Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - GreenHunter Resources, Inc. | d342011d8ka.htm |
| EX-99.1 - AUDITED FINANCIAL STATEMENTS OF HUNTER DISPOSAL, LLC - GreenHunter Resources, Inc. | d342011dex991.htm |
Exhibit 99.2
GREENHUNTER ENERGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following Unaudited Pro Forma Consolidated Financial Data are derived from the consolidated financial statements of GreenHunter Energy, Inc. (“GreenHunter”) and certain historical financial data in respect of various assets acquired by GreenHunter Water, LLC, a subsidiary of GreenHunter. The Unaudited Pro Forma Consolidated Balance Sheet of GreenHunter as of December 31, 2011 has been prepared assuming Hunter Disposal acquisition and all necessary ancillary transactions had been consummated on December 31, 2011. The Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2011 has been prepared assuming the Hunter Disposal acquisition and all necessary ancillary transactions had been consummated as of January 1, 2011. The pro forma adjustments set forth on the attached Unaudited Pro Forma Consolidated Balance Sheet and Unaudited Pro Forma Consolidated Statements of Operations reflects the following as if they occurred on the dates hereinabove set forth:
| (1) | Incurrence of indebtedness under the security agreement and promissory note entered into with Amegy Equipment Finance dated February 16, 2012. |
| (2) | Incurrence of indebtedness under the convertible promissory note entered into with Triad Hunter, LLC dated February 17, 2012. |
| (3) | Issuance of common stock upon the closing date of the Hunter Disposal acquisition. |
| (4) | Issuance of our 10% Series C preferred stock upon the closing date of the Hunter Disposal acquisition. |
The Unaudited Pro Forma Balance Sheet reflects the preliminary adjustments to record the estimated fair values of the assets and liabilities acquired in the acquisition of Hunter Disposal. The final entries, and the resulting effect on GreenHunter’s balance sheet as well as items in GreenHunter’s Income Statements, may differ based on the actual determination of the fair values of the assets acquired and liabilities assumed.
Transaction costs related to these acquisitions will be recorded as expenses in the periods in which these costs are incurred. These expenses are not included in the Unaudited Pro Forma Consolidated Statement of Operations.
The Unaudited Pro Forma Consolidated Financial Data should be read in conjunction with the notes thereto and with the consolidated financial statements of GreenHunter and the notes thereto as filed in GreenHunter’s Form 10-K.
The Unaudited Pro Forma Consolidated Financial Data are not indicative of the financial position or results of operations of GreenHunter which would actually have occurred if the transactions described above had occurred at the dates presented or which may be obtained in the future. In addition, future results may vary significantly from the results reflected in such statements due to future acquisitions and other factors.
The unaudited Pro Forma Consolidated Financial Data includes financial information received from Hunter Disposal and such financial information has been accepted and incorporated as presented without independent verification of such financial information.
GREENHUNTER ENERGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2011
| GreenHunter Historical |
Hunter
Disposal Historical |
Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| ASSETS |
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| CURRENT ASSETS: |
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| Cash and cash equivalents |
$ | 84,823 | $ | — | (A | ) | $ | 1,290,775 | $ | 1,375,598 | ||||||||||
| Accounts receivable |
63,049 | 2,355,636 | (A | ) (F) | 502,293 | 2,920,978 | ||||||||||||||
| Related party accounts receivable |
204,762 | 2,217,010 | (A | ) | (2,217,010 | ) | 204,762 | |||||||||||||
| Prepaid expenses and other current assets |
218,357 | — | (A | ) | 13,641 | 231,998 | ||||||||||||||
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| Total current assets |
570,991 | 4,572,646 | (410,301 | ) | 4,733,336 | |||||||||||||||
| FIXED ASSETS: |
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| Land and improvements |
3,243,687 | — | — | 3,243,687 | ||||||||||||||||
| Buildings |
1,674,827 | — | — | 1,674,827 | ||||||||||||||||
| Plant, equipment, and other fixed assets |
3,702,455 | 3,862,681 | (A | ) | 4,884,173 | 12,449,309 | ||||||||||||||
| Accumulated depreciation |
(570,552 | ) | (491,025 | ) | (A | ) | 491,025 | (570,552 | ) | |||||||||||
| Construction in progress |
12,842,251 | — | — | 12,842,251 | ||||||||||||||||
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| Net fixed assets |
20,892,668 | 3,371,656 | 5,375,198 | 29,639,522 | ||||||||||||||||
| OTHER ASSETS: |
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| Deferred financing costs, net of amortization of $253,705 |
254,285 | — | — | 254,285 | ||||||||||||||||
| Other noncurrent assets |
1,448,136 | 29,717 | (A | ) | (18,781 | ) | 1,459,072 | |||||||||||||
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| Total assets |
$ | 23,166,080 | $ | 7,974,019 | $ | 4,946,116 | $ | 36,086,215 | ||||||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| CURRENT LIABILITIES: |
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| Bank overdraft |
$ | — | $ | 355,517 | (A | ) | $ | (355,517 | ) | $ | — | |||||||||
| Current portion of notes payable |
264,606 | 82,675 | (A | ) | 492,566 | 839,847 | ||||||||||||||
| Note payable to related party |
889,269 | 33,430 | (A | ) | (33,430 | ) | 889,269 | |||||||||||||
| Redeemable debentures, net of discount of $19,923 |
5,281,884 | — | — | 5,281,884 | ||||||||||||||||
| Accounts payable and accrued liabilities |
7,578,628 | 2,297,705 | (A | ) (F) | 689,443 | 10,565,776 | ||||||||||||||
| Dividends payable |
168,461 | — | — | 168,461 | ||||||||||||||||
| Deferred revenue—related party |
65,925 | — | — | 65,925 | ||||||||||||||||
| Convertible securities |
23,857 | — | — | 23,857 | ||||||||||||||||
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| Total current liabilities |
14,272,630 | 2,769,327 | 793,062 | 17,835,019 | ||||||||||||||||
| NON-CURRENT LIABILITIES: |
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| Notes payable, less current portion |
2,076,119 | 189,577 | (A | ) | 1,435,182 | 3,700,878 | ||||||||||||||
| Notes payable, less current portion—related party |
— | 50,145 | (A | ) | (50,145 | ) | — | |||||||||||||
| Asset retirement obligation |
— | 26,928 | (A | ) | 427 | 27,355 | ||||||||||||||
| Convertible note payable |
— | — | (A | ) | 2,200,000 | 2,200,000 | ||||||||||||||
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| Total liabilities |
16,348,749 | 3,035,977 | 4,378,526 | 23,763,252 | ||||||||||||||||
| COMMITMENTS AND CONTINGENCIES |
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| STOCKHOLDERS’ EQUITY: |
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| Series A 8% convertible preferred stock, $.001 par value, $1,327 stated value, 5,978 issued and outstanding, liquidation preference of $8,102,516 |
7,934,055 | — | — | 7,934,055 | ||||||||||||||||
| Series B convertible preferred stock, $.001 par value, $1,000 stated value, 9,802 issued and outstanding, liquidation preference of $9,802,000 |
9,802,000 | — | — | 9,802,000 | ||||||||||||||||
| Series C 10% convertible preferred stock, $.001 par value |
— | — | (A | ) | 2,200,000 | 2,200,000 | ||||||||||||||
| Common stock, $.001par value, 90,000,000 authorized shares, 26,177,989 issued and outstanding |
26,178 | — | (A | ) | 1,847 | 28,025 | ||||||||||||||
| Additional paid-in capital |
94,677,525 | 1,358,057 | (A | ) | 1,945,728 | 97,981,310 | ||||||||||||||
| Accumulated deficit prior to re-entering development stage |
(126,670,716 | ) | — | — | (126,670,716 | ) | ||||||||||||||
| Accumulated earnings during development stage |
21,483,185 | 3,579,985 | (A | ) | (3,579,985 | ) | 21,483,185 | |||||||||||||
| Treasury stock, at cost, 13,985 shares |
(208,983 | ) | — | — | (208,983 | ) | ||||||||||||||
| Unearned common stock in KSOP, at cost, 15,200 shares |
(225,913 | ) | — | — | (225,913 | ) | ||||||||||||||
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| Total stockholders’ equity |
6,817,331 | 4,938,042 | 567,590 | 12,322,963 | ||||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 23,166,080 | $ | 7,974,019 | $ | 4,946,116 | $ | 36,086,215 | ||||||||||||
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See accompanying notes to Unaudited Pro Forma consolidated Financial Data
GREENHUNTER ENERGY, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
| GreenHunter Historical |
Hunter
Disposal Historical |
Pro Forma Adjustments |
Pro Forma | |||||||||||||||||
| REVENUE: |
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| Storage rental revenue—related party |
$ | 937,907 | $ | — | (G | ) | $ | (77,740 | ) | $ | 860,167 | |||||||||
| Other revenue—related party |
167,433 | — | — | 167,433 | ||||||||||||||||
| Water disposal revenue |
— | 11,224,840 | — | 11,224,840 | ||||||||||||||||
| Water disposal revenue—related party |
— | 1,852,032 | (G | ) | (87,074 | ) | 1,764,958 | |||||||||||||
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| Total revenues |
1,105,340 | 13,076,872 | (164,814 | ) | 14,017,398 | |||||||||||||||
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| COSTS AND EXPENSES: |
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| Cost of services |
1,065,154 | 9,058,973 | (G | ) | (164,814 | ) | 9,959,313 | |||||||||||||
| Project costs |
3,316 | — | — | 3,316 | ||||||||||||||||
| Depreciation expense |
189,656 | 328,267 | (B | ) | 577,048 | 1,094,971 | ||||||||||||||
| Selling, general and administrative |
4,158,096 | 661,693 | — | 4,819,789 | ||||||||||||||||
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| Total costs and expenses |
5,416,222 | 10,048,933 | 412,234 | 15,877,389 | ||||||||||||||||
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| OPERATING LOSS |
(4,310,882 | ) | 3,027,939 | (577,048 | ) | (1,859,991 | ) | |||||||||||||
| OTHER INCOME (EXPENSE): |
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| Interest and other income |
461,213 | 19,919 | — | 481,132 | ||||||||||||||||
| Interest, accretion and other expense |
(781,791 | ) | (20,821 | ) | (C | ) | (320,179 | ) | (1,122,791 | ) | ||||||||||
| Unrealized loss on convertible securities |
(185,944 | ) | — | — | (185,944 | ) | ||||||||||||||
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| Total other income (expense) |
(506,522 | ) | (902 | ) | (320,179 | ) | (827,603 | ) | ||||||||||||
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| Net income (loss) |
(4,817,404 | ) | 3,027,037 | (897,227 | ) | (2,687,594 | ) | |||||||||||||
| Preferred stock dividends |
(679,106 | ) | — | (D | ) | (220,000 | ) | (899,106 | ) | |||||||||||
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| Net loss to common stockholders |
$ | (5,496,510 | ) | $ | 3,027,037 | $ | (1,117,227 | ) | $ | (3,586,700 | ) | |||||||||
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| Weighted average shares outstanding, basic and diluted |
24,669,783 | (E | ) | 1,846,722 | 26,516,505 | |||||||||||||||
| Basic earnings (loss) per share: |
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| Net loss per share |
$ | (0.22 | ) | $ | (0.14 | ) | ||||||||||||||
See accompanying notes to Unaudited Pro Forma Consolidated Financial Data
GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
| (A) | To record the acquisition of Hunter Disposal for an estimated purchase price of $9.9 million. The estimated purchase price includes the cash payment of $2.2 million, the shares of common stock of GreenHunter that were issued to Triad Hunter, LLC, the parent of Hunter Disposal, the shares of 10% Series C Preferred Stock of Green Hunter that were issued to Triad Hunter, and the convertible promissory note payable to Triad Hunter. Hunter Disposal did not assume any existing debt in the acquisition. The acquisition is accounted for under the purchase method of accounting. All assets acquired and liabilities assumed are recorded at fair market value as determined by management. As noted above, these are preliminary estimates and are subject to adjustment. The following table summarizes the assets acquired, liabilities assumed, and purchase price paid: |
| Fair value of consideration transferred: |
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| Cash paid |
$ | 2,200,000 | ||
| 1,846,722 shares of common stock issued on February 17, 2012 at $1.70 per share |
3,305,632 | |||
| 88,000 shares of 10% Series C Preferred Stock at stated value of $25 per share |
2,200,000 | |||
| 10% Convertible Promissory note |
2,200,000 | |||
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| Total |
$ | 9,905,632 | ||
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| Amounts recognized for assets acquired and liabilities assumed: |
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| Cash |
$ | 1,290,775 | ||
| Accounts receivable |
2,945,003 | |||
| Prepaid expense |
13,641 | |||
| Accounts payable & accrued expenses |
(3,074,222 | ) | ||
| Disposal wells |
6,263,078 | |||
| Land and improvements |
13,776 | |||
| Field equipment (excluding disposal wells) |
2,466,500 | |||
| Office and admin assets |
3,500 | |||
| Deposits |
10,936 | |||
| Asset retirement obligation |
(27,355 | ) | ||
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| Total |
$ | 9,905,632 | ||
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| (B) | To record the pro forma adjustment to Hunter Disposal’s depreciation expense as the result of treating the acquisition of Hunter Disposal as if it had occurred January 1, 2011. Depreciation of disposal wells is provided using the straight line method over useful lives of 15 years. Depreciation of field equipment is provided using the straight line method over useful lives of 10 years. Depreciation of office and admin assets is provided using the straight line method over useful lives of 7 years. |
| (C) | To record the pro forma adjustment to Hunter Disposal’s interest expense as the result of treating the acquisition of Hunter Disposal and the related debt as if it had occurred January 1, 2011. GreenHunter entered into a note payable with a bank in the amount of $2.2 million, bearing a fixed interest rate of 5.5%, to finance a portion of the consideration paid in our acquisition of Hunter Disposal. The note is collateralized by the equipment acquired. GreenHunter also entered into a 10% convertible promissory note for $2.2 million payable to Triad Hunter as partial consideration in the Hunter Disposal acquisition. Terms of payment under the note are interest only due quarterly from May 17, 2012 to February 17, 2013. Thereafter, beginning May 17, 2013 and continuing quarterly until February 17, 2017, the payments due will include accrued interest and principle payments of $137,500 per quarter. The promissory note matures on February 17, 2017 and is convertible at any time by the holder into shares of common stock of the Company at a conversion price of $2.50 per share. |
| (D) | To record the pro forma adjustment to preferred dividend expense as the result of treating the acquisition of Hunter Disposal and the related issuance of 10% Series C Preferred Stock as if it had occurred January 1, 2011. |
| (E) | Acquisition shares were added to the weighted average number of common shares outstanding as if the shares were issued January 1, 2011. |
| (F) | To record elimination adjustment of $87,074 to properly eliminate intercompany balances. |
| (G) | To record elimination adjustment to properly eliminate intercompany revenues and cost of services. |