Alanco Technologies, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
March 31, 2006
Pro Forma Consolidated Unaudited Financial Information:
The following represents a pro forma condensed consolidated balance sheet as of March 31, 2006,
assuming the Company's acquisition of StarTrak Systems, LLC was consumated as of that date.
--------------(Dollars in Thousands)----------------
Alanco StarTrak Pro Forma Pro Forma
Technologies Systems Adjustments Consolidated
Inc. LLC Amounts
ASSETS
Current Assets:
Cash $ 197 $ 49 $ $ 246
Accounts Receivable, Net 925 1,011 1,936
Notes receivable 30 0 30
Inventory 2,253 794 3,047
Other Current Assets 545 89 634
Total Current Assets 3,950 1,943 5,893
Property and Equipment, net 196 47 243
Goodwill 5,356 13,700 (1) 19,056
Intangible Assets, Net 395 1,600 (2) 1,995
Other Assets, Net 97 6 103
-----------------------------------------------------
$ 9,994 $ 1,996 $ 15,300 $ 27,290
=====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable - current portion $ 89 $ 555 $ 257 (1) $ 901
Due to Members 838 838
Accounts Payable & Accrued Expense 1,494 2,928 168 (1) 4,590
Deferred Revenue & Customer Advances 47 1,243 1,290
Billing in exess of Costs and
Est. Earnings 32 32
-----------------------------------------------------
Total Current Liabilities 1,662 5,564 425 7,651
Notes Payable, Long-term - Net 1,314 2,000 3,314
Preferred Stock - Series B 719 719
Shareholders Equity 6,299 (5,568) 9,307 (1) 15,606
5,568 (1)
-----------------------------------------------------
Total Liabilities & Shareholders' Equity $ 9,994 $ 1,996 $ 15,300 $ 27,290
=====================================================
(1) Pro forma adjustments to reflect the purchase of StarTrak Systems,LLC
("StarTrak") for the assumption of $5,568 million in liabilities over
assets and the issuance of 13.2 million of Alanco Class A Common Shares
to the owners valued at $9.2 million. Costs associated with the
acquisition amounted to approximately $532,000, resulting in a short term
note payable of $257,000, accounts payable of $168,000 and the issuance
of approximately 153,500 common shares valued at $107,000.
(2) The amount allocated to other intangible assets represents management's
estimate of the value of other intangible assets, including patents,
trademarks, software, etc. The Company has engaged an independent
consultant to appraise StarTrak's assets and propose an allocation of
the purchase price. The results of the appraisal will be used to record
the acquisition effective June 30, 2006.
ALANCO TECHNOLOGIES, INC AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
For the Year ended June 30, 2005
The following represents an unaudited pro forma condensed consolidated statement of operations for
the year ended June 30, 2005, assuming the Company's acquisition of StarTrak Systems LLC
was consumated on July 1, 2004.
- - --------------(Dollars in Thousands)--------------
Alanco StarTrak Pro Forma Pro Forma
Technologies, Systems Adjustments Consolidated
Inc. LLC Amounts
-------------------------------------------------
Sales $7,184 $6,404 $13,588
-------------------------------------------------
Cost of Sales 4,676 4,645 9,321
Selling, General and Administrative Expense 6,371 5,815 12,186
Amortization of Intangibles - Startrak 220 (2) 220
-------------------------------------------------
11,047 10,460 21,727
-------------------------------------------------
Operating Loss (3,863) (4,056) (8,139)
Other Income (Expense)
Interest Expense, net (35) (272) (53) (1) (360)
Other Income 107 200 307
-------------------------------------------------
Loss From Operations (3,791) (4,128) (53) (1) (8,192)
Preferred Stock Dividends - paid in kind (521) 0 (521)
-------------------------------------------------
Net Loss Attributable to Common Stockholders ($4,312) ($4,128) ($8,713)
=================================================
Net Loss Per Share - Basic and Diluted ($0.17) ($0.23)
========== ============
Weighted Average Common Shares
Outstanding - shares in thousands 25,356 13,353 (1) 38,709
=================================================
(1) Additional interest expense and common shares related to acquisition
(2) To record management's estimate of amortization expense-related purchase
price allocation.
ALANCO TECHNOLOGIES, INC AND SUBSIDIARIES
PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
For the Nine Months ended March 31, 2006
The following represents an unaudited pro forma condensed consolidated statement
of operations for the nine months ended March 31, 2006, assuming the Company's
acquisition of StarTrak Systems LLC was consumated on July 1, 2005.
--------------(Dollars in Thousands)--------------
Alanco StarTrak Pro Forma Pro Forma
Technologies, Systems Adjustments Consolidated
Inc. LLC Amounts
-------------------------------------------------
Sales $4,693 $5,764 $10,457
-------------------------------------------------
Cost of Sales 3,085 4,035 7,120
Selling, General and Administrative Expense 4,717 4,417 9,134
Amortization of Intangibles - StarTrak 165 (2) 165
-------------------------------------------------
7,802 8,452 16,419
-------------------------------------------------
Operating Loss (3,109) (2,688) (5,962)
Other Income (Expense)
Interest Expense, net (66) (282) (40) (1) (388)
Other Income 77 143 220
-------------------------------------------------
Loss From Operations (3,098) (2,827) (6,130)
Preferred Stock Dividends - paid in kind (565) 0 (565)
-------------------------------------------------
Net Loss Attributable to Common Stockholders ($3,663) ($2,827) ($6,695)
=================================================
Net Loss Per Share - Basic and Diluted ($0.13) ($0.16)
========== =========
Weighted Average Common Shares
Outstanding - shares in thousands 28,352 13,353 (1) 41,705
=================================================
(1) Additional interest expense and common shares related to acquisition
(2) To record management's estimate of amortization expense-related purchase
price allocation.