EXHIBIT 99.2
Pro Forma Financial Information
The following pro forma condensed consolidated balance sheets and statements of operations are presented to give effect to the acquisition by Visual Management Systems, Inc. of substantially all of the assets of Intelligent Digital Systems, LLC (“IDS”) on April 3, 2008. The pro forma condensed consolidated balance sheet assumes that the acquisition occurred as of March 31, 2008. The pro forma condensed consolidated statements of operations assume that the acquisition occurred on January 1, 2007. Such information does not purport to be indicative of the results which would have actually been obtained if the acquisitions had been effected on the dates indicated nor is it indicative of actual or future operating results or financial position.
Visual Management Systems, Inc. and Subsidiaries | |||||||||||||||
Pro Forma Combined Balance Sheet | |||||||||||||||
At March 31, 2008 | Visual Management Systems, Inc. and Subsidiaries | Intelligent Digital Systems, LLC | Pro Forma Adjustments | Pro Forma Combined | |||||||||||
Assets | |||||||||||||||
Current assets | |||||||||||||||
Cash | $ | 111,567 | $ | 2,777 | a | $ | (7,777 | ) | $ | 106,567 | |||||
Accounts receivable | 195,912 | 3,185 | b | - | 199,097 | ||||||||||
Inventory | 587,606 | 20,123 | c | - | 607,729 | ||||||||||
Prepaid expenses | 5,190 | - | - | 5,190 | |||||||||||
Total current assets | 900,275 | 26,085 | (7,777 | ) | 918,583 | ||||||||||
Property and equipment - net | 726,786 | 225 | d | (225 | ) | 726,786 | |||||||||
Deposits and other assets | 90,808 | 90,808 | |||||||||||||
Investment in joint venture | e | 5,000 | 5,000 | ||||||||||||
Intangible assets - net | 1,659,727 | f | 1,562,692 | 3,222,419 | |||||||||||
Total Assets | $ | 3,377,596 | $ | 26,310 | $ | 1,559,690 | $ | 4,963,596 | |||||||
Liabilities and Stockholders' Deficit | |||||||||||||||
Current liabilities | |||||||||||||||
Accounts payable | $ | 705,074 | $ | 808 | i | $ | (808 | ) | $ | 705,074 | |||||
Accrued expenses and other current liabilities | 973,096 | 973,096 | |||||||||||||
Customer Deposits | 236,041 | 236,041 | |||||||||||||
Sales tax payable | 78,236 | 78,236 | |||||||||||||
Bank line of credit | 49,981 | 49,981 | |||||||||||||
Short term debt | - | - | g | 42,000 | 42,000 | ||||||||||
Current maturity of convertible notes payable | 833,333 | 833,333 | |||||||||||||
Current portion of long-term debt | 346,278 | 346,278 | |||||||||||||
Current portion of obligations under capital leases | 53,811 | 53,811 | |||||||||||||
Total current liabilities | 3,275,850 | 808 | 41,192 | 3,317,850 | |||||||||||
Convertible notes payable | 2,268,334 | h | 1,544,000 | 3,812,334 | |||||||||||
(net of current maturities and unamortized discount of $648,333) | |||||||||||||||
Long-term debt - net of current portion | 306,696 | 15,000 | i | (15,000 | ) | 306,696 | |||||||||
Obligations under capital leases - net of current portion | 100,554 | 100,554 | |||||||||||||
Stockholders' equity (deficit) | |||||||||||||||
Members Capital | 10,502 | j | (10,502 | ) | - | ||||||||||
Preferred stock | 1 | 1 | |||||||||||||
Common stock, $.001 par value; 50,000,000 shares authorized | 8,002 | 8,002 | |||||||||||||
Additional paid-in-capital | 12,744,785 | 12,744,785 | |||||||||||||
Accumulated deficit | (15,176,626 | ) | (15,176,626 | ) | |||||||||||
Treasury stock | (150,000 | ) | (150,000 | ) | |||||||||||
Total stockholders' equity (deficit) | (2,573,838 | ) | 10,502 | (10,502 | ) | (2,573,838 | ) | ||||||||
Total liabilities and stockholder's equity (deficit) | $ | 3,377,596 | $ | 26,310 | $ | 1,559,690 | $ | 4,963,596 | |||||||
a To record the $5,000 invested in the joint venture by VMS and to record the fair value of the cash received. | |||||||||||||||
b Adjustment to record the fair value of assets received | |||||||||||||||
c Adjustment to record the fair value of assets received | |||||||||||||||
d Adjustment to record the fair value of assets received | |||||||||||||||
e Adjustment to record the VMS investment in the joint venture | |||||||||||||||
f Adjustment to record the fair value of the intangible asset | |||||||||||||||
g Adjustment to record the portion of the purchase price to be paid in seven equal monthly installments | |||||||||||||||
h Adjustment to record the convertible note | |||||||||||||||
i Adjustment to record the fair value of the liabilities assumed | |||||||||||||||
j Adjustment to eliminate share capital of IDS |
Visual Management Systems, Inc. and Subsidiaries
Pro Forma Combined Statement of Operations
Three months ended March 31, 2008 | Visual Management Systems, Inc. and Subsidiaries | Intelligent Digital Systems, LLC | Pro Forma Adjustments | Pro Forma Combined | |||||||||||
Revenues - net | $ | 1,577,309 | $ | 9,918 | aa | $ | (9,918 | ) | $ | 1,577,309 | |||||
Cost of revenues | 843,113 | 63,849 | aa | (63,849 | ) | 843,113 | |||||||||
Gross margin | 734,196 | (53,931 | ) | 53,931 | 734,196 | ||||||||||
Operating expenses | 2,729,362 | 17,303 | bb | 60,832 | 2,807,497 | ||||||||||
Loss from operations | (1,995,166 | ) | (71,234 | ) | (6,901 | ) | (2,073,301 | ) | |||||||
Other (income) expenses | |||||||||||||||
Debt conversion expense | - | ||||||||||||||
Interest income | - | - | |||||||||||||
Interest expense | 140,003 | 140,003 | |||||||||||||
Miscellaneous income | 305 | 305 | |||||||||||||
140,308 | - | - | 140,308 | ||||||||||||
Net Income (Loss) | $ | (2,135,474 | ) | $ | (71,234 | ) | $ | (6,901 | ) | $ | (2,213,609 | ) | |||
Weighted average shares outstanding | 7,442,367 | 7,442,367 | |||||||||||||
Per share data (basic and diluted) | $ | (0.29 | ) | $ | (0.30 | ) |
aa | To eliminate IDS results |
bb | Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years |
Visual Management Systems, Inc. and Subsidiaries | |||||||||||||||
Pro Forma Combined Statement of Operations | |||||||||||||||
Year ended December 31, 2007 | Visual Management Systems, Inc. and Subsidiaries | Intelligent Digital Systems, LLC | Pro Forma Adjustments | Pro Forma Combined | |||||||||||
Revenues - net | $ | 6,315,622 | $ | 131,260 | aa | $ | (131,260 | ) | $ | 6,315,622 | |||||
Cost of revenues | 3,392,995 | 130,716 | aa | (130,716 | ) | 3,392,995 | |||||||||
Gross margin | 2,922,627 | 544 | (544 | ) | 2,922,627 | ||||||||||
Operating expenses | 8,490,554 | 337,585 | bb | (25,047 | ) | 8,803,092 | |||||||||
Loss from operations | (5,567,927 | ) | (337,041 | ) | 24,503 | (5,880,465 | ) | ||||||||
Other (income) expenses | |||||||||||||||
Debt conversion expense | 796,084 | 796,084 | |||||||||||||
Interest income | - | (12 | ) | aa | 12 | - | |||||||||
Interest expense | 3,420,634 | 3,420,634 | |||||||||||||
Miscellaneous income | - | - | |||||||||||||
4,216,718 | (12 | ) | 12 | 4,216,718 | |||||||||||
Net loss | (9,784,645 | ) | (337,029 | ) | 24,491 | (10,097,183 | ) | ||||||||
Deemed dividend on convertible preferred stock | 635,582 | - | - | 635,582 | |||||||||||
Net income available to common | $ | (10,420,227 | ) | $ | (337,029 | ) | 24,491 | $ | (10,732,765 | ) | |||||
Weighted average shares outstanding | 6,646,751 | 6,646,751 | |||||||||||||
Per share data (basic and diluted) | $ | (1.57 | ) | $ | (1.61 | ) | |||||||||
aa To eliminate IDS results | |||||||||||||||
bb Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years |