EXHIBIT 99.2

  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

The following unaudited pro forma condensed combined financial statements and related notes present the historical consolidated financial statements of Unrivaled Brands, Inc., formerly Terra Tech Corp. (the “Company”), and Peoples First Choice, LLC (“People’s First Choice”) as if completion of the acquisition had occurred on the dates specified below.

 

The following unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effects of the acquisition.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2021 is based on the individual unaudited historical consolidated balance sheets of the Company and People’s First Choice as if the transaction had occurred on September 30, 2021.

 

The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2020 combines the historical individual results of operations for the Company and People’s First Choice for the year ended December 31, 2020 and has been prepared to reflect the transaction as if it occurred on January 1, 2020.

 

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2021 combines the historical unaudited results of operations for the Company and Peoples First Choice for the nine months ended September 30, 2021 and has been prepared to reflect the transaction as if it occurred on January 1, 2021.

 

Other than as disclosed in the notes thereto, the unaudited pro forma condensed combined financial statements do not reflect any additional liabilities, off-balance sheet commitments or other obligations that may become payable after the date of such financial statements.

 

The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only to reflect the acquisition and do not represent what our results of operations or financial position would actually have been had the transactions occurred on the dates noted above or project our results of operations or financial position for any future periods. The unaudited pro forma condensed combined financial statements are intended to provide information about the continuing impact of the acquisition as if it had been consummated earlier. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable and are expected to have a continuing impact on our results of operations. In the opinion of management, all adjustments necessary to present fairly the unaudited pro forma condensed combined financial statements have been made.

 

The acquisition will be accounted for using the acquisition method of accounting for business combinations. The allocation of the preliminary estimated purchase price is based upon management’s estimates of, and assumptions related to the fair value of assets to be acquired and liabilities to be assumed as of December 31, 2020 using currently available information. Since the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on financial position and results of operations may materially differ from the pro forma amounts included herein. The Company expects to finalize its allocation of the purchase consideration as soon as practicable but is not required to finalize for one year from the closing date of the transaction.

 

The following unaudited pro forma condensed combined financial information should be read in conjunction with the Company’s consolidated financial statements and related notes. The Company’s financial statements and notes are included in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our Quarterly Report on Form 10-Q for the nine months ended September 30, 2021.

  

 
1

 

 

UNRIVALED BRANDS (FORMERLY TERRA TECH CORP.) AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

 

AS OF SEPTEMBER 30, 2021

 

(in thousands of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

Unrivaled Brands (formerly Terra Tech Corp.)
(as reported)

 

 

People's First Choice

 

 

Pro Forma Adjustments

 

 

Pro Forma Combined

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 $ 13,560

 

 

 $ 1,678

 

 

 $ -

 

 

 $ 15,238

 

Accounts receivable, net

 

 

 8,433

 

 

 

 3,790

 

 

 

 (3,790 )

 

 

 8,433

 

Short term investments

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

Inventory

 

 

 15,270

 

 

 

 595

 

 

 

 -

 

 

 

 15,865

 

Prepaid expenses and other current assets

 

 

 3,212

 

 

 

 48

 

 

 

 -

 

 

 

 3,260

 

Notes Receivable

 

 

 750

 

 

 

 -

 

 

 

 -

 

 

 

 750

 

Current assets of discontinued operations

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

 

 41,225

 

 

 

 6,111

 

 

 

 (3,790 )

 

 

 43,546

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Property, equipment and leasehold improvements, net

 

 

 40,246

 

 

 

 602

 

 

 

 -

 

 

 

 40,848

 

Intangible assets, net

 

 

 62,975

 

 

 

 -

 

 

 

 72,777

 

 

 

 135,752

 

Goodwill

 

 

 23,575

 

 

 

 -

 

 

 

 -

 

 

 

 23,575

 

Other assets

 

 

 14,860

 

 

 

 194

 

 

 

 -

 

 

 

 15,054

 

Other investments

 

 

 437

 

 

 

 -

 

 

 

 -

 

 

 

 437

 

Assets of discontinued operations

 

 

 109

 

 

 

 -

 

 

 

 -

 

 

 

 109

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 $ 183,427

 

 

 $ 6,907

 

 

 $ 68,987

 

 

 $ 259,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and other accrued expenses

 

 $ 17,064

 

 

 $ 6,802

 

 

 $ 562

 

 

 $ 24,428

 

Deferred gain on sale of assets

 

 

 139

 

 

 

 -

 

 

 

 -

 

 

 

 139

 

Short-term debt

 

 

 8,648

 

 

 

 -

 

 

 

 -

 

 

 

 8,648

 

Current liabilities of discontinued operations

 

 

 8,632

 

 

 

 -

 

 

 

 -

 

 

 

 8,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

 34,483

 

 

 

 6,802

 

 

 

 562

 

 

 

 41,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net of discounts

 

 

 8,548

 

 

 

 5,134

 

 

 

 (137 )

 

 

 13,545

 

Long-term lease liabilities

 

 

 6,912

 

 

 

 -

 

 

 

 1,153

 

 

 

 8,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 49,943

 

 

 

 11,936

 

 

 

 1,578

 

 

 

 63,457

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Company's stockholders' equity

 

 

 129,625

 

 

 

 (5,029 )

 

 

 8,660

 

 

 

 133,256

 

Non-controlling interest

 

 

 3,859

 

 

 

 -

 

 

 

 58,749

 

 

 

 62,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

 

 133,484

 

 

 

 (5,029 )

 

 

 67,409

 

 

 

 195,864

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 $ 183,427

 

 

 $ 6,907

 

 

 $ 68,987

 

 

 $ 259,321

 

 

 
2

 

 

UNRIVALED BRANDS (FORMERLY TERRA TECH CORP.) AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrivaled Brands (formerly Terra Tech Corp.)
(as reported)

 

 

People's First Choice

 

 

Pro Forma Adjustments

 

 

Pro Forma Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 $ 14,287

 

 

 $ 28,699

 

 

 $ -

 

 

 $ 42,986

 

Cost of goods sold

 

 

 10,687

 

 

 

 17,310

 

 

 

 -

 

 

 

 27,997

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 3,600

 

 

 

 11,389

 

 

 

 -

 

 

 

 14,989

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 24,602

 

 

 

 4,438

 

 

 

 -

 

 

 

 29,040

 

Impairment of assets

 

 

 19,910

 

 

 

 -

 

 

 

 -

 

 

 

 19,910

 

(Gain) / Loss  on sale of assets

 

 

 (35 )

 

 

 -

 

 

 

 -

 

 

 

 (35 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

 (40,877 )

 

 

 6,951

 

 

 

 -

 

 

 

 (33,926 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income / (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 (2,932 )

 

 

 -

 

 

 

 -

 

 

 

 (2,932 )

Unrealized gain/(loss) on investments

 

 

 29,045

 

 

 

 -

 

 

 

 -

 

 

 

 29,045

 

Bargain purchase on purchase of business

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 -

 

Other expense

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 -

 

Other income / (loss)

 

 

 964

 

 

 

 77

 

 

 

 -

 

 

 

 1,041

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income / (expense)

 

 

 27,077

 

 

 

 77

 

 

 

 -

 

 

 

 27,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

 -

 

 

 

 2,409

 

 

 

 -

 

 

 

 2,409

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income / (loss) from continuing operations

 

 

 (13,800 )

 

 

 4,619

 

 

 

 -

 

 

 

 (9,181 )

Income / (loss) from discontinued operations, net of tax

 

 

 (17,071 )

 

 

 -

 

 

 

 -

 

 

 

 (17,071 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME / (LOSS)

 

 $ (30,871 )

 

 $ 4,619

 

 

 $ -

 

 

 $ (26,252 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:  Income / (Loss) attributable to non-controlling interest from continuing operations

 

 

 (754 )

 

 

 -

 

 

 

 -

 

 

 

 (754 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC

 

 $ (30,117 )

 

 $ 4,619

 

 

 $ -

 

 

 

 (25,498 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income / ( Loss) from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted

 

 $ (0.07 )

 

 

 

 

 

 

 

 

 

 $ (0.05 )

Income / ( Loss) from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted

 

 $ (0.16 )

 

 

 

 

 

 

 

 

 

 $ (0.13 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Number of Common Shares Outstanding – Basic and Diluted

 

 

 191,978,187

 

 

 

 

 

 

 

 

 

 

 

 192,626,566

 

  

 
3

 

 

UNRIVALED BRANDS (FORMERLY TERRA TECH CORP.) AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

Unrivaled Brands (formerly Terra Tech Corp.)
(as reported)

 

 

People's First Choice

 

 

Pro Forma Adjustments

 

 

Pro Forma Combined

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 $ 34,809

 

 

 $ 24,920

 

 

 $ (2,634 )

 

 $ 57,095

 

Cost of goods sold

 

 

 27,750

 

 

 

 15,192

 

 

 

 (1,913 )

 

 

 41,029

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

 7,059

 

 

 

 9,728

 

 

 

 (721 )

 

 

 16,066

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

 

 33,841

 

 

 

 6,939

 

 

 

 (1,275 )

 

 

 39,505

 

Loss (gain) on sale of assets

 

 

 6

 

 

 

 -

 

 

 

 -

 

 

 

 6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

 (26,788 )

 

 

 2,789

 

 

 

 554

 

 

 

 (23,445 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income / (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 (1,344 )

 

 

 (252 )

 

 

 42

 

 

 

 (1,554 )

Gain/(loss) on Extinguishment of Debt

 

 

 (5,976 )

 

 

 -

 

 

 

 -

 

 

 

 (5,976 )

Gain/(loss) on investments

 

 

 5,337

 

 

 

 -

 

 

 

 -

 

 

 

 5,337

 

Other income / (loss)

 

 

 367

 

 

 

 45

 

 

 

 -

 

 

 

 412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income / (expense)

 

 

 (1,616 )

 

 

 (207 )

 

 

 42

 

 

 

 (1,781 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Income Taxes

 

 

 -

 

 

 

 1,714

 

 

 

 -

 

 

 

 1,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income / (loss) from continuing operations

 

 

 (28,404 )

 

 

 868

 

 

 

 596

 

 

 

 (26,940 )

Income / (loss) from discontinued operations, net of tax

 

 

 6,270

 

 

 

 -

 

 

 

 -

 

 

 

 6,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME / (LOSS)

 

 $ (22,134 )

 

 $ 868

 

 

 $ 596

 

 

 $ (20,670 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:  Income / (Loss) attributable to non-controlling interest from continuing operations

 

 

 (604 )

 

 

 -

 

 

 

 -

 

 

 

 (604 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS ATTRIBUTABLE TO UNRIVALED BRANDS, INC.

 

 $ (21,530 )

 

 

 868

 

 

 

 596

 

 

 

 (20,066 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income / ( Loss) from continuing operations per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted

 

 $ (0.09 )

 

 

 

 

 

 

 

 

 

 $ (0.08 )

Net Loss per common share attributable to Unrivaled Brands, Inc. common stockholders – basic and diluted

 

 $ (0.07 )

 

 

 

 

 

 

 

 

 

 $ (0.06 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Number of Common Shares Outstanding – Basic and Diluted

 

 

 317,491,979

 

 

 

 

 

 

 

 

 

 

 

 317,491,979

 

  

 
4

 

   

Note 1 – Unaudited Pro Forma Condensed Combined Balance Sheet

 

Consideration for the acquisition of People’s First Choice consisted of approximately $24 million in cash, $36 million in unsecured promissory notes, and $16 million in shares of the Company’s common stock, based on a per share price of $0.40.  The aggregate consideration is $76 million.

 

The following adjustments have been made to the accompanying unaudited pro forma combined balance sheet as of September 30, 2021 to reflect the acquisition adjustments related to the transaction:

 

(a) The preliminary estimated fair value of intangible assets reflects the preliminary purchase price allocation.

  

 
5