Quest Resource Holding Corp - FORM 8-K/A - EX-99.2 - PRO FORMA FINANCIAL INFORMATION

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file	filename
8-K/A - INFINITY RESOURCES HOLDINGS CORP. FORM 8-KA DECEMBER 21, 2012 - Quest Resource Holding Corp	infinityresources8ka20121221.htm
EX-99.1 - FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED - Quest Resource Holding Corp	ex99-1.htm

Exhibit 99.2

Earth911, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheets
September 30, 2012

		Historical						Pro Forma					Pro Forma
		Earth 911			YouChange			Adjustments					Combined
Current assets:
	Cash and cash equivalents		261,258			17,056			-					278,314
	Accounts receivable, net		223,219			-			-					223,219
	Inventory		-			4,415			-					4,415
	Prepaid expenses and other current assets		28,720			-			-					28,720
	Total current assets		513,197			21,471			-					534,668
Property and equipment , net of accumulated depreciation			164,636			6,301			-					170,937
Ownership interest in Quest Recycling, LLC			3,706,480			-			-					3,706,480
Deferred tax asset-non current			1,731,462			-			-					1,731,462
Goodwill			-			-			17,586,665		(1	)		17,586,665
Deposits and other assets			245,160			9,774			-					254,934
	Total assets		6,360,935			37,546			17,586,665					23,985,147

Current liabilities:
	Accounts payable		366,243			86,622			-					452,865
	Accrued liabilities		447,747			5,504			-					453,251
	Notes and advances payable-related party		-			37,500			-					37,500
	Deferred revenue		253,754			-			-					253,754
	Long term debt and capital lease obligations-current portion		77,611			6,000			-					83,611
	Convertible notes payable-short term		-			111,989			-					111,989
	Senior secured convertible note-related party		492,696			-								492,696
	Other current liabilities		60,200			-			-					60,200
	Total current liabilities		1,698,251			247,615			-					1,945,866
Long term debt and capital lease obligations-net of current portion			10,845			-			-					10,845
Convertible notes payable-long term			-			43,620			-					43,620
Convertible notes payable-long term- related party			-			-			-					-
Warrant liabilities			2,509,360			-			-					2,509,360
	Total liabilities		4,218,455			291,235			-					4,509,690

Stockholders' equity/(deficit)
	Common stock		3,510			8,681			8,666		(1	)		57,776
									45,600		(2	)
									(8,681	)	(1	)

	Additional paid in capital		11,621,600			3,723,743			17,324,310		(1	)		28,900,310
									(3,723,743	)	(1	)
									(45,600	)	(2	)
	Treasury stock, at cost (75,000 common shares as of
	September 30, 2012)		-			(26,250	)		26,250		(1	)		-
	Accumulated deficit		(9,482,631	)		(3,959,863	)		3,959,863		(1	)		(9,482,631	)
	Total stockholders' equity/(deficit)		2,142,479			(253,689	)		17,586,665					19,475,455

	Total Liabilities and Stockholders' Equity/(Deficit)		6,360,935			37,546			17,586,665					23,985,146

See the accompanying notes to the unaudited pro forma financial statements

Earth911, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the Nine Months Ended September 30, 2012


	Historical						Pro Forma		ProForma
	Earth911			YouChange			Adjustments		Combined

Revenues		790,244			100,051					890,295

Cost of products sold		-			19,418					19,418

Gross Profit		790,244			80,633			-		870,877

Operating expenses:
Employee compensation and related expenses
(inclusive of stock-based compensation)		3,250,833			165,764					3,416,597
Professional Fees		246,101			1,146,432					1,392,533
General, administrative, sales and marketing		943,170			546,413					1,489,583
Total operating expenses		4,440,104			1,858,609			-		6,298,713

Loss from operations		(3,649,860	)		(1,777,976	)		-		(5,427,836	)

Other income (expense):
Interest income		-			6,600					6,600
Interest expense		(674,286	)		(55,331	)				(729,617	)
Gain/Loss on Sale of Assets		(406	)		-					(406	)
Amortization expense		46,495			-					46,495
Financing costs-Senior Convertible Note		(2,055,855	)		-					(2,055,855	)
Total other income (expense)		(2,684,052	)		(48,731	)		-		(2,732,783	)

Loss before taxes and equity income		(6,333,912	)		(1,826,707	)		-		(8,160,619	)

Equity method income of Quest Recycling Services, LLC		1,548,909			-					1,548,909

Loss before taxes		(4,785,003	)		(1,826,707	)		-		(6,611,710	)

Income tax expense (benefit)		(877,230	)		-					(877,230	)

Net loss		(3,907,773	)		(1,826,707	)		-		(5,734,480	)

Basic and diluted loss per share				$	(0.21	)			$	(0.10	)
Number of common shares used in per share amounts					8,605,192					57,776,611

See the accompanying notes to the unaudited pro forma financial statements

Earth911, Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
for the Year Ended December 31, 2011


	Historical						Pro Forma	ProForma
	Earth911			YouChange			Adjustments	Combined

Revenues		979,833			37,360				1,017,193

Cost of product sold		-			13,229				13,229

Gross Profit		979,833			24,131				1,003,964

Operating expenses:
Employee compensation and related expenses
(inclusive of stock-based compensation)		3,820,557			113,506				3,934,063
Professional Fees		89,717			366,231				455,948
General, administrative, sales and marketing		1,213,578			143,234				1,356,812
Total operating expenses		5,123,852			622,971				5,746,823

Loss from operations		(4,144,019	)		(598,840	)			(4,742,859	)

Other income (expense):
Interest income		105			16,101				16,206
Interest expense		(463,011	)		(69,080	)			(532,091	)
Gain/Loss on Sale of Assets		-			-				-
Distribution fee-Quest Recycling Services, LLC		(79,998	)		-				(79,998	)
Total other income (expense)		(542,904	)		(52,979	)			(595,883	)

Loss before taxes and equity income		(4,686,923	)		(651,819	)			(5,338,742	)

Equity method income of Quest Recycling Services, LLC		2,233,028			-				2,233,028

Loss before taxes		(2,453,895	)		(651,819	)			(3,105,714	)

Income tax expense (benefit)		(874,775	)		-				(874,775	)

Net loss		(1,579,120	)		(651,819	)			(2,230,939	)

Basic and diluted loss per share				$	(0.01	)		$	(0.04	)
Number of common shares used in per share amounts					37,711,993				57,776,611

See the accompanying notes to the unaudited pro forma financial statements

EARTH911, INC.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE - BASIS OF PRESENTATION

On May 21, 2012, Earth911, Inc. (“Earth911”) entered into a Merger Agreement ("Agreement") with YouChange Holding Corp., a Nevada corporation (“YouChange”) and YouChange Merger Subsidiary Corp., a Delaware corporation and wholly owned subsidiary of YouChange (“YCMS”) wherby (i) YCMS will merge with and into Earth911 and the corporate existence of Earth911 shall continue as the surviving entity and a wholly owned subsidiary of YouChange (“the Merger”); (ii) all issued and outstanding shares of capital stock of Earth911 will be exchanged for newly issued shares of YouChange’s Common Stock such that former stockholders of Earth911 will own 85% of the issued and outstanding shares of YouChange’s Common Stock; (iii) the terms of each outsanding option and warrant to purchase shares of Earth911 common stock, shall be converted into options and warrants, as the case may be, to acquire shares of YouChange’s Common Stock using the same ratio as the exchange of shares of Earth911 capital stock for shares of YouChange’s Common Stock. Upon completion of the acquisition, the existing YouChange stockholders will own approximately 15% of the outstanding common stock of the combined company. Consequently, for accounting purposes, the transaction will be accounted for as a reverse acquisition, with Earth911 as the acquirer. Subsequent to the consummation of the transaction, the historical financial statements of Earth911 will become the historical financial statements of the combined company and the assets and liabilities of YCMS and YouChange, will be accounted for as required under the purchase method of accounting. The results of operations of YCMS and YouChange will be included in the consolidated financial statements from the closing date of acquisition.

The accompanying pro forma condensed consolidated financial statements are unaudited and illustrate the effect of the Earth911 reverse acquisition ("ProForma") of YouChange. The pro forma condensed balance sheet as of September 30, 2012 is based on the historical balance sheets of YouChange and Earth 911 as of that date and assumes the acquisition took place on that date. The pro forma condensedconsolidated statements of operations for the nine months ended September 30, 2012 and the year ended December 31, 2011 are based on the historical statements of operations of YouChange and Earth911 for those periods. The pro forma condensed consolidated statements of operations assume the acquisition took place on the first day of the respective periods, January 1, 2012 and January 1, 2011.

The pro forma condensed consolidated financial statements may not be indicative of the acquisition. In particular, the pro forma condensed consolidated financial statements are based on management's current estimate of the allocation of the purchase price, the actual allocation of which may differ.

The accompanying pro forma condensed financial statements should be read in connection with the historical financial statements of YouChange and Earth911, including the related notes and other financial information included in the filing.

EARTH911, INC.

NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2 - PRO FORMA ADJUSTMENTS

The pro forma adjustments to the unaudited condensed consolidated balance sheet are as follows:

(1) To reflect the reverse acquisition of YouChange equal to the value of the stock retained by the shareholders of YouChange in the merger. YouChange shareholders will retain 8,666,488 shares of common stock valued, after the reverse split, at $2.00 per share based on the YouChange stock price on the Merger date of October 17, 2012.

(2) Adjustment to the common stock and additional paid-in capital of Earth911 to reflect the adjustment in the number of common shares issued to Earth911 stockholders.

NOTE 3 - PRO FORMA NET LOSS PER COMMON SHARE

The unaudited pro forma basic and diluted net loss per share are based on the assumption that the number of shares of YouChange common stock issued in connection with the reverse acquisition of YouChange were outstanding at the inception of the respective operating statements.

NOTE 4 - YEAR END DATE CHANGE

On December 11, 2012, the Board of Directors of Infinity Resources Holding Corporation approved the change of the Company’s fiscal year-end from June 30th to December 31st. Therefore, the accompanying pro forma unaudited financial statements utilize the December 31st year-end of Earth911 rather than the June 30th year-end historically reported by YouChange.

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