Attached files
| file | filename |
|---|---|
| EX-99.1 - AUDITED FINANCIAL STATEMENTS OF BLACK DRAGON AT APRIL 11, 2017 AND FOR THE PERIO - Fortem Resources Inc. | blackdragonfs2017yefinal.htm |
| 8-K/A - FORM 8-K/A - Fortem Resources Inc. | fortemresourcesincform8kabla.htm |
![[fortemproformablackdragon002.gif]](fortemproformablackdragon002.gif)
PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - Prepared by Management)
(Expressed in U.S. Dollars)
February 28, 2017
FORTEM RESOURCES INC.
PRO-FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Unaudited – Prepared by Management)
(Expressed in U.S. Dollars)
AS AT FEBRUARY 28, 2017
|
|
|
| Fortem February 28, 2017 |
| Black Dragon April 11, 2017 |
| Note |
| Pro-forma Adjustments |
| Pro-forma Consolidated February 28, 2017 |
|
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|
| $ |
| $ |
|
|
| $ |
| $ |
Assets |
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| |
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Current |
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| ||
| Cash |
| 429,481 |
| - |
| 2 |
| (100,000) |
| 209,618 | |
|
|
|
|
|
|
|
| 3(b) |
| (119,863) |
|
|
| Receivables |
| 27,103 |
| - |
|
|
| - |
| 27,103 | |
| Prepaid expenses |
| 24,099 |
| - |
|
|
| - |
| 24,099 | |
|
|
|
| 480,683 |
| - |
|
|
| (219,863) |
| 260,820 |
|
|
|
|
|
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|
|
|
|
|
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|
Deposit |
| 33,082 |
| - |
|
|
| - |
| 33,082 | ||
Due from related party |
| - |
| - |
| 3(b) |
| 119,863 |
| - | ||
|
|
|
|
|
|
|
| 3(c) |
| (119,863) |
|
|
Equipment |
| 54,956 |
| - |
|
|
| - |
| 54,956 | ||
Oil and gas properties, full cost method |
| 59,294,286 |
| 119,863 |
| 2 |
| 39,677,306 |
| 123,578,323 | ||
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|
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| 2 |
| 24,486,868 |
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|
| 59,863,007 |
| 119,863 |
|
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| 63,944,311 |
| 123,927,181 |
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Liabilities |
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Current |
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| Accounts payable and accrued liabilities | 308,581 |
| 26,355 |
| 2 |
| 10,951 |
| 345,887 | ||
| Loan payable |
| 54,722 |
| - |
|
|
| - |
| 54,722 | |
| Advance payable |
| 4,058 |
| 119,863 |
| 3(c) |
| (119,863) |
| 4,058 | |
| Due to related parties |
| 108,831 |
| - |
|
|
| - |
| 108,831 | |
| Note payable |
| 18,825 |
| - |
|
|
| - |
| 18,825 | |
| Derivative liabilities |
| 2,590,477 |
| - |
|
|
| - |
| 2,590,477 | |
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|
| 3,085,494 |
| 146,218 |
|
|
| (108,912) |
| 3,122,800 |
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Asset retirement obligation |
| 24,546 |
| - |
|
|
| - |
| 24,546 | ||
Deferred tax liabilities |
| 15,782,937 |
| - |
| 2 |
| 24,486,868 |
| 40,269,805 | ||
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| 18,892,977 |
| 146,218 |
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| 24,377,956 |
| 43,417,151 |
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Shareholders' equity |
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| Capital stock |
| 50,428 |
| - |
| 2 |
| 20,000 |
| 70,428 | |
| Members' capital |
| - |
| - |
|
|
| - |
| - | |
| Additional paid in capital |
| 41,757,885 |
| - |
| 2 |
| 39,520,000 |
| 81,277,885 | |
| Obligation to issue shares |
| 6,000,000 |
| - |
|
|
| - |
| 6,000,000 | |
| Share subscriptions receivable |
| (110,000) |
| - |
|
|
| - |
| (110,000) | |
| Accumulated other comprehensive loss |
| (383,257) |
| - |
|
|
| - |
| (383,257) | |
| Accumulated deficit |
| (6,345,026) |
| (26,355) |
| 2 |
| 26,355 |
| (6,345,026) | |
|
|
|
| 40,970,030 |
| (26,355) |
|
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| 39,566,355 |
| 80,510,030 |
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| 59,863,007 |
| 119,863 |
|
|
| 63,944,311 |
| 123,927,181 |
The accompanying notes are integral part of these pro-forma consolidated financial statements.
FORTEM RESOURCES INC.
PRO-FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
(Unaudited – Prepared by Management)
(Expressed in U.S. Dollars)
PERIOD ENDED FEBRUARY 28, 2017
|
|
|
| Fortem Resources For the year ended February 28, 2017 |
| Black Dragon For the period ended April 11, 2017 |
| Note |
| Pro-forma Adjustments |
| Pro-forma Consolidated |
|
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| $ |
| $ |
|
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| $ |
| $ |
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Expenses |
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| Consulting fees |
| 70,592 |
| - |
|
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| - |
| 70,592 | |
| Depreciation |
| 3,409 |
| - |
|
|
| - |
| 3,409 | |
| Management fees |
| 233,786 |
| - |
|
|
| - |
| 233,786 | |
| Office |
| 51,373 |
| - |
|
|
| - |
| 51,373 | |
| Professional fees |
| 149,702 |
| 26,355 |
|
|
| - |
| 167,171 | |
|
| (508,862) |
| (26,355) |
|
|
| - |
| (526,331) | ||
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| Interest income |
| 251 |
| - |
|
|
| - |
| 251 | |
| Accretion expense |
| (202,263) |
| - |
|
|
| - |
| (202,263) | |
| Gain on settlement of debt |
| 79,239 |
| - |
|
|
| - |
| 79,239 | |
| Loss on settlement of convertible debt |
| (1,309,022) |
| - |
|
|
| - |
| (1,309,022) | |
| Interest expense |
| (16,871) |
| - |
|
|
| - |
| (16,871) | |
| Financing fee |
| (73,621) |
| - |
|
|
| - |
| (73,621) | |
| Foreign exchange gain |
| 271,294 |
| - |
|
|
| - |
| 271,294 | |
| Gain on write-off of accounts payable |
| 215,348 |
| - |
|
|
| - |
| 215,348 | |
| Change in fair value of derivative liability |
| (1,197,268) |
| - |
|
|
| - |
| (1,197,268) | |
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|
| (2,232,913) |
| - |
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| - |
| (2,232,913) |
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Net loss for the year |
| (2,741,775) |
| (26,355) |
|
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| - |
| (2,759,244) | ||
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| Foreign currency translation |
| (249,977) |
| - |
|
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| - |
| (249,977) | |
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Comprehensive loss for the year |
| (2,991,752) |
| (26,355) |
|
|
| - |
| (3,009,221) | ||
The accompanying notes are integral part of these pro-forma consolidated financial statements.
FORTEM RESOURCES INC.
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited – Prepared by Management)
(Expressed in U.S. Dollars)
FEBRUARY 28, 2017
|
1.
BASIS OF PRESENTATION
The accompanying unaudited pro-forma consolidated financial statements of Fortem Resources Inc. ("Fortem" or the “Company”) have been prepared by management in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) from information derived from the unaudited pro-forma consolidated financial statements of Fortem and the financial statements of Black Dragon Energy, LLC (“Black Dragon”) together with other information available to the Company. In the opinion of the Company's management, the pro-forma consolidated financial statements include all adjustments necessary for the fair presentation of the transactions as described below.
The unaudited pro-forma consolidated financial statements are not necessarily indicative of the financial position or results of operations which would have resulted if the combination had actually occurred as set out in Note 2.
The unaudited pro-forma consolidated financial statements should be read in conjunction with the February 28, 2017 unaudited pro-forma consolidated financial statements of Fortem which included the acquisition of Colony Energy, LLC, the February 28, 2017 audited financial statements of Fortem and the April 11, 2017 audited financial statements of Black Dragon.
2.
PRELIMINARY PURCHASE PRICE ALLOCATION
In April 2017, the Company entered into and closed a Membership Interest Purchase Agreement with two arm’s length vendors to acquire all membership interests of Black Dragon, a Nevada limited liability company. Black Dragon has the right to acquire a 75% working interest in and to certain leases, hydrocarbons, wells, agreements, equipment, surface rights agreements and assignable permits totaling approximately 165,000 acres (258 sections) at an 80% net revenue interest, located in the Moenkopi formation of the Carbon and Emery Counties, Utah (“Black Dragon Property”).
In consideration for the acquisition of Black Dragon, the Company issued an aggregate of 20,000,000 shares of its common stock to the two vendors on the closing date (issued at a fair value of $39,540,000) and paid $100,000 prior to the closing as a non-refundable deposit.
The assets and liabilities of Black Dragon assumed on the acquisition are as follows:
| $ |
|
Oil and gas properties | 119,863 |
|
Accounts payable and accrued liabilities | (26,355) |
|
Advance payable | (119,863) |
|
|
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Net liabilities | (26,355) |
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The total consideration for the acquisition is as follows:
| $ |
|
Value of shares issued | 39,540,000 |
|
Cash paid | 100,000 |
|
Transaction costs | 10,951 |
|
| 39,650,951 |
|
Add: net liabilities | 26,355 |
|
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|
Consideration paid over the net liabilities of Black Dragon | 39,677,306 |
|
The consideration paid plus the net liabilities of Black Dragon has been added to the oil and gas property to reflect the fair value of the Black Dragon Property.
As a result of the acquisition, the Company recorded a deferred tax liability of $24,486,868.
FORTEM RESOURCES INC.
NOTES TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited – Prepared by Management)
(Expressed in U.S. Dollars)
FEBRUARY 28, 2017
|
3.
PRO-FORMA TRANSACTIONS
The pro-forma consolidated financial statements have been prepared based on the following assumptions:
a)
The unaudited pro-forma consolidated statement of financial position gives effect to the acquisition as if it had occurred on February 28, 2017. The unaudited pro-forma consolidated statement of comprehensive loss gives effect to the acquisition as if it occurred on the first day of the period presented.
b)
Fortem advanced $119,863 as a loan to Black Dragon.
c)
The intercompany loan mentioned in 3(b) above has been eliminated.