Unaudited Pro Forma Condensed Combined Financial Information, and the Related Notes Thereto, of Super League Gaming, Inc. as of and for the Year ended December 31, 2020
Exhibit
99.3
Unaudited Pro Forma Condensed Combined Financial
Information,
and the Related Notes
Thereto, of Super League Gaming, Inc.
as of and for
the Year ended December 31,
2020
UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION
Overview
On March 9, 2021, Super League Gaming, Inc. (the
“Company” or “Super League”) entered into
an Agreement and Plan of Merger (the “Merger
Agreement”) by and among Mobcrush Streaming, Inc.
(“Mobcrush”), the Company, and SLG Merger Sub II, Inc.,
a wholly-owned subsidiary of the Company (“Merger Co”).
The Merger Agreement provides for the acquisition of Mobcrush by
the Company pursuant to the merger of Merger Co with and into
Mobcrush, with Mobcrush as the surviving corporation (the
“Merger”). Upon completion of the Merger, Mobcrush will
be a wholly-owned subsidiary of the Company.
In accordance with the terms and subject to the
conditions of the Merger Agreement: (A) each outstanding share of
Mobcrush common stock, par value $0.001 per share ("Mobcrush Common
Stock"), and Mobcrush preferred stock, par value $0.001 ("Mobcrush
Preferred Stock", and with the Mobcrush Common Stock, the "Mobcrush
Stock") (other than dissenting shares) will be canceled and
converted into the right to receive (i) 0.528 shares of the
Company's common stock, par value $0.001 per share ("Company Common
Stock"), as determined in the Merger Agreement (the “Share
Conversion Ratio”), and (ii) any cash in lieu of fractional
shares of Common Stock otherwise issuable under the Merger
Agreement (the "Merger Consideration"). Subject to certain
adjustments and other terms and conditions more specifically set
forth in the Merger Agreement, the Company will be issuing
12,582,204 shares of Company Common Stock as the Merger
Consideration.
The obligations of the Company and Mobcrush to
consummate the Merger are subject to certain closing conditions,
including, but not limited to the approval of Mobcrush's and the
Company’s shareholders.
Pro Forma Condensed Combined
Information
The following unaudited pro
forma condensed combined financial information combines the
historical financial statements of Super League and Mobcrush and
gives effect to the Merger as if the Merger had previously occurred
on the dates specified below. The pro forma adjustments
reflecting the completion of the Merger are based upon the
acquisition method of accounting in accordance with U.S. generally
accepted accounting principles ("GAAP"), and upon the assumptions
set forth in the notes to the unaudited pro forma condensed
combined financial statements.
In
accordance with the acquisition method of accounting, the actual
financial statements of Super League will reflect the Mobcrush
acquisition only from and after the actual date of acquisition.
Super League has not yet undertaken any detailed analysis of the
fair value of Mobcrush’s assets and liabilities and will not
finalize the purchase price allocation related to the Merger until
after the merger is consummated.
The unaudited pro forma condensed combined
balance sheet as of December 31, 2020, gives effect to the Merger
as if it had taken place on December 31, 2020. The unaudited pro
forma condensed combined
statements of operations for the year ended December 31, 2020,
reflect the Merger as if it had taken place on January 1,
2020.
The unaudited pro forma condensed combined
financial information, and the accompanying notes, should be read
in conjunction with the historical financial statements of the
Company as of and for the year ended December 31, 2020, which are
included in the Company’s Annual Report on Form 10-K filed
with the Securities and Exchange Commission on March 19, 2021,
including the notes thereto. The unaudited pro forma condensed
combined financial information, and the accompanying notes, should
also be read in conjunction with the historical financial
statements of Mobcrush as of and for the years ended December 31,
2020, and 2019, including the notes thereto, included elsewhere
herein.
F-1
The estimated acquisition consideration and
estimated fair value of assets acquired and liabilities assumed in
Note 2 and the preliminary pro forma adjustments in Note 3, are
based upon preliminary estimates and currently available
information. Final acquisition accounting adjustments may differ
from the preliminary pro forma adjustments presented
herein.
For purposes of the pro forma condensed combined
information, adjustments for estimated transaction and integration
costs for the Merger have been excluded. Aggregate estimated
transaction costs are expected to be approximately $900,000 and
include estimated costs associated with legal, advisory and
accounting fees of both companies. In addition, the combined
company will incur integration costs related to system and other
conversions and other integration costs. The specific details of
these integration plans will continue to be refined over the next
several quarters.
The unaudited pro forma condensed combined
financial information included herein does not give effect to any
potential cost reductions or other operating efficiencies that
could result from the Merger, including but not limited to those
associated with potential (i) reductions of corporate
overhead, (ii) eliminations of duplicate functions and
(iii) increased operational efficiencies through the adoption
of best practices and capabilities from each
company.
The unaudited pro forma condensed combined
balance sheet and statements of operations are for informational
purposes only. They do not purport to indicate the results that
would have actually been obtained had the acquisition been
completed on the assumed date or for the periods presented, or
which may be obtained in the future.
F-2
UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
As of December 31,
2020
|
|
Super
League
Gaming,
Inc.
|
Mobcrush
Successor
|
Preliminary
Pro Forma Adjustments
|
|
Pro Forma
Combined
|
|
Assets
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
|
$7,942,000
|
$1,712,000
|
$(1,712,000)
|
(A)
|
$7,942,000
|
|
Accounts receivable
|
588,000
|
1,134,000
|
|
|
1,722,000
|
|
Prepaid expenses and other current
assets
|
837,000
|
216,000
|
|
|
1,053,000
|
|
Total current
assets
|
9,367,000
|
3,062,000
|
(1,712,000)
|
|
10,717,000
|
|
Property and Equipment, net
|
138,000
|
21,000
|
44,000
|
(C)
|
203,000
|
|
Intangible and Other Assets,
net
|
1,907,000
|
2,501,000
|
3,480,000
|
(C),(E)
|
7,888,000
|
|
Goodwill
|
2,565,000
|
1,116,000
|
29,401,000
|
(C),(E)
|
33,082,000
|
|
Total
assets
|
$13,977,000
|
$6,700,000
|
$31,213,000
|
|
$51,890,000
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$1,829,000
|
$2,258,000
|
$(1,712,000)
|
(A)
|
$2,375,000
|
|
Deferred Revenue
|
-
|
180,000
|
(180,000)
|
(B)
|
-
|
|
Total current
liabilities
|
1,829,000
|
2,438,000
|
(1,892,000)
|
|
2,375,000
|
|
|
|
|
|
|
|
|
Note Payable
|
1,208,000
|
-
|
-
|
|
1,208,000
|
|
Total
liabilities
|
3,037,000
|
2,438,000
|
(1,892,000)
|
|
3,583,000
|
|
|
|
|
|
|
|
|
Stockholders’
Equity
|
|
|
|
|
|
|
Preferred stock, par value $0.001 per share;
10,000,000 shares authorized; no shares issued or
outstanding
|
|
|
|
|
|
|
Preferred Series A -
Mobcrush
|
|
3,415,000
|
(3,415,000)
|
(D)
|
-
|
|
Preferred Series A-1-
Mobcrush
|
|
4,891,000
|
(4,891,000)
|
(D)
|
-
|
|
Common stock, par value $0.001 per share;
100,000,000 shares authorized; 15,483,010 and 8,573,922 shares
issued and outstanding as of December 31, 2020 and 2019,
respectively.
|
25,000
|
-
|
13,000
|
(D)
|
38,000
|
|
Additional paid-in capital
|
115,459,000
|
66,000
|
38,841,000
|
(D),(E.1)
|
154,366,000
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
(104,544,000)
|
(4,110,000)
|
2,557,000
|
(C), (D), (E), (E.1)
|
(106,097,000)
|
|
Total stockholders’
equity
|
10,940,000
|
4,262,000
|
33,105,000
|
|
48,307,000
|
|
Total liabilities and
stockholders’ equity
|
$13,977,000
|
$6,700,000
|
$31,213,000
|
|
$51,890,000
|
F-3
UNAUDITED PRO FORMA
CONDENSEDCOMBINED STATEMENT OF OPERATIONS
For the Year Ended December
31, 2020
|
|
|
Mobcrush
|
|
|
|
|
|
|
|
Successor
|
Predecessor
|
|
|
|
|
|
Period from
May 4, 2020 to December 31, 2020
|
Period from
January 1, 2020 to May 3, 2020
|
Preliminary
Pro Forma Adjustments
|
|
Pro Forma
Combined
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$2,064,000
|
$4,457,000
|
$2,070,000
|
$-
|
|
$8,591,000
|
|
Cost of
Revenues
|
(856,000)
|
(2,967,000)
|
(1,202,000)
|
-
|
|
(5,025,000)
|
|
Gross
Profit
|
1,208,000
|
1,490,000
|
868,000
|
-
|
|
3,566,000
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
Selling, marketing and
advertising
|
5,403,000
|
1,211,000
|
1,001,000
|
-
|
|
7,615,000
|
|
Technology Platform and
Infrastructure
|
6,647,000
|
2,118,000
|
1,433,000
|
-
|
|
10,198,000
|
|
General and administrative
|
7,901,000
|
2,263,000
|
1,722,000
|
1,553,000
|
(F),(I)
|
13,439,000
|
|
Total operating
expenses
|
19,951,000
|
5,592,000
|
4,156,000
|
1,553,000
|
|
31,252,000
|
|
Net operating
loss
|
(18,743,000)
|
(4,102,000)
|
(3,288,000)
|
(1,553,000)
|
|
(27,686,000)
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Interest expense
|
(8,000)
|
|
(54,000)
|
54,000
|
(G)
|
(8,000)
|
|
Other
|
19,000
|
(8,000)
|
7,000
|
-
|
|
18,000
|
|
Total other income
(expense)
|
11,000
|
(8,000)
|
(47,000)
|
54,000
|
|
10,000
|
|
Net Loss
|
$(18,732,000)
|
$(4,110,000)
|
$(3,335,000)
|
$(1,499,000)
|
|
$(27,676,000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common
share
|
$(1.64)
|
|
|
$-
|
|
$(1.15)
|
|
Weighted-average number of shares outstanding,
basic and diluted
|
11,430,057
|
|
|
12,582,204
|
(H)
|
24,012,261
|
|
|
|
|
|
|
|
|
F-4
NOTES TO THE UNAUDITED PRO
FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Description
of Transaction and Basis of Presentation
On March 9, 2021, the Company entered into a
Merger Agreement by and among Mobcrush, the Company, and Merger Co.
The Merger Agreement provides for the acquisition of Mobcrush by
the Company pursuant to the merger of Merger Co with and into
Mobcrush, with Mobcrush as the surviving corporation. Upon
completion of the Merger, Mobcrush will be a wholly-owned
subsidiary of the Company.
In accordance with the terms and subject to the
conditions of the Merger Agreement: (A) each outstanding share of
Mobcrush Stock, (other than dissenting shares) will be canceled and
converted into the right to receive (i) 0.528 shares of the Company
Common Stock, as determined in the Merger Agreement, and (ii) any
cash in lieu of fractional shares of Company Common Stock otherwise
issuable under the Merger Agreement. Subject to certain adjustments
and other terms and conditions more specifically set forth in the
Merger Agreement, the Company will be issuing 12,582,204 shares of
Company Common Stock as the Merger
Consideration.
The obligations of the Company and Mobcrush to
consummate the Merger are subject to certain closing conditions,
including, but not limited to the approval of Mobcrush's and the
Company’s shareholders.
The accompanying unaudited pro forma condensed
combined financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and certain footnote disclosures normally
included in financial statements prepared in accordance with GAAP
have been condensed or omitted pursuant to such rules and
regulations; however, management believes that the disclosures are
adequate to make the information presented not
misleading.
The accompanying unaudited pro forma condensed
combined balance sheet as of December 31, 2020 gives effect to the
Merger as if it had taken place on December 31, 2020. The unaudited
pro forma condensed combined statement of operation for the year
ended December 31, 2020, reflects the Merger as if it had taken
place on January 1, 2020. The estimated fair values of the assets
acquired and liabilities assumed in Note 2 and the preliminary pro
forma adjustments in Note 3, are based upon preliminary estimates
and currently available information. Final acquisition method
accounting adjustments may differ from the pro forma adjustments
presented.
The pro forma adjustments include the
application of the acquisition method of accounting pursuant to ASC
Topic 805, "Business Combinations" (“ASC 805”). ASC 805
requires, among other things, that identifiable assets acquired and
liabilities assumed be recognized at their fair values as of the
acquisition date. Under the acquisition method of accounting, the
purchase consideration is allocated to the assets acquired,
including tangible assets, and identifiable intangible assets and
liabilities assumed, based on their estimated fair market values on
the date of acquisition. Any excess purchase price after the
initial allocation to identifiable net tangible and identifiable
intangible assets is assigned to goodwill. Amounts attributable to
intangible assets other than goodwill are amortized using the
straight-line method over the estimated economic useful life of the
underlying intangible asset. Fair value measurements can be highly
subjective, and it is possible that other professionals, applying
reasonable judgment to the same facts and circumstances, could
develop and support a range of alternative estimated
amounts.
The historical consolidated financial data has
been adjusted to give effect to pro forma events that are (1)
directly attributable to the Merger, (2) factually supportable, and
(3) with respect to the statements of operations, expected to have
a continuing impact on the combined results. The pro forma
adjustments are preliminary and based on management’s
preliminary estimates of the fair value and useful lives of the
assets acquired and liabilities assumed and have been prepared to
illustrate the estimated effect of the acquisition and certain
other adjustments.
2. Merger
Consideration and Estimated Fair Value of Assets Acquired and
Liabilities Assumed
The following preliminary allocation of the
Merger Consideration is based on the Company’s preliminary
estimates of the fair value of the tangible and intangible assets
and liabilities of Mobcrush as of December 31, 2020. The final
determination of the allocation of the purchase price will be based
on the fair value of such assets and liabilities as of the actual
consummation date of the acquisition and will be completed after
the acquisition is consummated. Such final determination of the
purchase price allocation may be different than the preliminary
estimates used in these pro forma condensed combined financial
statements.
F-5
Merger
Consideration. As described above, the Merger Consideration
is primarily comprised of 12,582,204 shares of Company Common
Stock. A preliminary estimate of the purchase consideration,
assuming the transaction closed on January 29, 2021, is as follows
(rounded to nearest thousandth, except share and per share
information):
|
Number of shares of Super League common
stock
|
12,582,204
|
|
|
Super League closing stock price - January 29,
2021
|
$3.07
|
|
|
Total estimated purchase price Fair value of
shares of Super League common stock
|
$38,627,000
|
|
For pro forma purposes, the
fair value of the Company Common Stock used in determining the
estimated Merger Consideration was $3.07 per share based on the
closing price of Company Common Stock on January 29,
2021.
The final Merger Consideration could
significantly differ from the amounts presented in the unaudited
pro forma condensed combined financial information due to changes
in Company Common Stock price as of the actual closing date of the
Merger. A sensitivity analysis related to the fluctuation in the
Company Common Stock price was performed to assess the impact that
a hypothetical change of 20% on the closing price of Company Common
Stock on January 29, 2021 would have on the equity component of the
estimated Merger Consideration and estimated goodwill as of the
closing date, as follows:
|
Change in Stock
Price:
|
Stock
Price
|
Equity
Component of Merger Consideration
|
Estimated
Goodwill
|
|
Increase 20%
|
$3.68
|
$46,303,000
|
$38,243,000
|
|
Decrease 20%
|
$2.46
|
$30,952,000
|
$22,792,000
|
As of April 30,
2021, the Company’s Common Stock closing price was
$5.38.
F-6
Estimated Fair
Value of Assets Acquired and Liabilities Assumed. Other than as described above
relating to the equity component of the Merger Consideration, the
unaudited pro forma condensed combined balance sheet as of December
31, 2020 gives pro forma effect to the Merger as if it was
completed on December 31, 2020. The estimated preliminary purchase
price of Mobcrush is allocated to the assets to be acquired and
liabilities to be assumed, based on the following preliminary basis
as of December 31, 2020:
|
|
Amount
|
|
Assets Acquired and
Liabilities Assumed:
|
|
|
Fair value of net tangible assets
acquired
|
$840,000
|
|
Intangible assets acquired -
patents
|
7,270,000
|
|
Goodwill
|
30,517,000
|
|
Total
|
$38,627,000
|
Management is primarily responsible for
determining the fair value of the tangible and identifiable
intangible assets acquired and liabilities assumed as of the
acquisition date. For the final analysis, management anticipates
considering a number of factors, including reference to an
independent analysis of estimated fair values solely for the
purpose of allocating the purchase price, which is not yet
complete. The preliminary estimates are subject to revision as more
detailed analysis is completed and additional information on the
fair values of the assets and liabilities acquired as of the
acquisition date becomes available. Any change in the estimated
fair value of the net assets acquired will change the amount of the
Merger Consideration allocable to tangible and intangible assets
acquired, and to goodwill, if any. Final acquisition method
accounting adjustments may therefore differ materially from the
proforma adjustments presented herein.
Immediately
prior to the effective time of the Merger, each vested option to
acquire shares of Mobcrush common stock will be exercised so that,
at the effective time of the Merger, shares of Mobcrush common
stock issued upon exercise of these vested options will receive
shares of Super League common stock issuable as Merger
Consideration. Unvested options to acquire shares of Mobcrush
common stock that are outstanding immediately prior to the
effective time shall be canceled, and a number of options to
purchase shares of Super League common stock will be issued to
replace the cancelled options in a manner consistent with options
currently granted by Super League under the 2014 Plan (the
“Replacement
Options”). The total number of Replacement Options to
be issued to assumed Mobcrush employees upon closing of the Merger
is estimated to be approximately 500,000 stock options.
The actual amount of Replacement
Options issued has not yet been determined and may differ
materially from the preliminary estimate provided
herein.
The Merger will be treated for tax purposes as a
nontaxable transaction and, as such, the historical tax bases of
the acquired assets and assumed liabilities, net operating losses,
and other tax attributes of Mobcrush will carryover. As a result,
no new tax goodwill will be created in connection with the Merger
as there is no step-up to fair value of the underlying tax bases of
the acquired net assets. The acquisition method of accounting
includes the establishment of a net deferred tax asset or liability
resulting from book tax basis differences related to assets
acquired and liabilities assumed on the date of acquisition.
Acquisition date deferred tax assets primarily relate to certain
net operating loss carryforwards of Mobcrush. Acquisition date
deferred tax liabilities related to specifically identified
non-goodwill intangibles resulting from the acquisition. For
purposes of the pro forma condensed combined financial information,
the estimated net deferred tax liability would be offset by the
Company’s existing net deferred tax assets, against which the
Company recorded a full valuation allowance as of December 31,
2020.
3.
Adjustments to Unaudited Pro Forma Condensed Combined Financial
Statements
The following
is a discussion of the adjustments made in connection with the
preparation of the unaudited pro forma condensed combined financial
statements. Each of these adjustments is based on a preliminary
assessment of currently available information, including
preliminary estimates of the fair values of Mobcrush's assets and
liabilities and estimated periodic amortization of such adjustments
to the extent applicable, and other preliminary estimates, as
described above. Actual adjustments will be made when the final
estimate of the fair value of Mobcrush's assets and liabilities on
the acquisition date is determined. Accordingly, the actual
adjustments to Mobcrush’s assets and liabilities and the
related amortization of such adjustments, and other estimates, may
differ materially from the estimates reflected in the unaudited pro
forma condensed combined financial statements contained
herein.
The accompanying unaudited pro forma combined
balance sheet gives effect to the Merger as if it had taken place
on December 31, 2020. The column entitled "Mobcrush Successor" on
the unaudited pro forma combined balance sheet reflects the
historical unaudited balance sheet of Mobcrush as of December 31,
2020. The unaudited pro forma combined statements of operations for
the year ended December 31, 2020, reflect the Merger as if it had
taken place on January 1, 2020. The columns entitled "Mobcrush
Successor" and “Mobcrush Predecessor” on the unaudited
pro forma condensed combined statements of operations reflects the
historical unaudited operating results of Mobcrush for the
applicable periods presented.
F-7
Unaudited Pro Forma Condensed
Combined Balance Sheet
The unaudited pro forma condensed combined
balance sheet also give effect to the following pro forma
adjustments:
(A)
To reflect the acquisition of Mobcrush’s
net liabilities at closing, pursuant to the terms of the Merger
Agreement. The adjustment contemplates that Mobcrush will use
existing cash to extinguish the applicable portion of liabilities
as of the proforma balance sheet date.
(B)
To reflect the estimated fair value of deferred
revenues in connection with the application of the acquisition
method of accounting.
(C)
To reflect the preliminary estimated fair value
of identifiable assets acquired and liabilities assumed. Intangible
assets are amortized over the estimated economic useful lives of
the underlying identifiable intangible assets, estimated as
described below, for purposes of the pro forma condensed combine
income statements included herein. Also reflects teh reversal of
fiscal 2020 depreciation and amortization expense for Mobcrush
pre-merger fixed assets and intangibles, totaling
$29,000.
(D)
To reflect the transfer of the Merger
Consideration as described above, primarily consisting of the
issuance of 12,582,204 shares of Company Common Stock to the
selling shareholders of Mobcrush, pursuant to the terms of the
Merger Agreement. Also includes pro forma adjustments to eliminate
the net equity of Mobcrush in connection with the application of
the acquisition method of accounting.
(E)
To reflect the reversal of Mobcrush’s
pre-merger existing intangibles and goodwill as of December 31,
2020, in connection with the application of acquisition method of
accounting. Also reflects the recording of estimated pro forma
amortization of identifiable intangibles acquired in connection
with the Merger totaling $1,289,000 for the period
presented.
(E.1)
To record in
additional paid-in capital and accumulated deficit, estimated
annual noncash stock compensation expense, totaling $293,000, in
connection with the issuance of an estimated 500,000 Replacement
Stock Options by Super League to certain Mobcrush employees assumed
in connection with the Merger, estimated using a Black-Scholes
calculation, based on an estimated stock price of $3.07. The actual
amount of Replacement Options to be issued has not yet been
determined and may differ materially from the preliminary estimate
provided herein.
F-8
Unaudited Pro Forma Condensed
Combined Income Statement
The unaudited pro forma condensed combined
income statement also give effect to the following pro forma
adjustments:
(F)
To reflect amortization of the estimated
intangible assets acquired on a straight-line basis over the
estimated economic useful life of the respective assets. The
preliminary allocation of Merger Consideration to the intangible
assets acquired and the related estimated useful lives was as
follows:
|
Description
|
Amount
|
Estimated
Useful Life (years)
|
Amortization
Expense per Year
|
|
Developed Technology
|
$2,500,000
|
5
|
$500,000
|
|
Influencers/Content Creators
|
1,800,000
|
5
|
360,000
|
|
Advertiser and Agency
Relationships
|
1,540,000
|
10
|
154,000
|
|
Trademarks
|
1,000,000
|
5
|
200,000
|
|
Other
|
466,000
|
5-7
|
75,000
|
|
|
$7,306,000
|
|
$1,289,000
|
Also reflects the reversal of fiscal 2020
depreciation and amortization expense for Mobcrush pre-merger fixed
assets and intangibles, totaling $29,000.
(G)
To exclude interest expense related to a
convertible promissory note to a minority stockholder of Mobcrush,
issued in December 2019, totaling $3,115,000, bearing interest at
5% compounded annually, with an original maturity of the earlier of
January 31, 2020, or the closing of the next equity financing. In
May 2020, the note holder became the majority stockholder of
Mobcrush Streaming, Inc. and assigned the note to that company. On
May 4, 2020, in connection with Mobcrush Streaming, Inc.’s
purchase of the assets of Mobcrush, Inc., the note plus accrued
interest balance of $3,181,000 was forgiven. This loan forgiveness
was considered part of the May 4, 2020 purchase price
consideration. There is no debt outstanding as of December 31,
2020. As such, the interest expense related to the promissory note
has been excluded from the accompanying unaudited pro forma
combined statements of operations for the periods
presented.
(H)
The denominator in computing pro forma earnings
(loss) per share includes only those common shares to be issued as
Merger Consideration in connection with the Merger on a pro forma
basis, totaling 12,582,204 shares.
(I)
To
record
estimated annual noncash stock compensation expense, totaling
$293,000, in connection with the issuance of an estimated 500,000
Replacement Stock Options by Super League to certain Mobcrush
employees assumed in connection with the Merger, estimated using a
Black-Scholes calculation, based on an estimated stock price of
$3.07. The actual amount of Replacement Options to be issued has
not yet been determined and may differ materially from the
preliminary estimate provided
herein.
F-9
