EXHIBIT 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On March 23, 2018 the Company acquired an approximately 46% stake in Vicon Industries, Inc. (“Vicon”) based in Hauppauge New York. Vicon a global producer of video management systems and system components for use in security, surveillance, safety and communication applications by a broad group of end users worldwide. Vicon’s product line consists of various elements of a video system, including DVR’s, NVR’s, video encoders, decoders, servers and related video management software, data storage units, analog, digital and HD megapixel fixed and robotic cameras, virtual and analog matrix video switchers and controls, and system peripherals.
The unaudited pro forma financial information, prepared by Cemtrex, Inc., presents the historical consolidated balance sheet and statement of operations of the Company adjusted to reflect the Company’s acquisition of approximately 46% of the issued and outstanding shares of Vicon in exchange for 1,012,625 share of the Company’s common stock
The unaudited proforma consolidated balance sheet gives effect to the investment as if it had occurred on December 31, 2017. The unaudited pro forma statements of operations for the three months ended December 31, 2017 and for the year ended September 31, 2017 gives effect to the investment as if it had occurred as of the beginning of the initial period presented.
The pro forma combined financial information is unaudited, and is not necessarily indicative of the consolidated results that actually would have occurred if the investment had been consummated at the beginning of the periods presented, nor does it purport to present the future financial position and results of operations for future periods.
| 1 |
PRO-FORMA CONSOLIDATED BALANCE SHEET
December 31, 2017
| Cemtrex Inc. | Equity investment in Vicon (Note 1) | Combined Proforma | ||||||||||
| ASSETS | ||||||||||||
| Current Assets | ||||||||||||
| Cash & equivalents | $ | 12,416,993 | $ | 12,416,993 | ||||||||
| Restricted cash | 1,582,345 | 1,582,345 | ||||||||||
| Accounts receivable, net | 17,840,344 | 17,840,344 | ||||||||||
| Inventory -net of allowance for inventory obsolescence | 12,850,015 | 12,850,015 | ||||||||||
| Prepaid expenses & other current assets | 2,503,311 | 2,503,311 | ||||||||||
| Total Current Assets | 47,193,008 | - | 47,193,008 | |||||||||
| Property & equipment, net | 22,384,454 | 22,384,454 | ||||||||||
| Goodwill | 3,322,818 | 3,322,818 | ||||||||||
| Investment in Vicon | - | 2,913,930 | (1a) | 2,913,930 | ||||||||
| Other | 400,875 | 400,875 | ||||||||||
| Total Assets | $ | 73,301,155 | $ | 2,913,930 | $ | 76,215,085 | ||||||
| LIABILITIES AND STOCKHOLDERS EQUITY | ||||||||||||
| Current Liabilities | ||||||||||||
| Accounts payable | $ | 7,604,475 | $ | 7,604,475 | ||||||||
| Credit card payable | 132,437 | 132,437 | ||||||||||
| Sales tax payable | 723,894 | 723,894 | ||||||||||
| Revolving line of credit | 3,992,282 | 3,992,282 | ||||||||||
| Accrued expenses | 3,045,079 | 3,045,079 | ||||||||||
| Deferred revenue | 484,005 | 484,005 | ||||||||||
| Accrued income taxes | 1,496,379 | 1,496,379 | ||||||||||
| Current portion of long-term liabilities | 2,090,821 | 2,090,821 | ||||||||||
| Total Current Liabilities | 19,569,372 | - | 19,569,372 | |||||||||
| Long term- Liabilities | ||||||||||||
| Loans payable to bank | 4,917,939 | 4,917,939 | ||||||||||
| Notes payable | 2,396,223 | 2,396,223 | ||||||||||
| Mortgage payable | 3,842,136 | 3,842,136 | ||||||||||
| Total long-term liabilities | 11,156,298 | 11,156,298 | ||||||||||
| Deferred tax liabilities | 1,891,000 | 1,891,000 | ||||||||||
| Total Liabilities | 32,616,670 | - | 32,616,670 | |||||||||
| Commitments & Contingencies | ||||||||||||
| Stockholders’ Equity | ||||||||||||
| Preferred stock , $0.001 par value, 10,000,000 shares authorized, | ||||||||||||
| Series A, 1,000,000 shares authorized, issued and outstanding at December 31, 2017 | 1,000 | 1,000 | ||||||||||
| Series 1, 3,000,000 shares authorized, 1,822,660 shares issued and outstanding as of December 31, 2017 | 1,823 | 1,823 | ||||||||||
| Common stock, $0.001 par value, 20,000,000 shares authorized,10,553,522 shares issued and outstanding at December 31, 2017 | 10,553 | 1,013 | (1b) | 11,566 | ||||||||
| Additional paid-in capital | 25,023,320 | 2,912,917 | (1b) | 27,936,237 | ||||||||
| Retained earnings | 15,150,236 | 15,150,236 | ||||||||||
| Accumulated other comprehensive income | 497,553 | 497,553 | ||||||||||
| Total Stockholders’ Equity | 40,684,485 | 2,913,930 | 43,598,415 | |||||||||
| Total Liabilities & Stockholders’ Equity | $ | 73,301,155 | $ | 2,913,930 | $ | 76,215,085 | ||||||
See Accompanying Notes to Proforma Combined Financial Statements.
| 2 |
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 2017
| Cemtrex Inc. | Equity investment in Vicon (Note 2) | Proforma consolidated | ||||||||||
| Revenues | ||||||||||||
| Total revenues | $ | 32,381,900 | $ | 32,381,900 | ||||||||
| Cost of revenues | ||||||||||||
| Total cost of revenues | 21,857,408 | 21,857,408 | ||||||||||
| Gross profit | 10,524,492 | 10,524,492 | ||||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative | 9,507,584 | 9,507,584 | ||||||||||
| Research and development | 149,217 | 149,217 | ||||||||||
| Equity loss form Vicon | - | (604,363) | (2a) | (604,363 | ) | |||||||
| Total operating expenses | 9,656,801 | (604,363 | ) | 10,261,164 | ||||||||
| Operating income/(loss) | 867,691 | (604,363 | ) | 263,328 | ||||||||
| Other income (expenses) | ||||||||||||
| Other Income (expense) | 291,767 | 291,767 | ||||||||||
| Interest Expense | (368,461 | ) | (368,461 | ) | ||||||||
| Total other income/(expense), | (76,694 | ) | (76,694 | ) | ||||||||
| Income/(loss) before income taxes | 790,997 | (604,363 | ) | 186,634 | ||||||||
| Income tax expense/(benefit), net | 59,006 | 59,006 | ||||||||||
| Net income available to common shareholders | $ | 731,991 | $ | (604,363 | ) | $ | 127,628 | |||||
| Income/(loss) per common share | ||||||||||||
| - basic | $ | 0.07 | $ | 0.01 | ||||||||
| -diluted | $ | 0.07 | $ | 0.01 | ||||||||
| Weighted average common shares outstanding | ||||||||||||
| - basic | 10,486,770 | 1,012,625 | (2b) | 11,499,395 | ||||||||
| -diluted | 10,644,723 | 1,012,625 | (2b) | 11,657,348 | ||||||||
See Accompanying Notes to Proforma Combined Financial Statements.
| 3 |
PRO-FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED SEPTEMBER 30, 2017
| Cemtrex Inc. | Equity investment in Vicon (Note 3) | Proforma consolidated | ||||||||||
| Revenues | ||||||||||||
| Total revenues | $ | 120,628,200 | $ | 120,628,200 | ||||||||
| Cost of revenues | ||||||||||||
| Total cost of revenues | 80,714,648 | 80,714,648 | ||||||||||
| Gross profit | 39,913,552 | 39,913,552 | ||||||||||
| Operating expenses | ||||||||||||
| Selling, general and administrative | 34,797,874 | 34,797,874 | ||||||||||
| Research and development | - | - | ||||||||||
| Equity loss form Vicon | - | (3,225,327) | (3a) | (3,225,327 | ) | |||||||
| Total operating expenses | 34,797,874 | (3,225,327 | ) | 38,023,201 | ||||||||
| Operating income/(loss) | 5,115,678 | (3,225,327 | ) | 1,890,351 | ||||||||
| Other income (expenses) | ||||||||||||
| Other Income (expense) | 313,837 | 313,837 | ||||||||||
| Interest Expense | (923,952 | ) | (923,952 | ) | ||||||||
| Total other income/(expense), | (610,115 | ) | (610,115 | ) | ||||||||
| Income/(loss) before income taxes | 4,505,563 | (3,225,327 | ) | 1,280,236 | ||||||||
| Income tax expense/(benefit), net | 917 | 917 | ||||||||||
| Net income/(loss) | $ | 4,504,646 | $ | (3,225,327 | ) | $ | 1,279,319 | |||||
| Preferred dividends paid | $ | 1,200,871 | $ | 1,200,871 | ||||||||
| Net income available to common shareholders | $ | 3,303,775 | $ | (3,225,327 | ) | $ | 78,448 | |||||
| Income/(loss) per common share | ||||||||||||
| - basic | $ | 0.33 | $ | 0.01 | ||||||||
| -diluted | $ | 0.32 | $ | 0.01 | ||||||||
| Weighted average common shares outstanding | ||||||||||||
| - basic | 10,013,378 | 1,012,625 | (3b) | 11,026,003 | ||||||||
| -diluted | 10,175,736 | 1,012,625 | (3b) | 11,188,361 | ||||||||
See Accompanying Notes to Proforma Combined Financial Statements.
| 4 |
NOTES TO PRO-FORMA COMBINED FINANCIAL STATEMENTS (unaudited)
Note 1. Equity Investment in Vicon Industries, Inc. – Balance Sheet Adjustments
The investment in Vicon will be accounted for using the equity method of accounting. The Company acquired its 46% investment in Vicon through the issuance of 1,012,625 shares of its common stock with a value of $2,913,930 based on the five-day weighted average price of the Company’s common stock of the five business days immediately preceding the closing date.
| (a) | Reflects the Company’s equity method investment in Vicon which was determined based on the preliminary allocation of the purchase price of $2,913,930 to the equity method investment. | |
| (b) | Reflects the increase in common stock and additional paid-in capital resulting in the issuance of 1,012,625 new shares. |
Note 2. Equity Investment in Vicon Industries, Inc. – Statement of Operations for the Three Months ended December 31, 2017, Adjustments
| (a) | Reflects 46% of Vicon’s net loss of $1,313,833 for the three months ended December 31, 2017. | |
| (b) | Reflects the issuance of 1,012,625 new shares of common stock. |
Note 3. Equity Investment in Vicon Industries, Inc. – Statement of Operations for the year ended September 30, 2017, Adjustments
| (a) | Reflects 46% of Vicon’s net loss of $7,011,580 for the year ended September 30, 2017. | |
| (b) | Reflects the issuance of 1,012,625 new shares of common stock. |
| 5 |