Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - World Energy Solutions, Inc. | d284192d8ka.htm |
| EX-99.2 - EXHIBIT 99.2 - World Energy Solutions, Inc. | d284192dex992.htm |
| EX-23.1 - EXHIBIT 23.1 - World Energy Solutions, Inc. | d284192dex231.htm |
EXHIBIT 99.3
Unaudited Pro Forma Combined Consolidated Financial Information
The following unaudited pro forma combined consolidated statements of operations of World Energy Solutions, Inc. (the “Company” or “World Energy”) for the nine-months ended September 30, 2011 and for the year ended December 31, 2010, gives effect to the acquisition of the Co-eXprise, Inc. energy procurement business (“Co-eXprise”) as if the transaction had occurred on January 1, 2010, Northeast Energy Solutions, LLC (“NES”) as if the transaction had occurred on March 31, 2010 (inception) and GSE Consulting, LP (“GSE”) as if the transaction had occurred on January 1, 2010. The unaudited pro forma combined consolidated balance sheet at September 30, 2011 gives effect to the acquisition of NES and GSE as if the transaction had occurred on September 30, 2011.
The accompanying unaudited pro forma combined consolidated financial information reflects World Energy’s acquisitions of Co-eXprise, NES and GSE. In accordance with Accounting Standards Codification (“ASC”) No. 805 “Business Combinations”, and ASC No. 350 “Intangibles – Goodwill and Other” (“ASC No. 350”), the Company used the purchase method of accounting for a business combination to account for the acquisitions as well as the related accounting and reporting regulations for goodwill and other intangibles. Under the purchase method of accounting, the total purchase price is allocated to the net assets and liabilities acquired based upon estimates of the fair value of those assets and liabilities. Any excess purchase price is allocated to goodwill. The preliminary allocation of the purchase price was based upon estimates of the fair value of the acquired assets and liabilities in accordance with ASC No. 350.
The following unaudited pro forma combined financial statements of the Company have been prepared by management in accordance with generally accepted accounting principles in the United States and do not reflect any operating efficiencies and cost savings that World Energy believes are achievable.
The unaudited pro forma combined financial information is presented for illustrative purpose only and is not necessarily indicative of the operating results that would have occurred if the acquisitions had been consummated at the beginning of the periods presented, nor is it necessarily indicative of future operating results. The pro forma adjustments are based upon available information and upon certain assumptions described in the notes to the unaudited pro forma combined financial statements that World Energy’s management believes are reasonable in the circumstances. The accompanying pro forma financial combined information should be read in conjunction with the historical consolidated financial statements and accompanying notes thereto of World Energy included in its Annual Report on Form 10-K for the year ended December 31, 2010 and GSE financial statements included elsewhere herein.
World Energy Solutions, Inc.
Pro Forma Combined Consolidated Balance Sheet
September 30, 2011
(Unaudited)
| World Energy Solutions |
NES | Pro Forma Adjustments |
Note | Pro Forma | GSE | Pro Forma Adjustments |
Note | Pro Forma | ||||||||||||||||||||||||
| Assets |
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| Current assets |
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| Cash and cash equivalents |
$ | 6,516,266 | $ | 110,765 | $ | (1,114,896 | ) | A | $ | 5,512,135 | $ | 272,408 | $ | (5,709,997 | ) | B | $ | 74,546 | ||||||||||||||
| Trade accounts receivable, net |
3,688,073 | 642,137 | (642,137 | ) | A | 3,688,073 | — | 490,017 | B | 4,178,090 | ||||||||||||||||||||||
| Inventory |
— | 24,267 | (18,167 | ) | A | 6,100 | — | — | 6,100 | |||||||||||||||||||||||
| Prepaid expenses and other current assets |
410,314 | 67,170 | (67,170 | ) | A | 410,314 | 12,940 | — | 423,254 | |||||||||||||||||||||||
| Advances to affiliates |
— | — | — | — | 208,509 | (208,509 | ) | B | — | |||||||||||||||||||||||
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| Total current assets |
10,614,653 | 844,339 | (1,842,370 | ) | 9,616,622 | 493,857 | (5,428,489 | ) | 4,681,990 | |||||||||||||||||||||||
| Property and equipment, net |
202,557 | 168,530 | (93,230 | ) | A | 277,857 | 104,474 | — | 382,331 | |||||||||||||||||||||||
| Convertible note receivable |
650,000 | — | — | 650,000 | — | — | 650,000 | |||||||||||||||||||||||||
| Intangible assets, definite lives, net |
4,740,063 | — | 991,600 | A | 5,731,663 | — | 6,720,000 | B | 12,451,663 | |||||||||||||||||||||||
| Intangible assets, indefinite lives |
— | — | 1,970,900 | A | 1,970,900 | — | — | 1,970,900 | ||||||||||||||||||||||||
| Goodwill |
5,010,092 | — | 1,630,338 | A | 6,640,430 | — | 5,245,031 | B | 11,885,461 | |||||||||||||||||||||||
| Other assets |
174,460 | 1,631 | (1,631 | ) | A | 174,460 | 15,030 | — | 189,490 | |||||||||||||||||||||||
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| Total assets |
$ | 21,391,825 | $ | 1,014,500 | $ | 2,655,607 | $ | 25,061,932 | $ | 613,361 | $ | 6,536,542 | $ | 32,211,835 | ||||||||||||||||||
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| Liabilities and Stockholders’ Equity |
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| Current liabilities |
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| Accounts payable |
$ | 318,633 | $ | 90,812 | $ | (90,812 | ) | A | $ | 318,633 | $ | 142,424 | $ | (142,424 | ) | B | $ | 318,633 | ||||||||||||||
| Accrued commissions |
918,840 | — | — | 918,840 | — | — | 918,840 | |||||||||||||||||||||||||
| Accrued compensation |
1,332,446 | — | 237,500 | A | 1,569,946 | — | 1,912,000 | B | 3,481,946 | |||||||||||||||||||||||
| Accrued expenses |
257,615 | 85,355 | (85,355 | ) | A | 257,615 | — | — | 257,615 | |||||||||||||||||||||||
| Deferred revenue and customer advances |
179,365 | — | — | 179,365 | — | — | 179,365 | |||||||||||||||||||||||||
| Bank line of credit and note payable |
— | 300,000 | (300,000 | ) | A | — | 1,567,717 | (1,567,717 | ) | B | — | |||||||||||||||||||||
| Loans payable, member |
— | 100,000 | (100,000 | ) | A | — | — | — | — | |||||||||||||||||||||||
| Loans payable, other |
— | 15,112 | 2,000,000 | A | 2,015,112 | — | — | 2,015,112 | ||||||||||||||||||||||||
| Capital lease obligations |
4,785 | — | — | 4,785 | 13,127 | — | 17,912 | |||||||||||||||||||||||||
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| Total current liabilities |
3,011,684 | 591,279 | 1,661,333 | 5,264,296 | 1,723,268 | 201,859 | 7,189,423 | |||||||||||||||||||||||||
| Loans payable, other, net of current portion |
— | 45,060 | 1,000,000 | A | 1,045,060 | — | — | 1,045,060 | ||||||||||||||||||||||||
| Capital lease obligations, net of current portion |
— | — | — | — | 15,776 | — | 15,776 | |||||||||||||||||||||||||
| Long-term accrued compensation |
— | — | 120,312 | A | 120,312 | — | 1,999,000 | B | 2,119,312 | |||||||||||||||||||||||
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| Total liabilities |
3,011,684 | 636,339 | 2,781,645 | 6,429,668 | 1,739,044 | 2,200,859 | 10,369,571 | |||||||||||||||||||||||||
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| Stockholders’ equity: |
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| Preferred stock |
— | — | — | — | — | — | — | |||||||||||||||||||||||||
| Common stock |
1,077 | — | 8 | A | 1,085 | — | 100 | B | 1,185 | |||||||||||||||||||||||
| Additional paid-in capital |
39,384,096 | 25,366 | 226,749 | A | 39,636,211 | (15,046,308 | ) | 18,256,208 | B | 42,846,111 | ||||||||||||||||||||||
| Accumulated deficit |
(20,784,494 | ) | 352,795 | (352,795 | ) | A | (20,784,494 | ) | 13,920,625 | (13,920,625 | ) | B | (20,784,494 | ) | ||||||||||||||||||
| Treasury stock |
(220,538 | ) | — | — | (220,538 | ) | — | — | (220,538 | ) | ||||||||||||||||||||||
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| Total stockholders’ equity |
18,380,141 | 378,161 | (126,038 | ) | 18,632,264 | (1,125,683 | ) | 4,335,683 | 21,842,264 | |||||||||||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 21,391,825 | $ | 1,014,500 | $ | 2,655,607 | $ | 25,061,932 | $ | 613,361 | $ | 6,536,542 | $ | 32,211,835 | ||||||||||||||||||
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2
World Energy Solutions, Inc.
Pro Forma Combined Consolidated Statements of Operations
For the Year Ended December 31, 2010
(Unaudited)
| Historical | ||||||||||||||||||||||||||||||||||||||||||||||
| NES | ||||||||||||||||||||||||||||||||||||||||||||||
| Period From | ||||||||||||||||||||||||||||||||||||||||||||||
| Historical World | Historical | March 31, 2010 | ||||||||||||||||||||||||||||||||||||||||||||
| Energy Solutions | Co-eXprise | (Inception) | Historical GSE | |||||||||||||||||||||||||||||||||||||||||||
| Year Ended | Year Ended | Pro Forma | Pro Forma | Through | Pro Forma | Pro Forma | Year Ended | Pro Forma | Pro Forma | |||||||||||||||||||||||||||||||||||||
| December 31, 2010 | December 31, 2010 | Adjustments | Combined | December 31, 2010 | Adjustments | Combined | December 31, 2010 | Adjustments | Combined | |||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 17,984,662 | $ | 2,131,228 | $ | — | $ | 20,115,890 | $ | 1,161,730 | $ | — | $ | 21,277,620 | $ | 7,062,745 | $ | (171,672 | ) | L | $ | 28,168,693 | ||||||||||||||||||||||||
| Cost of revenue |
3,715,869 | 211,766 | — | 3,927,635 | 785,664 | 8,263 | F | 4,721,562 | 1,222,252 | — | 5,943,814 | |||||||||||||||||||||||||||||||||||
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| Gross profit |
14,268,793 | 1,919,462 | — | 16,188,255 | 376,066 | (8,263 | ) | 16,556,058 | 5,840,493 | (171,672 | ) | 22,224,879 | ||||||||||||||||||||||||||||||||||
| Total operating expenses |
14,376,562 | 1,506,643 | 520,857 | C | 16,404,062 | 339,608 | 74,370 | F | 16,818,040 | 3,973,176 | 1,090,328 | I, L | 21,881,544 | |||||||||||||||||||||||||||||||||
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| Operating income (loss) |
(107,769 | ) | 412,819 | (520,857 | ) | (215,807 | ) | 36,458 | (82,633 | ) | (261,982 | ) | 1,867,317 | (1,262,000 | ) | 343,335 | ||||||||||||||||||||||||||||||
| Other income (expense), net |
8,682 | (9,677 | ) | (220,000 | ) | D | (220,995 | ) | (3,542 | ) | (70,289 | ) | G | (294,826 | ) | (102,401 | ) | (285,473 | ) | J | (682,700 | ) | ||||||||||||||||||||||||
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| Income (loss) before income taxes |
(99,087 | ) | 403,142 | (740,857 | ) | (436,802 | ) | 32,916 | (152,922 | ) | (556,808 | ) | 1,764,916 | (1,547,473 | ) | (339,365 | ) | |||||||||||||||||||||||||||||
| Income tax expense |
— | 9,590 | — | E | 9,590 | — | — | H | 9,590 | — | — | K | 9,590 | |||||||||||||||||||||||||||||||||
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| Net income (loss) |
$ | (99,087 | ) | $ | 393,552 | $ | (740,857 | ) | $ | (446,392 | ) | $ | 32,916 | $ | (152,922 | ) | $ | (566,398 | ) | $ | 1,764,916 | $ | (1,547,473 | ) | $ | (348,955 | ) | |||||||||||||||||||
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3
World Energy Solutions, Inc.
Pro Forma Combined Consolidated Statements of Operations
For the Nine Months Ended September 30, 2011
(Unaudited)
| Historical World | Historical | Pro Forma | ||||||||||||||||||||||||||||||||||||||||||||
| Energy Solutions | Co-eXprise | Adjustments For | Historical NES | Historical GSE | ||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended | Period Ended | Period Ended | Pro Forma | Nine Months Ended | Pro Forma | Pro Forma | Nine Months Ended | Pro Forma | Pro Forma | |||||||||||||||||||||||||||||||||||||
| September 30, 2011 | September 12, 2011 | September 12, 2011 | Combined | September 30, 2011 | Adjustments | Combined | September 30, 2011 | Adjustments | Combined | |||||||||||||||||||||||||||||||||||||
| Revenue |
$ | 15,180,140 | $ | 1,563,408 | $ | — | $ | 16,743,548 | $ | 2,438,895 | $ | — | $ | 19,182,443 | $ | 6,781,393 | $ | (104,363 | ) | L | $ | 25,859,473 | ||||||||||||||||||||||||
| Cost of revenue |
2,907,359 | 52,261 | — | 2,959,620 | 1,605,585 | 8,263 | F | 4,573,468 | 967,294 | — | 5,540,762 | |||||||||||||||||||||||||||||||||||
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| Gross profit |
12,272,781 | 1,511,147 | — | 13,783,928 | 833,310 | (8,263 | ) | 14,608,975 | 5,814,099 | (104,363 | ) | 20,318,711 | ||||||||||||||||||||||||||||||||||
| Total operating expenses |
10,996,133 | 370,284 | 366,902 | C | 11,733,319 | 496,513 | 74,370 | F | 12,304,202 | 3,079,668 | 842,137 | I, L | 16,226,007 | |||||||||||||||||||||||||||||||||
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| Operating income (loss) |
1,276,648 | 1,140,863 | (366,902 | ) | 2,050,609 | 336,797 | (82,633 | ) | 2,304,773 | 2,734,431 | (946,500 | ) | 4,092,704 | |||||||||||||||||||||||||||||||||
| Other income (expense), net |
41,646 | (5,555 | ) | (78,833 | ) | D | (42,742 | ) | (16,918 | ) | (24,350 | ) | G | (84,010 | ) | (85,463 | ) | (214,105 | ) | J | (383,578 | ) | ||||||||||||||||||||||||
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| Income (loss) before income taxes |
1,318,294 | 1,135,308 | (445,735 | ) | 2,007,867 | 319,879 | (106,983 | ) | 2,220,763 | 2,648,968 | (1,160,605 | ) | 3,709,126 | |||||||||||||||||||||||||||||||||
| Income tax expense |
21,750 | 6,288 | 6,530 | E | 34,568 | — | 3,847 | H | 38,415 | — | 29,768 | K | 68,183 | |||||||||||||||||||||||||||||||||
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| Net income (loss) |
$ | 1,296,544 | $ | 1,129,020 | $ | (452,265 | ) | $ | 1,973,299 | $ | 319,879 | $ | (110,830 | ) | $ | 2,182,348 | $ | 2,648,968 | $ | (1,190,373 | ) | $ | 3,640,943 | |||||||||||||||||||||||
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4
World Energy Solutions, Inc.
Notes to Pro Forma Combined Financial Statements
As of September 30, 2011, and For the Nine Months Ended September 30, 2011
and the Year Ended December 31, 2010
| Note A: |
Reflects excluded assets and retained liabilities of NES, elimination of the historical equity accounts and the allocation of total purchase price as follows: |
| Tangible assets acquired |
$ | 81,400 | ||
| Liabilities assumed |
(60,172 | ) | ||
| Intangibles acquired, definite life |
991,600 | |||
| Intangibles acquired, indefinite life |
1,970,900 | |||
| Goodwill |
1,630,338 | |||
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| Total purchase price |
$ | 4,614,066 | ||
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| Note B: |
Reflects excluded assets and retained liabilities of GSE, elimination of the historical equity accounts and the allocation of total purchase price as follows: |
| Tangible assets acquired |
$ | 622,461 | ||
| Liabilities assumed |
(28,903 | ) | ||
| Intangibles acquired, definite life |
6,720,000 | |||
| Goodwill |
5,245,031 | |||
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| Total purchase price |
$ | 12,558,589 | ||
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| Note C: |
Reflects the pro forma adjustments to amortization of intangible assets related to the acquisition of Co-eXprise as if the acquisition had occurred on January 1, 2010 using lives from two and one half to seven years. | |
| Note D: |
Reflects foregone interest income and interest expense on borrowed amounts to fund the purchase of Co-eXprise effective January 1, 2010. | |
| Note E: |
Reflects the pro forma tax effect of the Co-eXprise transactions outlined above and in the pro forma financial statements. | |
| Note F: |
Reflects the pro forma adjustments to amortization of intangible assets related to the acquisition of NES as if the acquisition had occurred on March 31, 2010 (inception) using a life of nine years. | |
| Note G: |
Reflects foregone interest income and interest expense on borrowed amounts to fund the purchase of NES effective March 31, 2010. | |
| Note H: |
Reflects the pro forma tax effect of NES transactions outlined above and in the pro forma financial statements. | |
| Note I: |
Reflects the pro forma adjustments to amortization of intangible assets related to the acquisition of GSE as if the acquisition had occurred on January 1, 2010 using lives from three to ten years. | |
| Note J: |
Reflects foregone interest income and interest expense on borrowed amounts to fund the purchase of GSE effective January 1, 2010. | |
5
| Note K: |
Reflects the pro forma tax effect of the GSE transactions outlined above and in the pro forma financial statements. | |
| Note L: |
Reflects the elimination of intercompany revenue and expenses between the Company and GSE. | |
6