ForceField Energy Inc.

CIK:0001407268|SEC Filings

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		4 Months Ended	5 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Apr. 25, 2014	Sep. 30, 2014	Sep. 30, 2015
Successor
Sales	$ 1,458,599	$ 1,951,844		$ 3,243,817	$ 4,020,035
Cost of goods sold	1,010,700	1,403,365		2,337,661	2,876,408
Gross margin	447,899	548,479		906,156	1,143,627
Operating expenses:
Depreciation and amortization	47,725	206,501		252,656	191,675
Selling and marketing	119,245	222,633		342,734	390,721
General and administrative	553,257	1,016,012		1,663,557	2,158,671
Professional fees	202,911	235,109		548,341	852,375
Impairment charge	391,009	0		0	768,009
Total operating expenses	1,314,147	1,680,255		2,807,288	4,361,451
Loss from continuing operations before other income (expense) and income taxes	(866,248)	(1,131,776)		(1,901,132)	(3,217,824)
Other income (expense)
Interest income (expense), net	(157,723)	(115,685)		(177,060)	(1,249,136)
Other gains (losses)	641,000	0		0	641,000
Loss on settlement of debt	0	0		0	(733,414)
Total other income (expense)	483,277	(115,685)		(177,060)	(1,341,550)
Loss from continuing operations before income taxes	(382,971)	(1,247,461)		(2,078,192)	(4,559,374)
Provision for income taxes (benefit)	(1,374)	(4,571)		(4,571)	(21,568)
Net loss from continuing operations	(381,597)	(1,242,890)		(2,073,621)	(4,537,806)
Discontinued Operations:
Loss from discontinued operations, net of income taxes				0	(7,964,638)
Gain on sale of discontinued operations, net of taxes				0	1,060,430
Total discontinued operations				0	(6,904,208)
Net loss	(381,597)	(1,242,890)		(2,073,621)	(11,442,014)
Less: Accretion of preferred stock				0	0
Less: Net loss attributable to noncontrolling interests	0	(30,517)		(47,136)	(6,387)
Net loss attributable to ForceField Energy Inc. stockholders	$ (381,597)	$ (1,212,373)		$ (2,026,485)	$ (11,435,627)
Basic and diluted loss per share
Continuing operations				$ (0.13)	$ (0.25)
Discontinued operations				0	(0.38)
Net loss attributable to ForceField Energy Inc. common stockholders	$ (0.02)	$ (0.07)		$ (0.13)	$ (0.63)
Weighted-average number of common shares outstanding:
Basic and diluted	17,828,189	16,255,493		16,201,792	18,010,329
Comprehensive loss:
Net loss	$ (381,597)	$ (1,242,890)		$ (2,073,621)	$ (11,442,014)
Foreign currency translation adjustment	(558)	5,484		(2,366)	(1,965)
Comprehensive loss	(382,155)	(1,237,406)		(2,075,987)	(11,443,979)
Comprehensive loss attributable to noncontrolling interests	0	(30,517)		(47,136)	(6,387)
Comprehensive loss attributable to ForceField Energy Inc. common stockholders	$ (382,155)	$ (1,206,889)		$ (2,028,851)	$ (11,437,592)
Predecessor
Sales			$ 1,611,213
Cost of goods sold			1,138,827
Gross margin			472,386
Operating expenses:
Depreciation and amortization			3,334
Selling and marketing			193,148
General and administrative			485,670
Professional fees			37,317
Impairment charge			0
Total operating expenses			719,469
Loss from continuing operations before other income (expense) and income taxes			(247,083)
Other income (expense)
Interest income (expense), net			5,567
Other gains (losses)			0
Loss on settlement of debt			0
Total other income (expense)			5,567
Loss from continuing operations before income taxes			(241,516)
Provision for income taxes (benefit)			2,100
Net loss from continuing operations			(243,616)
Discontinued Operations:
Loss from discontinued operations, net of income taxes			0
Gain on sale of discontinued operations, net of taxes			0
Total discontinued operations			0
Net loss			(243,616)
Less: Accretion of preferred stock			31,054
Less: Net loss attributable to noncontrolling interests			0
Net loss attributable to ForceField Energy Inc. stockholders			$ (274,670)
Basic and diluted loss per share
Continuing operations			$ (0.22)
Discontinued operations			0
Net loss attributable to ForceField Energy Inc. common stockholders			$ (0.22)
Weighted-average number of common shares outstanding:
Basic and diluted			1,252,403
Comprehensive loss:
Net loss			$ (243,616)
Foreign currency translation adjustment			0
Comprehensive loss			(243,616)
Comprehensive loss attributable to noncontrolling interests			0
Comprehensive loss attributable to ForceField Energy Inc. common stockholders			$ (243,616)

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	4 Months Ended	5 Months Ended	9 Months Ended
	Apr. 25, 2014	Sep. 30, 2014	Sep. 30, 2015
Successor
Cash flows from operating activities:
Net Loss		$ (2,073,621)	$ (11,442,014)
Net loss from discontinued operations		0	6,904,208
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		252,656	191,675
Amortization of debt discount		59,171	598,638
Amortization of deferred financing costs		0	152,375
Provision for (recovery of) doubtful accounts		3,774	(12,689)
Common stock issued for acquisition costs		109,000	91,260
Common stock issued for financing costs		0	116,659
Common stock issued in exchange for fees and services		84,267	12,880
Deferred taxes		0	(7,006)
Impairment charge		0	768,009
Loss on disposal of property and equipment		0	9,108
Loss on settlement of debt		0	733,414
Unrealized gain on change in fair value of contingent consideration		0	(641,000)
Changes in operating assets and liabililites:
Accounts receivable		(110,863)	802,801
Costs and earnings in excess of billings		(75,276)	(128,623)
Inventory		(225,989)	65,578
Prepaid expenses and other current assets		(21,713)	(49,907)
Other assets		(10,254)	(27,658)
Accounts payable		323,654	(246,097)
Accrued liabilities		255,721	13,459
Billings in excess of costs and earnings		0	(22,886)
Income taxes payable and other noncurrent liabilities		(4,438)	(17,594)
Net cash provided by (used in) operating activities -- continuing operations		(1,433,311)	(2,135,410)
Net cash used in operating activities -- discontinued operations		0	(769,738)
Net cash provided by (used in) operating activities		(1,433,311)	(2,905,148)
Cash flows from investing activities:
Cash consideration for acquisition of business		(3,588,844)	0
Cash acquired in acquisition of business		407,912	0
Cash forfeited in divestment of business		0	(67,053)
Cash received in divestment of business		0	950,000
Notes receivable		(150,000)	0
Purchase of fixed assets		(5,577)	(4,382)
Net cash provided by (used in) investing activities -- continuing operations		(3,336,509)	878,565
Net cash used in investing activities -- discontinued operations		0	(145,618)
Net cash provided by (used in) investing activities		(3,336,509)	732,947
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		1,324,750	1,755,311
Proceeds from the exercise of common stock purchase warrants, net of issuance costs		315,000	936,000
Proceeds from the issuance of convertible debentures		500,000	400,000
Proceeds from loans payable		130,000	0
Proceeds from related party loans payable		75,000	0
Dividend and redemption payments on preferred stock		0	0
Repayments of senior, secured promissory notes		0	(800,000)
Net cash provided by (used in) financing activities -- continuing operations		2,344,750	2,291,311
Net cash used in financing activities -- discontinued operations		0	(32,569)
Net cash provided by (used in) financing activities		2,344,750	2,258,742
Effect of exchange rates on cash and cash equivalents		(1,537)	(4,009)
Net increase (decrease) in cash and cash equivalents		(2,426,607)	82,532
Cash and cash equivalents at beginning of period		2,937,763	598,281
Cash and cash equivalents at end of period	$ 2,937,763	511,156	853,738
Supplemental disclosure of cash flow information:
Cash paid for interest		114,819	157,297
Cash paid for income taxes		4,716	61,344
Supplemental disclosure of non-cash investing and financing activities:
Accretion of preferred stock		0	0
Common stock issued related to acquisition of business		1,647,420	0
Common stock issued related to letter of intent to acquire a business		137,000	0
Common stock issued for financing costs incurred in connection with convertible and promissory notes		0	32,150
Common stock issued to reduce convertible and promissory notes payable		0	1,000,000
Common stock issued to reduce accounts payable and other accrued liabilities		206,250	36,000
Contingent purchase consideration		1,186,000	0
Debt issued related to acquisition of a business		1,000,000	0
Discount for beneficial conversion features on convertible debentures		12,500	67,636
Discount for fair value adjustment on promissory notes		34,981	0
Reallocation of amounts prepaid towards the acquisition of a business to consideration for an intangible asset — licensing rights		0	279,500
Working capital adjustment payable related to acquisition of business		1,329,528	$ 0
Predecessor
Cash flows from operating activities:
Net Loss	(243,616)
Net loss from discontinued operations	0
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization	3,334
Amortization of debt discount	0
Amortization of deferred financing costs	0
Provision for (recovery of) doubtful accounts	(32,967)
Common stock issued for acquisition costs	0
Common stock issued for financing costs	0
Common stock issued in exchange for fees and services	0
Deferred taxes	0
Impairment charge	0
Loss on disposal of property and equipment	0
Loss on settlement of debt	0
Unrealized gain on change in fair value of contingent consideration	0
Changes in operating assets and liabililites:
Accounts receivable	1,275,004
Costs and earnings in excess of billings	0
Inventory	9,307
Prepaid expenses and other current assets	(42,637)
Other assets	0
Accounts payable	(487,915)
Accrued liabilities	(120,270)
Billings in excess of costs and earnings	0
Income taxes payable and other noncurrent liabilities	(5,571)
Net cash provided by (used in) operating activities -- continuing operations	354,669
Net cash used in operating activities -- discontinued operations	0
Net cash provided by (used in) operating activities	354,669
Cash flows from investing activities:
Cash consideration for acquisition of business	0
Cash acquired in acquisition of business	0
Cash forfeited in divestment of business	0
Cash received in divestment of business	0
Notes receivable	0
Purchase of fixed assets	(2,768)
Net cash provided by (used in) investing activities -- continuing operations	(2,768)
Net cash used in investing activities -- discontinued operations	0
Net cash provided by (used in) investing activities	(2,768)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs	0
Proceeds from the exercise of common stock purchase warrants, net of issuance costs	0
Proceeds from the issuance of convertible debentures	0
Proceeds from loans payable	0
Proceeds from related party loans payable	0
Dividend and redemption payments on preferred stock	(283,000)
Repayments of senior, secured promissory notes	0
Net cash provided by (used in) financing activities -- continuing operations	(283,000)
Net cash used in financing activities -- discontinued operations	0
Net cash provided by (used in) financing activities	(283,000)
Effect of exchange rates on cash and cash equivalents	0
Net increase (decrease) in cash and cash equivalents	68,901
Cash and cash equivalents at beginning of period	339,011	$ 407,912
Cash and cash equivalents at end of period	407,912
Supplemental disclosure of cash flow information:
Cash paid for interest	0
Cash paid for income taxes	0
Supplemental disclosure of non-cash investing and financing activities:
Accretion of preferred stock	31,054
Common stock issued related to acquisition of business	0
Common stock issued related to letter of intent to acquire a business	0
Common stock issued for financing costs incurred in connection with convertible and promissory notes	0
Common stock issued to reduce convertible and promissory notes payable	0
Common stock issued to reduce accounts payable and other accrued liabilities	0
Contingent purchase consideration	0
Debt issued related to acquisition of a business	0
Discount for beneficial conversion features on convertible debentures	0
Discount for fair value adjustment on promissory notes	0
Reallocation of amounts prepaid towards the acquisition of a business to consideration for an intangible asset — licensing rights	0
Working capital adjustment payable related to acquisition of business	$ 0

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Accounts receivable, net	$ 1,164,386	$ 1,925,846
Accounts receivable, net -- noncurrent	(4,620)	(33,093)
Goodwill	3,729,939
Current liabilities:
Convertible debentures, net of loan discounts	0	2,949,666
Successor
Current assets:
Cash and cash equivalents	853,738	598,281
Accounts receivable, net	1,164,386	1,925,846
Costs and estimated earnings in excess of billings on uncompleted contracts	255,198	126,575
Inventory, net	227,880	383,033
Prepaid expenses and other current assets	220,220	449,606
Current assets held for sale	0	3,378,442
Total current assets	2,721,422	6,861,783
Accounts receivable, net -- noncurrent	4,620	33,093
Property and equipment, net	17,323	30,203
Goodwill	3,729,939	3,729,939
Intangible assets, net	1,524,861	3,511,553
Other assets	6,008	180,721
Noncurrent assets held for sale	0	13,266,728
Total assets	8,004,173	27,614,020
Current liabilities:
Accounts payable	590,422	852,809
Accrued liabilities	864,118	914,916
Billings in excess of costs and estimated earnings on uncompleted contracts	0	208,712
Convertible debentures, net — current	3,810,000	50,000
Loans payable — current	130,000	130,000
Senior, secured promissory notes — current	300,000	1,988,003
Income taxes payable	6,509	24,903
Current liabilities of discontinued operations	0	3,382,704
Total current liabilities	5,701,049	7,552,047
Convertible debentures, net of loan discounts	0	2,949,666
Deferred tax liabilities, net - noncurrent	554,000	811,248
Contingent purchase consideration	0	641,000
Other noncurrent liabilities	67,712	67,712
Noncurrent liabilities of discontinued operations	0	6,262,463
Total liabilities	6,322,761	18,284,136
ForceField Energy Inc. stockholders' equity:
Preferred stock, $0.001 par value. 12,500,000 shares authorized; zero shares issued and outstanding	0	0
Common stock, $0.001 par value. 37,500,000 shares authorized; 20,000,182 and 19,200,005 shares issued and 17,828,189 and 17,737,908 shares outstanding as of September 30, 2015 and December 31, 2014, respectively	20,000	19,200
Common stock held in treasury, at cost, 2,171,993 and 1,462,097 shares held at September 30, 2015 and December 31, 2014	(1,967,241)	(1,166,071)
Additional paid-in capital	31,821,548	27,132,299
Accumulated deficit	(28,203,503)	(16,767,876)
Accumulated other comprehensive income	10,608	12,573
Total ForceField Energy Inc. stockholders' equity	1,681,412	9,230,125
Noncontrolling interests	0	99,759
Total equity	1,681,412	9,329,884
Total liabilities and equity	$ 8,004,173	$ 27,614,020