Exhibit 99.3
Pro Forma Financial Information.
The following unaudited pro forma combined balance sheet has been derived from the unaudited consolidated balance sheet of C-Bond systems, Inc. and Subsidiary. (the “Company” or “we”) on June 30, 2021, and adjusts such information to give the effect of 1) the acquisition of 80% of Mobile Tint, LLC (“Mobile Tint”), as if it would have existed on June 30, 2021. The unaudited combined pro forma combined balance sheet gives effect to the share exchange agreement between the Company and the member of Mobile Tint.
The following unaudited pro forma combined statements of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021 have been derived from the consolidated statement of operations of the C-Bond Systems, Inc. The following unaudited pro forma combined statements of operations for the year ended December 31, 2020 and for the six months ended June 30, 2021 have been derived from the statement of operations of the Mobile Tint.
Mobile provides quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Mobile also carry products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS and C-Bond Secure products. As part of the transaction, Mobile’s owner-operator, Michael Wanke, joined the Company as President of its Safety Patriot Glass Solutions Group.
The unaudited pro forma combined balance sheet and unaudited combined statements of operations are presented for informational purposes only and do not purport to be indicative of the combined financial condition that would have resulted if the acquisition would have existed on June 30, 2021 and December 31, 2020.
C-BOND SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
June 30, 2021
C-Bond Systems, Inc. | Mobile Tint, | |||||||||||||||||||
and Subsidiary | LLC. | |||||||||||||||||||
June 30, | June 30, | Pro Forma Adjustments | Pro Forma | |||||||||||||||||
2021 | 2021 | Dr | Cr | Balamces | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||
Cash | $ | 281,444 | $ | 222,211 | $ | - | $ | - | $ | 503,655 | ||||||||||
Accounts receivable, net | 68,426 | 119,136 | - | - | 187,562 | |||||||||||||||
Inventory | 74,072 | 73,066 | - | - | 147,138 | |||||||||||||||
Prepaid expenses and other current assets | 41,632 | - | - | - | 41,632 | |||||||||||||||
Due from related party | 12,567 | - | - | - | 12,567 | |||||||||||||||
Total Current Assets | 478,141 | 414,413 | - | - | 892,554 | |||||||||||||||
OTHER ASSETS: | ||||||||||||||||||||
Property and equipment, net | 13,739 | 143,391 | - | - | 157,130 | |||||||||||||||
Right of use asset, net | - | - | (3) | 253,432 | - | 253,432 | ||||||||||||||
Intangible assets | - | - | (1) | 694,921 | - | 694,921 | ||||||||||||||
Security deposit | 7,132 | - | - | - | 7,132 | |||||||||||||||
Total Other Assets | 20,871 | 143,391 | 948,353 | - | 1,112,615 | |||||||||||||||
TOTAL ASSETS | $ | 499,012 | $ | 557,804 | $ | 948,353 | $ | - | $ | 2,005,169 | ||||||||||
LIABILITIES AND SHAREHOLDERS' DEFICIT | ||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||
Note payable, current portion | $ | 556,200 | $ | 16,376 | $ | - | $ | - | $ | 572,576 | ||||||||||
Capital lease obligation payable, current portion | - | 22,626 | - | - | 22,626 | |||||||||||||||
Accounts payable | 747,503 | 53,683 | - | - | 801,186 | |||||||||||||||
Accrued expenses | 223,143 | 102,451 | - | - | 325,594 | |||||||||||||||
Accrued compensation | 399,671 | - | - | - | 399,671 | |||||||||||||||
Lease liability | - | - | - | (3) | 40,778 | 40,778 | ||||||||||||||
Total Current Liabilities | 1,926,517 | 195,136 | - | 40,778 | 2,162,431 | |||||||||||||||
LONG-TERM LIABILITIES: | ||||||||||||||||||||
Note payable, net of current portion | 500,000 | 25,927 | - | - | 525,927 | |||||||||||||||
Capital lease obligation, net of current portion | - | 33,211 | - | - | 33,211 | |||||||||||||||
Lease liability, net of current portion | - | - | - | (3) | 212,654 | 212,654 | ||||||||||||||
Total Long-term Liabilities | 500,000 | 59,138 | - | 212,654 | 771,792 | |||||||||||||||
Total Liabilities | 2,426,517 | 254,274 | - | 253,432 | 2,934,223 | |||||||||||||||
Series B convertible preferred stock: $0.10 par value, 100,000 shares designated; 722 shares issued and outstanding at June 30, 2021 ($731,332 redemption and liquidation value at June 30, 2021) | 731,332 | - | - | - | 731,332 | |||||||||||||||
Series C convertible preferred stock: $0.10 par value, 100,000 shares designated; 15,800 shares issued and outstanding at June 30, 2021 ($2,401,443 liquidation value at June 30, 2021) | 1,600,962 | - | - | - | 1,600,962 | |||||||||||||||
SHAREHOLDERS' DEFICIT: | ||||||||||||||||||||
Preferred stock: $0.10 par value, 2,000,000 shares authorized; 100,000 Series B and 100,000 Series C designated | - | - | - | - | - | |||||||||||||||
Common stock: $0.001 par value, 4,998,000,000 shares authorized; 241,050,965 and 269,071,981 (pro forma) issued and outstanding at June 30, 2021, respectively | 241,051 | - | - | (1) | 28,021 | 269,072 | ||||||||||||||
Additional paid-in capital | 49,778,041 | 303,530 | (2) | 36,031 | (1) | 666,900 | 50,712,440 | |||||||||||||
Noncontrolling interest | - | - | (2) | 36,031 | 36,031 | |||||||||||||||
Accumulated deficit | (54,278,891 | ) | - | - | - | (54,278,891 | ) | |||||||||||||
Total Shareholders' Deficit | (4,259,799 | ) | 303,530 | 36,031 | 730,952 | (3,261,348 | ) | |||||||||||||
Total Liabilities and Shareholders' Deficit | $ | 499,012 | $ | 557,804 | $ | 36,031 | $ | 984,384 | $ | 2,005,169 |
See accompanying notes to unaudited pro forma combined financial statements.
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C-BOND SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
C-Bond Systems, Inc. and Subsidiary | Mobile Tint, LLC | |||||||||||||||||||
For the Six Months | For the Six Months | |||||||||||||||||||
Ended June 30, | Ended June 30, | Pro Forma Adjustments | Pro Forma | |||||||||||||||||
2021 | 2021 | Dr | Cr. | Balances | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
SALES | $ | 289,320 | $ 607,776 | (4) | $ | 20,056 | $ | - | $ | 877,040 | ||||||||||
COST OF SALES | 55,551 | 367,966 | - | (4) | 20,056 | 403,461 | ||||||||||||||
GROSS PROFIT | 233,769 | 239,810 | 20,056 | 20,056 | 473,579 | |||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Compensation and related benefits | 4,930,931 | 179,547 | - | - | 5,110,478 | |||||||||||||||
Research and development | (2,404 | ) | - | - | - | (2,404 | ) | |||||||||||||
Professional fees | 516,946 | 53,114 | - | - | 570,060 | |||||||||||||||
General and administrative expenses | 255,523 | 131,598 | - | - | 387,121 | |||||||||||||||
Total Operating Expenses | 5,700,996 | 364,259 | - | - | 6,065,255 | |||||||||||||||
LOSS FROM OPERATIONS | (5,467,227 | ) | (124,449 | ) | 20,056 | 20,056 | (5,591,676 | ) | ||||||||||||
OTHER EXPENSE: | ||||||||||||||||||||
Gain on extinguishment of debt | - | 275,494 | - | - | 275,494 | |||||||||||||||
Other income | 67,778 | - | - | - | 67,778 | |||||||||||||||
Derivative expense | - | - | - | - | - | |||||||||||||||
Interest expense | (43,549 | ) | (4,315 | ) | - | - | (47,864 | ) | ||||||||||||
Total Other Expense | 24,229 | 271,179 | - | - | 295,408 | |||||||||||||||
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (5,442,998 | ) | 146,730 | 20,056 | 20,056 | (5,296,268 | ) | |||||||||||||
INCOME TAXES | - | - | - | - | - | |||||||||||||||
NET (LOSS) INCOME | (5,442,998 | ) | 146,730 | 20,056 | 20,056 | (5,296,268 | ) | |||||||||||||
Preferred Stock Dividend and Deemed Dividend | (2,867,054 | ) | - | - | - | (2,867,054 | ) | |||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (8,310,052 | ) | $ | 146,730 | $ | 20,056 | $ | 20,056 | $ | (8,163,322 | ) | ||||||||
NET LOSS PER COMMON SHARE: | ||||||||||||||||||||
Net loss per common share - basic and diluted | $ | (0.04 | ) | $ | (0.03 | ) | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 235,125,277 | 263,146,293 |
See accompanying notes to unaudited pro forma combined financial statements.
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C-BOND SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
C-Bond Systems, Inc. and Subsidiary | Mobile Tint, LLC | |||||||||||||||||||
For the Year | For the Year | |||||||||||||||||||
Ended December 31, | Ended December 31, | Pro Forma Adjustments | Pro Forma | |||||||||||||||||
2020 | 2020 | Dr | Cr. | Balances | ||||||||||||||||
(Unaudited) | ||||||||||||||||||||
SALES | $ | 658,432 | $ 2,079,764 | (5) | $ | 48,196 | $ | - | $ | 2,690,000 | ||||||||||
COST OF SALES | 242,506 | 1,021,811 | - | (5) | 48,196 | 1,216,121 | ||||||||||||||
GROSS PROFIT | 415,926 | 1,057,953 | 48,196 | 48,196 | 1,473,879 | |||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Compensation and related benefits | 3,741,051 | 421,289 | - | - | 4,162,340 | |||||||||||||||
Research and development | 16,627 | - | - | - | 16,627 | |||||||||||||||
Professional fees | 546,979 | 58,464 | - | - | 605,443 | |||||||||||||||
General and administrative expenses | 588,302 | 297,551 | - | - | 885,853 | |||||||||||||||
Total Operating Expenses | 4,892,959 | 777,304 | - | - | 5,670,263 | |||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (4,477,033 | ) | 280,649 | 48,196 | 48,196 | (4,196,384 | ) | |||||||||||||
OTHER EXPENSE: | ||||||||||||||||||||
Gain on extinguishment of debt | 877,823 | - | - | - | 877,823 | |||||||||||||||
Other income | 6,574 | 10,000 | - | - | 16,574 | |||||||||||||||
Derivative expense | (90,623 | ) | - | - | - | (90,623 | ) | |||||||||||||
Interest expense | (751,184 | ) | (15,214 | ) | - | - | (766,398 | ) | ||||||||||||
Total Other Expense | 42,590 | (5,214 | ) | - | - | 37,376 | ||||||||||||||
(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES | (4,434,443 | ) | 275,435 | 48,196 | 48,196 | (4,159,008 | ) | |||||||||||||
INCOME TAXES | - | - | - | - | - | |||||||||||||||
NET (LOSS) INCOME | (4,434,443 | ) | 275,435 | 48,196 | 48,196 | (4,159,008 | ) | |||||||||||||
Preferred Stock Dividend and Deemed Dividend | (1,534,381 | ) | - | - | - | (1,534,381 | ) | |||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (5,968,824 | ) | $ | 275,435 | $ | 48,196 | $ | 48,196 | $ | (5,693,389 | ) | ||||||||
NET LOSS PER COMMON SHARE: | ||||||||||||||||||||
Net loss per common share - basic and diluted | $ | (0.03 | ) | $ | (0.03 | ) | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic and diluted | 172,978,187 | 200,999,203 |
See accompanying notes to unaudited pro forma combined financial statements.
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Notes to Unaudited Pro Forma Combined Financial Statements
On June 30, 2021, the Company entered into a Share Exchange Agreement and Plan of Reorganization (the “Exchange Agreement”) with (i) Mobile Tint LLC, a Texas limited liability company doing business as A1 Glass Coating (“Mobile Tint”), (ii) the sole member of Mobile Tint (the “Mobile Shareholder”), and (iii) Michael Wanke as the Representative of the Mobile Shareholder. Pursuant to the Exchange Agreement, C-Bond agreed to acquire 80% of Mobile Tint’s units, representing 80% of Mobile Tint’s issued and outstanding capital stock (the “Mobile Shares”). On July 22, 2021, the Company closed the Exchange Agreement and acquired 80% of the Mobile Shares. The Mobile Shares were exchanged for 28,021,016 restricted shares of the Company’s common stock in an amount equal to $800,000, divided by the average of the closing prices of the Company’s common stock during the 30-day period immediately prior to the closing as defined in the Exchange Agreement. Two years after closing, the Company has the option to acquire the remaining 20% of Mobile Tint’s issued and outstanding membership interests in exchange for a number of shares of the Company’s common stock equal to 300% of Mobile Tint’s average EBIT value, divided by the price of the Company’s common stock as defined in the Exchange Agreement (the “Additional Closing”). Mobile Tint provides quality window tint solutions for auto, home, and business owners across Texas, specializing in automotive window tinting, residential window film, and commercial window film that stop harmful UV rays from passing through its window films for reduced glare, comfortable temperatures, and lower energy bills. Mobile Tint also carry products that offer forced-entry protection and films that protect glass from scratches, graffiti, other types of vandalism, and even bullets, including C-Bond BRS and C-Bond Secure products. As part of the transaction, Mobile Tint’s owner-operator, Michael Wanke, joined the Company as President of its Safety Patriot Glass Solutions Group.
We have derived the Company’s historical financial data on June 30, 2021 and for the six months ended June 30, 2021 from its unaudited consolidated financial statements contained on Form 10-Q as filed with the Securities and Exchange Commission and for the year ended December 31, 2020 from its audited financial statements contained on Form 10-K as filed with the Securities and Exchange Commission.
We have derived Mobile Tint’s historical financial statements as of June 30. 2021 and the six months ended June 30, 2021 from Mobile Tint’s unaudited financial statements and for the year ended December 31, 2020 from Mobile Tint’s audited financial statements contained in this Report on Form 8-K/A.
The unaudited combined pro forma balance sheet at June 30, 2021 gives effect to 1) the issuance of 28,021,016 common shares for the acquisition of 80% of Mobile Tint, 2) the recognition of noncontrolling interest, 3) the recognition of a right of use assets and related lease liability upon signing of a lease agreement with an entity related to the member of Mobile Tint, 4) the reduction of sales and cost of sales related to intercompany sales for the six months ended June 30, 2021, and 5) the reduction of sales and cost of sales related to intercompany sales for the year ended December 31, 2020, and includes the following pro forma adjustments.
Debit | Credit | |||||||
On June 30, 2021 | ||||||||
1) To reflect the issuance of 28,021,016 shares of common stock at fair value | ||||||||
Intangible asset | 694,921 | |||||||
Common stock | 28,021 | |||||||
Paid-in capital | 666,900 | |||||||
2) To recognize noncontrolling interest upon acquisition of 80% of Mobile Tint | ||||||||
Paid-in capital | 36,031 | |||||||
Noncontrolling interest | 36,031 | |||||||
3) To reflect right of use asset and related lease liability upon signing of operating lease with entity related to member of Mobile Tint | ||||||||
Right of use asset | 253,432 | |||||||
Lease liability, current portion | 40,778 | |||||||
Lease liability, net of current portion | 212,654 | |||||||
4) To reduce sales and cost of sales for intercompany sales transactions for the six months ended June 30, 2021 | ||||||||
Sales – C-Bond | 20,056 | |||||||
Cost of sales – Mobile Tint | 20,056 | |||||||
On December 31, 2020 | ||||||||
5) To reduce sales and cost of sales for intercompany sales transactions for the year ended December 31, 2020 | ||||||||
Sales – C-Bond | 48,196 | |||||||
Cost of sales – Mobile Tint | 48,196 |
The information presented in the unaudited pro forma combined financial statements does not purport to represent what our financial position or results of operations would have been had the Share Exchange Agreement and related Merger and all related transactions occurred as of the dates indicated, nor is it indicative of our future combined financial position or combined results of operations for any period. You should not rely on this 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 company will experience after the Share Exchange Agreement and all related transactions.
These unaudited pro forma combined financial statements should be read in conjunction with the accompanying notes and assumptions and the historical financial statements and related notes of us and Mobile Tint.
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