EXHIBIT 99.2
CONSOLIDATED ACORN HOLDING AND VALENTEC SYSTEMS, INC
BALANCE SHEET
PERIOD ENDING SEPTEMBER 30, 2004
YEAR END DECEMBER 31, 2004
(Unaudited)
CONSOLIDATED ACORN VSI ACORN
SEPT 30 2005 SEPT 30 2004 YEAR END 2004 YEAR END 2004
Current Assets
Cash & Cash Equivalents 1,117,185 292,711 1,589,665 284,732
Accounts Receivable 7,950,986 1,821,546
Inventory 1,611,953 1,058,265
Contract Development 2,261,533 6,261,978
Other 146,579 91,132
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Total Current 13,088,236 292,711 10,822,586 284,732
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Fixed Assets
Furniture, Fixtures 470,709 368,412
Machinery & Equipment 2,246,049 2,005,506
---------- ----------- ---------- -----------
2,716,758 - 2,373,918 -
---------- ----------- ---------- -----------
Less Accumulated Depreciation (1,331,611) (1,053,380)
---------- ----------- ---------- -----------
Total Fixed 1,385,147 - 1,320,538 -
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
TOTAL ASSETS 14,473,383 292,711 12,143,124 284,732
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Current Liabilities
Accounts Payable 2,397,890 9,598 1,515,372 26,523
Accrued Expense 529,567 457,012
Customer Deposits 76,056 _
Lines of Credit - Notes Payable 6,998,981 2,255,545
Due to Shareholders 933,455 1,660,604
Deferred Revenue 2,453,787
---------- ----------- ---------- -----------
Total Current 10,935,949 9,598 8,342,320 26,523
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
TOTAL LIABILITIES 10,935,949 9,598 8,342,320 26,523
---------- ----------- ---------- -----------
Shareholders Equity
Common stock, $0.01 par value,
20,000,000 shares authorized,
6,997,100 shares issued and outstanding 69,971 15,739 10 15,739
Additional Paid In Capital 2,922,288 11,772,377 2,992,259 11,772,377
Retained Earnings 545,165 (11,505,003) 208,535 (11,529,907)
---------- ----------- ---------- -----------
Total Equity 3,537,434 283,113 3,200,804 258,209
---------- ----------- ---------- -----------
---------- ----------- ---------- -----------
TOTAL LIABILITIES & EQUITY 14,473,383 292,711 12,143,124 284,732
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EXHIBIT 99.2
CONSOLIDATED ACORN HOLDING AND VALENTEC SYSTEMS, INC
STATEMENT OF OPERATIONS
NINE MONTHS ENDING SEPTEMBER 30, 2004
TWELEVE MONTHS ENDING DECEMBER 31, 2004
(Unaudited)
CONSOLIDATED ACORN VSI ACORN
SEPT 30 2005 SEPT 30 2004 YEAR END 2004 YEAR END 2004
Revenues 12,385,602 - 6,419,483 -
Direct Contract Cost
Direct Labor 1,136,180 1,200,072
Direct Materials 4,181,076 1,398,177
Other Direct 2,064,165 1,992,828
--------- --------- --------- ---------
Total Direct Cost 7,381,421 - 4,591,077 -
--------- --------- --------- ---------
--------- --------- --------- ---------
Gross Margin 5,004,181 - 1,828,406 -
--------- --------- --------- ---------
Indirect Cost
Indirect Expenses 825,493 420,352
Overhead Expenses 721,919 311,185
Depreciation / Amortization 701,664 345,626
S G&A Expense 1,869,691 42,950 533,746 68,722
--------- --------- --------- ---------
total Indirect 4,118,767 42,950 1,610,909 68,722
--------- --------- --------- ---------
--------- --------- --------- ---------
Income from Operation 885,414 (42,950) 217,497 (68,722)
--------- --------- --------- ---------
Other (Expense) Income
interest Income 27,569 1,262 2,683 2,130
interest Expense (201,924) (128,761)
Miscellaneous (20,340) (12,095)
--------- --------- --------- ---------
Total Other (194,695) 1,262 (138,173) 2,130
--------- --------- --------- ---------
--------- --------- --------- ---------
Income Before taxes 690,719 (41,688) 79,324 (66,592)
--------- --------- --------- ---------
Provision for Taxes _ _ (28,725) _
--------- --------- --------- ---------
Net Income 690,719 (41,688) 50,599 (66,592)
--------- --------- --------- ---------
--------- --------- --------- ---------
Profit (loss) per Share 0.0987 (0.0265) 505.99 (0.0423)
--------- --------- --------- ---------
Weighted Avg shares 6,997,072 1,573,946 100 1,573,946
EXHIBIT 99.2
CONSOLIDATED ACORN HOLDING AND VALENTEC SYSTEMS, INC
STATEMENT OF CASH FLOW
NINE MONTHS ENDING SEPTEMBER 30, 2004
TWELEVE MONTHS ENDING DECEMBER 31, 2004
(Unaudited)
CONSOLIDATED ACORN VSI ACORN
SEPT 30 2005 SEPT 30 2004 YEAR END 2004 YEAR END 2004
Cash from Operations
Net Income 690,719 (41,688) 50,599 (66,592)
Depreciation / Amortization 701,664 - 345,626 -
---------- --------- ---------- -------
Net From Operations 1,392,383 (41,688) 396,225 (66,592)
---------- --------- ---------- -------
(Increase) Decrease in Assets
Accounts Receivable (6,129,440) 2,023,379
Inventory (553,688) (499,990)
Contract Development 1,327,468 (4,793,587)
Income Tax Rec (1,207,905) (5,246)
Interest Expense Contributed In-kind - 31,824
Other assets (5,079) 11,598
Pre Paid Expenses (55,447) -
---------- --------- ---------- -------
total (6,624,091) - (3,232,022) -
---------- --------- ---------- -------
Increase (Decrease) in Liabilities
Accounts Payable 958,576 4,301 (423,526) 21,226
Accrued Expense 77,632 53,759
Deferred Revenue (158,239) 2,453,787
Customer Deposits 2,331,129 -
---------- --------- ---------- -------
Total 3,209,098 4,301 2,084,020 21,226
---------- --------- ---------- -------
Net Cash from Operating Activities (2,022,610) (37,387) (751,777) (45,366)
---------- --------- ---------- -------
Cash Flow from Investing Activities
Furniture, Fixtures & Leasehold Improvements
Machinery & Equipment (342,840) (205,847)
Distribution to Parent (354,089) (1,327,468)
---------- --------- ---------- -------
(696,929) - (1,533,315) -
---------- --------- ---------- -------
Cash Flow from Financing Activities
Lines of Credit - Notes Payable 4,743,436 1,305,545
Due to Shareholders (100,000) - -
Notes Payable 100,000 (177,829)
Due to Shareholders (1,168,909) 1,266,806
---------- --------- ---------- -------
3,574,527 - 2,394,522 -
---------- --------- ---------- -------
Net Increase (decrease) in Cash 854,988 (37,387) 109,430 (45,366)
---------- --------- ---------- -------
Cash Beginning of Year 262,197 284,732 152,767 330,098
Cash End of Year 1,117,185 247,345 262,197 284,732
EXHIBIT 99.2
CONSOLIDATED ACORN HOLDING
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD ENDING SEPTEMBER 30, 2005
(Unaudited)
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
VSI Balance Dec 31, 2004 10 2,992,259 208,535 3,200,804
Net Income - - 690,719 690,719
Distribution to Parent (354,089) (354,089)
------ --------- -------- ---------
VSI Sept 30, 2005 10 2,884,773 652,651 3,537,434
Consolidation
Reclass Add Paid In Cap (354,089) (354,089)
Distribution to Parent 354,089 354,089
Acorn Stock at Par 69,971 69,971
Reclass Add Paid In Cap (69,961) (69,961)
------ --------- -------- ---------
Consolidated Sept 30, 2005 69,971 2,814,812 652,651 3,537,434
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