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EX-23.1 - CONSENT - Bravatek Solutions, Inc.bvtk_ex231.htm
EX-99.1 - AUDITED FINANCIAL STATEMENTS - Bravatek Solutions, Inc.bvtk_ex991.htm
8-K/A - FORM 8-K/A - Bravatek Solutions, Inc.bvtk_8ka.htm

EXHIBIT 99.2

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

On October 25, 2017, Bravatek Solutions, Inc. (“Bravatek” or the “Corporation”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Johnny Bolton (the “Seller”), the owner of HelpComm, Inc. (“HelpComm”), a telecom construction services corporation located in Manassas, Virginia, to purchase HelpComm from the Sellers in exchange for $25,000 of cash and 100,000 shares of Series D Convertible Preferred Stock (the “Acquisition”). Each share of Series D Convertible Preferred Stock is convertible into a number of shares of Company common stock equal to $24.00 divided by the volume-weighted average price of the common stock as reported on OTCMarkets.com on the trading day immediately preceding conversion.

 

On January 12, 2018, the Company and the Seller, entered into an Amended and Restated Stock Purchase Agreement (the “Amended Agreement”), amending the Stock Purchase Agreement to (i) add Johnathan Bolton (“Jonathan”) as a seller (the seller and Jonathan are referred to as the “Sellers”) of HelpComm, (ii) add an option to purchase pursuant to which the Corporation shall have the right to purchase 8760, LLC, a Virginia limited liability company (“8760, LLC”), for $100.00 at any time in the Corporation’s discretion, (iii) update certain exhibits and schedules to the Stock Purchase Agreement, and (iv) make the effective date of the Acquisition January 1, 2018.

 

Pursuant to the Amended Agreement, the Corporation agreed to purchase from the Sellers all of the issued and outstanding shares of stock of HelpComm effective as of January 1, 2018, in consideration of the payment of $25,000 to the Sellers and the issuance of 100,000 shares of Series D Preferred Stock of the Corporation to the Sellers, and the Corporation acquired the option to purchase 8760, LLC for $100.00. The entity 8760, LLC owns the real property from which HelpComm operates its business, and is subject to loan agreements, guaranteed by the Small Business Administration, which prohibit (i) any express change of ownership of 8760, LLC, or (ii) any disposition of 8760, LLC assets, including any real property, prior to repayment of the loans.

 

Based on the fair value of the 100,000 shares of Series D Convertible Preferred Stock of $1,564,319, the 8760, LLC purchase option and the $25,000 cash, the total consideration of the Acquisition is valued at $1,589,319.

 

The total purchase price of $1,589,319 has been allocated on a preliminary basis to assets acquired and liabilities assumed in connection with the Acquisition based on preliminary estimated fair values as of the completion of the Acquisition. These allocations reflect various preliminary estimates that are available at the time of this Current Report on Form 8-K/A and are subject to change as the valuation is finalized.

 

The unaudited pro forma condensed consolidated balance sheet as of December 31, 2017, gives effect to the transaction as if the Acquisition had occurred on December 31, 2017, and the unaudited pro forma condensed consolidated statement of operation for the year ended December 31, 2017, gives effect to the transaction as if the Acquisition had occurred on January 1, 2017.

 

The unaudited pro forma condensed financial information includes adjustments which are preliminary and may be revised. There can be no assurances that such revisions (if any) will not result in material changes. The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of results that have occurred or that may occur in the future had the transaction been completed on the dates indicated, nor is it necessarily indicative of the future operating results or financial position of Bravatek after the Acquisition.

 

The unaudited pro forma condensed consolidated financial information should be read together with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K and quarterly reports on Form 10-Q, and HelpComm’s historical information, included herein.

 

 
1
 
 

 

BRAVATEK SOLUTIONS, INC. 

UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ProForma

 

 

 

 

Pro Forma

 

 

 

Bravatek

 

 

HELPCOmm

 

 

Adjustments

 

 

Notes

 

Consolidated

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$ 189,357

 

 

$ 46,910

 

 

$ -

 

 

 

 

$ 236,267

 

Accounts receivable

 

 

54,897

 

 

 

386,964

 

 

 

-

 

 

 

 

 

441,861

 

Prepaid and other assets

 

 

52,104

 

 

 

-

 

 

 

(25,000 )

 

(a)

 

 

27,104

 

TOTAL CURRENT ASSETS

 

 

296,357

 

 

 

433,874

 

 

 

(25,000 )

 

 

 

 

705,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

23,288

 

 

 

171,714

 

 

 

 

 

 

 

 

 

195,002

 

Other assets, net

 

 

157,276

 

 

 

292,995

 

 

 

(24,756 )

 

(d)

 

 

425,515

 

Intangible assets, net

 

 

-

 

 

 

-

 

 

 

1,898,548

 

 

(a) (c)

 

 

1,898,548

 

Goodwill

 

 

-

 

 

 

-

 

 

 

472,313

 

 

(a)

 

 

472,313

 

TOTAL ASSETS

 

$ 476,921

 

 

$ 898,583

 

 

$ 2,321,105

 

 

 

 

$ 3,696,609

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving line of credit

 

$ -

 

 

$ 415,489

 

 

$ -

 

 

 

 

$ 415,489

 

Notes payable

 

 

830,788

 

 

 

63,284

 

 

 

-

 

 

 

 

 

894,072

 

Conertible notes payable, net of discounts

 

 

750,240

 

 

 

-

 

 

 

-

 

 

 

 

 

750,240

 

Bank term loans

 

 

-

 

 

 

104,900

 

 

 

-

 

 

 

 

 

104,900

 

Shareholder advances, related party

 

 

-

 

 

 

19,554

 

 

 

-

 

 

 

 

 

19,554

 

Capital leases payable, current portion

 

 

-

 

 

 

21,733

 

 

 

-

 

 

 

 

 

21,733

 

Accounts payable and accrued liabilities 

 

 

389,200

 

 

 

772,247

 

 

 

-

 

 

 

 

 

1,161,447

 

Accounts payable, related party 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Accrued interest 

 

 

229,967

 

 

 

-

 

 

 

-

 

 

 

 

 

229,967

 

Derivative liailities

 

 

5,331,567

 

 

 

-

 

 

 

-

 

 

 

 

 

5,331,567

 

Deferred revenue

 

 

-

 

 

 

24,756

 

 

 

(24,756 )

 

(d)

 

 

-

 

TOTAL CURRENT LIABILITIES

 

 

7,531,762

 

 

 

1,421,962

 

 

 

(24,756 )

 

 

 

 

8,928,968

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG- TERM LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes payable, net of current portion

 

 

-

 

 

 

69,984

 

 

 

-

 

 

 

 

 

69,984

 

Capital leases payable, net of current portion

 

 

-

 

 

 

1,599

 

 

 

-

 

 

 

 

 

1,599

 

Bank term loans, net of current portion

 

 

-

 

 

 

217,844

 

 

 

-

 

 

 

 

 

217,844

 

TOTAL LONG-TERM LIABILITIES

 

 

-

 

 

 

289,427

 

 

 

-

 

 

 

 

 

289,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' DEFICIT:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A convertible preferred stock 5,000,000 shares authorized; par value $0.0001, -0- shares issued and outstanding

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Series B preferred stock 350,000 shares authorized; par value $0.0001, 264,503 shares issued and outstanding

 

 

26

 

 

 

-

 

 

 

-

 

 

 

 

 

26

 

Series C preferred stock 1,000,000 shares authorized; par value $0.0001, 319,768 shares issued and outstanding

 

 

32

 

 

 

-

 

 

 

-

 

 

 

 

 

32

 

Series D convertible preferred stock 100,000 shares authorized; par value $0.0001, 100,000 shares issued and outstanding (pro forma)

 

 

-

 

 

 

-

 

 

 

1,564,319

 

 

(a)

 

 

1,564,319

 

Common stock (10,000,000,000 shares authorized; no par value; 8,040,670,036 shares issued and outstanding

 

 

5,385,977

 

 

 

1,984

 

 

 

(1,984 )

 

(b)

 

 

5,385,977

 

Common stock to be issued, 118,560,494 shares issuable

 

 

66,917

 

 

 

-

 

 

 

-

 

 

 

 

 

66,917

 

Additional paid in capital

 

 

18,291,657

 

 

 

(1,265,342 )

 

 

1,258,834

 

 

(a) (b)

 

 

18,285,149

 

Retained earnings

 

 

(30,799,450 )

 

 

450,552

 

 

 

(475,308 )

 

(b) (c) (d)

 

 

(30,824,206 )

TOTAL STOCKHOLDERS' DEFICIT

 

 

(7,054,841 )

 

 

(812,806 )

 

 

2,345,861

 

 

 

 

 

(5,521,786 )

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$ 476,921

 

 

$ 898,583

 

 

$ 2,321,105

 

 

 

 

$ 3,696,609

 

 

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

 

 
2
 
 

 

BRAVATEK SOLUTIONS, INC.

UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEAR ENDED DECMEBER 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pro Forma

 

 

 

 

Pro Forma

 

 

 

Bravatek

 

 

HELPCOmm

 

 

Adjustments

 

 

Notes

 

Consolidated

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, related party

 

$ 64,897

 

 

$ -

 

 

$ (14,897 )

 

(d)

 

$ 50,000

 

Sales, other

 

 

-

 

 

 

3,990,670

 

 

 

-

 

 

 

 

 

3,990,670

 

Total sales

 

 

64,897

 

 

 

3,990,670

 

 

 

(14,897 )

 

 

 

 

4,040,670

 

Cost of services

 

 

5,450

 

 

 

3,188,835

 

 

 

(14,897 )

 

(d)

 

 

3,191,075

 

GROSS PROFIT 

 

 

59,447

 

 

 

801,835

 

 

 

-

 

 

 

 

 

849,595

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees and expenses, related parties

 

 

202,955

 

 

 

188,931

 

 

 

-

 

 

 

 

 

391,886

 

Wages and employee expenses

 

 

-

 

 

 

169,343

 

 

 

-

 

 

 

 

 

169,343

 

Rent, related party

 

 

-

 

 

 

134,798

 

 

 

-

 

 

 

 

 

134,798

 

Truck and vehicle expense

 

 

-

 

 

 

162,097

 

 

 

-

 

 

 

 

 

162,097

 

Insurance

 

 

-

 

 

 

154,053

 

 

 

-

 

 

 

 

 

154,053

 

General and administrative 

 

 

77,181

 

 

 

208,165

 

 

 

-

 

 

 

 

 

285,346

 

Research and development

 

 

7,738

 

 

 

-

 

 

 

-

 

 

 

 

 

7,738

 

Professional fees 

 

 

258,542

 

 

 

-

 

 

 

-

 

 

 

 

 

258,542

 

Amortization and depreciation 

 

 

204,718

 

 

 

100,369

 

 

 

165,306

 

 

 (c) (d) 

 

 

470,393

 

TOTAL OPERATING EXPENSES 

 

 

751,134

 

 

 

1,117,756

 

 

 

165,306

 

 

 

 

 

2,034,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS 

 

 

(691,687 )

 

 

(315,921 )

 

 

(165,306 )

 

 

 

 

(1,172,913 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense 

 

 

(330,125 )

 

 

(183,245 )

 

 

-

 

 

 

 

 

(513,370 )

Interest expense related party 

 

 

(8,805 )

 

 

-

 

 

 

-

 

 

 

 

 

(8,805 )

Other income

 

 

1,000

 

 

 

209,410

 

 

 

(175,244 )

 

(d)

 

 

35,166

 

Loss on fair value of derivatives

 

 

(9,066,078 )

 

 

-

 

 

 

-

 

 

 

 

 

(9,066,078 )

Loss on extinguishment of debt 

 

 

(68,138 )

 

 

-

 

 

 

-

 

 

 

 

 

(68,138 )

Amortization of debt discount 

 

 

(1,273,116 )

 

 

-

 

 

 

-

 

 

 

 

 

(1,273,116 )

TOTAL OTHER INCOME (EXPENSES)

 

 

(10,745,262 )

 

 

26,165

 

 

 

(175,244 )

 

 

 

 

(10,894,341 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(11,436,949 )

 

 

(289,756 )

 

 

(340,550 )

 

 

 

 

(12,067,255 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME TAXES

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$ (11,436,949 )

 

$ (289,756 )

 

$ (340,550 )

 

 

 

$ (12,067,255 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE 

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

5,475,438,020

 

 

 

 

 

 

 

 

 

 

 

 

 

5,475,438,020

 

 

See accompanying notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

 

 
3
 
 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

 

GIVING EFFECT TO THE ACQUISITION

 

1.

Basis of Pro Forma Presentation

 

The accompanying unaudited pro forma condensed consolidated financial statements are based on Bravatek’s historical condensed financial statements and HelpComm’s historical condensed financial statements as adjusted to give effect to the acquisition of HelpComm by Bravatek. The unaudited pro forma condensed consolidated statement of income for the year ended December 31, 2017 gives effect to the acquisition of HelpComm as if it had occurred on January 1, 2017. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2017 gives effect to the acquisition of HelpComm as if it occurred on December 31, 2017.

 

The unaudited pro forma condensed consolidated financial statements do not necessarily reflect what the consolidated company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the consolidated company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of reasons.

 

Bravatek has prepared the unaudited pro forma condensed consolidated financial statements using the acquisition method of accounting under existing U.S. GAAP, with Bravatek as the acquirer in the transaction for accounting purposes. Under the acquisition method of accounting, assets acquired and liabilities assumed are recorded at fair value as of the date of acquisition. Bravatek has based the underlying tangible and intangible assets acquired and liabilities assumed on their respective fair market values, with excess purchase price allocated to goodwill and other intangible assets. Bravatek has measured the assets and liabilities of HelpComm based on various preliminary estimates and will revise them as Bravatek completes its valuation work.

 

The pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed consolidated financial statements prepared in accordance with the rules and regulations of the SEC. Bravatek will complete the purchase price allocation after completing the valuation of HelpComm’s assets and liabilities at the level of detail necessary to finalize the purchase price allocation. Differences between these preliminary estimates and the final acquisition accounting may occur and these differences could have a material impact on the unaudited pro forma condensed consolidated financial statements and the consolidated company’s future results of operations and financial position.

 

In order to prepare the unaudited pro forma condensed consolidated financial statements, Bravatek performed a preliminary review of HelpComm’s accounting policies and did not identify any significant differences. Bravatek is in the process of finalizing the review of HelpComm’s accounting policies to determine if differences in accounting policies require further adjustment or reclassification of HelpComm’s results of operations, assets or liabilities to conform to Bravatek’s accounting policies and classifications. As a result of that review, Bravatek may identify additional differences between the accounting policies of the two companies that, when conformed, could have a material impact on the unaudited pro forma condensed consolidated financial statements.

 

 
4
 
 

 

2.

Preliminary Purchase Price Allocation

 

The following table summarizes the preliminary purchase price allocation of the fair value of assets acquired and liabilities assumed in the acquisition:

 

 

 

Purchase

Price

Allocation

 

Fair value of consideration for Acquisition

 

$ 1,589,319

 

Liabilities assumed

 

 

1,668,438

 

Total purchase price

 

$ 3,257,757

 

Assets acquired

 

$ 886,895

 

Intellectual Property/Technology

 

 

391,600

 

Customer Base

 

 

961,000

 

Tradenames and Trademarks

 

 

431,300

 

Non- compete agreements

 

 

37,200

 

Option to buy building

 

 

77,448

 

Goodwill

 

 

472,314

 

 

 

$ 3,257,757

 

 

Goodwill represents the amount by which the estimated consideration transferred exceeds the historical costs of the HelpComm assets Bravatek acquired and the liabilities Bravatek assumed. Bravatek will not amortize the goodwill but will instead test the goodwill for impairment at least annually and whenever events or circumstances have occurred that may indicate a possible impairment.

 

3.

Pro Forma Adjustments

 

(a)

Reflects the consideration Bravatek paid for the acquisition of HelpComm consisting of: 100,000 shares of Series D Convertible Preferred Stock and $25,000 cash (previously paid).

 

 

(b)

Elimination of HelpComm’s historical equity accounts

 

(c)

Reflects the recognition of the amortization on the estimated fair value of HelpComm’s intangible assets as stated above.

 

 

The following table provides their related average estimated useful lives:

 

Intangible Asset

 

Life in Years

Intellectual Property/Technology

 

10

Customer Base

 

5

Tradenames and Trademarks

 

5

Option to purchase building

 

5

Non- compete agreements

 

5

 

 

The fair value of HelpComm’s identifiable intangible assets was estimated primarily using the income approach which requires an estimate or forecast of all the expected future cash flows, either through the use of the relief-from-royalty method or the multi-period excess earnings method. Bravatek will record amortization expense assuming a straight-line basis over the expected life of the finite lived intangible assets, which approximates expected future cash flows.

 

 

(d) To eliminate activity between Bravatek and HelpComm during the year ended December 31, 2017.

 

 

 5