Exhibit 99.2 Unaudited Pro Forma Consolidated Financial Statements
ARC Wireless Solutions, Inc.
Pro Forma Consolidated Statements of Operations
For the Year Ended December 31, 2005
Sale of
Historical Winncom Pro Forma
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Sales, net $ 37,025,000 $(30,068,000)(1) $ 6,957,000
Contract revenue 2,632,000 (2,632,000)(1) --
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Total revenue 39,657,000 (32,700,000) $ 6,957,000
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Cost of sales 29,884,000 (25,793,000)(1) 4,091,000
Contract cost of goods sold 2,296,000 (2,296,000)(1) --
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Total cost of goods sold 32,180,000 (28,089,000) 4,091,000
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Gross profit 7,477,000 (4,611,000) 2,866,000
Operating expenses:
Selling, general and administrative expenses 6,445,000 (3,774,000)(1) 2,671,000
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Total operating expenses 6,445,000 (3,774,000) 2,671,000
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Income (Loss) from operations 1,032,000 (837,000) 195,000
Other income (expense):
Interest expense (284,000) 161,000 (1) (123,000)
Other income 252,000 (190,000)(1) 910,000
848,000 (2)
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Total other income (expense) (32,000) 819,000 787,000
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Income (Loss) before income taxes 1,000,000 (18,000) 982,000
Less provision for income taxes (expense) benefit 292,000 (272,000)(1) 20,000
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Net income (loss) $ 1,292,000 $ (290,000) $ 1,002,000
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Basic and diluted income (loss) per share $ .008 -- $ .006
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The accompanying notes are an integral part of these pro forma consolidated
financial statements.
Notes to Pro Forma Consolidated Statement of Operations (Unaudited)
(1) To record the sale of Winncom as though it had occurred on January 1,
2005. Sales and cost of goods sold are adjusted for inter-company
sales that were previously eliminated in consolidation.
(2) Record interest income on net proceeds from the sale of Winncom of
$16.3 million invested in Treasury Bonds yielding 5.2% as though the
sale had occurred on January 1, 2005.
ARC Wireless Solutions, Inc.
Pro Forma Consolidated Statements of Operations
For the Six Months Ended June 30, 2006
Sale of
Historical Winncom Pro Forma
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Sales, net $ 3,373,000 $ 136,000(1) $ 3,509,000
Cost of sales 2,559,000 66,000(1) 2,625,000
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Gross profit 814,000 70,000 884,000
Operating expenses:
Selling, general and administrative expenses 1,486,000 -- (1) 1,486,000
----------- ----------- -----------
Income (Loss) from operations (672,000) 70,000 (602,000)
Other income (expense):
Interest expense (60,000) -- (1) (60,000)
Other income -- 425,000(2) 425,000
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Total other income (expense) (60,000) 425,000 365,000
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Income (Loss) from continuing operations before income
taxes (732,000) 495,000 (237,000)
Less provision for income taxes (expense) benefit 17,000 -- (1) 17,000
----------- ----------- -----------
Net income (loss) from continuing operations (715,000) 495,000 $ (220,000)
Discontinued Operations
Income (Loss) from discontinued operations before
income taxes 869,000 (869,000) --
Less provision for income taxes (expense) benefit (74,000) 74,000 --
----------- ----------- -----------
Net income (loss) $ 80,000 $ (300,000) $ (220,000)
=========== =========== ===========
Basic and diluted income (loss) per share, continuing
operations $ (.003) $ (.001)
Basic and diluted income (loss) per share, discontinued
operations $ .003 --
----------- ----------- -----------
The accompanying notes are an integral part of these pro forma consolidated
financial statements.
Notes to Pro Forma Consolidated Statement of Operations (Unaudited)
(1) To record the sale of Winncom as though it had occurred on January 1,
2006. Sales and cost of goods sold are adjusted for inter-company
sales that were previously eliminated in consolidation.
(2) Record interest income on net proceeds from the sale of Winncom of
$16.3 million invested in Treasury Bonds yielding 5.2% as though it
had occurred on January 1, 2006
ARC Wireless Solutions, Inc.
Pro Forma Consolidated Balance Sheets (Unaudited)
As of June 30, 2006
Sale of
Historical Winncom Pro Forma
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Assets
Current assets:
Cash and cash equivalents $ 79,000 $ 16,314,000 (1) $ 16,393,000
Accounts receivable trade, net 898,000 898,000
Inventory, net 1,170,000 1,170,000
Deferred tax assets 537,000 (267,000)(2) 270,000
Other current assets 145,000 145,000
Net assets of discontinued operations 39,761,000 (39,761,000)(2) --
------------ ------------ ------------
Total current assets 42,590,000 (23,714,000) 18,876,000
Property and equipment, net 355,000 355,000
Other assets:
Intangible assets, net 104,000 104,000
Other assets 52,000 52,000
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Total assets $ 43,101,000 $(23,714,000) $ 19,387,000
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Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 897,000 $ 897,000
Bank debt - current 1,234,000 1,234,000
Accrued expenses 174,000 174,000
Current portion of capital lease obligations 66,000 66,000
Net liabilities of discontinued operations 23,806,000 (23,806,000)(2) --
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Total current liabilities 26,177,000 (23,806,000) 2,371,000
Deferred tax liabilities 26,000 26,000
Capital lease obligations, less current portion --
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Total liabilities 26,203,000 (23,806,000) 2,397,000
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Stockholders' equity:
Common stock, par value $.0005 78,000 78,000
Preferred stock, par value $.001 -- --
Additional paid-in capital 21,768,000 21,768,000
Treasury stock (1,962,000 shares) (1,195,000) (1,195,000)
Accumulated deficit (3,753,000) 92,000 (3) (3,661,000)
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Total stockholders' equity 16,898,000 92,000 16,999,000
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Total liabilities and stockholders' equity $ 43,101,000 $(23,714,000) $ 19,387,000
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The accompanying notes are an integral part of these pro forma consolidated
financial statements.
Notes to Pro Forma Consolidated Balance Sheet
(1) Gross Proceeds $ 17,000,000
Repayment of inter-company note payable (636,000)
Legal Fees (50,000)
------------
Net proceeds to the Company $ 16,314,000
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(2) To reflect the sale of assets and liabilities of Winncom classified in
historical financial statements as discontinued operations as of June 30,
2006
(3) Reflect the gain on sale of Winncom