Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - CES Synergies, Inc. | glci103120138k.htm |
| EX-3 - ARTICLES OF MERGER - CES Synergies, Inc. | ex3.htm |
| EX-2.1 - AGREEMENT AND PLAN OF MERGE - CES Synergies, Inc. | ex21.htm |
| EX-16.1 - AUDITOR LETTER - CES Synergies, Inc. | ex161.htm |
| EX-10.1 - PROMISSORY NOTE, - CES Synergies, Inc. | ex101.htm |
Exhibit 99.1
GREEN LIVING CONCEPTS INC.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Expressed in United States Dollars, except where specified otherwise)
JUNE 30, 2013
GREEN LIVING CONCEPTS INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS AT JUNE 30, 2013
(Unaudited)
(Expressed in United States Dollars, except where specified otherwise)
Assets | Cross Environmental Services, Inc. | Green Living Concepts Inc. | Notes | Pro forma adjustments | Pro forma consolidated | ||||||||
Current Assets | |||||||||||||
Cash | $ | 600,016 | $ | 293 | $ | - | $ | 600,309 | |||||
Advances to employees | 24,817 | - | - | 24,817 | |||||||||
Receivables (net of allow. for bad debt) | 2,719,128 | - | - | 2,719,128 | |||||||||
Inventory | 97,284 | - | - | 97,284 | |||||||||
Cost and estimated earnings in excess |
| ||||||||||||
of billings on uncompleted contracts | 749,540 | - | - | 749,540 | |||||||||
Prepaid expenses |
| - |
| 320 |
| - |
| 320 | |||||
Total Current Assets | 4,190,785 | 613 | - | 4,191,398 | |||||||||
Fixed Assets | |||||||||||||
Property & equipment, net | 2,153,666 | 1,853 | - | 2,155,519 | |||||||||
Other Assets | |||||||||||||
Other receivables | 9,268 | - | - | 9,268 | |||||||||
Goodwill |
| 1,446,855 |
| - |
| - |
| 1,446,855 | |||||
-1-
Total Other Assets | 1,456,123 | - | - | 1,456,123 | |||||||||
Total Assets | $ | 7,800,574 | $ | 2,466 | $ | - | $ | 7,803,040 | |||||
Liabilities And Stockholders' Equity | |||||||||||||
Current Liabilities | |||||||||||||
Accounts payable and accrued liabilities | $ | 967,820 | $ | 46,350 | $ | $ | 1,014,170 | ||||||
Accounts payable - related party | - | 20,000 | - | 20,000 | |||||||||
Payroll taxes payable | - | 982 | - | 982 | |||||||||
Billings in excess of costs and | |||||||||||||
estimated earnings on uncompleted contracts | 411,248 | - | - | 411,248 | |||||||||
Current portion long-term debt |
| 418,911 |
| - |
| - |
| 418,911 | |||||
Total Current Liabilities | 1,797,979 | 67,332 | - | 1,865,311 | |||||||||
Long-Term Liabilities | |||||||||||||
Long-term debt, net of current portion | 3,752,392 | - | 3,752,392 | ||||||||||
Loan from officer |
| 234,513 |
|
|
| - |
| 234,513 | |||||
Total Long-Term Liabilities | 3,986,905 | - | - | 3,986,905 | |||||||||
Stockholders' Equity | |||||||||||||
Common stock, par value $0.001 per share, 75,000,000 shares authorized | |||||||||||||
11,525,000 shares issued and outstanding | 11,525 | 4(a)(i) | (11,525) | - | |||||||||
Common Stock, $1 Par Value, 100 Shares authorized | |||||||||||||
100 shares issued and outstanding | 160 | 160 | |||||||||||
Treasury stock, 80 shares, at cost | (129,356) | (129,356) | |||||||||||
-2-
Additional paid in capital | 1,130,424 | 31,675 | 4(a)(i) | (96,541) | 1,065,558 | ||||||||
Retained earnings | 1,014,462 | (108,066) | 4(a)(i) | 108,066 | 1,014,462 | ||||||||
|
|
|
|
|
|
|
| ||||||
Total Stockholders' Equity | 2,015,690 | (64,866) | - | 1,950,824 | |||||||||
|
|
|
|
|
|
|
| ||||||
Total Liabilities And Stockholders' Equity | $ | 7,800,574 | $ | 2,466 | $ | - | $ | 7,803,040 |
The accompanying notes are integral part of these Pro Forma Consolidated Financial Statements.
-3-
GREEN LIVING CONCEPTS INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2013
(Unaudited)
(Expressed in United States Dollars, except where specified otherwise)
Cross Environmental Services, Inc. | Green Living Concepts Inc. | Notes | Pro forma adjustments | Pro forma consolidated | |||||||||
Revenues | $ | 6,768,486 | $ | 16,980 | $ | $ | 6,785,466 | ||||||
Cost of revenues |
| 5,326,453 |
| 2,400 |
|
|
| 5,328,853 | |||||
Gross profit | 1,442,033 | 14,580 | 1,456,613 | ||||||||||
General and administrative expenses |
| 1,733,077 |
| 61,215 |
|
|
| 1,794,292 | |||||
Net income from operations | (291,044) | (46,635) | (337,679) | ||||||||||
Other income (expense) | |||||||||||||
Other income (expense) | 5,813 | (742) | 5,071 | ||||||||||
Interest expense |
| (78,371) |
| - |
|
|
| (78,371) | |||||
Total other income (expense) | (72,558) | (742) | (73,300) | ||||||||||
Loss from continuing operations before nonrecurring charges or credits directly attributable to the transaction | $ | (363,602) | $ | (47,377) | $ |
| $ | (410,979) | |||||
Pro forma weighted average number of shares outstanding - basic and diluted | 100 | 8,103,356 | (100) | 8,103,356 | |||||||||
Pro forma adjusted loss per share - basic and diluted | (0.05) | ||||||||||||
The accompanying notes are integral part of these Pro Forma Consolidated Financial Statements.
-4-
GREEN LIVING CONCEPTS INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 2012
(Unaudited)
(Expressed in United States Dollars, except where specified otherwise)
Assets | Cross Environmental Services, Inc. | Green Living Concepts Inc. | Notes | Pro forma adjustments | Pro forma consolidated | ||||||||
Current Assets | |||||||||||||
Cash | $ | 600,016 | $ | 2,029 | $ | $ | 602,045 | ||||||
Advances to employees | 24,817 | - | 24,817 | ||||||||||
Receivables (net of allow. for bad debt) | 2,719,128 | 1,125 | 2,720,253 | ||||||||||
Inventory | 97,284 | - | 97,284 | ||||||||||
Cost and estimated earnings in excess | - | ||||||||||||
of billings on uncompleted contracts | 749,540 | - | 749,540 | ||||||||||
Prepaid expenses |
| - |
| 120 |
|
|
| 120 | |||||
Total Current Assets | 4,190,785 | 3,274 | 4,194,059 | ||||||||||
Fixed Assets | |||||||||||||
Property & equipment, net | 2,153,666 | 2,101 | 2,155,767 | ||||||||||
Other Assets | |||||||||||||
Other receivables | 9,268 | - | 9,268 | ||||||||||
Goodwill |
| 1,446,855 |
| - |
|
|
| 1,446,855 | |||||
Total Other Assets | 1,456,123 | - | 1,456,123 | ||||||||||
|
|
| |||||||||||
Total Assets | $ | 7,800,574 | $ | 5,375 | $ |
| $ | 7,805,949 | |||||
Liabilities And Stockholders' Equity | |||||||||||||
-5-
Current Liabilities | |||||||||||||
Accounts payable and accrued liabilities | $ | 967,820 | $ | 41,768 | 1,009,588 | ||||||||
Accounts payable - related party | - | 15,200 | 15,200 | ||||||||||
Payroll taxes payable | - | 2,096 | 2,096 | ||||||||||
Billings in excess of costs and | - | ||||||||||||
estimated earnings on uncompleted contracts | 411,248 | - | 411,248 | ||||||||||
Current portion long-term debt |
| 418,911 |
| - |
|
|
| 418,911 | |||||
Total Current Liabilities | 1,797,979 | 59,064 | 1,857,043 | ||||||||||
Long-Term Liabilities | |||||||||||||
Long-term debt, net of current portion | 3,752,392 | 3,752,392 | |||||||||||
Loan from officer |
| 234,513 |
|
|
|
|
| 234,513 | |||||
Total Long-Term Liabilities | 3,986,905 | - | 3,986,905 | ||||||||||
Stockholders' Equity | |||||||||||||
Common stock, par value $0.001 per share, 75,000,000 shares authorized | |||||||||||||
7,000,000 shares issued and outstanding | 7,000 | 4(a)(i) | (7,000) | - | |||||||||
| |||||||||||||
Common Stock, $1 Par Value, 100 Shares authorized | |||||||||||||
100 shares issued and outstanding | 160 | 160 | |||||||||||
Treasury stock, 80 shares, at cost | (129,356) | (129,356) | |||||||||||
Additional paid in capital | 1,130,424 | - | 4(a)(i) | (53,689) | 1,076,735 | ||||||||
Retained earnings |
| 1,014,462 |
| (60,689) | 4(a)(i) |
| 60,689 |
| 1,014,462 | ||||
Total Stockholders' Equity | 2,015,690 | (53,689) | - | 1,962,001 | |||||||||
|
|
|
| ||||||||||
Total Liabilities And Stockholders' Equity | $ | 7,800,574 | $ | 5,375 | $ | - | $ | 7,805,949 | |||||
The accompanying notes are integral part of these Pro Forma Consolidated Financial Statements.
-6-
GREEN LIVING CONCEPTS INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2012
(Unaudited)
(Expressed in United States Dollars, except where specified otherwise)
Cross Environmental Services, Inc. | Green Living Concepts Inc. | Notes | Pro forma adjustments | Pro forma consolidated | |||||||||
Revenues | $ | 16,269,345 | $ | 33,105 | $ | $ | 16,302,450 | ||||||
Cost of revenues |
| 12,649,700 |
| 12,081 |
|
|
| 12,661,781 | |||||
Gross profit | 3,619,645 | 21,024 | 3,640,669 | ||||||||||
General and administrative expenses |
| 3,588,775 |
| 52,825 |
|
|
| 3,641,600 | |||||
Net income from operations | 30,870 | (31,801) | (931) | ||||||||||
Other income (expense) | |||||||||||||
Other income (expense) | 509,096 | (492) | 508,604 | ||||||||||
Interest expense |
| (150,883) |
| - |
|
|
| (150,883) | |||||
Total other income (expense) | 358,213 | (492) | 357,721 | ||||||||||
Loss from continuing operations before nonrecurring charges or credits directly attributable to the transaction | $ | 389,083 | $ | (32,293) | $ |
| $ | 356,790 | |||||
Pro forma weighted average number of shares outstanding - basic and diluted | 100 | 7,000,000 | (100) | 7,000,000 | |||||||||
Pro forma adjusted earnings per share - basic and diluted | 0.05 | ||||||||||||
The accompanying notes are integral part of these pro-forma consolidated financial statements.
-7-
1. BASIS OF PRESENTATION
The accompanying unaudited unaudited pro forma consolidated balance sheet as at June 30, 2013 and the unaudited pro forma consolidated statements of operations for the six-month period ended June 30, 2013 and the year ended December 31, 2012 (the “Pro Forma Consolidated Financial Statements”) of Green Living Concepts Inc. ("Green Living") have been prepared by management on the basis of United States Generally Accepted Accounting Principles (“US GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) from information derived from the financial statements of Green Living and the financial statements of Cross Environmental Services, Inc. (“Cross Environmental”). The unaudited Pro Forma Consolidated Financial Statements have been prepared for inclusion in the Form 8-K in conjunction with the proposed acquisition of 100% of the issued and outstanding capital stock of Cross Environmental (the “Acquisition”).
The unaudited pro forma consolidated balance sheet as at June 30, 2013 gives effect to the acquisition of Cross Environmental by Green Living as if it had occurred on June 30, 2013. The unaudited pro forma consolidated statements of loss for the six months ended June 30, 2013 and for the year ended December 31, 2011 give effect to the Acquisition as if it had occurred on January 1, 2012.
Prior to the date of the Acquisition, Green Living amended its by-laws to change its fiscal year end from March 31st to December 31st. Accordingly, all financial reports to be issued after the date of the Acquisition will use December 31st as the Company's fiscal year end. The accompanying unaudited Pro Forma Consolidated Financial Statements have been prepared on the basis of a fiscal year ending December 31st.
The unaudited Pro Forma Consolidated Financial Statements have been derived from:
a) | the unaudited condensed interim financial statements of Green Living for six month period ended June 30, 2013 |
b) | the unaudited financial statements of Green Living for the twelve month period ended December 31, 2012 |
c) | the unaudited condensed interim financial statements of Green Living for the twelve month period ended December 31, 2011 |
d) | the unaudited condensed interim financial statements of Cross Environmental for six month period ended June 30, 2013 |
e) | the audited financial statements of Cross Environmental for the year ended December 31, 2012. |
The unaudited pro forma adjustments are based on currently available information and certain assumptions that management believes are reasonable. The unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the selected historical financial information and related financial statements and accompanying footnotes of Cross Environmental and Green Living. The unaudited Pro Forma Consolidated Financial Statements are for informational purposes only and do not purport to reflect the financial position or results of operations that would have occurred if the Acquisition had been consummated on the dates indicated above; nor do they purport to represent or be indicative of the financial position or results of operations of Green Living for any future dates or periods. Unless otherwise stated, all amounts presented in these unaudited Pro Forma Consolidated Financial Statements are in U.S. dollars.
In accordance with U.S. GAAP, the Acquisition will be accounted for as a reverse recapitalization, equivalent to the issuance of common shares by Cross Environmental for the net monetary assets of Green Living accompanied by a re-capitalization. Green Living will be the legal acquirer but, for accounting purposes, Cross Environmental will be treated as the accounting acquirer. Cross Environmental will record Green Living’s assets acquired and liabilities assumed
upon the consummation of the Acquisition at fair value. The final fair values allocated to the various Green Living assets and liabilities as a result of the Acquisition will differ from those values presented in the unaudited Pro Forma Consolidated Financial Statements, and such differences could be material.
-8-
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies used in the preparation of these unaudited pro forma consolidated financial statements are those set out in Cross Environmental’s audited financial statements as at December 31, 2011 and Cross Environmental’s unaudited condensed interim financial statements for the six months ended June 30, 2013. Management has determined that no material adjustments are necessary to conform Green Living’s financial statements to the accounting policies used by Cross Environmental in the preparation of these Pro Forma Consolidated Financial Statements.
3. DESCRIPTION OF THE TRANSACTION
a) Description of the Transaction
On November 1, 2013, Green Living Concepts Inc. ("Company" or "Green Living") entered into and closed an Agreement and Plan of Merger (the “Merger Agreement”), with CES Acquisitions, Inc. ("Subsidiary"), and Cross Environmental Services, Inc. (“Cross Environmental”). Pursuant to the Merger Agreement, the Subsidiary merged into Cross Environmental, such that Cross Environmental became a wholly-owned subsidiary of the Company (the “Merger”), and the Company issued 35,000,000 shares of the Company’s common stock to the shareholders of Cross Environmental (the “Acquisition Shares”), representing approximately 75.2% of the Company’s aggregate issued and outstanding common stock following the closing of the Merger Agreement.
As a result of the shareholders of Cross Environmental having a controlling interest in Green Living subsequent to the Acquisition, for accounting purposes the transaction constitutes a reverse recapitalization with Cross Environmental being the accounting acquirer even though legally Cross Environmental is the acquiree. Therefore, the net assets of the Green Living are recorded at fair value at the date of the transaction. No goodwill is recorded with respect to the transaction as it does not constitute a business combination.
The fair value of the assets and liabilities of Green Living as at June 30, 2013 are as follows:
Cash |
| $ | 293 |
|
Prepaid expenses |
|
| 320 | |
Property and equipment |
|
| 1,853 | |
Accounts payable | (66,350 | ) | ||
Payroll taxes payable | (982 | ) | ||
(64,866 | ) |
4. PRO FORMA ASSUMPTIONS AND ADJUSTMENTS
The unaudited Pro Forma Consolidated Financial Statements are presented as if all shares of Cross Environmental have been exchanged for Green Living common shares at the date of the Acquisition
-9-
a)
The unaudited pro forma consolidated balance sheet as at June 30, 2013 reflects the following adjustment, which is directly attributable to the Acquisition, as if the Acquisition had occurred on June 30, 2013:
i)
To eliminate the book value of Green Living’s equity accounts and to adjust outstanding common shares to their par value.
b) The unaudited pro forma consolidated statement of operations for the six months ended June 30, 2013 and the year ended December 31, 2012 is prepared as if the Acquisition had occurred on January 1, 2012. The Company does not anticipate any income or expense adjustments directly attributable to the Acquisition. |
5. PRO FORMA COMMON STOCK
| Pro forma common stock as at June 30, 2013 has been determined as follows: | ||||||||
|
|
|
| ||||||
|
| June 30, 2013 |
| ||||||
|
| Common Shares | Amount ($) |
| |||||
Common stock of Cross Environmental at June 30, 2013 |
|
| 100 |
|
|
| 160 |
| |
Adjustment to par value |
|
| 11,249,900 |
|
|
| - |
| |
Pro forma common stock at June 30, 2013 |
|
| 11,250,000 |
|
|
| 160 |
| |
6. PRO FORMA INCOME/(LOSS) PER SHARE
| Pro forma income/(loss) per share has been determined as follows: |
|
| Six months ended June 30, 2013 | Year ended December 31, 2012 |
| ||||
Weighted average number of Cross Environmental common shares |
|
| 100 |
|
|
| 100 |
|
Deemed shares held by Green Living shareholders |
|
| 11,249,900 |
|
|
| 6,999,900 |
|
Pro forma weighted average number of shares outstanding - basic and diluted |
|
| 8,103,356 |
|
|
| 7,000,000 |
|
Pro forma adjusted net income/(loss) |
| $ | (0.05 | ) |
| $ | 0.05 | |
Pro forma adjusted earnings/(loss) per share - basic and diluted |
| $ | (0.05 | ) |
| $ | 0.05 | |
|
|
|
|
|
|
|
|
|
-10-