Tricell (TCLL) 8-K/A Completion of Acquisition or Disposition of Assets

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)
of the
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):November 21, 2006

TRICELL, INC.

(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or organization)

0-50036	88-0504530
(Commission File Number)	(IRS Employer Identification Number)

33 Lawton Street, Congleton, Cheshire, CW12 1RU, United Kingdom

(Address of principal executive offices)

011 44 1782 339 130
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition of Disposition of Assets.

     This Form 8-K/A amends the current report on Form 8-K filed with the Securities and Exchange Commission on July 7, 2005 by Tricell, Inc., a Nevada corporation (“Tricell”), in connection with Tricell’s acquisition of Ace Telecom Ltd. (“Ace”) on June 30, 2005. This Amendment is being filed to provide the financial information required by Item 9.01.

     On June 30, 2005, Tricell executed a Sale Agreement (the “Agreement”) with the four shareholders of Ace, namely James Reed, Neil Pursell, Adrian Sumnall and Neil Proctor (the “Shareholders”). Pursuant to the Agreement, the Company acquired all of the issued and outstanding capital stock of Ace, in aggregate, in exchange for one million (1,000,000) shares (“Shares”) of the Company’s common stock. Pursuant to the Agreement, all of the issued and outstanding capital stock of Ace immediately prior to closing was transferred to Tricell by the Shareholders, who in exchange received the Shares in a pro rata manner.

Item 9.01 Financial Statements and Exhibits.

(a)	Financial Statements of businesses acquired:
	Audited financial statements of Ace Telecom Trading Limited for the years ended June 30, 2005 and 2004.	F-1
(b)	Pro Forma financial information:
	The pro forma condensed consolidated statements of operations for the six months ended June 30, 2005 and for the year ended December 31, 2004.	F-18
(c)	Shell Company Transactions:
	None.
(d)	Exhibits:

Exhibit No.	Description
10	June 30, 2005 Sale Agreement (Incorporated by reference from the Company’s Form 8-K, file number 000-50006, filed on July 7, 2005).

SIGNATURES

     Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated this 21st day of November 2006.

	TRICELL, INC.
By:	/s/ Neil PursellNeil Pursell
	Chief Financial Officer

2

Independent auditors’ report to the shareholders of Ace Telecom Trading Limited

We have audited the financial statements of Ace Telecom Trading Limited for the years ended 30 June 2005 and 2004 which comprise the profit and loss accounts, the balance sheets, the cash flow statements, the statement of total recognized gains and losses and the related notes. These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and the accounting policies set out therein.

This report is made solely to the company’s shareholders, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company’s shareholders those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s shareholders as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The company’s directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and transactions with the company is not disclosed.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

F-1

Independent auditors’ report to the shareholders of Ace Telecom Trading Limited continued

Fundamental uncertainty

In forming our opinion, we have considered the adequacy of the disclosures made in Note 18 to the financial statements in respect of the contingent liability relating to the uncertainty over the possible outcome of the Inland Revenue challenge to the executive reward scheme and additional liabilities which might fall due if the scheme were deemed to be invalid.

We have also considered the adequacy of the disclosures made in Note 1.5 to the financial statements regarding the appropriateness of the going concern assumption which is ultimately dependent upon the validity of the scheme.

In view of the significance of this uncertainty, we consider that it should be drawn to your attention but our opinion is not qualified in this respect.

Opinion

In our opinion the financial statements give a true and fair view of the state of the company’s affairs as at 30 June 2005 and 2004 and of its loss and cash flows for the years then ended and have been properly prepared in accordance with the Companies Act 1985.

/s/ Jacksons

Jacksons
Chartered Accountants and	15-19 Marsh Parade
Registered Auditor	Newcastle-under-Lyme
	Staffordshire
	ST5 1BS

Date: 8 February 2006

F-2

Ace Telecom Trading Limited

Profit and loss accounts
for the years ended 30 June 2005 and 2004

			2005			2004
	Notes		£			£
Turnover		2		59,342,811			59,434,653
Cost of sales				(58,491,496	)		(59,068,566	)
Gross profit				851,315			366,087
Administrative expenses				(891,708	)		(385,409	)
Other operating income				999			—
Operating loss		3		(39,394	)		(19,322	)
Other interest receivable and similar income		4		—			1,136
Interest payable and similar charges		5		(15,222	)		(7,092	)
Loss on ordinary activities before taxation				(54,616	)		(25,278	)
Tax on loss on ordinary activities		7		—			6,186
Loss on ordinary activities after taxation				(54,616	)		(19,092	)
Loss for the year				(54,616	)		(19,092	)
Accumulated loss brought forward				(48,781	)		(29,689	)
Accumulated loss carried forward				(103,397	)		(48,781	)
Statement of total recognized gains and losses
Loss on ordinary activities after taxation				(54,616	)		(19,092	)
Unrealised movement on revaluation of property				91,421			—
Total recognized gains/losses relating to the year				36,805			(19,092	)

The notes form an integral part of these financial statements.

F-3

Ace Telecom Trading Limited

Balance sheets
as of 30 June 2005 and 2004

			2005						2004
	Notes		£			£			£			£
Fixed assets
Tangible assets		8					327,547						247,123
Current assets
Debtors		9		15,212,193						2,584,307
Cash at bank and in hand				585,327						50,047
				15,797,520						2,634,354
Creditors: amounts falling due within one year		10		(16,131,459	)					(2,805,528	)
Net current liabilities							(333,939	)					(171,174	)
Total assets less current liabilities							(6,392	)					75,949
Creditors: amounts falling due after more than one year		11					—						(124,727	)
Provisions for liabilities and charges		12					(5,581	)					—
Deficiency of assets							(11,973	)					(48,778	)
Capital and reserves
Called up share capital		14					3						3
Revaluation reserve		15					91,421						—
Profit and loss account		15					(103,397	)					(48,781	)
Equity shareholders’ funds		16					(11,973	)					(48,778	)

The notes form an integral part of these financial statements

F-4

Ace Telecom Trading Limited

Cash flow statements
for the years ended 30 June 2005 and 2004

			2005			2004
	Notes		£			£
Reconciliation of operating loss to net cash inflow from operating activities
Operating loss				(39,394	)		(19,322	)
Depreciation				16,579			16,857
Profit on disposal of fixed assets				—			—
(Increase) in debtors				(12,627,885	)		(1,273,302	)
Increase in creditors				13,218,092			1,304,735
Net cash inflow from operating activities				567,392			28,968
Cash flow statement
Net cash inflow from operating activities				567,392			28,968
Returns on investments and servicing of finance		24		(15,222	)		900
Taxation		24		(6,667	)		—
Capital expenditure		24		—			(203,423	)
				545,503			(173,555	)
Financing		24		(10,222	)		136,500
Increase in cash in the year				535,281			(37,055	)
Reconciliation of net cash flow to movement in net funds (Note 25)
Increase in cash in the year				535,281			(37,055	)
Cash outflow from increase in debts and lease financing				10,222			(136,500	)
Change in net funds resulting from cash flows				545,503			(173,555	)
Net debt at 1 July 2004				(86,454	)		87,101
Net funds at 30 June 2005				459,049			(86,454	)

The notes form an integral part of these financial statements.

F-5

Ace Telecom Trading Limited

Notes to the financial statements
for the years ended 30 June 2005 and 2004

1.	Accounting policies
1.1.	Accounting convention
	The financial statements are prepared under the historical cost convention modified to include the revaluation of certain fixed assets.
1.2.	Turnover
	Turnover represents the total invoice value, excluding value added tax, of sales made during the year.
	Revenue is recognized on a sale to a customer when and to the extent that the company obtains the right to consideration in exchange for its performance
1.3.	Tangible fixed assets and depreciation
	Depreciation is provided at rates calculated to write off the cost or valuation less residual value of each asset over its expected useful life, as follows:

Land and buildings	-	Not depreciated
Leasehold properties	-	20% Straight Line
Fixtures, fittings
and equipment	-	20% - 33% Straight Line

No depreciation is provided on freehold property because in the opinion of the directors the residual value will be in excess of the carrying value.

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

1.4.	Deferred taxation
	Deferred tax is recognized in respect of all timing differences that have originated but not reversed at the balance sheet date. Timing differences are differences between the taxable profits and the results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. A net deferred tax asset is regarded as recoverable and therefore recognized only when it can be regarded as more likely or not that there will be suitable taxable profits from which the future reversal of underlying timing differences can be deducted.
1.5.	Going concern
	As disclosed in Note 18 to the financial statements, there is a contingent tax liability in respect of the executive reward scheme. The directors consider that in preparing the financial statements it is appropriate to prepare them on a going concern basis. However, the going concern assumption is ultimately dependent upon the acceptance of the validity of the above scheme by the Inland Revenue. The financial statements do not include any adjustments that would arise should the going concern assumption no longer be appropriate.

F-6

Ace Telecom Trading Limited

Notes to the financial statements
for the years ended 30 June 2005 and 2004

2. Turnover

	2005		2004
	£		£
Geographical market
UK		34,832,370		42,275,503
Europe		24,510,441		17,159,150
		59,342,811		59,434,653

3. Operating loss

	2005		2004
	£		£
Operating loss is stated after charging:
Depreciation and other amounts written off tangible assets		16,578		16,857
Auditors’ remuneration		10,000		10,000

4. Interest receivable and similar income

	2005		2004
	£		£
Other interest		—		1,136

5. Interest payable and similar charges

	2005		2004
	£		£
Interest payable on loans < 1 yr		15,222		6,752
On overdue tax		—		340
		15,222		7,092

F-7

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

6. Employees

Number of employees	2005		2004
The average monthly numbers of employees (including the directors) during the year were:
Management		4		4
Administration		3		3
		7		7

	2005		2004
Employment costs	£		£
Wages and salaries		747,948		219,965
Social security costs		96,828		33,583
		844,776		253,548

6.1. Directors’ emoluments

	2005		2004
	£		£
Remuneration and other emoluments		634,228		212,450

Highest paid director	£		£
Amounts included above:
Emoluments and other benefits		158,557		53,113

F-8

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

7. Tax on loss on ordinary activities

	2005		2004
Analysis of charge in period	£		£
Current tax
UK corporation tax for current year at 19.00% (2004 - 19.00%)		—		(5,194	)
Total current tax charge		—		(5,194	)
Deferred tax
Timing differences, origination and reversal		—		(992	)
Total deferred tax		—		(992	)
Tax on loss on ordinary activities		—		(6,186	)

Factors affecting tax charge for period

The tax assessed for the period is higher than the standard small companies rate of corporation tax in the UK (19 per cent). The differences are explained below:

	2005			2004
	£			£
Loss on ordinary activities before taxation		(54,615	)		(25,278	)
Loss on ordinary activities multiplied by small companies rate of corporation tax in the UK of 19% (30 June 2004: 19%)		(10,377	)		(4,803	)
Effects of:
Expenses not deductible for tax purposes		2,147			513
Depreciation for period in excess of capital allowances		449			313
Utilisation of tax losses		—			(3,432	)
Depreciation on non qualifying assets		2,215			2,215
Unrelieved losses carried forward		5,566			—
Current tax charge for period		—			(5,194	)

F-9

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

8. Tangible fixed assets

	Land and		Fixtures,
	buildings		fittings and
	freehold		equipment		Total
	£		£		£
Cost or valuation
At 1 July 2004		202,998		83,159		286,157
Revaluation		97,002		—		97,002
At 30 June 2005		300,000		83,159		383,159
Depreciation
At 1 July 2004		—		39,034		39,034
Charge for the year		—		16,578		16,578
At 30 June 2005		—		55,612		55,612
Net book values
At 30 June 2005		300,000		27,547		327,547
At 30 June 2004		202,998		44,125		247,123

     On the 30 June 2005 the freehold land and buildings were valued at open market value excluding attributable selling costs of £300,000 by Butters John Bee, Chartered Surveyors an independent valuer.

     Tangible fixed assets included at a valuation would have been included on a historical cost basis at:

	2005		2004
	£		£
Cost		202,998		—
Depreciation		—		—
Net book value		202,998		—

F-10

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

9. Debtors

	2005		2004
	£		£
Trade debtors		14,998,347		2,298,236
Amounts owed by group undertakings		6,638		6,564
Amount owed by connected companies		—		37,765
Other debtors		203,862		238,466
Prepayments and accrued income		3,346		3,276
		15,212,193		2,584,307

10. Creditors: amounts falling due within one year

	2005		2004
	£		£
Bank loan		126,279		11,773
Trade creditors		15,453,506		2,475,482
Amounts owed to connected companies		75,000		—
Corporation tax		—		6,667
Other taxes and social security costs		400,874		4,026
Other creditors		—		3,798
Accruals and deferred income		75,800		303,782
		16,131,459		2,805,528

     The bank loan is secured by First Legal Mortgage over the company’s freehold property and a fixed charge over its other assets.

F-11

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

11. Creditors: amounts falling due after more than one year

	2005		2004
	£		£
Bank loan		—		124,727
Loans
Repayable in one year or less, or on demand (Note 10)		126,279		11,773
Repayable between one and two years		—		10,279
Repayable between two and five years		—		35,561
Repayable in five years or more		—		78,887
		126,279		136,500
Repayable in five years or more:
		—		78,887

     The bank loan is secured by First Legal Mortgage over the company’s freehold property and a fixed charge over its other assets.

     The bank loan was repayable by monthly installments over a 10 year period expiring on 30 April 2014 at a rate of 3% over the National Westminster Bank base rate. However the company disposed of its freehold property on which the loan was secured and the outstanding balance has been transferred to current liabilities to reflect its early settlement.

12.	Provisions for liabilities and charges
	Deferred

	Taxation
	(Note 13)		Total
	£		£
Movements in the year		5,581		5,581
At 30 June 2005		5,581		5,581

F-12

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

13. Provision for deferred taxation

	2005		2004
	£		£
Surplus on revaluation of property		5,581		—
Transferred from revaluation reserve		5,581
Provision at 30 June 2005		5,581

14. Share capital

	2005		2004
	£		£
Authorised
1,000 Ordinary shares of £1 each		1,000		1,000
Allotted, called up and fully paid
3 Ordinary shares of £1 each		3		3

15. Equity Reserves

				Profit
	Revaluation			and loss
	reserve			account			Total
	£			£			£
At 1 July 2004		—			(48,782	)		(48,782	)
Revaluation of property		97,002						97,002
Deferred tax on revaluation of property		(5,581	)					(5,581	)
Loss for the year					(54,615	)		(54,615	)
At 30 June 2005		91,421			(103,397	)		(11,976	)

F-13

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

16. Reconciliation of movements in shareholders’ funds

	2005			2004
	£			£
Loss for the year		(54,616	)		(19,092	)
Other recognised gains or losses		91,421			—
Net addition to shareholders’ funds		36,805			(19,092	)
Opening shareholders’ funds		(48,778	)		(29,686	)
Closing shareholders’ funds		(11,973	)		(48,778	)

17. Financial commitments

     At 30 June 2005 the company had annual commitments under non-cancellable operating leases as follows:

	Land and buildings
	2005		2004
	£		£
Expiry date:
In over five years		30,000		—

18. Contingent liabilities

     Bonuses for the period to 30 June 2003 were paid to directors amounting to £1,200,000 in the form of subsidiary company shares on 24 February 2004. The directors have received Counsel’s opinion on this executive reward scheme and are of the opinion that no additional Pay as You Earn, National Insurance or corporation tax is due by the company. However on 15 October 2004, the Inland Revenue initiated an enquiry into aspects of the company’s corporation tax return for the period ended 30 June 2003. The directors recognise that the Inland Revenue, in the course of the enquiry, may challenge the validity of the scheme, which, if successful, could result in additional Pay As You Earn, National Insurance, corporation tax, interest and, conceivably, penalties becoming payable by the company. It is not practicable for the directors to quantify the financial effect of the contingent liability because the enquiry is still in its infancy.

F-14

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

19. Transactions with directors

     The following directors had interest free loans during the year. The movements on these loans are as follows:

	Amount owing				Maximum
	2005		2004		in year
	£		£		£
James Reed		38,041		61,854		53,525
John Sumnall		38,042		61,854		53,525
Neil Proctor		38,042		61,854		53,525
Neil Pursell		38,042		15,854		53,525

20. Related party transactions

     During the year the company had received a deposit of £75,000 for the purchase of its freehold land and buildings from NJJ Homes Limited a company under the control of the directors of Ace Telecom Trading Limited. This deposit was the only amount due to NJJ Homes Limited at the year end, however the company was owed a balance of £23,500 at the previous year end on an interest free basis.

     During the year the directors agreed to assign an additional amount due from NJJ Homes Limited of £104,000 to the directors loan accounts in equal proportions.

     During the previous year the company was charged rent of £26,000 by N2J Limited a company controlled by the directors of Ace Telecom Trading Limited. During the previous year the company purchased its freehold property from N2J Limited for £200,000 which was considered by the directors to be at fair market value. During the current year the directors agreed to assign an amount owed to N2J Limited of £27,433 to the directors loan accounts in equal proportions. During the year the directors agreed to assign an amount of £30,000 owed by Peach 2 Limited a company under the control of the directors of Ace Telecom Trading Limited in equal proportion to each of the directors loan accounts. During the year the company made payments on behalf of the directors relating to their investments in a third party in which they do not have overall control of £176,959. These amounts were allocated in equal proportion to each of the directors’ loan accounts.

F-15

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

21. Ultimate parent undertaking

     The company is a 100% owned subsidiary of Ace Telecom Limited, a company registered in England and Wales. On 30 June 2005 the entire share capital of the 100% holding company Ace Telecom Limited was acquired by Tricell Inc a company incorporated in United States of America. The annual accounts of Tricell Inc are publicly available from the U. S. Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549.

22. Controlling interest

     From 30 June 2005 Tricell Inc controls the company as a result of controlling indirectly 100% of the issued Ordinary share capital. Prior to 30 June 2005 there was no ultimate controlling party during the current or previous periods.

23. Post balance sheet events

     On the 12 August 2005 the company completed the disposal of its freehold land and buildings to NJJ Homes Limited a related party for the agreed sum of £300,000. Although the company and NJJ Homes Limited had agreed the sale before the balance sheet date and a £70,000 deposit received, contracts had not been exchanged until after this date. The estimated profit on disposal of the property is £97,000.

     The company has signed a ten year lease of the property from NJJ Homes Limited for an annual rent of £30,000 from 12 August 2005. This rental has been secured by a guarantee to the lessor by the now ultimate controlling party Tricell Inc.

F-16

Ace Telecom Trading Limited

Notes to the financial statements (continued)
for the years ended 30 June 2005 and 2004

24. Gross cash flows

	2005			2004
	£			£
Returns on investments and servicing of finance
Interest received		—			1,136
Interest paid		(15,222	)		(234	)
		(15,222	)		902
Taxation
Corporation tax paid		(6,667	)		—
Capital expenditure
Payments to acquire tangible assets		—			(203,423	)
Financing
New long term bank loan		—			136,500
Repayment of long term bank loan		(10,222	)		—
		(10,222	)		136,500

25. Analysis of changes in net funds

	Opening			Cash		Other			Closing
	balance			flows		changes			balance
	£			£		£			£
Cash at bank and in hand		50,047			535,280					585,327
Debt due within one year		(11,773	)		10,222		(124,727	)		(126,278	)
Debt due after one year		(124,727	)		—		124,727			—
		(136,500	)		10,222		—			(126,278	)
Net funds		(86,453	)		545,502		—			459,049

F-17

TRICELL INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The unaudited pro forma condensed consolidated financial statements have been prepared to give effect to Tricell, Inc. and subsidiaries (“Tricell” or the “Company”) acquisition of ACE Telecom Limited and its wholly owned subsidiary, ACE Telecom Trading Limited, collectively referred to as “ACE”, pursuant to the terms of a purchase agreement entered into on June 30, 2005. The Company acquired all of the issued and outstanding capital stock of ACE, in aggregate, in exchange for 1,000,000 shares of the Company’s common stock. The 1,000,000 shares were valued at $30,000 based on the price of $0.03 on the date of acquisition. Pursuant to the purchase agreement, all of the issued and outstanding capital stock of ACE immediately prior to closing were transferred to the Company by the shareholders, who in exchange received the shares of the Company in a pro rata manner. As a result, ACE became a wholly-owned subsidiary of the Company.

The pro forma condensed consolidated statements of operations for the six months ended June 30, 2005 and for the year ended December 31, 2004 give effect to the acquisition as if it had occurred on January 1, 2004 combining the results of Tricell for the six months ended June 30, 2005 and the year ended December 31, 2004 with those of ACE for the six months ended June 30, 2005 and for the year ended December 31, 2004.

F-18

TRICELL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2005
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

	TRICELL			ACE			COMBINED
Sales	$	220,508		$	55,106		$	275,614
Cost of sales		219,101			54,316			273,417
Gross profit		1,408			790			2,198
Selling, general and administrative expenses		652			827			1,479
Income (loss) from operations		756			(37	)		719
Other income (expense):
Interest expense and other financing costs		(847	)		(14	)		(861	)
Interest income		—			—			—
Total other expense		(847	)		(14	)		(861	)
Loss before income taxes		(91	)		(51	)		(142	)
Income tax benefit		16			—			16
Net loss	$	(75	)	$	(51	)	$	(126	)
Net loss per share:
Basic and diluted	$	0.00					$	0.00
Weighted average common shares outstanding		93,753,020						94,753,020

See the accompanying notes to pro forma condensed financial statements.

F-19

TRICELL, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2004
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

	TRICELL			ACE			COMBINED
Sales	$	13,899		$	106,659		$	120,558
Cost of sales		13,426			105,550			118,976
Gross profit		473			1,109			1,582
Selling, general and administrative expenses		8,029			1,161			9,190
Loss from operations		(7,556	)		(52	)		(7,608	)
Other income (expense):
Interest expense and other financing costs		(202	)		(20	)		(222	)
Gain on sale of fixed assets		19			—			19
Interest income		—			1			1
Total other expense		(183	)		(19	)		(202	)
Loss before income taxes		(7,739	)		(71	)		(7,810	)
Income tax benefit		215			5			220
Net loss	$	(7,524	)	$	(66	)	$	(7,590	)
Net loss per share:
Basic and diluted	$	(0.08	)				$	(0.08	)
Weighted average common shares outstanding		93,719,284						94,719,284

See the accompanying notes to pro forma condensed financial statements.

F-20

TRICELL, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS

On June 30, 2005, the Company purchased ACE. ACE has bolstered the Company’s revenues and added additional customer base. Further, ACE has reinforced the Company’s wholesale trading and distribution business significantly. ACE is in the same line of business of the Company and acts complementary because they effect trades through separate networks of suppliers and purchasers. Pursuant to the purchase agreement, the Company acquired all of the issued and outstanding capital stock of ACE, in aggregate, in exchange for 1,000,000 shares of the Company’s common stock. The 1,000,000 shares were valued at $30,000 based on the price of $0.03 on the date of acquisition. Pursuant to the purchase agreement, all of the issued and outstanding capital stock of ACE immediately prior to closing was transferred to the Company by the shareholders, who in exchange received the shares of the Company in a pro rata manner. As a result, ACE became a wholly-owned subsidiary of the Company.

This acquisition was accounted for as a purchase with the total consideration allocated to the assets and liabilities assumed, as follows:

Cash	$	1,077,002
Accounts receivable, net		27,596,958
Other receivables		370,825
Prepaid expenses and other current assets		6,157
Fixed assets		602,495
Goodwill		70,915
Accounts payable		(28,434,451	)
Accrued expenses and other current liabilities		(1,017,279	)
Income tax payable		(10,269	)
Mortgage payable		(232,353	)
Total	$	30,000

The Company’s consolidated balance sheet giving effect to the above transaction as of June 30, 2005 has been filed by the Company on Form 10-Q.

The accompanying pro forma combined statements of operations give effect to the additional 1,000,000 shares outstanding related to the above transaction.

F-21