Attached files
file | filename |
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8-K - SG BLOCKS, INC. | form8k08066_11042011.htm |
EX-3.01 - SG BLOCKS, INC. | ex301to8k08066_11042011.htm |
EX-17.02 - SG BLOCKS, INC. | ex1702to8k08066_11042011.htm |
EX-17.01 - SG BLOCKS, INC. | ex1701to8k08066_11042011.htm |
EX-10.04 - SG BLOCKS, INC. | ex1004to8k08066_11042011.htm |
EX-16.01 - SG BLOCKS, INC. | ex1601to8k08066_11042011.htm |
EX-99.01 - SG BLOCKS, INC. | ex9901to8k08066_11042011.htm |
EX-10.03 - SG BLOCKS, INC. | ex1003to8k08066_11042011.htm |
EX-10.02 - SG BLOCKS, INC. | ex1002to8k08066_11042011.htm |
EX-10.06 - SG BLOCKS, INC. | ex1006to8k08066_11042011.htm |
EX-10.05 - SG BLOCKS, INC. | ex1005to8k08066_11042011.htm |
Exhibit 99.02
PRO FORMA INFORMATION
The following unaudited pro forma condensed combined financial statements give effect to the proposed merger between the Company and SG Blocks and certain other transactions between the Company and SG Blocks as provided for in the Merger Agreement.
On July 27, 2011, the Company and SG Blocks signed the Merger Agreement whereby at the closing 100% of the shares of SG Blocks will be canceled and extinguished and converted into 36,050,741 shares of the Company’s common stock. As a result of the transaction, the former owners of SG Blocks will become the controlling stockholders of the Company. Accordingly, the merger of the Company and SG Blocks is a reverse merger that will be accounted for as a recapitalization of SG Blocks. Upon completion of the merger, the Company will change its name to SG Blocks, Inc. The unaudited pro forma information is presented for illustration purposes only in accordance with the assumptions set forth below and in the notes to the pro forma condensed combined financial statements.
The unaudited pro forma condensed combined balance sheet as of June 30, 2011 combines the balance sheets of the Company and SG Blocks and gives pro forma effect to: (i) the reverse merger between the Company and SG Blocks in which SG Blocks is deemed to be the acquiring entity for accounting purposes, (ii) 408,750 shares of the Company’s common stock issued to Ladenburg and (iii) certain other transactions completed at the time of the merger as if the Company and SG Blocks completed such transactions as of June 30, 2011. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2010 and six months ended June 30, 2011 combine the statement of operations of the Company and SG Blocks for each of those periods and give pro forma effect to these transactions as if they were completed on January 1, 2010 and January 1, 2011, respectively.
The unaudited pro forma balance sheet and statements of operations should be read in conjunction with the separate historical financial statements of the Company and SG Blocks appearing elsewhere herein. These pro forma condensed combined financial statements may not be indicative of what would have occurred if the reverse acquisition had actually occurred on the indicated dates and they should not be relied upon as an indication of future results of operations.
Substance of the transaction
At the closing of the merger:
•
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The Company will issue 36,050,741 shares of common stock with a par value of $0.01 to the shareholders of SG Blocks in exchange for all outstanding shares of SG Blocks common stock.
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•
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The Company will issue 408,750 shares of common stock to Ladenburg for merger related consulting fees. The value of these shares was based on valuation models developed by the Company.
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•
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All outstanding SG Blocks warrants will be cancelled and substituted with warrants of similar tenor to purchase an aggregate 1,145,509 shares of the Company’s common stock.
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•
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The current holders of the Company’s common stock will own an aggregate of 8% of the Company’s common stock on a fully diluted basis, the stockholders and warrant holders of SG Blocks will beneficially own an aggregate of 91% of the common stock of the Company on a fully diluted bases and Ladenburg will own an aggregate of 1% of the common stock of the Company on a fully diluted basis (not including warrants to purchase shares of SG Blocks stock it will receive in the merger as a result of it currently holding warrants to purchase shares of SG Blocks common stock). The accumulated deficit of the Company will be eliminated to reflect the legal capitalization of the combined entity upon the completion of the merger.
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1
SG BLOCKS, INC.
Proforma Balance Sheet
(Unaudited)
June 30, 2011
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Note:
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CDSI
Holdings Inc.(1)
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SG Blocks, Inc.(2)
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Proforma
Adj. – Debit
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Proforma
Adj. – Credit
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Proforma
As Adjusted
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||||||||||||||||
Assets
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||||||||||||||||||||||
Current assets:
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||||||||||||||||||||||
Cash and cash equivalents
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$ | 13,430 | $ | 1,542,998 | $ | 1,556,428 | ||||||||||||||||
Accounts receivable, net
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— | 170,163 | 170,163 | |||||||||||||||||||
Costs and estimated earnings in excess of billings on uncompleted contracts
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— | — | — | |||||||||||||||||||
Inventory
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— | 344,923 | 344,923 | |||||||||||||||||||
Prepaid expenses and other current assets
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— | 11,111 | 11,111 | |||||||||||||||||||
Total current assets
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13,430 | 2,069,195 | — | — | 2,082,625 | |||||||||||||||||
Equipment, net
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8,084 | 8,084 | ||||||||||||||||||||
Totals
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$ | 13,430 | $ | 2,077,279 | $ | — | $ | — | $ | 2,090,709 | ||||||||||||
Liabilities and Stockholders' Equity (Deficit)
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||||||||||||||||||||||
Current liabilities:
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||||||||||||||||||||||
Accounts payable and accrued expenses
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$ | 37,962 | $ | 426,159 | $ | 464,121 | ||||||||||||||||
Accrued compensation and related costs
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— | — | — | |||||||||||||||||||
Accrued interest
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8,253 | 2,588 | 10,841 | |||||||||||||||||||
Related party accrued expenses
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— | 25,109 | 25,109 | |||||||||||||||||||
Short-term notes payable
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— | 51,247 | 51,247 | |||||||||||||||||||
Related party notes payable
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— | — | — | |||||||||||||||||||
Billings in excess of costs and estimated earnings on uncompleted contracts
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— | — | — | |||||||||||||||||||
Deferred revenue
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— | 406,660 | 406,660 | |||||||||||||||||||
Convertible promissory notes, net of discount of $90,989
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— | — | — | |||||||||||||||||||
Derivative conversion option liabilities
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— | — | — | |||||||||||||||||||
Warrant liabilities
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110,420 | 110,420 | ||||||||||||||||||||
Total current liabilities
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46,215 | 1,022,183 | — | — | 1,068,398 | |||||||||||||||||
Revolving credit promissory note from related party
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68,500 | 68,500 | ||||||||||||||||||||
Stockholders' equity (deficit):
|
||||||||||||||||||||||
Preferred stock
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— | — | — | — | — | |||||||||||||||||
Common stock
|
3
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32,700 | 1,781 | 1,781 | 364,595 | 397,295 | ||||||||||||||||
Additional paid-in capital
|
3
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8,223,444 | 4,999,600 | 8,720,243 | 4,502,801 | |||||||||||||||||
Accumulated deficit
|
3
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(8,357,429 | ) | (3,946,285 | ) | — | 8,357,429 | (3,946,285 | ) | |||||||||||||
Total stockholders' equity (deficit)
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(101,285 | ) | 1,055,096 | 8,722,024 | 8,722,024 | 953,811 | ||||||||||||||||
Totals
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$ | 13,430 | $ | 2,077,279 | $ | 8,722,024 | $ | 8,722,024 | $ | 2,090,709 |
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA BALANCE SHEET
(1)
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Derived from the historical balance sheet of CDSI Holdings, Inc. appearing elsewhere in this form 14C.
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(2)
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Derived from the historical balance sheet of SG Blocks Inc. appearing elsewhere in this form 14C.
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(3)
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To record effect of reorganization and merger pursuant to the Merger Agreement dated July 27, 2011 including:
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a.
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Cancelation and extinguishment of all issued and outstanding SG Blocks, Inc. common stock
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b.
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Issuance of 36,050,741 CDSI, Inc. common stock to the SG Blocks, Inc. shareholders
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c.
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Issuance of 408,750 CDSI, Inc. common stock to Ladenburg Thalmann & Co., Inc.
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2
SG BLOCKS, INC.
Proforma Statement of Operations
(Unaudited)
Six Months Ended June 30, 2011
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Note:
|
CDSI
Holdings Inc.(1)
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SG Blocks, Inc.(2)
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Proforma
Adj. – Debit
|
Proforma
Adj. – Credit
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Proforma As Adjusted
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||||||||||||||||
Revenue:
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|
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||||||||||||||||
SG block sales
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$
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—
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$
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2,523,599
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|
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$
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2,523,599
|
|||||||||||||
Engineering services
|
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—
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4,190
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|
|
4,190
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||||||||||||||||
Project management
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—
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64,894
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64,894
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|||||||||||||||||
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—
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2,592,683
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—
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—
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2,592,683
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||||||||||||||||
Cost of revenue:
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|
|
|
|
|
|
||||||||||||||||
SG block sales
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—
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2,178,696
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|
|
2,178,696
|
||||||||||||||||
Engineering services
|
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—
|
713
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|
|
713
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||||||||||||||||
Project management
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—
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37,904
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|
|
37,904
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|||||||||||||||||
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—
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2,217,313
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—
|
—
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2,217,313
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|||||||||||||||||
Gross profit
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—
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375,370
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—
|
—
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375,370
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||||||||||||||||
Operating expenses:
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|
|
|
|
|
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||||||||||||||||
Payroll and related expenses
|
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—
|
468,597
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|
|
468,597
|
||||||||||||||||
General and administrative expenses
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3
|
52,042
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311,537
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|
52,042
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311,537
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||||||||||||||||
Marketing and business development expense
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4
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—
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165,600
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92,610
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|
258,210
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||||||||||||||||
Pre-project expenses
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—
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45,165
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|
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45,165
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|||||||||||||||||
Total
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52,042
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990,899
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92,610
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52,042
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1,083,509
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|||||||||||||||||
Operating loss
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|
(52,042
|
)
|
(615,529
|
)
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(92,610
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)
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(52,042
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)
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(708,139
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)
|
|||||||||||
Other income (expense):
|
|
|
|
|
|
|
||||||||||||||||
Interest expense
|
3
|
(4,323
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)
|
(2,034
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)
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(4,323
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)
|
|
(2,034
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)
|
||||||||||||
Interest income
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—
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27
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|
|
27
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||||||||||||||||
Change in fair value of derivative liabilities
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—
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1,929
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|
|
1,929
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||||||||||||||||
Cancellation of trade liabiliites and unpaid interest
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—
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30,498
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30,498
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|||||||||||||||||
Total
|
(4,323
|
)
|
30,420
|
(4,323
|
)
|
—
|
30,420
|
|||||||||||||||
Net loss
|
$
|
(56,365
|
)
|
$
|
(585,109
|
)
|
$
|
(96,933
|
)
|
$
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(52,042
|
)
|
$
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(677,719
|
)
|
|||||||
Net loss per share – basic and diluted:
Basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
||||||||||||||||
Weighted average shares outstanding:
Basic and diluted
|
3,270,000
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37,944,887
|
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENTS OF OPERATIONS
(1)
|
Derived from the historical statement of operations of CDSI Holdings Inc. appearing elsewhere in this form 14C.
|
(2)
|
Derived from the historical statement of operations of SG Blocks Inc. appearing elsewhere in this form 14C.
|
(3)
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Reflects elimination of operations of CDSI.
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(4)
|
Reflects a merger expense calculated based on the enterprise value of SG Blocks, Inc. divided by the shares outstanding immediately after the merger.
|
3
SG BLOCKS, INC.
Proforma Statement of Operations
(Unaudited)
Year Ended December 31, 2010
|
Note:
|
CDSI
Holdings Inc.(1)
|
SG Blocks, Inc.(2)
|
Proforma
Adj. – Debit
|
Proforma
Adj. – Credit
|
Proforma As
Adjusted |
||||||||||||||||
Revenue:
|
|
|||||||||||||||||||||
SG block sales
|
|
$
|
—
|
$
|
1,190,004
|
$
|
1,190,004
|
|||||||||||||||
Engineering services
|
|
—
|
181,312
|
181,312
|
||||||||||||||||||
Project management
|
—
|
545,249
|
545,249
|
|||||||||||||||||||
|
|
—
|
1,916,565
|
—
|
—
|
1,916,565
|
||||||||||||||||
Cost of revenue:
|
|
|||||||||||||||||||||
SG block sales
|
|
—
|
803,453
|
803,453
|
||||||||||||||||||
Engineering services
|
|
—
|
104,369
|
104,369
|
||||||||||||||||||
Project management
|
—
|
431,337
|
431,337
|
|||||||||||||||||||
|
—
|
1,339,159
|
—
|
—
|
1,339,159
|
|||||||||||||||||
Gross profit
|
|
—
|
577,406
|
—
|
—
|
577,406
|
||||||||||||||||
Operating expenses:
|
|
|||||||||||||||||||||
Payroll and related expenses
|
|
—
|
963,075
|
963,075
|
||||||||||||||||||
General and administrative expenses
|
3
|
35,520
|
351,006
|
35,520
|
351,006
|
|||||||||||||||||
Marketing and business development expense
|
|
—
|
161,425
|
161,425
|
||||||||||||||||||
Pre-project expenses
|
—
|
35,758
|
35,758
|
|||||||||||||||||||
Total
|
35,520
|
1,511,264
|
—
|
35,520
|
1,511,264
|
|||||||||||||||||
Operating loss
|
|
(35,520
|
)
|
(933,858
|
)
|
—
|
(35,520
|
)
|
(933,858
|
)
|
||||||||||||
Other income (expense):
|
|
|||||||||||||||||||||
Interest expense
|
3
|
(2,510
|
)
|
(396,155
|
)
|
(2,510
|
)
|
(396,155
|
)
|
|||||||||||||
Interest income
|
3
|
1
|
37
|
1
|
37
|
|||||||||||||||||
Change in fair value of derivative liabilities
|
|
—
|
9,275
|
9,275
|
||||||||||||||||||
Cancellation of trade liabiliites and unpaid interest
|
|
—
|
73,057
|
73,057
|
||||||||||||||||||
Recovery of unclaimed property
|
3
|
2,825
|
—
|
2,825
|
—
|
|||||||||||||||||
Total
|
316
|
(313,786
|
)
|
316
|
—
|
(313,786
|
)
|
|||||||||||||||
Net loss
|
$
|
(35,204
|
)
|
$
|
(1,247,644
|
)
|
$
|
316
|
$
|
(35,520
|
)
|
$
|
(1,247,644
|
)
|
||||||||
Net loss per share – basic and diluted:
Basic and diluted |
$
|
(0.01
|
)
|
$
|
(0.05
|
)
|
||||||||||||||||
Weighted average shares outstanding:
Basic and diluted |
3,223,562
|
23,497,814
|
NOTES TO UNAUDITED CONDENSED COMBINED PRO FORMA STATEMENTS OF OPERATIONS
(1)
|
Derived from the historical statement of operations of CDSI Holdings Inc. appearing elsewhere in this form 14C.
|
(2)
|
Derived from the historical statement of operations of SG Blocks Inc. appearing elsewhere in this form 14C.
|
(3)
|
Reflects elimination of operations of CDSI.
|
4