Exhibit 99.3

 

VINCO VENTURES, INC., AND SUBSIDIARIES 

UNAUDITED COMBINED FINANCIAL STATEMENTS OF OPERATIONS

 

Vinco Ventures, Inc. (the “Company”) and ZASH Global Media and Entertainment Corporation (“Zash”), Zash entered into a definitive acquisition agreement (the “Acquisition Agreement”) with Lomotif Private Limited (“Lomotif”), pursuant to which Zash would acquire a majority controlling interest in Lomotif for $100,000,000. On July 19, 2021, the parties to the Acquisition Agreement agreed that a joint venture formed by the Company and Zash, ZVV Media Partners, LLC (“ZVV”), shall be the purchaser of Lomotif. The unwind period contemplated under the Acquisition Agreement expired on July 25, 2021. On July 23, 2021, the Company paid cash of $92,000,000. In addition, the Company entered into a certain side letter to Securities Purchase Agreement with a selling shareholder relating to ZVV Media Partners LLC’s acquisition of 80.00% of the shares in Lomotif Private Limited (the “Side Letter”) whereby the parties agreed that $8,000,000 of the cash consideration payable under the Lomotif SPA to a selling shareholder, a majority shareholder of Lomotif, would be held back pending the satisfaction of certain closing obligations contemplated under the Lomotif SPA, including, but not limited to, the transfer of the legal and beneficial ownership of the selling shareholders 403,466 ordinary shares in the Company (the “Holdback Amount”). The Holdback Amount was evidenced by a Note (as defined in the Side Letter) convertible into 2,750,000 shares of the Company’s common stock and Pledge Agreement (as defined in the Side Letter) as described in the Side Letter and 2,750,000 shares of the Company’s common stock issuable upon the signing of the agreement. The closing of the Lomotif acquisition is subject to certain customary conditions to closing as described in the definitive acquisition agreement.

 

The unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2021 and the year ended December 31, 2020 are presented as if the acquisition had occurred on January 1, 2020 and are based upon the unaudited condensed statements of operations of the Company for the six months ended June 30, 2021 and the unaudited condensed statements of operations of Lomotif Pte. LTD. for the six months ended June 30, 2021 (attached as Exhibit 99.2 in this Current Report on Form 8-K/A).

 

The financial statements of the Company and Lomotif have been adjusted in the unaudited pro forma condensed combined financial statements to give effect to events that are directly attributable to the acquisition, are factually supportable and are expected to have a continuing impact on the combined company. The unaudited pro forma condensed combined financial statements have been presented for informational purposes only. The unaudited pro forma condensed combined financial statements are not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the acquisition been completed as of the dates indicated. In addition, the unaudited pro forma condensed combined financial statements do not purport to project the future financial position or operating results of the combined company.

 

The unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting under generally accepted accounting principles in the United States (“GAAP”). Assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes and should be read in conjunction with the unaudited pro forma condensed combined financial statements.

 

Acquisition accounting is preliminary and dependent upon fair value estimates that are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions. The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company’s results of operations. The pro forma adjustments related to the acquisition are based upon available information and certain assumptions that management believes are reasonable under the circumstances and have been made solely for the purpose of preparing the unaudited pro forma condensed combined financial statements included in this Form 8-K/A. Differences between these preliminary estimates and the final acquisition accounting could occur and these differences could have a material impact on the unaudited pro forma condensed combined financial statements and the combined company’s future results of operations and financial position.

 

The unaudited pro forma condensed combined financial statements should be read in conjunction with the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2021, the audited financial statements of Lomotif for the period ended December 31, 2020 and the unaudited condensed statement of operations of Lomotif for the six months ended June 30, 2021. The unaudited pro forma condensed combined financial statements do not reflect any cost savings from operating efficiencies or revenue enhancements that the combined company may achieve as a result of the acquisition and the effects of the foregoing items could, individually or in the aggregate, materially impact the unaudited pro forma condensed combined financial statements.

 

 

 

VINCO VENTURES, INC., AND SUBSIDIARIES 

UNAUDITED PRO FORMA COMBINED BALANCE SHEET 

June 30, 2021

 

    Vinco Ventures, Inc.     Lomotif Pte. LTD.     Pro Forma Adjustments     Vinco Ventures, Inc. Combined  
                         
Assets                                
Current assets:                                
Cash and cash equivalents   $ 74,756,573     $ 2,049,642     $ 8,000,000     $ 84,806,215  
Accounts receivable, net     2,907,002       169,037       -       3,076,039  
Short-term investments     895,600       -       -       895,600  
Inventory     852,147       -       -       852,147  
Prepaid expenses and other current assets     1,209,435       373       -       1,209,808  
Current assets of discontinued operations     -       -       -       -  
Total current assets     80,620,757       2,219,052       -       90,839,809  
Property and equipment, net     1,033,810       94,038       -       1,127,848  
Right of use assets, net     104,707       19,035       -       123,742  
Loan receivable     5,000,000       -       10,000,000       15,000,000  
Equity method investment     12,000,000       -       (12,000,000 )    

-

  
Intangible assets, net     16,533,373       -       139,375,104      

155,908,477

  
Goodwill     5,983,852       -       -       5,983,852  
Deposits     -       37,792       -       37,792  
Total assets   $ 121,276,499     $ 2,369,917     $

145,375,104

     $

269,021,520

  
                                 
Liabilities and stockholders’ equity                                
Current liabilities:                                
Accounts payable   $ 1,791,982     $ 340,362     $ -     $ 2,132,344  
Accrued expenses and other current liabilities     1,284,168       1,300,000       -       2,584,168  
Deferred revenues     131,578       -       -       131,578  
Current portion of operating leases liabilities     99,293       20,212       -       119,505  
Income tax payable     27,643       -       -       27,643  
Line of credit, net of debt issuance costs     1,133,652       -       -       1,133,652  
Current portion of convertible notes payable, net of debt issuance costs     3,333,333       -       108,000,000       111,333,333  
Current portion of notes payable, net of debt issuance costs     15,185       -       -       15,185  
Current portion of notes payable – related parties     876,500       -       -       876,500  
Due to related party     15,401       -       -       15,401  
Current liabilities of discontinued operations     120,729       -       -       120,729  
Total current liabilities     8,829,464       1,660,574       108,000,000       118,490,038  
Operating leases liabilities –net of current portion     8,483       -       -       8,483  
Convertible notes payable – related parties, net of current portion, net of debt discount     267,183       5,072,101       (2,000,000 )     3,339,284  
Notes payable, net of current portion     19,966       -       -       19,966  
Notes payable – related parties, net of current portion     -       -       -       -  
Warrant liability     139,695,115       -       -       139,695,115  
Total liabilities   $ 148,820,211     $ 6,732,675     $ 106,000,000     $ 261,552,886  
Stockholders’ equity                                
Preferred stock, $0.001 par value, 30,000,000 shares authorized as of June 30, 2021   $ -     $ -     $ -     $ -  
Series B Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 0 and 764,618 shares issued and outstanding as of June 30, 2021     -       -       -       -  
Common stock, $0.001 par value, 250,000,000 shares authorized 59,927,241 and 14,471,403 shares issued and outstanding as of June 30, 2021     59,927       -       2,750       62,677  
Additional paid-in-capital     244,026,879       11,053,213       (2,173,463 )    

252,906,629

  
Accumulated deficit     (269,787,198 )     (15,415,971 )     14,325,192       (270,877,977 )
Total stockholders’ (deficit) equity attributable to Vinco Ventures, Inc.     (25,700,392 )     (4,362,758 )     12,154,479       (17,908,671 )
Noncontrolling interests     (1,843,320 )     -       27,220,625     25,377,305
Total stockholders’ equity     (27,543,712 )     (4,362,758 )    

39,375,104

       7,468,635
Total liabilities and stockholders’ equity   $ 121,276,499     $ 2,369,917     $ 145,375,104     $ 269,021,520  

 

The accompanying notes are an integral part of these financial statements.

 

 

 

VINCO VENTURES, INC., AND SUBSIDIARIES

 UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS 

For the Six Months Ended June 30, 2021

 

    Vinco Ventures, Inc.     Lomotif Pte. LTD.     Pro Forma Adjustments     Vinco Ventures, Inc. Combined  
Revenues, net   $ 5,256,973     $ -     $ -     $ 5,256,973  
Cost of revenues     3,374,570       -       -       3,374,570  
Gross profit     1,882,403       -       -       1,882,403  
                                 
Operating expenses:                                
Selling, general and administrative     17,602,532       3,334,165       -       20,936,697  
Operating loss     (15,720,129 )     (3,334,165 )     -       (19,054,294 )
                                 
Other (expense) income:                                
Rental income     54,407       -       -       54,407  
Interest expense     (15,410,414 )     (153,596 )     -       (15,564,010 )
Loss on issuance of warrants     (208,855,715 )     -       -       (208,855,715 )
Change in fair value of warrant liability     (773,447 )     -       -       (773,447 )
Change in fair value of short-term investment     (122,000 )     -       -       (122,000 )
Loss on disposal of interest in joint venture     (301,645 )     -       -       (301,645 )
Other (expense) income     -       94,395       -       94,395  
Total other (expense) income     (225,408,814 )     (59,201 )     -       (225,468,015 )
Loss before income taxes     (241,128,943 )     (3,393,366 )     -       (244,522,309 )
Income tax expense     -       -       -       -  
Net loss from continuing operations   $ (241,128,943 )   $ (3,393,366 )   $ -     $ (244,522,309 )
Net income (loss) attributable to noncontrolling interests     50,577       -       (2,036,020 )     (1,985,443 )
Net loss from continuing operations attributable to Vinco Ventures, Inc.     (241,179,520 )     (3,393,366 )     2,036,020       (242,536,866 )
Net loss from discontinued operations     (4,958,780 )     -       -       (4,958,780 )
Provision for income taxes for discontinued operations     -       -       -       -  
Net loss attributable to Vinco Ventures, Inc.   $ (246,138,300 )   $ (3,393,366 )   $ 2,036,020     $ (247,495,646 )
Net loss per share:                             -  
Net (loss) income per share - basic   $ (8.95 )   $ -     $ -     $ (8.95 )
Net (loss) income per share - diluted   $ (8.95 )   $ -     $ -     $ (8.95 )
Weighted average number of common shares outstanding – basic and diluted     27,489,580       -       -      

27,489,580

  

 

The accompanying notes are an integral part of these financial statements

 

 

 

VINCO VENTURES, INC., AND SUBSIDIARIES 

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS 

For the Year Ended December 31, 2020

 

      Vinco Ventures, Inc.       Lomotif Pte. LTD.       Pro Forma Adjustments       Vinco Ventures, Inc. Combined  
Revenues, net   $ 15,781,319     $ -     $ -     $ 15,781,319  
Cost of revenues     11,403,474       -       -       11,403,474  
Gross profit     4,377,845       -       -       4,377,845  
                                 
Operating expenses:                                
Selling, general and administrative     12,280,192       4,605,299       -       16,885,491  
Operating loss     (7,902,347 )     (4,605,299 )     -       (12,507,646 )
                                 
Other (expense) income:                                
Rental income     102,815       -       -       102,815  
Interest expense     (3,378,131 )     (91,019 )     -       (3,469,150 )
Change in fair value of short-term investment     (22,000 )     -       -       (22,000 )
Other (expense) income     -       97,920       -       97,920  
Gain on divestiture     4,911,760       -       -       4,911,760  
Total other (expense) income     1,614,444       6,901       -       1,621,345  
Loss before income taxes     (6,287,903 )     (4,598,398 )     -       (10,886,301 )
Income tax expense (benefit)     (19,197 )     -       -       (19,197 )
Net loss from continuing operations   $ (6,307,100 )   $ (4,598,398 )   $ -     $ (10,905,498 )
Net income (loss) attributable to noncontrolling interests     (554,382 )     -       (2,759,038 )     (3,313,420 )
Net loss from continuing operations attributable to Vinco Ventures, Inc.     (5,752,718 )     (4,598,398 )     2,759,038       (7,592,078 )
Loss from discontinued operations before income taxes     (629,692 )     -       -       (629,692 )
Provision for income taxes for discontinued operations     (12,940 )     -       -       (12,940 )
Net loss from discontinued operations     (642,632 )     -       -       (642,632 )
Gain on divestiture from discontinued operations     1,241,914       -       -       1,241,914  
Income from discontinued operations   $ 599,282     $ -     $ -     $ 599,282  
Net loss attributable to Vinco Ventures, Inc.   $ (5,153,436 )   $ (4,598,398 )   $ 2,759,038     $ (6,992,796 )
Net loss per share - basic and diluted:                             -  
Net loss per share – continuing operations   $ (0.55 )     -       -       (0.57 )
Net loss per share – discontinued operations     (0.06 )   $ -     $ -     $ (0.05 )
Net loss per share – gain on divestiture from discontinued operations     0.12       -       -       0.09  
Income (loss) per share – discontinued operations   $ 0.06       -       -       0.04  
Net (loss) income per share   $ (0.49 )   $ -     $ -     $ (0.53 )
Weighted average number of common shares outstanding – basic and diluted     10,514,010       -       -       13,264,010  

 

 

 

NOTES TO PRO FORMA FINANCIAL STATEMENTS

 

1. BASIS OF PRESENTATION

 

The unaudited pro forma condensed combined financial statements are based on Vinco Ventures, Inc.’s and Lomotif Pte. LTD’s historical consolidated financial statements as adjusted to give effect to the acquisition of Lomotif Pte. LTD. and the equity and debt issuance necessary to finance the acquisition. The unaudited pro forma combined statements of operations for the six months ended June 30, 2021 and the year ended December 31, 2020 give effect to the Lomotif Pte. LTD. acquisition as if it had occurred on January 1, 2020. The unaudited pro forma combined balance sheet as of June 30, 2021 gives effect to the Lomotif Pte. LTD acquisition as if it had occurred on January 1, 2020.

 

2. PRELIMINARY PURCHASE PRICE ALLOCATION

 

Vinco Ventures, Inc. (the “Company”) and ZASH Global Media and Entertainment Corporation (“Zash”), Zash entered into a definitive acquisition agreement (the “Acquisition Agreement”) with Lomotif Private Limited (“Lomotif”), pursuant to which Zash would acquire a majority controlling interest in Lomotif for $100,000,000. On July 19, 2021, the parties to the Acquisition Agreement agreed that a joint venture formed by the Company and Zash, ZVV Media Partners, LLC (“ZVV”), shall be the purchaser of Lomotif. The unwind period contemplated under the Acquisition Agreement expired on July 25, 2021. On July 23, 2021, the Company paid cash of $92,000,000. In addition, the Company entered into a certain side letter to Securities Purchase Agreement with a selling shareholder relating to ZVV Media Partners LLC’s acquisition of 80.00% of the shares in Lomotif Private Limited (the “Side Letter”) whereby the parties agreed that $8,000,000 of the cash consideration payable under the Lomotif SPA to a selling shareholder, a majority shareholder of Lomotif, would be held back pending the satisfaction of certain closing obligations contemplated under the Lomotif SPA, including, but not limited to, the transfer of the legal and beneficial ownership of the selling shareholders 403,466 ordinary shares in the Company (the “Holdback Amount”). The Holdback Amount was evidenced by a Note (as defined in the Side Letter) convertible into 2,750,000 shares of the Company’s common stock and Pledge Agreement (as defined in the Side Letter) as described in the Side Letter and 2,750,000 shares of the Company’s common stock issuable upon the signing of the agreement.

 

The following table summarizes the preliminary purchase price at the date of acquisition:

 

    July 25,  
    2021  
Cash paid   $ 92,000,000  
Issuance of convertible note payable     8,000,000  
Fair value of shares issuable     8,882,500  
Total purchase price   $ 108,882,500  

 

The Company believes that this combination will further strengthen its future growth opportunities in the media industry. The Company accounted for this acquisition as a business combination under the acquisition method of accounting. The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

 

      July 25,  
      2021  
Cash and cash equivalents   $ 1,140,421  
Other current assets     169,410  
Goodwill and intangible assets     139,375,104  
Other noncurrent assets     150,865  
         
Total assets acquired     140,835,800  
         
Accounts payable and other current assets     1,640,362  
Operating lease obligation     20,212  
Loans     -  
Convertible notes    

3,072,101

  
Total liabilities assumed    

4,732,675

  
Noncontrolling interest     27,220,625  
Total   $ 108,882,500  

 

The Company has preliminarily allocated the majority of the purchase price to goodwill and intangibles assets. The Company anticipates the goodwill and intangible assets will be tax deductible.

 

3. PRO FORMA ADJUSTMENTS

 

The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

 

Adjustments to the pro forma condensed combined balance sheet:

 

Assets:

 

  ● Reflects excess cash received of $8,000,000 from borrowing of debt after proceeds paid to Lomotif shareholders.
  ● Reflects the reclassification of investment in ZVV Media to loan receivables due to the consolidation of ZVV Media as a consolidated variable interest entity.
  ● Reflects the preliminary estimate of goodwill and intangible assets, which represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed as shown in Note 2 — Preliminary purchase price allocation.

 

Liabilities and Stockholders Equity:

 

  ● Reflects the issuance of the debt related to the completion of the acquisition of Lomotif.
  ● Reflects the elimination of intercompany debt from ZVV Media to Lomotif of $2,000,000.
  ● Reflects the issuance of 2,750,000 shares of common stock related to the acquisition of Lomotif.
  ● Reflects the adjustment for the noncontrolling interest of 50.0% of ZVV Media Partners LLC and 20.0% of Lomotif.

 

Adjustments to the pro forma condensed combined statements of operations:

 

Statement of Operations:

 

  ● Reflects adjustment for noncontrolling interest in ZVV Media Partners, LLC of 50.0% and noncontrolling interest of Lomotif of 20.0% thereby resulting in a noncontrolling interest of 60%.