Blue Earth, Inc. - FORM 8-K/A - EX-99.2 - April 5, 2011

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Exhibit 99.2


BLUE EARTH, INC.
  
Proforma Consolidated Balance Sheet
  
December 31, 2010
  
                                 
       
Castrovilla, Inc.
    
 
            
Adjusted
  
       
and Humitech
    
Combined
    
Pro Forma
      
ProForma
  
 
Blue Earth, Inc.
    
of NC, LLC
    
Totals
    
Adjustments
  
REF
  
Totals
  
ASSETS
                                
                                 
CURRENT ASSETS
                                
                                 
Cash
   $ 3,900,096     $ 466,620     $ 4,366,716     $ (150,000 )   [1]   $ 4,216,716  
Accounts receivable, net
     -       308,939       308,939       -           308,939  
Inventory
     -       125,627       125,627       -           125,627  
Prepaid expenses
     38,039       -       38,039       -           38,039  
Other current assets
     -       1,220       1,220       -           1,220  
                                             
Total Current Assets
     3,938,135       902,406       4,840,541       (150,000 )         4,690,541  
                                             
PROPERTY AND EQUIPMENT, net
     10,932       100,187       111,119       -           111,119  
                                             
OTHER ASSETS
                                            
                                             
Deposits
     3,000       33,831       36,831       -           36,831  
Distributorship and customer base
     -       74,914       74,914       2,458,250     [1]     2,533,164  
                                             
Total Other Assets
     3,000       108,745       111,745       2,458,250           2,569,995  
                                             
TOTAL ASSETS
   $ 3,952,067     $ 1,111,338     $ 5,063,405     $ 2,308,250         $ 7,371,655  
                                             
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                                      
                                             
CURRENT LIABILITIES
                                            
Accounts payable and accrued expenses
   $ 37,339     $ 432,858     $ 470,197     $ -         $ 470,197  
Warrant derivative liability
     1,288,159       -       1,288,159       -           1,288,159  
Loans and notes payable
     -       253,107       253,107       -           253,107  
                                             
Total Current Liabilities
     1,325,498       685,965       2,011,463       -           2,011,463  
                                             
LONG TERM LIABILITIES
                                            
Loans and notes payable-related parties
     -       250,899       250,899       -           250,899  
Loans and notes payable
     -       52,715       52,715       -           52,715  
                                             
Long term liabilities
     -       303,614       303,614       -           303,614  
                                             
TOTAL LIABILITIES
     1,325,498       989,579       2,315,077       -           2,315,077  
                                             
STOCKHOLDERS' EQUITY
                                            
                                             
Preferred stock
     -       -       -       -           -  
Common stock
     11,855       3,000       14,855       1,011     [1]     13,134  
                              268     [1]     -  
                              (3,000 )   [1]     -  
Additional paid-in capital
     11,259,953       -       11,259,953       1,920,070     [1]     13,688,683  
                              508,660     [1]     -  
Partner Equity
     -       (168,588 )     (168,588 )     168,588     [1]     -  
                                             
Retained earnings (deficit)
     (8,645,239 )     287,347       (8,357,892 )     (287,347 )   [1]     (8,645,239 )
                                             
Total Stockholders' Equity
     2,626,569       121,759       2,748,328       2,308,250           5,056,578  
                                             
TOTAL LIABILITIES AND
                                            
STOCKHOLDERS' EQUITY (DEFICIT)
   $ 3,952,067     $ 1,111,338     $ 5,063,405     $ 2,308,250         $ 7,371,655  

 
 
F-12
 


BLUE EARTH, INC.
  
Proforma Consolidated Statements of Operations
  
For the Year Ended December 31, 2010
  
   
                             
Pro-Forma
  
         
Castrovilla, Inc.
                  
Adjusted
  
         
and Humitech
    
Combined
    
Pro Forma
      
Combined
  
   
Blue Earth, Inc.
    
of NC, LLC
    
Totals
    
Adjustments
  
REF
  
Totals
  
REVENUES
   $ -     $ 3,433,145     $ 3,433,145     $ -       $ 3,433,145  
COST OF SALES
     -       1,228,133       1,228,133       -         1,228,133  
                                           
GROSS PROFIT
     -       2,205,012       2,205,012       -         2,205,012  
                                           
OPERATING EXPENSES
                                          
                                           
General and administrative
     1,042,107       2,125,725       3,167,832       -         3,167,832  
Depreciation expense
     -       61,284       61,284       -         61,284  
                                           
Total Costs and Expenses
     1,042,107       2,187,009       3,229,116       -         3,229,116  
                                           
OPERATING LOSS
     (1,042,107 )     18,003       (1,024,104 )     -         (1,024,104 )
                                           
OTHER INCOME (EXPENSE)
                                          
                                           
Change in fair value of warrant liability
     (483,441 )     -       (483,441 )     -         (483,441 )
Interest income
     15,311       -       15,311       -         15,311  
Interest expense
     -       (56,544 )     (56,544 )     -         (56,544 )
                                           
Total Other Income (Expense)
     (468,130 )     (56,544 )     (524,674 )     -         (524,674 )
                                           
LOSS BEFORE INCOME TAXES
     (1,510,237 )     (38,541 )     (1,548,778 )     -         (1,548,778 )
PROVISION FOR INCOME TAXES
     (12,781 )     -       (12,781 )     -         (12,781 )
                                           
LOSS FROM CONTINUING OPERATIONS
     (1,523,018 )     (38,541 )     (1,561,559 )     -         (1,561,559 )
                                           
GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS
     66,292       -       66,292       -         66,292  
LOSS FROM DISCONTINUED OPERATIONS
     (970,614 )     -       (970,614 )     -         (970,614 )
                                           
NET LOSS
   $ (2,427,340 )   $ (38,541 )   $ (2,465,881 )   $ -       $ (2,465,881 )



 
F-13
 

Notes to Unaudited Pro Forma Consolidated Financial Statements

Effective January 1, 2011, Castrovilla Energy, Inc., “Energy”, a newly formed subsidiary of Blue Earth Energy Management Services, Inc., which is a subsidiary of Blue Earth, Inc, entered into a merger agreement with Castrovilla, Inc. wherein Energy purchased all of the issued and outstanding shares of Castrovilla, Inc. for  1,011,095  shares of restricted common stock of Blue Earth, Inc.  These shares were valued based on the quoted market price on the effective date of the transaction, January 1, 2011, at $1.90 per share, or $1,921,081.

Immediately after the transaction, Energy ceased to exist and Castrovilla, Inc. became the surviving corporation, a wholly owned subsidiary of Blue Earth Energy Management Services, Inc..  Simultaneous with this purchase, Energy entered into an asset purchase agreement with Humitech of NC, LLC, “Humitech”, whereby the assets of Humitech and certain related liabilities were sold to Energy for  $150,000 cash and 267,857 restricted common shares of Blue Earth, Inc. valued based on the quoted market price on the effective date of the transaction, January 1, 2011, at $1.90 per share or $528,928.

Proforma adjustment [1] reflects the issuance of 1,011,095 shares of Blue Earth, Inc. common stock to shareholders of Castrovilla, Inc. in exchange for all issued and outstanding shares of Castrovilla and the issuance of 267,857 shares of Blue Earth, Inc. for the net assets of Humitech of NC, LLC.  This entry also reflects the elimination of equity balances, including the common stock of Castrovilla and the partner capital of Humitech, retained earnings of both entities and the allocation of excess purchase price above the market value of the fixed assets acquired and liabilities assumed in the acquisition to the Bay Area Gasket Guy distributorship held by Humitech.

The calculation of the $2,458,250 excess purchase price was calculated as shown in the table below.

Purchase Price
  
Shares
    
Price
    
Total
  
Castrovilla
     1,011,095     $ 1.90     $ 1,921,081  
Humitech
     267,857     $ 1.90       508,928  
Cash
                     150,000  
Total Purchase Price
                     2,580,009  
Tangible Assets Acquired
                     (1,036,424 )
Total Liabilities Assumed
                     989,579  
Cost of Distributorship and Customer Base Acquired
             $ 2,533,164  

The proforma, consolidated balance sheets and statements of operations of Blue Earth, Inc. and Castrovilla, Inc. and Humitech of NC, LLC are presented here as of December 31, 2010.

 
 
 
 
 

 





 
F-14
 

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