Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information and related notes give effect to the Merger and presents the historical condensed combined financial information of Cruzani, Inc. (the “Company”) and Bowmo, Inc. (“Bowmo”), after giving effect to the Agreement and Plan of Merger (the “Merger Agreement”) with Bowmo Merger Sub, Inc., a Delaware corporation and newly-formed, wholly-owned subsidiary of the Company (the “Merger Sub”), that was completed on May 4, 2022 (the “Merger”). The Merger was accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, Bowmo, Inc. became a wholly owned subsidiary of the Company.
The unaudited pro forma condensed combined financial information gives effect to the Merger based on the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information.
Pursuant to the terms of the Merger Agreement, the purchase price for Bowmo shall be 1,000,000 shares of the Company’s Series Preferred Stock holding the voting rights to 78% of the total voting equity securities. (the “Merger Consideration”).
The unaudited pro forma condensed combined balance sheet as of March 31, 2022 is presented as if the Merger had occurred on March 31, 2022. The unaudited condensed combined statements of operations for the three months ended March 31, 2022 and for the year ended December 31, 2021 are presented as if the Merger had occurred on January 1, 2021.
The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of the Securities and Exchange Commission’s Regulation S-X. The unaudited pro forma adjustments reflecting the Merger have been prepared in accordance with the guidance for business combinations presented in ASC 805 and reflect the allocation of the preliminary purchase price to the assets acquired and liabilities assumed in the Merger based on their estimated fair values. The historical financial information has been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are: (i) directly attributable to the Merger; (ii) factually supportable; and (iii) with respect to the condensed combined statements of operations, expected to have a continuing impact on the combined results of operations.
The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Merger had been affected on the dates previously set forth, nor is it indicative of the future operating results or financial position in combination. The preliminary purchase price allocation was made using the Company’s best estimates of fair value, which are dependent upon certain valuation and other analyses that are not yet final. As a result, the unaudited pro forma purchase price adjustments related to the Merger are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed during the applicable measurement period under ASC 805 (up to one year from the Merger date). There can be no assurances that any final valuations will not result in material adjustments to our preliminary estimated purchase price allocation. Further, the unaudited pro forma condensed combined financial information does not give effect to the potential impact of anticipated synergies, operating efficiencies, cost savings or transaction and integration costs that may result from the Merger.
The unaudited pro forma condensed combined financial information should be read in conjunction with our historical consolidated financial statements and their accompanying notes presented in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2022, as well as the historical financial statements of Bowmo for the years ended December 31, 2021 and 2020 and unaudited financial statements for the three month period ended March 31, 2022.
CRUZANI, INC. AND BOWMO, INC.
PROFORMA CONDENSED COMBINED BALANCE SHEETS
(UNAUDITED)
|
| Historical |
|
| Pro Forma |
| ||||||||||||||
|
| Cruzani, Inc. |
|
| Bowmo, Inc. |
|
| Transaction | | | Notes |
|
| Pro Forma |
| |||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Cash and cash equivalents |
| $ | 2,754 |
|
| $ | 255,027 |
|
| $ | - |
|
|
|
|
| $ | 257,781 |
| |
Accounts receivable |
|
| - |
|
|
| 39,750 |
|
|
| - |
|
|
|
|
|
| 39,750 |
| |
Total Assets |
| $ | 2,754 |
|
|
| 294,777 |
|
| $ | - |
|
|
|
|
|
| 297,531 |
| |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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| |||||
Current Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Accounts payable |
| $ | 326,400 |
|
| $ | 65,853 |
|
| $ | - |
|
|
|
|
| $ | 392,253 |
| |
Accrued expenses |
|
| - |
|
|
| 23,899 |
|
|
| - |
|
|
|
|
|
| 23,899 |
| |
Accrued interest |
|
| 1,189,559 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 1,189,559 |
| |
Accrued officer compensation |
|
| 442,000 |
|
|
| 604,662 |
|
|
| - |
|
|
|
|
|
| 1,046,662 |
| |
Convertible Notes |
|
| 592,600 |
|
|
| 84,681 |
|
|
| - |
|
|
|
|
|
| 677,281 |
| |
Derivative liability |
|
| - |
|
|
| 112,537 |
|
|
| - |
|
|
|
|
|
| 112,537 |
| |
Put premium on stock settled debt |
|
| 209,314 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 209,314 |
| |
Loans payable |
|
| 254,500 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 254,500 |
| |
Total Current Liabilities |
|
| 3,014,373 |
|
|
| 891,632 |
|
|
| - |
|
|
|
|
|
| 3,906,005 |
| |
loans payable, net of current portion |
|
| - |
|
|
| 309,501 |
|
|
| - |
|
|
|
|
|
| 309,501 |
| |
Total Liabilities |
|
| 3,014,373 |
|
|
| 1,201,133 |
|
|
| - |
|
|
|
|
|
| 4,215,506 |
| |
Commitments and Contingencies (Note 12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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| |||||
STOCKHOLDERS’ DEFICIT: |
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|
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|
|
|
|
|
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|
|
|
| |||||
Series A Preferred stock, 3,500,000 shares authorized, par value $0.01; 3,381,520, 0 and 3,381,520 shares issued and outstanding, respectively |
|
| 33,815 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 33,815 |
| |
Series B Preferred stock, 10,000 shares authorized, par value $0.01; 5,000, 0 and 5,000 shares issued and outstanding, respectively |
|
| 50 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 50 |
| |
Series C Preferred stock, 10,000,000 shares authorized, par value $0.01; 5,000,000, 0 and 5,000,000 shares issued and outstanding, respectively |
|
| 50,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 50,000 |
| |
Series D Preferred stock, 125,000 shares authorized, par value $0.0001; 125,000 shares issued and outstanding |
|
| 12 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 12 |
| |
Series AA - 0, 652,259 and 0 Shares issued and outstanding, respectively |
|
| - |
|
|
| 652 |
|
|
| (652 | ) |
|
| (a) | - |
| |||
Super Preferred - 0, 500 and 0 Shares issued and outstanding, respectively |
|
| - |
|
|
| 1 |
|
|
| (1 | ) |
|
| (a) | - |
| |||
Series E Preferred stock to be issued |
|
| 166,331 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 166,331 |
| |
Series G Preferred stock, 125,000 shares authorized, par value $0.0001; 0, 0, and 1,000,000 shares issued and outstanding, respectively |
|
| - |
|
|
| - |
|
|
| 1,000 |
|
| (a) | 1,000 |
| ||||
Common stock 20,000,000,000 shares authorized, $0.00001 par value; 8,955,014,498, 18,150,000 and 8,957,564,498 shares issued and outstanding, respectively |
|
| 89,550 |
|
|
| 18,150 |
|
|
| (18,125 | ) |
|
| (a) |
| 89,575 |
| ||
Treasury stock, at cost – 2,917, 0 and 2,917 shares, respectively |
|
| (773,500 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
| (773,500 | ) | |
Additional paid in capital |
|
| 80,950,405 |
|
|
| 3,802,391 |
|
|
| (83,510,505 | ) |
|
| (a)(b) |
|
|
| 1,242,291 |
|
Accumulated deficit |
|
| (83,528,283 | ) |
|
| (4,727,550 | ) |
|
| 83,528,283 |
|
|
| (a)(b) |
|
|
| (4,727,550 | ) |
Total Stockholders’ Deficit |
|
| (3,011,618 | ) |
|
| (906,356 | ) |
|
| - |
|
|
|
|
|
| (3,917,974 | ) | |
Total Liabilities and Stockholders’ Deficit |
| $ | 2,754 |
|
| $ | 294,777 |
|
| $ | - |
|
|
|
|
| $ | 297,531 |
| |
See Notes to Unaudited Pro Forma Combined Financial Statements.
| 2 |
CRUZANI, INC. AND BOWMO, INC.
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2022
(UNAUDITED)
|
| Historical |
|
| Pro Forma |
| ||||||||||||||
|
| Cruzani, Inc. |
|
| Bowmo, Inc. |
|
| Transaction | | | Notes |
|
| Pro Forma |
| |||||
Revenues |
| $ | - |
|
| $ | 88,667 |
|
| $ | - |
|
|
|
|
|
| $ | 88,667 |
|
Cost of revenues |
|
| - |
|
|
| 27,579 |
|
|
| - |
|
|
|
|
|
| 27,579 |
| |
Gross Profit |
|
| - |
|
|
| 61,088 |
|
|
| - |
|
|
|
|
|
| 61,088 |
| |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation expense |
|
| 30,000 |
|
|
| 102,268 |
|
|
| - |
|
|
|
|
|
| 132,268 |
| |
Consulting fees |
|
| 75,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 75,000 |
| |
General and administrative expenses |
|
| 2,957 |
|
|
| 6,327 |
|
|
| - |
|
|
|
|
|
| 9,284 |
| |
Professional fees |
|
| 13,180 |
|
|
| 10,000 |
|
|
| - |
|
|
|
|
|
| 23,180 |
| |
Total operating expenses |
|
| 121,137 |
|
|
| 118,595 |
|
|
| - |
|
|
|
|
|
| 239,732 |
| |
Loss from operations |
|
| (121,137 | ) |
|
| (57,507 | ) |
|
| - |
|
|
|
|
|
| (178,644 | ) | |
Other Income (Expense): |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
| |||
Interest expense |
|
| (94,307 | ) |
|
| (5,010 | ) |
|
| - |
|
|
|
|
|
| (99,317 | ) | |
Change in fair value of derivatives |
|
| - |
|
|
| (1,545 | ) |
|
| - |
|
|
|
|
|
| (1,545 | ) | |
Total other income (expense) |
|
| (94,307 | ) |
|
| (6,555 | ) |
|
| - |
|
|
|
|
|
| (100,862 | ) | |
Income (loss) before provision for income taxes |
|
| (215,444 | ) |
|
| (64,062 | ) |
|
| - |
|
|
|
|
|
| (279,506 | ) | |
Provision for income taxes |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
| $ |
|
| $ |
|
|
|
|
| $ |
| |||||
Net Income (Loss) |
| $ | (215,444 | ) |
|
| (64,062 | ) |
|
| - |
|
|
|
|
|
| (279,506 | ) | |
Basic income (loss) per share |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
|
|
| $ | - |
| |
Basic weighted average shares outstanding |
|
| 8,178,531,066 |
|
|
| 18,150,000 |
|
|
| (15,600,000 | ) |
| (a) |
|
|
| 8,181,081,066 |
| |
See Notes to Unaudited Pro Forma Combined Financial Statements.
| 3 |
CRUZANI, INC. AND BOWMO, INC.
PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
|
| Historical |
|
| Pro Forma |
| ||||||||||||||
|
| Cruzani, Inc. |
|
| Bowmo, Inc. |
|
| Transaction | | | Notes |
|
| Pro Forma |
| |||||
Revenues |
| $ | - |
|
| $ | 201,675 |
|
| $ | - |
|
|
|
|
|
| $ | 201,675 |
|
Cost of revenues |
|
| - |
|
|
| 51,643 |
|
|
| - |
|
|
|
|
|
| 201,675 |
| |
Gross Profit |
|
| - |
|
|
| 150,032 |
|
|
| - |
|
|
|
|
|
| - |
| |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Compensation expense |
|
| 120,000 |
|
|
| 403,738 |
|
|
| - |
|
|
|
|
|
| 523,738 |
| |
Consulting expense |
|
| 300,000 |
|
|
| - |
|
|
| - |
|
|
|
|
|
| 300,000 |
| |
General and administrative |
|
| 43,769 |
|
|
| 20,619 |
|
|
| - |
|
|
|
|
|
| 64,388 |
| |
Professional fees |
|
| 39,000 |
|
|
| 13,970 |
|
|
| - |
|
|
|
|
|
| 52,970 |
| |
Total operating expenses |
|
| 502,769 |
|
|
| 438,327 |
|
|
| - |
|
|
|
|
|
| 941,096 |
| |
Loss from operations |
|
| (502,769 | ) |
|
| (288,295 | ) |
|
| - |
|
|
|
|
|
| (941,096 | ) | |
Other Income (Expense): |
|
|
|
|
|
|
|
| - |
|
|
|
|
|
| - |
| |||
Interest expense |
|
| (1,038,632 | ) |
|
| (56,837 | ) |
|
| - |
|
|
|
|
|
| (1,095,469 | ) | |
Change in fair value of derivatives |
|
| (741,027 | ) |
|
| (17,820 | ) |
|
| - |
|
|
|
|
|
| (758,847 | ) | |
Forgiveness of note payable - PPP Loan |
|
| - |
|
|
| 91,035 |
|
|
| - |
|
|
|
|
|
| 91,035 |
| |
Grant income |
|
| - |
|
|
| 6,000 |
|
|
| - |
|
|
|
|
|
| 6,000 |
| |
Loss on debt litigation |
|
| (266,412 | ) |
|
| - |
|
|
| - |
|
|
|
|
|
| (266,412 | ) | |
Gain on new methodology for accounting for debt conversion features | 995,692 |
|
|
| - |
|
| - |
|
|
|
| 995,692 |
| ||||||
Total other income (expense) |
|
| (1,050,379 | ) |
|
| 22,378 |
|
|
| - |
|
|
|
|
|
| (1,028,001 | ) | |
Loss before provision for income taxes |
|
| (1,553,148 | ) |
|
| (265,917 | ) |
|
| - |
|
|
|
|
|
| (1,969,097 | ) | |
Provision for income taxes |
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| - |
| |||
Net Loss |
| $ | (1,553,148 | ) |
| $ | (265,917 | ) |
|
| - |
|
|
|
|
| $ | (1,969,097 | ) | |
Basic loss per share |
| $ | (0.01 | ) |
|
| (0.01 | ) |
|
| - |
|
|
|
|
|
| - |
| |
Basic weighted average shares outstanding |
|
| 4,811,860,024 |
|
|
| 18,150,000 |
|
|
| (15,600,000 | ) |
| (a) |
|
|
| 4,814,410,024 |
| |
See Notes to Unaudited Pro Forma Combined Financial Statements.
| 4 |
NOTES AND ASSUMPTIONS TO PROFORMA COMBINED FINANCIAL STATEMENTS
(Unaudited)
The pro-forma adjustments to the unaudited pro-forma combined financial statements are as follows:
(a) Represents the elimination of Bowmo, Inc.'s common stock and preferred stock in exchange for the Company's preferred and common stock. Per the terms of the Merger, Eddie Aizman and Michael E. Lakshin of Bowmo, will receive 1,000,000 shares of the Company's Series G Preferred stock as a conversion of the common stock held by Michael and Eddie of Bowmo. Additionally, the shareholders of Bowmo will be issued one common share of the Company for every common and preferred share held of Bowmo for a total of 2,550,000 shares of common stock.
(b) Represents the elimination of the Company’s accumulated deficit.
1. Basis of Pro Forma Presentation
On May 4, 2022, the Company entered into an Agreement and Plan of Merger with Bowmo, Inc. and Bowmo Merger Sub, Inc., a Delaware corporation and newly-formed, wholly-owned subsidiary of the Company (the “Merger Sub”) which merger was consummated on May 4, 2022, (the “Merger”) The unaudited pro forma condensed combined balance sheet at March 31, 2022 combines the Company’s historical condensed consolidated balance sheet with the historical condensed balance sheet of Bowmo as if the Merger had occurred on that date. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2022 and for the year ended December 31, 2021 combine the Company’s historical condensed consolidated statements of operations with the condensed statements of operations of Bowmo as if the Merger had occurred on January 1, 2021. The historical financial information is adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are: (i) directly attributable to the Merger; (ii) factually supportable; and (iii) with respect to the condensed combined statements of operations, expected to have a continuing impact on the Company’s combined results.
2. Preliminary Consideration Transferred
Pursuant to the terms of the Merger Agreement, the purchase price for Bowmo (the “Purchase Price”) shall be shares of the Company’s Series G Preferred Stock holding the voting rights to 78% of the total voting equity securities.
3. Preliminary Purchase Price Allocation
Under the acquisition method of accounting outlined in ASC 805, the identifiable assets acquired and liabilities assumed in the Merger are recorded at their Merger date at fair values and are included in the Company’s consolidated financial position. The Company’s unaudited pro forma adjustments are preliminary in nature and based on the estimates of fair value for all assets acquired and liabilities assumed to illustrate the estimated effect of the Merger on the Company’s condensed consolidated balance sheet at March 31, 2022.
| 5 |
