Exhibit 99.3
KAMERA CONTENT AB
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2008
TABLE OF CONTENTS
Page | |
Balance sheet of as of March 31, 2008 | 2 |
Income statement for the three months ended March 31, 2008 | 4 |
Cash flow statement for the three months ended March 31, 2008 | 5 |
Notes to financial statements | 6 |
Balance sheet | Note | 2008-03-31 | |||||
Assets | |||||||
Fixed assets | |||||||
Intangible fixed assets | |||||||
Capitalized software development expenses | 6 | 1 347 | |||||
Goodwill | 7 | 784 | |||||
2 131 | |||||||
Tangible fixed assets | |||||||
Equipment and computers | 8 | 468 | |||||
Financial fixed assets | |||||||
Participations in Group companies | 9 | 930 | |||||
Total fixed assets | 3 529 | ||||||
Current assets | |||||||
Current receivables | |||||||
Accounts receivable - trade | 2 636 | ||||||
Receivables from Group companies | 4 | 406 | |||||
Other current receivables | 183 | ||||||
Prepaid expenses and accrued income | 10 | 3 196 | |||||
6 421 | |||||||
Cash and bank balances | 1 896 | ||||||
Total current assets | 8 317 | ||||||
Total assets | 11 846 |
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Equity and liabilities | 2008-03-31 | ||||||
Equity | 11 | ||||||
Restricted equity | |||||||
Share capital | 227 | ||||||
Statutory reserve | 336 | ||||||
563 | |||||||
Non-restricted equity | |||||||
Loss brought forward | -13 720 | ||||||
Share premium reserve | 8 998 | ||||||
Net loss for the year | -1 648 | ||||||
-6 370 | |||||||
Total equity | -5 807 | ||||||
Long-term liabilities | 12 | ||||||
Liabilities to credit institutions | 3 500 | ||||||
Total long-term liabilities | 3 500 | ||||||
Current liabilities | |||||||
Advance payments from customers | |||||||
Accounts payable - trade | 5 556 | ||||||
Liabilities to Group companies | 4 | ||||||
Other current liabilities | 5 923 | ||||||
Accrued expenses and deferred income | 13 | 2 674 | |||||
Total current liabilities | 14 153 | ||||||
Total equity and liabilities | 11 846 | ||||||
Pledged assets | 14 | 3 500 | |||||
Contingent liabilities | None |
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Income statement | Note | 2008-01-01- 2008-03-31 | |||||
Gross profit | 2, 3, 4 | 1 099 | |||||
Operating expenses | |||||||
Personnel costs | 5 | -2 204 | |||||
Depreciation and write-downs (as well as reversals) of tangible and intangible assets | -365 | ||||||
Operating income | -1 470 | ||||||
Income from financial items | |||||||
Other interest income | |||||||
Interest expenses and exchange rate differences | -178 | ||||||
Total income from financial items | -178 | ||||||
Income after financial items | -1 648 | ||||||
Net loss for the year | -1 648 |
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Kamera Content AB
Reg no 556666-2135
CASH FLOW STATEMENT
1/1/2008 | ||||
3/31/2008 | ||||
Current operations | ||||
Net operating profit/loss | -1,470 | |||
Adjustment for items not included in cash flow | ||||
Depreciation | 365 | |||
-1,105 | ||||
Interest paid | -178 | |||
Cash flow from current operations before changes in working capital | -1,283 | |||
Changes in working capital | ||||
Increase/reduction of receivables | -936 | |||
Increase/reduction of other current liabilities | 3,553 | |||
Cash flow from current operations | 1,334 | |||
Investment activities | ||||
Acquisition of tangible fixed assets | -94 | |||
Cash flow from investment activities | -94 | |||
Financing activities | ||||
0 | ||||
Cash flow from financing activities | 0 | |||
Increase/reduction of liquid funds | 1,240 | |||
Liquid funds at beginning of year | 655 | |||
Liquid funds at end of year | 1,895 |
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Notes
Note 1 | Accounting and valuation principles |
The accounts have been prepared in accordance with the Annual Accounts Act. Adopted accounting principles comply with the standards for small companies set out by the Swedish Accounting Standards Board.
The accounting principles remain unchanged compared to the previous year.
Consolidated accounts
In accordance with the Annual Accounts Act chapter 7, § 3 no consolidated accounts have been prepared.
Revenue recognition
The Company’s revenue recognition for current account work is based on completed work, in line with BFN’s main heading in BFNAR 2003:3. Ongoing, not invoiced service assignments are recognized in the balance sheet at the rate of calculated invoice value of accrued work.
The company is, in line with BFN’s main heading in BFNAR 2003:3, recognizing revenues from completed service assignments based on fixed pricing at the rate of completed work, “percentage of completion”. At the calculation of accrued profit the degree of completion has been calculated as accrued expenses at the closing day, in relation to the calculated sum of expenses to complete the assignment.
Financial fixed assets
Financial assets which are intended to be held over a long period of time are reported at acquisition cost. If a financial fixed asset has, on balance sheet date, a value lower than its book value, the value of the asset is written down to lower value if it can be assumed that such reduction in value is permanent.
Accounts receivable
Accounts receivable are reported as current assets at the amounts expected to be received after deductions for individually-assessed bad debts.
Receivables
Receivables with a maturity of more than 12 months after the closing date are stated as fixed assets, other receivables as current assets.
Foreign currencies
Profit and loss of receivables and liabilities relating to operations are offset under other operating income or other operating expenses. Transactions in foreign currency are translated at the transaction day rate of exchange.
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Tangible fixed assets
Tangible fixed assets are reported at acquisition cost reduced by the amount of depreciation. Expenses for improving the performance of the assets beyond their original level increase the asset's reported value. Expenses for repairs and maintenance are reported as costs.
Depreciation is allocated on a straight-line over the useful life of the asset. Subsequent costs are included in the assets carrying amount if appropriate.
The straight-line method of depreciation is utilized for all types of tangible fixed assets. The following periods of depreciation are applied:
Equipment | 3 year |
Computers | 3 year |
Write-downs
If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.
Intangible assets
Goodwill
Expenses for acquired operations are balanced and depreciated linearly over its assessed useful life, normally up to five years.
Expenses for the development of software
All expenses for the development or maintenance of software are normally expensed immediately. Expenses that are directly connected to identifiable and unique software controlled by the company, including probable financial benefits exceeding expenses within one year, are however capitalized as intangible assets. Capitalized expenditure for the development of software is depreciated linearly over its useful life, in the case of Kamera Content estimated to three years.
Write-downs of intangible assets If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made, including goodwill. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.
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Note 2 | Remuneration to auditors |
2008-01-01- 2008-01-31 | ||||
Audit | ||||
Grant Thornton AB | 0 | |||
Other services | ||||
Grant Thornton AB | 0 | |||
Total | 0 |
Note 3 | Abridged Income Statement |
The Income statement is, in accordance with ÅRL 3 chapter 11 §, disclosed in an abridged state due to reasons of competition. The parent company’s net sales was 6 017 kSEK .
Note 4 | Transactions with related parties |
Purchases and sales between Group companies
The percentages of purchases and sales regarding Group companies are listed below
Purchases (Swegypt Company for Telecommunication
(S.A.E)): 9%
Sales : 0%
The same pricing principles apply to purchases and sales conducted between Group companies as with transactions with external parties.
Note 5 | Personnel |
2008-01-01- 2008-03-01 | ||||
Average number of employees | ||||
Women (Sweden) | 5 | |||
Men (Sweden) | 9 | |||
Total | 14 | |||
Salaries, remunerations, social costs and pension expenses | ||||
Salaries and remunerations for Board of Directors and managing director | 141 | |||
Total salaries and remunerations to other employees | 1 425 | |||
1 566 | ||||
Pension expenses for Board of Directors and managing director | 3 | |||
Statutory and contractual social security contributions | 505 | |||
Pension expenses, other employees | 32 | |||
Total | 2 106 |
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Members of the Board and senior management
Parent Company
2008 | |||||||
Number on balance sheet date | of whom men | ||||||
Members of the Board | 5 | 100 | % | ||||
Managing Director and other senior managers | 5 | 80 | % |
Absence due to illness
Total absence due to illness * | 2008-01-01—2008-01-31 | |||
3 | % | |||
-Long-term absence due to illness | 0 | % |
*Long term absence refers to a period of 60 consecutive days or more.
Other categories consist of fewer than 10 employees why information about these categories is not disclosed.
Note 6 | Capitalized software development expenses |
2008 | ||||
Opening acquisition cost | 2 022 | |||
Capitalization for the year | 0 | |||
Closing accumulated acquisition cost | 2 022 | |||
Opening depreciations | -561 | |||
Depreciation for the year | -114 | |||
Closing accumulated depreciation | -675 | |||
Closing residual value according to plan | 1 347 |
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Note 7 | Goodwill |
2008 | ||||
Opening acquisition cost | 2 016 | |||
- Acquisition | - | |||
Closing accumulated acquisition cost | 2 016 | |||
-Opening depreciation | -1 064 | |||
-Depreciation | -168 | |||
Closing accumulated depreciation | -1 232 | |||
Closing residual value according to plan | 784 |
Note 8 | Equipment and computers |
2008 | ||||
Opening acquisition cost | 969 | |||
Changes during the year | ||||
-Purchases | 94 | |||
Closing accumulated acquisition cost | 1 063 | |||
Opening depreciation | -511 | |||
-Depreciation | -84 | |||
Closing accumulated depreciation | -595 | |||
Closing residual value according to plan | 468 |
Note 9 | Participations in subsidiaries |
Number of shares | Registered office | Proportion of equity | Book value | ||||||||||
Kamera (S) PTE.LTD. | 190 000 | Singapore | 95 | % | 930 | ||||||||
687 500 | Kairo | 55 | % | 0 | |||||||||
Telecommunication (S.A.E) |
Note 10 | Prepaid expenses and accrued income |
2008-12-31 | ||||
Prepaid rent | 266 | |||
Accrued income | 2 113 | |||
Other prepaid expenses | 817 | |||
3 196 |
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Note 11 | Change in equity |
Share capital | Statutory reserve | Share premium reserve | Non- restricted equity | Total equity | ||||||||||||
Amount brought forward 2008 | 227 | 336 | 8 998 | -13 720 | -4 159 | |||||||||||
Net income for the year | - | - | - | -1 648 | -1 648 | |||||||||||
Equity 2008/03/31 | 227 | 336 | 8 998 | -15 368 | -5 807 |
Note 12 | Long term liabilities |
2008-03-31 | ||||
Long-term liabilities | ||||
Liabilities to credit institutions | 3 500 | |||
Total interest-bearing liabilities | 3 500 |
The loan as a whole is raised from Almi företagspartner and has duration of 48 months.
Note 13 | Accrued expenses and deferred income |
2008-03-31 | ||||
Accrued royalty expenses | 961 | |||
Accrued vacation pay, social expenses included | 456 | |||
Accrued social security contributions | 159 | |||
Other items | 1 098 | |||
Total | 2 674 |
Note 14 | Pledged assets |
2008-03-31 | ||||
For own provisions and liabilities | ||||
Floating charges | 3 500 | |||
designated to liabilities to credit institutions | ||||
Total pledged assets | 3 500 |
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Note 15 | Summary of significant differences between Swedish GAAP and U.S. GAAP |
The annual financial statements included herein of Kamera Content AB were prepared in accordance with accounting principles generally accepted in Sweden (Swedish GAAP) which differ in certain significant respects from U.S. GAAP, as described below.
1. Intangible assets
In accordance with Swedish GAAP, the Company amortizes intangible assets based on their statutory useful lives, which is 3 years for goodwill and 3-5 years for capitalized development expenditures.
Under US GAAP intangible assets are amortized over their expected useful lives, which can sometimes be different from the statutory useful lives.
Negative goodwill is required to be disclosed as a provision under Swedish GAAP and reversals be netted e.g. against future losses in the acquired entity.
Under US GAAP this would be disclosed as a reduction of the fair value of assets acquired and hence affecting depreciation.
2. Revenue recognition
In accordance with Swedish GAAP, the Company recognizes revenue when earned. In certain situations, revenue can be recognized upon receipt of payment, while in other situations, revenue is recognized ratably over the contract period. The requirements for recognizing revenue upfront or ratably can vary from the revenue recognition requirements under US GAAP.
Under US GAAP, revenue is recognized in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition and Statement Of Position No. 97-2, Software Revenue Recognition which requires revenue only be recognized when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller´s price to the buyer is fixed or determinable, and collectibility is probable. For certain arrangements that involve multiple deliverables revenue for each deliverable can be recognized individually if certain separation criteria are met. If elements cannot be separated, revenue must be bundled and recognized ratably over time.
3. Exchange differences
In accordance with Swedish GAAP, the Company recognizes exchange differences in the same way as in US GAAP with exception for translation differences which are not recognized as other comprehensive income but booked against equity.
Under US GAAP, assets and liabilities are translated into the entities reporting currency at the prevailing rate of exchange at the balance sheet date and revenue, costs and expenses are translated at the average exchange rate during the period. Translation gains and losses are reflected as other comprehensive income on the balance sheet. Assets and liabilities held by foreign subsidiaries that are in currencies other than the foreign subsidiaries´functional currency are remeasured at the prevailing rate of exchange at the balance sheet date. Gains and losses from remeasurement are included in the determination of net income.
4. Capitalization of development expenditures
Swedish GAAP allows for expenditures during the development phase to be capitalized as intangible assets if it is probable, with a high degree of certainty, that they will result in future economic benefits for the Company.
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Under US GAAP all costs incurred to establish technological feasibility are charged to expense when incurred in accordance with Statement of Financial Accounting Standards No. 2, Accounting for Research and Development Costs. Software development costs incurred subsequent to establishing technological feasibility but prior to general release shall be capitalized.
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