EXHIBIT 99.2 – PRO FORMA FINANCIAL STATEMENTS
COMPILATION REPORT ON PRO FORMA FINANCIAL STATEMENTS
To the Directors of IC2E Consolidated:
We have read the accompanying unaudited pro forma balance sheet and income statement of IC2E Consolidated as at March 31, 2007 and have performed the following procedures:
1)
Compared the figures in the columns captioned "IC2E Inc." to the unaudited financial statements of IC2E Inc. as at March 31, 2007, and for the three months then ended, and the audited financial statements of IC2E Inc. for the year ended December 31, 2006 and found them to be in agreement.
2)
Compared the figures in the columns captioned "IC2E International, Inc." to the unaudited financial statements of the company as at March 31, 2007, and for the nine months then ended, and for the year ended June 30, 2006 and found them to be in agreement.
3)
Compared the figures in the columns captioned "1284544 Alberta Ltd." to the unaudited financial statements of the company as at March 31, 2007, and for the period from incorporation November 28, 2006 to March 31, 2007 and found them to be in agreement.
4)
Made enquiries of certain officials of the company who have responsibility for financial and accounting matters about:
a)
the basis for determination of pro forma adjustments; and
b)
whether the pro forma financial statements comply as to form in all material respects with regulatory requirements.
The officials:
a)
described to us the basis for determination of the pro forma adjustments, and
b)
stated that the pro forma financial statements comply as to form in all material respects with regulatory requirements.
5)
Read the notes to the pro forma financial statements, and found them to be consistent with the basis described to us for determination of the pro forma adjustments.
6)
Recalculated the application of the pro forma adjustments to the aggregate of the amounts in the columns captioned “IC2E Inc.", "IC2E International, Inc." and "1284544 Alberta Ltd" as at and for the three months ended March 31, 2007 and for the year ended December 31, 2006 and found the amounts in the column captioned "Pro Forma Consolidated Balance" to be arithmetically correct.
Pro forma financial statement is based on management assumptions and adjustments which are inherently subjective. The foregoing procedures are substantively less than either an audit or a review, the objective of which is the expression of assurance with respect to management's assumptions, the pro forma adjustments, and the application of the adjustments to the historical financial information. Accordingly, we express no such assurance. The foregoing procedures would not necessarily reveal matters of significance to the pro forma financial statements, and we therefore make no representation about the sufficiency of the procedures for the purposes of a reader of such statements.
Calgary, Canada
June 21, 2007
IC2E Inc.
Pro Forma Balance Sheet
As at March 31, 2007
(Unaudited) – US$
IC2E Inc. CAD | IC2E Inc. | 1284544 Alberta Ltd. | IC2E International Inc. | Pro Forma Adjustments (note 2) | Pro Forma consolidated balance | ||
$ | $ | $ | $ | $ | $ | ||
Assets | |||||||
Current | |||||||
Cash and cash equivalents | 328,896 | 285,284 | 1 | 1,177,285 | (a) | (82,500) | 1,380,070 |
Accounts receivable | 153,178 | 132,867 | - | 3,155 | - | 136,022 | |
Prepaid expenses | 8,711 | 7,556 | - | 1,831 | (b) | (1) | 9,386 |
Due from related parties | - | - | - | 4,630 | - | 4,630 | |
490,785 | 425,707 | 1 | 1,186,901 | (82,501) | 1,530,108 | ||
Due from related party | 7,300 | 6,332 | - | 26,182 | - | 6,332 | |
Property and equipment | 57,154 | 49,301 | - | - | 75,483 | ||
Software development costs | 2,225,105 | 1,798,552 | - | - | - | 1,798,552 | |
2,780,344 | 2,279,892 | 1 | 1,213,083 | (82,501) | 3,410,475 | ||
Liabilities | |||||||
Current | |||||||
Accounts payable and accrued liabilities | 63,986 | 55,501 | - | 2,830 | - | 58,331 | |
Related party liabilities | - | - | - | 24,591 | - | 24,591 | |
63,986 | 55,501 | - | 27,421 | - | 82,922 | ||
Shareholders’ equity | |||||||
Share capital | 4,495,713 | 3,828,100 | 1 | 1,355 | (b) | (1,604,778) | 3,455,091 |
(b) | 1,069 | ||||||
(b) | (1) | ||||||
(c) | (400) | ||||||
(a) | (82,500) | ||||||
Additional paid-up capital | 1,345,945 | (c) | 400 | ||||
Share issue costs | - | - | - | (34,100) | - | - | |
Contributed surplus | 1,200 | 1,069 | - | - | (b) | (1,069) | - |
Deficit | (1,780,555) | (1,604,778) | - | (127,538) | (b) | 1,604,778 | (127,538) |
2,716,358 | 2,224,391 | 1 | 1,185,662 | (82,501) | 3,327,553 | ||
2,780,344 | 2,279,892 | 1 | 1,213,083 | (82,501) | 3,410,475 | ||
IC2E Inc.
Pro Forma Income Statement
For the three month period ended March 31, 2007
(Unaudited) – US$
IC2E Inc. CAD | IC2E Inc. | 1284544 Alberta Ltd. | IC2E International Inc. | Pro Forma Adjustments (note 2) | Pro Forma consolidated balance | |
$ | $ | $ | $ | $ | $ | |
Expenses | ||||||
Amortization | 146,873 | 119,012 | - | 818 | - | 119,830 |
General and administration | 39,933 | 34,090 | - | 14,416 | - | 48,506 |
Professional fees | 47,177 | 40,275 | - | 2,380 | - | 42,655 |
Salaries and related benefits | 170,116 | 145,228 | - | - | - | 145,228 |
Travel | 15,778 | 13,470 | - | - | - | 13,470 |
Exchange loss | - | - | - | (669) | - | (669) |
419,877 | 352,075 | - | 16,945 | - | 369,020 | |
Loss before the undernoted | (419,877) | (352,075) | - | (16,945) | - | (369,020) |
Interest income | 2,444 | 2,086 | - | - | - | 2,086 |
Net loss | (417,433) | (349,989) | - | (16,945) | - | (366,934) |
Loss per share Basic and diluted | - | - | - | - | - | (0.08) |
Weighted average number of shares | ||||||
Basic | 4,666,968 | |||||
Potential exercise of options | 5,000 | |||||
Potential exercise of warrants | 285,903 | |||||
Diluted | 4,957,871 | |||||
IC2E Inc.
Pro Forma Income Statement
For the year ended December 31, 2006
(Unaudited) – US$
IC2E Inc. CAD | IC2E Inc. | 1284544 Alberta Ltd. | IC2E International Inc. | Pro Forma Adjustments (note 2) | Pro Forma consolidated balance | |
$ | $ | $ | $ | $ | $ | |
Revenue | ||||||
Sales | 251,159 | 221,447 | - | - | - | 221,447 |
Expenses | ||||||
Amortization | 484,147 | 391,336 | - | - | - | 391,336 |
Canadian public listing costs | 128,609 | 113,395 | - | - | - | 113,395 |
Computer equipment costs | 58,119 | 51,244 | - | - | - | 51,244 |
General and administration | 164,289 | 144,854 | - | 6,608 | - | 151,462 |
Management and consulting fees | 139,904 | 123,353 | - | - | - | 123,353 |
Professional fees | 43,357 | 38,228 | - | 60,080 | - | 98,308 |
Salaries and related benefits | 422,306 | 372,347 | - | - | - | 372,347 |
Stock-based compensation | 1,200 | 1,058 | - | - | - | 1,058 |
Travel | 53,111 | 46,828 | - | - | - | 46,828 |
Exchange loss | - | - | - | (467) | - | (467) |
1,495,042 | 1,282,643 | - | 66,221 | - | 1,348,864 | |
Loss before the undernoted | (1,243,883) | (1,061,196) | - | (66,221) | - | (1,127,417) |
Interest income | 34,384 | 30,316 | - | - | - | 30,316 |
Net loss | (1,209,499) | (1,030,880) | - | (66,221) | - | (1,097,101) |
Loss per share | - | - | - | - | - | (0.06) |
Weighted average number of shares | ||||||
Basic | 18,667,873 | |||||
Potential exercise of options | 20,000 | |||||
Potential exercise of warrants | 1,143,611 | |||||
Diluted | 19,831,484 | |||||
IC2E Inc.
Notes to the Pro Forma Consolidated Financial Statements
For the three month period ended March 31, 2007 and the year ended December 31, 2006
(Unaudited) – US$
Note 1
-
Basis of presentation
Management has prepared the accompanying unaudited pro forma balance sheet (the "Balance Sheet") and income statement (the "Income Statement") of IC2E Consolidated in accordance with Canadian generally accepted accounting principles. The Balance Sheet is as at March 31, 2007. The Income statement is for the three month periods ended March 31, 2007 and for the year ended December 31, 2006 and assume the reorganization occurred on that date. They have been prepared from information derived from the unaudited financial statements of IC2E Inc. ("IC2E") as at and for the three month period ended March 31, 2007, and the audited financial statements for the year ended December 31, 2006. IC2E International Inc. ("International") unaudited financial statements as at and for the nine month period ended March 31, 2007,
International audited financial statements for the year ended June 30, 2006, and International unaudited financial statements for the 6 months ended December 31, 2005. 1284544 Alberta Ltd. unaudited financial statements as at and for the three month period ended March 31, 2007, and the unaudited financial statements for the year ended December 31, 2006, together with other information available to the corporation.
Management believes the Balance Sheet and Income Statement include all adjustments necessary for fair presentation of the proposed reorganization of the corporations as described below.
The Balance Sheet and Income Statement should be read in conjunction with the financial statements of IC2E and International referred to above and the related IC2E information circular dated June 25, 2007(the "Circular"). The Balance Sheet and Income Statement are not necessarily indicative of the financial position, which would have resulted if the transaction had not actually occurred on March 31, 2007.
The transaction has been accounted for in accordance with accounting principles applicable to reverse takeover transactions. Under these principles, International has been identified as the acquirer and the consolidated entity will be a continuation of this International. The purchase price is the fair value of the common shares retained by International shareholders.
Note 2
-
Pro forma adjustments
The Balance Sheet includes the following pro forma adjustments reflecting transactions disclosed in the Circular:
(a)
Estimated costs of the transaction of $82,500.
(b)
To record the acquisition of the net assets of amalgamated subsidiary.
(c)
Cancellation of 4,000,000 common shares of IC2E International Inc. just prior to amalgamation by Tom Charlton for no consideration as per the agreement.
(d)
International shares and warrants issued to IC2E shareholders on a 1 for 1.5 basis.
The Income Statement is not impacted and therefore does not reflect any adjustments for transactions disclosed in the Circular.
IC2E Inc.
Notes to the Pro Forma Consolidated Financial Statements
For the three month period ended March 31, 2007 and the year ended December 31, 2006
(Unaudited) – US$
Note 3
-
Share capital continuity
A continuity of IC2E issued common share capital and related recorded values after giving effect to the pro forma transactions described in note 2 above is set out below:
Common shares
Number of Shares | Amount US $ | |
International shares issued and outstanding at March 31, 2007 | 13,548,000 | $ 1,313,200 |
Cancellation of shares (note 2c) | (4,000,000) | - |
Shares issued to International shareholders | 9,548,000 | 1,313,200 |
IC2E issued and outstanding at March 31, 2007 | 13,679,810 | 2,224,391 |
Consolidation of IC2E shares (note 2d) | (4,559,937) | - |
Shares issued to IC2E shareholders | 9,119,873 | 2,224,391 |
Estimated transaction costs (note 2a) | - | (82,500) |
Total | 18,667,873 | $ 3,455,091 |
Options
As at March 31, 2007, International did not have any options outstanding. As at March 31, 2007, IC2E had 20,000 options outstanding exercisable into common shares at $0.45 per share and expiring in October 2007.
IC2E Consolidated will have 20,000 common share purchase warrants exercisable into common shares at $0.45 per share and expiring in October 2007.
Warrants
Number of Warrants | ||
International shares issued and outstanding at March 31, 2007 | - | |
IC2E issued and outstanding at March 31, 2007 | 1,715,417 | |
Consolidation of IC2E shares (note 2d) | (571,806) | |
Warrants issued to IC2E shareholders | 1,143,611 | |
Total | 1,143,611 |
As at March 31, 2007, International did not have any warrants outstanding. As at March 31, 2007, IC2E had 1,715,417 common share purchase warrants outstanding exercisable into common shares at $1 per share and expiring on December 31, 2007.
IC2E Consolidated will have 1,143,611 common share purchase warrants exercisable into common shares at $1.50 per share and expiring on December 31, 2007.
