GREENKRAFT, INC. - FORM 8-K - EX-99.2 - GREENKRAFT UNAUDITED FINANCIAL STATEMENTS - December 10, 2013

Attached files

file filename
8-K - CURRENT REPORT - GREENKRAFT, INC.f8k120413_sunriseglobal.htm
EX-2.1 - SECURITIES PURCHASE AGREEMENT - GREENKRAFT, INC.f8k120413ex2i_sunrise.htm
EX-3.1 - ARTICLES OF INCORPORATION OF GREENKRAFT, INC., A CALIFORNIA CORPORATION - GREENKRAFT, INC.f8k112613ex3i_sunrise.htm
EX-10.5 - COMMERCIAL LEASE AGREEMENT DATED APRIL 1, 2013 - GREENKRAFT, INC.f8k112613ex10v_sunrise.htm
EX-3.2 - ARTICLES OF INCORPORATION OF GREENKRAFT, INC., A NEVADA CORPORATION - GREENKRAFT, INC.f8k112613ex3ii_sunrise.htm
EX-3.4 - BYLAWS OF GREENKRAFT, INC., A NEVADA CORPORATION - GREENKRAFT, INC.f8k112613ex3iv_sunrise.htm
EX-99.1 - GREENKRAFT AUDITED FINANCIAL STATEMENTS - GREENKRAFT, INC.f8k120413ex99i_sunrise.htm
EX-10.1 - INVESTMENT AGREEMENT - GREENKRAFT, INC.f8k112613ex10i_sunrise.htm
EX-23.1 - CONSENT OF MALONEBAILEY, LLP - GREENKRAFT, INC.f8k120413ex23i_sunrise.htm
EX-3.3 - BYLAWS OF GREENKRAFT, INC., A CALIFORNIA CORPORATION - GREENKRAFT, INC.f8k112613ex3iii_sunrise.htm
EX-10.2 - REGISTRATION RIGHTS AGREEMENT - GREENKRAFT, INC.f8k112613ex10ii_sunrise.htm
EX-10.4 - COMMERCIAL SECURITY AGREEMENT DATED MARCH 31, 2012 - GREENKRAFT, INC.f8k112613ex10iv_sunrise.htm
EX-10.6 - LOAN MODIFICATION AGREEMENT - GREENKRAFT, INC.f8k112613ex10vi_sunrise.htm
EX-10.3 - BUSINESS LOAN AGREEMENT - GREENKRAFT, INC.f8k112613ex10iii_sunrise.htm
EX-4.1 - PROMISSORY NOTE - GREENKRAFT, INC.f8k112613ex4i_sunrise.htm
EX-99.3 - UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS - GREENKRAFT, INC.f8k120413ex99iii_sunrise.htm
Exhibit 99.2
 
 

GREENKRAFT, INC.
 
Unaudited Consolidated Financial Statements
For the Nine Months Ended September 30, 2013 and 2012
 
Unaudited Condensed Consolidated Financial Statements
  
 
 
  
 
Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012
2
     
 
Unaudited Consolidated Statements of Operations for the Nine Months Ended September 30, 2013 and 2012
3
     
 
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012
4
     
 
Notes to Unaudited Condensed Consolidated Financial Statements
5
 
 
 
 
 
Greenkraft, Inc.
Consolidated Balance Sheets
 
   
September 30,
    
December 31,
  
   
2013
    
2012
  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 411,432     $ 832,430  
Inventories
     2,381,619       373,540  
Deposits on inventory
      178,926        1,005,679  
Total current assets
     2,971,977       2,211,649  
Deposit
     -       7,150  
Equipment
      117,874        -  
Total assets
   $ 3,089,851     $ 2,218,799  
LIABILITIES AND EQUITY
                
Current liabilities:
                
Accounts payable
   $ 310,707     $ 137,843  
Accounts payable - related parties
     285,389        -  
Accrued liabilities
     39,000       406,000  
Deferred income
     928,205       584,955  
Line of credit
     1,036,024       271,024  
Related party debt
     1,941,916       2,009,950  
Total current liabilities
     4,541,241       3,409,772  
Equity:
                
Stockholders’ equity:
                
Common stock, 500,000,000 shares authorized, 100,000,000 issued and outstanding, no par value
     -        -  
Additional paid-in capital
     1,017,738       740,972  
Accumulated Deficit
     (2,469,128 )     (1,931,945 )
Total stockholders’ equity
     (1,451,390 )     (1,190,973 )
Total liabilities and stockholders' equity
   $ 3,089,851     $ 2,218,799  
 
The accompanying notes are an intergral part of these unaudited consolidated financial statements.
 
 
2
 
 
Greenkraft, Inc.
Consolidated Statements of Operations
 
   
Nine Months
Ended
    
Nine Months
Ended
  
   
September 30,
2013
    
September 30,
2012
  
Revenue
   $ 1,924,317     $ 178,547  
                 
Costs and expenses:
                
Cost of revenue
     1,189,644       113,439  
Research and development
     248,965       274,488  
Selling, general and administrative
     981,624       288,198  
Total costs and expenses
     2,420,233       676,125  
Operating loss
     (495,916 )     (497,578 )
Interest expense, net
     (41,411 )     (21,424 )
Interest income
     144       1,997  
Net loss
   $ (537,183 )   $ (517,005 )
 
The accompanying notes are an intergral part of these unaudited consolidated financial statements.
 
   
Three Months
Ended
    
Three Months
Ended
  
   
September 30,
 2013
    
September 30,
2012
  
Revenue
   $ 1,515,432     $ 150,924  
                 
Costs and expenses:
                
Cost of revenue
     969,591       93,450  
Research and development
     85,996       95,811  
Selling, general and administrative
     262,499       91,461  
Total costs and expenses
     1,318,086       280,722  
Operating loss
     197,346       (129,798 )
Interest expense, net
     (15,961 )     (223 )
Interest income
     4       648  
Net income (loss)
   $ 181,389     $ (129,374 )
 
The accompanying notes are an intergral part of these unaudited consolidated financial statements.
 
 
3
 
 
Greenkraft, Inc.
Consolidated Statements of Cash Flows
 
   
Nine Months
Ended
    
Nine Months
Ended
  
   
September 30,
2013
    
September 30,
2012
  
Cash flows from operating activities:
            
Net loss
   $ (537,183 )   $ (517,005 )
Adjustments to net loss to reconcile net loss to net cash used in operating activities:
          
Contributed payroll
     67,216       90,993  
Contributed rent
     1,800       1,800  
Contributed research and development
     168,750       176,230  
Contributed officer salary
     39,000       39,000  
Changes in operating assets and liabilities:
                
Inventory
     (1,002,400 )     (32,303 )
Deposits on inventory
     (178,926 )     40,000  
Other assets
     7,150       -  
Accounts payable
     172,864       (41,234 )
Accounts payable - related parties
     285,389       -  
Accrued liabilities
     (367,000 )     8,500  
Deferred income
     343,250       435,000  
Net cash used in operating activities
     (1,000,090 )     200,981  
                 
Cash flows from investing activities:
                
Cash paid for purchase of equipment
     (117,874 )     -  
Net cash used in investing activities
     (117,874 )     -  
                 
Cash flows from financing activities:
                
Borrowings under lines of credit
     765,000       21,024  
Borrowing (repayments) on related party debt
     (68,034 )     (20,000 )
Distributions to owner
     -       (19,109 )
Net cash provided by financing activities
     696,966       (18,085 )
Net change in cash
     (420,998 )     182,896  
Cash at beginning of period
     832,430       1,408,371  
Cash at end of period
   $ 411,432     $ 1,591,267  
                 
Supplemental cash flow information:
                
Cash paid for interest
   $ 24,037     $ -  
Cash paid for income taxes
   $ -     $ -  
                 
Non cash investing and financing activities:
                
Deposits on inventory transferred to inventory
   $ 1,005,679     $ -  
Distribution of bank line of credit proceeds to owner
   $ -     $ 250,000  
 
The accompanying notes are an intergral part of these unaudited consolidated financial statements.
 
 
4
 
 
GREENKRAFT, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period have been omitted.

NOTE 2 – RELATED PARTY TRANSACTIONS

First Standard Real Estate, LLC is the owner of 2530 S. Birch Street, Santa Ana, CA 92707 where Greenkraft uses office space.  Our CEO is a member of First Standard Real Estate.  Since 2008 Greenkraft has used office space from First Standard Real Estate as its headquarters on a rent free basis.  Greenkraft records contributed rent of $2,400 per year related to this space.

The Defiance Company, LLC is owned by our CEO.   As of September 30, 2013 accounts payable to Defiance is $285,389 for amounts paid by Defiance Company, LLC on behalf of Greenkraft.

CEE, LLC performed testing for Greenkraft for engine certifications and also shares employees with Greenkraft.  Our CEO is a member of CEE, LLC.  For the nine months ended September 30, 2013, Greenkraft recognized $168,750 of contributed research and development expense related to the engine certifications and $67,216 and of contributed payroll expense related to the shared employees.

As of September 30,  2013 Greenkraft owed a total of $1,941,916 to our owner and his related entities.  During 2013, the Company and repaid $68,034.   All amounts are due on demand, unsecured and do not bear interest.

Our CEO does not charge us a salary and therefore we have recognized $39,000 for the nine months ended September 30, 2013 of contributed salary expense.
 
NOTE 3 – LINE OF CREDIT

In March 2012, Greenkraft entered into an agreement with Pacific Premier Bank for a $3,500,000 line of credit.  The line of credit was due on April 10, 2013and bears interest at the prime rate plus 1%.  The line of credit is secured by certain real property owned by the majority shareholder and inventory.  On July 15, 2013 the maturity date of the facility was extended to December 10, 2013 and the maximum amount available under such facility was reduced to $2 million.

During fiscal 2012, $250,000 was transferred under this line of credit to CEE, LLC, a related entity.

In 2013, Greenkraft drew $765,000 on this line of credit.

NOTE 4 – ACQUISITION OF SUNRISE GLOBAL, INC.

In May 2013, Greenkraft, Inc. acquired a majority share of Sunrise Global, Inc. for $125,000 in a private transaction.  Sunrise Global, Inc. is a development stage company with nominal assets and liabilities and no revenues to date.  As a result, the entire purchase price was allocated to goodwill and immediately impaired due to Sunrise Global, Inc. having no operations or expected future cash flows.  The impairment was recorded to general and administrative expenses for the nine months ended September 30, 2013.
 
 
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GREENKRAFT, INC. Reports