Exhibit 99.2
SmartRay Network, Inc.
Unaudited Interim Financial Statements
The unaudited interim financial statements of smartRay Technology, Inc. for the
six months ended June 30, 2000 and for the period January 15, 1999 (date of
inception) to June 30, 1999 do not provide all disclosures included in the
annual financial statements. These interim financial statements should be read
in conjunction with the annual audited financial statements and the footnotes
thereto. Results for the interim periods are not necessarily indicative of the
results for the year ended December 31, 2000. In the opinion of management, the
accompanying interim financial statements reflect all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation of the
financial position and results of operations of smartRay.
SmartRay Technology, Inc.
Statements of Operations
For the cumulative period
January 1-June 30, 2000 January 15-June 30, 1999 January 15, 1999-June 30, 2000
(unaudited) (unaudited) (unaudited)
----------------------- ------------------------ ------------------------------
Revenue $ - $ - $ -
Cost of revenue 194,023 7,285 236,313
-------------- -------------- --------------
Gross loss (194,023) (7,285) (236,313)
-------------- -------------- --------------
Operating expenses:
Sales and marketing 545,950 - 673,686
Research and development 1,115,980 - 1,775,146
General and administrative 418,938 223,479 653,865
-------------- -------------- --------------
Total operating expenses 2,080,868 223,479 3,102,697
-------------- -------------- --------------
Loss from operations (2,274,891) (230,764) (3,339,010)
Interest income, net 27,301 1,033 37,735
-------------- -------------- --------------
Net loss $ (2,247,590) $ (229,731) $ (3,301,275)
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SmartRay Network, Inc.
Statements of Cash Flows
For the
cumulative period
January 1 - January 15 - January 15, 1999-
June 30, 2000 June 30, 1999 June 30, 2000
(unaudited) (unaudited) (unaudited)
-------------- -------------- ---------------------
Cash flows from development stage activities:
Net loss $(2,247,590) $ (229,731) $ (3,301,275)
Adjustments to reconcile net loss to cash
used in development stage activities:
Depreciation and amortization 198,193 6,660 335,195
Amortization of deferred compensation 73,933 - 91,651
Issuance of stock options in exchange for services 11,682 - 86,805
Changes in assets and liabilities:
Prepaid expenses and other current assets (20,000) (8,404) (39,227)
Other assets (15,922) (24,000) (23,889)
Accounts payable (28,007) 159,133 470,188
Accounts payable to related parties (86,746) - 3,671
-------------- -------------- --------------
Net cash used in development stage activities (2,114,457) (96,242) (2,376,881)
Cash flows from investing activities:
Purchase of property and equipment (287,823) (101,698) (842,942)
-------------- -------------- --------------
Net cash used in investing activities (287,823) (101,698) (842,942)
-------------- -------------- --------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 2,901,000 1,315,385 4,216,525
Costs incurred in connection with issuance of preferred
stock (10,953) - (22,557)
Proceeds from the sale of common stock and the
exercise of stock options 12,250 - 12,250
Payments on capital lease obligations (35,779) - (81,830)
-------------- -------------- --------------
Net cash provided by financing activities 2,866,518 1,315,385 4,124,388
-------------- -------------- --------------
Net increase in cash 464,238 1,117,345 904,565
Cash, beginning of period 440,327 - -
-------------- -------------- --------------
Cash, end of period $ 904,565 $1,117,345 $ 904,565
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Supplemental disclosure of noncash investing and
financing activities:
Issuance of stock options in exchange for services $ 11,682 $ - $ 86,805
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