Exhibit 99.2

SYSOREX GLOBAL HOLDINGS CORP.

INTRODUCTION TO PRO FORMA CONDENSED

COMBINED FINANCIAL STATEMENTS

(Unaudited)


The Company entered into an Asset Purchase and Merger Agreement to acquire substantially all of the assets and liabilities of Lilien LLC and 100% of the stock of Lilien Systems (collectively referred hereafter as “Lilien”) effective as of March 1, 2013. Effective August 31, 2013, the Company entered into an Agreement and Plan of Merger to acquire 100% of the issued and outstanding common stock of Shoom, Inc. (“Shoom”). On December 20, 2013 the Company entered into an Agreement and Plan of Merger to acquire 100% of the capital stock of AirPatrol Corporation (“AirPatrol”) and expects to close the acquisition in 2014. The following unaudited pro forma financial information presents the consolidated results of operations of the Company, Lilien, Shoom and AirPatrol for the year ended December 31, 2013 as if the acquisitions had occurred on January 1, 2013. The pro forma information does not necessarily reflect the results of operations that would have occurred had the entities been a single company during those periods. The unaudited pro forma information is presented for illustration purposes only in accordance with the assumptions set forth below and in the notes to the pro forma combined condensed financial statements.



F-1




Sysorex Global Holdings Corp., Lilien, Shoom and AirPatrol

Pro Forma Condensed Combined Balance Sheet

December 31, 2013

(Unaudited)


 

 

Sysorex

 

Air Patrol

 

 

 

 

 

 

 

 

2013

 

2013

 

 

 

 

 

 

 

 

Balance

 

Balance

 

 

 

 

 

Consolidated

 

 

Sheet

 

Sheet

 

Adj #1

 

Adj #2

 

 Total

ASSETS

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

Cash

 

2,103,955

 

80,072

 

1,000,000

 

-

 

3,184,027

Marketable Securities

 

124,753

 

-

 

-

 

-

 

124,753

Accounts Receivable

 

9,581,041

 

208,470

 

-

 

-

 

9,789,511

Notes Receivable

 

1,130,000

 

 

 

(1,000,000)

 

-

 

130,000

Inventory

 

74,929

 

256,998

 

-

 

-

 

331,927

Prepaid Licenses & Main Contracts

 

6,120,261

 

-

 

-

 

-

 

6,120,261

Other Current Assets

 

453,012

 

239,003

 

-

 

-

 

692,015

Total Current Assets

 

19,587,951

 

784,543

 

-

 

 

 

20,372,494

 

 

 

 

 

 

 

 

 

 

 

Furniture, Fixtures, & Equipment

 

290,665

 

116,696

 

-

 

-

 

407,361

Other Assets

 

1,691,391

 

14,496

 

-

 

-

 

1,705,887

Prepaid Licenses & Main Contracts

Non Current

 

4,268,010

 

-

 

-

 

-

 

4,268,010

Acquisition Intangibles

 

7,328,331

 

-

 

-

 

18,000,000

 

25,328,331

Goodwill

 

5,707,580

 

-

 

-

 

11,888,351

 

17,595,931

Total Assets

 

38,873,928

 

915,735

 

-

 

29,888,351

 

69,678,014

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

Accounts Payable

 

8,435,095

 

1,718,626

 

(1,285,705)

 

-

 

8,868,016

Accrued Expenses

 

3,841,552

 

1,239,375

 

(1,097,320)

 

-

 

3,983,607

Other Current Liabilities

 

882,488

 

676,133

 

(674,279)

 

-

 

884,342

Deferred Revenue

 

7,402,149

 

187,523

 

-

 

-

 

7,589,672

Notes Payable

 

723,042

 

4,330,000

 

(4,330,000)

 

10,000,000

 

10,723,042

Revolving Line of Credit

 

5,697,590

 

-

 

-

 

-

 

5,697,590

Term Loan

 

458,337

 

-

 

-

 

-

 

458,337

Total Liabilities

 

27,440,253

 

8,151,657

 

(7,387,304)

 

10,000,000

 

38,204,606

 

 

 

 

 

 

 

 

 

 

 

Deferred Revenue, non-current

 

4,845,143

 

-

 

-

 

-

 

4,845,143

Term Loan, non-current

 

291,663

 

-

 

-

 

-

 

291,663

Other Non-current Liabilities

 

-

 

803,653

 

(763,920)

 

-

 

39,733

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Deficiency)

 

6,296,869

 

(8,039,575)

 

8,151,224

 

19,888,351

 

26,296,869

 

 

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholder's Equity

 

38,873,928

 

915,735

 

-

 

29,888,351

 

69,678,014


1)

Adjustments #1 and #2 reflect the AirPatrol entity to be acquired.

 

 

 

The purchase price of this acquisition is expected to be $30,000,000 consisting of a $10,000,000 cash payment, 4,000,000 shares of the Company's common stock deemed to have a initial deemed fair value of $10,000,000 (initial deemed fair value will be revalued at the fair value at the date of the transaction), and up to a maximum of $10,000,000 in earn out consideration to be paid 50% in cash and 50% in Sysorex common stock. The Company is assuming 100% of the earn out will be received, however, it will revalue the cash portion of this contingency at each reporting period with any changes going to the statement of operations until the contingent consideration arrangement is settled. These proformas also assume that the Company will not assume $8,151,224 of outstanding notes and accrued liabilities as of December 31, 2013. These liabilities will be retained and satisfied out of the consideration received in connection with the acquisition. $1,000,000 of the non-assumed liabilities is a note payable to the Company. This note will repaid in connection with the acquisition and is, therefore, reflected in Adjustment #1 as a reduction in notes receivable by the Company and an increase to cash.

 

 

 

The below table details the projected split of the purchase price between goodwill and identifiable intangibles.  We expect the purchase price to be allocated to the following intangible classes: Developed technology, Patents, Customer relationships,  Distribution Agreements and Trademarks and Trade Names that will be amortized over 7 years.  

 

 

 

The goodwill resulting from this acquistion is due to the opportunity to get into the location based services segment and the opportunities it brings; the acquisition of AirPatrol validates Sysorex’ stated strategy to shift from a services only company to a technology and services company. The AirPatrol acquisition also enters Sysorex into what we believe is a fast growing market and will lead to synergies with Sysorex. AirPatrol provides Sysorex with products and technology that it owns that it can now sell through its other subsidiaries (Lilien, Shoom and Sysorex Government Services) to their existing and new customers.




F-2




We expect the purchase price to be allocated as follows:


 

Assets Acquired:

 

 

 

Cash

$

80,072

 

Accounts receivable

 

208,470

 

Inventory

 

256,998

 

Other current assets

 

239,003

 

Property and equipment

 

116,696

 

Other assets

 

14,496

 

Developed technology– Intangible amortized over 7 years

 

7,200,000

 

Patents– Intangible amortized over 7 years

 

4,500,000

 

Customer relationships– Intangible amortized over 7 years

 

1,800,000

 

Distribution agreements– Intangible amortized over 7 years

 

1,800,000

 

Trade name/trademarks– Intangible amortized over 7 years

 

2,700,000

 

Goodwill

 

11,888,351

 

 

 

30,804,086

 

Liabilities Assumed:

 

 

 

Accounts payable

 

432,921

 

Accrued expenses

 

142,055

 

Other current liabilities

 

1,854

 

Deferred revenue

 

187,523

 

Non-current liabilities

 

39,733

 

 

 

804,086

 

Purchase Price

$

30,000,000


**

This is a preliminary valuation to be adjusted at the time of closing.

 

 

2)

Acquisition of Lilien The purchase price of this acquisition aggregated $9,000,000 and consisted of cash of $3,000,000, and 6,000,000 shares of the Company's common stock deemed to have a fair value of $6,000,000.

 

 

 

The purchase price was allocated as follows and is included in the Sysorex 2013 balance sheet above.


 

Assets Acquired :

 

 

 

Cash

$

1,112,485

 

Receivables

 

4,870,471

 

Inventory

 

55,410

 

Other current assets

 

852,759

 

Prepaid licenses/contracts

 

9,146,954

 

Property and equipment

 

254,638

 

Trade name/trademarks – Intangible amortized over 7 years

 

3,250,000

 

Customer relationships – Intangible amortized over 7 years

 

2,130,000

 

Goodwill

 

4,544,053

 

 

 

26,216,770

 

Liabilities Assumed :

 

 

 

Accounts payable

 

5,094,390

 

Accrued expenses

 

970,139

 

Deferred revenue

 

11,152,241

 

 

 

17,216,770

 

Purchase Price

$

9,000,000


3)

Acquisition of Shoom.  The purchase price of this acquisition aggregated $8,107,000 and consisted of cash to be paid of $2,500,000, and 2,762,000 shares of the Company's common stock deemed to have a fair value of $5,607,000.

 

 

 

The purchase price was allocated as follows and is included in the Sysorex 2013 balance sheet above.


 

Assets Acquired :

 

 

 

Cash

$

3,669,000

 

Marketable securities

 

605,000

 

Receivables

 

141,000

 

Other assets

 

178,000

 

Property and equipment

 

29,000

 

Trade name/trademarks– Intangible amortized over 7 years

 

120,000

 

Customer relationships – Intangible amortized over 7 years

 

1,270,000

 

Developed technology – Intangible amortized over 4 years

 

1,380,000

 

Goodwill

 

1,164,000

 

 

 

8,556,000

 

Liabilities Assumed :

 

 

 

Accounts payable

 

69,000

 

Other current liabilities

 

380,000

 

 

 

449,000

 

Purchase Price

$

8,107,000




F-3




Sysorex Global Holdings Corp., Lilien, Shoom and AirPatrol

Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2013

(Unaudited)


 

 

 

 

Lilien

 

Shoom

 

AirPatrol

 

 

 

Adj #2

 

 

 

Adj #4

 

 

 

 

Sysorex

 

Jan 1 -

 

Jan 1 -

 

Jan 1 -

 

Adj #1

 

Issue

 

Adj #3

 

Acquisition

 

 

 

 

Global

 

Feb 28,

 

Aug 31,

 

December 31,

 

Interest

 

Shares

 

Amort

 

Expenses

 

Pro

 

 

Consolidated

 

2013

 

2013

 

2013

 

(Note 1)

 

(Note 2)

 

(Note 3)

 

(Note 4)

 

Forma

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

50,571,557

 

5,193,668

 

2,656,892

 

1,362,572

 

 

 

 

 

 

 

 

 

59,784,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

38,317,246

 

3,884,004

 

584,982

 

313,463

 

 

 

 

 

 

 

 

 

43,099,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

12,254,311

 

1,309,664

 

2,071,910

 

1,049,109

 

 

 

 

 

 

 

 

 

16,684,994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SG&A

 

16,170,215

 

1,958,157

 

1,358,889

 

3,749,461

 

 

 

 

 

3,061,909

 

(1,813,273)

 

24,485,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

(3,915,904)

 

(648,493)

 

713,021

 

(2,700,352)

 

 

 

 

 

 

 

 

 

(7,800,364)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

(619,558)

 

 

 

(8,664)

 

(1,055,334)

 

(36,531)

 

 

 

 

 

 

 

(1,720,087)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before taxes

 

(4,535,462)

 

(648,493)

 

704,357

 

(3,755,686)

 

 

 

 

 

 

 

 

 

(9,520,451)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

0

 

0

 

111,611

 

0

 

 

 

 

 

 

 

 

 

111,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

(4,535,462)

 

(648,493)

 

592,746

 

(3,755,686)

 

 

 

 

 

 

 

 

 

(9,632,062)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to non-controlling interests

 

(272,058)

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

(272,058)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to shareholders of SGH

 

(4,263,404)

 

(648,493)

 

592,746

 

(3,755,686)

 

 

 

 

 

 

 

 

 

(9,360,004)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends

 

0

 

0

 

0

 

0

 

 

 

 

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to
common shareholders

 

(4,263,404)

 

(648,493)

 

592,746

 

(3,755,686)

 

 

 

 

 

 

 

 

 

(9,360,004)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares o/s -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

24,575,556

 

 

 

 

 

 

 

 

 

7,102,474

 

 

 

 

 

31,678,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

(0.17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(0.30)


Notes:


1)

$4,175,000 line of credit outstanding starting January 1, 2013 at interest at 5.25% - additional 2 months

2)

Issuance of additional shares due to Lilien, Shoom and AirPatrol Acquisitions on a weighted average basis

3)

Amortization of intangibles to include the following:


 

 

 

Lilien

 

Shoom

 

AirPatrol

 

Tradename/trademarks - 7 year

 

3,250,000

 

120,000

 

2,700,000

 

Customer relationships - 7 year

 

2,130,000

 

1,270,000

 

1,800,000

 

Developed technology - 4 year

 

0

 

1,380,000

 

0

 

Developed technology - 7 year

 

0

 

0

 

7,200,000

 

Patents - 7 year

 

0

 

0

 

4,500,000

 

Distribution agreements - 7 year

 

0

 

0

 

1,800,000

 

Total Intangibles

 

5,380,000

 

2,770,000

 

18,000,000


 

The incremental amortization pertains to two months for Lilien, eight months for Shoom and 12 months for AirPatrol of $128,096, $362,384 and $2,571,429, respectively.

 

 

4)

Expenses directly associated with the acquisitions incurred and expensed during the year ended December 31, 2013; removed for proforma

 



F-4