Acquisition (Tables)

9 Months Ended

Sep. 30, 2017

The following table shows the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition:

ASSETS ACQUIRED
Cash	$	160,466
Contracts receivable		611,320
Equipment		102,524
Non-compete agreement		32,468
Contracts in progress		157,002
Goodwill		1,474,907
Total assets acquired	$	2,538,687

LIABILITIES ASSUMED
Accounts payable and accrued expenses	$	565,215
Billings in excess of costs on uncompleted contracts		1,827
Notes payable		11,179
Total liabilities assumed		578,221

NET ASSETS ACQUIRED	$	1,960,466

Adjustments were made to eliminate any inter-company transactions in the periods presented.

INTELLIGENT HIGHWAY SOLUTIONS

PRO-FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue	$	1,186,266		$	2,346,558		$	3,981,871		$	5,961,199
Cost of sales		1,149,731			2,261,160			3,947,497			5,406,742
Gross profit		36,535			85,398			34,374			554,457

Operating expenses
Salaries and wages		41,443			45,671			149,709			172,289
General and administrative		161,931			115,670			561,166			359,844
Total operating expenses		203,374			161,341			710,875			532,133

Income (loss) from operations		(166,839	)		(75,943	)		(676,501	)		22,324

Other income (expense)
Gain (loss) on extinguishment of debt		(459,587	)		-			(459,587	)		2,142
Gain on sale of fixed assets		-			2,800			-			16,550
Penalties on convertible notes payable		(298,321	)		-			(298,321	)		-
Gain (loss) on derivative fair value adjustment		(443,974	)		131,728			10,073,464			350,003
Interest expense		(544,660	)		(69,139	)		(752,186	)		(409,955	)
Total other income (expense)		(1,746,542	)		65,389			8,563,370			(41,260	)

Income (loss) before income taxes		(1,913,381	)		(10,554	)		7,886,869			(18,936	)

Income tax expense		-			-			-			-

Net income (loss) before non-controlling interest		(1,913,381	)		(10,554	)		7,886,869			(18,936	)
Net (loss) income attributable to non-controlling interest		(13,574	)		-			(37,454	)		73,548
Net income (loss) attributable to Intelligent Highway Solutions	$	(1,899,807	)	$	(10,554	)	$	7,924,323		$	(92,484	)

Intelligent Highway Solutions, Inc. 10-Q