Attached files
| file | filename |
|---|---|
| 8-K/A - Teletronics International, Inc. | form8-ka.htm |
| EX-99.2 - Teletronics International, Inc. | ex99-2.htm |
| EX-99.1 - Teletronics International, Inc. | ex99-1.htm |
Exhibit 99.3
Teletronics International, Inc.
Unaudited Pro Forma Combined Financial Information
Introduction
On October 30, 2014, the shareholders of Shanghai WWT IOT Technology Co., Ltd. agreed to transfer 100% interest owned in Shanghai WWT IOT Technology Co., Ltd. to Teletronics (Beijing) Science & Technology Co., Ltd, a wholly owned subsidiary of Teletronics International, Inc. As a result of the transaction, Teletronics would acquire 100% ownership of Shanghai WWT IOT Technology Co., Ltd. as its 100% wholly owned.
The unaudited pro forma combined balance sheet combines (i) the historical consolidated balance sheets of Teletronics and WWT, giving effect to the acquisition as if it had been consummated on September 30, 2014, and (ii) the unaudited pro forma combined statements of operations for the nine months ended September 30, 2014 and for the year ended December 31, 2013, giving effect to the acquisition as if it had occurred on January 1, 2013.
The historical consolidated financial statements of Teletronics and WWT have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the acquisition, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results.
The unaudited pro forma condensed combined financial information is provided for informational purposes only. The unaudited pro forma condensed combined statements of operations are not necessarily indicative of operating results that would have been achieved had the transaction been completed as of January 1, 2013 and does not intend to project the future financial results of Teletronics after the transaction. The unaudited pro forma condensed combined balance sheet does not purport to reflect what Teletronics’ financial condition would have been had the transactions closed on September 30, 2014 or for any future or historical period. The unaudited pro forma condensed combined statements of operations and balance sheet are based on certain assumptions, described in the accompanying notes, which management believes are reasonable and do not reflect the cost of any integration activities or the benefits from the acquisition and synergies that may be derived from any integration activities. There is no material transactions between Teletronics and Shanghai WWT IOT Technology Co., Ltd. during the periods presented in the unaudited condensed combined financial information that would need to be eliminated.
TELETRONICS INTERNATIONAL, INC.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2014
| Teletronics | Shanghai WWT IOT | Proforma adjustments | Proforma Combined | |||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 573,963 | $ | 56,201 | $ | - | $ | 630,164 | ||||||||
| Accounts receivable, net | 77,299 | 301,412 | - | 378,711 | ||||||||||||
| Accounts receivable-related party | 382,337 | - | - | 382,337 | ||||||||||||
| Other receivable | 159,405 | 237,158 | - | 396,563 | ||||||||||||
| Costs in excess of billings on uncompleted contracts (“CIE”) | - | 394,657 | - | 394,657 | ||||||||||||
| Inventories, net | 497,753 | 622,639 | - | 1,120,392 | ||||||||||||
| Prepaid expenses and other current assets | 49,406 | 31,039 | - | 80,445 | ||||||||||||
| Total current assets | 1,740,163 | 1,643,106 | - | 3,383,269 | ||||||||||||
| Property and equipment, net | 7,284 | 164,365 | - | 171,649 | ||||||||||||
| Intangible assets | - | 8,330 | - | 8,330 | ||||||||||||
| Claims and accounts receivable | - | 49,631 | - | 49,631 | ||||||||||||
| Restricted cash | 200,156 | - | - | 200,156 | ||||||||||||
| Other assets | 12,379 | 6,845 | - | 19,224 | ||||||||||||
| Total assets | $ | 1,959,982 | $ | 1,872,277 | $ | - | $ | 3,832,259 | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICT | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable | $ | 36,523 | $ | 288,328 | $ | - | $ | 324,851 | ||||||||
| Billings in excess of costs on uncompleted contracts (“BIE”) | - | 280,894 | - | 280,894 | ||||||||||||
| Deferred compensation | 547,213 | - | - | 547,213 | ||||||||||||
| Convertible debentures | 80,000 | - | - | 80,000 | ||||||||||||
| Accrued expenses and other current liabilities | 181,549 | 283,062 | - | 464,611 | ||||||||||||
| Total current liabilities | 845,285 | 852,284 | - | 1,697,569 | ||||||||||||
| Convertible debentures-non-current | 409,000 | - | - | 409,000 | ||||||||||||
| Loan from related party | - | 3,120,447 | - | 3,120,447 | ||||||||||||
| Total liabilities | 1,254,285 | 3,972,731 | - | 5,227,016 | ||||||||||||
| Stockholders’ Equity (Deficit): | ||||||||||||||||
| Common Stock | 177,451 | - | - | 177,451 | ||||||||||||
| Additional Paid in capital | 17,399,778 | 1,576,568 | - | 18,976,346 | ||||||||||||
| Accumulated deficit | (16,868,665 | ) | (3,682,761 | ) | - | (20,551,426 | ) | |||||||||
| Accumulated other comprehensive income (loss) | (2,867 | ) | 5,739 | - | 2,872 | |||||||||||
| Total stockholders’ equity (deficit) | 705,697 | (2,100,454 | ) | - | (1,394,757 | ) | ||||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 1,959,982 | $ | 1,872,277 | $ | - | $ | 3,832,259 | ||||||||
See accompanying to Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
TELETRONICS INTERNATIONAL, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss
For the Nine Months Ended September 30, 2014
| Teletronics | Shanghai WWT IOT | Proforma adjustments | Proforma Combined | |||||||||||||
| Net revenue | $ | 1,417,362 | $ | 732,630 | $ | - | $ | 2,149,992 | ||||||||
| Cost of revenue | 373,989 | 699,496 | - | 1,073,485 | ||||||||||||
| Gross profit | 1,043,373 | 33,134 | - | 1,076,507 | ||||||||||||
| Operating expenses | - | |||||||||||||||
| General and administrative | 1,120,781 | 702,334 | - | 1,823,115 | ||||||||||||
| Sales and marketing | 24,553 | 472,798 | - | 497,351 | ||||||||||||
| Stock-based compensation | 218,372 | - | - | 218,372 | ||||||||||||
| Total operating expenses | 1,363,706 | 1,175,132 | - | 2,538,838 | ||||||||||||
| Income (Loss) from operations | (320,333 | ) | (1,141,998 | ) | - | (1,462,331 | ) | |||||||||
| Other (income) expense | ||||||||||||||||
| Interest expense | 32,158 | - | - | 32,158 | ||||||||||||
| Interest income | (1,114 | ) | 2,151 | - | 1,037 | |||||||||||
| Equity in loss of unconsolidated investees | 99,676 | - | - | 99,676 | ||||||||||||
| Gain on sale of long-term investment | (3,252 | ) | - | - | (3,252 | ) | ||||||||||
| Other income, net | 1,474 | (702 | ) | - | 772 | |||||||||||
| Total other (income) loss, net | 128,942 | 1,449 | - | 130,391 | ||||||||||||
| Income before provision for income taxes | (449,275 | ) | (1,143,447 | ) | - | (1,592,722 | ) | |||||||||
| Provision for income taxes | 2,444 | - | - | 2,444 | ||||||||||||
| Net loss | $ | (451,719 | ) | $ | (1,143,447 | ) | $ | - | $ | (1,595,166 | ) | |||||
| Other comprehensive loss, net of tax: | ||||||||||||||||
| Cumulative translation adjustments (“CTA”) | (299 | ) | 8,227 | - | 7,928 | |||||||||||
| Total other comprehensive loss, net of tax | $ | (452,018 | ) | $ | (1,135,220 | ) | $ | - | $ | (1,587,238 | ) | |||||
| Net Income (Loss) Per Common Share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.09 | ) | ||||||||||
| Diluted | $ | (0.03 | ) | $ | (0.09 | ) | ||||||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic | 17,616,569 | 17,616,569 | ||||||||||||||
| Diluted | 17,616,569 | 17,616,569 | ||||||||||||||
See accompanying to Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
TELETRONICS INTERNATIONAL, INC.
Unaudited Pro Forma Condensed Combined Statement of Operations and Comprehensive Loss
For the Year Ended December 31, 2013
| Teletronics | Shanghai WWT IOT |
Proforma adjustments |
Proforma Combined |
|||||||||||||
| Net revenue | $ | 2,380,814 | $ | 419,928 | $ | - | $ | 2,800,742 | ||||||||
| Cost of revenue | 858,762 | 435,395 | - | 1,294,157 | ||||||||||||
| Gross profit | 1,522,052 | (15,467 | ) | - | 1,506,585 | |||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 1,375,412 | 917,392 | - | 2,292,804 | ||||||||||||
| Sales and marketing | 6,006 | 570,603 | - | 576,609 | ||||||||||||
| Total operating expenses | 1,381,418 | 1,487,995 | - | 2,869,413 | ||||||||||||
| Income (Loss) from operations | 140,634 | (1,503,462 | ) | - | (1,362,828 | ) | ||||||||||
| Other (income) expense | ||||||||||||||||
| Interest expense | 93,531 | - | - | 93,531 | ||||||||||||
| Interest income | (565 | ) | (404 | ) | - | (969 | ) | |||||||||
| Equity in loss of unconsolidated investees | 223,771 | - | - | 223,771 | ||||||||||||
| Other income, net | (51,209 | ) | (892 | ) | - | (52,101 | ) | |||||||||
| Total other (income) loss, net | 265,528 | (1,296 | ) | - | 264,232 | |||||||||||
| Income before provision for income taxes | (124,894 | ) | (1,502,166 | ) | - | (1,627,060 | ) | |||||||||
| Provision for income taxes | 4,620 | - | - | 4,620 | ||||||||||||
| Net loss | $ | (129,514 | ) | $ | (1,502,166 | ) | $ | - | $ | (1,631,680 | ) | |||||
| Other comprehensive loss, net of tax: | ||||||||||||||||
| Cumulative translation adjustments (“CTA”) | (2,378 | ) | (11,353 | ) | - | (13,731 | ) | |||||||||
| Total other comprehensive loss, net of tax | $ | (131,892 | ) | $ | (1,513,519 | ) | $ | - | $ | (1,645,411 | ) | |||||
| Net Income (Loss) Per Common Share: | ||||||||||||||||
| Basic | $ | (0.01 | ) | $ | (0.10 | ) | ||||||||||
| Diluted | $ | (0.01 | ) | $ | (0.10 | ) | ||||||||||
| Weighted Average Common Shares Outstanding | ||||||||||||||||
| Basic | 15,997,528 | 15,997,528 | ||||||||||||||
| Diluted | 15,997,528 | 15,997,528 | ||||||||||||||
See accompanying to Notes to the Unaudited Pro Forma Condensed Combined Financial Statements
TELETRONICS INTERNATIONAL, INC.
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1. Basis of Presentation
On October 30, 2014, Teletronics International, Inc. announced that we had concluded the acquisition of Shanghai WWT IOT Technology Co. Ltd., a leading Internet of Things (IOT) technology provider in China. Upon the acquisition, the shareholders of Shanghai WWT IOT Technology Co., Ltd. agreed to transfer 100% interest owned in Shanghai WWT IOT Technology Co., Ltd. to Teletronics (Beijing) Science & Technology Co., Ltd, a wholly owned subsidiary of Teletronics International, Inc. As a result of the transaction, Teletronics would acquire 100% ownership of Shanghai WWT IOT Technology Co., Ltd. as its 100% wholly owned subsidiary.
The accompanying unaudited pro forma condensed combined financial statements present the pro forma combined financial position and results of operations of the combined company based upon the historical financial statements of Teletronics International Inc. and Shanghai WWT IOT Technology Co., Ltd, after giving effect to the acquisition and adjustments described in these footnotes, and are intended to reflect the impact of the acquisition on Shanghai WWT IOT.
The accompanying unaudited pro forma combined financial statements are presented for illustrative purposes only and do not give effect to any cost savings, revenue synergies or restructuring costs which may result from the integration of our and Shanghai WWT IOT’s operations.
The unaudited pro forma condensed combined balance sheet reflects the acquisition as if it has been consummated on September 30, 2014. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2014 and for the year ended December 31, 2013, reflects the acquisition as if it had occurred on January 1, 2013.
Note 2. Pro Forma Adjustments
The pro forma adjustments are based on the best information available and assumptions that management believes are reasonable given the information available. However, such adjustments are subject to change as additional information is obtained.