Regional Brands (RGBD) 8-K Financial Statements and Exhibits

Exhibit 99.2

Unaudited Pro Forma Combined Consolidated Financial Information

On November 1, 2016, Regional Brands Inc. (“Regional Brands”) acquired a majority interest in B.R. Johnson, LLC (“BRJ LLC”) by contributing $3,808,696 in exchange for 95.22% of BRJ LLC’s preferred membership interest and 76.17% of its common membership interest. In addition, Regional Brands loaned to BRJ LLC $7,141,304 under a senior subordinated term note which bears interest at 6% per annum and has scheduled annual principal payments with the balance due at maturity in five years. BRJ LLC’s minority members contributed $191,304 for the remaining preferred and common membership interests and loaned to BRJ LLC $358,696 on the same terms as the Regional Brands senior subordinated loan pursuant to a participation agreement.

On November 1, 2016, Regional Brands issued 894,393 of its common shares for $13.50 per share in a private placement. Regional Brands’ per share data has been restated to reflect its 1-for-1,000 reverse stock split effective July 2016.

BRJ LLC, on November 1, 2016, acquired substantially all of the assets and assumed specific liabilities of B.R. Johnson, Inc. (“BRJ Inc.”) in an asset purchase transaction in exchange for cash of $12,900,000 and a subordinated note of $2,500,000 (the “Acquisition”). BRJ LLC will operate the business of BRJ Inc. as a consolidated subsidiary of Regional Brands. The Acquisition is being accounted for under the acquisition method of accounting. This results in BRJ LLC allocating the total consideration issued in the Acquisition to the fair value of BRJ Inc.’s assets acquired and liabilities assumed as of the Acquisition date, with any excess purchase consideration being recorded as goodwill.

The unaudited pro forma combined consolidated balance sheet is presented to show how Regional Brands might have looked at June 30, 2016 had the Acquisition occurred as of that date. The unaudited pro forma combined consolidated statements of operations for the year ended December 31, 2015 and the six-month period ended June 30, 2016 are presented to show how Regional Brands might have looked had the Acquisition occurred as of January 1, 2015, the beginning of the presented period.

This pro forma combined consolidated financial information is based on, and should be read in conjunction with, the following:

· The historical audited financial statements of BRJ Inc. as of and for the fiscal year ended December 31, 2015, included as Exhibit 99.1 to this Form 8-K;

· The historical unaudited financial statements of BRJ Inc. as of and for the six months ended June 30, 2016, included as Exhibit 99.1 to this Form 8-K;

· The historical audited financial statements of Regional Brands as of and for the fiscal year ended September 30 2015, included in a Form 10-K filed on January 6, 2016;

· The historical unaudited financial statements of Regional Brands as of and for the six months ended March 31, 2016, included in a Form 10-Q filed on May 13, 2016; and

· The historical unaudited financial statements of Regional Brands as of and for the nine months ended June 30, 2016, included in a Form 10-Q filed on August 15, 2016.

The unaudited pro forma combined consolidated balance sheet was derived from BRJ Inc.’s and Regional Brands’ unaudited financial statements as of June 30, 2016. The unaudited pro forma combined consolidated statement of operations for the fiscal year ended December 31, 2015 was derived from the audited financial statements of BRJ Inc. for the year ended December 31, 2015 and Regional Brands’ audited financial statements for the fiscal year ended September 30, 2015. The unaudited pro forma combined consolidated statement of operations for the six months ended June 30, 2016 was derived from BRJ Inc.’s unaudited financial statements for the six months ended June 30, 2016 and Regional Brands’ unaudited financial statements for the six months ended March 31, 2016.

The unaudited pro forma combined consolidated financial information was prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited pro forma adjustments reflecting the Acquisition have been prepared in accordance with the business combination accounting guidance and reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon the preliminary estimate of fair values, using the assumptions set forth in the notes to the unaudited pro forma combined consolidated financial information. The detailed assumptions used to prepare the unaudited pro forma combined consolidated financial information are contained in the notes hereto and such assumptions should be reviewed in their entirety.

The unaudited pro forma combined consolidated financial information is provided for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Acquisition had been completed during the periods presented above, nor is it indicative of the future results or financial position of the combined company. In connection with the unaudited pro forma combined consolidated financial information, the total purchase consideration was allocated based on the best estimates of fair value. The allocation is dependent upon certain valuation and other analyses that are not yet final. Accordingly, the pro forma acquisition price adjustments are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. There can be no assurances that the final valuations will not result in material changes to the preliminary estimated purchase price allocation. The unaudited pro forma combined consolidated financial information also does not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transaction or any integration costs.

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UNAUDITED PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET REGIONAL BRANDS INC.

June 30, 2016

	B.R. Johnson, Inc.		Regional Brands Inc.			Adjustment Note 1		Adjustment Note 2			Pro Forma
Assets
Current Assets:
Cash and cash equivalents	$	—	$	3,781,361		$	12,074,306	$	(10,950,000	)	$	4,905,667
Investments		—		927,729			—		—			927,729
Accounts Receivable, net		7,760,722		—			—		—			7,760,722
Inventories, net		1,350,855		—			—		—			1,350,855
Costs and estimated earnings in excess of billings on uncompleted contracts		656,987		—			—		—			656,987
Prepaid expenses and other current assets		328,438		—			—		—			328,438
Total current assets		10,097,002		4,709,090			12,074,306		(10,950,000	)		15,930,398
Equipment, net		435,313		—			—		12,399			447,712
Unbilled back log acquired		—		—			—		1,178,033			1,178,033
Goodwill		—		—			—		8,760,255			8,760,255
Other assets		181,826		—			—		(85,160	)		96,666
Total assets	$	10,714,141	$	4,709,090		$	12,074,306	$	(1,084,473	)	$	26,413,064
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit	$	99,810	$	—			—	$	1,450,190		$	1,550,000
Accounts payable		1,129,762		—			—		—			1,129,762
Accrued expenses and other current liabilities		425,635		—			—		530,000			955,635
Working capital liability to Seller				—			—		3,089,828			3,089,828
Accrued distributions to stockholders		684,200		—			—		(684,200	)		—
Billings in excess of costs and estimated earning on uncompleted contracts		534,443		—			—		—			534,443
Total current liabilities		2,873,850		—			—		4,385,818			7,259,668
Senior subordinated note		—		—			—		358,696			358,696
Subordinated term note		—		—			—		2,500,000			2,500,000
Total liabilities		2,873,850		—			—		7,244,514			10,118,364
Stockholders' equity
Class A voting, $100 par value, 200 shares authorized,
100 shares issued and outstanding		10,000		—			—		(10,000	)		—
Class B non-voting, $0.01par value, 200 shares authorized,
100 shares issued and outstanding		1		—			—		(1	)		—
Preferred stock, $0.01 par value; 5,000,000 shares authorized,
none issued and outstanding
Common stock, $0.00001 par value; 50,000,000 shares authorized,
379,702 issued and outstanding		—		4			9		—			13
Additional paid-in capital		311,686		8,207,402			12,074,297		(311,686	)		20,281,699
Non controlling interest consolidated subsidiary		—		—			—		191,304			191,304
Retained earnings		7,518,604		(3,493,929	)		—		(8,198,604	)		(4,173,929	)
Accumulated other comprehensive loss		—		(4,387	)		—		—			(4,387	)
Total stockholders' equity		7,840,291		4,709,090			12,074,306		(8,328,987	)		16,294,700
Total liabilities and stockholders' equity	$	10,714,141	$	4,709,090		$	12,074,306	$	(1,084,473	)	$	26,413,064

Note 1- Reflects the issuance of 894,393 shares of Regional Brands common stock at $13.50 per share in cash in a private placement.

Note 2- Reflects the acquisition of a controlling interest in the business of B.R. Johnson, Inc.

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UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS

REGIONAL BRANDS INC.

Year ended December 31, 2015

	B.R. Johnson, Inc.			Regional Brands Inc.			Adjustment Note 1			Pro Forma
		(as restated)
Net sales	$	27,612,825			—			—		$	27,612,825
Cost of sales		19,234,166			—			—			19,234,166
Gross profit		8,378,659			—			—			8,378,659
Operating expenses:
Selling		3,960,768			—			—			3,960,768
Amortization of unbilled backlog acquired					—		$	942,426			942,426
General and administrative		2,709,955			22,744			—			2,732,699
Total operating expenses		6,670,723			22,744			942,426			7,635,893
Operating income		1,707,936			(22,744	)		(942,426	)		742,766
Other income (expense), net		(11,811	)		(650	)		—			(12,461	)
Interest expense		—			(16,366	)		(199,892	)		(216,258	)
Net income		1,696,125			(39,760	)		(1,142,318	)		514,047
Less earnings attributable to non controlling interest		—			—			(7,652	)		(7,652	)
Net income attributable to common shareholders	$	1,696,125		$	(39,760	)	$	(1,149,970	)	$	506,395
Earnings per share basic and fully diluted	$	8,481		$	(4.29	)		—		$	0.56
Weighted average shares outstanding for basic and fully
diluted earnings per share		200			9,261			894,393			903,654
Note 1- Reflects the issuance of  894,383 shares of Regional Brands common stock in a private placement, the amortization and interest expense resulting from the acquisition of a controlling interest in the business of B.R. Johnson, Inc. and the allocation of net income to the non-controlling interest.

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UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENT OF OPERATIONS REGIONAL BRANDS INC.
Six months ended June 30, 2016

	B.R. Johnson, Inc.		Regional Brands Inc.			Adjustment Note 1			Pro Forma
Net sales	$	17,835,664		—			—		$	17,835,664
Cost of sales		12,687,111		—			—			12,687,111
Gross profit		5,148,553		—			—			5,148,553
Operating expenses:
Selling		2,016,740		—			—			2,016,740
Amortization of unbilled backlog acquired		—		—			706,820			706,820
General and administrative		1,397,875		10,410						1,408,285
Total operating expenses		3,414,615		10,410			706,820			4,131,845
Operating income		1,733,938		(10,410	)		(706,820	)		1,016,708
Other income (expense), net		7,582		666			—			8,248
Interest and debt expense		—		(9,126	)		(99,946	)		(109,072	)
Net income		1,741,520		(18,870	)		(806,766	)		915,884
Less earnings attributable to non controlling interest		—		—			(113,307	)		(113,307	)
Net income attributable to common shareholders	$	1,741,520	$	(18,870	)	$	(920,072	)	$	802,578
Earnings per share basic and fully diluted	$	8,708	$	(2.04	)		—		$	0.89
Weighted average shares outstanding for basic and fully
diluted earnings per share		200		9,261			894,393			903,654
Note 1- Reflects the issuance of  894,383 shares of Regional Brands common stock in a private placement, the amortization and interest expense resulting from the acquisition of a controlling interest in the business of B.R. Johnson, Inc. and the allocation of net income to the non-controlling interest.

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