Exhibit 99.2 March 31, 2008 Financial Statements
CREATIVE MANAGEMENT GROUP, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
ASSETS | March 31, | December 31, | ||||||
2008 | 2007 | |||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 1,693,474 | $ | 1,213,035 | ||||
Accounts receivable | 440,000 | - | ||||||
Prepaid expense | - | 17,454 | ||||||
Total Current Assets | 2,133,474 | 1,230,489 | ||||||
Fixed assets | 1,159 | 1,159 | ||||||
TOTAL ASSETS | $ | 2,134,633 | $ | 1,231,648 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Clients payable | $ | 493,172 | $ | 121,400 | ||||
Line of credit | 818,591 | 132,763 | ||||||
Accounts payable | 139,226 | 139,226 | ||||||
Salary payable | 1,050,000 | - | ||||||
Consulting payable | 396,750 | - | ||||||
Total Current Liabilities | 2,897,739 | 393,389 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Convertible notes payable | 1,492,000 | 1,178,000 | ||||||
TOTAL LIABILITIES | 4,389,739 | 1,571,389 | ||||||
SHAREHOLDER'S EQUITY: | ||||||||
Common stock: | ||||||||
100,000,000 shares authorized;par value $0.01 per share; | ||||||||
10,000,0000 shares issued and outstanding | 100,000 | 100,000 | ||||||
Additonal paid-in-capital | 20,686 | 590,686 | ||||||
Accumulated deficit | (2,375,792 | ) | (1,030,427 | ) | ||||
TOTAL SHAREHOLDER EQUITY | (2,255,106 | ) | (339,741 | ) | ||||
TOTAL LIABILITIES AND SHAREHOLDER EQUITY | $ | 2,134,633 | $ | 1,231,648 | ||||
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CREATIVE MANAGEMENT GROUP, INC. | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 | ||||||||
(Unaudited) | ||||||||
March 31, | March 31, | |||||||
2008 | 2007 | |||||||
Net revenues | $ | 399,167 | $ | 61,211 | ||||
Operating expenses | 1,734,495 | 54,231 | ||||||
Income from operations | (1,335,328 | ) | 6,980 | |||||
Other income (expense) | ||||||||
Interest expense | (22,380 | ) | - | |||||
Interest income | 12,341 | - | ||||||
Net income (loss) | $ | (1,345,367 | ) | $ | 6,980 | |||
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CREATIVE MANAGEMENT GROUP, INC. | ||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007 | ||||||||
(Unaudited) | ||||||||
March 31, | March 31, | |||||||
2008 | 2007 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income (loss) | $ | (1,345,367 | ) | $ | 6,980 | |||
Adjustments to reconcile net income (loss) | ||||||||
to net cash from operating activities: | ||||||||
Changes in: | ||||||||
Accounts recievable | (440,000 | ) | - | |||||
Prepaid expense | 17,454 | - | ||||||
Salary payable | 1,050,000 | - | ||||||
Consulting payable | 396,750 | - | ||||||
Client payable | 371,772 | - | ||||||
Accounts payable | - | (457 | ) | |||||
Net cash provided by operating activities: | 50,609 | 6,523 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Cash paid for acquisition of Pebble Beach Enterprises, Inc. | (600,000 | ) | - | |||||
Net cash used in operating activities: | (600,000 | ) | - | |||||
FINANCING ACTIVITIES: | ||||||||
Distributions to members | - | (15,500 | ) | |||||
Contributions to capital | 30,000 | - | ||||||
Net borrowings on line of credit | 685,830 | |||||||
Borrowing on convertible notes | 314,000 | - | ||||||
Net cash provided by (used in) financing activities | 1,029,830 | (15,500 | ) | |||||
Net increase (decrease) in cash | 480,439 | (8,977 | ) | |||||
Cash, beginning of period | 1,213,035 | 9,631 | ||||||
Cash, end of period | $ | 1,693,474 | $ | 654 | ||||
Income taxes paid | $ | - | $ | - | ||||
Interest paid | - | - | ||||||
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CREATIVE MANAGEMENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Creative Management Group, Inc., have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in its 2007 annual report in this Form 8K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements that would substantially duplicate the disclosure contained in the audited financial statements for fiscal year 2007, as reported in this Form 8K, have been omitted.
On February 20, 2008, Creative Management Group, Inc. formed CMG Acquisitions, Inc., a Delaware company, for the purpose of acquiring companies and expansion strategies.
On February 20, 2008, Creative Management Group, Inc. acquired 92.6% of Pebble Beach Enterprises, Inc. (a publicly traded company). The purpose of the acquisition was to effect a reverse merger with Pebble Beach Enterprises, Inc. at a later date.
The consolidated financial statements include the accounts of Creative Management Group, Inc. and its 100% owned subsidiary, CMG Acquisitions, Inc. and its majority owned subsidiary, Pebble Beach Enterprises, Inc., after elimination of all significant inter-company accounts and transactions.
NOTE 2 – SALARY PAYABLE AND CONSULTING PAYABLE
Salary Payable
Salary payable consists of 7,000,000 shares of common stock owed but not yet issued to three officers of Creative Management Goup, Inc. valued at $1,050,000.
Consulting Payable
Consulting payable consists of 2,645,000 shares of common stock owed but not yet issued to nine consultants of Creative Management Goup, Inc. valued at $396,750.
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CREATIVE MANAGEMENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 – NOTES PAYABLE
During the period between January 1, 2008 and May 23, 2008, Creative Management Group, Inc. issued 12 convertible notes with an aggregate amount of $314,000. Interest on these convertible notes is due and payable at 6% per annum. The maturity date for these convertible notes is March 30, 2010. $41,500 of these notes were issued to related parties.
NOTE 4 – EQUITY
On February 20, 2008, Creative Management Group, Inc. acquired 92.6% of Pebble Beach Enterprises, Inc. (a publicly traded company) for $600,000 cash. Because the purpose of the acquisition was to recapitalize Creative Management Group, Inc. through an eventual reverse merger with Pebble Beach Enterprises, Inc., the $600,000 has been accounted for as a recapitalization cost and was a reduction to paid in capital.
In the quarter ending March 31, 2008, shareholders contributed $30,000 of cash to Creative Mangement Group, Inc.
NOTE 5 – SUBSEQUENT EVENTS
Subsequent to March 31, 2008, Creative Management Group, Inc. issued shares as follows:
· | 7,000,000 shares of common stock to three officers of Creative Management Goup, Inc. valued at $1,050,000 for a previously recorded salary payable. |
· | 2,645,000 shares of common stock to nine consultants of Creative Management Goup, Inc. valued at $396,750 for a previously recorded consulting payable. |
· | 2,670,148 shares of common stock for the conversion of $720,940 of previously recorded convertible notes payable. |
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