Juhl Energy, Inc - FORM 8-K/A - EX-99.3 - EXHIBIT 99.3 - September 8, 2011

Attached files

file filename
8-K/A - FORM 8-K/A - Juhl Energy, Incjuhl_8ka-042811.htm
EX-99.1 - EXHIBIT 99.1 - Juhl Energy, Incex99-1.htm
EX-23.1 - EXHIBIT 23.1 - Juhl Energy, Incex23-1.htm
EX-99.2 - EXHIBIT 99.2 - Juhl Energy, Incex99-2.htm
Exhibit 99.3



JUHL WIND, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
GIVING EFFECT TO THE ACQUISITION OF WOODSTOCK HILLS LLC

 
 
 

JUHL WIND, INC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma condensed consolidated balance sheet combines the consolidated historical balance sheet of Juhl Wind, Inc. and subsidiaries and the balance sheet of Woodstock Hills (Woodstock), as of March 31, 2011, giving effect to the purchase of 99.9% of the Woodstock membership interests as if it had been consummated on March 31, 2011. The following unaudited pro forma condensed consolidated statement of operations for the three month period ended March 31, 2011 and the twelve month period ended December 31, 2010 combines the consolidated statement of operations of Juhl Wind, Inc. for its three months ended March 31, 2011 and its year ended December 31, 2010 with the statements of operations of  Woodstock for its three months ended March 31, 2011 and its year ended December 31, 2010, giving effect to the acquisition of the outstanding membership interests of Woodstock as if it had occurred at January 1, 2010. The .1% minority interest is considered immaterial for purposes of this presentation.
 
The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the membership interest acquisition, are factually supportable and are expected to have a continuing impact on the combined results. Certain events related and attributable to the acquisition may have occurred at Juhl Wind, Inc. prior the closing of the acquisition or immediately after the acquisition due to the acquisition transaction. Accordingly, the adjustments presented on the pro forma condensed consolidated financial statements have been identified and presented in accordance with their timing to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the acquisition.
 
We are providing the following information to aid you in your analysis of the financial aspects of the acquisition. We derived the historical financial information of Juhl Wind, Inc. for the three months ended March 31, 2011 from the unaudited consolidated financial statements of Juhl Wind, Inc. as filed on Form 10-Q for the three months ended March 31, 2011. We derived the historical financial information of Juhl Wind, Inc. for the year ended December 31, 2010 from the audited financial statements of Juhl Wind, Inc included in the Form 10-K filing dated March 31, 2011.  We derived the historical financial information of Woodstock for the three months ended March 31, 2011 from Woodstock’s unaudited internal financial statements incorporated herein and the December 31, 2010 audited financial statements, also incorporated herein. This information should be read together with Juhl Wind, Inc’s, audited and unaudited financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Juhl Wind, Inc included in its annual report on Form 10-K filed March 31, 2011 and its quarterly reports on Form 10-Q filed May 15, 2011 and August 15, 2011.
 
The unaudited pro forma condensed consolidated financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed consolidated financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience.
 
In the acquisition, Juhl Wind, Inc acquired 99.9% of the outstanding Woodstock membership interests of Woodstock in exchange for $400,000 cash. As a result, Woodstock is now a subsidiary.
 
 
2
 
 
JUHL WIND, INC
NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED
BALANCE SHEET AND STATEMENTS OF OPERATIONS

AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2011
AND THE YEAR ENDED DECEMBER 31, 2010

Note 1.  Basis of Presentation

The unaudited pro forma condensed consolidated financial information included herein has been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission.
  
Pro forma adjustments are necessary to (i) record certain events related or attributable to the membership interest acquisition of Woodstock, and (ii) the accounting upon consummation of the business combination.


Note 2.  Pro Forma Adjustments

Descriptions of the adjustments included in the unaudited pro forma condensed consolidated balance sheet and the condensed consolidated statements of operations are as follows:
 
 
(a)
 Juhl Wind, Inc. acquired 99.9% of the outstanding membership interests of Woodstock Hills LLC (“Woodstock”). The remaining .1% of the membership interests are owned by Dan Juhl, the Company’s controlling stockholder and is considered immaterial for purposes of recording a noncontrolling interest on the Juhl Wind financial statements. The 99.9% of the membership interests of Woodstock were acquired in exchange for $400,000 cash.  
 
The acquisition is being accounted for under the acquisition method.  No goodwill was recorded in connection with the transaction. The assets and liabilities of Woodstock were recorded at their respective estimated fair values.  The Company used a combination of the market and cost approaches to estimate the fair values of the Woodstock assets acquired and liabilities assumed. The fair value estimates include an increase of approximately $450,000 to the property and equipment of Woodstock based on our assessment of fair value in comparison to Woodstock’s carrying values. Included in the acquisition was the in-place power purchase agreement (PPA). Juhl Wind, Inc. determined that this agreement was below current market power rates. As such, an unfavorable contract liability of approximately $3,419,000 was recorded as of March 31, 2011for pro forma purposes.

 
(b)
An adjustment was made to eliminate intercompany maintenance services revenue transactions between Juhl Energy Services, Inc., a wholly-owned subsidiary of Juhl Wind, Inc., and Woodstock in the amounts of approximately $274,000 for the year ended December 31, 2010 and approximately $11,000 for the three months ended March 31, 2011.
   
 
(c)
An adjustment was made to Woodstock’s revenue as a result of an unfavorable contract liability of approximately $3,214,000 presumed as if the acquisition date occurred on January 1, 2010.  The power purchase rates in the PPA between Woodstock and the utility off-taker  are considered unfavorable when compared with market conditions at the time of the assumed acquisition. The amount of this liability was determined based on what Juhl Wind, Inc. believes is the current market rate that power purchasers are paying for electrical power, net of the fair value of the renewable energy credits that Woodstock Hills could be expected to realize during the term of the PPA.   The net increase to the unfavorable contract liability is approximately $87,000 and $17,000, for the year ended December 31, 2010 and the three months ended March 31, 2011, respectively, and is charged to revenue.
     
 
(d)
As required by Regulation S-X, Rule 11-02, historical income results of Juhl Wind, Inc. and Woodstock shall apply the appropriate tax rate due to the tax status of Juhl Wind, Inc. being a C-Corp.  Income taxes are assumed at a 40% tax rate. A tax benefit of $176,000 is reflected in the Statement of Operations for the year ended December 31, 2010.  A tax provision for the three months ended March 31, 2011 was deemed immaterial.
 
 
(e)
Basic outstanding shares include the weighted average shares of the Company’s common stock outstanding as if issued on January 1, 2011 and January 1, 2010. Diluted outstanding shares reflects the potential dilution effect that would occur if common stock warrants and convertible preferred stock were exercised or converted to common shares. However, for 2010, diluted outstanding shares is identical to basic outstanding shares, since potential common share equivalents are excluded from the calculation, as their effect is anti-dilutive, due to the Company’s net loss for the periods presented.
 
 
3
 
 
 JUHL WIND, INC.
 UNAUDITED  PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2011
 
 
    HISTORICAL     HISTORICAL     PRO FORMA     PRO FORMA  
    JUHL     WOODSTOCK     ADJUSTMENTS     CONSOLIDATED  
 ASSETS
                        
 CURRENT ASSETS
                        
 Cash and cash equivalents   $ 4,306,782     $  279,215     $   (400,000 )  (a)  $  4,185,997  
 Accounts receivable     1,986,262       98,430        -       2,084,692  
 Short term investments and accrued interest receivable
     327,610               -       327,610  
 Short term investments - restricted
     419,907               -       419,907  
 Promissory note receivable - including interest
     3,926,400               -       3,926,400  
 Inventory
     1,828,062       -       -       1,828,062  
 Reimbursable project costs
     113,161       -       -       113,161  
 Other current assets
     104,354       34,726       -       139,080  
 Current deferred income taxes
     41,000       -       -       41,000  
 TOTAL CURRENT ASSETS
     13,053,538       412,371       (400,000 )     13,065,909  
                                 
 PROPERTY AND EQUIPMENT (Net)
     483,934       4,395,202       449,711   (a)   5,328,847  
                                 
 OTHER ASSETS
                                
 Project development costs
     2,595,319       -       -       2,595,319  
 Promissory note receivable - long term portion
     1,606,087               -       1,606,087  
 Financing costs (net)
     -       16,165       -       16,165  
 Equity investment in wind farm
     478,570               -       478,570  
 Deferred income taxes
     344,000       -       -       344,000  
 TOTAL OTHER ASSETS
     5,023,976       16,165       -       5,040,141  
                                 
 TOTAL ASSETS
   $ 18,561,448     $ 4,823,738        49,711     $ 23,434,897  
                                 
 LIABILITIES AND EQUITY
                                
 CURRENT LIABILITIES
                                
 Accounts payable
   $ 1,374,900     $ 10,001     $       $ 1,384,901  
 Bank notes payable
     411,167       -               411,167  
 Advance on sale of project development costs
     1,000,000       -               1,000,000  
 Accrued expenses
     534,198       24,452               558,650  
 Billings in excess of costs and estimated profits
     95,339       -               95,339  
 Customer deposits
     149,339       -               149,339  
 Deferred revenue
     920,917       -               920,917  
 Income taxes payable
     700,000       -               700,000  
 Current portion of bank notes payable
     -       251,842       -       251,842  
 Promissory notes payable - including interest
     5,899,365       -       -       5,899,365  
 TOTAL CURRENT LIABILITIES
     11,085,225       286,295       -       11,371,520  
                                 
 LONG-TERM LIABILITIES
                                
 Bank note payable
     -       1,168,158       -       1,168,158  
 Deferred revenue
             3,809,320       (3,809,320 ) (a)    -  
 Power purchase contract liability
     -       -       3,418,996   (a)    3,418,996  
 TOTAL LONG-TERM LIABILITIES
     -       4,977,478       (390,324 )     4,587,154  
                                 
  EQUITY
                                
 Preferred stock - Series A
     2,525,589       -       -       2,525,589  
 Preferred stock - Series B
     12,819,116       -               12,819,116  
 Common stock
     2,132       -       -       2,132  
 Additional paid-in capital
     7,306,372       -       -       7,306,372  
  Treasury stock
     (84,795 )     -               (84,795 )
 Accumulated deficit
     (15,159,627 )     (440,035 )     440,035   (a)    (15,159,627 )
 Noncontrolling interest in equity
     67,436       -       -       67,436  
 TOTAL STOCKHOLDERS' EQUITY
     7,476,223       (440,035 )     440,035       7,476,223  
                                 
 TOTAL LIABILITIES AND EQUITY
   $ 18,561,448     $ 4,823,738     $ 49,711     $ 23,434,897  
 
 
4
 
 
        JUHL WIND, INC.
 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2011
 
 
    HISTORICAL     HISTORICAL     PRO FORMA       PRO FORMA  
    JUHL     WOODSTOCK     ADJUSTMENTS       CONSOLIDATED  
                           
REVENUE
   $ 6,591,411     $ 204,719     $ (27,701 )
(b), (c)
   $ 6,768,429  
COST OF REVENUES
     791,990       -       -         791,990  
GROSS PROFIT
     5,799,421       204,719       (27,701 )       5,976,439  
                                   
OPERATING EXPENSES
     1,020,733       191,887       (11,183 )
(b)
     1,201,437  
                                   
OPERATING INCOME
     4,778,688       12,832       (16,518 )       4,775,002  
                                   
OTHER INCOME (EXPENSE)
                                  
 Interest income
     138,769       49       -         138,818  
 Interest expense
     (163,608 )     (19,091 )     -         (182,699 )
 NET OTHER INCOME (EXPENSE)
     (24,839 )     (19,042 )     -         (43,881 )
                                   
NET LOSS BEFORE INCOME TAX
     4,753,849       (6,210 )     (16,518 )       4,731,121  
                                   
PROVISION FOR INCOME TAXES
     1,952,000       -       -  
(d)
     1,952,000  
                                   
NET INCOME (LOSS)
     2,801,849       (6,210 )     (16,518 )       2,779,121  
                                   
LESS NET LOSS ATTRIBUTABLE TO
                                  
NONCONTROLLING INTEREST
     (1,714 )     -       -         (1,714 )
                                   
NET INCOME (LOSS) ATTRIBUTED TO JUHL WIND INC.
   $ 2,803,563     $ (6,210 )   $ (16,518 )     $ 2,780,835  
                                   
PREFERRED STOCK CUMULATIVE DIVIDEND
     96,400       -       -         96,400  
                                   
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
   $ 2,707,163     $ (6,210 )   $ (16,518 )     $ 2,684,435  
                                   
                                   
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC
     21,266,752                         21,266,752  
                                   
INCOME PER COMMON SHARE - BASIC
   $ 0.13                  
(e)
   $ 0.13  
                                   
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING -  DILUTED
     21,317,925                         21,317,925  
                                   
INCOME PER COMMON SHARE -  DILUTED
   $ 0.13                  
(e)
   $ 0.13  

 
5
 
 
 JUHL WIND, INC.
 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                           FOR THE YEAR ENDED DECEMBER 31, 2010
 
 
                           
    HISTORICAL     HISTORICAL    
PRO FORMA
  
PRO FORMA
  
   
JUHL
    
WOODSTOCK
    
ADJUSTMENTS
  
CONSOLIDATED
  
                           
REVENUE
   $ 6,268,143     $ 695,760     $ (360,992 )
(b), (c)
   $ 6,602,911  
COST OF REVENUES
     4,894,481       -       -         4,894,481  
GROSS PROFIT
     1,373,662       695,760       (360,992 )       1,708,430  
                                   
OPERATING EXPENSES
     4,120,271       1,005,701       (273,564 )
(b)
     4,852,408  
                                   
OPERATING LOSS
     (2,746,609 )     (309,941 )     (87,428 )       (3,143,978 )
                                   
OTHER INCOME (EXPENSE)
                                  
 Interest income
     655,468       194       -         655,662  
 Interest expense
     (687,024 )     (131,847 )     -         (818,871 )
 NET OTHER INCOME (EXPENSE)
     (31,556 )     (131,653 )     -         (163,209 )
                                   
NET LOSS BEFORE INCOME TAX
     (2,778,165 )     (441,594 )     (87,428 )       (3,307,187 )
                                   
INCOME TAX BENEFIT
     (978,000 )     -       (176,000 )
(d)
     (1,154,000 )
                                   
NET LOSS
     (1,800,165 )     (441,594 )     88,572         (2,153,187 )
                                   
LESS NET LOSS ATTRIBUTABLE TO
                                  
NONCONTROLLING INTEREST
     (16,978 )     -       -         (16,978 )
                                   
NET INCOME (LOSS) ATTRIBUTED TO JUHL WIND INC.
   $ (1,783,187 )   $ (441,594 )   $ 88,572       $ (2,136,209 )
                                   
PREFERRED STOCK CUMULATIVE DIVIDEND
     390,955       -       -         390,955  
                                   
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
   $ (2,174,142 )   $ (441,594 )   $ 88,572       $ (2,527,164 )
                                   
WEIGHTED AVERAGE COMMON SHARES
                                  
    OUTSTANDING - BASIC AND DILUTED
     21,132,144                         21,132,144  
                                   
EARNINGS PER COMMON SHARE - BASIC AND DILUTED
     (0.10 )                
(e)
   $ (0.12 )
 
 
6

Juhl Energy, Inc Reports