EXHIBIT 99.3
PRO FORMA FINANCIAL INFORMATION
TPT GLOBAL TECH, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 2019
ASSETS
TPT Global Tech | SpeedConnect | Combined Before Pro Forma Adjustments | Pro Forma Adjustments | TPT Global Tech Pro Forma | |
CURRENT ASSETS | |||||
Cash and cash equivalents | $510,970 | $2,882,751 | $3,393,721 | $(2,532,751)(a) | $860,970 |
Accounts receivable, net | 71,245 | — | 71,245 | — | 71,245 |
Prepaid expenses and other current assets | 1,767 | 122,388 | 124,155 | — | 124,155 |
Total current assets | $583,982 | $3,005,139 | $3,589,121 | $(2,532,751) | $1,056,370 |
NON-CURRENT ASSETS | |||||
Property and equipment, net | $2,975,235 | $1,980,873 | $4,956,108 | $(41,873)(a) | $4,914,235 |
Right of use assets | — | 5,240,313 | 5,240,313 | — | 5,240,313 |
Intangible assets, net | 6,465,580 | 76,956 | 6,542,536 | 323,044(a) | 6,865,580 |
Goodwill | 924,361 | 220,419 | 1,144,780 | (220,419)(a) | 987,361 |
63,000(a) | |||||
Deposits and other assets | 66,996 | 13,190 | 80,186 | — | 80,186 |
Total non-current assets | $10,432,172 | $7,531,751 | $17,963,923 | $123,752 | $18,087,675 |
TOTAL ASSETS | $11,016,154 | $10,536,890 | $21,553,044 | $(2,408,999) | $19,144,045 |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |||||
CURRENT LIABILITIES | |||||
Accounts payable and accrued expenses | $5,401,935 | $551,129 | $5,953,064 | $79,276(a) | $6,032,340 |
Deferred revenue | 32,043 | 227,429 | 259,472 | — | 259,472 |
Customer deposits | 338,725 | 41,549 | 380,274 | — | 380,274 |
Business loans, advances and agreements | 766,936 | — | 766,936 | — | 766,936 |
Current portion of convertible notes payable, net of discount | 41,336 | — | 41,336 | 1,750,000(b) | 1,791,336 |
Notes payable - related parties, net of discount | 9,296,492 | — | 9,296,492 | — | 9,296,492 |
Current portion of convertible notes payable - related parties, net of discounts | 192,938 | — | 192,938 | — | 192,938 |
Derivative liabilities | 2,208,416 | — | 2,208,416 | — | 2,208,416 |
Current portion of operating lease liabilities | — | 1,800,332 | 1,800,332 | — | 1,800,332 |
Financing lease liabilities | 137,890 | — | 137,890 | — | 137,890 |
Financing lease liabilities - related party | 605,508 | — | 605,508 | — | 605,508 |
Total current liabilities | $19,022,219 | $2,620,439 | $21,642,658 | $1,829,276 | $23,471,934 |
NON-CURRENT LIABILITIES | |||||
Convertible note payable, net of current portion and discounts | $5,000 | $— | $5,000 | $— | $5,000 |
Convertible notes payable - related parties, net of current portion and discounts | 722,500 | — | 722,500 | — | 722,500 |
Operating lease liabilities, net of current portion | — | 3,678,176 | 3,678,176 | — | 3,678,176 |
Total non-current liabilities | 727,500 | 3,678,176 | 4,405,676 | — | 4,405,676 |
Total liabilities | $19,749,719 | $6,298,615 | $26,048,334 | $1,829,276 | $27,877,610 |
Total Stockholders’ deficit | (8,733,565) | 4,238,275 | (4,495,290) | (4,238,275)(c) | (8,733,565) |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $11,016,154 | $10,536,890 | $21,553,044 | $(2,408,999) | $19,144,045 |
See accompanying notes to unaudited pro forma condensed combined financial information
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TPT GLOBAL TECH, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2018
TPT Global Tech | SpeedConnect | Combined Before Pro Forma Adjustments | Pro Forma Adjustments | TPT Global Tech Pro Forma | ||
REVENUES | $937,069 | $17,324,555 | $18,261,624 | $— | $18,261,624 | |
COSTS OF SALES | $1,749,034 | $9,302,762 | $11,051,796 | $— | $11,051,796 | |
Gross profit (loss) | $(811,965) | $8,021,793 | $7,209,828 | $— | $7,209,828 | |
EXPENSES: | ||||||
Sales and marketing | $58,712 | $317,805 | $376,517 | $— | $376,517 | |
Professional | 1,695,053 | 2,980,483 | 4,675,536 | (2,952,983) | (a)(b) | 2,152,553 |
430,000 | (c) | |||||
Payroll and related | 802,142 | 5,999,428 | 6,801,570 | (4,581,301) | (a) | 2,220,269 |
General and administrative | 802,772 | 1,920,564 | 2,723,336 | 2,723,336 | ||
Depreciation | 213,823 | 454,664 | 668,487 | (454,664) | (d) | 601,627 |
387,804 | (e) | |||||
Amortization | 760,350 | 9,489 | 769,839 | (9,489) | (f) | 810,354 |
50,004 | (g) | |||||
Total expenses | $4,332,852 | $11,682,433 | $16,015,285 | $(7,130,629) | $8,884,656 | |
Operating loss | $(5,144,817) | $(3,660,640) | $(8,805,457) | $(7,130,629) | $(1,674,828) | |
OTHER INCOME (EXPENSE) | ||||||
Gain on sale of assets | — | 44,661,863 | 44,661,863 | (44,661,863) | (i) | --- |
Loss on impairment of assets | — | (676,739 | (676,739) | 676,739 | (i) | --- |
Other | — | (4,166 | (4,166) | 4,166 | (i) | --- |
Interest expense | (232,672) | (2,542,405) | (2,775,077) | (2,542,405) | (h) | (232,672) |
Total other income (expense) | $(232,672) | $41,438,553 | $41,205,881 | $(41,438,553) | $(232,672) | |
Net income (loss) before income taxes | (5,377,489) | 37,777,913 | 32,400,424 | (34,307,924) | (1,907,500) | |
Income taxes | — | — | — | — | --- | |
NET INCOME (LOSS) | $(5,377,489) | $37,777,913 | $32,400,424 | $34,307,924 | $(1,907,500) | |
Loss per common share: Basic and diluted | $(0.04) | — | — | — | $(0.01) | |
Weighted average number of common shares outstanding: Basic and diluted | 136,953,904 | — | — | — | 136,953,904 |
See accompanying notes to unaudited pro forma condensed combined financial information
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TPT GLOBAL TECH, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2019
TPT Global Tech | SpeedConnect | Combined Before Pro Forma Adjustments | Pro Forma Adjustments | TPT Global Tech Pro Forma | |
REVENUES | $161,476 | $3,457,803 | $3,619,279 | $— | $3,619,279 |
COSTS OF SALES | $262,368 | $2,185,867 | $2,448,235 | $— | $2,448,235 |
Gross profit (loss) | $(100,892) | $1,271,936 | $1,171,044 | $— | $1,171,044 |
EXPENSES: | |||||
Sales and marketing | $— | $25,726 | $25,726 | $--- | $25,726 |
Professional | 512,540 | 365,166 | 877,706 | (365,166)(a) | 620,040 |
107,500(b) | |||||
Payroll and related | 197,541 | 435,627 | 633,168 | — | 633,168 |
General and administrative | 222,011 | 99,765 | 321,776 | --- | 321,776 |
Depreciation | 71,707 | 101,852 | 173,559 | (101,852)(c) | 168,658 |
96,951(d) | |||||
Amortization | 206,002 | 240,571 | 446,573 | (240,571)(e) | 218,503 |
12,501(f) | |||||
Total expenses | $1,209,801 | $1,268,707 | 2,478,508 | $(490,637) | $1,987,871 |
Operating income (loss) | $(1,310,693) | $3,229 | $(1,307,464) | $(490,637) | $(816,827) |
OTHER INCOME (EXPENSE) | |||||
Derivative expense | $(1,540,416) | $— | $(1,540,416) | $— | $(1,540,416) |
Interest expense | (130,237) | — | (130,237) | — | (130,237) |
Total other expenses | $(1,670,653) | $— | $(1,670,653) | $— | $(1,670,653) |
Net income (loss) before income taxes | (2,981,346) | 3,229 | (2,978,117) | (490,637) | (2,487,480) |
Income taxes | — | — | — | — | — |
NET INCOME (LOSS) | $(2,981,346) | $3,229 | $(2,978,117) | $(490,637) | $(2,487,480) |
Loss per common share: Basic and diluted | $(0.02) | — | — | — | $(0.02) |
Weighted average number of common shares outstanding: Basic and diluted | 136,953,904 | — | — | — | 136,953,904 |
See accompanying notes to unaudited pro forma condensed combined financial information
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TPT GLOBAL TECH, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
NOTE 1 – TPT SPEEDCONNECT, LLC ASSET ACQUISITION
Effective April 3, 2019, the Company entered into an Asset Purchase Agreement with SpeedConnect, LLC (“SpeedConnect”) to acquire substantially all of the assets of SpeedConnect. On May 7, 2019, the Company closed the transaction underlying the Asset Purchase Agreement with SpeedConnect to acquire substantially all of the assets of SpeedConnect for $1.75 million and the assumption of certain liabilities. The Asset Purchase Agreement required a deposit of $500,000 made in April 2019 and an additional $500,000 payment to close. The additional $500,000 was paid in May 2019 and all other conditions were met to effectuate the sale of substantially all of the assets of SpeedConnect to the Company. As part of the closing, the Company entered into a Promissory Note to pay SpeedConnect $1,000,000 in two equal installments of $500,000 plus applicable interest at 10% per annum with the first installment payable within 30 days of closing and the second installment payable within 60 days of closing (but no later than July 6, 2019). The Company paid off the Promissory Note by June 11, 2019 and by amendment dated May 7, 2019, SpeedConnect forgave $250,000 of the Promissory Note.
NOTE 2 – BASIS OF PRO FORMA PRESENTATION
The unaudited pro forma condensed combined financial information has been prepared assuming that the acquisition is accounted for using the acquisition method of accounting. Accordingly, the assets acquired and liabilities assumed of SpeedConnect are recorded at their fair value and as though the net assets acquired constitute a business.
NOTE 3 – PRELIMINARY PURCHASE PRICE ALLOCATION
The Company applied the acquisition method of accounting to the business combination and has valued each of the assets acquired and liabilities on a provisional basis primarily because the valuation of the assets acquired has not yet been finalized, although we do not believe there will be a material adjustment. Accordingly, the assets and liabilities were deemed to be recorded at fair value on a provisional basis as of March 31, 2019.
Purchase Price Allocation:
Provisional Consideration Given: | |
Liabilities: | |
Cash and Promissory Note | 1,750,000 |
Lease liabilities | 5,478,508 |
Accounts and other payables | 899,383 |
Total Consideration Value | $8,127,891 |
Provisional Assets Acquired: | |
Assets | |
Cash | $350,000 |
Customer base | 400,000 |
Prepaid and other current assets | 135,578 |
Right of use assets | 5,240,313 |
Property and equipment | 1,939,000 |
Total Assets Acquired | $8,064,891 |
Goodwill - Provisional | $63,000 |
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NOTE 4 – PRO FORMA PRESENTATION ADJUSTMENTS AND ASSUMPTIONS
The adjustments included in the column under the heading “Pro Forma Adjustments” in the unaudited pro forma condensed combined financial information are as follows:
Pro Forma Adjustments to the Condensed Combined Balance Sheet
(a)
To record the purchase price allocation, including the assumption of assets and liabilities in accordance with the Asset Purchase Agreement, including the elimination of historical intangibles and goodwill.
(b)
To record the issuance of debt for the Asset Purchase Agreement.
(c)
To record the elimination of historical equity for SpeedConnect.
Pro Forma Adjustments to the Condensed Combined Statement of Operations for the Year Ended December 31, 2018
(a)
To record the elimination of bonuses resulting in the sale of the spectrum assets.
(b)
To record the elimination of excess legal and outside accounting work in large part because of the sale of the spectrum assets and the Asset Purchase Agreement.
(c)
To record consulting services and Spectrum asset management fee.
(d)
To record the elimination of historical depreciation of SpeedConnect.
(e)
To record recording of deprecation under allocation of purchase price to fixed assets.
(f)
To record elimination of historical amortization of SpeedConnect.
(g)
To record recording of amortization under allocation of purchase price to intangibles.
(h)
To eliminate historical interest expense for SpeedConnect.
(i)
To eliminate other income and expense not related to the combined entity.
Pro Forma Adjustments to the Condensed Combined Statement of Operations for the Three Months Ended March 31, 2019
(a)
To record the elimination of excess legal and outside accounting work in large part because of the sale of the spectrum assets and the Asset Purchase Agreement.
(b)
To record consulting services and spectrum asset management fee
(c)
To record the elimination of historical depreciation of SpeedConnect.
(d)
To record recording of deprecation under allocation of purchase price to fixed assets.
(e)
To record elimination of historical amortization of SpeedConnect.
(f)
To record recording of amortization under allocation of purchase price to intangibles
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