PEDEVCO CORP - FORM 8-K/A - EX-99.3 - August 8, 2012

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Exhibit 99.3
 
 UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
 
The following unaudited pro forma combined consolidated financial statements are based on the historical financial statements of PEDEVCO Corp. (formerly Blast Energy Services, Inc.)(“Blast” or the “Company”) and Pacific Energy Development Corp., a privately-held Nevada corporation (“PEDCO”) after giving effect to the agreement for our merger with PEDCO, and the assumptions, reclassifications and adjustments described in the accompanying notes to the unaudited pro forma combined financial statements.
 
The unaudited pro forma combined balance sheet as of March 31, 2012, is presented as if the merger with PEDCO had occurred on March 31, 2012.  The unaudited pro forma combined statements of operations for the three months ended March 31, 2012, are presented as if the merger had occurred on January 1, 2012, and on the audited pro forma combined statements of operations for the year ended December 31, 2011, are presented as if the date of the merger had occurred on January 1, 2011, with recurring merger-related adjustments reflected in each of the periods.
 
Determination of the purchase price and allocations of the purchase price used in the unaudited pro forma combined financial statements are based upon preliminary estimates and assumptions. These preliminary estimates and assumptions could change significantly during the purchase price measurement period as we finalize the valuations of the net tangible assets and intangible assets. Any change could result in material variances between our future financial results and the amounts presented in these unaudited combined financial statements, including variances in fair values recorded, as well as expenses associated with these items.
 
The unaudited pro forma combined financial statements are prepared for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of the dates indicated or that may be achieved in the future. The unaudited pro forma combined financial statements do not reflect any operating efficiencies and associated cost savings that we may achieve with respect to the combined companies.
 
The unaudited pro forma combined financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes and other information pertaining to Blast and PEDCO contained in this report and/or in Blast’s filings with the SEC.
 
 
 
 
 
 
 

PEDEVCO CORP.
  
(formerly Blast Energy Services, Inc.)
  
Pro forma Consolidated Balance Sheets
  
(Unaudited)
  
                             
         
Pacific Energy
                  
   
Blast Energy
    
Development
              
Pro forma
  
   
Services, Inc.
    
Corporation
        
Pro forma
    
Consolidated
  
   
03/31/12
    
03/31/12
        
Adjustments
    
03/31/12
  
 Assets
                            
                             
Current assets:
                            
Cash
  
$
3,097
    
$
250,884
              
$
253,981
  
Accounts receivable, net
    
20,742
      
58,292
                
79,034
  
Deferred costs
    
-
      
309,635
                
309,635
  
Prepaid expenses and other current assets
    
68,655
      
20,170
                
88,825
  
          Total current assets
    
92,494
      
638,981
                
731,475
  
                                   
Oil and gas properties
                                  
   Proved oil and gas properties
    
699,851
      
3,750,000
                
4,449,851
  
   Unproven oil and gas properties
    
696,178
      
1,729,989
                
2,426,167
  
   Equity method investment
    
-
      
560,882
                
560,882
  
           Total oil and gas properties
    
1,396,029
      
6,040,871
                
7,436,900
  
                                   
Other investment
    
-
      
4,100
                
4,100
  
                                   
Equipment, net
    
381,421
      
-
                
381,421
  
                                   
Goodwill
    
-
      
-
  
(1
)
    
2,091,000
      
2,091,000
  
                                     
          Total assets
  
$
1,869,944
    
$
6,683,952
          
2,091,000
    
$
10,644,896
  
                                     
 Liabilities and Stockholders’ Equity
                                    
                                     
Current liabilities:
                                    
Accounts payable
  
$
82,437
    
$
74,513
                
$
156,950
  
Accrued expenses
    
672,197
      
2,756,009
                  
3,428,206
  
Accrued expenses – related parties
    
396,413
      
-
  
(6
)
    
(344,997
)
    
51,416
  
Note payable – related parties
    
106,150
      
-
                  
106,150
  
Notes payable – other
    
1,561,589
      
-
                  
1,561,589
  
Total current liabilities
    
2,818,786
      
2,830,522
                  
5,304,311
  
                                     
Long-term liabilities:
                                    
Notes payable – related party
    
1,120,000
      
-
  
(6
)
    
(1,120,000
)
    
-
  
Asset retirement obligations
    
41,712
      
-
                  
41,712
  
Total liabilities
    
3,980,498
      
2,830,522
                  
5,346,023
  
 
 
 
 
 
                                     
Stockholders’ equity:
                                    
Series A Preferred Stock, $.001 par value, 20,000,000 shares
                                    
authorized, 6,000,000 shares issued and outstanding
    
6,000
      
-
  
(2
)
    
(6,000
)
    
14,714
  
                 
(5
)
    
14,714
          
Series A Preferred Stock, $.001 par value, 100,000,000 shares
                                    
authorized, 11,222,874 shares issued and outstanding
    
-
      
11,224
  
(5
)
    
(11,224
)
    
-
  
Series B Preferred Stock, $.001 par value, 1 share authorized
                                    
1 and 0 share issued and outstanding, respectively
    
-
      
-
  
(2
)
    
-
      
-
  
Common Stock, $.001 par value, 180,000,000 shares authorized;
                                    
71,425,905 shares and 19,202,580 shares issued and outstanding, respectively
    
71,426
      
-
  
(2
)
    
6,000
      
19,263
  
                 
(3
)
    
(76,734
)
        
                 
(4
)
    
17,917
          
                 
(6
)
    
654
          
Common stock, $0.001 par value, 200,000,000 shares authorized;
                                    
  15,502,261 shares issued and outstanding
    
-
      
15,503
  
(4
)
    
(15,503
)
    
-
  
Subscription receivable
    
-
      
(69,667
)
(4
)
    
69,667
      
-
  
Additional paid-in capital
    
76,389,124
      
5,056,697
  
(1
)
    
2,091,000
      
6,790,858
  
                 
(3
)
    
76,734
          
                 
(4
)
    
(78,283,550
)
        
                 
(5
)
    
(3,490
)
        
                 
(6
)
    
1,464,343
          
Accumulated deficit
    
(78,577,104
)
    
(1,160,327
)
(4
)
    
78,211,469
      
(1,525,962
)
Total stockholders’ equity
    
(2,110,554
)
    
3,853,430
                  
5,298,873
  
                                     
Total liabilities and stockholders’ equity
  
$
1,869,944
    
$
6,683,952
        
$
2,091,000
    
$
10,644,896
  
                                     
 
Pro Forma Footnotes:
(1) To record goodwill for the difference between the fair value of consideration transferred and the fair value of assets acquired and liabilities assumed (which valuation and allocation is not final, is not based on any valuation and is subject to change).
(2) To convert all outstanding Series A and Series B preferred stock into shares of the Company's common stock on a one-for-one basis.
(3) To adjust common stock par value and the additional paid-in capital to reflect one-for-one hundred and twelve (1:112) reverse stock split.
(4) To record the issuance of 17,917,261 shares of the Company's common stock to existing holders of common stock of PEDCO.
(5) To record the issuance of 14,713,645 shares of the Company's Series A preferred stock to existing holders of Series A preferred stock of PEDCO.
(6) To record the conversion of $1.465 million of Blast related party secured debt into common stock of PEDCO.

 
 
 
 
PEDEVCO CORP.
  
(formerly Blast Energy Services, Inc.)
  
Pro forma Consolidated Statements of Operations
  
(Unaudited)
  
                       
         
Pacific Energy
            
   
Blast Energy
    
Development
        
Pro forma
  
   
Services, Inc.
    
Corporation
        
Consolidated
  
   
for Quarter
    
for Quarter
        
for Quarter
  
   
Ended
    
Ended
    
Pro forma
  
Ended
  
   
3/31/2012
    
3/31/2012
    
Adjustments
  
3/31/2012
  
                       
Revenues:
   $ 118,214     $ -         $ 118,214  
                          -  
Cost of revenues
                            
Services
     -       -           -  
Lease operating costs
     67,353       -           67,353  
Total cost of revenues
     67,353       -           67,353  
                             
Operating expenses
                            
Selling, general and administrative expense
     190,981       438,746           629,727  
Depreciation, depletion and amortization
     36,124       -           36,124  
Total operating expenses
     227,105       438,746           665,851  
                             
Operating loss
     (176,244 )     (438,746 )         (614,990 )
                             
Other income (expense):
                            
Interest expense
     (189,391 )     -           (189,391 )
Equity in loss of equity method investment
     -       (27,571 )         (27,571 )
Other income (expense)
     -       -              
Total other expense
     (189,391 )     (27,571 )         (216,962 )
                          -  
Loss from continuing operations
     (365,635 )     (466,317 )         (831,952 )
Net Loss
     (365,635 )     (466,317 )         (831,952 )
                             
Preferred dividends
     (59,836 )     -           (59,836 )
Net loss attributable to common shareholders
   $ (425,471 )   $ (466,317 )       $ (891,788 )
                             
Net loss per common share - Basic :
                            
Continuing operations
   $ (0.01 )               $ (0.05 )
                             
Net loss per common share - Diluted :
                            
Continuing operations
   $ (0.01 )               $ (0.05 )
                             
Weighted average common shares outstanding - basic and diluted
     71,425,905          
(1)(2)
(52,163,325)
     19,262,580  
                             
 
 
 
 
Pro forma footnotes:

(1) The weighted average common shares outstanding - basic and diluted is adjusted to reflect the following:
       - The conversion of all outstanding Series A and Series B preferred stock into shares of the Company's common stock on a one-for-one basis;
       - The one-for-one hundred and twelve (1:112) reverse stock split;
       - The issuance of 17,917,261 shares of the Company's common stock to existing holders of common stock of PEDCO; and
       - The conversion of $1.465 million of Blast related party secured debt converted into common stock of PEDCO.

(2) The weighted average common shares outstanding do not include the following potentially dilutive securities:
- The grant of warrants to purchase 1,120,000 of the Company's common stock to existing warrant holders of PEDCO;
- The grant of options to purchase 4,235,000 of the Company's common stock to existing option holders of PEDCO; and
- The issuance of 14,713,645 shares of the Company's Series A preferred stock to existing holders of Series A preferred stock of PEDCO.
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 

PEDEVCO CORP.
  
(formerly Blast Energy Services, Inc.)
  
Pro forma Consolidated Statements of Operations
  
(Unaudited)
  
                     
         
Pacific Energy
          
   
Blast Energy
    
Development
      
Pro forma
  
   
Services, Inc.
    
Corporation
      
Consolidated
  
   
for Year
    
for Year
      
for Year
  
   
Ended
    
Ended
  
Pro forma
  
Ended
  
   
12/31/2011
    
12/31/2011
  
Adjustments
  
12/31/2011
  
                     
Revenues:
  
$
446,526
    
$
-
      
$
446,526
  
                       
-
  
Cost of revenues
                          
Services
    
8,069
      
-
        
8,069
  
Lease operating costs
    
270,746
      
-
        
270,746
  
Total cost of revenues
    
278,815
      
-
        
278,815
  
                           
Operating expenses
                      
-
  
Selling, general and administrative expense
    
1,469,061
      
648,125
        
2,117,186
  
Depreciation, depletion and amortization
    
147,591
      
-
        
147,591
  
Impairment loss
    
1,640,489
      
-
        
1,640,489
  
Total operating expenses
    
3,257,141
      
648,125
        
3,905,266
  
                           
Operating loss
    
(3,089,430
)
    
(648,125
)
      
(3,737,555
)
                           
Other income (expense):
                          
Interest expense
    
(1,057,331
)
    
(12,912
)
      
(1,070,243
)
Equity in loss of equity method investment
    
-
      
(25,875
)
      
(25,875
)
Other income (expense)
    
1,407
      
(7,098
)
      
(5,691
)
Total other expense
    
(1,055,924
)
    
(45,885
)
      
(1,101,809
)
                       
-
  
Loss from continuing operations
    
(4,145,354
)
    
(694,010
)
      
(4,839,364
)
Loss from discontinued operations
    
(3,686
)
    
-
        
(3,686
)
Net Loss
    
(4,149,040
)
    
(694,010
)
      
(4,843,050
)
                           
Preferred dividends
    
(240,000
)
    
-
        
(240,000
)
Net loss attributable to common shareholders
  
$
(4,389,040
)
  
$
(694,010
)
    
$
(5,083,050
)
                           
Net loss per common share - Basic :
                          
Continuing operations
  
$
(0.06
)
            
$
(0.26
)
Discontinued operations
    
(0.00
)
              
-
  
Total
  
$
(0.06
)
            
$
(0.26
)
                           
Net loss per common share - Diluted :
                          
Continuing operations
  
$
(0.06
)
            
$
(0.26
)
Discontinued operations
    
(0.00
)
              
-
  
Total
  
$
(0.06
)
            
$
(0.26
)
                           
                           
Weighted average common shares outstanding - basic and diluted
    
71,059,786
        
 (1)
(51,777,195)
    
19,282,591
  
   
 
 
 

Pro forma footnotes:

(1) The weighted average common shares outstanding - basic and diluted is adjusted to reflect the following:
- The conversion of all outstanding Series A and Series B preferred stock into shares of the Company's common stock on a one-for-one basis;
- The one-for-one hundred and twelve (1:112) reverse stock split;
- The issuance of 17,917,261 shares of the Company's common stock to existing holders of common stock of PEDCO;
- The issuance of 14,713,645 shares of the Company's Series A preferred stock to existing holders of Series A preferred stock of PEDCO; and
- The conversion of $1.465 million of Blast related party secured debt into common stock of PEDCO.

(2) The weighted average common shares outstanding do not include the following potentially dilutive securities:
- The grant of warrants to purchase 1,120,000 of the Company's common stock to existing warrant holders of PEDCO;
- The grant of options to purchase 4,235,000 of the Company's common stock to existing option holders of PEDCO; and
- The issuance of 14,713,645 shares of the Company's Series A preferred stock to existing holders of Series A preferred stock of PEDCO.
 
 
 

 
 
 
 
 
 
 
 
 
 

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