UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to
Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported): February 9, 2015
YELP INC.
(Exact name of registrant as
specified in its charter)
Delaware |
|
001-35444 |
|
20-1854266 |
(State of incorporation) |
|
(Commission File No.) |
|
(IRS Employer Identification
No.) |
140 New Montgomery
Street, 9th
Floor
San Francisco, CA 94105
(Address of principal executive offices and zip code)
Registrants
telephone number, including area code: (415) 908-3801
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:
☐ |
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425) |
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☐ |
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Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ |
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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☐ |
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Explanatory Note
This Amendment No. 1 to Current Report on
Form 8-K/A (the Amendment) is being filed to amend the Current Report on Form 8-K filed by Yelp Inc. (the
Company) with the U.S. Securities and Exchange Commission on February 10, 2015 (the Original Report)
regarding its acquisition of Eat24Hours.com, Inc. (Eat24). The sole purpose of this Amendment is to provide the
financial statements, pro forma financial information and accountant’s report required by Item 9.01, which were
excluded from the Original Report in accordance with the provisions of that item and are filed as exhibits hereto. All other items in the Original Report remain the same.
Item 9.01. Financial
Statements and Exhibits.
(a) Financial statements
of businesses acquired.
The audited consolidated
financial statements of Eat24 as of and for the year ended December 31, 2014 are
filed as Exhibit 99.3 to this Amendment.
(b) Pro forma financial
information.
The unaudited pro forma
condensed combined financial statements of the Company as of and for the year
ended December 31, 2014 giving effect to the acquisition of Eat24 are filed as
Exhibit 99.4 hereto.
(c) Exhibits.
Exhibit |
|
|
Number |
|
Description |
23.1 |
|
Consent of Independent Registered Public
Accounting Firm. |
99.1* |
|
Agreement and Plan of Merger, dated
February 9, 2015, by and among Yelp Inc., Eat24Hours.com, Inc., Kale
Acquisition Corp., Quinoa Acquisition LLC, the Stockholders of
Eat24Hours.com, Inc. and Nadav Sharon, as Stockholders
Agent. |
99.2* |
|
Press Release, dated February 10, 2015,
entitled Yelp Acquires Leading Online Food Ordering Service
Eat24. |
99.3 |
|
Eat24Hours.com, Inc. Audited Consolidated
Financial Statements as of and for the Year Ended December 31,
2014. |
99.4 |
|
Unaudited Pro Forma Condensed Combined
Financial Statements of Yelp Inc. as of and for the Year Ended December
31, 2014. |
* 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 hereunto duly
authorized.
Date:
April 27, 2015 |
YELP
INC. |
|
|
By: |
/s/ Rob Krolik |
|
|
|
Rob
Krolik |
|
|
Chief
Financial Officer |
INDEX TO
EXHIBITS
Exhibit |
|
|
Number |
|
Description |
23.1 |
|
Consent of Independent Registered Public
Accounting Firm. |
99.1* |
|
Agreement and Plan of Merger, dated
February 9, 2015, by and among Yelp Inc., Eat24Hours.com, Inc., Kale
Acquisition Corp., Quinoa Acquisition LLC, the Stockholders of
Eat24Hours.com, Inc. and Nadav Sharon, as Stockholders
Agent. |
99.2* |
|
Press Release, dated February 10, 2015,
entitled Yelp Acquires Leading Online Food Ordering Service
Eat24. |
99.3 |
|
Eat24Hours.com, Inc. Audited Consolidated
Financial Statements as of and for the Year Ended December 31,
2014. |
99.4 |
|
Unaudited Pro Forma Condensed Combined
Financial Statements of Yelp Inc. as of and for the Year Ended December
31, 2014. |
* Previously filed
Exhibit 23.1
Consent of Independent Registered Public
Accounting Firm
We consent to the incorporation by reference in Registration Statement No. 333-191967 on Form S-3
and Registration Statement Nos. 333-180221, 333-187545, 333-192016, 333-194260 and 333-202332 on
Form S-8 of Yelp Inc. of our report dated February 5, 2015, with respect to the consolidated balance sheet
of Eat24Hours.com, Inc. as of December 31, 2014, and the related consolidated statement of operations and
accumulated deficit and consolidated cash flows for the year then ended, which report appears in
Amendment No. 1 to the Current Report on Form 8-K of Yelp Inc. dated February 9, 2015, to be filed with
the U.S. Securities and Exchange Commission on April 27, 2015.
/s/ Frank, Rimerman + Co. LLP
Palo Alto, California
April 24, 2015
Eat24Hours.com, Inc.
Consolidated Financial Statements
December 31, 2014
![](exhibit99-3x1x1.jpg)
![](exhibit99-3x2x1.jpg)
Eat24Hours.com,
Inc. |
Consolidated Balance
Sheet |
December 31,
2014 |
ASSETS |
Current Assets |
|
|
|
|
Cash and cash
equivalents |
|
$ |
7,806,970 |
|
Accounts
receivable |
|
|
941,444 |
|
Prepaid expenses and
other current assets |
|
|
1,081,321 |
|
Total
current assets |
|
|
9,829,735 |
|
Other Assets |
|
|
28,043 |
|
|
|
$ |
9,857,778 |
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT |
Current Liabilities |
|
|
|
|
Restaurant
liability |
|
$ |
8,741,743 |
|
Accounts
payable |
|
|
1,694,106 |
|
Accrued expenses and
other current liabilities |
|
|
424,002 |
|
Total
current liabilities |
|
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10,859,851 |
|
|
Commitments and Contingencies (Notes 4 and 5) |
|
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Stockholders' Deficit |
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Common stock, $0.001 par
value; 15,000,000 shares authorized; |
|
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1,500,000
shares issued and outstanding |
|
|
1,500 |
|
Additional paid-in
capital |
|
|
18,500 |
|
Accumulated
deficit |
|
|
(1,022,073 |
) |
Total
stockholders' deficit |
|
|
(1,002,073 |
) |
|
|
$ |
9,857,778 |
|
See Independent Auditors'
Report and Notes to Consolidated Financial Statements
- 3 -
Eat24Hours.com, Inc. |
Consolidated Statement of Operations and Accumulated
Deficit |
Year Ended December
31, 2014 |
Revenue |
|
$ |
24,500,699 |
|
Cost
of Revenue |
|
|
10,745,641 |
|
Gross margin |
|
|
13,755,058 |
|
|
Operating Expenses |
|
|
|
|
Product
development |
|
|
2,323,555 |
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General and
administrative |
|
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4,124,100 |
|
Sales and
marketing |
|
|
7,248,427 |
|
Total
operating expenses |
|
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13,696,082 |
|
Income before Income Tax
Expense |
|
|
58,976 |
|
Income Tax Expense |
|
|
33,425 |
|
Net Income |
|
|
25,551 |
|
Accumulated Deficit, beginning of year |
|
|
(1,047,624 |
) |
Accumulated Deficit, end of year |
|
$ |
(1,022,073 |
) |
See Independent Auditors'
Report and Notes to Consolidated Financial Statements
- 4 -
Eat24Hours.com, Inc. |
Consolidated Statement of Cash Flows |
Year Ended December
31, 2014 |
Cash Flows from Operating
Activities |
|
|
|
|
Net income |
|
$ |
25,551 |
|
Adjustments to reconcile
net income to net cash |
|
|
|
|
provided
by operating activities: |
|
|
|
|
Depreciation
and amortization |
|
|
17,377 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
|
|
(502,731 |
) |
Prepaid
expenses and other current assets |
|
|
(524,785 |
) |
Other
assets |
|
|
(5,644 |
) |
Restaurant
liability |
|
|
3,431,027 |
|
Accounts
payable |
|
|
1,190,584 |
|
Accrued
expenses and other current liabilities |
|
|
(247,422 |
) |
Net
cash provided by operating activities |
|
|
3,383,957 |
|
|
|
|
|
|
Cash Flows from Investing
Activities |
|
|
|
|
Purchase of property and
equipment |
|
|
(17,377 |
) |
Net
cash used in investing activities |
|
|
(17,377 |
) |
Net
Increase in Cash and Cash Equivalents |
|
|
3,366,580 |
|
Cash and Cash Equivalents, beginning of
year |
|
|
4,440,390 |
|
Cash
and Cash Equivalents, end of year |
|
$ |
7,806,970 |
|
|
|
Supplemental Disclosure of Cash Flow
Information |
|
|
|
|
Cash paid for income
taxes |
|
$ |
34,000 |
|
See Independent Auditors'
Report and Notes to Consolidated Financial Statements
- 5 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
1. |
|
Nature of
Business |
|
|
|
Eat24Hours.com, Inc. (the Company) was originally incorporated in
the state of California in March 2009. In January 2012, the Company was
reincorporated in the state of Delaware. The Company provides an online
and mobile platform for restaurant pick-up and delivery orders. The
Company displays the menus and other relevant information for restaurants
in its network online and through their mobile platform from which orders
may be placed at no cost to the customer. The Company charges restaurants
a per order commission that is largely fee based. |
|
|
|
In
December 2014, the Company entered into a non-binding letter of intent
with a potential acquirer for the purchase of 100% equity interest in the
Company. The letter of intent allowed for the exclusive negotiation rights
with the Company through January 2015. |
|
2. |
|
Significant Accounting Policies |
|
|
|
Basis
of Presentation and Principles of Consolidation: |
|
|
|
The
accompanying consolidated financial statements include the accounts of
Eat24Hours.com, Inc., YesPOS, Inc. (YesPOS) and Yalla, Inc. (Yalla).
YesPOS and Yalla are owned by the Companys stockholders, and have been
determined to be variable interest entities in which the Company holds a
variable interest and is the primary beneficiary. YesPOS was incorporated
in state of Delaware in July 2013 for the purpose of licensing equipment
to the Company and was dissolved in December 2014. Yalla was incorporated
in the state of Delaware in January 2014 for the purpose of marketing on
behalf of the Company and was dissolved in December 2014. All intercompany
accounts and transactions have been eliminated in
consolidation. |
|
|
|
Revenue
Recognition: |
|
|
|
The
Company generates revenues primarily when customers place an order on its
platform and are recognized net of estimated refunds and chargebacks.
Restaurants pay a commission, typically a percentage of the transaction on
orders that are processed through the Companys platform. For most orders,
customers use a credit card to pay the Company for their meal when the
order is placed. For these transactions, the Company collects the total
amount of the order from the customer and remits the proceeds, net of
commissions and credit card fees, to the restaurant. The Company generally
accumulates proceeds and remits them to the restaurants on a daily, weekly
or monthly basis. The Company also deducts commissions for other
transactions utilizing its platform, such as cash transactions paid
directly to the restaurants in the network. |
See Independent Auditors
Report
- 6 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
2. |
|
Significant Accounting Policies (continued) |
|
|
|
Revenue
Recognition (continued): |
|
|
|
The
Company provides incentive offers in the form of credits (cash coupon
credits) applied against future purchases by customers using its platform.
Additional commissions are earned by the Company from restaurants offering
these promotions to cover the discounts provided to the customers. The
costs of these incentives are recorded as reductions in revenues,
generally on the date the corresponding revenue is recorded. |
|
|
|
Concentrations of Credit Risk: |
|
|
|
The
Companys product revenues are concentrated in the mobile application
market which is highly competitive and rapidly changing. Significant
technological changes in the industry or customer requirements, or the
emergence of competitive products with new capabilities or technologies,
could adversely affect the Companys operating results. |
|
|
|
Financial
instruments that potentially subject the Company to credit risk consist
primarily of cash and cash equivalents and accounts receivable. Accounts
located in the United States are insured by the Federal Deposit Insurance
Corporation, or FDIC, up to $250,000. Certain cash account balances exceed
the FDIC limits. |
|
|
|
For the
year ended December 31, 2014, the Company had no major customers.
Major customers are defined as those having sales that exceed 10% of the
Companys net revenues during the year. |
|
|
|
Cost of
Revenue: |
|
|
|
Cost of
revenue consists primarily of salaries and benefits for account manager
personnel, customer support personnel, merchant processing expenses,
website and data hosting and confirmation and fax services. The Company
recognizes the cost of revenue as the associated revenue is
recognized. |
|
|
|
Use of
Estimates: |
|
|
|
The
preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the consolidated
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates. The Companys most significant estimates relate to estimated
useful lives of fixed assets, website development costs and certain
accrued expenses. |
See Independent Auditors
Report
- 7 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
2. |
|
Significant Accounting Policies (continued) |
|
|
|
Cash
and Cash Equivalents: |
|
|
|
The
Company considers all highly liquid investments with an original maturity
from the date of purchase of three months or less to be cash and cash
equivalents. As of December 31, 2014, cash and cash equivalents
consisted of cash deposited with banks and merchant processors. The
recorded carrying amount of cash and cash equivalents approximates their
fair value. The Company places its cash and cash equivalents with high
credit quality financial institutions. |
|
|
|
Accounts Receivable: |
|
|
|
Accounts
receivable consist of credit card transactions processed by merchants due
the Company but not yet deposited to the Companys accounts. |
|
|
|
Property and Equipment: |
|
|
|
Property
and equipment are recorded at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of
the respective assets, generally one year or less. Leasehold improvements
are amortized over the shorter of the estimated useful lives of the assets
or the lease term. Expenditures for repairs and maintenance are charged to
operating expenses as incurred. Upon disposition, the cost and related
accumulated depreciation are removed from the accounts and the resulting
gain or loss is recorded in the consolidated statement of
operations. |
|
|
|
Cash
Coupon Credits: |
|
|
|
The
Company provides incentive offers to customers using their platform in the
form of cash coupon credits. Cash coupon credits, which expire after 30
days, are generally earned when a customer makes a purchase from a
restaurant offering a promotion and are recorded as a liability upon being
earned by the customer. |
|
|
|
As of
December 31, 2014, $144,000 of customer credits was included within
accrued expenses and other current liabilities on the accompanying
consolidated balance sheet. |
See Independent Auditors
Report
- 8 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
2. |
|
Significant Accounting Policies (continued) |
|
|
|
Software Development Costs: |
|
|
|
The
Company expenses software development costs as incurred until
technological feasibility of the underlying software product is achieved.
After technological feasibility in the form of a working model is
established, software development costs are capitalized, if the Company
believes the software will be used to perform the function intended.
Capitalized costs are then amortized on a straight-line basis over the
estimated product life, or based on the ratio of current revenue to total
projected project revenue, whichever is greater. To date, the period
between achieving technological feasibility and general availability of
such software has been short and software development costs qualifying for
capitalization have been insignificant. Accordingly, the Company has not
capitalized any software development costs to date. |
|
|
|
Accounting for Impairment of Long-Lived Assets: |
|
|
|
The
Company reviews its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets held and used is measured by
comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceeds the fair value of the
assets. Assets to be disposed of are reported at the lower of their
carrying cost amount or the fair value less the cost to sell. The Company
did not record any expense related to asset impairment in 2014. |
|
|
|
Product
Development: |
|
|
|
Product
development expenses consist of salaries and benefits for employees and
contractors engaged in the design, development, maintenance and testing of
the Companys platform, including its websites and mobile
applications. |
|
|
|
Advertising: |
|
|
|
The
Company expenses the costs of advertising, including television, radio,
online display, search engine marketing, media and other program expenses
as incurred. Advertising expense was $3,460,000 in 2014. |
See Independent Auditors
Report
- 9 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
2. |
|
Significant Accounting Policies (continued) |
|
|
|
Income
Taxes: |
|
|
|
The
Company has elected to be treated as an S corporation for federal and
state income tax purposes, whereby the Companys income is reportable by
its stockholders in their individual tax returns. For state purposes, the
Company is required to pay an S corporation income tax of approximately
1.5% of pretax income, which is based on state S corporation tax rates for
states in which the Company files tax returns. |
|
|
|
Authoritative guidance on accounting for and disclosure of
uncertainty in tax positions (Financial Accounting Standards Board
Accounting Standards Codification Topic 740) requires the Company to
determine whether a tax position of the Company is more likely than not to
be sustained upon examination, including resolution of any related appeals
or litigation processes, based on the technical merits of the position.
For tax positions meeting a more likely than not threshold, the tax amount
recognized in the financial statements is reduced by the largest benefit
that has a greater than fifty percent likelihood of being realized upon
ultimate settlement with the relevant taxing authority. Currently, the
Company does not expect any changes related to the liability for
unrecognized tax benefits in the next 12 months. In the event the Company
should need to recognize interest and penalties related to unrecognized
tax liabilities, this amount will be recorded as an accrued liability and
an increase to income tax expense. |
|
|
|
The
Company files tax returns as prescribed by the tax laws of the
jurisdictions in which it operates. In the normal course of business, the
Company is subject to examination by federal, state and local
jurisdictions, where applicable. The tax returns for the Company since
inception remain open to examination by the major taxing jurisdictions to
which the Company is subject. |
|
|
|
Deferred
income taxes result primarily from the Company using the accrual method of
accounting to record revenues and expenses for financial statement
purposes and the cash method of accounting for income tax
purposes. |
See Independent Auditors
Report
- 10 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
3. |
|
Significant Balance Sheet Components |
|
|
|
Property and Equipment: |
|
|
|
Property
and equipment consisted of the following at December 31,
2014: |
|
|
|
Computers |
$ |
33,187 |
|
|
|
Less accumulated
depreciation |
|
(33,187 |
) |
|
|
Property and equipment,
net |
$ |
- |
|
|
|
|
|
|
|
|
|
Prepaid Expenses
and Other Current Assets: |
|
|
|
|
|
|
|
|
|
Prepaid expenses and
other current assets consisted of the following at December 31,
2014: |
|
|
|
|
|
|
|
Prepaid television
commercials |
$ |
890,256 |
|
|
|
Prepaid insurance |
|
91,478 |
|
|
|
Other |
|
99,587 |
|
|
|
|
$ |
1,081,321 |
|
4. |
|
Capital
Stock |
|
|
|
The
Company has two classes of stock, common and preferred stock, which have
identical rights and privileges. The Company is authorized to issue
20,000,000 shares of which 15,000,000 shares shall be common stock and
5,000,000 shares shall be preferred stock. Both classes of stock have a
par value of $0.001 per share. |
See Independent Auditors
Report
- 11 -
Eat24Hours.com, Inc. |
Notes to Consolidated Financial
Statements |
5. |
|
Commitments and Contingencies |
|
|
|
Operating Leases: |
|
|
|
The
Company leases office facilities and automobiles under non-cancelable
operating lease agreements expiring at various dates through April 2016.
Rent expense related to the Companys office facilities was $282,000 in
2014. |
|
|
|
As of
December 31, 2014, future minimum payments under the non-cancelable leases
are $332,000 in 2015 and $104,000 in 2016. |
|
|
|
Contingencies: |
|
|
|
The
Company is involved in various legal proceedings and receives claims from
time to time, arising from the normal course of business activities. In
the Companys opinion, resolution of these matters is not expected to have
a material adverse impact on its consolidated results of operations, cash
flows or our financial position. |
|
|
|
Indemnification Agreements: |
|
|
|
From time
to time, in its normal course of business, the Company may indemnify other
parties, with whom it enters into contractual relationships, including
corporate officers within the Company. The Company may agree to hold such
parties harmless against specific losses, such as those that could arise
from a breach of representation, covenant or third-party infringement
claims. It may not be possible to determine the maximum potential amount
of liability under such indemnification obligations due to the unique
facts and circumstances that are likely to be involved in each particular
claim and indemnification provision. Historically, there have been no such
indemnification claims. |
|
6. |
|
Subsequent
Events |
|
|
|
Subsequent
events have been evaluated through the date of the independent auditors
report, which is the date the consolidated financial statements were
approved by management and available to be
issued. |
See Independent Auditors
Report
- 12 -
Exhibit 99.4
YELP, INC. AND
EAT24HOURS.COM, INC.
PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
(Unaudited)
On February 9, 2015, Yelp Inc.
(Yelp or Company) acquired Eat24Hours.com, Inc. (Eat24). In connection
with the acquisition, all of the outstanding capital stock of Eat24 was
converted into the right to receive an aggregate of approximately $75.0 million
in cash, less certain transaction expenses, and 1,402,844 shares of Yelp Class A
common stock with an aggregate fair value of approximately $59.2 million, as
determined on the basis of the closing market price of the Companys Class A
common stock on the acquisition date. Of the total consideration paid in
connection with the acquisition, $16.5 million in cash and 308,626 shares were
initially held in escrow to secure indemnification obligations. The key factor
underlying the acquisition was to obtain an online food ordering
solution.
The unaudited pro forma
condensed combined balance sheet combines the historical balance sheets of Yelp
and Eat24 as of December 31, 2014.
The unaudited pro forma
condensed combined statement of operations for the year ended December 31, 2014
combines the historical statement of operations for Yelp and Eat24 as if the
acquisition occurred on January 1, 2014.
The historical financial
information has been adjusted in the unaudited condensed combined pro forma
financial statements to give effect to events that are (1) directly attributable
to the acquisition; (2) factually supportable; and (3) with respect to the
statement of operations, expected to have a continuing impact on the combined
companys results. The pro forma adjustments are described in the accompanying
footnotes.
The unaudited pro forma
condensed combined financial information was based on and should be read in
conjunction with the following historical financial statements and accompanying
notes:
● |
Separate audited consolidated financial statements of Yelp as of
December 31, 2014 and for the year then ended, together with
managements discussion and analysis of financial condition and results of
operations, presented in the Companys Annual Report on Form 10-K filed on
February 27, 2015 with the Securities and Exchange
Commission; |
|
|
● |
Separate audited
historical financial statements of Eat24 as of December 31, 2014 and for
the year then ended included in this Current Report on Form 8-K/A;
|
The unaudited pro forma
condensed combined financial information is presented for informational purposes
only and is not intended to represent or be indicative of the combined results
of operations or financial position that the Company would have reported had the
acquisition been completed as of the date and for the periods presented, and
should not be taken as representative of its consolidated results of operations
or financial condition following the acquisition. In addition, the unaudited pro
forma condensed combined financial information is not intended to project the
future financial position or results of operations of the combined
company.
The acquisition has been
accounted for using the purchase method of accounting. Under the purchase method
of accounting, the total purchase price presented in the accompanying unaudited
pro forma condensed combined financial statements was allocated to the assets
acquired and liabilities assumed based on their estimated fair values. The
excess of the purchase price over the net of the amount assigned to tangible and
identifiable intangible assets acquired and liabilities assumed is considered
goodwill.
The pro forma adjustments are
preliminary and have been made solely for the purpose of providing unaudited pro
forma condensed combined financial information. Differences between these
preliminary management estimates (for example, estimates as to the values of
acquired intangible assets) and the final acquisition accounting will occur and
these differences could have a material impact on the accompanying unaudited pro
forma condensed combined financial statements and the combined companys future
results of operations and financial position.
The unaudited pro forma
condensed combined financial information does not reflect any cost savings,
operating synergies or revenue enhancements that the combined company may
achieve as a result of the acquisition, costs necessary to achieve such
measures, or costs to integrate the operations of the combined company.
Exhibit 99.4
Yelp
Inc.
Unaudited Pro Forma
Condensed Combined Balance Sheet
December 31, 2014
(In thousands, except
share and per share data)
|
Historical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
|
|
Assets |
Yelp (as
reported) |
|
Eat24 |
|
Adjustments |
|
Combined |
|
Notes |
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
247,312 |
|
|
$ |
7,807 |
|
|
$ |
(75,000 |
) |
|
$ |
180,119 |
|
|
(a) |
Short Term Investments |
|
118,498 |
|
|
|
- |
|
|
|
|
|
|
|
118,498 |
|
|
|
Accounts receivable, net |
|
35,593 |
|
|
|
941 |
|
|
|
|
|
|
|
36,534 |
|
|
|
Prepaid expenses and other current
assets |
|
19,355 |
|
|
|
1,081 |
|
|
|
|
|
|
|
20,436 |
|
|
|
Total current assets |
|
420,758 |
|
|
|
9,829 |
|
|
|
(75,000 |
) |
|
|
355,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Investments |
|
38,612 |
|
|
|
- |
|
|
|
|
|
|
|
38,612 |
|
|
|
Property, equipment and software, net |
|
62,761 |
|
|
|
- |
|
|
|
|
|
|
|
62,761 |
|
|
|
Goodwill |
|
67,307 |
|
|
|
- |
|
|
|
111,062 |
|
|
|
178,369 |
|
|
(b) |
Intangibles, net |
|
5,786 |
|
|
|
- |
|
|
|
39,600 |
|
|
|
45,386 |
|
|
(c) |
Restricted Cash |
|
17,943 |
|
|
|
- |
|
|
|
|
|
|
|
17,943 |
|
|
|
Other assets |
|
16,483 |
|
|
|
28 |
|
|
|
(12,412 |
) |
|
|
4,099 |
|
|
(d) |
Total assets |
$ |
629,650 |
|
|
$ |
9,857 |
|
|
$ |
63,250 |
|
|
$ |
702,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant liabilitiy |
$ |
- |
|
|
$ |
8,742 |
|
|
$ |
- |
|
|
$ |
8,742 |
|
|
|
Accounts payable |
|
1,398 |
|
|
|
1,694 |
|
|
|
|
|
|
|
3,092 |
|
|
|
Accrued liabilities |
|
29,581 |
|
|
|
424 |
|
|
|
230 |
|
|
|
30,235 |
|
|
(e) |
Deferred revenue |
|
2,994 |
|
|
|
- |
|
|
|
|
|
|
|
2,994 |
|
|
|
Total current liabilities |
|
33,973 |
|
|
|
10,860 |
|
|
|
230 |
|
|
|
45,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
term liabilities |
|
7,527 |
|
|
|
- |
|
|
|
3,089 |
|
|
|
10,616 |
|
|
(d) |
Total liabilities |
|
41,500 |
|
|
|
10,860 |
|
|
|
3,319 |
|
|
|
55,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
- |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
- |
|
|
(f) |
Additional paid-in capital |
|
627,742 |
|
|
|
18 |
|
|
|
59,140 |
|
|
|
686,900 |
|
|
(f) |
Accumulated other comprehensive loss |
|
(5,609 |
) |
|
|
- |
|
|
|
|
|
|
|
(5,609 |
) |
|
|
Accumulated deficit |
|
(33,983 |
) |
|
|
(1,022 |
) |
|
|
792 |
|
|
|
(34,213 |
) |
|
(e)(g) |
Total stockholders equity |
|
588,150 |
|
|
|
(1,003 |
) |
|
|
59,931 |
|
|
|
647,078 |
|
|
|
Total liabilities and stockholders equity |
$ |
629,650 |
|
|
$ |
9,857 |
|
|
$ |
63,250 |
|
|
$ |
702,757 |
|
|
|
The accompanying notes are
an integral part of the unaudited pro forma condensed combined
financial statements.
Exhibit 99.4
Yelp
Inc.
Unaudited
Pro Forma Condensed Combined Statement of Operations
Year Ended
December 31, 2014
(In thousands, except share and per share
data)
|
Historical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma |
|
|
|
|
|
|
Yelp (as
reported) |
|
Eat24 |
|
Adjustments |
|
Pro Forma
Combined |
|
Notes |
Net
revenue |
$ |
377,536 |
|
$ |
24,501 |
|
|
$ |
(1,147 |
) |
|
$ |
400,890 |
(h) |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue (exclusive of depreciation |
|
24,382 |
|
|
10,746 |
|
|
|
(5,663 |
) |
|
|
29,465 |
(h) |
|
and
amortization shown separately below) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing |
|
201,050 |
|
|
7,248 |
|
|
|
|
|
|
|
208,298 |
|
|
Product
development |
|
65,181 |
|
|
2,324 |
|
|
|
|
|
|
|
67,505 |
|
|
General
and administrative |
|
58,274 |
|
|
4,124 |
|
|
|
4,516 |
|
|
|
66,914 |
(h) |
|
Depreciation and amortization |
|
17,590 |
|
|
- |
|
|
|
5,344 |
|
|
|
22,934 |
(i) |
|
Total costs and expenses |
|
366,477 |
|
|
24,442 |
|
|
|
4,197 |
|
|
|
395,116 |
|
|
|
|
Loss
from operations |
|
11,059 |
|
|
59 |
|
|
|
(5,344 |
) |
|
|
5,774 |
|
|
Other income (expense), net |
|
221 |
|
|
- |
|
|
|
|
|
|
|
221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
11,280 |
|
|
59 |
|
|
|
(5,344 |
) |
|
|
5,995 |
|
|
Benefit (provision) for income taxes |
|
25,193 |
|
|
(33 |
) |
|
|
2,091 |
|
|
|
27,251 |
(j) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss) attributable to common stockholders (Class A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
B) |
$ |
36,473 |
|
$ |
26 |
|
|
$ |
(3,253 |
) |
|
$ |
33,246 |
|
|
|
|
Net
loss per share attributable to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stockholders (Class A and B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.51 |
|
|
|
|
|
|
|
|
|
$ |
0.46 |
|
|
|
|
Diluted |
$ |
0.48 |
|
|
|
|
|
|
|
|
|
$ |
0.43 |
|
|
|
|
Weighted-average shares used to
compute |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net
loss per share attributable to common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stockholders (Class A and B) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
71,936 |
|
|
|
|
|
|
|
|
|
|
73,030 |
|
|
|
|
Diluted |
|
76,712 |
|
|
|
|
|
|
|
|
|
|
77,806 |
|
|
The accompanying notes are an
integral part of the unaudited pro forma condensed combined financial
statements.
Exhibit 99.4
Notes to Unaudited Pro
Forma Condensed Combined Financial Information
Adjustments to the unaudited pro forma condensed combined balance sheet as of December 31, 2014 and condensed combined statements of operations for the year ended December 31, 2014 are presented below:
(a) Adjustment to reflect the cash payment to the former Eat24 shareholders as part of the acquisition.
(b) Adjustment to record preliminary goodwill created as a result of the acquisition.
(c) Adjustment to record the preliminary fair market value estimates of restaurant relationships, user relationships, acquired technology and trademarks intangible assets resulting from the acquisition.
(d) Adjustment to record tax purchase accounting adjustments.
(e) Adjustment to record estimated transaction costs. Amounts are not included in the pro forma Condensed Combined Statements of Operations for the year ended December 31, 2014.
(f) Adjustment to eliminate Eat24s historical shareholders equity and reflect the issuance of Yelp common stock to the former Eat24 shareholders as part of the acquisition.
(g) Adjustment to eliminate Eat24s accumulated deficit account balance.
(h) Adjustment to conform Eat24s net revenue and cost of revenue to Yelps presentation.
(i) Adjustment to reflect amortization expense related to restaurant relationships, user relationships, acquired technology and trademarks intangible assets which are amortized on a straight line basis over 4-12 years.
(j) Adjustment to record pro forma tax adjustments to reflect pro forma tax balances.
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