EXHIBIT 99.2
CELL POWER TECHNOLOGIES, INC.
Introduction to Pro Forma Condensed Combined Financial Statements
(Unaudited)
The following unaudited pro forma condensed combined financial statements give
effect to the acquisition transaction of Portagy Corp. ("Portagy"). On August
11, 2006, Cell Power Technologies, Inc. ("Cell Power"), a public shell
corporation, issued 16,051,413 shares of its common stock in exchange for all of
the common and preferred stock of Portagy. As a result of the transaction, the
former owners of Portagy became the controlling stockholders of Cell Power.
Accordingly, the acquisition of Portagy by Cell Power is treated for accounting
purposes as a reverse acquisition. The transaction is more fully described in
Note 5 to the unaudited financial statements of Portagy for the three months
ended March 31, 2006.
The accompanying unaudited pro forma condensed combined balance sheet presents
the balance sheet of Portagy and Cell Power as of March 31, 2006 as if the
acquisition of Portagy by Cell Power occurred on that date. The accompanying
unaudited pro forma combined statements of operations present the results of
operations of Portagy and Cell Power for the three months ended March 31, 2006
and for the year ended December 31, 2005 as if the aforementioned transaction
had occurred at the beginning of the respective periods.
The pro forma amounts have been developed from (a) the audited financial
statements of Cell Power contained in its Form 10-KSB for the year ended October
31, 2005, (b) the unaudited financial statements of Cell Power contained in its
Form 10-QSB for the three months ended April 30, 2006, (c) the audited financial
statements of Portagy as of December 31, 2005 and for the period from February
25, 2005 (inception) to December 31, 2005, and (d) the unaudited financial
statements of Portagy for the three months ended March 31, 2006.
The accompanying unaudited pro forma condensed combined financial statements are
provided for illustrative purposes only and do not purport to represent what the
actual combined results of operations or the combined financial position of Cell
Power would have been had the acquisition occurred on the dates assumed, nor are
they necessarily indicative of future combined results of operations or combined
financial position.
CELL POWER TECHNOLOGIES, INC.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(unaudited)
Historical Pro Forma
-------------------------------- -----------------------------------
April 30, 2006 March 31, 2006 Adjustments
--------------
Cell Power Portagy Credit (Debit) Combined
-------------- -------------- ------------- -----------
(1) (2)
Assets
Current assets
Cash $ 658 $ 8 $ -- $ 666
Prepaid expenses 9,474 72,750 -- 82,224
----------- ----------- ----------- -----------
Total current assets 10,132 72,758 -- 82,890
Prepaid distribution rights, net -- 376,667 -- 376,667
----------- ----------- ----------- -----------
Total assets $ 10,132 $ 449,425 $ -- $ 459,557
=========== =========== =========== ===========
Liabilities and shareholders' deficit
Current liabilities
Notes payable to related parties $ 104,301 $ 121,500 $ -- $ 225,801
Accounts payable 124,442 368,970 -- 493,412
Accrued expenses 132,595 11,688 -- 144,283
Convertible notes payable 456,000 -- (456,000)(3) --
----------- ----------- ----------- -----------
Total current liabilities 817,338 502,158 (456,000) 863,496
----------- ----------- ----------- -----------
Shareholders' deficit
Preferred stock
Series A convertible preferred stock -- 2,250 (2,250)(4) --
Common stock, no par value
23,277,673 shares issued and outstanding (5) 2,531,644 4,100 (4,100)(4) 2,531,644
Additional paid-in capital (deficiency) (359,399) 1,781,950 (2,517,101)(4) (1,094,550)
Deferred compensation -- (264,827) -- (264,827)
Deficit accumulated during development stage (2,523,451) (1,576,206) 2,523,451 (4) (1,576,206)
Less: treasury stock (456,000) -- 456,000 (3) --
----------- ----------- ----------- -----------
Total shareholders' deficit (807,206) (52,733) 456,000 (403,939)
----------- ----------- ----------- -----------
Total liabilities and shareholders' deficit $ 10,132 $ 449,425 $ -- $ 459,557
=========== =========== =========== ===========
See notes to proforma condensed combined financial statements.
CELL POWER TECHNOLOGIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(unaudited)
Historical Pro Forma
--------------------------------- -----------------------------------
For the three For the three
months ended months ended Adjustments
April 30, 2006 March 31, 2006 -------------
Cell Power Portagy Debit (Credit) Combined
-------------- -------------- -------------- ------------
(1) (2)
Revenue
Product sales $ -- $ -- $ -- $ --
Royalties -- -- -- --
------------ ------------ ------------ ------------
Total revenue -- -- -- --
Costs of goods sold
Product costs -- -- -- --
Amortization of intangibles 7,500 -- (7,500)(3) --
------------ ------------ ------------ ------------
Total cost of goods sold 7,500 -- (7,500) --
------------ ------------ ------------ ------------
Gross profit (7,500) -- (7,500) --
Operating expenses
Salaries, commission and related taxes 47,609 57,504 (47,609)(3) 57,504
Bad debt expense 35,104 -- (35,104)(3) --
Impairment loss on intangible asset 202,510 -- (202,510)(3) --
Depreciation and amortization -- 47,229 -- 47,229
Other general and administrative 15,332 292,025 (15,332)(3) 292,025
------------ ------------ ------------ ------------
Total operating expenses 300,555 396,758 (300,555) 396,758
------------ ------------ ------------ ------------
Loss from operations (308,055) (396,758) (308,055) (396,758)
Other expenses (Income)
Financing fees -- 375,000 -- 375,000
Interest expense 16,532 834 (16,532)(3) 834
------------ ------------ ------------ ------------
Total other expenses 16,532 375,834 (16,532) 375,834
------------ ------------ ------------ ------------
Net loss $ (324,587) $ (772,592) $ (324,587) $ (772,592)
Preferred stock dividend and other charges -- 40,000 -- 40,000
------------ ------------ ------------ ------------
Net loss applicable to common shareholders: $ (324,587) $ (812,592) $ (324,587) $ (812,592)
============ ============ ============ ============
Net loss per share applicable to
common shareholders - basic and diluted $ (0.06) $ (0.04)
============ ============
Weighted average shares of common
stock outstanding - basic and diluted 5,332,268 14,337,201(4) 19,669,469
============ ============ ============
See notes to proforma condensed combined financial statements.
CELL POWER TECHNOLOGIES, INC.
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(unaudited)
Historical Pro Forma
----------------------------------- --------------------------------
For the period
For the February 25, 2005
year ended (inception) Adjustments
October 30, 2005 December 31, 2005 -------------
Cell Power Portagy Debit (Credit) Combined
---------------- ----------------- -------------- ------------
Revenue
Product sales $ 164,445 $ -- 164,445 (3) $ --
Royalties 66,542 -- 66,542 (3) --
------------ ------------ ------------ ------------
Total revenue 230,987 -- 230,987 --
Costs of goods sold
Product costs 156,106 -- (156,106)(3) --
Amortization of intangibles 30,000 -- (30,000)(3) --
------------ ------------ ------------ ------------
Total cost of goods sold 186,106 -- (186,106) --
------------ ------------ ------------ ------------
Gross profit 44,881 -- 44,881 --
Operating expenses
Salaries, commission and related taxes 844,811 128,308 (844,811)(3) 128,308
Depreciation and amortization -- 310,016 -- 310,016
Other general and administrative 69,685 365,290 (69,685)(3) 365,290
------------ ------------ ------------ ------------
Total operating expenses 914,496 803,614 (914,496) 803,614
------------ ------------ ------------ ------------
Loss from operations (869,615) (803,614) (869,615) (803,614)
Other expenses
Interest expense 9,770 -- (9,770)(3) --
Late filing penalty on common stock registration 132,595 -- (132,595)(3) --
Interest income (1,117) -- 1,117 (4) --
------------ ------------ ------------ ------------
Total other expenses 141,248 -- (141,248) --
------------ ------------ ------------ ------------
Net loss $ (1,010,863) $ (803,614) $ (1,010,863) $ (803,614)
============ ============ ============ ============
Net loss per share applicable to
common shareholders - basic and diluted $ (0.19) $ (0.03)
============ ============
Weighted average shares of common
stock outstanding - basic and diluted 5,359,593 17,809,134 (4) 23,168,727
============ ============ ============ ============
See notes to proforma condensed combined financial statements.
CELL POWER TECHNOLOGIES, INC.
Notes to Pro Forma Condensed Combined Financial Statements
(Unaudited)
NOTE 1 - REVERSE ACQUISITION
On March 17, 2006, Portagy Corp. ("Portagy" or the "Company") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Cell Power
Technologies, Inc. ("Cell Power") and Portagy Acquisition Corp., a Florida
corporation and a wholly-owned subsidiary of Cell Power (the "Acquisition Sub").
On August 11, 2006, the Company, Cell Power, and the Acquisition Sub amended and
closed the merger transaction contemplated under the Merger Agreement. As a
result of the transaction, the Company became a wholly-owned subsidiary of Cell
Power and the former owners of the Company became the controlling stockholders
of Cell Power. Accordingly, the transaction is treated for accounting purposes
as a reverse acquisition. Under the amended Merger Agreement, each share of the
Company's common stock and preferred stock issued and outstanding immediately
prior to the closing of the Merger was exchanged for approximately 2.445 shares
or a total of 16,051,413 shares of Cell Power's common stock. Consequently, Cell
Power had 23,277,673 shares of common stock issued and outstanding after the
Merger.
The Company changed its fiscal year end from December 31 to October 31 and
adopted Cell Power Technologies, Inc. as its corporate name.
NOTE 2 - PRO FORMA ADJUSTMENTS
In combining the entities, the following pro forma adjustments have been made:
Pro Forma Condensed Combined Balance Sheet as of March 31, 2006
(1) Derived from the unaudited condensed consolidated balance
sheet of Cell Power as of April 30, 2006.
(2) Derived from the unaudited condensed balance sheet of Portagy
as of March 31, 2006.
(3) To reflect the conversion of convertible notes payable into
common stock and the issuance of treasury stock.
(4) To record the recapitalization of Portagy and the issuance of
16,051,413 shares of Cell Power's common stock for all of
Portagy's common and preferred stock.
(5) The 23,277,673 shares of common stock issued and outstanding
consist of 16,051,413 shares issued to the former owners of
Portagy in exchange for all of the common and preferred stock
of Portagy and 7,226,260 shares of the owners of Cell Power.
Pro Forma Condensed Combined Statement of Operations for the Three
Months Ended March 31, 2006
(1) Derived from the unaudited condensed consolidated statements
of operations of Cell Power for the three months ended April
30, 2006.
(2) Derived from the unaudited condensed statements of operations
of Portagy for the three months ended March 31, 2006.
(3) To eliminate the expenses of Cell Power.
(4) To reflect the pro forma adjustment on the weighted average
shares of common stock outstanding representing the shares of
Portagy.
Pro Forma Condensed Combined Statement of Operations for the Year Ended
December 31, 2005
(1) Derived from the audited consolidated statements of operations
of Cell Power for the year ended October 31, 2005.
(2) Derived from the audited statements of operations of Portagy
for the period from February 25, 2005 (inception) to
December 31, 2005.
(3) To eliminate the income and expenses of Cell Power.
(4) To reflect the pro forma adjustment on the weighted average
shares of common stock outstanding representing the shares of
Portagy.