EX-99.2
4
nave_unaudited-fncls.htm
NAVE COMMUNICATIONS COMPANY 12-31-13 UNAUDITED FINANCIALS
nave_unaudited-fncls.htm
Exhibit 99.2
NAVE COMMUNICATIONS COMPANY
BALANCE SHEET
(UNAUDITED)
December 31, 2013
Assets
Current assets:
Cash and cash equivalents
$
99,278
Accounts receivable, net of allowance of $137,982
1,732,333
Inventories
2,223,869
Prepaid expenses
36,729
Total current assets
4,092,209
Property and equipment, at cost
726,459
Less accumulated depreciation and amortization
(422,755
)
Net property and equipment
303,704
Other assets
120,000
Total assets
$
4,515,913
Liabilities and Equity
Current liabilities:
Line of credit
$
1,200,000
Current portion of capital lease obligations
24,364
Accounts payable and accrued expenses
2,058,869
Total current liabilities
3,283,233
Capital lease obligation, less current portion
54,752
Equity:
Common stock, no par value, 1,000 shares authorized,
500 shares issued and outstanding
47,936
Retained earnings
1,129,992
Total equity
1,177,928
Total liabilities and equity
$
4,515,913
NAVE COMMUNICATIONS COMPANY
STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended December 31,
2013
2012
Net sales
$
4,071,296
$
2,710,696
Cost of sales
2,220,280
1,523,061
Gross profit
1,851,016
1,187,635
General and administrative expenses
1,713,475
1,672,630
Operating income (loss)
137,541
(484,995
)
Other income (expense), net:
Other expense
4,785
−
Interest expense
18,298
13,098
Other income (expense), net
23,083
13,098
Net income (loss)
$
114,458
$
(498,093
)
NAVE COMMUNICATIONS COMPANY
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended December 31,
2013
2012
Cash Flow from Operating Activities
Net income
$
114,458
$
(456,685
)
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization
25,254
27,353
Provision for doubtful accounts
34,982
70,490
Changes in assets and liabilities:
Accounts receivable
119,837
954,871
Inventories
(589,859
)
(125,093
)
Other current assets
(126,371
)
(28,026
)
Accounts payable and accrued expenses
96,633
286,651
Net cash provided by (used in) operating activities
(325,066
)
729,561
Cash Flows from Investing Activities
Disposal of property and equipment
−
6,162
Cash Flows from Financing Activities
Draws on line of credit
310,100
431,000
Payments on line of credit
(300,000
)
(555,000
)
Payments on capital lease obligations
(4,397
)
(4,594
)
Distributions
−
(398,642
)
Net cash provided by (used in) financing activities
5,703
(527,236
)
Net increase (decrease) in cash and cash equivalents
(319,363
)
208,487
Cash and cash equivalents, beginning of period
418,641
−
Cash and cash equivalents, end of period
$
99,278
$
208,487
NAVE COMMUNICATIONS COMPANY
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Business
Nave Communications Company (the Company) was incorporated under the laws of the state of Maryland in 1999. The Company's principal business is to serve as a reseller of new, refurbished and used telecommunications networking equipment, and to offer brokering and asset recovering services to the telecommunication providers.
Note 2 - Line of Credit
The Company has a revolving line of credit with a bank up to $2,000,000 through March 7, 2014. Interest is payable monthly at the greater of the Prime rate or the lender's minimum interest rate plus 2% (3.75% at December 31, 2013). The line of credit is secured by a first lien on substantially all assets of the Company and is unconditionally guaranteed by the Company's majority stockholders. Under the agreement with the bank, the Company is required to maintain certain financial covenants. The outstanding balance on the line of credit was $1,200,000 as of December 31, 2013.
Note 3 - Capital Lease Obligations
The Company leases their telephone system under a capital lease which expires in September 2017. The effective interest rate is 9.3%. Payments are due in monthly installments of $644.
The Company leases a truck under a capital lease which expires in May 2017. The effective interest rate is 5.1%. Payments are due in monthly installments of $1,425.

EX - 99 . 2 4 nave _ unaudited - fncls . htm NAVE COMMUNICATIONS COMPANY 12 - 31 - 13 UNAUDITED FINANCIALS nave _ unaudited - fncls . htm Exhibit 99 . 2 NAVE COMMUNICATIONS COMPANY BALANCE SHEET ( UNAUDITED ) December 31 , 2013 Assets Current assets : Cash and cash equivalents $ 99,278 Accounts receivable , net of allowance of $ 137,982 1,732,333 Inventories 2,223,869 Prepaid expenses 36,729 Total current assets 4,092,209 Property and equipment , at cost 726,459 Less accumulated depreciation and amortization ( 422,755 ) Net property and equipment 303,704 Other assets 120,000 Total assets $ 4,515,913 Liabilities and Equity Current liabilities : Line of credit $ 1,200,000 Current portion of capital lease obligations 24,364 Accounts payable and accrued expenses 2,058,869 Total current liabilities 3,283,233 Capital lease obligation , less current portion 54,752 Equity : Common stock , no par value , 1,000 shares authorized , 500 shares issued and outstanding 47,936 Retained earnings 1,129,992 Total equity 1,177,928 Total liabilities and equity $ 4,515,913 NAVE COMMUNICATIONS COMPANY STATEMENTS OF INCOME ( UNAUDITED ) Three Months Ended December 31 , 2013 2012 Net sales $ 4,071,296 $ 2,710,696 Cost of sales 2,220,280 1,523,061 Gross profit 1,851,016 1,187,635 General and administrative expenses 1,713,475 1,672,630 Operating income ( loss ) 137,541 ( 484,995 ) Other income ( expense ) , net : Other expense 4,785 − Interest expense 18,298 13,098 Other income ( expense ) , net 23,083 13,098 Net income ( loss ) $ 114,458 $ ( 498,093 ) NAVE COMMUNICATIONS COMPANY STATEMENTS OF CASH FLOWS ( UNAUDITED ) Three Months Ended December 31 , 2013 2012 Cash Flow from Operating Activities Net income $ 114,458 $ ( 456,685 ) Adjustments to reconcile net income to net cash provided by operating activities : Depreciation and amortization 25,254 27,353 Provision for doubtful accounts 34,982 70,490 Changes in assets and liabilities : Accounts receivable 119,837 954,871 Inventories ( 589,859 ) ( 125,093 ) Other current assets ( 126,371 ) ( 28,026 ) Accounts payable and accrued expenses 96,633 286,651 Net cash provided by ( used in ) operating activities ( 325,066 ) 729,561 Cash Flows from Investing Activities Disposal of property and equipment − 6,162 Cash Flows from Financing Activities Draws on line of credit 310,100 431,000 Payments on line of credit ( 300,000 ) ( 555,000 ) Payments on capital lease obligations ( 4,397 ) ( 4,594 ) Distributions − ( 398,642 ) Net cash provided by ( used in ) financing activities 5,703 ( 527,236 ) Net increase ( decrease ) in cash and cash equivalents ( 319,363 ) 208,487 Cash and cash equivalents , beginning of period 418,641 − Cash and cash equivalents , end of period $ 99,278 $ 208,487 NAVE COMMUNICATIONS COMPANY NOTES TO FINANCIAL STATEMENTS Note 1 - Description of Business Nave Communications Company ( the Company ) was incorporated under the laws of the state of Maryland in 1999 . The Company 's principal business is to serve as a reseller of new , refurbished and used telecommunications networking equipment , and to offer brokering and asset recovering services to the telecommunication providers . Note 2 - Line of Credit The Company has a revolving line of credit with a bank up to $ 2,000,000 through March 7 , 2014 . Interest is payable monthly at the greater of the Prime rate or the lender 's minimum interest rate plus 2 % ( 3 . 75 % at December 31 , 2013 ) . The line of credit is secured by a first lien on substantially all assets of the Company and is unconditionally guaranteed by the Company 's majority stockholders . Under the agreement with the bank , the Company is required to maintain certain financial covenants . The outstanding balance on the line of credit was $ 1,200,000 as of December 31 , 2013 . Note 3 - Capital Lease Obligations The Company leases their telephone system under a capital lease which expires in September 2017 . The effective interest rate is 9 . 3 % . Payments are due in monthly installments of $ 644 . The Company leases a truck under a capital lease which expires in May 2017 . The effective interest rate is 5 . 1 % . Payments are due in monthly installments of $ 1,425 .