EX-99.2 3 v117505_ex99-2.htm

EXHIBIT 99.2
 
Pro Forma Financial Information
 
The following pro forma condensed consolidated balance sheets and statements of operations are presented to give effect to the acquisition by Visual Management Systems, Inc. of substantially all of the assets of Intelligent Digital Systems, LLC (“IDS”) on April 3, 2008. The pro forma condensed consolidated balance sheet assumes that the acquisition occurred as of March 31, 2008. The pro forma condensed consolidated statements of operations assume that the acquisition occurred on January 1, 2007. Such information does not purport to be indicative of the results which would have actually been obtained if the acquisitions had been effected on the dates indicated nor is it indicative of actual or future operating results or financial position.
 

Visual Management Systems, Inc. and Subsidiaries
                    
Pro Forma Combined Balance Sheet
                    
At March 31, 2008
  
Visual Management Systems, Inc. and Subsidiaries
  
Intelligent Digital Systems, LLC
    
Pro Forma Adjustments
 
Pro Forma Combined
 
                     
Assets
                    
                     
Current assets
                    
Cash
  
$
111,567
  
$
2,777
  
a
 
$
(7,777
)
$
106,567
  
Accounts receivable
    
195,912
   
3,185
 
b
   
-
   
199,097
 
Inventory
    
587,606
   
20,123
 
c
   
-
   
607,729
 
Prepaid expenses
    
5,190
   
-
       
-
   
5,190
 
 Total current assets
    
900,275
   
26,085
       
(7,777
)
  
918,583
 
Property and equipment - net
    
726,786
   
225
 
d
   
(225
)
  
726,786
 
Deposits and other assets
    
90,808
                   
90,808
 
Investment in joint venture
              
e
   
5,000
   
5,000
 
Intangible assets - net
    
1,659,727
       
f
   
1,562,692
   
3,222,419
 
                               
Total Assets
  
$
3,377,596
  
$
26,310
      
$
1,559,690
  
$
4,963,596
  
                               
Liabilities and Stockholders' Deficit
                              
                               
Current liabilities
                              
Accounts payable
  
$
705,074
  
$
808
  
i
 
$
(808
)
$
705,074
  
Accrued expenses and other current liabilities
    
973,096
                   
973,096
 
Customer Deposits
    
236,041
                   
236,041
 
Sales tax payable
    
78,236
                   
78,236
 
Bank line of credit
    
49,981
                   
49,981
 
Short term debt
    
-
   
-
 
g
   
42,000
   
42,000
 
Current maturity of convertible notes payable
    
833,333
                   
833,333
 
Current portion of long-term debt
    
346,278
                   
346,278
 
Current portion of obligations under capital leases
    
53,811
                   
53,811
 
 Total current liabilities
    
3,275,850
   
808
       
41,192
   
3,317,850
 
                               
Convertible notes payable
   
2,268,334
       
h
   
1,544,000
   
3,812,334
 
(net of current maturities and unamortized discount of $648,333)
                              
Long-term debt - net of current portion
    
306,696
   
15,000
 
i
   
(15,000
)
  
306,696
 
Obligations under capital leases - net of current portion
    
100,554
                   
100,554
 
                               
Stockholders' equity (deficit)
                              
Members Capital
          
10,502
 
j
   
(10,502
)
  
-
 
Preferred stock
    
1
                   
1
 
Common stock, $.001 par value; 50,000,000 shares authorized
    
8,002
                   
8,002
 
Additional paid-in-capital
    
12,744,785
                   
12,744,785
 
Accumulated deficit
    
(15,176,626
)
                  
(15,176,626
)
Treasury stock
    
(150,000
)
                  
(150,000
)
 Total stockholders' equity (deficit)
    
(2,573,838
)
  
10,502
       
(10,502
)
  
(2,573,838
)
                               
Total liabilities and stockholder's equity (deficit)
  
$
3,377,596
  
$
26,310
      
$
1,559,690
  
$
4,963,596
  
                               
                               
                               
                               
                               
a  To record the $5,000 invested in the joint venture by VMS and to record the fair value of the cash received.
                        
b  Adjustment to record the fair value of assets received
                      
c  Adjustment to record the fair value of assets received
                      
d  Adjustment to record the fair value of assets received
                      
e  Adjustment to record the VMS investment in the joint venture
                      
f   Adjustment to record the fair value of the intangible asset
                      
g  Adjustment to record the portion of the purchase price to be paid in seven equal monthly installments
                      
h  Adjustment to record the convertible note
                      
i   Adjustment to record the fair value of the liabilities assumed
                      
j   Adjustment to eliminate share capital of IDS
                      
 
 
 

Visual Management Systems, Inc. and Subsidiaries
Pro Forma Combined Statement of Operations

Three months ended March 31, 2008
  
Visual Management 
Systems, Inc. 
and Subsidiaries
  
Intelligent Digital 
Systems, LLC
    
Pro Forma Adjustments 
   Pro Forma Combined  
                     
Revenues - net
  
$
1,577,309
  
$
9,918
  
aa
 
$
(9,918
)
 $
1,577,309
  
                               
Cost of revenues
    
843,113
   
63,849
 
aa
    
(63,849
)
  
 843,113
  
                               
Gross margin
    
734,196
   
(53,931
 )       
53,931
   
 734,196
  
                               
Operating expenses
    
2,729,362
   
17,303
 
bb
    
60,832
   
 2,807,497
  
                               
Loss from operations
    
(1,995,166
)
  
(71,234
 )       
(6,901
)
  
 (2,073,301
 ) 
                               
Other (income) expenses
                              
Debt conversion expense
    
-
                       
Interest income
    
-
   
-
                 
Interest expense
    
140,003
                   
140,003
 
Miscellaneous income
    
305
                        
305
 
     
140,308
   
-
       
-
   
140,308
 
                               
Net Income (Loss)
  
$
(2,135,474
)
$
(71,234
 )     
$
(6,901
)
 $ 
 (2,213,609
 ) 
                               
                               
Weighted average shares outstanding
    
7,442,367
                   
7,442,367
 
                               
Per share data (basic and diluted)
  
$
(0.29
)
                 $ 
 (0.30
 ) 

aa
To eliminate IDS results
bb
Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years
 
 

Visual Management Systems, Inc. and Subsidiaries
                    
Pro Forma Combined Statement of Operations
                    
Year ended December 31, 2007
  
Visual Management Systems, Inc. and Subsidiaries
  
Intelligent Digital Systems, LLC
    
Pro Forma Adjustments
 
Pro Forma Combined
 
                     
                     
                     
                     
Revenues - net
  
$
6,315,622
  
$
131,260
  
aa
 
$
(131,260
)
$
6,315,622
  
                               
Cost of revenues
    
3,392,995
   
130,716
 
aa
    
(130,716
)
  
3,392,995
 
                               
Gross margin
    
2,922,627
   
544
       
(544
)
  
2,922,627
 
                               
                               
Operating expenses
    
8,490,554
   
337,585
 
bb
    
(25,047
)
  
8,803,092
 
                               
Loss from operations
    
(5,567,927
)
  
(337,041
) 
      
24,503
   
(5,880,465
)
                               
Other (income) expenses
                              
Debt conversion expense
    
796,084
                   
796,084
 
Interest income
    
-
   
(12
)
aa
   
12
   
-
 
Interest expense
    
3,420,634
                   
3,420,634
 
Miscellaneous income
    
-
                   
-
 
     
4,216,718
   
(12
)
      
12
   
4,216,718
 
                               
Net loss
    
(9,784,645
)
  
(337,029
)
      
24,491
   
(10,097,183
)
                               
                               
Deemed dividend on convertible preferred stock
    
635,582
   
-
       
-
   
635,582
 
                               
Net income available to common
  
$
(10,420,227
)
$
(337,029
)
      
24,491
 
$
(10,732,765
)
                               
Weighted average shares outstanding
    
6,646,751
                   
6,646,751
 
                               
Per share data (basic and diluted)
  
$
(1.57
)
                
$
(1.61
)
                               
                               
                               
aa    To eliminate IDS results
                  
bb   Adjustment to eliminate IDS results and the adjustment for the amortization of the intangible asset over the estimated useful life of 5 years