Exhibit 99.3
PRO FORMA FINANCIAL DATA
Introduction
The following financial data is based upon the historical
financial statements of Tanner's Restaurant Group Inc. ("Tanners" or
the "Company") and has been prepared to illustrate the effects on such
historical data of the acquisition of Fone.com, Limited ("Fone") from
DCI Telecommunications, Inc. ("DCI"). The unaudited pro forma
consolidated balance sheet as of March 31, 2000 and unaudited pro
forma consolidated income statements for the 52 weeks ended December
31, 1999 (Tanners), June 1999 (inception) through March 31, 2000
(Fone), period April 16, 2000 (Tanners) and quarter ended March 31,
2000 (Fone) gives effect to the Fone acquisition as if such
transaction had been completed on March 31, 2000.
Effective May 31, 2000, (closing date June 2, 2000), Tanners
acquired all of the common stock of Fone in exchange for 40,000,000
shares of Tanners and the assumption of $3,453,652 of debt of DCI. The
acquisition has been accounted for as a reverse acquisition under the
purchase method for business combinations. Accordingly, the
combination of the two companies is recorded as a recapitalization of
Fone.com, Limited pursuant to which Fone.com, Limited is treated as
the continuing entity.
The pro forma financial data is provided for comparative purposes
only and does not purport to represent the actual financial position
of the Company that actually would have been obtained if the Fone
acquisition had been consummated on the date specified.
The pro forma financial data are based on certain assumptions and
adjustments described in the notes thereto and should be read in
conjunction therewith.
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<TABLE>
<CAPTION>
Unaudited Pro Forma Consolidated Balance Sheet
Historical Pro Forma
----------------------------- ---------------------------
Tanner's Fone.Com
---------- ----------
April 16, March 31,
2000 2000 Adjustments As Adjusted
---------- ---------- ----------- -----------
ASSETS
------
Current assets:
<S> <C> <C> <C> <C>
Cash $ 527 $ 1,577 $ 900,000 $ 902,104
Accounts Receivable -- 31,934 31,934
Notes receivable 20,483 -- 20,483
Inventory -- -- --
Property and equipment held for sale 88,018 -- 88,018
Prepaid expenses and other
current assets 105,661 -- 105,661
----------- ------------ ------------- ------------
Total current assets 214,689 33,511 900,000 1,148,200
----------- ------------ ------------- ------------
$ 214,689 $ 33,511 $ 900,000 $ 1,148,200
=========== ============ ============= ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 871,152 $ 119,005 $ 990,157
Accrued expenses 531,227 23,814 555,041
Current portion long term debt 2,755,439 -- 2,755,439
----------- ------------- ------------
4,157,818 142,819 4,300,637
Long term liability:
DCI Telecommunications -- 150,800 $ (150,800) --
Convertible debentures -- -- 4,553,652 4,553,652
------------ ------------- ------------- ------------
-- 150,800 4,402,852 4,553,652
Stockholders' deficit
Preferred stock 1,215,086 -- 1,215,086
Common stock, $.01 par value, 200 million
shares authorized, 11,625,557 issued
and outstanding (actual) 51,625,557
shares issued (as adjusted) 116,256 3 399,997 516,256
Additional paid - in capital 9,087,710 -- (18,265,030) (9,177,320)
Accumulated deficit (14,362,181) (262,525) 14,362,181 (262,525)
Accumulated other comprehensive gain -- 2,414 -- 2,414
------------ ------------- ------------- ------------
Total stockholders' deficit (3,943,129) (260,108) (3,502,852) (7,706,089)
------------ ------------- ------------- ------------
$ 214,689 $ 33,511 $ 900,000 $ 1,148,200
=========== ============= ============= ============
See notes to pro forma consolidated financial statements
</TABLE>
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<TABLE>
<CAPTION>
Unaudited Pro Forma Consolidated Statements of Operations
Historical Pro Forma
------------------------------- ----------------------------
Tanner's Fone.Com Adjustments As Adjusted
-------------------------------- ------------ -----------
Period ended
--------------------------------
(December 27,
1999 through
April 16, (March 31,
2000) 2000)
------------- -------------
<S> <C> <C> <C> <C>
Revenues $ -- $ 13,403 $ 13,403
Costs and expenses -- 22,139 22,139
----------- --------------- -----------
Gross Profit -- (8,736) (8,736)
Selling, general and administrative 50,000 121,181 171,181
----------- --------------- -----------
Operating loss (50,000) (129,917) (179,917)
Other income (expenses)
Interest expense -- -- $ (1,583,189) (1,583,189)
----------- --------------- ------------- -----------
-- -- $ (1,583,189) (1,583,189)
----------- --------------- ------------- -----------
Net loss from continuing
operations $ (50,000) $ (129,917) $ (1,583,189) $(1,763,106)
=========== =============== ============= ===========
See notes to pro forma consolidated financial statements
</TABLE>
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
A. The following unaudited pro forma adjustments are included in the unaudited
pro forma balance sheet at March 31, 2000:
1. To record the acquisition of Fone from DCI by Tanners.
2. Effective May 31, 2000, (closing date June 2, 2000), Tanners acquired all of
the common stock of Fone in exchange for 40,000,000 shares of Tanners and the
assumption of $3,453,652 of debt of DCI. The acquisition has been accounted for
as a reverse acquisition under the purchase method for business combinations.
Accordingly, the combination of the two companies is recorded as a
recapitalization of Fone.com, Limited pursuant to which Fone.com, Limited is
treated as the continuing entity.
3. On June 7, 2000, Tanners received a net investment of $900,000 in exchange
for 6% secured convertible debentures ("debentures"). Tanners issued debentures
in an aggregate principal amount of $4,553,652, of which $4,353,652 were issued
to Sherman, LLC ("Sherman") and $200,000 were issued to Triton Private Equities
Fund, LP ("Triton"). The debentures issued to Triton were issued to refinance
existing indebtedness owed to Triton. The debentures issued to Sherman were
issued in exchange for an investment of $900,000 by Sherman, the payment of
$200,000 of Tanners existing indebtedness by Sherman, and to refinance another
$3,653,652 of existing indebtedness owed by Tanners.
4. The debentures issued to Sherman and Triton entitle the holder to convert all
or a portion of the debentures into shares of Tanners common stock, at a
conversion price which is the lower of $.75 per share or a variable conversion
price of seventy - five (75%) of the average of the five lowest closing prices
of stock during the twenty preceding trading days immediately prior to the date
of conversion. In addition, the conversion price of Tanners common stock is
reduced by a further 10% discount if, before October 5, 2000, Tanners sells
common stock without consent of each of the holders of the debenture at a price
that is lower than either the market price of the common stock on June 7, 2000
or $.75 per share. The maximum number of shares of common stock into which the
holder of the debenture may convert is capped at 4.9% of the total number of
outstanding shares of common stock, as determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended. The holder of the
debenture may convert into additional shares of common stock only to the extent
that previously converted shares are sold in the open market, so that the amount
beneficially owned by that holder never exceeds 4.9%. The debentures are secured
by all of the assets and property of Tanners, including a pledge of all
outstanding shares of Fone. In addition, Tanners has agreed to file a
registration statement with the SEC within 150 days of June 7, 2000 covering
resale of the common stock issuable upon conversion of debentures.
B. The following unaudited pro forma adjustments are included in the unaudited
pro forma statements of operations for the 52 weeks ended December 31, 1999
(Tanners), June 1999 (inception) through March 31, 2000 (Fone), period ended
April 16, 2000 (Tanners) and quarter ended March 31, 2000 (Fone):
1. To accrue interest expense of 6% and record the beneficial conversion feature
on the convertible debentures.
