Exhibit 99.3
BITNILE HOLDINGS, INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Financial Statements
The unaudited pro forma condensed combined financial statements (the “Pro Forma Statements”) presented below are derived from the historical consolidated financial statements of BitNile Holdings, Inc. (“BitNile” or the “Company”) and the combined results of:
· | Middleton Lodging Investors, LLC, a Wisconsin limited liability company founded in August 2002 and operating a 133-room Hilton Garden Inn located at 1801 Deming Street, Middleton, Wisconsin; |
· | Rockford Lodging Investors II, LLC, a Wisconsin limited liability company founded in December 2005 and operating a 135-room Hilton Garden Inn located at 7605 Walton Street, Rockford, Illinois; |
· | Mid Discovery Springs SPE Hotel, LLC, a Wisconsin limited liability company founded in January 2014 and operating a 136-room Courtyard by Marriott located at 2266 Deming Street, Middleton, Wisconsin; and |
· | MLI III SPE Hotel, LLC, a Wisconsin limited liability company founded in January 2014 and operating a 122-room Residence Inn by Marriott located at 8400 Market Street, Middleton, Wisconsin. |
The four companies above are together referred to as the “Madison Hotel Group”.
The Pro Forma Statements are prepared as an asset acquisition reflecting BitNile’s acquisition of the Madison Hotel Group (the “Acquisition”) as if the Acquisition had been completed on January 1, 2020 for statement of income purposes and on September 30, 2021 for balance sheet purposes. The Pro Forma Statements do not give effect to the realization of any expected cost savings or other synergies from the Acquisition as a result of restructuring activities or other cost savings initiatives.
The Pro Forma Statements have been developed from (a) the audited consolidated financial statements of BitNile contained in its Annual Report on Form 10-K for the year ended December 31, 2020 and the unaudited consolidated financial statements of BitNile contained in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2021, and (b) the audited financial statements of Madison Hotel Group for the year ended December 31, 2020 and the unaudited combined financial statements of Madison Hotel Group for the nine months ended September 30, 2021, both of which are contained in this Current Report on Form 8-K. Historical results of Madison Hotel Group have been adjusted to reclassify certain amounts to conform to BitNile’s presentation.
The Pro Forma Statements have been prepared to reflect adjustments to BitNile’s historical consolidated financial information that are (i) directly attributable to the Acquisition, (ii) factually supportable and (iii) with respect to the unaudited pro forma condensed combined statement of income, expected to have a continuing impact on the Company’s results.
The acquired assets of Madison Hotel Group were recorded at their respective fair values as of the date of the Acquisition, December 22, 2021. The values of Madison Hotel Group’s assets and liabilities are based on preliminary valuations, as allowed by U.S. generally accepted accounting principles, and are subject to adjustment as additional information is obtained. The Company cannot provide any assurance that such adjustments will not result in a material change.
The Pro Forma Statements are provided for illustrative purposes only and do not purport to represent what the actual combined results of operations or the combined financial position of BitNile would have been had the Acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position.
The Pro Forma Statements should be read in conjunction with the separate historical consolidated financial statements and accompanying notes of BitNile and the historical combined financial statements and accompanying notes of Madison Hotel Group.
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BITNILE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2021
Historical | Pro Forma | |||||||||||||||
BitNile | Madison Hotel Group | Adjustments | Combined | |||||||||||||
ASSETS | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Cash and cash equivalents | $ | 44,047,000 | $ | 2,176,000 | $ | (25,226,000 | ) | (a) | $ | 20,997,000 | ||||||
Restricted cash | - | 4,756,000 | (173,000 | ) | (b) | 4,583,000 | ||||||||||
Marketable equity securities | 49,931,000 | - | - | 49,931,000 | ||||||||||||
Accounts receivable | 5,115,000 | 422,000 | (422,000 | ) | (c) | 5,115,000 | ||||||||||
Accounts and other receivable, related party | 1,196,000 | - | - | 1,196,000 | ||||||||||||
Accrued revenue | 1,857,000 | - | - | 1,857,000 | ||||||||||||
Inventories | 3,842,000 | - | - | 3,842,000 | ||||||||||||
Prepaid expenses and other current assets | 7,987,000 | 2,985,000 | (1,960,000 | ) | (d) | 9,012,000 | ||||||||||
TOTAL CURRENT ASSETS | 113,975,000 | 10,339,000 | (27,781,000 | ) | 96,553,000 | |||||||||||
�� | ||||||||||||||||
Intangible assets, net | 4,069,000 | - | - | 4,069,000 | ||||||||||||
Goodwill | 9,606,000 | - | - | 9,606,000 | ||||||||||||
Property and equipment, net | 29,550,000 | 24,708,000 | 46,626,000 | (e) | 100,884,000 | |||||||||||
Right-of-use assets | 5,201,000 | - | - | 5,201,000 | ||||||||||||
Investment in promissory notes, related parties | 19,194,000 | - | - | 19,194,000 | ||||||||||||
Investments in common stock and warrants, related parties | 24,911,000 | - | - | 24,911,000 | ||||||||||||
Investments in debt and equity securities | 9,924,000 | - | - | 9,924,000 | ||||||||||||
Investment in limited partnership | 1,869,000 | - | - | 1,869,000 | ||||||||||||
Loans receivable | 5,877,000 | - | - | 5,877,000 | ||||||||||||
Other investments, related parties | 780,000 | - | - | 780,000 | ||||||||||||
Other assets | 765,000 | - | - | 765,000 | ||||||||||||
TOTAL ASSETS | $ | 225,721,000 | $ | 35,047,000 | $ | 18,845,000 | $ | 279,613,000 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Accounts payable and accrued expenses | $ | 9,361,000 | $ | 1,752,000 | $ | (1,752,000 | ) | (f) | $ | 9,361,000 | ||||||
Accounts payable and accrued expenses, related party | 26,000 | - | - | 26,000 | ||||||||||||
Operating lease liability, current | 1,014,000 | - | - | 1,014,000 | ||||||||||||
Revolving credit facility | - | - | - | - | ||||||||||||
Notes payable, net | 1,697,000 | 1,216,000 | (1,216,000 | ) | (g) | 1,697,000 | ||||||||||
Notes payable, related parties | - | 103,000 | (103,000 | ) | (h) | - | ||||||||||
Convertible notes payable, related party | - | - | - | - | ||||||||||||
Warrant liability | 4,322,000 | - | - | 4,322,000 | ||||||||||||
Other current liabilities | 3,608,000 | - | - | 3,608,000 | ||||||||||||
TOTAL CURRENT LIABILITIES | 20,028,000 | 3,071,000 | (3,071,000 | ) | 20,028,000 |
2 |
BITNILE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET - CONTINUED
AS OF SEPTEMBER 30, 2021
Historical | Pro Forma | |||||||||||||||
BitNile | Madison Hotel Group | Adjustments | Combined | |||||||||||||
LONG TERM LIABILITIES | ||||||||||||||||
Operating lease liability, non-current | 4,265,000 | - | - | 4,265,000 | ||||||||||||
Notes payable | - | 42,177,000 | 11,715,000 | (i) | 53,892,000 | |||||||||||
Notes payable, related parties | - | - | - | - | ||||||||||||
Convertible notes payable | 447,000 | - | - | 447,000 | ||||||||||||
TOTAL LIABILITIES | 24,740,000 | 45,248,000 | 8,644,000 | 78,632,000 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||
Series A Convertible Preferred Stock, $25.00 stated value per share, $0.001 par value – 1,000,000 shares authorized; 7,040 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively (redemption amount and liquidation preference of $176,000 as of September 30, 2021 and December 31, 2020) | - | - | - | - | ||||||||||||
Series B Convertible Preferred Stock, $10 stated value per share, share, $0.001 par value – 500,000 shares authorized; 125,000 shares issued and outstanding at September 30, 2021 and December 31, 2020 (liquidation preference of $1,250,000 at September 30, 2021 and December 31, 2020) | - | - | - | - | ||||||||||||
Class A Common Stock, $0.001 par value – 500,000,000 shares authorized; 63,346,921 and 27,753,562 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 63,000 | - | - | 63,000 | ||||||||||||
Class B Common Stock, $0.001 par value – 25,000,000 shares authorized; nil shares issued and outstanding at September 30, 2021 and December 31, 2020 | - | - | - | - | ||||||||||||
Additional paid-in capital | 331,886,000 | - | - | 331,886,000 | ||||||||||||
Members’ deficit | - | (10,201,000 | ) | 10,201,000 | (j) | - | ||||||||||
Accumulated deficit | (120,066,000 | ) | - | - | (120,066,000 | ) | ||||||||||
Accumulated other comprehensive loss | (9,631,000 | ) | - | - | (9,631,000 | ) | ||||||||||
Treasury stock, at cost | (2,773,000 | ) | - | - | (2,773,000 | ) | ||||||||||
TOTAL BITNILE HOLDINGS STOCKHOLDERS’ EQUITY (DEFICIT) | 199,479,000 | (10,201,000 | ) | 10,201,000 | 199,479,000 | |||||||||||
Non-controlling interest | 1,502,000 | - | - | 1,502,000 | ||||||||||||
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 200,981,000 | (10,201,000 | ) | 10,201,000 | 200,981,000 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 225,721,000 | $ | 35,047,000 | $ | 18,845,000 | $ | 279,613,000 |
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BITNILE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENTS OF INCOME AND
COMPREHENSIVE LOSS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
Historical | Pro Forma | |||||||||||||||
BitNile | Madison Hotel Group | Adjustments | Combined | |||||||||||||
Revenue | $ | 24,272,000 | $ | - | $ | - | $ | 24,272,000 | ||||||||
Revenue, hotels | - | 8,885,000 | - | 8,885,000 | ||||||||||||
Revenue, cryptocurrency mining | 693,000 | - | - | 693,000 | ||||||||||||
Revenue, lending activities | 19,615,000 | - | - | 19,615,000 | ||||||||||||
Total revenue | 44,580,000 | 8,885,000 | - | 53,465,000 | ||||||||||||
Cost of revenue | 16,657,000 | - | - | 16,657,000 | ||||||||||||
Gross profit | 27,923,000 | 8,885,000 | - | 36,808,000 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 1,657,000 | - | - | 1,657,000 | ||||||||||||
Selling and marketing | 4,740,000 | - | - | 4,740,000 | ||||||||||||
General and administrative | 24,376,000 | 7,842,000 | 1,690,000 | (k) | 33,908,000 | |||||||||||
Total operating expenses | 30,773,000 | 7,842,000 | 1,690,000 | 40,305,000 | ||||||||||||
Gain (loss) from continuing operations | (2,850,000 | ) | 1,043,000 | (1,690,000 | ) | (3,497,000 | ) | |||||||||
Other income (expenses) | ||||||||||||||||
Interest and other income | 176,000 | 960,000 | - | 1,136,000 | ||||||||||||
Accretion of discount on note receivable, related party | 4,210,000 | 4,210,000 | ||||||||||||||
Interest expense | (475,000 | ) | (1,695,000 | ) | (1,482,000 | ) | (l) | (3,652,000 | ) | |||||||
Change in fair value of marketable equity securities | (705,000 | ) | - | - | (705,000 | ) | ||||||||||
Realized gain on marketable securities | 428,000 | - | - | 428,000 | ||||||||||||
Gain on extinguishment of debt | 929,000 | - | - | 929,000 | ||||||||||||
Change in fair value of warrant liability | (130,000 | ) | - | - | (130,000 | ) | ||||||||||
Total other expenses, net | 4,433,000 | (735,000 | ) | (1,482,000 | ) | 2,216,000 | ||||||||||
Income (loss) from continuing operations before income taxes | 1,583,000 | 308,000 | (3,172,000 | ) | (1,281,000 | ) | ||||||||||
Income tax provision | (144,000 | ) | - | - | (144,000 | ) | ||||||||||
Net income (loss) | 1,439,000 | 308,000 | (3,172,000 | ) | (1,425,000 | ) | ||||||||||
Net loss attributable to non-controlling interest | (93,000 | ) | - | - | (93,000 | ) | ||||||||||
Net income (loss) | 1,346,000 | 308,000 | (3,172,000 | ) | (1,518,000 | ) | ||||||||||
Preferred dividends | (13,000 | ) | - | - | (13,000 | ) | ||||||||||
Net income (loss) available to common stockholders | $ | 1,333,000 | $ | 308,000 | $ | (3,172,000 | ) | $ | (1,531,000 | ) | ||||||
Basic and diluted net income (loss) per common share: | ||||||||||||||||
Net income (loss) per common share - basic | $ | 0.03 | $ | (0.03 | ) | |||||||||||
Net income (loss) per common share - diluted | $ | 0.03 | $ | (0.03 | ) | |||||||||||
Weighted average basic common shares outstanding | 49,714,000 | 49,714,000 | ||||||||||||||
Weighted average diluted common shares outstanding | 50,145,000 | 50,145,000 | ||||||||||||||
Comprehensive income (loss) | ||||||||||||||||
Income (loss) available to common stockholders | $ | 1,333,000 | $ | 308,000 | $ | (3,172,000 | ) | $ | (1,531,000 | ) | ||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | (141,000 | ) | - | - | (141,000 | ) | ||||||||||
Net unrealized loss on derivative securities of related party | (7,773,000 | ) | - | - | (7,773,000 | ) | ||||||||||
Other comprehensive loss | (7,914,000 | ) | - | - | (7,914,000 | ) | ||||||||||
Total comprehensive income (loss) | $ | (6,581,000 | ) | $ | 308,000 | $ | (3,172,000 | ) | $ | (9,445,000 | ) |
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BITNILE HOLDINGS, INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONDENSED COMBINED STATEMENTS OF INCOME AND
COMPREHENSIVE LOSS
FOR THE YEAR ENDED DECEMBER 31, 2020
Historical | Pro Forma | |||||||||||||||
BitNile | Madison Hotel Group | Adjustments | Combined | |||||||||||||
Revenue | $ | 23,629,000 | $ | - | $ | - | $ | 23,629,000 | ||||||||
Revenue, hotels | - | 7,906,000 | - | 7,906,000 | ||||||||||||
Revenue, lending activities | 242,000 | - | - | 242,000 | ||||||||||||
Total revenue | 23,871,000 | 7,906,000 | - | 31,777,000 | ||||||||||||
Cost of revenue | 16,357,000 | - | - | 16,357,000 | ||||||||||||
Gross profit | 7,514,000 | 7,906,000 | - | 15,420,000 | ||||||||||||
Operating expenses | ||||||||||||||||
Research and development | 1,849,000 | - | - | 1,849,000 | ||||||||||||
Selling and marketing | 1,177,000 | - | - | 1,177,000 | ||||||||||||
General and administrative | 12,527,000 | 9,044,000 | 1,942,000 | (k) | 23,513,000 | |||||||||||
Benefit for credit losses | (2,000,000 | ) | - | - | (2,000,000 | ) | ||||||||||
Gain on digital currency | (5,000 | ) | - | - | (5,000 | ) | ||||||||||
Total operating expenses | 13,548,000 | 9,044,000 | 1,942,000 | 24,534,000 | ||||||||||||
Loss from continuing operations | (6,034,000 | ) | (1,138,000 | ) | (1,942,000 | ) | (9,114000 | ) | ||||||||
Other income (expenses) | ||||||||||||||||
Interest income | 105,000 | - | - | 105,000 | ||||||||||||
Interest expense | (9,649,000 | ) | (2,313,000 | ) | (1,924,000 | ) | (l) | (13,886,000 | ) | |||||||
Change in fair value of marketable equity securities | 919,000 | - | - | 919,000 | ||||||||||||
Loss on extinguishment of debt | (18,706,000 | ) | - | - | (18,706,000 | ) | ||||||||||
Change in fair value of warrant liability | (49,000 | ) | - | - | (49,000 | ) | ||||||||||
Total other expenses, net | (27,380,000 | ) | (2,313,000 | ) | (1,924,000 | ) | (31,617,000 | ) | ||||||||
Loss from continuing operations before income taxes | (33,414,000 | ) | (3,451,000 | ) | (3,866,000 | ) | (40,731,000 | ) | ||||||||
Income tax benefit | 24,000 | - | - | 24,000 | ||||||||||||
Net loss from continuing operations | (33,390,000 | ) | (3,451,000 | ) | (3,866,000 | ) | (40,707,000 | ) | ||||||||
Net gain from discontinued operations, net of taxes | 661,000 | - | - | 661,000 | ||||||||||||
Net loss | (32,729,000 | ) | (3,451,000 | ) | (3,866,000 | ) | (40,046,000 | ) | ||||||||
Preferred dividends | (17,000 | ) | - | - | (17,000 | ) | ||||||||||
Net loss available to common stockholders | $ | (32,746,000 | ) | $ | (3,451,000 | ) | $ | (3,866,000 | ) | $ | (40,063,000 | ) | ||||
Basic and diluted net income (loss) per common share: | ||||||||||||||||
Continuing operations | $ | (3.48 | ) | $ | (4.24 | ) | ||||||||||
Discontinued operations | 0.07 | 0.07 | ||||||||||||||
Net loss per common share | $ | (3.41 | ) | $ | (4.17 | ) | ||||||||||
Weighted average common shares outstanding, basic and diluted | 9,606,000 | 9,606,000 | ||||||||||||||
Comprehensive loss | ||||||||||||||||
Loss available to common stockholders | $ | (32,746,000 | ) | $ | (3,451,000 | ) | $ | (3,866,000 | ) | $ | (40,063,000 | ) | ||||
Other comprehensive income | ||||||||||||||||
Foreign currency translation adjustment | 481,000 | - | - | 481,000 | ||||||||||||
Net unrealized gain on derivative securities of related party | 3,312,000 | - | - | 3,312,000 | ||||||||||||
Other comprehensive income | 3,793,000 | - | - | 3,793,000 | ||||||||||||
Total comprehensive loss | $ | (28,953,000 | ) | $ | (3,451,000 | ) | $ | (3,866,000 | ) | $ | (36,270,000 | ) |
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BITNILE HOLDINGS, INC. AND SUBSIDIARIES
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1. Basis of Presentation
The accompanying Unaudited Pro Forma Condensed Combined Financial Statements (the “Pro Forma Statements”) present the pro forma combined financial position and results of operations of the combined company based upon the historical consolidated financial statements of BitNile and combined financial statements of Madison Hotel Group, after giving effect to the Acquisition and adjustments described in these footnotes, and are intended to reflect the impact of the Acquisition on BitNile.
On December 22, 2021, wholly owned subsidiaries of AGREE Madison, LLC, which is a wholly owned subsidiary of Ault Global Real Estate Equities, Inc., which is a wholly owned subsidiary of Ault Alliance, Inc., which is a wholly owned subsidiary of BitNile, entered into construction loan agreements in the aggregate amount of $68,750,000 (the “Loans”) in connection with the Acquisition, as follows:
Borrower | Lender | Property | Loan Amount |
1801 Deming, LLC | PDOF Q4 21 Middleton 1801, LLC | 133-room Hilton Garden Inn 1801 Deming Street, Middleton, WI 53562 | $16,750,000 |
2226 Deming, LLC | PDOF Q4 21 Middleton 2266, LLC | 136-room Courtyard by Marriott 2266 Deming Street, Middleton, WI 53562 | $14,250,000 |
8400 Market, LLC | PDOF Q4 21 Middleton 8400, LLC | 122-room Residence Inn by Marriott 8400 Market Street, Middleton, WI 53562 | $15,375,000 |
7605 Walton, LLC | PDOF Q4 21 Rockford 7605, LLC | 135-room Hilton Garden Inn 7605 Walton Street, Rockford, IL 61108 | $22,375,000 |
The properties were acquired for an aggregate purchase price of $69,200,000, of which $2,500,000 was previously funded on deposit, $21,378,000 was paid by the Company on the closing date, and the remaining amounts were funded from the Loans. The remaining $23,428,000 of the Loans are available to be drawn upon by the Company towards the completion of the $13,700,000 in property improvement plans as well as to fund working capital, interest reserves, franchise fees and other costs and expenses related to the Acquisition.
The Loans are due on January 1, 2025 (the “Maturity Date”), but may be extended for two additional 12-month terms, subject to certain terms and conditions as set forth in the loan agreements. The Loans accrue interest at a rate equal to the greater of (i) the LIBOR Rate plus 675 basis points or (ii) 7% per annum. The Company will make monthly installment payments of interest only, starting January 1, 2022.
The Company paid a loan commitment fee of 1% of the total amount of the Loans on the closing date, and will pay an exit fee of 0.5% of the total amount of the Loans, which is fully earned on the Closing Date but payable on the earlier of the Maturity Date or the date of payment in full of the Loans. The Loans have maximum loan-to-value and loan-to-cost ratios that cannot exceed 75%. The Loans contain customary representations, warranties and covenants for transactions of this nature.
The assets and liabilities of Madison Hotel Group have been reflected on the opening balance sheet. Long-lived assets such as property, plant and equipment reflect a value that a market participant would spend to replace the assets. This approach often results in differences, sometimes material, from recorded book values even if, absent the Acquisition, the assets would be neither increased in value nor impaired.
The accompanying Pro Forma Statements are presented for illustrative purposes only and do not give effect to any cost savings, revenue synergies or restructuring costs which may result from the integration of BitNile’s and Madison Hotel Group’s operations. The accompanying Pro Forma Statements have been adjusted to reflect adjustments to BitNile’s historical consolidated financial information that are (i) directly attributable to the Acquisition, (ii) factually supportable and (iii) to reclassify certain Madison Hotel Group items to conform to BitNile’s presentation. The Unaudited Pro Forma Combined Statements of Income reflect the Acquisition as if it had been completed on January 1, 2021. The Unaudited Pro Forma Condensed Combined Balance Sheet reflects the Acquisition as if it was completed on September 30, 2021.
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Note 2. Preliminary Purchase Price Allocation
The Company has performed a preliminary valuation analysis of the fair market value of the assets acquired. The following table summarizes the preliminary allocation of the purchase price as of the date of the Acquisition. The purchase price consists of $69,200,000 paid to the seller and $2,133,706 of direct transaction costs.
Land | $ | 7,578,990 | ||
Building Improvements | 60,265,347 | |||
Site Improvements | 1,441,999 | |||
Furniture, Fixtures and Equipment | 2,047,370 | |||
Assets acquired | $ | 71,333,706 |
The preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma condensed combined statement of comprehensive income. The final purchase price allocation is subject to change as more detailed analyses are completed and additional information about the fair value of assets acquired becomes available.
Note 3. Pro Forma Adjustments
The pro forma adjustments are based on the Company’s preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:
(a) | Represents cash of $23.1 million paid by the Company upon closing the Acquisition, comprised of $14.1 million paid to the seller, $2.1 million of direct transaction costs, $4.6 million paid for interest and other reserves and included in restricted cash, working capital costs of $1.0 million included in prepaid expenses and the elimination of the $2.2 million Madison Hotel Group cash balance at September 30, 2021; |
(b) | Represents $4.6 million restricted cash related to interest and other reserves and the elimination of the $4.8 million Madison Hotel Group restricted cash balance at September 30, 2021; |
(c) | Represents the elimination of the $422,000 Madison Hotel Group accounts receivable balance at September 30, 2021; |
(d) | Represents $1.0 million of working capital payments made and the elimination of the $3.0 million Madison Hotel Group prepaid expenses and other current assets balance at September 30, 2021; |
(e) | Reflects adjustment of the acquired hotel property, plant and equipment to estimated fair value of $71.3 million as of the date of Acquisition. |
(f) | Represents the elimination of the $1.8 million Madison Hotel Group accounts payable and accrued expenses balance at September 30, 2021; |
(g) | Represents the elimination of the $1.2 million Madison Hotel Group current notes payable balance at September 30, 2021; |
(h) | Represents the elimination of the $103,000 Madison Hotel Group notes payable, related party balance at September 30, 2021; |
(i) | Represents the adjustment of notes payable to a total balance of $53.9 million, which consist of the $55.1 million notes used to finance the Acquisition offset by the debt discount of $1.2 million from loan origination and placement fees; |
(j) | Represents the elimination of the $10.2 million Madison Hotel Group members’ equity balance at September 30, 2021; |
(k) | Represents an increase in pro forma depreciation expense related to the acquired hotel property, plant and equipment to estimated fair value of $71.3 million as of the date of Acquisition. Estimated useful lives of the acquired assets are: |
· | 1.5 years for furniture, fixtures and equipment, |
· | 6-10 years for site improvements, and |
· | 29-39 years for building and improvements. |
(l) | Represents an increase in pro forma interest expense related to the notes payable of $55.1 million used to finance the Acquisition. |
7