Attached files
| file | filename |
|---|---|
| EX-99.2 - NewAge, Inc. | ex99_2.htm |
| 8-K/A - NewAge, Inc. | nab8ka_9112016.htm |
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Further to the Form 8-K dated June 30, 2016, on May 20, 2016, New Age Beverages Corporation ("NABC"), formerly known as Bucha, Inc., and American Brewing Company, Inc., a Washington corporation ("we" or the "Company"), entered into an Asset Purchase Agreement (the "Agreement") whereby the Company acquired substantially all of the operating assets of New Age Beverages, LLC, New Age Properties, LLC, Aspen Pure, LLC and Xing Beverage, LLC (collectively, "Xing"), which are companies engaged in the manufacture and sale of various teas and beverages (the "Acquisition"). On May 20, 2016, the parties executed the Asset Purchase Agreement for the Acquisition. On June 30, 2016 (the "Closing Date"), the parties executed the final exhibits and the Company transferred the purchase price and other consideration described in the Agreement, thereby closing the transaction.
The accompanying unaudited pro forma combined financial statements present the pro forma consolidated financial position and results of operations of the combined company based upon NABC's and Xing's historical financial statements, after giving effect to NABC's acquisition of Xing and the adjustments described in the following footnotes, and are intended to reflect the impact of this acquisition on NABC on a pro forma basis.
The unaudited pro forma combined balance sheets as of December 31, 2015 and 2014 reflect the acquisition of Xing as if it had been consummated on that date and includes historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition and that are factually supportable.
The unaudited pro forma combined statements of operations for the year ended December 31, 2015 and the year ended December 31, 2014 give effect to the Acquisition as if it had been consummated on January 1, 2014 and include historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition, are expected to have a continuing impact and are factually supportable.
The accompanying unaudited pro forma combined financial statements are presented for illustrative purposes only. They do not purport to represent what NABC's consolidated results of operations and financial position would have been had the Acquisition actually occurred as of the dates indicated, and they do not purport to project NABC's future consolidated results of operations or financial position. The unaudited pro forma combined statements of operations and income do not reflect any adjustments for the effect of non-recurring items that NABC may realize as a result of the Acquisition. The unaudited pro forma combined financial statements include certain reclassifications to conform the historical financial information of Xing to the presentation of NABC.
Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect the amounts related to tangible and intangible assets and liabilities acquired at an amount equal to the preliminary estimate of their fair values. The pro forma adjustments reflecting the completion of the Acquisition are based upon the acquisition method of accounting in accordance with Accounting Standards Codification 805, "Business Combinations" ("ASC 805"), and the assumptions set forth in the notes to the unaudited pro forma combined financial statements. Management has made a preliminary allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed based on various preliminary estimates. The allocation of the purchase price is preliminary pending finalization of various estimates and valuation analyses.
The pro forma adjustments are based on the preliminary information available at the time of the preparation of this document.
NEW AGE BEVERAGES CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2015
|
New Age Beverages Corporation
|
Xing Group
|
Pro Forma Adjustments
|
Pro Forma Balance Sheet
|
|||||||||||||
|
ASSETS
|
||||||||||||||||
|
CURRENT ASSETS:
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
43,856
|
$
|
400
|
$
|
-
|
$
|
44,256
|
||||||||
|
Accounts receivable, net
|
259,619
|
3,095,621
|
-
|
3,355,240
|
||||||||||||
|
Inventories, net
|
196,220
|
4,150,443
|
-
|
4,346,663
|
||||||||||||
|
Prepaid expenses and other current assets
|
26,264
|
131,793
|
-
|
158,057
|
||||||||||||
|
Total current assets
|
525,959
|
7,378,257
|
-
|
7,904,216
|
||||||||||||
|
|
||||||||||||||||
|
Property and equipment, net
|
66,336
|
4,034,876
|
(A) |
3,383,913
|
7,485,125
|
|||||||||||
|
Deposits
|
- |
1,750
|
-
|
1,750
|
||||||||||||
|
Customer relationships, net
|
187,500
|
-
|
-
|
187,500
|
||||||||||||
|
Goodwill
|
389,014
|
-
|
(B) |
6,946,515
|
7,335,529
|
|||||||||||
|
Total assets
|
$ |
1,168,809
|
$ |
11,414,883
|
$ |
10,330,428
|
$ |
22,914,120
|
||||||||
|
|
||||||||||||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||||||||||
|
CURRENT LIABILITIES:
|
||||||||||||||||
|
Accounts payable
|
$ |
282,845
|
$ |
1,915,195
|
$ |
-
|
$ |
2,198,040
|
||||||||
|
Current portion of notes payable and capital leases, net of unamortized discounts
|
-
|
178,960
|
-
|
229,960
|
||||||||||||
|
Due to related parties
|
-
|
4,650,000
|
(C) |
(4,650,000
|
)
|
-
|
||||||||||
|
Related party note payable
|
-
|
-
|
(D) |
4,500,000
|
4,500,000
|
|||||||||||
|
Factoring payable
|
110,663
|
-
|
-
|
110,663
|
||||||||||||
|
Accrued expenses and other current liabilities
|
177,589
|
-
|
-
|
177,589
|
||||||||||||
|
Line of credit
|
- |
19,470,000
|
(19,470,000
|
)
|
-
|
|||||||||||
|
Total current liabilities
|
571,097
|
26,264,369
|
(19,620,000
|
)
|
7,215,466
|
|||||||||||
|
|
||||||||||||||||
|
Note payable and capital leases, less current portion, net of unamortized discounts
|
78,931
|
2,195,880
|
(D) |
5,918,928
|
8,193,739
|
|||||||||||
|
Related party debt, net of unamortized discounts
|
23,669
|
- | (D) |
(23,669
|
)
|
-
|
||||||||||
|
Total liabilities
|
673,697
|
28,460,249
|
(13,724,741
|
)
|
15,409,205
|
|||||||||||
|
|
||||||||||||||||
|
COMMITMENTS AND CONTINGENCIES
|
||||||||||||||||
|
|
||||||||||||||||
|
STOCKHOLDERS' EQUITY:
|
||||||||||||||||
|
Common stock, $0.001 par value, 50,000,000 shares authorized;
|
||||||||||||||||
|
19,757,840 shares issued and outstanding
|
15,404
|
-
|
4,354
|
19,758
|
||||||||||||
|
Series A Preferred stock, $0.001 par value: 250,000 shares
|
||||||||||||||||
|
authorized, 250,000 shares issued and outstanding
|
282
|
-
|
-
|
282
|
||||||||||||
|
Series B Preferred stock, $0.001 par value: 300,000 shares
|
||||||||||||||||
|
authorized, 254,807 shares issued and outstanding
|
255
|
-
|
-
|
255
|
||||||||||||
|
Additional paid-in capital
|
3,811,049
|
-
|
(E) |
7,005,449
|
10,816,498
|
|||||||||||
|
Accumulated deficit
|
(3,331,878
|
)
|
(17,045,366
|
) (E)
|
17,045,366
|
(3,331,878
|
)
|
|||||||||
|
Total stockholders' equity
|
495,112
|
(17,045,366
|
)
|
24,055,169
|
7,504,915
|
|||||||||||
|
Total liabilities and stockholders' equity
|
$
|
1,168,809
|
$
|
11,414,883
|
$
|
10,330,428
|
$
|
22,914,120
|
||||||||
Exhibit 99.3 -- Page 2
NEW AGE BEVERAGES CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2015
|
New Age Beverages Corporation
|
Xing Group
|
Pro Forma Adjustments
|
Pro Forma Statement of Operations
|
|||||||||||||
|
REVENUES
|
$
|
2,421,752
|
$
|
43,316,772
|
$
|
-
|
$
|
45,738,524
|
||||||||
|
Net Revenue
|
2,421,752
|
43,316,772
|
-
|
45,738,524
|
||||||||||||
|
Cost of Goods Sold
|
2,008,376
|
33,682,086
|
-
|
35,690,462
|
||||||||||||
|
GROSS PROFIT
|
413,376
|
9,634,686
|
-
|
10,048,062
|
||||||||||||
|
OPERATING EXPENSES:
|
||||||||||||||||
|
Advertising, promotion and selling
|
260,625
|
-
|
-
|
260,625
|
||||||||||||
|
General and administrative
|
1,211,423
|
8,476,067
|
(F) |
57,513
|
9,745,003
|
|||||||||||
|
Gain on forgiveness of accrued payroll
|
(500,000
|
)
|
-
|
-
|
(500,000
|
)
|
||||||||||
|
Legal and professional
|
272,761
|
-
|
-
|
272,761
|
||||||||||||
|
Total operating expenses
|
1,244,809
|
8,476,067
|
57,513
|
9,778,389
|
||||||||||||
|
(LOSS) INCOME FROM OPERATIONS
|
(831,433
|
)
|
1,158,619
|
(57,513
|
)
|
269,673
|
||||||||||
|
OTHER INCOME (EXPENSE):
|
||||||||||||||||
|
Interest expense
|
(141,282
|
)
|
(937,847
|
) (G)
|
(191,053
|
)
|
(1,270,182
|
)
|
||||||||
|
Other income
|
1
|
551,536
|
-
|
551,537
|
||||||||||||
|
Total other income (expense)
|
(141,281
|
)
|
(386,311
|
)
|
(191,053
|
)
|
(718,645
|
)
|
||||||||
|
(LOSS) INCOME FROM CONTINUING OPERATIONS
|
(972,714
|
)
|
772,308
|
(248,566
|
)
|
(448,972
|
)
|
|||||||||
|
Loss on sales of discontinued operations
|
(256,773
|
)
|
-
|
-
|
(256,773
|
)
|
||||||||||
|
Income from discontinued operations
|
126,154
|
-
|
-
|
126,154
|
||||||||||||
|
NET (LOSS) INCOME
|
$ |
(1,103,333
|
)
|
$ |
772,308
|
$ |
(248,566
|
)
|
$ |
(579,591
|
)
|
|||||
|
Weighted Average Number of Common
|
||||||||||||||||
|
Shares Outstanding - Basic
|
15,403,925
|
4,353,915
|
19,757,840
|
|||||||||||||
|
Weighted Average Number of Common
|
||||||||||||||||
|
Shares Outstanding - Diluted
|
15,403,925
|
4,353,915
|
19,757,840
|
|||||||||||||
|
NET INCOME (LOSS) PER SHARE -
|
||||||||||||||||
|
BASIC
|
$
|
(0.06
|
)
|
$
|
0.18
|
N/A
|
|
$
|
(0.02
|
)
|
||||||
|
NET INCOME (LOSS) PER SHARE -
|
||||||||||||||||
|
DILUTED
|
$
|
(0.06
|
)
|
$ |
0.18
|
|
N/A
|
|
$
|
(0.02
|
)
|
|||||
Exhibit 99.3 -- Page 3
NEW AGE BEVERAGES CORPORATION
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2014
|
New Age Beverages Corporation
|
Xing Group
|
Pro Forma Adjustments
|
Pro Forma Balance Sheet
|
|||||||||||||
|
ASSETS
|
||||||||||||||||
|
CURRENT ASSETS:
|
||||||||||||||||
|
Cash and cash equivalents
|
$
|
125,312
|
$
|
246,593
|
$
|
-
|
$
|
371,905
|
||||||||
|
Accounts receivable, net
|
254,705
|
3,178,752
|
-
|
3,433,457
|
||||||||||||
|
Inventories, net
|
286,070
|
4,338,951
|
-
|
4,625,021
|
||||||||||||
|
Prepaid expenses and other current assets
|
13,865
|
58,564
|
-
|
72,429
|
||||||||||||
|
Total current assets
|
679,952
|
7,822,860
|
-
|
8,502,812
|
||||||||||||
|
Property and equipment, net
|
65,453
|
3,832,753
|
(A) |
3,383,913
|
7,282,119
|
|||||||||||
|
Deposits
|
-
|
1,750
|
-
|
1,750
|
||||||||||||
|
Goodwill
|
-
|
-
|
(B) |
6,946,515
|
6,946,515
|
|||||||||||
|
Total assets
|
$ |
745,405
|
$ |
11,657,363
|
$ |
10,330,428
|
$ |
22,733,196
|
||||||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||||||||||
|
CURRENT LIABILITIES:
|
||||||||||||||||
|
Accounts payable
|
$ |
616,719
|
$ |
2,482,802
|
$ |
-
|
$ |
3,099,521
|
||||||||
|
Current portion of notes payable and capital leases, net of unamortized discounts
|
3,689
|
166,917
|
-
|
170,606
|
||||||||||||
|
Convertible note payable to related parties
|
120,000
|
-
|
-
|
120,000
|
||||||||||||
|
Note payable related parties
|
-
|
4,150,000
|
(C) |
(4,150,000
|
)
|
-
|
||||||||||
|
Related party note payable
|
-
|
-
|
4,500,000
|
4,500,000
|
||||||||||||
|
Accrued expenses and other current liabilities
|
449,823
|
-
|
-
|
449,823
|
||||||||||||
|
Line of credit
|
20,470,000
|
(D) |
(20,470,000
|
)
|
-
|
|||||||||||
|
Total current liabilities
|
1,190,231
|
27,269,719
|
(20,120,000
|
)
|
8,339,950
|
|||||||||||
|
Note payable and capital leases, less current portion, net of unamortized discounts
|
-
|
2,205,318
|
(D) |
5,622,951
|
7,828,269
|
|||||||||||
|
Total liabilities
|
1,190,231
|
29,475,037
|
(14,497,049
|
)
|
16,168,219
|
|||||||||||
|
COMMITMENTS AND CONTINGENCIES
|
||||||||||||||||
|
STOCKHOLDERS' EQUITY:
|
||||||||||||||||
|
Members' equity, no par value, 40,000,000 shares authorized;
|
||||||||||||||||
|
1,366,042 shares issued and outstanding
|
(35,000
|
)
|
-
|
-
|
(35,000
|
)
|
||||||||||
|
Common stock, $0.001 par value, 50,000,000 shares authorized;
|
||||||||||||||||
|
4,353,915 shares issued and outstanding
|
-
|
4,354
|
4,354
|
|||||||||||||
|
Series A Preferred stock, no par value: 8,000,000 shares
|
||||||||||||||||
|
authorized, 6,205,558 shares issued and outstanding
|
4,327,628
|
-
|
-
|
4,327,628
|
||||||||||||
|
Additional paid-in capital
|
126,328
|
-
|
(E) |
7,005,449
|
7,131,777
|
|||||||||||
|
Accumulated deficit
|
(4,863,782
|
)
|
(17,817,674
|
) (E)
|
17,817,674
|
(4,863,782
|
)
|
|||||||||
|
Total stockholders' equity
|
(444,826
|
)
|
(17,817,674
|
)
|
24,827,477
|
6,564,977
|
||||||||||
|
Total liabilities and stockholders' equity
|
$
|
745,405
|
$
|
11,657,363
|
$
|
10,330,428
|
$
|
22,733,196
|
||||||||
Exhibit 99.3 -- Page 4
NEW AGE BEVERAGES CORPORATION
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2014
|
New Age Beverages Corporation
|
Xing Group
|
Pro Forma Adjustments
|
Pro Forma Statement of Operations
|
|||||||||||||
|
REVENUES
|
$
|
2,789,936
|
$
|
40,163,661
|
$
|
-
|
$
|
42,953,597
|
||||||||
|
Net Revenue
|
2,789,936
|
40,163,661
|
-
|
42,953,597
|
||||||||||||
|
Cost of Goods Sold
|
1,911,932
|
31,302,068
|
-
|
33,214,000
|
||||||||||||
|
GROSS PROFIT
|
878,004
|
8,861,593
|
-
|
9,739,597
|
||||||||||||
|
OPERATING EXPENSES:
|
||||||||||||||||
|
Advertising, promotion and selling
|
578,970
|
-
|
-
|
578,970
|
||||||||||||
|
General and administrative
|
595,199
|
7,768,981
|
(F) |
57,513
|
8,421,693
|
|||||||||||
|
Gain on forgiveness of accrued payroll
|
-
|
-
|
-
|
-
|
||||||||||||
|
Legal and professional
|
470,193
|
-
|
-
|
470,193
|
||||||||||||
|
Total operating expenses
|
1,644,362
|
7,768,981
|
57,513
|
9,470,856
|
||||||||||||
|
(LOSS) INCOME FROM OPERATIONS
|
(766,358
|
)
|
1,092,612
|
(57,513
|
)
|
268,742
|
||||||||||
|
OTHER INCOME (EXPENSE):
|
||||||||||||||||
|
Interest expense
|
(125,169
|
)
|
(984,292
|
) (G)
|
(144,608
|
)
|
(1,254,069
|
)
|
||||||||
|
Other income
|
92
|
114,360
|
-
|
114,452
|
||||||||||||
|
Total other income (expense)
|
(125,077
|
)
|
(869,932
|
)
|
(144,608
|
)
|
(1,139,617
|
)
|
||||||||
|
NET (LOSS) INCOME
|
$ |
(891,435
|
)
|
$ |
222,680
|
$ |
(202,121
|
)
|
$ |
(870,876
|
)
|
|||||
|
Weighted Average Number of Common
|
||||||||||||||||
|
Shares Outstanding - Basic
|
-
|
4,353,915
|
- |
4,353,915
|
||||||||||||
|
Weighted Average Number of Common
|
||||||||||||||||
|
Shares Outstanding - Diluted
|
-
|
4,353,915
|
- |
4,353,915
|
||||||||||||
|
NET INCOME (LOSS) PER SHARE -
|
||||||||||||||||
|
BASIC
|
$
|
NA
|
|
$
|
(0.20
|
) |
N/A
|
|
$
|
(0.20
|
)
|
|||||
|
NET INCOME (LOSS) PER SHARE -
|
||||||||||||||||
|
DILUTED
|
$
|
NA
|
|
$ |
(0.20
|
)
|
N/A
|
|
$
|
(0.20
|
)
|
|||||
Exhibit 99.3 -- Page 5
NEW AGE BEVERAGES CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
1. Basis of Presentation
The unaudited pro forma combined financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") have been omitted pursuant to such rules and regulations; accordingly, these pro forma combined financial statements should be read in connection with New Age Beverages Corporation ("NABC") and Xing Group ("Xing") historical audited and unaudited financial statements referred to above.
The unaudited pro forma combined balance sheets as December 31, 2015 and 2014 reflect the acquisition of Xing as if it had been consummated on that date and includes historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition and that are factually supportable.
The unaudited pro forma combined statements of operations for the year ended December 31, 2015 and the year ended December 31, 2014 give effect to the Acquisition as if it had been consummated on January 1, 2014 and include historical information as reported by the separate companies as well as adjustments that give effect to events that are directly attributable to the Acquisition, are expected to have a continuing impact and are factually supportable.
2. Acquisition of Xing
On June 30, 2016, NABC acquired the assets of New Age Beverage, LLC, New Age Properties, LLC, Aspen Pure, LLC, and Xing Beverage, LLC (collectively, Xing). Xing is engaged in the manufacturing and sale of various teas and beverages, which will help the Company expand its capabilities and product offering. The operating results of Xing will be consolidated with those of NABC beginning July 1, 2016. Total purchase consideration paid was $19,995,000, which consisted of $8,500,000 of cash, a note payable for $4,500,000 and 4,353,915 shares of common stock. The common stock issued was valued at $1.61 per share, which was the volume weighted average closing stock for the thirty days preceding the acquisition.
The purchase price was allocated to the net assets acquired based on their estimated fair values as follows:
|
|
||||
|
Accounts receivable
|
$
|
5,627,669
|
||
|
Inventories
|
4,847,417
|
|||
|
Prepaid expenses and other current assets
|
492,972
|
|||
|
Property and equipment, net
|
7,418,789
|
|||
|
Other intangible assets acquired
|
-
|
|||
|
Assumption of accounts payable, accrued expenses and other current liabilities
|
(5,338,362
|
)
|
||
|
|
13,048,485
|
|||
|
Goodwill
|
6,946,515
|
|||
|
Total Inventory
|
$
|
19,995,000
|
||
Exhibit 99.3 -- Page 6
NEW AGE BEVERAGES CORPORATION
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
2. Acquisition of Xing (Continued)
The above allocation is preliminary and is subject to change. Because the acquisition was consummated on June 30, 2016, NABC has begun to assess the fair value of the various net assets acquired, but has not yet completed this assessment. The Company is also in the process of identifying other intangible assets, such as customer relationships and recipes that may need to be recognized apart from goodwill. Once identified, these other intangible assets, if any, will be recorded at their fair values. NABC is working to finalize the allocations as quickly as possible, and anticipates that the allocation will not be final for approximately 6 months. Any adjustments necessary may be material to the condensed consolidated balance sheet and the amount of goodwill recognized. Any resulting adjustments would have no impact to the June 30, 2016 reported operating results.
3. Pro Forma Adjustments
The following is a summary of pro forma adjustments reflected in the unaudited pro forma condensed combined financial statements based on preliminary estimates, which may change as additional information is obtained.
Pro Forma Condensed Combined Balance Sheet Adjustments
| A. | To record the PPE adjustment to the acquisition of Xing. |
| B. | To record goodwill related to the acquisition of Xing. |
| C. | To eliminate the previously recorded due to related party. |
| D. | To record the related party note related to the acquisition of Xing. |
| E. | To record the equity transactions related to the acquisition of Xing. |
Pro Forma Statement of Comprehensive Income Adjustments
| F. | To record the depreciation expense related to the acquisition. |
| G. | To record interest expense. |
Exhibit 99.3 -- Page 7