Attached files
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| 8-K/A - FORM 8-K/A - True North Finance Corp | form8ka.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED SEPARATE FINANCIAL STATEMENTS AND RELEATED NOTES THERETO
The following unaudited pro forma condensed separate financial statements are based upon the separate historical financial position and results of operations of True North Finance Corporation (TN). The unaudited pro forma separate financial statements give effect to the deconsolidation on June 30, 2010.
The unaudited pro forma condensed separate financial information is provided for informational purposes only and is not necessarily indicative of deconsolidated results of operations of TN had the deconsolidation occurred on the date indicated above, or that would be realized in the future.
UNAUDITED PRO FORMA SEPARATE BALANCE SHEET
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ASSETS
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TN Consolidated
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Pro Forma at
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December 31, 2009
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Pro Forma Adjustments
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December 31, 2009
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CURRENT ASSETS
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Cash
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$ | 69,220 | $ | (10,383 | ) | $ | 58,837 | |||||
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Interest receivable
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3,798 | (3,798 | ) | - | ||||||||
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Other current assets
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70,559 | (70,559 | ) | - | ||||||||
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Total current assets
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143,577 | (84,740 | ) | 58,837 | ||||||||
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Property and equipment
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128,460 | (43,278 | ) | 85,182 | ||||||||
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Investments in notes receivable net of allowance of $1,643,485
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- | |||||||||||
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as of December 31, 2009
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1,250,000 | (1,250,000 | ) | - | ||||||||
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Investments in notes receivable, related party, net of allowance of $0
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- | |||||||||||
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as of December 31, 2009
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171,489 | (171,489 | ) | - | ||||||||
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Investments in real estate loans, net of allowance of $0
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- | |||||||||||
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as of December 31, 2009
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6,426,000 | (6,426,000 | ) | - | ||||||||
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Real estate held for sale
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39,540,000 | (28,540,000 | ) | 11,000,000 | ||||||||
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Deposits and other assets
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1,112,768 | (609,890 | ) | 502,878 | ||||||||
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Total assets
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$ | 48,772,294 | $ | (37,125,397 | ) | $ | 11,646,897 | |||||
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LIABILITIES AND STOCKHOLDERS' DEFICIT
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CURRENT LIABILITIES
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Accounts payable
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$ | 1,056,922 | $ | (918,380 | ) | $ | 138,542 | |||||
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Accounts payable, related party
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59,464 | (59,464 | ) | - | ||||||||
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Current portion of notes payable
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60,782,223 | (49,782,223 | ) | 11,000,000 | ||||||||
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Current portion of notes payable, related party
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1,300,000 | (1,300,000 | ) | - | ||||||||
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Other current liabilities, related party
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538,784 | (509,367 | ) | 29,417 | ||||||||
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Other current liabilities
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7,934,675 | (6,384,998 | ) | 1,549,677 | ||||||||
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Total current liabilities
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71,672,068 | (58,954,432 | ) | 12,717,636 | ||||||||
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LONG TERM LIABILITIES
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Notes payable
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9,930,000 | - | 9,930,000 | |||||||||
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Notes payable, related party
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628,000 | - | 628,000 | |||||||||
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Total liabilities commitments and contingencies
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82,230,068 | (58,954,432 | ) | 23,275,636 | ||||||||
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STOCKHOLDERS' DEFICIT
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Preferred stock, $1,000 stated value, 50,000 shares authorized;
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35,473 shares issued and outstanding
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16,700,298 | - | 16,700,298 | |||||||||
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Common stock (Series A), $.01 par value, 1,000,000 shares authorized;
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1,000,000 shares issued and outstanding
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10,000 | - | 10,000 | |||||||||
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Common stock (Series B), $.01 par value, 150,000,000 shares authorized;
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67,354,092 and 36,331,993 shares issued and outstanding
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at December 31, 2009 and December 31, 2008, respectively
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673,541 | - | 673,541 | |||||||||
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Additional paid-in capital
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41,687 | - | 41,687 | |||||||||
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Accumulated (deficit)
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(46,951,058 | ) | 17,896,793 | (29,054,265 | ) | |||||||
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Total True North Finance Corporation stockholders' deficit
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(29,525,532 | ) | 17,896,793 | (11,628,739 | ) | |||||||
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Noncontrolling interests
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(3,932,242 | ) | 3,932,242 | - | ||||||||
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Total stockholders' deficit
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(33,457,774 | ) | 21,829,035 | (11,628,739 | ) | |||||||
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Total liabilities and stockholders' deficit
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$ | 48,772,294 | $ | (37,125,397 | ) | $ | 11,646,897 | |||||
STATEMENTS OF OPERATIONS
(Unaudited)
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PRO FORMA
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For the Year Ended December 31, 2009
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Proforma Adjustments
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For the Year Ended December 31, 2009
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INTEREST AND FEE INCOME
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Interest and fee income
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$ | 100,550 | $ | (100,550 | ) | $ | - | |||||
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Interest and fee income, related party
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37,458 | (37,458 | ) | - | ||||||||
| 138,008 | (138,008 | ) | - | |||||||||
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OPERATING EXPENSES
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Insurance
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53,325 | (18,994 | ) | 34,331 | ||||||||
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Payroll
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228,699 | (105,810 | ) | 122,889 | ||||||||
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Professional fees
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236,090 | (165,823 | ) | 70,267 | ||||||||
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Interest expense
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5,043,160 | (3,873,453 | ) | 1,169,707 | ||||||||
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Interest expense, related party
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80,834 | (80,834 | ) | - | ||||||||
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Provision for doubtful accounts
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6,609,273 | (4,616,515 | ) | 1,992,758 | ||||||||
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Other expense
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3,279,024 | (2,488,041 | ) | 790,983 | ||||||||
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Other expense, related party
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1,279,864 | (1,279,864 | ) | - | ||||||||
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Total operating expenses
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16,810,269 | (12,629,334 | ) | 4,180,935 | ||||||||
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Loss from operations
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(16,672,261 | ) | 12,528,784 | (4,180,935 | ) | |||||||
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INCOME (LOSS) FROM REAL ESTATE HELD FOR SALE
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Income related to real estate held for sale
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233,054 | (233,054 | ) | - | ||||||||
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Expenses related to real estate held for sale
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(232,750 | ) | 232,750 | - | ||||||||
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Write-downs on real estate held for sale
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(29,890,000 | ) | 29,890,000 | - | ||||||||
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Total loss from real estate held for sale
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(29,889,696 | ) | 29,889,696 | - | ||||||||
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Loss before provision for income taxes
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(46,561,957 | ) | 42,418,480 | (4,180,935 | ) | |||||||
| - | ||||||||||||
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Deferred income tax benefit
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- | - | - | |||||||||
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Net loss
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(46,561,957 | ) | 114,726,656 | (4,180,935 | ) | |||||||
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Net loss attributable to noncontrolling interests
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7,667,596 | (7,667,596 | ) | - | ||||||||
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Net loss attributable to True North
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$ | (38,894,361 | ) | 107,059,060 | $ | (4,180,935 | ) | |||||
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Loss per share:
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Basic and diluted attributable to True North Stockholders
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$ | (0.73 | ) | 0.66 | $ | (0.08 | ) | |||||
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Weighted average basic and diluted shares outstanding
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52,970,531 | - | 52,970,531 | |||||||||
STATEMENTS OF OPERATIONS
(Unaudited)
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PRO FORMA
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For the Three Months Ended March 31, 2010
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Proforma Adjustments
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For the Three Months Ended March 31, 2010
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INTEREST AND FEE INCOME
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Interest and fee income
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$ | - | $ | - | $ | - | ||||||
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Interest and fee income, related party
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2,981 | (2,981 | ) | - | ||||||||
| 2,981 | (2,981 | ) | - | |||||||||
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OPERATING EXPENSES
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Insurance
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29,889 | - | 29,889 | |||||||||
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Payroll
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166,583 | - | 166,583 | |||||||||
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Professional fees
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101,779 | (22,039 | ) | 79,740 | ||||||||
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Interest expense
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2,235,625 | (1,754,768 | ) | 480,857 | ||||||||
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Interest expense, related party
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50,291 | (50,291 | ) | - | ||||||||
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Other expense
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703,838 | (230,803 | ) | 473,035 | ||||||||
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Other expense, related party
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375,065 | (375,065 | ) | - | ||||||||
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Total operating expenses
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3,663,070 | (2,432,966 | ) | 1,230,104 | ||||||||
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Loss from operations
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(3,660,089 | ) | 2,429,985 | (1,230,104 | ) | |||||||
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INCOME (LOSS) FROM REAL ESATE HELD FOR SALE
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Income related to real estate held for sale
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119,156 | (119,156 | ) | - | ||||||||
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Expenses related to real estate held for sale
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(135,281 | ) | 135,281 | - | ||||||||
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Total loss from real estate held for sale
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(16,125 | ) | 16,125 | - | ||||||||
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OTHER INCOME
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Gain from sale of investments
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84,500 | (84,500 | ) | - | ||||||||
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Total other income
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84,500 | (84,500 | ) | - | ||||||||
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Loss before provision for income taxes
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(3,591,714 | ) | 2,361,610 | (1,230,104 | ) | |||||||
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Deferred income tax benefit
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- | - | - | |||||||||
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Net loss
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(3,591,714 | ) | 2,361,610 | (1,230,104 | ) | |||||||
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Net loss attributable to noncontrolling interests
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427,267 | (427,267 | ) | 0 | ||||||||
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Net loss attributable to True North
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$ | (3,164,447 | ) | $ | 1,934,343 | $ | (1,230,104 | ) | ||||
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Loss per share:
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Basic and diluted attributable to True North Stockholders
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$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.02 | ) | |||
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Weighted average basic and diluted shares outstanding
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68,354,092 | - | 68,354,092 | |||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED SEPARATE FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The unaudited pro forma condensed separate financial statements do not give any effect to any restructuring cost, potential cost savings or other operating efficiencies that are expected to result from the Deconsolidation. The unaudited pro forma condensed separate financial statements are based upon certain assumptions and do not purport to be indicative of the results which would have been achieved if the Deconsolidation had been consummated on the dates indicated or which may be achieved in the future.
On June 30, 2010 the Company transferred the assets and liabilities of their subsidiary Capital Solutions Monthly Income Fund, LP, after these assets had been voluntarily surrendered to the Company pursuant to the Company’s security interest, to a liquidating trust not controlled by the Company. The Company has no continuing involvement with the Capital Solutions Monthly Income Fund, LP. The Company received no cash consideration in the transfer. In addition, the Company issued 12,000 shares of preferred stock to Capital Solutions Monthly Income Fund, LP’s Series 1 Note-holders. At the time of the deconsolidation, Capital Solutions Monthly Income Fund, LP’s liabilities exceeded their assets by $26,611,512.
2. PRO FORMA ADJUSTMENTS
The pro forma adjustments on the Balance Sheet and Statement of Operations exclude the financial information of the entities deconsolidated on June 30, 2010.