UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS AND FINANCIAL DATA
Balance Sheet
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of SEPTEMBER 30, 2019
| | | Sep 30, 2019 | |
| | | MPI | | | USAE | | | Adjustments | | | Total | |
| | | | | | | | | | | | | |
| Assets | | | | | | | | | | | | | | | | |
| Current Assets | | | | | | | | | | | | | | | | |
| Cash | | $ | 0 | | | $ | 1,170 | | | $ | 0 | | | $ | 1,170 | |
| Due from related party | | | 10,285 | | | | 0 | | | | 0 | | | | 10,285 | |
| Prepayments | | | 0 | | | | 4,125 | | | | 0 | | | | 4,125 | |
| Total Current Assets | | | 10,285 | | | | 5,295 | | | | 0 | | | | 15,580 | |
| Total Assets | | $ | 10,285 | | | $ | 5,295 | | | $ | 0 | | | $ | 15,580 | |
| | | | | | | | | | | | | | | | | |
| Liabilities and Equity | | | | | | | | | | | | | | | | |
| Liabilities | | | | | | | | | | | | | | | | |
| Current Liabilities | | | | | | | | | | | | | | | | |
| Accounts payable and other current liabilities | | $ | 5,194 | | | $ | 2,176 | | | $ | 0 | | | $ | 7,370 | |
| Advances from and accruals due to related party | | | 58,414 | | | | 7,000 | | | | 0 | | | | 65,414 | |
| Total Current Liabilities | | | 63,608 | | | | 9.176 | | | | 0 | | | | 72,784 | |
| Long Term Liabilities | | | | | | | | | | | | | | | | |
| Accrued interest expense | | | 69 | | | | 89,507 | | | | 0 | | | | 89,576 | |
| Notes payable | | | 20,000 | | | | 198,062 | | | | 0 | | | | 218,062 | |
| Total Long Term Liabilities | | | 20,069 | | | | 287,569 | | | | 0 | | | | 307,638 | |
| Total Liabilities | | | 83,677 | | | | 296,745 | | | | 0 | | | | 380,422 | |
| Equity | | | | | | | | | | | | | | | | |
| Preferred Stock | | | 0 | | | | 108 | | | | 0 | | | | 108 | |
| Common Stock | | | 217 | | | | 359 | | | | 0 | | | | 576 | |
| Additional Paid-in Capital | | | 0 | | | | 990,856 | | | | 0 | | | | 990,856 | |
| Retained Earnings | | | (73,609 | ) | | | (1,282,773 | ) | | | 0 | | | | (1,356,382 | ) |
| Total Equity | | | (73,392 | ) | | | (291,450 | ) | | | 0 | | | | (364,842 | ) |
| Total Liabilities and Equity | | $ | 10,285 | | | $ | 5,295 | | | $ | 0 | | | $ | 15,580 | |
USA EQUITIES CORP
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2019
| | | September 30, 2019 | |
| | | MPI | | | USAE | | | Adjustments | | | Total | |
| | | | | | | | | | | | | |
| Revenue | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | | | | | |
| Costs and Expenses | | | | | | | | | | | | | | | | |
| Research and development | | | 72,721 | | | | 0 | | | | 0 | | | | 72,721 | |
| General and administrative | | | 819 | | | | 19,563 | | | | 0 | | | | 20,382 | |
| Interest Expense | | | 69 | | | | 8,394 | | | | 0 | | | | 8,463 | |
| Net loss | | $ | 73,609 | | | $ | 27,957 | | | $ | 0 | | | $ | 101,566 | |
| | | | | | | | | | | | | | | | | |
| Earnings Per Share | | | | | | | | | | | | | | | | |
| Basic and diluted net loss | | $ | (0.03 | ) | | $ | (0.01 | ) | | | | | | $ | (0.02 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: (Basic and diluted) | | | 2,172,600 | | | | 3,590,135 | | | | | | | | 5,762,735 | |
Cash Flow Statement
Pro Forma - MPI and USA Equities Corp
For the nine months ended September 30, 2019
| | | September 30, 2019 | |
| | | MPI | | | USAE | | | Adjustments | | | Total | |
| | | | | | | | | | | | | |
| Operating Activities | | | | | | | | | | | | | | | | |
| Net income | | $ | (73,609 | ) | | $ | (27,957 | ) | | $ | 0 | | | $ | (101,566 | ) |
| Changes in net assets and liabilities | | | | | | | | | | | | | | | | |
| Increase in accrued interest | | | 69 | | | | 0 | | | | 0 | | | | 69 | |
| Increase in due from related party | | | (10,285 | ) | | | 0 | | | | 0 | | | | (10,285 | ) |
| Increase in prepaid expenses | | | 0 | | | | (2,375 | ) | | | 0 | | | | (2,375 | ) |
| Increase in accounts payable and accrued expenses | | | 5,194 | | | | 9,917 | | | | 0 | | | | 15,111 | |
| Net cash provided by operating activities | | | (78,631 | ) | | | (20,415 | ) | | | 0 | | | | (99,046 | ) |
| | | | | | | | | | | | | | | | | |
| Financing Activities | | | | | | | | | | | | | | | | |
| Proceeds of related party borrowings | | | 58,414 | | | | 21,585 | | | | 0 | | | | 79,999 | |
| Proceeds from sales of common stock | | | 217 | | | | 0 | | | | 0 | | | | 217 | |
| Issuance of convertible note payable, related party | | | 20,000 | | | | 0 | | | | 0 | | | | 20,000 | |
| Net cash provided by financing activities | | | 78,631 | | | | 21,585 | | | | 0 | | | | 100,216 | |
| | | | | | | | | | | | | | | | | |
| Change in cash | | | 0 | | | | 1,170 | | | | 0 | | | | 1,170 | |
| Cash - beginning of period | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Cash - end of period | | $ | 0 | | | $ | 1,170 | | | $ | 0 | | | $ | 1,170 | |
| | | | | | | | | | | | | | | | | |
| Noncash Investing and financing activity: | | | | | | | | | | | | | | | | |
| Conversion of due to related party to long-term debt | | | - | | | $ | 124,562 | | | | - | | | $ | 124,562 | |
| | | | | | | | | | | | | | | | | |
| Long-term debt and accrued interest converted to shares of preferred stock | | | - | | | $ | 270,023 | | | | - | | | $ | 270,023 | |
USA Equities Corp
Pro Forma Condensed Combined Financial Statements
(Unaudited)
On December 20, 2019, Medical Practice Income (“MPI”) and its shareholders entered into a share Exchange Agreement with USA Equities Corp (“we,” “our,” “us,” the “Company” or the “Registrant”). pursuant to which MPI became a wholly-owned subsidiary of USA Equities Corp. Pursuant to the Exchange Agreement, USA Equities Corp. shall issue 2,172,600 newly-issued shares of common stock, on a pro rata basis, to the equity holders of MPI (the “Exchange”).
The Company did not incur material costs associated with the Exchange Agreement.
The unaudited pro forma condensed combined financial statements are presented to illustrate the effects of the Exchange on USA Equities Corp.’s historical results of operations:
Unaudited condensed consolidated financial statements as of and for the nine months ended September 30, 2019
The historical condensed consolidated financial information of USA Equities Corp. has been adjusted in the Unaudited Pro Forma Financial Information to give effect to pro forma events that are (1) directly attributable to the acquisition of MPI by USA Equities, (2) factually supportable and (3) with respect to the consolidated statement of operations, expected to have a continuing impact on the combined results of USA Equities Corp. and MPI. Because there are no pro forma events directly attributable to the acquisition of MPI that are expected to have a continuing impact on the combined results of the Company and MPI, no adjustments have been made to the Pro Forma Financial Information and there are no notes necessary to describe such events. The unaudited pro forma condensed combined consolidated statements of operations (Unaudited Pro Forma Statements of Operations) have been prepared assuming the Exchange had been completed on January 1, 2019, the first day of USA Equities Corp’s fiscal year. The Unaudited Pro Forma Financial Information has been adjusted with respect to certain aspects of the combination to reflect the consummation of the Exchange.
The Unaudited Pro Forma Financial Information was prepared in accordance with the regulations of the United States Securities and Exchange Commission (SEC), and is not necessarily indicative of the financial position or results of operations that would have occurred if the Exchange had been completed on the dates indicated, nor is it indicative of the consolidated future operating results or financial position of the consolidated company.
The Unaudited Pro Forma Financial Information does not reflect events that may occur after the Exchange.
1. BASIS OF PRESENTATION
The Unaudited Pro Forma Financial Information presents the impact of the Exchange on the Company’s (USA Equities Corp) results of operations. The pro forma adjustments have been prepared as if the December 20, 2019, Exchange with USA Equities Corp. had taken place as of January 1, 2019. The consolidation is reflected in the Unaudited Pro Forma Financial Information as being accounted for as a reverse merger, with USA Equities Corp. as the surviving company, in accordance with guidance on accounting for business combinations under accounting principles generally accepted in the United States (US GAAP).
Prior to the Acquisition, Troy Grogan, the president and owner of the majority of Class A voting shares of MPI, owned 3,260,000 shares of our common stock, representing approximately 91% of our outstanding shares. Mr. Grogan is our President, Chief Executive Officer and sole director. The acquisition effected through the Exchange Agreementwas accounted for as a reorganization of equity interests under common control, whereby MPI was the continuing entity for financial reporting purposes and was deemed, for accounting purposes, to be the acquirer of our company. Although we legally acquired MPI, in accordance with the applicable accounting guidance for accounting for a business combination as a pooling of interests, MPI’s assets and liabilities were recorded at their historical carrying amounts, with no goodwill or other intangible assets recorded as a result of the accounting merger of MPI with our company.
In accordance with the guidance on accounting for business combinations, exchange-related transaction costs associated with business combinations are not included as components of consideration transferred but are accounted for as expenses in the period in which the costs are incurred. Total exchange-related transaction costs incurred were immaterial.
The Unaudited Pro Forma Financial Information are presented for illustrative purposes only and are not necessarily indicative of the operating results that would have been achieved had the merger been completed as of the date indicated above or the results that may be attained in the future.
