Manchester (MNCSQ) 8-K Entry into a Material Definitive Agreement

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2006

	Historical						Pro Forma
	Nice
	Cars, Inc			Manchester, Inc (*)			Adjustments				Combined
ASSETS
Current Assets
Cash and cash equivalents	$	1,436,923		$	115,796						$	$1,552,719
Refundable deposit					250,000			(74,989	)	1		175,011
Accounts receivable and contracts receivable		77,188,013			—							77,188,013
Allowance for credit losses		(18,724,364	)		—							(18,724,364	)
Accounts receivable and contracts receivable, net		59,900,572			365,796			(74,989	)			60,191,379
Inventory		1,986,998			—							1,986,998
Prepaid expenses and other current assets					14,524							14,524
Total Current Assets		61,887,570			380,320			(74,989	)			62,192,901
Property, plant and equipment, net		668,739			13,093							681,832
Deferred acquisition costs					167,506			(167,506	)	2		—
Goodwill								54,774,205		3		54,774,205
Other Assets
Deferred loan costs, net, prior financing		634,993			—			(634,993	)	4		—
Deferred loan costs, net, new financing								22,280,060		5		22,280,060
Deferred state income taxes		133,989			—							133,989
Total Other Assets		768,982			—			21,645,067				22,414,049
Total Assets	$	63,325,291		$	560,919		$	76,176,777			$	140,062,987
LIABILITIES
Current Liabilities
Accounts payable	$	553,521		$	62,430						$	$615,951
Accrued liabilities and interest		—			14,160							14,160
Credit line								54,000,000		6		54,000,000
Participation agreements payable		33,324,608			—			(33,324,608	)	7		—
Note payable		—			890,664							890,664
Current portion reserve for repairs		3,145,900			—							3,145,900
Current portion capital leases payable		239,199			—			(239,199	)	8		—
Total Current Liabilities		37,263,228			967,254			20,436,193				58,666,675
Long-term Liabilities
Reserve for repairs		2,915,087			—							2,915,087
Capital leases payable		—			—							—
Notes payable stockholder		690,671			—			7,309,329		9		8,000,000
Advances from stockholder		—			—							—
Total Long-term Liabilities		3,605,758			—			7,309,329				10,915,087
Total Liabilities		40,868,986			967,254			27,745,522				69,581,762
STOCKHOLDERS’ EQUITY
Capital Stock - Nice Cars, Inc.
Authorized:
1,000,000 common shares, no par value $1.00 per share,
1,000 shares issues and outstanding		1,000						(1,000	)	10		—
Capital Stock - Nice Cars Capital Acceptance Corporation.
Authorized:
1,000,000 common shares, no par value $1.00 per share,
1,000 shares issues and outstanding		1,000			—			(1,000	)	10		—
Capital Stock - Manchester, Inc.
Authorized:
100,000,000 common shares, no par value $ .001 per share,
33,138,000 shares issues and outstanding					33,138							33,138
Additional paid in capital					157,715			70,887,560		11		71,045,275
Retained earnings (accumulated deficit)		22,454,305			(597,188	)		(22,454,305	)	12		(597,188	)
Total Stockholders’ Equity		22,456,305			(406,335	)		48,431,255				70,481,225
Total Liabilities and Stockholders Equity	$	63,325,291		$	560,919		$	76,176,777			$	140,062,987

(*) - for the six months ended May 31, 2006 as reported on Form 10-Q

Footnotes:

1 - to reclassify amounts expended to date for the acquisition of Nice Cars, Inc. from refundable deposit to goodwill

2 - to reclassify deferred acquistion costs to goodwill

3 - to record goodwill on the acquisition of Nice Cars, Inc.

4 - to write-off the deferred loan costs of Nice Cars, Inc. at June 30, 2006

5 - to record 2% or $1,080,000 loan origination cost and $21,200,060 for 3,000,000 warrants at $3.00 per share to Palm Beach Multi-Strategy Fund, L.P.

6 - to record the credit line with Palm Beach Multi-Strategy Fund, L.P. to acquire Nice Cars, Inc.

7 - to record the payoff of the Nice Cars, Inc. participation agreement at June 30, 2006

8 - to record the payoff of the Nice Cars, Inc. capital leases at June 30, 2006

9 - to record the net increase in note payable to stockholder

10 - to eliminate common stock equity of Nice Cars, Inc. at June 30, 2006

11 - to record the value of the common stock canceled and re-issued to Seller, 6,250,000 common shares at $7.95 per share, plus 3,000,000 warrants issued to Palm Beach Multi-Strategy Fund, L.P. at $3.00 per share

12 - to eliminate the equity of Nice Cars, Inc. at June 30, 2006