Wilshire Technologies Inc. Pro Forma Consolidated Financial Statements (Unaudited) Following Asset Sale to Foamex Asia Co. LTD

Summary

Wilshire Technologies, Inc. prepared these unaudited pro forma consolidated financial statements to show the financial impact of selling certain assets and selected liabilities of its Wilshire Contamination Control Division to Foamex Asia Co. LTD. The statements reflect how the company's financial position and results of operations would have looked if the sale had occurred earlier, including the write-off of related goodwill and a recorded loss of $214,000. These documents are for informational purposes only and do not predict future results.

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EX-10.168 2 ex10-168.txt EXHIBIT 10.168 1 EXHIBIT 10.168 WILSHIRE TECHNOLOGIES INC. PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) On May 19, 2000, Wilshire Technologies, Inc. (the "Company") completed the sale of certain assets and selected liabilities of the Company's Wilshire Contamination Control Division (the "Division") to Foamex Asia Co. LTD, an affiliate of Foamex International (FMX:NASDAQ). The following unaudited pro forma condensed consolidated financial statements (the "Pro Forma Financial Statements") are based upon the historical consolidated financial statements of the Company. The historical financial information included in the Pro Forma Financial Statements represents the consolidated financial position and operations of the Company as previously reported by the Company in its Annual Report on Form 10-KSB for the year ended November 30, 1999 and its Quarterly Report on Form 10-QSB for the quarterly period ended February 29, 2000. The Pro Forma Financial Statements reflect the effect of the sale of certain net assets, the write off of related goodwill, and the recording of a loss related to the transaction of $214,000. The Pro Forma statements of operations for the year ended November 30, 1999 and for the three months ended February 29, 2000 give effect to this transaction as if it were consummated on December 1, 1998. The pro forma unaudited condensed consolidated balance sheet as of February 29, 2000 gives effect to this transaction as if it were consummated on February 29, 2000. The loss associated with this transaction arising from the write off of goodwill is reflected in the pro forma unaudited condensed consolidated balance sheet. That loss is not included in the pro forma unaudited condensed consolidated statements of operations as it is non-recurring in nature. The pro forma adjustments, including the loss arising from the write off of goodwill, are described more fully in the accompanying notes. The Pro Forma Financial Statements are presented for informational purposes only and do not purport to be indicative of the results of operations that actually would have been achieved had such transactions been consummated on the date or for the periods indicated and do not purport to be indicative of the results of operations for any future period. The Pro Forma Financial Statements should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes thereto included in the Company's Annual Report on Form 10-KSB for the year ended November 30, 1999 and the Company's Quarterly Report on Form 10-QSB for the quarterly period ended February 29, 2000. 2 WILSHIRE TECHNOLOGIES, INC. PRO-FORMA CONDENSED CONSOLIDATED BALANCE SHEET FEBRUARY 29,2000 (UNAUDITED)
Pro Forma Wilshire Disposal of Wilshire Technologies Inc. Wilshire Contamination Technologies Inc. Historical (a) Control Division(b) Pro Forma ------------ ----------- ------------ ASSETS Current assets: Cash $ 46,000 $ -- $ 46,000 Accounts receivable trade, net 397,000 -- 397,000 Inventories 908,000 (813,000) 95,000 Other current assets 332,000 -- 332,000 ------------ ----------- ------------ Total current assets 1,683,000 (813,000) 870,000 Property and equipment, net 3,323,000 (86,000) 3,237,000 Goodwill, net 325,000 (325,000) -- Patents and trademarks, net 124,000 (97,000) 27,000 Note Receivable -- 880,000 880,000 ------------ ----------- ------------ $ 5,455,000 $ (441,000) $ 5,014,000 ============ =========== ============ Liabilities and shareholders' equity (net capital deficiency) Current liabilities: Accounts payable $ 374,000 $ (261,000) $ 113,000 Accrued expenses 352,000 145,000 497,000 Interest payable 2,110,000 -- 2,110,000 Line of credit 12,383,000 -- 12,383,000 ------------ ----------- ------------ Total current liabilities 15,219,000 (116,000) 15,103,000 Shareholders' equity (net capital deficiency): Preferred stock, no par value, 2,000,000 shares authorized Common stock 25,912,000 -- 25,912,000 Common stock warrants 387,000 -- 387,000 Accumulated deficit (36,063,000) (325,000)(c) (36,388,000) ------------ ----------- ------------ Total shareholders' equity (net capital deficiency (9,764,000) (325,000) (10,089,000) ------------ ----------- ------------ $ 5,455,000 $ (441,000) $ 5,014,000 ============ =========== ============
The accounting notes are an integral part of the unaudited pro-forma condensed consolidated financial statements. 3 WILSHIRE TECHNOLOGIES, INC. PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 1999 (UNAUDITED)
Pro Forma Wilshire Disposal of Wilshire Technologies Inc. Wilshire Contamination Technologies Inc. Historical (a) Control Division (b) Pro Forma ----------------- ---------------------- ----------------- Net sales $ 2,691,000 $(2,639,000) $ 52,000 Cost of sales 3,551,000 (1,488,000) 2,063,000 ------------ ----------- ------------ Gross margin (860,000) (1,151,000) (2,011,000) Operating expenses: Marketing and selling 674,000 (575,000) 99,000 General and administrative 1,755,000 (156,000) 1,599,000 Research and development 176,000 (39,000) 137,000 ------------ ----------- ------------ Total operating expenses 2,605,000 (770,000) 1,835,000 ------------ ----------- ------------ Loss from operations (3,465,000) (381,000) (3,846,000) Other income (4,000) -- (4,000) Interest income (expense), net (1,218,000) -- (1,218,000) ------------ ----------- ------------ Loss before provision for state income taxes (4,687,000) (381,000) (5,068,000) Provision for state income taxes - current 1,000 -- 1,000 ------------ ----------- ------------ Net loss $ (4,688,000) $ (381,000) $ (5,069,000) ============ =========== ============ Weighted average shares outstanding 12,949,000 12,949,000 ============ ============ Basic and diluted loss per share $ (0.36) $ (0.39) ============ ============
The accounting notes are an integral part of the unaudited pro-forma condensed consolidated financial statements. 4 CONDENSED WILSHIRE TECHNOLOGIES, INC. PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED FEBRUARY 28, 2000 (UNAUDITED)
Pro Forma Wilshire Disposal of Wilshire Technologies Inc. Wilshire Contamination Technologies Inc. Historical (a) Control Division (b) Pro Forma ----------------- ---------------------- ----------------- Net sales $ 730,000 $(723,000) $ 7,000 Cost of sales 1,177,000 (477,000) 700,000 ------------ --------- ------------ Gross margin (447,000) (246,000) (693,000) Operating expenses: Marketing and selling 141,000 (105,000) 36,000 General and administrative 354,000 (20,000) 334,000 Research and development -- -- -- ------------ --------- ------------ Total operating expenses 495,000 (125,000) 370,000 ------------ --------- ------------ Loss from operations (942,000) (121,000) (1,063,000) Other income -- -- -- Interest income (expense), net (353,000) -- (353,000) ------------ --------- ------------ Loss before provision (1,295,000) (121,000) (1,416,000) for state income taxes Provision for state income taxes - current 1,000 -- 1,000 ------------ --------- ------------ Net loss $ (1,296,000) $(121,000) $ (1,417,000) ============ ========= ============ Weighted average shares outstanding 12,953,000 12,953,000 ============ ============ Basic and diluted loss per share $ (0.10) $ (0.11) ============ ============
The accounting notes are an integral part of the unaudited pro-forma condensed consolidated financial statements. 5 WILSHIRE TECHNOLOGIES INC. NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) a) Represents historical consolidated financial information as filed on Form 10-QSB with the Securities and Exchange Commission on April 15, 2000 under the registrant name "Wilshire Technologies Inc." b) To give effect to the sale of certain net assets as if it occurred on February 29, 2000 for the unaudited pro forma condensed balance sheet presentation and on December 1, 1998 for the unaudited pro forma condensed statements of operations presentation. c) The Company expects to record a loss on the sale of certain net assets due to the write off of goodwill as previously described. As the sale of net assets was at book value, the loss is equal to the book value of the related goodwill. If the transaction had been consummated as of December 1, 1998 the Company would have recorded a loss of $335,000 for the year ended November 30, 1999. Such loss is not reflected in the pro forma unaudited condensed consolidated statements of operations.