Exhibit 99.8
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial
statements have been provided to show the effects on the financial statements of
the acquisition by Lawrence Consulting Group, Inc. ("Lawrence") of Plaza
Consulting, Inc. ("Plaza") in a transaction accounted for as a reverse
acquisition. Under such accounting treatment, Plaza is treated as the accounting
acquirer, and the pro forma information reflects such acquisition as if the
acquisition has been completed on the dates set forth below.
The following unaudited pro forma condensed consolidated financial
statements should be read in conjunction with the accompanying notes and
assumptions. The unaudited pro forma condensed consolidated financial
information is presented for illustrative purposes only and contains estimates,
such as transaction costs and projected balance sheet amounts for the
transaction. The pro forma condensed consolidated financial statements are not
necessarily indicative of our operating results or financial position if the
acquisition had been completed on November 1, 2004, the beginning of Plaza's
fiscal year ended October 31, 2005, nor necessarily indicative of its future
operating results or financial position.
These pro forma condensed consolidated financial statements are based on,
and should be read in conjunction with, the historical financial statements and
the related notes thereto of Plaza, which are included in this Form 8-K, and the
historical financial statements of Lawrence, which are included in its filings
with the SEC.
LAWRENCE CONSULTING GROUP, INC. AND PLAZA CONSULTING GROUP, INC.
Pro Forma Combined Balance Sheet
Lawrence Plaza
Consulting Consulting Transaction and Consolidation
Group, Inc. Group, Inc. Entries
September 30, October 31, ------------------------------- Pro-Forma
ASSETS 2005 2005 Debit Credit Consolidated
-----------------------------------------------------------------------------------
Current assets:
Cash $ 25,585 $ 1,791,557 $10,000,000 (1) $10,000,000 (2) $ 2,025,585
208,443 (5)
Accounts receivable 5,400 4,927,422 -- 4,932,822
Other -- 133,611 1,025,000 (4) 505,000 (7) 653,611
--------------------------- -----------
Total current assets 30,985 6,852,590 7,612,018
Property and equipment, net -- 364,998 364,998
--------------------------- -----------
Total assets $ 30,985 $ 7,217,588 $ 7,977,016
=========================== ===========
LIABILITIES
Current liabilities:
Current portion of long-term debt $ -- 47,294 2,750,000 (6) 2,797,294
Accounts payable and accrued expenses 2,370 996,829 999,199
Due to stockholder -- -- 688,012 (12) 688,012
--------------------------- -----------
Total current liabilities 2,370 1,044,123 4,484,505
--------------------------- -----------
Long-term liabilities:
Obligations under capital leases, net
of current portion -- 192,896 192,896
Deferred acquisition liability, net of
current portion -- -- 2,750,000 (6) 8,250,000 (4) 5,500,000
--------------------------- -----------
Total long-term liabilities, net of
current portion -- 192,896 5,692,896
--------------------------- -----------
Stockholders' Equity:
Preferred stock $ -- $ -- $10,000,000 (1) $10,000,000
Common stock 28 1,000 1,000 (10) 844,560 (3) 1,285,228
440,640 (9A)
Warrant 1,686,000 (9B) 1,686,000
Capital surplus (deficit) 76,872 -- 48,285 (8) 1,000 (10) (20,166,613)
7,225,000 (4)
10,000,000 (2)
844,560 (3)
440,640 (9A)
1,686,000 (9B)
Retained earnings (deficit) (48,285) 5,979,569 505,000 (7) 48,285 (8) 4,995,000
688,012 (12) 208,443 (5)
--------------------------- -----------
Total stockholders'equity 28,615 5,980,569 (2,200,385)
--------------------------- -----------
Total liabilities and
stockholders'equity $ 30,985 $ 7,217,588 $ 7,977,016
=========================== ===========
(1) Proceeds, net of expenses, on sale of 1,175,000 shares of convertible
preferred stock.
(2) This total amount was disbursed as follows:
To: Ms. Plaza $ 9,391,000
To: San Juan Holdings, Inc. on behalf of Ms. Plaza
for fees and expenses incurred by that organization related to services
performed by them for Ms. Plaza 609,000
-----------
$10,000,000
===========
(3) Issuance of 1,150,000 shares of common stock to Mrs. Plaza (fair market
value of $.7344 per share) as additional consideration for the purchase of
Plaza shares.
(4) To record issuance of deferred purchase obligation notes payable to Ms.
Plaza (segregating imputed interest).
(5) Receipt of cash from Mrs. Plaza of $208,443; minimum agreed cash at
closing must be $2,000,000 as per Agreement and Plan of Reorganization.
(6) To reclassify current portion of deferred acquisition liability.
(7) To reflect amortization of the imputed interest in the deferred payment of
$8,250,000 (interest included) for the year ended October 31, 2005.
(interest calculated at 7% from the beginning of the period).
(8) To eliminate the deficit of Lawrence.
(9) To reflect issuance by to San Juan Holdings Inc. of the following
securities:
A. 600,000 shares of common stock
B. Warrant to purchase 2,500,000 shares of stock at a price of
$.06.
For purposes of these calculations, shares of common stock are being
valued at $.7344.
(10) Plaza's common stock eliminated in consolidation.
(11) No adjustment need be made to this Pro-Forma balance sheet by reason of
the pro-forma provision for income taxes of $2,300,000 presented in the
accompanying pro-forma statement of income because equivalent funds in
payment of such taxes have been included in distributions to stockholder.
(12) To reflect liability to Ms. Plaza for the amount by which stockholder's
equity exceeds $5,500,000.
LAWRENCE CONSULTING GROUP, INC. AND PLAZA CONSULTING GROUP, INC.
Pro Forma Statement of Operations for the fiscal year ended October 31, 2005
Lawrence
Consulting Plaza Consulting
Group, Inc. Group, Inc. Transaction and
for the twelve-month for the year Consolidation Entries
period ended ended ----------------------- Pro-Forma
September 30, 2005 October 31, 2005 Debit Credit Consolidated
---------------------------------------------------------------------------------
Revenues $ 21,200 $ 17,412,869 $ 17,434,069
Cost of Revenues -- 9,400,909 9,400,909
------------------------------------- --------------
Gross profit 21,200 8,011,960 8,033,160
Selling, general and administrative expenses 58,170 1,531,476 505,000 (1) 2,094,646
------------------------------------- --------------
Income (loss) before depreciation
and amortization and provision for
income taxes (36,970) 6,480,484 5,938,514
Depreciation and amortization -- 90,332 90,332
------------------------------------- --------------
Income (loss) before
provision for income taxes $ (36,970) $ 6,390,152 5,848,182
===================================== ==============
Provision for taxes on income 2,300,000 (2) 2,300,000
--------------
Net Income $ 3,548,182
==============
(1) To record imputed interest for the year on the deferred purchase
obligation issued to the stockholder of Plaza pursuant to the acquisition
of Plaza by Lawrence.
(2) Presently, Plaza operates in Puerto Rico as an N Corporation similar to an
S Corporation in the United States. Consequently, Plaza is not subject to
tax on its income. However, as a wholly-owned subsidiary of Lawrence,
Plaza can no longer be taxed as an N Corporation status and its income
will be subject to regular income taxes as established by the Puerto Rico
Income Tax Code. At the level of earnings of Plaza, the corresponding
Puerto Rico maximum tax rate is 39%.