Exhibit 99.3
Pro Forma
Focus Universal Inc.
and AVX Design & Integration, Inc.
Pro Forma Consolidated Financial Statements
(unaudited)
Contents
| Page | ||
| Pro Forma Consolidated Financial Statements: | ||
| Pro Forma Consolidated Balance Sheet as of December 31, 2018 (unaudited) | F-2 | |
| Pro Forma Consolidated Statement of Operations for the year ended December 31, 2018 (unaudited) | F-3 | |
Pro Forma Consolidated Balance Sheet as of March 31, 2019 (unaudited) |
F-4 | |
| Pro Forma Consolidated Statement of Operations for the three months ended March 31, 2019 (unaudited) | F-5 | |
| Notes to Pro Forma Consolidated Financial Statements (unaudited) | F-6 | |
| F-1 |
Focus Universal Inc.,
and AVX Design & Integration, Inc.
Pro Forma Consolidated Balance Sheet
As of December 31, 2018
(unaudited)
| Pro forma | Pro forma | |||||||||||||||||
| Focus | AVX | Adjustments | Consolidated | |||||||||||||||
| ASSETS | ||||||||||||||||||
| Current assets | ||||||||||||||||||
| Cash and cash equivalents | $ | 4,455,751 | $ | 103,193 | $ | (550,000 | ) | a | $ | 4,008,944 | ||||||||
| Accounts receivable | 10,908 | 318,871 | 327,529 | |||||||||||||||
| Accounts receivable - related party | 39,625 | – | 39,779 | |||||||||||||||
| Inventories, net | 69,787 | 32,638 | 102,425 | |||||||||||||||
| Prepaid expenses | 115,833 | – | 115,833 | |||||||||||||||
| Total Current Assets | 4,691,904 | 454,702 | (550,000 | ) | 4,596,606 | |||||||||||||
| Property and equipment, net | 4,578,135 | 11,526 | 4,589,661 | |||||||||||||||
| Other assets: | ||||||||||||||||||
| Deposits | 7,872 | 5,968 | 13,840 | |||||||||||||||
| Goodwill | – | – | 592,264 | a | 592,264 | |||||||||||||
| Total assets: | $ | 9,277,911 | $ | 472,196 | $ | 42,264 | $ | 9,792,371 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
| Current Liabilities: | ||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 163,661 | $ | 106,907 | $ | – | $ | 270,568 | ||||||||||
| Accounts payable - related party | 4,921 | – | 4,921 | |||||||||||||||
| Note payable - short term | – | – | 50,000 | a | 50,000 | |||||||||||||
| Other payable | 7,210 | – | 7,210 | |||||||||||||||
| Customer deposit | 36,184 | – | 36,184 | |||||||||||||||
| Total Current Liabilities | 211,976 | 106,907 | 50,000 | 368,883 | ||||||||||||||
| Non-current Liabilities | ||||||||||||||||||
| Deferred rent | – | 11,157 | 11,157 | |||||||||||||||
| Total Non-Current Liabilities | – | 11,157 | – | 11,157 | ||||||||||||||
| Total Liabilities | 211,976 | 118,064 | 50,000 | 380,040 | ||||||||||||||
| Stockholders' Equity | ||||||||||||||||||
| Common stocks | 40,907 | 2,000 | (1,961 | ) | a | 40,946 | ||||||||||||
| Additional paid-in capital | 12,956,486 | – | 290,677 | a | 13,247,163 | |||||||||||||
| Shares to be issued, common shares | 72,000 | – | 72,000 | |||||||||||||||
| Retained earnings (Accumulated deficit) | (4,003,458 | ) | 352,132 | (296,452 | ) | a | (3,947,778 | ) | ||||||||||
| Total stockholders' equity | 9,065,935 | 354,132 | (7,736 | ) | 9,412,331 | |||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 9,277,911 | $ | 472,196 | $ | 42,264 | $ | 9,792,371 | ||||||||||
| F-2 |
Focus Universal Inc.,
and AVX Design & Integration, Inc.
Pro Forma Consolidated Statement of Operation
For the year ended December 31, 2018
(unaudited)
| Pro forma | Pro forma | |||||||||||||||
| Focus | AVX | Adjustments | Consolidated | |||||||||||||
| Revenue | $ | 285,929 | $ | 1,788,702 | $ | – | $ | 2,074,631 | ||||||||
| Revenue - related party | 22,200 | – | – | 22,200 | ||||||||||||
| Total revenue | 308,129 | 1,788,702 | – | 2,096,831 | ||||||||||||
| Cost of Revenue | 137,897 | 968,807 | – | 1,106,704 | ||||||||||||
| Gross Profit | 170,232 | 819,895 | – | 990,127 | ||||||||||||
| Operation Expenses: | ||||||||||||||||
| Selling | – | 174,180 | – | 174,180 | ||||||||||||
| Compensation - officers | 120,000 | – | – | 120,000 | ||||||||||||
| Research and development | 221,510 | – | – | 221,510 | ||||||||||||
| Professional fees | 960,846 | 8,843 | – | 969,689 | ||||||||||||
| General and administrative | 451,597 | 295,734 | – | 747,331 | ||||||||||||
| Total Operating Expenses | 1,753,953 | 478,757 | – | 2,232,710 | ||||||||||||
| Income (Loss) from Operations | (1,583,721 | ) | 341,138 | – | (1,242,583 | ) | ||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest income (expense), net | (440,943 | ) | (1,571 | ) | – | (442,514 | ) | |||||||||
| Total other expense | (440,943 | ) | (1,571 | ) | – | (442,514 | ) | |||||||||
| Income (Loss) before income taxes | (2,024,664 | ) | 339,567 | – | (1,685,458 | ) | ||||||||||
| Tax expense | – | 2,361 | – | 2,361 | ||||||||||||
| Net Income (Loss) | $ | (2,024,664 | ) | $ | 337,206 | $ | – | $ | (1,687,458 | ) | ||||||
| Weight Average Number of Common Shares Outstanding - Basic and Diluted | 37,778,614 | – | – | 37,778,614 | ||||||||||||
| Net Loss per common share | ||||||||||||||||
| Basic and diluted | $ | (0.05 | ) | – | – | $ | (0.04 | ) | ||||||||
| F-3 |
Focus Universal Inc.,
and AVX Design & Integration, Inc.
Pro Forma Consolidated Balance Sheet
As of March 31, 2019
(unaudited)
| Pro forma | Pro forma | |||||||||||||||
| Focus | AVX | Adjustments | Consolidated | |||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash and cash equivalents | $ | 3,366,986 | $ | 187,989 | $ | – | $ | 3,554,975 | ||||||||
| Accounts receivable | 16,225 | 530,413 | – | 546,638 | ||||||||||||
| Accounts receivable - related party | 2,000 | – | – | 2,000 | ||||||||||||
| Inventories, net | 40,283 | 5,164 | – | 45,447 | ||||||||||||
| Other receivables | – | 2,151 | – | 2,151 | ||||||||||||
| Prepaid expenses | 71,640 | – | 71,640 | |||||||||||||
| Total Current Assets | 3,497,134 | 725,717 | – | 4,222,851 | ||||||||||||
| Property and equipment, net | 4,726,476 | 10,235 | – | 4,736,711 | ||||||||||||
| Operating lease right-of-use assets | – | 184,416 | – | 184,416 | ||||||||||||
| Investment | 890,716 | – | (890,716 | ) | a | – | ||||||||||
| Deposits | 7,872 | 5,968 | 13,840 | |||||||||||||
| Goodwill | – | – | 307,572 | a | 307,572 | |||||||||||
| Total assets: | $ | 9,122,198 | $ | 926,336 | $ | (583,144 | ) | $ | 9,465,390 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable and accrued liabilities | $ | 170,860 | $ | 77,803 | $ | – | $ | 248,663 | ||||||||
| Customer deposit | 25,717 | – | – | 25,717 | ||||||||||||
| Current maturities of operating leases | – | 51,329 | 51,329 | |||||||||||||
| Promissory note - short term | 41,500 | – | – | 41,500 | ||||||||||||
| Total Current Liabilities | 238,077 | 129,132 | – | 367,209 | ||||||||||||
| Non-current Liabilities | ||||||||||||||||
| Promissory note - long term | 8,500 | – | – | 8,500 | ||||||||||||
| Noncurrent operating leases | – | 144,313 | – | 144,313 | ||||||||||||
| Total Liabilities | 246,577 | 273,445 | – | 520,022 | ||||||||||||
| Stockholders' Equity (Deficit): | ||||||||||||||||
| Common stock | 40,959 | 2,000 | (2,000 | ) | a | 40,959 | ||||||||||
| Additional paid-in capital | 13,343,659 | – | – | 13,343,659 | ||||||||||||
| Shares to be issued, common shares | 11,491 | – | – | 11,491 | ||||||||||||
| Accumulated deficit | (4,520,488 | ) | 650,891 | (581,144 | ) | a | (4,450,741 | ) | ||||||||
| Total stockholders' equity | 8,875,621 | 652,891 | (583,144 | ) | 8,945,368 | |||||||||||
| Total Liabilities and Stockholders' Equity | $ | 9,122,198 | $ | 926,336 | $ | (583,144 | ) | $ | 9,465,390 | |||||||
| F-4 |
Focus Universal Inc.,
and AVX Design & Integration, Inc.
Pro Forma Consolidated Statement of Operation
For the three months ended March 31, 2019
(unaudited)
| Pro forma | Pro forma | |||||||||||||||
| Focus | AVX | Adjustments | Consolidated | |||||||||||||
| Revenue | $ | 111,193 | $ | 724,100 | $ | $ | 835,293 | |||||||||
| Revenue - related party | 3,000 | – | 3,000 | |||||||||||||
| Total revenue | 114,193 | 724,100 | 838,293 | |||||||||||||
| Cost of Revenue | 87,179 | 173,234 | 260,413 | |||||||||||||
| Gross Profit | 27,014 | 550,866 | 577,880 | |||||||||||||
| Operation Expenses: | ||||||||||||||||
| Selling | – | 91,849 | 91,849 | |||||||||||||
| Compensation - officers | 30,000 | 21,775 | 51,775 | |||||||||||||
| Research and development | 62,004 | – | 62,004 | |||||||||||||
| Professional fees | 353,845 | 14,682 | 368,527 | |||||||||||||
| General and administrative | 98,920 | 71,227 | 169,347 | |||||||||||||
| Total Operating Expenses | 544,769 | 199,533 | 744,302 | |||||||||||||
| Loss from Operations | (517,755 | ) | 351,292 | (166,422 | ) | |||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest income (expense), net | 725 | (41 | ) | 684 | ||||||||||||
| Total other expense | 725 | (41 | ) | 684 | ||||||||||||
| Loss before income taxes | (517,030 | ) | 351,292 | (165,738 | ) | |||||||||||
| Tax expense | – | – | – | |||||||||||||
| Net Loss | $ | (517,030 | ) | $ | 351,292 | $ | $ | (165,738 | ) | |||||||
| Weight Average Number of Common Shares Outstanding - Basic and Diluted | 40,917,475 | 40,917,475 | ||||||||||||||
| Net Loss per common shares - Basic and diluted | $ | (0.01 | ) | $ | (0.00 | ) | ||||||||||
| F-5 |
Focus Universal Inc.
and AVX Design & Integration, Inc.
Notes to Pro Forma Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION
On March 15, 2019, Focus Universal Inc. (the “Company”) (OTCQB: FCUV) entered into a stock purchase agreement with AVX Design & Integration, Inc. (“AVX”) whereby the Company purchased 100% of the outstanding stock of AVX, an Internet of Things (“IoT”) installation company (the “Acquisition Transaction”). Pursuant to the Acquisition Transaction, the Company will purchase all 2,000 shares of the outstanding common stock of AVX for $875,000. The purchase price will be paid as follows: (1) $550,000 payable in cash at closing; (2) $275,000 payable in 39,286 shares of the Company’s common stock issued upon closing; and (3) $50,000 payable in the form of a secured promissory note at 6% interest over 12 months secured by six shares of AVX common stock.
AVX is an IoT installation and management company, based in southern California that was established in 1993 by Patrick Calderone. AVX is a design and installation provider for high performance Audio Visual, Home Theater, Lighting Control, Automation and Integration There are approximately 11 employees and is currently based in Culver City, California.
The accompanying pro forma consolidated balance sheet presents the accounts of The Company and AVX as if the transactions occurred December 31, 2018 and March 31, 2019. The accompanying pro forma consolidated statement of operations presents the accounts of the Company and AVX for the year ended December 31, 2018 and three months ended March 31, 2019 as if the transactions occurred on January 1, 2018 and 2019.
The following adjustments would be required if the acquisition occurred as indicated above:
| a) | To record the purchase price allocation and to eliminate the common stock and retained earnings of AVX. |
The unaudited consolidated pro forma financial information is presented for informational purposes only and is subject to a number of uncertainties and assumptions and do not purport to represent what the company’s actual performance or financial position would have been had the transaction occurred on the dates indicated and does not purport to indicate the financial position or results of operations as of any future date or for any future period.
| F-6 |