EX-99.3 4 filing_411-3.htm MOVENTIS CAPITALS UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS AND NOTES AFTER GIVING EFFECT TO THE ACQUISITION OF PTL

MOVENTIS CAPITAL, INC. AND SUBSIDUARIES

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2006


CONTENTS


Introduction to Pro Forma Financial Statements

1 

 

 

Pro Form Consolidating Balance Sheets as of September 30, 2006 (Unaudited)

3 

 

 

Notes to the Pro Forma Balance sheets

4 

 

 

Pro Form Consolidating Statements of Operations- for the twelve (12) months ended June 30, 2006 (Unaudited)

5 

 

 

Notes to the Consolidating Pro Forma Statements of Operations for the twelve (12) months ended June 30, 2006

6 

 

 

Pro Form Consolidating Statements of Operations- for the three (3) months ended September 30, 2006 (Unaudited)

7 

 

 

Notes to the Consolidating Pro Forma Statements of Operations for the three (3) months ended September 30, 2006

8 




Moventis Capital Inc.

Unaudited Pro Forma Condensed Combined Statements

Of Income and Balance Sheet

(In US Dollars)



The unaudited pro forma condensed combined financial information gives effect, on a purchase accounting basis, to the Share Purchase Agreement dated as of May 10, 2006 by and among Moventis and the vendors of PTL Electronics.                             


The historical financial statements of PTL reported activity on a fiscal year ending March 31 using generally accepted accounting principles in Canada.  The  PTL  historical  financial  information  presented in this  document has been adjusted to reflect a June 30  year-end  using  generally  accepted accounting principles in the United States.


The unaudited pro forma condensed combined statements, which are based on historical  financial  results,  do  not  include  any  adjustments  to reflect anticipated cost savings and other benefits management believes will result from the integration of PTL.


The unaudited pro forma condensed combined balance sheet at September 30, 2006 assumes that the transaction occurred on September 30, 2006.  


Basis of Pro Forma Presentation


On November 22, 2006, Moventis completed the purchase of all outstanding shares and the shareholder’s loan of PTL Electronics Ltd. (“PTL”) an electronic manufacturing services company located in British Columbia, Canada.  Under the terms of the agreement, Moventis paid PTL Shareholders a sum of $6,138,609 ($7,000,000 Canadian).  The purchase price breakdown is as follows:



 

 

 

US Dollars

 

 

CDN Dollars

Cash

 

$

2,626,970

 

$

3,000,000

Short Term Loan

 

 

437,828

 

 

500,000

Convertible Debenture

 

 

2,014,011

 

 

2,300,000

Common Shares

 

 

1,059,801

 

 

1,200,000

Total Purchase Price

 

$

6,138,609

 

$

7,000,000

Estimated cost of transaction

 

$

      346,241

 

$

      395,410

Total Consideration

 

$

   6,484,850

 

$

  7,395,410


The short term loan is payable nine (9) months from closing. The company has the option to extend payment for 90 days with interest payable for the 90 day period at an annual rate of 10% per annum.  The convertible debenture is non-interest bearing and can be repaid at the option of Moventis by conversion into common shares of Moventis within nine months of closing.


Purchase Price Allocation


In accordance with SFAS No. 141 (SFA 141), Business Combinations the allocation of the total purchase price to PTL’s tangible and unidentifiable intangible assets acquired and liabilities assumed was based on their fair values as of November 22, 2006 and the residual value was allocated to goodwill.  The fair values of liabilities were determined based on market values of traded debt securities, or the present values of the amounts to be paid, unless they were expected to be settled in a short period in which case discounting was not performed.  The classification of intangible assets were done after consultation with the Company’s auditors.


The values assigned to certain acquired assets and liabilities are preliminary, are based on information available as of November 22, 2006 and may be adjusted as further information becomes available during the allocations period of up to 12 months from the acquisitions date (in accordance with SFAS 141).  Additional information that may become available subsequently and may result in changes in the values allocated to various assets and liabilities includes, but is not limited to, changes in, previously unidentified claims from suppliers or other contingent obligations, including warranty liabilities and the amounts required to settle them, unidentified customer claims.  Any changes in the values allocated to tangible and specifically identified intangible assets acquired and liabilities assumed during the allocation period may result in material adjustments to goodwill.




The following represents the Company’s preliminary allocation of the purchase price to the assets and liabilities of PTL:


Tangible assets acquired and liabilities assumed:

 

 

 

 

 

 

 

US Dollars

 

 

CDN Dollars

Accounts receivable

$ 

3,766,997 

 

$ 

4,301,910 

Inventory & project cost

 

3,580,714 

 

 

4,089,175 

Other current assets

 

306,496 

 

 

350,019 

Property, equipment & leaseholds improvements

 

971,355 

 

 

1,109,287 

Bank indebtedness

 

(3,422,828)

 

 

(3,931,170)

Accounts payable & accrued liabilities

 

(2,073,232)

 

 

(2,367,631)

Other current liabilities

 

(1,032,170)

 

 

(1,178,738)

Long term debt

 

(2,247,016)

 

 

(2,566,092)

Intangible assets

 

701,770 

 

 

801,420 

Goodwill

 

5,952,765 

 

 

6,787,770 

Total

$ 

6,484,850 

 

$ 

7,395,410 



The pro forma condensed combined financial statements are not necessarily indicative of the results that actually would have occurred if the transactions described had been effective since the assumed dates, nor as the statements indicative of future combined financial position or earnings.  Moventis’ future financial statements will reflect the acquisition of PTL as of November, 2006.


The pro forma condensed combined financial statements should be read in conjunction with financial statements of Moventis as filed with the Securities and Exchange Commission in its Form 10KSB for the year ended June 30, 2006 and Quarterly Report on Form 10QSB for the three months ended September 30, 2006.


Prior to the acquisition of PTL Electronics, Moventis Capital did not have a business relationship with PTL Electronics.  None of the PTL shareholders held any Moventis Capital shares prior to the acquisition.




MOVENTIS CAPITAL AND SUBSIDIARIES

 

 

 

 

 

Pro Forma Combined

 

 

 

 

 

 

 

Balance Sheets

 

 

 

 

 

 

 

 

(Unaudited- Prepared by Management)

 

 

 

 

 

(In US Dollars)

 

 

 

 

 

 

 

 

(As at September 30, 2006)

 

Historical

 

Pro Forma

 

 

 

Moventis

 

PTL

 

Adjustments

Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

Cash

 

 

 $     1,267,011 

 

 $                - 

(a)

 $     608,525 

 $         98,566 

 

 

 

 

 

 

 

(b)

850,000 

                   - 

 

 

 

 

 

 

 

(c)

(2,626,970)

                   - 

 

Accounts Receivable

 

                   - 

 

        3,421,753 

 

                - 

        3,421,753 

 

Inventory

 

 

                   - 

 

        2,975,386 

 

                - 

        2,975,386 

 

Other current assets

 

            16,224 

 

          365,494 

 

                - 

          381,718 

 

 

 

 

        1,283,235 

 

        6,762,633 

 

(1,168,445)

        6,877,423 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital assets (net)

 

            13,174 

 

          638,201 

(d)

       372,154 

        1,023,529 

 

Goodwill

 

 

                   - 

 

          996,515 

(j)

(996,515)

        5,668,334 

 

 

 

 

 

 

 

(e)

     5,668,334 

                   - 

 

Minority Interest

 

 

 

 

            19,916 

 

                - 

            19,916 

 

Intangible assets

 

 

                   - 

 

 

(e)

       604,236 

          604,236 

 

 

 

 

            13,174 

 

        1,654,632 

 

     5,648,209 

        7,316,015 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        1,296,409 

 

        8,417,265 

 

     4,479,764 

      14,193,438 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Bank indebtedness

 

 $                - 

 

 $     2,767,877 

 

                - 

 $     2,767,877 

 

Accounts payable and accrued liabilities

          173,599 

 

        1,811,287 

 

                - 

        1,984,886 

 

Short term loan

 

 

                   - 

 

          102,253 

(b)

       850,000 

        1,390,081 

 

 

 

 

 

 

 

(c)

       437,828 

 

 

Dividends Payable

 

                   - 

 

                   - 

(k)

       569,344 

          569,344 

 

Other current liabilities

 

            34,720 

 

          353,294 

 

                - 

          388,014 

 

 

 

 

          208,319 

 

        5,034,711 

 

     1,857,172 

        7,100,202 

 

 

 

 

 

 

 

 

 

 

Long term liabilities

 

 

 

 

 

 

 

 

 

HSBC debt

 

 

                   - 

 

          275,549 

 

                - 

          275,549 

 

Debenture

 

 

        1,191,181 

 

                   - 

(a)

       608,525 

        3,813,717 

 

 

 

 

 

 

 

(f)

     2,014,011 

 

 

Due to Shareholders

 

                   - 

 

        2,047,261 

(i)

(2,047,261)

                   - 

 

Due to Parent

 

 

                   - 

 

                   - 

(i)

     2,047,261 

        2,047,261 

 

 

 

 

        1,191,181 

 

        2,322,810 

 

     2,622,536 

        6,136,527 

 

 

 

 

 

 

 

 

 

 

Shareholder's equity

 

 

 

 

 

 

 

 

Par Value Shares

 

 

            26,067 

 

                  89 

(g)

(89)

            27,901 

 

 

 

 

 

 

 

(h)

1,834 

 

 

Additional Paid in Capital

 

        4,051,011 

 

                   - 

(h)

1,057,967 

        5,108,978 

 

Retained Earnings

 

 

(4,180,169)

 

1,059,655 

 (g)

506,204 

(4,180,169)

 

 

 

 

 

 

 

 (j)

(996,515)

 

 

 

 

 

 

 

 

(k)

(569,344)

 

 

 

 

 

(103,091)

 

1,059,744 

 

56 

956,709 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        1,296,409 

 

        8,417,265 

 

     4,479,764 

      14,193,438 




Moventis Capital Inc. and PTL Electronics Ltd.

Notes to Pro Forma Unaudited Condensed Balance Sheet

As at September 30, 2006

(In US Dollars)




The unaudited balance sheets as of September 30, 2006 have been combined to reflect the pro forma impact of the acquisition of PTL by Moventis as if the transaction occurred on September 30, 2006.


a)

Additional funds raised through the convertible debenture


b)

Funds raised through short term loans:


-

$650,000 to be paid back in 10 monthly payments with 10% annual interest rate;

-

$75,000 plus interest to be paid in 45 days; and

-

$125,000 plus interest to be paid back in 65 days.


c)

Cash component of the purchase price to be paid at closing $2,626,970 ($3M CDN) and short term note $437,828 ($500K CDN)


d)

To record the increase in the FMV of the production equipment acquired


e)

To record the amount by which the purchase price exceeds the fair market value of assets acquired, less liabilities assumed and transactions costs associated with the acquisition of PTL Electronics


f)

Convertible debenture held by the PTL shareholders as part of the purchase price


g)

Elimination of the PTL equity


h)

To record the issuance of issuance of 1,833,564 shares at a value of $0.578 each.


i)

Reclassification of Shareholder’s loan Due from Parent


j)

Elimination of PTL Goodwill


k)

Dividends payable to PTL Shareholders for the period January 1, 2006 to November 30, 2006 as per the purchase agreement.




MOVENTIS CAPITAL AND SUBSIDIARIES

 

 

 

 

 

 Pro Forma Statement of Earnings

 

 

 

 

 

 

 For the Period July 1, 2005 to June 30, 2006

 

 

 

 

 

(Unaudited- Prepared by Management)

 

 

 

 

 

 

(In US Dollars)

 

 

Historical

 

Pro Forma

 

 

 

 

Moventis

 

PTL

 

Adjustments

Combined

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 $           - 

 

 $     9,232,228 

 

               - 

 $     9,232,228 

Cost of Sales

 

 

              - 

 

        6,798,351 

 

               - 

        6,798,351 

Gross Margin

 

 

              - 

 

        2,433,878 

 

               - 

        2,433,878 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Sales and Marketing

 

       16,718 

 

          151,519 

 

               - 

          168,237 

 

General & administration

      467,924 

 

        1,026,901 

 

               - 

        1,494,825 

 

Stock based compensation

       76,459 

 

                   - 

(a)

        99,250 

          175,709 

 

Foreign currency (gain) loss

(3,845)

 

            76,382 

 

               - 

            72,537 

 

Amortization

 

      175,000 

 

                   - 

(b)

      271,906 

          446,906 

 

Deprecation

 

         4,146 

 

          231,355 

(c)

      111,646 

          347,147 

 

Interest

 

 

              - 

 

          132,830 

(d)

      123,149 

          255,979 

Total Expenses

 

 

      736,402 

 

        1,618,987 

 

      605,951 

        2,961,340 

 

 

 

 

 

 

 

 

 

 

Loss on Investment

 

 

              - 

 

            90,012 

 

               - 

            90,012 

Other Income

 

 

            375 

 

                   - 

 

               - 

                 375 

 

 

 

 

 

 

 

 

 

 

Earnings Before Income Tax

 

(736,027)

 

          724,879 

 

(605,951)

(617,099)

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

              - 

 

          251,777 

(e)

(251,777)

                   - 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings for the period

(736,027)

 

473,101 

 

(354,174)

(617,099)

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

Basic

 

 

(0.03)

 

 

 

 

(0.02)

 

Diluted

 

 

(0.03)

 

 

 

 

(0.02)

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

Basic

 

 

 23,266,309 

 

 

 (f)

   1,833,564 

      25,099,873 

 

Diluted

 

 

 24,320,952 

 

 

 (f)

   6,492,694 

      30,813,646 

 

 

 

 

 

 

 

 

 

 




Moventis Capital Inc. and PTL Electronics Ltd.

Notes to Pro Forma Unaudited Condensed Combined

Statements of Income for the

Year ended June 30, 2006

(In US Dollars)




The following pro forma adjustments are included in the unaudited pro forma condensed statement of income:


a)

To record stock-based compensation related to options issued to executives of PTL as per the purchase agreement;


b)

To record the amortization of intangible assets acquired.  The amortization periods for the intangibles are:


-  customer list

- 5 years


c)

To record the depreciation on the writ-up of FMV of production equipment acquired.  The depreciation rate is 30% declining balance.


d)

Interest rates relating to the convertible debenture and short terms loans.  Interest rate on these two instruments is 10% annually.  Interest paid is semi-annually to the debenture holders.  Interest paid on the short term loans are:


-

monthly interest and principal payments for 10 months on $650,000;

-

$75,000 plus interest to be paid in 45 days and $125,000 plus interest to be paid in 65 days.

e)

Adjustments of income tax provision to reflect the amount payable based on the combined results.


f)

The pro forma number of shares used in per share calculations reflects the weighted average of Moventis common shares for the period presented combined with shares issued to PTL shareholders.  The impact of stock options issued and the anti-dilutive effects of the convertible debenture and warrants issued to holders of short term loans.




MOVENTIS CAPITAL AND SUBSIDIARIES

 

 

 

 

 

 

 Pro Forma Statement of Earnings

 

 

 

 

 

 

 

For the Period July 1, 2006 to September 30, 2006

 

 

 

 

 

 

(Unaudited- Prepared by Management)

 

 

 

 

 

 

 

(In US Dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Historical

 

Pro Forma

 

 

 

 

 

Moventis

 

PTL

 

Adjustments

Combined

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 $           - 

 

 $     2,780,316 

 

              - 

 $     2,780,316 

Cost of Sales

 

 

 

              - 

 

        2,105,839 

 

              - 

        2,105,839 

Gross Margin

 

 

 

              - 

 

          674,477 

 

              - 

          674,477 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

Sales and Marketing

 

 

              - 

 

            34,165 

 

              - 

            34,165 

 

General & administration

 

      176,166 

 

          298,332 

 

 

          474,498 

 

Stock based compensation

 

       35,219 

 

                   - 

 (a)

        26,219 

            61,438 

 

Foreign currency (gain) loss

 

              - 

 

(34,415)

 

              - 

(34,415)

 

Amortization

 

 

              - 

 

                   - 

 (b)

        67,977 

            67,977 

 

Deprecation

 

 

            688 

 

            48,660 

 (c)

        27,912 

            77,260 

 

Interest

 

 

 

              - 

 

            35,103 

 (d)

        55,349 

            90,452 

Total Expenses

 

 

 

      212,073 

 

          381,845 

 

      177,457 

          771,375 

 

 

 

 

 

 

 

 

 

 

 

Loss on Investment

 

 

 

              - 

 

            19,142 

 

              - 

            19,142 

 

 

 

 

 

 

 

 

 

 

 

Earnings Before Income Tax

 

 

(212,073)

 

273,489 

 

(177,457)

(116,040)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

 

              - 

 

            87,790 

 (e)

(87,790)

                   - 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings for the period

 

(212,073)

 

185,699 

 

(89,667)

(116,040)

 

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

(0.01)

 

 

 

 

(0.00)

 

Diluted

 

 

 

(0.01)

 

 

 

 

(0.00)

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

 

 

 

 

 

Basic

 

 

 

 25,960,595 

 

 

 (f)

   1,833,564 

      27,794,159 

 

Diluted

 

 

 

 27,962,024 

 

 

 (f)

   6,492,694 

      34,454,718 




Moventis Capital Inc. and PTL Electronics Ltd.

Notes to Pro Forma Unaudited Condensed Combined

Statements of Income for the

Three months ended September 30, 2006

(In US Dollars)




The following pro forma adjustments are included in the unaudited pro forma condensed statements of income:


a)

To record stock-based compensation related to options issued to executives of PTL as per the purchase agreement;


b)

To record the amortization of intangible assets acquired.  The amortization periods for the intangibles are:


-

customer list

-

5 years


c)

To record the depreciation on the write-up of FMV of production equipment acquired.  The depreciation rate is 30% declining balance.


d)

Interest rates relating to the convertible debenture and short terms loans.  Interest rate on these two instruments is 10% annually.  Interest paid is semi-annually to the debenture holders.  Interest paid on the short term loans are:


-

monthly interest and principal payments for 10 months on $650,000;

-

$75,000 plus interest to be paid in 45 days and $125,000 plus interest to be paid in 89 days.


e)

Adjustments of income tax provision to reflect the amount payable based on the combined results.


f)

The pro forma number of shares used in per share calculations reflects the weighted average of Moventis common shares for the period presented combined with shares issued to PTL shareholders.  The impact of stock options issued and the anti-dilutive effects of the convertible debenture and warrants issued to holders of short term loans.