Attached files
| file | filename |
|---|---|
| 8-K/A - 8-K/A - AgFeed Industries, Inc. | v204104_8ka.htm |
| EX-99.1 - EX-99.1 - AgFeed Industries, Inc. | v204104_ex99-1.htm |
Exhibit
99.2
AgFeed
Industries, Inc.
and
M2 P2, LLC
Pro
Forma Combined Financial Statements
(unaudited)
Contents
|
Page
|
|
|
Pro
Forma Combined Financial Statements:
|
|
|
Pro
Forma Combined Balance Sheet as of June 30, 2010
(unaudited)
|
F-2
|
|
Pro
Forma Combined Statements of Operations for the six months June 30, 2010
(unaudited)
|
F-3
|
|
Pro
Forma Combined Statements of Operations for the year ended December 31,
2009 (unaudited)
|
F-4
|
|
Notes
to Pro Forma Combined Financial Statements (unaudited)
|
F-5
|
F-1
AgFeed
Industries, Inc.
and
M2 P2, LLC
Pro
Forma Combined Balance Sheet
June
30, 2010
(unaudited)
|
Pro
forma
|
Pro
forma
|
|||||||||||||||
|
AgFeed,
Inc. (1)
|
M2
P2 (2)
|
Adjustments
|
Combined
|
|||||||||||||
|
(historical)
|
(historical)
|
|||||||||||||||
|
ASSETS
|
||||||||||||||||
|
CURRENT
ASSETS:
|
||||||||||||||||
|
Cash
and cash equivalents
|
$ | 24,027,490 | $ | 445 | $ | (12,194,294 | )(a) | $ | 24,833,641 | |||||||
| 13,000,000 | (b) | |||||||||||||||
|
Accounts
receivable
|
17,415,553 | 2,206,433 | 19,621,986 | |||||||||||||
|
Advances
to suppliers
|
289,829 | 289,829 | ||||||||||||||
|
Other
receivables
|
1,820,684 | 1,820,684 | ||||||||||||||
|
Inventory
|
27,287,750 | 55,544,039 | 82,831,789 | |||||||||||||
|
Prepaid
expenses
|
1,388,865 | 1,677,196 | 3,066,061 | |||||||||||||
|
Debt
issue costs
|
19,785 | 19,785 | ||||||||||||||
|
Total
current assets
|
72,249,956 | 59,428,113 | 805,706 | 132,483,775 | ||||||||||||
|
PROPERTY
AND EQUIPMENT, net
|
33,913,168 | 25,525,705 | (3,501,559 | )(a) | 55,937,314 | |||||||||||
|
CONSTRUCTION-IN-PROCESS
|
5,595,137 | 5,595,137 | ||||||||||||||
|
INTANGIBLE
ASSETS, net
|
43,944,086 | 5,400,000 | (a) | 49,344,086 | ||||||||||||
|
OTHER
ASSETS
|
7,149,532 | 89,610 | 7,239,142 | |||||||||||||
|
TOTAL
ASSETS
|
$ | 162,851,879 | $ | 85,043,428 | $ | 2,704,147 | $ | 250,599,454 | ||||||||
|
LIABILITIES
AND EQUITY
|
||||||||||||||||
|
CURRENT
LIABILITIES:
|
||||||||||||||||
|
Short-term
loan
|
$ | 4,419,000 | $ | $ | $ | 4,419,000 | ||||||||||
|
Accounts
payable
|
6,800,705 | 5,373,764 | 12,174,469 | |||||||||||||
|
Other
payables
|
2,282,587 | 2,658,400 | 4,940,987 | |||||||||||||
|
Unearned
revenue
|
328,855 | 328,855 | ||||||||||||||
|
Accrued
expenses
|
144,092 | 2,765,846 | 2,909,938 | |||||||||||||
|
Accrued
payroll
|
734,515 | 734,515 | ||||||||||||||
|
Tax
and welfare payable
|
472,577 | 472,577 | ||||||||||||||
|
Interest
payable
|
155,614 | 155,614 | ||||||||||||||
|
Convertible
notes
|
953,439 | 953,439 | ||||||||||||||
|
Current
portion of long-term debt
|
1,400,000 | 1,400,000 | ||||||||||||||
|
Total
current liabilities
|
16,291,384 | 12,198,010 | - | 28,489,394 | ||||||||||||
|
PROMISSORY
NOTE
|
- | 9,621,434 | (a) | 9,621,434 | ||||||||||||
|
LONG-TERM
DEBT
|
49,879,558 | 49,879,558 | ||||||||||||||
|
TOTAL
LIABILITIES
|
16,291,384 | 62,077,568 | 9,621,434 | 87,990,386 | ||||||||||||
|
COMMITMENTS
AND CONTINGENCIES
|
- | - | - | - | ||||||||||||
|
EQUITY:
|
||||||||||||||||
|
AgFeed
stockholders' equity:
|
||||||||||||||||
|
Common
stock
|
45,421 | 1,287 | (a) | 51,738 | ||||||||||||
| 5,030 | (b) | |||||||||||||||
|
Additional
paid-in capital
|
112,903,436 | 3,047,286 | (a) | 128,945,692 | ||||||||||||
| 12,994,970 | (b) | |||||||||||||||
|
Members'
equity
|
22,965,860 | (22,965,860 | )(a) | - | ||||||||||||
|
Deferred
compensation
|
(3,086,560 | ) | (3,086,560 | ) | ||||||||||||
|
Other
comprehensive income
|
4,475,896 | 4,475,896 | ||||||||||||||
|
Statutory
reserve
|
5,207,997 | 5,207,997 | ||||||||||||||
|
Treasury
stock (367,295 shares)
|
(1,811,746 | ) | (1,811,746 | ) | ||||||||||||
|
Retained
earnings
|
28,800,347 | 28,800,347 | ||||||||||||||
|
Total
AgFeed stockholders' equity
|
146,534,791 | 22,965,860 | (6,917,287 | ) | 162,583,364 | |||||||||||
|
Noncontrolling
interest (deficit)
|
25,704 | 25,704 | ||||||||||||||
|
Total
equity
|
146,560,495 | 22,965,860 | (6,917,287 | ) | 162,609,068 | |||||||||||
|
TOTAL
LIABILITIES AND EQUITY
|
$ | 162,851,879 | $ | 85,043,428 | $ | 2,704,147 | $ | 250,599,454 | ||||||||
(1)
Source: unaudited financial statements of AgFeed Industries, Inc. as of June 30,
2010 included in Form 10-Q.
(2)
Source: unaudited financial statements of M2 P2, LLC as of June 30,
2010 included elsewhere in this Form 8-K.
See
accompanying notes to pro forma combined financial statements
F-2
AgFeed
Industries, Inc.
and
M2 P2, LLC
Pro
Forma Combined Statement of Operations
For
the Six Months Ended June 30, 2010
(unaudited)
|
Pro
forma
|
Pro
forma
|
|||||||||||||||
|
AgFeed, Inc.
(1)
|
M2
P2 (2)
|
Adjustments
|
Combined
|
|||||||||||||
|
(historical)
|
(historical)
|
|||||||||||||||
|
Revenues
|
$ | 90,521,022 | $ | 85,245,065 | $ | - | $ | 175,766,087 | ||||||||
|
Cost
of goods sold
|
81,642,462 | 80,397,180 | - | 162,039,642 | ||||||||||||
|
Gross
profit
|
8,878,560 | 4,847,885 | - | 13,726,445 | ||||||||||||
|
Operating
expenses
|
||||||||||||||||
|
Selling
expenses
|
2,013,940 | - | - | 2,013,940 | ||||||||||||
|
General
and administrative expenses
|
7,173,081 | 1,105,696 | 385,714 | (c) | 8,664,491 | |||||||||||
|
Total
operating expenses
|
9,187,021 | 1,105,696 | 385,714 | 10,678,431 | ||||||||||||
|
Income
(loss) from operations
|
(308,461 | ) | 3,742,189 | (385,714 | ) | 3,048,014 | ||||||||||
|
Non-operating
income (expense):
|
||||||||||||||||
|
Other
expense
|
(450,907 | ) | - | - | (450,907 | ) | ||||||||||
|
Interest
income
|
86,073 | - | - | 86,073 | ||||||||||||
|
Interest
and financing costs
|
(264,841 | ) | (1,255,217 | ) | (384,857 | )(d) | (1,904,915 | ) | ||||||||
|
Foreign
currency transaction loss
|
(20,634 | ) | - | - | (20,634 | ) | ||||||||||
|
Total
non-operating expense
|
(650,309 | ) | (1,255,217 | ) | (384,857 | ) | (2,290,383 | ) | ||||||||
|
Income
(loss) before provision for income taxes
|
(958,770 | ) | 2,486,972 | (770,571 | ) | 757,631 | ||||||||||
|
Provision
for income taxes
|
1,094,719 | - | 686,560 | (e) | 1,781,279 | |||||||||||
|
Net
income (loss) including noncontrolling interest
|
(2,053,489 | ) | 2,486,972 | (1,457,131 | ) | (1,023,648 | ) | |||||||||
|
Less:
Net loss attributed to noncontrolling interest
|
(166,155 | ) | - | - | (166,155 | ) | ||||||||||
|
Net
income (loss) attributed to AgFeed
|
$ | (1,887,334 | ) | $ | 2,486,972 | $ | (1,457,131 | ) | $ | (857,493 | ) | |||||
|
Weighted
average shares outstanding :
|
||||||||||||||||
|
Basic
|
44,942,821 | 51,259,171 | ||||||||||||||
|
Diluted
|
44,942,821 | 51,259,171 | ||||||||||||||
|
Loss
per share attributed to AgFeed common stockholders:
|
||||||||||||||||
|
Basic
|
$ | (0.04 | ) | $ | (0.02 | ) | ||||||||||
|
Diluted
|
$ | (0.04 | ) | $ | (0.02 | ) | ||||||||||
(1)
Source: unaudited financial statements of AgFeed Industrial, Inc. included in
Form 10-Q for the six months ended June 30, 2010.
(2)
Source: unaudited financial statements of M2 P2 LLC for the six
months ended June 30, 2010 included elsewhere in this Form 8-K.
See
accompanying notes to pro forma combined financial statements
F-3
AgFeed
Industries, Inc.
and
M2 P2, LLC
Pro
Forma Combined Statement of Operations
For
the Year Ended December 31, 2009
|
Pro
forma
|
Pro
forma
|
|||||||||||||||
|
AgFeed, Inc.
(1)
|
M2
P2 (2)
|
Adjustments
|
Combined
|
|||||||||||||
|
(historical)
|
(historical)
|
|||||||||||||||
|
Revenues
|
$ | 173,203,271 | $ | 185,441,816 | $ | - | $ | 358,645,087 | ||||||||
|
Cost
of goods sold
|
146,568,116 | 173,742,572 | - | 320,310,688 | ||||||||||||
|
Gross
profit
|
26,635,155 | 11,699,244 | - | 38,334,399 | ||||||||||||
|
Operating
expenses
|
||||||||||||||||
|
Selling
expenses
|
3,934,047 | - | - | 3,934,047 | ||||||||||||
|
General
and administrative expenses
|
10,109,020 | 4,723,734 | 771,429 | (c) | 15,604,183 | |||||||||||
|
Total
operating expenses
|
14,043,067 | 4,723,734 | 771,429 | 19,538,230 | ||||||||||||
|
Income
from operations
|
12,592,088 | 6,975,510 | (771,429 | ) | 18,796,169 | |||||||||||
|
Non-operating
income (expense):
|
||||||||||||||||
|
Other
expense
|
(442,635 | ) | - | - | (442,635 | ) | ||||||||||
|
Interest
income
|
213,018 | - | - | 213,018 | ||||||||||||
|
Interest
and financing costs
|
(1,022,626 | ) | (3,005,458 | ) | (769,715 | )(d) | (4,797,799 | ) | ||||||||
|
Foreign
currency transaction loss
|
(17,943 | ) | - | - | (17,943 | ) | ||||||||||
|
Total
non-operating expense
|
(1,270,186 | ) | (3,005,458 | ) | (769,715 | ) | (5,045,359 | ) | ||||||||
|
Income
before provision for income taxes
|
11,321,902 | 3,970,052 | (1,541,144 | ) | 13,750,810 | |||||||||||
|
Provision
for income taxes
|
1,142,105 | - | 971,563 | (e) | 2,113,668 | |||||||||||
|
Net
income including noncontrolling interest
|
10,179,797 | 3,970,052 | (2,512,707 | ) | 11,637,142 | |||||||||||
|
Less:
Net loss attributed to noncontrolling interest
|
(168,569 | ) | - | - | (168,569 | ) | ||||||||||
|
Net
income attributed to AgFeed
|
$ | 10,348,366 | $ | 3,970,052 | $ | (2,512,707 | ) | $ | 11,805,711 | |||||||
|
Weighted
average shares outstanding :
|
||||||||||||||||
|
Basic
|
40,978,457 | 47,294,807 | ||||||||||||||
|
Diluted
|
41,214,070 | 47,530,420 | ||||||||||||||
|
Earnings
per share attributed to AgFeed common stockholders:
|
||||||||||||||||
|
Basic
|
$ | 0.25 | $ | 0.25 | ||||||||||||
|
Diluted
|
$ | 0.25 | $ | 0.25 | ||||||||||||
(1)
Source: unaudited financial statements of AgFeed Industrial, Inc. included in
Form 10-K for the year ended December 31, 2009.
(2)
Source: unaudited financial statements of M2 P2 LLC for the year
ended December 31, 2009 included elsewhere in this Form 8-K.
See
accompanying notes to pro forma combined financial statements
F-4
AgFeed
Industries, Inc.
and
M2 P2, LLC
Notes
to Pro form Combined Financial Statements
NOTE
1 - BASIS OF PRESENTATION
The
accompanying pro forma combined balance sheet presents the accounts of AgFeed
Industries, Inc. (“AgFeed”) and M2 P2, LLC (“M2P2”) as if the acquisition of
M2P2 by AgFeed occurred on June 30, 2010. The accompanying pro forma
combined statement of operations presents the accounts of AgFeed and M2P2 for
the year ended December 31, 2009, and for the six months ended June 30, 2010 as
if the acquisition occurred on January 1, 2009.
The
following adjustments would be required if the acquisition occurred as indicated
above:
|
a.
|
To
record the purchase price of $24,864,301 consisting of the following: cash
- $12,194,294; promissory note - $9,621,434 and common stock – 1,286,588
shares valued at $3,048,573; and to allocate the purchase price to the
fair value of assets acquired and liabilities
assumed;
|
|
b.
|
To
record the issuance of 5,029,762 shares of AgFeed common stock, under its
Equity Credit Agreement, for proceeds of $13 million. The
proceeds were used to purchase M2P2, with any excess retained for general
corporate purposes.
|
|
c.
|
To
record the amortization for the purchased intangible
assets;
|
|
d.
|
To
record the interest on the $9.6 million promissory note issued in
connection with the acquisition of
M2P2;
|
|
e.
|
To
record the tax provision of 40% (combined US federal and state income tax
rate) since M2P2 as a limited liability company did not provide for income
taxes; and to record tax effects of other pro forma
adjustments.
|
F-5