Attached files
| file | filename |
|---|---|
| 8-K/A - SurgePays, Inc. | form8-ka.htm |
| EX-99.2 - SurgePays, Inc. | ex99-2.htm |
| EX-23.1 - SurgePays, Inc. | ex23-1.htm |
| EX-99.1 - SurgePays, Inc. | ex99-1.htm |
EXHIBIT 99.3
Pro forma financial statements of DigitizeIQ, LLC
Pro forma balance sheet as of September 30, 2015 for KSIX Media Holdings, Inc. (“KSIX”) and DigitizeIQ, LLC (“DIQ”); pro forma consolidated statements of operations for the year ended December 31, 2014 includes the pro forma consolidated operations of KSIX included in the KSIX Media Holdings, Inc. Form 8-K/A filed on December 11, 2015 and DIQ for the period from inception (July 23, 2014) through December 31, 2014. The pro forma consolidated statement of operations for the nine months ended September 30, 2015 includes the operations of KSIX for the nine months ended September 30, 2015 as reported in its Form 10-Q for that period and the operations of DIQ for the nine months ended September 30, 2015.
KSIX MEDIA HOLDINGS, INC.
PRO FORMA STATEMENTS
The pro forma financial statements include the consolidated financial statements of KSIX Media Holdings, Inc. (“Holdings”) and the financial statements of DIGITIZEIQ, LLC. (“DIQ”).
The pro forma consolidated balance sheet includes Holdings and DIQ at September 30, 2015. The proforma consolidated statement of operations for the year ended December 31, 2014 includes the proforma operations of Holdings included in the KSIX Media Holdings, Inc. Form 8-K/A filed on December 11, 2015 and DIQ for the period of inception (July 23, 2014) through December 31, 2014. The pro forma consolidated statement of operations for the nine months ended September 30, 2015 includes the operations of Holdings for the nine months ended September 30, 2015 as reported in its Form 10-Q and the operations of DIQ for the nine months ended September 30, 2015.
As described previously, pursuant to an Agreement for Exchange of Common Stock, Holdings paid cash at closing of $250,000, issued notes payable in the amount of $750,000 and issued 1,250,000 shares of its common stock to the shareholder of DIQ, and acquired 100% of DIQ on October 12, 2015.
KSIX MEDIA HOLDINGS, INC.
PRO FORMA BALANCE SHEET
SEPTEMBER 30, 2015
| KSIX
Media Holdings, Inc. and Subsidiaries | DIGITALIQ,
LLC | Adjustments | Proforma | |||||||||||||
| ASSETS: | ||||||||||||||||
| Cash and cash equivalents | 136,072 | 140,927 | (a) | (100,000 | ) | 176,999 | ||||||||||
| Accounts receivable | 257,803 | 257,803 | ||||||||||||||
| Other current assets | 23,342 | - | 23,342 | |||||||||||||
| Total current assets | 417,217 | 140,927 | (100,000 | ) | 458,144 | |||||||||||
| Property and equipment, net of accumulated depreciation | 7,229 | 7,229 | ||||||||||||||
| Investment in DIQ | (a) | 1,325,000 | - | |||||||||||||
| (b) | (1,325,000 | ) | ||||||||||||||
| Intangible assets | 849,021 | (a) | 1,590,609 | 2,041,978 | ||||||||||||
| - | - | (c) | (397,652 | ) | - | |||||||||||
| Total assets | 1,273,467 | 140,927 | 1,092,957 | 2,507,351 | ||||||||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY: | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable and accrued expenses | 155,730 | 88,866 | 244,596 | |||||||||||||
| Advance from related party | 170,942 | 170,942 | ||||||||||||||
| Deferred revenue | 317,670 | 317,670 | ||||||||||||||
| Notes payable and current portion of long-term debt | 372,121 | (a) | 750,000 | 1,122,121 | ||||||||||||
| Total current liabilities | 698,793 | 406,536 | 750,000 | 1,855,329 | ||||||||||||
| Long-term debt, less current installments | 721,327 | 721,327 | ||||||||||||||
| Total liabilities | 1,420,120 | 406,536 | 750,000 | 2,576,656 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||||
| Preferred stock | - | - | - | |||||||||||||
| Common stock | 34,880 | - | (a) | 1,250 | 36,130 | |||||||||||
| Member units | (265,609 | )(a) | 1,590,609 | - | ||||||||||||
| (b) | (1,325,000 | ) | ||||||||||||||
| Additional paid in capital | 311,179 | - | (a) | 473,750 | 784,929 | |||||||||||
| - | ||||||||||||||||
| Retained earnings (deficit) | (492,712 | ) | - | (c) | (397,652 | ) | (890,364 | ) | ||||||||
| - | ||||||||||||||||
| (146,653 | ) | (265,609 | ) | 342,957 | (69,305 | ) | ||||||||||
| 1,273,467 | 140,927 | 1,092,957 | 2,507,351 | |||||||||||||
| (a) | Common stock and notes payable issued to acquire DIQ on October 12, 2015, with stock price of $0.38 on October 12, 2015; $150,000 credit in reduction in purchase price. |
| (b) | Eliminate investment in DIQ. |
| (c) | Amortization of intangible assets. |
KSIX MEDIA HOLDINGS, INC.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 2014 AND NINE MONTHS ENDED SEPTEMBER 30, 2015
| KSIX Media Holdings, Inc. and Subsidiaries | DIGITIZEIQ, LLC | Adjustments | Proforma | |||||||||||||||||
| Year ended December 31, 2014 | ||||||||||||||||||||
| Revenues | $ | 2,676,194 | $ | 876,699 | $ | - | $ | 3,552,893 | ||||||||||||
| Cost of revenue | 1,679,214 | 706,153 | - | 2,385,367 | ||||||||||||||||
| Gross profit | 996,980 | 170,546 | - | - | 1,167,526 | |||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Depreciation and amortization | 382,532 | - | (c) | 530,203 | 912,735 | |||||||||||||||
| Selling, general and administrative expense | 1,070,262 | 288,581 | 1,358,843 | |||||||||||||||||
| Total costs and expenses | 1,452,794 | 288,581 | - | 530,203 | 2,271,578 | |||||||||||||||
| Operating income (loss) | (455,814 | ) | (118,035 | ) | - | (530,203 | ) | (1,104,052 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (12,056 | ) | (12,056 | ) | ||||||||||||||||
| Interest expense - related party | - | - | ||||||||||||||||||
| Gain on merger | 63,248 | 63,248 | ||||||||||||||||||
| Interest expense forgiven | 14,138 | 14,138 | ||||||||||||||||||
| Total income (expense) | 65,330 | - | - | - | 65,330 | |||||||||||||||
| Net income (loss) | $ | (390,484 | ) | $ | (118,035 | ) | $ | - | $ | (530,203 | ) | $ | (1,038,722 | ) | ||||||
| Nine months ended September 30, 2015 | ||||||||||||||||||||
| Revenues | $ | 1,874,872 | $ | 3,675,005 | $ | - | $ | 5,549,877 | ||||||||||||
| Cost of revenue | 1,181,236 | 2,878,907 | - | 4,060,143 | ||||||||||||||||
| Gross profit | 693,636 | 796,098 | - | - | 1,489,734 | |||||||||||||||
| Costs and expenses: | ||||||||||||||||||||
| Depreciation and amortization | 286,917 | - | - | (c) | 397,652 | 684,569 | ||||||||||||||
| Selling, general and administrative expense | 801,563 | 997,172 | - | 1,798,735 | ||||||||||||||||
| Total costs and expenses | 1,088,480 | 997,172 | - | 397,652 | 2,483,304 | |||||||||||||||
| Operating income (loss) | (394,844 | ) | (201,074 | ) | - | (397,652 | ) | (993,570 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||||||
| Interest expense | (6,143 | ) | - | - | - | (6,143 | ) | |||||||||||||
| Other | (22 | ) | - | - | (22 | ) | ||||||||||||||
| Total income (expense) | (6,165 | ) | - | - | - | (6,165 | ) | |||||||||||||
| Net income (loss) | $ | (401,009 | ) | $ | (201,074 | ) | $ | - | $ | (397,652 | ) | $ | (999,735 | ) | ||||||
| (c) | Amortization of intangible assets. |