Attached files
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| 8-K - CURRENT REPORT - MIT Holding, Inc. | form8k.htm |
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On February 4, 2011, MITRX Corporation, a South Carolina corporation and subsidiary of MIT Holding Inc. ("MIT" or the "Company"), executed two stock purchase agreements (attached hereto as Exhibit 10.19 and 10.20) (the "Agreements"), pursuant to which it agreed to acquire one hundred Percent (100%) of the issued and outstanding equity interests of two companies; National Direct Home Pharmacy, Inc., owned by Lancelot D. Wright and John T. Crocker, Sr., and Palmetto Long Term Care Pharmacy, LLC a wholly owned subsidiary of Strategies Healthcare, Inc., which is owned by Lancelot D. Wright and Robert A. Williams. There are no material relationships between the sellers, their owners, affiliates, officers or directors and MIT's officers, directors or affiliates.
The following unaudited pro forma condensed combined financial statements are based on the year ended December 31, 2010, giving effect to the transaction under the purchase method of accounting, with MIT Holding, Inc. treated as the acquiring entity for financial reporting purposes.
The unaudited pro forma condensed combined balance sheet at December 31, 2010 presents the financial position of the Surviving Corporation assuming the merger was completed on December 31, 2010. The pro forma condensed combined statement of operations for the year ended December 31, 2010 presents the results of operations of the Surviving Corporation, assuming the merger was completed on January 1, 2010.
The pro forma condensed combined financial statements have been prepared by management of MIT Holding, Inc. based on the financial statements included elsewhere herein. The pro forma adjustments include certain assumptions and preliminary estimates as discussed in the accompanying notes and are subject to change. These pro forma statements may not be indicative of the results that actually would have occurred if the combination had been in effect on the dates indicated or which may be obtained in the future. These pro forma financial statements should be read in conjunction with the accompanying notes and the historical financial information of MIT Holding, Inc., Palmetto Long Term Care Pharmacy, LLC and National Direct Home Pharmacy (including the notes thereto) included in this Form.
MIT HOLDING, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2010
| Palmetto Long | National | |||||||||||||||||||
| MIT Holding, | Term Care | Direct Home | Pro Forma | Pro Forma | ||||||||||||||||
| Inc | Pharmacy, LLC | Pharmacy | Eliminations | Consolidated | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||||
| Cash and cash equivalents | $ | 177,620 | $ | 17,021 | $ | 2,959 | $ | 197,600 | ||||||||||||
| Amount due from lender, received January 24, 2011 | 50,000 | 0 | 0 | 50,000 | ||||||||||||||||
| Accounts receivable | 565,777 | 1,278,875 | 1,456,532 | 3,301,184 | ||||||||||||||||
| Inventory, at cost | 201,068 | 106,530 | 0 | 307,598 | ||||||||||||||||
| Employee advances | 6,100 | 0 | 0 | 6,100 | ||||||||||||||||
| Prepaid expenses | 65,000 | 0 | 0 | 65,000 | ||||||||||||||||
| Total current assets | 1,065,565 | 1,402,426 | 1,459,491 | 3,927,482 | ||||||||||||||||
| PROPERTY AND EQUIPMENT | 13,324 | 268,913 | 760,309 | 1,042,546 | ||||||||||||||||
| OTHER ASSETS | ||||||||||||||||||||
| Affiliated loans, net | 0 | 3,062,656 | 2,277,208 | 5,339,864 | ||||||||||||||||
| Contract valuation | 0 | 285,510 | 0 | 11,030,500 | 11,316,010 | |||||||||||||||
| Deferred acquisition cost | 0 | 0 | 0 | 750,000 | 750,000 | |||||||||||||||
| Other assets | 62,075 | 260,000 | 0 | 322,075 | ||||||||||||||||
| Total other assets | 62,075 | 3,608,166 | 2,277,208 | 11,780,500 | 17,727,949 | |||||||||||||||
| TOTAL ASSETS | $ | 1,140,964 | $ | 5,279,505 | $ | 4,497,008 | 11,780,500 | $ | 22,697,977 | |||||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 2,140,246 | $ | 6,941,477 | $ | 1,282,552 | $ | 10,364,275 | ||||||||||||
| Notes and loans payable | 111,198 | 0 | 430,000 | 541,198 | ||||||||||||||||
| Total current liabilities | 2,251,444 | 6,941,477 | 1,712,552 | 10,905,473 | ||||||||||||||||
| LONG-TERM LIABILITIES | ||||||||||||||||||||
| Notes and loans payable | 814,623 | 1,327,423 | 7,349,915 | 9,491,961 | ||||||||||||||||
| Common stock subject to mandatory redemption | 250,000 | 0 | 0 | 250,000 | ||||||||||||||||
| Series A Convertible Preferred stock | 71,869 | 0 | 0 | 71,869 | ||||||||||||||||
| Warrants | 817 | 0 | 0 | 817 | ||||||||||||||||
| Total long-term liabilities | 1,137,309 | 1,327,423 | 7,349,915 | 9,814,647 | ||||||||||||||||
| STOCKHOLDERS’ DEFICIENCY | ||||||||||||||||||||
| Preferred stock | 0 | 0 | 0 | 0 | ||||||||||||||||
| Common stock | 52 | 0 | 0 | 28 | 80 | |||||||||||||||
| Additional paid in capital | 6,279,362 | 0 | 0 | 4,225,618 | 10,504,980 | |||||||||||||||
| Accumulated deficit | (8,527,203 | ) | (2,989,395 | ) | (4,565,459 | ) | 7,554,854 | (8,527,203 | ) | |||||||||||
| Total stockholders’ deficiency | (2,247,789 | ) | (2,989,395 | ) | (4,565,459 | ) | 11,780,500 | 1,977,857 | ||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | $ | 1,140,964 | $ | 5,279,505 | $ | 4,497,008 | 11,780,500 | $ | 22,697,977 |
The accompanying notes are an integral part of these statements.
MIT HOLDING, INC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
| Palmetto Long | National | |||||||||||||||||||
| MIT Holding, | Term Care | Direct Home | Pro Forma | Pro Forma | ||||||||||||||||
| Inc | Pharmacy, LLC | Pharmacy | Eliminations | Consolidated | ||||||||||||||||
| Revenue-Sales and services rendered | $ | 7,088,493 | $ | 16,369,857 | $ | 708,910 | $ | 24,167,260 | ||||||||||||
| Cost of medical supplies | 2,612,063 | 14,658,690 | 483,808 | 17,754,561 | ||||||||||||||||
| Gross profit | 4,476,430 | 1,711,167 | 225,102 | 6,412,699 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||
| Salaries and payroll cost | 1,811,967 | 2,420,688 | 139,298 | 4,371,953 | ||||||||||||||||
| Selling, general and administrative | 2,222,339 | 1,481,520 | 229,187 | 3,933,046 | ||||||||||||||||
| Provision for doubtful accounts | 84,000 | 0 | 0 | 84,000 | ||||||||||||||||
| Depreciation and amortization | 42,996 | 0 | 0 | 42,996 | ||||||||||||||||
| Total operating expenses | 4,161,302 | 3,902,208 | 368,485 | 8,431,995 | ||||||||||||||||
| Net income (loss) from operations | 315,128 | (2,191,041 | ) | (143,383 | ) | (2,019,296 | ) | |||||||||||||
| Other income (expense): | ||||||||||||||||||||
| Income from revaluation of equity-based financial instruments with characteristics of liabilities at fair values | 96,375 | 0 | 0 | 96,375 | ||||||||||||||||
| Interest expense | (332,671 | ) | (49,999 | ) | (88,080 | ) | (470,750 | ) | ||||||||||||
| Net income (loss) before provision for income taxes | 78,832 | (2,241,040 | ) | (231,463 | ) | (2,393,671 | ) | |||||||||||||
| Provision for income taxes | — | — | — | — | — | |||||||||||||||
| Net income (loss) | 78,832 | $ | (2,241,040 | ) | $ | (231,463 | ) | (2,393,671 | ) | |||||||||||
| Increase in cumulative dividends payable on Series A | ||||||||||||||||||||
| Preferred Stock | 90,466 | — | — | 90,466 | ||||||||||||||||
| Net loss attributable to common stockholders | $ | (11,634 | ) | — | — | $ | (2,484,137 | ) | ||||||||||||
| Basic earnings (loss) per common share | $ | (.00 | ) | N/A | N/A | $ | (.05 | ) | ||||||||||||
| Weighted average shares outstanding-basic and diluted | 52,104,434 | N/A | N/A | 52,104,434 |
The accompanying notes are an integral part of these statements
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(1) General
Pursuant to the terms of the purchase agreements, MITRX has acquired a fully operating home delivery/mail order pharmacy with annual gross sales of approximately Eighteen Million Dollars ($18,000,000) in exchange for the assumption of approximately $15,273,492 in total debt. The acquired companies have assets including but not limited to furniture, fixtures, licenses, government awards, private nursing home contracts, large individual customer bases and pharmaceutical equipment, including a PharmASSIST RobotX.
(2) Pro Forma Adjustments
Deferred acquisition cost of $750,000 was estimated for the issuance of twenty-five million shares of common stock valued at $.03 per share. The Company’s estimated contract valuation of $11,030,500 was based on private
nursing home contracts and large individual customer bases.