EMPIRE GLOBAL CORP.
PRO-FORMA CONSOLIDATED
FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2005
UNAUDITED
CONTENTS
Pro-Forma Consolidated Balance Sheet 2 - 3
Pro-Forma Consolidated Statement of Stockholders' Equity 4
Pro-Forma Consolidated Statement of Operations 5 - 6
Notes to Pro-Forma Consolidated Financial Statements 7 - 8
EMPIRE GLOBAL CORP.
Pro-Forma Consolidated Balance Sheet
September 30, 2005
(Stated in United States Dollars)
Unaudited
Historical
-----------------------
501 Empire Empire
Canada Global Global Corp.
Inc. Corp. Pro-Forma
Sept. 30, Sept. 30, Pro-Forma Sept. 30,
2005 2005 Adjustments 2005
-----------------------------------------------------
ASSETS
------
Current
Cash $ 11,552 $ - $ - $ 11,552
Short term
investments 58,010 - - 58,010
Prepaid and
sundry assets 239,937 - - 239,937
-----------------------------------------------------
Total Current Assets 309,499 - - 309,499
-----------------------------------------------------
Revenue Producing
Real Estate 6,765,334 - - 6,765,334
Equipment 21,889 - - 21,889
Deferred Financing
Charges 90,587 - - 90,587
Advances to related
Companies 230,062 - - 230,062
Notes Receivable - 3,000,000 - 3,000,000
Interest
Receivable - 45,000 - 45,000
-----------------------------------------------------
Total Long Term
Assets 7,107,872 3,045,000 - 10,152,872
Total Assets $ 7,417,371 $ 3,045,000 $ - $10,462,371
=====================================================
(The accompanying notes are an integral part of
these pro-forma consolidated statements)
- 2 -
EMPIRE GLOBAL CORP.
Pro-Forma Consolidated Balance Sheet (CONTINUED)
September 30, 2005
(Stated in United States Dollars)
Unaudited
Historical
-----------------------
501 Empire Empire
Canada Global Global Corp.
Inc. Corp. Pro-Forma
Sept. 30, Sept. 30, Pro-Forma Sept. 30,
2005 2005 Adjustments 2005
-----------------------------------------------------
LIABILITIES
-----------
Current
Bank
indebtedness $ 86,989 $ - $ - $ 86,989
Accounts payable
& Accrued
Liabilities 376,101 466,458 - 842,559
Current portion
of mortgage
payable 53,374 - - 53,374
Advances from
shareholder 514,970 - - 514,970
Income taxes
payable 5,165 409,947 - 415,112
-----------------------------------------------------
Total Current
Liabilities 1,036,599 876,405 - 1,913,004
-----------------------------------------------------
Mortgages Payable 7,223,831 - - 7,223,831
Future Income Taxes 6,147 - - 6,147
-----------------------------------------------------
Total Long Term Debt 7,229,978 - - 7,229,978
-----------------------------------------------------
Total Liabilities 8,266,577 876,405 - 9,142,982
-----------------------------------------------------
STOCKHOLDERS'
EQUITY
-------------
Capital Stock 67 973 2,167,622 2,618,662
Paid in Capital - 1,318,299 (1,318,299) -
Accumulated Other
Comprehensive
Income (Loss) (71,785) 143,177 (143,177) (71,785)
Accumulated Earnings
(Deficit) (777,488) 706,146 (706,146) (777,488)
-----------------------------------------------------
Total Stockholders'
Deficit (849,206) 2,168,595 - 1,319,389
-----------------------------------------------------
Total Liablities
and Stockholder's
Deficit $ 7,417,371 $ 3,045,000 $ - $ 10,462,371
=====================================================
(The accompanying notes are an integral part of
these pro-forma consolidated statements)
- 3 -
EMPIRE GLOBAL CORP.
Pro-Forma Consolidated Statement of Stockholders' Equity
Nine Months Ended September 30, 2005
(Stated in United States Dollars)
Unaudited
Historical
----------------------------
501 Empire Empire
Canada Global Global Corp.
Inc. Corp. Pro-Forma
Sept. 30, Sept. 30, Pro-Forma Sept. 30,
2005 2005 Adjustments 2005
-----------------------------------------------------------
Accumulated Deficit
- beginning of
period $ (220,837) $ (175,583) $ 175,583 $ (220,837)
Net Income (Loss) (556,651) 881,729 (881,729) (556,651)
-----------------------------------------------------------
Accumulated Deficit
- end of period $ (777,488) $ 706,146 $ (706,146) $ (777,488)
===========================================================
(The accompanying notes are an integral part of
these pro-forma consolidated statements)
- 4 -
EMPIRE GLOBAL CORP.
Pro-Forma Consolidated Statement of Operations
Nine Months Ended September 30, 2005
(Stated in United States Dollars)
Unaudited
Historical
----------------------------
501 Empire Empire
Canada Global Global Corp.
Inc. Corp. Pro-Forma
Sept. 30, Sept. 30, Pro-Forma Sept. 30,
2005 2005 Adjustments 2005
-----------------------------------------------------------
Revenues
Rent $ 466,032 $ - $ - $ 466,032
Other Income 41 - - 41
-----------------------------------------------------------
466,073 - - 466,073
-----------------------------------------------------------
Expenses
Advertising &
Promotion - 495,162 - 495,162
Consulting - 483,000 - 483,000
Mortgage Interest 296,562 - - 296,562
Utilities 170,587 - - 170,587
Property Taxes 138,427 - - 138,427
Professional
Fees 49,922 54,140 - 104,062
Commissions 102,084 - - 102,084
Repairs and
Maintenance 96,483 - - 96,483
Insurance 35,892 - - 35,892
Office and
General 5,305 30,401 - 35,706
Bad Debts - 22,545 - 22,545
Vehicle 16,114 - - 16,114
Rental - 8,646 - 8,646
Bank Charges and
Interest 7,221 - - 7,221
Salaries and
Wages 2,448 - - 2,448
Foreign Exchange
Gain - (6,006) - (6,006)
Amortization 99,956 - - 99,956
-----------------------------------------------------------
Total Expenses $ 1,021,001 $ 1,087,888 $ - $ 2,108,889
(The accompanying notes are an integral part of
these pro-forma consolidated statements)
- 5 -
EMPIRE GLOBAL CORP.
Pro-Forma Consolidated Statement of Operations (CONTINUED)
Nine Months Ended September 30, 2005
(Stated in United States Dollars)
Unaudited
Historical
----------------------------
501 Empire Empire
Canada Global Global Corp.
Inc. Corp. Pro-Forma
Sept. 30, Sept. 30, Pro-Forma Sept. 30,
2005 2005 Adjustments 2005
-----------------------------------------------------------
Income (Loss)
Before Taxes $ (554,928) $ (1,087,888) $ - $ (1,642,816)
Current Income
Taxes 1,719 - - 1,719
Future Income
Taxes - - - -
-----------------------------------------------------------
(556,647) (1,087,888) - (1,644,535)
-----------------------------------------------------------
Other
Interest - 45,000 - 45,000
Loan Forgiveness - 11,800 - 11,800
-----------------------------------------------------------
- 56,800 - 56,800
-----------------------------------------------------------
Income (Loss) Before
Discontinued
Operations (556,647) (1,031,088) - (1,587,735)
Gain from
discontinued
operations net
of taxes - 1,912,817 - 1,912,817
-----------------------------------------------------------
Net Income (Loss) (556,647) 881,729 - 325,082
Foreign Currency
Adjustment (4) (28,317) - (28,321)
-----------------------------------------------------------
Comprehensive
Income (Loss) $ (556,651) $ 853,412 $ - $ 296,761
===========================================================
Income per Share -
Basic and fully
Diluted $ 0.02 -
===========================================================
Weighted Average
Number of Shares
- Basic and
Fully Diluted 39,912,000
===========================================================
(The accompanying notes are an integral part of
these pro-forma consolidated statements)
- 6 -
EMPIRE GLOBAL CORP.
Notes to Pro-Forma Consolidated Financial Statements
September 30, 2005
(Stated in United States Dollars)
Unaudited
1. Basis of Presentation
A) These unaudited pro forma consolidated financial statements present the
pro forma financial position and results of operations of the Company
based upon historical financial information after giving effect to the
transaction and adjustments as follows:
1) On October 27, 2005 Empire Global, Corp. ("Empire") entered into a
merger agreement whereby Empire, through its wholly owned
subsidiary, Empire Global Acquisition Corp ("EGAC"), acquired 100%
of 501 Canada Inc. ("501 Company") using exchangeable shares of
EGAC. Empire acquired 501 Company by issuing an additional
6,240,000 restricted shares of Empire in exchange for shares of
EGAC held by the 501 Company. The substance of Empire's share
issuance and the proposed reorganization is a transaction which
results in 501 Company becoming a listed public entity through 501
Company's acquisition of Empire's net assets and 501 Company's
recapitalization. While the balance sheet and the income statement
are of Empire as a legal entity, the assets, liabilities, and
dollar amounts attributed to share capital are those of 501
Company. Future Empire financial statements will present a
continuation of 501 Company's business. Empire is accounting for
this acquisition using the purchase method of accounting as if it
had occurred at September 30, 2005 for these unaudited pro-forma
consolidated financial statements. Empire has recorded the
investment in 501 Canada, the issuance of shares and the accrual
for transaction costs as if it had occurred at September 30, 2005.
2) 501 Company maintains its books and records in Canadian dollars.
Balance sheet accounts are translated using closing exchange rates
in effect at the balance sheet date. Income and expense accounts
are translated using an average exchange rate prevailing during
each reporting period. No representation is made that the
Canadian dollar could have been, or could be, converted into
United States dollars at the rates on the respective dates and or
at any other certain rates. Adjustments resulting from the
translation are included in the accumulated other comprehensive
income (loss) in stockholders' equity.
3) The financial statements of Empire and 501 Company are prepared in
accordance with accounting principles generally accepted in the
United States of America.
- 7 -
EMPIRE GLOBAL CORP.
Notes to Pro-Forma Consolidated Financial Statements
September 30, 2005
(Stated in United States Dollars)
Unaudited
1. Basis of Presentation (Cont'd)
B) The pro-forma consolidated financial statements are based on the
balance sheets of the following:
1) 501 Company as at September 30, 2005 (unaudited)
2) Empire as at September 30, 2005 (unaudited)
C) The pro-forma consolidated financial statements include the statement
of operations for the following:
1) 501 Company for the nine months ended September 30, 2005
(unaudited).
2) Empire for the nine months ended September 30, 2005 (unaudited).
D) The pro-forma consolidated balance sheet as at September 30, 2005 gives
effect to the transactions as at September 30, 2005 and the pro-forma
statement of operations for the nine months ended September 30, 2005
and year ended December 31, 2004 gives effect to the transactions as
if they had taken place at the beginning of each period.
E) The pro-forma consolidated financial statements are not necessarily
indicative of the actual results that would have occurred had the
proposed transactions occurred on the dates indicated and not
necessarily indicative of future operations or financial position.
2. Pro-Forma Adjustments
Empire's issuance of 6,240,000 shares to 501 Company's shareholders in
exchange for all of 501 Company's outstanding shares results in this
transaction being accounted for as an acquisition of Empire's net assets
by the 501 Company. Accordingly, the issuance of shares will be recorded
by eliminating Empire's share capital and deficit, resulting in a net
$2,615,772 increase to the pro forma share capital.
- 8 -