EXHIBIT 99
ICC TECHNOLOGIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1997
(UNAUDITED)
Pro Forma
ICC Fresh Air Adjustments Pro Forma
Technologies Solutions LP. (1) Dr. (Cr.) As Adjusted
------------ ----------------- ----------- -----------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,257,483 $ 235,432 $18,628,571 (2) $ 22,621,486
2,500,000 (3)
Accounts receivable, net -- 1,043,734 -- 1,043,734
Inventories, net -- 2,101,894 -- 2,101,894
Prepaid expenses and other 406,558 62,965 (300,000)(2) 169,523
------------ ------------ ----------- ------------
Total current assets 1,664,041 3,444,025 20,828,571 25,936,637
Investment in Engelhard HexCore LP -- -- 797,958 (4) 231,352
(566,606)(2)
Property, equipment and software, net 7,615 2,634,389 -- 2,642,004
Other assets -- 539,827 -- 539,827
Note receivable 350,000 -- -- 350,000
Restricted cash 2,500,000 -- (2,500,000)(3) --
------------ ------------ ----------- ------------
Total assets $ 4,521,656 $ 6,618,241 $18,559,923 $ 29,699,820
============ ============ =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities 281,504 4,306,795 -- 4,588,299
Short-term loan -- 2,750,000 -- 2,750,000
Losses of Engelhard/ICC in excess of investments 7,302,358 -- 7,279,765 (2) --
(797,958)(4)
820,551 (1)
Long-term debt -- 198,685 -- 198,685
Commitments and contingencies -- -- -- --
Minority interest -- -- -- --
Stockholders' equity (deficit):
Partners' capital (deficit) -- (637,239) (637,239)(1) --
Common Stock, $.01 par value, authorized 50,000,000 shares,
issued 21,519,998 shares at December 31, 1997 215,200 -- -- 215,200
Additional paid-in capital 51,308,904 -- -- 51,308,904
Note receivable from officer (230,467) -- -- (230,467)
Accumulated deficit (54,184,413) -- (25,225,042)(2) (28,959,371)
Less: Treasury common stock, at cost, 66,227 shares (171,430) -- -- (171,430)
------------ ------------ ----------- ------------
Total stockholders' equity (deficit) (3,062,206) (637,239) (25,862,281) 22,162,836
------------ ------------ ----------- ------------
Total liabilities and stockholders' equity (deficit) $ 4,521,656 $ 6,618,241 $(18,559,923) $ 29,699,820
============ ============ ============ ============
The accompanying notes are an integral part of the unaudited pro forma
consolidated financial statements.
ICC TECHNOLOGIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1997
(UNAUDITED)
Pro Forma
Icc Fresh Air Adjustments Pro Forma
Technologies Solutions LP.(1) Dr. (Cr.) As Adjusted
------------ ---------------- ----------- -----------
Revenues -- $ 6,415,474 -- $ 6,415,474
Cost of goods sold -- 11,661,030 -- 11,661,030
------------ -----------
Gross loss -- (5,245,556) -- (5,245,556)
Operating expenses:
Marketing -- 4,105,228 -- 4,105,228
Engineering -- 2,074,295 -- 2,074,295
Research and development -- 901,523 -- 901,523
General and administrative $ 1,991,594 3,799,838 -- 5,791,432
------------ ------------ ------------ ------------
Total operating expenses 1,991,594 10,880,884 -- 12,872,478
Loss from operations (1,991,594) (16,126,440) -- (18,118,034)
Other income (expense):
Equity interest in net loss of investee (11,985,361) -- $ (11,985,361)(5) --
92,328 (5) (92,328)
Interest income (expense), net 492,870 (136,283) -- 356,587
Minority interest -- -- -- --
------------ ------------ ------------ ------------
Net loss $(13,484,085) $(16,262,723) $(11,893,033) $(17,853,775)
============ ============ ============ ============
Net loss applicable to common stockholders $(13,484,085) $(17,853,775)
============ ============
Net (loss) per common share $ (0.63) $ (0.84)
============ ============
Weighted average common shares 21,339,635 21,339,635
============ ============
The accompanying notes are an integral part of the unaudited
consolidated pro forma financial statements.
ICC TECHNOLOGIES, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of presentation:
The unaudited pro forma consolidated financial statements are presented to
illustrate the effect of the restructuring of the Partnership, which occurred on
February 27, 1998, on the Company's financial position as if it occurred on
December 31, 1997, and to demonstrate the effects upon the Company's historical
results of operations for the year ended December 31, 1997, as if the
restructuring occurred on January 1, 1997.
Pursuant to the restructuring, the Partnership was terminated and its net assets
were divided into two separate operating limited partnerships, Fresh Air
Solutions LP and Engelhard HexCore LP (see Note 3). The Company will have an
ownership interest of 90% in Fresh Air Solutions LP and 20% in Engelhard HexCore
LP. The assets, liabilities and results of operations of Fresh Air Solutions LP
will be consolidated in the Company's financial statements. The Company will
account for its 20% investment in Engelhard HexCore LP under the equity method
of accounting. Under the equity method of accounting, the Company will recognize
its proportionate share of the net income or loss of Engelhard HexCore LP on a
current basis.
The unaudited pro forma consolidated financial statements are not necessarily
indicative of the financial position or results of operation had the
aforementioned restructuring occurred on those dates, nor are they necessarily
indicative of the future results of the Company's operations.
The unaudited pro forma consolidated financial statements have been prepared
from the historical financial statements of the Company and contain certain
adjustments with respect to the restructuring as explained hereafter. The
unaudited pro forma consolidated statements of operations for the year ended
December 31, 1997 do not include any nonrecurring adjustments that may result
from the restructuring.
2. Pro Forma Adjustments:
(1) The adjustment column (Fresh Air Solutions LP) reflects the consolidation
of 100% of the assets and liabilities of Fresh Air Solutions LP and the pro
forma adjustments reflect the elimination of Fresh Air Solutions LP equity
in consolidation.
(2) The pro forma adjustment reflects the Company's sale of 60% of its interest
in Engelhard HexCore LP amounting to $566 thousand for consideration of
approximately $18.6 million in cash and 80% of Engelhard's interest in
Fresh Air Solutions LP amounting to $7.3 million. The restructuring would
result in a gain of $25.2 million, net of estimated transaction costs of
$450 thousand.
(3) The pro forma adjustment reflects the reclassification of $2.5 million from
restricted cash to cash available for operations due to the release of the
Company's portion of a guarantee on Engelhard HexCore LP's bond obligation.
(4) The pro forma adjustment reflects the reclassification of the Company's
50% equity investment in Engelhard HexCore LP in connection with the
restructuring.
(5) The pro forma adjustment reflects the elimination of the equity interest in
net loss of investee recorded in ICC's historical financial statements
because Fresh Air Solutions LP will now be consolidated and the recording
of the equity in net loss of Engelhard HexCore LP based on the Company's
20% ownership interest.
3. Summarized Financial Data of the Partnership:
The restructuring resulted in the Partnership being terminated and the net
assets divided into two separate companies, one to manufacture and market
complete, active Climate Control Systems (Fresh Air Solutions LP) and the other
to manufacture and market the desiccant and heat-exchange rotors that are a
component of Climate Control Systems (Engelhard HexCore LP).
The following summarizes carved out financial information of Fresh Air Solutions
LP and Engelhard HexCore LP as of December 31, 1997 and for the year ended
December 31, 1997, as if the restructuring had occurred on January 1, 1997.
Historical Fresh Air Engelhard
Balance Sheet Data Partnership Solutions LP HexCore LP
----------- ------------ ----------
Total Assets $16,761,610 $6,618,241 $10,143,369
Total Liabilities 16,217,279 7,255,480 8,961,799
Partners' Capital (Deficit) 544,331 (637,239) 1,181,570
Historical Fresh Air Engelhard
Income Statement Data Partnershp Eliminations Solutions LP HexCore LP
---------- ------------ ------------ ----------
Revenue $12,239,012 $1,103,000 $ 6,415,474 $6,926,538
Expenses 28,963,373 1,103,000 22,678,197 7,388,176
Net (Loss) (16,724,361) -- (16,262,723) (461,638)
4. Purchase Price:
In connection with the acquisition of Fresh Air Solutions LP, the Company and an
investment banker were unable to determine the fair market values of either
Fresh Air Solutions LP or Engelhard HexCore LP within reasonable limits. As a
result, the non-monetary considerations paid and received by the Company were
based upon their recorded amounts in the accompanying unaudited pro forma
consolidated financial statements.