Exhibit 99.2
Unaudited Pro Forma Condensed Consolidated Financial Statements
of Novo Networks, Inc.
The unaudited pro forma condensed consolidated financial
statements (the "Pro Forma Financial Statements") are presented
to give effect to the acquisition of a 33% interest in Paciugo
Management LLC, Ad Astra LP and their subsidiaries ("Paciugo")
in December of 2002. The Pro Forma Financial Statements are
presented for illustrative purposes only and are not necessarily
indicative of the operating results that would have occurred if
the transactions given pro forma effect herein had been
consummated as of the time reflected herein, nor are they
necessarily indicative of the future operating results or
financial position of Novo Networks, Inc. ("Novo Networks").
The pro forma adjustments are based upon available information
and certain assumptions that Novo Networks believes are reasonable.
The 33% interest in Paciugo has been accounted for under the
equity method of accounting. Differences between the amounts
included herein and the final allocations are not expected to
have a material effect on the Pro Forma Financial Statements.
The following unaudited pro forma condensed statements of
operations for the year ended June 30, 2002, and the six months
ended December 31, 2002, give effect to the investment in Paciugo
as though it had occurred on July 1, 2001.
NOVO NETWORKS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 2002
Novo Pro Forma
Networks Adjustments Pro Forma
------------ ------------ ------------
<s> <c> <c> <c>
Revenues $ 10,486,982 $ - $ 10,486,982
Operating expenses:
Direct costs 14,614,766 - 14,614,766
Selling, general and administrative expenses 14,803,110 - 14,803,110
Impairment loss 2,400,543 - -
Depreciation and amortization 1,370,958 - 1,370,958
------------ ------------ ------------
33,189,377 - 33,189,377
------------ ------------ ------------
Loss from operations, before other (income) expense (22,702,395) - (22,702,395)
Other (income) expense:
Interest (income) expense, net 17,355 41,259 (1) 58,614
Equity in loss of investments 1,720,000 238,354 (2) 1,958,354
Foreign currency loss 98,135 - 98,135
Net gain on liquidation of debtor subsidiaries (16,074,355) - (16,074,355)
Other income (668,993) (250,000) (3) (918,993)
------------ ------------ ------------
(14,907,858) 29,613 (14,878,245)
------------ ------------ ------------
Net loss (7,794,537) (29,613) (7,824,150)
Series D preferred dividends (603,432) - (603,432)
------------ ------------ ------------
Net loss allocable to common shareholders $ (8,397,969) $ (29,613) $ (8,427,582)
============ ============ ============
Basic and diluted:
Net loss per share $ (0.16) $ (0.16)
============ ============
Weighted average number of shares outstanding 52,323,701 52,323,701
============ ============
(1) Elimination of historical interest income for Novo Networks'
$2.5 million payment to Paciugo.
(2) To record equity in loss of Paciugo for the year
ended June 30, 2002.
(3) To record management fee income from Paciugo.
NOVO NETWORKS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2002
Novo Pro Forma
Networks Adjustments Pro Forma
------------ ------------ ------------
<s> <c> <c> <c>
Revenues $ - $ - $ -
Operating expenses:
Direct costs - - -
Selling, general and administrative expenses 1,517,995 - 1,517,995
Depreciation and amortization 76,457 - 76,457
------------ ------------ ------------
1,594,452 - 1,594,452
------------ ------------ ------------
Loss from operations, before other (income) expense (1,594,452) - (1,594,452)
------------ ------------ ------------
Other (income) expense:
Interest (income) expense, net (154,022) 20,629 (4) (133,393)
Equity in loss of investments 264,751 287,316 (5) 552,067
Net gain on liquidation of debtor subsidiaries (214,000) - (214,000)
Other income (37,105) (125,000) (6) (162,105)
------------ ------------ ------------
(140,376) 182,945 42,569
------------ ------------ ------------
Net loss (1,454,076) (182,945) (1,637,021)
Series D preferred dividends (322,779) - (322,779)
------------ ------------ ------------
Net loss allocable to common shareholders $ (1,776,855) $ (182,945) $ (1,959,800)
============ ============ ============
Basic and diluted:
Net loss per share $ (0.03) $ (0.04)
============ ============
Weighted average number of shares outstanding 52,323,701 52,323,701
============ ============
(4) Elimination of historical interest income for Novo Networks'
$2.5 million payment to Paciugo.
(5) To record equity in loss of Paciugo for the six months ended
December 31, 2002.
(6) To record management fee income from Paciugo.