I-ON Digital Corp. - FORM 8-K/A - EX-99.2 - EXHIBIT 99.2 - May 7, 2018

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Exhibit 99.2
 
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following supplemental pro forma information of I-ON Communications Corp., f/k/a Evans Brewing Company, Inc. (“Evans”) is presented for informational purposes only, as an aid to understanding the combined financial results of I-ON Communications Co, Ltd. and Evans Brewing Company, Inc. This unaudited pro forma condensed combined financial information should not be considered a substitute for the historical financial information prepared in accordance with generally accepted accounting principles (“GAAP”), as presented in Exhibit 99.1 and 99.2 of this Current Report on Form 8-K. The unaudited pro forma consolidated financial information disclosed in this report is for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the pro forma events taken place on the dates indicated, or of the Company’s future consolidated results of operations.

On January 25, 2018, Evans executed an Agreement of Merger and Plan of Reorganization (the “Merger Agreement”), with I-ON Communications Co., Ltd., a company organized under the laws of the Republic of Korea (South Korea) (“I-ON”) and I-ON Acquisition Corp., a wholly-owned subsidiary of Evans (“Acquisition”). Pursuant to the terms of the Merger Agreement, Acquisition merged with and into I-ON in a statutory reverse triangular merger (the “Merger”) with I-ON surviving as a wholly-owned subsidiary of Evans.  As consideration for the Merger, Evans agreed to issue the shareholders of I-ON (the “I-ON Holders”) an aggregate of 26,000,000 shares of Evans’ common stock, par value $0.001 per share (the “Common Stock”) in accordance with their pro rata ownership of I-ON capital stock.  Following the Merger, Evans adopted the business plan of I-ON in information technology consultancy and software development.

The Merger will be accounted for as a reverse business combination. Under this method of accounting, I-ON will be treated as the acquiring company for financial reporting purposes. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of Evans issuing stock for the net assets of I-ON, accompanied by a recapitalization. The net liabilities of Evans will be stated at fair value, while the assets and liabilities of I-ON are recognized at their historical basis.

The unaudited pro forma condensed combined financial statements are derived from and should be read in conjunction with historical consolidated financial statements and related notes of I-ON, which are included in its financial statements for the years ended December 31, 2017 and 2016, which are filed as Exhibit 99.1 and 99.2 of the Current Report on Form 8- K to which this is an exhibit. The unaudited pro forma condensed combined balance sheet as of December 31, 2017, are presented herein.
 
12/31/2017
                        
ASSETS
  
Evans Brewing
    
I-ON Communications Ltd. (a)
    
Pro-forma Adjustments
    
I-ON Communications Corp.
  
                         
Current Assets
                        
Cash
    
-
      
1,439,700
      
-
      
1,439,700
  
Restricted cash
    
-
      
1,795,781
      
-
      
1,795,781
  
Short-term financial instruments
    
-
      
746,687
      
-
      
746,687
  
Short-term loans
    
-
      
112,003
      
-
      
112,003
  
Accounts receivable
    
124,638
      
4,014,388
      
-
      
4,139,026
  
Misc receivable
    
400,000
      
-
      
-
      
400,000
  
Inventory
    
292,764
      
-
      
-
      
292,764
  
Deposits-short term
    
47,203
      
-
      
-
      
47,203
  
Prepaid expense and other
    
25,600
      
537,402
              
563,002
  
Total Current Assets
    
890,204
      
8,785,044
      
-
      
9,675,248
  
                                 
Non-current Assets
                                
Investments
    
-
      
136,271
      
-
      
136,271
  
Property & equipment, net
    
1,596,945
      
69,455
      
-
      
1,666,400
  
Intangible assets, net
    
-
      
74,642
      
-
      
74,642
  
Deposits
    
67,500
      
392,095
      
-
      
459,595
  
Liquor license
    
135,968
      
-
      
-
      
135,968
  
Deferred tax asset
    
11,668
      
879,957
      
-
      
891,625
  
Total Non-current Assets
    
1,812,081
      
1,552,420
      
-
      
3,364,501
  
Total Assets
    
2,702,285
      
10,198,381
      
-
      
12,900,666
  
                                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                                
                                 
Current Liabilities
                                
Bank overdraft
    
30,976
      
-
      
-
      
30,976
  
Accounts payable
    
387,846
      
520,045
      
-
      
907,891
  
Accrued interest
    
58,801
      
-
      
-
      
58,801
  
Accrued salary
    
54,832
      
-
      
-
      
54,832
  
Accrued expenses and other
    
-
      
1,197,005
      
-
      
1,197,005
  
Value-added tax payable
    
-
      
184,186
      
-
      
184,186
  
Deferred revenue
    
14,215
      
-
      
-
      
14,215
  
Payable-credit cards
    
20,417
      
-
      
-
      
20,417
  
Refundable deposits
    
96,684
      
-
      
-
      
96,684
  
Total notes payable
    
2,524,378
      
-
      
-
      
2,524,378
  
Total Current Liabilities
    
3,188,151
      
1,901,236
      
-
      
5,228,470
  
                                 
Long Term Liabilities
                                
Long-term debt, net of current portion
    
-
      
280,007
      
-
      
280,007
  
Deferred tax liability
    
11,668
      
-
      
-
      
11,668
  
Total Long Term Liabilities
    
11,668
      
280,007
      
-
      
291,675
  
Total Liabilities
    
3,199,819
      
2,320,326
      
-
      
5,520,146
  
                                 
Stockholders' Equity
                                
Preferred stock
    
100
      
-
      
(100
)
    
-
  
Common stock
    
490
      
1,203,383
      
(1,200,673
)
    
3,200
  
Additional paid in capital
    
3,510,977
      
2,011,254
      
(798,688
)
    
4,723,543
  
Accumulated other comprehensive loss
            
274,468
              
274,468
  
Accumulated deficit
    
(4,009,100
)
    
4,527,781
              
518,681
  
Non-controlling interests
            
252
              
252
  
Total Company Stockholders' Equity
    
(497,533
)
    
8,017,138
              
7,519,605
  
                                 
Total Liabilities and Stockholders' Equity
    
2,702,285
      
10,198,381
      
-
      
12,900,666
  
 
(a) Reflects 100% of assets, liabilities, income and expenses of I-ON Communications, Ltd.
   
Evans Brewing
    
I-ON Communications Ltd. (a)
    
Pro-forma adjustments
    
I-ON Communications Corp
  
Net Sales
    
2,336,804
      
9,206,355
      
-
      
11,543,159
  
Cost of goods sold
    
2,347,515
      
6,199,386
      
-
      
8,546,901
  
Gross Profit
    
(10,711
)
    
3,006,969
      
-
      
2,996,258
  
                                 
Operating Expense:
                                
General and administrative
    
1,370,386
      
1,749,576
      
-
      
3,119,962
  
Research and development
    
-
      
670,714
      
-
      
670,714
  
Total operating expense
    
1,370,386
      
2,420,290
      
-
      
3,790,676
  
                                 
Income from operations
    
(1,381,097
)
    
586,679
      
-
      
(794,418
)
                                 
Other income (expense)
    
321
      
-
      
-
          
Interest income
    
-
      
49,020
      
-
      
49,020
  
Gain on foreign currency exchange, net
    
-
      
(12,525
)
    
-
      
(12,525
)
Miscellaneous income (expense), net
    
-
      
(393,006
)
    
-
      
(393,006
)
Interest expense
    
(60,717
)
    
(10,149
)
    
-
      
(70,866
)
Total other income (expense), net
    
(60,396
)
    
(366,660
)
    
-
      
(427,056
)
                     
-
          
Income before provision for income taxes
    
(1,441,493
)
    
220,019
      
-
      
(1,221,474
)
                                 
Provision for income tax
    
5,570
      
146,901
      
-
      
152,471
  
Net income before income or loss on equity investments in affiliates and non-controlling interest
    
(1,447,063
)
    
73,118
      
-
      
(1,373,945
)
Income (loss) on equity investments in affiliates
    
-
      
(54,100
)
    
-
      
(54,100
)
Net income (loss) before non-controlling interest
    
(1,447,063
)
    
19,018
      
-
      
(1,428,045
)
Non-controlling interest
    
-
      
91
      
-
      
91
  
Net income (loss)
    
(1,447,063
)
    
19,109
      
-
      
(1,427,954
)
                                 
Earnings (loss) per share;
                    
-
          
Basic and Diluted
    
(0.30
)
    
(0.01
)
    
-
      
(0.04
)
Weighted average number of shares outstanding (Basic and Diluted)
    
4,802,240
      
2,808,214
      
-
      
32,000,000
  
                     
-
          
Comprehensive income statement:
                    
-
          
Net income
    
(1,447,063
)
    
19,018
      
-
      
(1,428,045
)
Foreign currency translation
    
-
      
747,785
      
-
      
747,785
  
Total comprehensive income
    
-
      
766,803
      
-
      
766,803
  
 

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