Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - Sunworks, Inc. | solar3d8ka011415.htm |
Exhibit 99.2
SOLAR3D, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information is based on the historical financial statements of Solar3D, Inc. (the “Company”) and MD Energy, LLC (MDE) after entering into an agreement in November 2014 giving effect to the Company’s acquisition of MDE expected to close in February 2015. The notes to the unaudited pro forma condensed financial information describes the reclassifications and adjustments to the financial information presented.
The unaudited pro forma condensed combined balance sheet and the statement of operations for the nine months ended September 30, 2014, and the year ended December 31, 2013 are presented as if the acquisition of MDE had occurred on January 1, 2013 and were carried forward through each of the periods presented.
The allocation of the purchase price used in the unaudited pro forma condensed combined financial information is based upon the respective fair values of the assets and liabilities of MDE as of the date of acquisition.
The unaudited pro forma condensed combined financial information is not intended to represent or be indicative of the Company’s consolidated results of operations or financial position that the Company would have reported had the MDE acquisition been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operation or financial position.
The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company included in the annual report on form 10K for the year ended December 31, 2014.
SOLAR3D, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2014
|
ProForma
|
|||||||||||||||||
|
Adjustments
|
ProForma
|
||||||||||||||||
|
SOLAR3D
|
MDE
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
ASSETS
|
|||||||||||||||||
|
CURRENT ASSETS
|
|||||||||||||||||
|
Cash and cash equivalents
|
$ | 1,288,855 | $ | 489,936 | $ | - | $ | 1,778,791 | |||||||||
|
Accounts receivable
|
1,082,436 | - | - | 1,082,436 | |||||||||||||
|
Contracts receivable
|
- | 740,697 | - | 740,697 | |||||||||||||
|
Inventory
|
89,821 | - | - | 89,821 | |||||||||||||
|
Costs and estimated earnings in excess of billings
|
1,551,854 | 146,814 | - | 1,698,668 | |||||||||||||
|
Prepaid expense
|
289,422 | - | - | 289,422 | |||||||||||||
|
Other receivable
|
107,458 | 150,442 | 257,900 | ||||||||||||||
| - | |||||||||||||||||
|
TOTAL CURRENT ASSETS
|
4,409,846 | 1,527,889 | - | 5,937,735 | |||||||||||||
|
PROPERTY & EQUIPMENT, at cost
|
|||||||||||||||||
|
Equipment, computer, software, furniture & fixtures, and automotive
|
126,989 | 83,389 | - | 210,378 | |||||||||||||
|
Less accumulated depreciation
|
(85,567 | ) | (5,000 | ) | - | (90,567 | ) | ||||||||||
| - | |||||||||||||||||
|
NET PROPERTY AND EQUIPMENT
|
41,422 | 78,389 | - | 119,811 | |||||||||||||
|
OTHER ASSETS
|
|||||||||||||||||
|
Security deposit
|
7,000 | - | - | 7,000 | |||||||||||||
|
Goodwill
|
2,599,268 | - | 3,003,608 |
(A)
|
5,602,876 | ||||||||||||
|
Patents
|
23,161 | - | - | 23,161 | |||||||||||||
| - | |||||||||||||||||
|
TOTAL OTHER ASSETS
|
2,629,429 | - | 3,003,608 | 5,633,037 | |||||||||||||
| - | |||||||||||||||||
|
TOTAL ASSETS
|
$ | 7,080,697 | $ | 1,606,278 | $ | 3,003,608 | 11,690,583 | ||||||||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
|||||||||||||||||
|
CURRENT LIABILITIES
|
|||||||||||||||||
|
Accounts payable
|
$ | 1,829,925 | $ | 473,496 | $ | - | 2,303,421 | ||||||||||
|
Billings in excess of costs and estimated earnings
|
939,364 | 257,007 | - | 1,196,371 | |||||||||||||
|
Accrued expenses and other liabilities
|
310,616 | - | - | 310,616 | |||||||||||||
|
Customer deposits
|
48,141 | - | - | 48,141 | |||||||||||||
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Other liabilities
|
10,810 | 79,383 | - | 90,193 | |||||||||||||
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Derivative liability
|
12,879,105 | - | - | 12,879,105 | |||||||||||||
|
Convertible promissory note, net of beneficial conversion feature of $478,723
|
646,277 | - | - | 646,277 | |||||||||||||
|
Convertible promissory note payable, net of discount $164,385
|
1,097,615 | - | 3,800,000 |
(C)
|
4,897,615 | ||||||||||||
| - | |||||||||||||||||
|
TOTAL CURRENT LIABILITIES
|
17,761,853 | 809,886 | 3,800,000 | 22,371,739 | |||||||||||||
|
SHAREHOLDERS' DEFICIT
|
|||||||||||||||||
|
Preferred stock, $.001 par value;
5,000,000 authorized shares; |
- | - | - | ||||||||||||||
|
Common stock, $.001 par value;
1,000,000,000 authorized shares; |
330,154 | - | - | 330,154 | |||||||||||||
|
Additional paid in capital
|
22,513,814 | - | - | 22,513,814 | |||||||||||||
|
Members' Equity
|
- | 796,392 | (796,392 | ) |
(B)
|
- | |||||||||||
|
Retained earnings (deficit)
|
(33,525,124 | ) | - | - | (33,525,124 | ) | |||||||||||
| - | |||||||||||||||||
|
TOTAL SHAREHOLDERS' DEFICIT
|
(10,681,156 | ) | 796,392 | (796,392 | ) | (10,681,156 | ) | ||||||||||
| - | |||||||||||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT
|
$ | 7,080,697 | $ | 1,606,278 | $ | 3,003,608 | 11,690,583 | ||||||||||
See notes to unaudited pro forma condensed combined financial information
SOLAR3D, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014
|
ProForma
|
|||||||||||||||||
|
Nine Months Ended
|
Adjustments
|
ProForma
|
|||||||||||||||
|
SOLAR3D
|
MDE
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
REVENUE
|
$ | 14,956,077 | $ | 4,398,799 | $ | - | $ | 19,354,876 | |||||||||
|
COST OF SERVICES
|
10,909,254 | 3,644,405 | - | 14,553,659 | |||||||||||||
|
GROSS PROFIT
|
4,046,823 | 754,394 | - | 4,801,217 | |||||||||||||
|
OPERATING EXPENSES
|
|||||||||||||||||
|
Selling and marketing expense
|
1,030,915 | - | - | 1,030,915 | |||||||||||||
|
General and administrative expenses
|
3,028,954 | 302,270 | 800 |
(D)
|
3,332,024 | ||||||||||||
|
Research and development
|
86,025 | - | - | 86,025 | |||||||||||||
|
Depreciation and amortization expense
|
5,747 | 5,000 | - | 10,747 | |||||||||||||
|
TOTAL OPERATING EXPENSES
|
4,151,641 | 307,270 | 800 | 4,459,711 | |||||||||||||
|
LOSS FROM OPERATIONS
|
(104,818 | ) | 447,124 | (800 | ) | 341,506 | |||||||||||
|
OTHER INCOME/(EXPENSES)
|
|||||||||||||||||
|
Interest income
|
323 | 3,728 | 4,051 | ||||||||||||||
|
Gain/(loss) on change in derivative liability
|
(14,533,218 | ) | - | (14,533,218 | ) | ||||||||||||
|
Gain/(Loss) on settlement of debt
|
(14,355 | ) | - | (14,355 | ) | ||||||||||||
|
Penalties
|
(7,170 | ) | |||||||||||||||
|
State tax
|
- | (800 | ) | 800 |
(D)
|
- | |||||||||||
|
Interest expense
|
(2,918,779 | ) | - | (2,918,779 | ) | ||||||||||||
| - | |||||||||||||||||
|
TOTAL OTHER INCOME/(EXPENSES)
|
(17,473,199 | ) | 2,928 | 800 | (17,469,471 | ) | |||||||||||
| - | |||||||||||||||||
|
NET LOSS
|
$ | (17,578,017 | ) | $ | 450,052 | $ | - | $ | (17,127,965 | ) | |||||||
|
BASIC AND DILUTED LOSS PER SHARE
|
$ | (0.06 | ) | $ | - | $ | - | $ | (0.06 | ) | |||||||
|
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
|
|||||||||||||||||
|
BASIC AND DILUTED
|
284,426,783 | - | - | 284,426,783 | |||||||||||||
See notes to unaudited pro forma condensed combined financial information
SOLAR3D, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
FOR THE YEAR ENDED DECEMBER 31, 2013
|
ProForma
|
|||||||||||||||||
|
Adjustments
|
ProForma
|
||||||||||||||||
|
SOLAR3D
|
MDE
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
ASSETS
|
|||||||||||||||||
|
CURRENT ASSETS
|
|||||||||||||||||
|
Cash and cash equivalents
|
$ | 10,422 | $ | 377,080 | $ | - | $ | 387,502 | |||||||||
|
Contracts receivable
|
- | 85,166 | - | 85,166 | |||||||||||||
|
Costs and estimated earnings in excess of billings
|
- | 13,557 | - | 13,557 | |||||||||||||
|
Prepaid expense
|
4,862 | 420,500 | - | 425,362 | |||||||||||||
|
Other receivable
|
- | - | - | ||||||||||||||
| - | |||||||||||||||||
|
TOTAL CURRENT ASSETS
|
15,284 | 896,303 | - | 911,587 | |||||||||||||
|
PROPERTY & EQUIPMENT, at cost
|
|||||||||||||||||
|
Equipment, computer, software, furniture & fixtures, and automotive
|
79,705 | 2,926 | - | 82,631 | |||||||||||||
|
Less accumulated depreciation
|
(72,971 | ) | (418 | ) | - | (73,389 | ) | ||||||||||
| - | |||||||||||||||||
|
NET PROPERTY AND EQUIPMENT
|
6,734 | 2,508 | - | 9,242 | |||||||||||||
|
OTHER ASSETS
|
|||||||||||||||||
|
Security deposit
|
2,000 | - | - | 2,000 | |||||||||||||
|
Goodwill
|
- | - | 3,646,826 |
(A)
|
3,646,826 | ||||||||||||
|
Patents
|
23,161 | - | - | 23,161 | |||||||||||||
| - | |||||||||||||||||
|
TOTAL OTHER ASSETS
|
25,161 | - | 3,646,826 | 3,671,987 | |||||||||||||
| - | |||||||||||||||||
|
TOTAL ASSETS
|
$ | 47,179 | $ | 898,811 | $ | 3,646,826 | 4,592,816 | ||||||||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT
|
|||||||||||||||||
|
CURRENT LIABILITIES
|
|||||||||||||||||
|
Accounts payable
|
$ | 73,791 | $ | 137,326 | $ | - | 211,117 | ||||||||||
|
Billings in excess of costs and estimated earnings
|
- | 608,311 | - | 608,311 | |||||||||||||
|
Accrued expenses and other liabilities
|
82,950 | - | - | 82,950 | |||||||||||||
|
Other liabilities
|
- | - | - | - | |||||||||||||
|
Derivative liability
|
2,822,430 | - | - | 2,822,430 | |||||||||||||
|
Convertible promissory note payable, net of discount $204,020
|
515,397 | - | 3,800,000 |
(C)
|
4,315,397 | ||||||||||||
| - | |||||||||||||||||
|
TOTAL CURRENT LIABILITIES
|
3,494,568 | 745,637 | 3,800,000 | 8,040,205 | |||||||||||||
|
SHAREHOLDERS' DEFICIT
|
|||||||||||||||||
|
Preferred stock, $.001 par value;
5,000,000 authorized shares; |
- | - | - | ||||||||||||||
|
Common stock, $.001 par value;
1,000,000,000 authorized shares; |
213,289 | - | - | 213,289 | |||||||||||||
|
Additional paid in capital
|
12,286,429 | - | - | 12,286,429 | |||||||||||||
|
Members' Equity
|
- | 153,174 | (153,174 | ) |
(B)
|
- | |||||||||||
|
Retained earnings (deficit)
|
(15,947,107 | ) | - | - | (15,947,107 | ) | |||||||||||
| - | |||||||||||||||||
|
TOTAL SHAREHOLDERS' DEFICIT
|
(3,447,389 | ) | 153,174 | (153,174 | ) | (3,447,389 | ) | ||||||||||
| - | |||||||||||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT
|
$ | 47,179 | $ | 898,811 | $ | 3,646,826 | 4,592,816 | ||||||||||
See notes to unaudited pro forma condensed combined financial information
SOLAR3D, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
|
ProForma
|
|||||||||||||||||
|
Year Ended
|
Adjustments
|
ProForma
|
|||||||||||||||
|
SOLAR3D
|
MDE
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||
|
REVENUE
|
$ | - | $ | 350,465 | $ | - | $ | 350,465 | |||||||||
|
COST OF SERVICES
|
- | 313,606 | - | 313,606 | |||||||||||||
|
GROSS PROFIT
|
- | 36,859 | - | 36,859 | |||||||||||||
|
OPERATING EXPENSES
|
|||||||||||||||||
|
General and administrative expenses
|
970,769 | 145,120 | 800 |
(D)
|
1,116,689 | ||||||||||||
|
Research and development
|
108,565 | - | - | 108,565 | |||||||||||||
|
Depreciation and amortization expense
|
1,847 | - | - | 1,847 | |||||||||||||
|
TOTAL OPERATING EXPENSES
|
1,081,181 | 145,120 | 800 | 1,227,101 | |||||||||||||
|
LOSS FROM OPERATIONS
|
(1,081,181 | ) | (108,261 | ) | (800 | ) | (1,190,242 | ) | |||||||||
|
OTHER INCOME/(EXPENSES)
|
|||||||||||||||||
|
Gain/(loss) on change in derivative liability
|
(2,068,886 | ) | - | (2,068,886 | ) | ||||||||||||
|
Gain/(Loss) on settlement of debt
|
60,908 | - | 60,908 | ||||||||||||||
|
State tax
|
- | (800 | ) | 800 |
(D)
|
- | |||||||||||
|
Interest expense
|
(725,767 | ) | - | (725,767 | ) | ||||||||||||
| - | |||||||||||||||||
|
TOTAL OTHER INCOME/(EXPENSES)
|
(2,733,745 | ) | (800 | ) | 800 | (2,733,745 | ) | ||||||||||
| - | |||||||||||||||||
|
NET LOSS
|
$ | (3,814,926 | ) | $ | (109,061 | ) | $ | - | $ | (3,923,987 | ) | ||||||
|
BASIC AND DILUTED LOSS PER SHARE
|
$ | (0.02 | ) | $ | - | $ | - | $ | (0.02 | ) | |||||||
|
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING
|
|||||||||||||||||
|
BASIC AND DILUTED
|
168,603,843 | - | - | 168,603,843 | |||||||||||||
See notes to unaudited pro forma condensed combined financial information
SOLAR3D
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
|
1.
|
BASIS OF PRO FORMA PRESENTATION
|
The unaudited pro forma condensed combined balance sheet and the unaudited pro forma condensed statements of operations for the nine months ended September 30, 2014, and the year ended December 31, 2013, are based on the historical financial statements of Solar3D, Inc. (the ”Company”) and MD Energy, LLC (MDE) after giving effect to the Company’s expected acquisition of MDE during the month of February 2015, and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information.
The Company accounts for business combinations pursuant to Accounting Standards Codification ASC 805, Business Combinations. In accordance with ASC 805, the Company uses it best estimates and assumptions to accurately assign fair value to the assets acquired and the liabilities assumed at the acquisition date. Goodwill as of the acquisition date is measured as the excess of the purchase consideration over the fair value of the assets acquired and the liabilities assumed.
The fair values assigned to MDE’s assets acquired and liabilities assumed are based on management’s estimates and assumptions. The estimated fair values of these assets acquired and liabilities assumed are considered preliminary and are based on the information that was available as of the date of acquisition. The Company believes that the information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but is waiting for additional information, primarily related to estimated values of current and non current income taxes payable and deferred taxes, which are subject to change, pending the finalization of certain tax returns. The Company expects to finalize the valuation of the assets and liabilities as soon as practicable, but not later than one year from the acquisition date.
The unaudited pro forma condensed combined financial information is not intended to represent or be indicative of the Company’s consolidated results of operations or financial position that the Company would have reported had the MDE acquisition been completed as of the dates presented, and should not be taken as a representation of the Company’s future consolidated results of operation or financial position.
The unaudited pro forma condensed combined financial information should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company included in the annual report on form 10K for the year ended December 31, 2014.
Accounting Periods Presented
For purposes of these unaudited pro forma condensed combined financial information, MDE’s historical nine months ended September 30, 2014, and the year ended December 31, 2013, have been aligned to more closely conform to the Company’s financial information, as explained below. Certain pro forma adjustments were made to conform MDE’s accounting policies to the Company’s accounting policies as noted below.
The unaudited pro forma condensed combined balance sheet and statement of operations for the nine months ended September 30, 2014, and the year ended December 31, 2013 are presented as if the acquisition of MDE had occurred on January 1, 2013 and were carried forward through each of the periods presented.
Reclassifications
The Company reclassified certain accounts in the presentation of MDE’s historical financial statements in order to conform to the Company’s presentation.
|
2.
|
ACQUISITION OF MD ENERGY, LLC.
|
|
|
During the month of November 2014, Solar3D, Inc. (SLTD) entered into an agreement to acquire 100% of the membership interest of MD Energy, LLC (MDE) expected to close in February 2015. The transaction will be accounted for under ASC 805, for cash in the amount of $1,000,000, and convertible promissory notes for $2,800,000. MDE is engaged in energy, infrastructure, electrical and building construction. The acquisition is designed to enhance our services for solar technology. MDE will be a wholly-owned subsidiary of SLTD.
|
|
2.
|
ACQUISITION OFMD ENERGY, LLC (Continued)
|
|
|
Under the purchase method of accounting, the transactions will be valued for accounting purposes at $3,800,000, which will be the estimated fair value of the Company at date of acquisition. The assets and liabilities of MDE will be recorded at their respective fair values as of the date of acquisition, and the following table summarizes these values.
|
|
Purchase Price Allocation
|
||||
|
Nine Months Ended
|
||||
|
9/30/2014
|
||||
|
Assets acquired
|
||||
|
Current Assets
|
||||
|
Cash
|
$ | 489,936 | ||
|
Contract Receivables
|
740,697 | |||
|
Costs and Estimated Earnings in Excess of Billings
|
146,814 | |||
|
Note Receivable
|
150,442 | |||
|
Total Current Assets
|
1,527,889 | |||
|
Tangible Assets subject to depreciation
|
||||
|
Machinery and Equipment, net of depreciation
|
78,389 | |||
|
Other Assets
|
||||
|
Goodwill
|
3,003,608 | |||
|
Total Other Assets
|
3,003,608 | |||
|
Total assets acquired
|
4,609,886 | |||
|
Liabilities assumed
|
||||
|
Current liabilities
|
||||
|
Accounts Payable
|
$ | 473,496 | ||
|
Billings in Excess of Costs and Estimated Earnings
|
257,007 | |||
|
Other Liabilities
|
79,383 | |||
|
Total liabilities acquired
|
809,886 | |||
|
Net assets acquired
|
$ | 3,800,000 | ||
|
3.
|
PRO FORMA ADJUSTMENTS
|
The following pro forma adjustments are included in the Company’s unaudited pro forma condensed combined financial information:
|
(A)
|
To record the preliminary estimate of goodwill for the Company’s acquisition of MDE. The preliminary estimate of goodwill represents the excess of the purchase consideration over the estimated fair value of the assets acquired and the liabilities assumed.
|
|
(B)
|
To eliminate MDE’s historical members interest.
|
|
(C)
|
Record the purchase of 100% of MDE’s member interest through the issuance of convertible notes in the amount of $2,800,000, and convertible notes in the amount of $1,000,000 for cash received.
|
|
(D)
|
To reclassify other income (expenses) to general and administrative expenses to conform to the Company’s presentation.
|