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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