EXHIBIT 99.3
VISUAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES (FORMERLY WILDON PRODUCTIONS INC.) |
PRO-FORMA FINANCIAL STATEMENTS |
The accompanying amended unaudited pro forma consolidated financial statements of Visual Management Systems, Inc. and subsidiaries (formerly Wildon Productions Inc.) (the “Company”) give effect to the (a) merger (the “Merger”) of the Company’s wholly-owned subsidiary, VMS Acquisition Corp., with and into Visual Management Systems Holding, Inc., a New Jersey Corporation (“VMS”) and (b) 1-for-7 reverse split (the “Reverse Split”) of the Company’s common stock, $.01 par value (the “Common Stock”), which became effective on July 17, 2007 as if such transactions had occurred on May 31, 2007 for balance sheet data and March 1, 2006 for Statement of Operations Data.
In connection with the Merger, the Company acquired 100% of the issued and outstanding capital stock of VMS in exchange for 5,218,000 shares of the Company’s Common Stock, and certain holders of Common Stock agreed to cancel 476,429 shares (after giving effect to the Reverse Split) of Common Stock at the time of the Merger. Under the terms of the Merger Agreement, each share of VMS Common Stock outstanding prior to the Merger (10,436,000 shares) was converted into .50 shares of Common Stock at the time of the Merger. As a result, VMS’ former stockholders became the majority shareholders of the Company and VMS became a wholly-owned subsidiary of the Company.
The acquisition of VMS by the Company has been accounted for as a reverse merger because on a post-merger basis, the former VMS shareholders hold a majority of the outstanding shares of the Company’s Common Stock. As a result, VMS was deemed to be the acquirer for accounting purposes.
In April 2008, in conjunction with the audit of the Company’s financial statements for the year ended December 31, 2007, the Company’s management, after discussions with the Company’s independent registered public accounting firm, determined that its previously issued pro forma financial statements for the periods identified above failed to properly record the impact of inter-company transactions on revenue, cost of revenue, and inventory. In addition, changes were made to properly reflect the impacts on customer deposits and accounts receivable for amounts billed to customers but not yet earned as revenue. Finally, the identified pro forma statements were modified to properly reflect the impact of the Company’s reverse merger transaction on the equity section of the Company’s balance sheet.
In the opinion of the Company’s management, the accompanying amended unaudited pro forma consolidated balance sheet and amended unaudited pro forma statement of loss include all adjustments necessary for the fair presentation of the transactions in accordance with the requirements of the Securities Exchange Commission. The accompanying amended unaudited pro forma consolidated financial statements are prepared for illustrative purposes only and may not be indicative of the financial position or operating results that would have occurred if the transactions had been completed on March 1, 2006. Furthermore, the reported unaudited pro forma consolidated statement of loss is not necessarily indicative of the operating results that may be obtained by the Company on an annual basis.
VISUAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES |
(FORMERLY WILDON PRODUCTIONS INC.) |
PRO-FORMA STATEMENT OF OPERATIONS |
FOR THE 3 MONTHS ENDED MAY 31, 2007 |
Visual Management Systems, Inc. (formerly Wildon Productions Inc.) | Visual Management Systems Holding, Inc. and Subsidiaries | Eliminations | Pro-Forma Combined | ||||||||||||
Revenues | $ | - | 1,459,355 | 1,459,355 | |||||||||||
Cost of revenues | - | 788,512 | 788,512 | ||||||||||||
Gross margin | - | 670,843 | 670,843 | ||||||||||||
Operating expenses | 40,094 | 1,610,726 | -40,094 | 1,610,726 | |||||||||||
Loss from operations | -40,094 | -939,883 | 40,094 | -939,883 | |||||||||||
Other (income) expenses | |||||||||||||||
Debt conversion expense | - | - | - | ||||||||||||
Interest income | - | -47 | -47 | ||||||||||||
Interest expense | - | 145,374 | 145,374 | ||||||||||||
Miscellaneous (income) expense | - | - | - | ||||||||||||
- | 145,327 | - | 145,327 | ||||||||||||
Provision for taxes | 2,933 | 2,933 | |||||||||||||
Net loss | $ | -40,094 | -1,088,143 | 40,094 | -1,088,143 |
VISUAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES |
(FORMERLY WILDON PRODUCTIONS INC.) |
PRO-FORMA STATEMENT OF OPERATIONS |
FOR THE 12 MONTHS ENDED FEBRUARY 28, 2007 |
Visual Management Systems, Inc. (formerly Wildon Productions Inc.) | Visual Management Systems Holding, Inc. and Subsidiaries | Eliminations | Pro Forma Combined | |||||||||||||
Revenues - net | - | 4,664,694 | - | 4,664,694 | ||||||||||||
Cost of revenues | - | 2,394,650 | - | 2,394,650 | ||||||||||||
Gross margin | - | 2,270,044 | - | 2,270,044 | ||||||||||||
Operating expenses | 78,979 | 4,285,187 | -78,979 | 4,285,187 | ||||||||||||
Loss from operations | -78,979 | -2,015,142 | 78,979 | -2,015,142 | ||||||||||||
Other (income) expenses | ||||||||||||||||
Debt conversion expense | 855,034 | - | 855,034 | |||||||||||||
Interest income | (1,604 | ) | - | -1,604 | ||||||||||||
Interest expense | 59,303 | - | 59,303 | |||||||||||||
Miscellaneous (income) expense | 1,108 | - | 1,108 | |||||||||||||
- | 913,842 | - | 913,842 | |||||||||||||
Provision for taxes | 182 | - | 182 | |||||||||||||
Net loss | $ | -78,979 | -2,929,166 | 78,979 | -2,929,166 |
VISUAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES | ||||||||||
(FORMERLY WILDON PRODUCTIONS INC.) | ||||||||||
PRO-FORMA CONSOLIDATING BALANCE SHEET | ||||||||||
31-May-07 |
Visual Management Systems, Inc. (Formerly Wildon Productions Inc.) | Visual Management Systems Holding, Inc. and Subsidiaries | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
Assets | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | 14,864 | - | 14,864 | |||||||||||||
Accounts Receivable | - | 370,163 | - | 370,163 | ||||||||||||
Intercompany Receivable | - | - | - | - | ||||||||||||
Inventory | - | 356,670 | - | 356,670 | ||||||||||||
Prepaid Expenses | - | 27,277 | - | 27,277 | ||||||||||||
14,864 | 754,109 | - | 768,973 | |||||||||||||
Property and Equipment - net | - | 355,955 | - | 355,955 | ||||||||||||
Equipment Under Capital Leases - net | - | - | - | |||||||||||||
Deposits | - | 106,132 | - | 106,132 | ||||||||||||
Intangibles - net | - | 35,123 | - | 35,123 | ||||||||||||
Total Assets | 14,864 | 1,251,320 | 1,266,184 | |||||||||||||
Liabilities and Stockholders' Deficit | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Bank Overdraft | - | 64,551 | 64,551 | |||||||||||||
Accounts Payable | 4,120 | 1,011,375 | - | 1,015,495 | ||||||||||||
Interco Payable | - | - | - | - | ||||||||||||
Accrued Expenses | 21,012 | 330,919 | - | 351,931 | ||||||||||||
Customer Deposits | - | 166,849 | - | 166,849 | ||||||||||||
Sales Tax Payable | - | 52,225 | - | 52,225 | ||||||||||||
Current Portion of Long-Term Debt | - | 78,997 | - | 78,997 | ||||||||||||
Current Portion of Obligations Under | - | - | - | - | ||||||||||||
Capital Leases | ||||||||||||||||
25,132 | 1,704,916 | - | 1,730,048 | |||||||||||||
Convertible Debt | 125,000 | 125,000 | ||||||||||||||
Long-Term Debt - net of current portion | - | 252,992 | 252,992 | |||||||||||||
Obligations Under Capital Leases - net of current | - | 22,995 | 22,995 | |||||||||||||
portion | - | |||||||||||||||
Loans Payable Stockholders | - | 4,622 | 4,622 | |||||||||||||
- | ||||||||||||||||
Stockholders Deficit | - | |||||||||||||||
Common Stock | 2,035 | 37,142 | -2,035 | 37,142 | ||||||||||||
Additional Paid-In Capital | 111,965 | 4,112,690 | -122,233 | 4,102,422 | ||||||||||||
Treasury Stock | - | -150,000 | -150,000 | |||||||||||||
Accumulated Deficit | -124,268 | -4,859,037 | 124,268 | -4,859,037 | ||||||||||||
-10,268 | -859,205 | - | -869,473 | |||||||||||||
14,864 | 1,251,320 | - | 1,266,184 |
VISUAL MANAGEMENT SYSTEMS, INC. AND SUBSIDIARIES | ||||||||||
(FORMERLY WILDON PRODUCTIONS INC.) | ||||||||||
PRO-FORMA CONSOLIDATING BALANCE SHEET | ||||||||||
28-Feb-07 |
Visual Management Systems, Inc. (Formerly Wildon Productions Inc.) | Visual Management Systems Holding, Inc. and Subsidiaries | Pro Forma Adjustments | Pro Forma Combined | |||||||||||||
Assets | ||||||||||||||||
Current Assets | ||||||||||||||||
Cash | 49,791 | 60,204 | 109,995 | |||||||||||||
Accounts Receivable | - | 227,405 | 227,405 | |||||||||||||
Intercompany Receivable | - | - | ||||||||||||||
Inventory | - | 301,323 | 301,323 | |||||||||||||
Prepaid Expenses | 285 | 8,894 | 9,179 | |||||||||||||
50,076 | 597,826 | - | 647,902 | |||||||||||||
Property and Equipment - net | - | 323,889 | - | 323,889 | ||||||||||||
Equipment Under Capital Leases - net | - | - | - | |||||||||||||
Deposits | - | 75,299 | - | 4,338 | ||||||||||||
Intangibles - net | - | 4,338 | - | 75,299 | ||||||||||||
Total Assets | 50,076 | 1,001,352 | - | 1,051,428 | ||||||||||||
Liabilities and Stockholders' Deficit | ||||||||||||||||
Current Liabilities | ||||||||||||||||
Bank Overdraft | - | - | - | |||||||||||||
Accounts Payable | 731,817 | - | 731,817 | |||||||||||||
Interco Payable | - | - | - | |||||||||||||
Accrued Expenses | 20,700 | 272,387 | - | 293,087 | ||||||||||||
Customer Deposits | - | 146,004 | - | 146,004 | ||||||||||||
Sales Tax Payable | - | 35,197 | - | 35,197 | ||||||||||||
Current Portion of Long-Term Debt | - | 75,719 | - | 75,719 | ||||||||||||
Current Portion of Obligations Under | ||||||||||||||||
Capital Leases | - | - | - | - | ||||||||||||
20,700 | 1,261,124 | - | 1,281,824 | |||||||||||||
Convertible Debt | - | - | ||||||||||||||
Long-Term Debt - net of current portion | - | 282,054 | 282,054 | |||||||||||||
Obligations Under Capital Leases - net of current | - | 28,832 | 28,832 | |||||||||||||
portion | - | |||||||||||||||
Loans Payable Stockholders | - | 6,000 | 6,000 | |||||||||||||
- | ||||||||||||||||
Stockholders Deficit | - | |||||||||||||||
Common Stock | 14,250 | 28,777 | -14,250 | 28,777 | ||||||||||||
Additional Paid-In Capital | 105,400 | 3,315,460 | -76,024 | 3,344,836 | ||||||||||||
Treasury Stock | - | (150,000 | ) | -150,000 | ||||||||||||
Accumulated Deficit | -90,274 | -3,770,895 | 90,274 | -3,770,895 | ||||||||||||
29,376 | -576,658 | - | -547,282 | |||||||||||||
50,076 | 1,001,352 | - | 1,051,428 |