Exhibit 99.2
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial statements are based upon
our historical consolidated financial statements and those of Advanced
Reclamation Company, L.L.C. ("ARC"). You should read this pro forma
financial information in connection with the historical financial statements.
With respect to our acquisition of ARC, the unaudited pro forma condensed
financial statements give effect to our acquisition of ARC applying the
purchase method of accounting and adjustments that are directly attributable to
the ARC acquisition and are anticipated to have a continuing impact.
We have prepared the unaudited pro forma condensed financial statements based
upon currently available information and assumptions that we have deemed
appropriate. This pro forma information may not be indicative of what actual
results would have been, nor does the data purport to represent our and ARC's
combined financial results for future periods.
We are currently in the process of allocating the purchase price among the
assets acquired and the liabilities assumed. The allocation of the purchase
price to the assets and liabilities acquired reflected in this pro forma
financial data is preliminary. The final purchase price and its allocation are
expected to be completed within one year following the ARC acquisition.
Accordingly, the actual financial position and results of operations may differ
from these pro forma amounts.
Condensed financial information for the unaudited pro forma consolidated
balance sheet as of December 31, 1999 assuming this transaction occurred on
December 31, 1999 is as follows:
Actual ARC Pro Forma
December 31, December 31, Pro Forma December 31,
1999 1999 Adjustments 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 868,522 $ 3,721 $ (400,000) (a) $ 472,243
Accounts receivable 45,825 49,452 - 5,277
Note receivable 89,100 - - 89,100
Inventory 50,638 15,870 - 66,508
Prepaids and deposits 10,352 16,943 (1,220) (b) 26,075
------------ ------------ ------------ ------------
Total current assets 1,064,437 85,986 (401,220) 749,203
PROPERTY AND EQUIPMENT, net 14,229 168,072 - 182,301
INVESTMENTS IN AND ADVANCES
TO JOINT OPERATIONS 1,500 - - 1,500
GOODWILL - - 761,555 (c) 761,555
OTHER ASSETS 33,524 20,748 - 54,272
------------ ------------ ------------ ------------
Total assets $ 1,113,690 $ 274,806 $ 360,335 $ 1,748,831
============ ============ ============ ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and
accrued liabilities $ 270,076 $ 112,044 $ - $ 382,120
Dividends payable 388,632 - - 388,632
Short-term debt, net - 58,746 (2,000) (b) 56,746
------------ ------------ ------------ ------------
Total current liabilities 658,708 170,790 (2,000) 827,498
LONG-TERM DEBT - 6,351 400,000 (a) 406,351
------------ ------------ ------------ ------------
Total liabilities 658,708 177,141 398,000 1,233,849
------------ ------------ ------------ ------------
SHAREHOLDERS' EQUITY
Warrants 252,793 - - 252,793
Preferred stock:
Series A 1,230,000 - - 1,230,000
Series B 350,000 - - 350,000
Common stock 156,292 - - 156,292
Additional paid-in capital 12,763,943 - (11,160) (a) 12,752,783
Accumulated deficit (13,419,467) - - (13,419,467)
Treasury stock, at cost (878,579) - 71,160 (a) (807,419)
Member's equity - 97,665 (97,665) (d) -
------------ ------------ ------------ ------------
Total shareholders' equity 454,982 97,665 (37,665) 514,982
------------ ------------ ------------ ------------
Total liabilities and
shareholders' equity $ 1,113,690 $ 274,806 $ 360,335 $ 1,748,831
============ ============ ============ ============
Condensed financial information for the unaudited pro forma consolidated income
statement for the year ended December 31, 1999 assuming this transaction
occurred on January 1, 1999 is as follows:
Actual ARC Pro Forma
December 31, December 31, Pro Forma December 31,
1999 1999 Adjustments 1999
REVENUES:
Beverage distribution $ 238,039 $ - $ - $ 238,039
Refrigerant revenue - 805,736 - 805,736
General sales agency revenue 23,661 - - 23,661
------------ ------------ ------------ ------------
Total operating revenues 261,700 805,736 - 1,067,436
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Cost of revenue 233,301 432,284 - 665,585
Personnel and consulting 214,375 164,566 - 378,941
Legal and professional 85,675 401 - 86,076
Other general and administrative 178,698 256,856 (52,468) (e) 383,086
------------ ------------ ------------ ------------
Total operating expenses 712,049 854,107 (52,468) 1,513,688
------------ ------------ ------------ ------------
INCOME (LOSS) FROM OPERATIONS (450,349) (48,371) 52,468 (446,252)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE):
Interest expense (25,800) (2,709) (40,000) (f) (68,509)
Interest income 10,360 - - 10,360
Other income (expense) (23,377) - - (23,377)
------------ ------------ ------------ ------------
Total other income (expense) (38,817) (2,709) (40,000) (81,526)
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME
TAXES AND DISCONTINUED
OPERATIONS (489,166) (51,080) 12,468 (527,778)
INCOME TAX EXPENSE - - - -
DISCONTINUED OPERATIONS 1,258,303 - - 1,258,303
------------ ------------ ------------ ------------
NET INCOME $ 769,137 $ (51,080) $ 12,468 $ 730,525
============ ============ ============ ============
INCOME PER SHARE AMOUNTS:
Basic and diluted $ 0.05 $ 0.05
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following pro forma adjustments have been made to the unaudited pro forma
financial statements:
(a) Reflects the purchase of ARC for cash of $400,000, a total of 500,000
Baltic common shares and a note payable to seller of an additional
$400,000.
(b) Reflects the elimination of receivables from and payables to related
parties of ARC that were eliminated as part of the acquisition of ARC.
(c) Reflects the goodwill for the purchase of ARC.
(d) Reflects the elimination of ARC's equity account.
(e) Reflects the impact of goodwill amortization of $38,078 for the year
less the elimination of $5,800 of administrative costs reimbursed to a
related party of the former owner and $84,746 of personal expenses
incurred by the former owner.
(f) Reflects the interest expense accrual for the loan used to purchase ARC.