Exhibit 99.3
MICRONET ENERTEC TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
MICRONET ENERTEC TECHNOLOGIES, INC.
INTRODUCTION TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET AND CONDENSED COMBINED STATEMENTS OF
OPERATIONS
The accompanying unaudited pro forma condensed combined balance sheet combines the unaudited historical balance sheets of Micronet Enertec Technologies, Inc. and Subsidiaries (the “Company") and the Vehicle business of Beijer Electronics Inc. ("Vehicle business") as at March 31, 2014 as if the Company had consummated the acquisition of the Vehicle business on March 31, 2014 instead of June 2, 2014.
The accompanying unaudited pro forma condensed combined statements of operations combine the unaudited historical statements of operations of each of the Company and Vehicle business for the three months ended March 31, 2014 and for the year ended December 31, 2013, as if the Company had consummated the acquisition of the Vehicle business on January 1, 2013.
The Company has presented the accompanying unaudited pro forma condensed balance sheet and statements of operations for informational purposes only. The accompanying unaudited pro forma condensed combined balance sheet and unaudited pro forma condensed combined statements of operations are not necessarily indicative of what the Company’s results of operations actually would have been had the Company completed the acquisition of the Vehicle business on March 31, 2014 or January 1, 2013, respectively. In addition, the unaudited pro forma condensed combined statements of operations do not purport to project the future operating results of the combined companies due to allocated costs that may not continue in the future. The accompanying unaudited pro forma condensed combined financial statements should be read in connection with the audited and unaudited historical financial statements of the Vehicle business included elsewhere in the Current Report on form 8K/A, and the audited historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2013 and the unaudited historical condensed consolidated financial statements of the Company included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 previously filed with the Securities and Exchange Commission (“SEC”).
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MICRONET ENERTEC TECHNOLOGIES, INC.
Pro Forma Condensed Combined Balance Sheet
As of March 31, 2014
(USD in thousands, unaudited)
Micronet Enertec Technologies, Inc. (1) | Vehicle business(2) | Pro forma Adjustments | Pro forma consolidated | |||||||||||||
| Assets | ||||||||||||||||
| Current assets | ||||||||||||||||
| Cash and cash equivalents | $ | 11,959 | - | $ | (2,046 | )(b) | 9,913 | |||||||||
| Marketable securities | 6,964 | - | - | 6,964 | ||||||||||||
| Trade account receivables | 11,454 | - | - | 11,454 | ||||||||||||
| Inventories | 4,417 | 1,360 | - | 5,777 | ||||||||||||
| Other account receivables | 1,326 | - | - | 1,326 | ||||||||||||
| Call option | 532 | - | - | 532 | ||||||||||||
Total current assets | 36,652 | 1,360 | (2,046 | ) | 35,966 | |||||||||||
| Property and equipment, net | 2,369 | 47 | - | 2,416 | ||||||||||||
| Long term deposit | 139 | - | - | 139 | ||||||||||||
| Intangible assets, net | 1,000 | 4,232 | - | 5,232 | ||||||||||||
| Goodwill | - | 1,466 | 1,466 | |||||||||||||
| Total long term assets | 3,508 | 5,745 | - | 9,253 | ||||||||||||
| Total assets | $ | 40,160 | $ | 7,105 | $ | (2,046 | ) | $ | 45, 219 | |||||||
Liabilities and equity | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Short term bank loans and current portion of long term loans | 5,080 | - | 3,233 | (a) | 8,313 | |||||||||||
| Trade account payables | 3,645 | - | - | 3,645 | ||||||||||||
| Current portion of long term notes, net of discount | 983 | - | - | 983 | ||||||||||||
| Other account payables | 2,352 | - | 209 | (c) | 2,561 | |||||||||||
| Total current liabilities | 12,060 | - | 3,442 | 15,502 | ||||||||||||
| Long term loans from banks and others | 2,374 | - | 1,617 | (a) | 3,991 | |||||||||||
| Accrued severance pay, net | 138 | - | - | 138 | ||||||||||||
| Finance lease | 97 | - | - | 97 | ||||||||||||
| Deferred tax liability | 99 | - | - | 99 | ||||||||||||
| Total long term liabilities | 2,708 | - | 1,617 | 4,325 | ||||||||||||
| Equity | ||||||||||||||||
| Common stock | 6 | - | - | 6 | ||||||||||||
| Additional Paid in capital | 8,059 | - | - | 8,059 | ||||||||||||
| Accumulated other comprehensive income | 1,440 | - | - | 1,440 | ||||||||||||
| Retained earnings | 8,090 | - | - | 8,090 | ||||||||||||
| Micronet Enertec stockholder's equity | 17,595 | - | - | 17,595 | ||||||||||||
| Non controlling interests | 7,797 | - | - | 7,797 | ||||||||||||
| Total equity | 25,392 | - | - | 25,392 | ||||||||||||
| total liability and equity | $ | 40,160 | - | $ | 5,059 | $ | 45,219 | |||||||||
| (1) | As reported in the Company’s unaudited quarterly report on Form 10-Q for the three months ended March 31, 2014 filed with the SEC on May 15, 2014. |
(2) | Acquired assets of the Vehicle business as described in note 1. |
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MICRONET ENERTEC TECHNOLOGIES, INC.
Pro Forma Condensed combined Statements of Operations
Three months ended March 31, 2014
(USD in thousands, except share and per share data, unaudited)
Micronet Enertec Technologies, Inc. (1) | Vehicle business (2) | Pro froma Adjustments | Consolidated | |||||||||||||
| Revenues | $ | 5,567 | $ | 2,551 | - | $ | 8,118 | |||||||||
| Cost of revenues | 3,515 | 1,871 | - | 5,386 | ||||||||||||
| Gross profit | 2,052 | 680 | - | 2,732 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | 391 | 185 | - | 576 | ||||||||||||
| Administrative and general | 884 | 265 | - | 1,149 | ||||||||||||
| Research and development | 744 | 187 | - | 931 | ||||||||||||
| Amortization of intangible assets | 93 | - | 212 | (e) | 305 | |||||||||||
| Total operating expenses | 2,112 | 637 | 212 | 2,961 | ||||||||||||
| Income (loss) from operations | (60 | ) | 43 | (212 | ) | (229 | ) | |||||||||
| Financial expenses, net | 46 | - | 41 | (f) | 87 | |||||||||||
| Income (loss) before provision for income taxes | (106 | ) | 43 | (253 | ) | (316 | ) | |||||||||
| Taxes on Income | 79 | - | - | 79 | ||||||||||||
| Net income (loss) | (185 | ) | 43 | (253 | ) | (395 | ) | |||||||||
| Net income (loss) attribute to non-controlling interests | 147 | - | (101 | )(g) | 46 | |||||||||||
| Net income (loss) attribute to Micronet Enertec Technologies | $ | (332 | ) | $ | 43 | $ | (152 | ) | $ | (441 | ) | |||||
| Loss per share attributable to Micronet Enertec | ||||||||||||||||
| Basic and Diluted | $ | (0.06 | ) | (0.07 | ) | |||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic and Diluted | 5,831,246 | 5,831,246 | ||||||||||||||
| (1) | As reported inthe Company’s unaudited quarterly report on Form 10-Q for the three months ended March 31, 2014 filed with the SEC on May 15, 2014. |
| (2) | As reported in the Vehicle business financial statements appearing elsewhere in this Current Report on 8- K/A. |
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MICRONET ENERTEC TECHNOLOGIES, INC.
Year ended December 31, 2013
(USD in thousands, except share and per share data, unaudited)
Micronet Enertec Technologies, Inc. (1) | Vehicle business (2) | Pro forma Adjustments | Consolidated | |||||||||||||
| Revenues | $ | 35,571 | $ | 10,732 | - | $ | 46,303 | |||||||||
| Cost of revenues | 22,298 | 8,890 | 413 | (d) | 31,601 | |||||||||||
| Gross profit | 13,273 | 1,842 | (413 | ) | 14,702 | |||||||||||
| operating expenses: | ||||||||||||||||
| Research and development | 2,675 | 1,437 | - | 4,112 | ||||||||||||
| Selling and marketing | 1,170 | 745 | - | 1,915 | ||||||||||||
| Administrative and general | 4,179 | 676 | - | 4,855 | ||||||||||||
| Amortization of intangible assets | 657 | - | 848 | (e) | 1,505 | |||||||||||
| Total operating expenses | 8,681 | 2,858 | 848 | 12,387 | ||||||||||||
| Income (loss) from operations | 4,592 | (1,016 | ) | (1,261 | ) | 2,315 | ||||||||||
| Interest expenses, net | 2,293 | - | 165 | (f) | 2,458 | |||||||||||
| Other expense | 2 | - | - | 2 | ||||||||||||
| Income (loss) before provision for income taxes | 2,297 | (1,016 | ) | (1,426 | ) | (145 | ) | |||||||||
| Provision for income taxes | 496 | - | - | 496 | ||||||||||||
| Net Income (loss) | 1,801 | (1,016 | ) | (1,426 | ) | (641 | ) | |||||||||
| Net income (loss) attribute to non-controlling interests | 2,296 | - | (1,172 | )(g) | 1,124 | |||||||||||
| Net loss attribute to Micronet Enertec Technologies | $ | (495 | ) | $ | (1,016 | ) | $ | (254 | ) | $ | (1,765 | ) | ||||
| Loss per share attributable to Micronet Enertec Technologies: | ||||||||||||||||
| Basic and Diluted | (0.097 | ) | (0.35 | ) | ||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic and Diluted | 5,089,122 | 5,089,122 | ||||||||||||||
| (1) | As reported in the Company’s audited annual report on Form 10-K for the year ended December 31, 2013 as filed with the SEC on March 19, 2014. |
| (2) | As reported in the Vehicle business financial statements appearing in this Current Report on 8- K/A. |
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MICRONET ENERTEC TECHNOLOGIES, INC.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(USD In thousands, unaudited)
NOTE 1 -ACQUISITION
On June 2, 2014, the Company through its subsidiary Micronet Ltd. completed the acquisition of certain assets relates to the Vehicle business and operations related to the supply of panels to various transportation segments, pursuant to an Asset Purchase Agreement dated May 6, 2014 (the "Asset Purchase Agreement"). The total purchase price of the transaction was $ 7.1 million out of which $209 will be paid following 90 days from the closing subject to certain inventory review.
In order to finance a portion of the acquisition the company borrowed a $4.85 million bank loan (the “Loan”). Pursuant to the terms of the applicable loan agreement, $2.425 million of the Loan shall bear interest at a quarterly adjustable rate of Prime plus 1.5 percent (3.75% percent as of the date of the Loan) (the "Long Term Portion"). The Long Term Portion plus interest shall be due and payable in twelve equal consecutive quarterly installments beginning at August 29, 2014. The balance of the Loan in the amount of $2.425 million shall bear interest at a quarterly adjustable rate of Prime plus 1.2 percent (3.45% percent as of the date of the Loan) (the "Short Term Portion"). The Short Term Portion shall be due and payable within one year from the date of the Loan, subject to renewal, and the interest on the Short Term Portion shall be due and payable every quarter beginning at August 29, 2014.
The purchase consideration was allocated to the tangible assets and intangible assets acquired based on their estimated fair values. The fair value assigned to identifiable intangible assets acquired has been determined by using valuation methods that discount expected future cash flows to present value using estimates and assumptions determined by management. The Company determined that the fair values of assets acquired exceeded the purchase price by approximately $1.46 million. These estimates are subject to revision, which may result in significant adjustments to the values presented below, when certain appraisals are finalized. Purchased identifiable intangible assets are amortized on a straight-line basis over the respective useful lives. The table below summarizes the estimates of the fair value of assets acquired and liabilities assumed in the purchase, which the Company accrued on March 31, 2014.
March 31, 2014 (in Thousands) | ||||
| Inventories | $ | 1,360 | ||
| Property and equipment | 47 | |||
| Identifiable intangible assets: | ||||
| Customer relations | 2,552 | |||
Core technology | 1,680 | |||
| Goodwill | 1,466 | |||
| Total assets acquired | $ | 7,105 | ||
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MICRONET ENERTEC TECHNOLOGIES, INC.
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(USD In thousands, unaudited)
NOTE 2 - PRO FORMA ADJUSTMENTS
The unaudited pro forma combined statements of operations and balance sheet reflect the effect of the following pro forma adjustments :
| a. | Adjusted to record the borrowing of $4,850 ($3,233 - were recorded as current portion) of the Loan from the bank. |
| b. | Adjustment to record the cash payment of the acquisition of $2,046. |
| c. | Adjusted to record the amount which will be paid 90 days following the closing of $209. |
| d. | Adjusted to record the decrease in the inventory step up follow the acquisition of $413 for the year ended December 31, 2013. |
| e. | Adjusted to record the amortization of intangibles assets amounting to $212 for the three months ended in March 31, 2014 and $848 for the year ended December 31, 2013. Customer relations and Core technology are amortized over 5 years. |
| f. | Adjusted to record the interest expenses derived from the $4,850 Loan to finance the acquisition of $41 for three months ended March 31, 2014 and $165 for the year ended December 31, 2013. |
| g. | Adjusted to record the 48% non-controlling interests hold in Micronet Ltd. |
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