Exhibit 99.3
Selectica, Inc. Unaudited Pro Forma Financial Information
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet
March 31, 2014
| | Historical Statement of | | | | | | | | | | |
(in thousands) | | Operations Information | | | Pro Forma | |
| | Selectica, Inc. | | | Iasta.com Inc. | | | Adjustments | | Notes | | Combined | |
ASSETS | | | | | | | | | | | | | | | | | |
Current assets | | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | $ | 16,907 | | | $ | 2,016 | | | $ | (260 | ) | (1),(4),(7),(9) | | $ | 18,663 | |
Accounts receivable, net of allowance for doubtful accounts | | | 3,006 | | | | 2,198 | | | | - | | | | | 5,204 | |
Deferred Income Tax | | | - | | | | 40 | | | | - | | | | | 40 | |
Prepaid expenses and other current assets | | | 689 | | | | 579 | | | | - | | | | | 1,268 | |
Total current assets | | | 20,602 | | | | 4,833 | | | | (260 | ) | | | | 25,175 | |
| | | | | | | | | | | | | | | | | |
Property and equipment, net | | | 312 | | | | 268 | | | | - | | | | | 580 | |
Capitalized software | | | 856 | | | | - | | | | - | | | | | 856 | |
Other assets | | | 30 | | | | 180 | | | | - | | | | | 210 | |
Goodwill | | | | | | | | | | | 5,386 | | (2) | | | 5,386 | |
Intangibles, net of amortization | | | | | | | | | | | 7,170 | | (3) | | | 7,170 | |
Total assets | | $ | 21,800 | | | $ | 5,281 | | | $ | 12,296 | | | | $ | 39,377 | |
| | | | | | | | | | | | | | | | | |
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | |
Current liabilities | | | | | | | | | | | | | | | | | |
Credit facility | | $ | 6,949 | | | $ | 653 | | | $ | (653 | ) | | | $ | 6,949 | |
Accounts payable | | | 1,371 | | | | 514 | | | | - | | | | | 1,885 | |
Accrued payroll and related liabilities | | | 648 | | | | 492 | | | | 350 | | (5) | | | 998 | |
Note payable to stockholder | | | - | | | | 308 | | | | | | (4) | | | 308 | |
Other accrued liabilities | | | 345 | | | | 321 | | | | - | | | | | 1,158 | |
Income Tax Payable | | | - | | | | 34 | | | | - | | | | | 34 | |
Deferred revenue | | | 5,131 | | | | 3,174 | | | | (1,604 | ) | | | | 6,701 | |
Total current liabilities | | | 14,444 | | | | 5,496 | | | | (1,906 | ) | | | | 18,033 | |
| | | | | | | | | | | | | | | | | |
Long-term deferred revenue | | | 618 | | | | - | | | | - | | | | | 618 | |
Total liabilities | | | 15,062 | | | | 5,496 | | | | (1,906 | ) | | | | 18,651 | |
| | | | | | | | | | | | | | | | | |
Commitments and contingencies | | | | | | | | | | | | | | | | | |
Preferred Stock | | | 3,653 | | | | - | | | | 6,486 | | (7) | | | 10,139 | |
Stockholder's Equity: | | | | | | | | | | | | | | | | | |
Common stock | | | 4 | | | | 26 | | | | 74 | | (7),(9) | | | 104 | |
Additional paid-in capital | | | 278,083 | | | | - | | | | 7,418 | | (7),(9) | | | 285,501 | |
Foreign currency translation adjustment | | | | | | | 30 | | | | (30 | ) | (6) | | | - | |
Treasury stock at cost | | | (472 | ) | | | (1,042 | ) | | | 1,042 | | (9) | | | (472 | ) |
Accumulated deficit | | | (274,530 | ) | | | 770 | | | | (788 | ) | (5),(9),(6) | | | (274,546 | ) |
Total stockholders' equity | | | 3,085 | | | | (215 | ) | | | 7,716 | | | | | 10,587 | |
Total liabilities, redeemable convertible preferred stock and stockholders' equity | | $ | 21,800 | | | $ | 5,281 | | | $ | 12,296 | | | | $ | 39,377 | |
(1) | To reflect the use of the Company’s cash on hand to fund a portion of the acquisition and to eliminate cash at Iasta excluded from the Acquisition and 2) recognize additional borrowings of approximately $7.5M under Financing of Series E Preferred Stock to fund athe purchase |
(2) | To record preliminary goodwill resulting from the Iasta Acquisition. |
(3) | To record identifiable intangible assets related to the Iasta Acquisition. The identifiable intangible assets attributable to the Acquisition are comprised of the following: |
| | Estimated Fair Value | | | Estimated Useful life (Years) | | | Estimated amortization expense | |
Customer Relationship | | $ | 3,880 | | | | 5 | | | $ | 776 | |
Developed Technology | | | 3,170 | | | | 5 | | | $ | 634 | |
Trademark | | | 120 | | | | 2 | | | $ | 60 | |
| | $ | 7,170 | | | | | | | $ | 1,470 | |
(4) | To reflect eepayment of Iasta short-term debt which occurred immediately prior to the closing of the Acquisition |
(5) | To recognize as of July 2, 2014 known transaction costs incurred by the Company and Iasta related to the closing of theAcquisition. The transaction fees have not been included in the accompanying unaudited pro forma combined statement of operations due to their non-recurring nature. |
(6) | In accordance with SFAS No. 52, Foreign Currency Translation, the functional currency of all the Company’s U.K. subsidiaries had historically been pounds sterling. The Company translated the assets and liabilities of its U.K. subsidiaries into U.S. dollars using period-end exchange rates and the revenues and expenses of these entities were translated using the average exchange rates for the reporting period. |
(7) | On June 5, 2014, the Company entered into a Purchase Agreement with certain institutional funds and other accredited investors pursuant to which the Company agreed to sell, and the June 2014 Investors agreed to purchase, 124,890.5 shares of Series E Convertible Preferred Stock for $60 per whole share, with total proposed proceeds to the Company of approximately $7.5 million. |
(8) | Deferred Revenue adjustemnt at the Acquisition date. |
(9) | To eliminate Iasta’s historical equity balances as of July 2, 2014 and to record Issuance of Common Stock to Iasta's Founders at July 2, 2014 - 1,000,000 Common Stock, par value $0.0001 at $6.61 |
(10) | The purchase price is calculated as follows (dollars in thousands, except number of shares and per share amount): |
Cash Paid | | $ | 7,000 | |
| | | | |
Common Stock Issued | | | 1,000,000 | |
SLTC Common Stock strike price | | $ | 6.61 | |
Total Stock value | | $ | 6,610 | |
| | | | |
Note Paid by Selectica | | | 653 | |
| | | | |
Total Purchase Price | | $ | 14,263 | |
Selectica, Inc.
Unaudited Pro Forma Condensed Combined Consolidated Statement of Operations
(in thousands, except per share data)
| | Historical Statement of | | | | | | | | | | |
| | Operations Information | | | Pro Forma | |
| | Selectica, Inc. | | | Iasta.com Inc. | | | Adjustments | | Notes | | Combined | |
| | Twelve Months Ended | |
Revenues: | | March 31, 2014 | | | December 31, 2013 | | | | | | | | | | |
Recurring revenues | | $ | 12,210 | | | $ | 7,996 | | | | | | | | $ | 20,206 | |
Non-recurring revenues | | | 3,579 | | | | 2,965 | | | | | | | | | 6,544 | |
Total revenues | | | 15,789 | | | | 10,962 | | | | | | | | | 26,751 | |
| | | | | | | | | | | | | | | | | |
Cost of revenues: | | | | | | | | | | | | | | | | | |
Cost of recurring revenues | | | 2,673 | | | | 735 | | | | 776 | | (1) | | | 4,184 | |
Cost of non-recurring revenues | | | 5,738 | | | | 2,256 | | | | | | | | | 7,994 | |
Total cost of revenues | | | 8,411 | | | | 2,991 | | | | 776 | | | | | 12,178 | |
| | | | | | | | | | | | | | | | | |
Gross profit: | | | | | | | | | | | | | | | | | |
Recurring gross profit | | | 9,537 | | | | 7,261 | | | | | | | | | 16,022 | |
Non-recurring gross profit | | | (2,159 | ) | | | 709 | | | | | | | | | (1,450 | ) |
Total gross profit | | | 7,378 | | | | 7,970 | | | | | | | | | 14,572 | |
| | | | | | | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | | | | | | | |
Research and development | | | 2,993 | | | | 1,893 | | | | | | | | | 4,886 | |
Sales and marketing | | | 8,313 | | | | 4,250 | | | | 694 | | (1) | | | 13,257 | |
General and administrative | | | 4,984 | | | | 1,427 | | | | | | | | | 6,411 | |
Restructuring costs | | | 227 | | | | - | | | | | | | | | 227 | |
Total operating expenses | | | 16,517 | | | | 7,570 | | | | 694 | | | | | 24,781 | |
Loss from operations | | | (9,139 | ) | | | 401 | | | | (1,470 | ) | | | | (10,209 | ) |
| | | | | | | | | | | | | | | | | |
Decrease in fair value of warrant liability | | | 982 | | | | 0 | | | | | | | | | 982 | |
Other income (expense), net | | | (22 | ) | | | (75 | ) | | | | | | | | (97 | ) |
Loss before provision for income taxes | | | (8,179 | ) | | | 325 | | | | (1,470 | ) | | | | (9,324 | ) |
| | | | | | | | | | | | | | | | | |
Provision for Income Taxes | | | - | | | | 44 | | | | | | | | | 44 | |
Net loss | | $ | (8,179 | ) | | $ | 282 | | | $ | (1,470 | ) | | | $ | (9,368 | ) |
Series C and D redeemable preferred stock accretion | | | 3,513 | | | | - | | | | | | | | | 3,513 | |
Net loss attributable to common stockholders | | $ | (11,692 | ) | | $ | 282 | | | $ | (1,470 | ) | | | $ | (12,881 | ) |
| | | | | | | | | | | | | | | | | |
Basic and diluted net loss per common share attributable to common stockholders | | | (2.18 | ) | | | - | | | | | | | | | (3.43 | ) |
| | | | | | | | | | | | | | | | | |
Weighted-average shares of common stock used in computing basicand diluted net loss per share attributable to common stockholders | | | 3,756 | | | | - | | | | | | | | | 3,756 | |
(1) | To recognize amortization expense related to identified intangible assets recognized as part of the purchase price allocation |
Iasta.com, Inc.
Unaudited Preliminary Balance Sheet as of July 2, 2014
ASSETS | | July 2, 2014 | |
Current assets | | | | |
Cash and cash equivalents | | $ | 1,619 | |
Accounts receivable | | | 2,738 | |
Prepaid expenses and other current assets | | | 597 | |
Total current assets | | | 4,954 | |
| | | | |
Property and equipment, net | | | 245 | |
Goodwill | | | 5,386 | |
Intangibles | | | 7,170 | |
Other assets | | | 270 | |
Total assets | | $ | 18,025 | |
| | | | |
| | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
Current liabilities | | | | |
Notes Payable | | $ | 961 | |
Accounts payable | | | 321 | |
Acrrued expenses | | | 837 | |
Income Tax Payable | | | 72 | |
Deferred revenue | | | 1,570 | |
Total current liabilities | | | 3,761 | |
Total liabilities | | | 3,761 | |
| | | | |
Net Assets Acquired | | $ | 14,263 | |