Attached files
| file | filename |
|---|---|
| EX-99.1 - AUDITED FINANCIAL STATEMENTS - DLT Resolution Inc. | dlti_ex991.htm |
| 8-K/A - FORM 8-K/A - DLT Resolution Inc. | dlti_8ka.htm |
EXHIBIT 99.2
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2019 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash and cash equivalents |
| $ | 13,140 |
|
| $ | 14,927 |
|
| $ | - |
|
| $ | 28,067 |
|
| Accounts receivable, net |
|
| 34,631 |
|
|
| 133,780 |
|
|
| - |
|
|
| 168,411 |
|
| Receivable - related parties |
|
| - |
|
|
| 81,150 |
|
|
| (81,150 | )[B] |
|
| - |
|
| Total current assets |
|
| 47,771 |
|
|
| 229,858 |
|
|
| (81,150 | ) |
|
| 196,478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
| - |
|
|
| 99,255 |
|
|
| - |
|
|
| 99,255 |
|
| Operating leases - right of use assets |
|
| - |
|
|
| 14,224 |
|
|
| - |
|
|
| 14,224 |
|
| Intangible assets, net of accumulated amortization |
|
| 376,460 |
|
|
| - |
|
|
| 1,393,184 | [B][C] |
|
| 1,769,644 |
|
| Goodwill |
|
| 165,022 |
|
|
| - |
|
|
| 922,297 | [B] |
|
| 1,087,319 |
|
| Total assets |
| $ | 589,253 |
|
| $ | 343,336 |
|
| $ | 2,234,331 |
|
| $ | 3,166,919 |
|
Notes
|
| [A] | To record the 1,500,000 shares of DLT Resolution, Inc. Common Stock issued to the shareholders of Union Strategies, Inc. and the contingent obligation to issue an additional 1,000,000 Common shares that are valued at $1.47 per share. |
|
| ||
|
| [B] | To record the adjustment to fair value of the acquired assets and and assumed liabilities of Union Strategies, Inc., including its customer list, developed technology, domain name and the non-compete agreements provided for in the Purchase Agreement. |
|
|
| |
|
| [C] | To record the amortization expense for intangible assets recognized upon acquisition of Union Strategies, Inc. and the related accumulated amortization as of the balance sheet date. |
|
| ||
|
| [D] | To record the consolidation of Union Strategies, Inc. as a wholly-owned subsidiary of DLT Resolution, Inc. and recognize other comprehensive income from translation of the Union Strategies, Inc. financial results that are based on the Canadian Dollar at its functional currency . |
| 1 |
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2019 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Bank overdraft |
| $ | 16,782 |
|
| $ | - |
|
| $ | - |
|
| $ | 16,782 |
|
| Accounts payable and accrued liabilities |
|
| 99,201 |
|
|
| 405,068 |
|
|
| - |
|
|
| 504,269 |
|
| Accounts payable, related party |
|
| 15,000 |
|
|
| - |
|
|
| - |
|
|
| 15,000 |
|
| Interest payable, related party |
|
| 34,190 |
|
|
| - |
|
|
| - |
|
|
| 34,190 |
|
| Related party payables |
|
| 20,880 |
|
|
| - |
|
|
| - |
|
|
| 20,880 |
|
| Current notes payable, related party |
|
| 81,500 |
|
|
| 30,771 |
|
|
| (30,771 | )[B] |
|
| 81,500 |
|
| Lease obligations - operating leases, current portion |
|
| - |
|
|
| 6,637 |
|
|
| - |
|
|
| 6,637 |
|
| Total current liabilities |
|
| 267,553 |
|
|
| 442,476 |
|
|
| (30,771 | ) |
|
| 679,258 |
|
| Lease obligations - operating leases, net of current portion |
|
| - |
|
|
| 7,122 |
|
|
| - |
|
|
| 7,122 |
|
| Notes payable, net of current portion |
|
| 5,000 |
|
|
| - |
|
|
| - |
|
|
| 5,000 |
|
| Other long-term liability |
|
| 685,000 |
|
|
| - |
|
|
| 1,470,000 | [A] |
|
| 2,155,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
| 957,553 |
|
|
| 449,598 |
|
|
| 1,439,229 |
|
|
| 2,846,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Series B convertible preferred stock |
|
| 64,000 |
|
|
| - |
|
|
| - |
|
|
| 64,000 |
|
| Common stock |
|
| 24,395 |
|
|
| 77 |
|
|
| 2,423 | [A][D] |
|
| 26,895 |
|
| Treasury stock |
|
| (5,300 | ) |
|
| - |
|
|
| - |
|
|
| (5,300 | ) |
| Additional paid-in capital |
|
| 4,236,265 |
|
|
| - |
|
|
| 1,091,622 | [A] |
|
| 5,327,887 |
|
| Other comprehensive income |
|
| (34,430 | ) |
|
| (22 | ) |
|
| 251,728 | [D] |
|
| 217,276 |
|
| Accumulated deficit |
|
| (4,653,230 | ) |
|
| (106,317 | ) |
|
| (550,672 | )[B][C][D] |
|
| (5,310,218 | ) |
| Total stockholders’ equity attributable to parent |
|
| (368,300 | ) |
|
| (106,262 | ) |
|
| 795,101 |
|
|
| 320,539 |
|
| Non-controlling interest |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
| Total stockholders’ equity |
|
| (368,300 | ) |
|
| (106,262 | ) |
|
| 795,101 |
|
|
| 320,539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders’ equity |
| $ | 589,253 |
|
| $ | 343,336 |
|
| $ | 2,234,330 |
|
| $ | 3,166,920 |
|
| 2 |
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2019 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Services |
| $ | 463,325 |
|
| $ | 1,797,098 |
|
| $ | - |
|
| $ | 2,260,423 |
|
| Promotional |
|
| - |
|
|
| 259,126 |
|
|
| - |
|
|
| 259,126 |
|
| Total revenue |
|
| 463,325 |
|
|
| 2,056,224 |
|
|
| - |
|
|
| 2,519,549 |
|
| Cost of Sales |
|
| 154,874 |
|
|
| 1,323,454 |
|
|
| - |
|
|
| 1,478,328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
| 308,451 |
|
|
| 732,770 |
|
|
| - |
|
|
| 1,041,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
|
| 546,541 |
|
|
| 475,787 |
|
|
| - |
|
|
| 1,022,328 |
|
| Bad debt expense |
|
| - |
|
|
| 128,856 |
|
|
| - |
|
|
| 128,856 |
|
| Depreciation and amortization |
|
| - |
|
|
| 31,166 |
|
|
| 259,026 | [C] |
|
| 290,192 |
|
| Sales and marketing |
|
| - |
|
|
| 197,618 |
|
|
| - |
|
|
| 197,618 |
|
| Total operating expenses |
|
| 546,541 |
|
|
| 833,427 |
|
|
| 259,026 |
|
|
| 1,638,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss from operations |
|
| (238,090 | ) |
|
| (100,657 | ) |
|
| (259,026 | ) |
|
| (597,773 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
| (7,315 | ) |
|
| (33,084 | ) |
|
| - |
|
|
| (40,399 | ) |
| Loss on stock-based liability |
|
| (467,487 | ) |
|
| - |
|
|
| - |
|
|
| (467,487 | ) |
| Foreign exchange gain |
|
| 5,362 |
|
|
| - |
|
|
| - |
|
|
| 5,362 |
|
| Loss on investment |
|
| (331,787 | ) |
|
| - |
|
|
| - |
|
|
| (331,787 | ) |
| Other income |
|
| - |
|
|
| 2,150 |
|
|
| - |
|
|
| 2,150 |
|
| Total other expense |
|
| (801,227 | ) |
|
| (30,934 | ) |
|
| - |
|
|
| (832,161 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss before income taxes |
|
| (1,039,317 | ) |
|
| (131,591 | ) |
|
| (259,026 | ) |
|
| (1,429,935 | ) |
| Provision for income taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
| $ | (1,039,317 | ) |
| $ | (131,591 | ) |
| $ | (259,026 | ) |
| $ | (1,429,935 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted loss per share |
| $ | (0.05 | ) |
|
|
|
|
|
|
|
|
| $ | (0.06 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
|
| 20,871,886 |
|
|
| - |
|
|
| 1,500,000 | [A] |
|
| 22,371,886 |
|
| 3 |
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2018 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Current Assets: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Cash and cash equivalents |
| $ | 12,908 |
|
| $ | 36,837 |
|
| $ | - |
|
| $ | 49,745 |
|
| Accounts receivable |
|
| 12,217 |
|
|
| 225,334 |
|
|
| (219,999 | )[B] |
|
| 17,552 |
|
| Receivable - related parties |
|
| - |
|
|
| 71,298 |
|
|
| (71,298 | )[B] |
|
| - |
|
| Other prepaid expenses |
|
| - |
|
|
| 6,546 |
|
|
| (6,546 | )[B] |
|
| - |
|
| Assets held for sale |
|
| 656,735 |
|
|
| - |
|
|
| - |
|
|
| 656,735 |
|
| Total current assets |
|
| 681,860 |
|
|
| 340,015 |
|
|
| (297,843 | ) |
|
| 724,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
| - |
|
|
| 98,551 |
|
|
| - |
|
|
| 98,551 |
|
| Intangible assets, net of accumulated amortization |
|
| 460,491 |
|
|
| - |
|
|
| 1,652,210 | [B][C] |
|
| 2,112,701 |
|
| Goodwill |
|
| 156,774 |
|
|
| - |
|
|
| 922,297 | [B] |
|
| 1,079,071 |
|
| Total assets |
| $ | 1,299,125 |
|
| $ | 438,566 |
|
| $ | 2,276,664 |
|
| $ | 4,014,355 |
|
Notes
|
| [A] | To record the 1,500,000 shares of DLT Resolution, Inc. Common Stock issued to the shareholders of Union Strategies, Inc. and the contingent obligation to issue an additional 1,000,000 Common shares that are valued at $1.47 per share. |
|
|
|
|
|
| [B] | To record the adjustment to fair value of the acquired assets and and assumed liabilities of Union Strategies, Inc., including its customer list, developed technology, domain name and the non-compete agreements provided for in the Purchase Agreement. |
|
|
|
|
|
| [C] | To record the amortization expense for intangible assets recognized upon acquisition of Union Strategies, Inc. and the related accumulated amortization as of the balance sheet date. |
|
|
|
|
|
| [D] | To record the consolidation of Union Strategies, Inc. as a wholly-owned subsidiary of DLT Resolution, Inc. and recognize other comprehensive income from translation of the Union Strategies, Inc. financial results that are based on the Canadian Dollar at its functional currency. |
| 4 |
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2018 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Accounts payable and accrued expenses |
| $ | 48,920 |
|
| $ | 296,402 |
|
| $ | 4,283 | [B] |
| $ | 349,605 |
|
| Accounts payable – related party |
|
| 40,000 |
|
|
| - |
|
|
| - |
|
|
| 40,000 |
|
| Interest payable – related party |
|
| 26,875 |
|
|
| - |
|
|
| - |
|
|
| 26,875 |
|
| Related party payables |
|
| 17,713 |
|
|
| - |
|
|
| - |
|
|
| 17,713 |
|
| Current notes payable – related party |
|
| 81,500 |
|
|
| 115,441 |
|
|
| - |
|
|
| 196,941 |
|
| Liabilities held for sale |
|
| 146,127 |
|
|
| - |
|
|
| - |
|
|
| 146,127 |
|
| Total current liabilities |
|
| 361,135 |
|
|
| 411,843 |
|
|
| 4,283 |
|
|
| 777,261 |
|
| Notes payable, net of current portion |
|
| 5,000 |
|
|
| - |
|
|
| - |
|
|
| 5,000 |
|
| Other long-term liability |
|
| 196,142 |
|
|
| - |
|
|
| 1,470,000 | [A] |
|
| 1,666,142 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
| 562,277 |
|
|
| 411,843 |
|
|
| 1,474,283 |
|
|
| 2,448,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Series B convertible preferred stock |
|
| 64,000 |
|
|
| - |
|
|
| - |
|
|
| 64,000 |
|
| Common stock |
|
| 24,983 |
|
|
| 73 |
|
|
| 1,427 | [A][D] |
|
| 26,483 |
|
| Treasury stock |
|
| (5,300 | ) |
|
| - |
|
|
| - |
|
|
| (5,300 | ) |
| Additional paid-in capital |
|
| 4,192,678 |
|
|
| 0 |
|
|
| 1,092,622 | [A] |
|
| 5,285,300 |
|
| Other comprehensive income |
|
| (37,688 | ) |
|
| 22 |
|
|
| (22 | )[D] |
|
| (37,688 | ) |
| (Accumulated deficit) retained earnings |
|
| (3,595,912 | ) |
|
| 26,628 |
|
|
| (291,645 | )[B][C][D] |
|
| (3,860,930 | ) |
| Total stockholders’ equity attributable to parent |
|
| 642,761 |
|
|
| 26,723 |
|
|
| 802,381 |
|
|
| 1,471,865 |
|
| Non-controlling interest |
|
| 94,087 |
|
|
| - |
|
|
| - |
|
|
| 94,087 |
|
| Total stockholders’ equity |
|
| 736,848 |
|
|
| 26,723 |
|
|
| 802,381 |
|
|
| 1,565,952 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and stockholders’ equity |
| $ | 1,299,125 |
|
| $ | 438,566 |
|
| $ | 2,276,664 |
|
| $ | 4,014,355 |
|
| 5 |
| DLT RESOLUTION, INC. PRO FORMA UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2018 |
|
|
| DLT Resolution, Inc. |
|
| Union Strategies, Inc. |
|
| Adjustments |
|
| Combined |
| ||||
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
| Services |
| $ | 227,343 |
|
| $ | 1,844,699 |
|
| $ | - |
|
| $ | 2,072,042 |
|
| Promotional |
|
| - |
|
|
| 236,480 |
|
|
| - |
|
|
| 236,480 |
|
| Total revenue |
|
| 227,343 |
|
|
| 2,081,179 |
|
|
| - |
|
|
| 2,308,522 |
|
| Cost of Sales |
|
| (108,401 | ) |
|
| (1,126,869 | ) |
|
| - |
|
|
| (1,235,270 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
| 118,942 |
|
|
| 954,310 |
|
|
| - |
|
|
| 1,073,252 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
|
| 351,724 |
|
|
| 597,641 |
|
|
| - |
|
|
| 949,365 |
|
| Bad debt expense |
|
| - |
|
|
| 84,987 |
|
|
| - |
|
|
| 84,987 |
|
| Depreciation and amortization |
|
| - |
|
|
| 23,281 |
|
|
| 265,018 | [C] |
|
| 288,299 |
|
| Sales and marketing |
|
| - |
|
|
| 156,082 |
|
|
| - |
|
|
| 156,082 |
|
| Total operating expenses |
|
| 351,724 |
|
|
| 861,992 |
|
|
| 265,018 |
|
|
| 1,478,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Loss) income from operations |
|
| (232,782 | ) |
|
| 92,318 |
|
|
| (265,018 | ) |
|
| (405,482 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income (Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
| (4,767 | ) |
|
| (24,520 | ) |
|
| - |
|
|
| (29,287 | ) |
| Loss on change in fair value of derivative liability |
|
| (2,427 | ) |
|
| - |
|
|
| - |
|
|
| (2,427 | ) |
| Foreign exchange loss |
|
| (3,992 | ) |
|
| - |
|
|
| - |
|
|
| (3,992 | ) |
| Other income |
|
| 31,834 |
|
|
| - |
|
|
| - |
|
|
| 31,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total other income (expense) |
|
| 20,648 |
|
|
| (24,520 | ) |
|
| - |
|
|
| (3,872 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) income from continuing operations |
|
| (212,134 | ) |
|
| 67,798 |
|
|
| (265,018 | ) |
|
| (409,354 | ) |
| Loss from discontinued operations |
|
| (117,148 | ) |
|
| - |
|
|
| - |
|
|
| (117,148 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net (loss) income attibutable to common stockholders |
| $ | (329,282 | ) |
| $ | 67,798 |
|
| $ | (265,018 | ) |
| $ | (526,502 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic and diluted loss from operations per share |
| $ | (0.02 | ) |
|
|
|
|
|
|
|
|
| $ | (0.03 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding |
|
| 19,263,408 |
|
|
| - |
|
|
| 1,500,000 | [A] |
|
| 20,763,408 |
|
| 6 |