UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 2012
VIPER POWERSPORTS INC.
(Exact name of Registrant as specified in its charter)
Nevada | 000-51632 | 41-1200215 |
(State or other jurisdiction of incorporation or organization) | (Commission File No) | (IRS Employer Identification No.) |
2458 West Tech Lane, Auburn, AL | 36832 |
(Address of principal executive offices) | (Zip Code) |
(334) 887-4445
(Registrant’s telephone number)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CER 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.l4a-12) |
¨ | Pre-commencement communications pursuant to Rule 1 4d-2(b) under the Exchange Act (17 CFR 240. 14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 1 3e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Explanatory Note
On April 24, 2012, Viper Powersports, Inc. (the “Company”) filed a Current Report on Form 8-K with the Security and Exchange Commission (the “Original 8-K”). This amendment on Form 8-K/A amends and restates items 9.01 appearing in the Original 8-K in its entirety. Except as so specifically amended and restated, the Original 8/K shall not be deemed to have been modified by the filing of this amendment on Form 8-K/A.
Item 9.01 Financial Statements and Exhibits
(a) | Financial Statements of Business Acquired. |
The financial statements of Precision Metal Fab Racing, including Precision Metal Fab Racing's balance sheets as of December 31, 2010 and 2011 and statements of operations, and owner’s capital and cash flows for the years ended December 31, 2010 and 2011, and the interim financial statements of Precision Metal Fab Racing, including Precision Metal Fab Racing's balance sheet as of March 31, 2012, statements of operations and cash flows for the three months ended March 31, 2012, and unaudited statement of owner’s capital for the three months ended March 31, 2012, and the notes related thereto, are being filed as Exhibit 99.1 to this Form 8-K/A.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed consolidated financial information that gives effect to the acquisition of Precision Metal Fab Racing, including the unaudited pro forma condensed consolidated balance sheet as of March 31, 2012 and the unaudited pro form condensed consolidated statement of operations for the three months ended March 31, 2012 and the year ended December 31, 2011, and the notes related thereto, are being filed as Exhibit 99.2 to this Form 8-K/A.
(d) Exhibits.
Exhibit 99.1 | Financial statements of Precision Metal Fab Racing as of and for the years ended December 31, 2010 and 2011 and financial statements of Precision Metal Fab Racing as of March 31, 2012 and for the three months ended March 31, 2012 |
Exhibit 99.2 | Unaudited pro forma condensed consolidated financial statements as of and for the year ended March 31, 2012 |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 13, 2012 | Viper Powersports Inc. | |
By: | /s/ Timothy Kling | |
Timothy Kling Chief Financial Officer |
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EXHIBIT INDEX
(d) Exhibits.
Exhibit 99.1 | Financial statements of Precision Metal Fab Racing as of and for the years ended December 31, 2010 and 2011 and financial statements of Precision Metal Fab Racing as of March 31, 2012 and for the three months ended March 31, 2011 and 2012 |
Exhibit 99.2 | Unaudited pro forma condensed consolidated financial statements as of and for the year ended March 31, 2012 |
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EXHIBIT 99.1
Precision Metal Fab Racing
Financial Statements
As of March 31, 2012, December 31, 2011 and 2010
PRECISION METAL FAB RACING
INDEX TO FINANCIAL STATEMENTS
PAGE | |
Independent Auditor’s Report | 2 |
Balance Sheets – March 31, 2012, December 31, 2011 and 2010 | 3 |
Statements of Operations – For the Three Months Ended March 31, 2012 and for the Years Ended | |
December 31, 2011 and 2010 | 4 |
Statements of Owner’s Capital – For the Three Months Ended March 31, 2012 and | |
For the Years Ended December 31, 2011 and 2010 | 5 |
Statements of Cash Flows – For the Three Months Ended March 31, 2012 and | |
For the Years Ended December 31, 2011 and 2010 | 6 |
Notes to Financial Statements | 7 |
1 |
INDEPENDENT AUDITOR’S REPORT
Owners
Precision Metal Fab Racing
Minneapolis, Minnesota
We were engaged to audit the accompanying balance sheets of Precision Metal Fab Racing as of December 31, 2011 and 2010, and the related statements of operations, owner’s capital, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management.
The Company did not take a physical inventory of merchandise at December 31, 2011 or 2010, which is stated at $144,000 and $188,000, respectively, in the accompanying financial statements. The Company’s records do not permit the application of other auditing procedures to inventories.
Also, the Company’s inventories and cost of goods sold are accounted for on a cash basis, which should be recorded on an accrual basis in order to conform with accounting principles generally accepted in the United States of America.
Since the Company did not take a physical inventory and we were unable to apply other auditing procedures to satisfy ourselves as to inventory quantities, and the Company did not properly account for inventories and costs of goods sold, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on these financial statements.
We were also engaged to review the March 31, 2012 financial statements, but the scope of our work was not sufficient to complete the review for the same reasons as listed above.
/s/ Hein & Associates LLP
Denver, Colorado
August 13, 2012
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PRECISION METAL FAB RACING
BALANCE SHEETS
March 31, | December 31, | |||||||||||
2012 | 2011 | 2010 | ||||||||||
ASSETS | ||||||||||||
Current Assets: | ||||||||||||
Cash and cash equivalents | $ | 95,840 | $ | 60,123 | $ | 29,803 | ||||||
Accounts receivable | 7,610 | 7,610 | 6,862 | |||||||||
Inventories | 149,380 | 144,000 | 188,000 | |||||||||
Total current assets | 252,830 | 211,733 | 224,665 | |||||||||
Property and Equipment, net | 44,435 | 49,815 | 61,091 | |||||||||
Total Assets | $ | 297,265 | $ | 261,548 | $ | 285,756 | ||||||
LIABILITIES AND OWNER’S CAPITAL | ||||||||||||
Current Liabilities: | ||||||||||||
Accounts payable | $ | 2,654 | $ | 7,134 | $ | 9,250 | ||||||
Accrued expenses | 121 | 801 | 1,776 | |||||||||
Total current liabilities | 2,775 | 7,935 | 11,026 | |||||||||
Owner’s Capital | 294,490 | 253,613 | 274,730 | |||||||||
Total Liabilities and Owner’s Capital | $ | 297,265 | $ | 261,548 | $ | 285,756 |
See accompanying notes to these financial statements.
3 |
PRECISION METAL FAB RACING
STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, | December 31, | |||||||||||
2012 | 2011 | 2010 | ||||||||||
Net Sales | $ | 195,978 | $ | 667,098 | $ | 584,337 | ||||||
Costs and Expenses: | ||||||||||||
Cost of products sold | 138,650 | 569,580 | 497,842 | |||||||||
Selling, general and administrative | 9,233 | 50,512 | 51,761 | |||||||||
Depreciation and amortization | 5,380 | 21,518 | 21,841 | |||||||||
Total costs and expenses | 153,263 | 641,610 | 571,444 | |||||||||
Net Income (Loss) | $ | 42,715 | $ | 25,488 | $ | 12,893 |
See accompanying notes to these financial statements.
4 |
PRECISION METAL FAB RACING
STATEMENTS OF OWNER’S CAPITAL
FOR THE THREE MONTHS ENDED
MARCH 31, 2012
AND FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010
Balance at January 1, 2010 | $ | 308,636 | ||
Net income | 12,893 | |||
Distributions | (46,799 | ) | ||
Balance at December 31, 2010 | 274,730 | |||
Net income | 25,488 | |||
Distributions | (46,605 | ) | ||
Balance at December 31, 2011 | 253,613 | |||
Net income | 42,715 | |||
Distributions | (1,838 | ) | ||
Balance at March 31, 2012 | $ | 294,490 |
See accompanying notes to these financial statements.
5 |
PRECISION METAL FAB RACING
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, | December 31, | |||||||||||
2012 | 2011 | 2010 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income | $ | 42,715 | $ | 25,488 | $ | 12,893 | ||||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 5,380 | 21,518 | 21,841 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 0 | (748 | ) | 14,422 | ||||||||
Inventories | (5,380 | ) | 44,000 | 4,500 | ||||||||
Accounts payable | (4,480 | ) | (2,116 | ) | 2,014 | |||||||
Accrued liabilities | (680 | ) | (975 | ) | 572 | |||||||
Net cash provided by (used in) operating activities | 37,555 | 87,167 | 56,242 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Purchases of property and equipment, net | 0 | (10,242 | ) | (7,027 | ) | |||||||
Net cash provided by (used in) investing activities | 0 | (10,242 | ) | (7,027 | ) | |||||||
Cash Flows from Financing Activities: | ||||||||||||
Distributions paid | (1,838 | ) | (46,605 | ) | (46,799 | ) | ||||||
Net cash provided by (used in) financing activities | (1,838 | ) | (46,605 | ) | (46,799 | ) | ||||||
Increase (Decrease) in Cash and Cash Equivalents | 35,717 | 30,320 | 2,416 | |||||||||
Cash and Cash Equivalents, beginning of year | 60,123 | 29,803 | 27,387 | |||||||||
Cash and Cash Equivalents, end of year | $ | 95,840 | $ | 60,123 | $ | 29,803 |
See accompanying notes to these financial statements.
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1. | Organization and Significant Accounting Policies |
Organization and Business – Precision Metal Fab Racing (the “Company” or PMFR) (a business-owned by a sole proprietor) is an experienced manufacturer and marketer of high performance racing and custom motorcycle components and accessories. The Company was started in 1978, and is based in Shakopee, Minnesota and markets its products directly through its proprietary catalogs, website and certain distributors.
Basis of Presentation – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Despite management’s best effort to establish good faith estimates and assumptions; actual results may differ from these estimates.
The balance sheet as of March 31, 2012, the statement of operations, owner’s capital, and cash flows for the months ended March 31, 2012 have been prepared by the Company without audit. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position, as of March 31, 2012 and results of operations, owner’s capital, and cash flows for the three months ended March 31, 2012 have been made.
Revenue Recognition – Revenue is recognized when risk and title on products passes to the customer. Generally, both risk and title pass to the customers at date of shipment via common carrier. There is no right of return for customers, other than for defective products.
Revenue includes shipping and handling fees of $11,150 for the three months ended March 31, 2012 and $40,420 and $33,365 for the years ended 2011 and 2010, respectively.
Cash and Cash Equivalents – The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. The Company periodically maintains cash balances at commercial banks in excess of insured limits.
Accounts Receivable and Allowance for Doubtful Accounts – The Company’s headquarters are located in Minnesota and its customers are geographically disbursed throughout the United States. All amounts are due in 30 days and no interest is charged on account balances. The Company reviews all receivable balances for risk of loss, and as of March 31, 2012 and December 31, 2011 and 2010, there were no allowance for doubtful accounts.
Inventories –Inventories, consisting of raw materials and finished products, are stated at the lower of cost (first-in, first-out method) or market and are recorded under the cash basis method. Cost of finished products includes materials and contracted conversion costs. The Company records provisions for slow-moving inventory to the extent the cost of inventory exceeds estimated net realizable value.
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Property and Equipment – Property and equipment are stated at cost. Depreciation is provided over the estimated useful lives of the assets ranging from three to seven years using an accelerated method of depreciation. The cost of normal maintenance and repairs is charged to operating expenses as incurred. Material expenditures which increase the life of an asset are capitalized and depreciated over the estimated remaining useful life of the asset. Upon disposing of assets, the related cost and accumulated depreciation are removed from the books and the resulting gain or loss, if any, is recognized in the year of the disposition.
Income Taxes – The Company files its tax returns in the United States and Minnesota. As a sole proprietor, the Company will not be required to pay federal income taxes applicable to federal taxable income. Income and losses after that date will be included in the personal income tax returns of the stockholders and taxed depending on their personal tax strategies.
The Company has not recorded any liabilities as of December 31, 2011 related to its assessment of uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2011, the Company made no provision for interest or penalties related to uncertain tax returns in the U.S. federal jurisdiction and various states. There are currently no federal or state income tax examinations underway for these jurisdictions.
Impairment of Long-Lived Assets – Impairment losses are recorded on long-lived assets used in operations when impairment indicators are present and the undiscounted cash flows estimated to be generated by those assets are less than the asset’s carrying amount. When impairment is indicated, a loss is recognized for the excess of the carrying values over the fair values. The Company has not recorded any impairment or long-lived assets.
Fair Value of Financial Instruments – The carrying value of cash and cash equivalents, trade accounts receivable and payable, and accrued liabilities and expenses are considered to approximate fair value due to the short-term nature of these instruments.
2. | INVENTORIES |
Inventories consist of the following:
March 31, | December 31, | |||||||||||
2012 | 2011 | 2010 | ||||||||||
Raw materials | $ | 0 | $ | 0 | $ | 0 | ||||||
Finished goods | 149,380 | 144,000 | 188,000 | |||||||||
$ | 149,380 | $ | 144,000 | $ | 188,000 |
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3. | PROPERTY AND EQUIPMENT |
Property and equipment are recorded at cost and are comprised of the following:
March 31, | December 31, | |||||||||||
2012 | 2011 | 2010 | ||||||||||
Shop office equipment | $ | 466,589 | $ | 466,589 | $ | 456,349 | ||||||
Equipment | 24,422 | 24,422 | 24,422 | |||||||||
491,011 | 491,011 | 480,771 | ||||||||||
Less accumulated depreciation | (446,576 | ) | (441,196 | ) | (419,680 | ) | ||||||
$ | 44,435 | $ | 49,815 | $ | 61,091 |
Depreciation and amortization expense for the years ended December 31, 2011 and 2010 was $21,518 and $21,841, respectively, and $5,380 for the period ended March 31, 2012.
4. | CONTINGENCIES AND COMMITMENTS |
Operating Leases – The Company has a warehouse lease. The lease expired on April 30, 2012. The current rent payment is based on a monthly rental fee.
Rent expense was $33,000 for the years ended December 31, 2011 and 2010, respectively, and $8,250 for the period ended March 31, 2012.
Concentrations of Credit Risk – Credit risk represents the accounting loss that would be recognized at the reporting date if counterparties failed completely to perform as contracted. Concentrations of credit risk, whether on or off balance sheet, that arise from financial instruments, exist for groups of customers or counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.
5. | SUBSEQUENT EVENTS |
On April 24, 2012 the Company sold all its assets to PMFR Inc., a wholly owned subsidiary of Viper Powersports Inc. (VPWI) for $640,000 in cash. The Company will continue to be based at its current facility and the former owner has agreed to remain with PMFR, Inc. and remain in charge of product marketing and operations. VPWI issued approximately $48,000 of its shares as a condition of an employment contract.
Subsequent events have been evaluated through August 13, 2012, the date the financial statements were available to be issued.
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EXHIBIT 99.2
INTRODUCTION TO UNAUDITED PRO FORMA
FINANCIAL STATEMENTS
The Unaudited Pro Forma Consolidated Balance Sheet combines the historical consolidated balance sheet of Viper Powersports Inc. (Viper) as of March 31, 2012 and the historical balance sheet of Precision Metal Fab Racing (PMFR) as of March 31, 2012, giving effect to the acquisition as if it had occurred January 1, 2012. The Unaudited Pro Forma Statement of Operations for year ended December 31, 2011 combines the historical statement of operations of Viper and PMFR for the year ended December 31, 2011 as if the merger had occurred on January 1, 2011. No pro forma effects have been given to any operational or other synergies that may be realized from the acquisitions.
The unaudited pro forma financial information is based on the estimates and assumptions described in the notes to the unaudited pro forma consolidated financial statements. The unaudited pro forma financial information has been prepared using the purchase method of accounting in which the total cost of the PMFR acquisition are allocated to the tangible and intangible assets acquired based on their estimated fair values at the date of the acquisition. This allocation has been done on a preliminary basis and is subject to change pending final determination of fair values for the acquired assets and assumed liabilities and a final analysis of the total purchase price paid, including direct costs of the acquisition. The adjustments included in the unaudited pro forma consolidated financial information represent the preliminary determination of such adjustments based upon currently available information. Accordingly, the actual fair value of the assets acquired and the related adjustments may differ from those reflected in this filing. Viper expects to finalize the purchase price allocations within one year of the date of the PMFR acquisition.
The unaudited pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that might have been achieved had the transaction occurred as of an earlier date, and they are not necessarily indicative of future operating results or financial position. These pro forma amounts do not, therefore, project Viper’s financial position or results of operations for any future date or period. The accompanying unaudited pro forma financial information should be read in conjunction with the historical financial statements and the related notes thereto of Viper, which are included in its Annual Report on Form 10-K, as well as other financial information included elsewhere in this filing.
1 |
. VIPER POWERSPORTS INC.
UNAUDITED PRO FORMA BALANCE SHEET
MARCH 31, 2012
Viper Powersports Inc. | Precision
Metal Fab Racing | Pro
Forma Adjustments | Viper
Powersports Inc. Pro Forma | |||||||||||||||
(Historical) | (Historical) | |||||||||||||||||
ASSETS | ||||||||||||||||||
Current Assets: | ||||||||||||||||||
Cash and cash equivalents | $ | 9,281 | $ | 95,840 | $ | 1,484,160 | A,B | $ | 1,589,281 | |||||||||
Accounts receivable | 6,553 | 7,610 | (7,610 | ) | B | 6,553 | ||||||||||||
Inventory and supplies | 476,709 | 149,380 | 65,620 | B | 691,709 | |||||||||||||
Prepaid and other current assets | 74,043 | 0 | 0 | 74,043 | ||||||||||||||
Total current assets | 566,586 | 252,830 | 1,542,170 | 2,361,586 | ||||||||||||||
Property and Equipment, net | 483,294 | 44,435 | 255,565 | B | 783,294 | |||||||||||||
Long-Term Assets: | ||||||||||||||||||
Intangible assets | 0 | 0 | 85,000 | B | 85,000 | |||||||||||||
Other | 13,400 | 0 | 2,617,415 | A | 2,630,815 | |||||||||||||
Total long-term assets | 13,400 | 0 | 2,702,415 | 2,715,815 | ||||||||||||||
Total Assets | $ | 1,063,280 | $ | 297,265 | $ | 4,500,150 | $ | 5,860,695 | ||||||||||
liabilities and Stockholders’ equity (Deficit) | ||||||||||||||||||
Current Liabilities: | ||||||||||||||||||
Accounts payable | $ | 209,744 | $ | 2,654 | $ | (2,654 | ) | B | $ | 209,744 | ||||||||
Accrued liabilities | 167,946 | 121 | (121 | ) | B | 167,946 | ||||||||||||
Notes payable, short-term net of discount | 225,000 | 0 | (200,000 | ) | A | 25,000 | ||||||||||||
Notes payable – related party, net of discount | 454,933 | 0 | (80,000 | ) | A | 374,933 | ||||||||||||
Current portion of long-term liabilities | 100,000 | 0 | 0 | 100,000 | ||||||||||||||
Total current liabilities | 1,157,623 | 2,775 | (282,775 | ) | 877,623 | |||||||||||||
Long-Term Liabilities: | ||||||||||||||||||
Note payable | 170,000 | 0 | 2,500,000 | A | 2,670,000 | |||||||||||||
Total Liabilities | 1,327,623 | 2,775 | 2,217,225 | 3,547,623 | ||||||||||||||
Stockholders’ quity(deficit) | ||||||||||||||||||
Preferred stock, $0.001 par value, 20,000,000 authorized,366,668 issued and outstanding | 367 | 0 | 0 | 367 | ||||||||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized 33,368,174 shares issued and outstanding | 33,683 | 0 | 9,694 | A | 43,377 | |||||||||||||
Additional paid-in capital | 41,261,113 | 0 | 2,607,721 | A | 43,868,834 | |||||||||||||
Accumulated earnings(deficit) | (41,559,506 | ) | 294,490 | (334,490 | ) | B | (41,599,506 | ) | ||||||||||
Total Stockholders’ Equity(deficit) | (264,343 | ) | 294,490 | 2,282,925 | 2,313,072 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,063,280 | $ | 297,265 | $ | 4,500,150 | $ | 5,860,695 |
See accompanying notes to these unaudited pro forma financial statements.
2 |
VIPER POWERSPORTS INC
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011
Viper Powersports Inc | Precision
Metal Fab Racing | Pro Forma Adjustments | Viper
Powersports Inc. Pro forma | ||||||||||||||
(Historical) | (Historical) | ||||||||||||||||
Revenue | $ | 165,209 | $ | 667,098 | $ | 0 | $ | 832,307 | |||||||||
Cost of Revenue | 165,538 | 569,580 | 0 | 735,118 | |||||||||||||
Gross Profit | (329 | ) | 97,518 | 0 | 97,189 | ||||||||||||
Operating Expense: | |||||||||||||||||
Research and development costs | 69,585 | 0 | 0 | 69,585 | |||||||||||||
Selling, general and administrative | 3,136,316 | 72,030 | (40,000 | ) | B | 3,248,346 | |||||||||||
Loss on impairment and charge-off of assets and inventory | 75,802 | 0 | 0 | 75,802 | |||||||||||||
Income (Loss) from Operations | (3,282,032 | ) | 25,488 | (40,000 | ) | (3,296,544 | ) | ||||||||||
Other Income (Expense): | |||||||||||||||||
Interest expense | (59,444 | ) | 0 | 0 | (59,444 | ) | |||||||||||
Financing costs related to debt discount | (83,304 | ) | 0 | 0 | (83,304 | ) | |||||||||||
Accretion of debt discount | (227,419 | ) | 0 | 0 | (227,419 | ) | |||||||||||
Beneficial conversion features | (183,566 | ) | 0 | 0 | (183,566 | ) | |||||||||||
Other income | 2,905 | 0 | 0 | 2,905 | |||||||||||||
Total other income (expense) | 550,828 | ) | 0 | 0 | (1,108 | ) | |||||||||||
Net Income (Loss) | (3,832,860 | ) | 25,488 | (40,000 | ) | B | (3,847,372 | ) | |||||||||
Deemed dividend of preferred stock | (338,508 | ) | 0 | 0 | (338,508 | ) | |||||||||||
Net Income (Loss) attributed to common sharesholders | $ | (4,171,368 | ) | $ | 25,488 | $ | (40,000 | ) | $ | (4,185,880 | ) | ||||||
Net Income (Loss) per Common Share from Continuing Operations: | |||||||||||||||||
Basic and diluted | $ | (0.19 | ) | $ | 0.00 | $ | 0.00 | $ | (0.12 | ) | |||||||
Diluted | $ | (0.19 | ) | $ | 0.00 | $ | 0.00 | $ | (0.12 | ) | |||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||
Basic and diluted | 20,493,779 | – | 9,694,128 | 30,187,907 |
See accompanying notes to these unaudited pro forma financial statements.
3 |
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2012
Viper Powersports Inc | Precision
Metal Fab Racing | Pro Forma Adjustments | Viper
Powersports Inc. Pro forma | ||||||||||||||
(Historical) | (Historical) | ||||||||||||||||
Revenue | $ | 74,172 | $ | 195,978 | $ | 0 | $ | 270,150 | |||||||||
Cost of Revenue | 83,412 | 138,650 | 0 | 222,062 | |||||||||||||
Gross Profit | (9,240 | ) | 57,328 | 0 | 48,088 | ||||||||||||
Operating Expense: | |||||||||||||||||
Research and development costs | 30,247 | 0 | 0 | 30,247 | |||||||||||||
Selling, general and administrative | 605,875 | 14,613 | 40,000 | B | 660,488 | ||||||||||||
Income (Loss) from Operations | (645,362 | ) | 42,715 | (40,000 | ) | (642,647 | ) | ||||||||||
Other Income (Expense): | |||||||||||||||||
Interest expense | (101,426 | ) | 0 | 0 | (101,426 | ) | |||||||||||
Accretion of debt discount | (80,488 | ) | 0 | 0 | (80,488 | ) | |||||||||||
Other income | 30,356 | 0 | 0 | 30,356 | |||||||||||||
Total other income (expense) | (151,558 | ) | 0 | 0 | (151,558 | ) | |||||||||||
Net Income (Loss) attributed to common sharesholders | $ | (796,920 | ) | $ | 42,715 | $ | (40,000 | ) | $ | (794,205 | ) | ||||||
Net Income (Loss) per Common Share from Continuing Operations: | |||||||||||||||||
Basic and diluted | $ | (0.03 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.02 | ) | ||||||
Diluted | $ | (0.03 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.02 | ) | ||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||
Basic and diluted | 30,765,090 | – | 9,694,128 | 40,459,218 |
See accompanying notes to these unaudited pro forma financial statements.
4 |
1. | Basis of Presentation: |
On April 24, Viper Powersports Inc (VIPER) entered into definitive purchase and sale agreement to acquire assets and some of the business lines of Precision Metal Fab Racing (PMFR). The PMFR purchase price is approximately $640,000, to be paid with cash. The effective date is the same as the purchase date with no final purchase price adjustments to be calculated. |
The Unaudited Pro Forma Balance Sheet combines the historical consolidated balance sheets of Viper and PMFR as of March 31, 2012, giving effect to the acquisition as if it had occurred January 1, 2011. The Unaudited Pro Forma Statement of Operations for the year ended December 31, 2011 combines the historical consolidated statements of operations of Viper and PMFR for the year ended December 31, 2011, as if the merger had occurred on January 1, 2011. No pro forma effects have been given to any operational or other synergies that may be realized from the acquisitions.
The unaudited pro forma financial information is based on the estimates and assumptions described in the notes to the unaudited pro forma financial statements. The unaudited pro forma financial information has been prepared using the purchase method of accounting in which the total cost of the PMR acquisition are allocated to the tangible and intangible assets acquired based on their estimated fair values at the date of the acquisition. This allocation has been done on a preliminary basis and is subject to change pending final determination of fair values for the acquired assets and a final analysis of the total purchase price paid, including direct costs of the acquisition. The adjustments included in the unaudited pro forma financial information represent the preliminary determination of such adjustments based upon currently available information. Accordingly, the actual fair value of the assets acquired and the related adjustments may differ from those reflected in this statement. Viper expects to finalize the purchase price allocations within one year of the date of the PMFR acquisition.
2. | Pro Forma Adjustments to the Balance Sheet and Statement of Operations: |
A | To account for new Loan and Security Agreement; $2,500,000 initial loan advance on the agreement. The proceeds of the loan are to be used to pay existing debt of $280,000, purchase PMFR and other future operating costs. Included in the agreement is the issuance of 9,694,128 unregistered shares as a fee for the transaction (at $0.27 per share), of which the value of $2,617,415 is reflected as deferred financing costs. |
B | To record the assets purchased for cash, for the acquisition of PMFR: |
Purchase price | $ | 640,000 | ||
Less fair value of assets acquired: | ||||
Inventories | 215,000 | |||
Property and equipment | 300,000 | |||
Identifiable intangible (customer list) | 85,000 | |||
Finder’s fee expense | 40,000 | |||
Total | $ | 640,000 |
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Total change in cash is reflected as such; | ||||
Borrowing under new Loan agreement: | $ | 2,500,000 | ||
Payment for acquisition of PMFR: | (640,000 | ) | ||
Payoff of existing debt | (280,000 | ) | ||
Cash not acquired from PMFR: | (95,840 | ) | ||
Net increase in cash | $ | 1,484,160 |
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