PROVIDENCE RESOURCES, INC. Pro Forma Balance Sheet As of June 30, 2008 (Unaudited) |
ASSETS | | | | |
| | | Providence | | Pro Forma | | Pro Forma |
Current Assets | | Resources, Inc | | Adjustments | | Combined |
Cash | | $ 1,108,091 | | $ 7,112,800 | (a) | $ 8,220,891 |
Note Receivable | | 250,000 | | - | | 250,000 |
Total current assets | | 1,358,091 | | 7,112,800 | | 8,470,891 |
Property and equipment (net) | | 12,115,585 | | (6,057,792) | (a) | 6,057,793 |
Total assets | | $ 13,473,676 | | $ 1,055,008 | | $ 14,528,684 |
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LIABILITIES AND STOCKHOLDERS' EQUITY | | | | |
| | | | | | | |
Current Liabilities | | | | | | |
Accounts payable and accruals | | $ 1,082,969 | | $ - | | $ 1,082,969 |
Accrued Expenses | | 877,508 | | - | | 877,508 |
Related Party Payables | | 83,000 | | - | | 83,000 |
Total current liabilities | | 2,043,477 | | - | | 2,043,477 |
| | | | | | | |
Long-Term Liabilities | | | | | | |
Long Term Convertible - Promissory Note | | 1,949,290 | | - | | 1,949,290 |
Notes payable - Long Term | | 700,000 | | - | | 700,000 |
Convertible debenture | | 3,320,000 | | - | | 3,320,000 |
Total long-term liabilities | | 5,969,290 | | - | | 5,969,290 |
| | | | | | | |
Total Liabilities | | 8,012,767 | | - | | 8,012,767 |
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Commitments and Contingencies | | - | | - | | - |
Minority Interest in Net Asset of Subsidiary | | 150,973 | | - | | 150,973 |
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Stockholders' Equity | | | | | | |
Preferred stock, ($0.0001 par value), 25,000,000 shares authorized, none issued | | | | | | |
Common stock, $0.0001 par value, 250,000,000 shares authorized, 60,261,118 shares issued and outstanding | | 6,026 | | - | | 6,026 |
| | | | | | | |
Additional paid-in-capital | | 48,280,573 | | - | | 48,280,573 |
Deficit accumulated during the exploration stage | | (42,976,663) | | 1,055,008 | (a) | (41,921,655) |
Accumulated other comprehensive deficit | | - | | - | | - |
| | | | | | | |
Total stockholders' equity | | 5,309,936 | | 1,055,008 | | 6,364,944 |
| | | | | | | |
Total liabilities and stockholders' equity | | $ 13,473,676 | | $ 1,055,008 | | $ 14,528,684 |
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PROVIDENCE RESOURCES, INC. Pro Forma Statement of Operations |
| | | | | | |
| | | | | | Pro Forma |
| | Providence | | | | Combined |
| | Resources | | | | Period ended |
| | December 31, | | Pro Forma | | December 31, |
| | 2007 | | Adjustments | | 2007 |
| | | | | | |
Revenue | $ - | | $ - | | $ - |
| | | | | | |
Expenses | | | | | |
| | | | | | |
General and Administrative | (1,120,602) | | - | | (1,120,602) |
| | | | | | |
Total operating expenses | (1,120,602) | | - | | (1,120,602) |
| | | | | | |
Income/(loss) from operations | (1,120,602) | | - | | (1,120,602) |
| | | | | | |
Other Income (Expense) | | | | | |
| | | | | | |
Interest expense | (1,554,288) | | - | | (1,554,288) |
Debt Conversion Expense | (162,444) | | - | | (162,444) |
Interest Income | 25,828 | | - | | 25,828 |
Loss on Disposal of Assets | (35,899) | | - | | (35,899) |
Impairment on Capital Asset | (19,390,826) | | - | | (19,390,826) |
| | | | | | |
Total other expense | (21,117,629) | | - | | (21,117,629) |
| | | | | | |
Minority Interest | 33,956 | | - | | 33,956 |
| | | | | | |
Income/(loss) before income taxes | (22,204,275) | | - | | (22,204,275) |
| | | | | | |
Provision for income taxes | - | | - | | - |
| | | | | | |
Net Income/(loss) | $ (22,204,275) | | $ - | | $ (22,204,275) |
| | | | | | |
Loss per share - basic and diluted | $ (0.38) | | $ - | | $ (0.38) |
| | | | | | |
Weighted average shares outstanding - | | | | | |
basic and diluted | 58,845,506 | | | | 58,845,506 |
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PROVIDENCE RESOURCES, INC.
Notes to Pro Forma Consolidated Financial Statements
Basis of Presentation
The unaudited pro forma consolidated financial statements give effect to the sale of leasehold interest of Providence Resources, Inc. (the “Company”) completed with an effective date of August 8, 2008, to Elm Ridge Exploration Company, LLC (“Elm Ridge”). See Sale of Leasehold Interest below. The unaudited pro forma consolidated financial statements have been prepared by management using the accounting principles disclosed in the consolidated financial statements of the Company for the year ended December 31, 2007 as if the transaction had occurred on January 1, 2007 with respect to the unaudited pro forma consolidated statement of operations for the year ended December 31, 2007, and the unaudited pro forma consolidated balance sheet as of June 30, 2008 is based on the unaudited interim consolidated financial statements of the Company as of June 30, 2008.
The unaudited pro forma consolidated balance sheet and statements of operations are not necessarily indicative of the results of operations that would have been realized for the periods presented, nor do they purport to project the results of operations of the Company for any future periods. The statements of operations do not include expected benefits and cost savings.
The unaudited pro forma consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended December 31, 2007, the interim unaudited consolidated financial statements of the Company for the six-month period ended June 30, 2008.
Sale Of Leasehold Interest
On August 8, 2008, the Company sold 50% of 8/8 leasehold interest in its Val Verde Leases to Elm Ridge pursuant to which Elm Ridge purchased the subject property for $7,212,800. The Company and Elm Ridge agreed that the $100,000 previously paid by Elm Ridge as an option on the leases was to be credited against the purchase price.
Pro Forma Adjustments
The transaction has been accounted for as a sale of assets of the Company to Elm Ridge, which results in the adjustments labeled (a) and includes a decrease of $6,057,792 in unproved oil and gas properties, not subject to amortization, an increase of $7,212,800 in cash, and a gain on the sale of assets which total $1,155,008. The gain on the sale of assets was recorded as a change in the deficit accumulated during the exploration stage at the balance sheet date.
