8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

December 24, 2007

(Date of earliest event reported)

Double-Take Software, Inc.

(Exact Name of Registrant as Specified in its Charter)

DELAWARE	001-33184	20-0230046
(State or other jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
257 TURNPIKE ROAD, SUITE 210
SOUTHBOROUGH, MASSACHUSETTS	01772	877-335-5674
(Address of principal executive offices)	(Zip Code)	(Registrant’s telephone number including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

EXPLANATORY NOTE

As reported in the Current Report on Form 8-K filed by Double-Take Software, Inc. (the “Company”) on December 28, 2007 (the “Original Filing”), on December 24, 2007 the Company and Double-Take Software Canada, Inc. (“Double-Take Canada”), a Canadian corporation and wholly-owned subsidiary of the Company, entered into a share purchase agreement (the “Purchase Agreement”) with TimeSpring Software Corporation (“TimeSpring”), a Canadian corporation, and the shareholders of TimeSpring (the “Sellers”) for the acquisition of TimeSpring. Pursuant to the terms of the Purchase Agreement, Double-Take Canada acquired all of the issued and outstanding shares of TimeSpring from the Sellers.

As permitted by Item 9.01(a)(4) of Form 8-K, the Original Filing did not include certain financial statements and pro forma financial information. This Amendment amends the Original Filing to include the financial statements of TimeSpring and the pro forma financial information required by Items 9.01(a) and 9.01(b) of Form 8-K, respectively.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of business acquired.

The audited consolidated financial statements of TimeSpring Software Corporation/Corporation de Logiciels TimeSpring and Subsidiaries, as of December 31, 2006 and December 31, 2005 and for the years then ended, including the related independent auditors’ report, are filed as Exhibit 99.01 hereto.

The unaudited consolidated financial statements of TimeSpring Software Corporation/Corporation de Logiciels TimeSpring and Subsidiaries, as of September 30, 2007, and for the nine months ended September 30, 2007 and 2006 is filed as Exhibit 99.02 hereto.

(b) Pro forma financial information.

The unaudited pro forma condensed consolidated financial statements of Double-Take Software, Inc. and TimeSpring Software Corporation (now known as Double-Take Software Canada, Inc.), as of September 30, 2007, and for the nine months ended September 30, 2007 and the year ended December 31, 2006 reflecting the acquisition of TimeSpring Software Corporation by Double-Take Software, Inc., are furnished as Exhibit 99.03 hereto.

(d) Exhibits.

2.02*	Share Purchase Agreement among Double-Take Software Canada, Inc. a Canadian Corporation, Double-Take Software, Inc., a Delaware Corporation, TimeSpring Software Corporation, a Canadian Corporation, and the Shareholders of TimeSpring Software Corporation for the sale of all of the issued and outstanding shares of TimeSpring Software Corporation as of December 24, 2007 (incorporated by reference to Exhibit 2.02 of the Original Filing)
23.01	Consent of Deloitte and Touche LLP
99.01	Audited consolidated financial statements of TimeSpring Software Corporation/Corporation de Logiciels TimeSpring and Subsidiaries as of December 31, 2006 and December 31, 2005 and for the years then ended, including the related independent auditors’ report
99.02	The unaudited consolidated financial statements of TimeSpring Software Corporation/Corporation de Logiciels TimeSpring and Subsidiaries as of September 30, 2007, and for the nine months ended September 30, 2007 and 2006
99.03	Unaudited pro forma condensed consolidated financial statements of Double-Take Software, Inc. and TimeSpring Software Corporation (now known as Double-Take Software Canada, Inc.) as of September 30, 2007, and for the nine months ended

September 30, 2007 and for the year ended December 31, 2006, which reflects the acquisition of TimeSpring Software Corporation by Double-Take Software, Inc.

* The Company has omitted certain schedules and similar attachments in accordance with Regulation S-K 601(b)(2). The Company will furnish the omitted schedules and similar attachments to the U.S. Securities and Exchange Commission upon request.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Double-Take Software, Inc.
Date: March 11, 2008	By:	/s/ S. CRAIG HUKE
		S. Craig Huke
		Vice President and Chief Financial Officer

EX-23.01

Exhibit 23.01

CONSENT OF INDEPENDENT REGISTERED CHARTERED ACCOUNTANTS

We consent to the incorporation by reference in Registration Statements No. 333-139369 on Form S-8 and No. 333-148840 on Form S-3 of Double-Take Software Inc. of our report dated March 9, 2007 except as to Note 21, which is as of July 18, 2007 and Note 22, which is as of January 23, 2008 relating to the consolidated financial statements of Timespring Software Corporation/Corporation de Logiciels Timespring (“Timespring”) for the years ended December 31, 2006 and 2005 (which report expresses an unqualified opinion and includes a separate report titled comments by Independent Registered Chartered Accountants on Canada and United States of America Reporting Differences referring to conditions and events that cast substantial doubt on Timespring’s ability to continue as a going concern), appearing in this Current Report on Form 8-K/A of Double-Take Software Inc. dated March 11, 2008.

/s/ DELOITTE & TOUCHE LLP
Montreal, Canada
March 11, 2008

EX-99.01

Exhibit 99.1

Consolidated financial statements of

TIMESPRING SOFTWARE
CORPORATION/CORPORATION DE
LOGICIELS TIMESPRING

December 31, 2006

TIMESPRING SOFTWARE
CORPORATION/CORPORATION DE LOGICIELS
TIMESPRING
Table of contents

Report of Independent Registered Chartered Accountants	1
Consolidated statement of operations	2
Consolidated statement of deficit	3
Consolidated balance sheet	4
Consolidated statement of cash flows	5
Notes to the consolidated financial statements	6-23

Deloitte & Touche LLP
1 Place Ville Marie
Suite 3000
Montreal QC H3B 4T9
Canada

Tel: 514-393-5194
Fax: 514-390-4104
www.deloitte.ca

Report of Independent Registered Chartered Accountants

To the Board of Directors of
Timespring Software Corporation/
Corporation de Logiciels Timespring

We have audited the consolidated balance sheets of Timespring Software Corporation/Corporation de Logiciels Timespring and subsidiaries (the “Company”) as at December 31, 2006 and 2005 and the consolidated statements of operations, deficit 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 Canadian generally accepted auditing standards and auditing standards generally accepted in the United States of America. These standards require that we plan and perform an audit to obtain reasonable assurance whether the 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 consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2006 and 2005 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

/s/ Deloitte & Touche LLP

Independent Registered Chartered Accountants

Montreal, Canada
March 9, 2007, except Note 21, which is as of July 18, 2007, and Note 22, which is as of January 23, 2008

Comments by Independent Registered Chartered Accountants for U.S. readers on Canada-U.S. reporting differences

Generally accepted auditing standards in the United States require the addition of an explanatory paragraph when the consolidated financial statements are affected by conditions and events that cast substantial doubt on the Company’s ability to continue as a going concern, such as those described in Note 1 to the consolidated financial statements of the Company. Although we conducted our audits in accordance with both Canadian generally accepted auditing standards and auditing standards generally accepted in the United States of America, our report to the Board of Directors, dated March 9, 2007, except as to Note 21, which is as of July 18, 2007, and Note 22, which is as of January 23, 2008, is expressed in accordance with Canadian reporting standards, which do not permit a reference to such conditions and events in the auditors’ report when these are adequately disclosed in the consolidated financial statements.

/s/ Deloitte & Touche LLP

Independent Chartered Chartered Accountants

Montreal, Canada
March 9, 2007, except Note 21, which is as of July 18, 2007, and Note 22, which is as of January 23, 2008

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Consolidated statement of operations
years ended December 31
In Canadian dollars

	2006			2005
	$			$
Revenue
Licences		453,178			174,862
Maintenance		99,230			21,071
Service		51,648			1,884
		604,056			197,817
Cost of sales		62,244			9,934
		541,812			187,883
Expenses
Research and development, net (Note 5)		1,349,159			2,133,886
Selling, general and administrative		4,614,832			5,355,012
Financial (Note 17)		2,078,330			1,803,449
Amortization — capital assets		229,011			175,782
		8,271,332			9,468,129
Operating loss		(7,729,520	)		(9,280,246	)
Interest income		134,100			236,497
Net loss		(7,595,420	)		(9,043,749	)

Page 2 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Consolidated statement of deficit
years ended December 31
In Canadian dollars

	2006			2005
	$			$
Balance, beginning of year		(18,266,067	)		(9,222,318	)
Net loss		(7,595,420	)		(9,043,749	)
Balance, end of year		(25,861,487	)		(18,266,067	)

Page 3 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Consolidated balance sheet
as at December 31
In Canadian dollars

	2006			2005
	$			$
Assets
Current assets
Cash		152,757			435,840
Marketable securities		3,185,614			2,847,392
Accounts receivable, net (Note 4)		225,927			137,214
Research and development tax credits receivable (Note 5)		1,397,674			3,031,192
Prepaid expenses		49,120			26,711
		5,011,092			6,478,349
Capital assets, net (Note 6)		616,016			679,417
Deferred charges (Note 7)		76,608			132,833
Patents		1			1
		5,703,717			7,290,600
Liabilities
Current liabilities
Bank loan and overdraft (Note 8)		724,074			720,000
Shareholders credit loan (Note 13)		4,128,768			—
Accounts payable and accrued liabilities (Note 9)		295,314			276,687
Deferred revenue		91,443			34,439
Current portion of obligation under capital lease (Note 12)		42,744			8,904
Loans payable (Note 11)		27,045			27,045
		5,309,388			1,067,075
Redeemable preferred shares (Note 10)		23,399,582			21,666,279
Loans payable (Note 11)		110,160			110,160
Long-term portion of obligation under capital lease (Note 12)		49,985			17,064
		28,869,115			22,860,578
Commitments (Note 14)
Shareholders’ deficiency
Capital stock (Note 15)		2,696,089			2,696,089
Deficit		(25,861,487	)		(18,266,067	)
		(23,165,398	)		(15,569,978	)
		5,703,717			7,290,600

Approved by the Board

Director

Director

Page 4 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Consolidated statement of cash flows
years ended December 31
In Canadian dollars

	2006			2005
	$			$
Operating activities
Net loss		(7,595,420	)		(9,043,749	)
Items not affecting cash:
Amortization		285,236			232,007
Interest accrued on redeemable preferred shares		1,733,303			1,604,909
Interest accrued on Shareholders Credit Loan		128,768			—
Loss on disposal of capital assets		1,910			—
Loss on sale of marketable securities		—			28,390
		(5,446,203	)		(7,178,443	)
Increase in accounts receivable		(88,713	)		(55,653	)
Decrease in interest receivable		—			117,252
Decrease (increase) in research and development tax credits receivable		1,633,518			(1,489,719	)
Increase in prepaid expenses		(22,409	)		(12,271	)
Increase (decrease) in other current liabilities		75,631			(101,973	)
Cash used in operating activities		(3,848,176	)		(8,720,807	)
Investing activities
Increase in marketable securities		(338,222	)		—
Proceeds from disposal of marketable securities		—			9,613,787
Acquisition of capital assets		(80,680	)		(575,430	)
Cash (used in) provided by investing activities		(418,902	)		9,038,357
Financing activities
Issuance of bank loan		1,974,074			—
Repayment of bank loan		(1,970,000	)		—
Issuance of Shareholders Credit Loan		4,000,000			—
Repayment of obligations under capital lease		(20,079	)		(4,404	)
Issuance of capital stock		—			2,598
Cash provided by (used in) financing activities		3,983,995			(1,806	)
(Decrease) increase in cash		(283,083	)		315,744
Cash, beginning of year		435,840			120,096
Cash, end of year		152,757			435,840

See Note 18 for supplementary cash flow information.

Page 5 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

1.	Going concern
	The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of operations. Several adverse conditions and events cast substantial doubt upon the validity of this assumption. The Company has incurred significant losses during 2006, 2005 and prior years and has incurred significant costs related to developing its general and administrative infrastructure, developing technology, recruiting personnel and establishing a market for the Company’s products and services. The Company has funded such costs with investment capital and related party debt. As of December 31, 2006, the Company has current liabilities of $5,309,388 and a shareholders’ deficiency of $23,165,398. In addition, the Company’s bank loan is subject to various financial covenants which, at December 31, 2006, were not respected.
	These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amount and classification of liabilities and the reported revenue and expenses that would be necessary should the Company be unable to continue as a going concern.
	The Company’s ability to continue as a going concern is dependent upon, amongst other things, the attainment of a satisfactory sales level, attaining profitable operations, its ability to generate sufficient cash from operations in the future and the continued financial support of its shareholders and creditors. These matters are dependent on a number of items outside the Company’s control and there is significant uncertainty about the Company’s ability to successfully conclude on these matters. As such, the realization of assets and discharge of liabilities in the ordinary course of business is subject to significant uncertainty.
	Management’s plans with respect to addressing the going concern uncertainty include the following:

1.	Restructure the operations in order to reduce the Company’s operating cash requirements;
2.	Renew existing bank loans and seek additional financing to contribute to the funding of its expansion projects; and
3.	Continue financial support of certain current shareholders.

Management believes that with the above plans and continued financial support of its creditors and shareholders, the Company will be able to continue to operate as a going concern. There can, however, be no assurance that the plans described above will result in sufficient funds being generated.

Page 6 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

2.	Description of the business
	Timespring Software Corporation (the “Company”) is incorporated under the Canada Business Corporations Act and is engaged in providing High Data Availability and Disaster Recovery solutions.
3.	Summary of significant accounting policies
	Financial statement presentation
	The accompanying consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) assuming the Company is a going concern (see Note 1). They include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.
	Use of estimates
	The presentation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions also affect revenue and expenses during the period reported. The balances that are subject to a high degree of estimation are allowances for doubtful accounts and returns, investment tax credits and fair value of the stock options. Actual results could differ from those estimates.
	Marketable securities
	Marketable securities are recorded at the lower of cost or market value.
	Capital assets
	Capital assets are recorded at cost and are amortized over their expected useful lives on a declining balance basis at the following annual rates:

Furniture and fixtures		30%
Research and development equipment		30%
Computer hardware, software and telecom		20%
Leasehold improvements	until end of lease — September 2008
Equipment under capital lease	until end of lease — December 2009

Income taxes

The Company follows the liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are determined for each temporary difference based on the substantially enacted tax rates expected to apply when the differences will reverse. A valuation allowance is recorded against any future income tax asset if it is more likely than not that the asset will not be realized. The effect of the changes in tax rates on future income tax assets and liabilities is recognized in earnings in the year the changes occur.

Page 7 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

3.	Summary of significant accounting policies (continued)
	Revenue recognition
	The Company generates revenue principally through two sources: (1) software licences and (2) services. Software licence revenue is normally generated from licensing the perpetual use of the Company’s software products. Services revenue is generated from sales of maintenance and services performed for customers that licence the Company’s products.
	Revenue from the sale of software license agreements is recognized upon delivery of software if persuasive evidence of an arrangement exists, collection is probable, the fee is fixed or determinable. Fair value is used to allocate the total fee to the different elements of an arrangement. Fair value is typically based on the price charged when an element is sold separately, or, in the case of an element not yet sold separately, the price established by management, if it is probable that the price, once established, will not change before market introduction.
	Revenue from maintenance services for licences previously sold and implemented is recognized ratably over the term of the contract.
	Revenue is presented net of sales tax
	Amounts received in advance of the delivery of products or performance of services are classified as deferred revenue.
	Foreign currency translation
	The Company’s subsidiary is considered to be integrated and its financial statements are translated following the temporal method. Accordingly, monetary assets and liabilities are translated using the exchange rates in effect at the balance sheet date, whereas non-monetary assets are translated at historical rates. Revenue and expenses are translated at the average exchange rate. Translation gains or losses are included in earnings.
	Foreign currency transactions
	For transactions in foreign currencies, the Company translates monetary assets and liabilities denominated in foreign currencies into Canadian dollars using exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates prevailing during the year. Translation gains or losses are included in earnings.
	Research and development
	Research and development costs, net of investment tax credits, are expensed as incurred, except for development costs that meet certain criteria. Development costs were not considered deferrable.
	Government assistance
	Government assistance, in the form of grants and investment and other tax credits, is accrued when earned and, in the case of tax credits, where there is also reasonable assurance that they will be realized. Such assistance is applied to reduce the related asset costs or expenses.

Page 8 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

3.	Summary of significant accounting policies (continued)
	Deferred charges
	Deferred charges relate to costs incurred in connection with the issuance of the preferred shares and are amortized on a straight-line basis over the term of the financing, to a maximum of five years.
	Stock-based compensation plan
	The Company has a stock-based compensation plan, which is described in Note 15. The Company accounts for its grants under this plan in accordance with the fair value-based method of accounting for stock-based compensation. The fair value of stock options is determined on their grant date and recorded as compensation expense over the period that the stock options vest, with a corresponding increase to contributed surplus. When stock options are exercised, the proceeds, together with the amount recorded in contributed surplus, are recorded in share capital.
4.	Accounts receivable, net

	2006			2005
	$			$
Trade		200,372			103,441
Sales tax receivable		36,426			27,175
Other		3,946			6,598
Allowance for doubtful accounts		(14,817	)		—
		225,927			137,214

5.

Research and development tax credits receivable

Research and development expenses have been reduced by investment tax credits of $1,506,918 in 2006 ($1,599,908 in 2005). The amounts recorded by the Company are subject to review and approval by the tax authorities and the amounts granted may differ from those accounted for by the Company. Should such a difference arise resulting from assessment by the tax authorities, the amount would be recorded in earnings in the year of the assessment.

Page 9 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

6. Capital assets

	2006						2005
			Accumulated		Net book		Net book
	Cost		amortization		value		value
	$		$		$		$
Furniture and fixtures		77,392		50,963		26,429		37,756
Research and development equipment		803,254		456,122		347,132		457,363
Computer hardware, software and telecom		113,466		46,064		67,402		72,811
Leasehold improvements		135,389		54,120		81,269		85,519
Equipment under capital lease		113,547		19,763		93,784		25,968
		1,243,048		627,032		616,016		679,417

7. Deferred charges

	2006		2005
	$		$
Original cost		281,127		281,127
Less:
Accumulated amortization		204,519		148,294
		76,608		132,833

8.	Bank loan
	The Company has a credit facility with maximum borrowings of $1,250,000, due on demand, to finance up to 75% of refundable research and development tax credits, bearing interest at a Canadian chartered bank’s prime rate plus 1.75% per annum payable monthly. As at December 31, 2006, $625,000 was unused. The facility is secured by a $1,500,000 movable hypothec, which provides for a charge on the Company’s present and future assets, including intellectual property, and by a certificate of guarantee from Garantie Québec as described below. The credit facility was renewed August 23, 2007 for an amount of $873,000.
	The credit facility is subject to various financial covenants of which, at December 31, 2006, the Company was not in compliance with. As a result, the availability of the credit facility is limited.
	Garantie Québec has provided a guarantee of 80% of the bank loan to a maximum of $1,000,000. The guarantee expires on June 30, 2008. The agreement contains various covenants that require the Company to maintain certain financial ratios as defined by Garantie Québec. As at December 31, 2006, the Company was not in compliance with these covenants.

Page 10 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

9. Accounts payable and accrued liabilities

	2006		2005
	$		$
Trade accounts		198,719		139,931
Commissions		33,453		34,353
Capital tax		17,000		29,000
Accrued expenses		35,672		69,957
Other		10,470		3,446
		295,314		276,687

10.	Redeemable convertible preferred shares
	In accordance with the accounting recommendations of Section 3860 of the Canadian Institute of Chartered Accountants’ Handbook, “Financial Instruments”, the preferred shares have been presented in these financial statements based on their substance. Although their legal form is that of share capital, in substance these shares are liabilities because they provide for redemption, at the option of the holder, for a fixed amount.
	The holders of preferred shares have the option to require the Company to redeem all or part of the preferred shares at any time on or after December 17, 2009 for a consideration equal to the issue price paid for such shares, plus declared, accrued and unpaid dividends, plus an amount equal to 8% of the issue price for such preferred shares per annum on a compounded basis calculated from the original issue date. The increase in the preferred share redemption value has been included in the financial expenses for the year.
	Should the Company not pay the redemption amount within 120 days after the demand for redemption, the Company is obligated to pay an additional 20% per annum from the date of issuance of the shares.

Page 11 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

10. Redeemable convertible preferred shares (continued)

	2006		2005
	$		$
6,900,261 (6,900,261 in 2005) Class A preferred shares		20,000,000		20,000,000
Increase in redemption value		3,399,582		1,666,279
		23,399,582		21,666,279

	See Note 15 for additional characteristics of the preferred shares.
	On March 31, 2006, the Company consolidated its shares on a 42-to-1 basis. All share information is presented as if the share consolidation took place on January 1, 2005.
11.	Loans payable
	The loans payable include an amount of $110,160 ($110,160 in 2005) from a beneficial shareholder of the Company, which bears interest at a Canadian chartered bank’s prime rate plus 1% and is subrogated in favour of the Company’s bank, carrying a maximum term of five years to June 30, 2008 with any prior repayments to be made out of “First Available Funds”, which has been defined as the funds generated from the revenue of the Company available for the payment of its indebtedness after operating expenses, capital expenditures, debt service and taxes.
	The balance of the loans payable, in the amount of $27,045, is due to a former employee, is non-interest bearing and without specific terms of repayment.
12.	Obligation under capital lease

	2006		2005
	$		$
Equipment lease contracts, repayable in monthly installments of $4,112, including interest calculated at 10.9% to December 31, 2009		92,729		25,968
Current portion		42,744		8,904
		49,985		17,064

Future minimum payments under the capital lease for subsequent years are as follows:

	$
2007		49,350
2008		41,015
2009		16,253

Page 12 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

13.	Shareholders credit loan
	The loan is due on demand, upon the agreement of the majority of the lenders, bears interest at 20% per annum compounded monthly and is secured by a movable hypothec covering the universality of the Company’s assets. The loan is also convertible into Class A preferred shares at $2.89842 per share at the option of the lenders at any time. The fair value of the conversion option at the date of issue was not considered significant. Upon agreement of the majority of the lenders, all of the outstanding loans will be converted at the then applicable loan conversion price.
14.	Commitments
	The minimum rents payable to non-related parties and to a beneficial shareholder of the Company (Note 19) under long-term operating leases exclusive of certain operating costs for which the Company is responsible are approximately as follows:

	Non-related		Beneficial
	parties		shareholders
	$		$
2007		85,593		130,755
2008		64,195		98,066

15.	Capital stock
	On March 31, 2006, the Company consolidated is shares on a 42-to-1 basis. All share information is presented as if the share consolidation took place on January 1, 2005.
	Authorized

The following authorized classes of shares are unlimited in number and without par value:

a) Class A preferred shares

Voting, providing for a non-cumulative dividend to be determined at the discretion of the directors, convertible into common shares at the option of the holder at a price that could vary depending upon future events and financings, see Note 10.

b) Common shares

Voting and providing for a non-cumulative dividend to be determined by the directors

	2006		2005
	$		$
Issued and fully paid 1,794,902 common shares (1,794,902 in 2005)		2,696,089		2,696,089

The Class A preferred shares are recorded as long-term debt as described in Note 10.

Stock-based compensation plan

The Company adopted a stock option plan for officers, directors, key employees and service providers of the Company. Options granted under this plan generally expire ten years after the date of the grant and vest over a period of four years. The plan provides that a maximum of 1,393,774 common shares may be optioned under the stock option plan.

Page 13 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

15.	Capital stock (continued)
	Stock-based compensation plan (continued)
	The fair value of the stock options granted during the years ended December 31, 2006 and 2005 had nominal value and has been determined using the Black-Scholes option pricing model, with the following assumptions:

	2006			2005
Expected dividend yield		0.0	%		0.0	%
Expected volatility		100.0	%		0.0	%
Risk-free interest rate		4.0	%		4.7	%
Weighted average expected life		10years			10years

The Black-Scholes option pricing model requires the input of subjective assumptions, including the changes in the subjective input assumptions that can materially affect the fair value estimate, and, therefore, the Black-Scholes model does not necessarily provide a reliable single measure of the fair value of the Company’s share purchase options.

	2006					2005
				Weighted					Weighted
				average					average
				exercise					exercise
	Number			price		Number			price
				$					$
Options outstanding, beginning of year		1,257,359			0.84		1,152,189			0.84
Granted during the year		57,390			0.84		129,942			0.84
Cancelled		(23,918	)		0.84		(21,679	)		0.84
Exercised		—			0.84		(3,093	)		0.84
Options outstanding, end of year		1,290,831			0.84		1,257,359			0.84

The Company has 1,290,831 options outstanding as at December 31, 2006 with a weighted average remaining life of 7.39 years, of which 820,967 were exercisable at year end at a price of $0.84.

Page 14 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

16.	Future income taxes
	The Company’s income tax provision has been determined as follows:

	Federal			Provincial
		$			$
Net loss for the year for accounting purposes		7,595,420			7,595,420
Temporary differences arising from:
Amortization		236,924			236,924
Research and development		828,107			1,103,858
Permanent differences arising from:
Non-deductible items		1,758,646			1,776,467
		4,771,743			4,478,171
Combined basic federal and provincial income tax recovery at 11% and 8%, respectively		524,892			358,254
Net operating loss and temporary differences for which no benefit was recognized, excluding the effect of investment tax credits in accordance with the Company’s accounting policy		(524,892	)		(358,254	)
		—			—

Page 15 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

16.

Future income taxes (continued)

The Company has non-capital losses and research and development expenses available, in excess of amounts taken for book purposes, for income tax purposes, which may be carried forward and applied against future years’ taxable income. The potential benefits relating to the available losses and expenses have not been recorded in the financial statements. These losses expire approximately as follows:

	Federal		Provincial
	$		$
2008		427,533		661,000
2009		863,188		577,106
2010		3,133,288		2,704,470
2014		4,369,827		3,918,356
2015		4,168,575		3,738,940
2016		2,890,012		2,596,440
		15,852,423		14,196,312
Unused research and development expenses, not subject to expiry		3,112,385		8,466,106

The Company has earned non-refundable investment tax credits that can be applied to reduce future federal income taxes payable. These credits expire as follows:

	$
2010		25,552
2011		15,070
2012		9,966
2013		24,498
2014		23,819
2015		181,916
2016		77,605
		358,426

The significant components of future income tax assets and liabilities are summarized approximately as follows:

	2006			2005
	$			$
Non-capital loss carry-forwards		2,879,471			3,144,563
Pool of unused research and development expenses		1,019,651			970,713
Benefit of investment tax credits		290,325			212,166
Valuation allowance		(4,189,447	)		(4,327,442	)
Net tax asset		—			—

The Company has recorded a valuation allowance against its future tax assets. The benefits will be recorded when their realization is reasonably assured.

Page 16 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

17. Financial expenses

	2006		2005
	$		$
Interest and bank charges		160,034		142,315
Interest on preferred shares		1,733,303		1,604,909
Interest on Shareholders Credit Loan		128,768		—
Amortization — deferred charges		56,225		56,225
		2,078,330		1,803,449

18. Supplementary cash flow information

	2006		2005
	$		$
Cash paid for interest		92,899		25,672
Capital assets acquired through capital leases		86,840		26,708

19.	Related party transactions
	During the year, the Company had transactions with related parties in the normal course of operations. These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

a) Consulting fees were charged approximately as follows:

	2006		2005
	$		$
i) Beneficial shareholders and companies owned
by beneficial shareholders (owning between 1 and 8%)		39,833		180,925
ii) Shareholders’ director		35,106		76,276

b) Rent of approximately $131,168 ($130,755 in 2005) was charged by a beneficial shareholder of the Company as a sublet of property at the same price the shareholder is paying to an arm’s length party.

Page 17 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

20.	Financial instruments
	Credit risk
	The Company’s exposure to credit risk at December 31, 2006 is equal to the carrying amount of its accounts receivable.
	Concentration of credit risk
	The Company is exposed to a concentration of credit risk, with respect to accounts receivable, due to the small number of customers. As at December 31, 2006, five customers represented 58% of the total accounts receivable.
	Currency risk
	The Company is exposed to market risk principally from foreign exchange fluctuations. The Company does not actively manage this risk. Accounts receivable and accounts payable and accrued liabilities include amounts denominated in foreign currency of $161,798 and $55,192, respectively.
	Interest rate risk
	The Company is subject to interest rate risk due to changes to the prime rate since its borrowings bear variable interest rates.
	Fair value
	The carrying amounts of the Company’s financial assets and liabilities, included in the current and non-current assets and liabilities, other than the redeemable preferred shares, approximate their fair values at December 31, 2006 and 2005, given their short-term maturities or variable interest rates. Due to the nature of the preferred shares and the status of the Company, the quantification of the fair value of the redeemable preferred shares is not determinable at a reasonable cost.
21.	Subsequent event
	On July 18, 2007, the Company entered into an amendment to the shareholder credit loan (Note 13) for an additional $650,000 and subject to the same conditions as the original loan.

Page 18 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

22.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP
	These consolidated financial statements are prepared in accordance with Canadian GAAP, which differ in certain material respects from United States GAAP (US GAAP). Material differences between Canadian and US GAAP and the effect on net loss and balance sheet amounts are presented in the following tables with an explanation of the adjustments.
	Reconciliation of consolidated net loss and comprehensive loss

	2006			2005
	$			$
Net loss — Canadian GAAP		(7,595,420	)		(9,043,749	)
Adjustments
Increase in redemption value of Preferred shares (a)		1,733,303			1,604,909
Amortization of deferred charges (a)		56,225			56,225
Net loss — US GAAP		(5,805,892	)		(7,382,615	)

Statement of comprehensive loss

Comprehensive loss is the same as net loss and accordingly, a statement of comprehensive loss is not presented.

Page 19 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

22.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP (continued)
	Reconciliation of reported amounts on consolidated balance sheets
	Reconciliation of material selected balance sheet accounts between Canadian and US GAAP are as follows:

	Canadian						US
	GAAP			Adjustments			GAAP
	$			$			$
As at December 31, 2006
Liabilities
Preferred shares (a)		23,399,582			(23,399,582	)		—
Redeemable preferred shares (a)		—			23,118,455			23,118,455
Shareholders deficiency (a)		(23,165,398	)		204,519			(22,960,879	)
As at December 31, 2005
Liabilities
Preferred shares (a)		21,666,279			(21,666,279	)		—
Redeemable preferred shares (a)		—			21,385,152			21,385,152
Shareholders deficiency (a)		(15,569,978	)		148,294			(15,421,684	)

Page 20 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

22.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP (continued)
	Reconciliation of reported amounts on consolidated balance sheets (continued)

(a) Convertible redeemable preferred shares

Under Canadian GAAP, the convertible redeemable preferred shares are accounted for as described in Note 10. Under US GAAP, the convertible redeemable preferred shares are accounted for in accordance with FAS 150, “Accounting for certain financial instruments with characteristics of both liabilities and equity”, and are not classified as a liability, but, instead, are presented as a category between liabilities and equity.

The redemption terms of the Preferred shares include an amount equal to 8% of the issue price per annum on a compounded basis calculated from the original issue date. Under Canadian GAAP, the increase in the preferred share redemption value has been included in the financial expenses of the year. Under US GAAP, in accordance with EITF Topic D-98, “Classification and Measurement of Redeemable Securities”, the increase in redemption value is charged to the deficit and a corresponding amount added to the redeemable preferred shares at each balance sheet date. The amounts charged to deficit amounted to $1,733,303 in 2006 and $1,604,909 in 2005.

The terms of the convertible redeemable preferred shares were examined to determine if any of the terms created a beneficial conversion feature at the date of issuance. The terms did not result in the recognition of any such beneficial conversion feature.

In addition, under Canadian GAAP, costs incurred in connection with the issuance of the preferred shares were deferred and amortized as a charge to earnings, using the straight-line method over a period of five years. Under US GAAP, such costs are recorded as a reduction of the share issuance proceeds.

(b) Marketable securities

Under SFAS 115, Accounting for Certain Investments in Debt and Equity Securities, the Company’s investments in securities would be classified as available-for-sale securities and are carried at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings under US GAAP and reported as a net amount in accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity on the balance sheet, until realized. Upon realization, comprehensive income (loss) would be adjusted to reflect the reclassification of the gains or losses into income (loss). As at December 31, 2006 and 2005, the difference between the carrying value and fair value of the securities was nominal.

Page 21 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

22.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP (continued)
	Reconciliation of reported amounts on consolidated balance sheets (continued)

(c) Shareholder credit loan

Under Canadian GAAP, the convertible term loan is accounted for as described in Note 13, Under US GAAP the terms and conditions of the convertible term loan were examined to determine if a beneficial conversion feature was created at the date of issuance. These terms and conditions did not result in the recognition of any such beneficial conversion feature.

(d) Research and development

Under Canadian GAAP, investment tax credits on research and development are deducted from research and development expense. Under US GAAP, non-refundable Canadian federal investment tax credits are included in the provision for income taxes. The Company does not recognize benefits of federal investment tax credits carry forwards and, as such, no reconciling item between Canadian and US GAAP is required for the 2005 and 2006 periods.

(e) Stock-based compensation

Under Canadian GAAP, the Company accounts for Stock-based compensation to employees and directors as described in Note 15. Under US GAAP, the Company had elected, as permitted, to account for stock-based compensation in accordance with Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees”, and related interpretations in accounting for employee stock options, rather than the alternative fair value accounting as allowed by Statement of Financial Accounting Standards (SFAS”) No. 123, “Accounting for Stock-Based Compensation”.

On January 1, 2006, the Company adopted SFAS 123R, “Share-Based Payment”, using the modified prospective basis approach and using the calculated value method allowed for certain non-public entities. As the Company had previously used the minimum value method under the provisions of APB No. 25, the Company is now required to adopt the provisions of SFAS 123R prospectively for any newly issued, modified or settled awards after the date of initial adoption whereby the Company recognizes a compensation expense for these options. The Company is also required to continue to provide proforma disclosure on any portion of awards outstanding at the date of initial application of the new standard. As the compensation expense was nominal, no proforma disclosure is made.

Page 22 of 23

TIMESPRING SOFTWARE CORPORATION/CORPORATION
DE LOGICIELS TIMESPRING
Notes to the consolidated financial statements
years ended December 31, 2006 and 2005
In Canadian dollars

22.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP (continued)
	Reconciliation of reported amounts on consolidated balance sheets (continued)

(e) Stock-based compensation (continued)

The fair value of the stock options granted during the years ended December 31, 2006 and 2005 had nominal values and has been determined using the Black-Scholes option pricing model, with the following assumptions:

	2006			2005
Expected dividend yield		0.0	%		0.0	%
Expected volatility		100.0	%		0.0	%
Risk-free interest rate		4.0	%		4.7	%
Weighted average expected life		10years			10years

The weighted average fair value per option granted for all options as of December 31, 2006 and 2005 is nominal.

Page 23 of 23

EX-99.02

Exhibit 99.2

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Consolidated unaudited statement of operations
Nine months ended September 30, 2007 and 2006
In Canadian dollars

	Nine months			Nine Months
	Ended			Ended
	Sept 30,			Sept. 30,
	2007			2006
	$			$
Revenue
Licences		171,066			344,613
Maintenance		121,096			63,541
Service		10,453			36,061
		302,615			444,215
Cost of sales		29,758			55,617
		272,857			388,598
Expenses
Research and development, net (Note 4)		921,387			1,388,322
Selling, general and administrative		2,712,022			3,215,130
Financial (Note 10)		2,275,713			1,497,158
Amortization — capital assets		159,156			166,176
		6,068,278			6,266,786
Operating loss		(5,795,421	)		(5,878,188	)
Interest income		35,907			89,936
Net loss		(5,759,514	)		(5,788,252	)

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Consolidated unaudited statement of deficit
In Canadian dollars

	Nine Months ended			Year Ended
	September 30, 2007			Dec. 31, 2006
	$			$
Balance, beginning of year		(25,861,487	)		(18,266,067	)
Net loss		(5,759,514	)		(7,595,420	)
Balance, end of year		(31,621,001	)		(25,861,487	)

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Consolidated unaudited balance sheet
as at September 30, 2007
In Canadian dollars

	September 30, 2007			Dec. 31, 2006
	$
Assets
Current assets
Cash		389,729			152,757
Marketable securities		—			3,185,614
Accounts receivable, net		199,129			225,927
Research and development tax credits receivable (Note 4)		805,775			1,397,674
Prepaid expenses		31,552			49,120
		1,426,185			5,011,092
Capital assets, net		467,078			616,016
Deferred charges		34,439			76,608
Patents		1			1
		1,927,703			5,703,717
Liabilities
Current liabilities
Bank loan and overdraft (Note 5)		—			724,074
Shareholders credit loan (Note 8)		5,467,172			4,128,768
Accounts payable and accrued liabilities		208,042			295,314
Deferred revenue		138,852			91,443
Current portion of obligation under capital lease		42,744			42,744
Loans payable (Note 7)		137,205			27,045
		5,994,015			5,309,388
Redeemable preferred shares (Note 6)		24,841,583			23,399,582
Loans payable (Note 7)		—			110,160
Long-term portion of obligation under capital lease		17,017			49,985
		30,852,615			28,869,115
Shareholders’ deficiency
Capital stock (Note 9)		2,696,089			2,696,089
Deficit		(31,621,001	)		(25,861,487	)
		(28,924,912	)		(23,165,398	)
		1,927,703			5,703,717

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Consolidated Unaudited statement of cash flows
Nine months ended September 30, 2007
In Canadian dollars

	Nine months			Nine Months
	Ended			Ended
	Sept 30,			Sept. 30,
	2007			2006
	$			$
Operating activities
Net loss		(5,759,514	)		(5,788,252	)
Items not affecting cash:
Amortization		201,325			208,345
Interest accrued on redeemable preferred shares		1,442,001			1,299,977
Interest accrued on Shareholder’s Credit Loan		688,404			—
		(3,427,784	)		(4,279,930	)
Decrease (increase) in accounts receivable		26,798			(127,357	)
Decrease in research and development tax credits receivable		591,899			512,119
Decrease (increase) in prepaid expenses		17,568			(39,909	)
Increase (decrease) in other current liabilities		(39,863	)		69,503
Cash used in operating activities		(2,831,382	)		(3,865,574	)
Investing activities
Proceeds from disposal of marketable securities		3,185,614			2,826,523
Acquisition of capital assets		(10,218	)		(66,776	)
Cash (used in) provided by investing activities		3,175,396			2,759,747
Financing activities
Issuance of bank loan		495,000			1,829,930
Repayment of bank loan		(1,219,074	)		(720,000	)
Issuance of Shareholders Credit Loan		650,000			—
Repayment of obligations under capital lease		(32,968	)		(15,090	)
Cash provided by financing activities		(107,042	)		1,094,840
Increase (decrease) in cash		236,972			(10,987	)
Cash, beginning of year		152,757			435,840
Cash, end of year		389,729			424,853

See Note 11 for supplementary cash flow information.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

1.	Going concern
	The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of operations. Several adverse conditions and events cast substantial doubt upon the validity of this assumption. The Company has incurred significant losses during 2007, 2006, 2005 and prior periods and has incurred significant costs related to developing its general and administrative infrastructure, developing technology, recruiting personnel and establishing a market for the Company’s products and services. The Company has funded such costs with investment capital and related party debt. As of September 30, 2007, the Company has net current liabilities of $4,567,830 and a shareholders’ deficiency of $28,924,912. In addition, the Company’s bank loan is subject to various financial covenants which, at September 30, 2007, were not respected.
	These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, the amount and classification of liabilities and the reported revenue and expenses that would be necessary should the Company be unable to continue as a going concern.
	The Company’s ability to continue as a going concern is dependent upon, amongst other things, the attainment of a satisfactory sales level, attaining profitable operations, its ability to generate sufficient cash from operations in the future and the continued financial support of its shareholders and creditors. These matters are dependent on a number of items outside the Company’s control and there is significant uncertainty about the Company’s ability to successfully conclude on these matters. As such, the realization of assets and discharge of liabilities in the ordinary course of business is subject to significant uncertainty.
	Management’s plans with respect to addressing the going concern uncertainty include the following:

1.	Restructure the operations in order to reduce the Company’s operating cash requirements;
2.	Renew existing bank loans and seek additional financing to contribute to the funding of its expansion projects; and
3.	Continue financial support of certain shareholders.

Management believes that with the above plans and continued financial support of its creditors and shareholders, the Company will be able to continue to operate as a going concern. There can, however, be no assurance that the plans described above will result in sufficient funds being generated.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

2.	Description of the business
	Timespring Software Corporation (the “Company”) is incorporated under the Canada Business Corporations Act and is engaged in providing High Data Availability and Disaster Recovery solutions.
3.	Summary of significant accounting policies
	Financial statement presentation
	The accompanying consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) assuming the Company is a going concern (see Note 1). They include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated upon consolidation.
	The interim consolidated financial statements for the nine months ended September 30, 2007 and 2006 are unaudited and include all adjustments that management of Timespring Software Corporation (the “Company”) considers necessary for a fair presentation of the financial position, results of operations and cash flows.
	The disclosures provided for these interim periods do not conform in all respects to the requirements of Canadian generally accepted accounting principles (“GAAP”) for the annual consolidated financial statements; therefore, the interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements of the Company for the years ended December 31, 2006 and 2005, respectively. These interim consolidated financial statements have been prepared using the same accounting policies and methods of their application as the annual consolidated financial statements for the years ended December 31, 2006 and 2005, respectively. The results for the nine months ended September 30, 2007 are not necessarily indicative of the results to be expected for any subsequent period or for the fiscal year ended December 31, 2007.
	Future accounting changes
	In April 2005, the Canadian Institute of Chartered Accountants (“CICA”) issued Section 1530, Comprehensive Income; Section 3251, Equity; Section 3855, Financial Instruments — Recognition and Measurement; and Section 3865, Hedges. All these Sections will be applicable to financial statements relating to fiscal years beginning on or after October 1, 2007. Accordingly, the Company will adopt the new standards for its fiscal year beginning January 1, 2008. These standards provide guidance on: the recognition, measurement, classification and presentation of financial assets and liabilities including financial and non-financial derivative instruments and embedded derivatives; reporting items in other comprehensive income; hedge accounting criteria and methodologies and presentation of equity.
	In December 2006, the CICA issues Section 3862, Financial Instruments - Disclosures; Section 3863, Financial Instruments - Presentation; and Section 1535, Capital Disclosures. All three Sections will be applicable to financial statements relating to fiscal years beginning on or after October 1, 2007. Accordingly, the Company will adopt the new standards for its fiscal year beginning January 1, 2008. Section 3862 on financial instruments disclosures, requires the disclosure of information about a) the significance of financial instruments, for the entity’s financial position and performance and b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and ho the entity manages those risks. Section 3863 on the presentation of financial instruments establishes standards for the presentation of financial instruments and non-financial derivatives. Section 1535 on capital disclosures requires the disclosure of information about an entity’s objectives, policies and processes for managing capital.
	The Company does not expect that the adoption of these new Sections will have a material impact on its financial statements.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

4.

Research and development tax credits receivable

Research and development expenses have been reduced by investment tax credits of $939,179 as of September 30, 2007 ($919,164 as of September 30, 2006). The amounts recorded by the Company are subject to review and approval by the tax authorities and the amounts granted may differ from those accounted for by the Company. Should such a difference arise resulting from assessment by the tax authorities, the amount would be recorded in earnings in the year of the assessment.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

5.	Bank loan
	The Company has a credit facility with maximum borrowings of $1,250,000, due on demand, to finance up to 75% of refundable research and development tax credits, bearing interest at a Canadian chartered bank’s prime rate plus 1.75% per annum payable monthly. As at September 30, 2007, the facility was not utilized, and as at December 31, 2006, $625,000 was unused. The facility is secured by a $1,500,000 movable hypothec, which provides for a charge on the Company’s present and future assets, including intellectual property, and by a certificate of guarantee from Garantie Québec as described below. The credit facility was renewed August 23, 2007 for an amount of $873,000.
	The credit facility is subject to various financial covenants of which, at September 30, 2007, the Company was not in compliance with. As a result, the availability of the credit facility is limited.
	Garantie Québec has provided a guarantee of 80% of the bank loan to a maximum of $1,000,000. The guarantee expires on June 30, 2008. The agreement contains various covenants that require the Company to maintain certain financial ratios as defined by Garantie Québec. As at September 30, 2007, the Company was not in compliance with these covenants.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

6.	Redeemable preferred shares
	In accordance with the accounting recommendations of Section 3860 of the Canadian Institute of Chartered Accountants’ Handbook, “Financial Instruments”, the preferred shares have been presented in these financial statements based on their substance. Although their legal form is that of share capital, in substance these shares are liabilities because they provide for redemption, at the option of the holder, for a fixed amount.
	The holders of preferred shares have the option to require the Company to redeem all or part of the preferred shares at any time on or after December 17, 2009 for a consideration equal to the issue price paid for such shares, plus declared, accrued and unpaid dividends, plus an amount equal to 8% of the issue price for such preferred shares per annum on a compounded basis calculated from the original issue date. The increase in the preferred share redemption value has been included in the financial expenses for the year.
	Should the Company not pay the redemption amount within 120 days after the demand for redemption, the Company is obligated to pay an additional 20% per annum from the date of issuance of the shares.

	September 30, 2007
	$
6,900,261 Class A preferred shares		20,000,000
Increase in redemption value		4,841,583
		24,841,583

See Note 9 for additional characteristics of the preferred shares.

On March 31, 2006, the Company consolidated its shares on a 42-to-1 basis. All share information is presented as if the share consolidation took place on January 1, 2006.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

7.	Loans payable
	The loans payable include an amount of $110,160 from a beneficial shareholder of the Company, which bears interest at a Canadian chartered bank’s prime rate plus 1% and is subrogated in favour of the Company’s bank, carrying a maximum term of five years to June 30, 2008 with any prior repayments to be made out of “First Available Funds”, which has been defined as the funds generated from the revenue of the Company available for the payment of its indebtedness after operating expenses, capital expenditures, debt service and taxes.
	The balance of the loans payable, in the amount of $27,045, is due to a former employee, is non-interest bearing and without specific terms of repayment.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

8.	Shareholders credit loan
	The loan is due on demand, upon the agreement of the majority of the lenders, bears interest at 20% per annum compounded monthly and is secured by a movable hypothec covering the universality of the Company’s assets. The loan is also convertible into Class A preferred shares at $2.89842 per share at the option of the lenders at any time. Upon agreement of the majority of the lenders, all of the outstanding loans will be converted at the then applicable loan conversion price.
	On July 18, 2007, the Company entered into an amendment to the shareholder credit loan for an additional $650,000 and subject to the same conditions as the original loan.
9.	Capital stock
	On March 31, 2006, the Company consolidated is shares on a 42-to-1 basis. All share information is presented as if the share consolidation took place on January 1, 2006.
	Authorized

The following authorized classes of shares are unlimited in number and without par value:

a) Class A preferred shares

Voting, providing for a non-cumulative dividend to be determined at the discretion of the directors, convertible into common shares based on a formula, see Note 10.

b) Common shares

Voting and providing for a non-cumulative dividend to be determined by the directors

	September 30, 2007
	$
Issued and fully paid 1,794,902 common shares		2,696,089

The Class A preferred shares are recorded as long-term debt as described in Note 6.

Stock-based compensation plan

The Company adopted a stock option plan for officers, directors, key employees and service providers of the Company. Options granted under this plan generally expire ten years after the date of the grant and vest over a period of four years. The plan provides that a maximum of 1,393,774 common shares may be optioned under the stock option plan.

Stock-based compensation plan (continued)

There were no options granted during the nine months ended September 30, 2007. The fair value of the stock options granted during the nine months ended September 30, 2006 had nominal value determined using the Black-Scholes option pricing model, with the following assumptions:

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

	Nine Months
	ended
	Sept 30, 2006
Expected dividend yield		0.0	%
Expected volatility		100.0	%
Risk-free interest rate		3.98	%
Weighted average expected life	10 years

The Black-Scholes option pricing model requires the input of subjective assumptions, including the changes in the subjective input assumptions that can materially affect the fair value estimate, and, therefore, the Black-Scholes model does not necessarily provide a reliable single measure of the fair value of the Company’s share purchase options.

	2007					2006
				Weighted					Weighted
				average					average
				exercise					exercise
	Number			price		Number			price
				$					$
Options outstanding, beginning of period		1,290,831			0.84		1,257,359			0.84
Granted during the period		—			0.84		57,390			0.84
Cancelled		(732,338	)		0.84		(23,918	)		0.84
Exercised		—			0.84		—			0.84
		558,493			0.84		1,290,831			0.84

The Company has 558,493 options outstanding as at September 30, 2007 with a weighted average remaining life of 6.64 years, of which 443,454 were exercisable at a price of $0.84.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

10. Financial expenses

	Nine Months ended Sept 30,
	2007		2006
	$		$
Interest and bank charges		103,139		155,012
Interest on preferred shares		1,442,001		1,299,977
Interest on Shareholders Credit Loan		688,404		—
Amortization — deferred charges		42,169		42,169
		2,275,713		1,497,158

11. Supplementary cash flow information

	Nine Months ended Sept 30,
	2007		2006
	$		$
Cash paid for interest		58,709		49,497
Capital assets acquired through capital leases		—		54,063

12.	Related party transactions
	During the nine months ended September 30, 2007 and 2006, the Company had transactions with related parties in the normal course of operations. These transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

a) Consulting fees were charged approximately as follows:

	Nine Months ended Sept 30,
	2007		2006
	$		$
i) Beneficial shareholders and companies owned by beneficial shareholders (owning between 1 and 8%)		—		25,766
ii) Shareholders’ director		86,500		26,435

b) Rent of approximately $99,307 for the nine months ended September 30, 2007 ($98,375 for the nine months ended September 30, 2006) was charged by a beneficial shareholder of the Company as a sublet of property at the same price the shareholder is paying to an arm’s length party.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

13.	Reconciliation of amounts reported in accordance with Canadian GAAP to United States GAAP
	These consolidated financial statements are prepared in accordance with Canadian GAAP, which differ in certain material respects from United States GAAP (US GAAP). While the information is not a comprehensive summary of all differences between Canadian and US GAAP, other differences are considered unlikely to have a significant impact on the consolidated net loss, and shareholders’ deficiency of the Company.
	All material differences between Canadian and US GAAP and the effect on net loss, and balance sheet amounts are presented in the following tables with an explanation of the adjustments.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

Reconciliation of consolidated net loss and comprehensive loss

	Nine Months ended Sept 30,
	2007			2006
	$			$
Net loss — Canadian GAAP		(5,759,514	)		(5,788,352	)
Adjustments
Increase in redemption value of Preferred shares (a)		1,442,001			1,299,977
Amortization of deferred charges (a)		42,169			42,169
Net loss — US GAAP		(4,275,344	)		(4,446,206	)

Statement of comprehensive loss

Comprehensive loss is the same as net loss and accordingly, a statement of comprehensive loss is not presented.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

Reconciliation of reported amounts on consolidated balance sheets

Reconciliation of material selected balance sheet accounts between Canadian and US GAAP are as follows:

	Canadian						US
	GAAP			Adjustments			GAAP
	$			$			$
As at September 30, 2007
Liabilities
Preferred shares (a)		24,841,583			(24,841,583	)		—
Redeemable preferred shares (a)		—			24,560,456			24,560,456
Shareholders deficiency (a)		(28,924,912	)		246,688			(28,678,224	)

(a)	Convertible redeemable preferred shares
	Under Canadian GAAP, the convertible redeemable preferred shares are accounted for as described in Note 6. Under US GAAP, the convertible redeemable preferred shares are accounted for in accordance with FAS 150, “Accounting for certain financial instruments with characteristics of both liabilities and equity”, and are not classified as a liability, but, instead, are presented as a category between liabilities and equity.
	The redemption terms of the Preferred shares include an amount equal to 8% of the issue price per annum on a compounded basis calculated from the original issue date. Under Canadian GAAP, the increase in the preferred share redemption value has been included in the financial expenses of the year. Under US GAAP, in accordance with EITF D-98, “Classification and Measurement of Redeemable Securities”, the increase in redemption value is charged to the deficit and a corresponding amount added to the redeemable preferred shares at each balance sheet date. The amounts charged to deficit amounted to $1,442,001 and $1,299,977 during the nine months ended as of September 30, 2007 and 2006, respectively.
	The terms of the convertible redeemable preferred shares were examined to determine if any of the terms created an embedded derivative and/or beneficial conversion feature. The features did not result in the recognition of any such embedded derivatives.
	In addition, under Canadian GAAP, costs incurred in connection with the issuance of the preferred shares were deferred and amortized as a charge to earnings, using the straight-line method over a period of five years. Under US GAAP, such costs are recorded as a reduction of the share issuance proceeds.
(b)	Marketable securities
	Under SFAS 115, Accounting for Certain Investments in Debt and Equity Securities, the Company’s investments in securities would be classified as available-for-sale securities and

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

	are carried at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings under US GAAP and reported as a net amount in accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity on the balance sheet, until realized. Upon realization, comprehensive income (loss) would be adjusted to reflect the reclassification of the gains or losses into income (loss). As at December 31, 2006, the difference between the carrying value and fair value of the securities was nominal and the investments were sold during the period.
(c)	Shareholder credit loan
	Under Canadian GAAP, the convertible term loan is accounted for as described in Note 13, Under US GAAP the terms and conditions of the convertible term loan were examined to determine if a beneficial conversion feature was created at the date of issuance. These terms and conditions did not result in the recognition of any such beneficial conversion feature.
(d)	Research and development
	Under Canadian GAAP, investment tax credits on research and development are deducted from research and development expense. Under US GAAP, non-refundable Canadian federal investment tax credits are included in the provision for income taxes. The Company does not recognize benefits of federal investment tax credits carry forwards and, as such, no reconciling item between Canadian and US GAAP is required for the nine months ended September 30, 2007 and 2006.
(e)	Stock-based compensation
	Under Canadian GAAP, the Company accounts for Stock-based compensation to employees and directors as described in Note 15. Under US GAAP, the Company had elected, as permitted, to account for stock-based compensation in accordance with Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees”, and related interpretations in accounting for employee stock options, rather than the alternative fair value accounting as allowed by Statement of Financial Accounting Standards (SFAS”) No. 123, “Accounting for Stock-Based Compensation”.
	On January 1, 2006, the Company adopted SFAS 123R, “Share-Based Payment”, using the modified prospective basis approach and using the calculated value method allowed for certain non-public entities. As the Company had previously used the minimum value method under the provisions of APB No. 25, the Company is now required to adopt the provisions of SFAS 123R prospectively for any newly issued, modified or settled awards after the date of initial adoption whereby the Company recognizes a compensation expense for these options. The Company is also required to continue to provide proforma disclosure on any portion of awards outstanding at the date of initial application of the new standard. As the compensation expense was nominal, no proforma disclosure is made.

TIMESPRING SOFTWARE CORPORATION/CORPORATION DE LOGICIELS TIMESPRING
Notes to the unaudited consolidated financial statements
Nine months ended September 30, 2007
In Canadian dollars

There were no options granted for the nine months ended September 30, 2007. The fair value of the stock options granted during the nine months ended September 30, 2006 had nominal values determined using the Black-Scholes option pricing model, with the following assumptions:

	Nine Months
	ended
	Sept 30, 2006
Expected dividend yield		0.0	%
Expected volatility		100	%
Risk-free interest rate		3.98	%
Weighted average expected life	10 years

The weighted average fair value per option granted for all options as of September 30, 2007 and 2006 is nominal.

EX-99.03

Exhibit 99.3

DOUBLE-TAKE SOFTWARE, INC.
UNAUDITED PRO FORMA
Condensed Consolidated Financial Statements

On December 24, 2007, Double-Take Software acquired 100% of the shares outstanding of TimeSpring Software Corporation, which is now known as Double-Take Canada. The purchase price paid in cash was approximately $8.3 million plus transaction costs and working capital adjustments which totaled approximately $1.5 million. A portion of the amount paid to the selling shareholders will be held in escrow.

The following represents preliminary allocation of the purchase price of Double-Take Canada. The acquisition adjustments are based on currently available information and upon certain assumptions and estimates that the Company believes are reasonable. The acquisition of Double-Take Canada was accounted for using the purchase method of accounting, and the assets acquired and liabilities assumed were accounted for at their fair market values at the acquisition date based on preliminary estimates. The purchase price allocation is preliminary and subject to adjustment based on the preparation of and review by the selling shareholders of the closing balance sheet of Double-Take Canada within 90 days of the closing of the transaction.

The details of the purchase price allocation are as follows (in thousands):

Purchase price paid to selling shareholders	$	8,000
Operating expense reimbursement paid to selling shareholders		339
Transaction costs		620
Working capital acquired		818
Total purchase price	$	9,777

The estimated fair value of identifiable assets and liabilities on the date of the acquisition are as follows (in thousands):

Accounts receivable	$	60
Prepaid expenses and other current assets		1,215
Bank overdraft		(149	)
Accounts payable		(25	)
Accrued expenses		(113	)
Other liabilities		(92	)
Deferred revenue		(36	)
Property and equipment		453
Technology related intangibles (5 year life)		1,936
Net assets acquired	$	3,249
Excess of purchase price over net assets acquired (goodwill)	$	6,528

The following pro forma financial data has been prepared by the Company to give effect to our acquisition of Double-Take Canada. The pro forma adjustments, which are based upon available information and upon assumptions that the Company believes are reasonable, are described in the accompanying notes.

The unaudited pro forma balance sheet at September 30, 2007 has been prepared to give effect to the acquisition of Double-Take Canada as if it had occurred on September 30, 2007.

The unaudited pro forma statements of operations combines the statement of operations with Double-Take Canada’s for the year ended December 31, 2006 and for the nine month period ended September 30, 2007, to reflect the acquisition of Double-Take Canada as if the acquisition had been completed and was effective as of January 1, 2006 and January 1, 2007, respectively.

The financial effects to the Company of the acquisition of Double-Take Canada as presented in the pro forma financial data are not necessarily indicative of the consolidated financial position or results of operations the Company would have obtained if the Double-Take Canada acquisition had actually occurred on the dates described above, nor are they necessarily indicative of the results of future operations. The pro forma financial data should be read in conjunction with the accompanying notes, which are an integral part of the pro forma information, and the historical financial statement of Double-Take Software, Inc. and Double-Take Canada and the related notes.

Double-Take Software, Inc. — TimeSpring
Balance Sheet
September 30, 2007
(unaudited)

							Pro Forma
				Double-			as Adjusted
	Double-			Take			for the
	Take (1)			Canada (2)			Acquistion			Pro Forma
(in thousands of US $)	(historical)
ASSETS
Current assets:
Cash and cash equivalents		38,845			391			(9,157	) 3		30,079
Short term investments		28,561			—						28,561
Accounts receivable, net of allowance for doubtful accounts		16,068			200						16,268
Prepaid expenses and other current assets		2,751			841						3,592
Deferred tax assets		2,849			—						2,849
Total current assets		89,074			1,432			(9,157	)		81,349
Property and equipment, net		3,274			469						3,743
Goodwill		3,059			—			6,528	4		9,587
Intangible Asset — Customer relationship		1,653			—						1,653
Intangible Asset — Marketing relationship		1,655			—						1,655
Intangible Asset — Technology Related		—			—			1,936	4		1,936
Other assets		150			—						150
Total assets		98,865			1,901			(693	)		100,073
LIABILITIES, REDEEMABLE SHARES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		1,273			147						1,420
Accrued expenses		4,425			105			800	3, 5		5,330
Other liabilities		360			—						360
Deferred revenue		21,284			139						21,423
Total current liabilities		27,342			391			800			28,533
Long-term deferred revenue		4,463			—						4,463
Long-term deferred rent		306			—						306
Loans payable		—			5,627			(5,627	) 6		—
Long-term capital lease obligation		3			17						20
Total long-term liabilities		4,772			5,644			(5,627	)		4,789
Total liabilities		32,114			6,035			(4,827	)		33,322
Redeemable preferred shares		—			24,662			(24,662	) 7		—
Stockholders’ equity (deficit)
Common Stock		22			2,707			(2,707	) 7		22
Additional paid in capital		146,313			—						146,313
Cumulative translation adjustment		(5	)		—						(5	)
Accumulated deficit		(79,579	)		(31,503	)		31,503	7		(79,579	)
Total stockholders’ equity (deficit)		66,751			(28,796	)		28,796			66,751
Total liabilities, redeemable shares and stockholders’ equity (deficit)		98,865			1,901			(693	)		100,073

NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(dollars in thousands, except where noted otherwise)

(1)	Derived from the unaudited balance sheet for Double-Take Software, Inc. at September 30, 2007.
(2)	Derived from the unaudited consolidated balance sheet for Double-Take Canada at September 30, 2007 and converted from Canadian dollars to US dollars using the $/Cdn exchange rate on September 30, 2007 of 0.9959. The balance sheet was adjusted to conform to US GAAP by reducing other assets by $34, redeemable preferred stock by $281 and accumulated deficit by $247 to net costs associated with redeemable preferred stock.
(3)	The components of the pro forma adjustment to cash are as follows:

Purchase price paid to selling shareholders	$	8,000
Operating expense reimbursement paid to selling shareholders		339
Working capital acquired		818
Cash paid to selling shareholders at closing	$	9,157
Transaction costs not accrued on Double-Take Software’s balance sheet as of September 30 and not paid at closing (recorded as accrued expense instead of reducing cash)	$	620

(4)	Intangible assets resulting from the acquisition of Double-Take Canada.
(5)	Accrual for acquisition costs incurred after September 30, 2007.
(6)	Elimination of debt on Double-Take Canada books as of September 30, 2007. All debt was paid off by the selling shareholders concurrent with the acquisition of Double-Take Canada by Double-Take Software, Inc.
(7)	Adjustments to eliminate the equity related to the Double-Take Canada equity.

Double-Take Software Inc.
Pro Forma Consolidated Statements of Operations
Year ended December 31, 2006
(unaudited)

				Double-			Pro Forma as
	Double-			Take			Adjusted for the
(in thousands of US $, except share and per share amounts)	Take (1)			Canada (2)			Acquistion			Pro Forma
Revenue:
Software licenses		38,418			400						38,818
Maintenance and professional services		22,422			133						22,555
Total Revenue		60,840			533			—			61,373
Cost of Revenue:
Software licenses		1,355			55						1,410
Maintenance and professional services		6,193			—						6,193
Total Cost of Revenue		7,548			55			—			7,603
Gross profit		53,292			478			—			53,770
Operating Expenses:
Sales and marketing		22,211			2,397						24,608
Research and development		10,679			1,190						11,869
General and administrative		11,824			1,672						13,496
Depreciation and amortization		1,613			202			387	3		2,202
Total Operating Expenses		46,327			5,461			387			52,175
Income (loss) from Operations		6,965			(4,983	)		(387	)		1,595
Interest Income		319			118						437
Interest Expense		(91	)		(255	)		237	4		(109	)
Foreign Exchange gains (losses)		56			—			—			56
Income (loss) before income taxes		7,249			(5,120	)		(150	)		1,979
Income tax expense (benefit)		494			—						(494	)
Net income (loss)		6,755			(5,120	)		(150	)		1,485
Accretion on redeemable shares		(4,496	)		(1,528	)		1,528	5		(4,496	)
Dividends on redeemable shares		(2,830	)								(2,830	)
Net income (loss) attributable to shareholders		(571	)		(6,648	)		1,378			(5,841	)
Net Loss per share attributable to common stock holders
Basic		(0.13	)								(1.36	)
Diluted		(0.13	)								(1.36	)
Weighted average number of shares used in per share amounts:
Basic and diluted		4,306									4,306
Diluted		4,306									4,306

Double-Take Software Inc.
Pro Forma Consolidated Statements of Operations
Nine months ended September 30, 2007
(unaudited)

				Double-			Pro Forma as
	Double-			Take			Adjusted for the
(in thousands of US $, except share and per share amounts)	Take (1)			Canada (2)			Acquistion			Pro Forma
Revenue:
Software licenses		34,993			155						35,148
Maintenance and professional services		24,251			119						24,370
Total Revenue		59,244			274			—			59,518
Cost of Revenue:
Software licenses		216			27						243
Maintenance and professional services		5,792			—						5,792
Total Cost of Revenue		6,008			27			—			6,035
Gross profit		53,236			247			—			53,483
Operating Expenses:
Sales and marketing		20,683			1,358						22,041
Research and development		8,756			835						9,591
General and administrative		11,007			1,095						12,102
Depreciation and amortization		1,707			144			290	3		2,141
Total Operating Expenses		42,153			3,432			290			45,875
Income (loss) from Operations		11,083			(3,185	)		(290	)		7,608
Interest Income		2,213			33						2,246
Interest Expense		(39	)		(716	)		700	4		(55	)
Foreign Exchange gains (losses)		(50	)		—						(50	)
Income (loss) before income taxes		13,207			(3,868	)		410			9,749
Income tax expense (benefit)		(531	)		2						(529	)
Net income (loss)		13,738			(3,870	)		410			10,278
Accretion on redeemable shares					(1,305	)		1,305	5		—
Net income (loss) attributable to shareholders		13,738			(5,175	)		1,715			10,278
Net Loss per share
Basic		0.65									0.49
Diluted		0.60									0.45
Weighted average number of shares used in per share amounts:
Basic		21,152									21,152
Diluted		22,950									22,950

NOTES TO UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(US dollars in thousands, except where noted otherwise)

(1)

Derived from the historical audited statements of operations for Double Take for the year ended December 31, 2006 and the unaudited nine months ended September 30, 2007.

(2)

Derived from the historical audited consolidated statement of operations for Double-Take Canada for the year ended December 31, 2006 and the nine months ended September 30, 2007 and converted from Canadian dollars to US dollars using the $/Cdn average exchange rate of 1.1340 for the year ended December 31, 2006 and 1.1049 for the nine months ended September 30, 2007. See financial statements for the periods ended September 30, 2007 and 2006, and December 31, 2006 and 2005 included as Exhibits 99.02 and 99.01 to this 8-K/A.

The statement of operations for the year ended December 31, 2006 was adjusted to conform to US GAAP as follows:

• Reduce interest expense by $1,733 (Cdn) related to the increase in the redemption value of redeemable preferred shares. This amount is shown below as an increase in capital deficiencies for US GAAP purposes.

• Reduce interest expense by $56 (Cdn) for amortization of deferred charges that are netted against the value of preferred shares for US GAAP purposes.

The unaudited statement of operations for the nine months ended September 30, 2007 was adjusted to conform to US GAAP as follows:

• Reduce interest expense by $1,442 (Cdn) related to the increase in the redemption value of redeemable preferred shares. This amount is shown below as an increase in capital deficiencies for US GAAP purposes.

• Reduce interest expense by $42 (Cdn) for amortization of deferred charges that are offset against the value of preferred shares for US GAAP purposes.

(3) Adjustment to record amortization of the identified intangible asset recorded for the acquisition of Double-Take Canada:

The adjustment for the year ended December 31, 2006 was calculated as follows:

Technology intangible	$	1,936
Estimated life		5
Amortization for year	$	387

The adjustment for the nine month period ending September 30, 2007 was calculated as follows:

Full year amortization	$	387
Multiply by portion of year to amortize		.75
Amortization for nine months	$	290

(4)	Adjustment to eliminate interest expense on bank debt and shareholder debt. This debt was paid in full concurrent with the closing of the acquisition.
(5)	Adjustment to eliminate accretion on the redeemable of preferred shares. These shares were cancelled at the closing of the acquisition.