Exhibit 99.3
BLUE EARTH, INC.
Proforma Consolidated Balance Sheet
December 31, 2010
|
| Blue Earth, Inc. |
| Castrovilla, Inc. and Humitech of NC, LLC |
| Xnergy, Inc. and Variable Interest Entity |
| HVAC Controls & Specialities, Inc. |
| Combined Totals |
| Pro Forma Adjustments | REF |
| Adjusted Pro Forma Totals | ||
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ASSETS |
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CURRENT ASSETS |
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| Cash | $ | 3,900,096 | $ | 466,620 | $ | 1,565,006 | $ | 16,941 | $ | 5,948,663 | $ | (150,000) | [8] | $ | 5,748,663 | |
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| (50,000) | [9] |
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| Accounts receivable, net |
| - |
| 308,939 |
| 665,845 |
| 91,652 |
| 1,066,436 |
| - |
|
| 1,066,436 | |
| Costs in excess of billings |
| - |
| - |
| 10,830 |
| - |
| 10,830 |
| - |
|
| 10,830 | |
| Inventory |
| - |
| 125,627 |
| - |
| - |
| 125,627 |
| - |
|
| 125,627 | |
| Other current assets |
| 38,039 |
| 1,220 |
| 29,975 |
| - |
| 69,234 |
| - |
|
| 69,234 | |
|
| Total Current Assets |
| 3,938,135 |
| 902,406 |
| 2,271,656 |
| 108,593 |
| 7,220,790 |
| (200,000) |
|
| 7,020,790 |
PROPERTY AND EQUIPMENT, net |
| 10,932 |
| 100,187 |
| 3,672,902 |
| 25,445 |
| 3,809,466 |
| (2,921,016) | [11] |
| 888,450 | ||
OTHER ASSETS |
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| Deposits |
| 3,000 |
| 33,831 |
| 29,864 |
| - |
| 66,695 |
| - |
|
| 66,695 | |
| Related party receivables |
| - |
| - |
| 2,590,523 |
| - |
| 2,590,523 |
| - |
|
| 2,590,523 | |
| Distributorship and customer base |
| - |
| 74,914 |
| - |
| - |
| 74,914 |
| 2,148,639 | [4] |
| 7,739,945 | |
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| (287,347) | [6] |
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| 7,740,000 | [5] |
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| (145,380) | [7] |
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| 36,563 | [11] |
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| (1,827,444) | [12] |
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| Total Other Assets |
| 3,000 |
| 108,745 |
| 2,620,387 |
| - |
| 2,732,132 |
| 7,665,031 |
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| 10,397,163 |
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| TOTAL ASSETS | $ | 3,952,067 | $ | 1,111,338 | $ | 8,564,945 | $ | 134,038 | $ | 13,762,388 | $ | 4,544,015 |
| $ | 18,306,403 |
1
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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CURRENT LIABILITIES |
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| Accounts payable and accrued expenses | $ | 37,339 | $ | 432,858 | $ | 1,654,532 | $ | 19,844 | $ | 2,144,573 | $ | (50,000) | [9] | $ | 2,094,573 | |
| Billings in excess of revenues |
| - |
| - |
| 207,350 |
| - |
| 207,350 |
| - |
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| 207,350 | |
| Loans and notes payable |
| - |
| 253,107 |
| 1,578,361 |
| 6,314 |
| 1,837,782 |
| (150,000) | [8] |
| 1,687,782 | |
| Related party payable |
| - |
| - |
| - |
| 18,273 |
| 18,273 |
| - |
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| 18,273 | |
| Warrant derivative liability |
| 1,288,159 |
| - |
| - |
| - |
| 1,288,159 |
| - |
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| 1,288,159 | |
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| Total Current Liabilities |
| 1,325,498 |
| 685,965 |
| 3,440,243 |
| 44,431 |
| 5,496,137 |
| (200,000) |
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| 5,296,137 |
LONG TERM LIABILITIES |
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| Loans and notes payable-related parties |
| - |
| 250,899 |
| 677,117 |
| 51,645 |
| 979,661 |
| - |
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| 979,661 | |
| Loans and notes payable |
| - |
| 52,715 |
| 3,555,623 |
| 8,615 |
| 3,616,953 |
| (2,589,263) | [11] |
| 1,027,690 | |
|
| Long term liabilities |
| - |
| 303,614 |
| 4,232,740 |
| 60,260 |
| 4,596,614 |
| (2,589,263) |
|
| 2,007,351 |
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| TOTAL LIABILITIES |
| 1,325,498 |
| 989,579 |
| 7,672,983 |
| 104,691 |
| 10,092,751 |
| (2,789,263) |
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| 7,303,488 |
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STOCKHOLDERS' EQUITY (DEFICIT) |
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| Preferred stock |
| - |
| - |
| - |
| - |
| - |
| - |
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| - | |
| Common stock |
| 11,855 |
| 3,000 |
| 50,000 |
| 5,771 |
| 70,626 |
| (3,000) | [1] |
| 17,701 | |
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| (50,000) | [2] |
| - |
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| (5,771) | [3] |
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| 1,279 | [4] |
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| 4,500 | [5] |
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| 67 | [10] |
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| Additional paid-in capital |
| 12,420,166 |
| (168,588) |
| 424,968 |
| - |
| 12,676,546 |
| 3,000 | [1] |
| 22,732,777 | |
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| 50,000 | [2] |
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| - |
| - |
| - |
| - |
| - |
| 5,771 | [3] |
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| 2,147,360 | [4] |
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| 7,735,500 | [5] |
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| 114,600 | [10] |
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| Non controlling interest |
| - |
| - |
| 295,190 |
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| 295,190 |
| (295,190) | [11] |
| - | |
| Retained earnings (deficit) |
| (9,805,452) |
| 287,347 |
| 121,804 |
| 23,576 |
| (9,372,725) |
| (287,347) | [6] |
| (11,747,563) | |
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| (145,380) | [7] |
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| (114,667) | [10] |
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| (1,827,444) | [12] |
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| Total Stockholders' Equity (Deficit) |
| 2,626,569 |
| 121,759 |
| 891,962 |
| 29,347 |
| 3,669,637 |
| 7,333,278 |
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| 11,002,915 |
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| TOTAL LIABILITIES AND |
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| STOCKHOLDERS' EQUITY (DEFICIT) | $ | 3,952,067 | $ | 1,111,338 | $ | 8,564,945 | $ | 134,038 | $ | 13,762,388 | $ | 4,544,015 |
| $ | 18,306,403 |
2
BLUE EARTH, INC.
Proforma Consolidated Statements of Operations
For the Year Ended December 31, 2010
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| Pro-Forma | |||||||
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| Castrovilla, Inc. | Xnergy, Inc. | HVAC |
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| Adjusted | |||||||
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| Blue | and Humitech | and Variable | Controls & | Combined | Pro Forma |
| Combined | |||||||
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| Earth, Inc. | of NC, LLC | Interest Entity | Specialities, Inc. | Totals | Adjustments | REF | Totals | |||||||
REVENUES | $ | - | $ | 3,433,145 | $ | 18,120,860 | $ | 844,756 | $ | 22,398,761 | $ | - |
| $ | 22,398,761 | ||
COST OF SALES |
| - |
| 1,228,133 |
| 14,084,438 |
| 556,131 |
| 15,868,702 |
| - |
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| 15,868,702 | ||
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GROSS PROFIT |
| - |
| 2,205,012 |
| 4,036,422 |
| 288,625 |
| 6,530,059 |
| - |
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| 6,530,059 | ||
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OPERATING EXPENSES |
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| General and administrative |
| 2,202,320 |
| 2,125,725 |
| 3,272,237 |
| 159,562 |
| 7,759,844 |
| 114,667 | [10] |
| 7,874,511 | |
| Depreciation and amortization expense |
| - |
| 61,284 |
| 135,021 |
| - |
| 196,305 |
| 1,827,444 | [12] |
| 2,023,749 | |
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| Total Costs and Expenses |
| 2,202,320 |
| 2,187,009 |
| 3,407,258 |
| 159,562 |
| 7,956,149 |
| 1,942,111 |
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| 9,898,260 |
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| OPERATING LOSS |
| (2,202,320) |
| 18,003 |
| 629,164 |
| 129,063 |
| (1,426,090) |
| (1,942,111) |
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| (3,368,201) |
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OTHER INCOME (EXPENSE) |
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| Change in fair value of warrant liability |
| (483,441) |
| - |
| - |
| - |
| (483,441) |
| - |
|
| (483,441) | |
| Other income |
| 15,311 |
| - |
| 159,216 |
| 3,776 |
| 178,303 |
| - |
|
| 178,303 | |
| Interest expense |
| - |
| (56,544) |
| (218,378) |
| (7,147) |
| (282,069) |
| 164,660 | [11] |
| (117,409) | |
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| Total Other Income (Expense) |
| (468,130) |
| (56,544) |
| (59,162) |
| (3,371) |
| (587,207) |
| 164,660 |
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| (422,547) |
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| LOSS BEFORE INCOME TAXES |
| (2,670,450) |
| (38,541) |
| 570,002 |
| 125,692 |
| (2,013,297) |
| (1,777,451) |
|
| (3,790,748) |
|
| PROVISION FOR INCOME TAXES |
| (12,781) |
| - |
| (30,738) |
| (52,288) |
| (95,807) |
| - |
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| (95,807) |
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| NET LOSS | $ | (2,683,231) | $ | (38,541) | $ | 539,264 | $ | 73,404 | $ | (2,109,104) | $ | (1,777,451) |
| $ | (3,886,555) |
3
BLUE EARTH, INC.
Proforma Consolidated Balance Sheet
June 30, 2011
|
|
| Blue Earth, Inc. | Xnergy, Inc. | HVAC |
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| Adjusted | ||||||
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| and | and Variable | Controls & | Combined | Pro Forma |
| Pro Forma | ||||||
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| Subsidiary | Interest Entity | Specialities, Inc. | Totals | Adjustments | REF | Totals | ||||||
ASSETS |
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CURRENT ASSETS |
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| Cash | $ | 2,255,286 | $ | 1,267,648 | $ | 148,435 | $ | 3,671,369 | $ | (50,000) | [9] | $ | 3,621,369 | |
| Accounts receivable, net |
| 624,223 |
| 249,225 |
| 177,733 |
| 1,051,181 |
| - |
|
| 1,051,181 | |
| Inventory |
| 361,453 |
| - |
| - |
| 361,453 |
| - |
|
| 361,453 | |
| Costs in excess of billings |
| - |
| 383 |
| - |
| 383 |
| - |
|
| 383 | |
| Other current assets |
| 809,304 |
| 207,216 |
| - |
| 1,016,520 |
| - |
|
| 1,016,520 | |
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| Total Current Assets |
| 4,050,266 |
| 1,724,472 |
| 326,168 |
| 6,100,906 |
| (50,000) |
|
| 6,050,906 |
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PROPERTY AND EQUIPMENT, net |
| 214,047 |
| 3,631,671 |
| 19,662 |
| 3,865,380 |
| (2,921,016) | [11] |
| 944,364 | ||
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OTHER ASSETS |
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| Deposits |
| 17,930 |
| - |
| - |
| 17,930 |
| - |
|
| 17,930 | |
| Related party receivables |
| - |
| 2,239,910 |
| - |
| 2,239,910 |
| - |
|
| 2,239,910 | |
| Customer lists and contracts |
| 2,819,416 |
| - |
| - |
| 2,819,416 |
| 7,740,000 | [5] |
| 11,316,814 | |
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|
| 1,626,217 | [7] |
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| 44,903 | [11] |
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|
| (913,722) | [12] |
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| Total Other Assets |
| 2,837,346 |
| 2,239,910 |
| - |
| 5,077,256 |
| 8,497,398 |
|
| 13,574,654 |
|
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| TOTAL ASSETS | $ | 7,101,659 | $ | 7,596,053 | $ | 345,830 | $ | 15,043,542 | $ | 5,526,382 |
| $ | 20,569,924 |
4
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
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|
CURRENT LIABILITIES |
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| Accounts payable and accrued expenses | $ | 711,821 | $ | 2,713,700 | $ | 202,797 | $ | 3,628,318 | $ | (50,000) | [9] | $ | 3,578,318 | |
| Billings in excess of revenues |
| - |
| 142,644 |
| - |
| 142,644 |
| - |
|
| 142,644 | |
| Loans and notes payable |
| 254,023 |
| 5,034 |
| 46,218 |
| 305,275 |
| - |
|
| 305,275 | |
| Related party payable |
| - |
| 149,000 |
| 18,273 |
| 167,273 |
| - |
|
| 167,273 | |
| Warrant derivative liability |
| 1,223,960 |
| - |
| - |
| 1,223,960 |
| - |
|
| 1,223,960 | |
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| Total Current Liabilities |
| 2,189,804 |
| 3,010,378 |
| 267,288 |
| 5,467,470 |
| (50,000) |
|
| 5,417,470 |
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|
LONG TERM LIABILITIES |
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|
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| ||
| Loans and notes payable-related parties |
| - |
| - |
| 42,209 |
| 42,209 |
| - |
|
| 42,209 | |
| Loans and notes payable |
| 117,079 |
| 5,614,320 |
| 5,818 |
| 5,737,217 |
| (2,589,263) | [11] |
| 3,147,954 | |
|
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| Long term liabilities |
| 117,079 |
| 5,614,320 |
| 48,027 |
| 5,779,426 |
| (2,589,263) |
|
| 3,190,163 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES |
| 2,306,883 |
| 8,624,698 |
| 315,315 |
| 11,246,896 |
| (2,639,263) |
|
| 8,607,633 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Preferred stock |
| - |
| - |
| - |
| - |
| - |
|
| - | |
| Common stock |
| 13,708 |
| 50,000 |
| 5,771 |
| 69,479 |
| (50,000) | [2] |
| 18,275 | |
|
|
|
|
|
|
|
|
|
|
|
| (5,771) | [3] |
| - |
|
|
|
|
|
|
|
|
|
|
|
| 4,500 | [5] |
| - |
|
|
|
|
|
|
|
|
|
|
|
| 67 | [10] |
|
|
| Additional paid-in capital |
| 15,889,285 |
| 424,968 |
| - |
| 16,314,253 |
| 50,000 | [2] |
| 24,220,124 | |
|
|
|
|
|
|
|
|
|
|
|
| 5,771 | [3] |
| - |
|
|
|
| - |
| - |
| - |
| - |
| 7,735,500 | [5] |
| - |
|
|
|
|
|
|
|
|
|
|
|
| 114,600 | [10] |
|
|
| Non controlling interest |
| - |
| 286,850 |
| - |
| 286,850 |
| (286,850) | [11] |
| - | |
| Retained earnings (deficit) |
| (11,108,217) |
| (1,790,463) |
| 24,744 |
| (12,873,936) |
| 1,626,217 | [7] |
| (12,276,108) | |
|
|
|
|
|
|
|
|
|
|
|
| (114,667) | [10] |
|
|
|
|
|
|
|
|
|
|
|
|
|
| (913,722) | [12] |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Stockholders' Equity (Deficit) |
| 4,794,776 |
| (1,028,645) |
| 30,515 |
| 3,796,646 |
| 8,165,645 |
|
| 11,962,291 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| STOCKHOLDERS' EQUITY (DEFICIT) | $ | 7,101,659 | $ | 7,596,053 | $ | 345,830 | $ | 15,043,542 | $ | 5,526,382 |
| $ | 20,569,924 |
5
BLUE EARTH, INC.
Proforma Consolidated Statements of Operations
For the Six Months Ended June 30, 2011
|
|
|
|
|
|
|
|
| Pro-Forma | ||||||
|
|
| Blue Earth, Inc. | Xnergy, Inc. | HVAC |
|
|
| Adjusted | ||||||
|
|
| and | and Variable | Controls & | Combined | Pro Forma |
| Combined | ||||||
|
|
| Subsidiary | Interest Entity | Specialities, Inc. | Totals | Adjustments | REF | Totals | ||||||
REVENUES | $ | 2,043,636 | $ | 1,540,098 | $ | 653,656 | $ | 4,237,390 | $ | - |
| $ | 4,237,390 | ||
COST OF SALES |
| 752,303 |
| 1,012,043 |
| 508,116 |
| 2,272,462 |
| - |
|
| 2,272,462 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
| 1,291,333 |
| 528,055 |
| 145,540 |
| 1,964,928 |
| - |
|
| 1,964,928 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative |
| 2,659,253 |
| 1,771,645 |
| 112,281 |
| 4,543,179 |
| 114,667 | [10] |
| 4,657,846 | |
| Depreciation and amortization expense |
| - |
| 30,000 |
| - |
| 30,000 |
| 913,722 | [12] |
| 943,722 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Costs and Expenses |
| 2,659,253 |
| 1,801,645 |
| 112,281 |
| 4,573,179 |
| 1,028,389 |
|
| 5,601,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING LOSS |
| (1,367,920) |
| (1,273,590) |
| 33,259 |
| (2,608,251) |
| (1,028,389) |
|
| (3,636,640) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in fair value of warrant liability |
| 64,199 |
| - |
| - |
| 64,199 |
| - |
|
| 64,199 | |
| Interest income |
| 956 |
| 6,610 |
| - |
| 7,566 |
| - |
|
| 7,566 | |
| Interest expense |
| - |
| (60,173) |
| (2,260) |
| (62,433) |
| - |
|
| (62,433) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Other Income (Expense) |
| 65,155 |
| (53,563) |
| (2,260) |
| 9,332 |
| - |
|
| 9,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOSS BEFORE INCOME TAXES |
| (1,302,765) |
| (1,327,153) |
| 30,999 |
| (2,598,919) |
| (1,028,389) |
|
| (3,627,308) |
|
| PROVISION FOR INCOME TAXES |
| - |
| - |
| (12,090) |
| (12,090) |
| - |
|
| (12,090) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET LOSS | $ | (1,302,765) | $ | (1,327,153) | $ | 18,909 | $ | (2,611,009) | $ | (1,028,389) |
| $ | (3,639,398) |
6
PRO FORMA ADJUSTMENTS
Common Stock | 3,000 |
| [1] | To eliminate common stock of Castrovilla/Humatech |
Additional Paid-in Capital |
| 3,000 | [1] | To eliminate common stock of Castrovilla/Humatech |
Common Stock | 50,000 |
| [2] | To eliminate common stock of Xnergy |
Additional Paid-in Capital |
| 50,000 | [2] | To eliminate common stock of Xnergy |
Common Stock | 5,771 |
| [3] | To eliminate common stock of HVAC Controls |
Additional Paid-in Capital |
| 5,771 | [3] | To eliminate common stock of HVAC Controls |
Common Stock |
| 1,279 | [4] | Record issuance of 1,278,952 shares for Castrovilla/Humitech valued at $1.68 per share |
Additional Paid-in Capital |
| 2,147,360 | [4] | Record issuance of 1,278,952 shares for Castrovilla/Humitech valued at $1.68 per share |
Customer Lists and Contracts | 2,148,639 |
| [4] | Record issuance of 1,278,952 shares for Castrovilla/Humitech valued at $1.68 per share |
Common Stock |
| 4,500 | [5] | Record issuance of 4,500,000 shares for Xnergy and HVAC Controls valued at $1.72 per share |
Additional Paid-in Capital |
| 7,735,500 | [5] | Record issuance of 4,500,000 shares for Xnergy and HVAC Controls valued at $1.72 per share |
Customer Lists and Contracts | 7,740,000 |
| [5] | Record issuance of 4,500,000 shares for Xnergy and HVAC Controls valued at $1.72 per share |
Customer Lists and Contracts |
| 287,347 | [6] | To eliminate retained earnings of Castrovilla/Humatech |
Retained Earnings | 287,347 |
| [6] | To eliminate retained earnings of Castrovilla/Humatech |
Customer Lists and Contracts |
| 145,380 | [7] | To eliminate retained earnings of Xnergy and HVAC Controls |
Retained Earnings | 144,706 |
| [7] | To eliminate retained earnings of Xnergy and HVAC Controls |
Related Party Payable | 150,000 |
| [8] | To record cash paid at closing of Castrovilla/Humatech |
Cash |
| 150,000 | [8] | To record cash paid at closing of Castrovilla/Humatech |
Accounts Payable and Accrued Expenses | 50,000 |
| [9] | To record cash paid at closing of Xnergy and HVAC Controls |
Cash |
| 50,000 | [9] | To record cash paid at closing of Xnergy and HVAC Controls |
Common Stock |
| 67 | [10] | Record issuance of 66,667 shares for Xnergy employees valued at $1.72 per share |
Additional Paid-in Capital |
| 114,600 | [10] | Record issuance of 66,667 shares for Xnergy employees valued at $1.72 per share |
Salaries and Wages | 114,667 |
| [10] | Record issuance of 66,667 shares for Xnergy employees valued at $1.72 per share |
Property and Equipment |
| 2,921,016 | [11] | Remove real estate not acquired in with Xnergy |
Loans and Notes Payable | 2,589,263 |
| [11] | Remove real estate not acquired in with Xnergy |
Customer Lists and Contracts | 36,563 |
| [11] | Remove real estate not acquired in with Xnergy |
Non Controlling Interest | 295,190 |
| [11] | Remove real estate not acquired in with Xnergy |
Amortization Expense | 1,827,444 |
| [12] | To amortize intangible assets |
Customer Lists and Contracts |
| 1,827,444 | [12] | To amortize intangible assets |
7
Notes to Unaudited Pro Forma Consolidated Financial Statements
Effective January 1, 2011, Castrovilla Energy, Inc., “Energy”, a newly formed subsidiary of Blue Earth Energy Management Services, Inc., which is a subsidiary of Blue Earth, Inc, entered into a merger agreement with Castrovilla, Inc. wherein Energy purchased all of the issued and outstanding shares of Castrovilla, Inc. for 1,011,095 shares of restricted common stock of Blue Earth, Inc. These shares were valued based on the quoted market price on the effective date of the transaction, January 1, 2011, at $1.90 per share, or $1,921,081.
Immediately after the transaction, Energy ceased to exist and Castrovilla, Inc. became the surviving corporation, a wholly owned subsidiary of Blue Earth Energy Management Services, Inc.. Simultaneous with this purchase, Energy entered into an asset purchase agreement with Humitech of NC, LLC, “Humitech”, whereby the assets of Humitech and certain related liabilities were sold to Energy for $150,000 cash and 267,857 restricted common shares of Blue Earth, Inc. valued based on the quoted market price on the effective date of the transaction, January 1, 2011, at $1.90 per share or $528,928.
Proforma adjustment [4] reflects the issuance of 1,011,095 shares of Blue Earth, Inc. common stock to shareholders of Castrovilla, Inc. in exchange for all issued and outstanding shares of Castrovilla and the issuance of 267,857 shares of Blue Earth, Inc. for the net assets of Humitech of NC, LLC. Entries [1] and [6] reflect the elimination of equity balances, including the common stock of Castrovilla and the partner capital of Humitech, retained earnings of both entities and the allocation of excess purchase price above the market value of the fixed assets acquired and liabilities assumed in the acquisition to the Bay Area Gasket Guy distributorship held by Humitech.
The calculation of the $2,458,250 excess purchase price was calculated as shown in the table below.
Purchase Price |
| Shares |
|
| Price |
|
| Total |
| |||
Castrovilla |
|
| 1,011,095 |
|
| $ | 1.90 |
|
| $ | 1,921,081 |
|
Humitech |
|
| 267,857 |
|
| $ | 1.90 |
|
|
| 508,928 |
|
Cash |
|
|
|
|
|
|
|
|
|
| 150,000 |
|
Total Purchase Price |
|
|
|
|
|
|
|
|
|
| 2,580,009 |
|
Tangible Assets Acquired |
|
|
|
|
|
|
|
|
|
| (1,036,424 | ) |
Total Liabilities Assumed |
|
|
|
|
|
|
|
|
|
| 989,579 |
|
Cost of Distributorship and Customer Base Acquired |
|
|
|
|
|
| $ | 2,533,164 |
|
The proforma, consolidated balance sheets and statements of operations of Blue Earth, Inc. and Castrovilla, Inc. and Humitech of NC, LLC are presented here as of December 31, 2010. The balance sheet and statement of operations of Castrovilla, Inc. are included in the consolidated balance sheet and statement of operations of Blue Earth, Inc. as of June 30, 2011.
8
On September 7, 2011 the Company acquired 100% of the outstanding common stock of Xnergy, Inc. and its wholly-owned subsidiary HVAC Controls & Specialties, Inc., a Carlsbad, California based energy services company (“Xnergy’). Simultaneously, the Company purchased all of the membership interests of ecoLegacy, LLC (“eco”), a California limited liability company, which serves as a financing vehicle for Xnergy. The Company issued 4,500,000 shares of its common stock for all of the outstanding shares of Xnergy valued at $3.00 per share in the merger agreement. However, the common shares were subsequently valued at $1.72 per share for accounting purposes based upon the average closing price of the Company’s common stock from September 8, 2011 through trading on September 26, 2011. The Company also assumed the obligation of $1,415,088 due to a former shareholder of Xnergy for the purchase of his shares by the exchanging shareholders of Xnergy. The Company assumed $143,681 of debt as the consideration for the purchase of ecoLegacy, a California limited liability company. Hence, for valuation purposes, the proper price/share for accounting purposes is $1.72/share or $7,740,000 for the shares plus the cash component as stated above.
The proforma, consolidated balance sheets and statements of operations of Blue Earth, Inc. and Xnergy, Inc. and HVAC Controls & Specialties, Inc. are presented here as of December 31, 2010 and June 30, 2011. Proforma adjustment [5] reflects the issuance of 4,500,000 shares of Blue Earth, Inc. common stock to shareholders of Xnergy, Inc. in exchange for all issued and outstanding shares of Xnergy, Inc and its wholly owned subsidiary, HVAC Controls & Specialties, Inc. and the allocation of excess purchase price above the market value of the fixed assets acquired and liabilities assumed to the customer base and existing or potential contracts owned by Xnergy and HVAC. Entries [2], [3] and [7] reflect the elimination of equity balances, including the common stock of Xnergy and HVAC and the retained earnings of both entities.
The calculation of the $8,497,398 excess purchase price was calculated as shown in the table below.
Purchase Price |
| Shares |
|
| Price |
|
| Total |
| |||
Xnergy, Inc. and HVAC Controls & Specialties, Inc. |
|
| 4,500,000 |
|
| $ | 1.72 |
|
| $ | 7,740,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Purchase Price |
|
|
|
|
|
|
|
|
|
| 7,740,000 |
|
Tangible Assets Acquired |
|
|
|
|
|
|
|
|
|
| (4,675,037 | ) |
Total Liabilities Assumed |
|
|
|
|
|
|
|
|
|
| 5,432,435 |
|
Cost of Customer Base Acquired |
|
|
|
|
|
| $ | 8,497,398 |
|
9