Attached files
| file | filename |
|---|---|
| EX-99.1 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF SABLE POLYMER SOLUTIONS, LLC AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 - Ecoark Holdings, Inc. | f8k050316a1ex99i_ecoark.htm |
| 8-K/A - AMENDMENT NO. 1 TO CURRENT REPORT - Ecoark Holdings, Inc. | f8k050316a1_ecoarkholdings.htm |
| EX-99.2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF SABLE POLYMER SOLUTIONS, LLC AS OF AND FOR THE PERIODS ENDED MARCH 31, 2016 AND 2015 - Ecoark Holdings, Inc. | f8k050316a1ex99ii_ecoark.htm |
| EX-23.1 - CONSENT OF KBL LLP. - Ecoark Holdings, Inc. | f8k050316a1ex23i_ecoark.htm |
Exhibit 99.3
ECOARK HOLDINGS, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect to the acquisition of Sable Polymer Solutions, LLC, (“Sable”) as of March 31, 2016 by Ecoark Holdings, Inc. (“Ecoark” and the “Company”) and are based on estimates and assumptions set forth herein and in the notes to such pro forma statements.
On May 3, 2016, Ecoark, a Nevada corporation, entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among Sable, Pioneer Products (an indirect subsidiary of Ecoark), and the holder of all of Sable’s membership interests whereby the Company issued 2,000,000 shares of its common stock in exchange for all of Sable’s membership interests.
The transaction is being accounted for as an acquisition of Sable. No cash was paid relating to the acquisition.
As a result of the transaction effected by the Exchange Agreement, at closing Sable became a wholly-owned subsidiary of Pioneer Products.
The following unaudited pro forma consolidated statements of operations for three months ended March 31, 2016 and the year ended December 31, 2015 of the Company and Sable gives effect to the above as if the transactions had occurred at the beginning of the period. The unaudited pro forma consolidated balance sheet at March 31 2016 assumes the effects of the above as if this transaction had occurred as of January 1, 2015.
At the time of the merger on March 24, 2016, Magnolia Solar Corporation, renamed to Ecoark Holdings, Inc. (the “ Company”), completed the transactions contemplated in an Agreement and Plan of Merger (the “Merger Agreement”) with Ecoark, Inc., and Magnolia Solar Acquisition Corporation, a wholly-owned subsidiary of the Company (the “Merger Sub”), providing for the merger of Merger Sub with and into Ecoark (the “Merger”), with Ecoark surviving the Merger as a wholly-owned subsidiary of the Company. At the time of the Merger, each two shares of Ecoark common stock were converted automatically into the right to receive one share of common stock of the Company.
ECOARK HOLDINGS, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements are based upon, and should be read in conjunctions with the Company’s consolidated financial statements as of and for the three months ended March 31, 2016 and as of and for the year ended December 31, 2015 and the interim financial statements of Sable as of and for the three months ended March 31, 2016 and audited financial statements of Sable as of and for the year ended December 31, 2015.
The unaudited pro forma consolidated financial statements and notes thereto contain forward-looking statements that involve risks and uncertainties. Therefore, our actual results may vary materially from those discussed herein. The unaudited pro forma consolidated financial statements do not purport to be indicative of the results that would have been reported had such events actually occurred on the dates specified, nor is it indicative our future results.
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2016
(Dollars and number of shares in thousands, except per share)
| ECOARK | SABLE | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
| ASSETS | ||||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash | $ | 8,848 | $ | - | B | $ | 7,737 | $ | 16,585 | |||||||||||
| Accounts receivable, net of allowance | 1,421 | 1,303 | 2,724 | |||||||||||||||||
| Inventory, net of reserves | 809 | 1,367 | A | 445 | 1,731 | |||||||||||||||
| Prepaid expenses | 156 | 14 | 170 | |||||||||||||||||
| Other current assets | - | 25 | 25 | |||||||||||||||||
| Total current assets | 11,234 | 2,709 | 21,235 | |||||||||||||||||
| Property and equipment, net | 360 | 1,321 | A | 1,501 | 3,182 | |||||||||||||||
| Intangible assets, net | 907 | - | A | 2,265 | 3,172 | |||||||||||||||
| Goodwill | ||||||||||||||||||||
| Other assets | 26 | - | 26 | |||||||||||||||||
| Total non-current assets | 1,293 | 1,321 | 6,380 | |||||||||||||||||
| TOTAL ASSETS | $ | 12,527 | $ | 4,030 | $ | 11,503 | $ | 445 | $ | 27,615 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||||
| Current portion of long-term debt | $ | 3,000 | $ | 178 | $ | 3,178 | ||||||||||||||
| Debt - related parties | 742 | - | 742 | |||||||||||||||||
| Note payable | - | 1,500 | 1,500 | |||||||||||||||||
| Cash overdraft | - | 388 | 388 | |||||||||||||||||
| Accounts payable | 1,244 | 615 | 1,859 | |||||||||||||||||
| Accounts payable - related parties | - | 64 | 64 | |||||||||||||||||
| Accrued expenses | 687 | 134 | 821 | |||||||||||||||||
| Accrued interest | 58 | 6 | 64 | |||||||||||||||||
| Deferred revenue | 61 | - | 61 | |||||||||||||||||
| Total current liabilities | 5,792 | 2,885 | 8,677 | |||||||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||||||||
| Long-term debt, net of current portion | - | 282 | 282 | |||||||||||||||||
| Total non-current liabilities | - | 282 | 282 | |||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | - | - | - | |||||||||||||||||
| Total liabilities | 5,792 | 3,167 | 8,959 | |||||||||||||||||
| STOCKHOLDERS' EQUITY (DEFICIT) (Numbers of shares rounded to thousands) | ||||||||||||||||||||
| Common Stock | 31 | - | A | 2 | 34 | |||||||||||||||
| B | 1 | |||||||||||||||||||
| Additional paid-in-capital | 49,897 | - | A | 4,182 | 57,525 | |||||||||||||||
| B | 3,446 | |||||||||||||||||||
| Member's equity (deficit) | - | 863 | A | 863 | - | |||||||||||||||
| Subscription receivable | (4,290 | ) | - | B | 4,290 | - | ||||||||||||||
| Accumulated deficit | (38,810 | ) | - | - | (38,810 | ) | ||||||||||||||
| Total stockholders' equity (deficit) before non-controlling interest | 6,828 | 863 | 18,749 | |||||||||||||||||
| Non-controlling interest | (93 | ) | - | (93 | ) | |||||||||||||||
| Total stockholders' equity (deficit) | 6,735 | 863 | 18,656 | |||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 12,527 | $ | 4,030 | $ | 863 | $ | 11,921 | $ | 27,615 | ||||||||||
Adjustment Notes
| A | Adjust Sable assets to fair value, record intangible assets and issuance of 2,000 shares to Sable member. |
| B | Proceeds received in April 2016 - additional shares in private offering. |
| -3 - |
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PROFORMA INCOME STATEMENTS
Three Months Ended March 31, 2016
(Dollars in thousands, except per share)
| ECOARK | SABLE | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
| REVENUES | ||||||||||||||||||||
| Revenue from product sales | $ | 1,207 | $ | 1,811 | $ | 3,018 | ||||||||||||||
| Revenue from services | 757 | - | 757 | |||||||||||||||||
| 1,964 | 1,811 | 3,775 | ||||||||||||||||||
| COST OF REVENUES | ||||||||||||||||||||
| Cost of product sales | $ | 1,182 | $ | 1,859 | 3,041 | |||||||||||||||
| Cost of services | 277 | - | 277 | |||||||||||||||||
| 1,459 | 1,859 | 3,318 | ||||||||||||||||||
| GROSS PROFIT (LOSS) | 505 | (48 | ) | 457 | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| Salaries and salary related costs, including stock based compensation | 1,020 | - | 1,020 | |||||||||||||||||
| Professional fees and consulting | 267 | - | 267 | |||||||||||||||||
| General and administrative | 517 | 74 | 591 | |||||||||||||||||
| Depreciation and amortization | 75 | 71 | 146 | |||||||||||||||||
| Research and development | 752 | - | 752 | |||||||||||||||||
| Total operating expenses | 2,631 | 145 | 2,776 | |||||||||||||||||
| Loss from operations | (2,126 | ) | (193 | ) | (2,319 | ) | ||||||||||||||
| OTHER EXPENSE: | ||||||||||||||||||||
| Interest expense, net of interest income | (95 | ) | (27 | ) | (122 | ) | ||||||||||||||
| Loss from before provision for income taxes | (2,221 | ) | (220 | ) | (2,441 | ) | ||||||||||||||
| `` | ||||||||||||||||||||
| PROVISION FOR INCOME TAXES | - | - | - | |||||||||||||||||
| NET LOSS | (2,221 | ) | (220 | ) | (2,441 | ) | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 2 | - | 2 | |||||||||||||||||
| NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | (2,223 | ) | $ | (220 | ) | $ | (2,443 | ) | |||||||||||
| NET LOSS PER SHARE | ||||||||||||||||||||
| Basic | $ | (0.08 | ) | $ | (0.08 | ) | ||||||||||||||
| Diluted | $ | (0.08 | ) | $ | (0.08 | ) | ||||||||||||||
| SHARES USED IN CALCULATION OF NET LOSS PER SHARE (Number of shares in thousands) | ||||||||||||||||||||
| Basic | 27,847 | 4,574 | A | 32,421 | ||||||||||||||||
| Diluted | 27,847 | 4,574 | A | 32,421 | ||||||||||||||||
Adjustment Notes
| A | Adjust outstanding shares for 2,000 shares issued to Sable member and additional issuances subsequent to March 31, 2016. |
| -4 - |
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PROFORMA INCOME STATEMENTS
Year Ended December 31, 2015
(Dollars in thousands, except per share)
| ECOARK | SABLE | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
| REVENUES | ||||||||||||||||||||
| Revenue from product sales | $ | 5,167 | $ | 14,047 | $ | 19,214 | ||||||||||||||
| Revenue from services | 2,701 | - | 2,701 | |||||||||||||||||
| 7,868 | 14,047 | 21,915 | ||||||||||||||||||
| COST OF REVENUES | ||||||||||||||||||||
| Cost of product sales | $ | 4,960 | $ | 14,635 | 19,595 | |||||||||||||||
| Cost of services | 1,178 | - | 1,178 | |||||||||||||||||
| 6,138 | 14,635 | 20,773 | ||||||||||||||||||
| GROSS PROFIT (LOSS) | 1,730 | (588 | ) | 1,142 | ||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||
| Salaries and salary related costs, including stock based compensation | 3,791 | - | 3,791 | |||||||||||||||||
| Professional fees and consulting | 3,651 | - | 3,651 | |||||||||||||||||
| General and administrative | 1,636 | 305 | 1,941 | |||||||||||||||||
| Depreciation and amortization | 1,226 | 266 | 1,492 | |||||||||||||||||
| Research and development | 1,114 | - | 1,114 | |||||||||||||||||
| Total operating expenses | 11,418 | 571 | 11,989 | |||||||||||||||||
| Loss from operations | (9,688 | ) | (1,159 | ) | (10,847 | ) | ||||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||||||
| Other income | - | 74 | 74 | |||||||||||||||||
| Loss on abandonment of leasehold improvements | - | (43 | ) | (43 | ) | |||||||||||||||
| Interest expense, net of interest income | (785 | ) | (77 | ) | (862 | ) | ||||||||||||||
| Other income (expense), net | (785 | ) | (46 | ) | (831 | ) | ||||||||||||||
| Loss from before provision for income taxes | (10,473 | ) | (1,205 | ) | (11,678 | ) | ||||||||||||||
| PROVISION FOR INCOME TAXES | - | - | - | |||||||||||||||||
| NET LOSS | (10,473 | ) | (1,205 | ) | (11,678 | ) | ||||||||||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST | 29 | - | 29 | |||||||||||||||||
| NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST | $ | (10,502 | ) | $ | (1,205 | ) | $ | (11,707 | ) | |||||||||||
| NET LOSS PER SHARE | ||||||||||||||||||||
| Basic | $ | (0.36 | ) | $ | (0.37 | ) | ||||||||||||||
| Diluted | $ | (0.36 | ) | $ | (0.37 | ) | ||||||||||||||
| SHARES USED IN CALCULATION OF NET LOSS PER SHARE (Number of shares in thousands) | ||||||||||||||||||||
| Basic | 29,344 | 2,287 | A | 31,631 | ||||||||||||||||
| Diluted | 29,344 | 2,287 | A | 31,631 | ||||||||||||||||
Adjustment Notes
| A | Adjust outstanding shares for 2,000 shares issued to Sable member and additional issuances subsequent to March 31, 2016. |
ECOARK HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND
FOR THE YEAR ENDED DECEMBER 31, 2015
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
The acquisition of Sable is being accounted for as a business combination, whereby Ecoark is the acquierer.
NOTE B – ADJUSTMENT
| (a) | To record the acquisition of Sable which includes the adjustment of certain amounts to their respective fair values. |
NOTE C – PRO FORMA WEIGHTED AVERAGES SHARES OUTSTANDING (in thousands)
Pro forma shares outstanding assuming the transaction occurred as of March 31, 2016:
| Ecoark Holdings, Inc. Weighted Average Shares Outstanding | 27,847 | |||
| Shares issued subsequent to March 31, 2016 and prior to Sable acquisition | 2,574 | |||
| Shares issued to acquire Sable | 2,000 | |||
| Pro forma shares outstanding | 32,421 |