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EX-99.2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF ANC GREEN SOLUTIONS I AS OF AND F - Andover National Corp | f8k100419a1ex99-2_andover.htm |
EX-99.1 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF ANC GREEN SOLUTIONS I AS OF AND FOR - Andover National Corp | f8k100419a1ex99-1_andover.htm |
8-K/A - AMENDMENT NO. 1 TO CURRENT REPORT - Andover National Corp | f8k100419a1_andovernational.htm |
Exhibit 99.3
Andover National Corporation and Legg Holdings, Inc.
Unaudited Pro Forma Consolidated Financial Statements
Table of Contents
Andover National Corporation and Legg Holdings, Inc.
Unaudited Combined Pro Forma Balance Sheets
As of September 30, 2019
Andover National Corporation | Legg Holdings, Inc. | Combined | Pro forma Adjustments | Consolidated pro forma | ||||||||||||||||
Assets | ||||||||||||||||||||
Current Assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 13,298,414 | $ | 194,510 | $ | 13,492,924 | $ | (3,500,000 | )(a) | $ | 9,992,924 | |||||||||
Accounts receivable | - | 176,705 | 176,705 | - | 176,705 | |||||||||||||||
Prepaid expenses | 56,167 | 9,643 | 65,810 | - | 65,810 | |||||||||||||||
Total Current Assets | 13,354,581 | 380,858 | 13,735,439 | (3,500,000 | ) | 10,235,439 | ||||||||||||||
Property and equipment, net | - | 206,124 | 206,124 | - | 206,124 | |||||||||||||||
Right of use assets | - | - | 231,540 | (b) | 231,540 | |||||||||||||||
Goodwill | - | - | - | 3,687,850 | (a) | 3,687,850 | ||||||||||||||
Total Assets | $ | 13,354,581 | $ | 586,982 | $ | 13,941,563 | $ | 419,390 | $ | 14,360,953 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Current Liabilities | ||||||||||||||||||||
Accounts payable and accrued liabilities | $ | 64,935 | $ | 66,732 | $ | 131,667 | $ | 500,000 | (a) | $ | 631,667 | |||||||||
Total Current Liabilities | 64,935 | 66,732 | 131,667 | 500,000 | 631,667 | |||||||||||||||
Long-Term Liabilities | ||||||||||||||||||||
Lease liability | - | - | - | 231,540 | (b) | 231,540 | ||||||||||||||
Total Liabilities | 64,935 | 66,732 | 131,667 | 731,540 | 863,207 | |||||||||||||||
Stockholders’ Equity | ||||||||||||||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, none issued | - | - | - | - | - | |||||||||||||||
Class A common stock, $0.001 par value; 60,000,000 shares authorized, 1,460,757 shares issued and outstanding | 1,461 | 600 | 2,061 | (600 | )(a) | 1,461 | ||||||||||||||
Class B common stock, $0.001 par value; 7,500,000 shares authorized, 121,797 shares issued and outstanding | 122 | - | 122 | - | 122 | |||||||||||||||
Additional paid in capital | 15,348,394 | 72,757 | 15,421,151 | (72,757 | )(a) | 15,348,394 | ||||||||||||||
Accumulated equity/(deficit) | (2,060,331 | ) | 446,893 | (1,613,438 | ) | (446,893 | )(a) | (2,060,331 | ) | |||||||||||
Total Combined Stockholders’ Equity | 13,289,646 | 520,250 | 13,809,896 | (520,250 | ) | 13,289,646 | ||||||||||||||
Noncontrolling interest | - | - | - | 208,100 | (a) | 208,100 | ||||||||||||||
Total stockholders’ equity | 13,289,646 | 520,250 | 13,809,896 | (312,150 | ) | 13,497,746 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 13,354,581 | $ | 586,982 | $ | 13,941,563 | $ | 419,390 | $ | 14,360,953 |
PF-1
Andover National Corporation and Legg Holdings, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
Andover National Corporation | Legg Holdings, Inc. | |||||||||||||||
For the nine months ended | For the nine months ended | |||||||||||||||
September 30, 2019 | September 30, 2019 | Pro Forma Adjustments | Consolidated Pro Forma | |||||||||||||
Revenue | ||||||||||||||||
Service revenue | $ | 14,659 | $ | - | $ | - | $ | 14,659 | ||||||||
Lawn care revenue | - | 1,880,694 | - | 1,880,694 | ||||||||||||
Franchise revenue | - | 76,331 | - | 76,331 | ||||||||||||
Total revenue | 14,659 | 1,957,025 | - | 1,971,684 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of revenue | - | 249,461 | - | 249,461 | ||||||||||||
Sales and marketing | - | 116,967 | - | 116,967 | ||||||||||||
General and administrative | 1,229,448 | 1,118,450 | - | 2,347,898 | ||||||||||||
Depreciation and amortization | - | 62,108 | - | 62,108 | ||||||||||||
Total operating expenses | 1,229,448 | 1,546,986 | - | 2,776,434 | ||||||||||||
Income (Loss) from operations | (1,214,789 | ) | 410,039 | - | (804,750 | ) | ||||||||||
Other Expenses | ||||||||||||||||
Unrealized gains from investment | 110,518 | - | - | 110,518 | ||||||||||||
Gain on insurance compensation | - | 120,644 | - | 120,644 | ||||||||||||
Interest expense | - | (345 | ) | - | (345 | ) | ||||||||||
Total other expenses | 110,518 | 120,299 | - | 230,817 | ||||||||||||
Loss before taxes | (1,104,271 | ) | 530,338 | - | (573,933 | ) | ||||||||||
Net gain (loss) before noncontrolling interest | $ | (1,104,271 | ) | $ | 530,338 | $ | - | $ | (573,933 | ) | ||||||
Net gain (loss) income attributable to noncontrolling interest | 212,135 | 212,135 | ||||||||||||||
Net Gain (Loss) | $ | (1,104,271 | ) | $ | 318,203 | $ | - | $ | (361,798 | ) | ||||||
Net loss per common share Class A - basic and diluted | $ | (0.37 | ) | $ | (0.12 | ) | ||||||||||
Net loss per common share Class B - basic and diluted | $ | (0.83 | ) | $ | (0.27 | ) | ||||||||||
Weighted average common shares – basic and diluted Class A | 2,963,334 | 2,963,334 | ||||||||||||||
Weighted average common shares – basic and diluted Class B | 1,338,452 | 1,338,452 |
PF-2
Andover National Corporation and Legg Holdings, Inc.
Unaudited Pro Forma Consolidated Statement of Operations
Andover National Corporation | Legg Holdings, Inc. | |||||||||||||||
For the year ended | For the year ended | |||||||||||||||
December 31, 2018 | December 31, 2018 | Pro Forma Adjustments | Consolidated Pro Forma | |||||||||||||
Revenue | ||||||||||||||||
Service revenue | $ | 18,836 | $ | - | $ | - | $ | 18,836 | ||||||||
Lawn care revenue | - | 2,142,043 | - | 2,142,043 | ||||||||||||
Franchise revenue | - | 93,194 | - | 93,194 | ||||||||||||
Total revenue | 18,836 | 2,235,237 | - | 2,254,073 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of revenue | - | 295,166 | - | 295,166 | ||||||||||||
Sales and marketing | - | 99,303 | - | 99,303 | ||||||||||||
General and administrative | 536,999 | 1,321,439 | - | 1,858,438 | ||||||||||||
Depreciation and amortization | - | 85,452 | - | 85,452 | ||||||||||||
Total operating expenses | 536,999 | 1,801,360 | - | 2,338,359 | ||||||||||||
Loss from operations | (518,163 | ) | 433,877 | - | (84,286 | ) | ||||||||||
Other Expenses | ||||||||||||||||
Interest expense | (18,048 | ) | (1,122 | ) | - | (19,170 | ) | |||||||||
Total other expenses | (18,048 | ) | (1,122 | ) | - | (19,170 | ) | |||||||||
Loss before taxes | (536,211 | ) | 432,755 | - | (103,456 | ) | ||||||||||
Net gain (loss) before noncontrolling interest | $ | (536,211 | ) | $ | 432,755 | - | $ | (103,456 | ) | |||||||
Net gain (loss) income attributable to noncontrolling interest | - | $ | 173,102 | $ | 173,102 | |||||||||||
Net Gain (Loss) | $ | (536,211 | ) | $ | 259,653 | - | $ | 69,646 | ||||||||
Net Income (Loss) per common share — basic and diluted | $ | (0.20 | ) | $ | 0.03 | |||||||||||
Weighted average common shares – basic and diluted | 2,719,121 | 2,719,121 |
PF-3
Purchase of Controlling Interest through subsidiary, Andover Environmental Solutions, LLC
ANDOVER
NATIONAL CORPORATION and LEGG HOLDINGS, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 – Basis of Presentation
On October 4, 2019, Andover Environmental Solutions LLC (“Andover Environmental”), a wholly-owned subsidiary of Andover National Corporation, entered into a Membership Interest Purchase Agreement with the Company and Heath L. Legg, pursuant to which Andover Environmental purchased from seller sixty percent (60%) of the membership interests of ANC Green Solutions I, LLC, a Delaware limited liability company, for $4,000,000 in cash, subject to certain adjustments. The primary reason for the business combination was to expand the existing business into new markets, and to increase the revenue through acquisition using cash the Company had available through recent sales of equity securities. The Company was able to obtain control through cash purchase of membership interests in a newly formed subsidiary.
The accompanying pro forma consolidated balance sheets presents the accounts of the Company and Legg Holdings, Inc. as if the acquisition occurred as of January 1, 2019. The accompanying pro forma consolidated statements of operations presents the accounts of the Company and Legg Holdings, Inc. for the nine months ended September 30, 2019, and the year ended December 31, 2018, as if the acquisition occurred on January 1, 2019 and January 1, 2018, respectively. The unaudited pro forma consolidated financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the historical financial statements of Andover National Corporation and Legg Holdings, Inc.
The following adjustments would be required if the acquisition occurred as indicated above:
a. To allocate the purchase price of $4,000,000 consisting of $3,500,000 in cash and $500,000 holdback pursuant to Section 2.03 of the Membership Interest Purchase.
Purchase Price Allocation | ||||
Cash | $ | 194,510 | ||
Accounts Receivable | 176,705 | |||
Prepaid | 9,643 | |||
Property and equipment, net | 206,124 | |||
Goodwill | 3,687,850 | |||
Accounts payable and accrued liabilities | (66,732 | ) | ||
Non-Controlling Interest | (208,100 | ) | ||
Total consideration | 4,000,000 | |||
Holdback | 500,000 | |||
Cash Paid | $ | 3,500,000 |
b. To record rental agreement at closing.
The unaudited consolidated pro forma financial information is presented for informational purposes only and is subject to a number of uncertainties and assumptions and do not purport to represent what Andover National Corporation actual performance or financial position would have been had the transaction occurred on the dates indicated and does not purport to indicate the financial position or result of operations as of any future date or for any future period.
PF-4