Attached files
| file | filename |
|---|---|
| 8-K/A - KONARED 8K AMENDMENT 4, 02.03.14 - KonaRed Corp | konared8ka4100413.htm |
Exhibit 99.4
KONARED CORPORATION
PROFORMA FINANCIAL STATEMENTS
Condensed Proforma Balance Sheets
(Unaudited)
|
KonaRed
Corporation
September 30,
2013
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Sandwich Isles
Trading Co. Inc.
Sept 30,
2013
|
Proforma
Adjustments
|
Proforma
Adjusted Totals
September 30,
2013
|
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ASSETS
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CURRENT ASSETS
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Cash (Note 2)
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$ | — | $ | 16,021 | $ | 800,000 | $ | 816,021 | ||||||||
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Accounts receivable
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— | 55,062 | — | 55,062 | ||||||||||||
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Inventories
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— | 323,584 | — | 323,584 | ||||||||||||
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Total current assets
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— | 394,667 | 800,000 | 1,194,667 | ||||||||||||
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OTHER ASSETS
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13,144 | 13,144 | ||||||||||||||
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Total Assets
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$ | — | $ | 407,811 | $ | 800,000 | $ | 1,207,811 | ||||||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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CURRENT LIABILITIES
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Accounts payable
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9,036 | 571,172 | $ | — | $ | 580,208 | ||||||||||
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Accounts payable – related parties
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44,437 | — | — | 44,437 | ||||||||||||
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Secured note (Note 2)
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— | 500,000 | (500,000 | ) | — | |||||||||||
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Line of credit and short term debt
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— | 65,212 | — | 65,212 | ||||||||||||
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Shareholder advances
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— | — | — | — | ||||||||||||
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Total current liabilities
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53,473 | 1,136,384 | (500,000 | ) | 689,857 | |||||||||||
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Total Liabilities
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53,473 | 1,136,384 | (500,000 | ) | 689,857 | |||||||||||
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COMMITMENTS AND CONTINGENCIES
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— | — | — | |||||||||||||
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STOCKHOLDERS’ (DEFICIT) EQUITY
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Preferred Stock, 10,000,000 par value $0.001 authorized;
nil shares issued and outstanding
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$ | — | $ | — | $ | — | $ | — | ||||||||
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Common Stock, 877,500,000 shares par value $0.001 authorized;
71,288,889 shares issued and outstanding (Notes 1 & 2)
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4,767 | 7,101,125 | (7,034,603 | ) | 71,289 | |||||||||||
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Additional paid-in capital (Note 2)
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47,566 | 190,500 | 8,228,797 | 8,466,863 | ||||||||||||
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Accumulated deficit (Note 2)
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(105,806 | ) | (8,020,198 | ) | 105,806 | (8,020,198 | ) | |||||||||
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Total stockholders’ (deficit) equity
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(53,473 | ) | (728,573 | ) | 1,300,000 | 517,954 | ||||||||||
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Total Liabilities and Stockholders’ (Deficit) Equity
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$ | — | 407,811 | $ | 800,000 | $ | 1,207,811 | |||||||||
1
KONARED CORPORATION
PROFORMA FINANCIAL STATEMENTS
Condensed Proforma Statements of Operations
(Unaudited)
|
KonaRed
Corporation
September 30,
2013
|
Sandwich Isles
Trading Co. Inc.
Sept 30,
2013
|
Proforma
Adjustments
|
Proforma
Adjusted Totals
September 30,
2013
|
|||||||||||||
|
REVENUE:
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Sales
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$ | — | $ | 913,233 | $ | — | $ | 913,233 | ||||||||
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Cost of Goods Sold
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— | 541,408 | — | 541,408 | ||||||||||||
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GROSS MARGIN
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$ | — | $ | 371,825 | $ | — | $ | 371,825 | ||||||||
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OPERATING EXPENSES:
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Research and development
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$ | — | $ | 16,326 | $ | — | $ | 16,326 | ||||||||
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Advertising and marketing
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— | 73,988 | — | 73,988 | ||||||||||||
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General and administrative expenses
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45,187 | 839,261 | — | 884,448 | ||||||||||||
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Total operating expenses
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45,187 | 929,575 | — | 974,762 | ||||||||||||
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Profit (Loss) from operations
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(45,187 | ) | (557,750 | ) | — | (602,937 | ) | |||||||||
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OTHER EXPENSE:
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Interest expense
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— | (18,264 | ) | — | (18,264 | ) | ||||||||||
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Total other expense
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— | (18,264 | ) | — | (18,264 | ) | ||||||||||
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Net Profit (Loss)
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$ | (45,187 | ) | $ | (576,014 | ) | $ | — | $ | (621,201 | ) | |||||
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Basic and diluted loss per
common share
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$ | (0.00 | ) | $ | (0.03 | ) | $ | (0.01 | ) | |||||||
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Basic and diluted weighted
average shares outstanding (Note 2)
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64,350,423 | 23,151,952 | (16,213,486 | ) | 71,288,889 | |||||||||||
2
KONARED CORPORATION
PROFORMA FINANCIAL STATEMENTS
Notes to Condensed Proforma Financial Statements
(Unaudited)
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note 1 – Share Exchange
Pursuant to an asset purchase agreement dated October 4, 2013 (the "Asset Purchase Agreement") between KonaRed Corporation, a Nevada Corporation (formerly known as TeamUpSports, Inc.) ('KonaRed'), and Sandwich Isles Trading Co. Inc., a Hawaiian Corporation ('SITC'), we purchased substantially all of the assets and business operations including intellectual and proprietary property of SITC on October 4, 2013.
The following are the specific transactions which were required at date of execution of the Asset Purchase Agreement. We note that these do not include any prospective future stock issuances contemplated in the Asset Purchase Agreement.
Pursuant to the terms of the asset purchase agreement, and on the closing date thereof, SITC sold its business to KonaRed in consideration for the issuance of 42,750,000 shares of KonaRed’s common stock.
In connection with the closing of the asset purchase agreement, on October 4, 2013, we completed a non-brokered private placement of 1,777,778 shares of our common stock to an un-related third party at a price $0.45 per share for gross proceeds of $800,000.
Also in connection with the closing of the asset purchase agreement, on October 4, 2013, we converted a secured convertible promissory note in the principal amount of $500,000, which was held by the same party as subscribed for the cash purchase of shares noted above , into 1,111,111 shares of common stock of our company at a price of $0.45 per share.
These two issuances of the shares of common stock of our company were issued to one non-U.S. person (as that term is defined in Regulation S of the Securities Act of 1933 (the “1933 Act”)) in offshore transactions relying on Regulation S and/or Section 4(a)(2) of the 1933 Act.
Also, in connection with the closing of the Asset Purchase Agreement, a former director and officer of our company and our company’s largest shareholder, returned 38,700,423 shares of our common stock to the treasury of our company for cancellation without consideration. The share cancellations went effective on October 4, 2013.
At the closing, we determined the acquisition should be treated as a reverse recapitalization for accounting purposes, with SITC as the acquirer for accounting purposes. The number of shares outstanding and per share amounts have been restated to recognize the recapitalization as reflected in proforma adjustments.
3
KONARED CORPORATION
PROFORMA FINANCIAL STATEMENTS
Notes to Condensed Proforma Financial Statements
(Unaudited)
The proforma consolidated balance sheets of SITC and KonaRed are presented here as of September 30, 2013. The proforma consolidated statements of operations for SITC and KonaRed are presented here as of the nine month period ended September 30, 2013.
Note 2 – Adjustments
The following net adjustments are included in these proforma statements to present the combined corporation:
(a) Cash
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Cash from private placement of common shares issued for cash
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$ | 800,000 |
(b) Secured Note
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Conversion of secured note to common shares
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$ | (500,000 | ) |
(c) Number of common shares issued and outstanding:
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Common shares cancelation
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(38,700,423 | ) | ||
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KonaRed common shares issued to SITC shareholders
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42,750,000 | |||
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Private placement common shares issued for cash
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1,777,778 | |||
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Common shares issued for secured note conversion
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1,111,111 | |||
| Net adjustment | 6,938,466 |
(d) Common Stock :
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Adjustment to increase common shares value to reflect par value
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||||
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($0.001 per share) of post-split common shares (64,350,423 shares)
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$ | $ 59,583 | ||
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Common shares cancellation (38,7000,423 shares at par $0.001)
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(38,700 | ) | ||
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KonaRed common shares issued to SITC shareholders (42,750,000 shares at par $0.001)
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42,750 | |||
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Cancellation of SITC common shares
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(7,101,125 | ) | ||
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Private placement common shares issued for cash (1,777,777 shares par $0.001)
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1,778 | |||
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Common shares issued for secured note conversion (1,111,111 share par $0.001)
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1,111 | |||
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Net adjustment
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$ | (7,034,603 | ) | |
4
KONARED CORPORATION
PROFORMA FINANCIAL STATEMENTS
Notes to Condensed Proforma Financial Statements
(Unaudited)
Note 2 – Adjustments (continued)
(e) Additional Paid in Capital ('APIC'):
|
APIC adjustment to offset increase in common shares value to reflect par value
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||||
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($0.001 per share) of post-split common shares (64,350,423 shares)
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$ | (59,583 | ) | |
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APIC adjustment related to common shares cancellation
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38,700 | |||
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APIC adjustment related to KonaRed common shares issued to SITC shareholders
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(42,750,000 shares par $0.001)
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(42,750 | ) | ||
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APIC adjustment related to elimination of KonaRed pre-merger accumulated deficit
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(105,806 | ) | ||
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APIC adjustment due to cancellation of SITC shares
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7,101,125 | |||
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APIC from private placement of common shares issued for cash
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798,222 | |||
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APIC from common shares issued for secured note conversion
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498,889 | |||
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Net adjustment
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$ | 8,228,797 | ||
(f) Accumulated Deficit
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Elimination of KonaRed pre-merger accumulated deficit
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$ | 105,806 |
5
(g) Summary of equity transactions related to reverse merger Asset Purchase Agreement:
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Shares
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Common
Stock
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Additional Paid-in Capital
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Accumulated Deficit
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Total Shareholders' Equity/Deficit
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KonaRed - pre-reverse merger capital stock
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64,350,423 | $ | 4,767 | $ | 47,566 | $ | (105,806 | ) | $ | (53,473 | ) | |||||||||
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Adjustment of common shares value to reflect par value
post-split stock, pre-reverse merger (64,350,423 x $0.001)
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- | $ | 59,583 | $ | (59,583 | ) | $ | - | $ | - | ||||||||||
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Adjusted KonaRed share capital pre-reverse merger
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64,350,423 | $ | 64,350 | $ | (12,017 | ) | $ | (105,806 | ) | $ | (53,473 | ) | ||||||||
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Specific Transactions Required at Execution Date under Terms of Asset Purchase Agreement
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Shares cancellation
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(38,700,423 | ) | $ | (38,700 | ) | $ | 38,700 | $ | - | $ | - | |||||||||
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Issuance of KonaRed shares to Sandwich Isles shareholders
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42,750,000 | $ | 42,750 | $ | (42,750 | ) | $ | - | $ | - | ||||||||||
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sub-total
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68,400,000 | $ | 68,400 | $ | (16,067 | ) | $ | (105,806 | ) | $ | (53,473 | ) | ||||||||
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Elimination of retained earnings of KonaRed
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- | $ | - | $ | (105,806 | ) | $ | 105,806 | $ | - | ||||||||||
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Sandwich Isles - pre-reverse merger capital stock at September 30, 2013
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23,151,952 | $ | 7,101,125 | $ | 190,500 | $ | (8,020,198 | ) | $ | (728,573 | ) | |||||||||
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Elimination of common shares of Sandwich Isles
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(23,151,952 | ) | $ | (7,101,125 | ) | $ | 7,101,125 | $ | - | $ | - | |||||||||
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sub-total
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68,400,000 | $ | 68,400 | $ | 7,169,752 | $ | (8,020,198 | ) | $ | (782,046 | ) | |||||||||
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Shares issued as required by Asset Purchase Agreement:
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Shares issued by KonaRed at $0.45 per share October 4, 2013
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1,777,778 | $ | 1,778 | $ | 798,222 | $ | - | $ | 800,000 | |||||||||||
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Shares issued by KonaRed for secured note conversion at $0.45 per share October 4, 2013
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1,111,111 | $ | 1,111 | $ | 498,889 | $ | - | $ | 500,000 | |||||||||||
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Total KonaRed post-reverse merger equity
|
71,288,889 | $ | 71,829 | $ | 8,466,863 | $ | (8,020,198 | ) | $ | 517,954 | ||||||||||
6