Exhibit 99.1
AMERICHIP INTERNATIONAL, INC.
PROFORMA FINANCIAL STATEMENTS
The following proforma financial statements reflect the combination of AmeriChip International, Inc. (“AmeriChip”) with KSI Machine & Engineering, Inc. (“KSI”) for the periods presented. The AmeriChip proforma statements of operations and the KSI statements of operations are presented for the three months ended February 28, 2007 and 2006. The proforma balance sheet is presented at November 30, 2006 for AmeriChip and at December 31, 2006 for KSI. The proforma financial statements reflect the result of the satisfaction of the purchase agreement between AmeriChip and the shareholder of KSI.
The proforma financial statements have been prepared utilizing the historical financial statements of AmeriChip and KSI. These proforma financial statements should be read in conjunction with the historical financial statements and notes thereto of AmeriChip and KSI.
The proforma statements of operations assume that the combination occurred at the beginning of the periods presented in the statements. All intercompany accounts and transactions have been eliminated. AmeriChip’s year end is November 30, whereas KSI had a year end of December 31.
The proforma financial statements do not purport to be indicative of the financial positions and results of operations which actually would have been obtained if the combination had occurred on the dates indicated, or the results, which may be obtained in the future.
Amerchip | |||||||||||||
Balance Sheets | |||||||||||||
PROFORMA | |||||||||||||
Proforma | |||||||||||||
Americhip | KSI Machine | Combined | |||||||||||
November 30, | December 31, | November 30, | |||||||||||
2006 | 2006 | Eliminations | 2006 | ||||||||||
Unaudited | Unaudited | Unaudited | |||||||||||
Assets | |||||||||||||
Current | |||||||||||||
Cash and equivalents | $ | 1,716 | $ | (25,962 | ) | $ | (150,000) | (a) | $ | (174,246 | ) | ||
Accounts receivable and contracts receivable | 27,015 | 646,704 | (4,145) | (e) | 669,574 | ||||||||
Prepaid expenses | 31,898 | 50,174 | - | 82,072 | |||||||||
Other current assets | 212,517 | - | - | 212,517 | |||||||||
Total Current Assets | 273,146 | 670,916 | (154,145 | ) | 789,917 | ||||||||
Property, Plant and Equipment | 550,796 | 1,638,112 | 1,956,957 | (b) | 4,145,865 | ||||||||
Other Assets | |||||||||||||
Investment in KSI | - | - | 2,988,043 | (a) | - | ||||||||
(2,988,043) | (d) | ||||||||||||
Loan acquisition costs | - | 27,598 | 27,598 | ||||||||||
Loan receivable | - | 2,634,267 | (2,634,267) | (c) | - | ||||||||
Deposits | 203,200 | - | (200,000) | (a) | 3,200 | ||||||||
Intangibles, net of amortization | 16,302 | - | - | 16,302 | |||||||||
Goodwill | - | - | 2,044,756 | (d) | 2,044,756 | ||||||||
Total Other Assets | 219,502 | 2,661,865 | (789,511 | ) | 2,091,856 | ||||||||
Total Assets | $ | 1,043,444 | $ | 4,970,893 | $ | 1,013,301 | $ | 7,027,638 | |||||
Liabilities | |||||||||||||
Current | |||||||||||||
Accounts payable | $ | 1,022,265 | $ | 273,791 | $ | (4,145) | (e) | $ | 1,291,911 | ||||
Payable to related party including interest | 939,438 | 1,031,315 | (1,031,315) | (c) | 939,438 | ||||||||
Notes payable | - | 2,958,090 | (246,090) | (b) | 2,712,000 | ||||||||
Due to KSI shareholder | - | - | 2,638,043 | (a) | 2,638,043 | ||||||||
Convertible debentrue, net of discounts | 244,579 | - | - | 244,579 | |||||||||
Other current liabilities | 432,580 | 319,247 | - | 751,827 | |||||||||
Propety tax payable | - | 45,258 | - | 45,258 | |||||||||
Total Current Liabilities | 2,638,862 | 4,627,701 | 1,356,493 | 8,623,056 | |||||||||
Commitments and Contingencies | - | - | - | - | |||||||||
Total Liabilities | 2,638,862 | 4,627,701 | 1,356,493 | 8,623,056 | |||||||||
Minority interest | 3,413 | - | - | 3,413 | |||||||||
Stockholders' Equity | |||||||||||||
Preferred stock | - | - | - | - | |||||||||
Common stock | 458,767 | 10,000 | (10,000) | (d) | 458,767 | ||||||||
- | |||||||||||||
Additional paid-in capital | 19,444,471 | - | - | 19,444,471 | |||||||||
- | |||||||||||||
Retained earnings (deficit) | (21,502,069 | ) | 333,192 | (1,602,952) | (c) | (21,502,069 | ) | ||||||
2,203,047 | (b) | ||||||||||||
(933,287) | (d) | ||||||||||||
Total Stockholders' Equity | (1,598,831 | ) | 343,192 | (343,192 | ) | (1,595,418 | ) | ||||||
- | |||||||||||||
Total Liabilities and Stockholders' Equity | $ | 1,043,444 | $ | 4,970,893 | $ | 1,013,301 | $ | 7,027,638 |
AmeriChip International, Inc. | |||||||||||||
Statements of Operations | |||||||||||||
PROFORMA | |||||||||||||
AmeriChip | KSI Machine & | ||||||||||||
International, Inc. | Engineering, Inc. | ||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||
February 28, | February 28, | Proforma | |||||||||||
2006 | 2006 | Combined | |||||||||||
(Unaudited) | (Unaudited) | Eliminations | Total | ||||||||||
Revenues | $ | 48,139 | $ | 482,595 | $ | (2,022)(f | ) | $ | 528,712 | ||||
Cost of Sales | 26,796 | 255,564 | (2,022)(f | ) | 280,338 | ||||||||
Gross Profit | 21,343 | 227,031 | - | 248,374 | |||||||||
Expenses | |||||||||||||
Administrative service | 115,536 | 105,656 | - | 221,192 | |||||||||
Director fees | - | - | - | - | |||||||||
Consulting expense | 1,846,513 | - | - | 1,846,513 | |||||||||
Depreciation and amortization | 11,572 | 75,468 | - | 87,040 | |||||||||
Legal and accounting | 48,637 | 21,569 | - | 70,206 | |||||||||
License expense | 1,350,000 | - | - | 1,350,000 | |||||||||
Office expense | 5,970 | 2,783 | - | 8,753 | |||||||||
Wages - officers and directors | 53,018 | 71,400 | - | 124,418 | |||||||||
Wages - office | 60,389 | 3,500 | - | 63,889 | |||||||||
Total Operating Expenses | 3,491,635 | 280,376 | - | 3,772,011 | |||||||||
Loss From Operations | (3,470,292 | ) | (53,345 | ) | - | (3,523,637 | ) | ||||||
Other Income (Expenses) | |||||||||||||
Forgiveness of debt | 43,904 | - | - | 43,904 | |||||||||
Financing expense | (26,250 | ) | - | - | (26,250 | ) | |||||||
Interest income | - | 21,075 | - | 21,075 | |||||||||
Interest expense | (22,841 | ) | (87,112 | ) | - | (109,953 | ) | ||||||
Total Other Income (Expenses) | (5,187 | ) | (66,037 | ) | - | (71,224 | ) | ||||||
Net Income (Loss) Before Taxes | (3,475,479 | ) | (119,382 | ) | - | (3,594,861 | ) | ||||||
Income Tax Expense | - | - | - | - | |||||||||
Net Loss | $ | (3,475,479 | ) | $ | (119,382 | ) | $ | - | $ | (3,594,861 | ) | ||
Basic and Diluted Earnings Per Share | $ | (0.01 | ) | $ | (119.38 | ) | $ | - | $ | (0.01 | ) | ||
Weighted Average Number of Common Shares | |||||||||||||
Outstanding, Basic and Diluted | 274,001,233 | 1,000 | (1,000 | ) | 274,001,233 |
AmeriChip International, Inc. | |||||||||||||
Statements of Operations | |||||||||||||
PROFORMA | |||||||||||||
AmeriChip | KSI Machine & | ||||||||||||
International, Inc. | Engineering, Inc. | ||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||
February 28, | February 28, | Proforma | |||||||||||
2007 | 2007 | Combined | |||||||||||
(Unaudited) | (Unaudited) | Eliminations | Total | ||||||||||
Revenues | $ | 15,617 | $ | 770,176 | $ | (732) | (f) | $ | 785,061 | ||||
Cost of Sales | 5,713 | 402,104 | (732) | (f) | 407,085 | ||||||||
Gross Profit | 9,904 | 368,072 | - | 377,976 | |||||||||
Expenses | |||||||||||||
Administrative service | 147,291 | 290,431 | - | 437,722 | |||||||||
Director fees | 5,850,000 | - | - | 5,850,000 | |||||||||
Consulting expense | 1,756,997 | - | - | 1,756,997 | |||||||||
Depreciation and amortization | 47,858 | 65,819 | - | 113,677 | |||||||||
Legal and accounting | 214,746 | 12,554 | - | 227,300 | |||||||||
License expense | 30,000 | - | - | 30,000 | |||||||||
Office expense | 22,285 | 1,495 | - | 23,780 | |||||||||
Wages - officers and directors | - | 65,950 | - | 65,950 | |||||||||
Wages - office | 63,542 | - | - | 63,542 | |||||||||
Total Operating Expenses | 8,132,719 | 436,249 | - | 8,568,968 | |||||||||
Loss From Operations | (8,122,815 | ) | (68,177 | ) | - | (8,190,992 | ) | ||||||
Other Income (Expenses) | |||||||||||||
Forgiveness of debt | - | (1,762,202 | ) | - | (1,762,202 | ) | |||||||
Financing expense | (2,000 | ) | - | - | (2,000 | ) | |||||||
Interest income | - | 1,034 | - | 1,034 | |||||||||
Interest expense | (48,531 | ) | (68,185 | ) | - | (116,716 | ) | ||||||
Total Other Income (Expenses) | (50,531 | ) | (1,829,353 | ) | - | (1,879,884 | ) | ||||||
Net Income (Loss) Before Taxes | (8,173,346 | ) | (1,897,530 | ) | - | (10,070,876 | ) | ||||||
Income Tax Expense | - | - | - | - | |||||||||
Net Loss | $ | (8,173,346 | ) | $ | (1,897,530 | ) | $ | - | $ | (10,070,876 | ) | ||
Basic and Diluted Earnings Per Share | $ | (0.02 | ) | $ | (1,897.53 | ) | $ | - | $ | (0.02 | ) | ||
Weighted Average Number of Common Shares | |||||||||||||
Outstanding, Basic and Diluted | 523,248,243 | 1,000 | (1,000 | ) | 523,248,243 |
AMERICHIP INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
On February 15, 2007, AmeriChip International, Inc. (“AmeriChip”) effectively completed the acquisition of 100% of the outstanding shares of KSI Machine & Engineering, Inc. (“KSI”) in consideration to the selling shareholder of cash and notes totaling approximately $2,988,043, subject to certain post closing audit adjustments. The accompanying proforma financial statements contain adjustments to characterize the transactions of KSI as those of AmeriChip for the periods presented. The proforma statements of operations are presented for the three months ended February 28, 2007 and 2006 for both AmeriChip and KSI. The proforma balance sheet is presented at November 30, 2006 for AmeriChip and December 31, 2006 for KSI.
The adjustments to the November 30, 2006 financial statements are as follows:
a. | This adjustment is to record the acquisition of 100% of KSI’s common stock by Americhip. The total purchase price of 100% of KSI’s common stock was $2,988,043. Of this price, $150,000 was paid in cash at closing, a note payable to the seller in the amount of $2,638,043 was entered into, and deposits paid prior to the closing date in the amount of $200,000 were applied. |
b. | This adjustment is to record the additional replacement value assigned to the property, plant and equipment purchased from KSI. |
c. | This adjustment was to write off the net amount due to KSI from its former sole shareholder prior to the closing date of February 15, 2007. This write-off is reflected pursuant the purchase agreement between AmeriChip and KSI’s former sole shareholder. |
d. | This adjustment is to record the amount assigned to goodwill as a result of the acquisition price of KSI’s common stock exceeding the fair value of the net assets acquired and liabilities assumed. |
e. | This adjustment is to eliminate intercompany accounts receivable and accounts payable between AmeriChip and KSI as of November 30, 2006. |
f. | This adjustment is to eliminate the intercompany revenue and cost of sales between AmeriChip and KSI for the three month periods ending February 28, 2006 and 2007. |