Attached files
| file | filename |
|---|---|
| 8-K/A - Premier Power Renewable Energy, Inc. | v162627_8ka.htm |
| EX-23.2 - Premier Power Renewable Energy, Inc. | v162627_ex23-2.htm |
| EX-99.1 - Premier Power Renewable Energy, Inc. | v162627_ex99-1.htm |
| EX-23.1 - Premier Power Renewable Energy, Inc. | v162627_ex23-1.htm |
| EX-99.2 - Premier Power Renewable Energy, Inc. | v162627_ex99-2.htm |
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PREMIER
POWER RENEWABLE ENERGY, INC.
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UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
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AS
OF JUNE 30, 2009
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Premier
Power Renewable Energy, Inc.
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RUPINVEST
(unaudited)
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Pro
Forma Adjustments
|
Notes
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Pro
Forma Consolidated
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ASSETS
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(1)
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Current
assets:
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||||||||||||||||||||
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Cash
and cash equivalents
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$ | 3,552,347 | $ | 2,175,399 | $ | - | $ | 5,727,746 | ||||||||||||
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Accounts
receivable, net
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2,109,961 | 637,757 | - | 2,747,718 | ||||||||||||||||
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Inventory
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2,336,292 | 407,656 | - | 2,743,948 | ||||||||||||||||
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Prepaid
expenses and other current assets
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75,064 | 7,024 | - | 82,088 | ||||||||||||||||
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Costs
and estimated earnings in excess of billings on uncompleted
contracts
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965,683 | - | - | 965,683 | ||||||||||||||||
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Other
assets
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1,580,063 | - | (1,580,063 | ) |
3A
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- | ||||||||||||||
| 18,292 |
3B
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|||||||||||||||||||
| (18,292 | ) |
3C
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||||||||||||||||||
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Sales
tax receivable
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161,933 | - | - | 161,933 | ||||||||||||||||
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Deferred
tax assets
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262,709 | - | - | 262,709 | ||||||||||||||||
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Total
current assets
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11,044,052 | 3,227,836 | (1,580,063 | ) | 12,691,825 | |||||||||||||||
| - | ||||||||||||||||||||
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Property
and equipment, net
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469,832 | 32,988 | - | 502,820 | ||||||||||||||||
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Intangible
assets
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925,258 | - | 105,009 |
3B
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1,030,267 | |||||||||||||||
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Goodwill
|
483,496 | - | 11,976,338 |
3B
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12,459,834 | |||||||||||||||
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Deferred
tax assets, long-term
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1,150,074 | - | - | 1,150,074 | ||||||||||||||||
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Total
assets
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$ | 14,072,712 | $ | 3,260,824 | $ | 10,501,284 | $ | 27,834,820 | ||||||||||||
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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Current
liabilities:
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Accounts
payable
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$ | 2,028,788 | $ | 1,108,466 | $ | - | $ | 3,137,254 | ||||||||||||
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Accrued
liablilities
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1,114,186 | 169,552 | 18,292 |
3B
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1,302,030 | |||||||||||||||
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Related
party advance
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1,755,663 | (1,755,663 | ) |
3A
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- | |||||||||||||||
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Billings
in excess of costs and estimated earnings on uncompleted
contracts
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523,599 | - | - | 523,599 | ||||||||||||||||
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Taxes
payable
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177,113 | 304,416 | - | 481,529 | ||||||||||||||||
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Deferred
income taxes
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- | - | - | - | ||||||||||||||||
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Borrowings,
current
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161,754 | - | - | 161,754 | ||||||||||||||||
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Total
current liabilities
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4,005,440 | 3,338,097 | (1,737,371 | ) | 5,606,166 | |||||||||||||||
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Contingent
consideration liability
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- | - | 12,026,400 |
3F
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12,026,400 | |||||||||||||||
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Borrowings,
non-current
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432,816 | - | - | 432,816 | ||||||||||||||||
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Long-term
deferred income taxes
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343,279 | - | - | 343,279 | ||||||||||||||||
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Total
liabilities
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4,781,535 | 3,338,097 | 10,289,029 | 18,408,661 | ||||||||||||||||
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Shareholders'
equity:
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Series
A convertible preferred stock, par value $.0001 per shares; 5,000,000
shares designated; 20,000,000 shares of preferred stock authorized;
3,500,000 issued and outstanding at June 30, 2009
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350 | - | - | 350 | ||||||||||||||||
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Series
B convertible preferred stock, par value $.0001 per share: 2,800,000
shares issued and outstanding at June 30,
2009
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280 | - | - | 280 | ||||||||||||||||
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Common
stock, par value $.0001 per share; 500,000,000 shares authorized;
26,048,750 shares issued and outstanding at June 30,
2009
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2,605 | - | - | 2,605 | ||||||||||||||||
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Common
stock, par value $16; 1,250 shares issued and outstanding at December 31,
2008
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- | 19,500 | (19,500 | ) |
3C
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- | ||||||||||||||
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Additional
paid-in-capital
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17,865,197 | - | 319,204 |
3B
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18,184,401 | |||||||||||||||
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Retained
earnings (accumulated deficit)
|
(8,493,037 | ) | (80,714 | ) | 80,714 |
3C
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(8,493,037 | ) | ||||||||||||
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Noncontrolling
interest
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- | (8,622 | ) | (175,600 | ) |
3F
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(184,222 | ) | ||||||||||||
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Accumulated
other comprehensive income (loss)
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(84,218 | ) | (7,437 | ) | 7,437 |
3C
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(84,218 | ) | ||||||||||||
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Total
shareholders' equity
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9,291,177 | (77,273 | ) | 212,255 | 9,426,159 | |||||||||||||||
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Total
liabilities and shareholders' equity
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$ | 14,072,712 | $ | 3,260,824 | $ | 10,501,284 | $ | 27,834,820 | ||||||||||||
(1) Effective May 15, 2009,
Premier Power Italy S.p.A. (formerly ARCO Energy, SRL) became a wholly owned
subsidiary of Rupinvest Sarl. As the companies were under common control at the
time of the reorganization, the balances above reflect the combined accounts of
the two entities, with all significant intercompany activity being eliminated,
at their historical carrying amounts.
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UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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For
the Six Months Ended June 30, 2009
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Premier
Power Renewable Energy, Inc.
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RUPINVEST
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Pro
Forma Adjustments
|
Notes
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Pro
Forma Consolidated
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(unaudited)
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(unaudited)
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(1)
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Net
sales
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$ | 8,907,699 | $ | 2,194,881 | $ |
-
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$ | 11,102,580 | ||||||||||||
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Cost
of sales
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(8,000,654 | ) | (1,844,721 | ) |
-
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(9,845,375 | ) | |||||||||||||
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Gross
profit
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907,045 | 350,160 | - | 1,257,205 | ||||||||||||||||
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Operating
expenses:
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Sales
and marketing
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1,372,304 | 161,558 |
-
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1,533,862 | ||||||||||||||||
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General
and administrative
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2,402,741 | 286,151 | 17,502 |
3E
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2,706,394 | |||||||||||||||
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Total
operating expenses
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3,775,045 | 447,710 | 17,502 | 4,308,800 | ||||||||||||||||
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Operating
(loss) income
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(2,868,000 | ) | (97,549 | ) | (17,502 | ) | (2,983,051 | ) | ||||||||||||
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Other
income (expense):
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Interest
expense
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(8,170 | ) | (6,088 | ) |
-
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(14,258 | ) | |||||||||||||
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Other
income
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-
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2,237 |
-
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2,237 | ||||||||||||||||
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Change
in fair value of financial instruments
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2,183,498 | - |
-
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2,183,498 | ||||||||||||||||
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Interest
income
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28,438 | 127 |
-
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28,565 | ||||||||||||||||
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Total
other income (expense), net
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2,203,766 | (3,724 | ) | - | 2,200,042 | |||||||||||||||
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Income
before income taxes
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(664,234 | ) | (101,273 | ) | (17,502 | ) | (783,009 | ) | ||||||||||||
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Income
tax benefit (expense)
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1,126,487 | (49 | ) |
-
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1,126,438 | |||||||||||||||
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Net
income (loss)
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462,253 | (101,322 | ) | (17,502 | ) | 343,429 | ||||||||||||||
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Less: Net
income attributable to the noncontrolling interest
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-
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(10,132 | ) | - | (10,132 | ) | ||||||||||||||
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Net
income (loss)
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$ | 462,253 | $ | (91,190 | ) | $ | (17,502 | ) | $ | 353,561 | ||||||||||
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Earnings
Per Share:
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Basic
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$ | 0.02 | $ | 0.01 | ||||||||||||||||
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Diluted
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$ | 0.02 | $ | 0.01 | ||||||||||||||||
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Weighted
Average Shares Outstanding:
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Basic
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26,048,750 | 1,250 | 1,453,750 |
3D
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27,503,750 | |||||||||||||||
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Diluted
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30,256,711 | 2,985,000 |
3D
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33,241,711 | ||||||||||||||||
(1) Amounts reflect the combined
result of operations of Rupinvest Sarl and Premier Power Italy S.p.A. (formerly
ARCO Energy, SRL) ("Premier Power Italy"). Effective May 15, 2009, the entities
were reorganized under common control such that Rupinvest Sarl became the parent
of Premier Power Italy. As the entities were under common control, there was no
adjustment to the historical basis of the entities assets and liabilities. The
combined balances give effect to the elimination of significant intercompany
activity.
2
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UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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For
the year ended December 31, 2008
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Premier
Power Renewable Energy, Inc.
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Rupinvest
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Pro
Forma Adjustments
|
Notes
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Pro
Forma Consolidated
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(audited)
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(1)
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Net
sales
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$ | 44,237,984 | $ | 7,685,250 | $ | - | $ | 51,923,234 | ||||||||||||
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Cost
of sales
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(38,710,592 | ) | (7,027,656 | ) | - | (45,738,248 | ) | |||||||||||||
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Gross
profit
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5,527,392 | 657,594 | - | 6,184,986 | ||||||||||||||||
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Operating
expenses:
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Sales
and marketing
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2,224,362 | 38,728 | - | 2,263,090 | ||||||||||||||||
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General
and administrative
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2,505,180 | 222,173 | 35,003 |
3E
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2,762,356 | |||||||||||||||
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Total
operating expenses
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4,729,542 | 260,901 | 35,003 | 5,025,446 | ||||||||||||||||
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Operating
(loss) income
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797,850 | 396,693 | (35,003 | ) | 1,159,540 | |||||||||||||||
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Other
income (expense):
|
||||||||||||||||||||
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Interest
expense
|
(82,088 | ) | (520 | ) | - | (82,608 | ) | |||||||||||||
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Other
income
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- | 20 | - | 20 | ||||||||||||||||
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Interest
income
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36,764 | 163 | - | 36,927 | ||||||||||||||||
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Total
other income (expense), net
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(45,324 | ) | (337 | ) | - | (45,661 | ) | |||||||||||||
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Income
before income taxes
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752,526 | $ | 396,356 | $ | (35,003 | ) | 1,113,879 | |||||||||||||
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Income
tax benefit (expense)
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40,857 | $ | (129,726 | ) | - | (88,869 | ) | |||||||||||||
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Net
income (loss) before minority interest
|
793,383 | 266,630 | (35,003 | ) | 1,025,010 | |||||||||||||||
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Minority
interest
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(224,315 | ) | (26,663 | ) | - | (250,978 | ) | |||||||||||||
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Net
income (loss)
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$ | 569,068 | $ | 239,967 | $ | (35,003 | ) | $ | 774,032 | |||||||||||
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Earnings
Per Share:
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Basic
|
$ | 0.03 | $ | 0.03 | ||||||||||||||||
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Diluted
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$ | 0.02 | $ | 0.03 | ||||||||||||||||
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Weighted
Average Shares Outstanding:
|
||||||||||||||||||||
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Basic
|
22,666,138 | 1,250 | - | 22,667,388 | ||||||||||||||||
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Diluted
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23,749,700 | 2,220,000 |
3D
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25,969,700 | ||||||||||||||||
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(1)
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The
results of operations for Rupinvest Sarl, consisting of $0 in revenues and
approximately $2,000 in operating expenses have been combined with those
of Arco Energy Srl for
convenience.
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3
PREMIER
POWER RENEWABLE ENERGY, INC
Notes
to Unaudited Pro Forma Condensed Consolidated Financial Statements
|
1.
|
BASIS
OF PRO FORMA PRESENTATION
|
The
unaudited pro forma condensed consolidated balance sheet as of June 30, 2009,
and the unaudited pro forma condensed consolidated statements of operations for
the six months ended June 30, 2009, and the year ended December 31, 2008, are
based on the historical financial statements of Premier Power Renewable Energy,
Inc. (PPRE), and Rupinvest Sarl (Rupinvest) and its majority owned subsidiary
Premier Power Italy (formerly ARCO Energy, SRL) after giving effect to PPRE’s
acquisition of Rupinvest on July 31, 2009.
We
account for business combinations pursuant to Financial Accounting Standards
Board Statement No. 141R, Business
Combinations. In accordance with Statement 141R, we allocate
the purchase price of an acquired company to the net tangible assets and
intangible assets acquired based upon their estimated fair values. We
have made significant assumptions and estimates in determining the preliminary
estimated purchase price and the preliminary allocation of the estimated
purchase price in the unaudited pro forma condensed consolidated financial
statements. These preliminary estimates and assumptions are subject
to change during the measurement period (generally one year from the acquisition
date) as we finalize the valuations of the net tangible assets and intangible
assets acquired. In particular, the final valuations of identifiable
intangible assets and associated tax effects may change significantly from our
preliminary estimates. These changes could result in material
variances between our future financial results and the amounts presented in
these unaudited condensed consolidated pro forma financial statements, including
variances in fair values recorded, as well as expenses and cash flows associated
with these items.
The
unaudited pro forma condensed consolidated financial statements as of and for
the six month period ended June 30, 2009 present the noncontrolling interest
related to Rupinvest in accordance with FASB Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statemetns - An Amendment of ARB No. 51,
which is effective for interim periods beginning on January 1,
2009.
The
unaudited pro forma condensed consolidated financial statements are not intended
to represent or be indicative of our consolidated results of operations or
financial position that we would have reported had the acquisition of Rupinvest
and its majority owned subsidiary Premier Power Italy been completed as of the
dates presented, and should not be taken as a representation of our future
consolidated results of operations or financial position. The unaudited pro
forma condensed consolidated financial statements do not reflect any operating
efficiencies and/or cost savings that we may achieve with respect to the
combined companies.
On May
15, 2009 the common ownership of Rupinvest and ARCO Energy, SRL (ARCO) effected
a legal reorganization of their ownership interests so that ARCO became a
subsidiary of Rupinvest. As Rupinvest and ARCO were under common control, the
transaction has been treated as a reorganization. The historical results of
operations for Rupinvest for the six months ended June 30, 2009 include the
results of operations of both Rupinvest and ARCO.
The
unaudited pro forma condensed consolidated financial statements should be read
in conjunction with the historical consolidated financial statements and
accompanying notes of PPRE, Rupinvest, and ARCO Energy, S.R.L included
herein.
|
2.
|
ACQUISITION
OF RUPINVEST SARL AND ITS MAJORITY OWNED SUBSIDIARY, PREMIER POWER
ITALY
|
We
acquired Rupinvest and its 90% interest in Premier Power Italy on July 31, 2009
in exchange for $18,292 in cash, a capital investment in the amount of
$1,580,063, and the potential issuance of up to 3 million shares of PPRE’s
common stock (“Contingent Consideration”).
The
Contingent Consideration is to be distributed over a three-year period based
upon Premier Power Italy achieving certain sales and gross margin goals during
such period. Based on projected sales and gross margin levels of
Premier Power Italy, the PPRE determined that all of the Contingent
Consideration would be earned by the sellers. An independent third party
valuation determined the value of the Contingent Consideration to be
$12,026,400. The valuation used a discounted future income
methodology for the years 2009, 2010 and 2011 inclusive and then applied a
discounted cash flow model to the calculation periods. The applicable
results obtained were then incorporated into the universal income projections
for Premier Power for the years 2009 through 2011 and further analyzed from a
cash flow perspective in order to determine the overall value of the PPRE
and the related fair value of the PPRE’s outstanding stock in 2009, 2010 and
2011. The projected 2009, 2010 and 2011 fair value of the PPRE’s stock price was
then multiplied against a yearly estimate of shares earned by
Rupinvest. The specific calculation of the shares earned were
determined by utilizing a probability weighted approach. A discount rate of
20% was used in the valuation model, based on the aggregate of 3
factors: [1] risk free rate of return, [2] market equity premium, [3]
special company risk premium,
as determined by the independent third party valuation.
4
PREMIER
POWER RENEWABLE ENERGY, INC
Notes
to Unaudited Pro Forma Condensed Consolidated Financial
Statements
Preliminary
Purchase Price Allocation
The total
purchase price for Rupinvest Sarl of $13,624,755 was allocated to the net
tangible assets and intangible assets acquired based upon their estimated fair
value as of July 31, 2009, as set forth below. The excess of the
purchase price over the net tangible assets and intangible assets was recorded
as goodwill. The preliminary allocation of the purchase price was
based upon a preliminary valuation and our estimates and assumptions are subject
to change.
A summary
of the acquired tangible and intangible assets and liabilities is as
follows:
|
Fair value of shares exchanged
agreeemnt
|
$ | 12,026,400 | ||
|
Cash and capital
contribution
|
$ | 1,598,355 | ||
|
Tangible assets
acquired
|
$ | (2,151,375 | ) | |
|
Amortizing intangible assets
acquired
|
$ | (105,009 | ) | |
|
Liabilities
assumed
|
$ | 607,967 | ||
|
Goodwill
|
$ | 11,976,338 |
Intangible
Assets
Amortizing
intangible assets consist of the estimated fair value of acquired customer
lists. In estimating the fair value we used an income approach,
utilizing a discount rate of 20%. We have estimated the useful life
of the acquired customer lists to be three years.
|
3.
|
PRO
FORMA FINANCIAL STATEMENT
ADJUSTMENTS
|
The
following pro forma adjustments are included in our unaudited pro forma
condensed consolidated financial statements:
|
A.
|
To
reclassify working capital deposit as part of purchase price (see Note 2
to these pro forma condensed consolidated financial
statements)
|
|
B.
|
To
record the purchase price and preliminary allocation of purchase price to
the acquired tangible and intangible assets and
liabilities.
|
|
C.
|
To
eliminate the historical capital stock and equity of Rupinvest and its
majority owned subsidiary Premier Power
Italy.
|
|
D.
|
The
basic weighted average shares were adjusted for contingent shares assumed
issued under the contingent arrangement and diluted weighted average
shares have been adjusted for shares earned as of the reporting date under
the contingency arrangment, whether they have been distributed or
not.
|
|
E.
|
To
amortize the intangible assets
acquired.
|
|
F.
|
Estimated fair value of the contingent
consideration (see Note 2). As the amount and value of the shares to be
issued in satisfaction of the contingent consideration are variable based
on Premier Power Italy's sales levels, the Company determined that
classification as a liability was
appropriate.
|
|
G.
|
To reflect the charge in non-controlling interest
resulting from the increase in net assets of Premier Power Italy resulting
from the
acquisition.
|