THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS OF THE COMPANY AND TRANSTECH
Published on August 23, 2010
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VISUALANT, INC. AND SUBSIDIARIES
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PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Historical
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Historical
TransTech
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Visualant, Inc.
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Systems, Inc.
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EXHIBIT 99.3
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Unaudited
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Unaudited
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9 Months Ended,
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9 Months Ended,
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Pro Forma
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Pro Forma
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June 30, 2010
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June 30, 2010
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Adjustments
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Combined
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REVENUE
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$ | - | $ | 6,191,057 | $ | - | $ | 6,191,057 | ||||||||
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COST OF SALES
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- | 4,981,939 | - | 4,981,939 | ||||||||||||
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GROSS PROFIT
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- | 1,209,118 | - | 1,209,118 | ||||||||||||
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RESEARCH AND DEVELOPMENT EXPENSES
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58,500 | - | - | 58,500 | ||||||||||||
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
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690,916 | 1,251,339 | 147,547 | 2,089,802 | ||||||||||||
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OPERATING LOSS
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(749,416 | ) | (42,221 | ) | (147,547 | ) | (939,184 | ) | ||||||||
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OTHER INCOME (EXPENSE):
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Interest expense
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(57,962 | ) | (44,634 | ) | - | (102,596 | ) | |||||||||
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Other income
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- | 22,844 | - | 22,844 | ||||||||||||
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Total other expense
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(57,962 | ) | (21,790 | ) | - | (79,752 | ) | |||||||||
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LOSS BEFORE INCOME TAXES
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(807,378 | ) | (64,011 | ) | (147,547 | ) | (1,018,936 | ) | ||||||||
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Income taxes - current benefit
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- | - | - | - | ||||||||||||
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NET LOSS
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(807,378 | ) | (64,011 | ) | (147,547 | ) | (1,018,936 | ) | ||||||||
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NONCONTROLLING INTEREST
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- | (30,362 | ) | - | (30,362 | ) | ||||||||||
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NET LOSS ATTRIBUTABLE TO VISUALANT, INC. AND SUBSIDIARIES COMMON SHAREHOLDERS
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$ | (807,378 | ) | $ | (94,373 | ) | $ | (147,547 | ) | $ | (1,049,298 | ) | ||||
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Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders-
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Basic and diluted loss per share
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$ | (0.03 | ) | $ | - | $ | - | $ | (0.03 | ) | ||||||
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Weighted average shares of common stock outstanding- basic and diluted
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30,728,036 | - | - | 30,728,036 | ||||||||||||
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The accompanying notes are an integral part of these unaudited pro forma combined condensed consolidated financial statements.
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1
Notes to Unaudited Pro Forma Combined Condensed Financial Statements
The cost to acquire TransTech Systems, Inc. has been preliminarily allocated to the assets acquired according to estimated fair values and is subject to adjustment when additional information concerning asset valuations is finalized, but no later than June 8, 2011. Final purchase accounting adjustments may differ materially from the pro forma financial information. The preliminary allocation is as follows:
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Common stock
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$
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76,000
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Notes payable
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2,300,000
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Accounts receivable, net
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(755,836
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)
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Inventories
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(444,105
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)
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Equipment, net
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(590,955
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)
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Other assets
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(141,870
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)
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Accounts payable - trade
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921,183
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Notes payable - current portion of long term debt
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499,680
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Other liabilities
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103,193
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Total purchase price
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$
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1,967,290
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Portion allocated to identifiable intangible assets
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$
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983,645
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Portion allocated to goodwill
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983,645
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Total
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$
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1,967,290
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The fair value of the TransTech intellectual property acquired was $983,645, estimated by using a discounted cash flow approach based on future economic benefits associated with agreements with customers, or through expected continued business activities with its customers. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results.
The remaining $983,645 excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in the acquisition of TransTech Systems, Inc. was allocated to goodwill. With the adoption of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired.
2