FDN, INC. AND SUBSIDIARIES
INTRODUCTION TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma financial statements have been prepared
based upon certain pro forma adjustments to the historical financial
statements of FDN, Inc. and Subsidiaries (collectively called the Company.)
The pro forma financial statements should be read in conjunction with the
notes thereto and the historical financial statements of the Company.
The accompanying pro forma balance sheet has been presented as if the
acquisition described below occurred at the Company's balance sheet date,
December 31, 1999. The accompanying pro forma statement of operations
has been prepared as if the acquisition occurred at the beginning of the year
ended December 31, 1999. These pro forma financial statements do not purport
to be indicative of the results which would actually have been obtained had
the pro forma transactions been completed as of the beginning of the year
ended December 31, 1999.
The pro forma transaction (see Notes to pro forma financial statements)
is as follows:
- - The exchange of all the outstanding common stock of Mercury Capital
Corporation (4,000,000 shares) for 1,250,000 shares of common stock of
FDN, Inc.
FDN, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(UNAUDITED)
ASSETS
Historical Pro Forma Adjustments
---------------------- ---------------------
FDN, Inc. Mercury Debit Credit Pro Forma
and Capital Consolidated
subsidiaries Corp.
-------------- --------- ------- -------- --------------
CURRENT ASSETS:
Cash $ 80,482 $ 249 $ 100,000(2) $ (19,269)
Accounts
receivable 244,129 - 244,129
Accounts
receivable
- affiliates 108,201 - 108,201
Accounts
receivable
- factored 148,888 - 148,888
Other current
assets 47,232 - 47,232
----------- --------- ------- ------------- ---------
TOTAL CURRENT
ASSETS 628,932 249 529,181
Property, plant
and equipment
- net 1,055,144 - 1,055,144
OTHER ASSETS:
Investment in
subsidiary - - 5,770 (1) 5,770 (4) -
Deferred charges
and intangibles
- net 3,119,071 - 3,119,071
Assets held
for resale 385,000 - 385,000
Security deposits 5,000 - 5,000
Organization costs,
net of
amortization 6,420 6,420 (3) -
---------- --------- --------- ---------- ---------
$5,193,147 $ 6,669 $5,093,396
---------- ---------- --------- ---------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable $ 1,644,291 $ - $ $ 100,000 (2) $1,744,291
Equipment loan
payable 385,000 - 385,000
Loans payable
- affiliate 145,809 - 145,809
Factoring payable 93,055 - 93,055
Note payable
- bank 212,000 - 212,000
Capital lease
obligations
- current 80,183 - 80,183
Accounts payable 1,078,397 899 1,079,296
Loan payable
- shareholder 29,611 - 29,611
Payroll taxes
payable 191,732 - 191,732
Accrued liabilities 93,778 - 93,778
---------- ------ -------- --------- ----------
TOTAL CURRENT
LIABILITIES 3,953,856 899 4,054,755
Notes payable
- net of current
portion 5,301,766 - 5,301,766
Capital lease
obligations
- net of current
portion 419,179 - 419,179
TOTAL LIABILITIES 9,674,801 899 9,775,700
STOCKHOLDERS'
EQUITY (DEFICIT):
Preferred stock - - -
Common stock 39,261 12,050 12,050 (4) 1,250 (1) 40,511
Additional Paid
In Capital 24,589 10,800 10,800 (4) 4,520 (1) 29,109
Accumulated
deficit (4,545,504)(17,080) 200,000 (2) 17,080(4) (4,751,924)
6,420 (3)
TOTAL SHAREHOLDERS'
EQUITY (DEFICIT) (4,481,654) 5,770 (4,682,304)
$5,193,147 $6,669 $5,093,396
See notes to pro forma consolidated financial statements.
FDN, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
Historical Pro Forma Adjustments
--------------------- ----------------------
FDN, Inc. Mercury Debit Credit Pro Forma
and Capital Consolidated
subsidiaries Corp.
--------------- ----------- ------ ------- ------------
NET REVENUE $ 1,187,643 $ - $ 1,187,643
COST OF GOODS SOLD 801,854 - 801,854
GROSS PROFIT 385,789 - 385,789
SELLING, GENERAL
& ADMINISTRATIVE
EXPENSES 3,618,413 9,860 200,000(2) 3,834,693
6,420(3)
LOSS FROM
OPERATION (3,232,624) (9,860) (3,448,904)
OTHER EXPENSES 272,588 - 272,588
------------- ------------ ------- ------ ----------
LOSS BEFORE
PROVISION
FOR INCOME TAXES (3,505,212) (9,860) (3,721,492)
Income Taxes - - -
------------ ------------ -------- ------ ----------
NET LOSS $(3,505,212) $(9,860) $(3,721,472)
LOSS PER SHARE
Basic $ (0.09) - $ (0.09)
Diluted (0.09) - (0.09)
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 39,261,735 4,000,000 40,511,735
Diluted 39,261,735 4,000,000 40,511,735
See notes to pro forma consolidated financial statements.
FDN, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
(UNAUDITED)
NOTE 1 FDN, Inc. issued 1,250,000 shares of common stock par value $.001
in exchange for all the outstanding stock of Mercury Capital Corporation.
NOTE 2 In connection with the merger, FDN, Inc. incurred $200,000 in
consulting fees, $100,000 paid in cash and issued a promissory note for
the remaining $100,000.
NOTE 3 Organization costs of Mercury Capital Corporation of $6,420 are
written off after the merger.
NOTE 4 Reflects the elimination of FDN, Inc's investment in Mercury Capital
Corporation against Mercury Capital Corporation's stockholders' equity.