Attached files
| file | filename |
|---|---|
| 8-K - NUZEE 8K, 01.05.17 - NuZee, Inc. | nuzee8k010517.htm |
| EX-99.2 - NUZEE 8K, UNAUDITED FINANCIAL STATEMENTS - NuZee, Inc. | nuzeeexh99_2.htm |
| EX-99.1 - NUZEE 8K, AUDITED FINANCIAL STATEMENTS - NuZee, Inc. | nuzeeexh99_1.htm |
Exhibit 99.3
INTRODUCTION TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
The accompanying unaudited pro forma condensed financial statements present NuZee, Inc. (the "Company" or the "Purchaser") and NuZee JAPAN Co., Ltd. ("NuZee JP") as follows: (i) unaudited pro forma condensed consolidated statements of operations for the year ended June 30, 2016 for NuZee, Inc. and NuZee JP; (ii) unaudited pro forma condensed statements of operations for the six (6) months ended June 30, 2016 for the Purchaser and NuZee JP (iii) unaudited pro forma condensed balance sheet as of June 30, 2016 for the Purchaser and NuZee JP. The unaudited pro forma condensed statements of operations are presented as if the acquisition had occurred on January 1, 2015. The unaudited pro forma condensed consolidated balance sheets gives effect to the transaction as if it occurred on June 30, 2016.
The unaudited pro forma condensed consolidated financial information is based on estimates and assumptions, which are preliminary and subject to change, as set forth in the notes to such statements and which are provided for informational purposes only. The unaudited pro forma condensed consolidated financial information is not necessarily indicative of the financial position or operating results that would have been achieved had the merger been consummated as of the dates indicated, nor is it necessarily indicative of future financial position or operating results. This information should be read in conjunction with the historical financial statements and related notes of NuZee, Inc. and NuZee JP included in this Form 8-K.
We anticipate that the acquisition will provide the Company the ability to integrate the business of NuZee JP into the Company's existing staffing business within the expected timeframe which would enable the Company to operate more effectively and efficiently and to create synergy hence lower costs of operations. The pro forma information, while helpful in illustrating the financial characteristics of the combined company under one set of assumptions, does not reflect the benefits of increased revenues due to synergies or cost savings on operating expenses and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had the companies been combined during these periods.
The actual amounts recorded as of the completion of the acquisition may differ materially from the information presented in these unaudited pro forma condensed consolidated financial statements as a result of:
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·
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changes in the trading price for NuZee, Inc.'s common stock;
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·
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other changes in NuZee JP's net assets that occur prior to the completion of the acquisition, which could cause material changes in the information presented below;
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·
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changes in the financial results of the combined company; and
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·
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changes in the estimated fair value of the acquired intangible assets
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The unaudited pro forma condensed consolidated financial statements are provided for informational purposes only. The unaudited pro forma condensed consolidated financial statements are not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the merger been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma condensed consolidated financial statements and related adjustments required management to make certain assumptions and estimates. The unaudited pro forma condensed consolidated financial statements should be read together with:
1
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·
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the accompanying notes to unaudited pro forma consolidated financial information;
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·
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the audited financial statements of NuZee JP for the years ended January 31, 2016 and 2015 and the notes relating thereto;
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·
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the unaudited consolidated financial statements of NuZee, Inc. as of June 30, 2016 and the notes relating thereto;
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Acquisition of NuZee JAPAN Co., Ltd.
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||||||||
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Value of NuZee, Inc's stock
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$
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258,465
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||||||
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Acquired Assets
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508,410
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|||||||
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Acquired Liabilities
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232,158
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|||||||
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Net assets acquired
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276,252
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|||||||
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70% of net assets
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193,377
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|||||||
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TOTAL
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$
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65,088
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||||||
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Breakdown of Total:
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||||||||
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Goodwill
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$
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65,088
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||||||
2
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Nuzee, Inc.
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Pro Forma Condensed Balance Sheet
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As at June 30, 2016
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(Unaudited)
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||||||||||||||||||||
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Nuzee, Inc.
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NuZee
JAPAN Co., Ltd
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Pro Forma
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Note
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Pro Forma
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||||||||||||||||
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June 30, 2016
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July 31, 2016
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Adjustment
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Reference
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Consolidated
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||||||||||||||||
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ASSETS
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Current assets:
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Cash
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$
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17,047
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$
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165,831
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$
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-
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$
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182,878
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||||||||||||
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Accounts receivable
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13,534
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59,598
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-
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73,132
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||||||||||||||||
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Inventories
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213,684
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196,161
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-
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409,845
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||||||||||||||||
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Other current assets
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12,938
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70,038
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-
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82,976
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||||||||||||||||
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Total current assets
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257,203
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491,628
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-
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748,831
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||||||||||||||||
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Equipment, net
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163,444
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16,782
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-
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180,226
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||||||||||||||||
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Other assets-Goodwill
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-
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-
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65,088
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65,088
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||||||||||||||||
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Total assets
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$
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420,647
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$
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508,410
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$
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65,088
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$
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994,145
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||||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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Current liabilities:
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Accounts payable
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$
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103,555
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$
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4,357
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$
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-
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$
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107,912
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||||||||||||
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Loan payable - short term - related party
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45,148
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9,577
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-
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54,725
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||||||||||||||||
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Loan payable - short term
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-
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29,152
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-
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29,152
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||||||||||||||||
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Convertible Notes payable
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601,496
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-
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-
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601,496
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||||||||||||||||
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Other current liabilities
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416
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76,968
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-
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77,384
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||||||||||||||||
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Total current liabilities
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750,615
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120,054
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-
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870,669
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||||||||||||||||
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Non-current liabilities:
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Loan payable - long term
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$
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-
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$
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112,104
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$
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-
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$
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112,104
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||||||||||||
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Total non-current liabilities
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-
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112,104
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-
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112,104
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Stockholders' equity (deficit):
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||||||||||||||||||||
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Capital stock
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$
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311
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$
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545,844
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$
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(545,844
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)
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(1
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)
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$
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322
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|||||||||
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11
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(1
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)
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|||||||||||||||||
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Additional paid in capital
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6,752,564
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-
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258,454
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(1
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)
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7,011,018
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||||||||||||||
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-
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(1
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)
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|||||||||||||||||
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Retained earnings (deficit)
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(7,005,477
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)
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(249,002
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)
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249,002
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(1
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)
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(7,005,477
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)
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|||||||||||
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Less: treasury stock, at cost
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(77,366
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)
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-
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-
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(1
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)
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(77,366
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)
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||||||||||||
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Accumulated other comprehensive loss
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-
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(20,590
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)
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20,590
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(1
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)
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-
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|||||||||||||
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Noncontrolling interest
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82,875
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(1
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)
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82,875
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||||||||||||||||
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Total stockholders' equity (deficit)
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(329,968
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)
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276,252
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65,088
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11,372
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|||||||||||||||
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Total liabilities and stockholders' equity (deficit)
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$
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420,647
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$
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508,410
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$
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65,088
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$
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994,145
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||||||||||||
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements
3
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Nuzee, Inc.
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Pro Forma Condensed Statement of Operations
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Six months ended June 30, 2016
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(Unaudited)
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|||||||||||||||||
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Nuzee, Inc.
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NuZee JAPAN Co., Ltd
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Six Months Ended
June 30, 2016
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Six Months Ended
July 31, 2016
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Pro Forma
Adjustment
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Note
Reference
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Pro Forma
Consolidated
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|||||||||||||
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Revenues
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$
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187,222
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$
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496,314
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$
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-
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$
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683,536
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|||||||||
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Cost of sales
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102,820
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366,473
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-
|
469,293
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|||||||||||||
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Gross Profit
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84,402
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129,841
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-
|
214,243
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|||||||||||||
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Operating expenses
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757,853
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148,366
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-
|
906,219
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|||||||||||||
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Loss from operations
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(673,451
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)
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(18,525
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)
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-
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(691,976
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)
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||||||||||
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Other income
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11,605
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19,921
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31,526
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||||||||||||||
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Other expense
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(912
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)
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(2,306
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)
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-
|
(3,218
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)
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||||||||||
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Net loss
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(662,758
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)
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(910
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)
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-
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(663,668
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)
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||||||||||
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Net loss attributable to
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|||||||||||||||||
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noncontrolling interest
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-
|
-
|
273
|
273
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|||||||||||||
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Net loss attributable to the Company
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$
|
(662,758
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)
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$
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(910
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)
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$
|
273
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$
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(663,395
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)
|
||||||
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Net loss per share, basic and fully diluted
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(0.02
|
)
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|||||||||||||||
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Weighted average of shares outstanding
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31,730,747
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||||||||||||||||
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements
4
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Nuzee, Inc.
|
||||||||||||||||||||
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Pro Forma Condensed Statement of Operations
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||||||||||||||||||||
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Year Ended December 31, 2015
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||||||||||||||||||||
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(Unaudited)
|
||||||||||||||||||||
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Nuzee, Inc.
|
NuZee JAPAN
Co., Ltd
|
Pro Forma
Adjustment
|
Note
Reference
|
Pro Forma
Consolidated
|
||||||||||||||||
|
Revenues
|
$
|
118,466
|
$
|
800,585
|
$
|
-
|
$
|
919,051
|
||||||||||||
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Cost of sales
|
65,620
|
503,790
|
-
|
569,410
|
||||||||||||||||
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Gross Profit
|
52,846
|
296,795
|
-
|
349,641
|
||||||||||||||||
|
Operating expenses
|
1,471,860
|
363,480
|
45,000
|
(2
|
)
|
1,880,340
|
||||||||||||||
|
Loss from operations
|
(1,419,014
|
)
|
(66,685
|
)
|
(45,000
|
)
|
(1,530,699
|
)
|
||||||||||||
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Other income
|
669
|
22,823
|
-
|
23,492
|
||||||||||||||||
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Other expense
|
58,325
|
22,535
|
-
|
80,860
|
||||||||||||||||
|
Net loss
|
(1,476,670
|
)
|
(66,397
|
)
|
(45,000
|
)
|
(1,588,067
|
)
|
||||||||||||
|
Net loss attributable to
|
||||||||||||||||||||
|
noncontrolling interest
|
-
|
-
|
19,919
|
19,919
|
||||||||||||||||
|
Net loss attributable to the Company
|
$
|
(1,476,670
|
)
|
$
|
(66,397
|
)
|
$
|
(25,081
|
)
|
$
|
(1,568,148
|
)
|
||||||||
|
Net loss per share, basic and fully diluted
|
(0.05
|
)
|
||||||||||||||||||
|
Weighted average of shares outstanding
|
31,153,074
|
|||||||||||||||||||
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements
5
Notes to the Unaudited Pro Forma Condensed Financial Statements
To reflect the acquisition of NuZee JAPAN Co., Ltd. ("NuZee JP") through a Stock Exchange. NuZee, Inc. (the "Company") entered into a Share Exchange Agreement with NuZee JP and its shareholders whereby the Company exchanged 1,148,734 shares of its Common Stock, par value $0.00001 per share, for seventy percent (70%) of the issued and outstanding common stock of NuZee JP. The fair market value of the Company's common stock was $0.225 per share.
The resultant Goodwill from the acquisition of NuZee JP has been deemed cost in excess of assets. The value of stock was $258,465 and net assets of Japan at seventy percent (70%) was $193,377. The difference of these amounts is Goodwill. The resultant of Noncontrolling interest is calculated at thirty percent (30%) of net assets of NuZee JP.
|
Entry #1
|
Dr.
|
Cr.
|
||||||
|
Common Stock-NuZee JAPAN Co., Ltd
|
$
|
545,844
|
||||||
|
Goodwill
|
65,088
|
|||||||
|
Retained Earnings
|
$
|
249,002
|
||||||
|
Common stock
|
11
|
|||||||
|
Additional paid in capital
|
258,454
|
|||||||
|
Accumulated Other Comprehensive Income
|
20,590
|
|||||||
|
Noncontrolling interest
|
82,875
|
|||||||
To reflect professional fees associated with acquisition of NuZee Japan Co., Ltd.
|
Entry #2
|
Dr.
|
Cr.
|
||||||
|
Operating expenses
|
$
|
45,000
|
||||||
|
Accounts payable
|
$
|
45,000
|
||||||
6