Exhibit 99.2
MANGOSOFT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Background
Immediately after the Merger described under Item 7 above, the former
common and preferred stockholders of MangoSoft Corporation held 6,008,998 shares
of the Company's common stock, while the former common stockholders of
MangoSoft, Inc. held 1,575,000 shares of the Company's common stock. In
addition, the 12% Senior Secured Convertible Notes held by creditors of
MangoSoft Corporation were converted into 9,000,000 shares of the MangoSoft,
Inc.'s common stock. As part of the Merger, the Company completed a private
placement (the "Private Placement") of 3,000,000 shares of the common stock for
net proceeds of $3,098,827.
At the time of the Merger, the common shares issued to the former
stockholders of MangoSoft Corporation represented a majority of the Company's
common stock, enabling them to retain voting and operating control of the
Company. Because First American was a non-operating entity and the closing of
the Private Placement was contingent upon the closing of the Merger, the Merger
was accounted for as a capital transaction and was treated as a reverse
acquisition as the shareholders of MangoSoft Corporation received the larger
portion of the voting interests in the combined enterprise.
The following unaudited pro forma combined financial information for the
six months ended June 30, 1999 and year ended December 31, 1998 have been
prepared assuming the Merger had occurred on January 1, 1998, the beginning of
the earliest period presented. The pro forma results have been prepared for
comparative purposes only and are not necessarily indicative of what would have
occurred had the Merger occurred at that date or of results which may occur in
the future.
The following pro forma financial information is based on, and should be
read in conjunction with, the historical financial statements of each of the
companies and the notes related thereto.
MANGOSOFT, INC. AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET INFORMATION
AS OF JUNE 30, 1999
MangoSoft, MangoSoft Pro Forma Pro Forma
ASSETS Inc. Corporation Adjustments Combined
---- ----------- ----------- --------
CURRENT ASSETS:
Cash and cash equivalents $ 15 $ 165,859 $ 3,750,000 A $ 3,915,874
Other current assets -- 21,991 -- 21,991
------- ----------- ----------- -----------
Total current assets 15 187,850 3,750,000 3,937,865
PROPERTY AND EQUIPMENT - Net -- 157,183 -- 157,183
Deposits and other assets 287 5,943 (287) B 5,943
------- ----------- ----------- -----------
TOTAL ASSETS $ 302 $ 350,976 $ 3,749,713 $ 4,100,991
======= =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
12% senior secured convertible notes - related parties $ -- $ 3,752,500 $(3,752,500) C $ --
12% senior secured convertible notes - others -- 2,000,000 (2,000,000) C --
Loans from stockholders 78 -- (78) B --
Accrued expenses to related parties -- 667,398 100,000 D 767,398
Accounts payable, including past due amounts -- 1,783,483 1,783,483
Accrued payroll -- 302,968 302,968
Accrued merger costs -- -- 276,173 E 276,173
Other accrued expenses -- 868,076 (261,223) C 606,853
------- ----------- ----------- -----------
Total current liabilities 78 9,374,425 (5,637,628) 3,736,875
REDEEMABLE CONVERTIBLE PREFERRED STOCK -- 33,377,386 (33,377,386) C --
STOCKHOLDERS' EQUITY (DEFICIENCY):
Convertible preferred stock -- 30,000 (30,000) C --
Common stock 908 761 3,000 A 19,513
14,077 C
(200) D
300 E
667 F
Additional paid-in-capital 45,753 -- 3,095,827 A 42,776,199
39,407,032 C
(99,800) D
374,700 E
(667) F
(46,646) G
(209) B
Deficit accumulated during the development stage (46,437) (42,431,596) 46,646 G (42,431,596)
------- ----------- ----------- -----------
Total stockholders' equity (deficiency) 224 (42,400,835) 42,764,727 364,116
------- ----------- ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 302 $ 350,976 $ 3,749,713 $ 4,100,991
======= =========== =========== ===========
NOTES TO THE JUNE 30, 1999 UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
A To record the receipt of $3,098,827 from the issuance of 3.0 million shares
of common stock of MangoSoft, Inc., $0.001 par value, net of issuance costs
of $651,173.
B To write-off MangoSoft, Inc. assets with no value.
C To record the conversion of the MangoSoft Corporation common stock, 12%
senior secured convertible notes and redeemable convertible preferred stock
into 14,076,498 shares of MangoSoft, Inc. common stock, $0.001 par value.
D To record the Company's purchase and subsequent retirement of 200,000 shares
of common stock, $0.001 par value, from a related party.
E To record the issuance of common shares to the placement agent.
F To record the 1.734 to 1.000 common stock split by MangoSoft, Inc.
G To record the elimination of MangoSoft, Inc.'s accumulated deficit.