Exhibit 99.2
VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
CARVE- OUT BALANCE SHEETS
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March 31,
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December 31,
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(Unaudited)
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ASSETS
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Current assets:
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Accounts receivable
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$ |
2,132 |
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$ |
2,900 |
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Inventories
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1,909 |
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2,314 |
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Other accounts receivable
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62 |
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62 |
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Total current assets
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4,103 |
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5,276 |
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Property and equipment, net
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122 |
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170 |
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Total assets
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$ |
4,225 |
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$ |
5,446 |
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March 31,
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December 31,
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(Unaudited)
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LIABILITIES AND EQUITY
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Trade accounts payable
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$ |
878 |
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$ |
1,606 |
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Other accounts payable
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657 |
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956 |
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Total current liabilities
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1,535 |
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2,562 |
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Equity:
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Parent equity in Business
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2,691 |
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2,884 |
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Total Liabilities and equity
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$ |
4,226 |
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$ |
5,446 |
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VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
CARVE- OUTSTATEMENTS OF OPERATIONS
(USD In Thousands)
(Unaudited)
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Three months ended March 31,
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Revenues
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$ |
2,551 |
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$ |
1,739 |
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Cost of revenues
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1,872 |
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1,317 |
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Gross profit
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679 |
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422 |
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Operating expenses:
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Research and development
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187 |
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233 |
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Selling and marketing
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185 |
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133 |
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General and administrative
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264 |
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158 |
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Total operating expenses
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636 |
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524 |
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Income (loss) from operations
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43 |
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(102 |
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Taxes on income
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- |
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- |
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Income (loss) for the period
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$ |
43 |
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$ |
(102 |
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VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
CARVE- OUTSTATEMENTS OF CASH FLOWS
(USD In Thousands)
(Unaudited)
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Three months ended March 31,
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income (loss)
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$ |
43 |
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$ |
(102 |
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation
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48 |
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42 |
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Changes in operating assets and liabilities
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Increase (decrease) in account receivables
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768 |
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112 |
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Increase in inventories
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405 |
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168 |
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Increase in other receivables
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- |
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6 |
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Increase in account payables
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(728 |
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(68 |
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Decrease in other account payables
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(299 |
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(67 |
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Net cash provided by operating activities
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237 |
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91 |
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchase of property and equipment
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- |
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- |
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Net cash used in operating activities
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- |
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- |
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Net transfer (financed) to parent
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(237 |
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(91 |
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Net cash provided by (used in) financing activities
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(237 |
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(91 |
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NET CHANGE IN CASH AND CASH EQUIVALENTS
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- |
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- |
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CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
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- |
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- |
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CASH AND CASH EQUIVALENTS AT END OF YEAR
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$ |
- |
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$ |
- |
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VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
NOTES TO CARVE- OUT FINANCIAL STATEMENTS
(USD In Thousands)
(Unaudited)
NOTE 1 - DESCRIPTION OF BUSINESS
Overview
On June 2, 2014, Micronet Enertech Technologies, Inc. through its subsidiary Micronet Ltd. completed the acquisition of certain assets and liabilities of Beijer Electronics Inc. ("Beijer" or the "Parent") which comprise the vehicle business and operations (the "Business" or "We" or “Our”) for the design, development, manufacturing and selling of rugged mobile computing devices that provide fleet operators and field workforces with computing solutions in challenging work environments. The Business is not a substantial portion of the Beijer entity.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
No changes were made to our significant accounting policies during the three months ended March 31, 2014.
Basis of Presentation
These financial statements were prepared on a stand-alone basis derived from the financial statements and accounting records of Beijer as if the business had been operating as a stand-alone business for all periods presented. These statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). The assets and liabilities in the financial statements have been reflected on a historical cost basis, as included in the historical statements of financial position of Beijer.
The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the operating results for the full fiscal year or any future period. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes thereto of the Business for the year ended December 31, 2013 included in this Current Report on Form 8-K/A. The Business’s accounting policies are described in the notes to such financial statements for the year ended December 31, 2013.
The statement of operations include allocations for certain functions and employees that are provided on a centralized basis by the Parent and subsequently recorded at the business unit level, such as expenses related to mutual employee salaries, production, finance, human resources, information technology, facilities, and legal, among others. These expenses have been allocated to the business on the basis of direct usage when identifiable, with the remainder allocated on a proportional basis of combined sales, headcount or other measures of the Business or the Parent. Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses from the Parent, are reasonable. Nevertheless, the financial statements may not include all actual expenses that would have been incurred by the Business and may not reflect the results of operations, financial position and cash flows had it been a stand-alone business during the periods presented. Actual costs that would have been incurred if the Business had been a stand-alone business would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.
VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
NOTES TO CARVE- OUT FINANCIAL STATEMENTS
(USD In Thousands)
(Unaudited)
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONT.)
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the combined financial statements and the reported amounts of revenues and expenses during the reporting period. The combined financial statements reflect management's estimates as of the reporting date. Actual results could differ from those estimates.
Recent Accounting Pronouncements
On January 1, 2014, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (“ASU 2013-05”). Under ASU 2013-05 when: a parent sells an investment in a foreign entity and ceases to have a controlling interest in that foreign entity or a foreign subsidiary disposes of substantially all of its assets; or, control of a foreign entity is obtained in which it held an equity interest before the acquisition date, the cumulative translation adjustment should be released into net income. The Business does not expect material impacts on the financial statements upon adoption in 2015.
On January 1, 2014 the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 eliminates diversity in practice regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward or a tax credit carryforward exists. The Business does not expect material impacts on the financial statements upon adoption in 2015.
In April 2014, the FASB issued ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the requirements for reporting discontinued operations in subtopic 205-20 as well as the related disclosures. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2014. The Business does not expect material impacts on the financial statements upon adoption in 2015.
VEHICLE BUSINESS OF BEIJER ELECTRONICS INC.
NOTES TO CARVE- OUT FINANCIAL STATEMENTS
(USD In Thousands)
(Unaudited)
NOTE 3- INVENTORIES
Inventories are stated at the lower of cost or market, computed using the first-in, first-out method. Inventories consist of the following:
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March 31,
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December 31,
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(Unaudited)
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Raw materials
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$ |
2,124 |
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$ |
2,281 |
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Work in process and finished product
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159 |
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232 |
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Allowance for obsolescence
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( 374 |
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( 199 |
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$ |
1,909 |
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$ |
2,314 |
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NOTE 4 – COMMITMENTS AND CONTINGENCIES
The Business is subject to risks and uncertainties in the normal course of our Business, including legal proceedings; governmental regulation, such as the interpretation of tax and labor laws; and consumer sensitivity to changes in general economic conditions. The Business has accrued for probable and estimatable costs that may be incurred with respect to identified risks and uncertainties based upon the facts and circumstances currently available to us. Due to uncertainties in the estimating process, actual costs could vary from those accruals.
At December 31, 2013, total minimum cars and lease rentals under non-cancelable operating leases with an initial or remaining lease term of one year or more are as follows:
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Three months ended March 31,
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2014
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Fiscal 2014
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$ |
12 |
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Fiscal 2015
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17 |
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Fiscal 2016 and thereafter
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108 |
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$ |
137 |
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The Business is not subject to any pending or threatened legal proceedings, nor is our property the subject of a pending or threatened legal proceeding, guarantees or collaterals. None of our directors, officers or affiliates is involved in a proceeding adverse to our Business or has a material interest adverse to our Business.