

(5) Think Partnership Inc.s’ Current Report on Form 8-K/A previously filed on April 7, 2006.

 


 

Think Partnership, Inc.

Consolidated Pro Forma Balance Sheet

December 31, 2005

(Unaudited)

 

 

 

Think

 

Morex

 

Adjustments

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

2,609,114

 

$

403,908

 

 

 

$

3,013,022

 

Restricted Cash

 

828,804

 

0

 

 

 

828,804

 

Accounts Receivable

 

4,223,599

 

1,942,145

 

 

 

6,165,744

 

Other Current Assets

 

2,747,048

 

15,758

 

 

 

2,762,806

 

Total Current Assets

 

10,408,565

 

2,361,812

 

 

 

12,770,377

 

Property and Equipment, net

 

3,253,078

 

202,390

 

 

 

3,455,468

 

Other Assets

 

 

 

 

 

 

 

 

 

Goodwill

 

32,959,252

 

0

 

12,909,941

(1)

45,869,193

 

Intangible Assets

 

10,300,248

 

1,670,896

 

 5,800,118

(1)

17,771,262

 

Other Assets

 

573,176

 

19,526

 

 

 

592,702

 

Total Other Assets

 

43,832,676

 

1,690,422

 

18,710,060

 

64,233,157

 

Total Assets

 

$

57,494,319

 

$

4,254,624

 

18,710,060

 

$

80,459,002

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

Current Portion of Long-Term Debt

 

$

429,761

 

$

0

 

2,500,000

(1)

$

2,929,761

 

Notes Payable – Line of Credit

 

0

 

0

 

6,937,778

(1)

6,937,778

 

Accounts Payable

 

3,443,603

 

1,009,369

 

 

 

4,452,972

 

Other Current Liabilities

 

4,921,096

 

276,478

 

 

 

5,197,574

 

Total Current Liabilities

 

8,794,460

 

1,505,020

 

9,437,778

(1)

19,737,258

 

Long-Term Liabilities

 

10,052,329

 

1,703

 

 

 

10,054,032

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

 

Common Stock

 

38,222

 

0

 

5,514

(1)

43,736

 

Additional Paid in Capital

 

42,375,320

 

0

 

12,014,668

(1)

54,389,988

 

Accumulated Deficit

 

(3,320,016

)

2,747,900

 

(2,747,900

(1)

(3,320,016

)

Treasury Stock

 

(540,000

)

0

 

 

 

(540,000

)

Accumulated other comprehensive income

 

94,004

 

0

 

 

 

94,004

 

Total Shareholders’ Equity

 

38,647,530

 

2,747,900

 

9,272,282

 

50,667,712

 

Total Liabilities and Shareholders’ Equity

 

$

57,494,319

 

$

4,254,624

 

$

18,710,060

 

$

80,459,002

 

 


 

Think Partnership Inc

Consolidated Pro Forma Statement of Income and Comprehensive Income

Year Ended December 31, 2005

(Unaudited)

 

 

 

Think

 

Morex

 

Adjustments

 

Total

 

Net Revenue

 

$

40,440,729

 

$

6,446,851

 

 

 

$

46,887,580

 

Cost of Revenue

 

13,853,863

 

1,093,892

 

 

 

14,947,755

 

Gross Profit

 

26,586,866

 

5,350,473

 

 

 

31,937,339

 

Selling, General and Administrative Expenses

 

24,922,388

 

1,874,178

 

 

 

26,796,566

 

Amortization of Purchased Intangibles

 

1,546,859

 

0

 

1,421,423

(2)

2,968,282

 

Income from Operations

 

117,619

 

3,476,295

 

(1,421,423

)

2,172,491

 

Other Income(Expense)

 

 

 

 

 

 

 

 

 

Interest Income

 

78,140

 

8,566

 

 

 

86,706

 

Interest Expense

 

(172,704

)

0

 

 

 

(172,704

)

Other Income

 

10,299

 

0

 

 

 

10,299

 

Income before Income Taxes

 

33,354

 

3,484,862

 

(1,421,423

)

2,096,793

 

Provision for Income Taxes

 

36,975

 

0

 

767,286

(3)

862,350

 

Net Income

 

(3,621

)

3,484,862

 

(2,188,709

)

1,234,442

 

Other Comprehensive Income Unrealized Gain(Loss) of Securities

 

94,004

 

0

 

 

 

94,004

 

Comprehensive Income

 

$

90,383

 

$

,484,862

 

(2,188,709

)

$

1,328,446

 

 

 

 

 

 

 

 

 

 

 

Net Income per Share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.00

 

 

 

 

 

$

0.03

 

Fully Diluted

 

$

0.00

 

 

 

 

 

$

0.02

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares (Basic)

 

33,809,371

 

10,607,182

 

 

 

44,416,553

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Share (Fully Diluted)

 

39,467,062

 

10,607,182

 

 

 

50,074,244

 

 


 

Think Partnership Inc

Consolidated Pro Forma Statement of Income and Comprehensive Income

Year Ended December 31, 2004

(Unaudited)

 

 

 

Think

 

Morex

 

Adjustments

 

Total

 

Net Revenue

 

$

17,621,100

 

$

2,031,856

 

 

 

$

19,652,956

 

Cost of Revenue

 

4,091,939

 

98,390

 

 

 

4,190,329

 

Gross Profit

 

13,529,161

 

1,933,466

 

 

 

15,462,627

 

Selling, General and Administrative Expenses

 

10,585,315

 

734,937

 

 

 

11,320,252

 

Amortization of Purchased Intangibles

 

108,489

 

0

 

$

1,421,423

(2)

1,529,912

 

Income from Operations

 

2,835,357

 

1,198,529

 

(1,421,423

)

2,612,463

 

Other Income(Expense)

 

 

 

 

 

 

 

 

 

Interest Income

 

22,164

 

0

 

 

 

22,164

 

Interest Expense

 

(44,603

)

0

 

 

 

(44,603

)

Other Income

 

24,863

 

0

 

 

 

24,863

 

Income before Income Taxes

 

2,837,781

 

1,198,529

 

(1,421,423

)

2,614,887

 

Provision for Income Taxes

 

1,063,793

 

0

 

(89,158

)(3)

974,635

 

Net Income

 

$

1,773,988

 

$

1,198,529

 

$

(1,332,266

)

$

1,640,251

 

 

 

 

 

 

 

 

 

 

 

Net Income per Share

 

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

 

 

 

 

$

0.05

 

Fully Diluted

 

$

0.06

 

 

 

 

 

$

0.04

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares (Basic)

 

24,332,967

 

10,607,182

 

 

 

34,940,149

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Share (Fully Diluted)

 

30,264,304

 

10,607,182

 

 

 

40,871,486

 

 

Notes to Unaudited Pro Forma Combined Financial Information

 

Note        (1) This adjustment represents the purchase price allocation. The valuation of the intangibles is currently being performed by an independent valuation firm. These are estimates.

 

Note        (2) This adjustment reflects the estimated amount of amortization that would have been recognized from the acquired intangible assets during the period reflected.

 

Note        (3) This adjustment reflects the estimated combined income tax effect that would have been recognized using applicable state and federal tax rates in effect during the periods presented.