Proforma Condensed Consolidated Financial Statements for ProtoSource Corporation and Subsidiary (Asset Sale to Dauphin Technology, Inc.)

Contract Categories: Mergers & Acquisitions › Plan of Reorganization Agreements
Summary

This document presents unaudited proforma condensed consolidated financial statements for ProtoSource Corporation and its subsidiary, reflecting the sale of substantially all assets of its subsidiary, Suncoast Automation, Inc., to Dauphin Technology, Inc. The statements show how the company's financial position and results of operations would look if the asset sale had occurred as of June 30, 2001, or at the start of the relevant periods. The document is for informational purposes and should be read alongside the company's historical financial statements.

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EX-2.2 3 protosourceex2-2.txt PROFORMA CONDENSED FINANCIAL STATEMENTS EXHIBIT 2.2 PROTOSOURCE CORPORATION AND SUBSIDIARY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGE ---- Proforma Condensed Financial Statements Summary of Presentation F-2 Proforma Condensed Balance Sheet as of June 30, 2001 F-3 Proforma Condensed Statement of Operations for the six months ended June 30, 2001 F-5 Proforma Condensed Statement of Operations for the year ended December 31, 2000 F-7 Notes to Proforma Condensed Financial Statements F-8 F-1 PROTOSOURCE CORPORATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited proforma condensed consolidated financial statements gives effect to the sale of substantially all of the assets of Suncoast Automation, Inc. ("Suncoast"), ProtoSource Corporation's (the "Company's") wholly-owned subsidiary to Dauphin Technology, Inc. ("Dauphin"). The proforma condensed consolidated financial statements are based on the Company's historical financial statements and estimates and assumptions set forth below. The proforma condensed consolidated balance sheet as of June 30, 2001 gives effect to the sale of substantially all of the assets of Suncoast to Dauphin as if the sale took place on June 30, 2001. The proforma condensed consolidated statement of operations for the six months ended June 30, 2001 includes the sale of substantially all of the assets of Suncoast to Dauphin as if the transaction was completed at the beginning of the year. The proforma condensed consolidated statement of operations for the year ended December 31, 2000 includes the sale of substantially all of the assets of Suncoast to Dauphin as if the transaction was completed at the beginning of the year. Proforma adjustments are based upon preliminary estimates, available information and certain assumptions that management deems appropriate. The unaudited proforma financial information presented herein is not necessarily indicative of the results of operations or financial position that the Company would have obtained had such events occurred at the beginning of the year, as assumed, or of the future results of the Company. The proforma financial statements should be read in conjunction with the historical financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2000. F-2 PROTOSOURCE CORPOATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2001 ASSETS ------ Proforma Proforma Adjustments Combined ----------- ----------- Current Assets: Cash and cash equivalents $ 108,641 $ -- $ 108,641 Accounts receivable 111,456 -- 111,456 Prepaid expenses and other 139,296 -- 139,296 Marketable securities -- (1)1,069,800 1,069,800 Assets held for sale 1,210,069 (1)(1,210,069) -- ----------- ----------- ----------- Total Current Assets 1,569,462 (140,269) 1,429,193 ----------- ----------- ----------- Property and Equipment, at cost: Equipment 1,049,019 -- 1,049,019 Furniture 148,219 -- 148,219 Leasehold improvements 6,463 -- 6,463 ----------- ----------- ----------- 1,203,701 -- 1,203,701 Less accumulated depreciation (1,041,498) -- (1,041,498) ----------- ----------- ----------- Net Property and Equipment 162,203 -- 162,203 ----------- ----------- ----------- Other Assets: Goodwill 477,857 -- 477,857 Investment in corporation 226,000 -- 226,000 Deposits 14,601 -- 14,601 ----------- ----------- ----------- Total Other Assets 718,458 -- 718,458 ----------- ----------- ----------- Total Assets $ 2,450,123 $ (140,269) $ 2,309,854 =========== =========== =========== The accompanying notes are an integral part of these proforma condensed consolidated financial statements. F-3
PROTOSOURCE CORPORATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET JUNE 30, 2001 LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Proforma Proforma Adjustments Combined ----------- ------------ Current Liabilities: Accounts payable $ 226,679 $ -- $ 226,679 Customer deposits 5,000 -- 5,000 Accrued expenses 62,816 -- 62,816 Deferred revenue 28,708 -- 28,708 Current portion of long-term debt 47,739 -- 47,739 Liabilities assumed upon sale 140,269 (1)(140,269) -- ------------ ------------ ------------ Total Current Liabilities 511,211 (140,269) 370,942 ------------ ------------ ------------ Long-term debt, net of current portion above: Obligations under capital leases 139,637 -- 139,637 Less current portion above (47,739) -- (47,739) ------------ ------------ ------------ Total Long-Term Debt 91,898 -- 91,898 ------------ ------------ ------------ Commitments and Contingencies -- -- -- Stockholders' Equity: Preferred stock -- -- -- Common stock 24,535,043 -- 24,535,043 Additional paid in capital 221,325 -- 221,325 Accumulated deficit (22,909,354) -- (22,909,354) ------------ ------------ ------------ Total Stockholders' Equity 1,847,014 -- 1,847,014 ------------ ------------ ------------ Total Liabilities and Stockholders' Equity $ 2,450,123 $ (140,269) $ 2,309,854 ============ ============ ============ The accompanying notes are an integral part of these proforma condensed consolidated financial statements. F-4 PROTOSOURCE CORPORATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001 Proforma Proforma Adjustments Combined ----------- ----------- Net revenues $ 786,483 $ -- $ 786,483 ----------- ----------- ----------- Operating Expenses: Selling, general and administrative 892,041 -- 892,041 Cost of revenues 377,457 -- 377,457 Depreciation and amortization 113,658 -- 113,658 Impairment of investment 404,000 -- 404,000 ----------- ----------- ----------- Total Operating Expenses 1,787,156 -- 1,787,156 ----------- ----------- ----------- Operating Loss (1,000,673) -- (1,000,673) ----------- ----------- ----------- Other Income (Expense): Interest income 3,975 -- 3,975 Interest expense (878,089) -- (878,089) ----------- ----------- ----------- Total Other Income (Expense) (874,114) -- (874,114) ----------- ----------- ----------- Income (Loss) Before Provision For Income Taxes (1,874,787) -- (1,874,787) Provision for income taxes -- -- -- ----------- ----------- ----------- Net Loss From Continuing Operations (1,874,787) -- (1,874,787) ----------- ----------- ----------- Discontinued Operations: Loss from discontinued operations (984,098) (2)(984,098) -- Loss on disposal (6,786,621) (2)(6,786,621) -- ----------- ----------- ----------- Total Loss From Discontinued Operations (7,770,719) (7,770,719) -- ----------- ----------- ----------- Net Loss $(9,645,506) $(7,770,719) $(1,874,787) =========== =========== =========== The accompanying notes are an integral part of these proforma condensed consolidated financial statements. F-5 PROTOSOURCE CORPORATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2001 (CONTINUED) Proforma Proforma Adjustments Combined ----------- ------------ Net Income (Loss) Per Share of Common Stock: Basic: Weighted Average Number of Common Shares Outstanding 4,315,338 4,315,338 Net Income (Loss) Per Share of Common Stock: Continuing operations $ (0.44) $ (0.44) Discontinued operations (1.80) -- ------------ ------------ Net Loss $ (2.24) $ (0.44) ============ ============ Diluted: Weighted Average Number of Common Shares Outstanding 4,315,338 4,315,338 Net Income (Loss) Per Share of Common Stock: Continuing operations $ (0.44) $ (0.44) Discontinued operations (1.80) -- ------------ ------------ Net Loss $ (2.24) $ (0.44) ============ ============ The accompanying notes are an integral part of these proforma condensed consolidated financial statements. F-6 PROTOSOURCE CORPORATION AND SUBSIDIARY PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2000 Proforma Proforma Adjustments Combined ----------- ----------- Net revenues $ 1,609,791 $(2)(87,290) $ 1,522,501 ----------- ----------- ----------- Operating Expenses: Selling, general and administrative 2,392,597 (2)(355,046) 2,037,551 Cost of revenues 760,903 (2) (92,723) 668,180 Depreciation and amortization 824,183 (2)(525,005) 299,178 Stock compensation expense 220,705 -- 220,705 Impairment of investment 1,271,484 -- 1,271,484 ----------- ----------- ----------- Total Operating Expenses 5,469,872 (972,774) 4,497,098 ----------- ----------- ----------- Operating Loss (3,860,081) 885,484 (2,974,597) ----------- ----------- ----------- Other Income (Expense): Interest income 40,076 (2) (255) 39,821 Other income 6,672 -- 6,672 Interest expense (1,392,865) -- (1,392,865) ----------- ----------- ----------- Total Other Income (Expense) (1,346,117) (255) (1,346,372) ----------- ----------- ----------- Income (Loss) Before Provision For Income Taxes (5,206,198) 885,229 (4,320,969) Provision for income taxes -- -- -- ----------- ----------- ----------- Net Loss $(5,206,198) $ 885,229 $(4,320,969) =========== =========== =========== Net Income (Loss) Per Share of Common Stock: Basic: Weighted Average Number of Common Shares Outstanding 2,569,133 2,569,133 Net Loss $ (2.03) $ (1.68) Diluted: Weighted Average Number of Common Shares Outstanding 2,569,133 2,569,133 Net Loss $ (2.03) $ (1.68) The accompanying notes are an integral part of these proforma condensed consolidated financial statements. F-7
PROTOSOURCE CORPORATION AND SUBSIDIARY NOTES TO UNAUDITED PROFORMA CONDENSED FINANCIAL STATEMENTS 1. Basis of Presentation --------------------- On July 1, 2001, the Company sold substantially all of the assets of Suncoast to Dauphin for 766,058 shares of Dauphin common stock, valued at $1.1 million based on the closing bid price of $1.47 per share on June 29, 2001. The Dauphin shares received are restricted stock and Dauphin is obligated to file a registration statement prior to the thirtieth day following the filing of its Form 10-Q for the quarter ended June 30, 2001 to register the Company's shares it received. The proforma condensed consolidated balance sheet as of June 30, 2001 gives effect to the sale of substantially all of the assets of Suncoast to Dauphin as if the sale took place on June 30, 2001. The proforma condensed consolidated statement of operations for the six months ended June 30, 2001 and for the year ended December 31, 2000 includes the sale of substantially all of the assets of Suncoast to Dauphin as if the transaction was completed on January 1, 2000. The loss on sale of Suncoast is not included in the proforma condensed statement of operations. The estimated loss on sale as if the sale took place on January 1, 2000 would have been approximately $6,800,000. 2. Proforma Net Income (Loss) Per Share of Common Stock ---------------------------------------------------- The proforma net income (loss) per share of common stock is based on the weighted average number of common shares outstanding during the period. 3. Proforma Adjustments -------------------- Adjustments to present the proforma condensed consolidated financial statements are as follows: 1. Adjustment to record the sales proceeds for the sale of substantially all of the assets of Suncoast to Dauphin and to remove the assets sold as of June 30, 2001. Includes payment of estimated legal, commissions and other estimated costs of the sale of approximately $100,000. 2. Adjustment to remove the operations of Suncoast for the period. F-8