Attached files
Exhibit 99.3
The following financials summarize our consolidated results of operations for the year ended December 31, 2017 as well as the three month period ending March 31, 2018, as though the acquisition of 80% of the membership interest units of Flux Carbon LLC had occurred on December 31, 2017:
ATTIS INDUSTRIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2017
Attis Industries | Flux Carbon LLC et al | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
| Assets | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 400,223 | $ | -- | $ | - | $ | 400,223 | ||||||||
| Accounts receivable, net of allowance | 861,031 | -- | - | 861,031 | ||||||||||||
| Prepaid expenses | 334,603 | -- | - | 334,603 | ||||||||||||
| Other current assets | 6,450 | -- | - | 6,450 | ||||||||||||
| Current assets held for sale | 8,714,497 | -- | - | 8,714,497 | ||||||||||||
| Total current assets | 10,316,804 | -- | -- | 10,316,804 | ||||||||||||
| Property, plant and equipment, at cost net of accumulated depreciation | 333,499 | -- | - | 333,499 | ||||||||||||
| Other assets: | ||||||||||||||||
| Contract deposits | 536,076 | -- | - | 536,076 | ||||||||||||
| Other deposits | 162,206 | -- | - | 162,206 | ||||||||||||
| Goodwill | 5,279,207 | -- | - | 5,279,207 | ||||||||||||
| Capitalized software | 108,767 | -- | - | 108,767 | ||||||||||||
| Patents | 3,141,796 | -- | - | 3,141,796 | ||||||||||||
| Intangibles | -- | -- | 17,634,854 | 17,634,854 | ||||||||||||
| Customer list, net of accumulated amortization | 2,718,300 | -- | - | 2,718,300 | ||||||||||||
| Note receivable – long term | -- | -- | 10,000,000 | 10,000,000 | ||||||||||||
| Website, net of accumulated amortization | 27,117 | -- | - | 27,117 | ||||||||||||
| Total other assets | 11,973,469 | -- | 27,634,854 | 39,608,323 | ||||||||||||
| Total noncurrent assets held for sale | 80,932,386 | -- | - | 80,932,386 | ||||||||||||
| Total assets | $ | 103,556,158 | $ | -- | $ | 27,634,854 | $ | 131,191,012 | ||||||||
| Liabilities and Shareholders’ Equity (Deficit) | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 1,777,355 | $ | -- | $ | - | $ | 1,777,355 | ||||||||
| Accrued expenses | 820,458 | -- | - | 820,458 | ||||||||||||
| Notes payable, related parties | 6,891 | -- | - | 6,891 | ||||||||||||
| Deferred compensation | - | -- | - | - | ||||||||||||
| Derivative and other fair value liabilities | 2,307,363 | -- | - | 2,307,363 | ||||||||||||
| Current portion - capital leases payable | 25,999 | -- | - | 25,999 | ||||||||||||
| Current portion - long-term debt | 8,502,387 | -- | - | 8,502,387 | ||||||||||||
| Current liabilities held for sale | 84,227,518 | -- | - | 84,227,518 | ||||||||||||
| Total current liabilities | 97,667,971 | -- | - | 97,667,971 | ||||||||||||
| Long-term liabilities: | ||||||||||||||||
| Contingent consideration liability | 1,957,226 | -- | - | 1,957,226 | ||||||||||||
| Deferred tax liability | 14,337 | -- | - | 14,337 | ||||||||||||
| Deferred rent | 53,418 | -- | - | 53,418 | ||||||||||||
| Long-term debt, net of current | 1,977,707 | -- | - | 1,977,707 | ||||||||||||
| Noncurrent liabilities held for sale | 17,307,998 | -- | - | 17,307,998 | ||||||||||||
| Total long-term liabilities | 21,310,686 | -- | - | 21,310,686 | ||||||||||||
| Total liabilities | 118,978,657 | -- | 118,978,657 | |||||||||||||
| - | ||||||||||||||||
| Preferred Series C stock redeemable, cumulative, stated value $100 per share, par value $.001, 67,361 shares authorized, 35,750 and 0 shares issued and outstanding, respectively | - | - | - | - | ||||||||||||
| Preferred Series E stock, cumulative, stated value $100 per share, par value $.001, 300,000 shares authorized, 300,000 and 0 shares issued and outstanding, respectively | 1,253,476 | - | - | 1,253,476 | ||||||||||||
| Shareholders’ equity (deficit): | ||||||||||||||||
| Preferred Series A stock, par value $.001, 51 shares authorized, issued and outstanding | - | - | - | - | ||||||||||||
| Preferred Series B stock, par value $.001, 71,210 shares authorized, 0 and 71,210 issued and outstanding | - | - | - | - | ||||||||||||
| Preferred Series D stock, cumulative, stated value $100 per share, par value $.001, 67,361 shares authorized, 35,750 and 0 shares issued and outstanding, respectively | 531,691 | - | - | 531,691 | ||||||||||||
| Common stock, par value $.025, 75,000,000 shares authorized, 14,658,979 and 1,712,471 shares issued and 6,932,744 and 14,647,749 shares outstanding, respectively | 366,156 | - | - | 366,156 | ||||||||||||
| Common stock to be issued | 720,147 | - | - | 720,147 | ||||||||||||
| Treasury stock, at cost, 11,500 shares | (224,250 | ) | - | - | (224,250 | ) | ||||||||||
| Additional paid in capital | 65,532,467 | 2,090 | 28,000,000 | 93,532,467 | ||||||||||||
| Accumulated deficit | (85,061,593 | ) | (2,090 | ) | (365,146 | ) | (85,426,739 | ) | ||||||||
| Total Attis Industries Inc.. shareholders’ deficit | (18,135,382 | ) | - | 27,634,854 | 9,499,471 | ) | ||||||||||
| Noncontrolling Interest | 1,459,407 | - | - | 1,459,407 | ||||||||||||
| Total shareholders’ equity (deficit) | (16,675,975 | ) | - | 27,634,854 | 10,958,879 | |||||||||||
| Total liabilities and shareholders’ equity (deficit) | $ | 103,556,158 | $ | - | $ | 27,634,854 | $ | 131,191,012 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
ATTIS INDUSTRIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2017
Attis Industries | Flux Carbon LLC et al | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
| Revenue | ||||||||||||||||
| Services | $ | 890,258 | $ | - | $ | - | $ | 890,258 | ||||||||
| Total revenue | 890,258 | - | - | 890,258 | ||||||||||||
| Cost and expenses: | ||||||||||||||||
| Operating | 691,415 | - | - | 691,415 | ||||||||||||
| Depreciation and amortization | 223,977 | - | - | 223,977 | ||||||||||||
| Impairment expense | 221,146 | - | - | 221,146 | ||||||||||||
| Selling, general and administrative | 13,198,096 | 490 | - | 13,198,586 | ||||||||||||
| Total cost and expenses | 14,334,634 | 490 | - | 14,335,124 | ||||||||||||
| Other income (expenses): | ||||||||||||||||
| Unrealized loss on change in fair value of derivative and other fair value liabilities | (992,115 | ) | - | - | (992,115 | ) | ||||||||||
| Unrealized gain from change in fair value of contingent consideration | 263,458 | - | - | 263,458 | ||||||||||||
| Gain on extinguishment of debt | 2,911,417 | - | - | 2,911,417 | ||||||||||||
| Gain on contingent liability | - | - | - | - | ||||||||||||
| Loss on equity method investment | -- | - | (365,146 | ) | (365,146 | ) | ||||||||||
| Interest income | 7,644 | - | - | 7,644 | ||||||||||||
| Interest expense | (620,923 | ) | - | - | (620,923 | ) | ||||||||||
| Total other income (expenses) | 1,569,481 | - | (365,146 | ) | 1,204,335 | |||||||||||
| Loss before income taxes | (11,874,895 | ) | (490 | ) | (365,146 | ) | (12,240,531 | ) | ||||||||
| Provision for income taxes | (14,337 | ) | - | - | (14,337 | ) | ||||||||||
| Loss from continuing operations | $ | (11,889,232 | ) | $ | (490 | ) | $ | (365,146 | ) | $ | (12,254,868 | ) | ||||
| Discontinued Operations, net of tax Loss from operations of discontinued operations | |
$ |
(27,148,257 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(27,148,257 |
) |
| Consolidated Net Loss | $ | (39,037,489 | ) | $ | (490 | ) | $ | (365,146 | ) | $ | (39,403,125 | ) | ||||
| Net income attributable to noncontrolling interest | $ | 123,523 | $ | - | $ | - | $ | 123,523 | ||||||||
| Net loss available to common shareholders | $ | (39,161,012 | ) | $ | (490 | ) | $ | (365,146 | ) | $ | (39,526,648 | ) | ||||
| Deemed dividend related to beneficial conversion feature and accretion of a discount on Series C Preferred Stock | $ | (2,115,317 | ) | $ | - | $ | - | $ | (2,115,317 | ) | ||||||
| Stock dividend related to Series C Preferred Stock | $ | (135,072 | ) | $ | - | $ | - | $ | (135,072 | ) | ||||||
| Deemed dividend related to issuance of Series D Preferred Stock | $ | (531,692 | ) | $ | - | $ | - | $ | (531,692 | ) | ||||||
| Stock dividend related to issuance of Series D Preferred Stock | $ | (106,874 | ) | $ | - | $ | - | $ | (106,874 | ) | ||||||
| Deemed dividend related to issuance of Series E Preferred Stock | $ | (1,253,476 | ) | $ | - | $ | - | $ | (1,253,476 | ) | ||||||
| Stock dividend related to issuance of Series E Preferred Stock | $ | (703,168 | ) | $ | - | $ | - | $ | (703,168 | ) | ||||||
| Net loss attributable to common stockholders | $ | (44,006,611 | ) | $ | (490 | ) | $ | (365,146 | ) | $ | (44,372,247 | ) | ||||
| Earnings per common share (basic and diluted): | ||||||||||||||||
| Loss from continuing operations | (1.77 | ) | (1.77 | ) | ||||||||||||
| Loss from discontinued operations | (2.86 | ) | (2.86 | ) | ||||||||||||
| Net loss per common share | $ | (4.63 | ) | $ | $ | $ | (4.63 | ) | ||||||||
| Weighted average number of shares outstanding | ||||||||||||||||
| (Basic and Diluted) | 9,547,042 | 9,547,042 | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
ATTIS INDUSTRIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2018
Attis Industries | Flux Carbon LLC et al | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
| Assets | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 1,013,180 | $ | -- | $ | - | $ | 1,013,180 | ||||||||
| Accounts receivable, net of allowance | 731,085 | -- | - | 731,085 | ||||||||||||
| Prepaid expenses | 505,083 | -- | - | 505,083 | ||||||||||||
| Other current assets | 6,450 | -- | - | 6,450 | ||||||||||||
| Current assets held for sale | 9,513,601 | -- | - | 9,513,601 | ||||||||||||
| Total current assets | 11,769,399 | -- | -- | 11,769,399 | ||||||||||||
| Property, plant and equipment, at cost net of accumulated depreciation | 3,029,066 | -- | - | 3,029,066 | ||||||||||||
| Other assets: | ||||||||||||||||
| Contract deposits | - | -- | - | - | ||||||||||||
| Other deposits | 152,544 | -- | - | 152,544 | ||||||||||||
| Goodwill | 5,279,207 | -- | - | 5,279,207 | ||||||||||||
| Capitalized software | 97,516 | -- | - | 97,516 | ||||||||||||
| Patents | 4,894,470 | -- | - | 4,894,470 | ||||||||||||
| Intangibles | -- | 17,634,854 | (37,856 | ) | 17,596,998 | |||||||||||
| Customer list, net of accumulated amortization | 2,447,250 | -- | - | 2,447,250 | ||||||||||||
| Note receivable – long term | 10,000,000 | 10,000,000 | ||||||||||||||
| Website, net of accumulated amortization | 25,582 | -- | - | 25,582 | ||||||||||||
| Total other assets | 22,896,569 | 17,634,854 | (37,856 | ) | 40,493,567 | |||||||||||
| Total noncurrent assets held for sale | 87,042,249 | -- | - | 87,042,249 | ||||||||||||
| Total assets | $ | 124,737,283 | $ | 17,634,854 | $ | (37,856 | ) | $ | 142,334,281 | |||||||
| Liabilities and Shareholders’ Equity (Deficit) | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 2,004,208 | $ | -- | $ | - | $ | 2,004,208 | ||||||||
| Accrued expenses | 3,267,275 | -- | - | 3,267,275 | ||||||||||||
| Notes payable, related parties | 6,891 | -- | - | 6,891 | ||||||||||||
| Deferred compensation | -- | -- | - | -- | ||||||||||||
| Derivative and other fair value liabilities | 11,180,347 | -- | - | 11,180,347 | ||||||||||||
| Current portion - capital leases payable | 21,455 | -- | - | 21,455 | ||||||||||||
| Current portion - long-term debt | 4,820,629 | -- | - | 4,820,629 | ||||||||||||
| Current liabilities held for sale | 17,423,578 | -- | - | 17,423,578 | ||||||||||||
| Total current liabilities | 38,724,383 | -- | - | 38,724,383 | ||||||||||||
| Long-term liabilities: | ||||||||||||||||
| Contingent consideration liability | 1,929,936 | -- | - | 1,929,936 | ||||||||||||
| Deferred tax liability | 14,337 | -- | - | 14,337 | ||||||||||||
| Deferred rent | 53,055 | -- | - | 53,055 | ||||||||||||
| Long-term debt, net of current | 8,364,660 | -- | - | 8,364,660 | ||||||||||||
| Noncurrent liabilities held for sale | 90,704,394 | -- | - | 90,704,394 | ||||||||||||
| Total long-term liabilities | 101,066,382 | -- | - | 101,066,382 | ||||||||||||
| Total liabilities | 139,790,765 | -- | 139,790,765 | |||||||||||||
| Preferred Series E stock, cumulative, stated value $100 per share, par value $.001, 300,000 shares authorized, 300,000 and 0 shares issued and outstanding, respectively | 2,676,892 | - | - | 2,676,892 | ||||||||||||
| Shareholders’ equity (deficit): | ||||||||||||||||
| Preferred Series A stock, par value $.001, 51 shares authorized, issued and outstanding | - | - | - | - | ||||||||||||
| Preferred Series B stock, par value $.001, 71,210 shares authorized, 0 and 71,210 issued and outstanding | - | - | - | - | ||||||||||||
| Preferred Series D stock, cumulative, stated value $100 per share, par value $.001, 67,361 shares authorized, 35,750 and 0 shares issued and outstanding, respectively | 1,269,511 | - | - | 1,269,511 | ||||||||||||
| Common stock, par value $.025, 75,000,000 shares authorized, 14,658,979 and 1,712,471 shares issued and 6,932,744 and 14,647,749 shares outstanding, respectively | 429,299 | - | - | 429,299 | ||||||||||||
| Common stock to be issued | 39,479 | - | - | 39,479 | ||||||||||||
| Treasury stock, at cost, 11,500 shares | (224,250 | ) | - | - | (224,250 | ) | ||||||||||
| Additional paid in capital | 65,539,399 | 18,002,180 | - | 83,541,579 | ||||||||||||
| Accumulated deficit | (88,247,178 | ) | (367,326 | ) | (37,856 | ) | (88,652,360 | ) | ||||||||
| Total Attis Industries Inc. shareholders’ deficit | (21,193,740 | ) | 17,634,854 | (37,856 | ) | (3,596,742 | ) | |||||||||
| Noncontrolling Interest | 3,463,366 | - | - | 3,463,366 | ||||||||||||
| Total shareholders’ equity (deficit) | (17,730,374 | ) | 17,634,854 | (37,856 | ) | (133,376 | ) | |||||||||
| Total liabilities and shareholders’ equity (deficit) | $ | 124,737,283 | $ | 17,634,854 | $ | (37,856 | ) | $ | 142,334,281 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
ATTIS INDUSTRIES AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2018
Attis Industries | Flux Carbon LLC et al | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
| Revenue | ||||||||||||||||
| Services | $ | 788,218 | $ | 788,218 | ||||||||||||
| Total revenue | 788,218 | 788,218 | ||||||||||||||
| Cost and expenses: | ||||||||||||||||
| Operating | 856,490 | 856,490 | ||||||||||||||
| Depreciation and amortization | 717,231 | 717,231 | ||||||||||||||
| Impairment expense | 432,480 | 432,480 | ||||||||||||||
| Selling, general and administrative | 3,609,142 | 490 | 3,609,632 | |||||||||||||
| Total cost and expenses | 5,615,343 | 5,615,343 | ||||||||||||||
| Other income (expenses): | ||||||||||||||||
| Unrealized loss on change in fair value of derivative and other fair value liabilities | 2,316,360 | - | - | 2,316,360 | ||||||||||||
| Unrealized gain from change in fair value of contingent consideration | 27,290 | - | - | 27,290 | ||||||||||||
| Gain on extinguishment of debt | - | - | - | |||||||||||||
| Loss on equity method investment | -- | - | (37,856 | ) | (37,856 | ) | ||||||||||
| Interest income | 1,892 | - | - | 1,892 | ||||||||||||
| Interest expense | (301,729 | ) | - | - | (301,729 | |||||||||||
| Total other income (expenses) | 2,043,813 | - | (37,856 | ) | (2,005,957 | ) | ||||||||||
| Loss before income taxes | (2,783,312 | ) | (490 | ) | (37,856 | ) | (2,821,1658 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Loss from continuing operations | $ | (2,783,312 | ) | $ | (490 | ) | $ | (37,856 | ) | $ | (2,821,658 | ) | ||||
| Discontinued Operations, net of tax Loss from operations of discontinued operations | |
$ |
(544,145 |
) |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(544,145 |
) |
| Consolidated Net Loss | $ | (3,327,457 | ) | $ | (490 | ) | $ | (37,856 | ) | $ | (3,365,803 | ) | ||||
| Net income attributable to noncontrolling interest | $ | (141,872 | ) | $ | - | $ | - | $ | (141,872 | ) | ||||||
| Net loss available to common shareholders | $ | (3,185,585 | ) | $ | (490 | ) | $ | (37,856 | ) | $ | (3,223,931 | ) | ||||
| Deemed dividend related to beneficial conversion feature and accretion of a discount on Series C Preferred Stock | $ | -- | $ | - | $ | - | $ | -- | ||||||||
| Deemed dividend related to Series A and B warrants down round provisions | $ | (9,648 | ) | $ | - | $ | - | $ | (9,648 | ) | ||||||
| Deemed dividend related to issuance of Series D and E warrants down round provisions | $ | (234,912 | ) | $ | - | $ | - | $ | (234,912 | ) | ||||||
| Deemed dividend related to extinguishment of Series D and E Preferred Stock | $ | (2,626,873 | ) | $ | - | $ | - | $ | (2,626,873 | ) | ||||||
| Deemed dividend related to conversion of Series D Preferred Stock | (212,230 | ) | (212,230 | ) | ||||||||||||
| Deemed dividend related to conversion of Series E Preferred Stock | $ | (386,978 | ) | $ | - | $ | - | $ | (386,978 | ) | ||||||
| Stock dividend related to issuance of Series F Preferred Stock | $ | (4,214,073 | ) | $ | - | $ | - | $ | (4,214,073 | ) | ||||||
| Net loss attributable to common stockholders | $ | (10,870,299 | ) | $ | (490 | ) | $ | (37,856 | ) | $ | (10,908,645 | ) | ||||
| Earnings per common share (basic and diluted): | ||||||||||||||||
| Loss from continuing operations | (0.60 | ) | - | (0.60 | ) | |||||||||||
| Loss from discontinued operations | (0.03 | ) | - | (0.03 | ) | |||||||||||
| Net loss per common share | $ | (0.63 | ) | $ | - | $ | $ | (0.63 | ) | |||||||
| Weighted average number of shares outstanding | ||||||||||||||||
| (Basic and Diluted) | 17,358,891 | - | 17,358,891 | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
PRO FORMA ADJUSTMENTS
The financial statements included herein present the effect on Attis Industries Inc. as if the FLUX Carbon LLC acquisition had occurred on January 3, 2017 (inception) rather than the actual purchase date of May 25, 2018.
For the year ended December 31, 2017 the effect would have been a net increase in intangible assets of $17,634,854, an increase in notes receivable – long term of $10,000,00, an increase in Additional Paid in Capital of $28,002,090, and an increase in expenses of $490 of SG&A costs, plus $365,146, which represents the allocable equity method investment loss in Genarex FD, LLC.
For the three months ended March 31, 2018 the effect would have been an increase in expenses of $490 of SG&A costs, plus $37,856, which represents the allocable equity method investment loss in Genarex FD, LLC.
Other than adjustments listed above there are no other material pro forma effects related to the FLUX Carbon, LLC acquisition.
6