EX-99.2 3 smti_ex992.htm UNAUDITED PRO FORMA Blueprint
 
 
Exhibit 99.2
 
 
On March 15, 2019, Wound Management Technologies, Inc., a Texas corporation doing business as WNDM Medical Inc. (“WNDM”), executed and closed an agreement with CGI Cellerate RX, LLC, an affiliate of The Catalyst Group, Inc. (Catalyst) of Houston, Texas, for WNDM to acquire the remaining 50% equity interest in Cellerate, LLC not then owned by WNDM. Prior to this agreement, WNDM and CGI Cellerate RX, LLC each owned a 50% equity interest in Cellerate, LLC and shared equally in profits and losses and management of the company. After closing the acquisition, WNDM owned 100% of Cellerate, LLC. WMDM acquired the remaining 50% equity interest in Cellerate, LLC in exchange for the issuance to Catalyst of 1,136,815 shares of WNDM’s Series F Convertible Preferred Stock.
 
 
The acquisition of CGI’s interest in Cellerate, LLC was accounted for as a reverse merger and recapitalization because, immediately following the completion of the transaction, CGI could obtain effective control of WNDM upon exercise of its convertible preferred stock and promissory note both of which could occur at CGI’s option.
 
 
The following unaudited pro forma combined balance sheet as of December 31, 2018 as well as the unaudited combined statement of operations for the year ended December 31, 2018, presented herein, gives effect to the reverse merger as if the transaction had occurred at the beginning of 2018.
 
 
 
 
Cellerate, LLC and Sanara MedTech Inc.
Pro Forma Combined Balance Sheet
As of December 31, 2018 (unaudited)
 
 
 
 
 
 
Sanara
 
 
Pro Forma
 
 
 
 
 
Pro Forma
 
 
 
Cellerate LLC
 
 
MedTech Inc.
 
 
Adjustments
 
 
 
Combined
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
 
 
   Cash
 $176,421 
 $731,849 
 $- 
 
 $908,270 
   Accounts receivable, net of allowance for bad debt
  1,022,500 
  164,459 
  - 
 
  1,186,959 
   Royalty receivable
  - 
  50,250 
  - 
 
  50,250 
   Inventory, net of allowance for obsolescence
  465,315 
  - 
  - 
 
  465,315 
   Prepaid and other assets
  26,445 
  31,926 
  - 
 
  58,371 
Total current assets
  1,690,681 
  978,484 
  - 
 
  2,669,165 
 
    
    
    
 
    
Long-term assets:
    
    
    
 
    
   Property and equipment, net of accumulated depreciation
  18,777 
  52,827 
  - 
 
  71,604 
   Intangible assets, net of accumulated amortization
  - 
  52,266 
  - 
 
  52,266 
   Investment Cellerate LLC
  - 
  1,958,463 
  (1,958,463)
    A 
  - 
Total long-term assets
  18,777 
  2,063,556 
  (1,958,463)
       
  123,870 
 
    
    
    
       
    
Total assets
 $1,709,458 
 $3,042,040 
 $(1,958,463)
       
 $2,793,035 
 
    
    
    
       
    
Liabilities and shareholders' equity
    
    
    
       
    
 
    
    
    
       
    
Current liabilities
    
    
    
       
    
   Accounts payable
 $156,727 
 $54,179 
 $(52,065)
    B 
 $158,841 
   Accounts payable - related parties
  36,203 
  63,288 
  52,065 
    B 
  151,556 
   Accrued royalties and payables
  228,606 
  34,214 
  - 
       
  262,820 
   Accrued bonus and commission
  701,125 
  241,849 
  - 
       
  942,974 
   Deferred rent
  - 
  10,474 
  - 
       
  10,474 
Total current liabilities
  1,122,661 
  404,004 
  - 
       
  1,526,665 
 
    
    
    
       
    
Long-term liabilities
    
    
    
       
    
  Convertible notes payable
  - 
  1,500,000 
  (1,500,000)
       
  - 
   Accrued interest
  - 
  25,978 
  (25,978)
       
  - 
   Convertible notes payable - related parties
  - 
  - 
  1,500,000 
       
  1,500,000 
   Accrued interest - related parties
  - 
  - 
  25,978 
       
  25,978 
Total long-term liabilities
  - 
  1,525,978 
  - 
       
  1,525,978 
 
    
    
    
       
    
Total liabilities
  1,122,661 
  1,929,982 
  - 
       
  3,052,643 
 
    
    
    
       
    
Shareholders' deficit and members’ capital
    
    
    
       
    
Series F Convertible Preferred Stock, $10 par value, 1,200,000 shares authorized; 1,136,815 issued and outstanding as of December 31, 2018
  - 
  - 
  11,368,150 
    C 
  11,368,150 
Common Stock: $.001 par value; 20,000,000 shares authorized; 2,366,465 issued and 2,366,424 outstanding as of December 31, 2018
  - 
  236,647 
  (234,281)
    D 
  2,366 
   Additional paid-in capital
  448,511 
  48,356,467 
  (59,950,823)
    E 
  (11,145,845)
   Treasury stock
  - 
  (12,039)
  - 
       
  (12,039)
  Retained earnings (accumulated deficit)
  138,286 
  (47,469,017)
  46,858,491 
    E, F 
  (472,240)
Total shareholders' deficit and members’ capital
  586,797 
  1,112,058 
  (1,958,463)
       
  (259,608)
 
    
    
    
       
    
Total liabilities and shareholders' deficit and members’ capital
 $1,709,458 
 $3,042,040 
 $(1,958,463)
       
 $2,793,035 
 
Pro Forma Reference
A - to remove Sanara MedTech's equity method investment in Cellerate, LLC
B - to reclassify related party payables as a result of the reverse merger
C - to reflect the issuance of preferred stock as part of reverse merger
D - to reflect 1 for 100 reverse stock split
E - to restate Sanara MedTech's paid-in capital and accumulated deficit as a result of the recapitalization of the business
F - to remove Sanara MedTech's current year net income related to its equity method investment in Cellerate, LLC
 
 
 
 
 
Cellerate, LLC and Sanara MedTech Inc.
Pro Forma Combined Statement of Operations
For the Twelve Months Ended December 31, 2018 (unaudited)
 
 
 
Cellerate, LLC September 1 through December 31, 2018
 
 
Sanara MedTech Inc. January 1 through December 31, 2018
 
 
Pro FormaAdjustments
 
 
 
CombinedDecember 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
 $3,006,320 
 $5,837,839 
 $- 
 
 $8,844,159 
 
    
    
    
 
    
Cost of goods sold
  371,421 
  507,418 
  - 
 
  878,839 
 
    
    
    
 
    
Gross profit
  2,634,899 
  5,330,421 
  - 
 
  7,965,320 
 
    
    
    
 
    
Operating expenses
    
    
    
 
    
  Selling, general and administrative expenses
  2,519,469 
  5,735,833 
  - 
 
  8,255,302 
  Depreciation and amortization
  511 
  83,890 
  - 
 
  84,401 
  Bad debt expense
  - 
  12,558 
  - 
 
  12,558 
Total operating expenses
  2,519,980 
  5,832,281 
  - 
 
  8,352,261 
 
    
    
    
 
    
Operating income / (loss)
  114,919 
  (501,860)
  - 
 
  (386,941)
 
    
    
    
 
    
Other income / (expense)
    
    
    
 
    
  Gain on Equity Method Investment in Cellerate, LLC
  - 
  9,951 
  (9,951)
    G 
  - 
  Other income (expense)
  23,367 
  (22,078)
  - 
       
  1,289 
  Interest expense
  - 
  (86,587)
  - 
       
  (86,587)
Total other income / (expense)
  23,367 
  (98,714)
  (9,951)
       
  (85,298)
 
    
    
    
       
    
Net income / (loss)
  138,286 
  (600,574)
  (9,951)
       
  (472,239)
 
    
    
    
       
    
Series C preferred stock dividends
  - 
  (28,061)
  - 
       
  (28,061)
Series C preferred stock inducement dividends
  - 
  (103,197)
  - 
       
  (103,197)
 
    
    
    
       
    
Net income / (loss) available to common stockholders
 $138,286 
 $(731,832)
 $(9,951)
       
 $(603,497)
 
    
    
    
       
    
Basic income (loss) per share of common stock
 $- 
 $- 
 $- 
       
 $(0.28)
 
    
    
    
       
    
Diluted income (loss) per share of common stock
 $- 
 $- 
 $- 
       
 $(0.28)
 
    
    
    
       
    
Weighted average number of common shares outstanding basic
  N/A 
  217,163,538 
  (214,991,903)
  H 
  2,171,635 
 
    
    
    
    
    
Weighted average number of common shares outstanding diluted
  N/A 
  217,163,538 
    
  H 
  2,171,635 
 
Pro Forma Reference
G - to remove Sanara MedTech's current year net income related to its equity method investment in Cellerate, LLC
H - to reflect 1 for 100 reverse stock split