EXHIBIT 99.2
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FINANCIAL STATEMENTS
FISCAL 2008
Page
Report of Independent Registered Public Accounting Firm F-2
Financial Statements - fiscal year 2008:
Balance Sheets F-3
Statements of Operations F-4
Statement of Stockholders' (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7 to F-13
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors
Britton International Inc.
We have audited the accompanying balance sheet of Britton International Inc. (A
Development Stage Company) as of April 30, 2008and April 30, 2007and the related
statements of operations, stockholders' (deficit), and cash flows for the year
ended April 30, 2008 and for the period from October 3, 2007 (date of inception)
through April 30, 2007 and for the cumulative period October 3, 2007(date of
inception) to April 30, 2008. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Britton International Inc (A Development Stage
Company) as of April 30, 2008 and April 30, 2007 and the results of its
operations, stockholders' (deficit), and its cash flows for the year ended April
30, 2008 and for the period from October 3, 2007 (date of inception) through
April 30, 2007 and for the cumulative period from October 3, 2007 (date of
inception) to April 30, 2008, in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 2 the Company has
accumulated operating losses since its inception and has limited business
operations, which raise substantial doubt about the Company's ability to
continue as a going concern. Management's plan in regard to this matter is also
discussed in Note 2. The financial statements do not include any adjustments
that might result from the outcome of these uncertainties.
/s/ SCHUMACHER & ASSOCIATES, INC.
_________________________________
Schumacher & Associates, Inc.
Certified Public Accountants
2525 Fifteenth Street, Suite 3H
Denver, Colorado 80211
July 31, 2008
F-2
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
April 30, April 30,
2008 2007
_________ _________
ASSETS
CURRENT ASSETS
Cash $ 910 $ 7,280
Prepaid expenses 596 558
_________ _________
Total current assets 1,506 7,838
OTHER ASSETS
Property and Equipment, net of accumulated
depreciation of $11,881 as of April 30, 2007 $ - $ 2,746
_________ _________
Total assets $ 1,506 $ 10,584
========= =========
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 17,266 $ 28,191
Shareholder loans from related party (Note 7) 64,302 40,050
Accrued liabilities 10,000 -
Accrued interest payable (Note 7) 1,603 1,241
_________ _________
Total current liabilities 93,171 69,482
STOCKHOLDERS' (DEFICIT)
Common shares, 100,000,000 shares with par value $0.0001
authorized, 70,806,270 issued and outstanding (Note 6) 236 738
Paid-in Capital (Note 6) 91,201 70,699
Accumulated deficit in the development stage (183,102) (129,997)
Accumulated other comprehensive income (loss) - (338)
_________ _________
Total stockholders' (deficit) (91,665) (58,898)
_________ _________
Total liabilities and stockholders' (deficit) $ 1,506 $ 10,584
========= =========
The accompanying notes to financial statements are an integral part of this statement
F-3
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
October 3,
2007
(development
Year ended Year ended stage re-set)
April 30, April 30, to
2008 2007 April 30, 2008
___________ ___________ ______________
REVENUES:
Sales $ - $ 35,873 $ -
Cost of Goods Sold - 32,138 -
___________ ___________ ___________
GROSS MARGIN $ - $ 3,735 $ -
EXPENSES:
Website expenses $ - $ 4,553 $ -
Professional and consultant fees 29,134 61,329 29,134
Depreciation 2,450 -
Administrative expenses 1,886 6,781 1,886
___________ ___________ ___________
Total expenses $ 31,020 $ 75,113 $ 31,020
Net (loss) from continuing
operations (31,020) (71,378) (31,020)
Interest income - continuing
operations 10 146 10
Interest expense - continuing
operations (1,603) (1,363) (1,603)
Net (loss) from discontinued
operations (Note 4) (20,492) - (20,492)
___________ ___________ ___________
Net (loss) $ (53,105) (72,595) $ (53,105)
=========== =========== ===========
Loss per common share - continuing
operations $ Nil $ Nil $ Nil
Loss per common share - discontinued
operations Nil - Nil
Weighted average shares outstanding 70,806,270 70,806,270 70,806,270
OTHER COMPREHENSIVE LOSS:
Net (loss) $ (53,105) $ (72,595) $ (53,105)
Foreign currency translation adjustment - (38) -
Total other comprehensive (loss) $ (53,105) $ (72,633) $ (53,105)
The accompanying notes to financial statements are an integral part of this statement
F-4
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' (DEFICIT)
Deficit
Accumulated Accumulated
Other During the Total
Common Common Paid-in Comprehensive Accumulated Development Stockholders'
Shares Stock Capital Income Deficit Stage (Deficit)
____________ ______ _______ _____________ ___________ ___________ _____________
Balance, April 30, 2006 221,406,270 738 $70,699 $ (300) $ (57,402) $ -- $ 13,735
Net loss year ended
April 30, 2007 -- -- -- (38) (72,595) -- (72,633)
____________ ______ _______ ______ __________ _________ _________
Balance, April 30, 2007 221,406,270 $ 738 $70,699 $ (338) $ (129,997) -- $ (58,898)
Common shares issued
for cash at $0.25 on
July 20, 2007
(Note 6) 2,400,000 $ 8 $19,992 $ -- $ -- -- 20,000
To give effect to stock
cancellation October 1,
2007 (Note 6) (153,000,000) (510) 510 -- -- -- --
Net loss during Period
from May 1, 2007 to
October 2, 2007 -- $ $ $ 338 $ (20,492) -- $ (20,154)
Net loss during Period
from October 3, 2007 to
April 30, 2008 -- $ -- $ -- $ -- $ (32,613) $ (32,613)
____________ ______ _______ ______ __________ _________ _________
Balance, April 30, 2008 70,806,270 $ 236 $91,201 $ -- $ (150,489) $ (32,613) $ (91,665)
============ ====== ======= ====== ========== ========= =========
The accompanying notes to financial statements are an integral part of this statement
F-5
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
October 3, 2007
(development
Year ending Year ending stage re-set) to
April 30, 2008 April 30, 2007 April 30, 2008
______________ ______________ ________________
Cash flows from operating activities:
Net loss for the period $ (53,105) $ (72,595) $ (51,368)
Reconciling adjustments:
Adjustments to reconcile net loss to cash
used in Operating activities:
Depreciation - 2,451 -
Website impairment charge - 3,523 -
Accrued interest on loans 1,603 1,210 1,603
Net change in operating assets and liabilities:
Prepaid expenses 129 5,375 129
Accounts receivable (2,356) 23,275 (2,356)
Accounts payable and accrued liabilities 20,388 (4,118) 18,651
_________ _________ _________
Net cash (used) in operating activities (33,341) (40,879) (33,341)
Cash flows (used) by discontinued operating
activities (6,857) - (6,857)
Cash flows from financing activities:
Common stock issued for cash 20,000 - 20,000
Loans from shareholders 16,428 38,897 16,428
_________ _________ _________
Net cash provided by financing activities 36,428 38,897 36,428
Effect of foreign currency translation - (38) -
Net decrease in cash (3,770) (2,020) (3,770)
Cash, beginning of period 4,680 9,300 4,680
_________ _________ _________
Cash, end of period $ 910 $ 7,280 $ 910
========= ========= =========
SUPPLEMENTAL STATEMENT OF CASH FLOWS
October 3, 2007
(development
Year ending Year ending stage re-set) to
April 30, 2008 April 30, 2007 April 30, 2008
______________ ______________ ________________
Supplemental cash flow information:
Interest received $ 10 $ 146 $ 10
========= ========= =========
The accompanying notes to financial statements are an integral part of this statement
F-6
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in
understanding Britton International Inc.'s financial statements. The financial
statements and notes are representations of the Company's management, who are
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles in the United States of
America and have been consistently applied in the preparation of the financial
statements, which are stated in U.S. Dollars.
The financial statements reflect the following significant accounting policies:
ORGANIZATION AND DESCRIPTION OF BUSINESS
Britton International Inc. ("Britton", "We", or the "Company") was incorporated
in the State of Nevada on August 1, 2003. We were established as an online
retailer of jewelry, watches and jewelry related products. Our jewelry business
was discontinued on October 2, 2007 and we are currently researching other
business opportunities. These audited financial statements are presented to
reflect the discontinuation of the Company's jewelry operation and concurrently
reset the Development Stage inception date of the Company as October 3, 2007.
Our fiscal year end is April 30th.
REVENUE RECOGNITION
Revenues are recognized in accordance with SEC Staff Accounting Bulletin (SAB)
No. 101, "Revenue Recognition in Financial Statements". Under SAB 101, product
or service revenues are recognized when persuasive evidence of an arrangement
exists, delivery has occurred (or service has been performed), the sales price
is fixed and determinable and collectability is reasonably assured.
Revenue is recognized when payment is received, or when we have made other
payment arrangements with clients and management has a high degree of confidence
that collectability of the sale is assured. Shipping and handling costs are
included in prices charged to customers and are reflected as part of income in
reported revenues.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the period. Actual results could differ from those estimates.
F-7
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
LOSS PER SHARE
Loss per share is computed in accordance with SFAS No. 128, "Earnings per
Share". Basic loss per share is calculated by dividing the net loss available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted loss per share is computed by dividing net loss by the
weighted average shares outstanding assuming all dilutive potential common
shares were issued. There were no dilutive potential common shares at balance
sheet date. The Company has incurred a net loss and has no potentially dilutive
common shares, therefore; basic and diluted loss per share is the same.
Additionally, for the purposes of calculating diluted loss per share, there were
no adjustments to net loss.
ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of accounts payable, and other financial instruments
reflected in the financial statements approximates fair value due to the
short-term maturity of the instruments. It is management's opinion that the
Company is not exposed to significant interest, currency or credit risks arising
from these financial instruments.
COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income". SFAS 130 requires that the components and
total amounts of comprehensive income be displayed in the financial statements
beginning in 1998. Comprehensive income includes net income and all changes in
equity during a period that arises from non-owner sources, such as foreign
currency items and unrealized gains and losses on certain investments in equity
securities. Comprehensive loss for the periods shown equals the net loss for the
period plus the effect of foreign currency translation.
INCOME TAXES
The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes", which requires the
Company to recognize deferred tax liabilities and assets for the expected future
tax consequences of events that have been recognized in the Company's financial
statements or tax returns using the liability method. Under this method,
deferred tax liabilities and assets are determined based on the temporary
differences between the financial statement carrying amounts and tax bases of
assets and liabilities using enacted rates in effect in the years during which
the differences are expected to reverse and upon the possible realization of net
operating loss carry-forwards.
VALUATION OF LONG-LIVED ASSETS
The Company periodically analyzes its long-lived assets for potential
impairment, assessing the appropriateness of lives and recoverability of
un-depreciated balances through measurement of undiscounted operation cash flows
on a basis consistent with accounting principles generally accepted in the
United States of America.
F-8
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
START-UP COSTS
The Company has adopted Statement of Position No. 98-5 ("SOP 98-5"), "Reporting
the Costs of Start-Up Activities." SOP 98-5 requires that all non-governmental
entities expense the cost of start-up activities, including organizational costs
as those costs are incurred.
DEVELOPMENT STAGE ENTERPRISE
Based upon the Company's revenue generation and its business plan, it is a
development stage enterprise as of the year ending April 30, 2008. Accordingly,
the Company presents its financial statements in conformity with the accounting
principles generally accepted in the United States of America that apply in
establishing operating enterprises. As a development stage enterprise, the
Company discloses the deficit accumulated during the development stage and the
cumulative statements of operations and cash flows from inception to the current
balance sheet date. When the Company discontinued its jewelry business it became
required under GAAP to reset the Development Stage period of the Company to a
start date of October 3, 2007, the termination date of the discontinued jewelry
operation.
CURRENCY
The majority of the Company's cash flows are in United States dollars.
Accordingly, the US dollar is the Company's functional currency.
CASH AND CASH EQUIVALENTS
The Company considers cash and cash equivalents to consist of cash on hand and
demand deposits in banks with an initial maturity of 90 days or less.
RISKS AND UNCERTAINTIES
The Company is subject to substantial business risks and uncertainties inherent
in starting a new business. There is no assurance that the Company will be able
to generate sufficient revenues or obtain sufficient funds necessary for
launching a new business venture.
OTHER
The Company paid no dividends during the periods presented.
The Company consists of one reportable business segment.
We did not have any off-balance sheet arrangements as of April 30, 2008.
F-9
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - GOING CONCERN
Generally accepted accounting principles in the United States of America
contemplate the continuation of the Company as a going concern. However, the
Company has accumulated operation losses since its inception and currently has
limited business operations, which raises substantial doubt about the Company's
ability to continue as a going concern. The continuation of the Company is
dependent on further financial support of investors and management. Once the
Company has established a new business unit, the Company intends to attempt to
acquire additional operating capital through equity offerings to the public to
fund its business plan but there is no assurance that equity or debt offerings
will be successful in raising sufficient funds to assure the eventual
profitability of the Company.
NOTE 3 - RECENT ACCOUNTING PRONOUNCEMENTS
In May 2008, FASB issued SFAS No. 162, THE HIERARCHY OF GENERAL ACCEPTED
ACCOUNTING PRINCIPLES. This Statement identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy). The Company has adopted this Statement
and this adoption did not impact the Company's financial position, results of
operations, or cash flows.
In February 2007, FASB issued SFAS No. 159, THE FAIR VALUE OPTION FOR FINANCIAL
ASSETS AND FINANCIAL LIABILITIES - INCLUDING AN AMENDMENT OF FASB STATEMENT NO.
115. This standard permits fair value measurement of certain financial assets
and liabilities in an effort to eliminate volatility of earnings created by
current practice. Most of the Statement applies only to companies that elect
fair value. However, the amendment to FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities, applies to all entities with
available-for-sale and trading securities. This statement is effective for the
first fiscal period beginning after November 15, 2007. The Company has adopted
this Statement and this adoption did not impact the Company's financial
position, results of operations, or cash flows.
Various additional accounting pronouncements have been issued during 2006 to
2008, none of which are expected to have any material effect on the financial
statements of the Company.
F-10
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - DISCONTINUED OPERATIONS
Due to general economic conditions and other factors, the Company initiatives to
create an online retail jewelry business were unsuccessful and on October 2,
2007 the operating assets of the Company were sold and its jewelry business was
discontinued.
The components of discontinued operations are:
Period from August 1, 2003
May 1, 2007 to May 1, 2006 to through
October 2, 2007 April 30, 2007 October 2, 2007
_______________ ______________ _______________
REVENUES:
Sales $ 878 $ 35,873 $ 302,427
Cost of Goods Sold (704) 32,138 (271,808)
___________ ___________ ___________
GROSS MARGIN $ 174 $ 3,735 $ 30,619
EXPENSES:
Website expenses $ 266 $ 4,553 $ 14,131
Directors & Officers fees - - 500
Professional fees 16,224 61,329 127,882
Advertising - - 3,944
Depreciation 196 2,450 12,077
Administrative expenses 2,728 6,781 18,370
Bad debt expense - - 1,020
___________ ___________ ___________
Total expenses $ 19,414 $ 75,113 $ 177,924
Net Income (loss) from operations (19,240) (71,378) (147,305)
Interest income 70 146 518
Interest expense (984) (1,363) (3,364)
Adjustment to recognize prior years'
foreign currency translation losses (338) (338)
___________ ___________ ___________
Net Income (loss) $ (20,492) $ (72,595) $ (150,489)
=========== =========== ===========
Loss per common share $ Nil $ Nil $ Nil
Weighted average shares outstanding 70,806,270 70,806,270 70,806,270
OTHER COMPREHENSIVE INCOME (LOSS):
Net Income (loss) $ (20,492) $ (72,595) $ (150,489)
Foreign currency translation adjustment 338 (38) 338
___________ ___________ ___________
Total Other Comprehensive Income (Loss) $ (20,154) $ (72,633) $ (150,151)
F-11
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 5 - INCOME TAXES
The Company is subject to federal income taxes in the US. The Company has had no
net income from its US operations and therefore has not paid nor has any income
taxes owing in the US.
Deferred income taxes arise from temporary timing differences in the recognition
of income and expenses for financial reporting and tax purposes. The Company's
deferred tax assets consist entirely of the benefit from net operating loss
carry-forwards. The Company's deferred tax assets are offset by a valuation
allowance due to the uncertainty of the realization of the net operating loss
carry-forwards. Net operating loss carry-forwards may be further limited by a
change in company ownership and other provisions of the tax laws.
The Company's deferred tax assets, valuation allowance, and change in valuation
allowance are as follows ("NOL" denotes Net Operating Loss):
Estimated
Estimated Tax
NOL NOL Benefit Valuation Net Tax
Year Ending Carry-forward Expires from NOL Allowance Benefit
___________ _____________ _______ _________ _________ _______
2004 $ (4,737) 2024 $ 711 $ (711) $ --
2005 $ (8,925) 2025 $ 1,339 $ (1,339) $ --
2006 $ (44,040) 2026 $ 6,606 $ (6,606) $ --
2007 $ (72,633) 2027 $ 10,895 $ (10,895) $ --
2008 $ (53,105) 2028 $ 7,966 $ (7,966) $ --
____________ _________ _________ _______
$ (183,102) $ 27,517 $ (27,517) $ --
============ ========= ========= =======
The total combined valuation allowance for the year as of April 30, 2008 is
$(27,517) which increased by $(7,966) for the year ended April 30, 2008.
NOTE 6 - COMMON STOCK ISSUED
On August 7, 2003, the Company issued 5,000,000 shares of its common stock to
its President for services as a director & officer of the Company. This
transaction was valued at a fair market value of $0.0001 per share for a total
value of $500.
On November 12, 2003, the Company issued 1,000,000 shares of its common stock
for the purchase of its website. This transaction was valued at a fair market
value of $0.01 per share for a total value of $10,000.
During the fiscal year ending April 30, 2004, the Company issued 656,876 shares
of its common stock in a private offering at $0.02 per share for a total of
$13,138.
During the fiscal year ending April 30, 2005, the Company issued 390,000 shares
of its common stock in a private offering at $0.02 per share for a total of
$7,800.
F-12
BRITTON INTERNATIONAL INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
On December 15, 2005, the Company issued 333,333 shares of its common stock in a
private offering at $0.12 per share for aggregate proceeds of $40,000.
On July 20, 2007, the Company issued 80,000 shares of its common stock in a
private offering at $0.25 per share for aggregate proceeds of $20,000.
On October 1, 2007, the Board of Directors authorized the cancellation of
5,100,000 shares of its common stock which were submitted for cancellation by
its CEO as to 4,550,000 shares and a related party as to 550,000 shares. This
cancellation resulted in the revaluation of share capital as follows: (i) Common
Stock was revalued from $746 to $236, based on par value of $0.0001 times
5,100,000 common shares; and (ii) Paid In Capital was adjusted from $90,691 to
$91,201.
On October 2, 2007, the Board of Directors authorized a 30 for 1 forward stock
split which became effective November 15, 2007. All references to stock issued
and stock outstanding have been retroactively adjusted as if the stock split and
stock dividend had taken place at the earliest date shown.
Subsequent to year end, on May 28, 2008 the Company issued 206,577 shares of its
common stock in a private offering at $0.10 per share for aggregate proceeds of
$20,658.
NOTE 7 - RELATED PARTY TRANSACTIONS
At April 30, 2008, the Company had one related party shareholder loan
outstanding of $65,905 which included $1,603 of accrued interest. This loan is
uncollateralized, accrues interest at 5% per annum and has no fixed repayment
date. During the year ended April 30, 2008, loans from shareholders, including
accrued interest, increased by $18,031.
NOTE 8 - SUBSEQUENT EVENT
Subsequent to year end, on May 13, 2008, the Company entered into a letter of
intent with CaliCo Entertainment Group, Inc. ("Calico'), a privately-held
company with its corporate headquarters located in Reno, Nevada and its
principal business operations in Santa Monica, California. The letter of intent
outlines a business combination whereby Britton would acquire all of the issued
and outstanding stock of Calico in exchange for 3,450,000 newly issued shares of
Britton. Upon completion of the transaction, the shareholders of Calico would
own approximately 5% of the issued and outstanding stock of Britton. The
transaction is subject to Britton and the shareholders of Calico entering into a
definitive agreement.
Subsequent to year end, on May 28, 2008 the Company issued 206,577 shares of its
common stock in a private offering at $0.10 per share for aggregate proceeds of
$20,658.
F-13