EX-99.2 3 nm007_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial information and related notes give effect to the Merger and presents the historical condensed combined financial information of Cruzani, Inc. (the “Company”) and Bowmo, Inc. (“Bowmo”), after giving effect to the Agreement and Plan of Merger (the “Merger Agreement”) with Bowmo Merger Sub, Inc., a Delaware corporation and newly-formed, wholly-owned subsidiary of the Company (the “Merger Sub”), that was completed on May 4, 2022 (the “Merger”). The Merger was accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, Bowmo, Inc. became a wholly owned subsidiary of the Company.

 

The unaudited pro forma condensed combined financial information gives effect to the Merger based on the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information.

 

Pursuant to the terms of the Merger Agreement, the purchase price for Bowmo shall be 1,000,000 shares of the Company’s Series Preferred Stock holding the voting rights to 78% of the total voting equity securities. (the “Merger Consideration”).

  

The unaudited pro forma condensed combined balance sheet as of March 31, 2022 is presented as if the Merger had occurred on March 31, 2022. The unaudited condensed combined statements of operations for the three months ended March 31, 2022 and for the year ended December 31, 2021 are presented as if the Merger had occurred on January 1, 2021.

 

The unaudited pro forma condensed combined financial information was prepared in accordance with Article 11 of the Securities and Exchange Commission’s Regulation S-X. The unaudited pro forma adjustments reflecting the Merger have been prepared in accordance with the guidance for business combinations presented in ASC 805 and reflect the allocation of the preliminary purchase price to the assets acquired and liabilities assumed in the Merger based on their estimated fair values. The historical financial information has been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are: (i) directly attributable to the Merger; (ii) factually supportable; and (iii) with respect to the condensed combined statements of operations, expected to have a continuing impact on the combined results of operations.

 

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the Merger had been affected on the dates previously set forth, nor is it indicative of the future operating results or financial position in combination. The preliminary purchase price allocation was made using the Company’s best estimates of fair value, which are dependent upon certain valuation and other analyses that are not yet final. As a result, the unaudited pro forma purchase price adjustments related to the Merger are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed during the applicable measurement period under ASC 805 (up to one year from the Merger date). There can be no assurances that any final valuations will not result in material adjustments to our preliminary estimated purchase price allocation. Further, the unaudited pro forma condensed combined financial information does not give effect to the potential impact of anticipated synergies, operating efficiencies, cost savings or transaction and integration costs that may result from the Merger.

 

The unaudited pro forma condensed combined financial information should be read in conjunction with our historical consolidated financial statements and their accompanying notes presented in our Annual Report on Form 10-K for the year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the three months ended March 31, 2022, as well as the historical financial statements of Bowmo for the years ended December 31, 2021 and 2020 and unaudited financial statements for the three month period ended March 31, 2022.


 

 


CRUZANI, INC. AND BOWMO, INC.

PROFORMA CONDENSED COMBINED BALANCE SHEETS

(UNAUDITED)

 

 

 

Historical

 

 

Pro Forma

 

 

 

Cruzani, Inc.
and
Subsidiaries

 

 

Bowmo, Inc.

 

 

Transaction
Accounting
Adjustments

 

 

Notes

 

 

Pro Forma
Combined

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,754

 

 

$

255,027

 

 

$

-

 

 

 

 

 

$

257,781

 

Accounts receivable

 

 

-

 

 

 

39,750

 

 

 

-

 

 

 

 

 

 

39,750

 

Total Assets

 

$

2,754

 

 

 

294,777

 

 

$

-

 

 

 

 

 

 

297,531

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

326,400

 

 

$

65,853

 

 

$

-

 

 

 

 

 

$

392,253

 

Accrued expenses

 

 

-

 

 

 

23,899

 

 

 

-

 

 

 

 

 

 

23,899

 

Accrued interest

 

 

1,189,559

 

 

 

-

 

 

 

-

 

 

 

 

 

 

1,189,559

 

Accrued officer compensation

 

 

442,000

 

 

 

604,662

 

 

 

-

 

 

 

 

 

 

1,046,662

 

Convertible Notes

 

 

592,600

 

 

 

84,681

 

 

 

-

 

 

 

 

 

 

677,281

 

Derivative liability

 

 

-

 

 

 

112,537

 

 

 

-

 

 

 

 

 

 

112,537

 

Put premium on stock settled debt

 

 

209,314

 

 

 

-

 

 

 

-

 

 

 

 

 

 

209,314

 

Loans payable

 

 

254,500

 

 

 

-

 

 

 

-

 

 

 

 

 

 

254,500

 

Total Current Liabilities

 

 

3,014,373

 

 

 

891,632

 

 

 

-

 

 

 

 

 

 

3,906,005

 

loans payable, net of current portion

 

 

-

 

 

 

309,501

 

 

 

-

 

 

 

 

 

 

309,501

 

Total Liabilities

 

 

3,014,373

 

 

 

1,201,133

 

 

 

-

 

 

 

 

 

 

4,215,506

 

Commitments and Contingencies (Note 12)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ DEFICIT:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Preferred stock, 3,500,000 shares authorized, par value $0.01; 3,381,520, 0 and 3,381,520 shares issued and outstanding, respectively

 

 

33,815

 

 

 

-

 

 

 

-

 

 

 

 

 

 

33,815

 

Series B Preferred stock, 10,000 shares authorized, par value $0.01; 5,000, 0 and 5,000 shares issued and outstanding, respectively

 

 

50

 

 

 

-

 

 

 

-

 

 

 

 

 

 

50

 

Series C Preferred stock, 10,000,000 shares authorized, par value $0.01; 5,000,000, 0 and 5,000,000 shares issued and outstanding, respectively

 

 

50,000

 

 

 

-

 

 

 

-

 

 

 

 

 

 

50,000

 

Series D Preferred stock, 125,000 shares authorized, par value $0.0001; 125,000 shares issued and outstanding

 

 

12

 

 

 

-

 

 

 

-

 

 

 

 

 

 

12

 

Series AA - 0, 652,259 and 0 Shares issued and outstanding, respectively

 

 

-

 

 

 

652

 

 

 

(652

) 

 

 

(a)

-

 

Super Preferred - 0, 500 and 0 Shares issued and outstanding, respectively

 

 

-

 

 

 

1

 

 

 

(1

) 

 

 

(a)

-

 

Series E Preferred stock to be issued

 

 

166,331

 

 

 

-

 

 

 

-

 

 

 

 

 

 

166,331

 

Series G Preferred stock, 125,000 shares authorized, par value $0.0001; 0, 0, and 1,000,000 shares issued and outstanding, respectively

 

 

-

 

 

 

-

 

 

 

1,000


 

 

(a)

1,000

 

Common stock 20,000,000,000 shares authorized, $0.00001 par value; 8,955,014,498, 18,150,000 and 8,957,564,498 shares issued and outstanding, respectively

 

 

89,550

 

 

 

18,150

 

 

 

(18,125

)

 

 

(a)

 

89,575

 

Treasury stock, at cost – 2,917, 0 and 2,917 shares, respectively

 

 

(773,500

)

 

 

-

 

 

 

-

 

 

 

 

 

 

(773,500

)

Additional paid in capital

 

 

80,950,405

 

 

 

3,802,391

 

 

 

(83,510,505

)

 

 

(a)(b)

 

 

 

1,242,291

 

Accumulated deficit

 

 

(83,528,283

)

 

 

(4,727,550

)

 

 

83,528,283

 

 

 

(a)(b)

 

 

 

(4,727,550

)

Total Stockholders’ Deficit

 

 

(3,011,618

)

 

 

(906,356

)

 

 

-

 

 

 

 

 

 

(3,917,974

)

Total Liabilities and Stockholders’ Deficit

 

$

2,754

 

 

$

294,777

 

 

$

-

 

 

 

 

 

$

297,531

 


See Notes to Unaudited Pro Forma Combined Financial Statements.


 

2

 


CRUZANI, INC. AND BOWMO, INC.

PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2022

(UNAUDITED)


 

 

Historical

 

 

Pro Forma

 

 

 

Cruzani, Inc.
and
Subsidiaries

 

 

Bowmo, Inc.

 

 

Transaction
Accounting
Adjustments

 

 

Notes

 

 

Pro Forma
Combined

 

Revenues

 

$

-

 

 

$

88,667

 

 

$

-

 

 

 

 

 

 

$

88,667

 

Cost of revenues

 

 

-

 

 

 

27,579

 

 

 

-

 

 

 

 

 

 

27,579

 

Gross Profit

 

 

-

 

 

 

61,088

 

 

 

-

 

 

 

 

 

 

61,088

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

30,000

 

 

 

102,268

 

 

 

-

 

 

 

 

 

 

132,268

 

Consulting fees

 

 

75,000

 

 

 

-

 

 

 

-

 

 

 

 

 

 

75,000

 

General and administrative expenses

 

 

2,957

 

 

 

6,327

 

 

 

-

 

 

 

 

 

 

9,284

 

Professional fees

 

 

13,180

 

 

 

10,000

 

 

 

-

 

 

 

 

 

 

23,180

 

Total operating expenses

 

 

121,137

 

 

 

118,595

 

 

 

-

 

 

 

 

 

 

239,732

 

Loss from operations

 

 

(121,137

)

 

 

(57,507

)

 

 

-

 

 

 

 

 

 

(178,644

)

Other Income (Expense):

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

-

 

Interest expense

 

 

(94,307

)

 

 

(5,010

)

 

 

-

 

 

 

 

 

 

(99,317

)

Change in fair value of derivatives

 

 

-

 

 

 

(1,545

)

 

 

-

 

 

 

 

 

 

(1,545

)

Total other income (expense)

 

 

(94,307

)

 

 

(6,555

)

 

 

-

 

 

 

 

 

 

(100,862

)

Income (loss) before provision for income taxes

 

 

(215,444

)

 

 

(64,062

)

 

 

-

 

 

 

 

 

 

(279,506

)

Provision for income taxes

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 

 

$

 

 

 

 

 

$

 

Net Income (Loss)

 

$

(215,444

)

 

 

(64,062

)

 

 

-

 

 

 

 

 

 

(279,506

)

Basic income (loss) per share

 

$

-

 

 

$

-

 

 

$

-

 

 

 

 

 

$

-

 

Basic weighted average shares outstanding

 

 

8,178,531,066

 

 

 

18,150,000

 

 

 

(15,600,000

)

 

(a)

 

 

 

8,181,081,066

 


See Notes to Unaudited Pro Forma Combined Financial Statements.


 

3

 


CRUZANI, INC. AND BOWMO, INC.

PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED


 

 

Historical

 

 

Pro Forma

 

 

 

Cruzani, Inc.
and
Subsidiaries

 

 

Bowmo, Inc.

 

 

Transaction
Accounting
Adjustments

 

 

Notes

 

 

Pro Forma
Combined

 

Revenues

 

$

-

 

 

$

201,675

 

 

$

-

 

 

 

 

 

 

$

201,675

 

Cost of revenues

 

 

-

 

 

 

51,643

 

 

 

-

 

 

 

 

 

 

201,675

 

Gross Profit

 

 

-

 

 

 

150,032

 

 

 

-

 

 

 

 

 

 

-

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compensation expense

 

 

120,000

 

 

 

403,738

 

 

 

-

 

 

 

 

 

 

523,738

 

Consulting expense

 

 

300,000

 

 

 

-

 

 

 

-

 

 

 

 

 

 

300,000

 

General and administrative

 

 

43,769

 

 

 

20,619

 

 

 

-

 

 

 

 

 

 

64,388

 

Professional fees

 

 

39,000

 

 

 

13,970

 

 

 

-

 

 

 

 

 

 

52,970

 

Total operating expenses

 

 

502,769

 

 

 

438,327

 

 

 

-

 

 

 

 

 

 

941,096

 

Loss from operations

 

 

(502,769

)

 

 

(288,295

)

 

 

-

 

 

 

 

 

 

(941,096

)

Other Income (Expense):

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

-

 

Interest expense

 

 

(1,038,632

)

 

 

(56,837

)

 

 

-

 

 

 

 

 

 

(1,095,469

)

Change in fair value of derivatives

 

 

(741,027

)

 

 

(17,820

)

 

 

-

 

 

 

 

 

 

(758,847

)

Forgiveness of note payable - PPP Loan

 

 

-

 

 

 

91,035

 

 

 

-

 

 

 

 

 

 

91,035

 

Grant income

 

 

-

 

 

 

6,000

 

 

 

-

 

 

 

 

 

 

6,000

 

Loss on debt litigation

 

 

(266,412

)

 

 

-

 

 

 

-

 

 

 

 

 

 

(266,412

)

Gain on new methodology for accounting for debt conversion features

995,692

 

 

 

-

 

 

-

 

 

 

 



995,692

 

Total other income (expense)

 

 

(1,050,379

)

 

 

22,378

 

 

 

-

 

 

 

 

 

 

(1,028,001

)

Loss before provision for income taxes

 

 

(1,553,148

)

 

 

(265,917

)

 

 

-

 

 

 

 

 

 

(1,969,097

)

Provision for income taxes

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Net Loss

 

$

(1,553,148

)

 

$

(265,917

)

 

 

-

 

 

 

 

 

$

(1,969,097

)

Basic loss per share

 

$

(0.01

)

 

 

(0.01

)

 

 

-

 

 

 

 

 

 

-

 

Basic weighted average shares outstanding

 

 

4,811,860,024

 

 

 

18,150,000

 

 

 

(15,600,000

)

 

(a)

 

 

 

4,814,410,024

 


See Notes to Unaudited Pro Forma Combined Financial Statements.


 

4

 


NOTES AND ASSUMPTIONS TO PROFORMA COMBINED FINANCIAL STATEMENTS

(Unaudited)

 

The pro-forma adjustments to the unaudited pro-forma combined financial statements are as follows:

(a) Represents the elimination of Bowmo, Inc.'s common stock and preferred stock in exchange for the Company's preferred and common stock. Per the terms of the Merger, Eddie Aizman and Michael E. Lakshin of Bowmo, will receive 1,000,000 shares of the Company's Series G Preferred stock as a conversion of the common stock held by Michael and Eddie of Bowmo. Additionally, the shareholders of Bowmo will be issued one common share of the Company for every common and preferred share held of Bowmo for a total of 2,550,000 shares of common stock.

 

(b) Represents the elimination of the Company’s accumulated deficit.

 

1.             Basis of Pro Forma Presentation

 

On May 4, 2022, the Company entered into an Agreement and Plan of Merger with Bowmo, Inc. and Bowmo Merger Sub, Inc., a Delaware corporation and newly-formed, wholly-owned subsidiary of the Company (the “Merger Sub”) which merger was consummated on May 4, 2022, (the “Merger”) The unaudited pro forma condensed combined balance sheet at March 31, 2022 combines the Company’s historical condensed consolidated balance sheet with the historical condensed balance sheet of Bowmo as if the Merger had occurred on that date. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2022 and for the year ended December 31, 2021 combine the Company’s historical condensed consolidated statements of operations with the condensed statements of operations of Bowmo as if the Merger had occurred on January 1, 2021. The historical financial information is adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are: (i) directly attributable to the Merger; (ii) factually supportable; and (iii) with respect to the condensed combined statements of operations, expected to have a continuing impact on the Company’s combined results.

 

2.             Preliminary Consideration Transferred

 

Pursuant to the terms of the Merger Agreement, the purchase price for Bowmo (the “Purchase Price”) shall be shares of the Company’s Series G Preferred Stock holding the voting rights to 78% of the total voting equity securities.

 

3.             Preliminary Purchase Price Allocation

 

Under the acquisition method of accounting outlined in ASC 805, the identifiable assets acquired and liabilities assumed in the Merger are recorded at their Merger date at fair values and are included in the Company’s consolidated financial position. The Company’s unaudited pro forma adjustments are preliminary in nature and based on the estimates of fair value for all assets acquired and liabilities assumed to illustrate the estimated effect of the Merger on the Company’s condensed consolidated balance sheet at March 31, 2022.



5