Exhibit 99.3
MFIC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 2002
|
| HISTORICAL |
| PRO FORMA |
| PRO FORMA |
| |||
|
|
|
|
|
|
|
| |||
SALES |
| $ | 14,573,382 |
| $ | -5,059,202 |
| $ | 9,514,180 |
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|
|
|
|
|
|
|
| |||
COST OF GOODS SOLD |
| 8,064,758 |
| -3,626,407 |
| 4,438,351 |
| |||
|
|
|
|
|
|
|
| |||
GROSS PROFIT |
| 6,508,624 |
| -1,432,795 |
| 5,075,829 |
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|
|
|
|
|
|
|
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OPERATING EXPENSES |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
ENGINEERING |
| 906,494 |
| -322,811 |
| 583,683 |
| |||
SELLING |
| 3,093,293 |
| -1,006,746 |
| 2,086,547 |
| |||
GENERAL & ADMINISTRATIVE |
| 2,189,164 |
| -425,280 |
| 1,763,884 |
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|
|
|
|
|
|
|
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TOTAL OPERATING EXPENSES |
| 6,188,951 |
| -1,754,837 |
| 4,434,114 |
| |||
|
|
|
|
|
|
|
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INCOME FROM CONTINUING OPERATIONS |
| 319,673 |
| 322,042 |
| 641,715 |
| |||
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|
|
|
|
|
|
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COSTS ASSOCIATED WITH SALE OF DISCONTINUED OPERATION |
|
|
| -125,000 |
| -125,000 |
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|
|
|
|
|
|
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INTEREST INCOME |
| 7,191 |
|
|
| 7,191 |
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|
|
|
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INTEREST EXPENSE- CORPORATE |
| -179,429 |
| 35,980 |
| -143,449 |
| |||
|
|
|
|
|
|
|
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NET INCOME BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE |
| 147,435 |
| 233,022 |
| 380,457 |
| |||
|
|
|
|
|
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|
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CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE |
| -2,661,409 |
| 2,661,409 |
| 0 |
| |||
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|
|
|
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|
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NET (LOSS) INCOME |
| $ | -2,513,974 |
| $ | 2,894,431 |
| $ | 380,457 |
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
|
|
|
|
|
|
| |||
BASIC |
| 7,426,586 |
|
|
| 7,426,586 |
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DILUTED |
| 7,470,090 |
|
|
| 7,470,090 |
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|
|
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NET INCOME PER SHARE FROM CONTINUING OPERATIONS |
|
|
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|
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BASIC |
| $ | 0.02 |
|
|
| $ | 0.09 |
| |
DILUTED |
| $ | 0.02 |
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|
| $ | 0.09 |
| |
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NET (LOSS) INCOME PER SHARE |
|
|
|
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|
|
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BASIC |
| $ | (0.34 | ) |
|
| $ | 0.05 |
| |
DILUTED |
| $ | (0.34 | ) |
|
| $ | 0.05 |
| |
MFIC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2003
|
| HISTORICAL |
| PRO FORMA |
| PRO FORMA |
| |||
|
|
|
|
|
|
|
| |||
SALES |
| $ | 10,560,353 |
| $ | -2,578,473 |
| $ | 7,981,880 |
|
|
|
|
|
|
|
|
| |||
COST OF GOODS SOLD |
| 5,740,834 |
| -1,875,399 |
| 3,865,435 |
| |||
|
|
|
|
|
|
|
| |||
GROSS PROFIT |
| 4,819,519 |
| -703,074 |
| 4,116,445 |
| |||
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|
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|
|
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|
| |||
OPERATING EXPENSES |
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
| |||
ENGINEERING |
| 785,332 |
| -230,670 |
| 554,662 |
| |||
SELLING |
| 2,256,731 |
| -639,733 |
| 1,616,998 |
| |||
GENERAL & ADMINISTRATIVE |
| 1,593,867 |
| -321,865 |
| 1,272,002 |
| |||
|
|
|
|
|
|
|
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TOTAL OPERATING EXPENSES |
| 4,635,930 |
| -1,192,268 |
| 3,443,662 |
| |||
|
|
|
|
|
|
|
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INCOME FROM CONTINUING OPERATIONS |
| 183,589 |
| 489,194 |
| 672,783 |
| |||
|
|
|
|
|
|
|
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INTEREST INCOME |
| 6,965 |
|
|
| 6,965 |
| |||
|
|
|
|
|
|
|
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INTEREST EXPENSE- CORPORATE |
| -89,589 |
| 17,444 |
| -72,145 |
| |||
|
|
|
|
|
|
|
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NET INCOME |
| $ | 100,965 |
| $ | 506,638 |
| $ | 607,603 |
|
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|
|
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES |
|
|
|
|
|
|
| |||
BASIC |
| 7,468,203 |
|
|
| 7,468,203 |
| |||
DILUTED |
| 7,661,476 |
|
|
| 7,661,476 |
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|
|
|
|
|
|
|
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NET INCOME PER SHARE |
|
|
|
|
|
|
| |||
BASIC |
| $ | 0.01 |
|
|
| $ | 0.08 |
| |
DILUTED |
| $ | 0.01 |
|
|
| $ | 0.08 |
| |
MFIC CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2003
|
| HISTORICAL |
| PRO FORMA |
| PRO FORMA |
| |||
|
|
|
|
|
|
|
| |||
ASSETS |
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CURRENT ASSETS |
|
|
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|
|
|
| |||
CASH AND CASH EQUIVALENTS |
| $ | 104,080 |
| $ | 85,326 |
| $ | 189,406 |
|
ACCOUNTS RECEIVABLE - TRADE |
| 1,481,725 |
| -326,523 |
| 1,155,202 |
| |||
RESERVE FOR DOUBTFUL ACCOUNTS |
| -54,611 |
| 11,111 |
| -43,500 |
| |||
INVENTORY |
| 4,156,104 |
| -1,991,359 |
| 2,164,745 |
| |||
PREPAID EXPENSES AND OTHER CURRENT ASSETS |
| 282,791 |
| -22,326 |
| 260,465 |
| |||
TOTAL CURRENT ASSETS |
| 5,970,089 |
| -2,243,771 |
| 3,726,318 |
| |||
|
|
|
|
|
|
|
| |||
FIXED ASSETS-GROSS |
| 861,671 |
| -341,735 |
| 519,936 |
| |||
ACCUMULATED DEPRECIATION |
| -552,815 |
| 201,111 |
| -351,704 |
| |||
|
| 308,856 |
| -140,624 |
| 168,232 |
| |||
|
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NOTES RECEIVABLE- NUSIL |
|
|
| 100,000 |
| 100,000 |
| |||
|
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|
|
|
|
|
| |||
GOODWILL |
| 2,100,000 |
| -2,100,000 |
| 0 |
| |||
|
|
|
|
|
|
|
| |||
INTANGIBLES AND OTHER ASSETS |
| 115,797 |
|
|
| 115,797 |
| |||
|
|
|
|
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|
|
| |||
TOTAL ASSETS |
| 8,494,742 |
| -4,384,395 |
| 4,110,347 |
| |||
|
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|
| |||
LIABILITIES AND EQUITY |
|
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CURRENT LIABILITIES |
|
|
|
|
|
|
| |||
LINE OF CREDIT |
| 2,236,331 |
| -818,238 |
| 1,418,093 |
| |||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES |
| 1,585,570 |
| -498,057 |
| 1,087,513 |
| |||
CUSTOMER ADVANCES |
| 272,984 |
| -159,033 |
| 113,951 |
| |||
CURRENT PORTION-LONG TERM DEBT |
| 157,486 |
| 0 |
| 157,486 |
| |||
TOTAL CURRENT LIABILITIES |
| 4,252,371 |
| -1,475,328 |
| 2,777,043 |
| |||
|
|
|
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| |||
LONG TERM DEBT |
| 25,000 |
|
|
| 25,000 |
| |||
|
|
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|
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STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
| |||
TREASURY STOCK |
| -687,701 |
|
|
| -687,701 |
| |||
COMMON STOCK |
| 77,493 |
|
|
| 77,493 |
| |||
APIC |
| 12,959,116 |
|
|
| 12,959,116 |
| |||
ACCUMULATED DEFICIT |
| -8,131,537 |
| -2,909,067 |
| -11,040,604 |
| |||
|
|
|
|
|
|
|
| |||
TOTAL LIABILITIES AND EQUITY |
| $ | 8,494,742 |
| $ | -4,384,395 |
| $ | 4,110,347 |
|
MFIC CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. The Company has sold the Morehouse-COWLES Division (“M/C”) for $818,238 in cash, and a $100,000 promissory note due one year from the date of sale. Proceeds were used from the sale to pay down a line of credit. The pro forma financial statements assume the following:
The sale is assumed to have generated a loss on the disposition of approximately $809,000.
Adjustments have been recorded in the unaudited pro forma condensed consolidated financial statements to reflect the receipt of the net proceeds, the disposition of the net assets of the business and the recording of accruals to cover the costs associated with the transaction.
A reduction in interest expense has been recorded in the pro forma financial statements on the assumption that, if the transaction had occurred prior to January 1, 2002, the proceeds would be used to reduce the Company’s borrowings under its line of credit with its lender.
Due to the sale of M/C, Goodwill associated with the purchase of this division has been written off in the amount of $2,100,000.
Costs associated with this transaction in the amount of approximately $125,000 have been recorded as a pro forma adjustment.
