EX-99.3 2 ex-99_3.txt EXHIBIT 99.3 Mendocino Brewing Company, Inc. and United Breweries International (UK) Limited Pro Forma Balance Sheet and Income Statement for the years ended December 31, 1999 and 2000 The Pro Forma Condensed Consolidated Financial Statements of Registrant as of December 31, 2000 and 1999 were prepared using U.S. Generally Accepted Accounting Principles (U.S. GAAP) and reflects the financial position of Registrant after giving effect to the acquisition of the stock of United Breweries International, Ltd. discussed above and assumes the acquisition took place on January 1, 1999. Such pro forma financial statements also reflect the sale of 5,500,000 shares of common stock referred above for the purchase of the common stock of United Breweries International, Ltd. at a purchase price of $.8125 per share (the last reported sale price of common stock on November 2, 2000, the day the agreement was finalized.) The purchase is being recorded as if it were a pooling transaction due to the related party nature of the transaction. The unaudited pro forma condensed consolidated financial statements have been prepared by Registrant based upon assumptions deemed proper by it. The unaudited pro forma condensed consolidated financial statements presented herein are shown for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of Registrant, or of the financial position or results of operations of Registrant that would have actually occurred had the transaction been in effect as of the date or for the periods presented. In addition, it should be noted that Registrant's financial statements will reflect the purchase only from the closing date, should it occur. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements and related notes of Registrant. 7
Pro forma Adjustment ---------------------------------- Mendocino United Breweries Pro forma Brewing Co, Inc. International, Ltd. Consolidated ASSETS 12/31/00 12/31/2000 (a) Adjustments 12/31/00 -------------- ------------------- ----------- -------------- CURRENT ASSETS Cash $ - $ 208,300 $ - $ $ 208,300 Accounts receivable 1,173,000 4,242,900 - 5,415,900 Inventories 1,203,300 103,300 - 1,306,600 Prepaid expenses 116,600 - 116,600 Deferred income taxes 48,100 - - 48,100 -------------- --------------- ----------- ------------- Total current assets 2,541,000 4,554,500 - 7,095,500 -------------- --------------- ----------- ------------- PROPERTY AND EQUIPMENT 13,997,400 864,900 - 14,862,300 -------------- --------------- ----------- ------------- OTHER ASSETS Intangibles, net of amortization 53,900 33,500 - 87,400 Other assets 410,500 - (340,700)(b) 69,800 Deferred taxes 2,768,000 - - 2,768,000 -------------- --------------- ----------- ------------- 3,232,400 33,500 (340,700) 2,925,000 -------------- --------------- ----------- ------------- Total assets $ 19,770,800 $ 5,452,900 $(340,700) $ 24,883,000 ============== =============== =========== ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Disbursements in excess of deposits $ $ 1,700 $ - $ - $ 1,700 Line of credit - 1,486,300 1,486,300 Accounts payable 1,942,200 2,134,300 4,076,500 Accrued liabilities 358,100 666,100 - 1,024,200 Accrued income taxes 1,000 202,600 203,600 Current maturities of debt and leases 759,900 - - 759,900 -------------- --------------- ----------- ------------- Total current liabilities 3,062,900 4,489,300 - 7,552,200 LONG-TERM DEBT AND CAPITAL LEASES, less current maturities 5,655,100 - - 5,655,100 LINE OF CREDIT 1,281,600 - - 1,281,600 -------------- --------------- ----------- ------------- Total liabilities 9,999,600 4,489,300 - 14,488,900 -------------- --------------- ----------- ------------- STOCKHOLDERS' EQUITY Preferred stock 227,600 - - 227,600 Common stock 13,875,900 149,600 - 14,025,500 Accumulated deficit (4,332,300) 814,000 (340,700) (3,859,000) -------------- --------------- ----------- ------------- Total stockholders' equity 9,771,200 963,600 (340,700) 10,394,100 -------------- --------------- ----------- ------------- Total liabilities and stockholders' equity $ 19,770,800 $ 5,452,900 $(340,700) $ 24,883,000 ============== =============== =========== =============
(a) To include the assets and liabilities of United Breweries International, Ltd., as of December 31, 2000. (b) To expense capitalized acquisition costs. 8
Pro forma Adjustment ---------------------------------- Mendocino United Breweries Pro forma Brewing Co, Inc. International, Ltd. Consolidated 12/31/00 12/31/2000 (a) Adjustments 12/31/00 ---------------- ------------------- ------------- -------------- NET SALES $ 9,255,900 $ 12,643,600 $ - $ 21,899,500 COST OF GOODS SOLD 5,823,300 8,220,000 - 14,043,300 ------------- --------------- ------------- ------------ GROSS PROFIT 3,432,600 4,423,600 - 7,856,200 OPERATING EXPENSES Selling and marketing 2,041,900 2,806,400 - 4,848,300 General and administrative 1,441,500 903,500 2,345,000 ------------- --------------- ------------- ------------ 3,483,400 3,709,900 - 7,193,300 ------------- --------------- ------------- ------------ INCOME (LOSS) FROM OPERATIONS (50,800) 713,700 - 662,900 OTHER INCOME (EXPENSE) Interest expense (895,800) (82,000) - (977,800) Other income (expense) 90,000 (17,600) (340,700)(b) (268,300) ------------- --------------- ------------- ------------ (805,800) (99,600) (340,700) (1,246,100) ------------- --------------- ------------- ------------ INCOME (LOSS) BEFORE INCOME TAXES (856,600) 614,100 (340,700) (1,246,100) PROVISION (BENEFIT) FROM INCOME TAXES (329,400) 202,200 - (127,200) ------------- --------------- ------------- ------------ NET INCOME (LOSS) $ (527,200) $ 411,900 $ (340,700) $ (456,000) ============= =============== ============= ============ BASIC INCOME (LOSS) PER COMMON SHARE $ (0.10) $ (0.04) ============= ============ WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 5,538,514 5,500,000 11,038,514 ============= ============= ============
(a) To include the profits and losses of United Breweries International, Ltd. (b) To expense capitalized acquisition costs. 9
Pro forma Adjustment ---------------------------------- Mendocino United Breweries Pro forma Brewing Co, Inc. International, Ltd. Consolidated ASSETS 12/31/99 12/31/1999 (a) Adjustments 12/31/99 ---------------- ------------------- ----------- -------------- CURRENT ASSETS Cash $ - $ 54,700 $ - $ 54,700 Accounts receivable 1,040,300 4,396,400 - 5,436,700 Inventories 1,168,700 101,900 - 1,270,600 Prepaid expenses 57,200 - 57,200 Deferred income taxes 43,100 - - 43,100 ------------- ------------- ---------- ------------ Total current assets 2,309,300 4,553,000 - 6,862,300 ------------- ------------- ---------- ------------ PROPERTY AND EQUIPMENT 14,727,200 957,900 - 15,685,100 ------------- ------------- ---------- ------------ OTHER ASSETS Intangibles, net of amortization 61,000 41,300 - 102,300 Other assets 92,100 92,100 Deferred taxes 2,440,300 - - 2,440,300 ------------- ------------- ---------- ------------ 2,593,400 41,300 - 2,634,700 ------------- ------------- ---------- ------------ Total assets $ 19,629,900 $ 5,552,200 $ - $ 25,182,100 ============= ============= ========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Disbursements in excess of deposits $ 9,600 $ - $ - $ 9,600 Line of credit 1,159,800 2,009,000 3,168,800 Accounts payable 1,708,700 2,284,300 3,993,000 Accrued liabilities 334,900 545,700 - 880,600 Accrued income taxes - 111,600 111,600 Current maturities of debt and leases 596,700 - - 596,700 ------------- ------------- ---------- ------------ Total current liabilities 3,809,700 4,950,600 - 8,760,300 LONG-TERM DEBT AND CAPITAL LEASES, less current maturities 5,562,800 - - 5,562,800 ------------- ------------- ---------- ------------ Total liabilities 9,372,500 4,950,600 - 14,323,100 ------------- ------------- ---------- ------------ STOCKHOLDERS' EQUITY Preferred stock 227,600 - - 227,600 Common stock 13,834,900 161,500 - 13,996,400 Accumulated deficit (3,805,100) 440,100 - (3,365,000) ------------- ------------- ---------- ------------ Total stockholders' equity 10,257,400 601,600 - 10,859,000 ------------- -------------- ---------- ------------ Total liabilities and stockholders' equity $ 19,629,900 $ 5,552,200 $ - $ 25,182,100 ============= ============= ========== ============
(a) To include the assets and liabilities of United Breweries International, Ltd., as of December 31, 1999. 10
Pro forma Adjustment ---------------------------------- Mendocino United Breweries Pro forma Brewing Co, Inc. International, Ltd. Consolidated 12/31/99 12/31/1999 (a) Adjustments 12/31/99 -------------- ------------------- ----------- -------------- NET SALES $ 8,698,600 $ 11,886,600 $ - $ 20,585,200 COST OF GOODS SOLD 5,767,900 7,783,600 - 13,551,500 ------------ -------------- ----------- -------------- GROSS PROFIT 2,930,700 4,103,000 - 7,033,700 OPERATING EXPENSES Selling and marketing 2,108,600 2,513,900 - 4,622,500 General and administrative 1,652,200 1,054,500 2,706,700 ------------ -------------- ----------- -------------- 3,760,800 3,568,400 - 7,329,200 ------------ -------------- ----------- -------------- INCOME (LOSS) FROM OPERATIONS (830,100) 534,600 - (295,500) OTHER INCOME (EXPENSE) Interest expense (846,800) (116,100) - (962,900) Other income (expense) (358,900) (202,700) - (561,600) ------------ -------------- ----------- -------------- (1,205,700) (318,800) - (1,524,500) ------------ -------------- ----------- -------------- INCOME (LOSS) BEFORE INCOME TAXES (2,035,800) 215,800 - 1,820,000 PROVISION (BENEFIT) FROM INCOME TAXES (729,500) 102,000 - (627,500) ------------ -------------- ----------- -------------- NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS (1,306,300) 113,800 - (1,192,500) LOSS FROM OPERATIONS OF SOYCO, LTD. - (242,500) 242,500 (b) - GAIN ON THE DISPOSAL OF SOYCO, LTD. - 3,056,300 (3,056,300)(b) - ------------ -------------- ----------- -------------- NET INCOME (LOSS) $ (1,306,300) $ 2,927,600 $(2,813,800) $ (1,192,500) ============ ============== =========== ============== BASIC INCOME (LOSS) PER COMMON SHARE $ (0.27) $ (0.12) ============ ============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 4,838,151 5,500,000 (c) 10,338,151 ============ =========== ==============
(a) To include the profits and losses of United Breweries International, Ltd. (b) To carve out the operations of Soyco, Ltd., a subsidiary that will not be purchased as part of the the proposed transaction. Soyco, Ltd. was sold in December 1999. (c) To reflect the shares issued for the purchase of the stock of United Breweries International, Ltd. 11