Search the web
Welcome, Guest
[Sign Out, My Account]
EDGAR_Online

Quotes & Info
Enter Symbol(s):
e.g. YHOO, ^DJI
Symbol Lookup | Financial Search
ESPH > SEC Filings for ESPH > Form 8-K/A on 20-Sep-2013All Recent SEC Filings

Show all filings for ECOSPHERE TECHNOLOGIES INC

Form 8-K/A for ECOSPHERE TECHNOLOGIES INC


20-Sep-2013

Completion of Acquisition or Disposition of Assets, Financial Statem


Item 2.01. Completion of Acquisition or Disposition of Assets.

On May 24, 2013, Ecosphere Technologies, Inc. ("ETI") sold 12% of Fidelity National Environmental Solutions, LLC, formerly Ecosphere Energy Services, LLC, ("FNES") to Fidelity National Financial, Inc. ("FNF"), an existing EES member, for $6 million under a Unit Purchase Agreement (the "Agreement"). In consideration for facilitating the transaction, ETI transferred an additional 1.5% interest of FNES to an existing EES member. As a result, ETI and FNF now own 39% and 31% of FNES, respectively. Additionally, for a 90-day period, FNF was granted an option to purchase an additional 8% of FNES from ETI for $4 million. FNF exercised this option on July 31, 2013. In 2012, FNES unaudited revenues and net income were approximately $11.7 and $3.8 million, respectively.

ETI and FNES also entered into a Master Manufacturing Agreement which provides for ETI to be the exclusive manufacturer of all equipment and products for FNES that use ETI's water treatment technologies, for energy applications as required by FNES for a two-year period. ETI and the other EES members also entered into a Second Amended and Restated Limited liability Company Agreement. Copies of these agreements and the Unit Purchase Agreement with FNF were filed as exhibits to the Form 10-Q for the period ended June 30, 2013, filed with the SEC on August 9, 2013.

Effective May 24, 2013, ETI will account for its investment in FNES using the equity method of accounting. The following unaudited pro-forma presentation reflects ETI's condensed balance sheet as of March 31, 2013 as if the FNF transaction and corresponding deconsolidation and equity method accounting occurred on March 31, 2013:

                          Ecosphere Technologies, Inc.

                  Unaudited Condensed Pro Forma Balance Sheet


                                  March 31,                                        March 31,
                                     2013         (Unaudited)                         2013
                                 (Unaudited)       Pro Forma                      (Unaudited)
                                 As Reported      Adjustments                      Pro Forma
            Assets
Current assets
Cash and cash equivalents        $    433,694        4,496,201       1,2          $  4,929,895
Other current assets                4,664,459         (705,358 )     1               3,959,101
Total current assets                5,098,153                                        8,888,996
Investment in EES                           -       19,546,600       3              19,546,600
Property, plant and equipment,
net                                 4,262,338       (3,256,336 )     1               1,006,002
Other assets                          163,933           (4,200 )     1                 159,733
Total Assets                     $  9,524,424                                     $ 29,601,331

   Liabilities, Redeemable
    Convertible Cumulative
       Preferred Stock
   and Stockholders' Equity
          (Deficit)


Current liabilities              $  5,670,647         (166,009 )     1            $  5,504,638
Long Term Liabilities                 648,640           (7,743 )     1                 640,897
Total liabilities                   6,319,287                                        6,145,535

Redeemable convertible
cumulative preferred stock          3,658,461                                        3,658,461

Stockholders' Equity (Deficit)       (453,324 )     20,250,659       4,5            19,797,335

Total Liabilities, Redeemable
Convertible Cumulative
Preferred Stock and
Stockholders' Equity (Deficit)   $  9,524,424                                     $ 29,601,331


-------

1 Represents reduction of assets and liabilities for carrying amounts on FNES on March 31, 2013.


2 Represents cash proceeds of $6 million from sale of 12% interest in FNES, less cash payment from proceeds to FNES to settle amounts due, less $150,000 broker fee paid to Ladenburg Thalmann & Co.

3 Represents the fair value of ETI's 39.1% retained interest in EES.

4 Gain on deconsolidation.

5 Removal on non-controlling interest as of March 31, 2013.

The following unaudited pro-forma presentation reflects ETI's pro forma condensed statement of operations for the year ended December 31, 2012, and for the three months ended March 31, 2013as if the FNF transaction and corresponding deconsolidation and equity method accounting occurred at the beginning of each period:

                          Ecosphere Technologies, Inc.

             Unaudited Pro Forma Condensed Statement of Operations

                          Year Ended December 31, 2012


                                                  (Unaudited)
                                                   Pro Forma                      (Unaudited)
                                As Reported       Adjustments                      Pro Forma

Revenues                        $ 31,132,298     $ (10,788,031 )     1            $ 20,344,267
Costs and expenses                29,967,088        (6,995,433 )     1              22,971,655
Income (loss) from operations      1,165,210        (3,792,598 )     1              (2,627,388 )
Allocation of income from
unconsolidated investee                    -         1,481,817       2               1,481,817
Other expense, net                  (111,143 )           2,126       1                (109,017 )
Net income                      $  1,054,067     $  (2,308,655 )                  $ (1,254,588 )

Net income applicable to
Ecosphere Technologies, Inc.
common stock                    $    136,200     $  (1,390,788 )                  $ (1,254,588 )

Net income per common share
applicable to common stock -
basic                           $       0.00     $       (0.01 )                  $      (0.01 )

Net income per common share
applicable to common stock -
diluted                         $       0.00     $       (0.01 )                  $      (0.01 )


-------

1 Pro forma deconsolidation of EES revenues and costs

2 Pro forma allocation of income from EES using Equity Method


                          Ecosphere Technologies, Inc.

             Unaudited Pro Forma Condensed Statement of Operations

                          Quarter Ended March 31, 2013


                                                  (Unaudited)
                                 (Unaudited)       Pro Forma                      (Unaudited)
                                 As Reported      Adjustments                      Pro Forma

Revenues                         $    861,619     $   (756,994 )     1            $    104,625
Costs and expenses                  3,186,094       (1,549,492 )     1               1,636,602
Loss from operations               (2,324,475 )        792,498       1              (1,531,977 )
Allocation of loss from
unconsolidated investee                     -         (309,972 )     2                (309,972 )
Other expense, net                   (178,473 )            408       1                (178,065 )
Net income (loss)                $ (2,502,948 )   $    482,934                    $ (2,020,014 )

Net income (loss) applicable
to Ecosphere Technologies,
Inc. common stock                $ (2,353,140 )   $    333,126                    $ (2,020,014 )

Net income (loss) per common
share applicable to common
stock - basic                    $      (0.02 )   $       0.00                    $      (0.01 )

Net income (loss) per common
share applicable to common
stock - diluted                  $      (0.02 )   $       0.00                    $      (0.01 )


-------

1 Pro forma deconsolidation of EES revenues and costs

2 Pro forma allocation of loss from EES using Equity Method

The full pro forma March 31, 2013 balance sheet and pro form statements of operations for the year ended December 31, 2012, and for the three months ended March 31, 2013 is attached as Exhibit 99.1, 99.2 and 99.3 and should be reviewed by investors.



Item 9.01. Financial Statements and Exhibits.

(b) Pro forma financial information.

Exhibits.

99.1 Unaudited pro forma balance sheet as of March 31, 2013.

99.2 Unaudited pro forma condensed statement of operations for the year ended December 31, 2012.

99.3 Unaudited pro forma condensed statement of operations for the quarter ended March 31, 2013.


  Add ESPH to Portfolio     Set Alert         Email to a Friend  
Get SEC Filings for Another Symbol: Symbol Lookup
Quotes & Info for ESPH - All Recent SEC Filings
Copyright © 2014 Yahoo! Inc. All rights reserved. Privacy Policy - Terms of Service
SEC Filing data and information provided by EDGAR Online, Inc. (1-800-416-6651). All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.