Attached files
| file | filename |
|---|---|
| 8-K/A - Synergy CHC Corp. | form8-ka.htm |
| EX-99.1 - Synergy CHC Corp. | ex99-1.htm |
| EX-99.2 - Synergy CHC Corp. | ex99-2.htm |
PRO FORMA FINANCIAL INFORMATION
| ● | Condensed Consolidated Pro Forma Unaudited Balance Sheet as of September 30, 2015 | |
| ● | Condensed Consolidated Pro Forma Unaudited Statement of Operations and Comprehensive Loss for the Year Ended December 31, 2014 | |
| ● | Condensed Consolidated Pro Forma Unaudited Statement of Operations and Comprehensive Loss for the Nine Months Ended September 30, 2015 | |
| ● | Notes to Condensed Consolidated Pro Forma Unaudited Financial Statements |
On November 15, 2015, Synergy CHC Corp. (“Synergy” or “the Company”) acquired Nomadchoice Pty Ltd. (“Nomad”), a distributor and producer of flat tummy teas (the “Acquisition”).
The unaudited condensed combined pro forma statements of operations are presented as if the Acquisition had been completed on January 1, 2014 combining Nomad’s audited condensed statement of operations for the year ended June 30, 2015 and the Company’s audited condensed statement of operations for the year ended December 31, 2014 and the Company’s condensed unaudited statement of operations for the nine months ended September 30, 2015, respectively. The unaudited condensed combined pro forma balance sheet gives effect to the acquisition as if the Acquisition had taken place on September 30, 2015 and combines Nomad’s unaudited condensed balance sheet as of September 30, 2015 with the Company’s unaudited condensed balance sheet as of September 30, 2015.
The unaudited pro forma combined statement of income is presented for illustrative purposes only and, therefore, is not necessarily indicative of the operating results that might have been achieved had the transaction occurred as of an earlier date, nor is it necessarily indicative of the operating results that may be achieved in the future. You should not rely on the pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined companies will experience after the Acquisition.
The unaudited pro forma combined statement of operations and comprehensive loss, including the notes thereto, should be read in conjunction with the Company’s audited historical consolidated financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K for the year ended December 31, 2014, as well as Nomad’s audited financial statements for the years ended June 30, 2015 and 2014 and unaudited condensed financial statements for the three month ended September 30, 2015 and 2014 included in Exhibit 99.1 to this Form 8-K/A.
Synergy CHC Corp.
Unaudited Pro Forma Balance Sheet
September 30, 2015
| Balance Sheet Synergy CHC Corp. September 30, 2015 |
NomadChoice Pty Ltd. September 30, 2015 |
Pro Forma Adjustments | Balance Sheet Consolidated Pro Forma September 30, 2015 | |||||||||||||||||
| Dr | Cr | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Current Assets | ||||||||||||||||||||
| Cash and cash equivalents | $ | 824,948 | $ | 1,240,595 | 2,307,825 | (1) | $ | 4,373,368 | ||||||||||||
| Accounts receivable | 1,327,154 | 1,327,154 | ||||||||||||||||||
| Receivable from related party | 175,422 | 31,463 | 206,885 | |||||||||||||||||
| Inventory | 499,448 | 52,248 | 551,696 | |||||||||||||||||
| Prepaid expenses | 122,576 | 36,464 | 159,040 | |||||||||||||||||
| Total current assets | 2,949,548 | 1,360,770 | 6,618,143 | |||||||||||||||||
| Other assets | ||||||||||||||||||||
| Fixed assets, net | 3,614 | 3,497 | 7,111 | |||||||||||||||||
| Investment in Hand MD Corp. | 1,500,000 | 1,500,000 | ||||||||||||||||||
| Goodwill and Intangible assets, net | 5,694,584 | 3,659 | 2,316,792 | (1) | 8,015,035 | |||||||||||||||
| Debt issuance cost, net | 198,429 | 2,515,221 | ||||||||||||||||||
| Total other assets | 7,396,627 | 7,156 | 12,037,368 | |||||||||||||||||
| Total Assets | $ | 10,346,175 | $ | 1,367,926 | $ | 18,655,510 | ||||||||||||||
| Liabilities and Stockholders’ Equity | ||||||||||||||||||||
| Current liabilities | ||||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 1,653,296 | $ | 120,096 | $ | 1,773,392 | ||||||||||||||
| Provision for income taxes payable | 439,046 | 439,046 | ||||||||||||||||||
| Provision for dividends payable | 47,633 | 47,633 | ||||||||||||||||||
| Current portion of long-term debt | 750,000 | 750,000 | ||||||||||||||||||
| Current portion of long-term debt, related party | 300,000 | — | 300,000 | |||||||||||||||||
| Total current liabilities | 2,703,296 | 606,775 | 3,310,071 | |||||||||||||||||
| Long-term liabilities | ||||||||||||||||||||
| Note payable | 750,000 | 750,000 | ||||||||||||||||||
| Note payable, net of debt discount, related party | 5,047,178 | 5,500,000 | (1)(2) | 10,547,178 | ||||||||||||||||
| Total long-term liabilities | 5,797,178 | 11,297,178 | ||||||||||||||||||
| Total Liabilities | 8,500,474 | 606,775 | 14,607,249 | |||||||||||||||||
| Stockholders’ Equity | ||||||||||||||||||||
| Common stock, $0.00 par value unlimited shares authorized, 1,200 issued and outstanding | 127 | 127 | (2) | 0 | ||||||||||||||||
| Common stock, $0.00001 par value; 300,000,000 shares authorized, 69,238,044 issued and outstanding | 692 | 692 | ||||||||||||||||||
| Common stock to be issued | 68,000 | 68,000 | ||||||||||||||||||
| Additional paid in capital | 5,882,448 | 5,882,448 | ||||||||||||||||||
| Cumulative translation adjustment | (114,232 | ) | (114,232 | ) | ||||||||||||||||
| Accumulated (deficit)/Retained earnings | (4,105,439 | ) | 875,256 | 875,256 | (2) | (4,105,439 | ) | |||||||||||||
| Total stockholders’ equity | 1,845,701 | 761,151 | 1,731,469 | |||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 10,346,175 | $ | 1,367,926 | 5,500,000 | 5,500,000 | $ | 16,338,718 | ||||||||||||
| (1) | To record the issuance of $5,500,000 of debt in connection with the acquisition of NomadChoice and eliminate NomadChoice’s equity as of September 30, 2015 |
| (2) | To eliminate Nomad’s retained earnings and capital structure. |
Synergy CHC Corp.
Unaudited Pro Forma Statement of Operations and Comprehensive Loss
Nine months ended September 30, 2015
| Synergy
CHC Corp. Nine months ended September 30, 2015 | NomadChoice
Pty Ltd. Twelve months ended June 30, 2015 | Add:NomadChoice
Pty Ltd. Three months ended September 30, 2015 | Less:
NomadChoice Pty Ltd. Three months ended September 30, 2014 | Pro Forma Adjustments | Consolidated
Pro Forma Nine months ended September 30, 2015 | |||||||||||||||||||||||
| Revenue, Less returns, allowances and discounts | $ | 7,237,619 | $ | 2,485,654 | $ | 2,188,134 | $ | 256,350 | $ | 11,655,057 | ||||||||||||||||||
| Cost of sales | 3,103,244 | 556,566 | 548,092 | 55,232 | 4,152,670 | |||||||||||||||||||||||
| Gross profit | 4,134,375 | 1,929,088 | 1,640,042 | 201,118 | 7,502,387 | |||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||||
| Selling and marketing | 2,228,418 | 368,177 | 439,471 | 36,910 | 2,999,156 | |||||||||||||||||||||||
| General and administrative | 1,407,458 | 376,256 | 143,051 | 76,617 | 1,850,148 | |||||||||||||||||||||||
| Depreciation and amortization | 282,256 | 4,576 | 662 | - | 287,494 | |||||||||||||||||||||||
| Total operating expenses | 3,918,132 | 749,009 | 583,184 | 113,527 | 5,136,798 | |||||||||||||||||||||||
| Income (loss) from operations | 216,243 | 1,180,079 | 1,056,858 | 87,591 | 2,365,589 | |||||||||||||||||||||||
| Other income (expenses) | ||||||||||||||||||||||||||||
| Interest expense | (612,094 | ) | (615,548 | ) | (1) | (1,227,642 | ) | |||||||||||||||||||||
| Interest income | 8,369 | 1,557 | 637 | 9,289 | ||||||||||||||||||||||||
| Amortization of debt discount | (2,575,192 | ) | (2,575,192 | ) | ||||||||||||||||||||||||
| Amortization of debt issuance cost | (101,105 | ) | (101,105 | ) | ||||||||||||||||||||||||
| Total other expenses | (3,288,391 | ) | 8,369 | 1,557 | 637 | (3,279,102 | ) | |||||||||||||||||||||
| Net income (loss) before provision for income taxes | (3,072,148 | ) | $ | 1,188,448 | $ | 1,058,415 | $ | 88,228 | $ | (913,513 | ) | |||||||||||||||||
| Income Taxes | 341,619 | 319,556 | - | 661,175 | ||||||||||||||||||||||||
| Net income (loss) | $ | (3,072,148 | ) | $ | 846,829 | $ | 738,859 | $ | 88,228 | (1,574,688 | ) | |||||||||||||||||
| Comprehensive income (loss) | ||||||||||||||||||||||||||||
| Net income (loss) | (3,072,148 | ) | 846,829 | 738,859 | 88,228 | (1,574,688 | ) | |||||||||||||||||||||
| Foreign currency translation adjustments | — | (92,520 | ) | (25,889 | ) | 8,409 | (126,818 | ) | ||||||||||||||||||||
| Total Comprehensive income | $ | (3,072,148 | ) | $ | 754,309 | $ | 712,970 | $ | 96,637 | $ | (1,701,506 | ) | ||||||||||||||||
| Net loss per share - basic and diluted | $ | (0.05 | ) | - | $ | (0.02 | ) | |||||||||||||||||||||
| Weighted average common shares - basic | ||||||||||||||||||||||||||||
| and diluted | 67,033,094 | - | 67,033,094 | |||||||||||||||||||||||||
(1) To record interest expense in connection with the debt issuance of $5,500,000
The pro forma condensed statement of income for the nine months ended September 30, 2015 is presented using the Company’s quarter ended September 30, 2015 and Nomad’s fiscal year end of June 30, 2015 plus their next quarter ended September 30, 2015, less the quarter ended September 30, 2014. Due to different year ends, this is the most practical way to reconcile to the quarter ended September 30, 2015.
Synergy CHC Corp.
Unaudited Pro Forma Statement of Operations and Comprehensive Loss
Twelve months ended December 31, 2014
| Synergy
CHC Corp. Twelve months ended December 31, 2014 | NomadChoice
Pty Ltd. Twelve months ended June 30, 2015 | Pro Forma Adjustments | Consolidated Pro Forma Twelve Months | |||||||||||||||||
| Revenue less: returns, allowances and discounts | $ | 9,158 | $ | 2,485,654 | $ | 2,494,812 | ||||||||||||||
| Cost of sales | 5,616 | 556,566 | 562,182 | |||||||||||||||||
| Gross profit | 3,542 | 1,929,088 | 1,932,630 | |||||||||||||||||
| Operating expenses | ||||||||||||||||||||
| Selling and marketing | 368,177 | 368,177 | ||||||||||||||||||
| General and administrative | 961,636 | 376,256 | 1,337,892 | |||||||||||||||||
| Depreciation and amortization | 4,576 | 4,576 | ||||||||||||||||||
| Total operating expenses | 961,636 | 749,009 | 1,710,645 | |||||||||||||||||
| Income (loss) from operations | (958,094 | ) | 1,180,079 | 221,985 | ||||||||||||||||
| Other income (expenses) | — | - | ||||||||||||||||||
| Interest expense | (1,998 | ) | (796,017 | ) | (1) | (798,015 | ) | |||||||||||||
| Interest income | 8,369 | 8,369 | ||||||||||||||||||
| Other expenses | - | |||||||||||||||||||
| Total other income (expenses) | (1,998 | ) | 8,369 | (789,646 | ) | |||||||||||||||
| Net income (loss) before provision for income taxes | (960,092 | ) | $ | 1,188,448 | $ | (567,661 | ) | |||||||||||||
| Income Taxes | 341,619 | 341,619 | ||||||||||||||||||
| Net income (loss) | $ | (960,092 | ) | $ | 846,829 | $ | (909,280 | ) | ||||||||||||
| Comprehensive income (loss) | ||||||||||||||||||||
| Net income (loss) | (960,092 | ) | 846,829 | (909,280 | ) | |||||||||||||||
| Foreign currency translation adjustments | - | (92,520 | ) | (92,520 | ) | |||||||||||||||
| Comprehensive income (loss) | $ | (960,092 | ) | $ | 754,309 | $ | (1,001,800 | ) | ||||||||||||
| Net loss per share - basic and diluted | $ | (0.01 | ) | - | $ | (0.01 | ) | |||||||||||||
| Weighted average common shares - basic and diluted | 97,165,479 | - | 97,165,479 | |||||||||||||||||
(1) To record interest expense in connection with the debt issuance of $5,500,000
The pro forma condensed statement of income for the year ended December 31, 2014 is presented using the Company’s fiscal year end of December 31, 2014 and Nomad’s fiscal year end of June 30, 2015, a difference greater than 93 days. Management has determined it is not practicable for Nomad’s fiscal year end to be brought up to within 93 days of the Company’s fiscal year end.
SYNERGY CHC CORP.
NOTES TO CONDENSED PRO FORMA UNAUDITED FINANCIAL STATEMENTS
Unaudited Pro Forma Condensed Financial Information.
The Pro Forma Unaudited Condensed Financial Statements have been prepared in order to present consolidated financial position and results of operations of Synergy CHC Corp. (the “Company”) and Nomadchoice Pty Ltd. (“Nomad”) as if the Acquisition had occurred as of September 30, 2015 for the pro forma condensed consolidated balance sheet and to give effect to the Acquisition by the Company, as if the transaction had taken place at January 1, 2014 for the pro forma condensed consolidated statements of operations and comprehensive loss for the year ended December 31, 2014 and the nine months ended September 30, 2015, respectively.
The following pro forma adjustments are incorporated into the pro forma condensed consolidated balance sheet as of September 30, 2015 and the pro forma condensed consolidated statement of operations and comprehensive loss for the year ended December 31, 2014 and nine months ended September 30, 2015, respectively.
(1) Acquisition of Nomad and issuance of note payable
The Acquisition has been accounted for under the acquisition method of accounting. Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. In order to ultimately determine the fair values of tangible and intangible assets acquired and liabilities assumed for Nomad, we may engage a third party independent valuation specialist, however as of the date of this report, the valuation has not been undertaken.
During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets. The Company expects the purchase price allocations for the acquisition of Nomad to be completed by the end of the fourth quarter of 2016.
This pro forma adjustments do not reflect the amortization of intangible assets acquired, if any, in the Acquisition
(2) To eliminate Nomad’s retained earnings and capital structure