Wellness Center USA, Inc. - FORM 8-K/A - EX-99.4 - EXHIBIT 99.4 PRO FORMA COMBINED FINANCIAL STMTS

Attached files

file	filename
8-K/A - AMENDED CURRENT REPORT ON FORM 8-K/A - Wellness Center USA, Inc.	f8ka010813_8kz.htm
EX-99.3 - EXHIBIT 99.3 2011 REVIEWED FINANCIAL STATEMENTS - Wellness Center USA, Inc.	f8ka010813_ex99z3.htm
EX-99.2 - EXHIBIT 99.2 PSI AUDITED FINANCIAL STATEMENTS - Wellness Center USA, Inc.	f8ka010813_ex99z2.htm

Wellness Center USA, Inc.

CNS Wellness Florida, LLC

and

Psoria-Shield Inc.

Index to the Pro Forma Combined Financial Statements

(Unaudited)


Contents	Page(s)

Pro Forma Combined Balance Sheet at June 30, 2012	P-2

Pro Forma Combined Statement of Operations for the Nine Months Ended June 30, 2012	P-3

Pro Forma Combined Statement of Operations for the Fiscal Year Ended September 30, 2011	P-4

Notes to the Pro Forma Combined Financial Statements	P-5

P-1


Wellness Center USA, Inc.

Pro Forma Combined Balance Sheet
June 30, 2012
(Unaudited)

					Historical						Pro Forma
					Wellness Center USA, Inc.		CNS Wellness Florida, LLC		Psoria- Shield Inc.		Adjustments		Combined

ASSETS
CURRENT ASSETS:
	Cash			$	37,048	$	8,798	$	768	$	-	$	46,614
	Inventories				-		-		14,562		-		14,562

		Total current assets			37,048		8,798		15,330		-		61,176

PROPERTY AND EQUIPMENT
	Property and equipment				1,792		44,929		125,508		-		172,229
	Accumulated depreciation				(597)		(26,470)		(44,098)		-		(71,165)

		Property and equipment, net			1,195		18,459		81,410		-		101,064

EXCLUSIVE LICENSES
	Exclusive licenses				-		-		5,000		-		5,000
	Accumulated amortization				-		-		(375)		-		(375)

		Exclusive licenses, net			-		-		4,625		-		4,625

WEBSITE DEVELOPMENT COST
	Website development cost				17,809		-		-		-		17,809
	Accumulated amortization				(1,402)		-		-		-		(1,402)

		Website development cost, net			16,407		-		-		-		16,407

TRADE MARKS
	Trade marks				-		-		-	(1)	110,000		740,000
					-		-		-	(5)	210,000
					-		-		-	(5)	420,000
	Accumulated amortization				-		-		-	(2)	(12,222)		(102,222)
					-		-		-	(6)	(30,000)
					-		-		-	(7)	(60,000)

		Trade mark, net			-		-		-		637,778		637,778

ACQUIRED TECHNOLOGY
	Acquired technology				-		-		-	(1)	325,000		2,420,000
					-		-		-	(5)	2,095,000
	Accumulated amortization				-		-		-	(3)	(16,250)		(121,000)
					-		-		-	(8)	(104,750)

		Acquired technology, net			-		-		-		2,299,000		2,299,000

NON-COMPETE AGREEMENTS
	Non-compete agreements				-		-		-	(1)	120,000		240,000
					-		-		-	(5)	120,000
	Accumulated amortization				-		-		-	(4)	(40,000)		(70,000)
					-		-		-	(9)	(30,000)

		Non-compete agreements, net			-		-		-		170,000		170,000

OTHER ASSETS
	Goodwill				-		-		-	(1)	2,862,969		4,607,055
					-		-		-	(5)	1,744,086
	Security deposit				-		36,939		1,760		-		38,699

		Total other assets			-		36,939		1,760		4,607,055		4,645,754

			Total Assets	$	54,650	$	64,196	$	103,125	$	7,713,833	$	7,935,804

P-2


Wellness Center USA, Inc.

Pro Forma Combined Balance Sheet
June 30, 2012
(Unaudited)

(Continued)

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
	Accounts payable			$	180	$	30,424	$	179,124	$	-	$	209,728
	Accrued interest - related party				-		3,516		-		-		3,516
	Credit card payable				-		66,855		42,840		-		109,695
	Current portion of deferred rent				-		11,363		-		-		11,363
	Current portion of long-term payable				-		-		72,653		-		72,653
	Customer deposits				-		-		25,000		-		25,000
	Accrued warranty				-		-		9,600		-		9,600
	Payroll liabilities				-		3,057		-		-		3,057
	Loan payable				-		-		20,000		-		20,000
	Note payable - related parties				-		37,139		-		-		37,139
	Advances from related parties				36,375		197,608		237,994		-		471,977
	Accrued expenses and other current liabilities				650		-		-		-		650

		Total current liabilities			37,205		349,962		587,211		-		974,378

NON-CURRENT LIABILITIES
	Non-current liabilities				-		32,203		-		-		32,203

		Total non-current liabilities			-		32,203		-		-		32,203

			Total liabilities		37,205		382,165		587,211		-		1,006,581

COMMITMENTS AND CONTENGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
	Common stock: $0.001 par value; 74,000,000 shares authorized; 15,367,273 shares issued and outstanding 30,354,070 shares issued and outstanding - Pro Forma

					15,367		-		-	(1)	7,300		30,354
					-		-		-	(5)	7,687
	Additional paid-in capital				291,037		-		3,333,916	(1)	3,092,700		7,481,050
					-		-		-	(5)	4,097,313
					-		-		-	(5)	(3,333,916)
	Members' capital				-		(51,092)		-	(1)	51,092
	Accumulated deficit				(288,959)		(266,877)		(3,818,002)	(1)	266,877		(582,181)
					-		-		-	(5)	3,818,002
					-		-		-	(2)(3)(4)	(68,472)
					-		-		-	(6)(7)(8)(9)	(224,750)

		Total Stockholders' Equity (Deficit)			17,445		(317,969)		(484,086)		7,713,833		6,929,223

			Total Liabilities and Stockholders' Equity (Deficit)	$	54,650	$	64,196	$	103,125	$	7,713,833	$	7,935,804

(1)	To reflect issuance of 7,300,000 shares of WCUI's common stock to the members of CNS for the acquisition of all of the issued and outstanding limited liability company interests in CNS upon acquisition of CNS.
(2)	To amortize the fair value of trade mark over the estimated useful life of nine (9) years.
(3)	To amortize the fair value of acquired technology over the estimated useful life of 20 years.
(4)	To amortize the fair value of non-compete agreements over the estimated useful lives of three (3) years.

(5)	To reflect issuance of 7,686,797 shares of WCUI's common stock to the stockholders of PSI for the acquisition of all of the issued and outstanding common stock of PSI upon acquisition of PSI.
(6)	To amortize the fair value of trade mark - Psoria-Shield over the estimated useful life of seven (7) years.
(7)	To amortize the fair value of trade mark - Psoria-Light over the estimated useful life of seven (7) years.
(8)	To amortize the fair value of acquired technology over the estimated useful life of 20 years.
(9)	To amortize the fair value of non-compete agreement over the estimated useful life of four (4) years.

See accompanying notes to the pro forma combined financial statements.

P-3


Wellness Center USA, Inc.

Pro Forma Combined Statement of Operations
For the Nine Months Ended June 30, 2012
(Unaudited)

				Historical						Pro Forma
				Wellness Center USA, Inc.		CNS Wellness Florida, LLC		Psoria- Shield Inc.
				For the Nine Months		For the Nine Months		For the Nine Months
				Ended		Ended		Ended
				June 30, 2012		June 30, 2012		June 30, 2012		Adjustments		Combined

NET REVENUES			$	1,187	$	223,540	$	91,000	$	-	$	315,727
COST OF SALES				837		-		59,289		-		60,126
GROSS PROFIT				350		223,540		31,711		-		255,601
OPERATING EXPENSES:
	Amortization			-		-		-	(2)(3)(4)	51,354		219,917
				-		-		-	(6)(7)(8)(9)	168,563
	Consulting fees			22,066		-		-		-		22,066
	Payroll expenses and contract labor			-		99,275		527,878		-		627,153
	Payroll expenses - officers			-		10,000		51,000		-		61,000
	Professional fee			59,181		-		297,427		-		356,608
	Rent expenses			18,912		101,213		32,100		-		152,225
	Research and development expense			-		-		70,284		-		70,284
	Selling expenses			-		13,526		174,717		-		188,243
	General and administrative			36,924		73,670		237,051		-		347,645

		Total Operating Expenses		137,083		297,684		1,390,457		219,917		2,045,141

LOSS FROM OPERATIONS				(136,733)		(74,144)		(1,358,746)		(219,917)		(1,789,540)
OTHER (INCOME) EXPENSE:
	Interest expense			-		-		6,981		-		6,981
	Interest expense - related party			-		1,394		-		-		1,394
	Other (income) expense			-		6,983		-		-		6,983
		Other (income) expense, net		-		8,377		6,981		-		15,358

LOSS BEFORE INCOME TAX PROVISION AND NONCONTROLLING INTEREST				(136,733)		(82,521)		(1,365,727)		(219,917)		(1,804,898)
INCOME TAX PROVISION				-		-		-		-		-
LOSS BEFORE NONCONTROLLING INTEREST				(136,733)		(82,521)		(1,365,727)		(219,917)		(1,804,898)
NONCONTROLLING INTEREST				-		-		-		-		-
NET LOSS			$	(136,733)	$	(82,521)	$	(1,365,727)	$	(219,917)	$	(1,804,898)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:			$	(0.01)					$	(0.01)	$	(0.06)
Weighted average common shares outstanding - basic and diluted				15,122,726					(1)	7,300,000		22,422,726
				-					(5)	7,686,797		7,686,797
				15,122,726						14,986,797		30,109,523

(1)	To reflect issuance of 7,300,000 shares of WCUI's common stock to the members of CNS for the acquisition of all of the issued and outstanding limited liability company interests in CNS upon acquisition of CNS.
(2)	To amortize the fair value of trade mark over the estimated useful lives of nine (9) years.
(3)	To amortize the fair value of purchased technology over the estimated useful lives of 20 years.
(4)	To amortize the fair value of non-compete agreements over the estimated useful lives of three (3) years.
(5)	To reflect issuance of 7,686,797 shares of WCUI's common stock to the stockholders of PSI for the acquisition of all of the issued and outstanding common stock of PSI upon acquisition of PSI.
(6)	To amortize the fair value of trade mark - Psoria-Shield over the estimated useful life of seven (7) years.
(7)	To amortize the fair value of trade mark - Psoria-Light over the estimated useful life of seven (7) years.
(8)	To amortize the fair value of acquired technology over the estimated useful life of 20 years.
(9)	To amortize the fair value of non-compete agreement over the estimated useful life of four (4) years.

See accompanying notes to the pro forma combined financial statements.

P-4


Wellness Center USA, Inc.

Pro Forma Combined Statement of Operations
For the Fiscal Year Ended September 30, 2011
(Unaudited)

				Historical						Pro Forma
				Wellness Center USA, Inc.		CNS Wellness Florida, LLC		Psoria-Shield Inc.
				For the Fiscal Year		For the Fiscal Year		For the Fiscal Year
				Ended		Ended		Ended
				September 30, 2011		September 30, 2011		September 30, 2011		Adjustments		Combined

NET REVENUES			$	312	$	277,670	$	-	$	-	$	277,982
COST OF SALES				314		-		-		-		314
GROSS PROFIT				(2)		277,670		-		-		277,668
OPERATING EXPENSES:
	Amortization			-		-		-	(2)(3)(4)	68,472		293,222
								-	(6)(7)(8)(9)	224,750
	Consulting fees			13,913		-		-		-		13,913
	Payroll expenses and contract labor			-		198,804		284,646		-		483,450
	Payroll expenses - officers			-		-		138,120		-		138,120
	Professional fee			59,335		-		687,160		-		746,495
	Rent expenses			21,489		114,448		32,772		-		168,709
	Research and development expense			-		-		237,368		-		237,368
	Selling and marketing expense			-		99,829		176,950		-		276,779
	General and administrative			14,447		109,401		315,610		-		439,458

		Total Operating Expenses		109,184		522,482		1,872,626		293,222		2,797,514

LOSS FROM OPERATIONS				(109,186)		(244,812)		(1,872,626)		(293,222)		(2,519,846)
OTHER (INCOME) EXPENSE:
	Interest expense			-		-		2,665		-		2,665
	Interest expense - related party			-		1,857		-		-		1,857
	Other (income) expense			-		7,948		-		-		7,948
		Other (income) expense, net		-		9,805		2,665		-		12,470

LOSS BEFORE INCOME TAX PROVISION AND NONCONTROLLING INTEREST				(109,186)		(254,617)		(1,875,291)		(293,222)		(2,532,316)
INCOME TAX PROVISION				-		-		-		-		-
LOSS BEFORE NONCONTROLLING INTEREST				(109,186)		(254,617)		(1,875,291)		(293,222)		(2,532,316)
NONCONTROLLING INTEREST				-		-		-				-
NET LOSS			$	(109,186)	$	(254,617)	$	(1,875,291)	$	(293,222)	$	(2,532,316)
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:			$	(0.01)					$	(0.02)	$	(0.09)
Weighted average common shares outstanding - basic and diluted				13,125,860					(1)	7,300,000		20,425,860
				-					(5)	7,686,797		7,686,797
				13,125,860						14,986,797		28,112,657

(1)	To reflect issuance of 7,300,000 shares of WCUI's common stock to the members of CNS for the acquisition of all of the issued and outstanding limited liability company interests in CNS upon acquisition of CNS.
(2)	To amortize the fair value of trade mark over the estimated useful lives of nine (9) years.
(3)	To amortize the fair value of purchased technology over the estimated useful lives of 20 years.
(4)	To amortize the fair value of non-compete agreements over the estimated useful lives of three (3) years.

(5)	To reflect issuance of 7,686,797 shares of WCUI's common stock to the stockholders of PSI for the acquisition of all of the issued and outstanding common stock of PSI upon acquisition of PSI.
(6)	To amortize the fair value of trade mark - Psoria-Shield over the estimated useful life of seven (7) years.
(7)	To amortize the fair value of trade mark - Psoria-Light over the estimated useful life of seven (7) years.
(8)	To amortize the fair value of acquired technology over the estimated useful life of 20 years.
(9)	To amortize the fair value of non-compete agreement over the estimated useful life of four (4) years.

See accompanying notes to the pro forma combined financial statements.

P-5

Wellness Center USA, Inc.

CNS Wellness Florida, LLC

and

Psoria-Shield Inc.

As of and for the nine months ended June 30, 2012

and

As of and for the fiscal year ended September 30, 2011

Notes to the Pro Forma Combined Financial Statements

(Unaudited)

Note 1 - Organization and Operations

Wellness Center USA, Inc.

Wellness Center USA, Inc. ("WCUI" or the “Company”) was incorporated on September 30, 2010 under the laws of the State of Nevada. The Company engages in online sports and nutrition supplements marketing and distribution.

Acquisition of CNS Wellness Florida, LLC

On May 30, 2012, Wellness Center USA, Inc. (“WCUI” or the “Company”) entered into an Exchange Agreement (“Exchange Agreement”) to acquire all of the limited liability company interests in CNS-Wellness Florida, LLC (“CNS”), a Tampa, Florida-based cognitive neuroscience company specializing in the treatment of brain-based behavioral health disorders including developmental, emotional and stress-related problems.

On August 2, 2012, the Company consummated the Exchange Agreement and acquired all of the issued and outstanding limited liability company interests in CNS for and in consideration of the issuance of 7.3 million shares of the Company’s common stock pursuant to the Exchange Agreement. The 7.3 million common shares issued in connection with the share exchange represent 32.2% of the 22,704,773 shares of issued and outstanding common stock of the Company as of the closing of the share exchange under the Exchange Agreement. CNS is now operated as a wholly-owned subsidiary of the Company.

CNS Wellness Florida, LLC, the Successor of Cognitive Neuro Sciences, Inc.

Cognitive Neuro Sciences, Inc., (the ''CNS Predecessor") was incorporated on March 14, 2006 under the laws of the State of Florida. The CNS Predecessor specialized in the treatment of brain-based behavioral health disorders including developmental, emotional and stress-related problems. On May 26, 2009, the stockholders of CNS Predecessor decided to dissolve CNS Predecessor and form a Limited Liability Company (“LLC”) to carry-on the business of CNS Predecessor.

CNS Wellness Florida, LLC (“CNS”) was formed on May 26, 2009 under the laws of the State of Florida. The sole purpose of CNS was to carry-on the business of CNS Predecessor in the form of an LLC. The assets and liabilities of CNS Predecessor were carried forward to CNS and recorded at the historical cost on the date of conversion.

Acquisition of Psoria-Shield Inc.

On June 21, 2012, the Company entered into an Exchange Agreement (“Exchange Agreement”) to acquire all of the issued and outstanding shares of capital stock in Psoria-Shield Inc. (“PSI”), a Tampa, Florida-based developer and manufacturer of Ultra Violet ("UV") phototherapy devices for the treatment of skin diseases, for and in consideration of the issuance of 7,686,797 shares of common stock in the Company.

On August 24, 2012, the Company consummated the share exchange and acquired all of the issued and outstanding shares of stock in PSI for and in consideration of the issuance of 7,686,797 shares of its common stock pursuant to the Exchange Agreement. The 7,686,797 common shares issued in connection with the share exchange represent 25.3% of the 30,354,070 shares of issued and outstanding common stock of the Company as of the closing of the share exchange under the Exchange Agreement. PSI is now operated as a wholly-owned subsidiary of the Company.

P-6

Psoria-Shield Inc.

Psoria-Shield Inc. (“PSI”) was incorporated on June 17, 2009 under the laws of the State of Florida. PSI engages in the business of research and development, manufacturing, and marketing and distribution of Ultra Violet ("UV") phototherapy devices for the treatment of skin diseases.

NOTE 2

- Basis of Pro Forma Presentation

Business Combinations

The Company applies Topic 805 “Business Combinations” of the FASB Accounting Standards Codification (formerly Statement of Financial Accounting Standards No. 141 (R) “Business Combinations” (“SFAS No. 141(R)”)) for transactions that represent business combinations to be accounted for under the acquisition method. Pursuant to ASC Paragraph 805-10-25-1 in order for a transaction or other event to be considered as a business combination it is required that the assets acquired and liabilities assumed constitute a business. Upon determination of transactions representing business combinations the Company then (i) identifies the accounting acquirer; (ii) identifies and estimates the fair value of the identifiable tangible and intangible assets acquired, separately from goodwill; (iii) estimates the business enterprise value of the acquired entities; (iv) allocates the purchase price of acquired entities to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values at the date of acquisition. The excess of the liabilities assumed and the purchase price over the assets acquired was recorded as goodwill and the excess of the assets acquired over the liabilities assumed and the purchase price was recorded as a gain from bargain purchase.

Acquisition of CNS Wellness Florida, LLC

Identification of the Accounting Acquirer

The Company used the existence of a controlling financial interest to identify the acquirer—the entity that obtains control of the acquiree in accordance with ASC paragraph 805-20-25-5 and identifies the acquisition date, which is the date on which it obtains control of the acquiree in accordance with ASC paragraph 805-20-25-6. The management of the Company specifically addressed (i) the ownership interest of each party after the acquisition; (ii) the members of the board of directors from both companies; and (iii) senior management from both companies and determined that Wellness Center USA, Inc. was the accounting acquirer for the merger between Wellness Center USA, Inc. and CNS Wellness Florida, LLC.

The specific control factors considered to determine which entity was the accounting acquirer are as follows:


(i) The ownership interest of each party after the acquisition

WCUI's common shares issued and outstanding prior to CNS acquisition	15,367,273	67.8	%

WCUI's common shares issued to the members of CNS for the acquisition of all of the issued and outstanding limited liability company interests in CNS upon acquisition of CNS	7,300,000	32.2	%

	22,667,273	100.0	%

(ii) The members of the board of directors from both companies

The members of the board of directors from WCUI prior to CNS acquisition	3	60.0	%

The members of the board of directors from CNS upon acquisition of CNS	2	40.0	%

	5	100.0	%

(iii) Senior management from both companies

Senior management from WCUI prior to CNS acquisition	1	100.0	%

Senior management from CNS upon acquisition of CNS	-	-	%

	1	100.0	%

P-7

Intangible Assets Identification, Estimated Fair Value and Useful Lives

With the assistance of the third party valuation firm, the Company identified certain separate recognizable intangible assets that possessed economic value, estimated their fair values and related useful lives of CNS at the date of acquisition as follows:


	Estimated Useful Life (Years)	August 2, 2012

Trademark/Trade Name	9	$	110,000

Unpatented Technology	20		325,000

Non-Competition Agreement	3		120,000

Total Recognized Intangible Assets		$	555,000

Business Enterprise Valuation

With the assistance of the third party valuation firm, the Company estimated the indicated value of the total invested operating capital of CNS at the date of acquisition utilizing the income approach – discounted cash flows method, was $3,100,000, as follows:


	August 2, 2012

Present Value of Debt-Free Net Cash Flow - Forecast Period	$	807,921

Present Value of Debt-Free Net Cash Flow - Residual Period		2,287,246

Present Value of Debt-Free Net Cash Flow – Total		3,095,167

Value Indication Income Approach - Discounted Net Cash Flow Method (Rounded)	$	3,100,000

P-8

Allocation of Purchase Price

The purchase price of CNS has been allocated to the tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the CNS based on their estimated fair values at the date of acquisition as follows:


	Book Value			Fair Value Adjustment		Fair Market Value

Cash	$	11,713		$	-	$	11,713

Property and equipment		18,459					18,459

Trade mark		-			110,000		110,000

Unpatented technology		-			325,000		325,000

Non-compete agreements		-			120,000		120,000

Goodwill		323,045			2,545,000		2,868,045

Security deposits		36,939					36,939

Accounts payable		(41,957	)				(41,957	)

Accrued interest - related party		(3,516	)				(3,516	)

Credit cards payable		(66,008	)				(66,008	)

Payroll liability		(2,709	)				(2,709	)

Current portion of deferred rent		(11,363	)				(11,363	)

Advances from related parties		(196,208	)				(196,208	)

Note payable - related party		(37,139	)				(37,139	)

Deferred rent, net of current portion		(31,256	)				(31,256	)

Total		-			3,100,000		3,100,000

Non-controlling interest		(-	)		-		(-	)

Purchase price	$	-		$	3,100,000	$	3,100,000

Acquisition of Psoria-Shield Inc.

Identification of the Accounting Acquirer

P-9

The specific control factors considered to determine which entity was the accounting acquirer are as follows:


(i) The ownership interest of each party after the acquisition

WCUI's common shares issued and outstanding prior to PSI acquisition	22,667,273	74.7	%

WCUI's common shares issued to the stockholders of PSI for the acquisition of all of the issued and outstanding common stock of PSI upon acquisition of PSI	7,686,797	25.3	%

	22,667,273	100.0	%

(ii) The members of the board of directors from both companies

The members of the board of directors from WCUI prior to PSI acquisition	5	83.3	%

The members of the board of directors from PSI upon acquisition of PSI	1	16.7	%

	6	100.0	%

(iii) Senior management from both companies

Senior management from WCUI prior to CNS acquisition	1	100.0	%

Senior management from CNS upon acquisition of CNS	-	-	%

	1	100.0	%

Intangible Assets Identification, Estimated Fair Value and Useful Lives


	Estimated Useful Life (Years)	August 24, 2012

Trademark - Psoria-Shield	7	$	210,000

Trademark - Psoria-Light	6	$	420,000

Unpatented Technology	20		2,095,000

Non-Competition Agreement	4		120,000

Total Recognized Intangible Assets		$	2,845,000

P-10

Business Enterprise Valuation

With the assistance of the third party valuation firm, the Company estimated the indicated value of the total invested operating capital of PSI at the date of acquisition utilizing the income approach – discounted cash flows method, was $4,105,000, as follows:


	August 24, 2012

Present Value of Debt-Free Net Cash Flow - Forecast Period	$	2,205,360

Present Value of Debt-Free Net Cash Flow - Residual Period		1,899,261

Present Value of Debt-Free Net Cash Flow – Total		4,104,622

Value Indication Income Approach - Discounted Net Cash Flow Method (Rounded)	$	4,105,000

P-11

Allocation of Purchase Price

The purchase price of PSI has been allocated to the tangible and intangible assets acquired and liabilities assumed, and any non-controlling interest in the PSI based on their estimated fair values at the date of acquisition as follows:


	Book Value			Fair Value Adjustment		Fair Market Value

Cash	$	11,413		$	-	$	11,413

Inventories		12,694					12,694

Property and equipment		80,956					80,956

Exclusive licenses		4,562					4,562

Trade mark - Psoria-Shield		-			210,000		210,000

Trade mark - Psoria-light		-			420,000		420,000

Unpatented technology		-			2,095,000		2,095,000

Non-compete agreements		-			120,000		120,000

Goodwill		453,270			1,260,000		1,713,260

Security deposits		1,760					1,760

Accounts payable		(161,821	)				(161,821	)

Credit cards payable		(42,198	)				(42,198	)

Customer deposits		(25,000	)				(25,000	)

Accrued warranty		(9,600	)				(9,600	)

Current portion of long-term payable		(72,653	)				(72,653	)

Loan payable		(20,000	)				(20,000	)

Advances from stockholders		(233,994	)				(233,994	)

Total		-			4,105,000		4,105,000

Non-controlling interest		(-	)		-		(-	)

Purchase price	$	-		$	4,105,000	$	4,105,000

P-12

Assumptions of Pro Forma Combined Financial Statements

The accompanying pro forma combined balance sheet as of June 30, 2012 and the pro forma combined statements of operations for the nine months ended June 30, 2012 and for the fiscal year ended September 30, 2011 are based on the historical financial statements of the Company and CNS and PSI after giving effect to WCUI’s acquisition of CNS and PSI using the acquisition method of accounting and applying the assumptions and adjustments described in the accompanying notes to the pro forma combined financial statements as if such acquisition had occurred as of September 30, 2011 for the balance sheet, and October 1, 2010 for statements of operations for pro forma financial statements purposes.

The pro forma combined financial statements have been prepared by management for illustrative purposes only and are not necessarily indicative of the combined financial position or combined results of operations in future periods or the results that actually would have been realized had the Company, CNS and PSI been a combined company during the specified periods. The pro forma adjustments are based on the preliminary information available at the time of the preparation of this document and assumptions that management believes are reasonable. The pro forma combined financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with the Company’s historical financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2011 as filed with United States Securities and Exchange Commission (“SEC”) on December 13, 2011 and in its Quarterly Report on Form 10-Q for the interim period ended June 30, 2012 as filed with SEC on August 20, 2012; CNS’s historical financial statements included in the Amendment No. 1 to the Current Report on Form 8-K/A1 for the fiscal year ended September 30, 2011 and for the interim period ended June 30, 2012 as Exhibits as filed with SEC on October 23, 2012; and PSI’s historical financial statements included elsewhere in the Amendment No. 1 to the Current Report on Form 8-K/A1 for the fiscal year ended September 30, 2011 and for the interim period ended June 30, 2012 as Exhibits as filed with SEC herewith.

The pro forma combined financial statements do not purport to represent what the results of operations or financial position of the Company would actually have been if the merger had in fact occurred on October 1, 2010, nor do they purport to project the results of operations or financial position of the Company for any future period or as of any date, respectively.

These pro forma combined financial statements do not give effect to any restructuring costs or to any potential cost savings or other operating efficiencies that could result from the merger between WCUI and CNS and CNS since such amounts, if any, are not presently determinable.

P-13

NOTE 3

- Pro Forma Adjustments

Acquisition of CNS Wellness Florida, LLC

The accompanying pro forma combined financial statements reflect the following pro forma adjustments:


1) To reflect issuance of 7,300,000 shares of WCUI's common stock to the members of CNS for the acquisition of all of the issued and outstanding limited liability company interests in CNS upon acquisition of CNS.

Common stock: $0.001 par value	(7,300	)

Additional paid-in capital	(3,092,700	)

Members' capital	(51,092	)

Accumulated deficit	(266,877	)

Trade mark	110,000

Acquired technology	325,000

Non-compete agreements	120,000

Goodwill	2,862,969

2) To amortize trade mark over the estimated useful life of nine (9) years.

Amortization	12,222

Accumulated amortization	(12,222	)

3) To amortize acquired technology over the estimated useful life of 20 years.

Amortization	16,250

Accumulated amortization	(16,250	)

4) To amortize non-compete agreements over the estimated useful lives of three (3) years.

Amortization	40,000

Accumulated amortization	(40,000	)

P-14

Acquisition of Psoria-Shield Inc.

The accompanying pro forma combined financial statements reflect the following pro forma adjustments:


5) To reflect issuance of 7,686,797 shares of WCUI's common stock to the stockholders of PSI for the acquisition of all of the issued and outstanding common stock of PSI upon acquisition of PSI.

Common stock: $0.001 par value	(7,687	)

Additional paid-in capital	(4,097,313	)

Capital stock	2,093,964

Additional paid-in capital	1,239,952

Accumulated deficit	(3,818,002	)

Trade mark - Psoria-Shield	210,000

Trade mark - Psoria-Light	420,000

Acquired technology	2,095,000

Non-compete agreements	120,000

Goodwill	1,744,086

6) To amortize trade mark - Psoria-Shield over the estimated useful life of seven (7) years.

Amortization	30,000

Accumulated amortization	(30,000	)

7) To amortize trade mark - Psoria-Light over the estimated useful life of seven (7) years.

Amortization	60,000

Accumulated amortization	(60,000	)

8) To amortize acquired technology over the estimated useful life of 20 years.

Amortization	104,750

Accumulated amortization	(104,750	)

9) To amortize non-compete agreement over the estimated useful life of four (4) years.

Amortization	30,000

Accumulated amortization	(30,000	)

P-15

Wellness Center USA, Inc. - FORM 8-K/A - EX-99.4 - EXHIBIT 99.4 PRO FORMA COMBINED FINANCIAL STMTS - January 9, 2013

Attached files

Wellness Center USA, Inc. Reports