Airbee Wireless, Inc. and Subsidiaries
Unaudited Pro Forma Condensed
Consolidated Financial Statements
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AIRBEE WIRELESS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 2005
AIRBEE | IDENTITY | NOTE | ADJUSTMENTS | PROFORMA | ||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | 91,650 | $ | 45,523 | $ | 137,173 | ||||||||||||||
Accounts receivable, net | — | 229,379 | 229,379 | |||||||||||||||||
Inventory | — | 434,305 | 434,305 | |||||||||||||||||
Prepaid expenses and other current assets | 41,805 | — | 41,805 | |||||||||||||||||
Total Current Assets | 133,455 | 709,207 | — | 842,662 | ||||||||||||||||
Fixed assets, net of depreciation | 62,601 | 13,303 | — | 75,904 | ||||||||||||||||
OTHER ASSETS | ||||||||||||||||||||
Intangible assets | 165,975 | — | 165,975 | |||||||||||||||||
Goodwill | — | — | (a) | 4,552,850 | 4,552,850 | |||||||||||||||
Other assets | — | 350 | 350 | |||||||||||||||||
Total Other Assets | 165,975 | 350 | 4,552,850 | 4,719,175 | ||||||||||||||||
TOTAL ASSETS | $ | 362,031 | $ | 722,860 | $ | 4,552,850 | $ | 5,637,741 | ||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||
Current portion of notes payable | $ | 1,060,621 | $ | — | $ | 1,060,621 | ||||||||||||||
Accounts payable and accrued expenses | 457,781 | 275,710 | 733,491 | |||||||||||||||||
Total Current Liabilities | 1,518,402 | 275,710 | — | 1,794,112 | ||||||||||||||||
LONG-TERM LIABILITIES | ||||||||||||||||||||
Due officer | 40,927 | — | 40,927 | |||||||||||||||||
Total Long-Term Liabilities | 40,927 | — | — | 40,927 | ||||||||||||||||
TOTAL LIABILITIES | 1,559,329 | 275,710 | — | 1,835,039 | ||||||||||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
Common stock, $0.00004 Par Value; 200,000,000, 0, and 200,000,000 | ||||||||||||||||||||
shares authorized; 42,724,056, 0, and 50,416,864 shares issued and | ||||||||||||||||||||
outstanding | 1,709 | — | (a) | 308 | 2,017 | |||||||||||||||
Additional paid in capital | 2,256,600 | — | (a) | 4,999,692 | 7,256,292 | |||||||||||||||
Unearned compensation | (37,804 | ) | (37,804 | ) | ||||||||||||||||
Accumulated comprehensive income | 933 | — | 933 | |||||||||||||||||
Deficit accumulated during the development stage | (3,366,647 | ) | — | (3,366,647 | ) | |||||||||||||||
Members’ equity (deficit) | — | 447,150 | (a) | (447,150 | ) | — | ||||||||||||||
(1,145,209 | ) | 447,150 | 4,552,850 | 3,854,791 | ||||||||||||||||
Less: Treasury stock, 704,362, 0, and 704,362 shares at cost | (52,089 | ) | — | — | (52,089 | ) | ||||||||||||||
Total Stockholders’ Equity (Deficit) | (1,197,298 | ) | 447,150 | 4,552,850 | 3,802,702 | |||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 362,031 | $ | 722,860 | $ | 4,552,850 | $ | 5,637,741 | ||||||||||||
See notes to pro forma condensed consolidated financial statements.
AIRBEE WIRELESS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2005
AIRBEE | IDENTITY | NOTE | PROFORMA | |||||||||||||
OPERATING REVENUES | ||||||||||||||||
Revenues | $ | — | $ | 612,734 | $ | 612,734 | ||||||||||
. | ||||||||||||||||
COSTS OF REVENUES | — | 175,250 | 175,250 | |||||||||||||
GROSS PROFIT (LOSS) | — | 437,484 | 437,484 | |||||||||||||
OPERATING EXPENSES | ||||||||||||||||
Professional fees and commission expenses | 246,426 | 79,702 | 326,128 | |||||||||||||
Research and development costs | 212,070 | 92 | 212,162 | |||||||||||||
General and administrative expenses | 62,129 | 124,646 | 186,775 | |||||||||||||
Depreciation and amortization | 3,082 | 699 | 3,781 | |||||||||||||
Total Operating Expenses | 523,707 | 205,139 | 728,846 | |||||||||||||
INCOME (LOSS) BEFORE OTHER (EXPENSE) | (523,707 | ) | 232,345 | (291,362 | ) | |||||||||||
OTHER (EXPENSE) | ||||||||||||||||
Interest expense | (28,574 | ) | — | (28,574 | ) | |||||||||||
Total Other (Expense) | (28,574 | ) | — | (28,574 | ) | |||||||||||
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME | ||||||||||||||||
TAXES | (552,281 | ) | 232,345 | (319,936 | ) | |||||||||||
Provision for income taxes | — | — | (b) | — | ||||||||||||
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | $ | (552,281 | ) | $ | 232,345 | $ | (319,936 | ) | ||||||||
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES | ||||||||||||||||
$ | (0.013 | ) | N/A | $ | (0.006 | ) | ||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||||||||||||
OUTSTANDING | 41,849,373 | — | 49,542,181 | |||||||||||||
See notes to pro forma condensed consolidated financial statements.
AIRBEE WIRELESS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
AIRBEE | IDENTITY | NOTE | ADJUSTMENTS | PROFORMA | ||||||||||||||||
OPERATING REVENUES | ||||||||||||||||||||
Revenues | $ | — | $ | 3,688,300 | $ | 3,688,300 | ||||||||||||||
. | ||||||||||||||||||||
COSTS OF REVENUES | — | 2,709,888 | 2,709,888 | |||||||||||||||||
GROSS PROFIT (LOSS) | — | 978,412 | — | 978,412 | ||||||||||||||||
OPERATING EXPENSES | ||||||||||||||||||||
Professional fees and commission expenses | 505,776 | 277,010 | 782,786 | |||||||||||||||||
Research and development costs | 502,853 | 4,240 | 507,093 | |||||||||||||||||
General and administrative expenses | 129,655 | 243,017 | 372,672 | |||||||||||||||||
Depreciation and amortization | 4,188 | 1,872 | 6,060 | |||||||||||||||||
Total Operating Expenses | 1,142,472 | 526,139 | — | 1,668,611 | ||||||||||||||||
INCOME (LOSS) BEFORE OTHER (EXPENSE) | (1,142,472 | ) | 452,273 | — | (690,199 | ) | ||||||||||||||
OTHER (EXPENSE) | ||||||||||||||||||||
Other income | 70,000 | — | 70,000 | |||||||||||||||||
Interest expense | (64,271 | ) | (151,638 | ) | (215,909 | ) | ||||||||||||||
Total Other (Expense) | 5,729 | (151,638 | ) | — | (145,909 | ) | ||||||||||||||
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME | ||||||||||||||||||||
TAXES | (1,136,743 | ) | 300,635 | — | (836,108 | ) | ||||||||||||||
Provision for income taxes | — | — | (b) | — | — | |||||||||||||||
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | $ | (1,136,743 | ) | $ | 300,635 | $ | - | $ | (836,108 | ) | ||||||||||
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES | ||||||||||||||||||||
$ | (0.029 | ) | N/A | N/A | $ | (0.018 | ) | |||||||||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||||||||||||||||||
OUTSTANDING | 38,578,861 | — | — | 46,271,669 | ||||||||||||||||
See notes to pro forma condensed consolidated financial statements.
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Airbee Wireless, Inc. and Subsidiaries
Introduction to Unaudited Pro Forma Condensed
Consolidated Financial Statements
On May 2, 2005, Airbee Wireless, Inc. (“Airbee”) entered into an agreement and plan of merger with Identity, Inc., a Delaware corporation, and Daniel R. Nelson, Identity, LLC (“Identity”) and Airbee Automotive Group, Inc., a wholly-owned subsidiary of Airbee, whereby Identity merged with and into Identity, Inc. Identity’s member, and sole shareholder of the newly formed Identity, Inc., was issued 7,692,808 shares of Airbee’s restricted common stock (the “Purchase Price”). The shares issued were valued at $5,000,000 (the “Merger Consideration”), which was based upon the 30-day average closing price of Airbee’s common stock through April 25, 2005. Fifty percent of the Purchase Price is immediately issuable to this shareholder. The remaining shares are subject to an Escrow Agreement dated May 2, 2005 (the “Escrow Agreement”). Upon the completion of the acquisition, Identity was consolidated with Airbee and will operate as Airbee Automotive Group, Inc. d/b/a Identity.
The acquisition will be accounted for as a purchase, with the assets acquired and liabilities assumed recorded at fair values, and the results of Identity’s operations included in Airbee’s consolidated financial statements from the date of acquisition.
The following unaudited pro forma condensed consolidated balance sheet represents the pro forma financial position of Airbee and Identity at March 31, 2005.
The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2005 and the year ended December 31, 2004 reflect the combined results of Airbee and Identity as if the proposed combination of the companies had occurred at the beginning of 2004.
The unaudited pro forma condensed consolidated financial statements do not necessarily represent the actual results that would have been achieved had the companies been combined at the beginning of the year, nor may they be indicative of future operations. These unaudited pro forma condensed consolidated financial statements should be read in conjunction with the companies’ respective historical financial statements and notes included thereto.
The following unaudited pro forma adjustments are included in the accompanying unaudited pro forma condensed balance sheet at March 31, 2005 and the unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2005 and the year ended December 31, 2004 to reflect the proposed combination of Airbee and Identity.
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Airbee Wireless, Inc. and Subsidiaries
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements
(a) To record the purchase of Identity which occurred on May 2, 2005;
(b) | There is no income tax provision for 2004 or 2005 due to the carryover of net operating losses. |
Pro forma earnings per share is based on the pro forma weighted average number of shares outstanding as follows:
Three Months | Year Ended December | |||||||
March 31, 2005 | 31, 2004 | |||||||
Airbee’s weighted average shares outstanding | ||||||||
Before acquisition | 41,849,373 | 38,578,861 | ||||||
Shares issued in acquisition | 7,692,808 | 7,692,808 | ||||||
After acquisition | 49,542,181 | 46,271,669 | ||||||
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