EX-99 3 financials.txt EXHIBIT 99.2 UNITED CAPTURDYNE TECHNOLOGIES, INC. Financial Statements For the Nine Months Ended September 30, 2001 (Unaudited) and the Years Ended December 31, 2000 and 1999 UNITED CAPTURDYNE TECHNOLOGIES, INC. TABLE OF CONTENTS Page REPORT OF INDEPENDENT AUDITOR .............................................. 1 FINANCIAL STATEMENTS Balance Sheets .................................................... 2 Statements of Income and Comprehensive Income ..................... 3 Statements of Shareholders' Equity (Deficit) ...................... 4 Statements of Cash Flows .......................................... 5 Notes to Financial Statements .....................................6-12 INDEPENDENT AUDITOR'S REPORT Board of Directors United Capturdyne Technologies, Inc. Ft. Lauderdale, Florida We have audited the accompanying balance sheets of United Capturdyne Technologies, Inc. as of December 31, 2000 and 1999, and the related statements of income and comprehensive income, Shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of United Capturdyne Technologies, Inc. as of December 31, 2000 and 1999, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. /s/Margolies, Fink and Wichrowski --------------------------------- Margolies, Fink and Wichrowski Certified Public Accountants Pompano Beach, Florida October 31, 2001 1 UNITED CAPTURDYNE TECHNOLOGIES, INC. Balance Sheets

See accompanying notes to the financial statements. 2 UNITED CAPTURDYNE TECHNOLOGIES, INC. Statements of Income and Comprehensive Income

See accompanying notes to the financial statements. 3 UNITED CAPTURDYNE TECHNOLOGIES, INC. Statements of Shareholders' Equity (Deficit) Years Ended December 31, 2000 and 1999 Accumulated Additional other Total Common Paid-in Retained comprehensive Treasury Shareholders' Stock Capital Earnings income Stock Equity ---------- ---------- ---------- ------------- --------- ------------- Balance at January 1, 1999 .... $ 1,500 $ 59,556 $ 30,440 $ - $ - $ 91,496 Unrealized net losses on marketable securities ..... (17,325) (17,325) Net loss .................... - - (26,895) - - (26,895) ---------- ---------- ---------- ---------- --------- ---------- Balance at December 31, 1999 .. 1,500 59,556 3,545 (17,325) - 47,276 Unrealized net losses on marketable securities ..... (64,583) (64,583) Net income .................. - - 63,971 - - 63,971 ---------- ---------- ---------- ---------- --------- ---------- Balance at December 31, 2000 .. 1,500 59,556 67,516 (81,908) - 46,664 Acquisition of treasury stock (487,160) (487,160) Realized loss on sale of marketable securities ..... 43,031 43,031 Unrealized net losses on marketable securities ..... (22,365) (22,365) Net income (unaudited) ...... - - (12,881) - - (12,881) ---------- ---------- ---------- ---------- --------- ---------- Balance at September 30, 2001 (Unaudited) ................. $ 1,500 $ 59,556 $ 54,635 ($ 61,242) $(487,160) ($432,711) ========== ========== ========== ========== ========= =========

See accompanying notes to the financial statements. 4 UNITED CAPTURDYNE TECHNOLOGIES, INC. Statements of Cash Flows

See accompanying notes to the financial statements 5 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (1) Summary of Significant Accounting Policies (a) Business The Company was incorporated in the State of Florida on March 4, 1990. The Company is a supplier of advanced transaction processing and account management software for enterprise, retail, and service oriented customers. The Company's product line is designed to accommodate a broad spectrum of needs encountered both at the point-of-sale and on the Internet. The capabilities range from automated clearing to account management to point-of-sale automation and electronic commerce. (b) Use of estimates The accounting and reporting policies of the company is in conformity with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. (c) Cash and cash equivalents For purposes of the statements of cash flows, cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. The Company may, from time to time, maintain cash balances in excess of federally insured limits. (d) Marketable securities Marketable securities consist of equity securities. All equity securities are classified as available for sale. Available for sale securities are recorded at fair value. Unrealized holding gains and losses, net of the related tax effect, on available for sale securities are excluded from earnings and are reported as a separate component of Shareholders' equity until realized. Realized gains and losses from the sale of available for sale securities are determined on a specific identification basis. A decline in the fair value of an available for sale security below cost that is deemed other than temporary results in a charge to income, resulting in the establishment of a new cost basis for the security. (Continued) 6 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (e) Property, plant and equipment Property, plant and equipment is recorded at cost, and depreciation is computed on the straight-line method over the estimated useful lives of the respective assets. Expenditures for maintenance and repairs are charged to operating expenses as incurred, and expenditures for improvements and additions are capitalized. (f) Reserves payable The Company has the right to establish a reserve holdback to secure against the high risk and fraud involved in accepting mail order and telephone order one time processing items. The Company's contract with its customers delineate the reserve percentage and period of time over which these holdbacks are to be made. The Company has established that it will take any unpaid amounts into income after a period of twenty-four months. (g) Inventory The inventory, consisting primarily of point of sale equipment, is carried at the lower of cost (first-in, first-out) or market. (h) Impairment of long-lived assets In the event that facts and circumstances indicate that the carrying value of long-lived assets, including associated intangibles, may be impaired, an evaluation of recoverability is performed by comparing the estimated future undiscounted cash flows associated with the asset to the asset's carrying amount to determine if a write-down to market value or discounted cash flow is required. (i) Fair value of financial instruments The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximated their fair values because of the short maturity of these instruments. (Continued) 7 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (1) Summary of Significant Accounting Policies (Continued) (j) Income taxes The Company has adopted the method of accounting for income taxes pursuant to the Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes" (SFAS 109). SFAS 109 requires an asset and liability approach for financial accounting and reporting for income taxes. Under SFAS 109, the effect on deferred taxes of a change in tax rates is recognized in income in the year that includes the enactment date. (k) Comprehensive income The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income consists of net income and net unrealized gains (losses) on securities and is presented in the statements of Shareholders' equity and comprehensive income. The Statement requires only additional disclosures in the financial statements; it does not affect the Company's financial position or results of operations. (l) Earnings per share The Company has adopted SFAS No. 128, ("Earnings Per Share"), which requires the reporting of both basic and diluted earnings per share. Basic net loss per share is determined by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock, as long as the effect of their inclusion is not anti-dilutive. (2) Concentration of Credit Risk During the year, the Company has maintained cash balances in excess of the Federally insured limits. The funds are with various major money center banks. Consequently, the Company does not believe that there is a significant risk in having these balances in one financial institution. (Continued) 8 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (3) Marketable Securities Marketable securities, classified as available for sale, consist of marketable equitable securities recorded at fair value and have an aggregate basis of $123,416, $354,244 and $82,863 as of September 30, 2001 (unaudited) and December 31, 2001 and 2000, respectively. The gross unrealized losses as of September 30, 2001 (unaudited) and December 31, 2001 and 2000 are $61,242, $81,908 and $17,325, respectively. (4) Other Current Assets Other current assets consist of the following:

(5) Property and Equipment The following is a summary of property, plant and equipment:

(Continued) 9 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (6) Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following:

(7) Income Taxes The provision (benefit) for income taxes consisted of the following:

(Continued) 10 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (7) Income Taxes (Continued) The Company's deferred tax balances consist of the following as of:

A reconciliation of the Company's effective tax rate compared to the statutory federal tax rate for the periods indicated is as follows:

The Company did not have any available net operating loss carryforwards as of December 31, 2000. (Continued) 11 UNITED CAPTURDYNE TECHNOLOGIES, INC. Notes to Financial Statements (Continued) (8) Shareholders' equity As of September 30, 2001, the Company had acquired 500,000 shares of the outstanding shares of common stock at a cost of $487,160 from its majority shareholder. The Company transferred one of its investment accounts, which included marketable securities and cash, to the shareholder with a total market value of $232,160. A note was recorded in the amount of $255,000 representing the balance outstanding to the shareholder as of September 30, 2001. The note was paid during October 2001. (9) Subsequent events On October 19, 2001, the Company entered into a "Plan of Merger" with VoiceFlash Networks, Inc. The merger called for the issuance of 1,200,000 shares of VoiceFlash Networks, Inc. restricted $.001 par value common stock in exchange all of the issued and outstanding shares of the Company's common stock immediately prior to the effective time of the merger. Upon the completion of the merger, the Company shall continue to operate as a wholly-owned subsidiary of the merged companies. 12 UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION Introductory Note The accompanying unaudited pro forma combined condensed financial statements illustrate the effect of the acquisition of the outstanding capital stock of United Capturdyne Technologies, Inc. ("UCT") by a wholly owned subsidiary of VoiceFlash Networks Incorporated (the "Merger Sub"). In accordance with the terms of the transaction, the UCT shareholders will receive an aggregate of 1,200,000 VoiceFlash common shares. The transaction will be accounted for under the purchase method of accounting. The accompanying unaudited pro forma combined condensed balance sheet as of October 31, 2001 combines the historical balance sheet of VoiceFlash as of that date with the balance sheet of UCT as of October 31, 2001 and assumes the merger took place on October 31, 2001. The unaudited pro forma combined condensed statements of operations for the three months ended October 31, 2001 and for the year ended July 31, 2001 are based on the historical statements of operations of VoiceFlash for those periods combined with the historical statements of UCT operations for the three months ended October 31, 2001 and the twelve months ended July 31, 2001. The unaudited pro forma combined condensed statements of operations assume the merger took place on August 1, 2000. The unaudited pro forma combined condensed financial statements reflect a preliminary allocation of the purchase price by VoiceFlash based upon preliminary estimates, available information and certain assumptions deemed proper by it and, accordingly, are subject to change upon, among other things, a final determination of required purchase accounting adjustments necessary to allocate the purchase price to the assets acquired and liabilities assumed based on their respective fair values which have not yet been made. Accordingly, the purchase accounting adjustments made in connection with the development of the unaudited pro forma combined condensed financial information appearing in this joint proxy statement are preliminary and have been made solely for purposes of developing such pro forma combined condensed financial information. 1 The unaudited pro forma combined condensed financial statements have been prepared by VoiceFlash. The unaudited pro forma combined condensed financial statements are presented for illustrative purposes only and are not necessarily indicative of the future financial position or future results of operations of VoiceFlash or the results that would have actually occurred had the transaction been in effect for the periods presented. The unaudited pro forma combined condensed financial statements should be read in conjunction with the historical financial statements and related notes of VoiceFlash and UCT. 2 VoiceFlash Networks, Inc.And Subsidiaries (formerly Registry Magic, Inc.) Unaudited Pro Forma Combined Condensed Balance Sheet October 31, 2001

3 VoiceFlash Networks, Inc. And Subsidiaries (formerly Registry Magic, Inc.) Unaudited Pro Forma Combined Condensed Statements of Operations

4 VoiceFlash Networks, Inc. And Subsidiaries (formerly Registry Magic, Inc.) Unaudited Pro Forma Combined Condensed Statements of Operations

5 United CapturedyneTechnologies Inc Statement of revenue and Expenses August 1, 2001 Through October 31, 2001

6 VoiceFlash Networks Incorporated Notes to Unaudited Pro Forma Combined Condensed Financial Statements Pro forma adjustments to effect the merger are as follows: 1. To reflect the issuance of 1,200,000 shares of VoiceFlash common stock at an assumed value of $0.36 per share (approximately $432,000). The assumed purchase price of $467,000 including estimated acquisition costs of approximately $35,000 is based on management's estimate of the fair value of the assets acquired and the liabilities assumed of United. 2. To reflect the amortization of the excess cost over the fair value of the net assets acquired $912,025, on a straight-line basis over five years. The amortization of goodwill is considered a permanent difference for income taxes and accordingly no benefit has been recorded. 3. To reflect the issuance of the 1,200,000 shares of common stock as if they were issued on August 1, 2000 for purposes of the weighted average number of shares outstanding in connection with the calculation of net loss per common share (basic and diluted). VoiceFlash's potentially issuable shares of common stock pursuant to outstanding stock purchase options, warrants, and the Series A 12% cumulative non-voting preferred convertible shares for purposes of the adjusted pro forma net loss per common share calculation are excluded from the pro forma diluted computation as their effect would be antidilutive to the pro forma net loss per share. 7 Capturdyne Purchase 1,200,000 shares of VFNX on Oct. 19, 2001 Closed on 10/19/01 at $0.48 1,200,000 shares 0.36 ---------- 432,000 Purchase Price ........................... 432,000 Acquisition Costs ........................ 35,000 Fair Value of Asserts Acquired ........... (1,976,733) Fair Value of Liabilities Assumed ........ 2,421,758 my estimate ---------- Goodwill ................................. 912,025 ========== Fair Value of Asserts Acquired: Cash .............................. 1,822,799 Officers Loan Receivable .......... 96,798 Property and Equipment ............ 55,530 Other assets ...................... 1,606 ---------- ---------- 1,976,733 ========== Fair Value of Liabilities Assumed: Accounts payable .................. 1,857,177 Accrued Expenses .................. 446,533 Deferred tax payable .............. 7,010 Corporate and Payroll Taxes Payable 111,038 ---------- ---------- 2,421,758 ========== Proof: If we consolidated the balance sheet of VFNX and Capturdyne the consolidating entry VFNX Capturdyne Consolidating Consolidated balance sheet balance sheet Entry balance sheet ----------------- ----------------------- ----------------- --------------- XXXX XXXX XXXX XXXX Capital Stock (Capturdyne) .................................... 1,000 Treasury Stock (Capturdyne) ................ 486,660 Paid In Capital (Capturdyne) .................................. 59,556 Retained Earnings (Capturdyne) ................................ 67,516 Current Earnings (Capturdyne) .............. 86,437 Capital Stock (VFNX) ....................... 1,200 APIC ....................................... 430,800 Acquisition Cost (VFNX) .................... 35,000 Goodwill (VFNX / Plug) ....................................... 912,025 --------------- --------------- 1,040,097 1,040,097 Immaterial Difference -

VOICEFLASH NETWORKS INC 8-K/A