Attached files
| file | filename |
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| 8-K - NATIONAL COAL CORP | fm8k-042010.htm |
| EX-99.1 - NATIONAL COAL CORP | exh99-1b.htm |
Exhibit
99.2
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The accompanying unaudited pro forma
condensed consolidated financial information as of and for the year ended
December 31, 2009 has been prepared from the audited consolidated financial
statements of National Coal Corp., a Florida corporation (the “Company”), as of
and for the year ended December 31, 2009.
The Company completed the sale of its
preparation plant and rail loadout facility located in Devonia, Tennessee, an
active underground mine, certain idle mines, and related assets used in and
located at our New River Tract operations on April 20, 2010 to Ranger Energy
Investments, LLC (“Ranger
Energy”) for $11.8 million. Ranger Energy also paid the Company $1.9
million in cash which was previously pledged to secure
reclamation bonds and other liabilities associated with the New River Tract
operation. Additionally, the Company entered into a lease agreement
whereby Ranger Energy is leasing mineral rights on approximately 22,000 acres of
the New River Tract. As a part of the asset sale, Ranger Energy assumed a
coal supply agreement for which the Company will receive an overriding
royalty and certain reclamation liabilities related to the assets sold.
The unaudited pro forma condensed consolidated financial information has been
prepared on a basis to reflect the transaction as if such transaction occurred
as of January 1, 2009 for the statement of operations and at December 31, 2009
for the balance sheet.
The unaudited pro forma condensed
consolidated financial information is presented for informational purposes only
and should not be considered indicative of actual results that would have been
achieved had the sale been completed as of the dates indicated and does not
purport to project the financial condition or results of operations and cash
flows for any future date or period.
The accompanying unaudited pro forma
condensed consolidated financial information should be read in conjunction
with the Company’s consolidated financial statements as of and for the year
ended December 31, 2009, including the notes thereto, included in the Company’s
Form 10-K for the year ended December 31, 2009.
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National
Coal Corp.
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Unaudited
Pro Forma Condensed Consolidated Balance Sheet
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December
31, 2009
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Historical
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Pro
Forma
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National
Coal Corp.
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Adjustments
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As
Adjusted
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Assets
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Current
Assets:
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Cash
and cash equivalents
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$ | 1,185,725 | $ | 12,181,570 |
(a)
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$ | 13,367,295 | ||||||
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Accounts
receivable, net
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366,680 | - | 366,680 | ||||||||||
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Inventory
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1,403,972 | (347,344 | ) |
(b)
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1,056,628 | ||||||||
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Prepaid
and other current assets
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1,550,919 | (568,385 | ) |
(b)
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982,534 | ||||||||
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Total
Current Assets
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4,507,296 | 11,265,841 | 15,773,137 | ||||||||||
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Property,
plant, equipment and mine development, net
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40,298,450 | (11,295,147 | ) |
(b)
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29,003,303 | ||||||||
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Deferred
financing costs
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890,048 | - | 890,048 | ||||||||||
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Restricted
cash
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6,211,637 | (1,897,250 | ) |
(a)
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4,314,387 | ||||||||
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Other
non-current assets
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906,097 | - | 906,097 | ||||||||||
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Total
Assets
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$ | 52,813,528 | $ | (1,926,556 | ) | $ | 50,886,972 | ||||||
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Liabilities
and Stockholders' Deficit
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Current
Liabilities:
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Accounts
payable
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$ | 11,551,663 | $ | (2,097,857 | ) |
(a)
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$ | 9,453,806 | |||||
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Accrued
expenses
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1,065,355 | - | 1,065,355 | ||||||||||
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Borrowings
under short-term line of credit
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3,000,000 | (3,000,000 | ) |
(a)
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- | ||||||||
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Current
maturities of long - term debt
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42,372,933 | (10,595 | ) |
(a)
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42,362,338 | ||||||||
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Current
installments of obligations under capital leases
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1,237,358 | (1,092,251 | ) |
(a)
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145,107 | ||||||||
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Current
portion of asset retirement obligations
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98,528 | - | 98,528 | ||||||||||
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Total
Current Liabilities
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59,325,837 | (6,200,703 | ) | 53,125,134 | |||||||||
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Long
- term debt, less current maturities, net of discount
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270,291 | (7,484 | ) |
(a)
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262,807 | ||||||||
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Obligations
under capital leases, less current installments
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140,958 | - | 140,958 | ||||||||||
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Asset
retirement obligations, less current portion
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3,790,212 | (467,274 | ) |
(b)
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3,322,938 | ||||||||
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Deferred
revenue
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1,000,000 | - | 1,000,000 | ||||||||||
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Other
non-current liabilities
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589,139 | - | 589,139 | ||||||||||
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Total
Liabilities
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65,116,437 | (6,675,461 | ) | 58,440,976 | |||||||||
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Stockholders'
Deficit:
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Common
Stock, $.0001 par value; 80 million shares authorized;
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34,313,889
shares issued and outstanding at December 31, 2009
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3,431 | - | 3,431 | ||||||||||
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Additional
paid - in capital
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116,191,838 | - | 116,191,838 | ||||||||||
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Accumulated
deficit
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(128,498,178 | ) | 154,443 |
(a)
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(123,749,273 | ) | |||||||
| 4,594,462 |
(c)
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Total
Stockholders' Deficit
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(12,302,909 | ) | 4,748,905 | (7,554,004 | ) | ||||||||
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Total
Liabilities and Stockholders' Deficit
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$ | 52,813,528 | $ | (1,926,556 | ) | $ | 50,886,972 | ||||||
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See
accompanying notes.
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2
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National
Coal Corp.
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Unaudited
Pro Forma Condensed Consolidated Statement of Operations
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For
the Year Ended December 31, 2009
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Historical
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Pro
Forma
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National
Coal Corp.
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Adjustments
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As
Adjusted
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Revenues:
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Coal
sales
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$ | 85,598,350 | $ | (33,709,463 | ) |
(d)
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$ | 51,888,887 | |||||
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Other
revenues
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2,437,132 | 2,750,581 |
(e)
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5,187,713 | |||||||||
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Total
revenues
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88,035,482 | (30,958,882 | ) | 57,076,600 | |||||||||
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Operating
expenses:
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Cost
of coal sales (exclusive of depreciation, depletion, amortization and
accretion)
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80,323,782 | (27,710,915 | ) |
(f)
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52,612,867 | ||||||||
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Cost
of services
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2,325,490 | - | 2,325,490 | ||||||||||
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Depreciation,
depletion, amortization and accretion
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9,925,328 | (4,749,748 | ) |
(g)
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5,175,580 | ||||||||
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General
and administrative
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6,636,346 | (90,016 | ) |
(h)
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6,546,330 | ||||||||
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Total
operating expenses
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99,210,946 | (32,550,679 | ) | 66,660,267 | |||||||||
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Loss
from continuing operations
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(11,175,464 | ) | 1,591,797 | (9,583,667 | ) | ||||||||
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Other
income (expense):
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Interest
expense
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(6,879,517 | ) | 1,028,687 |
(i)
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(5,850,830 | ) | |||||||
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Interest
income
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170,086 | - | 170,086 | ||||||||||
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Other
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155,504 | - | 155,504 | ||||||||||
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Other
income (expense)
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(6,553,927 | ) | 1,028,687 | (5,525,240 | ) | ||||||||
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Loss
from continuing operations before income taxes
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(17,729,391 | ) | 2,620,484 | (15,108,907 | ) | ||||||||
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Income
tax benefit
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- | - | - | ||||||||||
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Loss
from continuing operations
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$ | (17,729,391 | ) | $ | 2,620,484 | $ | (15,108,907 | ) | |||||
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Loss
per common share from continuing operations - basic and
diluted
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$ | (0.52 | ) | $ | (0.44 | ) | |||||||
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Weighted
average common shares outstanding
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34,004,575 | 34,004,575 | |||||||||||
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See
accompanying notes.
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3
National
Coal Corp.
Notes
to Unaudited Pro Forma Condensed Consolidated Financial Information
The notes
to the unaudited pro forma condensed consolidated financial information
that follow are intended to provide additional information regarding the effect
of the pro forma adjustments on the unaudited pro forma condensed consolidated
financial information.
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(a)
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Reflects
the sources and uses of cash from the sale of assets to Ranger Energy
assuming the transaction occurred on December 31,
2009.
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Sources:
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Sale
of assets
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$ | 10,000,000 | ||
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Sale
of coal inventory at the Baldwin processing plant and loadout
facility
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284,320 | |||
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Release
of restricted cash due to the assumption of the reclamation liabilities by
Ranger Energy
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1,897,250 | |||
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Total
sources
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12,181,570 | |||
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Uses:
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Repayment
of trade accounts payable to an entity related to Ranger
Energy
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1,925,291 | |||
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Repayment
of the short term revolving line of credit with Ranger
Energy
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3,000,000 | |||
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Repayment
of equipment capital lease
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696,432 | |||
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Repayment
of equipment note payable
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18,079 | |||
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Payment
of transaction expenses
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154,443 | |||
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Total
uses
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5,794,245 | |||
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Pro
forma - Net proceeds to the Company
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$ | 6,387,325 | ||
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Actual
net proceeds to the Company on April 20, 2010 were $1.4
million. The difference is primarily due to increases from
December 31, 2009 to April 20, 2010 in trade accounts payable to an entity
related to Ranger Energy and a $1.5 million increase in the
outstanding balance on the short term revolving line of
credit.
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(b)
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Reflects
the elimination of assets sold and liabilities assumed as a result of the
asset sale.
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(c)
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Reflects
the loss on the sale if it had occurred on December 31,
2009. The actual loss to be recognized will be based on the
carrying amounts of the assets sold and liabilities assumed or released on
the date of the transaction and may be materially different than the loss
noted herein. Based on preliminary estimates, National Coal Corp.
anticipates a $1.1 million loss will be recognized in the final accounting
for the asset sale. The pro forma presentations included herein
should not be relied upon as indicative of the actual loss to be
recorded.
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(d)
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Reflects
the elimination of coal sales related to the coal supply agreement that
was sold.
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(e)
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Reflects
other revenues recognized from the overriding royalty agreement related to
the coal supply agreement and royalty income from the leasing of mineral
rights.
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(f)
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Reflects
the elimination of mining and processing costs associated with the sale of
the preparation plant, loadout facility, three mines and mining equipment
and the elimination of purchased coal from a coal purchase contract that
was terminated as a result of the sale.
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4
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(g)
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Reflects
the elimination of depreciation, depletion, amortization and accretion
from the preparation plant, loadout facility, three mines and mining
equipment sold, net of additional depletion from coal sold through the
mineral rights lease agreement.
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(h)
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Reflects
the elimination of franchise and property taxes on assets
sold.
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(i)
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Reflects
the elimination of interest expense on the short term revolving line of
credit repaid from the proceeds of the transaction and the elimination of
interest expense on a capital lease obligation and an equipment note
payable relating to mining equipment sold, which were also repaid from the
proceeds.
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5