Document:

paos_ex102.htm

EXHIBIT 10.2
  
  
 PRIME METALS & ALLOYS, INC.
  
 FINANCIAL STATEMENTS
  
 SIX MONTHS ENDED JUNE 30, 2017 AND 2016
 PRIME METALS & ALLOYS, INC.
  
 (Unaudited) 
  
  	 
	1
	 
 
	 

  
 PRIME METALS & ALLOYS, INC.
  
 TABLE OF CONTENTS
  
  	  
	  
	 Page
	  

	  
	  
	  
	  

	 Financial Statements - Unaudited
	  
	  
	  

	  
	  
	  
	  

	 Balance Sheets
	  
	  
	3	  

	  
	  
	  
	  
	  

	 Statements of Operations
	  
	  
	4	  

	  
	  
	  
	  
	  

	 Statements of Stockholders’ Deficiency
	  
	  
		  

	  
	  
	  
	  
	  

	 Statements of Cash Flows
	  
	  
	5	  

	  
	  
	  
	  
	  

	 Notes to Financial Statements
	  
	  
	6	  

  
  	 
	2
	 
 
	 

  
  	 PRIME METALS & ALLOYS INC.

	 BALANCE SHEETS

	  
	  
		  
	  
		  

	 ASSETS

	  

	  
	  
	 June 30, 
	  
	  
	 December 31, 
	  

	  
	  
	 2017 
	  
	  
	 2016 
	  

		  
	 (Unaudited) 
	  
	  
	 (Audited) 
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Current assets:
	  
	  
	  
	  
	  
	  
	  
	  

	 Cash
	  
	$	154,971	  
	  
	$	15,371	  

	 Accounts receivable - net
	  
	  
	353,673	  
	  
	  
	632,215	  

	 Inventories - net
	  
	  
	699,905	  
	  
	  
	975,822	  

	 Prepaid expenses and other current assets
	  
	  
	428,958	  
	  
	  
	-	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total current assets
	  
	  
	1,637,507	  
	  
	  
	1,623,408	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Property, plant and equipment - net
	  
	  
	5,859,819	  
	  
	  
	6,039,173	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other assets:
	  
	  
	29,005	  
	  
	  
	-	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total
	  
	$	7,526,331	  
	  
	$	7,662,581	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 LIABILITIES AND STOCKHOLDERS' DEFICIENCY

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Current liabilities:
	  
	  
	  
	  
	  
	  
	  
	  

	 Lines of credit
	  
	$	6,491,268	  
	  
	$	6,530,606	  

	 Loans payable
	  
	  
	5,387,547	  
	  
	  
	5,593,242	  

	 Accounts payable and accrued expenses
	  
	  
	5,709,486	  
	  
	  
	5,911,810	  

	 Officer loans
	  
	  
	1,265,329	  
	  
	  
	1,085,853	  

	 Advance from third party
	  
	  
	1,579,119	  
	  
	  
	1,579,119	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total current liabilities
	  
	  
	20,432,749	  
	  
	  
	20,700,630	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Stockholders' deficiency:
	  
	  
	  
	  
	  
	  
	  
	  

	 Common stock, no par value, 120 shares authorized, issued and outstanding
	  
	  
	1,800	  
	  
	  
	1,800	  

	 Accumulated deficit 
	  
	  
	(12,908,218	)	  
	  
	(13,039,849	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total stockholders' deficiency
	  
	  
	(12,906,418	)	  
	  
	(13,038,049	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total liabilities and stockholders' deficiency
	  
	$	7,526,331	  
	  
	$	7,662,581	  

	        
	  
	  
	  
	  
	  
	  
	  
	  

	 See accompanying notes to the financial statements

  
  	 
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	Table of Contents

  
  	 PRIME METALS & ALLOYS, INC.

	 STATEMENTS OF INCOME AND CHANGES ACCUMULATED DEFICIT

	  

	  
	  
	 (Unaudited)
	  

	  
	  
	 Six months ended
	  

	  
	  
	 June 30,
	  
	  
	 June 30, 
	  

	  
	  
	 2017 
	  
	  
	 2016 
	  

	 Net revenue
	  
	$	11,786,894	  
	  
	$	12,636,139	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cost of goods sold
	  
	  
	10,445,687	  
	  
	  
	9,591,091	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Gross profit
	  
	  
	1,341,207	  
	  
	  
	3,045,048	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Operating expenses:
	  
	  
	  
	  
	  
	  
	  
	  

	 General and administrative expenses
	  
	  
	1,001,175	  
	  
	  
	847,335	  

	 Professional and consulting fees
	  
	  
	48,572	  
	  
	  
	138,370	  

	 Total operating expenses
	  
	  
	1,049,747	  
	  
	  
	985,705	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Income before other income (expense)
	  
	  
	291,460	  
	  
	  
	2,059,343	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other income (expense)
	  
	  
	  
	  
	  
	  
	  
	  

	 Interest expense 
	  
	  
	(165,783	)	  
	  
	(195,838	)
	 Impairment loss 
	  
	  
	(17,751	)	  
	  
	-	  

	 Other income 
	  
	  
	23,705	  
	  
	  
	15,683	  

	 Total other income (expense) 
	  
	  
	(159,829	)	  
	  
	(180,155	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Net income
	  
	  
	131,631	  
	  
	  
	1,879,188	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Accumulated deficit - beginning 
	  
	  
	(13,039,849	)	  
	  
	(12,898,805	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Ending
	  
	$	(12,908,218	)	  
	$	(11,019,617	)
	        
	  
	  
	  
	  
	  
	  
	  
	  

	 See accompanying notes to the financial statements

  
  	 
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	Table of Contents

  
  	 PRIME METALS & ALLOYS, INC.

	 STATEMENTS OF CASH FLOWS

	  

	  
	  
	 (Unaudited)
	  

	  
	  
	 Six Months Ended June 30, 
	  

	 CASH FLOWS FROM OPERATING ACTIVITIES
	  
	 2017 
	  
	  
	 2016 
	  

	 Net income
	  
	$	131,631	  
	  
	$	1,879,188	  

	 Adjustments to reconcile net income to net cash provided by operating activities:
	  
	  
	  
	  
	  
	  
	  
	  

	 Depreciation and amortization
	  
	  
	244,531	  
	  
	  
	257,494	  

	 Impairment loss
	  
	  
	17,751	  
	  
	  
	-	  

	 Accounts receivable reserve
	  
	  
	-	  
	  
	  
	(13,146	)
	 Inventory reserve
	  
	  
	-	  
	  
	  
	(80,596	)
	 Changes in assets and liabilities:
	  
	  
	  
	  
	  
	  
	  
	  

	 Decrease (increase) in accounts receivable
	  
	  
	278,542	  
	  
	  
	(360,752	)
	 Decrease in inventory
	  
	  
	275,917	  
	  
	  
	591,487	  

	 (Increase) in prepaid expenses and other current assets
	  
	  
	(428,958	)	  
	  
	(11,185	)
	 (Increase) in other assets
	  
	  
	(29,005	)	  
	  
	-	  

	 Decrease in accounts payable and accrued expenses
	  
	  
	(202,324	)	  
	  
	(1,945,137	)
	 Net cash provided by operating activities
	  
	  
	288,085	  
	  
	  
	317,353	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 CASH FLOWS FROM INVESTING ACTIVITIES
	  
	  
	  
	  
	  
	  
	  
	  

	 Disposal of property, plant and equipment
	  
	  
	-	  
	  
	  
	175,355	  

	 Purchase of property, plant and equipment
	  
	  
	(82,929	)	  
	  
	-	  

	 Net cash (used in) provided by investing activities
	  
	  
	(82,929	)	  
	  
	175,355	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 CASH FLOWS FROM FINANCING ACTIVITIES
	  
	  
	  
	  
	  
	  
	  
	  

	 Repayments on lines of credit
	  
	  
	(39,338	)	  
	  
	(3,362	)
	 Repayments on loans payable
	  
	  
	(205,694	)	  
	  
	(758,027	)
	 Borrowings on officer loans
	  
	  
	179,476	  
	  
	  
	227,409	  

	 Net cash used in financing activities
	  
	  
	(65,556	)	  
	  
	(533,980	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
	  
	  
	139,600	  
	  
	  
	(41,272	)
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD
	  
	  
	15,371	  
	  
	  
	57,455	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 CASH AND CASH EQUIVALENTS - END OF PERIOD
	  
	$	154,971	  
	  
	$	16,183	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cash paid during the period for:
	  
	  
	  
	  
	  
	  
	  
	  

	 Interest
	  
	$	153,625	  
	  
	$	195,838	  

	        
	  
	  
	  
	  
	  
	  
	  
	  

	 See accompanying notes to the financial statements

  
  	 
	5
	 
 
	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 1 - DESCRIPTION OF BUSINESS
  
 Prime Metals & Alloys, Inc. (the “Company” or “PMAI”) manufactured specialty ingot and electrode products which were supplied for investment castings, forging, ring rolling, and plate production. The Company also manufactured shot products and master alloys which were sold to other melt shops, and provided manufacturing support services. The flexible manufacturing operations at PMAI enabled the Company to offer a wide range of product grades in customer specific order quantities. The primary grade types include stainless steels, tool steels, nickel based grades, cobalt based grades and some non-ferrous alloys. The Company also offered toll conversion melting services. 
  
 On March 2, 2017 the Company filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (as amended, the “Bankruptcy Code”) in the United States Bankruptcy Court. As of August 17, 2017, the Company does not have active operations. See Note 2 for additional information.
  
 2 - GOING CONCERN AND SUBSEQUENT EVENTS
  
 These financial statements have been prepared on a going concern basis. As shown in the Company’s accompanying financial statements, the Company’s current liabilities exceeded its current assets at June 30, 2017 by approximately $19,000,000. The Company had a stockholders’ deficiency of approximately $13,000,000 at June 30, 2017. Additionally, the Company experienced cash flow shortages resulting in the default of its debt obligations and the Company becoming past due with a substantial amount of its vendors. Subsequent to year end the Company entered Chapter 11 bankruptcy and sold significantly all their assets to a third party. The Company ceased active operations on August 17, 2017 immediately following the sale of its operating assets. The Company is currently in the process of settling all liabilities under the bankruptcy. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary resulting from the Company’s inability to continue as a going concern.
  
 On March 2, 2017 the Company filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code (as amended, the “Bankruptcy Code”) in the United States Bankruptcy Court for the Western District of Pennsylvania (the “Bankruptcy Court”). 
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 2 - GOING CONCERN AND SUBSEQUENT EVENTS (Continued)
  
 On August 17, 2017, Prime Metals Acquisition LLC (“PMAL”), a subsidiary of Amerinac Holding Corp., purchased substantially all of the assets of the Company for $9,600,000 pursuant to an asset purchase agreement dated July 12, 2017 (the “APA”). The APA was approved by the Bankruptcy Court under Section 363 of the Bankruptcy Code. Pursuant to the Bankruptcy Court Order Confirming the Sale of Property Free and Clear of All Liens, Claims and Encumbrances filed July 21, 2017 (the “Sale Order”), PMAL acquired substantially all of the assets of the Company free and clear of all interests, claims and liens (as defined in the Sale Order), including but not limited to any successor liability of any kind (including but not limited to tort, product liability or environmental claims), whether matured or unmatured, liquidated or unliquidated, or known or unknown.
  
 The Bankruptcy Court continues to administer the remaining assets of the Company not purchased by PMAL and the pre-petition liabilities not expressly assumed by PMAL. Under the bankruptcy sale, secured creditors received payment on a portion of outstanding balances, with the remainder extinguished. Unsecured creditors are entitled to receive $175,000 under the bankruptcy plan, with all remaining debt to be dissolved and discharged pursuant to the Bankruptcy Code.
  
 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
 Use of Estimates
  
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
  
 Cash and Concentrations of Credit Risk 
  
 For purposes of the statement of cash flows, the Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents. Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations. 
  
 The Company’s cash balances in financial institutions at times may exceed federally insured limits. The Company has not experienced any losses in such accounts, and management believes they are not exposed to any significant risk relating to cash balances.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  
 Accounts Receivable 
  
 Accounts receivable are stated at the amounts management expects to collect. An allowance for doubtful accounts is recorded based on a combination of historical experience, aging analysis and 
 information on specific accounts. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Management has recorded an allowance for doubtful accounts of $23,960 at June 30, 2017, and December 31, 2016, respectively.
  
 Inventory
  
 Inventory is stated at the lower of cost (first-in, first-out) or market. Management analyzes inventory quantities and values on hand during the year to identify slow-moving or obsolete items. Periodic charges are made to cost of sales to reflect management’s estimate of the decline in inventory value due to item obsolescence or changing market conditions. A corresponding credit is applied to an inventory reserve account on the balance sheet. Items are charged against the reserve account as they are determined to meet the obsolescence criteria. Management has recorded an inventory reserve of $143,705 at June 30, 2017, and December 31, 2016, respectively.
  
 Property, Plant and Equipment
  
 Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 39 years. Leasehold improvements are amortized using the straight-line method over estimated useful lives or the term of the lease, whichever is shorter. Upon sale or retirement of depreciable equipment, the cost and related accumulated depreciation or amortization are removed from the related accounts and the resulting gains or losses are reflected in income. Maintenance, repairs and renewals that neither materially add to the value of equipment nor appreciably prolong its life are charged to expense as incurred.
  
 The Company reviews the carrying value of its property, plant and equipment whenever events or changes in circumstances indicate that the carrying values may no longer be appropriate. Recoverability of carrying values is assessed by estimating future net cash flows from the assets. Impairment assessment inherently involves judgment as to assumptions about expected future cash flows and the impact of market conditions on those assumptions. Future events and changing market conditions may impact management’s assumptions as to sales prices, costs or other factors that may result in changes in the Company’s estimates of future cash flows. Although management believes the assumptions used in testing for impairment are reasonable, changes in any one of the assumptions could produce a significantly different result.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  
 Revenue Recognition
  
 The Company recognizes revenue when their customers take title to the products, which generally happens upon shipment of the finished product. 
  
 In May 2014, the Financial Accounting Standards Board (“FASB”), jointly with the International Accounting Standards Board, issued a comprehensive new standard on revenue recognition from contracts with customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this new guidance would require significantly expanded disclosures about revenue recognition. Provisions of this new standard are effective for annual reporting periods beginning 
 after December 15, 2018. Early application is not permitted. The Company is currently evaluating the potential effect on its financial position, results of operations and cash flows from adoption of this standard.
  
 Advertising Costs
  
 Advertising costs are expensed as incurred and totaled $68 and $0 for the six months ended June 30, 2017 and June 30, 2016, respectively.
  
 Shipping and Handling
  
 Shipping and handling costs are expensed as incurred and included in cost of sales. Shipping and handling costs totaled $134 and $1,094 for the periods ended June 30, 2017 and June 30, 2016, respectively.
  
 Income Taxes
  
 The Company has elected by consent of its stockholders to be taxed under the provisions of Subchapter S of the United States of America and the Commonwealth of Pennsylvania Revenue Codes. Under those provisions the income and expense of the Company are passed through and 
 reported on the stockholders’ individual income tax returns. Accordingly, no income tax provision is provided in these financial statements.
  
 The Company evaluates all significant tax positions as required by generally accepted accounting principles in the United States. The Company does not believe that it has taken any tax positions that would require the recording of any additional tax liability, nor does it believe that there are any unrealized tax benefits that would either increase or decrease within the next year. The Company’s income tax returns are subject to examination by the appropriate tax jurisdictions. The Company’s Federal and state tax returns generally remain open for examination for the last three years.
  
  	 
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	Table of Contents

 
 
PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 4 - INVENTORIES
  
 Inventories consist of the following:
  
  	  
	  
	 June 30, December 31,
	  

	  
	  
	 2017
	  
	  
	 2016
	  

	  
	  
	  
	  
	  
	  
	  

	 Raw materials
	  
	$	646,565	  
	  
	$	948,815	  

	 Finished goods
	  
	  
	197,045	  
	  
	  
	170,712	  

	 Reserve
	  
	  
	(143,705	)	  
	  
	(143,705	)
	  
	  
	$	699,905	  
	  
	$	975,822	  

  
 5 - PROPERTY, PLANT AND EQUIPMENT
  
 Property, plant and equipment consists of the following:
  
  	  
	  
	 June 30, December 31,
	  

	  
	  
	 2017
	  
	  
	 2016
	  

	  
	  
	  
	  
	  
	  
	  

	 Land, buildings and improvements
	  
	$	3,410,000	  
	  
	$	3,410,000	  

	 Machinery and equipment
	  
	  
	2,694,350	  
	  
	  
	2,629,173	  

	 Accumulated depreciation
	  
	  
	(244,531	)	  
	  
	-	  

	  
	  
	$	5,859,819	  
	  
	$	6,039,173	  

  
 Depreciation and amortization expense was $244,531 and $257,494 for the six months ended June 30, 2017 and 2016, respectively.
  
 During July 2017, the Company had an appraisal performed over property, plant and equipment by a third party consultant. Impairment was noted on certain of the Company’s property, plant and equipment, which was recognized as an impairment loss during the year ended December 31, 2016, with a reduction to the corresponding asset and accumulated depreciation at the balance sheet date.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 6 - DEBT AND LINES OF CREDIT
  
 Debt consisted of the following:
  
  	  
	  
	 June 30, December 31,
	  

	  
	  
	 2017
	  
	  
	 2016
	  

	  
	  
	  
	  
	  
	  
	  

	 Line of credit A
	  
	$	31,330	  
	  
	$	31,330	  

	 Line of credit B
	  
	  
	6,459,938	  
	  
	  
	6,499,276	  

	  
	  
	$	6,491,268	  
	  
	$	6,530,606	  

	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Term Note A
	  
	$	39,233	  
	  
	$	39,233	  

	 Term Note B
	  
	  
	5,166,483	  
	  
	  
	5,192,909	  

	 Term Note C
	  
	  
	-	  
	  
	  
	170,675	  

	 Term Note D
	  
	  
	179,241	  
	  
	  
	187,835	  

	 Capital lease payable
	  
	  
	2,590	  
	  
	  
	2,590	  

	  
	  
	$	5,387,547	  
	  
	$	5,593,242	  

  
 The Company had various loan agreements with a bank which provide for various debt instruments including lines of credit and multiple term notes. The agreements are collateralized by substantially all of the Company’s assets. Based on the current terms and conditions in the agreements, the Company was in default on all outstanding debt. Due to the default, all debt was classified as current at June 30, 2017 and December 31, 2016.
  
 On June 22, 2016, the Company entered into a forbearance agreement with its bank for the lines of credit and term notes A and B. Under the terms of the forbearance agreement the bank agreed not to exercise any of its rights available under the default provisions of the original agreements, including calling the debt, until December 31, 2016. For the remainder of 2016 the Company was required to make monthly payments of interest on the lines of credit and monthly payments of $92,422 on Term Note B. No payments were due on remaining balances during 2016. See Note 2 for additional information.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 6 - DEBT AND LINES OF CREDIT (Continued)
  
 Line of Credit A
  
 Subject to the terms of the amended agreement, the Company is able to borrow up to $50,000 under the revolving line of credit. The line of credit was guaranteed by the former owners of the Company. Beginning July 30, 2015, the Company was required to make 20 monthly payments of $100 or 3% of the outstanding principal balance, whichever is greater. Interest on borrowings is variable, with the current rate based on the index of the lender’s Prime rate (with a floor of 3.25%), 4.25% at June 30, 2017 and 3.75% at December 31, 2016. The line of credit was set to expire on March 1, 2017, prior to the event of default. Per the Company’s forbearance agreement on June 22, 2016, no principal payments were due on the loan beginning July 1, 2016 through June 30, 2017.
  
 Line of Credit B
  
 The Company entered into a $6,500,000 revolving line of credit in February 2015 to refinance an outstanding loan balance. The note was guaranteed by the former owners of the Company. Subject to the terms of the amended agreement, the note required one payment of all outstanding principal plus all accrued unpaid interest on March 1, 2016. The borrower was required to make regular monthly payments of all accrued unpaid interest due as of each payment date, beginning February 28, 2015, with all subsequent interest payments to be due on the same day of each following month. An amendment was executed to extend the maturity date on the line to December 31, 2016. Interest on borrowings was variable, with the rate based on the index of the bank’s current interest rate earned on the certificate of deposit, 1.75% at June 30, 2017 and 2.75% at December 31, 2016. The balance on this loan was past due. Per the Company’s forbearance agreement on June 22, 2016, interest accrued on the note at the per annum rate of the present index plus 1%, beginning July 1, 2016. This agreement also required weekly installments of an amount equal to interest due and owing as accrued for the prior month on the note.
  
 Term Note A
  
 The Company entered into a $2,000,000 term note in 2008. Subject to the terms of the amended agreement, this loan has graduated principal payments due monthly. The Company was required to make regular monthly payments of all accrued unpaid interest due as of each payment date with all subsequent interest payments to be due on the same day of each following month. The extended due date of this loan was April 21, 2017. Interest on borrowings was variable, with the rate based on the index of the current interest rate paid on bank time deposits, 1.75% at June 30, 2017 and 1.75% at December 31, 2016. Per the Company’s forbearance agreement on June 22, 2016, no payments were due on the loan beginning July 1, 2016 through June 30, 2017.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 6 - DEBT AND LINES OF CREDIT (Continued)
  
 Term Note B
  
 The Company entered into a $10,300,000 term note in 2011. The note was guaranteed by the former owners of the Company. Subject to the terms of the agreement, the note required 83 monthly principal and interest payments of $92,422 and a final balloon payment of the outstanding balance. The Company’s final payment was due on December 16, 2018, at which time the Company would pay the outstanding principal balance and all accrued interest. Interest on borrowings was variable, with the rate based on the index of the current interest rate paid on bank time deposits, 1.75% at June 30, 2017 and 1.75% at December 31, 2016. Per the Company’s forbearance agreement on June 22, 2016, the monthly payment of $92,422 was to be made in four equal weekly installments in the month that the payment was made.
  
 Term Note C
  
 The Company entered into a $500,000 term note in 2013. Subject to the terms of the amended agreement, the note required 60 monthly principal and interest payments of $8,693. The Company’s final payment was due September 12, 2018, at which time the Company would pay the outstanding principal balance and all accrued interest. Interest on borrowings was variable, with the rate based on the index of the current interest rate paid on bank time deposits, 1.65% at June 30, 2017 and 1.65% at December 31, 2016. This note was guaranteed by a former stockholder and was paid off in 2017.
  
 Term Note D
  
 The Company entered into a $492,493 term note in 2013. Subject to the terms of the amended agreement, the note requires 60 monthly payments of $9,281. The Company’s final payment was due September 16, 2018, at which time the Company was to pay the outstanding principal balance and all accrued interest. Interest on borrowings is fixed at a rate of 4.25% at June 30, 2017 and December 31, 2016. This note was guaranteed by a former stockholder, and was paid off in 2017.
  
 Capital Lease Payable
  
 The Company entered into a capital lease agreement for equipment in February 2011. The agreement required 60 monthly payments of $472. Final payment was due on February 28, 2016. As of June 30, 2017, the Company was past due on payments and was working with the vendor to pay the outstanding balance.
  
  	 
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	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 7 - ADVANCES – RELATED PARTIES
  
 Advances from related parties consist of the following:
  
  	  
	  
	 June 30 December 31,
	  

	  
	  
	 2017
	  
	  
	 2016
	  

	  
	  
	  
	  
	  
	  
	  

	 Advance A
	  
	$	745,829	  
	  
	$	745,829	  

	 Advance B
	  
	  
	181,224	  
	  
	  
	163,974	  

	 Advance C
	  
	  
	126,050	  
	  
	  
	126,050	  

	 Advance D
	  
	  
	20,000	  
	  
	  
	20,000	  

	 Advance E
	  
	  
	162,226	  
	  
	  
	-	  

	 Advance F
	  
	  
	30,000	  
	  
	  
	30,000	  

	  
	  
	$	1,265,329	  
	  
	$	1,085,853	  

  
 Advance A 
  
 The Company was advanced $745,829 from a former stockholder, in 2015 at an interest rate of 4.5%. The loan was uncollateralized and was not guaranteed. The loans matured throughout 2015 and were classified as current at June 30, 2017 and December 31, 2016.
  
 Advance B 
  
 The Company was advanced $150,000 from a former stockholder, in 2014 and an additional $7,682 in 2015. Both advances bear interest at a rate of 4.5%, were uncollateralized and were not guaranteed. The loans matured on December 31, 2015 and were classified as current at June 30, 2017 and December 31, 2016.
  
 Advance C 
  
 The Company was advanced $109,800 from a former stockholder, in 2014 and an additional $16,250 in 2015. Both advances bear interest at a rate of 3.5% and were collateralized by certain equipment used by the Company in the operations. The advances were not guaranteed, matured on December 31, 2015 and were classified as current at June 30, 2017 and December 31, 2016.
  
 Advance D
  
 The Company was advanced $20,000 from a former stockholder, in 2014 at an interest rate of 3.5%. The loan was uncollateralized and was not guaranteed. The loan matured on December 31, 2015 and was classified as current at June 20, 2017 and December 31, 2016.
  
 Advance E
  
 During 2017, Term Note C, as referenced in Note 6, was paid off by a former stockholder. The Company now owes the former stockholder for the repayment of the note, with an outstanding balance of $162,226 at June 30, 2017.
   	 
	14
	 
 
	Table of Contents

  
 PRIME METALS & ALLOYS, INC.
  
 NOTES TO FINANCIAL STATEMENTS
  
 7 - ADVANCES – RELATED PARTIES (continued)
  
 Advance F
  
 The Company was advanced $30,000 from a related party, in 2014 at an interest rate of 3.5%. The loan was uncollateralized and was not guaranteed. The loan matured on December 31, 2015 and was classified as current at June 30, 2017 and December 31, 2016.
  
 8 - ADVANCE – THIRD PARTY
  
 The Company was given an additional advance from a third party when the Company was provided services from the third party and was unable to meet the payment terms. The Company entered into an agreement to convert the accounts payable to an advance of $1,645,010 at an interest rate of prime plus 1%. The interest rate was 4.5% at June 30, 2017, and 4.5% at December 31, 2016. Discretionary monthly principal plus interest payments were to commence January 1, 2015 and end December 1, 2035 with the balance payable in full. As of June 30, 2017 and December 31, 2016, there was $1,579,119 outstanding on the advance. The Company was in default of these terms and the balance outstanding was classified as current at June 30, 2017 and December 31, 2016.
  
 9 - PROFIT-SHARING SAVINGS PLAN
  
 The Company had a profit-sharing savings plan for all eligible employees. Employees could make voluntary deferred salary contributions up to a maximum of 100% of compensation, subject to certain federal limitations. Matching contributions, as well as profit sharing contributions, from the Company were determined at the discretion of management for each plan year following the close of the plan year. There were no discretionary contributions for the periods ending, June 30, 2017 and 2016.
  
 10 - CONCENTRATIONS
  
 During the six months ended June 30, 2017, 83% of the Company’s revenue was generated from four customers (26%, 23%, 18% and 17% on an individual basis). At December 31, 2016, balances from three customers made up 69% of accounts receivable (29%, 28% and 12% on an individual basis). At June 30, 2017, balances from three customers made up 80% of accounts receivable (41%, 25% and 13% on an individual basis).
  
 During the six months ended June 30, 2016, 71% of the Company’s revenue was generated from three customers (27%, 23%, and 21% on an individual basis). 
  
 During the six months ended June 30, 2017, 10% of the Company’s purchases were from one supplier. At June 30, 2017, one vendor made up 12% of the accounts payable balance.
  
 During the six months ended June 30, 2016, 20% of the Company’s purchases were from one supplier. At December 31, 2016, one vendor made up 14% of the accounts payable balance.
  
 11 - RELATED PARTY TRANSACTIONS
  
 In addition to the advances discussed in Note 6, the Company had amounts payable to related parties of $72,795 and $69,021 at June 30, 2017 and December 31, 2016, respectively. During the six months ended June 30, 2017 and 2016, the Company accrued interest expense to related parties of approximately $24,000 and $24,000, respectively.
  
  
  
  	15paos_ex103.htm

EXHIBIT 10.3
  
  	 AMERINAC HOLDING CORP. AND SUBSIDIARIES

	 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 AMERINAC HOLDING CORP.
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Unaudited Pro Forma Condensed Consolidated Balance Sheets
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 June 30, 2017
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 ASSETS
	  

	  
	  

	  
	  
	 Historical 
	  
	  
	 Historical 
	  
	  
	 Pro Forma 
	  
	  
	 Pro 
	  

	 Current assets:
	  
	 Amerinac 
	  
	  
	 Prime 
	  
	  
	 Adjustments 
	  
	  
	 Forma 
	  

	 Cash
	  
	$	1,131,275	  
	  
	$	154,971	  
	  
	$	(1,254,971	)	 a
	$	31,275	  

	 Accounts receivable - net
	  
	  
	1,043,389	  
	  
	  
	353,673	  
	  
	  
	-	  
	  
	  
	1,397,062	  

	 Inventories - net
	  
	  
	1,897,414	  
	  
	  
	699,905	  
	  
	  
	-	  
	  
	  
	2,597,319	  

	 Escrow receivable
	  
	  
	1,000,000	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	1,000,000	  

	 Escrow deposit
	  
	  
	500,000	  
	  
	  
	-	  
	  
	  
	(500,000	)	 a
	  
	-	  

	 Other current assets
	  
	  
	264,200	  
	  
	  
	428,958	  
	  
	  
	-	  
	  
	  
	693,158	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total current assets
	  
	  
	5,836,278	  
	  
	  
	1,637,507	  
	  
	  
	(1,754,971	)	  
	  
	5,718,814	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Property, plant and equipment - net
	  
	  
	54,152	  
	  
	  
	5,859,819	  
	  
	  
	-	  
	  
	  
	5,913,971	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other assets:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other 
	  
	  
	3,382	  
	  
	  
	29,005	  
	  
	  
	-	  
	  
	  
	32,387	  

	 Goodwill
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	2,352,409	  
	 b
	  
	2,352,409	  

	 Total other assets
	  
	  
	3,382	  
	  
	  
	29,005	  
	  
	  
	2,352,409	  
	  
	  
	2,384,796	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total
	  
	$	5,893,812	  
	  
	$	7,526,331	  
	  
	$	597,438	  
	  
	$	14,017,581	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Current liabilities:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Lines of credit
	  
	$	497,438	  
	  
	$	6,491,268	  
	  
	$	(6,491,268	)	 c
	$	497,438	  

	 Accounts payable and accrued expenses
	  
	  
	858,779	  
	  
	  
	5,709,486	  
	  
	  
	(5,623,345	)	 c
	  
	944,920	  

	 Loans payable
	  
	  
	-	  
	  
	  
	5,387,547	  
	  
	  
	(5,387,547	)	 c
	  
	-	  

	 Advance from third party
	  
	  
	-	  
	  
	  
	1,579,119	  
	  
	  
	(1,579,119	)	 c
	  
	-	  

	 Officer loans
	  
	  
	-	  
	  
	  
	1,265,329	  
	  
	  
	(1,265,329	)	 c
	  
	-	  

	 Income taxes payable
	  
	  
	22,831	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	22,831	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total current liabilities
	  
	  
	1,379,048	  
	  
	  
	20,432,749	  
	  
	  
	(20,346,608	)	  
	  
	1,465,189	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Long-term liabilities - notes payable
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	8,000,000	  
	 d
	  
	8,000,000	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total liabilities
	  
	  
	1,379,048	  
	  
	  
	20,432,749	  
	  
	  
	(12,346,608	)	  
	  
	9,465,189	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Stockholders' equity (deficiency):
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Common stock, $.001 par value; 1,500,000 shares authorized, 358,333 issued and 261,636 outstanding at June 30, 2017
	  
	  
	358	  
	  
	  
	1,800	  
	  
	  
	(1,800	)	 c
	  
	358	  

	 Treasury stock, $.001 par value; 96,697 shares held in treasury
	  
	  
	(97	)	  
	  
	-	  
	  
	  
	-	  
	  
	  
	(97	)
	 Additional paid-in capital
	  
	  
	14,119,501	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	14,119,501	  

	 Accumulated deficit 
	  
	  
	(9,604,998	)	  
	  
	(12,908,218	)	  
	  
	12,945,846	  
	  
	  
	(9,567,370	)
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total stockholders' equity (deficiency)
	  
	  
	4,514,764	  
	  
	  
	(12,906,418	)	  
	  
	12,944,046	  
	  
	  
	4,552,392	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total liabilities and stockholders' equity (deficiency)
	  
	$	5,893,812	  
	  
	$	7,526,331	  
	  
	$	597,438	  
	  
	$	14,017,581	  

  
 
    
  	a.	Decrease in cash and escrow for purchase of Prime Metals & Alloys, Inc. LLC
	b.	An increase in goodwill to reflect the estimated value of the assets acquired from Prime Metals and Alloys, Inc. on the closing date.
	c.	Elimination of items not assumed in the transaction.
	d.	An increase in notes payable to acquire the assets of Prime Metals and Alloys, Inc. on the closing date.

  
  	 
	1
	 
 
	 

  
  	 AMERINAC HOLDING CORP. AND SUBSIDIARIES

	 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	  
	 AMERINAC HOLDING CORP.

	 Unaudited Pro Forma Condensed Consolidated Statements of Income

	 Six Months Ended June 30, 2017

  
   
 	  
	  
	 Historical
	  
	  
	 Historical
	  
	  
	 Pro
 Forma
	  
	  
	 Pro
	  

	  
	  
	 Amerinac 
	  
	  
	 Prime 
	  
	  
	 Adjustments 
	  
	  
	 Forma 
	  

	 Net revenue
	  
	$	4,133,305	  
	  
	$	11,786,894	  
	  
	$	-	  
	  
	$	15,920,199	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cost of goods sold
	  
	  
	3,295,704	  
	  
	  
	10,445,687	  
	  
	  
	-	  
	  
	  
	13,741,391	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Gross profit
	  
	  
	837,601	  
	  
	  
	1,341,207	  
	  
	  
	-	  
	  
	  
	2,178,808	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Operating expenses:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 General and administrative expenses
	  
	  
	968,539	  
	  
	  
	1,001,175	  
	  
	  
	-	  
	  
	  
	1,969,714	  

	 Professional and consulting fees
	  
	  
	204,111	  
	  
	  
	48,572	  
	  
	  
	-	  
	  
	  
	252,683	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Total operating expenses
	  
	  
	1,172,650	  
	  
	  
	1,049,747	  
	  
	  
	-	  
	  
	  
	2,222,397	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 (Loss) income before other (expense) income
	  
	  
	(335,049	)	  
	  
	291,460	  
	  
	  
	-	  
	  
	  
	(43,589	)
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other income(expense):
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Interest
	  
	  
	(263,372	)	  
	  
	(165,783	)	  
	  
	-	  
	  
	  
	(429,155	)
	 Impairment loss
	  
	  
	-	  
	  
	  
	(17,751	)	  
	  
	  
	  
	  
	  
	(17,751	)
	 Change in fair value of put option
	  
	  
	(213,000	)	  
	  
	-	  
	  
	  
	-	  
	  
	  
	(213,000	)
	 Gain on sale
	  
	  
	3,409,184	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	3,409,184	  

	 Other expense
	  
	  
	(3,765	)	  
	  
	23,705	  
	  
	  
	-	  
	  
	  
	19,940	  

	 Total other income (expense)
	  
	  
	2,929,047	  
	  
	  
	(159,829	)	  
	  
	-	  
	  
	  
	2,769,218	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Income from continuing operations before provision for income taxes
	  
	  
	2,593,998	  
	  
	  
	131,631	  
	  
	  
	-	  
	  
	  
	2,725,629	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Provision for income taxes 
	  
	  
	(731	)	  
	  
	-	  
	  
	  
	-	  
	  
	  
	(731	)
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Income from continuing operations
	  
	  
	2,593,267	  
	  
	  
	131,631	  
	  
	  
	-	  
	  
	  
	2,724,898	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Discontinued operations:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Income (loss) from discontinued operations, net
	  
	  
	992,853	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	992,853	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Net income applicable to common stockholders
	  
	$	3,586,120	  
	  
	$	131,631	  
	  
	$	-	  
	  
	$	3,717,751	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Basic earnings per share applicable to common stockholders:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Continuing operations
	  
	  
	8.67	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	9.11	  

	 Discontinued operations
	  
	  
	3.32	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	3.32	  

	 Net income
	  
	  
	11.99	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	12.43	  

	 Diluted earnings per share applicable to common stockholders:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Continuing operations
	  
	  
	8.67	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	9.11	  

	 Discontinued operations
	  
	  
	3.32	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	3.32	  

	 Net income
	  
	  
	11.99	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	12.43	  

	 Weighted average shares outstanding:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Basic
	  
	  
	299,146	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	299,146	  

	 Diluted
	  
	  
	299,146	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	299,146	  

 
 
  	 
	2
	 
 
	 

   
  	 AMERINAC HOLDING CORP. AND SUBSIDIARIES

	 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	 

	 AMERINAC HOLDING CORP.

	 Unaudited Pro Forma Condensed Consolidated Statements of Income

	 Year Ended December 31, 2016

  
    
 	  
	  
	 Historical
	  
	  
	 Historical
	  
	  
	 Pro
 Forma
	  
	  
	 Pro
	  

	  
	  
	 Amerinac 
	  
	  
	 Prime 
	  
	  
	 Adjustments 
	  
	  
	 Forma 
	  

	 Net revenue
	  
	$	22,608,024	  
	  
	$	22,587,083	  
	  
	$	-	  
	  
	$	45,195,107	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Cost of goods sold
	  
	  
	17,479,599	  
	  
	  
	18,774,272	  
	  
	  
	-	  
	  
	  
	36,253,871	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Gross profit
	  
	  
	5,128,425	  
	  
	  
	3,812,811	  
	  
	  
	-	  
	  
	  
	8,941,236	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Operating expenses:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 General and administrative expenses
	  
	  
	3,615,873	  
	  
	  
	1,777,185	  
	  
	  
	-	  
	  
	  
	5,393,058	  

	 Professional and consulting fees
	  
	  
	275,620	  
	  
	  
	123,890	  
	  
	  
	-	  
	  
	  
	399,510	  

	 Total operating expenses
	  
	  
	3,891,493	  
	  
	  
	1,901,075	  
	  
	  
	-	  
	  
	  
	5,792,568	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 (Loss) income before other (expense) income
	  
	  
	1,236,932	  
	  
	  
	1,911,736	  
	  
	  
	-	  
	  
	  
	3,148,668	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Other income(expense):
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Interest
	  
	  
	(908,146	)	  
	  
	(362,134	)	  
	  
	-	  
	  
	  
	(1,270,280	)
	 Change in fair value of put option
	  
	  
	(121,658	)	  
	  
	-	  
	  
	  
	-	  
	  
	  
	(121,658	)
	 Impairment loss
	  
	  
	-	  
	  
	  
	(1,715,091	)	  
	  
	  
	  
	  
	  
	(1,715,091	)
	 Other expense
	  
	  
	2,700	  
	  
	  
	24,445	  
	  
	  
	-	  
	  
	  
	27,145	  

	 Total other income (expense)
	  
	  
	(1,027,104	)	  
	  
	(2,052,780	)	  
	  
	-	  
	  
	  
	(3,079,884	)
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Income before provision for income taxes
	  
	  
	209,828	  
	  
	  
	(141,044	)	  
	  
	-	  
	  
	  
	68,784	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Provision for income taxes 
	  
	  
	40,749	  
	  
	  
	-	  
	  
	  
	-	  
	  
	  
	40,749	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Net income applicable to common stockholders
	  
	$	250,577	  
	  
	$	(141,044	)	  
	$	-	  
	  
	$	109,533	  

	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Net income per share applicable to common stockholders:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Basic
	  
	  
	1.46	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	0.64	  

	 Diluted
	  
	  
	1.39	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	0.61	  

	 Weighted average shares outstanding:
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  

	 Basic
	  
	  
	171,118	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	171,118	  

	 Diluted
	  
	  
	180,088	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	  
	180,088	  

 
 
  
  	3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00276-of-00352.parquet"}]]