Exhibit 99.2
CITYSYNC LIMITED
CONSOLIDATED BALANCE SHEET (unaudited)
(in thousands, except share data)
|
|
|
|
|
|
| April 30, |
| |
ASSETS |
|
|
| |
Current assets: |
|
|
| |
Cash and cash equivalents |
| $ | 119 |
|
Accounts receivable, net |
|
| 1,638 |
|
Inventories |
|
| 746 |
|
Income taxes refundable and other |
|
| 233 |
|
Total current assets |
|
| 2,736 |
|
|
|
|
|
|
Property and equipment, net |
|
| 268 |
|
|
|
|
|
|
Software development costs, net |
|
| 258 |
|
TOTAL ASSETS |
| $ | 3,262 |
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
| $ | 827 |
|
Bank line of credit and shareholder loans |
|
| 1,456 |
|
Accrued compensation |
|
| 65 |
|
Accrued interest and other |
|
| 634 |
|
Total current liabilities |
|
| 2,982 |
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Common stock |
|
| 24 |
|
Retained earnings |
|
| 256 |
|
Total shareholders’ equity |
|
| 280 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 3,262 |
|
See accompanying notes to the consolidated financial statements.
1
CITYSYNC LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except share data)
|
|
|
|
|
|
|
|
|
| Three months |
| ||||
| |||||||
|
| 2010 |
| 2009 |
| ||
| |||||||
Revenue |
| $ | 1,448 |
| $ | 889 |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
| 523 |
|
| 472 |
|
Gross profit |
|
| 925 |
|
| 417 |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
| 955 |
|
| 834 |
|
Loss from operations |
|
| (30 | ) |
| (417 | ) |
|
|
|
|
|
|
|
|
Interest expense |
|
| (38 | ) |
| (24 | ) |
Loss before income taxes |
|
| (68 | ) |
| (441 | ) |
|
|
|
|
|
|
|
|
Income taxes |
|
| — |
|
| — |
|
Net loss |
| $ | (68 | ) | $ | (441 | ) |
See accompanying notes to the consolidated financial statements.
2
CITYSYNC LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
(in thousands)
|
|
|
|
|
|
|
|
|
| Three months |
| ||||
|
| 2010 |
| 2009 |
| ||
Operating activities: |
|
|
|
|
|
|
|
Net loss |
| $ | (68 | ) | $ | (441 | ) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 55 |
|
| 30 |
|
Changes in operating assets and liabilities |
|
| 137 |
|
| 142 |
|
Net cash provided by (used in) operating activities |
|
| 124 |
|
| (269 | ) |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
| (79 | ) |
| (39 | ) |
Software development costs capitalized |
|
| — |
|
| (30 | ) |
Net cash used in investing activities |
|
| (79 | ) |
| (69 | ) |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
Proceeds from line of credit |
|
| 72 |
|
| 279 |
|
Increase (decrease) in cash |
|
| 117 |
|
| (59 | ) |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
| 2 |
|
| 70 |
|
Cash and cash equivalents at end of period |
| $ | 119 |
| $ | 11 |
|
See accompanying notes to the consolidated financial statements.
3
Notes to Consolidated Financial Statements (interim, unaudited)
April 30, 2010
Note A: Basis of Presentation
The accompanying unaudited consolidated financial statements of CitySync Limited (the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. It is the opinion of management that the unaudited consolidated financial statements include all adjustments consisting of normal recurring accruals considered necessary for a fair presentation. Operating results for the three-month period ended April 30, 2010 are not necessarily indicative of the results that may be expected for the full fiscal year.
Note B: Foreign Currency
All assets and liabilities of CitySync Limited are translated from British pounds to United States dollars at period-end rates of exchange, while the statement of operations is translated at the average exchange rates during the period.
Note C: Credit Facility
At April 30, 2010, we were out of compliance with the minimum tangible net worth provision of our bank line of credit.
Note D: Income Taxes
We did not recognize an income tax benefit in the three months ended April 30, 2010, as we are in a net loss position and it cannot be assured that we will be able to realize such losses in future periods.
Note E: Legal Settlement
In 2009, we were named in a lawsuit for patent infringement. In May 2010, the lawsuit was settled and we were given a perpetual, royalty-free license to use the patent. We had accrued the expense of this lawsuit, including settlement and legal costs, as of January 31, 2010.
Note F: Subsequent Event
In June 2010, we became a wholly-owned subsidiary of Image Sensing Systems Europe Ltd. (ISS/Europe) upon the purchase of all of our outstanding ordinary shares by ISS/Europe. ISS/Europe is a subsidiary of Image Sensing Systems, Inc.
4