AAMPRO GROUP, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
JUNE 30, 2007
AAMPRO GROUP, INC. AND SUBSIDIARIES
INDEX TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2007
| Page |
| |
Introduction to Unaudited Pro Forma Condensed Consolidated | |
Financial Statements | 1 |
| |
Financial Statements (Unaudited): | |
| |
Balance Sheet at June 30, 2007 (Unaudited) | 2 |
| |
Statement of Income for the Six Months Ended June 30, 2007 (Unaudited) | 3 |
| |
Statement of Income for the Year Ended December 31, 2006 (Unaudited) | 4 |
| |
Notes to the Consolidated Financial Statements (Unaudited) | 5 |
AAMPRO GROUP, INC. AND SUBSIDIARIES
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On July 2, 2007, AAMPRO Group, Inc. and Subsidiaries (“AAMPRO”) consummated a Share Exchange Agreement (“the Agreement”) with Vital Consultants, L.L.C., (“Vital” and “the Company”) a New Jersey limited liability company. Under the terms of the Agreement AAMPRO issued 80 million shares of its common stock in exchange for all the membership interests in Vital from its members. The transaction will be accounted for as a reverse acquisition (“the Merger”) for accounting and financial statement purposes. Accordingly, Vital will be treated as the surviving entity and the Merger is accounted for as a recapitalization in which the assets and liabilities of Vital have been recorded at their historical values and the outstanding capital has been restated to give effect to the shares of common stock issued in connection with the transaction.
The following unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of AAMPRO and Vital and have been prepared to illustrate the effects of the Merger under the terms of the Agreement. The following data is presented as if the Merger was effective as of June 30, 2007 for the unaudited pro forma condensed consolidated balance sheet. The unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2006 and the six months ended June 30, 2007 are presented as if the Merger had occurred on the first day of each period presented. Subsequent to the Merger, reported financial position, results of operations, and cash flows of the consolidated group shown for comparative purposes in periodic filings will reflect Vital’s operations only.
The pro forma adjustments represent, in the opinion of management, all adjustments necessary to present the Company’s pro forma financial position and results of operations in accordance with Article 11 of SEC Regulation S-X based upon available information and certain assumptions considered reasonable under the circumstances. The pro forma data presented herein is for informational purposes only and is not intended to represent or be indicative of the results of operations or financial condition of the consolidated entities that would have been reported had the proposed transaction been completed as of the dates presented, and should not be taken as representative of future results of operations or financial position of the consolidated group.
The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the the historical financial statements, including the related notes covering these periods included in AAMPRO’s Annual Report on Form 10-KSB as of and for the fiscal year ended December 31, 2006; and in the financial statements of Vital Consultants, L.L.C. as of and for the year ended December 31, 2006, and as of and for the six months ended June 30, 2007 included as exhibits to this Form 8-K.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2007
| | | AAMPRO Group, Inc. and Subsidiaries | | | Vital Consultants, L.L.C. | | Note | | Adjustments | | | Proforma | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
ASSETS | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
CURRENT ASSETS | | | | | | | | | | | | | | |
Cash | | | $ | 94,282 | | | $ 3,134 | | A | | $ | (94,282 | ) | | $ | 3,134 | |
Accounts receivable, net | | | | 315,931 | | | - | | A | | | (315,931 | ) | | | - | |
Other current assets | | | | 70,386 | | | 5,192 | | A | | | (70,386 | ) | | | 5,192 | |
Total Current Assets | | | | 480,599 | | | | 8,326 | | | | | | | | | 8,326 | |
| | | | | | | | | | | | | | | | | | |
OTHER ASSETS | | | | | | | | | | | | | | | | | | |
Customer lists, net | | | | 20,300 | | | - | | A | | | (20,300 | ) | | | - | |
Property and equipment, net | | | | 6,602 | | | 73,671 | | A | | | (6,602 | ) | | | 73,671 | |
TOTAL ASSETS | | | $ | 507,501 | | | $ | 81,997 | | | | | | | | $ | 81,997 | |
| | | | | | | | | | | | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
CURRENT LIABILITIES | | | | | | | | | | | | | | | | | | |
Accounts payable and accrued expenses | | | $ | 296,428 | | | $ - | | A | | | (296,428 | ) | | $ | - | |
Accrued penalties | | | | 1,554,000 | | | - | | A | | | (1,554,000 | ) | | | - | |
Health benefits payable | | | | 902,466 | | | - | | A | | | (902,466 | ) | | | - | |
Payroll taxes payable | | | | 3,403,268 | | | - | | A | | | (3,403,268 | ) | | | - | |
Installment notes payable | | | | 18,078 | | | - | | A | | | (18,078 | ) | | | - | |
Client deposits | | | | 46,367 | | | - | | A | | | (46,367 | ) | | | - | |
Total Current Liabilities | | | | 6,220,607 | | | | - | | | | | | | | | - | |
| | | | | | | | | | | | | | | | | | |
TOTAL LIABILITIES | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | |
Preferred stock Series A, convertible, no par value; 10 million shares authorized; 0 shares issued and outstanding | | | | - | | | | - | | | | | - | | | | - | |
Common stock, $.001; 100 million shares | | | | | | | | | | | | | | | | | | |
authorized; 80,172,195 issued and | {1} | | | | | | | | | | | | | | | | | |
outstanding | | | | 172 | | | - | | A | | | 39,559 | | | | 39,731 | |
Additional paid-in capital | | | | 2,187,191 | | | - | | A | | | (2,187,191 | ) | | | - | |
Contributed capital, L.L.C. | | | | - | | | 39,731 | | A | | | (39,731 | ) | | | - | |
Accumulated earnings (deficit) | | | | (7,900,469 | ) | | 42,266 | | A | | | 7,900,469 | | | | 42,266 | |
Total Stockholders' (Deficit) Equity | | | | (5,713,106 | ) | | | 81,997 | | | | | | | | | 81,997 | |
TOTAL LIABILITIES AND | | | | | | | | | | | | | | | | | | |
STOCKHOLDERS' EQUITY | | | $ | 507,501 | | | $ | 81,997 | | | | | | | | $ | 81,997 | |
{1} | The number of common shares issued and outstanding includes 80 million shares issued July 2, 2007in exchange for all the outstanding membership interests in Vital Consultants, L.L.C. For the purposeof presenting pro forma financial information, these shares are presented as if they were issued as ofthe balance sheet date. |
See the accompanying notes to unaudited pro forma condensed consolidated financial statements
AAMPRO GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2007
| | AAMPRO Group, Inc. and Subsidiaries | | | Vital Consultants, L.L.C. | | Note | | Adjustments | | | Proforma | |
| | | | | | | | | | | | | |
REVENUE: | | | | | | | | | | | | | |
Fee income | | $ | - | | | $ | 101,405 | | | | | | | $ | 101,405 | |
Staffing revenue | | | 485,710 | | | - | | A | | $ | (485,710 | ) | | | - | |
Payroll processing revenue | | | 67,154 | | | - | | A | | | (67,154 | ) | | | - | |
Total Revenue | | | 552,864 | | | | 101,405 | | | | | | | | | 101,405 | |
| | | | | | | | | | | | | | | | | |
COST OF REVENUE | | | 296,405 | | | 30,384 | | A | | | (296,405 | ) | | | 30,384 | |
| | | | | | | | | | | | | | | | | |
GROSS PROFIT | | | 256,459 | | | | 71,021 | | | | | | | | | 71,021 | |
| | | | | | | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 710,516 | | | 55,865 | | A | | | (710,516 | ) | | | 55,865 | |
Stock based compensation | | | - | | | | - | | | | | | | | | - | |
Depreciation and amortization | | | 3,748 | | | 7,828 | | A | | | (3,748 | ) | | | 7,828 | |
Total Operating Expenses | | | 714,264 | | | | 63,693 | | | | | | | | | 63,693 | |
| | | | | | | | | | | | | | | | | |
INCOME (LOSS) FROM OPERATIONS | | | (457,805 | ) | | | 7,328 | | | | | | | | | 7,328 | |
| | | | | | | | | | | | | | | | | |
OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | | |
Interest income | | | 28 | | | - | | A | | | (28 | ) | | | - | |
Other income | | | 72,427 | | | - | | A | | | (72,427 | ) | | | - | |
Interest expense | | | (608 | ) | | - | | A | | | 608 | | | | - | |
Total Other Income (Expense) | | | 71,847 | | | | - | | | | | | | | | - | |
| | | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | | | (385,958 | ) | | | 7,328 | | | | | | | | | 7,328 | |
Provision for income taxes | | | - | | | | - | | | | | | | | | - | |
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | | $ | (385,958 | ) | | $ | 7,328 | | | | | | | | $ | 7,328 | |
| | | | | | | | | | | | | | | | | |
NET LOSS PER SHARE | | $ (0.00 | ) {2} | | $ | - | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | | 80,172,195 | {2} | | | - | | | | | | | | | | |
{2} | Net loss per share and weighted average number of common shares outstanding give effect for 80 millionshares issued July 2, 2007 in exchange for all the outstanding membership interests in Vital Consultants,L.L.C. For the purpose of presenting pro forma financial information, these shares are presented as ifthey had been outstanding during the period presented. |
See the accompanying notes to unaudited pro forma condensed consolidated financial statements
AAMPRO GROUP, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2006
| | AAMPRO Group, Inc. and Subsidiaries | | | Vital Consultants, L.L.C. | | Note | | Adjustments | | | Proforma | |
| | | | | | | | | | | | | |
REVENUE: | | | | | | | | | | | | | |
Fee income | | $ | - | | | $ | 355,741 | | | | | | | $ | 355,741 | |
Employee leasing revenue, net | | | 954,278 | | | - | | A | | $ | (954,278 | ) | | | - | |
Staffing revenue | | | 665,977 | | | - | | A | | | (665,977 | ) | | | - | |
Payroll processing revenue | | | 239,349 | | | - | | A | | | (239,349 | ) | | | - | |
Total Revenue | | | 1,859,604 | | | | 355,741 | | | | | | | | | 355,741 | |
| | | | | | | | | | | | | | | | | |
COST OF REVENUE | | | 1,200,114 | | | 176,576 | | | | | (1,200,114 | ) | | | 176,576 | |
| | | | | | | | | | | | | | | | | |
GROSS PROFIT | | | 659,490 | | | | 179,165 | | | | | | | | | 179,165 | |
| | | | | | | | | | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | | | | | | | | | |
General and administrative expenses | | | 1,803,900 | | | 135,814 | | A | | | (1,803,900 | ) | | | 135,814 | |
Stock based compensation | | | 61,950 | | | - | | A | | | (61,950 | ) | | | - | |
Depreciation and amortization | | | 10,558 | | | 8,412 | | A | | | (10,558 | ) | | | 8,412 | |
Total Operating Expenses | | | 1,876,408 | | | | 144,226 | | | | | | | | | 144,226 | |
| | | | | | | | | | | | | | | | | |
INCOME (LOSS) FROM OPERATIONS | | | (1,216,918 | ) | | | 34,939 | | | | | | | | | 34,939 | |
| | | | | | | | | | | | | | | | | |
OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | | |
Interest income | | | 901 | | | - | | A | | | (901 | ) | | | - | |
Interest expense | | | (11,651 | ) | | - | | A | | | 11,651 | | | | - | |
Other income | | | 34,227 | | | | - | | | | | (34,227 | ) | | | - | |
Total Other Income (Expense) | | | 23,477 | | | - | | A | | | | | | | - | |
| | | | | | | | | | | | | | | | | |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | | | (1,193,441 | ) | | | 34,939 | | | | | | | | | 34,939 | |
Provision for income taxes | | | - | | | | - | | | | | | | | | - | |
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | | $ | (1,193,441 | ) | | $ | 34,939 | | | | | | | | $ | 34,939 | |
| | | | | | | | | | | | | | | | | |
NET LOSS PER SHARE | | $ (0.01 | ) {3} | | $ | - | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | | 80,172,195 | {3} | | | - | | | | | | | | | | |
{3} | Net loss per share and weighted average number of common shares outstanding give effect for- |
| a) | 80 million shares issued July 2, 2007 in exchange for all the outstanding membership interestsin Vital Consultants, L.L.C., and |
| b) | 1:300 reverse stock split effective June 13, 2007. |
For the purpose of presenting pro forma financial information, the 80 million sharesissued in connection with the Merger are presented as if they had been outstandingduring the year presented.
See the accompanying notes to unaudited pro forma condensed consolidated financial statements
AAMPRO GROUP, INC. AND SUBSIDIARIES
INTRODUCTION TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma adjustments are included in the accompanying unaudited pro forma condensed consolidated balance sheet as of June 30, 2007, and the unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2007, and the pro forma condensed consolidated statement of income for the year ended December 31, 2006, to reflect the Merger of AAMPRO Group, Inc. and Subsidiaries and Vital Consultants, L.L.C.
A. To record the issuance of stock and recapitalization of the Company.
5