Blue Earth, Inc. - FORM 8-K/A - EX-99.3 - INTERIM FINANCIAL STATEMENTS OF XNERGY, INC.

Attached files

file	filename
8-K/A - CURRENT REPORT - Blue Earth, Inc.	bblu_8ka2.htm
EX-99.1 - FINANCIAL STATEMENTS OF XNERGY, INC. - Blue Earth, Inc.	bblu_ex991.htm
EX-99.5 - PRO FORMA FINANCIAL INFORMATION FOR CASTROVILLA, INC., XNERGY, INC., AND HVAC CONTROLS & SPECIALTIES, INC. - Blue Earth, Inc.	bblu_ex995.htm
EX-99.4 - INTERIM FINANCIAL STATEMENTS OF HVAC CONTROLS & SPECIALTIES, INC. - Blue Earth, Inc.	bblu_ex994.htm
EX-99.2 - FINANCIAL STATEMENTS OF HVAC CONTROLS & SPECIALTIES, INC. - Blue Earth, Inc.	bblu_ex992.htm

Exhibit 99.3


XNERGY, INC. and Variable Interest Entity
Consolidated Balance Sheets
ASSETS
			June 30,		December 31,
			2011		2010
			(unaudited)
CURRENT ASSETS
	Cash		$	1,267,648	$	1,565,006
	Accounts receivable, net of allowance of
		$140,000 and $140,000 respectively		249,225		665,845
	Costs in excess of billings			383		10,830
	Other current assets			177,352		29,975

		Total Current Assets		1,694,608		2,271,656

PROPERTY AND EQUIPMENT, net				3,631,671		3,672,902
OTHER ASSETS
	Related party loans			2,239,910		2,590,523
	Other assets			29,864		29,864

		Total Other Assets		2,269,774		2,620,387

		TOTAL ASSETS	$	7,596,053	$	8,564,945

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	2,713,700	$	1,654,532
	Billings in excess of revenues			142,644		207,350
	Current portion of long-term liabilities			154,034		1,578,361
		Total Current Liabilities		3,010,378		3,440,243

LONG-TERM LIABILITIES
	Loans and notes payable-related parties			1,889,782		1,889,782
	Loans and notes payable			3,147,764		2,342,958
		Total Long-term Liabilities		5,037,546		4,232,740

		Total Liabilities		8,047,924		7,672,983
STOCKHOLDERS' EQUITY (DEFICIT)
	Common stock; 100,000 shares authorized,
	at no par value, 100,000 and 100,000
	shares issued and outstanding, respectively			50,000		50,000
	Additional paid in capital			424,968		424,968
	Non controlling interest			286,850		295,190
	Retained earnings (accumulated deficit)			(1,213,689)		121,804

		Total Stockholders' Equity (Deficit)		(451,871)		891,962
		TOTAL LIABILITIES AND
		STOCKHOLDERS' EQUITY (DEFICIT)	$	7,596,053	$	8,564,945

The accompanying notes are an integral part of these consolidated financial statements


XNERGY, INC. and Variable Interest Entity
Consolidated Statements of Operations
(unaudited)
			For the Six Months Ended
			June 30,
			2011		2010
REVENUES			$	1,540,098	$	15,052,488
COST OF GOODS SOLD				1,012,043		11,813,471
GROSS PROFIT				528,055		3,239,017

OPERATING EXPENSES
	Depreciation and amortization			30,000		34,027
	Salary and wages			1,048,775		879,132
	Professional fees			109,075		95,786
	General and administrative			613,795		570,461

		Total Operating Expenses		1,801,645		1,579,406

INCOME (LOSS) FROM OPERATIONS				(1,273,590)		1,659,611

OTHER EXPENSE
	Other income			505		12,760
	Interest income			6,105		9,245
	Interest expense			(60,173)		(29,090)

	TOTAL OTHER EXPENSE			(53,563)		(7,085)

INCOME BEFORE INCOME TAXES				(1,327,153)		1,652,526

INCOME TAX EXPENSE				-		(11,530)

NET INCOME (LOSS) BEFORE NONCONTROLLING INTERESTS				(1,327,153)		1,640,996
NONCONTROLLING INTEREST IN VARIABLE INTEREST ENTITY				(8,340)		(4,599)

NET INCOME (LOSS)			$	(1,335,493)	$	1,636,397

The accompanying notes are an integral part of these consolidated financial statements


XNERGY, INC. and Variable Interest Entity
Consolidated Statements of Cash Flows
(unaudited)
				For the Six Months Ended
				June 30,
				2011		2010
OPERATING ACTIVITIES
	Net loss			$	(1,335,493)	$	1,636,397
	Adjustments to reconcile net loss to net cash
	used in operating activities:
		Depreciation and amortization			30,000		34,027
		Non controlling interest			8,340		4,599
	Changes in operating assets and liabilities:
		Accounts receivable			416,620		5,147,861
		Costs in excess of billings			10,447		(49,781)
		Other assets			(147,377)		99,849
		Billings in excess of costs			(64,706)		(923,007)
		Accounts payable and accrued expenses			1,053,719		(4,329,686)

			Net Cash Provided by (Used in) Operating Activities		(28,450)		1,620,259

INVESTING ACTIVITIES
		Repayment of loans to stockholders			350,613		271,686

			Net Cash Provided by Investing Activities		350,613		271,686


FINANCING ACTIVITIES
		Repayment short term and installment notes payable			(619,521)		(919,956)

			Net Cash Provided by (Used in) Financing Activities		(619,521)		(919,956)

NET INCREASE (DECREASE) IN CASH					(297,358)		971,989
CASH AT BEGINNING OF PERIOD					1,565,006		2,012,333

CASH AT END OF PERIOD				$	1,267,648	$	2,984,322

SUPPLEMENTAL DISCLOSURES OF
	CASH FLOW INFORMATION

	CASH PAID FOR:
		Interest		$	60,173	$	29,090
		Income taxes		$	-	$	-

The accompanying notes are an integral part of these consolidated financial statements

XNERGY, INC. and Variable Interest Entity

Notes to Financial Statements

June 30, 2011

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2011, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The results of operations for the periods ended June 30, 2011 and 2010 are not necessarily indicative of the operating results for the full year.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

NOTE 3 - RELATED PARTY TRANSACTIONS

Related Party Receivables

On June 17, 2008, two of the Company’s stockholders agreed to purchase the shares of another shareholder for $2,486,850. Concurrent with this agreement, the Company agreed to issue a promissory note for the payment for the stock. The liability was recorded along with notes receivable from the purchasing stockholders. The notes receivable bear interest at 3.2% and are due 60 consecutive months commencing August 1, 2008. The notes are secured by 49,750 shares of the Company’s common stock. As of June 30, 2011 and December 31, 2010, the notes receivable totaled $2,239,910 and $2,590,523, respectively.

Loans and Notes Payable-Related Parties

As explained above, the Company has agreed to pay $2,486,850 for the purchase of its shares. Principal and interest payments are currently $48,456 per month. As of June 30, 2011 and December 31, 2010, the notes payable totaled $1,889,782 and $1,889,782, respectively.

XNERGY, INC. and Variable Interest Entity

Notes to Financial Statements

June 30, 2011

NOTE 4 - SUBSEQUENT EVENT

On September 7, 2011, the Company was acquired by Blue Earth, Inc. (“BBLU”). Pursuant to the terms and conditions of an Agreement and Plan of Merger (the “Plan”), BBLU purchased all of the capital stock of Company for a Purchase Price of $15,012,010 (the “Purchase Price”). BBLU issued to the two shareholders of the Company an aggregate of 4,500,000 shares of restricted common stock, valued at $3.00 per share. The shares are subject to a lock-up period whereby 1,000,000 of the shares are eligible for sale beginning one year from the closing date and the remaining 3,500,000 shares are eligible for sale commencing two years from the Closing Date. The Company’s stockholders had previously acquired all of the shares of the Company owned by a former stockholder for $1,512,010 evidenced by a promissory note. BBLU paid the Company’s stockholders $10.00 and other good and valuable consideration for the right to assume payment to the former stockholder. BBLU has made two payments and will continue to make payments for up to 30 months to the former stockholder. These shares are currently held in escrow and BBLU has the right to vote the shares while they are in escrow.

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