Attached files
Exhibit 99.3
VET ONLINE SUPPLY INC.
INDEX TO PRO FORMA FINANCIAL INFORMATION
Unaudited
Pro Forma Combined Financial Information
of Vet Online Supply Inc. and BrewBilt Manufacturing, LLC
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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The unaudited pro forma condensed combined balance sheet presents the historical balance sheets of BrewBilt Manufacturing, LLC (“BrewBilt”) and Vet Online Supply Inc. (“Vet Online Supply”) as of September 30, 2019 and December 31, 2018, and accounts for the merger of BrewBilt and Vet Online Supply as a reverse merger transaction, with BrewBilt as the accounting acquirer giving effect to the transaction as if it had occurred as of January 1, 2018. On November 22, 2019, Vet Online Supply and BrewBilt entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby BrewBilt merged with and into Vet Online Supply, with BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer.
The BrewBilt balance sheet information was derived from its unaudited balance sheet as of September 30, 2019 and audited balance sheet as of December 31, 2018. The Vet Online Supply balance sheet information was derived from its unaudited balance sheet as of September 30, 2019, included in its quarterly report Form 10-Q that was filed with the Securities and Exchange Commission (“SEC”) on November 13, 2019. The Vet Online Supply balance sheet information was derived from its audited balance sheet as of December 31, 2018, included in its annual report Form 10-K that was filed with the SEC on April 15, 2019.
The unaudited pro forma condensed combined statements of operations are based on the historical statements of BrewBilt and Vet Online Supply and combine the results of operations of BrewBilt and Vet Online Supply for the year ended December 31, 2018 and the nine months ended September 30, 2019, giving effect to the transaction as if it occurred on January 1, 2018, and reflecting the pro forma adjustments expected to have a continuing impact on the combined results.
The historical results of operations of BrewBilt were derived from its unaudited statement of operations for the nine months ended September 30, 2019 and its audited statement of operations for the year ended December 31, 2018 that are included in this Form 8-K. The historical results of operations for Vet Online Supply were derived from its unaudited statement of operations for the nine months ended September 30, 2019 and its audited statement of operations for the year ended December 31, 2018 that are included in this Form 8-K.
The unaudited pro forma condensed combined financial statements are for informational purposes only. They do not purport to indicate the results that would have actually been obtained had the reverse acquisition been completed on the assumed dates or for the periods presented, or that may be realized in the future. Furthermore, while the pro forma financial information reflects transaction costs incurred with the merger of BrewBilt with and into Vet Online Supply on November 22, 2019, the pro forma financial information does not reflect the impact of any reorganization or restructuring expenses or operating efficiencies resulting from the transaction. The unaudited pro forma condensed combined 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 referred to above.
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| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS |
| AS OF SEPTEMBER 30, 2019 |
| Vet Online | BrewBilt | Pro Forma | Pro Forma | |||||||||||||
| Supply | Manufacturing | Adjustments | Combined | |||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets | ||||||||||||||||
| Cash | $ | 5,468 | $ | 19,705 | $ | — | $ | 25,173 | ||||||||
| Accounts receivable | — | 454,431 | — | 454,431 | ||||||||||||
| Earnings in excess of billings | — | 42,293 | — | 42,293 | ||||||||||||
| Inventory | 17,375 | 35,513 | — | 52,888 | ||||||||||||
| Prepaid expenses | — | 5,430 | 5,430 | |||||||||||||
| Other current assets | 156 | 164 | 320 | |||||||||||||
| Total current assets | 22,999 | 557,536 | — | 580,535 | ||||||||||||
| Property and equipment, net | — | 180,449 | 180,449 | |||||||||||||
| Right-of-use asset | — | 400,533 | 400,533 | |||||||||||||
| Security deposit | — | 4,980 | — | 4,980 | ||||||||||||
| TOTAL ASSETS | $ | 22,999 | $ | 1,143,498 | $ | — | $ | 1,166,497 | ||||||||
| LIABILITIES | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable | $ | 569,519 | $ | 298,508 | $ | — | $ | 868,027 | ||||||||
| Accrued interest | — | 5,982 | — | 5,982 | ||||||||||||
| Accrued liabilities | 51 | 89,092 | — | 89,143 | ||||||||||||
| Billings in excess of revenues | — | 1,676,856 | — | 1,676,856 | ||||||||||||
| Convertible notes payable, interest | 189,143 | — | — | 189,143 | ||||||||||||
| Convertible notes payable, net of discount | 826,820 | — | — | 826,820 | ||||||||||||
| Derivative liabilities | 1,322,116 | — | — | 1,322,116 | ||||||||||||
| Liability for unissued shares | 150,825 | — | — | 150,825 | ||||||||||||
| Related party liabilities | 82,032 | 5,805 | — | 87,837 | ||||||||||||
| Total Current Liabilities | 3,140,506 | 2,076,243 | — | 5,216,749 | ||||||||||||
| Operating lease liabilities | — | 400,533 | — | 400,533 | ||||||||||||
| Long term debt | — | 258,286 | — | 258,286 | ||||||||||||
| Total Liabilities | 3,140,506 | 2,735,062 | — | 5,875,568 | ||||||||||||
| SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
| Series A preferred stock, $0.001 par value | — | — | 500 | (b) | 500 | |||||||||||
| Series B preferred stock, $0.001 par value | 1 | — | — | 1 | ||||||||||||
| Common stock, $0.001 par value | 1,942 | — | — | 1,942 | ||||||||||||
| Additional paid in capital | 6,858,915 | (74,443 | ) | (8,859,474 | ) (a) | (2,075,002 | ) | |||||||||
| Accumulated equity (deficit) | (9,978,365 | ) | (1,517,121 | ) | 8,858,974 | (a) | (2,636,512 | ) | ||||||||
| Total shareholders’ equity (deficit) | (3,117,507 | ) | (1,591,564 | ) | — | (4,709,071 | ) | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 22,999 | $ | 1,143,498 | $ | — | $ | 1,166,497 | ||||||||
See notes to the unaudited pro forma condensed combined financial statements
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| UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS |
| AS OF DECEMBER 31, 2018 |
| Vet Online | BrewBilt | Pro Forma | Pro Forma | |||||||||||||
| Supply | Manufacturing | Adjustments | Combined | |||||||||||||
| ASSETS | ||||||||||||||||
| Current Assets | ||||||||||||||||
| Cash | $ | 10,640 | $ | 43,285 | $ | — | $ | 53,925 | ||||||||
| Accounts receivable | — | 987,454 | — | 987,454 | ||||||||||||
| Earnings in excess of billings | — | 344,134 | — | 344,134 | ||||||||||||
| Inventory | 17,960 | 35,513 | — | 53,473 | ||||||||||||
| Prepaid expenses | 3,000 | 2,567 | — | 5,567 | ||||||||||||
| Other current assets | — | 2,246 | — | 2,246 | ||||||||||||
| Total current assets | 31,600 | 1,415,199 | — | 1,446,799 | ||||||||||||
| Property and equipment, net | — | 216,812 | — | 216,812 | ||||||||||||
| Security deposit | — | 4,980 | — | 4,980 | ||||||||||||
| TOTAL ASSETS | $ | 31,600 | $ | 1,636,991 | $ | — | $ | 1,668,591 | ||||||||
| LIABILITIES | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable | $ | 567,250 | $ | 299,403 | $ | — | $ | 866,653 | ||||||||
| Accrued liabilities | 35 | 94,141 | — | 94,176 | ||||||||||||
| Billings in excess of revenues | — | 1,905,346 | — | 1,905,346 | ||||||||||||
| Convertible notes payable, interest | 61,586 | — | — | 61,586 | ||||||||||||
| Convertible notes payable, net of discount | 555,224 | — | — | 555,224 | ||||||||||||
| Deferred revenue | 82 | — | — | 82 | ||||||||||||
| Derivative liabilities | 1,426,982 | — | — | 1,426,982 | ||||||||||||
| Liability for unissued shares | 150,825 | — | — | 150,825 | ||||||||||||
| Related party liabilities | 29,267 | 5,805 | — | 35,072 | ||||||||||||
| Total Current Liabilities | 2,791,251 | 2,304,695 | — | 5,095,946 | ||||||||||||
| Long term debt | — | 358,419 | — | 358,419 | ||||||||||||
| Total Liabilities | 2,791,251 | 2,663,114 | — | 5,454,365 | ||||||||||||
| SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||
| Series A preferred stock, $0.001 par value | — | — | 500 | (b) | 500 | |||||||||||
| Series B preferred stock, $0.001 par value | 1 | — | — | 1 | ||||||||||||
| Common stock, $0.001 par value | 1,498 | — | — | 1,498 | ||||||||||||
| Additional paid in capital | 6,672,064 | (303,375 | ) | (8,859,474 | ) (a) | (2,490,785 | ) | |||||||||
| Accumulated equity (deficit) | (9,433,214 | ) | (722,748 | ) | 8,858,974 | (a) | (1,296,988 | ) | ||||||||
| Total shareholders’ equity (deficit) | (2,759,651 | ) | (1,026,123 | ) | — | (3,785,774 | ) | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 31,600 | $ | 1,636,991 | $ | — | $ | 1,668,591 | ||||||||
See notes to the unaudited pro forma condensed combined financial statements
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| UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS |
| FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 |
| Vet Online | BrewBilt | Pro Forma | Pro Forma | |||||||||||||
| Supply | Manufacturing | Adjustments | Combined | |||||||||||||
| Sales | $ | 1,521 | $ | 1,409,153 | $ | — | $ | 1,410,674 | ||||||||
| Cost of sales | 920 | 1,104,451 | — | 1,105,371 | ||||||||||||
| Gross profit | 601 | 304,702 | — | 305,303 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Consulting fees | 39,228 | 45,000 | — | 84,228 | ||||||||||||
| G&A expenses | 16,482 | 305,153 | — | 321,635 | ||||||||||||
| Professional fees | 54,446 | 7,451 | — | 61,897 | ||||||||||||
| Salaries and wages | 27,000 | 404,067 | — | 431,067 | ||||||||||||
| Total operating expenses | 137,156 | 761,671 | — | 898,827 | ||||||||||||
| — | ||||||||||||||||
| Loss from operations | (136,555 | ) | (456,969 | ) | — | (593,524 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Gain (loss) on derivative liability valuation | 78,541 | — | — | 78,541 | ||||||||||||
| Interest expenses | (487,137 | ) | (34,029 | ) | — | (521,166 | ) | |||||||||
| Total other income (expense) | (408,596 | ) | (34,029 | ) | — | (442,625 | ) | |||||||||
| Net income (loss) before income taxes | (545,151 | ) | (490,998 | ) | (1,036,149 | ) | ||||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net income (loss) | $ | (545,151 | ) | $ | (490,998 | ) | $ | — | $ | (1,036,149 | ) | |||||
| Per share information | ||||||||||||||||
| Weighted number of common shares outstanding, basic | 1,874,134 | — | — | 1,874,134 | ||||||||||||
| Net income (loss) per common share | $ | (0.2909 | ) | $ | — | $ | — | $ | (0.5529 | ) | ||||||
See notes to the unaudited pro forma condensed combined financial statements
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| UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS |
| FOR THE YEAR ENDED DECEMBER 31, 2018 |
| Vet Online | BrewBilt | Pro Forma | Pro Forma | |||||||||||||
| Supply | Manufacturing | Adjustments | Combined | |||||||||||||
| Sales | $ | 5,379 | $ | 1,874,363 | $ | — | $ | 1,879,742 | ||||||||
| Cost of sales | 2,685 | 1,464,222 | — | 1,466,907 | ||||||||||||
| Gross profit | 2,694 | 410,141 | — | 412,835 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Consulting fees | 1,376,284 | 60,450 | — | 1,436,734 | ||||||||||||
| G&A expenses | 72,241 | 393,746 | — | 465,987 | ||||||||||||
| Professional fees | 79,449 | 22,259 | — | 101,708 | ||||||||||||
| Salaries and wages | 111,000 | 494,110 | — | 605,110 | ||||||||||||
| Total operating expenses | 1,638,974 | 970,565 | — | 2,609,539 | ||||||||||||
| Loss from operations | (1,636,280 | ) | (560,424 | ) | — | (2,196,704 | ) | |||||||||
| Other income (expense): | ||||||||||||||||
| Interest expenses | (1,363,867 | ) | (41,162 | ) | — | (1,405,029 | ) | |||||||||
| Loss on derivative liability valuation | (1,568,461 | ) | — | — | (1,568,461 | ) | ||||||||||
| Loss on goodwill impairment | — | — | (2,289,884 | ) (c) | (2,289,884 | ) | ||||||||||
| Total other income (expense) | (2,932,328 | ) | (41,162 | ) | (2,289,884 | ) | (5,263,374 | ) | ||||||||
| Net income (loss) before income taxes | (4,568,608 | ) | (601,586 | ) | (2,289,884 | ) | (7,460,078 | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net income (loss) | $ | (4,568,608 | ) | $ | (601,586 | ) | $ | (2,289,884 | ) | $ | (7,460,078 | ) | ||||
| Per share information | ||||||||||||||||
| Weighted number of common shares outstanding, basic | 815,812 | — | — | 815,812 | ||||||||||||
| Net income (loss) per common share | $ | (5.6001 | ) | $ | — | $ | — | $ | (9.1444 | ) | ||||||
See notes to the unaudited pro forma condensed combined financial statements
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On November 22, 2019, Vet Online Supply and BrewBilt entered into an Agreement and Plan of Merger (the “Merger Agreement”) and completed a merger, whereby BrewBilt merged with and into Vet Online Supply, with BrewBilt remaining as the surviving entity (the “Merger”). Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with BrewBilt as the accounting acquirer.
Pro forma adjustments to the attached condensed combined financial statements include the following:
| a) | To eliminate the retained earnings account of Vet Online Supply. | |
| b) | To record Preferred Series A stock issued pursuant to the Merger Agreement. | |
| c) | To record goodwill impairment loss. |
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