SMSA GAINESVILLE ACQUISITION CORP.

CIK:0001474266|SEC Filings

Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating expenses
Acquisition bargain purchase gain				$ 182,625
Successor
Revenues	$ 138,076	$ 1,200
Operating expenses
Professional fees	92,013	55,065
Rent to related party	26,361	30,000
Personnel costs	$ 530,330	$ 222,195
Shell acquisition costs
Transaction costs	$ 36,971	$ 439,228
Commissions to related parties	$ 22,144
Administrative services from related parties
License fee for software from member
Other general and administrative costs	$ 333,462	$ 154,193
Depreciation and amortization	39,107	2,273
Total operating expenses	1,080,388	902,954
Loss from operations	$ (942,312)	(901,754)
Other income		57
Acquisition bargain purchase gain		182,625
Total other income		182,682
Loss before income tax expense	$ (942,312)	$ (719,072)
Income tax expense
Net loss	$ (942,312)	$ (719,072)
Loss per weighted-average share of common stock or member unit outstanding - basic and diluted	$ (0.01)
Weighted-average number of shares of common stock or member units outstanding - basic and diluted	167,392,035	145,699,001
Predecessor
Revenues		$ 714,780		$ 2,431,720
Operating expenses
Professional fees
Rent to related party
Personnel costs		$ 669,765		$ 2,125,786
Shell acquisition costs
Transaction costs
Commissions to related parties
Administrative services from related parties		$ 4,319		$ 10,864
License fee for software from member		8,250		24,750
Other general and administrative costs		65,037		179,411
Depreciation and amortization		12,213		38,067
Total operating expenses		759,584		2,378,878
Loss from operations		(44,804)		52,842
Other income		$ 1,462		$ 2,059
Acquisition bargain purchase gain
Total other income		$ 1,462		$ 2,059
Loss before income tax expense		(43,342)		54,901
Income tax expense		1,718		6,666
Net loss		$ (45,060)		$ 48,235
Loss per weighted-average share of common stock or member unit outstanding - basic and diluted		$ (45.06)		$ 48.24
Weighted-average number of shares of common stock or member units outstanding - basic and diluted		1,000		1,000
Successor
Revenues			$ 1,707,081	$ 1,200
Operating expenses
Professional fees			480,625	418,717
Rent to related party			94,399	70,000
Personnel costs			$ 1,544,940	258,915
Shell acquisition costs				12,070
Transaction costs			$ 144,612	$ 439,228
Commissions to related parties			$ 143,327
Administrative services from related parties
License fee for software from member
Other general and administrative costs			$ 1,130,946	$ 320,350
Depreciation and amortization			116,168	2,273
Total operating expenses			3,655,017	1,521,553
Loss from operations			(1,947,936)	(1,520,353)
Other income			$ (773)	57
Acquisition bargain purchase gain				182,625
Total other income			$ (773)	182,682
Loss before income tax expense			(1,948,709)	$ (1,337,671)
Income tax expense			5,400
Net loss			$ (1,954,109)	$ (1,337,671)
Loss per weighted-average share of common stock or member unit outstanding - basic and diluted			$ (0.01)	$ (0.01)
Weighted-average number of shares of common stock or member units outstanding - basic and diluted			165,098,677	138,765,343

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Acquisition bargain purchase gain			$ (182,625)
Cash flows provided by (used in) financing activities
Sale of common stock, net		$ 843,908
Successor
Cash flows provided by (used in) operating activities
Net (loss) income		$ (1,954,109)	(1,337,671)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Acquisition bargain purchase gain			(182,625)
Depreciation and amortization		$ 116,168	$ 2,273
License fee for software contributed by a member
Changes in operating assets and liabilities:
Accounts receivable		$ (32,945)	$ (1,200)
Inventories		(7,864)	(14,658)
Prepaid expenses and other assets		24,663	(34,444)
Accounts payable		208,059	613,887
Accrued expenses and other current liabilities		$ (137,239)	$ 223,230
Deferred revenue
Accrued shell acquisition costs			$ (109,548)
Due to shareholders		$ 28,307
Due to related party		26,143	$ 296,121
Net cash (used in) provided by operating activities		$ (1,728,817)	(544,635)
Cash flows used in investing activities
Acquisition of business, net of cash received			67,987
Purchases of property and equipment		$ (59,094)	$ (68,525)
Proceeds from sale of property and equipment		1,000
Net cash used in investing activities		(58,094)	$ (538)
Cash flows provided by (used in) financing activities
Sale of common stock, net		843,908	762,324
Due to shareholder		$ 790,125	$ (18)
Distributions to members
Net cash provided by (used in) financing activities		$ 1,634,033	$ 762,306
Net (decrease) increase in cash		(152,878)	217,133
Cash at beginning of period		199,861	38
Cash at end of period	$ 217,171	$ 46,983	217,171
Noncash investing and financing activities:
Acquisition and acquisition earn-out			549,667
Predecessor
Cash flows provided by (used in) operating activities
Net (loss) income	$ (45,060)		$ 48,235
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Acquisition bargain purchase gain
Depreciation and amortization	$ 12,213		$ 38,067
License fee for software contributed by a member	8,250		24,750
Changes in operating assets and liabilities:
Accounts receivable			(62,213)
Inventories			(13,761)
Prepaid expenses and other assets			2,035
Accounts payable			(29,582)
Accrued expenses and other current liabilities			53,202
Deferred revenue			$ (5,378)
Accrued shell acquisition costs
Due to shareholders
Due to related party			$ 200
Net cash (used in) provided by operating activities			$ 55,555
Cash flows used in investing activities
Acquisition of business, net of cash received
Purchases of property and equipment			$ (12,655)
Proceeds from sale of property and equipment
Net cash used in investing activities			$ (12,655)
Cash flows provided by (used in) financing activities
Sale of common stock, net
Due to shareholder
Distributions to members			$ (82,000)
Net cash provided by (used in) financing activities			(82,000)
Net (decrease) increase in cash			(39,100)
Cash at beginning of period			107,087
Cash at end of period	$ 67,987		$ 67,987
Noncash investing and financing activities:
Acquisition and acquisition earn-out

Condensed Consolidated Balance Sheets - Successor - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash	$ 46,983	$ 199,861
Accounts receivable	202,047	169,102
Inventories	36,485	28,621
Prepaid expenses and other current assets	70,751	40,414
Total current assets	356,266	437,998
Property and equipment, net	313,358	323,645
Intangible assets, net	63,719	111,506
Other assets	5,380	60,380
Total other assets	69,099	171,886
Total Assets	738,723	933,529
Current Liabilities:
Accounts payable	1,205,535	997,476
Accrued expenses and other current liabilities	539,223	676,462
Earn-out and other amounts payable for acquisition	25,000	25,000
Due to related parties	414,906	388,763
Due to shareholders	941,758	123,326
Total current liabilities	$ 3,126,422	$ 2,211,027
Stockholders' Deficit:
Preferred stock - $0.001 par value, 10,000,000 shares authorized, none issued and outstanding
Common Stock, $0.001 par value, 250,000,000 shares authorized, 167,954,975 and 159,515,885 shares issued and outstanding in 2015 and 2014, respectively	$ 167,955	$ 159,516
Additional paid-in capital	2,160,141	1,324,672
Accumulated deficit	(4,715,795)	(2,761,686)
Total Stockholders' Deficit	(2,387,699)	(1,277,498)
Total Liabilities and Stockholders' Deficit	$ 738,723	$ 933,529