Exhibit 99.3

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

On November 14, 2018, Mobivity Holdings Corp. (the “Company”) entered into an Asset Purchase Agreement (the “Agreement”) with Belly, Inc., a Delaware corporation, pursuant to which we agreed to purchase from Belly, Inc. (“Belly”) and Belly agreed to sell to us, certain operating assets relating to Belly’s proprietary digital customer loyalty platform, including client contracts, accounts receivable and intellectual property, in exchange for Mobivity’s payment of $3,000,000, subject to certain post-losing working capital adjustments.  The Asset Purchase Agreement contains customary representations, warranties and indemnities on the part of Belly.  The transactions under the Asset Purchase Agreement closed on November 14, 2018.

 

The following tables set forth certain Unaudited Pro Forma Condensed Combined Financial Statements giving effect to the Company’s acquisition of certain Belly assets. The historical financial information included in the Unaudited Pro Forma Condensed Combined Financial Statements for both the Company and Belly were prepared in conformity with U.S. Generally Accepted Accounting Principles.

 

The Unaudited Pro Forma Condensed Combined Financial Statements were prepared for informational purposes only and are not indicative of the consolidated results of operations or financial positions that the Company would have reported had the acquisition occurred at the previous dates presented, nor do they project results of future operations as a consolidated entity. The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect any operating efficiencies and/or cost savings that the Company may achieve with respect to the combined business operations.

 

The historical financial information has been adjusted in the Unaudited Pro Forma Condensed Combined Financial Statements to reflect pro forma events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the statements of earnings, expected to have a continuing impact on the combined results of the businesses.


1


 

 

Mobivity Holdings Corp.

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma

 

 

 

Pro Forma

 

 

 

Mobivity

 

Belly

 

Adjustments

 

Notes

 

Combined

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

$

5,119,562   

 

$

-   

 

$

(3,000,000)  

 

A   

 

$

2,119,562   

Accounts receivable, net

 

 

 

2,445,292   

 

 

9,400   

 

 

-   

 

 

 

 

2,454,692   

Other current assets

 

 

 

215,699   

 

 

18,009   

 

 

-   

 

 

 

 

233,708   

Total current assets

 

 

 

7,780,553   

 

 

27,409   

 

 

(3,000,000)  

 

 

 

 

4,807,962   

Goodwill

 

 

 

803,118   

 

 

-   

 

 

701,289   

 

B   

 

 

1,504,407   

Intangible assets, net

 

 

 

771,991   

 

 

-   

 

 

2,312,500   

 

C   

 

 

3,084,491   

Accounts receivable, long term

 

 

 

2,410,130   

 

 

-   

 

 

-   

 

 

 

 

2,410,130   

Other assets

 

 

 

92,179   

 

 

22,459   

 

 

(937)  

 

 

 

 

113,701   

TOTAL ASSETS

 

 

$

11,857,971   

 

$

49,868   

 

$

12,852   

 

 

 

$

11,920,691   

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

$

1,118,287   

 

$

51,546   

 

$

6,466   

 

D   

 

$

1,176,299   

Accrued interest

 

 

 

6,100   

 

 

-   

 

 

-   

 

 

 

 

6,100   

Accrued and deferred personnel compensation

 

 

 

554,137   

 

 

9,391   

 

 

(4,683)  

 

D   

 

 

558,845   

Deferred revenue and customer deposits

 

 

 

3,418,025   

 

 

-   

 

 

-   

 

 

 

 

3,418,025   

Notes payable, net - current maturities

 

 

 

332,312   

 

 

-   

 

 

-   

 

 

 

 

332,312   

Other current liabilities

 

 

 

731,421   

 

 

-   

 

 

-   

 

 

 

 

731,421   

Total current liabilities

 

 

 

6,160,282   

 

 

60,937   

 

 

1,783   

 

 

 

 

6,223,002   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, net - long term

 

 

 

205,786   

 

 

-   

 

 

-   

 

 

 

 

205,786   

Other long term liabilities

 

 

 

1,509,662   

 

 

-   

 

 

-   

 

 

 

 

1,509,662   

Total non-current liabilities

 

 

 

1,715,448   

 

 

-   

 

 

-   

 

 

 

 

1,715,448   

Total liabilities

 

 

 

7,875,730   

 

 

60,937   

 

 

1,783   

 

 

 

 

7,938,450   

Commitments and Contingencies (See Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 100,000,000 shares authorized; 45,904,948 shares issued and outstanding

 

 

 

45,905   

 

 

-   

 

 

-   

 

 

 

 

45,905   

Equity payable

 

 

 

100,862   

 

 

-   

 

 

-   

 

 

 

 

100,862   

Additional paid-in capital

 

 

 

87,500,045   

 

 

-   

 

 

-   

 

 

 

 

87,500,045   

Accumulated other comprehensive loss

 

 

 

(46,846)  

 

 

-   

 

 

-   

 

 

 

 

(46,846)  

Accumulated deficit

 

 

 

(83,617,725)  

 

 

-   

 

 

-   

 

 

 

 

(83,617,725)  

Total stockholders' equity

 

 

 

3,982,241   

 

 

-   

 

 

-   

 

 

 

 

3,982,241   

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

$

11,857,971   

 

$

60,937   

 

$

1,783   

 

 

 

$

11,920,691   

 

See accompanying notes to condensed combined financial statements (unaudited).


2


 

 

Mobivity Holdings Corp.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma  

 

 

 

Pro Forma  

 

 

Mobivity

 

Belly

 

Adjustments

 

Notes

 

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

8,591,955   

 

$

3,305,808   

 

$

-   

 

 

 

$

11,897,763   

Cost of revenues

 

 

2,792,738   

 

 

1,505,690   

 

 

-   

 

 

 

 

4,298,428   

Gross profit

 

 

5,799,217   

 

 

1,800,118   

 

 

-   

 

 

 

 

7,599,335   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

3,357,166   

 

 

1,393,563   

 

 

-   

 

 

 

 

4,750,729   

Sales and marketing

 

 

3,631,727   

 

 

302,231   

 

 

-   

 

 

 

 

3,933,958   

Engineering, research, and development

 

 

4,201,647   

 

 

70,028   

 

 

-   

 

 

 

 

4,271,675   

Depreciation and amortization

 

 

386,304   

 

 

611,497   

 

 

-   

 

 

 

 

997,801   

Total operating expenses

 

 

11,576,844   

 

 

2,377,319   

 

 

-   

 

 

 

 

13,954,163   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

(5,777,627)  

 

 

(577,201)  

 

 

-   

 

 

 

 

(6,354,828)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

4,637   

 

 

-   

 

 

-   

 

 

 

 

4,637   

Interest expense

 

 

(169,044)  

 

 

-   

 

 

-   

 

 

 

 

(169,044)  

Foreign currency (loss) gain

 

 

(3,978)  

 

 

-   

 

 

-   

 

 

 

 

(3,978)  

Total other income/(expense)

 

 

(168,385)  

 

 

-   

 

 

-   

 

 

 

 

(168,385)  

Income (loss) before income taxes

 

 

(5,946,012)  

 

 

(577,201)  

 

 

-   

 

 

 

 

(6,523,213)  

Income tax expense

 

 

-   

 

 

-   

 

 

-   

 

 

 

 

-   

Net Income (loss)

 

 

(5,946,012)  

 

 

(577,201)  

 

 

-   

 

 

 

 

(6,523,213)  

Other comprehensive income (loss), net of income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(32,765)  

 

 

-   

 

 

-   

 

 

 

 

(32,765)  

Comprehensive income (loss)

 

$

(5,978,777)  

 

$

(577,201)  

 

$

-   

 

 

 

$

(6,555,978)  

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.16)  

 

 

 

 

$

0.00   

 

 

 

$

(0.18)  

Diluted

 

$

(0.16)  

 

 

 

 

$

0.00   

 

 

 

$

(0.18)  

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,575,762   

 

 

 

 

 

36,575,762   

 

 

 

 

36,575,762   

Diluted

 

 

36,575,762   

 

 

 

 

 

36,575,762   

 

 

 

 

36,575,762   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed combined financial statements (unaudited).


3


 

 

Mobivity Holdings Corp.

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma  

 

 

 

Pro Forma  

 

 

Mobivity

 

Belly

 

Adjustments

 

Notes

 

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

9,620,935   

 

$

1,858,575   

 

$

-   

 

 

 

$

11,479,510   

Cost of revenues

 

 

2,570,804   

 

 

515,737   

 

 

-   

 

 

 

 

3,086,541   

Gross profit

 

 

7,050,131   

 

 

1,342,838   

 

 

-   

 

 

 

 

8,392,969   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

2,876,029   

 

 

302,657   

 

 

-   

 

 

 

 

3,178,686   

Sales and marketing

 

 

3,046,521   

 

 

55,990   

 

 

-   

 

 

 

 

3,102,511   

Engineering, research, and development

 

 

3,637,996   

 

 

50,634   

 

 

-   

 

 

 

 

3,688,630   

Depreciation and amortization

 

 

283,224   

 

 

83,961   

 

 

-   

 

 

 

 

367,185   

Total operating expenses

 

 

9,843,770   

 

 

493,242   

 

 

-   

 

 

 

 

10,337,012   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

(2,793,639)  

 

 

849,596   

 

 

-   

 

 

 

 

(1,944,043)  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income/(expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

881   

 

 

-   

 

 

-   

 

 

 

 

881   

Interest expense

 

 

(193,036)  

 

 

-   

 

 

-   

 

 

 

 

(193,036)  

Gain on sale of fixed assets

 

 

(8,722)  

 

 

-   

 

 

-   

 

 

 

 

(8,722)  

Other income

 

 

-   

 

 

-   

 

 

-   

 

 

 

 

-   

Foreign currency (loss) gain

 

 

(3,726)  

 

 

-   

 

 

-   

 

 

 

 

(3,726)  

Total other income/(expense)

 

 

(204,603)  

 

 

-   

 

 

-   

 

 

 

 

(204,603)  

Income (loss) before income taxes

 

 

(2,998,242)  

 

 

849,596   

 

 

-   

 

 

 

 

(2,148,646)  

Income tax expense

 

 

-   

 

 

-   

 

 

-   

 

 

 

 

-   

Net Income (loss)

 

 

(2,998,242)  

 

 

849,596   

 

 

-   

 

 

 

 

(2,148,646)  

Other comprehensive income (loss), net of income tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

18,918   

 

 

-   

 

 

-   

 

 

 

 

18,918   

Comprehensive income (loss)

 

$

(2,979,324)  

 

$

849,596   

 

$

-   

 

 

 

$

(2,167,564)  

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.07)  

 

 

 

 

$

-   

 

 

 

$

(0.05)  

Diluted

 

$

(0.07)  

 

 

 

 

$

-   

 

 

 

$

(0.05)  

Weighted average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

41,325,443   

 

 

 

 

 

41,325,443   

 

 

 

 

41,325,443   

Diluted

 

 

41,325,443   

 

 

 

 

 

41,325,443   

 

 

 

 

41,325,443   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed combined financial statements (unaudited).


4


 

 

1. BASIS OF PRESENTATION

 

The accompanying Pro Forma Statement of Operations for the year ended December 31, 2017, and for the nine month period ended September 30, 2018, give effect to the Company’s acquisition of certain Belly assets as discussed in Note 2, as if such acquisition had occurred on January 1, 2017, combining the results of the Company and Belly for the year ended December 31, 2017 and for the  nine month period ended September 30, 2018. The accompanying Pro Forma Balance Sheet as of September 30, 2018 gives effect to the Belly assets acquisition as if it had occurred on September 30, 2018, combining the consolidated balance sheets of the Company and Belly as of September 30, 2018.

 

2. BELLY ASSETS ACQUISITION

 

The total acquisition purchase price was allocated to the net assets acquired based upon their preliminary estimated fair values as of the close of business on September 30, 2018 as set forth below. The excess of the preliminary purchase price over the preliminary net assets was recorded as goodwill. The preliminary allocation of the purchase price was based upon a preliminary valuation and the estimates and assumptions are subject to change. The preliminary purchase price allocation for the acquisition is as follows:

 

Total purchase price

 

 

 

 

 

$

3,000,000

 

Book value of net assets acquired

 

$

2,298,711

 

 

 

 

 

Fair value of net assets acquired

 

 

 

 

 

$

2,298,711

 

Residual goodwill

 

 

 

 

 

$

701,289

 

 

Except as discussed in Note 3 below, the carrying value of assets and liabilities in Belly financial statements are considered to be a reasonable estimate of the fair value of those assets and liabilities.

 

3. PRO FORMA ADJUSTMENTS

 

The Pro Forma Financial Statements are based upon the historical consolidated financial statements of the Company and Belly and certain adjustments which the Company believes are reasonable to give effect to the Belly assets acquisition. These adjustments are based upon currently available information and certain assumptions, and therefore the actual adjustments will likely differ from the pro forma adjustments. The Pro Forma Financial Statements included herein were prepared using the acquisition method of accounting for the business combination. As discussed above, the purchase price allocation is considered preliminary at this time. However, the Company believes that the preliminary purchase price allocation and other related assumptions utilized in preparing the Pro Forma Financial Statements provide a reasonable basis for presenting the pro forma effects of the Belly assets acquisition.

 

The adjustments made in preparing the Pro Forma Financial Statements are as follows:

 

A - Reflects the purchase price of $3,000,000

B - Reflects preliminary goodwill from acquisition

C - Reflects the preliminary valuation of intangibles

D - Reflects assets and liabilities not acquired

 

The Belly acquisition was funded with cash on November 14, 2018.

 


5