Exela 8K Other Events | XELA 30 Mar 23

Exhibit 99.2

Pro Forma Financial Information

Reconciliation of financial information of Exela Technologies, Inc., as “Parent” and “Reporting Entity” and pro forma financial information of Exela Intermediate LLC, as “Company”, for the period ended September 30, 2022. Capitalized terms used but not defined herein shall have the meanings given in the INDENTURE, dated as of December 9, 2021 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), by and among the Company, Exela Finance, Inc., the Subsidiary Guarantors party hereto from time to time and U.S. Bank National Association, as trustee.

Notes:

1)	Refer to the form 10-Q filed with the SEC on November 14, 2022 for Exela Technologies, Inc., quarterly filing for the period ended September 30, 2022 ( https://www.sec.gov/ix?doc=/Archives/edgar/data/1620179/000155837022017856/xela-20220930x10q.htm).

A Consolidated Balance Sheet and Consolidated Statements of Operations are provided for the Reporting Entity and the Company to reflect the quantitative pro forma differences between the two as of September 30, 2022. These differences are caused by (i) cash held at the Reporting Entity and Subsidiaries that are not Subsidiaries of the Company (each an “Independent Subsidiary”)(ii) $298 million of Notes held by Independent Subsidiaries (the amounts reflected in current portion of long-term debts for the Company also include $13.4 million of Old Notes now held by Independent Subsidiaries as of February 20, 2023, but not as of September 30, 2022), and (iii)(x) the exclusion of items relating to XBP Europe, Inc. (“XBP Europe”) and (y) the exclusion on a pro forma basis of items related to Exela Enterprise Solutions, Inc. (“EES”), as further described below.

Parent announced on October 10, 2022 that it had entered into a merger agreement relating to XBP Europe (https://www.sec.gov/ix?doc=/Archives/edgar/data/1620179/000110465922107470/tm2227875d1_8k.htm). Prior to entering into this agreement, during the third quarter of 2022, a subsidiary of the Company sold its EMEA business to an Independent Subsidiary and established XBP Europe. Thus XBP Europe and its subsidiaries’ results are excluded from the Company’s Balance Sheet and Consolidated Statements of Operations as shown in the attached. The enterprise value for the sold business was approximately $109.2 million.

On October 24, 2022, a subsidiary of the Company closed on the sale of its onsite business operated by EES along with certain other assets to an Independent Subsidiary. Immediately prior to this transaction EES distributed its business related to (1) federal, state, and local government customers, (2) certain finance and healthcare customers and (3) its digital assets group business to a Subsidiary of the Company that remains a Subsidiary Guarantor. The Company’s Balance Sheet and Consolidated Statements of Operations as shown in the attached have been modified on a pro forma basis to give effect to these EES-related transactions, which occurred after September 30, 2022. The enterprise value for these sold assets was approximately $148.8 million.

3)	The accompanying reconciliation is extracted from the Reporting Entity’s “consolidating” financials and is subject to the following notes:

The financial statements presented are unaudited results.

The financial statements presented are not consolidating financial statements. Consolidation and elimination entries, in particular account categories such as intercompany, investment in subsidiaries, equity and retained earnings and certain other items are not adjusted or eliminated at the levels presented for the Company, XBP Europe and EES.

Push down accounting for past mergers or acquisitions, including goodwill and intangible assets are recorded either at the segment level or Parent level and not at the levels presented for the Company XBP Europe and EES.

EES financials are preliminary and subject to change with regard to grouping and reclassification of account categories and/or updates for additional allocation and related changes within the consolidating financials.

Accounting considerations related to a carve-out entity’s statement of financial position or statement of comprehensive income has not been applied to EES financials, instead, for the purposes of this reconciliation, revenue ratio-based percentage allocation was used to report the balance sheet and specific identification method used for statement of income.

Each of the transactions with Independent Subsidiaries described above are subject to a look back whereby if within six (6) months following their respective closings, (x) the buyer sells, transfers or otherwise exchanges one or more equity interests in a transaction where the price on an aggregate basis would be greater than the purchase price or (y) the Seller presents a report of the fair market value thereof that is greater than the purchase price, then in either event, Buyer shall at its option (i) pay to Seller the amount of such difference in cash within twelve months of the Closing, (ii) return a number of equity interests of equivalent value, or (iii) if the equity has been exchanged for other consideration, an equivalent portion of such other consideration. No accounting entries have been made to reflect these potential transactions.

4)	Rounding: Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided.

Consolidated Balance Sheet (Unaudited)

As of September 30, 2022

(in thousands of United States dollars)

		Exela Technologies, Inc. Consolidated (Reported)			Exela Intermediate LLC (“Company”) Subsidiaries with XBP Europe & EES			XBP Europe and Subsidiaries			EES and Subsidiaries		Proforma Company and Subsidiaries without XBP Europe & EES
Assets
Current assets
Cash and cash equivalents	$	10,401		$	5,808		$	1,506		$	376	$	3,927
Restricted cash		34,402			34,402								34,402
Related party receivables		504			(11,645	)		12,149					(11,645	)
Accounts receivable, net of allowance for doubtful accounts		93,600			105,751			31,700					74,051
Inventories, net		17,234			17,234			4,779			295		12,160
Prepaid expenses and other current assets		28,551			28,551			9,412			1,393		17,746
Total current assets		184,690			180,100			59,546			2,064		130,639
Property, plant and equipment, net of accumulated depreciation		68,788			65,013			13,716			1,142		50,154
Operating lease right-of-use assets, net		44,943			44,943			6,135			296		38,513
Goodwill		328,071			328,071			20,295			61,557		246,220
Intangible assets, net		211,659			211,659			1,533			51,693		158,433
Deferred income tax assets		1,279			1,279			8,864					(7,585	)
Other noncurrent assets		25,839			23,812			619			1,057		22,136
Total assets		865,270			854,877			110,708			117,808		638,510

Liabilities and Stockholders’ Equity (Deficit)
Liabilities
Current liabilities
Accounts payables	$	80,783		$	80,783		$	13,198		$	4,272	$	63,313
Related party payables		1,698			(22,464	)		24,162					(22,464	)
Income tax payable		1,178			1,178						72		1,106
Accrued liabilities		52,795			52,545			18,929			5,753		27,863
Accrued compensation and benefits		52,925			52,817			13,738			208		38,871
Accrued interest		29,430			34,341						179		34,161
Customer deposits		18,278			18,278			929			2,994		14,356
Obligation for claim payment		50,780			50,780								50,780
Deferred revenue		15,681			15,681			6,247			155		9,279
Current portion of finance lease liabilities		4,902			4,902			659			13		4,230
Current portion of operating lease liabilities		13,127			13,127			2,120			223		10,784
Current portion of long-term debts		195,043			122,089			15,684			84		106,321
Total current liabilities		516,620			424,057			95,666			13,951		338,602

Long-term debt, net of current maturities		909,506			1,227,178			3,516					1,223,662
Finance lease liabilities, net of current portion		7,276			7,276			709			10		6,557
Pension liabilities, net		23,165			23,165			22,087					1,078
Deferred income tax liabilities		14,046			14,046								14,046
Long-term income tax liabilities		2,757			2,757								2,757
Operating lease liabilities, net of current portion		34,573			34,573			3,938			111		30,524
Other long-term liabilities		4,888			4,888			1,451			405		3,032
Related party notes payable					(11,164	)		11,164					(11,164	)
Total liabilities		1,512,831			1,726,776			138,531			14,478		1,609,093

Stockholders’ equity (deficit)
Total stockholders’ deficit		(647,560	)		(871,899	)		(27,823	)		103,330		(970,583	)
Total liabilities and stockholders’ deficit	$	865,270		$	854,877		$	110,708		$	117,808	$	638,510

Consolidated Statements of Income (Unaudited)

Nine months ended September 30, 2022

(in thousands of United States dollars)

		Exela Technologies, Inc. Consolidated (Reported)			Exela Intermediate LLC (“Company”) Subsidiaries with XBP Europe & EES			XBP Europe and Subsidiaries			EES and Subsidiaries		Proforma Company and Subsidiaries without XBP Europe & EES
Revenue	$	810,205		$	809,956		$	136,722		$	106,060	$	567,174
Cost of Revenue (exclusive of depreciation and amortization		658,623			658,623			103,172			77,424		478,027
Selling, general and administrative expenses		137,604			132,557			22,721			7,255		102,580
Depreciation and amortization		53,942			53,824			3,357			2,895		47,572
Impairment of goodwill and other intangible assets		29,565			29,565								29,565
Related party expense, net		6,189			6,189			7,326					(1,137	)
Operating profit (loss)		(75,718	)		(70,801	)		146			18,485		(89,433	)
Other expense (income), net:
Interest expense, net		122,927			136,336			2,094			14		134,228
Other expense (income), net & Debt modification and extinguishment costs (gain), net		16,724			20,284			52					20,232
Sundry expense (income), net		348			348			2,863					(2,515	)
Net income (loss) before income taxes		(215,716	)		(227,769	)		(4,863	)		18,472		(241,378	)
Income tax expense (benefit)		5,721			5,721			1,933					3,788
Net income / (loss)	$	(221,437	)	$	(233,490	)	$	(6,796	)	$	18,472	$	(245,166	)

Exela (XELA) 8-KOther Events