iTalk, Inc.
Consolidated Proforma Balance Sheet
November 30, 2015
| ASSETS | Italk | UMS | Proforma Adjustments | Proforma | ||||||||||||
| Current Assets | ||||||||||||||||
| Cash on Hand | $ | 4,626 | $ | 19,483 | $ | — | $ | 24,109 | ||||||||
| Accounts Receivable | — | 50,888 | — | 50,888 | ||||||||||||
| Commission receivable | — | 656,687 | — | 656,687 | ||||||||||||
| Inventory | — | 162,048 | — | 162,048 | ||||||||||||
| Prepaid | — | 81,969 | — | 81,969 | ||||||||||||
| Total current assets | 4,626 | 971,075 | — | 975,701 | ||||||||||||
| Property and Equipment | — | 293,136 | — | 293,136 | ||||||||||||
| Other assets | 118,822 | 31,608 | — | 150,430 | ||||||||||||
| Total Assets | $ | 123,448 | $ | 1,295,819 | $ | — | $ | 1,419,267 | ||||||||
| LIABILITY AND STOCKHOLDERS EQUITY | ||||||||||||||||
| Current Liabilities | ||||||||||||||||
| Accounts Payable | $ | 282,066 | $ | 2,329,808 | $ | — | $ | 2,611,874 | ||||||||
| Line of Credit | — | 500,000 | — | 500,000 | ||||||||||||
| Bank term note — current portion | — | 96,764 | — | 96,764 | ||||||||||||
| Accrued liability— related party | 327,500 | — | — | 327,500 | ||||||||||||
| Short term financing and capital lease s | — | 2,804,488 | — | 2,804,488 | ||||||||||||
| Convertible debt | 878,175 | — | — | 878,175 | ||||||||||||
| Notes payable | 615,385 | — | — | 615,385 | ||||||||||||
| Advances — related party | 5,600 | 222,418 | — | 228,018 | ||||||||||||
| Due related party | 37,065 | — | — | 37,065 | ||||||||||||
| Derivative liability | 475,200 | — | — | 475,200 | ||||||||||||
| Deferred revenue | 46,243 | — | — | 46,243 | ||||||||||||
| Total current liabilities | 2,667,234 | 5,953,478 | — | 8,620,712 | ||||||||||||
| Capital lease obligation— long term | — | 3,598 | — | 3,598 | ||||||||||||
| Note payable | — | 291,023 | — | 219,023 | ||||||||||||
| Total liabilities | 2,667,234 | 6,248,099 | — | 8,915,333 | ||||||||||||
| Stockholders’ deficit | ||||||||||||||||
| Preferred shares | 50,000 | — | — | 50,000 | ||||||||||||
| Common stock | 1,825,000 | 10 | 8,070,444 | 9,895,454 | ||||||||||||
| Additional paid in capital | 1,300,516 | (10 | (8,070,444 | ) | (6,769,938 | ) | ||||||||||
| Accumulative deficit | (5,719,302 | ) | (4,952,280 | ) | — | (10,671,582 | ) | |||||||||
| Total stockholders deficit | (2,543,786 | ) | (2,952,280 | ) | — | (7,496,066 | ) | |||||||||
| Total liabilities and stockholders deficit | $ | 123,448 | $ | 1,295,819 | $ | — | $ | 1,419,267 | ||||||||
iTALK, INC.
Consolidated Proforma Statement of Operations
For Year Ended August 31, 2015
| iTalk | UMS | Proforma Adjustments | Proforma | |||||||||||||
| Revenue | $ | 689,824 | $ | 13,198,676 | $ | — | $ | 13,888,500 | ||||||||
| Cost of Goods | 754,930 | 10,474,682 | — | 11,229,612 | ||||||||||||
| Gross profit | (65,106 | ) | 2,723,994 | 2,658,888 | ||||||||||||
| Operating expense | 268,711 | 4,578,002 | — | 4,846,713 | ||||||||||||
| Loss form operations | (333,817 | ) | (1,809,056 | ) | — | (2,142,873 | ) | |||||||||
| Other income (expense) | (951,229 | ) | (576,953 | ) | — | (1,528,182 | ) | |||||||||
| Net loss | $ | (1,285,046 | ) | $ | (2,38,609 | ) | $ | — | $ | (1,523,655 | ) | |||||
iTALK, INC.
ConsolidatedProforma Statement of Operations
For Three Months Ended November 30, 2015
| iTalk | UMS | Proforma Adjustments | Proforma | |||||||||||||
| Revenue | $ | 100,404 | $ | 1,837,208 | $ | — | $ | 1,937,612 | ||||||||
| Cost of goods | 99,971 | 1,473,160 | — | 1,573,131 | ||||||||||||
| Gross profit | 433 | 364,048 | 364,481 | |||||||||||||
| Operating expense | 23,608 | 718,009 | — | 714,617 | ||||||||||||
| Operating income (loss) | (23,608 | ) | (353,961 | ) | — | (377,136 | ) | |||||||||
| Other expense | (117,961 | ) | (36,050 | ) | — | (154,011 | ) | |||||||||
| Net loss | $ | (141,136 | ) | $ | (390,011 | ) | $ | — | $ | (531,147 | ) | |||||
iTALK, INC.
NOTES TO CONSOLIDATED PROFORMA FINANICAL STATEMENTS
NOTE 1— Proforma Consolidated Balance sheet and Proforma Consolidated Statement of Operations
Due to the variance in fiscal years the proforma consolidated balance sheet and proforma statements of operations reflect the nearest month end of the acquired company to the parent company ending periods. The proforma consolidated balance sheet is a combination of the iTalk, Inc. (“iTalk”) consolidated balance sheet as of November 30, 2015 and the UMS, Inc (“UMS”) consolidated balance sheet as of December 31, 2015. The proforma consolidated statement of operations for year ended August 31, 2015 is a combination of ITalk’s consolidated statement of operations for the year ended August 31, 2015 and UMS’ consolidated statement of operations for the year ended September 30, 2015. The Proforma consolidated statement of operations for three months ended November 30, 2015 is a combination of the iTalk consolidated statement of operations for the three months ended November 30, 2015 and UMS’ consolidated statement of operations for the three months ended December 31, 2015.
NOTE 2—Adjustments
The adjustments to the equity section reflect the issuance of common stock for the acquisition of UMS by iTalk, Inc.
