AGUAMAINT, INC.

AGUAMAINT, INC. BALANCE SHEET DECEMBER 31, ASSETS 20X2 20x1 CURRENT ASSETS Cash $ 322,474 $ 2,536 Accounts receivable, net of allowance for doubtful accounts of $19,500 and $0 , respectively 121,600 79,600 Supplies on hand 8,177 5,190 Prepaid insurance 204 2,649 Total Current Assets 452,455 89,975 PROPERTY, PLANT, AND EQUIPMENT Equipment, net of accumulated depreciation of $12,200 and $6,100 , respectively 30,500 36,600 Vehicles, net of accumulated depreciation of $38,667 and $0 , respectively 193,333 - Total Property, Plant, and Equipment 223,833 36,600 RIGHT OF USE ASSETS Operating leasebuilding (Note 3) 288,537 - Total Right of Use Assets 288,537 - INTANGIBLE ASSETS License agreement 41,600 44,800 Total Intangible Assets 41,600 44,800 OTHER ASSETS Net operating loss tax benet, net of valuation allowance of $939 (Note 4) - 1,744 Deferred income tax (Note 4) 11,174 - Total Other Assets 1 1 ,1 74 1 ,744 TOTAL ASSETS $ 1,017,599 $ 173,119 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable $ 12,254 $ 1 9,1 00 Wages payable 9,380 15,050 Interest payable 1 1,440 - Income tax payable 70,187 - Short term portion of long term debt (Note 2) 47,547 - Short term portion of operating lease payable (Note 3) 39,000 - Deferred contract revenue 45,800 - Total Current Liabilities 235,608 34,150 LONG-TERM LIABILITIES Note payable (Note 2) 160,453 - Operating lease payable (Note 3) 249,537 - Total Long-term Liabilities 409,990 - Total Liabilities 645,598 34,150 STOCKHOLDERS' EQUITY Common stock, PAR $10, 50,000 shares authorized, 15,000 shares issued and outstanding 150,000 150,000 Retained earnings (decit) 222,001 (11,031) Total Stockholders' Equity 372,001 138,969 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,017,599 $ 173,119 Notes are an integral part of the nancial statements. 20X2 20x1 Net Income $ 233,032 $ (11,031) Adjustments to reconcile earnings to cash flow: Depreciation and amortization 47,967 9,300 Increase in net accounts receivable (42,000) (79,600) Increase in supplies inventory (2,987) ' (5,190) Decrease (increase) in prepaid insurance 2,445 (2,649) Decrease (increase) in tax benet net of valuation allowance 1,744 (1,744) Increase in deferred income tax (11,174) - Increase (decrease) in accounts payable (6,846) 19,100 Increase (decrease) in wages payable (5,670) 15,050 Increase in deferred contract revenue 45,800 - Increase in interest payable (net of capitalized interest) 9,880 - Increase in tax payable 70,187 - Net cash provided (used) by operations $ 342,378 $ (56,764) STATEMENT IM INCOME FOR THE YE DECEMBER 31, 20X2 20X1 Service contract revenue (Note ?) 1,284,700 S 767 800 Cost of goods sole 635 279 486 195 Gross profit 651.421 281 645 Operating expenses Selling and administrative 299 785 246 320 Start up crew training 38 800 Depreciation and armoriization 17 967 9 300 Total operating expenses S47 752 294.420 Operating income 305 669 (12 775) Other income (expense) Interest expense (Note ?) (9 830) Income (loss) before income taxes 295 789 (12 775) Income tax (expense) benefit (Note !) (60 757) Net income (loss) 283,062 S (1,031) Other comprehensive income Total comprehensive income (loss) 255 052 11,051 Earnings (loss) per share (Note ) 5 54 (0.83) Notes are an integral part of the financial statementsAGU STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY FOR THE YEARS ENDING DECEMBER 31, 20X2 AND 20X 1 Common Accumulated Other Stock Common Retained Compishensive shares Stock Bannings Income Total Beginning balance, January 1, 20x1 Issue common stock 15,000 150 000 150 000 Net income (loss) (11,081) (14,081) Eneling belance, December 31, 20X1 15 000 150 000 (11.051) 9 138 969 Net income 235 052 235 052 Ending belance, December 31, 20%2 15 000 150 000 222.901 372.001 Notes are an integral part of the financial statementsAGUAMAINT, INC. STA'IEMENT OF CASH FLOWS FOR 'I1-IE YEARS ENDING DECEMBER 31, 20X2 20x1 Operating Activities: Cash received from customers $ 1,269,000 $ 688,200 Cash paid to suppliers and service employees (648,782) (465,195) Cash paid for selling and administrative expenses (277,840) (240,969) Cash paid for start-up costs - (38,800) Net cash provided (used) by operations 342,378 (56,764) Investing Activities Purchase of license agreement - (8,000) Purchase of equipment - (42,700) Purchase of vehicles (230,440) - Net cash used by investing activities (230,440) (50,700) Financing Activities Proceeds from issue of common stock - 110,000 Proceeds from note 208,000 - Net cash provided by nancing activities 208,000 110,000 Net increase in cash 319,938 2,536 Cash at beginning of year 2,536 - Cash at end of year $ 322,474 $ 2,536 Signicant non-cash transaction: Acquired ROU building with operating lease $ 313,145 Capitalized interest payable for vehicles $ 1,560 Common stock issued for license agreement $ 40,000 Notes are an integral part of the nancial statements Case Cost! 20X2 20X1 Operating lease cost Shop and office building SA 39,000 Total operating lease cost 39 000 Short term lease cost Shop and office building 27,000 Trucks 24 600 71,800 Total short term lease cost 24 600 98 800 Total lease cost 63 600 98 800Other lease information: 20X2 20x1 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outows for operating leases $ 39,000 $ Right-ofuse assets obtained in exchange for new operating lease liabilities: Shop and ofce building $ 313,145 Weighted-average remaining lease tenn- operating leases 9 years Weighted-average discount rate-operating leases 5.25% Lease maturity analysis: Operating Future lease payments: Lease Payment due in 20x3 $ 39,000 Payment due in 20x4 39,000 Payment due in 20x5 39,000 Payment due in 20X6 39,000 Payment due in 20x7 39.000 Payments due thereafter 156,000 Minimum future lease payments $ 351,000 Less: Interest portion of payments (76,855) Present value of minimum lease payments $ 274,145 Add: Interest portion of short term portion of lease payable ' 14,393 Operating Lease Payable $ 288,537 20x2 20x1 Current tax payable (net tax benet carryforward) $ 72,870 $ (1,744) Change in deferred tax (11,174) - Change in accounting estimatevaluation allowance (939) - Current tax expense $ 60.757 $ (1.744) Deferred income tax results from bookltax differences related to: 20X2 20x1 Deferred tax asset (liability) Accounts receivable $ 4,095 $ Deferred contract revenue 9,618 Shop equipment (915) Vehicles (1 ,624) Net deferred tax asset, December 31 $ 11,174 $ 20x2 20x1 Carrying Fair Carrying Fair Financial instruments: Value Value Value Value Cash $ 322,474 $ 322,474 $ 2,536 $ 2,536 Note payable (208,000) (208,000)