Exhibit No. 99.5
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The following Unaudited Pro Forma Combined Financial Statements of
Financial Intranet and Technest gives effect to the merger between Financial
Intranet and Technest under the purchase method of accounting prescribed by
Accounting Principles Board Opinion No. 16, Business Combinations. These pro
forma statements are presented for illustrative purposes only. The pro forma
adjustments are based upon available information and assumptions that management
believes are reasonable. The Unaudited Pro Forma Combined Financial Statements
do not purport to represent what the results of operations or financial position
of Financial Intranet would actually have been if the merger had in fact
occurred on March 1, 2000, nor do they purport to project the results of
operations or financial position of Financial Intranet for any future period or
as of any date, respectively. The acquisition of Technest by Financial Intranet
has been accounted for as a reverse acquisition under the purchase method for
business combinations. The combination of the two companies is recorded as a
recapitalization of Technest, pursuant to which Technest is treated as the
continuing entity.
These Unaudited Pro Forma Combined Financial Statements do not give effect
to any restructuring costs or to any potential cost savings or other operating
efficiencies that could result from the merger between Financial Intranet and
Technest.
The consolidated financial statements of Financial Intranet for the year
ended December 31, 2000, are derived from audited consolidated financial
statements and are included in the Form 10-KSB as filed by Financial Intranet on
April 16, 2001, with the Securities and Exchange Commission. The consolidated
financial statements of Financial Intranet for the three months ended March 31,
2001, are derived from unaudited consolidated financial statements and are
included in the Form 10-QSB as filed by Financial Intranet on May 18, 2001, with
the Securities and Exchange Commission.
You should read the financial information in this section along with
Financial Intranet's historical consolidated financial statements and
accompanying notes in prior Securities and Exchange Commission filings and in
this amended Current Report on Form 8-K.
Financial Intranet, Inc.
Unaudited Pro Forma Combined
Statements of Operations
Period Ended December 31, 2000
Pro Forma adjustments
-----------------------
FNTN TECHNEST TOTAL DR CR Pro Forma
------------ ------------- ------------ ----------- ---------- ---------------
Revenues $ 2,833 $ (9,040,304) $ (9,037,471) $ (9,037,471)
Selling, general & administrative 991,900 799,057 1,790,957 1,790,957
Depreciation and amortization 567,120 96,810 663,930 663,930
Stock based compensation 458,204 - 458,204 458,204
------------ ------------- ------------ ---------------
Total Operating Expenses 2,017,224 895,867 2,913,091 2,913,091
------------ ------------- ------------ ---------------
Operating Loss (2,014,391) (9,936,171) (11,950,562) (11,950,562)
Interest income 69,706 38,924 108,630 108,630
Interest expense (1,498,701) (25,653) (1,524,354) (1,524,354)
Other (60,693) 115,347 54,654 54,654
Loss on impairment of long-lived assets (1,787,125) - (1,787,125) (1,787,125)
------------ ------------- ------------ ----------------
Net Loss (5,291,204) (9,807,553) (15,098,757) (15,098,757)
Discontinued operations (1,512,312) - (1,512,312) (1,512,312)
------------ ------------- ------------ ----------------
Net loss $ (6,803,516) $ (9,807,553) $(16,611,069) $ (16,611,069)
============ ============= ============ ===============
Net loss per share - Basic and diluted:
Continuing operations $ (0.10) $ - $ (0.28) $ (0.17)
Discontinued operations (0.03) - (0.03) (0.02)
------------ ------------- ----------- ---------------
$ (0.13) $ - $ (0.31) $ (0.19)
============ ============= =========== ===============
WEIGHTED AVERAGE SHARES 53,188,568 - 53,188,568 33,450,000 86,638,568
============ ============== =========== ===============
See notes to unaudited pro forma financial statements
Financial Intranet, Inc.
Unaudited Pro Forma Combined Balance Sheet
March 31, 2001
Pro Forma adjustments
---------------------------------
FNTN TECHNEST DR CR Pro Forma
---------- ------------- ---------------- --------------- --------------
Assets
Cash $ 28,224 $ 179,850 $ 208,074
Due from suppliers 27,849 - 27,849
Note receivable - related party - 266,000 266,000
Prepaid insurance and other 77,835 - 77,835
---------- ------------- ---------------- --------------- --------------
Total Current Assets 133,908 445,850 - - 579,758
Property and equipment 12,753 793,127 805,880
Capitalized software
development costs 275,000 - 275,000
Investments - 4,897,023 4,897,023
Other 28,084 2,179 30,263
---------- ------------- ---------------- --------------- --------------
Total Assets $ 449,745 $ 6,138,179 - - $ 6,587,924
========== ============= ================ =============== ==============
Liabilities and Stockholders' Equity
Accounts payable and
accrued expenses $ 369,808 $ 350,879 $ 720,687
Accrued interest - 45,153 45,153
Note payable 75,000 300,000 375,000
Deferred revenue - 18,675 18,675
Other liabilities - 33,341 33,341
---------- ------------- ---------------- --------------- --------------
Total Current Liabilities 444,808 748,048 - - 1,192,856
Note payable 10,000 690,000 700,000
Stockholders equity (deficit):
Preferred Stock - 1,488 1,488
Common Stock 85,163 7,085 $ 7,085 $ 3,345 88,508
Additional paid-in capital 13,678,701 14,873,512 13,772,272 7,085 14,787,026
Common stock subscription receivable - (7,035) (7,035)
Accumulated deficit (13,768,927) (10,174,919) 13,768,927 (10,174,919)
----------- ------------- ---------------- --------------- --------------
Total Stockholders' Equity (Deficit) (5,063) 4,700,131 13,779,357 13,779,357 4,695,068
----------- ------------- ---------------- --------------- --------------
$ 449,745 $ 6,138,179 $ 13,779,357 $ 13,779,357 $ 6,587,924
=========== ============= ================ =============== ==============
See notes to unaudited pro forma financial statements
Financial Intranet, Inc.
Unaudited Pro Forma Combined
Statements of Operations
Three Months Ended March 31, 2001
Pro Forma adjustments
---------------------------
FNTN TECHNEST TOTAL DR CR Pro Forma
----------- ------------- -------------- ------------ ------------- -------------
Revenues $ 1,719 $ $ 1,719 $ 1,719
Cost of Revenue 86 86 86
----------- ------------- -------------- -------------
1,633 - 1,633 1,633
Selling, general & administrative 226,122 336,372 562,494 562,494
Depreciation and amortization 28,612 49,805 78,417 78,417
----------- ------------- -------------- -------------
Total Operating Expenses 254,734 386,177 640,911 640,911
Operating Loss (253,101) (386,177) (639,278) (639,278)
Interest income 125 - 125 125
Interest expense (26,500) (19,500) (46,000) (46,000)
Other - 38,311 38,311 38,311
----------- ------------- -------------- -------------
Net Loss $ (279,476) $ (367,366) $ (646,842) $ (646,842)
=========== ============= ============== =============
Net loss per share
- Basic and diluted $ (0.00) $ - $ (0.01) $ (0.01)
=========== ============= ============== =============
WEIGHTED AVERAGE SHARES 85,163,416 - 85,163,416 33,450,000 118,613,416
See notes to unaudited pro forma financial statements
Financial Intranet, Inc.
Unaudited Pro Forma Adjustments
Pro Forma adjustments reflect the following transaction:
Pro Forma adjustments - Balance Sheet March 31, 2001
DR CR
Common Stock $ 7,085
Additional paid-in capital $7,085
Additional paid-in capital 13,772,272
Common Stock 3,345
Accumulated deficit 13,768,927
To record the acquisition of Technest by Financial Intranet for 33,450,000
shares of Financial Intranet's common stock, which is equivalent to 90% of the
total number of Financial Intranet shares of common stock outstanding, in
exchange for all the outstanding shares of Technest common stock the Technest
Stockholders delivered to Financial Intranet. The acquisition has been accounted
for as a reverse acquisition under the purchase method for business
combinations. The combination of the two companies is recorded as a
recapitalization of Technest, pursuant to which Technest is treated as the
continuing entity.