EX-99.04
4
ex99-04.htm
UNAUDITED
PRO FORMA COMBINED FINANCIAL INFORMATION
On
January 31, 2017 (the "Closing Date"), we entered into a share exchange agreement (the "Exchange Agreement")
by and among us, The Pride Group (QLD) Pty Ltd., an Australian corporation ("Pride"), Turquino Equity LLC ("Turquino")
and Stephen Paul Mullane and Marie Louise Mullane as Trustees of the Mullane Family Trust (the "Mullane Trust" and
together with Turquino, the "Pride Shareholders"). Andrew Hidalgo and Matthew Hidalgo, our Chief Executive Officer
and Chief Financial Officer, respectively, are each a managing partner of Turquino.
Pursuant
to the exchange agreement, we acquired all of the issued and outstanding capital stock of Pride from the Pride Shareholders in
exchange for an aggregate of 3,800,000 shares of our common stock (the "Acquisition Shares").
The
unaudited pro forma combined balance sheet as of December 31, 2016 giving effect to the contribution transactions as if they had
occurred on the balance sheet date, and statements of operations for the year ended December 31, 2016 include the historical statements
of operations of the combined companies, giving effect to the contribution transactions as if they had occurred at the beginning
of the period. This information is only a summary, and you should read it in conjunction with the company's historical financial
statements and related notes and management's discussion and analysis of financial condition and results of operations contained
in H/Cell's annual reports, quarterly reports and other information on file with the SEC. As a result, the combination of
H/Cell and Pride pursuant to the exchange agreement is considered a business combination of companies under common control and
will be accounted for in a manner similar to a pooling-of-interests.
We
have prepared the unaudited pro forma combined financial statements based on available information, using assumptions that we
believe are reasonable. These unaudited pro forma combined financial statements are being provided for informational purposes
only. They do not purport to represent our actual financial position or results of operations had the exchange agreement occurred
on the dates specified, nor do they project our results of operations or financial position for any future period or date.
The
unaudited pro forma condensed combined statements of operations do not reflect any adjustments for non-recurring items or anticipated
synergies resulting from the combination. Pro forma adjustments are based on certain assumptions and other information that are
subject to change as additional information becomes available. Accordingly, the adjustments included in our financial statements
published after the completion of the combination may vary from the adjustments included in these unaudited pro forma condensed
combined financial statements below.
H/CELL
ENERGY CORPORATION
UNAUDITED
PRO FORMA COMBINED BALANCE SHEET
AS
OF DECEMBER 31, 2016
H/Cell
Pride
Pro
Forma Adjustment
Pro
Forma Combined
December
31, 2016
ASSETS
Current
Assets
Cash
and Cash Equivalents
$
292,887
$
244,980
$
-
$
537,867
Accounts
and retainage receivable, net
-
650,886
-
650,886
Prepaid
Expenses
13,329
839
-
14,168
Costs
in Excess of Billings
247
91,657
-
91,904
Total
Current Assets
306,463
988,362
-
1,294,825
Property
and equipment, net of accumulated depreciation
-
99,816
-
99,816
Security
deposits, and other non-current assets
2,400
6,097
-
8,497
TOTAL
ASSETS
$
308,863
$
1,094,275
$
-
$
1,403,138
LIABILITIES
AND STOCKHOLDERS' EQUITY
Current
Liabilities
Accounts
Payable and Accrued Expenses
$
6,000
$
707,237
$
-
$
713,237
Billings
in Excess of Costs
7,847
75,691
-
83,538
Sales
Tax Payable
-
114,086
-
114,086
Due
to Stockholders
-
-
-
-
Total
Current Liabilities
13,847
897,014
-
910,861
Stockholders'
Equity
Common
Stock
313
-
380
(a)
693
Preferred
Stock
-
-
-
-
Paid-in-Capital
778,938
504,484
(380
)
(a)
1,283,042
Retained
Earnings
(484,235
)
(307,223
)
-
(791,458
)
Total
Stockholders' Equity
295,016
197,261
-
492,277
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY
$
308,863
$
1,094,275
$
-
$
1,403,138
(a) To reflect 3,800,000 common shares issued as consideration
in the share exchange agreement.
H/CELL
ENERGY CORPORATION
UNAUDITED
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR
THE YEAR ENDED DECEMBER 31, 2016
H/Cell
Pride
(AUD to USD)
Pro
Forma Adjustment
Pro
Forma
Combined
December
31, 2016
Revenue
Contracts
$
8,553
$
5,060,904
$
-
$
5,069,457
Related
Party
12,374
-
-
12,374
Total
Revenue
20,927
5,060,904
-
5,081,831
Cost
of Goods Sold
Contracts
9,882
3,334,976
-
3,344,858
Related
Party
10,627
-
-
10,627
Total
Cost of Goods Sold
20,509
3,334,976
-
3,355,485
Gross
Profit
$
418
$
1,725,928
$
-
$
1,726,346
Operating
Expenses
Research
and Development
2,000
-
-
2,000
General
and Administrative Expenses
476,833
1,901,430
-
2,378,263
Total
Operating Expenses
478,833
1,901,430
-
2,380,263
Loss
before other income and expense
$
(478,415
)
$
(175,502
)
$
-
$
(653,917
)
Income
Tax Provision (Benefit)
-
-
-
-
Other
Income
Gain
on disposition of equipment
-
(25,350
)
-
(25,350
)
Other
income
-
1,391
-
1,391
Total
Other Income
-
(23,959
)
-
(23,959
)
Net
Income (Loss)
$
(478,415
)
$
(199,461
)
$
-
$
(677,876
)
Other
Comprehensive Loss
Foreign
currency translation difference
-
(25,695
)
-
$
(25,695
)
Total
Comprehensive Gain (Loss)
-
(225,156
)
-
(225,156
)
Stockholders
Equity, Beginning of Year
453,581
249,193
-
702,774
Stockholders
Equity, End of Year
$
295,016
$
197,261
$
-
$
492,277

EX - 99 . 04 4 ex99 - 04 . htm UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION On January 31 , 2017 ( the " Closing Date " ) , we entered into a share exchange agreement ( the " Exchange Agreement " ) by and among us , The Pride Group ( QLD ) Pty Ltd . , an Australian corporation ( " Pride " ) , Turquino Equity LLC ( " Turquino " ) and Stephen Paul Mullane and Marie Louise Mullane as Trustees of the Mullane Family Trust ( the " Mullane Trust " and together with Turquino , the " Pride Shareholders " ) . Andrew Hidalgo and Matthew Hidalgo , our Chief Executive Officer and Chief Financial Officer , respectively , are each a managing partner of Turquino . Pursuant to the exchange agreement , we acquired all of the issued and outstanding capital stock of Pride from the Pride Shareholders in exchange for an aggregate of 3,800,000 shares of our common stock ( the " Acquisition Shares " ) . The unaudited pro forma combined balance sheet as of December 31 , 2016 giving effect to the contribution transactions as if they had occurred on the balance sheet date , and statements of operations for the year ended December 31 , 2016 include the historical statements of operations of the combined companies , giving effect to the contribution transactions as if they had occurred at the beginning of the period . This information is only a summary , and you should read it in conjunction with the company 's historical financial statements and related notes and management 's discussion and analysis of financial condition and results of operations contained in H / Cell 's annual reports , quarterly reports and other information on file with the SEC . As a result , the combination of H / Cell and Pride pursuant to the exchange agreement is considered a business combination of companies under common control and will be accounted for in a manner similar to a pooling - of - interests . We have prepared the unaudited pro forma combined financial statements based on available information , using assumptions that we believe are reasonable . These unaudited pro forma combined financial statements are being provided for informational purposes only . They do not purport to represent our actual financial position or results of operations had the exchange agreement occurred on the dates specified , nor do they project our results of operations or financial position for any future period or date . The unaudited pro forma condensed combined statements of operations do not reflect any adjustments for non - recurring items or anticipated synergies resulting from the combination . Pro forma adjustments are based on certain assumptions and other information that are subject to change as additional information becomes available . Accordingly , the adjustments included in our financial statements published after the completion of the combination may vary from the adjustments included in these unaudited pro forma condensed combined financial statements below . H / CELL ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31 , 2016 H / Cell Pride Pro Forma Adjustment Pro Forma Combined December 31 , 2016 ASSETS Current Assets Cash and Cash Equivalents $ 292,887 $ 244,980 $ - $ 537,867 Accounts and retainage receivable , net - 650,886 - 650,886 Prepaid Expenses 13,329 839 - 14,168 Costs in Excess of Billings 247 91,657 - 91,904 Total Current Assets 306,463 988,362 - 1,294,825 Property and equipment , net of accumulated depreciation - 99,816 - 99,816 Security deposits , and other non - current assets 2,400 6,097 - 8,497 TOTAL ASSETS $ 308,863 $ 1,094,275 $ - $ 1,403,138 LIABILITIES AND STOCKHOLDERS ' EQUITY Current Liabilities Accounts Payable and Accrued Expenses $ 6,000 $ 707,237 $ - $ 713,237 Billings in Excess of Costs 7,847 75,691 - 83,538 Sales Tax Payable - 114,086 - 114,086 Due to Stockholders - - - - Total Current Liabilities 13,847 897,014 - 910,861 Stockholders ' Equity Common Stock 313 - 380 ( a ) 693 Preferred Stock - - - - Paid - in - Capital 778,938 504,484 ( 380 ) ( a ) 1,283,042 Retained Earnings ( 484,235 ) ( 307,223 ) - ( 791,458 ) Total Stockholders ' Equity 295,016 197,261 - 492,277 TOTAL LIABILITIES & STOCKHOLDERS ' EQUITY $ 308,863 $ 1,094,275 $ - $ 1,403,138 ( a ) To reflect 3,800,000 common shares issued as consideration in the share exchange agreement . H / CELL ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31 , 2016 H / Cell Pride ( AUD to USD ) Pro Forma Adjustment Pro Forma Combined December 31 , 2016 Revenue Contracts $ 8,553 $ 5,060,904 $ - $ 5,069,457 Related Party 12,374 - - 12,374 Total Revenue 20,927 5,060,904 - 5,081,831 Cost of Goods Sold Contracts 9,882 3,334,976 - 3,344,858 Related Party 10,627 - - 10,627 Total Cost of Goods Sold 20,509 3,334,976 - 3,355,485 Gross Profit $ 418 $ 1,725,928 $ - $ 1,726,346 Operating Expenses Research and Development 2,000 - - 2,000 General and Administrative Expenses 476,833 1,901,430 - 2,378,263 Total Operating Expenses 478,833 1,901,430 - 2,380,263 Loss before other income and expense $ ( 478,415 ) $ ( 175,502 ) $ - $ ( 653,917 ) Income Tax Provision ( Benefit ) - - - - Other Income Gain on disposition of equipment - ( 25,350 ) - ( 25,350 ) Other income - 1,391 - 1,391 Total Other Income - ( 23,959 ) - ( 23,959 ) Net Income ( Loss ) $ ( 478,415 ) $ ( 199,461 ) $ - $ ( 677,876 ) Other Comprehensive Loss Foreign currency translation difference - ( 25,695 ) - $ ( 25,695 ) Total Comprehensive Gain ( Loss ) - ( 225,156 ) - ( 225,156 ) Stockholders Equity , Beginning of Year 453,581 249,193 - 702,774 Stockholders Equity , End of Year $ 295,016 $ 197,261 $ - $ 492,277