EX-99.2 3 v172102_ex99-2.htm Unassociated Document
Exhibit 99.2
 
 
InferX Corporation
Proforma Unaudited Consolidated Financial Statements


The following unaudited proforma financial statements for InferX Corporation (“The Company”) have been prepared to illustrate the acquisition of The Irus Group, Inc. (“Irus”) in a merger transaction and are based on estimates and assumptions set forth herein and in the notes to such proforma statements.

On June 15, 2009 InferX entered into an amended and restated merger agreement, with Irus, under which it effected a reverse triangular merger between Irus and InferX’s wholly-owned subsidiary, Irus Acquisition Corp. (the Merger”). On October 27, 2009, the Company and Irus completed the Merger. As consideration for the Merger, InferX issued 9,089,768 shares of InferX’s common stock, par value $.0001 per share (the “Common Stock”) and 1,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”), to the sole shareholder of Irus. As a result, Common Stock was credited for $909 and Preferred Stock was credited for $100. The $15 Common Stock of Irus was eliminated.

In connection with the merger InferX issued of 233,740 shares of common stock in connection with the conversion of A and B warrants into common shares. In addition, InferX issues 1,895,000 shares of common stock in connection with the conversion of $304,488 of notes payable into common stock.

The following proforma condensed consolidated statements of operations for the nine months ended September 30, 2009 and the year ended December 31, 2008 reflects the financial results of the Company and Irus as if the acquisition had occurred on January 1, 2008.

 
 

 
 
InferX Corporation
Proforma Unaudited Consolidated Financial Statements


The unaudited proforma financial information combines the historical financial information of the Company and Irus for the nine months ended September 30, 2009 and the year ended December 31, 2008.  The unaudited proforma balance sheet assumes the acquisition was completed on that date.  The unaudited proforma statements of operations give effect to the merger and acquisitions as if the merger and acquisition had been completed on January 1, 2008. These unaudited proforma financial statements are based upon and should be read in conjunction with InferX’s audited financial statements as of and for the year ended December 31, 2008, InferX’s unaudited financial statements for the nine months ended September 30, 2009, Irus’s unaudited financial statements for the year ended December 31, 2008 and Irus’s unaudited financial statements for the nine months ended September 30, 2009.

These unaudited proforma financial statements and the notes thereto contain forward-looking statements that involve risks and uncertainties. Therefore, our actual results may vary materially from those discussed herein. They do not purport to indicate the results that would have actually been obtained had the merger and acquisition been completed on the assumed dates or for the periods presented, or which may be realized in the future.  The accounting adjustments reflected in these unaudited proforma consolidated financial statements included herein are preliminary and are subject to change.  



 
 

 
 
InferX Corporation
Notes To Unaudited Proforma Consolidated Financial Statements
For the Year Ended December 31, 2008 and the Nine Months Ended September 30, 2009
 
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
 
The transaction is being accounted for as a reverse acquisition. InferX is the acquirer for accounting purposes. Accordingly, InferX’s historical financial statements for periods prior to the acquisition have been retroactively restated for the equivalent number of shares issued in the transaction. The accumulated deficit of Irus has been eliminated. Operations prior to the transaction ate those of both InferX and Irus. Earnings per share for the period prior to the transaction are restated to reflect the equivalent number of shares outstanding.
 
NOTE B – ADJUSTMENT
 
(A)  
– To record the issuance of 9,089,768 common shares and 1,000,000 preferred shares to the shareholders of Irus in exchange for 100% of their shares in Irus.
 
(B)  
– To reflect the cancellation of the 15 common shares of Irus as a result of the acquisition. Also, to reflect the elimination of the additional paid-in capital balance of $80,085 and the retained earnings (deficit) of $415,228 that were recorded on the financial statements of Irus at September 30, 2009.
 
(C)  
– To record the conversion of $304,488 in convertible notes payable into 1,895,000 shares of common stock.
 
(D)  
– To record the conversion of 116,870 A warrants and 116,870 B warrants into 233,740 shares of common stock
 
The following table reflects the changes to the common stock balance as a result of the merger and the conversion of the A and B warrants and notes payable into common stock:
 
       
       
Common shares outstanding at September 30, 2009
    886,926  
Common shares issued in the merger
    9,089,768  
Common shares issued for conversion of warrants
    233,940  
Common shares issued for conversion of notes payable
    1,895,000  
Total common shares
    12,105,634  
         
 


INFERX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2009 (UNAUDITED)
 
ASSETS
 
                         
   
InferX
   
Irus
   
Adjustments
       
Consolidated
 
                             
CURRENT ASSETS
                           
   Cash
  $ 13,829     $ 45,056               $ 58,885  
   Accounts receivable, net
            1,032,847                 1,032,847  
   Other current assets
            30,064                 30,064  
Total current assets
    13,829       1,107,967       -           1,121,796  
                                     
Fixed assets, net of depreciation
    24,398       35,441                   59,839  
                                     
Other Asset
                                   
  Security deposit
            6,000                   6,000  
  Note receivable
            18,255                   18,255  
  Computer software development costs, net of amortization
    83,728                           83,728  
Total other asset
    83,728       24,255       -           107,983  
                                     
TOTAL ASSETS
  $ 121,955     $ 1,167,663       -         $ 1,289,618  
                                     
                                     
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                             
                                     
CURRENT LIABILITIES
                                   
   Accounts payable and accrued expenses
  $ 1,748,051     $ 1,122,791                 $ 2,870,842  
   Line of credit
    -       380,000                   380,000  
   Liability for stock to be issued
    127,000                           127,000  
   Current portion of notes payable, net of debt discount of $85,928
    304,488             $ (304,488 )   C     0  
Total current liabilities
    2,179,539       1,502,791       (304,488 )         3,377,842  
                                     
Long-term Liabilities
                                   
   Notes payable, net of current portion, net of debt discount of $1,059
    341,461                           341,461  
                                     
TOTAL LIABILITIES
    2,521,000       1,502,791       (304,488 )         3,719,303  
                                     
STOCKHOLDERS' EQUITY (DEFICIT)
                                   
   Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized
    -               100     A     100  
                                     
   Common stock, par value $0.0001 per share, 400,000,000 shares authorized
    89       15       909     A     1,210  
                      (15 )   B        
                      189     C        
                      23     D        
   Additional paid-in capital
    4,950,377       80,085       (336,137 )   A     4,918,516  
                      (80,085 )   B        
                      304,299     C        
                      (23 )   D        
   Retained earnings (defict)
    (7,349,511 )     (415,228 )     415,228     B     (7,349,511 )
Total stockholders' equity (deficit)
    (2,399,045 )     (335,128 )     304,488           (2,429,685 )
                                     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 121,955     $ 1,167,663     $ -         $ 1,289,618  
 

 
INFERX CORPORATION
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 
     
InferX
   
Irus
   
Adjustments
   
Consolidated
 
                           
                           
REVENUE
    $ -     $ 5,636,895           $ 5,636,895  
                                 
COST OF REVENUES
                             
    Direct labor and other finges
    -       680,326             680,326  
    Subcontractor
    -       3,392,133             3,392,133  
    Other direct costs
    -       187,778             187,778  
    Amortization of computer software development costs
    56,521                     56,521  
 
Total costs of revenues
    56,521       4,260,237             4,316,758  
                                 
GROSS PROFIT (LOSS)
    (56,521 )     1,376,658       -       1,320,137  
                                   
OPERATING EXPENSES
                               
    Indirect and overhead labor and fringes
    199,254       493,905               693,159  
    Professional fees
    65,979       61,830               127,809  
    Advertising and promotion
            9,461               9,461  
    Travel related costs
    5,481                       5,481  
    Business development
            34,823               34,823  
    Bad debts
            4,264               4,264  
    Rent
    500       67,090               67,590  
    General and administrative
    95,780       128,106               223,886  
    Stock issued for services
    -                       -  
    Stock based compensation
    -                       -  
    Depreciation
    7,180       26,309               33,489  
 
Total operating expenses
    374,174       825,788       -       1,199,962  
                                   
NET INCOME (LOSS) FROM OPERATIONS BEFORE OTHER EXPENSE AND
         
   PROVISION FOR INCOME TAXES
    (430,695 )     550,870       -       120,175  
                                   
OTHER EXPENSE
                               
    Interest expense, net of interest income
    117,181       16,381               133,562  
                                   
NET INCOME (LOSS) FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES
    (547,876 )     534,489       -       (13,387 )
                                   
   Provision for income taxes
    -       -       -       -  
                                   
NET INCOME (LOSS) APPLICABLE TO SHARES
  $ (547,876 )   $ 534,489     $ -     $ (13,387 )
                                   
NET INCOME (LOSS) PER BASIC AND DILUTED SHARES
  $ (0.05 )   $ 0.36             $ (0.00  
                                   
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
    12,105,634       1,500,000               12,105,634