EXHIBIT 99.2
 
DRONE AVIATION HOLDING CORP.
Unaudited Combined Pro Forma Balance Sheet at
March 31, 2014
 
                         
ASSETS
                       
                         
               
Proforma
   
Adjusted Pro
 
   
DRONE
   
LTAS
   
Adjustments
   
Forma Totals
 
                         
CURRENT ASSETS
                       
Cash
  $ 572,041     $ 53,429     $ -     $ 625,470  
Accounts receivable
    20,442       135,050       -       155,492  
Inventories
    -       65,122       -       65,122  
Prepaid expenses
    18,440       1,625       -       20,065  
                                 
TOTAL CURRENT ASSETS
    610,923       255,226       -       866,149  
                                 
Property and equipment, net of accumulated depreciation
    2,470       1,728       (2,470 )     1,728  
                                 
OTHER ASSETS
                               
Goodwill
    -       807,824       (671,418 )     136,406  
Customer list
    -       -       135,550       135,550  
Investments held for resale
    315,353       -       -       315,353  
Capitalized patent costs, net of accumulated amortization
    69,520       -       (69,520 )     -  
                                 
TOTAL ASSETS
  $ 998,266     $ 1,064,778     $ (607,858 )   $ 1,455,186  
                                 
LIABILITIES AND STOCKHOLDERS' DEFICIT
                               
                                 
CURRENT LIABILITIES
                               
Accounts payable trade
  $ 61,837     $ 93,473     $ -     $ 155,310  
Accounts payable - related parties
    -       254,957       (254,957 )     -  
Accrued liabilities
    -       65,140       -       65,140  
Accrued debenture interest
    48,083       -       (48,083 )     -  
Accrued shareholder loan interest
    47,988       -       (47,988 )     -  
Short term debt - related parties
    22,500       -       -       22,500  
Current maturities of note payable
    110,000       -       -       110,000  
                                 
TOTAL CURRENT LIABILITIES
    290,408       413,570       (351,028 )     352,950  
                                 
LONG TERM LIABILITY
                               
Shareholder note payable
    533,681       -       (533,681 )     -  
Convertible debentures, net of discount of $50,000
    100,000       -       (100,000 )     -  
      633,681       -       (633,681 )     -  
TOTAL LIABILITIES
    924,089       413,570       (984,709 )     352,950  
                                 
STOCKHOLDERS' EQUITY
                               
                                 
Convertible preferred stock, Series A, $.0001 par value; authorized 595,000 shares;
    -       -       60       60  
556,900 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Convertible preferred stock, Series B, $.0001 par value; authorized 324,674 shares;
    -       -       32       32  
324,671 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Convertible preferred stock, Series B-1, $.0001 par value; authorized 156,231 shares;
    -       -       16       16  
68,731 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Convertible preferred stock, Series C, $.0001 par value; authorized 355,000 shares;
    -       -       36       36  
355,000 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Convertible preferred stock, Series D, $.0001 par value; authorized 36,050,000 shares;
    -       -       3,605       3,605  
  36,050,000 and 10,000,000 shares issued and outstanding, at June 30, 2014
                         
and December 31, 2013, respectively
                               
Convertible preferred stock, Series E, $.0001 par value; authorized 2,700,000 shares;
    -       -       270       270  
2,700,000 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Common stock, $.0001 par value; authorized 300,000,000 shares;
    1,982,191       1       (1,980,995 )     1,197  
15,780,700 and 0 shares issued and outstanding, at June 30, 2014
                               
and December 31, 2013, respectively
                               
Additional paid in capital
    19,946,750       922,499       (19,431,417 )     1,437,832  
Accumulated other comprehensive income
    (455,985 )     -       455,985       -  
Accumulated deficit
    (21,398,779 )     (271,292 )     21,329,259       (340,812 )
                                 
                                 
TOTAL STOCKHOLDERS' DEFICIT
    74,177       651,208       376,851       1,102,236  
                                 
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
  $ 998,266     $ 1,064,778     $ (607,858 )   $ 1,455,186  
 
 
 
1

 
 
DRONE AVIATION HOLDING CORP.
Unaudited Combined Pro Forma Statements of Operations --
Three Months Ended March 31, 2014
 
 
                     
Pro Forma
 
               
Pro Forma
   
Adjusted
 
   
DRONE
   
LTAS
   
Adjustments
   
Combined Totals
 
                         
Sales
  $ 134,808     $ 229,350     $ (134,808 )   $ 229,350  
                                 
Cost of goods sold
    99,557       139,238       (99,557 )     139,238  
Gross Profit
    35,251       90,112       (35,251 )     90,112  
                                 
Operating expenses
                               
General and administrative expenses
    244,660       90,201       (244,660 )     90,201  
                                 
Total operating expenses
    244,660       90,201       (244,660 )     90,201  
                                 
LOSS FROM OPERATIONS
    (209,409 )     (89 )     209,409       (89 )
                                 
Interest expense, net
    (15,555 )     -       15,555       -  
                                 
Net loss
  $ (224,964 )   $ (89 )   $ 224,964     $ (89 )
                                 
Net Loss Per Share - Basic and Diluted
  $ (0.03 )   $ (0.00 )   $ -     $ (0.00 )
                                 
Weighted Average Shares Outstanding - Basic and Diluted
    8,050,000       3,920,700       -       11,970,700  
 
 
 
 
2

 
 
DRONE AVIATION HOLDING CORP.
Unaudited Combined Pro Forma Statements of Operations --
Year ended December 31, 2013
 
                     
Pro Forma
 
               
Pro Forma
   
Adjusted
 
   
DRONE
   
LTAS
   
Adjustments
   
Combined Totals
 
                         
Sales
  $ 1,454,337     $ 847,314     $ (1,454,337 )   $ 847,314  
                                 
Cost of goods sold
    854,471       511,689       (854,471 )     511,689  
Gross Profit
    599,866       335,625       (599,866 )     335,625  
                                 
Operating expenses
                               
General and administrative expenses
    777,920       187,705       (777,920 )     187,705  
                                 
Total operating expenses
    777,920       187,705       (777,920 )     187,705  
                                 
LOSS FROM OPERATIONS
    (178,054 )     147,920       178,054       147,920  
                                 
OTHER INCOME (EXPENSE)
                               
                                 
Other income
    6,681       -       (6,681 )     -  
Interest expense, net
    (69,311 )     (811 )     69,311       (811 )
                                 
                                 
Net loss
  $ (240,684 )   $ 147,109     $ 240,684     $ 147,109  
                                 
Net Loss Per Share - Basic and Diluted
  $ (0.03 )   $ 0.04     $ -     $ 0.01  
                                 
Weighted Average Shares Outstanding - Basic and Diluted
    8,050,000       3,920,700               11,970,700  
 
 
 
3

 
 
 
Notes to Unaudited Pro Forma Consolidated Financial Statements
 
Drone Aviation Holding Corp. (DAHC) entered into a Share Exchange Agreement with Drone Aviation Corp. (DAC), whereby Drone Aviation Holding Corp exchanged 67.2% of its outstanding shares of common stock and 89.7% of its outstanding shares of preferred stock for 100% of the outstanding shares of Drone Aviation Corp. common stock. As of the closing date, Drone Aviation Corp., and its subsidiary Lighter Than Air Systems (LTAS), will operate as wholly-owned subsidiaries of Drone Aviation Holding Corp.
 
As a result of the Share Exchange Agreement, each outstanding share of Drone Aviation Corp. common stock shall be transferred, conveyed and delivered to Drone Aviation Holding Corp. in exchange for 8,050,000 newly-issued shares of common stock and 36,050,000 newly-issued shares of Series D preferred stock of Drone Aviation Holding Corp.
 
As of the closing date of the Share Exchange Agreement, the former shareholders of Drone Aviation Corp. held approximately 30.2% of the issued and outstanding common and preferred shares on a fully-diluted basis of Drone Aviation Holding Corp. The preferred stock contains a restrictive blocker with respect to individual holders’ ownership notwithstanding. The issuance of 8,050,000 common shares and 36,050,000 preferred shares to the shareholders of Drone Aviation Corp. was deemed to be an acquisition for accounting purposes. The number of shares outstanding and per share amounts have been restated to recognize the recapitalization as reflected in pro forma adjustments.
 
The pro forma consolidated balance sheets of Drone Aviation Holding Corp. and DAC/LTAS are presented here as of March 31, 2014. The pro forma consolidated statements of operations for Drone Aviation Holding Corp. and Drone Aviation Corp. are presented here as of the year ended December 31, 2013 and the three months ended March 31, 2014.
 

4