Exhibit 99.3
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
On July 31, 2015, Code Rebel Corporation (the ‘‘Company,’’ ‘‘we,’’ ‘‘our’’ or ‘‘us’’) completed the acquisition of ThinOps Resources, LLC. (‘‘ThinOps’’). The accompanying unaudited pro forma condensed consolidated combined balance sheet as of June 30, 2015 presents our historical financial position combined with ThinOps as if the acquisition and the financing for the acquisition had occurred on June 30, 2015. The accompanying unaudited pro forma condensed consolidated combined statements of operations for the six months ended June 30, 2015 and the year ended December 31, 2014 present the combined results of our operations with ThinOps as if the acquisition and the financing for the acquisition had occurred on January 1, 2014. The historical unaudited pro forma condensed consolidated financial information includes adjustments that are directly attributable to the acquisition, factually supportable and with respect to the statement of operations are expected to have a continuing effect on our combined results. The unaudited pro forma condensed consolidated combined financial information does not reflect the costs of any integration activities or benefits that may result from realization of future cost savings from operating efficiencies, or any revenue, tax, or other synergies that may result from the acquisition. The unaudited pro forma condensed consolidated combined financial information and related notes are being provided for illustrative purposes only and are not necessarily indicative of what our financial position or results of operations actually would have been had we completed the acquisition at the dates indicated nor are they necessarily indicative of the combined company’s future financial position or operating results of the combined company.
The accompanying unaudited pro forma condensed consolidated combined financial information and related notes should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2014 and our unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2015 and ThinOps audited financial statements as of and for the year ended December 31, 2014 and ThinOps unaudited consolidated financial statements as of and for the six months ended June 30, 2015.
We prepared the unaudited pro forma condensed consolidated combined financial information pursuant to Regulation S-X Article 11. Accordingly, our cost to acquire ThinOps of approximately $9.25 million has been allocated to the assets acquired and liabilities assumed according to their estimated fair values at the date of acquisition. Any excess of the purchase price over the estimated fair value of the net assets acquired has been recorded as goodwill. The preliminary estimates of fair values are reflected in the accompanying unaudited pro forma condensed consolidated combined financial information. The final determination of these fair values will be completed as soon as possible but no later than one year from the acquisition date. The final valuation will be based on the actual fair values of assets acquired and liabilities assumed at the acquisition date. Although the final determination may result in asset and liability fair values that are different than the preliminary estimates of these amounts included herein, it is not expected that those differences will be material to an understanding of the impact of this transaction to our financial results.
| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET | ||||||||||||||||||||
| JUNE 30, 2015 | ||||||||||||||||||||
| Code Rebel Corporation | ThinOps Resources, LLC | Combined Historical | Pro forma Adjustments | Combined Pro Forma | ||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 4,428,018 | $ | 181,750 | $ | 4,609,768 | 1 | $ | (750,000 | ) | $ | 3,859,768 | ||||||||
| Accounts receivable | 9,490 | 150,807 | 160,297 | 160,297 | ||||||||||||||||
| Deposit and prepaid expense | 32,014 | 2,326 | 34,340 | 34,340 | ||||||||||||||||
| TOTAL CURRENT ASSETS | 4,469,522 | 334,883 | 4,804,405 | 4,054,405 | ||||||||||||||||
| NON-CURRENT ASSETS | ||||||||||||||||||||
| Investment in subsidiary | 1 | 9,247,415 | - | |||||||||||||||||
| 2 | (9,247,415 | ) | ||||||||||||||||||
| Intangible assets, net | 12,194 | - | 12,194 | 12,194 | ||||||||||||||||
| Property and equipment, net | 9,134 | - | 9,134 | 9,134 | ||||||||||||||||
| Deposits | - | 1,727 | 1,727 | 1,727 | ||||||||||||||||
| Goodwill | - | - | - | 2 | 9,141,229 | 9,141,229 | ||||||||||||||
| TOTAL NON-CURRENT ASSETS | 21,328 | 1,727 | 23,055 | 9,164,284 | ||||||||||||||||
| TOTAL ASSETS | $ | 4,490,850 | $ | 336,610 | $ | 4,827,460 | $ | 13,218,689 | ||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 217,208 | $ | 94,048 | $ | 311,256 | $ | 311,256 | ||||||||||||
| Trade financing | - | 125,543 | 125,543 | 125,543 | ||||||||||||||||
| Income tax payable | - | 9,039 | 9,039 | 9,039 | ||||||||||||||||
| Payable to related party | 113,653 | - | 113,653 | 113,653 | ||||||||||||||||
| Other payable | 10,000 | 1,794 | 11,794 | 11,794 | ||||||||||||||||
| TOTAL CURRENT LIABILITIES | 340,861 | 230,424 | 571,285 | 571,285 | ||||||||||||||||
| STOCKHOLDERS' EQUITY | ||||||||||||||||||||
| Common stock | 1,268 | - | 1,268 | 1 | 67 | 1,335 | ||||||||||||||
| Additional paid in capital | 6,150,317 | - | 6,150,317 | 1 | 8,497,348 | 14,647,665 | ||||||||||||||
| Members' distribution | - | (1,037,678 | ) | (1,037,678 | ) | 2 | 1,037,678 | - | ||||||||||||
| Retained earnings (accumulated deficit) | (2,001,596 | ) | 1,143,864 | (857,732 | ) | 2 | (1,143,864 | ) | (2,001,596 | ) | ||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 4,149,989 | 106,186 | 4,256,175 | 12,647,404 | ||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 4,490,850 | $ | 336,610 | $ | 4,827,460 | $ | 13,218,689 | ||||||||||||
| Pro Forma Adjustments | |||||||||||||||||||||
| #1 | Investment in subsidiary | 9,247,415 | |||||||||||||||||||
| Cash | 750,000 | ||||||||||||||||||||
| Common stock | 67 | ||||||||||||||||||||
| Additional paid in capital | 8,497,348 | ||||||||||||||||||||
| To record investment for ThinOps. Payment of cash of $750,000 and issuance of 667,511 shares at $12.73 per share. | |||||||||||||||||||||
| #2 | Investment in subsidiary | 9,247,415 | |||||||||||||||||||
| Members distribution | 1,037,678 | ||||||||||||||||||||
| Retained earnings | 1,143,864 | ||||||||||||||||||||
| Goodwill | 9,141,229 | ||||||||||||||||||||
| To eliminate the investment in ThinOps and record the goodwill. | |||||||||||||||||||||
| UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS | ||||||||||||||||||||
| For the Six Month Period Ended June 30, 2015 | ||||||||||||||||||||
| Code Rebel Corporation | ThinOps Resources, LLC | Combined Historical | Pro forma Adjustments | Combined Pro Forma | ||||||||||||||||
| Revenue, net | $ | 81,423 | $ | 770,451 | $ | 851,874 | - | $ | 851,874 | |||||||||||
| Cost of sales | 142,915 | 423,206 | 566,121 | 566,121 | ||||||||||||||||
| Gross (loss) profit | (61,492 | ) | 347,245 | 285,753 | 285,753 | |||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Advertising and promotion | 9,047 | 11,993 | 21,040 | 21,040 | ||||||||||||||||
| Legal and professional | 73,895 | 37,360 | 111,255 | 111,255 | ||||||||||||||||
| General and administration expenses | 186,222 | 26,105 | 212,327 | 212,327 | ||||||||||||||||
| Depreciation and amortization expenses | 1,421 | - | 1,421 | 1,421 | ||||||||||||||||
| Total operating expenses | 270,585 | 75,458 | 346,043 | 346,043 | ||||||||||||||||
| Income (loss) from operations | (332,077 | ) | 271,787 | (60,290 | ) | (60,290 | ) | |||||||||||||
| Other expense | ||||||||||||||||||||
| Interest expense | 33,293 | - | 33,293 | 33,293 | ||||||||||||||||
| Amortization of debt discount | 47,413 | - | 47,413 | 47,413 | ||||||||||||||||
| Trade financing fees | - | 14,333 | 14,333 | - | 14,333 | |||||||||||||||
| Total other expense | 80,706 | 14,333 | 95,039 | 95,039 | ||||||||||||||||
| Income (loss) before income tax provision | (412,783 | ) | 257,454 | (155,329 | ) | (155,329 | ) | |||||||||||||
| Income tax provision | - | - | - | - | ||||||||||||||||
| Net (loss) income | $ | (412,783 | ) | $ | 257,454 | $ | (155,329 | ) | $ | (155,329 | ) | |||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||
| Diluted | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.01 | ) | |||||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 10,622,508 | 10,622,508 | 1 | 667,511 | 11,290,019 | |||||||||||||||
| Diluted | 10,622,508 | 10,622,508 | 1 | 667,511 | 11,290,019 | |||||||||||||||
| Pro Forma Adjustments | ||||||||||
| #1 | To effect shares issued upon reorganization. | |||||||||
| The Company did not include potentially dilutive shares issued or outstanding as the effect of those shares would have been anti-dilutive. | ||||||||||
| UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS | ||||||||||||||||||||
| For the Year Ended December 31, 2014 | ||||||||||||||||||||
| Code Rebel Corporation | ThinOps Resources, LLC | Combined Historical | Pro forma Adjustments | Combined Pro Forma | ||||||||||||||||
| Revenue, net | $ | 223,453 | $ | 2,000,499 | $ | 2,223,952 | - | $ | 2,223,952 | |||||||||||
| Cost of sales | 157,590 | 1,187,972 | 1,345,562 | 1,345,562 | ||||||||||||||||
| Gross profit | 65,863 | 812,527 | 878,390 | 878,390 | ||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Advertising and promotion | 21,940 | 24,485 | 46,425 | 46,425 | ||||||||||||||||
| Legal and professional | 595,404 | 40,520 | 635,924 | 635,924 | ||||||||||||||||
| General and administration expenses | 46,213 | 56,299 | 102,512 | 102,512 | ||||||||||||||||
| Depreciation and amortization expenses | 5,960 | - | 5,960 | 5,960 | ||||||||||||||||
| Total operating expenses | 669,517 | 121,304 | 790,821 | 790,821 | ||||||||||||||||
| (Loss) income from operations | (603,654 | ) | 691,223 | 87,569 | 87,569 | |||||||||||||||
| Other expense | ||||||||||||||||||||
| Interest expense | 43,200 | - | 43,200 | 43,200 | ||||||||||||||||
| Amortization of debt discount | 33,088 | - | 33,088 | 33,088 | ||||||||||||||||
| Trade financing fees | - | 32,051 | 32,051 | - | 32,051 | |||||||||||||||
| Total other expense | 76,288 | 32,051 | 108,339 | 108,339 | ||||||||||||||||
| (Loss) income before income tax provision | (679,942 | ) | 659,172 | (20,770 | ) | (20,770 | ) | |||||||||||||
| Income tax provision | - | 9,039 | 9,039 | 9,039 | ||||||||||||||||
| Net (loss) income | $ | (679,942 | ) | $ | 650,133 | $ | (29,809 | ) | $ | (29,809 | ) | |||||||||
| Earnings per share: | ||||||||||||||||||||
| Basic | $ | (0.07 | ) | $ | - | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||
| Diluted | $ | (0.07 | ) | $ | - | $ | (0.00 | ) | $ | (0.00 | ) | |||||||||
| Weighted average number of shares outstanding: | ||||||||||||||||||||
| Basic | 10,000,000 | - | 10,000,000 | 1 | 667,511 | 10,667,511 | ||||||||||||||
| Diluted | 10,000,000 | - | 10,000,000 | 1 | 667,511 | 10,667,511 | ||||||||||||||
| Pro Forma Adjustments | ||||||||||
| #1 | To effect shares issued upon reorganization. | |||||||||
| The Company did not include potentially dilutive shares issued or outstanding as the effect of those shares would have been anti-dilutive. | ||||||||||
Note 1 — Basis of presentation
The unaudited pro forma condensed combined financial statements are based on Code Rebel Corporation and Subsidiary’s and ThinOps Resources, LLC’s historical consolidated financial statements as adjusted to give effect to the acquisition of ThinOps Resources, LLC by Code Rebel Corporation. The unaudited pro forma combined statements of operations for the six month period ended June 30, 2015 and the 12 months ended December 31, 2014 give effect to the ThinOps Resources, LLC acquisition as if it had occurred on January 1, 2014. The unaudited pro forma combined balance sheet as of June 30, 2014 gives effect to the ThinOps Resources LLC acquisition as if it had occurred on June 30, 2015.
Note 2 — Preliminary purchase price allocation
On July 31, 2015, Code Rebel acquired ThinOps Resources, LLC for total consideration of approximately $9.25 million. The unaudited pro forma condensed combined financial information includes various assumptions, including those related to the preliminary purchase price allocation of the assets acquired and liabilities assumed of ThinOps Resources, LLC based on management’s best estimates of fair value. The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumed liabilities. Accordingly, the pro forma adjustments are preliminary and have been made solely for illustrative purposes.
The following table shows the preliminary allocation of the purchase price for ThinOps Resources, LLC to the acquired identifiable assets, liabilities assumed and pro forma goodwill:
| Total purchase price | $ | 9,247,415 | ||
| Cash and cash equivalents | 181,750 | |||
| Accounts receivable | 150,807 | |||
| Deposit and prepaid expense | 2,326 | |||
| Other | 1,727 | |||
| Total identifiable assets | 336,610 | |||
| Accounts payable and accrued expenses | (94,048 | ) | ||
| Trade financing | (125,543 | ) | ||
| Income tax payable | (9,039 | ) | ||
| Other payable | (1,794 | ) | ||
| Total liabilities assumed | (230,424 | ) | ||
| Net assets acquired | 106,186 | |||
| Total proforma goodwill | $ | 9,141,229 |
Note 3 — Pro forma adjustments
The pro forma adjustments are based on our preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:
Adjustments to the pro forma condensed combined balance sheet:
(1) Reflect the investment in a subsidiary and the payment of the purchase price; and
(2) Reflect the preliminary estimate of goodwill, which represents the excess of the purchase price over the fair value of ThinOps Resources, LLC’s identifiable assets acquired and liabilities assumed as shown in Note 2.