TRAQIQ, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect to the acquisition of the outstanding common shares of Mann-India Technologies Private Ltd., (“Mann”) on May 16, 2019 by TraqIQ, Inc. (“Traq” and the “Company”) and are based on estimates and assumptions set forth herein and in the notes to such pro forma statements.
In May 2019, Traq, a California corporation entered into a Share Exchange Agreement (the “Exchange Agreement”) with Mann, whereby as consideration for the transaction:
(a) | Traq is to deliver 1,329,272 warrants valued at $486,912 (value of $.3663 per warrant based on a $10mm valuation of Traq) in three tranches in the next two years. The warrants have criteria attached to them and can be reduced if certain earning figures are not achieved by Mann. | |
(b) | Traq is to assume debt of $144,088 from Mann. | |
(c) | Traq is to pay $270,000 of accounts payable. |
The transaction is being accounted for as an acquisition of Mann.
As a result of the transaction effected by the Exchange Agreement, at closing Mann became a wholly owned subsidiary of the Company.
The following unaudited pro forma consolidated statement of operations for three months ended March 31, 2019 and the year ended December 31, 2018 of the Company and Mann gives effect to the above as if the transactions had occurred at the beginning of the period. The unaudited pro forma consolidated balance sheet at March 31, 2019 assumes the effects of the above as if this transaction had occurred as of January 1, 2018.
TRAQIQ, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements are based upon, and should be read in conjunctions with the Company’s audited financial statements as of and for the year ended December 31, 2018 and the audited consolidated financial statements of Mann as of and for the year ended December 31, 2018.
The unaudited pro forma consolidated financial statements and notes thereto contained forward-looking statements that involve risks and uncertainties. Therefore, our actual results may vary materially from those discussed herein. The unaudited pro forma consolidated financial statements do not purport to be indicative of the results that would have been reported had such events actually occurred on the dates specified, nor is it indicative our future results.
TRAQIQ, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND
FOR THE YEAR ENDED DECEMBER 31, 2018
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
The acquisition of Mann is being accounted for as a business combination, whereby Traq is the acquirer.
NOTE B – ADJUSTMENT
(a) | To record the acquisition of Mann-India which includes the adjustment of certain amounts to their respective fair values. |
NOTE C – PRO FORMA WEIGHTED AVERAGES SHARES OUTSTANDING
Pro forma shares outstanding assuming the transaction occurred as of March 31, 2019:
Traq Weighted Average Shares Outstanding | 27,297,960 | |||
Shares issued to acquire Mann | 1,329,272 | |||
Pro forma shares outstanding | 28,627,232 |
TRAQIQ, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2019
TRAQ | MANN | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||
Cash | $ | 1,517 | $ | 1,210 | $ | 2,727 | ||||||||||||||
Accounts receivable, net of allowance | 11,494 | 593,592 | 605,086 | |||||||||||||||||
Accrued revenue | - | 7,954 | 7,954 | |||||||||||||||||
Other current assets | - | 166,496 | 166,496 | |||||||||||||||||
Total current assets | 13,011 | 769,252 | 782,263 | |||||||||||||||||
Property and equipment, net | - | 72,055 | 72,055 | |||||||||||||||||
Intangible assets, net | - | 1,043,930 | 1,043,930 | |||||||||||||||||
Goodwill | - | - | A | 756,912 | 756,912 | |||||||||||||||
Lease right-of-use asset | - | 579,446 | 579,446 | |||||||||||||||||
Restricted cash | - | 248,706 | 248,706 | |||||||||||||||||
Long-term investments | - | 42,914 | 42,914 | |||||||||||||||||
Other assets | - | 38,548 | 38,548 | |||||||||||||||||
Total non-current assets | - | 2,025,599 | 2,782,511 | |||||||||||||||||
TOTAL ASSETS | $ | 13,011 | $ | 2,794,851 | $ | 756,912 | $ | - | $ | 3,564,774 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||
Current portion of long-term debt | $ | 31,196 | $ | 71,195 | $ | 102,391 | ||||||||||||||
Current portion of long-term debt - related parties | 921,655 | - | 921,655 | |||||||||||||||||
Current portion of convertible debt - long-term debt | 241,334 | - | 241,334 | |||||||||||||||||
Cash overdraft | - | 593,496 | B | 270,000 | 863,496 | |||||||||||||||
Accounts payable and accrued expenses | 584,513 | 158,473 | 742,986 | |||||||||||||||||
Current portion of lease liabilities | - | 117,545 | 117,545 | |||||||||||||||||
Accrued payroll | - | 274,677 | 274,677 | |||||||||||||||||
Other current liabilities | - | 67,610 | 67,610 | |||||||||||||||||
Total current liabilities | 1,778,698 | 1,282,996 | 3,331,694 | |||||||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||||||
Other liabilities | - | 3,342 | 3,342 | |||||||||||||||||
Accrued payroll and related benefits - long-term | - | 85,816 | 85,816 | |||||||||||||||||
Lease liabilities - net of current portion | - | 467,662 | 467,662 | |||||||||||||||||
Deferred tax liabilites, net - long-term | - | 142,351 | 142,351 | |||||||||||||||||
Long-term debt, net of current portion | - | 22,339 | 22,339 | |||||||||||||||||
Total non-current liabilities | - | 721,510 | 721,510 | |||||||||||||||||
COMMITMENTS AND CONTINGENCIES | - | - | - | |||||||||||||||||
Total liabilities | 1,778,698 | 2,004,506 | 4,053,204 | |||||||||||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
Preferred Stock | 5 | - | 5 | |||||||||||||||||
Common Stock | 2,730 | 52,092 | A | 13 | 54,835 | |||||||||||||||
Additional paid-in-capital | 12,355 | 1,002,875 | A | 486,899 | 1,502,129 | |||||||||||||||
Accumulated other comprehenive income (loss) | - | 17,668 | 17,668 | |||||||||||||||||
Accumulated deficit | (1,780,777 | ) | (282,290 | ) | - | (2,063,067 | ) | |||||||||||||
Total stockholders’ equity (deficit) | (1,765,687 | ) | 790,345 | (488,430 | ) | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 13,011 | $ | 2,794,851 | $ | - | $ | 756,912 | $ | 3,564,774 |
Adjustment Notes
A | Recod warrants issued in acquisition and reflect the exercise of those warrants effective on date of acquisition |
B | The $270,000 paid by Traq to acquire Mann |
F-1 |
TRAQIQ, INC. AND SUBSIDIARIES
PROFORMA STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2019
TRAQ | MANN | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
REVENUES | ||||||||||||||||||||
Revenue from services | $ | 5,565 | $ | 315,093 | $ | 320,658 | ||||||||||||||
5,565 | 315,093 | 320,658 | ||||||||||||||||||
COST OF REVENUES | ||||||||||||||||||||
Cost of services | 4,071 | 194,404 | 198,475 | |||||||||||||||||
4,071 | 194,404 | 198,475 | ||||||||||||||||||
GROSS PROFIT | 1,494 | 120,689 | 122,183 | |||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Salaries and salary related costs | 600 | - | 600 | |||||||||||||||||
Professional fees and consulting | 46,843 | - | 46,843 | |||||||||||||||||
General and administrative | 16,050 | 22,320 | 38,370 | |||||||||||||||||
Depreciation and amortization | - | 49,995 | 49,995 | |||||||||||||||||
Rent | 285 | - | 285 | |||||||||||||||||
Total operating expenses | 63,778 | 72,315 | 136,093 | |||||||||||||||||
Gain (Loss) from operations | (62,284 | ) | 48,374 | (13,910 | ) | |||||||||||||||
OTHER EXPENSE: | ||||||||||||||||||||
Other income (loss) | - | 386 | 386 | |||||||||||||||||
Interest expense, net of interest income | (44,050 | ) | (15,174 | ) | (59,224 | ) | ||||||||||||||
Other income (expense), net | (44,050 | ) | (14,788 | ) | (58,838 | ) | ||||||||||||||
Loss from before provision for income taxes | (106,334 | ) | 33,586 | (73,134 | ) | |||||||||||||||
PROVISION FOR INCOME TAXES | (668 | ) | 2,521 | 1,853 | ||||||||||||||||
NET LOSS | $ | (107,002 | ) | $ | 36,107 | $ | (71,281 | ) | ||||||||||||
NET LOSS PER SHARE | ||||||||||||||||||||
Basic | $ | (0.00 | ) | $ | 0.11 | $ | (0.00 | ) | ||||||||||||
Diluted | $ | (0.00 | ) | $ | 0.11 | $ | (0.00 | ) | ||||||||||||
SHARES USED IN CALCULATION OF NET LOSS PER SHARE | ||||||||||||||||||||
Basic | 27,297,960 | 322,088 | A | 1,329,272 | 28,627,232 | |||||||||||||||
Diluted | 27,297,960 | 322,088 | A | 1,329,272 | 28,627,232 |
Adjustment Notes
A | Adjust outstanding shares for the 1,329,272 warrants that are assumed to be immediately exercised into shares of common stock |
F-2 |
TRAQIQ, INC. AND SUBSIDIARIES
PROFORMA STATEMENTS OF OPERATIONS
Year Ended December 31, 2018
TRAQ | MANN | ADJUSTMENTS | CONSOLIDATED | |||||||||||||||||
REVENUES | ||||||||||||||||||||
Revenue from services | $ | 181,318 | $ | 1,055,347 | $ | 1,236,665 | ||||||||||||||
181,318 | 1,055,347 | 1,236,665 | ||||||||||||||||||
COST OF REVENUES | ||||||||||||||||||||
Cost of services | 179,086 | 732,580 | 911,666 | |||||||||||||||||
179,086 | 732,580 | 911,666 | ||||||||||||||||||
GROSS PROFIT | 2,232 | 322,767 | 324,999 | |||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Salaries and salary related costs | 18,669 | - | 18,669 | |||||||||||||||||
Professional fees and consulting | 158,168 | - | 158,168 | |||||||||||||||||
General and administrative | 86,793 | 311,481 | 398,274 | |||||||||||||||||
Depreciation and amortization | - | 224,276 | 224,276 | |||||||||||||||||
Product development | - | 102,626 | 102,626 | |||||||||||||||||
Rent | 2,331 | - | 2,331 | |||||||||||||||||
Total operating expenses | 265,961 | 638,383 | 904,344 | |||||||||||||||||
Loss from operations | (263,729 | ) | (315,616 | ) | (579,345 | ) | ||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Other income | 25,000 | 1,010 | 26,010 | |||||||||||||||||
Forgiveness of debt | 11,330 | - | 11,330 | |||||||||||||||||
Interest expense, net of interest income | (170,462 | ) | (91,683 | ) | (262,145 | ) | ||||||||||||||
Other income (expense), net | (134,132 | ) | (90,673 | ) | (224,805 | ) | ||||||||||||||
Loss from before provision for income taxes | (397,861 | ) | (406,289 | ) | (804,150 | ) | ||||||||||||||
PROVISION FOR INCOME TAXES | - | 77,877 | 77,877 | |||||||||||||||||
NET LOSS | $ | (397,861 | ) | $ | (328,412 | ) | $ | (726,273 | ) | |||||||||||
NET LOSS PER SHARE | ||||||||||||||||||||
Basic | $ | (0.01 | ) | $ | (1.08 | ) | $ | (0.03 | ) | |||||||||||
Diluted | $ | (0.01 | ) | $ | (1.08 | ) | $ | (0.03 | ) | |||||||||||
SHARES USED IN CALCULATION OF NET LOSS PER SHARE | ||||||||||||||||||||
Basic | 27,297,960 | 304,455 | A | 1,329,272 | 28,627,232 | |||||||||||||||
Diluted | 27,297,960 | 304,455 | A | 1,329,272 | 28,627,232 |
Adjustment Notes
A | Adjust outstanding shares for the 1,329,272 warrants that are assumed to be immediately exercised into shares of common stock |
F-3 |