Exhibit 99.3
ENERGIE HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
As used in this report, we, us, our, Energie Holdings or Company refer to Energie Holdings, Inc. The unaudited pro forma condensed combined financial statements present the impact on our financial position and results of operations from our acquisition of 100% of the membership interest in Energie LLC. We paid a purchase price of 33,000,000 shares of Energie Holdings common stock.
The pro forma financial statements as of March 31, 2014, for the three months ended March 31, 2014, and for the year ended December 31, 2013, have been prepared based on certain pro forma adjustments to our historical financial statements set forth in our Annual Report on Form 10-K for the year ended December 31, 2013, and our Quarterly Report on Form 10-Q for the three-month period ended March 31, 2014, as filed with the Securities and Exchange Commission, and are qualified in their entirety by reference to such historical financial statements and related notes contained in those reports. The historic financial statements for Energie LLC were derived from audited financial statements for the year ended December 31, 2013. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical consolidated financial statements and related notes thereto.
The unaudited pro forma condensed combined balance sheet has been prepared as if the transaction had occurred as of March 31, 2014. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on January 1, 2013.
These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed at the dates indicated or what would be any future periods. The consideration given and the purchase price allocation in these pro formas is based on preliminary estimated fair values. We have not completed our determination of the fair value of the consideration given or the net assets acquired. Accordingly, the fair value of consideration given and the allocation of purchase price is preliminary and subject to adjustments. Upon completion of our valuation analysis, the fair value of the consideration given and the allocation of purchase price may change significantly. Such changes may include, but not be limited to, the fair value of intangible assets and goodwill, and potential impairment charges.
ENERGIE HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 2014
| | | Energie
Holdings | | Energie
LLC
(a) | | Pro Forma Adjustments | | Energie Holdings Pro Forma |
| Assets | | | | | | | | | | | | | | | | |
| Current assets: | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | — | | | $ | 10,416 | | | $ | 27,458 | (b) | | $ | 37,874 | |
| Accounts receivable, net | | | — | | | | 1,040,723 | | | | (326,215) | (b) | | | 466,324 | |
| | | | | | | | | | | | (248,184) | (c) | | | | |
| Inventory | | | — | | | | 404,346 | | | | 9,962 | (b) | | | 414,308 | |
| Prepaid expenses | | | — | | | | 8,917 | | | | 7,005 | (b) | | | 15,922 | |
| Total current assets | | | — | | | | 1,464,402 | | | | (529,974 | ) | | | 934,428 | |
| | | | | | | | | | | | | | | | | |
| Goodwill and intangible assets | | | — | | | | 1,100,408 | | | | 4,000,965 | (b) | | | 5,101,373 | |
| Property and equipment, net | | | — | | | | 6,237 | | | | 17,184 | (b) | | | 23,421 | |
| Other | | | — | | | | 11,695 | | | | — | | | | 11,695 | |
| | | | | | | | | | | | | | | | | |
| Total assets | | $ | — | | | $ | 2,582,742 | | | | 3,488,175 | | | $ | 6,070,917 | |
| | | | | | | | | | | | | | | | | |
| Liabilities and Equity | | | | | | | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | | | | | | | |
| Accounts payable | | $ | 248,184 | | | $ | 847,307 | | | | (252,105) | (b) | | $ | 595,202 | |
| | | | | | | | | | | | (248,184) | (c) | | | | |
| Other | | | — | | | | 102,184 | | | | (10,217) | | | | 91,967 | |
| Notes payable | | | — | | | | 4,316,496 | | | | (334,564) | (b) | | | 3,981,932 | |
| Total current liabilities | | | 248,184 | | | | 5,265,987 | | | | (845,070) | | | | 4,669,101 | |
| | | | | | | | | | | | | | | | | |
| Equity: | | | | | | | | | | | | | | | | |
| Energie Holdings, Inc. | | | (248,184 | ) | | | — | | | | 1,650,000 | (b) | | | 1,401,816 | |
| Energie LLC | | | — | | | | (2,683,245 | ) | | | 2,683,245 | (b) | | | — | |
| Total equity | | | (248,184 | ) | | | (2,683,245 | ) | | | 4,333,245 | | | | 1,401,816 | |
| | | | | | | | | | | | | | | | | |
| Total liabilities and equity | | $ | — | | | $ | 2,582,742 | | | $ | 3,488,175 | | | $ | 6,070,917 | |
| | | | | | | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed combined financial statements.
ENERGIE HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Three months ended March 31, 2014
| | | Energie
Holdings | | Energie
LLC
(a) | | Pro Forma Adjustments | | Energie Holdings Pro Forma |
| Revenue | | $ | — | | | $ | 164,609 | | | $ | — | | | $ | 164,609 | |
| Cost of revenue | | | — | | | | (70,102 | ) | | | — | | | | (70,102 | ) |
| Gross profit | | | — | | | | 94,507 | | | | — | | | | 94,507 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Commissions | | | — | | | | 26,673 | | | | — | | | | 26,673 | |
| Compensation | | | — | | | | 125,283 | | | | — | | | | 125,283 | |
| Depreciation and amortization | | | — | | | | 42,254 | | | | (25,070) | (d) | | | 17,184 | |
| General and administrative | | | — | | | | 38,352 | | | | — | | | | 38,352 | |
| Professional fees | | | 173,425 | | | | 5,799 | | | | (173,425) | (c) | | | 5,799 | |
| Rent | | | — | | | | 53,666 | | | | — | | | | 53,666 | |
| Travel | | | — | | | | 6,207 | | | | — | | | | 6,207 | |
| Total operating expenses | | | 173,425 | | | | 298,234 | | | | (198,495) | | | | 273,164 | |
| | | | | | | | | | | | | | | | | |
| Loss from operations | | | (173,425 | ) | | | (203,727 | ) | | | 198,495 | | | | (178,657 | ) |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | — | | | | (87,570 | ) | | | — | | | | (87,570 | ) |
| Other income (expense) | | | — | | | | 26,524 | | | | (173,425) | (c) | | | (146,901 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (173,425 | ) | | $ | (264,773 | ) | | $ | 25,070 | | | $ | (413,128 | ) |
| | | | | | | | | | | | | | | | | |
Net loss per share
Basic and diluted | | $ | (0.01 | ) | | | | | | | | | | $ | (0.01 | ) |
| | | | | | | | | | | | | | | | | |
Shares outstanding
Basic and diluted | | | 19,429,347 | | | | | | | | | | | | 51,400,000 | |
| | | | | | | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed combined financial statements.
ENERGIE HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
Year ended December 31, 2013
| | | Energie
Holdings | | Energie
LLC
(a) | | Pro Forma Adjustments | | Energie Holdings Pro Forma |
| Revenue | | $ | — | | | $ | 1,733,373 | | | $ | — | | | $ | 1,733,373 | |
| Cost of revenue | | | — | | | | (758,739 | ) | | | — | | | | (758,739 | ) |
| Gross profit | | | — | | | | 974,634 | | | | — | | | | 974,634 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Commissions | | | — | | | | 372,954 | | | | — | | | | 372,954 | |
| Compensation | | | — | | | | 600,786 | | | | — | | | | 600,786 | |
| Depreciation and amortization | | | — | | | | 238,053 | | | | (227,267) | (d) | | | 10,786 | |
| Impairment | | | — | | | | — | | | | 5,101,373 | (d) | | | 5,101,373 | |
| General and administrative | | | — | | | | 161,567 | | | | — | | | | 161,567 | |
| Professional fees | | | 184,299 | | | | 22,746 | | | | (184,299) | (c) | | | 22,746 | |
| Rent | | | — | | | | 217,088 | | | | — | | | | 217,088 | |
| Travel | | | — | | | | 8,502 | | | | — | | | | 8,502 | |
| Total operating expenses | | | 184,299 | | | | 1,621,696 | | | | 4,689,807 | | | | 6,495,802 | |
| | | | | | | | | | | | | | | | | |
| Loss from operations | | | (184,299 | ) | | | (647,062 | ) | | | (4,689,807) | | | | (5,521,168 | ) |
| | | | | | | | | | | | | | | | | |
| Interest expense | | | — | | | | (421,787 | ) | | | — | | | | (421,787 | ) |
| Other income (expense) | | | — | | | | 114,251 | | | | (184,299) | (c) | | | (70,048 | ) |
| | | | | | | | | | | | | | | | | |
| Net loss | | $ | (184,299 | ) | | $ | (954,598 | ) | | $ | (4,874,106) | | | $ | (6,013,003 | ) |
| | | | | | | | | | | | | | | | | |
Net loss per share
Basic and diluted | | $ | (0.00 | ) | | | | | | | | | | $ | (0.12 | ) |
| | | | | | | | | | | | | | | | | |
Shares outstanding
Basic and diluted | | | 39,638,991 | | | | | | | | | | | | 51,000,000 | |
| | | | | | | | | | | | | | | | | |
See accompanying notes to unaudited pro forma condensed combined financial statements.
Note 1. Basis of Presentation
The historical financial information is derived from our historical financial statements and the historical financial statements of Energie LLC. The pro forma adjustments have been prepared as if we acquired Energie LLC on March 31, 2014, for the balance sheet, and on January 1, 2013, for the statements of operations.
The pro forma combined financial statements reflect the following the acquisition of 100% of the member interest in Energie LLC in exchange for 33,000,000 shares of Energie Holdings, Inc. common stock.
Note 2. Pro Forma Adjustments and Assumptions
(a) Reflects 100% of the assets, liabilities, income and expenses of Energie LLC.
(b) The total purchase price of $1,650,000 is based on the issuance of 33,000,000 shares of Energie Holdings, Inc. at the closing price of the Company’s stock on December 31, 2013, of $0.05 per common share. The following reflects the allocation of the consideration as of December 31, 2013, subject to adjustments arising from final determination of the fair value of the consideration transferred and the allocation of purchase price to the acquired assets and liabilities:
| Consideration: | |
| Energie Holdings common stock | $ 1,650,000 |
| |
| Allocation of purchase price: | |
| Cash | $ 37,874 |
| Accounts receivable | 714,508 |
| Inventory | 414,308 |
| Prepaid expenses | 15,922 |
| Goodwill and intangible assets | 5,101,373 |
| Property and equipment | 23,421 |
| Deposits | 11,695 |
| Accounts payable | (522,202) |
| Commissions payable | (91,967) |
| Debt | (3,981,932) |
| $ 1,650,000 |
The acquisition of Energie LLC was accounted for under the purchase method of accounting. The consideration transferred and the purchase price allocation in these pro formas is based on preliminary estimated fair values.
We have not completed our determination of the fair value of the consideration transferred or the net assets acquired. Accordingly, the fair value of consideration given and the allocation of purchase price is preliminary and subject to adjustments. Upon completion of our valuation analysis, the fair value of the consideration given and the allocation of purchase price may change significantly. Such changes may include, but not be limited to, the fair value of intangible assets and goodwill, and potential impairment charges.
(c) Reflects elimination of intercompany transactions.
(d) We performed a preliminary impairment assessment of Goodwill and intangible assets, and estimate that they are fully impaired. This adjustment reflects the impairment of Goodwill and intangible assets, and elimination of the historic amortization expense.
Note 3. Net Loss Per Share
The following table illustrates our calculation of pro forma net loss per share:
| Year ended December 31, 2013 | Three months ended March 31, 2014 |
| Pro forma net loss | $ (6,013,003) | $ (413,128) |
| | |
| Weighted-average shares outstanding: |
| Previously reported | 39,638,991 | 19,429,347 |
| Incremental shares | 11,361,009 | 31,970,653 |
| Pro forma shares | 51,000,000 | 51,400,000 |
| | |
Net loss per share Basic and diluted | $ (0.12) | $ (0.01) |
| | |
Incremental shares are less than the amount issued for the transaction, because shares held in escrow for the transaction were included in the previously reported weighted-average shares outstanding.
