Exhibit 99.3

 

 

THUNDER ENERGIES CORPORATION

 

UNAUDITED PROFORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

 

 

TABLE OF CONTENTS

 

		Page
UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS:
PROFORMA CONDENSED COMBINED BALANCE SHEET AS OF JUNE 30, 2020		3
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 2020		4
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS - FOR THE THREE MONTHS ENDED JUNE 30, 2020		5
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2019		6
NOTES AND ASSUMPTIONS TO THE UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS		7

 

 

 

 

 

 

 

 

 

THUNDER ENERGIES CORPORATION

UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS

OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 2019 AND

AS OF AND FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020

 

 

The following unaudited proforma condensed combined financial statements give effect to the August 14, 2020 Asset Purchase Agreement whereby Thunder Energies Corporation (the "Company") acquired substantially all of the operating assets of Nature Consulting LLC, a Florida limited liability company ("Nature") (the "Acquisition"). Nature is the premier source of turnkey CBD and Hemp extract solutions, providing high quality products, comprehensive services and a process that clients trust. The Company was founded in February 2019. On August 14, 2020 (the “Closing Date”), TNRG and the member of Nature entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”), which closed on the same date.  Pursuant to the terms of the Interest Purchase Agreement, the members of Nature sold all of their membership interests in Nature to TNRG in exchange for sixty million (60,000,000) shares of TNRG’s Common Stock. As a result of this transaction, Nature became a wholly-owned subsidiary of TNRG.

 

The unaudited proforma condensed combined balance sheet as of June 30, 2020, together with the unaudited condensed combined statements of operations for the year ended December 31, 2019 and for the three and six months ended June 30, 2020 presented herein gives effect to the Acquisition as if the transaction had occurred at the beginning of such periods and includes certain adjustments that are directly attributable to the transaction which are expected to have a continuing impact on the Company, and are factually supportable, as summarized in the accompanying notes and assumptions.

 

The proforma condensed combined financial statements presented herein are unaudited and have been prepared for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had the Company and Nature been a combined company during the specified periods.  The unaudited proforma condensed combined financial statements, including the notes and assumptions thereto, are qualified in their entirety by reference, and should be read in conjunction with:

 

•

The accompanying notes and assumptions to the unaudited proforma condensed combined financial statements.

 

•

the audited consolidated financial statements of the Company for the year ended December 31, 2019 and the related notes thereto, included in its Annual Report on Form 10-K and the unaudited consolidated financial statements of the Company for the three and six months ended June 30, 2020 and the related notes thereto, included in its Quarterly Report on Form 10-Q both as filed with the Securities and Exchange Commission.

 

•

The audited financial statements of Nature for the year ended December 31, 2019 as filed herewith as Exhibit 99.1 to this Form 8-K.

 

•

The unaudited financial statements of Nature for the three months ended June 30, 2020 and six months ended June 30, 2020 and for the period January 19, 2019 (date of formation) to June 30, 2019 as filed herewith as Exhibit 99.2 to this Form 8-K.

 

The purchase price allocation for Nature takes into account the information management believes is reasonable. 

 

 

 

THUNDER ENERGIES CORPORATION

PROFORMA CONDENSED COMBINED BALANCE SHEET

JUNE 30, 2020

(Unaudited)

 

		Thunder												Excluded
		Energies				Nature								Assets and				Adjustment				Pro Forma				Pro Forma
		Corporation				Consulting				Combined				Liabilities				Letter				Adjustments				Combined
		(Historical)				(Historical)								(A)
ASSETS
Current assets:
Cash		$	1,655			$	31,968			$	33,623			$	(1,655	)										$	31,968
Accounts receivable, net of allowance of $0 and $0 at June 30, 2020 for Thunder Energies and Nature Consulting, respectively			–				166,022				166,022				–												166,022
Inventories, net			–				68,464				68,464				–												68,464
Prepaid expenses			56,500				11,979				68,479				–												68,479
Total current assets			58,155				278,433				336,588				(1,655	)											334,933
Property and equipment, net			–				31,746				31,746				–												31,746
Intangible assets, net			–				16,040				16,040				–												16,040
Operating lease right-of-use assets, net			–				238,429				238,429				–												238,429
Total assets		$	58,155			$	564,648			$	622,803			$	(1,655	)										$	621,148
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable		$	1,550			$	22,024			$	23,574			$	–											$	23,574
Accrued interest			23,204				29,877				53,081				–												53,081
Due to related party			–				595,243				595,243				–												595,243
Advance from members			–				70,000				70,000				–												70,000
Customer advance payments			–				88,543				88,543				–												88,543
Short term notes payable			–				201,065				201,065				–												201,065
Short term notes payable - related party			–				37,000				37,000				–												37,000
Current portion of convertible notes payable, less unamortized debt discount			107,458				–				107,458				–												107,458
Derivative liabilities			216,443				–				216,443				–												216,443
Current portion of operating lease liabilities			–				114,291				114,291				–												114,291
Other current liabilities			–				66,223				66,223				–												66,223
Total current liabilities			348,655				1,187,266				1,535,921				–												1,535,921
Long-term liabilities:
Operating lease liabilities, less current portion			–				129,157				129,157																129,157
Convertible notes, less unamortized debt discount			37,778				–				37,778				–												37,778
Total long-term liabilities			37,778				129,157				166,935				–												166,935
Total liabilities			386,433				1,316,423				1,702,856				–												1,702,856
Commitments and contingencies
Stockholders' deficit
Preferred stock - Series A			50,000				–				50,000				–												50,000
Preferred stock - Series B			5				–				5				–												5
Preferred stock - Series C			10				–				10				–												10
Common stock			12,645				–				12,645				–				B				60,000				72,645
Additional paid in capital			5,383,426				–				5,383,426				(1,655	)			B				(1,537,691	)			3,844,080
Accumulated deficit			(5,774,364	)			–				(5,774,364	)			–				B				725,916				(5,048,448	)
Total stockholders' deficit			(328,278	)			–				(328,278	)			(1,655	)											(1,081,708	)
Members' deficit
Members' capital			–				(1,477,691	)			(1,477,691	)			–				B				1,477,691				–
Accumulated earnings (deficit)			–				725,916				725,916				–				B				(725,916	)			–
Total members' deficit			–				(751,775	)			(751,775	)			–												–
Total liabilities and stockholders' deficit		$	58,155			$	564,648			$	622,803			$	(1,655	)										$	621,148

 

 

 

 

THUNDER ENERGIES CORPORATION

PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2020

(Unaudited)

 

		Thunder Energies Corporation				Nature Consulting				Combined				Adjustment Letter				Pro Forma Adjustments				Pro Forma Combined
			(Historical)				(Historical)
Revenues		$	–			$	5,291,850			$	5,291,850								–			$	5,291,850
Cost of Sales			–				3,359,480				3,359,480								–				3,359,480
Gross Profit			–				1,932,370				1,932,370								–				1,932,370
Operating expenses:
Marketing expenses			–				173,645				173,645								–				173,645
Research and development			2,741				–				2,741			A					(2,741	)			–
General and administrative			109,765				908,020				1,017,785			A					(109,765	)			908,020
Total operating expenses			112,506				1,081,665				1,194,171								(112,506	)			1,081,665
(Loss) income from operations			(112,506	)			850,705				738,199								112,506				850,705
Other (income) expense:
Accretion of debt discount			106,522				–				106,522			A					(106,522	)			–
Change in fair value of derivative liabilities			(9,044	)			–				(9,044	)		A					9,044				–
Extinguishment of derivative liability related to debt conversion			(25,686	)			–				(25,686	)		A					25,686				–
Loss on extinguishment of change of control			337,348								337,348			A					(337,348	)			–
Other income			–				(7,000	)			(7,000	)											(7,000	)
Other expense			–				4,500				4,500								–				4,500
Interest expense			81,605				29,977				111,582			A					(81,605	)			29,977
Total other expense			490,745				27,477				518,222								(490,745	)			27,477
(Loss) income before income taxes			(603,251	)			823,228				219,977								603,251				823,228
Income taxes			–				–				–								–				–
Net (loss) income		$	(603,251	)		$	823,228			$	219,977							$	603,251			$	823,228
Net loss per share, basic and diluted		$	(0.05	)			N/A			$	0.02							$	–			$	0.01
Weighted average number of shares outstanding
Basic and diluted			11,602,292				N/A				11,602,292			C					60,000,000				71,602,292

 

 

THUNDER ENERGIES CORPORATION

PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 2020

(Unaudited)

 

		Thunder Energies Corporation				Nature Consulting				Combined				Adjustment Letter				Pro Forma Adjustments				Pro Forma Combined
			(Historical)				(Historical)
Revenues		$	–			$	4,320,493			$	4,320,493								–			$	4,320,493
Cost of Sales			–				3,009,514				3,009,514								–				3,009,514
Gross Profit			–				1,310,979				1,310,979								–				1,310,979
Operating expenses:
Marketing expenses			–				54,902				54,902								–				54,902
General and administrative			60,309				599,090				659,399			A					(60,309	)			599,090
Total operating expenses			60,309				653,992				714,301								(60,309	)			653,992
(Loss) income from operations			(60,309	)			656,987				596,678								60,309				656,987
Other (income) expense:
Accretion of debt discount			55,018				–				55,018			A					(55,018	)			–
Change in fair value of derivative liabilities			(2,416	)			–				(2,416	)		A					2,416				–
Other income			–				(7,000	)			(7,000	)							–				(7,000	)
Interest expense			12,835				20,290				33,125			A					(12,835	)			20,290
Total other expense			65,437				13,290				78,727								(65,437	)			13,290
(Loss) income before income taxes			(125,746	)			643,697				517,951								125,746				643,697
Income taxes			–				–				–								–				–
Net (loss) income		$	(125,746	)		$	643,697			$	517,951							$	125,746			$	643,697
Net loss per share, basic and diluted		$	(0.01	)			N/A			$	0.04							$	–			$	0.01
Weighted average number of shares outstanding
Basic and diluted			11,768,332				N/A				11,768,332			C					60,000,000				71,768,332

 

 

 

 

THUNDER ENERGIES CORPORATION

PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2019

(Unaudited)

 

		Thunder Energies Corporation				Nature Consulting				Combined				Adjustment Letter				Pro Forma Adjustments				Pro Forma Combined
		(Historical)				(Historical)
Revenues		$	–			$	2,204,316			$	2,204,316								–			$	2,204,316
Cost of Sales			–				1,729,020				1,729,020								–				1,729,020
Gross Profit			–				475,296				475,296								–				475,296
Operating expenses:
Marketing expenses			–				293,601				293,601								–				293,601
Research and development			43,620				–				43,620			A					(43,620	)			–
Stock in exchange for services			910,055				–				910,055			A					(910,055	)			–
General and administrative			363,149				279,007				642,156			A					(363,149	)			279,007
Total operating expenses			1,316,824				572,608				1,889,432								(1,316,824	)			572,608
Loss from operations			(1,316,824	)			(97,312	)			(1,414,136	)							1,316,824				(97,312	)
Other expense (income):
Change in derivative			(2,879	)			–				(2,879	)		A					2,879				–
Interest expense related to derivative liability			50,983				–				50,983			A					(50,983	)			–
Interest expense			24,247				–				24,247			A					(24,247	)			–
Total other expense			72,351				–				72,351								(72,351	)			–
Loss before income taxes			(1,389,175	)			(97,312	)			(1,486,487	)							1,389,175				(97,312	)
Income taxes			–				–				–								–				–
Net loss		$	(1,389,175	)		$	(97,312	)		$	(1,486,487	)						$	1,389,175			$	(97,312	)
Net loss per share, basic and diluted		$	(0.44	)			N/A			$	(0.47	)						$	–			$	(0.00	)
Weighted average number of shares outstanding
Basic and diluted			3,180,338				N/A				3,180,338			C					60,000,000				63,180,338

 

 

 

 

 

 

THUNDER ENERGIES CORPORATION

NOTES AND ASSUMPTIONS TO THE UNAUDITED PROFORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

 

 

NOTE 1 – ACQUISITION OF ASSETS OF NATURE

 

On August 14, 2020 (the “Closing Date”), TNRG and the members of Nature entered into an Interest Purchase Agreement (the “Interest Purchase Agreement”), which closed on the same date. Pursuant to the terms of the Interest Purchase Agreement, the members of Nature sold all of their membership interests in Nature to TNRG in exchange for sixty million (60,000,000) shares of TNRG’s Common Stock.  As a result of this transaction, Nature became a wholly-owned subsidiary of TNRG.

 

The Interest Purchase Agreement contained customary representations and warranties and pre- and post-closing covenants of each party and customary closing conditions.  Breaches of the representations and warranties will be subject to customary indemnification provisions, subject to specified aggregate limits of liability.

 

The membership Interest Purchase Agreement will be treated as an asset acquisition by the Company for financial accounting purposes. TNRG will be considered the acquirer for accounting purposes, and the historical financial statements of Nature, before the membership exchange will replace the historical financial statements of TNRG before the membership exchange and in all future filings with the SEC.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The unaudited proforma condensed combined financial statements have been compiled in a manner consistent with the accounting policies adopted by the Company. The accounting policies of Nature were not deemed to be materially different to those adopted by the Company.

 

NOTE 3 – PROFORMA ADJUSTMENTS

 

The unaudited proforma condensed combined financial statements are based upon the historical financial statements of the Company and Nature and certain adjustments which the Company believes are reasonable to give effect to the Acquisition. These adjustments are based upon currently available information and certain assumptions, and therefore the actual impacts will likely differ from the proforma adjustments. As discussed above in Note 1, the fair value amounts assigned to the identifiable assets acquired and liabilities assumed are considered preliminary at this time. However, the Company believes that the preliminary determination of fair value of acquired assets and assumed liabilities and other related assumptions utilized in preparing the unaudited proforma condensed combined financial statements provide a reasonable basis for presenting the proforma effects of the Acquisition.

 

The adjustments made in preparing the unaudited proforma condensed combined financial statements are as follows:

 

A.	The Acquisition specified that the Company received substantially all of the operating assets and liabilities of Nature.

 

B.	To eliminate the members’ capital of Nature and issue 60,000,000 of the Registrant’s common shares pursuant to the Acquisition.

 

C.

Proforma basic and diluted loss per common share information presented in the accompanying proforma condensed combined statements of operations for the three and six months ended June 30, 2020 is based on the weighted average number of common shares which would have been outstanding during the periods had the Acquisition occurred on the first day of the period presented.

 

 

 

 

Summary of Pro Forma Adjustment shares:

 

		Six Months Ended June 30, 2020				Three Months Ended June 30, 2020				For the Year Ended December 31, 2019
Shares issued due to acquisition			60,000,000				60,000,000				60,000,000
Add: Thunder Energies shares outstanding			11,602,292				11,768,332				3,180,338
Pro Forma Adjustment of shares outstanding due to acquisition			71,602,292				71,768,332				63,180,338

 

The unaudited proforma condensed combined financial statements do not include any adjustment of non-recurring costs incurred or to be incurred after August 14, 2020 by both the Company and Nature to consummate the Acquisition, except as noted above.