Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - Juhl Energy, Inc | juhl_8ka-112911.htm |
| EX-99.1 - EXHIBIT 99.1 - Juhl Energy, Inc | ex99-1.htm |
| EX-23.1 - EXHIBIT 23.1 - Juhl Energy, Inc | ex23-1.htm |
| EX-99.2 - EXHIBIT 99.2 - Juhl Energy, Inc | ex99-2.htm |
Exhibit 99.3
JUHL WIND, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
GIVING EFFECT TO THE ACQUISITION OF VALLEY VIEW TRANSMISSION, LLC
1
JUHL WIND, INC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated balance sheet combines the consolidated historical balance sheet of Juhl Wind, Inc. and subsidiaries and the balance sheet of Valley View Transmission (Valley View), as of September 30, 2011, giving effect to the purchase of 32.6% of the Valley View membership interests as if it had been consummated on September 30, 2011. The following unaudited pro forma condensed consolidated statement of operations for the nine month period ended September 30, 2011 and the twelve month period ended December 31, 2010 combines the consolidated statement of operations of Juhl Wind, Inc. for its nine months ended September 30, 2011 and its year ended December 31, 2010 with the statements of operations of Valley View for its nine months ended September 30, 2011 and its year ended December 31, 2010, giving effect to the acquisition of all of the outstanding shares of Valley View as if it had occurred at January 1, 2010.
The historical financial information has been adjusted to give effect to pro forma events that are related and/or directly attributable to the membership interest acquisition, are factually supportable and are expected to have a continuing impact on the combined results. Certain events related and attributable to the acquisition may have occurred at Juhl Wind, Inc. prior the closing of the acquisition or immediately after the acquisition due to the acquisition transaction. Accordingly, the adjustments presented on the pro forma condensed consolidated financial statements have been identified and presented in accordance with their timing to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the acquisition.
We are providing the following information to aid you in your analysis of the financial aspects of the acquisition. We derived the historical financial information of Juhl Wind, Inc. for the nine months ended September 30, 2011 from the unaudited condensed consolidated financial statements of Juhl Wind, Inc. as filed on Form 10-Q for the nine months ended September 30, 2011. We derived the historical financial information of Juhl Wind, Inc. for the year ended December 31, 2010 from the audited financial statements of Juhl Wind, Inc included in the Form 10-K filing dated on March 31, 2011. We derived the historical financial information of Valley View for the nine months ended September 30, 2011 from Valley View’s unaudited internal financial statements incorporated herein and the December 31, 2010 audited financial statements, also incorporated herein. This information should be read together with Juhl Wind, Inc’s, audited and unaudited financial statements and related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Juhl Wind, Inc included in its annual report on Form 10-K filed March 31, 2011 and its quarterly reports on Form 10-Q filed August 15, 2011 and November 14, 2011.
The unaudited pro forma condensed consolidated financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma condensed consolidated financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience.
At the acquisition date of November 30, 2011, Juhl Wind, Inc. acquired 32.6% of the outstanding Valley View membership interests of Valley View in exchange for $1,851,000 in cash and conversion of its notes receivable. The assets and liabilities of Valley View Transmission are to be recorded at their respective estimated fair values as of the date of the acquisition using generally accepted accounting principles for business combinations. The fair value of the total consideration paid by all investors, including the Company, at the acquisition date was $4,573,430 for an 80.4% interest. This indicated that the fair value of the entity was approximately $5,689,000. The remaining outside interest of 67.4%, that is not classified outside of permanent equity as redeemable membership units, will be presented and classified in the consolidated financial statement as a noncontrolling interest.
2
JUHL WIND, INC
NOTES TO UNAUDITED PROFORMA CONDENSED CONSOLIDATED
BALANCE SHEET AND STATEMENTS OF OPERATIONS
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
AND THE YEAR ENDED DECEMBER 31, 2010
Note 1. Basis of Presentation
The unaudited pro forma condensed consolidated financial information included herein has been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission.
Pro forma adjustments are necessary to (i) record certain events related or attributable to the membership interest acquisition of Valley View, and (ii) the accounting upon consummation of the business combination.
Note 2. Pro Forma Adjustments
Descriptions of the adjustments included in the unaudited pro forma condensed consolidated balance sheet and the condensed consolidated statements of operations are as follows:
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(a)
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Juhl Wind, Inc. acquired 32.6% of the outstanding membership interests of Valley View Transmission LLC (“Valley View”) for $1,851,000 in cash and reduction of notes receivable. The remaining outside interest of 67.4%, consists of $1,319,756 non-controlling interests and $2,518,450 for redeemable preferred membership interests that are classified outside of permanent equity as redeemable membership units. For total equity raised of approximately $5,689,000.
The acquisition is being accounted for under the acquisition method. No goodwill was recorded in connection with the transaction. The assets and liabilities of Valley View were recorded at their respective estimated fair values. The Company used a combination of the market and cost approaches to estimate the fair values of the Valley View assets acquired and liabilities assumed. The fair value estimates include an increase of approximately $2,709,000 to the property and equipment of Valley View based on our assessment of fair value in comparison to Valley View’s carrying values. The fair value estimates of the bank notes payable included the elimination of all loan financing fees.
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(b)
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Intercompany promissory notes receivable and promissory notes payable are eliminated in the consolidated proforma, or because they were reduced through the Juhl’s conversion to an equity interest.
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(c)
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Previous contributions by local owners in excess of their final equity contribution are reclassified to accrued expenses in the amount of $395,000.
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(d)
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As required by Regulation S-X, Rule 11-02, historical income results of Juhl Wind, Inc. and Valley View shall apply the appropriate tax rate due to the tax status of Juhl Wind, Inc. being a C-Corp. A tax benefit for the nine months ended September 30, 2011 of $436,000 was recorded. A tax provision for the year ended December 31, 2010 was deemed immaterial.
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| (e) | As a result of obtaining control, as defined by VIE consolidation accounting guidance, the Company’s previously held equity interest in this entity was remeasured at the acquisition date. The Company recognized a one-time non-cash pre-tax gain of approximately $320,000 as a result of the remeasurement. The gain is included in the consolidated statement of operations as a gain on previously held equity interest. Previously, the Company had recorded approximately $320,000 of losses attributable equity method accounting. | |
3
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(f)
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Basic outstanding shares include the weighted average shares of the Company’s common stock outstanding as if issued on January 1, 2011 and January 1, 2010. Diluted outstanding shares reflects the potential dilution effect that would occur if common stock warrants and convertible preferred stock were exercised or converted to common shares. However, for 2010, diluted outstanding shares is identical to basic outstanding shares, since potential common share equivalents are excluded from the calculation, as their effect is anti-dilutive, due to the Company’s net loss for the periods presented.
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4
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JUHL WIND, INC.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
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AS OF SEPTEMBER 30, 2011
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HISTORICAL
JUHL
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HISTORICAL
VALLEY VIEW
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PRO FORMA
ADJUSTMENTS
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PRO FORMA
CONSOLIDATED
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|||||||||||||||
| ASSETS | ||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||
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Cash and Cash Equivalents
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$ | 5,043,285 | $ | 3,339 | $ | 2,700,000 |
(a)
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$ | 7,746,624 | |||||||||
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Restricted Cash
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- | 168,906 | - | 168,906 | ||||||||||||||
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Accounts Receivable
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1,168,754 | - | - | 1,168,754 | ||||||||||||||
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Short term investments and accrued interest receivable
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564,058 | - | - | 564,058 | ||||||||||||||
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Short term investments - restricted
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422,395 | - | - | 422,395 | ||||||||||||||
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Promissory note receivable - including interest
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4,455,137 | - | (4,455,137 | ) | (b) | - | ||||||||||||
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Inventory
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298,206 | - | - | 298,206 | ||||||||||||||
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Reimbursable project costs
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292,178 | - | - | 292,178 | ||||||||||||||
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Costs and estimated profits in excess of billings
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25,530 | - | - | 25,530 | ||||||||||||||
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Other current assets
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181,033 | - | - | 181,033 | ||||||||||||||
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Current deferred income taxes
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- | - | - | - | ||||||||||||||
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TOTAL CURRENT ASSETS
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12,450,576 | 172,245 | (1,755,137 | ) | 10,867,684 | |||||||||||||
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PROPERTY AND EQUIPMENT (Net)
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4,997,489 | 19,461,698 | 2,709,733 |
(a)
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27,168,920 | |||||||||||||
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OTHER ASSETS
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Project Development Costs
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4,665,878 | - | (303,651 | ) | (b) | 4,362,227 | ||||||||||||
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Escrowed cash reserves for contractual commitments
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138,175 | - | - | 138,175 | ||||||||||||||
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Loan Costs (Net)
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14,480 | 1,063,688 | (1,063,688 | ) |
(a)
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14,480 | ||||||||||||
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Equity investment in wind farm
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478,570 | - | (478,570 | ) |
(a)
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- | ||||||||||||
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Deferred Income Taxes
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393,000 | - | 436,000 |
(d)
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829,000 | |||||||||||||
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TOTAL OTHER ASSETS
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5,690,103 | 1,063,688 | (1,409,909 | ) | 5,343,882 | |||||||||||||
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TOTAL ASSETS
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$ | 23,138,168 | $ | 20,697,631 $ | (455,313 | ) | $ | 43,380,486 | ||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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| CURRENT LIABILITIES | ||||||||||||||||||
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Accounts Payable
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$ | 1,918,714 | $ | 2,169,176 $ | - | $ | 4,087,890 | |||||||||||
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Bank notes payable
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391,167 | 12,195,593 | - | 12,586,760 | ||||||||||||||
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Current deferred income taxes
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207,000 | - | - | 207,000 | ||||||||||||||
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Accrued Expenses
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668,488 | 153,705 | 395,000 |
(c)
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1,217,193 | |||||||||||||
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Billings in excess of costs and estimated profits
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73,415 | - | - | 73,415 | ||||||||||||||
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Customer Deposits
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101,079 | - | - | 101,079 | ||||||||||||||
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Deferred Revenue
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910,583 | - | - | 910,583 | ||||||||||||||
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Income taxes payable
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330,000 | - | - | 330,000 | ||||||||||||||
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Derivative liabilities- interest rate swap
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- | 211,532 | - | 211,532 | ||||||||||||||
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Promissory notes payable - including interest
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6,695,876 | 4,758,787 | (4,758,788 | ) | (b) | 6,695,875 | ||||||||||||
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Current portion of long-term liabilities
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262,113 | - | - | 262,113 | ||||||||||||||
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TOTAL CURRENT LIABILITIES
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11,558,435 | 19,488,793 | (4,363,788 | ) | 26,683,440 | |||||||||||||
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LONG-TERM LIABILITIES
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Bank Note Payable
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1,036,352 | - | - | 1,036,352 | ||||||||||||||
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Derivative liabilities- interest rate swap
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- | 843,107 | - | 843,107 | ||||||||||||||
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Power purchase contract liability
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3,580,153 | - | - | 3,580,153 | ||||||||||||||
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TOTAL LONG-TERM LIABILITIES
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4,616,505 | 843,107 | - | 5,459,612 | ||||||||||||||
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REDEEMABLE PREFERRED STOCK
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- | - | 2,518,450 |
(a)
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2,518,450 | |||||||||||||
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STOCKHOLDERS' EQUITY
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Preferred Stock - Series A
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2,527,731 | - | - | 2,527,731 | ||||||||||||||
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Preferred Stock - Series B
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11,392,403 | - | - | 11,392,403 | ||||||||||||||
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Common Stock
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2,194 | - | - | 2,194 | ||||||||||||||
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Additional Paid-In Capital
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8,929,055 | - | - | 8,929,055 | ||||||||||||||
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Treasury Stock
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(216,937 | ) | - | - | (216,937 | ) | ||||||||||||
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Accumulated Deficit
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(15,742,912 | ) | - | 436,000 |
(d)
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(15,306,912 | ) | |||||||||||
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Membership Capital
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365,731 | (365,731 | ) | (a) | - | |||||||||||||
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Noncontrolling Interest in equity
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71,694 | - | 1,319,756 |
(a)
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1,391,450 | |||||||||||||
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TOTAL STOCKHOLDERS' EQUITY
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6,963,228 | 365,731 | 1,390,025 | 8,718,984 | ||||||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 23,138,168 | $ | 20,697,631 $ | (455,313 | ) | $ | 43,380,486 | ||||||||||
5
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JUHL WIND, INC.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
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FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2011
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HISTORICAL
JUHL
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HISTORICAL
VALLEY VIEW
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PRO FORMA
ADJUSTMENTS
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PRO FORMA
CONSOLIDATED
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REVENUE
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$ | 10,937,156 | $ | 19,175 | $ | - | $ | 10,956,331 | |||||||||
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COST OF REVENUES
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3,162,781 | - | - | 3,162,781 | |||||||||||||
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GROSS PROFIT
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7,774,375 | 19,175 | - | 7,793,550 | |||||||||||||
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OPERATING EXPENSES
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3,510,337 | 56,778 | - | 3,567,115 | |||||||||||||
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OPERATING INCOME (LOSS)
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4,264,038 | (37,603 | ) | - | 4,226,435 | ||||||||||||
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OTHER INCOME (EXPENSE)
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Interest Income
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349,968 | 2,887 | - | 352,855 | |||||||||||||
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Loss in fair value of interest rate swap
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- | (1,054,639 | ) | (1,054,639 | ) | ||||||||||||
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Loss from equity method investment
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- | - | (320,000 | ) |
(e)
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(320,000 | ) | ||||||||||
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Gain on previously held equity interest
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- | - | 320,000 |
(e)
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320,000 | ||||||||||||
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Interest Expense
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(414,171 | ) | - | - | (414,171 | ) | |||||||||||
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NET OTHER INCOME (EXPENSE)
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(64,203 | ) | (1,051,752 | ) | - | (1,115,955 | ) | ||||||||||
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NET INCOME (LOSS) BEFORE INCOME TAX
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4,199,835 | (1,089,355 | ) | - | 3,110,480 | ||||||||||||
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PROVISION FOR INCOME TAXES (BENEFIT)
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1,781,000 | - | (436,000 | ) |
(d)
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1,345,000 | |||||||||||
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NET INCOME (LOSS)
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2,418,835 | (1,089,355 | ) | 436,000 | 1,765,480 | ||||||||||||
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LESS NET LOSS ATTRIBUTABLE TO NON-
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|||||||||||||||||
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CONTROLLING INTEREST
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2,544 | - | - | 2,544 | |||||||||||||
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NET INCOME (LOSS) ATTRIBUTED TO JUHL WIND INC.
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$ | 2,416,291 | $ | (1,089,355 | ) | $ | 436,000 | $ | 1,762,936 | ||||||||
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PREFERRED STOCK CUMULATIVE DIVIDEND
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289,869 | - | - | 289,869 | |||||||||||||
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NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
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$ | 2,126,422 | $ | (1,089,355 | ) | $ | 436,000 | $ | 1,473,067 | ||||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC
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21,588,448 | 21,588,448 | |||||||||||||||
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INCOME PER COMMON SHARE - BASIC AND DILUTED
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$ | 0.10 | $ | 0.07 | |||||||||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
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21,620,585 | 21,620,585 | |||||||||||||||
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INCOME PER COMMON SHARE - BASIC AND DILUTED
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$ | 0.10 | $ | 0.07 | |||||||||||||
6
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JUHL WIND, INC.
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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
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FOR THE YEAR ENDED DECEMBER 31, 2010
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| HISTORICAL
JUHL
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HISTORICAL
VALLEY VIEW
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PRO FORMA
ADJUSTMENTS
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PRO FORMA
CONSOLIDATED
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REVENUE
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$ | 6,268,143 | $ | - | $ | - | $ | 6,268,143 | ||||||||
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COST OF REVENUES
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4,894,481 | - | - | 4,894,481 | ||||||||||||
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GROSS PROFIT
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1,373,662 | - | - | 1,373,662 | ||||||||||||
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OPERATING EXPENSES
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4,120,271 | 4,315 | - | 4,124,586 | ||||||||||||
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OPERATING LOSS
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(2,746,609 | ) | (4,315 | ) | - | (2,750,924 | ) | |||||||||
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OTHER INCOME (EXPENSE)
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||||||||||||||||
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Interest Income
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655,468 | 144 | - | 655,612 | ||||||||||||
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Other Income (Expense), net
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- | - | - | - | ||||||||||||
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Interest Expense
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(687,024 | ) | - | - | (687,024 | ) | ||||||||||
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NET OTHER INCOME (EXPENSE)
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(31,556 | ) | 144 | - | (31,412 | ) | ||||||||||
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NET LOSS BEFORE INCOME TAX
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(2,778,165 | ) | (4,171 | ) | - | (2,782,336 | ) | |||||||||
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PROVISION FOR INCOME TAX (BENEFIT)
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(978,000 | ) | - | - | (978,000 | ) | ||||||||||
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NET LOSS
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(1,800,165 | ) | (4,171 | ) | - | (1,804,336 | ) | |||||||||
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LESS NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST
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(16,978 | ) | - | - | (16,978 | ) | ||||||||||
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NET LOSS ATTRIBUTABLE TO JUHL WIND, INC.
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$ | (1,783,187 | ) | $ | (4,171 | ) | $ | - | $ | (1,787,358 | ) | |||||
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PREFERRED STOCK CUMULATIVE DIVIDEND
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390,955 | - | 390,955 | |||||||||||||
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NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
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$ | (2,174,142 | ) | $ | (4,171 | ) | $ | - | (2,178,313 | ) | ||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC AND DILUTED
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21,132,144 | 21,132,144 | ||||||||||||||
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LOSS PER COMMON SHARE - BASIC AND DILUTED
|
$ | (0.10 | ) | $ | (0.10 | ) | ||||||||||
7