TETRIDYN SOLUTIONS, INC. AND SUBSIDIARY OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Exhibit 99.4
TETRIDYN SOLUTIONS, INC. AND SUBSIDIARY
OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
TetriDyn Solutions, Inc. entered into a certain Agreement and Plan of Merger, dated as of March 1, 2017 (the “Merger Agreement”), by and among TetriDyn Solutions, Inc., a Nevada corporation (“TetriDyn”) and Ocean Thermal Energy Corporation (“OTE”), a Delaware corporation. Pursuant to the Merger Agreement, a newly-created Delaware corporation that is wholly-owned by TetriDyn will merge with and into OTE, with OTE continuing as the surviving corporation and a wholly-owned subsidiary of TetriDyn. All outstanding shares of OTE’s common stock held as of the record date by the stockholders of OTE will be converted into the right to receive newly-issued shares of TetriDyn common stock (the “Merger”). In connection with the Merger, TetriDyn will change its name to Ocean Thermal Energy Corporation. The business operations of OTE shall continue uninterrupted.
The following unaudited pro forma condensed combined financial statements are based on our historical consolidated financial statements and OTE’s historical consolidated financial statements as adjusted to give effect to the Company’s merger with OTE and the related financing transactions. The unaudited pro forma condensed combined statements of operations for the 3 month period ending March 31, 2017 to give the effect to the transaction as if it had occurred in January 1, 2017.
The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined financial statements are described in the accompanying notes, which should be read together with the pro forma condensed combined financial statements.
The unaudited pro forma condensed combined financial statements should be read together with the Company’s historical financial statements, which are included in the Company’s latest annual report on Form 10-K, 10-Q and 14-C.
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TETRIDYN SOLUTIONS, INC. AND SUBSIDIARY
OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2017
| Pre-Merger | Pre-Merger | Pre-Merger | Pro forma | Post-Merger | |||||||||||||||||
| OTEC | TetriDyn | Total | Adjustments | Condensed | |||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Current Assets | |||||||||||||||||||||
| Cash | $ | 166,291 | $ | 1,784 | $ | 168,075 | $ | $ | 168,075 | ||||||||||||
| Prepaid expenses | 23,846 | – | 23,846 | 23,846 | |||||||||||||||||
| Other current assets | 34,773 | – | 34,773 | 34,773 | |||||||||||||||||
| Total Current Assets | 224,910 | 1,784 | 226,694 | 226,694 | |||||||||||||||||
| Property and Equipment | |||||||||||||||||||||
| Property and equipment, net | 1,863 | – | 1,863 | 1,863 | |||||||||||||||||
| Assets under construction | 869,138 | – | 869,138 | 869,138 | |||||||||||||||||
| Property and Equipment, net | 871,001 | – | 871,001 | 871,001 | |||||||||||||||||
| Total Assets | $ | 1,095,911 | $ | 1,784 | $ | 1,097,695 | $ | $ | 1,097,695 | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY | |||||||||||||||||||||
| Current Liabilities | |||||||||||||||||||||
| Accounts payables | $ | 2,458,109 | $ | 202,867 | $ | 2,660,976 | $ | $ | 2,660,976 | ||||||||||||
| Accrued liabilities | 3,383,397 | 414,765 | 3,798,162 | 3,798,162 | |||||||||||||||||
| Notes payable | 300,000 | 294,353 | 594,353 | 594,353 | |||||||||||||||||
| Notes payable, related party | 3,061,000 | 549,031 | 3,610,031 | 3,610,031 | |||||||||||||||||
| Convertible notes payable | 50,000 | – | 50,000 | 50,000 | |||||||||||||||||
| Convertible notes payable, related party | – | 162,500 | 162,500 | 162,500 | |||||||||||||||||
| Total Current Liabilities | 9,252,506 | 1,623,516 | 10,876,022 | 10,876,022 | |||||||||||||||||
| Notes payable - related party, net | 45,958 | – | 45,958 | 45,958 | |||||||||||||||||
| Notes payable, net | 603,406 | – | 603,406 | 603,406 | |||||||||||||||||
| Total Liabilities | 9,901,870 | 1,623,516 | 11,525,386 | 11,525,386 | |||||||||||||||||
| Stockholders' deficiency | |||||||||||||||||||||
| Common Stock | 10,998 | 246 | 11,244 | 98,973 | 110,217 | ||||||||||||||||
| Additional paid-in capital | 51,860,295 | 3,723,609 | 55,583,904 | (98,973 | ) | 55,484,931 | |||||||||||||||
| Accumulated deficit | (60,677,252 | ) | (5,345,587 | ) | (66,022,839 | ) | (66,022,839 | ) | |||||||||||||
| Total Stockholders' Deficiency | (8,805,959 | ) | (1,621,732 | ) | (10,427,691 | ) | (10,427,691 | ) | |||||||||||||
| Total Liabilities and Stockholders' Deficiency | $ | 1,095,911 | $ | 1,784 | $ | 1,097,695 | $ | 1,097,695 | |||||||||||||
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TETRIDYN SOLUTIONS, INC. AND SUBSIDIARY
OCEAN THERMAL ENERGY CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2017
| Pre-Merger | Pre-Merger | Pre-Merger | Pro forma | Post-Merger | ||||||||||||||||
| OTEC | TetriDyn | Total | Adjustments | Condensed | ||||||||||||||||
| Revenue | $ | – | $ | – | $ | – | $ | – | ||||||||||||
| Cost of Revenue | – | – | – | – | ||||||||||||||||
| Gross Profit | – | – | – | – | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||
| Salaries and wages | 257,488 | – | 257,488 | 257,488 | ||||||||||||||||
| Professional fees | 352,796 | 36,061 | 388,857 | 388,857 | ||||||||||||||||
| General and administrative | 78,346 | 24,692 | 103,038 | 103,038 | ||||||||||||||||
| Warrant Expense | 6,769,562 | – | 6,769,562 | 6,769,562 | ||||||||||||||||
| Total Operating Expenses | 7,458,192 | 60,753 | 7,518,945 | 7,518,945 | ||||||||||||||||
| Loss from Operations | (7,458,192 | ) | (60,753 | ) | (7,518,945 | ) | (7,518,945 | ) | ||||||||||||
| Other Expenses | ||||||||||||||||||||
| Interest Expense | (104,993 | ) | (14,209 | ) | (119,202 | ) | (119,202 | ) | ||||||||||||
| Amortization of debt discount | (2,524 | ) | (2,524 | ) | (2,524 | ) | ||||||||||||||
| Total Other expense | (107,517 | ) | (14,209 | ) | (121,726 | ) | (121,726 | ) | ||||||||||||
| Loss Before Income Taxes | (7,565,709 | ) | (74,962 | ) | (7,640,671 | ) | (7,640,671 | ) | ||||||||||||
| Provision for Income Taxes | – | – | – | – | ||||||||||||||||
| Net Loss | $ | (7,565,709 | ) | $ | (74,962 | ) | $ | (7,640,671 | ) | $ | (7,640,671 | ) | ||||||||
| Net Loss per Common Share | ||||||||||||||||||||
| Basic and Diluted | $ | (0.07 | ) | $ | (0.30 | ) | $ | (0.07 | ) | |||||||||||
| Weighted Average Number of Common Shares Outstanding Basic and Diluted | 104,848,986 | 246,616 | 104,121,039 | |||||||||||||||||
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Note 1 - Nature of the Business
TetriDyn currently is in the business of facilitating the development of sustainable living communities by creating ecologically sustainable “EcoVillages” powered by 100% fossil-fuel free electricity, buildings cooled by energy efficient and chemical free systems, and on-site water produced for drinking, aquaculture and agriculture.
Prior to the purchase of all of the assets of JPF Venture Group, Inc., a Delaware corporation (“JPF”), on December 8, 2016 (“EcoVillage Acquisition”), the Company specialized in providing business information technology (IT) solutions to our customers through the optimization of business and IT processes by using systems engineering methodologies, strategic planning, and system integration to add efficiency and value to our customers’ business processes and to help our customers identify critical success factors in their business.
OTE designs Ocean Thermal Energy Conversion (“OTEC”) power plants, and Seawater Air Conditioning (“SWAC”) plants for large commercial properties, utilities and municipalities. These technologies provide practical solutions to mankind’s three oldest and most fundamental needs: clean drinking water, plentiful food, and sustainable, affordable energy without the use of fossil fuels.
OTEC is a clean technology that continuously extracts energy from the temperature difference between warm surface ocean water and cold deep seawater. In addition to producing electricity, some of the seawater running through an OTEC plant can be efficiently desalinated using the power generated by the OTEC technology, producing thousands of cubic meters of fresh water every day for the communities served by its plants for use in agriculture and human consumption. This cold deep nutrient-rich water can also be used to cool buildings (SWAC) and for fish farming/ aquaculture. In short, it’s a technology with many benefits, and its versatility makes OTEC unique.
Many examples of these technologies have been developed at the Natural Energy Laboratory of Hawaii Authority (“NELHA”) test facility (xxxx://xxxxx.xxxxxx.xxx/xxx-xxxxxxx/), including desalinated seawater, fish-farming, and agriculture. NELHA is a state run agency in Hawaii administratively attached to The Department of Business, Economic Development & Tourism (“DBEDT”). Since the 1970’s, our engineers and scientists have worked on several OTEC and SWAC systems including those at NELHA, and the Argonne National Laboratory (xxxx://xxx.xxx.xxx) and others.
Note 2 - Basis of Presentation
The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination.
The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The combined pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the merger with OTE as a result of restructuring activities and other planned cost savings initiatives following the completion of the business combination.
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Note 3 – Pro forma Adjustments
The pro forma adjustments are based on our preliminary assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information.
(a) Represents the adjustments related to the change in par value of Ocean Thermal Energy Corporation from common stock going from $0.0001 to $0.001. The total shares of the merged companies for March 31, 2017 were 110,504,997.
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