Form: 8-K/A

Current report filing

December 2, 2016

Documents

Exhibit 99.1

 

 

TIMEFIREVR INC.
(FORMERLY ENERGYTEK CORP.)
UNAUDITED  PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2016
                     
  Timefire VR Inc.                              
    (formerly EnergyTek Corp)     Timefire, LLC     Pro Forma Adjustments     Notes     Pro Forma Combined  
                                         
ASSETS                                        
Current Assets:                                        
Cash   $ 9,703     $ 60,546     $ —               $ 70,249  
Accounts receivable     624       —         —                 624  
Prepaid expenses and other current assets     —         2,000       —                 2,000  
Total current assets     10,327       62,546       —                 72,873  
                                         
Other Assets:                                        
Goodwill     —         —         6,160,229       a       6,160,229  
Intangible assets     100,000       —         (100,000 )     b       —    
Property and equipment, net     11,469       45,038       (11,469 )     c       45,038  
Deposit     —         3,000       —                 3,000  
Total Assets   $ 121,796     $ 110,584     $ 6,048,760             $ 6,281,140  
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)                                    
Current Liabilities:                                        
Accounts payable and accrued expenses   $ 83,309     $ 10,640     $ —               $ 93,949  
Notes payable - related party     142,562       —         —                 142,562  
Notes payable - current portion     172,942       —         —                 172,942  
Loans from officer     —         161,800       —                 161,800  
Total current liabilities     398,813       172,440       —                 571,253  
                                         
                                         
Long Term Liabilities:                                        
Convertible notes payable     —         25,000       (25,000 )      d        —    
Accrued interest     —         7,032       (7,032 )      d        —    
Derivative liability     —         —         1,103,276        e        1,103,276  
Total long term liabilities     —         32,032       1,071,244               1,103,276  
                                         
Total liabilities     398,813       204,472       1,071,244               1,674,529  
                                         
Commitments and Contingencies     —         —         —                 —    
                                         
Mezzanine Equity                                        
Preferred Series A stock. Stated at redemption value net of discount.     —         —         396,728        f        396,728  
                                         
Shareholders' Equity/(Deficit):                                        
Preferred Series B stock     3,000       —         —                 3,000  
Preferred Series C stock     9       —         —                 9  
Common stock     22,788       —         20,891       g,h       43,679  
Additional paid-in capital     24,727,584       —         (19,690,725 )   a,d,e,f,g,h     5,036,859  
Accumulated deficit     (25,030,398 )     (93,888 )     24,250,622       b,c       (873,664 )
Total shareholders' equity/(deficit)     (277,017 )     (93,888 )     4,580,788               4,209,883  
                                         
Total Liabilities and Shareholders' Equity/(Deficit)   $ 121,796     $ 110,584     $ 6,048,760             $ 6,281,140  

 

     

 

 

TIMEFIREVR INC.
(FORMERLY ENERGYTEK CORP.)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 2015
         
  Timefire VR Inc.                          
    (formerly EnergyTek Corp)     Timefire, LLC     Pro Forma Adjustments   Notes   Pro Forma Combined  
                                     
Revenues   $ 59,404     $ 6,500     $ —           $ 65,904  
                                     
Cost of sales     49,769       —         —             49,769  
                                     
Gross profit     9,635       6,500       —             16,135  
                                     
Operating expenses     248,673       386,418       —             635,091  
                                     
Loss from operations     (239,038 )     (379,918 )     —             (618,956 )
                                     
Other income (expense):                                    
Other income (expense)     (3,203,744 )     —         (111,469 )    b, c     (3,315,213 )
Interest expense     (104,812 )     (1,817 )     —             (106,629 )
                                     
Total other income (expense)     (3,308,556 )     (1,817 )     (111,469 )         (3,421,842 )
                                     
Loss before income taxes     (3,547,594 )     (381,735 )     (111,469 )         (4,040,798 )
                                     
Income tax expense     —         —         —             —    
                                     
Net loss     (3,547,594 )     (381,735 )     (111,469 )         (4,040,798 )
                                     
Accretion on Series A preferred stock     —         —         (1,500,004 )    i     (1,500,004 )
                                     
Net loss attributed to common shareholders   $ (3,547,594 )   $ (381,735 )   $ (1,611,473 )       $ (5,540,802 )
                                     
Basic net loss per common share   $ (0.16 )           $ —           $ (0.09 )
                                     
Diluted net loss per common share   $ (0.16 )           $ —           $ (0.09 )
                                     
Basic weighted average common shares outstanding     21,901,314               21,744,387           43,645,701  
                                     
Diluted weighted average common shares outstanding     21,901,314               21,744,387           43,645,701  

 

     

 

 

TIMEFIREVR INC.
(FORMERLY ENERGYTEK CORP.)
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2016
         
  Timefire VR Inc.                              
    (formerly EnergyTek Corp)     Timefire, LLC     Pro Forma Adjustments     Notes     Pro Forma Combined  
                                         
Revenues   $ —       $ 203,640     $ —               $ 203,640  
                                         
Cost of sales     —         —         —                 —    
                                         
Gross profit     —         203,640       —                 203,640  
                                         
Operating expenses     93,249       373,804       —                 467,053  
                                         
Loss from operations     (93,249 )     (170,164 )     —                 (263,413 )
                                         
Other income (expense):                                        
Other income (expense)     —         —         (111,469 )      b,c        (111,469 )
Interest expense     (59 )     (6,113 )     —                 (6,172 )
                                         
Total other income (expense)     (59 )     (6,113 )     (111,469 )             (117,641 )
                                         
Loss before income taxes     (93,308 )     (176,277 )     (111,469 )             (381,054 )
                                         
Income tax expense     —         —         —                 —    
                                         
Net loss     (93,308 )     (176,277 )     (111,469 )             (381,054 )
                                         
Accretion on Series A preferred stock     —         —         (1,500,004 )      i        (1,500,004 )
                                         
Net loss attributed to common shareholders   $ (93,308 )   $ (176,277 )   $ (1,611,473 )           $ (1,881,058 )
                                         
Basic net loss per common share   $ (0.00 )           $ —               $ (0.01 )
                                         
Diluted net loss per common share   $ (0.00 )           $ —               $ (0.01 )
                                         
Basic weighted average common shares outstanding     22,787,964               21,052,426               43,840,390  
                                         
Diluted weighted average common shares outstanding     22,787,964               21,052,426               43,840,390  

 

     

 

TIMEFIREVR INC.

(FORMERLY ENERGYTEK CORP.)

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1. Description of Transaction

 

Effective September 13, 2016, TimefireVR Inc. (the “Company”) entered into an Agreement and Plan of Merger ("Merger Agreement") through which it acquired Timefire, LLC, a Phoenix-based virtual reality content developer that is an Arizona Limited Liability Company. As consideration for the merger, the Company issued the equity holders of Timefire, LLC a total of 414,000,000 shares of its common stock, and 28,000,000 five year warrants exercisable at $0.058 per share for 100% of the membership interests of Timefire, LLC. As a result, the former members of Timefire, LLC owned approximately 99% of the then outstanding shares of common stock.

 

Immediately upon the closing of the Merger Agreement, the Company closed on a private placement offering (the "Offering") with institutional investors (the "Investors") pursuant to which the Company issued and sold the Investors approximately 133,334 shares of the Company's newly designated Series A Convertible Preferred Stock, par value $0.01 per share, convertible into a total of approximately 66,666,844 shares of the Company's common stock, and a total of 25,862,069 five-year warrants exercisable at $0.058 per share, for gross Offering proceeds of $1,500,004.

 

2. Basis of Presentation

 

The unaudited condensed consolidated pro forma financial statements for the period ended June 30, 2016 are based upon the previously filed unaudited financial statements of the Company for the six months ended June 30, 2016, and the unaudited financial statements of Timefire, LLC for the same period. The unaudited condensed consolidated pro forma statements of operations for the year ended December 31, 2015 are based upon the previously filed audited financial statements of the Company for the year ended December 31, 2015, and the audited financial statements of Timefire, LLC for the same period. The unaudited pro forma condensed consolidated financial information was prepared under United States Generally Accepted Accounting Principles.

 

The pro forma financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

On November 21, 2016, the Company effected a one-for-ten reverse stock split. This is reflected in the pro forma adjustment columns of the financial statements.

 

3. Unaudited Pro Forma Adjustments

 

Adjustments included under the column headings “Pro Forma Adjustments” represent the following:

a. To record goodwill resulting from Merger transaction: $6,160,229
b. To record full impairment of pre-merger Company intangibles: $100,000
c. To write off obsolete fixed assets of the Company: $11,469
d. To eliminate notes and interest payable to Timefire, LLC equity holders in exchange for their interest in the Company: $32,032
e. To record derivative liability resulting from issuance of warrants to Investors: $1,103,276
f. To record Series A stock sold to Investors: $396,728
g. To record 414,000,000 shares of common stock of Company issued to Timefire, LLC equity holders: $414,000
h. To record effect of one-for-ten reverse stock split effective November 21, 2016: $393,109
i. To record accreted dividend on Series A stock: $1,500,004