Accel Brands (ACLP) 8-K Technest Holdings announces closing of sale of EOIR subsidiary for up to $34 million

Exhibit 99.2

CERTAIN UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

TECHNEST HOLDINGS, INC. AND SUBSIDIARIES

AND

E-OIR TECHNOLOGIES, INC.

PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following unaudited pro forma condensed consolidated financial statements show the balance sheet of Technest Holdings, Inc. and Subsidiaries ("Technest") as of September 30, 2007, assuming that Technest’s sale of EOIR occurred as of September 30, 2007 and  statements of operations for the year ended June  30, 2007 and the three months ended September 30, 2007  using the assumptions described in the following notes, giving effect to Technest's sale of EOIR (see note 2 to the pro forma consolidated financial statements), as if the transaction had occurred as of July 1, 2006, and July 1, 2007, respectively.

The pro forma condensed consolidated financial statements should be read in conjunction with the separate historical financials statements of Technest, and the unaudited historical financial statements of EOIR appearing elsewhere herein. These pro forma financial statements are not necessarily indicative of the consolidated financial position, had the sale occurred on the date indicated above, or the consolidated results of operations which might have existed for the period indicated or the results of operations as they may be in the future.

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Technest Holdings Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated Balance Sheet

September 30, 2007

	Per 10-QSB			Adjustments				Pro Forma
ASSETS
Current Assets
Cash and cash equivalents	$	103,431		$	756,229		(2)	$	859,660
Accounts receivable		306,205			-				306,205
Unbilled receivables		57,098			-				57,098
Due from related parties, net		2,604			-				2,604
Prepaid expenses and other current assets		81,154			-				81,154
Assets related to discontinued operations		32,180,829			(32,180,829	)	(1)		-
Total Current Assets		32,731,321			(31,424,600	)			1,306,721
Property and Equipment
- net of accumulated depreciation of $75,788		98,859			-				98,859
Other Assets
Deposits		28,525			-				28,525
Definite-lived intangible assets
- net of accumulated depreciation of $852,444		878,666			-				878,666
Goodwill		4,876,038			-				4,876,038
Total Other Assets		5,783,229			-				5,783,229
Total Assets	$	38,613,409		$	(31,424,600	)		$	7,188,809
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Accounts payable	$	277,058		$	-			$	277,058
Accrued expenses and other current liabilities		500,096			-				500,096
Liabilities related to discontinued operations		21,042,375			(21,042,375	)	(1)		-
Total Current Liabilities		21,819,529			(21,042,375	)			777,154
Total Liabilities		21,819,529			(21,042,375	)			777,154
Commitments and Contingencies
Stockholders' Equity
Series A Convertible Preferred Stock		-			-				-
Series C Convertible Preferred Stock		632			-				632
Common Stock		20,029			-				20,029
Additional paid-in capital		37,706,719			-				37,706,719
Accumulated deficit		(20,933,500	)		(10,390,502	)	(1)		(30,824,002	)
					500,000		(2)
Total Stockholders' Equity		16,793,880			(9,890,502	)			6,903,378
Total Liabilities and Stockholders' Equity	$	38,613,409		$	(30,932,877	)		$	7,680,532

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Technest Holdings Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated  Statement of Operations

For the year ended June 30, 2007

	Per 10-KSB			Adjustments			Pro Forma
Revenues	$	3,396,795					$	3,396,795
Cost of Revenues		2,120,005						2,120,005
Gross Profit		1,276,790			-			1,276,790
Operating Expenses
Selling, general and administrative		3,600,562						3,600,562
Research and development		1,093						1,093
Amortization of intangible assets		324,741						324,741
Total Operating Expenses		3,926,396			-			3,926,396
Operating Loss from Continuing Operations		(2,649,606	)		-			(2,649,606	)
Other (Expense) Income, Net
Other income		2,951						2,951
Interest expense		(1,744,102	)					(1,744,102	)
Total Other (Expense) Income, Net		(1,741,151	)		-			(1,741,151	)
Net Loss from Continuing operations		(4,390,757	)					(4,390,757	)
Net loss from Discontinued Operations		(395,939	)		395,939	(3)		-
Net Loss Applicable to Common Shareholders	$	(4,786,696	)	$	395,939		$	(4,390,757	)
Loss per Common Share - Basic and diluted	$	(0.29	)	$	0.02		$	(0.27	)
Weighted average number of common shares outstanding		16,536,917						16,536,917
-Basic and Diluted

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Technest Holdings Inc. and Subsidiaries

Unaudited Pro Forma Condensed Consolidated  Statement of Operations

For the three months ended September 30, 2007

	Per 10-QSB			Adjustments				Pro Forma
Revenues	$	561,773						$	561,773
Cost of Revenues		208,918							208,918
Gross Profit		352,855			-				352,855
Operating Expenses
Selling, general and administrative		2,017,471							2,017,471
Amortization of intangible assets		81,185							81,185
Total Operating Expenses		2,098,656			-				2,098,656
Operating Loss from Continuing Operations		(1,745,801	)		-				(1,745,801	)
Other (Expense) Income, Net
Other income		132							132
Interest expense		(8,059	)						(8,059	)
Total Other (Expense) Income, Net		(7,927	)		-				(7,927	)
Net Loss from Continuing operations		(1,753,728	)						(1,753,728	)
Net Income from Discontinued Operations		844,863			(844,863	)	(3)		-
Net Loss Applicable to Common Shareholders	$	(908,865	)	$	(844,863	)			(1,753,728	)
Loss per Common Share - Basic and diluted	$	(0.05	)	$	0.10				(0.05	)
Weighted average number of common shares outstanding		17,945,929							16,037,913
-Basic and Diluted

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NOTES TO THE PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Basis of Pro Forma Presentation

The unaudited pro forma condensed consolidated financial information included herein has been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission.

The unaudited pro forma condensed consolidated financial information of Technest Holdings, Inc. and Subsidiaries is based on the historical financial statements of Technest as of September 30, 2007 and June 30, 2007 and for the three months and year then ended, respectively, after giving effect to the pro forma adjustments and assumptions described below.

Note 2.  Proposed Sale of EOIR Technologies, Inc.

On September 10, 2007, Technest and its wholly owned subsidiary, E-OIR Technologies, Inc. (“EOIR”), entered into a Stock Purchase Agreement with EOIR Holdings LLC, a Delaware limited liability company ( “LLC”), pursuant to which Technest will sell EOIR to LLC (see Note 15 to our financial statements in the annual report on Form 10-KSB for the year ended June 30, 2007).  LLC is an entity formed on August 9, 2007 by The White Oak Group, Inc., an Atlanta, Georgia based private investment firm, for the purposes of facilitating this transaction.  The White Oak Group, Inc. is a private investment firm focused on investments in the aerospace and defense industry, with an emphasis on the following sectors: Homeland security (detection and deterrence); avionics and instrumentation; command and control; and communication networks and services.

The sale of EOIR to LLC will be structured as a stock sale in which LLC will acquire all of the outstanding stock of EOIR in exchange for approximately $34 million in cash, $11 million of which will be paid at closing and $23 million of which will be paid upon the successful re-award to EOIR of the contract with the U.S. Army's Night Vision and Electronics Sensors Directorate.

EOIR is presented in the annual report on Form 10-KSB as a discontinued operation in the consolidated financial statements in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.

The following unaudited pro forma condensed consolidated financial statements show the balance sheet of Technest Holdings, Inc. and Subsidiaries ("Technest") as of September 30, 2007, assuming that Technest’s sale of EOIR occurred as of September 30, 2007 and  statements of loss for the year ended June  30, 2007 and the three months ended September 30, 2007 using the assumptions described in the following notes, giving effect to Technest's sale of EOIR as if the transaction had occurred as of July 1, 2006, and July 1, 2007, respectively.

Note 3.  Discontinued Operations and EOIR Presentation

In accordance with SFAS No. 144, paragraph 30, the Company determined that in May 2007, EOIR represented a disposal group that should be presented in the financial statements as held for sale.  As a result, the assets and liabilities of EOIR have been presented separately as a discontinued operation in the consolidated Balance Sheet at September 30, 2007.  The net assets of EOIR have been measured at the lower of their carrying amount or fair value less costs to sell.  As of September 30, 2007, there was no write-down of EOIR’s carrying value.  EOIR’s goodwill has been accounted for under SFAS No. 142.

All of the assets and liabilities of EOIR have been classified in the Balance Sheet as current since the proposed sale is expected to close and proceeds received within one year.

As a condition of the covenants of the proposed EOIR sale, certain long-term debt of Technest will be paid in full from the proceeds of the sale.  All such debt has been included as current liabilities related to the discontinued operations of EOIR.

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For the year ended June 30, 2007 and the three months ended September 30, 2007,  the operations of EOIR have been reported in discontinued operations in the Statements of Operations in accordance with SFAS No. 144, paragraph 42. Revenues and net loss from discontinued operations were as follows:

	June 30,		September 30,
	2007		2007
Revenues from discontinued operations	$	68,349,121	$	17,818,559
Net (loss) income from discontinued operations	$	(395,939)	$	844,863

After the closing of the EOIR sale, the Company does not expect any additional cash flows related to EOIR.  Certain general and administrative expenses of the Company that are clearly associated with EOIR totaling approximately $726,000 in the year ended June 30, 2007, and $533,304 in the three months ended September 30, 2007, have been included in the net (loss) income from discontinued operations.

Note 4.  Contingent Consideration

The unaudited pro forma condensed consolidated financial statements have been prepared without giving effect to the contingent consideration of $23 million which will be paid upon the successful re-award to EOIR of the contract with the U.S. Army's Night Vision and Electronics Sensors Directorate.  The contingent purchase price will be recognized when the contingency is resolved or when the outcome of the contingency is determinable beyond a reasonable doubt.

Note 5.  Pro Forma Adjustments

(1)  To remove the assets, liabilities and equity related to discontinued operations as of June 30, 2007.  Assets and liabilities consisted of the following:

	September 30,
	2007
Assets related to discontinued operations:
Cash	$	832,426
Accounts receivable		10,382,514
Unbilled receivable		1,105,020
Prepaid expenses and other current assets		125,931
Total current assets		12,445,891
Property and equipment, net		282,205
Deposits		47,603
Deferred financing costs		1,238,985
Definitive lived intangible assets, net		9,006,632
Goodwill		9,159,513
Total non-current assets		19,734,938
Total assets related to discontinued operations	$	32,180,829
Liabilities related to discontinued operations:
Accounts payable	$	7,073,893
Unearned revenue		169,920
Due to related party		249,940
Accrued expenses and other current liabilities		3,015,679
Current portion of long term debt		10,532,943
Total current liabilities		21,042,375
Total liabilities related to discontinued operations	$	21,042,375

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Included in the assets and liabilities related to discontinued operations are the following balances of the Company that will be eliminated upon the sale of EOIR:

Assets–
Deferred financing costs on notes payable that will be repaid at closing	$	1,238,985
Liabilities -
Accrued interest and termination fees on notes payable that will be repaid on closing		217,795
Accrued severance payments for non executive staff associated with the disposal		37,500
Notes payable that will be repaid on closing		1,478,408

(2) To record the estimated net cash proceeds from the sale of EOIR.  Closing proceeds are estimated as follows:

Sale Proceeds		$	11,000,000
Less:
Escrow	200,000
Transaction costs	300,000		(500,000	)
Debt Repayment			(10,931,319	)
Working Capital adjustment			2,489,298
Contract obligations			(1,301,750	)
Net cash proceeds		$	756,229

The working capital adjustment to the EOIR sale price has been calculated based on the actual working capital balance of EOIR at September 30, 2007 excluding debt to be repaid and intercompany balances.

CURRENT ASSETS
Cash and Cash Equivalents	$	832,426
Accounts Receivable		10,382,514
Unbilled Receivables		1,105,020
Other Receivables		47,603
Prepaid Expenses		125,931
Total Current Assets	$	12,493,494
CURRENT LIABILITIES
Accounts Payable		7,073,893
Unearned revenue		169,920
Accrued Salaries and Wages		2,760,383
Total Current Liabilities	$	10,004,196
Net Working Capital	$	2,489,298

Transaction costs include the estimated costs of legal and financial advisory fees.

As noted above, as a condition of the covenants of the proposed EOIR sale, certain long-term debt of Technest will be paid in full from the proceeds of the sale. The following balances would be payable in full if the EOIR transaction closed on September 30, 2007.

EOIR Sellers note	$	1,167,859
Shelter Island		1,680,000
Bank Revolver		6,105,051
Bank term loan		1,916,667
	$	10,869,577

Contract obligations represent payments due to certain officers and employees pursuant to certain change of control provisions in their employment contracts which were triggered by the sale of EOIR. The total amount payable of $1,301,750 includes payments of $350,000 each to the Technest’s Chief Executive Officer and Chief Financial Officer. The balance of $601,750 is payable to three non-executive officers of the Company.

(3) To remove the net loss associated with discontinued operations of $(395,939) for the year ended June 30, 2007 and the net income of $844,863 associated with discontinued operations for the three months ended September 30, 2007.

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