EX-99.3 4 c51985_ex99-3.htm c51985_ex99-3.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

EXHIBIT 99.3

ITEM 7 (b). Pro-forma Consolidated Financial Information of Enliven Corporation (unaudited)

     As previously reported, on October 31, 2007 Enliven Marketing Technologies Corporation (“Enliven” or the “Company”) completed its acquisition of all of the outstanding partnership interests of Springbox, Ltd. (“Springbox”).

     Pursuant to a Purchase Agreement, dated as of October 18, 2007 by and among Springbox GP, LLC, the limited partners and Enliven, Enliven issued an aggregate of 714,286 shares of Enliven common stock to the partners of Springbox and paid $4,950,000 in cash, in exchange for all of the outstanding partnership interests of Springbox. In addition, the Company completed an equity offering on October 18, 2007, by issuing 15.7 million shares of common stock resulting in gross proceeds to the Company of $11 million. Approximately $5.0 million of the gross proceeds were used to acquire Springbox.

     The amount of cash payable by Enliven is subject to adjustment based on the net book value of Springbox as of the closing date of the acquisition and the subsequent receipt by Enliven of accounts receivable outstanding on the closing date of the acquisition. In addition, the sellers of Springbox are entitled to an additional contingent consideration based on defined future earnings (“EBITDA based earnout”). Enliven has the option to pay shares of common stock or the fair market value of such shares in order to satisfy any obligations pursuant to the earnout. For purposes of preparing pro-forma condensed consolidated financial statements included herein, we have assumed that there will be no purchase price adjustments related to net book value adjustments or payments under the EBITDA based earnout.

     Enliven has prepared pro forma financial information for the Springbox acquisition to combine the financial results of the Company with Springbox for the nine months ended September 30, 2007 and for the year ended December 31, 2006 as if the acquisition of Springbox had closed on January 1, 2006. Additionally, the following information presents pro forma Balance Sheet information as if the acquisition of Springbox and completion of the equity offering had occurred on September 30, 2007.

     The pro forma financial information is based on the historical consolidated financial statements of Enliven and the historical financial statements of Springbox and should be read in conjunction with such financial statements and accompanying notes. The purchase method of accounting was used to prepare the pro forma financial statements using estimated fair values of the assets and liabilities of Springbox at the date of the acquisition. The purchase accounting adjustments to reflect the assets and liabilities of Springbox were based upon management’s preliminary evaluation as of this filing and are subject to change pending final evaluation of fair values of the assets and liabilities, including intangible assets and deferred revenue, and such change could be materially different from amounts disclosed herein.

     The pro forma financial information does not purport to be indicative of either a) the results of operations which would have actually been obtained if the acquisition had occurred on the dates indicated, or b) the results of operations that will be reported in the future.


ENLIVEN MARKETING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 2007
(UNAUDITED)

      Enliven                              
      Marketing       Springbox,       Pro Forma           Pro Forma  
      Technologies       LLC       Adjustments           Combined  
ASSETS                                    
Current Assets:                                    
   Cash and cash equivalents   $ 1,531     $ 614     $ 6,000     (1,2)   $ 8,145  
   Marketable securities     1,725       -       -           1,725  
   Accounts receivable     4,345       1,426       -           5,771  
   Prepaid expenses and other current assets     679       15       -           694  
         Total current assets.     8,280       2,055       6,000           16,335  
Restricted cash     591       -       -           591  
Property and equipment, net     802       455       -           1,257  
Goodwill     15,103       -       -           15,103  
Intangible assets, net     3,779       -       4,096     (3)     7,875  
Other assets     60       14       -           74  
         Total assets   $ 28,615     $ 2,524     $ 10,096         $ 41,235  
 
LIABILITIES AND STOCKHOLDERS' EQUITY                                    
Current liabilities:                                    
   Accounts payable   $ 2,527     $ -     $ -         $ 2,527  
   Accrued expenses     426       416       -           842  
   Deferred revenues     177       638       -           815  
   Current portion of notes payable     488       -       -           488  
   Accrued incentive compensation     545       -       -           545  
   Current liabilities related to discontinued operations     231               -           231  
         Total current liabilities     4,394       1,054       -           5,448  
Deferred rent     160       -       -           160  
Warrants to purchase common stock     1,877       -       -           1,877  
Subordinated notes     2,529       -       -           2,529  
Unicast notes     1,420       -       -           1,420  
         Total liabilities     10,380       1,054       -           11,434  
Stockholders' equity:                                    
   Preferred stock     -       -       -           -  
   Common stock     83       190       (173 )   (1,4)     100  
   Paid-in capital     312,157       -       11,549     (1,4)     323,706  
   Treasury stock at cost     (1,015 )     -       -           (1,015 )
   Accumulated other comprehensive income     4       -       -           4  
   Retained earnings (accumulated deficit)     (292,994 )     1,280       (1,280 )   (4)     (292,994 )
         Total stockholders' equity     18,235       1,470       10,096           29,801  
         Total liabilities and stockholders' equity   $ 28,615     $ 2,524     $ 10,096         $ 41,235  


ENLIVEN MARKETING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2007
(UNAUDITED)

                                 
      Viewpoint       Springbox, LLC       Pro Forma       Pro Forma  
      Corp.             Adjustments (2)       Combined  
Revenues:                                
   Advertising systems   $ 4,540     $ -     $ -     $ 4,540  
   Search     4,744       -       -       4,744  
   Services     2,353       4,106       -       6,459  
   Licenses     30       -       -       30  
Total revenues     11,667       4,106       -       15,773  
 
Cost of Revenues:                                
   Advertising systems     2,715       -       -       2,715  
   Search     100       -       -       100  
   Services     1,737       1,994       -       3,731  
   Licenses     3       -       -       3  
   Total cost of revenues     4,555       1,994       -       6,549  
Gross profit     7,112       2,112       -       9,224  
 
Operating expenses:                                
   Sales and marketing     3,635       -       -       3,635  
   Research and development     2,506       -       -       2,506  
   General and administrative     6,886       1,059       -       7,945  
   Depreciation     375       -       -       375  
   Amortization of intangible assets     640       -       1,048 (1)     1,688  
Total operating expenses     14,042       1,059       1,048       16,149  
 
Loss from operations     (6,930 )     1,053       (1,048 )      (6,925 )
 
Other income (expense), net                                
   Interest and other income; net     180       4       -       184  
   Interest expense     (606 )     -       -       (606 )
   Changes in fair values of warrants to purchase common                                
       stock and conversion options of convertible notes     (7 )     -       -       (7 )
Total other income (expense)     (433 )     4       -       (429 )
Loss before provision for income taxes     (7,363 )     1,057       (1,048 )      (7,354 )
Provision for income taxes     45       24       -       69  
 
Net loss applicable to common shareholders   $ (7,408 )   $ 1,033     $ (1,048 )    $ (7,423 )
 
Basic and diluted net loss per common share:                                
Net loss per common share   $ (0.10 )                   $ (0.08 ) (3)
 
Weighted average number of shares outstanding     75,677               16,428   (3)     92,105  


ENLIVEN MARKETING TECHNOLOGIES CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2006
(UNAUDITED)

                                 
      Viewpoint       Springbox, LLC       Pro Forma       Pro Forma  
      Corp.             Adjustments (2)       Combined  
Revenues:                                
   Advertising systems   $ 7,252     $ -     $ -     $ 7,252  
   Search     6,307       -       -       6,307  
   Services     3,470       3,120       -       6,590  
   Licenses     148       -       -       148  
Total revenues     17,177       3,120       -       20,297  
 
Cost of Revenues:                                
   Advertising systems     4,176       -       -       4,176  
   Search     154       -       -       154  
   Services     2,337       1,268       -       3,605  
   Licenses     8       -       -       8  
   Total cost of revenues     6,675       1,268       -       7,943  
Gross profit     10,502       1,852       -       12,354  
 
Operating expenses:                                
   Sales and marketing     5,892       -       -       5,892  
   Research and development     3,919       -       -       3,919  
   General and administrative     8,466       1,209       -       9,675  
   Depreciation     466       -       -       466  
   Amortization of intangible assets     570       -       1,397 (1)     1,967  
   Restructuring charges     92      
-
             
92
 
   Impairment of goodwill     10,655       -               10,655  
Total operating expenses     30,060       1,209       1,397       32,666  
 
Loss from operations     (19,558 )     643       (1,397
)
    (20,312 )
 
Other income (expense), net                                
   Interest and other income; net     332       26       -       358  
   Interest expense     (926 )     -       -       (926 )
   Changes in fair values of warrants to purchase common             -       -       -  
       stock and conversion options of convertible notes     515       -       -       515  
Total other income (expense)     (79 )     26       -       (53 )
Loss before provision for income taxes     (19,637 )     669       (1,397 )     (20,365 )
Provision for income taxes     78       -       -       78  
 
Net loss applicable to common shareholders   $ (19,715 )   $ 669     $ (1,397 )   $ (20,443 )
 
Net loss per common share   $ (0.30 )                   $ (0.25 ) (3)
 
Weighted average number of shares outstanding     66,610               16,428   (3)     83,038  


Balance Sheet

The pro forma adjustments to the consolidated balance sheet reflect the following:

 

  (1) Viewpoint entered into a Securities Purchase Agreement with certain accredited investors, dated as of October 18, 2007, pursuant to which Viewpoint issued 15,714,000 shares of Viewpoint common stock in a private placement to such accredited investors at a purchase price of $0.70 per share (resulting in aggregate gross proceeds of $11,000,000).
     
Total proceeds    
$
11,000,000  
Less Springbox purchase price and transaction costs
(5,000,000 )
     
$
6,000,000  

  (2)  Allocation of Purchase Price of Springbox

 
Total
  Cash  
 
Consideration
  Consideration  
Cash
$
4,950,000   $ 4,950,000  
Common Stock Issued
  564,286        
Transaction costs
  50,000     50,000  
Total purchase price
  5,564,286     5,000,000  
Allocation of purchase price to acquired assets and liabilities            
            Net working capital assets assumed
  (999,330 )      
            Non-current assets assumed
  (469,087 )      
            Fair value of intangible assets acquired
  4,095,869        

    The purchase accounting adjustments to reflect fair value of assets and liabilities, including intangible assets and deferred revenue, was based on management’s evaluation as of this filing date and are subject to change pending final evaluation of the assets and liabilities, including intangible assets and deferred revenue. At this time, the net book value of tangible assets is estimated to approximate fair value.
     
  (3) To record the fair values for Springbox intangible assets.
     
  (4)  To reflect the elimination of Springbox equity and the issuance of 714,286 shares of Enliven’s common stock (at a market price of $0.79 at the closing date of the acquisition based on a formula defined in the purchase agreement) and the issuance of 15,714,000 shares of Enliven’s common stock in the private placement for gross proceeds of approximately $11 million.

 

 
Common
Paid-in
Accumulated
 
 
stock
capital
deficit
 
 
(in thousands)
 
 
Eliminate Springbox equity
$ (190 )  
$
-   $ -  
Issue Enliven equity
  1    
563     -  
Equity offering
  16    
10,986        
Eliminate Springbox retaining earnings
 
-
   
-     (1,280 )
Total
$ (173 )  
$
11,549   $ (1,280 )

Statement of Operations

Income statement adjustments include:

  1.  These intangible values included non-competition and employment agreements, trade name, and customer base. The intangible assets were determined to have a life of two to ten years.

Amortization expense was computed as follows:

 

Preliminary Fair Value Allocation

 

Depreciable Life

 

Nine Months Ended
September 30, 2007

 

Year Ended
December 31, 2006

 

 

 

     

 

     

 

     

 

 

Non-competition and employment agreements

 

2,552,723

     

2

     

883,499

     

1,177,998

 

Trade name asset

 

1,265,660

     

10

     

94,925

     

126,566

 

Customer base asset

 

277,486

     

3

     

69,371

     

92,495

 

 

 

 

     

 

     

 

     

 

 

Amortization expense

 

 4,095,869

     

 

     

1,047,795

     

1,397,060

 


2. There were no transactions between Springbox and Enliven during 2006 or 2007 so there are no inter-company transactions to eliminate.
   
3. The impact on per share amounts and weighted average number of shares outstanding was determined as follows (in thousands, except per share amounts):

    Nine Months Ended     Year Ended  
    September 30, 2007     December 31, 2006  
Weighted average shares outstanding            
     for the period   75,677     66,610  
Shares issued in connection with            
     the Springbox acquisition   714     714  
Shares issued in connection with the            
     Securities Purchase Agreement   15,714     15,714  
    92,105     83,038  
 
Proforma net loss per share amounts   $ (0.08 )   $      (0.25 )