UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 2
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 1, 2014
Gaming Partners International Corporation |
(Exact name of registrant as specified in its charter) |
Nevada |
0-23588 |
88-0310433 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
1700 Industrial Road, Las Vegas, Nevada |
|
89102 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrant’s telephone number, including
area code (702) 384-2425
|
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
On July 7, 2014, Gaming Partners International Corporation (the
"Company") filed a Current Report on Form 8-K (the "Initial Form 8-K") to report the completion of the acquisition
of all of the net assets (the "Acquired Assets") of GemGroup Inc. and its subsidiaries ("GemGroup"). On September
16, 2014, the Company filed a Current Report on Form 8-K/A ("Amendment No. 1") to amend Item 9.01 of the Initial Form
8-K to provide certain financial statements and pro forma financial information with respect to the Acquired Assets as required
by Items 9.01(a) and 9.01(b). We are filing this Amendment No. 2 to the Initial Form 8-K to (a) correct certain information in
the unaudited pro forma condensed combined statements of income for the six months ended June 30, 2014, previously filed
as part of Exhibit 99.3, and (b) amend the consent of McGladrey LLP dated September 16, 2014, previously filed as Exhibit 23.1.
Item 9.01 |
Financial Statements and Exhibits. |
| (a) | Financial Statements of the Business Acquired. |
| · | The Audited Consolidated Financial Statements as of and for the years ended December 31, 2013 and 2012 required by this Item
9.01(a) were previously filed as Exhibit 99.1 on September 16, 2014. |
| · | The Unaudited Consolidated Financial Statements, consisting of: Consolidated Balance Sheets as of June 30, 2014 and December
31, 2013, and Consolidated Statements of Income and Consolidated Statements of Cash Flows for the six months ended June 30, 2013
and June 30, 2014 required by this Item 9.01(a) were previously filed as Exhibit 99.2 on September 16, 2014. |
| (b) | Pro Forma Financial Information. |
In accordance with Rule 8-05 of Regulation S-X, filed
herewith (and incorporated herein by reference) as Exhibit 99.3 is the unaudited pro forma condensed combined financial information
of the Company and GemGroup, giving effect to certain pro forma events related to the acquisition. It does not purport to project
the future financial position or operating results of the post-acquisition combined entities. The pro forma statements of income
reflecting the combined operations of the Company and GemGroup are for the six months ended June 30, 2014 and for the year ended
December 31, 2013. The pro forma balance sheet is as of June 30, 2014.
(c) Shell Company Transactions.
Not applicable.
(d) Exhibits.
23.1 |
Consent of Independent Auditors (McGladrey LLP). |
|
|
*99.1 |
Audited Consolidated Financial Statements of GemGroup Inc. as of and for the years ended December 31, 2013 and 2012. |
|
|
*99.2 |
Unaudited Consolidated Financial Statements of GemGroup Inc. consisting of: Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013, and Consolidated Statements of Income and Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and June 30, 2013. |
|
|
99.3 |
Unaudited Pro Forma Condensed Combined Financial Information of Gaming Partners International Corporation and GemGroup Inc. consisting of: pro forma condensed combined statement of operations for the six months ended June 30, 2014 and for the year ended December 31, 2013; pro forma balance sheet as of June 30, 2014; and notes to the pro forma financial statements. |
*
Previously filed.
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
thereunto duly authorized.
|
Gaming Partners International Corporation |
|
|
Date: September 16, 2014 |
|
|
By: |
/s/ Gregory S. Gronau |
|
|
Gregory S. Gronau
President and Chief Executive Officer, Treasurer and Secretary |
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
Exhibit 23.1 |
|
Consent of Independent Auditors (McGladrey LLP) |
|
|
|
*Exhibit 99.1 |
|
Audited Consolidated Financial Statements of GemGroup Inc. as of and for the years ended December 31, 2013 and 2012 |
|
|
|
*Exhibit 99.2
|
|
Unaudited Consolidated Financial Statements of GemGroup Inc. consisting of: Consolidated Balance Sheets as of June 30, 2014 and December 31, 2013, and Consolidated Statements of Income and Consolidated Statements of Cash Flows for the six months ended June 30, 2014 and June 30, 2013 |
|
|
|
Exhibit 99.3 |
|
Unaudited Pro Forma Condensed Combined Financial Information of Gaming Partners International Corporation and GemGroup Inc. consisting of: pro forma condensed combined statement of operations for the six months ended June 30, 2014 and for the year ended December 31, 2013; pro forma balance sheet as of June 30, 2014; and notes to the pro forma financial statements |
* Previously
filed.
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statements (Nos. 33-84726, 333-114019, 333-152186 and 333-159217) on Form S-8 of Gaming Partners International Corporation of our
report, dated March 24, 2014, relating to our audit of the consolidated financial statements of GemGroup Inc. and Subsidiaries
as of and for the years ended December 31, 2013 and December 31, 2012, included in this Current Report on Form 8-K/A.
/s/ McGladrey LLP
Kansas City, Missouri
September 16, 2014
Exhibit 99.3
Unaudited Pro Forma Condensed Combined
Balance Sheet
June 30, 2014
(dollars in thousands)
| |
| | |
| | |
Pro Forma | |
| |
Pro Forma | |
| |
GPI | | |
GemGroup | | |
Adjustments | |
| |
Combined | |
| |
| | |
| | |
| |
| |
| |
ASSETS | |
| | | |
| | | |
| | |
| |
| | |
Current Assets: | |
| | | |
| | | |
| | |
| |
| | |
Cash and cash equivalents | |
$ | 15,517 | | |
$ | 108 | | |
$ | (8,858 | ) |
(A) | |
$ | 6,767 | |
Marketable securities | |
| 4,989 | | |
| - | | |
| - | |
| |
| 4,989 | |
Accounts receivable, net | |
| 4,195 | | |
| 2,608 | | |
| (289 | ) |
(B) | |
| 6,514 | |
Inventories | |
| 8,110 | | |
| 2,124 | | |
| 19 | |
(C) | |
| 10,253 | |
Prepaid expenses | |
| 838 | | |
| 501 | | |
| (431 | ) |
(D) | |
| 908 | |
Deferred income tax asset | |
| 630 | | |
| - | | |
| - | |
| |
| 630 | |
Restricted Cash | |
| 10,000 | | |
| - | | |
| (10,000 | ) |
(E) | |
| - | |
Other current assets | |
| 2,438 | | |
| - | | |
| (1,000 | ) |
(F) | |
| 1,438 | |
Total current assets | |
| 46,717 | | |
| 5,341 | | |
| (20,559 | ) |
| |
| 31,499 | |
Property and equipment, net | |
| 10,139 | | |
| 5,710 | | |
| (1,059 | ) |
(G) | |
| 14,790 | |
Intangibles, net | |
| 923 | | |
| - | | |
| 3,221 | |
(H) | |
| 4,144 | |
Goodwill | |
| - | | |
| 1,941 | | |
| 7,801 | |
(I) | |
| 9,742 | |
Deferred income tax asset | |
| 3,264 | | |
| - | | |
| - | |
| |
| 3,264 | |
Inventories, non-current | |
| 509 | | |
| - | | |
| - | |
| |
| 509 | |
Other assets | |
| 2,349 | | |
| 56 | | |
| (28 | ) |
(J) | |
| 2,377 | |
Total assets | |
$ | 63,901 | | |
$ | 13,048 | | |
$ | (10,624 | ) |
| |
$ | 66,325 | |
| |
| | | |
| | | |
| | |
| |
| | |
| |
| | | |
| | | |
| | |
| |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | | |
| | |
| |
| | |
Current Liabilities: | |
| | | |
| | | |
| | |
| |
| | |
Demand line of credit and shor-term debt | |
$ | 10,000 | | |
$ | 1,185 | | |
$ | (1,185 | ) |
(K) | |
$ | 10,000 | |
Accounts payable | |
| 2,402 | | |
| 1,723 | | |
| (523 | ) |
(L) | |
| 3,602 | |
Accrued liabilities | |
| 2,925 | | |
| 805 | | |
| 368 | |
(M) | |
| 4,098 | |
Customer deposits and deferred revenue | |
| 1,395 | | |
| - | | |
| - | |
| |
| 1,395 | |
Income taxes payable | |
| 195 | | |
| - | | |
| - | |
| |
| 195 | |
Total current liabilities | |
| 16,917 | | |
| 3,713 | | |
| (1,340 | ) |
| |
| 19,290 | |
Long-term Debt | |
| - | | |
| 2,534 | | |
| (2,534 | ) |
(N) | |
| - | |
Deferred income tax liability | |
| 1,865 | | |
| 362 | | |
| (362 | ) |
(O) | |
| 1,865 | |
Other Liabilities | |
| - | | |
| 51 | | |
| - | |
| |
| 51 | |
Total liabilities | |
| 18,782 | | |
| 6,660 | | |
| (4,236 | ) |
| |
| 21,206 | |
Commitments and contingencies | |
| | | |
| | | |
| | |
| |
| | |
Stockholders' Equity: | |
| | | |
| | | |
| | |
| |
| | |
Preferred stock | |
| - | | |
| - | | |
| - | |
| |
| - | |
Common stock | |
| 82 | | |
| 0.1 | | |
| (0.1 | ) |
(P) | |
| 82 | |
Additional paid-in capital | |
| 19,853 | | |
| 3,572 | | |
| (3,572 | ) |
(P) | |
| 19,853 | |
Treasury stock at cost | |
| (2,262 | ) | |
| - | | |
| - | |
| |
| (2,262 | ) |
Retained earnings | |
| 25,920 | | |
| 2,816 | | |
| (2,816 | ) |
(P) | |
| 25,920 | |
Accumulated other comprehensive income | |
| 1,526 | | |
| - | | |
| - | |
| |
| 1,526 | |
Total stockholders' equity | |
| 45,119 | | |
| 6,388 | | |
| (6,388 | ) |
| |
| 45,119 | |
Total liabilities and stockholders' equity | |
$ | 63,901 | | |
$ | 13,048 | | |
$ | (10,624 | ) |
| |
$ | 66,325 | |
Unaudited Pro Forma Condensed Combined
Statement of Operations
For the Six Months Ended June 30, 2014
(dollars in thousands, except share and
per share data)
| |
GPI | | |
GemGroup | | |
Pro Forma
Adjustments | | |
Pro Forma
Combined | |
Revenues | |
$ | 20,775 | | |
$ | 12,974 | | |
$ | (754 | )(A) | |
$ | 32,995 | |
Cost of revenues | |
| 15,263 | | |
| 8,879 | | |
| (350 | )(B) | |
| 23,792 | |
Gross profit | |
| 5,512 | | |
| 4,095 | | |
| (404 | ) | |
| 9,203 | |
| |
| | | |
| | | |
| | | |
| | |
Marketing and sales | |
| 2,646 | | |
| 905 | | |
| - | | |
| 3,551 | |
General and administrative | |
| 4,111 | | |
| 1,533 | | |
| (386 | )(C) | |
| 5,258 | |
Research and development | |
| 854 | | |
| - | | |
| - | | |
| 854 | |
Operating (loss) income | |
| (2,099 | ) | |
| 1,657 | | |
| (18 | ) | |
| (460 | ) |
Other income and (expense), net | |
| 106 | | |
| (79 | ) | |
| (46 | )(D) | |
| (19 | ) |
(Loss) income before income taxes | |
| (1,993 | ) | |
| 1,578 | | |
| (64 | ) | |
| (479 | ) |
Income tax provision (benefit) | |
| 292 | | |
| - | | |
| 544 | (E) | |
| 836 | |
Net (loss) income | |
$ | (2,285 | ) | |
$ | 1,578 | | |
$ | (608 | ) | |
$ | (1,315 | ) |
| |
| | | |
| | | |
| | | |
| | |
Earnings per share: | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | (0.29 | ) | |
| | | |
| | | |
$ | (0.17 | ) |
Diluted | |
$ | (0.29 | ) | |
| | | |
| | | |
$ | (0.17 | ) |
Weighted-average shares of common stock outstanding: | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 7,916 | | |
| | | |
| | | |
| 7,916 | |
Diluted | |
| 7,916 | | |
| | | |
| | | |
| 7,916 | |
Unaudited Pro Forma Condensed Combined
Statement of Operations
For the Year Ended December 31, 2013
(dollars in thousands, except share and
per share data)
| |
| | |
| | |
Pro Forma | |
| |
Pro Forma | |
| |
GPI | | |
GemGroup | | |
Adjustments | |
| |
Combined | |
| |
| | | |
| | | |
| | |
| |
| | |
Revenues | |
$ | 56,173 | | |
$ | 24,194 | | |
$ | (870 | ) |
(A) | |
$ | 79,497 | |
Cost of revenues | |
| 38,584 | | |
| 17,615 | | |
| (506 | ) |
(B) | |
| 55,693 | |
Gross profit | |
| 17,589 | | |
| 6,579 | | |
| (364 | ) |
| |
| 23,804 | |
| |
| | | |
| | | |
| | |
| |
| | |
Marketing and sales | |
| 5,988 | | |
| 1,751 | | |
| - | |
| |
| 7,739 | |
General and administrative | |
| 9,023 | | |
| 2,049 | | |
| 135 | |
(C) | |
| 11,207 | |
Research and development | |
| 1,959 | | |
| - | | |
| - | |
| |
| 1,959 | |
Operating (loss) income | |
| 619 | | |
| 2,779 | | |
| (499 | ) |
| |
| 2,899 | |
Other income and (expense), net | |
| 4 | | |
| (195 | ) | |
| (50 | ) |
(D) | |
| (241 | ) |
(Loss) income before income taxes | |
| 623 | | |
| 2,584 | | |
| (549 | ) |
| |
| 2,658 | |
Income tax provision (benefit) | |
| (543 | ) | |
| - | | |
| 948 | |
(E) | |
| 405 | |
Net (loss) income | |
$ | 1,166 | | |
$ | 2,584 | | |
$ | (1,497 | ) |
| |
$ | 2,253 | |
| |
| | | |
| | | |
| | |
| |
| | |
Earnings per share: | |
| | | |
| | | |
| | |
| |
| | |
Basic | |
$ | 0.15 | | |
| | | |
| | |
| |
$ | 0.28 | |
Diluted | |
$ | 0.15 | | |
| | | |
| | |
| |
$ | 0.28 | |
Weighted-average shares of common stock outstanding: | |
| | | |
| | | |
| | |
| |
| | |
Basic | |
| 7,942 | | |
| | | |
| | |
| |
| 7,942 | |
Diluted | |
| 8,029 | | |
| | | |
| | |
| |
| 8,029 | |
Note 1. Description of Transaction and Basis of Presentation
On July 1, 2014, we purchased the net gaming
assets of GemGroup, a manufacturer of casino currency, cards and table layouts primarily sold under the Gemaco® brand, for
$19.75 million subject to certain post-closing working capital adjustments. This acquisition has been accounted for as a business
purchase under GAAP. Under the purchase method of accounting, the gaming assets and liabilities of GemGroup are recorded as of
the completion of the acquisition, at their respective fair values, and consolidated with our assets and liabilities. The results
of operations generated by the net gaming assets acquired have been consolidated with the Company beginning on the date of the
acquisition.
Note 2: Preliminary Estimated Acquisition Consideration
and Preliminary Estimated Acquisition Consideration Allocation
The following table sets forth the estimated
allocation for each component of acquisition consideration paid, or estimated to be paid in the GemGroup acquisition (dollars in
thousands):
Preliminary Estimated Acquisition Consideration | |
| |
| |
| |
Cash | |
$ | 19,750 | |
Purchase agreement contingencies | |
| 450 | |
Total preliminary estimated acquisition consideration | |
$ | 20,200 | |
For the purposes of these pro forma financial
statements, the estimated acquisition consideration has been preliminarily allocated based on an estimate of the fair value of
assets and liabilities acquired as of the acquisition date. The allocation of the estimated acquisition consideration for the gaming
assets of GemGroup is based on estimates, assumptions, valuations and other studies which have not yet been finalized in order
to make a definitive allocation. The final amounts allocated to assets acquired and liabilities assumed could differ materially
from the amounts presented in the unaudited pro forma condensed consolidated combined financial statements.
The total preliminary estimated acquisition consideration as
shown in the table above is allocated to the tangible and intangible assets and liabilities of the gaming assets of GemGroup based
on their preliminary estimated fair values as follows (in thousands):
Preliminary Estimated Acquisition Consideration Allocation | |
| | |
| |
| | |
Accounts receivable | |
$ | 2,319 | |
Inventories | |
| 2,142 | |
Prepaid Expenses | |
| 70 | |
Other current assets | |
| 29 | |
Property and Equipment | |
| 4,651 | |
Intangible assets | |
| 3,221 | |
Goodwill | |
| 9,742 | |
Accounts payable | |
| (1,200 | ) |
Accrued liabilities | |
| (723 | ) |
Other liabilities | |
| (51 | ) |
Total preliminary estimated acquisition consideration | |
$ | 20,200 | |
Note 3: Unaudited Pro Forma Condensed Combined Balance
Sheet Adjustments
The pro forma adjustments are preliminary,
based on estimates, and are subject to change as more information becomes available and after final analyses of the fair values
of both tangible and intangible assets acquired and liabilities assumed are completed. Accordingly, the final fair value adjustments
may be materially different from those presented in this document. Whereas the GemGroup column in the Pro Forma includes all of
GemGroup’s assets and liabilities, GPI only acquired the Gaming assets and liabilities, which we identified as being substantially
all of the GemGroup assets.
Adjustments included in the column under
the heading ‘‘Pro Forma Adjustments’’ primarily relate to the following:
(A) | |
To reverse the book value of cash not acquired | |
$ | (108 | ) |
| |
To reflect the cash consideration paid for the acquisition | |
| (8,750 | ) |
| |
Total adjustment to cash | |
| (8,858 | ) |
| |
| |
| | |
(B) | |
To reverse the book value of accounts receivable not acquired | |
$ | (289 | ) |
| |
Total adjustment to accounts receivable | |
| (289 | ) |
| |
| |
| | |
(C) | |
To reverse the book value of inventory not acquired | |
$ | (519 | ) |
| |
To reflect the inventory acquired at FIFO | |
| 538 | |
| |
Total adjustment to inventory | |
| 19 | |
| |
| |
| | |
(D) | |
To reverse the book value of prepaid assets not acquired | |
$ | (288 | ) |
| |
To record the fair value of prepaid assets acquired | |
| (143 | ) |
| |
Total adjustment to prepaid assets | |
| (431 | ) |
| |
| |
| | |
(E) | |
To reflect the use of the restricted cash for the acquisition | |
$ | (10,000 | ) |
| |
Total adjustment to restricted cash | |
| (10,000 | ) |
| |
| |
| | |
(F) | |
To reflect the consumption of the deposit made for the acquisition | |
$ | (1,000 | ) |
| |
Total adjustment to deposits | |
| (1,000 | ) |
| |
| |
| | |
(G) | |
To reverse the book value of property and equipment not acquired | |
$ | (1,248 | ) |
| |
To record the fair value of property and equipment acquired | |
| 189 | |
| |
Total adjustment to property and equipment | |
| (1,059 | ) |
| |
| |
| | |
(H) | |
To record the fair value of intangibles acquired and generated by the acquisition | |
$ | 3,221 | |
| |
Total adjustment to intangibles | |
| 3,221 | |
| |
| |
| | |
(I) | |
To reverse the book value of goodwill not acquired | |
$ | (1,941 | ) |
| |
To record the fair value of goodwill acquired and generated by the acquisition | |
| 9,742 | |
| |
Total adjustment to goodwill | |
| 7,801 | |
| |
| |
| | |
(J) | |
To reverse the book value of other assets not acquired | |
$ | (28 | ) |
| |
Total adjustment to other assets | |
| (28 | ) |
| |
| |
| | |
(K) | |
To reverse the book value of the line of credit and short-term debt not acquired | |
$ | (1,185 | ) |
| |
Total adjustment to line of credit and debt | |
| (1,185 | ) |
| |
| |
| | |
(L) | |
To reverse the book value of accounts payable not acquired | |
$ | (523 | ) |
| |
Total adjustment to accounts payable | |
| (523 | ) |
| |
| |
| | |
(M) | |
To reverse the book value of accrued liabilities not acquired | |
$ | (82 | ) |
| |
To record the estimated fair value of accrued liabilites acquired | |
| 450 | |
| |
Total adjustment to accrued liabilities | |
| 368 | |
| |
| |
| | |
(N) | |
To reverse the book value of long-term debt not acquired | |
$ | (2,534 | ) |
| |
Total adjustment to long-term debt | |
| (2,534 | ) |
| |
| |
| | |
(O) | |
To reverse the book value of deffered tax liabilities not acquired | |
| (362 | ) |
| |
Total adjustment to other assets | |
| (362 | ) |
| |
| |
| | |
(P) | |
To reverse the book value of common stock not acquired | |
$ | (0.1 | ) |
| |
To reverse the additional paid in capital not acquired | |
| (3,572 | ) |
| |
To reverse the retained earnings not acquired | |
| (2,816 | ) |
| |
Total adjustment to stockholders' equity | |
| (6,388 | ) |
Note 4: Unaudited Pro Forma Condensed Combined Statement
of Operations Adjustments for the Six Months Ended June 30, 2014
The pro forma adjustments are preliminary,
based on estimates, and are subject to change as more information becomes available and after final analyses of the fair values
of both tangible and intangible assets acquired and liabilities assumed are completed. Accordingly, the final fair value adjustments
may be materially different from those presented in this document.
Adjustments included in the column under
the heading ‘‘Pro Forma Adjustments’’ primarily relate to the following:
(A) | |
To eliminate the revenue not generated by the net assets acquired | |
$ | (1,385 | ) |
| |
To record revenue according to GPI's accounting principles | |
| 631 | |
| |
Total adjustment to revenue | |
| (754 | ) |
| |
| |
| | |
(B) | |
To eliminate the cost of revenue not generated by the net assets acquired | |
$ | (990 | ) |
| |
To record cost of revenue according to GPI's accounting principles | |
| 631 | |
| |
To record the depreciation expense for revaluation of property and equipment | |
| 9 | |
| |
Total adjustment to cost of revenue | |
| (350 | ) |
| |
| |
| | |
(C) | |
To eliminate general and administrative expenses not related to the gaming assets acquired | |
$ | (247 | ) |
| |
| |
| | |
| |
To eliminate the cost related to the acquisition | |
$ | (300 | ) |
| |
To record the amortization of newly identified intangible assets | |
| 161 | |
| |
Total adjustment to general and administrative | |
| (386 | ) |
| |
| |
| | |
(D) | |
To eliminate other income and expense not related to the gaming assets acquired | |
$ | 78 | |
| |
To record the interest expense as if GPI had entered into the $10.0 million line of credit as of January 1st, 2014. | |
| (124 | ) |
| |
Total adjustment to other income and expense | |
| (46 | ) |
| |
| |
| | |
(E) | |
Effect of pro forma adjustments on the income tax expense, at statutory federal and state tax rates | |
$ | 544 | |
| |
Total adjustment to income tax | |
| 544 | |
Note 5: Unaudited Pro Forma Condensed Combined Statement
of Operations Adjustments for the Year Ended December 31, 2013
The pro forma adjustments are preliminary,
based on estimates, and are subject to change as more information becomes available and after final analyses of the fair values
of both tangible and intangible assets acquired and liabilities assumed are completed. Accordingly, the final fair value adjustments
may be materially different from those presented in this document.
Adjustments included in the column under
the heading ‘‘Pro Forma Adjustments’’ primarily relate to the following:
(A) | |
To eliminate the revenue not generated by the net assets acquired | |
$ | (2,232 | ) |
| |
To record revenue according to GPI's accounting principles | |
| 1,362 | |
| |
Total adjustment to revenue | |
| (870 | ) |
| |
| |
| | |
(B) | |
To eliminate the cost of revenue not generated by the net assets acquired | |
$ | (1,887 | ) |
| |
To record cost of revenue according to GPI's accounting principles | |
| 1,362 | |
| |
To record the depreciation expense for revaluation of property and equipment | |
| 19 | |
| |
Total adjustment to cost of revenue | |
| (506 | ) |
| |
| |
| | |
(C) | |
To eliminate general and administrative expenses not related to the gaming assets acquired | |
$ | (187 | ) |
| |
To record the amortization of newly identified intangible assets | |
| 322 | |
| |
Total adjustment to general and administrative | |
| 135 | |
| |
| |
| | |
(D) | |
To eliminate other income and expense not related to the gaming assets acquired | |
$ | 198 | |
| |
To record the interest expense as if GPI had entered into the $10.0 million line of credit as of January 1st, 2013. | |
| (248 | ) |
| |
Total adjustment to other income and expense | |
| (50 | ) |
| |
| |
| | |
(E) | |
Effect of pro forma adjustments on the income tax expense, at statutory federal and state tax rates | |
$ | 948 | |
| |
Total adjustment to income tax | |
| 948 | |
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