EX-99.3 4 ex99-3.htm EXHIBIT 99.3 EXHIBIT 99.3

  

Exhibit 99.3

 

Notes to Condensed Combined Pro Forma Unaudited Financial Statements

 

On July 25, 2014, Surna, Inc. (“Surna” or “the Company”) acquired Hydro Innovations LLC (“Hydro”), a company that manufactures and sells equipment for the indoor gardening industry. The Company manufactures and/or assembles its products (the “Acquisition”).

 

The unaudited condensed combined pro forma statements of operations are presented as if the Acquisition had been completed on January 1, 2013 combining Hydro’s condensed audited statement of operations for the year ended December 31, 2013 and Surna’s audited condensed statement of operations for the year ended December 31, 2013. The unaudited condensed combined pro forma statements of operations for the six months ended June 30, 2014 are presented as if the Acquisition had been completed on January 1, 2013 combining Hydro’s condensed unaudited statement of operations for the six months ended June 30, 2014 and Surna’s unaudited condensed statement of operations for the six months ended June 30, 2014. The unaudited condensed combined pro forma balance sheet gives effect to the acquisition as if the Acquisition had taken place on June 30, 2014 and combines Hydro’s unaudited condensed balance sheet as of June 30, 2014 with Surna’s unaudited condensed balance sheet as of June 30, 2014.

 

The unaudited pro forma combined statement of income is presented for illustrative purposes only and, therefore, is not necessarily indicative of the operating results that might have been achieved had the transaction occurred as of an earlier date, nor is it necessarily indicative of the operating results that may be achieved in the future. You should not rely on the pro forma condensed combined financial information as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined companies will experience after the Acquisition.

 

The unaudited pro forma combined statement of income, including the notes thereto, should be read in conjunction with Surna’s audited historical consolidated financial statements for the year ended December 31, 2013 included in our Annual Report on Form 10-K for the year ended December 31, 2013, the Form 10-Q for the quarterly periods ended March 31, 2014 and June 30, 2014 as well as Hydro’s audited financial statements for the years ended December 31, 2013 and 2012 included in Exhibit 99.1 to this Form 8-K/A.

 

 
 

 

Surna, Inc.

Unaudited Combined Pro Forma Balance Sheet

as of June 30, 2014

 

   June 30, 2014 
   (Unaudited)   Pro Forma (Unaudited) 
   Surna   Hydro   Adjustments   Combined 
ASSETS                    
CURRENT ASSETS                    
Cash  $214,067   $2,637   $-   $216,704 
Accounts receivable   68,399    76,444    -    144,843 
Advance to related party   84,681    -    (84,681)   - 
Assets held for sale   -    -    -    - 
Inventory   2,507    17,631    -    20,138 
Total current assets   369,654    96,712    (84,681)   381,685 
                     
Property and equipment   128,188    72,617    -    200,805 
Accumulated depreciation   (5,366)   (42,809)   -    (48,175)
    122,822    29,808    -    152,630 
                     
Intangible assets   13,500    5,178(1)(2)   631,064    649,742 
Accumulated amortization   -    (3,747)   -    (3,747)
    13,500    1,432    631,064    645,995 
                     
TOTAL ASSETS  $505,976   $127,951   $546,383   $1,180,310 
                     
LIABILITIES AND MEMBERS’ DEFICIT                    
                     
CURRENT LIABILITIES                    
Accounts payable and accrued liabilities  $62,469   $46,992   $    $109,461
Payroll taxes payable        54,138         54,138 
Short term line of credit        21,386         21,386 
Short term loans        260,000         260,000 
Advances from others        28,186         28,186 
Advances from Surna, Inc.        84,681 (1)(2)   (84,681)   - 
Current portion of promissory note        (1)   60,000    60,000 
Amounts due to related parties held for sale        -         - 
Total current liabilities   62,469    495,383    (24,681)   533,171 
                     
LONG TERM DEBT                    
Vehicle loan   46,571              46,571 
Promissory note issued for purchase        (1)   190,000    190,000 
Long term line of credit        13,632         13,632 
Convertible promissory notes   759,283              759,283 
Debt discount on convertible notes   (691,118)             (691,118)
Total long term debt   114,736    13,632    190,000    318,368 
                     
NONCURRENT LIABILITIES                    
Derivative liability on convertible debt   2,497,425              2,497,425 
                     
TOTAL LIABILITIES   2,674,630    509,015    165,319    3,348,964 
                     
COMMITMENTS AND CONTINGENCIES                    
                     
SHAREHOLDERS’ AND MEMBERS’ DEFICIT                    
Members’ deficit        (381,064) (2)   381,064    - 
Shareholders’ deficit   (2,168,654)   -         (2,168,654)
    (2,168,654)   (381,064)   381,064    (2,168,654)
                     
TOTAL LIABILITIES AND MEMBER’S DEFICIT  $505,976   $127,951   $546,383   $1,180,310 

 

See accompanying notes to the financial statements