GlyEco, Inc. & Subsidiaries
Proforma Financial Information
December 31, 2011
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| Pro-forma Consolidated Balance Sheets - December 31, 2011 | 1 |
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| Pro-forma Consolidated Statements of Operations - for the year December 31, 2011 | 2 |
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| Notes to Pro-forma (Unaudited) Consolidated Financial Statements | 3 |
| GlyEco, Inc. & Subsidiaries | |
| Proforma Consolidated Balance Sheets | |
| December 31, 2011 | |
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| | | GlyEco, | | | Recycool, | | | Pro-forma | | | Pro-forma | |
| | | Inc. | | | Inc. | | | Adjustments | | | Consolidated | |
| | | (A) | | | (B) | | | | | | | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
| ASSETS | | | | | | | | | | | | |
| Current assets | | | | | | | | | | | | |
| Cash | | $ | 577,127 | | | $ | 43,033 | | | $ | - | | | $ | 620,160 | |
| Accounts receivable | | | 35,098 | | | | 47,338 | | | | - | | | | 82,436 | |
| Inventory | | | - | | | | 10,390 | | | | - | | | | 10,390 | |
| Prepaid expenses | | | - | | | | 2,353 | | | | - | | | | 2,353 | |
| Total current assets | | | 612,225 | | | | 103,114 | | | | - | | | | 715,339 | |
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| Property, plant and equipment | | | | | | | | | | | | | | | | |
| Plant and equipment | | | - | | | | 279,263 | | | | - | | | | 279,263 | |
| Accumulated depreciation | | | - | | | | (133,416 | ) | | | - | | | | (133,416 | ) |
| Property plant and equipment net | | | - | | | | 145,847 | | | | - | | | | 145,847 | |
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| Total assets | | $ | 612,225 | | | $ | 248,961 | | | $ | - | | | $ | 861,186 | |
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| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | | | | | | | | | | | | | | | | |
| Current liabilities | | | | | | | | | | | | | | | | |
| Accounts payable | | $ | 212,749 | | | $ | 4,031 | | | $ | - | | | $ | 216,780 | |
| Interest payable | | | 399,782 | | | | - | | | | - | | | | 399,782 | |
| Due to related parties | | | 568,602 | | | | - | | | | - | | | | 568,602 | |
| Total current liabilities | | | 1,181,133 | | | | 4,031 | | | | - | | | | 1,185,164 | |
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| Long-term liabilities | | | | | | | | | | | | | | | | |
| Convertible note payable | | | 1,000,000 | | | | - | | | | - | | | | 1,000,000 | |
| Total long-term liabilities | | | 1,000,000 | | | | - | | | | - | | | | 1,000,000 | |
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| Total liabilities | | | 2,181,134 | | | | 4,031 | | | | - | | | | 2,185,165 | |
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| Shareholders' equity (deficit) | | | | | | | | | | | | | | | | |
| Common stock: 100,000,000, $0.0001 par value shares authorized; 22,585,235 shares issued and outstanding | | | 2,286 | | | | 900 | | | | (900 | ) | | | 2,286 | |
| Preferred stock: 10,000,000, $0.0001 par values shares authorized, none issued | | | - | | | | - | | | | - | | | | - | |
| Additional paid-in capital | | | 5,773,924 | | | | - | | | | 900 | | | | 5,774,824 | |
| Options and warrants outstanding | | | 107,347 | | | | - | | | | - | | | | 107,347 | |
| Accumulated earnings (deficit) | | | (7,451,465 | ) | | | 244,030 | | | | - | | | | (7,207,435 | ) |
| Total shareholders' equity (deficit) | | | (1,568,909 | ) | | | 244,930 | | | | - | | | | (1,323,979 | ) |
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| Total liabilities and shareholders' equity (deficit) | | $ | 612,225 | | | $ | 248,961 | | | $ | - | | | $ | 861,186 | |
The financial information presented herein has been prepared by management
without audit and/or review by independent certified public accountants
See accompanying notes to proforma financial information
| GlyEco, Inc. & Subsidiaries | |
| Proforma Consolidated Balance Sheets | |
| December 31, 2011 | |
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| | | GlyEco, | | | Recycool, | | | Pro-forma | | | Pro-forma | |
| | | Inc. | | | Inc. | | | Adjustments | | | Consolidated | |
| | | (A) | | | (B) | | | | | | | |
| | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | | | (Unaudited) | |
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| Net Sales | | $ | 824,289 | | | $ | 421,243 | | | $ | - | | | $ | 1,245,532 | |
| Cost of goods sold | | | 663,689 | | | | 226,448 | | | | - | | | | 890,137 | |
| Gross profit | | | 160,600 | | | | 194,795 | | | | - | | | | 355,395 | |
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| Operating expenses | | | | | | | | | | | | | | | | |
| Compensation | | | 406,790 | | | | 57,110 | | | | - | | | | 463,900 | |
| Legal fees | | | 39,629 | | | | 23,417 | | | | - | | | | 63,046 | |
| General and administrative | | | 141,469 | | | | 23,654 | | | | - | | | | 165,123 | |
| Total expenses | | | 587,635 | | | | 104,181 | | | | - | | | | 691,816 | |
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| Other income (expenses) | | | | | | | | | | | | | | | | |
| Interest income | | | 375 | | | | - | | | | - | | | | 375 | |
| Interest expense | | | (149,601 | ) | | | - | | | | - | | | | (149,601 | ) |
| Gain on the disposition of assets | | | 16,000 | | | | - | | | | - | | | | 16,000 | |
| Total other income (expenses) | | | (133,226 | ) | | | - | | | | - | | | | (133,226 | ) |
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| Income (loss) from operations before income tax | | $ | (560,261 | ) | | $ | 90,614 | | | $ | - | | | $ | (469,647 | ) |
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| Income taxes | | | - | | | | - | | | | - | | | | - | |
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| Net income (loss) | | $ | (560,261 | ) | | $ | 90,614 | | | $ | - | | | $ | (469,647 | ) |
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| Primary and fully diluted loss per share | | $ | (0.02 | ) | | $ | 100.68 | | | $ | - | | | $ | 100.66 | |
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| Weighted average common shares outstanding (basic and diluted) | | | 15,124,541 | | | | 900 | | | | -900 | | | | 15,124,541 | |
The financial information presented herein has been prepared by management
without audit and/or review by independent certified public accountants
See accompanying notes to proforma financial information
GlyEco, Inc. & Subsidiaries
Notes to Proforma (Unaudited)
Consolidated Financial Statements
December 31, 2011
1. BACKGROUND – PURCHASE AGREEMENT
On December 16, 2011 GlyEco, Inc. (“GlyEco”) entered into a purchase agreement (“Agreement”) in which it acquired substantially all of the assets of Recycool, Inc. (“Recycool”).
The principal provisions of the Agreement include:
| · | Purchase Price: Recycool agreed to sell the business and all of the assets, with the exception of excluded assets, and properties of Recycool in consideration for an aggregate purchase price of $525,000 (the “Purchase Price”) comprised of (subject to adjustment as provided in the Agreement) an aggregate of 525,000 restricted shares of common stock of the Company (the “Shares”). The Shares will be deemed to be “restricted” under Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and certificates evidencing the Shares shall bear a restrictive Securities Act legend. |
| · | Assets Purchased exclude: Physical possession of organizational documents, computers, personal mobile phone numbers, and accounts receivable equal to or greater than 90 days old. |
| · | Closing Date: The “Closing Date” or “Closing” was to occur on January 2, 2012, effective as of January 1, 2012, or on such later date when all conditions under the Agreement are satisfied in full. All conditions were satisfied and the actual closing occurred on January 4, 2012, with the effective date remaining January 1, 2012. |
| · | Amendment No. 1: On December 27, 2011, the Parties entered into Amendment No. 1 to the Agreement pursuant to which GlyEco agreed to issue, on a pro rata basis, 8,153 additional shares of restricted Common Stock under the terms of the Agreement in consideration for Recycool’s payment of $8,153 in incurred audit fees. |
| · | Amendment No. 2: On January 1, 2012, the Parties entered into Amendment No. 2 to the Agreement pursuant to which the Purchase Price payable by GlyEco was increased from $525,000 to $543,750. The $18,750 increase in the Purchase Price consists of: (i) 8,878 additional shares of Common Stock due to the fact that the Net Working Capital (as defined in the Agreement) of Recycool was calculated to be $63,878 (an increase of $8,878 from $55,000 under the Agreement); (ii) 8,153 additional restricted shares of Common Stock under Amendment No. 1; and (iii) 1,719 additional restricted shares of Common Stock in consideration for Recycool’s payment of $1,719 in month rent pursuant to its Office/Warehouse Lease, dated September 1, 2000, as amended, by and between Recycool and Bolger Building Partnership, L.L.P. (and Bolger Family Limited Partnership). |
A copy of the purchase agreement is attached as Exhibit 10.1 filed with the SEC on December 21, 2011. Amendments to the purchase agreement are attached as Exhibit 10.2 and 10.3 filed with the SEC on January 10, 2012. The foregoing description of the purchase agreement is qualified in its entirety by reference to the full text of the exhibit to the Form 8-K and 8-K/A, respectively.
GlyEco, Inc. & Subsidiaries
Notes to Proforma (Unaudited)
Consolidated Financial Statements
December 31, 2011
2. NOTES TO PROFORMA (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS
| NOTE A. | The financial information presented in the Proforma Consolidated Balance Sheets as of December 31, 2011 and the Proforma Consolidated Operations Statements as of December 31, 2011 as they pertain to GlyEco, Inc. were derived from GlyEco’s 2011 Financial Statements. |
| NOTE B. | The financial information presented in the Proforma Consolidated Balance Sheets as of December 31, 2011 and the Proforma Consolidated Operations Statements as of December 31, 2011 as they pertain to Recycool, Inc. were derived from Recycool’s 2011-2010 Audited Financial Statements. |
