Exhibit 99.2
Page(s)
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Unaudited Pro Forma Combined Condensed Financial Statements Description. 1 - 2
Unaudited Pro Forma Combined Condensed Statement of Income for the Period 3
and Year Ended December 31, 2005.
Unaudited Pro Forma Combined Condensed Balance Sheet as of December 31, 4
2005.
Notes to the Unaudited Pro Forma Combined Condensed Statement of Income 5
and Balance Sheet.
Dynamic Leisure Corporation
Unaudited Pro Forma Combined
Condensed Financial Statements
The following unaudited pro forma combined condensed financial statements relate
to Dyneco Corporation, ("DynEco"), now known as Dynamic Leisure Corporation
("Dynamic"), the acquisition of all the issued and outstanding shares of capital
stock of Dynamic Leisure Group, Inc, on January 13, 2006 and the acquisition of
all the issued and outstanding shares of capital stock of Changes in
L'Attitudes, Inc ("CLA"), on February 8, 2006.
On January 13, 2006, DynEco acquired all of the outstanding capital stock of
Dynamic Leisure and Dynamic Leisure became a wholly owned subsidiary of DynEco.
As consideration for its acquisition of the outstanding capital stock of Dynamic
Leisure, DynEco issued an aggregate of 197,000 shares of its Series A Preferred
Stock to the former shareholders of Dynamic Leisure.
Issuance of the Series A Preferred Stock in exchange for the outstanding capital
stock of Dynamic Leisure pursuant to the Stock Exchange Agreement resulted in a
change in control of DynEco where (a) the former shareholders of Dynamic Leisure
acquired voting rights over approximately 83% of the currently outstanding
voting securities of DynEco and (b) the designees of the former shareholders of
Dynamic have been appointed as the executive officers and a majority of the
board of directors. The Series A Preferred Stock converted into 6,566,667 shares
of the common stock. At such time as DynEco's Articles of Incorporation were
amended to increase the number of shares of common stock DynEco is authorized to
issue sufficiently to permit full conversion of the Series A Preferred Stock.
Currently outstanding options and warrants of Dynamic Were exchanged for options
and warrants to purchase an aggregate of 1,493,887 shares of common stock, and
the currently outstanding convertible promissory notes of Dynamic would become
convertible into 1,386,111 shares of common stock.
On February 28, 2006, the Company filed Articles of Correction with the
Secretary of State of Minnesota, to change the Company's name to Dynamic Leisure
Corporation. These Articles were effective in the State of Minnesota at the
close of business on March 3, 2006.
On January 31, 2006, shareholders approved a 1:30 reverse split of DynEco's
common stock, to be effective at the close of business on March 3, 2006. As a
result of the reverse stock split, every thirty (30) shares of the Company's
common stock outstanding on the effective date was automatically combined into
one (1) share. Except as provided with respect to fractional interests, no cash
was paid or distributed as a result of the reverse stock split nor were any
fractional shares issued as a result of the reverse stock split.
The historical financial statements of Dynamic Leisure Group, Inc. are for the
period from May 16, 2005 (Inception) to December 31, 2005. The historical
financial statements for DynEco Corporation and Changes in L'Attitudes are for
the 12 months ending December 31, 2005. The financial statements of both DynEco
and Dynamic have been adjusted for the subsequent affect of the 1:30 reverse
stock split.
The CLA purchase price of $1,750,000 consists of a combination of cash
($640,000), shares of Dynamic Leisure common stock (340,000 shares), and a
one-year secured Convertible Promissory Note in the principal amount of
$600,000. The cash portion consists of $200,000 delivered at closing, with the
balance to be delivered on or before June 9, 2006, following completion of
audits of the financial statements of CLA for the years ended December 31, 2004,
and 2005. The balance of the cash payment will be reduced by any trade payables
in excess of short term liquid assets.
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Additional shares of Dynamic Leisure common stock may be issued to owners of the
Company, as part of any subsequent business acquisitions on or before December
31, 2006, issues to the acquiree/seller Dynamic Leisure common stock at a rate
of less than $1.50 per share.
The Convertible Promissory Note is payable with interest at the rate of 9% per
annum, and matures on February 7, 2007 ("Maturity Date"). The Promissory Note is
convertible into Dynamic Leisure common stock, on or before the Maturity Date,
at a rate of $1.50 per share. The conversion rate may be adjusted downward under
certain circumstances, but no lower than $1.00 per share. Early repayment of the
Convertible Promissory Note, may be required, based on certain levels of
additional financing received, up to 100% of the outstanding principal balance
if Dynamic receives in excess of $5,000,000 in cumulative net external
financing. The Convertible Debenture is secured by a lien on the assets of CLA.
The unaudited pro forma combined condensed financial statements of income
reflect the results of operations for the 12 months ended December 31, 2005 for
DynEco and CLA and for the period May 16 (inception) to December 31, 2005 for
Dynamic Leisure, with pro forma adjustments as if the acquisition of CLA had
occurred at the beginning of the period (January 1, 2005), and as if the
acquisition of Dynamic Leisure had occurred on May 16, 2005. The unaudited pro
forma combined condensed balance sheet is based upon the purchase method of
accounting and each company's individual historical financial position at
December 31, 2005 with pro forma adjustments as if the acquisitions had occurred
on December 31, 2005. The pro forma adjustments are described in the
accompanying notes and give effect to events that are (a) directly attributable
to the acquisitions, (b) factually supportable, and (c) expected to have a
continuing effect.
These pro forma combined condensed financial statements should be read in
conjunction with the audited consolidated financial statements and related
notes, included in Dyneco's 2005 Form 10-KSB, Dynamic Leisure's audited
financial statements, and CLA's audited financial statements.
The pro forma adjustments do not reflect anticipated additional benefits of
revenue growth or cost savings from synergies which may be realized nor
integration costs to be incurred subsequent to the acquisitions.
The unaudited pro forma combined condensed financial statements presented are
for informational purposes only and do not necessarily represent what the
Company's financial position or results of operations as of the dates or for the
periods presented would have been had the acquisition occurred on such dates
indicated, or to project the combined Company's financial position or results of
operations for any future date or period. For purposes of preparing the
Company's consolidated financial statements subsequent to the acquisition, the
Company will establish a new basis for CLA's assets and liabilities based upon
the fair values thereof and the purchase price, including the costs of the
acquisition. A final determination of the allocation of purchase price to the
assets acquired and liabilities assumed based on their respective fair values
has not yet been completed. Therefore, the pro forma adjustments included in the
pro forma combined condensed financial information should be treated as
preliminary and being made solely for the purpose of preparing the pro forma
combined condensed financial statements. Following an analysis of the fair value
of CLA's assets and liabilities, any appropriate purchase accounting adjustments
will be made and reported. The actual combined financial position and results of
operations will likely differ, possibly significantly, from the pro forma
amounts included herein.
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Dynamic Leisure Corporation
Unaudited Pro Forma Combined Condensed Statement of Income
For the 12 months ended December 31, 2005
Pro Forma
Combined
Historical Statement
Historical Dynamic Historical Acquisitions of Income
DynEco (a) Leisure (a) Changes (a) Adjustments (a) Ref Total
---------- ----------- ----------- --------------- --- ----------
Revenue ................................... $ - $ - $5,737,408 $ - $5,737,408
Cost of revenue ........................... - - 4,701,541 - 4,701,541
---------- ---------- ---------- -------- ----------
Gross Profit .............................. - - 1,035,867 - 1,035,867
General and administrative expenses ....... 497,968 455,954 835,801 - 1,789,723
---------- ---------- ---------- -------- ----------
Income from operations .................... $ (497,968) $ (455,954) $ 200,066 $ - $ (753,856)
Other Income/(Expense)
Interest income ......................... 1,257 - 15,194 - 16,451
Interest expense ........................ (199,041) (29,360) - (93,600) (c) (322,001)
Other Income ............................ 169,287 - - - 169,287
---------- ---------- ---------- -------- ----------
Total Other Income/(Expense) .......... (28,497) (29,360) 15,194 (93,600) (136,263)
---------- ---------- ---------- -------- ----------
Income before taxes ................... (526,465) (485,314) 215,260 (93,600) (890,119)
Provision for income taxes ............ - - - - (d) -
---------- ---------- ---------- -------- ----------
Net income ............................ $ (526,465) $ (485,314) $ 215,260 $(93,600) $ (890,119)
Net Loss per share - Basic and Diluted .... $ (0.47) $ (.07) $ (.63) $ - $ (0.11)
Weighted average number of shares
outstanding during the period -
basic and diluted ....................... 1,125,327 6,566,667 340,000 - 8,031,994
See accompanying notes to unaudited pro forma combined condensed financial statements.
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Dynamic Leisure Corporation
Unaudited Pro Forma Combined Condensed Balance Sheet
December 31, 2005
Pro Forma
Historical Acquisition Combined
Historical Dynamic Historical Adjustments Balance Sheet
Dyneco (b) Leisure (b) Changes (b) (b) Ref Total
----------- ----------- ----------- ----------- --- -------------
Cash .......................................... $ (232) $ 19,563 $ 546,725 $ (200,000) (e) $ 366,056
Short term investments, restricted ............ - - 69,548 - 69,548
Prepaid travel ................................ - - 142,110 - 142,110
Other Current Assets .......................... - 19,136 18,467 - 37,603
----------- ---------- --------- ---------- -----------
Total Current Assets ........................ (232) 38,699 776,850 (200,000) 615,317
Property and equipment, net ................... 33,418 646,713 54,455 - 734,586
Other Assets
Debt issue costs, net ....................... 521 - - - 521
Deposits .................................... 28,434 1,760 - - 30,194
Goodwill .................................... - - - 1,682,892 (e) 1,682,892
----------- ---------- --------- ---------- -----------
Total Other Assets .......................... 28,955 1,760 - 1,682,892 1,713,607
----------- ---------- --------- ---------- -----------
Total Assets ................................ $ 62,141 $ 687,172 831,305 $1,482,892 $ 3,063,510
Current Liabilities
Accounts payable and other accrued expenses . $ 366,575 $ 148,126 $ 57,613 $ - $ 572,314
Deferred Revenue ............................ - - 594,698 - 594,698
Customer deposits ........................... - - 111,886 - 111,886
Convertible promissory notes, net of discount 115,380 847,500 - 600,000 (e) 1,562,880
Warrant liability ........................... 240,592 - - - 240,592
Accrued Interest ............................ 59,930 29,360 - - 89,290
Loans payable ............................... 213,640 - - - 213,640
Notes Payable - Current ..................... 37,216 140,000 - 440,000 (e) 617,216
----------- ---------- --------- ---------- -----------
Total Current Liabilities ................... 1,033,333 1,164,986 764,197 1,040,000 4,002,516
Loans and Notes payable ....................... 134,719 - - - 134,719
----------- ---------- --------- ---------- -----------
Total Liabilities ........................... $ 1,168,052 $1,164,986 $ 764,197 $1,040,000 $ 4,137,235
Stockholder's Equity
Common Stock $.01 par value, 300,000,000
shares authorized, 9,331,016 issued and
outstanding ................................ 11,580 65,666 - 3,400 (e) 80,646
Paid in Capital ............................. 7,543,532 (57,629) 7,500 506,600 (e) 8,000,003
Stock subscription receivable ............... - (537) - - (537)
Retained Earnings/(Accumulated Deficit) ..... (8,661,023) (485,314) 59,608 (67,108) (e) (9,153,837)
----------- ---------- --------- ---------- -----------
Total Stockholders' Equity .................. (1,105,911) (477,814) 67,108 442,892 (1,073,725)
----------- ---------- --------- ---------- -----------
Total Liabiliites and Stockholders' Equity .. 62,141 687,172 831,305 1,482,892 3,063,510
See accompanying notes to unaudited pro forma combined condensed financial statements.
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Dynamic Leisure Corporation
Notes to Unaudited Pro Forma Combined
Condensed Financial Statements
(a) The unaudited pro forma combined condensed statement of income reflects the
combined historical financial statements of Dynamic Leisure Group, Inc. for the
period from May 16, 2005 (inception) to December 31, 2005. The historical
financial statements for DynEco Corporation and Changes in L'Attitudes, Inc.,
("CLA") are for the 12 months ending December 31, 2005. The historical results
are presented in the unaudited pro forma income statement as if the acquistions
had occurred at the beginning of the period or for Dynamic, at its inception.
The financial statements of both DynEco and Dynamic have been adjusted for the
subsequent affect of a 1:30 reverse stock split.
The pro forma adjustments do not reflect benefits of additional revenue or
reduced expenses from the combinations nor acquisition or integration costs
subsequent to the acquisitions, which will cause actual earnings results that
will vary from the pro forma earnings shown. A final determination of possible
required purchase accounting adjustments has not yet been made, which could also
affect the pro form earnings presented.
(b) The unaudited pro forma combined condensed balance sheet reflects the
combined historical financial position of DynEco Corporation, Dynamic Leisure
Group, Inc., and Changes in L'Attitudes, Inc., as if the acquisitions had
occurred on December 31, 2005. Certain reclassifications were made from
historical financial reports for comparability and consistency. Dynamic Leisure
Group, Inc, was acquired through a share exchange agreement, in which no cash or
new additional liabilities were assumed other then those already recorded by
Dynamic or DynEco. CLA was acquired for a total purchase price of $1,750,000
consisting of $200,000 in cash, a short term note payable of 440,000, a
convertible note payable of $600,000 and 340,000 shares of common stock, valued
at $510,000.
(c) Adjustment represents interest income to finance the acquisition of CLA, as
if amounts due for both a short term note payable of $440,000 and a convertible
note payable in the amount of $600,000 were outstanding for the entire 12 month
period, accruing interest at the 9% annual stated rate.
(d) There is no provision or benefit for income taxes recorded, based on the
historical operating losses previously reported by DynEco and Dynamic.
(e) Under the purchase method of accounting, assets and liabilities are reported
at their estimated fair value, which may result in an increase or decrease from
previously reported amounts. There are no adjustments presented to the value of
existing assets or liabilities of CLA, based on an initial valuation that they
are already reported at their estimated fair value. However, the analysis of
purchase accounting valuations is still continuing and may or may not result in
future adjustments. The amount of the CLA purchase price that exceeded net
assets is presented as goodwill, and prior CLA equity that represents the book
value of net assets acquired was eliminated.
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