EXHIBIT 99.3
GlobalNet Financial.com, Inc.
Pro Forma Financial Data (Unaudited)
The following pro forma unaudited condensed consolidated financial statements
present the pro forma financial position at June 30, 2000 for GlobalNet
Financial.com, Inc. ("GlobalNet") and for Dalton Kent Securities Group, Inc.
("Dalton Kent"), and the pro forma results of operations for the six months
ended June 30, 2000, along with the pro forma results of operations for the year
ended December 31, 1999. These pro forma financial statements give effect to the
acquisition as if such acquisition of Dalton Kent by GlobalNet had occurred at
the beginning of each period for purposes of the condensed consolidated
statements of operations and as if such acquisition had occurred at the end of
the period for purposes of the condensed consolidated balance sheet.
The pro forma unaudited condensed consolidated financial statements do not
purport to represent what GlobalNet's actual results of operations would have
been had the acquisition occurred at the beginning of the periods and may not be
indicative of GlobalNet's financial position or operating results for any future
periods.
The pro forma adjustments are based upon currently available information. The
assumptions underlying the calculation of the pro forma adjustments are
considered appropriate under the circumstances. These pro forma unaudited
condensed consolidated financial statements should be read in conjunction with
GlobalNet's Consolidated Financial Statements and the Notes thereto for the year
ended December 31, 1999, and for the six months ended June 30, 2000 along with
Management's Discussion and Analysis of Operations, which are included in
GlobalNet's Form 10-KSB covering such year and for the six months ended June 30,
2000 and Form 10-QSB covering such six month period, respectively.
On August 1, 2000, GlobalNet Financial.com, Inc., a Delaware corporation
("GlobalNet"), acquired 100% of the outstanding common stock of Dalton Kent
Securities Group, Inc., a New York corporation ("Dalton Kent"), a full service
broker dealer offering stocks, bonds, options and mutual funds to United States
(U.S.) and non-U.S. investors. As consideration, the Company issued to the
eleven stockholders of Dalton Kent an aggregate of 1.45 million common shares
having a fair market value at the time of issuance of $14.00 per share or an
aggregate value of $20.3 million. The consideration was the product of arms
length negotiations and was based on the prior operating history of Dalton Kent
and its prospectus when integrated into the operating and business model of the
Company.
<PAGE>
GLOBALNETFINANCIAL.COM, INC.
PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET (UNAUDITED)
June 30, 2000
<TABLE>
<CAPTION>
Historical Historical
GlobalNet Dalton Kent Pro Forma Adjusted
June 30, 2000 June 30, 2000 Adjustments Pro Forma
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Current Assets
Cash & equivalents, including short term cash investments $ 58,948,090 $ 902,118 $ 59,850,208
Accounts receivable 1,179,477 1,179,477
Due from broker 777,392 777,392
Securities - marketable and not readily marketable 12,871,046 642,692 13,513,738
Prepaid expenses and other current assets 1,687,022 228,492 1,915,514
------------- ------------- ------------- -------------
TOTAL CURRENT ASSETS 74,685,635 2,550,694 77,236,329
Equity in unconsolidated companies 53,709,703 53,709,703
Investments and other assets 1,171,715 87,100 1,258,815
Licensing and promotion agreements, net 2,249,318 2,249,318
Furniture, fixtures and equipment, net 2,603,626 130,058 2,733,684
Goodwill, net 14,589,282 $ 18,393,210 B 32,982,492
------------- ------------- ------------- -------------
TOTAL ASSETS $ 149,009,279 $ 2,767,852 $ 18,393,210 $ 170,170,341
============= ============= ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities
Accounts payable and accrued expenses $ 3,420,600 $ 661,062 $ 200,000 $ 4,281,662
------------- ------------- ------------- -------------
Long term liability 772,666 772,666
Minority interest 2,606,001 1,166,813 D 3,772,814
Stockholders' equity:
Common Stock 14,732 103 (103) C 16,182
1,450 A
Class A Common Stock 34,225 34,225
Additional paid in capital 206,719,917 533,406 (533,406) C 227,018,467
20,298,550 A
Accumulated deficit (46,447,693) 1,573,281 (1,573,281) C (47,614,506)
(1,166,813) D
Unearned compensatory and licensing costs (9,980,004) (9,980,004)
Accumulated other comprehensive loss (8,008,207) (8,008,207)
Subscriptions receivable (92,958) (92,958)
Treasury Stock (30,000) (30,000)
------------- ------------- ------------- -------------
Total stockholders' equity 142,210,012 2,106,790 17,026,397 161,343,199
------------- ------------- ------------- -------------
TOTAL $ 149,009,279 $ 2,767,852 $ 18,393,210 $ 170,170,341
============= ============= ============= =============
</TABLE>
<PAGE>
GLOBALNETFINANCIAL.COM, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
Six months ended June 30, 2000
<TABLE>
<CAPTION>
Historical Historical
GlobalNet Dalton Kent
For the For the
six months ended six months ended Pro Forma Adjusted
June 30, 2000 June 30, 2000 Adjustments Pro Forma
---------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C>
Advertising $ 466,607 $ 466,607
Private placement fees 264,800 264,800
Commission income 562,851 $ 10,063,859 10,626,710
Net gain on broker principal transactions 5,413,248 5,413,248
Broker interest and dividend income 333,030 333,030
Subscription revenue 262,211 262,211
Other revenue 69,202 69,202
------------ ------------ ------------ ------------
Total Operating Revenue 1,625,671 15,810,137 -- 17,435,808
Operating expenses:
Cost of advertising revenue 225,574 225,574
Commission 219,829 8,955,739 9,175,568
General and administrative expenses 16,071,831 5,359,843 21,431,674
Non-cash compensatory and licensing expenses 5,694,797 $ 1,166,813 B 6,861,610
Depreciation and amortization 2,105,107 33,666 942,704 A 3,081,477
------------ ------------ ------------ ------------
Total Operating Expenses 24,317,138 14,349,248 2,109,517 40,775,903
------------ ------------ ------------ ------------
Operating (Loss) Income before other
income/expense (22,691,467) 1,460,889 (2,109,517) (23,340,095)
Other income (expense):
Interest income 1,750,964 1,750,964
Net realized and unrealized gains (losses)
on marketable and not readily marketable
securities (608,517) (608,517)
Equity in losses of unconsolidated
companies and joint ventures (275,518) (275,518)
Minority interest in losses of consolidated
subsidiaries 34,223 34,223
------------ ------------ ------------ ------------
Total 901,152 -- -- 901,152
------------ ------------ ------------ ------------
Net (Loss) Income $(21,790,315) $ 1,460,889 $ (2,109,517) $(22,438,943)
============ ============ ============ ============
Basic and diluted loss per share $ (1.29) $ (1.22)
============ ============
Weighted Average common shares outstanding-
basis and diluted 16,898,930 1,450,000 18,348,930
============ ============ ============
</TABLE>
<PAGE>
GLOBALNETFINANCIAL.COM, INC.
PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Historical Historical
GlobalNet Dalton Kent
For the For the
year ended year ended
December 31, December 31, Pro Forma Adjusted
1999 1999 Adjustments Pro Forma
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Advertising $ 390,907 $ 390,907
Private placement fees 489,482 489,482
Commission income 481,744 $ 22,391,494 22,873,238
Net gain on broker principal transactions 7,698,020 7,698,020
Broker interest and dividend income 531,745 531,745
Other revenue 51,681 444,102 495,783
------------ ------------ ------------ ------------
Total Operating Revenue 1,413,814 31,065,361 -- 32,479,175
Operating expenses:
Cost of advertising revenue 239,270 239,270
Commission 217,000 17,574,664 17,791,664
General and administrative expenses 12,194,882 9,032,011 21,226,893
Non-cash compensatory and licensing expenses 7,814,287 $ 1,166,813 B 8,981,100
Depreciation and amortization 1,398,976 66,029 1,925,623 A 3,390,628
------------ ------------ ------------ ------------
Total Operating Expenses 21,864,415 26,672,704 3,092,436 51,629,555
------------ ------------ ------------ ------------
Operating (Loss) Income before other
income/expense (20,450,601) 4,392,657 (3,092,436) (19,150,380)
Other Income Expense:
Interest income, net 535,581 535,581
Net realized and unrealized gains (losses)
on marketable and not readily marketable
securities 1,421,194 1,421,194
Equity in earnings of unconsolidated
companies and joint ventures 80,737 80,737
Minority interest in losses of consolidated
subsidiaries 53,832 53,832
------------ ------------ ------------ ------------
Total 2,091,344 -- -- 2,091,344
------------ ------------ ------------ ------------
(Loss) Income before income taxes (18,359,257) 4,392,657 (3,092,436) (17,059,036)
Income taxes (benefit) 181,222 (181,222) C --
------------ ------------ ------------ ------------
Net (Loss) Income $(18,359,257) $ 4,211,435 $ (2,911,214) $(17,059,036)
============ ============ ============ ============
Basic and diluted loss per share $ (1.79) $ (1.46)
============ ============
Weighted Average common shares outstanding-
basis and diluted 10,232,538 1,450,000 11,682,538
============ ============ ============
</TABLE>
<PAGE>
GlobalNet Financial.com
Notes to Pro Forma Financial Statements (Unaudited)
Note A- Pro Forma Adjustments
On August 1, 2000, GlobalNet Financial.com, Inc. ("GlobalNet") acquired 100% of
the outstanding common stock of Dalton Kent Securities Group, Inc. ("Dalton
Kent"), and transferred its investment in Dalton Kent to a 94.2% subsidiary of
GlobalNet for 1,000,000 shares of preferred stock. The remaining 5.8% of the
subsidiary is owned by certain officers and Directors of GlobalNet. The
acquisition was accounted for under the purchase method. The purchase price of
$20.5 million was primarily allocated based on estimated fair values of tangible
assets acquired and liabilities assumed. The excess of purchase price over the
fair value of the net assets, approximately $18.9 million, has been recorded as
goodwill and will be amortized on a straight-line basis over 10 years.
Pursuant to the business combination, GlobalNet issued 1,450,000 shares of its
Common Stock valued at fair market value of $14.00 per share, with an
aggregating value of $20.3 million.
The pro forma condensed consolidated balance sheet at June 30, 2000 and the
related pro forma condensed consolidated statement of operations for the six
months then ended, as well as the pro forma condensed consolidated statements of
income for the year ended December 31, 1999 reflect the acquisition as if it had
occurred at the beginning of the period for purposes of the condensed
consolidated statements of operations and as if such acquisition had occurred at
the end of the period for purposes of the condensed consolidated balance sheet.
The pro forma adjustments are described below:
CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 30, 2000
A. To reflect the issuance of 1,450,000 shares of GlobalNet Common Stock
valued at $20.3 million.
B. To record a preliminary allocation of the excess purchase price over
the fair value of the assets acquired and liabilities assumed.
C. To eliminate Dalton Kent's equity accounts.
D. To record non-cash compensation representing minority interest in
Dalton Kent through a transfer of ownership to a majority owned
subsidiary of GlobalNet.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000
AND THE YEAR ENDED DECEMBER 31, 1999
A. To recognize incremental amortization of goodwill from a preliminary
allocation of purchase price.
B. To record non-cash compensation representing minority interest in
Dalton Kent through a transfer of ownership to a majority owned
subsidiary of GlobalNet.
C. To reverse tax expense of Dalton Kent utilization of GlobalNet's net
operating loss carryovers.
