BE AT TV, Inc.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

As of March 31, 2015

 

 

See notes to the unaudited pro forma combined financial statements

		Historical
		Year Ended
		November 30, 2014				December 31, 2014				Pro-Forma
						Epic Stores Corp.				Adjustments				Pro-Forma
		BE AT TV, Inc.				(Note 1)				(Note 3)				Combined
Retail revenues						$	5,207,572							$	5,207,572
Wholesale revenues							853,293								853,293
Total revenues			-				6,060,865				-				6,060,865
Cost of revenues							(1,367,870	)							(1,367,870	)
Gross profit			-				4,692,995				-				4,692,995
Operating expenses
Payroll and related expenses							3,486,860								3,486,860
General and administrative expenses			13,502				2,564,527								2,578,029
Rent expense							1,742,732								1,742,732
Professional fees			77,449				862,439								939,888
Depreciation expense							249,703								249,703
Total operating expenses			90,951				8,906,261				-				8,997,212
Loss from operations			(90,951	)			(4,213,266	)			-				(4,304,217	)
Other income (expense)
Interest expense							(81,617	)							(81,617	)
Other income							41,266								41,266
Total other expense			-				(40,351	)			-				(40,351	)
Net loss		$	(90,951	)		$	(4,253,617	)		$	-			$	(4,344,568	)
Less: Net gain (loss) attributable to non-controlling interest						$	42,051							$	42,051
Net loss attributable to the Company		$	(90,951	)		$	(4,295,668	)		$	-			$	(4,386,619	)

 

BE AT, TV, INC.

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

 

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On June 24, 2015, the Company completed the acquisition of Epic pursuant to the terms of the share exchange agreement dated June 24, 2015 among the Company, Epic and all of the stockholders of Epic. In connection with the closing, the Company acquired all 27,083,493 issued and outstanding shares of common stock in the capital of Epic from Epic's stockholders in consideration for the issuance of an aggregate of: (i) 47,903,927 shares of the Company's common stock, and (ii) 2,764,457 warrants, each of which is exercisable into one share of the Company's common stock at a price of $0.424 per share until June 24, 2018. The shares of the Company's common stock issued to the former Epic stockholders represented approximately 58.1% of the Company's issued and outstanding shares of common stock, on an undiluted basis, at the time of closing of the Transaction.

Concurrently with the closing of the Transaction, the Company  completed a private placement financing pursuant to which it issued an aggregate of 6,315,534 units at a price of $0.3675 per unit for gross proceeds of $2,300,000. Each unit consisted of one share of common stock of the Company and one transferable share purchase warrant. Each warrant entitles the holder thereof to acquire one share of the Company's common stock at a price of $0.424 per warrant share until June 24, 2018.

Following the closing of the Transaction and the completion of the concurrent financing, as described above, there are 82,462,582 shares of the Company's common stock outstanding.

The Company has determined to treat the acquisition of Epic as a reverse merger and recapitalization, with Epic as the acquirer for accounting purposes. Consequently, for future financial periods, the assets and liabilities and the historical operations that will be reflected in the Company's financial statements for periods ended prior to the closing of the Transaction will be those of Epic.  The Transaction also resulted in a deemed change of the Company's year end from November 30 to December 31, being Epic's fiscal year end.

As Epic was deemed to be the acquirer in the Transaction for accounting purposes under recapitalization accounting, these pro forma financial statements are presented as a continuation of Epic. The equity of Epic is presented as the equity of the combined company and the capital stock account of Epic is adjusted to reflect the par value of the issued and outstanding common stock of the Company, being the legal acquirer, after giving effect to the number of shares issued in connection with the Transaction and the concurrent financing. Shares retained by the Company are reflected as an issuance as of the acquisition date for the historical amount of the net assets of the acquired entity.

These unaudited pro forma financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP") and are expressed in US dollars.  They have been compiled using the significant accounting policies as set out in the audited financial statements of Epic for the year ended December 31, 2014. Based on the review of the accounting policies of Epic and the Company, there are no material accounting differences between the accounting policies of Epic and the Company.

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It is management's opinion that these pro forma financial statements include all adjustments necessary for the fair presentation, in all material respects, of the proposed transaction described above in accordance with US GAAP applied on a basis consistent with the Company's accounting policies.

The unaudited pro forma condensed consolidated financial statements incorporate the following pro forma assumptions and adjustments:

(a)	Upon closing of the Transaction, 33,000,000 shares of the Company's common stock and 250,000 warrants will be returned to treasury and cancelled.

(b)	On May 20, 2015, Epic issued 634,458 shares of common stock to two note holders to settle notes outstanding in the principal amount of $250,000.

 

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(c)	On May 20, 2015, Epic issued 131,449 shares of common stock in settlement of $74,686 in dividends payable.

(d)	Subsequent to March 31, 2015, Epic issued 4,031,788 shares of common stock at a price of $0.01 per share for aggregate gross proceeds of $403,000.

(e)

For purposes of these pro-forma condensed consolidated financial statements, it is assumed that all shareholders of Epic exchanged their shares of Epic common stock for an aggregate of: (i) 47,903,927 shares of common stock of the Company at a rate of 1.76875 shares of common stock of the Company for each outstanding Epic share, and (ii) 2,764,457 warrants, each of which is exercisable into one share of common stock of the Company at a price of $0.424 per share until June 24, 2018.

(f)	All assets and liabilities held by the Company at the time of acquisition were not to be assumed by Epic.

(g)	Eliminate outstanding deficit of the Company after effects of settlement of outstanding assets and liabilities.

(h)

Issuance of 6,258,654] units of the Company, at a price of $0.3675 per unit, for gross proceeds of $2,300,000, net of settlement of a bridge loan in the principal amount of $750,000, plus accrued interest of $20,959 thereon, owed by Epic to a subscriber under the financing. Each unit consisted of one share of common stock of the Company and one warrant, each of which is exercisable into one share of the Company's common stock at a price of $0.424 per share until June 24, 2018.

Pro forma shares of the Company's common stock as at March 31, 2015 have been determined as follows:

 

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Pro-forma basic and diluted loss per share for the year ended December 31, 2014 and the three months ended March 31, 2015 have been calculated based on the weighted average number of shares of the Company's common stock outstanding plus the shares of the Company's common stock to be issued and cancelled in connection with the Transaction.