EX-99.2 3 exhibit99_2.htm EXHIBIT 99.2 exhibit99_2.htm
Exhibit 99.2
 
                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA BALANCE SHEETS
 
BALANCE AT JUNE 30, 2014
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
 
Leo Motors
 
LGM
 
Pro Forma
 
Pro Forma
 
 
6/30/2014
 
6/30/2014
 
AJE
 
Consolidated
 
                     
Assets
 
Current Assets
                       
Cash and cash equivalents
  $ 847     $ 215,458           $ 216,305  
Accounts Receivable
    0       242,352             242,352  
Inventories
    23,492       118,955             142,447  
Prepayment to suppliers
    198,181       0             198,181  
Short term advances
    4,900       0             4,900  
Other current assets
    1,315       192,012             193,327  
Total Current Assets
    228,735       768,777             997,512  
Fixed assets, net
    23,652       16,846             40,498  
Deposit
    76,321       22,637             98,958  
Other non-current assets
    63,831       0             63,831  
Investments
    1,108,272       0     $ (346,272 )     762,000  
Goodwill
    2,542,228       0               2,542,228  
Total Assets
  $ 4,043,039     $ 808,260             $ 4,505,027  
                                 
Liabilities and Equity(Deficit)
 
Current Liabilities:
                               
Accounts payable and accrued expenses
  $ 930,347     $ 97,595             $ 1,027,942  
Current portion notes payable
    224,833       271,106               495,939  
Advance from customers
    435,439       9,872               445,311  
Due to related parties
    150,637       0               150,637  
Taxes payable
    145,521       3,133               148,654  
Total Current Liabilities
    1,886,777       381,706               2,268,483  
Accrued retirement benefits
    34,019       0               34,019  
Long trm debt net of current portion
    0       151,456               151,456  
Total Liabilities
    1,920,796       533,162               2,453,958  
Commitments
    -       -                  
Leo Motors, Inc.("LEOM") Equity(Deficit):
                               
Common stock ($0.001 par value; 220,000,000 shares authorized); 133,219,074 shares issued and outstanding at June 30, 2014
    133,219       284,870       (284,870 )     133,219  
Additional paid-in capital
    17,441,936       0               17,441,936  
Accumulated other comprehensive income
    472,836       72,945               545,781  
Accumulated loss
    (18,345,297 )     (82,717 )     (61,402 )     (18,489,416 )
Total Equity(Deficit) Leo Motors, Inc.
    (297,306 )     275,098               (368,480 )
Non-controlling interest
    2,419,549       0               2,419,549  
Total Equity(Deficit)
    2,122,243       275,098               2,051,069  
Total Liabilities and Equity(Deficit)
  $ 4,043,039     $ 808,260       0     $ 4,505,027  
                                 
"See accompanying notes to consolidated financial statements"
 
 
 
 

 
 
                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
 
FOR THE SIX MONTHS ENDED JUNE 30 2014
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
   
Leo Motors
   
LGM
   
Pro Forma
   
Pro Forma
 
   
6/30/2014
   
6/30/2014
   
AJE
   
Consolidated
 
                         
Revenues
  $ 0     $ 579,071           $ 579,071  
Cost of Revenues
    0       173,259             173,259  
Gross Profit
    0       405,812             405,812  
                               
Operating Expenses
    1,498,510       279,489             1,777,999  
                               
Income(loss) from Continuing Operations
    (1,498,510 )     126,323             (1,372,187 )
Other Income (Expenses)
                             
Assets disposal gain, net
    0       0             0  
Debt Forgiveness
    0       0             0  
Interest expense
    (58,297 )     (13,301 )           (71,598 )
Non-Operating (expense) income
    (24,376 )     8,166             (16,210 )
Total Other Income (Expenses)
    (82,673 )     (5,135 )           (87,808 )
                               
Income(loss) from Continuing Operations Before Income Taxes
    (1,581,183 )     121,188             (1,459,995 )
Income Tax Expense
    0       0             0  
Net Income(Loss)
  $ (1,581,183 )   $ 121,188           $ (1,459,995 )
                               
Income(loss) attributable to non-controlling interest
  $ (107,736 )   $ 0           $ (107,736 )
Net Income(Loss) Attributable To Leo Motors, Inc.
  $ (1,473,447 )   $ 121,188           $ (1,352,259 )
Other Comprehensive Income:
                             
Net Income(loss)
  $ (1,473,447 )   $ 121,188           $ (1,352,259 )
Unrealized foreign currency translation gain
    4,506       1,935             6,441  
Comprehensive Income(loss) Attributable to Leo Motors, Inc.
  $ (1,468,941 )   $ 123,123     $ 0     $ (1,345,818 )
Net Loss per Common Share:
                               
Basic
  $ (0.01 )                   $ (0.01 )
Diluted
  $ (0.01 )                   $ (0.01 )
Weighted Average Common Shares Outstanding:
                               
Basic
  $ 125,044,939                     $ 125,044,939  
Diluted
  $ 128,162,368                     $ 128,162,368  
                                 
"See accompanying notes to consolidated financial statements"
 
                                 


 
 

 
                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA BALANCE SHEETS
 
BALANCE AT DECEMBER 31, 2013
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
 
Leo Motors
 
LGM
 
Pro Forma
 
Pro Forma
 
 
12/31/2013
 
12/31/2013
 
AJE
 
Consolidated
 
                     
Assets
 
Current Assets
                       
Cash and cash equivalents
  $ 1,774     $ 260,014           $ 261,788  
Accounts Receivable
    0       423,361             423,361  
Inventories
    0       105,199             105,199  
Prepayment to suppliers
    197,973       0             197,973  
Short term advances
    4,900       0             4,900  
Other current assets
    563       177,534             178,097  
Total Current Assets
    205,210       966,108             1,171,318  
Fixed assets, net
    35,996       19,299             55,295  
Deposit
    76,321       21,720             98,041  
Other non-current assets
    63,831       0             63,831  
Investments
    1,108,272       0     $ (346,272 )     762,000  
Goodwill
    2,542,228       0               2,542,228  
Total Assets
  $ 4,031,858     $ 1,007,127             $ 4,692,713  
                                 
Liabilities and Equity(Deficit)
 
Current Liabilities:
                               
Accounts payable and accrued expenses
  $ 840,604     $ 51,782             $ 892,386  
Current portion notes payable
    83,500       260,030               343,530  
Advance from customers
    435,439       0               435,439  
Due to related parties
    150,637       0               150,637  
Taxes payable
    143,210       39,927               183,137  
Total Current Liabilities
    1,653,390       351,739               2,005,129  
Accrued retirement benefits
    62,036       0               62,036  
Long trm debt net of current portion
    0       145,316               145,316  
Total Liabilities
    1,715,426       497,055               2,212,481  
Commitments
    -       -                  
Leo Motors, Inc.("LEOM") Equity(Deficit):
                               
Common stock ($0.001 par value; 220,000,000 shares authorized); 115,186,112 shares issued and outstanding at December 31, 2013
    115,186       284,870       (284,870 )     115,186  
Additional paid-in capital
    16,077,481       0               16,077,481  
Accumulated other comprehensive income
    468,330       42,612               510,942  
Accumulated loss
    (16,871,850 )     182,590       (61,402 )     (16,750,662 )
Total Equity(Deficit) Leo Motors, Inc.
    (210,853 )     510,072               (47,053 )
Non-controlling interest
    2,527,285       0               2,527,285  
Total Equity(Deficit)
    2,316,432       510,072               2,480,232  
Total Liabilities and Equity(Deficit)
  $ 4,031,858     $ 1,007,127       0     $ 4,692,713  
                                 
"See accompanying notes to consolidated financial statements"
 

 
 

 

                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
 
FOR THE YEAR ENDED DECEMBER 31, 2013
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
   
Leo Motors
   
LGM
   
Pro Forma
   
Pro Forma
 
   
12/31/2013
   
12/31/2013
   
AJE
   
Consolidated
 
                         
Revenues
  $ 0     $ 579,071           $ 579,071  
Cost of Revenues
    0       173,259             173,259  
Gross Profit
    0       405,812             405,812  
                               
Operating Expenses
    882,541       279,489             1,162,030  
                               
Income(loss) from Continuing Operations
    (882,541 )     126,323             (756,218 )
Other Income (Expenses)
                             
Assets disposal gain, net
    0       0             0  
Debt Forgiveness
    0       0             0  
Interest expense
    (130,057 )     (13,301 )           (143,358 )
Non-Operating (expense) income
    (225,287 )     8,166             (217,121 )
Total Other Income (Expenses)
    (355,344 )     (5,135 )           (360,479 )
                               
Income(loss) from Continuing Operations Before Income Taxes
    (1,237,885 )     121,188             (1,116,697 )
Income Tax Expense
    0       0             0  
Net Income(Loss)
  $ (1,237,885 )   $ 121,188           $ (1,116,697 )
                               
Income(loss) attributable to non-controlling interest
  $ (612,432 )   $ 0           $ (612,432 )
Net Income(Loss) Attributable To Leo Motors, Inc.
  $ (625,453 )   $ 121,188           $ (504,265 )
Other Comprehensive Income:
                             
Net Income(loss)
  $ (625,453 )   $ 121,188           $ (504,265 )
Unrealized foreign currency translation gain
    1,545       1,935             3,480  
Comprehensive Income(loss) Attributable to Leo Motors, Inc.
  $ (623,908 )   $ 123,123     $ 0     $ (500,785 )
Net Loss per Common Share:
                               
Basic
  $ (0.01 )                   $ (0.01 )
Diluted
  $ (0.01 )                   $ (0.01 )
Weighted Average Common Shares Outstanding:
                               
Basic
  $ 103,583,195                     $ 103,583,195  
Diluted
  $ 107,573,301                     $ 107,573,301  
                                 
"See accompanying notes to consolidated financial statements"
 
 
 
 

 
 
                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA BALANCE SHEETS
 
BALANCE AT DECEMBER 31, 2012
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
                         
 
Leo Motors
 
LGM
 
Pro Forma
 
Pro Forma
 
 
12/31/2012
 
12/31/2012
 
AJE
 
Consolidated
 
                     
Assets
 
Current Assets
                       
Cash and cash equivalents
  $ 430,307     $ 2,630           $ 432,937  
Accounts Receivable
    0       254,367             254,367  
Inventories
    235,255       103,335             338,590  
Prepayment to suppliers
    303,457       0             303,457  
Short term advances
    0       0             0  
Other current assets
    600       7,739             8,339  
Total Current Assets
    969,619       368,071             1,337,690  
Fixed assets, net
    51,153       15,164             66,317  
Deposit
    76,091       20,133             96,224  
Other non-current assets
    57,166       0             57,166  
Investments
    381,933       0     $ (111,933 )     270,000  
Goodwill
    2,776,567       0               2,776,567  
Total Assets
  $ 4,312,529     $ 403,368             $ 4,603,964  
                                 
Liabilities and Equity(Deficit)
 
Current Liabilities:
                               
Accounts payable and accrued expenses
  $ 865,096     $ 28,281             $ 893,377  
Current portion notes payable
    240,000       0               240,000  
Advance from customers
    445,455       3,123               448,578  
Due to related parties
    187,372       0               187,372  
Taxes payable
    158,388       4,507               162,895  
Total Current Liabilities
    1,896,311       35,911               1,932,222  
Accrued retirement benefits
    91,671       0               91,671  
Long trm debt net of current portion
    0       210,977               210,977  
Total Liabilities
    1,987,982       246,888               2,234,870  
Commitments
    -       -                  
Leo Motors, Inc.("LEOM") Equity(Deficit):
                               
Common stock ($0.001 par value; 220,000,000 shares authorized); 104,116,073 shares issued and outstanding at December 31, 2012
    104,116       50,531       (50,531 )     104,116  
Additional paid-in capital
    15,405,804       0               15,405,804  
Accumulated other comprehensive income
    469,875       44,547               514,422  
Accumulated loss
    (16,246,397 )     61,402       (61,402 )     (16,246,397 )
Total Equity(Deficit) Leo Motors, Inc.
    (266,602 )     156,480               (222,055 )
Non-controlling interest
    2,591,149       0               2,591,149  
Total Equity(Deficit)
    2,324,547       156,480               2,369,094  
Total Liabilities and Equity(Deficit)
  $ 4,312,529     $ 403,368       0     $ 4,603,964  
                                 
"See accompanying notes to consolidated financial statements"
 
 
 
 

 
 
                         
LEO MOTORS, INC.
 
CONSOLIDATED PRO FORMA STATEMENTS OF OPERATIONS
 
FOR THE YEAR ENDED DECEMBER 31, 2012
 
UNAUDITED
 
(AMOUNTS EXPRESSED IN US DOLLAR)
 
   
Leo Motors
   
LGM
   
Pro Forma
   
Pro Forma
 
   
12/31/2012
   
12/31/2012
   
AJE
   
Consolidated
 
                         
Revenues
  $ 25,605     $ 398,025           $ 423,630  
Cost of Revenues
    23,786       141,063             164,849  
Gross Profit
    1,819       256,962             258,781  
                               
Operating Expenses
    2,925,023       235,300             3,160,323  
                               
Income(loss) from Continuing Operations
    (2,923,204 )     21,662             (2,901,542 )
Other Income (Expenses)
                             
Assets disposal gain, net
    52,893       0             52,893  
Debt Forgiveness
    1,309,028       0             1,309,028  
Interest expense
    (197,634 )     (6,120 )           (203,754 )
Non-Operating (expense) income
    (105,705 )     15,301             (90,404 )
Total Other Income (Expenses)
    1,058,582       9,181             1,067,763  
                               
Income(loss) from Continuing Operations Before Income Taxes
    (1,864,622 )     30,843             (1,833,779 )
Income Tax Expense
    25,283       0             25,283  
Net Income(Loss)
  $ (1,889,905 )   $ 30,843           $ (1,859,062 )
                               
Income(loss) attributable to non-controlling interest
  $ (54,249 )   $ 0           $ (54,249 )
Net Income(Loss) Attributable To Leo Motors, Inc.
  $ (1,835,656 )   $ 30,843           $ (1,804,813 )
Other Comprehensive Income:
                             
Net Income(loss)
  $ (1,835,656 )   $ 30,843           $ (1,804,813 )
Unrealized foreign currency translation gain
    1,001       425             1,426  
Comprehensive Income(loss) Attributable to Leo Motors, Inc.
  $ (1,834,655 )   $ 31,268     $ 0     $ (1,803,387 )
Net Loss per Common Share:
                               
Basic
  $ (0.02 )                   $ (0.02 )
Diluted
  $ (0.02 )                   $ (0.02 )
Weighted Average Common Shares Outstanding:
                               
Basic
  $ 101,222,315                     $ 101,222,315  
Diluted
  $ 102,402,755                     $ 102,402,755  
                                 
"See accompanying notes to consolidated financial statements"
 
                                 

 
 

 

1.  BASIS OF PRESENTATION

The accompanying unaudited pro forma consolidated balance sheet as at June 30, 2014 and the unaudited pro forma consolidated statements of operations for the six-month period ended June 30, 2014 and the years ended December 31, 2013 and 2012 (the “Pro Forma Consolidated Financial Statements”) of Leo Motors, Inc have been prepared by management on the basis of United States Generally Accepted Accounting Principles (“US GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) from information derived from the financial statements of Leo Motors Inc. and the financial statements of LGM Co., LTD.  The unaudited Pro Forma Consolidated Financial Statements have been prepared for inclusion in the Form 8-K in conjunction with the proposed acquisition of 100% of the issued and outstanding capital stock of LGM Co., LTD (the “Acquisition”).

The unaudited pro forma consolidated balance sheet as at June 30, 2014 gives effect to the acquisition of LGM Co., LTD by Leo Motors, Inc. as if it had occurred on January 1, 2012.  The unaudited pro forma consolidated statements of loss for the six months ended June 30, 2014 and for the years ended December 31, 2013 and 2012 give effect to the Acquisition as if it had occurred on January 1, 2012.

The unaudited Pro Forma Consolidated Financial Statements have been derived from:

a)  
the unaudited interim financial statements of Leo Motors Inc. for six month period ended June 30, 2014
b)  
the unaudited financial statements of Leo Motors Inc for the twelve month period ended December 31, 2013
                                            c)
the unaudited financial statements of Leo Motors Inc for the twelve month period ended December 31, 2012
d)  
the unaudited condensed interim financial statements of LGM Co., LTD for six month period ended June 30, 2013
e)  
the audited financial statements of LGM Co., LTD for the year ended December 31, 2013.
f)  
the audited financial statements of LGM Co., LTD for the year ended December 31, 2012.

The unaudited pro forma adjustments are based on currently available information and certain assumptions that management believes are reasonable.  The unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the selected historical financial information and related financial statements and accompanying footnotes of Leo Motors Inc. and LGM Co., LTD. The unaudited Pro Forma Consolidated Financial Statements are for informational purposes only and do not purport to reflect the financial position or results of operations that would have occurred if the Acquisition had been consummated on the dates indicated above; nor do they purport to

 
 

 
 

represent or be indicative of the financial position or results of operations of LGM Co., LTD for any future dates or periods. Unless otherwise stated, all amounts presented in these unaudited Pro Forma Consolidated Financial Statements are in U.S. dollars.

2.   SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these unaudited pro forma consolidated financial statements are those set out in Leo Motors Inc’s audited financial statements as at December 31, 2013 and LGM Co., LTD ’s unaudited condensed interim financial statements for the six months ended June 30, 2014. Management has determined that no material adjustments are necessary to conform LGM Co., LTD’s financial statements to the accounting policies used by Leo Motors Inc. in the preparation of these Pro Forma Consolidated Financial Statements.

3.  DESCRIPTION OF THE TRANSACTION

a) Description of the Transaction

On July 1, 2014, Leo Motors, Inc., a Nevada Corporation (the “Company”) acquired all of the outstanding common stock of LGM Co. Ltd., a corporation incorporated in the Republic of Korea (“LGM”), from LGM’s shareholders, which represents 813,747 shares of LGM common stock, in exchange for 47,352,450 shares of the Company's common stock (the “Transaction”) pursuant to the Share Swap Agreement entered into by and between LGM and the Company (the “Agreement”). Pursuant to the Agreement, LGM became a wholly-owned subsidiary of the Company.

4.  PRO FORMA ASSUMPTIONS AND ADJUSTMENTS

The unaudited Pro Forma Consolidated Financial Statements are presented as if all shares of LGM Co., LTD have been exchanged for Leo Motors, Inc. common shares at the date of the Acquisition

a)
The unaudited pro forma consolidated balance sheet as at June 30, 2014 reflects the following adjustment, which is directly attributable to the Acquisition, as if the Acquisition had occurred on January 1, 2012:
 
i)
To eliminate the book value of LGM Co., LTD’s equity accounts and to adjust outstanding common shares.
 
b)The unaudited pro forma consolidated statement of operations for the six months ended June 30, 2014 and the years ended December 31, 2013 and 2012 is prepared as if the Acquisition had occurred on January 1, 2012. The Company  does not anticipate any income or expense adjustments directly attributable to the Acquisition.

5.  PRO FORMA COMMON STOCK

Pro forma common stock as at June 30, 2014 has been determined as follows:
       
   
June 30, 2014
 
   
Common Shares
   
Amount ($)
 
Common stock of Leo Motors, Inc. at June 30, 2014
   
85,866,624
     
85,867
 
Common Shares Issued
   
47,352,450
     
 47,352
 
Pro forma common stock at June 30, 2014
   
133,219,074
     
133,219
 

 
 

 
 
6.  PRO FORMA INCOME/(LOSS) PER SHARE

 
Pro forma income/(loss) per share has been determined as follows:
 
   
Six months ended June 30, 2013
 
Year ended December 31, 2013
   
Year ended December 31, 2012
 
Deemed shares held by LGM Co., LTD shareholders - basic
 
47,352,450
   
47,352,450
     
47,352,452
 
Weighted average number of Leo Motors, Inc. common shares - basic
 
77,692,489
   
56,230,745
     
53,869,865
 
Weighted average number of Leo Motors, Inc. common shares - diluted
 
80,809,918
   
60,220,851
     
55,050,305
 
Pro forma weighted average number of shares outstanding - basic
 
125,044,939
   
103,583,195
     
101,222,315
 
Pro forma weighted average number of shares outstanding - diluted
 
128,162,368
   
107,573,301
     
102,402,755
 
Pro forma adjusted net income/(loss) - basic
$
(0.01)
 
$
(0.01
)
 
$
(0.02)
 
Pro forma adjusted earnings/(loss) per share - diluted
$
(0.01)
 
$
(0.01
)
 
$
(0.02)