EXHIBIT 99.3
TURBOCHEF TECHNOLOGIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated financial statements have been
prepared to give effect to TurboChef Technologies, Inc.'s (TurboChef)
acquisition of Enersyst Development Center, L.L.C. (Enersyst) pursuant to the
terms of a Contribution Agreement entered into with Enersyst and the members of
Enersyst (the Members) on May 21, 2004. In connection therewith, TurboChef made
a capital contribution in the amount of $7,247,081 in exchange for 7,247,081
shares of common membership units (the Common Units) of Enersyst. The Members
exchanged all of their units of membership interest for preferred membership
units (the Preferred Units) and the Members and TurboChef entered into a
Preferred Unit Exchange Agreement (the Exchange Agreement) pursuant to which the
Members were granted the right to exchange their Preferred Units for shares of
TurboChef common stock, par value $.01 per share (Common Stock). As of May 21,
2004, the effective date of the Contibution Agreement and the Exchange
Agreement, the Preferred Units were exchangeable for a fixed total of 1,832,924
shares of Common Stock based on the exchange price of $3.465 per share. The
exchange price is subject to adjustment in the event of a stock split, stock
dividend, recapitalization or other similar events. The Members and TurboChef
also entered into and Amended and Restated Operating Agreement of Enersyst (the
Operating Agreement). Under the Operating Agreement, TurboChef will serve as the
managing member and will be exclusively responsible for the management and
operations of Enersyst.
TurboChef financed the capital contribution with a portion of the proceeds it
received in connection with a private placement of 3,453,629 shares of its
Common Stock at $2.90 per share for aggregate proceeds received of $10,015,524.
The pro forma condensed consolidated balance sheet gives effect to the Enersyst
acquisition as if it had occurred on March 31, 2004 combining the balance sheets
of TurboChef and Enersyst as of that date. Additionally, the pro forma condensed
consolidated balance sheet gives effect to the private placement as if it had
occurred on March 31, 2004. The pro forma condensed consolidated statements of
operations for the three months ended March 31, 2004 and for the year ended
December 31, 2003 give effect to the acquisition as if it had occurred on
January 1, 2003 combining the results of TurboChef for the three months ended
March 31, 2004 and the year ended December 31, 2003 with those of Enersyst for
the three months ended March 31, 2004 and for the year ended December 31, 2003.
The pro forma consolidated statements of operations for the three months ended
March 31, 2004 and for the year ended December 31, 2003 include appropriate
adjustments for amortization, interest and other items related to the
transaction. The pro forma adjustments are based on preliminary appraisal
results, estimates, available information and certain assumptions that
management deems appropriate. The pro forma consolidated financial information
is unaudited and does not purport to represent the consolidated results that
would have been obtained had the transactions occurred at the beginning of 2003,
as assumed, nor does it purport to present the results which may be obtained in
the future.
TURBOCHEF TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2004
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
TURBOCHEF ENERSYST ADJUSTMENTS COMBINED
------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,593 $ 35 $ 10,000 (A) $ 7,571
(302) (B)
(7,247) (C)
(508) (C)
Accounts receivable, net 787 943 1,730
Other receivables, net 52 - 52
Inventories 2,542 - 2,542
Prepaid expense and other current assets 287 170 457
------------------------------------------------------------------------
Total current assets 9,261 1,148 1,943 12,352
Property and equipment, net 1,471 682 (362) (B) 1,791
Intangible and other assets, net 109 5,347 7,173 (B) 12,629
Goodwill - 5,836 (3,311) (B) 2,525
------------------------------------------------------------------------
Total assets $ 10,841 $ 13,013 $ 5,443 $ 29,297
========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,128 $ 74 $ 1,202
Other payables 1,445 - 1,445
Accrued expenses 1,172 131 1,303
Notes payable - 6,353 (6,353) (C) -
Deferred revenue 267 - 267
Accrued warranty and upgrade costs 878 - 878
------------------------------------------------------------------------
Total current liabilities 4,890 6,558 (6,353) 5,095
Notes payable, members - 1,402 (1,402) (C) -
Deferred income tax liabilities 1,900 (B) 1,900
------------------------------------------------------------------------
Total liabilities 4,890 7,960 (5,855) 6,995
------------------------------------------------------------------------
Convertible, redeemable preferred stock 12,605 - - 12,605
------------------------------------------------------------------------
Equity:
Members' equity - 5,053 (5,053) (B) -
Non-redeemable, convertible preferred units
exchangeable into 1,832,924 shares
of TurboChef Common Stock 6,351 (B) 6,351
Stockholders' equity:
Common stock 262 - 35 (A) 297
Additional paid-in capital 56,122 - 9,965 (A) 66,087
Accumulated deficit (62,544) - (62,544)
Notes receivable for stock issuances (43) - (43)
Treasury stock - at cost (451) - (451)
------------------------------------------------------------------------
Total equity (6,654) 5,053 11,298 9,697
------------------------------------------------------------------------
Total liabilities and equity $ 10,841 $ 13,013 $ 5,443 $ 29,297
========================================================================
TURBOCHEF TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2004
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Pro Forma Pro Forma
TurboChef Enersyst Adjustments Combined
------------------------------------------------------------
Total revenue $ 946 $ 1,007 $ - $ 1,953
------------------------------------------------------------
Costs and expenses:
Cost of goods sold 447 - - 447
Selling, general and administrative 2,165 749 127 (D) 3,041
Research and development 311 76 - 387
------------------------------------------------------------
Total operating expenses 2,923 825 127 3,875
------------------------------------------------------------
Operating income (loss) (1,977) 182 (127) (1,922)
Interest and other (expense), net 31 (118) 118 (E) 31
------------------------------------------------------------
Net income (loss) $ (1,946) $ 64 $ (9) $ (1,891)
============================================================
Net (loss) per share:
Basic and diluted $ (0.08) $ (0.07)
============== ==============
Weighted average shares outstanding: 25,847 2,674 (F) 28,521
============== ============ ==============
TURBOCHEF TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2003
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
Pro Forma Pro Forma
TurboChef Enersyst Adjustments Combined
------------------------------------------------------------
Total revenue $ 4,340 $ 3,791 $ 8,131
------------------------------------------------------------
Costs and expenses:
Cost of goods sold 2,338 2,338
Selling, general and administrative 6,523 3,199 488 (D) 10,210
Research and development 897 220 1,117
Compensation and severance related to termination
of former officers and directors 7,585 7,585
------------------------------------------------------------
Total operating expenses 17,343 3,419 488 21,250
------------------------------------------------------------
Operating income (loss) (13,003) 372 (488) (13,119)
Interest and other (expense), net (1,088) (511) 522 (E) (1,077)
------------------------------------------------------------
Net (loss) (14,091) (139) 34 (14,196)
Preferred stock dividends and beneficial conversion (12,800) (12,800)
------------------------------------------------------------
Net (loss) available to common shareholders $ (26,891) $ (139) $ 34 $ (26,996)
============================================================
Net (loss) per share:
Basic and diluted $ (1.32) $ (1.17)
============== ==============
Weighted average shares outstanding: 20,393 2,674 (F) 23,067
============== ============ ==============
TURBOCHEF TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET ADJUSTMENTS
(A) Records the private placement of 3,453,629 shares of TurboChef Common
Stock at a per share price of $2.90 for proceeds of $10.0 million net
of transaction costs.
(B) Records the Enersyst acquisition, including (1) capital contribution
of $7.2 million in exchange for the Common Units, (2) the Members
exchange of all of their units of membership interest for the
Preferred Units exchangeable for a fixed 1,832,924 shares of TurboChef
Common Stock based on an exchange price of $3.465 per share, (3)
payment of all outstanding indebtedness of Enersyst and (4) estimated
transaction costs of $300,000. The Preferred Units are valued based on
the contract price per share of the TurboChef Common Stock for which
they are exchangeable which approximates recent closing prices. For
pro forma purposes the total consideration is estimated at $13.9
million.
This acquisition was accounted for as a purchase with the total
consideration preliminarily allocated to the assets and liabilities
assumed as follows:
AMOUNT
DESCRIPTION (IN THOUSANDS)
Total consideration:
Capital contribution in exchange for Common Units $ 7,247
Issuance of Preferred Units exchangeable for 1,832,924
shares of TurboChef Common Stock 6,351
Estimated transaction costs 302
-------------
13,900
=============
Allocation:
Current assets 640
Property and equipment 320
Current liabilities (205)
Deferred income tax liabilities (1,900)
Developed technology and other amortizable intangibles 12,520
Goodwill including assembled workforce 2,525
-------------
$ 13,900
-------------
The foregoing allocations are based on estimated fair values and are
subject to adjustment. Fair values of assets acquired were determined
based on an independent valuation. Current assets allocation reflects
adjustment for Enersyst payment of debt subsequent to March 31, 2004.
(C) Records payment of outstanding indebtedness. Long term debt of
$508,000 was paid subsequent to the pro forma balance sheet date from
Enersyst cash on hand which is included in composition of this
pro forma adjustment.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS
(D) Records adjustment to amortization expense to reflect increase for new
basis of identifiable intangible assets including developed technology
and other amortizable intangibles and assembled workforce. Developed
technology and other amortizable intangibles are amortized using the
straight line method over a 10 year estimated life. Assembled
workforce is considered to have an indefinite life and is classified
together with goodwill.
(E) Records adjustment to interest expense to reflect the payment of
Enersyst's indebtedness arising from the acquisition.
(F) Represents increase to weighted average shares outstanding in
connection with equivalent shares issued to liquidate Enersyst
indebtedness.