<PAGE>
EXHIBIT 99.1
The following unaudited condensed consolidated pro forma balance sheet as of
March 31, 2000 and unaudited condensed consolidated pro forma statement of
operations for the nine months ended March 31, 2000 reflect the financial
effects of the purchase, on May 11, 2000, of the stock of ParaComm, Inc.
("ParaComm") by a wholly owned subsidiary of DualStar Technologies Corporation
(the "Company" or "DualStar"). The Company issued 774,997 shares of common stock
and warrants to purchase 25,000 shares of common stock with an exercise price of
$15 per share as consideration for the purchase of ParaComm. For the pro forma
balance sheet, it is assumed that the purchase occurred as of March 31, 2000.
For the pro forma statement of operations, it is assumed that the purchase
occurred at the beginning of the fiscal period. The revenues and results of
operations included in the unaudited condensed consolidated pro forma statement
of operations are not considered necessarily to be indicative of anticipated
results of operations for periods subsequent to the transaction, nor are they
considered necessarily to be indicative of the results of operations for the
period specified had the transaction actually been completed at the beginning of
the fiscal period.
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
DUALSTAR
CONSOLIDATED PARACOMM PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $16,478,080 $262,748 $16,740,828
Contracts receivable - net 1,414,344 78,037 1,492,381
Deferred tax assets - current 178,000 178,000
Prepaid expenses and sundry receivable 387,880 9,500 397,380
Net assets of discontinued operations 10,964,832 10,964,832
---------------------------------------------------- ----------------
TOTAL CURRENT ASSETS 29,423,136 350,285 - 29,773,421
Property and equipment - net 2,417,769 1,198,135 3,615,904
OTHER ASSETS:
Capitalized subscriber list $1,385,858 (a) 1,385,858
Goodwill 303,863 (b) 303,863
Deferred income taxes assets 1,574,000 163,480 1,737,480
Other assets 1,616,171 1,832 1,618,003
---------------------------------------------------- ----------------
TOTAL ASSETS $35,031,076 $1,713,732 $1,689,721 $38,434,529
==================================================== ================
</TABLE>
See notes to unaudited condensed consolidated pro forma balance sheet
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
MARCH 31, 2000
<TABLE>
<CAPTION>
DUALSTAR
CONSOLIDATED PARACOMM PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENTS PRO FORMA
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $1,124,952 $104,328 $1,229,280
Accrued expenses and sundry liabilities 684,259 73,862 $100,000 (c) 858,121
Promissory note payable 7,000,000 7,000,000
---------------------------------------------------- ----------------
TOTAL CURRENT LIABILITIES 8,809,211 178,190 100,000 9,087,401
Mortgage payable - net of current portion 1,728,269 1,728,269
Other liabilities 124,916 124,916
---------------------------------------------------- ----------------
TOTAL LIABILITIES 10,662,396 178,190 100,000 10,940,586
---------------------------------------------------- ----------------
SHAREHOLDERS' EQUITY:
Common stock 157,016 100 7,650 (c) 164,766
Additional paid in capital 41,038,308 2,199,900 917,613 (c) 44,155,821
Accumulated deficit (14,637,394) (664,458) 664,458 (c) (14,637,394)
Deferred compensation (2,189,250) (2,189,250)
---------------------------------------------------- ----------------
TOTAL SHAREHOLDERS' EQUITY 24,368,680 1,535,542 1,589,721 27,493,943
---------------------------------------------------- ----------------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $35,031,076 $1,713,372 $1,689,721 $38,434,529
==================================================== ================
</TABLE>
See notes to unaudited condensed consolidated pro forma balance sheet
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED PRO-FORMA BALANCE SHEET
The pro forma adjustment reflects the purchase of ParaComm, Inc. as of March 31,
2000. The transaction consists of issuance of (1) 774,997 shares of Company
common stock, and (2) warrants to purchase 25,000 shares of common stock, which
are exercisable at $15.00 per share. The transaction is accounted for under the
purchase method. The total consideration for the purchase was estimated as
$3,225,263, based upon the value of DualStar common stock at time of the
purchase, the estimated value of the warrants issued, and related transaction
costs.
The pro forma balance sheet reflects the following adjustments based upon a
preliminary allocation of the purchase price to the fair value of the assets and
liabilities acquired:
(a) Capitalized subscriber list would increase by $1,385,858 based on the number
of ParaComm's subscribers multiplied by a per subscriber valuation factor.
(b) The excess of the consideration given, i.e. common stock, warrants and
transaction costs, over the fair value of the net assets acquired as of March
31, 2000 would be assigned to goodwill.
(c) For the issuance of common stock and warrants and for the related
transaction costs, the common stock would increase by $7,650, the additional
paid-in capital would increase by $917,613, the accumulated deficit would
decrease by $664,458, and accrued expenses would increase by $100,000.
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
DUALSTAR PARACOMM PRO FORMA
HISTORICAL HISTORICAL ADJUSTMENT PRO FORMA
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues $3,689,423 $201,942 $3,891,365
Cost of revenues 3,547,723 48,226 3,595,949
-------------------------------------------------------- ----------------
Gross profit 141,700 153,716 295,416
General and administrative expenses 4,469,965 981,654 $148,485 (a)
15,193 (b) 5,615,297
-------------------------------------------------------- ----------------
Loss before provision for income taxes (4,328,265) (827,938) (163,678) (5,319,881)
Provision for income taxes (benefit) 40,000 (163,480) (123,480)
-------------------------------------------------------- ----------------
Loss from continuing operations (4,368,265) (664,458) (163,678) (5,196,401)
Loss from discontinued operations (1,872,710) (1,872,710)
-------------------------------------------------------- ----------------
Net loss ($6,240,975) ($664,458) ($163,678) ($7,069,111)
======================================================== ================
Basic and diluted loss per share:
Net loss per share $(0.38) $(0.57)
Weighted average shares outstanding 11,609,429 12,384,426
</TABLE>
PRO FORMA ADJUSTMENTS:
(a) Adjusts to amortize capitalized subscriber list over 7 years.
(b) Adjusts to amortize goodwill over 15 years.
See note to unaudited condensed consolidated pro forma statements of operations
<PAGE>
DUALSTAR TECHNOLOGIES CORPORATION AND SUBSIDIARIES
NOTE TO UNAUDITED CONDENSED CONSOLIDATED PRO-FORMA STATEMENTS OF OPERATIONS
ParaComm, Inc. commenced business in July 1999. Accordingly, no pro forma
statement of operations for the year ended June 30, 1999 is presented in this
filing.
