CONVERTED ORGANICS INC. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2012
Historical
Converted Organics
Pro Forma
Pro Forma
Inc. and subsidiaries
Adjustments
Ref.
Consolidated
ASSETS
CURRENT ASSETS
Cash
$
765,315
$
5
(1)
$
765,320
Accounts receivable, net
118,408
—
118,408
Inventories
162,749
—
162,749
Prepaid expenses and other assets
85,740
-
85,740
Deferred financing costs, net
4,415
-
4,415
Current assets of discontinued operations
456
-
456
Total current assets
1,137,083
5
1,137,088
Deposits and other non-current assets
23,136
-
23,136
Property and equipment, net
1,086,443
-
1,086,443
Intangible assets, net
1,203,598
—
1,203,598
Assets of discontinued operations
1,035,351
(1,035,351
)
(1)
-
Total assets
$
4,485,611
$
(1,035,346
)
$
3,450,265
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
$
818,285
$
—
$
818,285
Accrued expenses
580,480
—
580,480
Convertible notes payable, net of unamortized discount
442,344
-
442,344
Derivative liabilities, current portion
340,564
-
340,564
Liabilities of discontinued operations
1,561,550
(1,035,351
)
(1)
526,199
Total current liabilities
3,743,223
(1,035,351
)
2,707,872
Derivative liabilities, net of current portion
412,725
-
412,725
Total liabilities
4,155,948
(1,035,351
)
3,120,597
COMMITMENTS AND CONTINGENCIES
-
-
-
STOCKHOLDERS’ EQUITY
Preferred stock, $.0001 par value, 10,000,000 shares authorized;
13,281 ($1,000 stated value) shares
issued and outstanding
13,281,000
—
13,281,000
Common stock, $.0001 par value, 1,000,000,000 shares authorized;
536,836,281 shares issued and outstanding
53,683
—
53,683
Additional paid-in capital
101,622,642
-
101,622,642
Accumulated deficit
(114,253,112
)
(374,545
)
(2
)
(114,627,657
)
Accumulated other comprehensive loss
(11,396
)
11,396
(2
)
-
692,817
(363,149
)
329,668
Non-controlling interests
(363,154
)
363,154
(2
)
—
Total stockholders' equity
329,663
5
329,668
Total liabilities and stockholders' equity
$
4,485,611
$
(1,035,346
)
$
3,450,265
1
CONVERTED ORGANICS INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012
Historical
Converted Organics
Inc. and
Pro Forma
Pro Forma
subsidiaries
Adjustments
Ref.
Consolidated
Revenues
$
1,399,984
$
—
$
1,399,984
Cost of goods sold
1,211,392
-
1,211,392
Gross profit
188,592
—
188,592
Operating expenses:
Selling, general and administrative expenses
2,046,366
-
2,046,366
Amortization of intangibles assets
216,006
-
216,006
2,262,372
—
2,262,372
Loss from continuing operations
(2,073,780
)
—
(2,073,780
)
Other income (expense):
Other income
33,272
—
33,272
Gain on change in fair value of obligations to issue
shares
9,127
(9,127
)
(3
)
—
Gain on sale of investment
974,515
-
974,515
Gain on change in fair value of derivative liability
9,507,874
-
9,507,874
Gain on debt extinguishment
1,204,711
-
1,204,711
Loss on debt modification
(3,000,205
)
-
(3,000,205
)
Interest expense
(3,966,577
)
—
(3,966,577
)
4,762,717
(9,127
)
4,753,590
Income from continuing operations before
provision for income taxes
2,688,937
(9,127
)
2,679,810
Provision for income taxes
-
-
-
Net income from continuing operations
2,688,937
(9,127
)
2,679,810
Loss from discontinued operations
(2,054,477
)
2,205,119
(4
)
150,642
Net income
$
634,460
$
2,195,992
$
2,830,452
Earnings (loss) per share, basic and diluted:
Continuing operations
$
0.02
$
0.02
Discontinued operations
(0.01
)
0.00
$
0.00
$
0.02
Weighted average common shares outstanding, basic and diluted
162,972,652
162,972,652
2
CONVERTED ORGANICS INC. UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2011
Historical
Converted Organics
Inc. and
Pro Forma
Pro Forma
subsidiaries
Adjustments
Ref.
Consolidated
Revenues
$
2,754,206
$
—
$
2,754,206
Cost of goods sold
2,167,437
-
2,167,437
Gross profit
586,769
—
586,769
Operating expenses:
Selling, general and administrative expenses
6,703,796
-
6,703,796
Amortization of intangibles assets
288,008
-
288,008
6,991,804
—
6,991,804
Loss from continuing operations
(6,405,035
)
—
(6,405,035
)
Other income (expense):
Other income
39,203
—
39,203
Gain on change in fair value of obligations to issue
shares
640,593
(640,593
)
(3
)
—
Loss on debt modification
(2,357,322
)
-
(2,357,322
)
Gain on change in fair value of derivative liability
5,823,629
-
5,823,629
Interest expense
(8,175,566
)
—
(8,175,566
)
(4,029,463
)
(640,593
)
(4,670,056
)
Loss from continuing operations before provision for
income taxes
(10,434,498
)
(640,593
)
(11,075,091
)
Provision for income taxes
-
-
-
Net loss from continuing operations
(10,434,498
)
(640,593
)
(11,075,091
)
Loss from discontinued operations
(7,546,361
)
6,682,350
(864,011
)
Net loss
$
(17,980,859
)
$
6,041,757
(4
)
$
(11,939,102
)
Loss per share, basic and diluted:
Discontinued operations
(191
)
(22
)
$
(454.10
)
$
(301.52
)
Weighted average common shares outstanding, basic and diluted
39,597.00
39,597.00
3
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