Edgar Filing: ONLINE VACATION CENTER HOLDINGS CORP

FT378898.DOC;1

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K/A

^{______________}

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 5, 2007

^{______________}

Online Vacation Center Holdings Corp.

(Exact name of registrant as specified in its charter)

^{______________}


Florida	0-32137	65-0701352
(State or other jurisdiction of incorporation)	Commission File Number)	(IRS Employer Identification No.)

1801 N.W. 66th Avenue, Plantation, Florida 33313

(Address of principal executive offices) Zip Code)

(954) 377-6400

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

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 (see General Instruction A.2. below):

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

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

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

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

This report on Form 8-K/A amends the Company’s previously filed Form 8-K on January 11, 2007, respectively.

Item 1.01, Item 2.01 and Item 3.02 Entry Into a Material Definitive Agreement; Completion of Acquisition or Disposition of Assets; Unregistered Sales of Equity Securities

On January 5, 2007, Online Vacation Center Holdings Corp. (the “Company,” “we” or “us”) consummated the acquisition of Dunhill Vacations, Inc., a Fort Lauderdale, Florida travel newsletter provider, pursuant to the terms of an acquisition agreement, dated January 5, 2007 (“ Acquisition Agreement”), by and among the Company, Dunhill Vacations, Inc, and Pat Daly, James DiStefano and Robert Dunhill, three individuals (the “Investors”).

Pursuant to the Dunhill Acquisition Agreement, we purchased and acquired all of the issued and outstanding ownership interests of Dunhill Vacations, Inc. for $250,000 cash and 50,000 restricted shares of our common stock. The shares were issued in a transaction that was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended (“Securities Act”), as a transaction by an issuer not involving a public offering. Each of the Investors is knowledgeable, sophisticated and has access to comprehensive information about us. Each Investor represented his/her intention to acquire the shares for investment only and not with a view to distribute or sell the shares. We placed legends on the certificates stating that the shares were not registered under the Securities Act and set forth the restrictions on their transferability and sale.

The foregoing description of the Dunhill Acquisition Agreement and the transactions consummated thereby is qualified in its entirety by reference to the Dunhill Acquisition Agreement attached as Exhibit 2.1 hereto and the press release attached as Exhibit 99.1 hereto, and incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

The financial statements required under Item 9.01(a) of Dunhill Vacations, Inc., are attached to this report.

(b)

Pro forma Financial Information.

Pro forma financial information at December 31, 2006 is attached to this report.

(c )

Shell Company Transactions

N/A

(d)

Exhibits.


Exhibit No.		Description
2.1		Acquisition Agreement, dated January 5, 2007, by and among Online Vacation Center Holdings Corp, Dunhill Vacations, Inc., and Pat Daly, James DiStefano and Robert Dunhill (incorporated by reference from Exhibit 2.1 in the Company’s Current Report on Form 8-K filed with the SEC on January 11, 2007).
99.1		Press Release dated January 8, 2007 (incorporated by reference from Exhibit 99.1 in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on January 11, 2007).

SIGNATURES

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

Date: March 21, 2007


	ONLINE VACATION CENTER HOLDINGS CORP.


	BY:	/s/ EDWARD B. RUDNER
		Edward B. Rudner
		Chief Executive Officer, President and Chief Financial Officer

Item 9.01(a) Financial Statements of the Business Acquired

DUNHILL VACATIONS, INC.

TABLE OF CONTENTS


	PAGE



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2


FINANCIAL STATEMENTS

Balance Sheets	F-3

Statements of Operations	F-4

Statements of Changes in Stockholders’ Equity	F-5

Statements of Cash Flows	F-6

Notes to Financial Statements	F-7-11

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Online Vacation Holdings Corp. and Subsidiaries

We have audited the accompanying balance sheets of Dunhill Vacations, Inc. as of December 31, 2006 and 2005 and the related statements of operations, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about 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 financial statements referred to above present fairly, in all material respects, the financial position of Dunhill Vacations, Inc. for December 31, 2006 and 2005 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

/s/ JEWETT, SCHWARTZ, WOLFE & ASSOCIATES

February 21, 2007

Hollywood, Florida

F-2

DUNHILL VACATIONS, INC.

BALANCE SHEETS

DECEMBER 31,


	2006			2005
ASSETS

Current assets:
Cash	$	4,658		$	56
Accounts receivable		14,800			15,400
		19,458			15,456

Fixed asset, net		2,417			469

Total Assets	$	21,875		$	15,925


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	5,212		$	113

Total Liabilities		5,212			113

Commitments and contingencies

Stockholders' Equity
Common stock: $1.00 par value, 100,000 shares authorized, issued and outstanding		1,000			1,000

Additional paid in capital		24,562			24,562
Accumulated deficit		(8,899	)		(9,750	)

Total stockholders' equity		16,663			15,812

Total Liabilities and Stockholders' Equity	$	21,875		$	15,925

The accompanying Notes to the Financial Statements are an integral part of these statements.

F-3

DUNHILL VACATIONS, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,


	2006		2005



NET REVENUE	$	123,088	$	152,961

EXPENSES:
General and administrative expense		12,168		11,109
Selling and promotional expenses		107,069		73,183
		119,237		84,292

NET INCOME	$	3,851	$	68,669

Weighted average shares outstanding - basic and diluted		1,000		1,000

Earnings per share - basic and diluted	$	3.85	$	68.67

The accompanying Notes to the Financial Statements are an integral part of these statements.

F-4

DUNHILL VACATIONS, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED DECEMBER 31,


	Common Stock
	Shares Issued and Outstanding		$1.00 Par Value		Additional Paid-In Capital		Accumulated Deficit			Total Equity

Balance, January 1, 2005		1,000	$	1,000	$	24,562	$	(21,219	)	$	4,343

Distributions								(57,200	)		(57,200	)
Net income								68,669			68,669

Balance, December 31, 2005		1,000	$	1,000	$	24,562	$	(9,750	)	$	15,812

Distributions								(3,000	)		(3,000	)
Net income								3,851			3,851

Balance, December 31, 2006		1,000	$	1,000	$	24,562	$	(8,899	)	$	16,663

The accompanying Notes to the Financial Statements are an integral part of these statements.

F-5

DUNHILL VACATIONS, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31,


	2006			2005
Cash Flows from Operating Activities:
Net income	$	3,851		$	68,669
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		918			770
Changes in operating assets and liabilities:
Accounts receivable		601			(6,500	)
Accrued liabilities		5,099			(38,534	)
Net cash provided by operating activities		10,469			24,405

Cash Flows from Investing Activities:
Fixed Assets acquired		(2,867	)		(276	)
Net cash used in investing activities		(2867	)		(276	)

Cash Flows from Financing Activities:
Shareholder distributions		(3,000	)		(57,200	)
Net cash used in financing activities		(3,000	)		(57,200	)

Net increase (decrease) in cash		4,602			(33,071	)

Cash, Beginning of Year		56			33,127

Cash, End of Year	$	4,658		$	56

Supplemental Disclosures:
Cash paid for interest	$	—		$	—
Cash paid for taxes	$	—		$	—

The accompanying Notes to the Financial Statements are an integral part of these statements.

F-6

NOTES TO FINANCIAL STATEMENTS

NOTE 1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Dunhill Vacations, Inc. (Company) is a virtual business that involves the publication and distribution of a travel newsletter through Internet email to targeted qualified customers. The content is driven by destination travel promotions offered by its customers, which are marketing companies, travel agencies and cruise lines. The Company has a physical location in South Florida, however, the majority of its activity is conducted via the Internet.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure at the date of the financial statements and during the reporting period. The most significant of the estimates relates to third-party payer contractual allowances and the allowance for doubtful accounts. It is reasonably possible that these estimates will change in the near term due to one or more future confirming events. Accordingly, actual results could differ from those estimates.

Revenue recognition

The Company recognizes revenue in accordance with provision of Staff Accounting Bulletin (SAB) No. 104 “Revenue Recognition in Financial Statements”, which states that revenue is realized or realizable and earned when all of the following criteria are met: Persuasive evidence of an arrangement exists, services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectibility is reasonably assured. Revenue is recognized upon distribution of the travel promotions through Internet email.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At December 31, 2006 and 2005 cash and cash equivalents include cash held in bank.

Accounts Receivable

Accounts receivables principally consist of amounts due from customers. The Company determines its allowance by considering a number of factors, including the length of time trade accounts receivable are past due, the Company’s previous loss history, the specific customer’s current ability to pay its obligation to the Company and the condition of the general economy and the industry as a whole. As of December 31, 2006 and 2005, there were no amounts recorded as doubtful accounts as all balances were fully collectible.

Property and Equipment

Property and equipment are recorded at cost and depreciation is provided using the straight-line method over the estimated useful lives of the assets.

Major replacements and betterments are capitalized and depreciated over the remaining useful lives of the assets.

Income Taxes

The Company is organized as a Sub Chapter S Corporation, as defined by the Internal Revenue Code, whereby the income or loss of the corporation is reported on the personal income tax returns of the stockholders. Accordingly, no income taxes have been provided.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable.

F-7

NOTES TO FINANCIAL STATEMENTS

NOTE 1.

UMMARY OF SIGNIFICANT ACCOUNTING POLICIES- continued

Fair Value of Financial Instruments

The Company’s financial instruments include cash and trade receivables. The carrying amount of these financial instruments has been estimated by management to approximate fair value.

Recent accounting pronouncements that the Company has adopted or will be required to adopt in the future are summarized below.

Accounting Changes and Error Corrections

In May 2005, the Financial Accounting Standards Board (FASB) issued SFAS No. 154, “Accounting Changes and Error Corrections” (SFAS 154), which replaces Accounting Principles Board (APB) Opinion No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion No. 28.” SFAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections, and it establishes retrospective application, or the latest practicable date, as the required method for reporting a change in accounting principle and the reporting of a correction of an error. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2006. The Company will adopt SFAS 154 in the first quarter of fiscal year 2007 and does not expect it to have a material impact on its results of operations and financial condition.

Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 provides guidance for using fair value to measure assets and liabilities. SFAS 157 addresses the requests from investors for expanded disclosure about the extent to which a company measures its assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and will be adopted by the Company in the first quarter of fiscal year 2009. The Company is unable at this time to determine the effect that its adoption of SFAS 157 will have on its results of operations and financial condition.

Accounting for Uncertainty in Income Taxes

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (FIN 48). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The cumulative effects, if any, of applying FIN 48 will be recorded as an adjustment to retained earnings as of the beginning of the period of adoption. FIN 48 is effective for fiscal years beginning after December 15, 2006, and the Company is required to adopt it in the first quarter of fiscal year 2008. The Company is currently evaluating the effect that the adoption of FIN 48 will have on its results of operations and financial condition and is not currently in a position to determine such effects, if any.

Taxes Collected and Remitted to Governmental Authorities

In June 2006, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 06−3 (EITF 06-3), “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation).” EITF 06−3 applies to any tax assessed by a governmental authority that is directly imposed on a revenue producing transaction between a seller and a customer. EITF 06−3 allows companies to present taxes either gross within revenue and expense or net. If taxes subject to this issue are significant, a company is required to disclose its accounting policy for presenting taxes and the amount of such taxes that are recognized on a gross basis. The Company currently presents such taxes net. EITF 06−3 is required to be adopted during the first quarter of fiscal year 2008. These taxes are currently not material to the Company’s financial statements.

F-8

NOTES TO FINANCIAL STATEMENTS

NOTE 1.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- continued

Accounting for Rental Costs Incurred During a Construction Period

In September 2006, the FASB issued FASB Staff Position No. FAS 13-1 (As Amended), “Accounting for Rental Costs Incurred during a Construction Period” (FAS 13-1). This position requires a company to recognize as rental expense the rental costs associated with a ground or building operating lease during a construction period, except for costs associated with projects accounted for under SFAS No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects.” FAS 13-1 is effective for reporting periods beginning after December 15, 2005 and was adopted by the Company in the first quarter of fiscal year 2007. The Company’s adoption of FAS 13-1 will not materially affect its results of operations and financial position.

Considering the Effects of Prior Year Misstatements

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (SAB 108). SAB 108 provides guidance on the consideration of the effects of prior year misstatements in quantifying current year misstatements for the purpose of a materiality assessment. SAB 108 establishes an approach that requires quantification of financial statement errors based on the effects of each on a company’s balance sheet and statement of operations and the related financial statement disclosures. Early application of the guidance in SAB 108 is encouraged in any report for an interim period of the first fiscal year ending after November 15, 2006, and will be adopted by the Company in the first quarter of fiscal year 2007. The Company does not expect the adoption of SAB 108 to have a material impact on its results of operations and financial condition.

FSP FAS 123(R) -5

FASB Staff Position (“FSP”) FAS No. 123(R)-5 was issued on October 10, 2006. The FSP provides that instruments that were originally issued as employee compensation and then modified, and that modification is made to the terms of the instrument solely to reflect an equity restructuring that occurs when the holders are no longer employees, then no change in the recognition or the measurement (due to a change in classification) of those instruments will result if both of the following conditions are met: (a). There is no increase in fair value of the award (or the ratio of intrinsic value to the exercise price of the award is preserved, that is, the holder is made whole), or the antidilution provision is not added to the terms of the award in contemplation of an equity restructuring; and (b). All holders of the same class of equity instruments (for example, stock options) are treated in the same manner.

The provisions in this FSP shall be applied in the first reporting period beginning after the date the FSP is posted to the FASB website. The Company does not expect the adoption of FSP FAS 123(R)-5 to have a material impact on its consolidated results of operations and financial condition.

NOTE 2.

PROPERTY AND EQUIPMENT


	Estimated Useful Lives (Years)
		2006		2005

Computer and office equipment	5	$	10,379	$	7,513

Less accumulated depreciation			7,962		7,044
		$	2,417	$	469

Depreciation expense for the years ended December 31, 2006 and 2005 totaled $918 and $770 respectively.

NOTE 3.

SUBSEQUENT EVENT

On January 5, 2007, the Company was acquired by Online Vacation Center Holdings Corp (OVCH). The Company will continue to operate as a wholly owned subsidiary of OVCH.

F-9

Item 9.01(b) Pro forma Financial Information

PRO FORMA UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

Balance Sheet as of December 31, 2006

The following pro forma unaudited consolidated financial information gives effect to the acquisitions of Dunhill Vacations, Inc. (the “Acquisition”). This pro forma balance sheet assumes the transactions occurred as of December 31, 2006. The pro forma unaudited consolidated financial information is presented for illustrative purposes only. It is not necessarily indicative of the operating results or financial position that would have occurred if the Acquisition had been consummated at the beginning of the period indicated, nor is such information indicative of the future operating results or financial position of Online Vacation Center Holdings Corp. after the Acquisition.

PF-1

ONLINE VACATION CENTER HOLDINGS CORP. AND DUNHILL VACATIONS, INC.

PRO FORMA COMBINED BALANCE SHEET

DECEMBER 31, 2006

(UNAUDITED)


	Online Vacation Center Holdings Corp.			Dunhill Vacations, Inc.			Effect of Dunhill Vacations, Inc. Acquisition				Post Acquisition
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,658,885		$	4,658		$	(306,158	)	(2)	$	2,357,385
Accounts receivable, net		1,043,955			14,800			—				1,058,755
Prepaid expenses and other current assets		370,072			—			—				370,072
Deferred tax asset, net		248,455			—			—				248,455
Total Current Assets		4,321,367			19,458			(306,158	)			4,034,667

Restricted cash		336,135			—			—				336,135
Property and equipment, net		92,215			2,417			—				94,632
Franchise fee, net					—			—				—
Deferred tax asset, net		98,183			—			—				98,183
Intangible assets, net		1,067,849			—			—				1,067,849
Goodwill		1,942,495			—			416,074		(2)		2,358,569
Total Assets	$	7,858,244		$	21,875		$	109,916			$	7,990,035

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	1,339,574		$	5,212		$	1,579		(1)	$	1,346,365
Deferred revenue, net		805,134			—			—				805,134
Customer deposits		1,470,178			—			—				1,470,178
Convertible note, current		125,000			—			—				125,000
Total Current Liabilities		3,739,886			5,212			1,579				3,746,677

Convertible note, long-term		375,000			—			—				375,000
Total Liabilities		4,114,886			5,212			1,579				4,121,677

SHAREHOLDERS' EQUITY
Preferred Stock, 1,000,000 shares authorized at $.0001 par value; 0 shares issued and outstanding		—			—			—				—
Common Stock, 80,000,000 shares authorized at $.0001 par value; 18,256,777 actual shares and 18,306,777 pro forma shares issued and outstanding		1,826			—			5		(2)		1,831
Common Stock, 1,000 shares authorized at $1.00 par value; 1,000 shares issued and outstanding					1,000			(1,000	)	(2)		—
Additional paid-in capital		5,099,059			24,562			100,433		(2)		5,224,054
Accumulated deficit		(1,357,527	)		(8,899	)		8,899		(2)		(1,357,527	)
Total Shareholders' Equity		3,743,358			16,663			108,337				3,868,358

Total Liabilities & Shareholders' Equity	$	7,858,244		$	21,875		$	109,916			$	7,990,035

PF-2

ONLINE VACATION CENTER HOLDINGS CORP. AND DUNHILL VACATIONS, INC.

PRO FORMA COMBINED BALANCE SHEET

NOTES

DECEMBER 31, 2006

(1)

Represents the application of Online Vacation Center Holdings Corp.’s statutory tax rate of 41% to Dunhill Vacations, Inc. pre-tax income of $3,851.

(2)

Goodwill was computed as follows:


Fair value of net assets acquired:			$	16,663
Less: Pro forma income taxes payable				1,579
Pro forma fair value of net assets acquired				15,084
Consideration given:
Cash – at closing	$	250,000
Direct expenses associated with acquisition – assumed to be paid at closing		56,158
Issuance of 50,000 shares of the Company’s common Stock		125,000		431,158
Goodwill			$	416,074

For purposes of this presentation the excess of purchase price over the fair value of the pro forma net assets acquired was considered goodwill. Management has retained the services of a third-party company to prepare a valuation to assist management of the Company in its allocation of the purchase price, primarily through the determination of the fair value and remaining useful lives of Dunhill Vacations, Inc.’s intangible assets.

PF-3

PPRO FORMA UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

For the year ended December 31, 2006

The following pro forma unaudited consolidated financial information gives effect to the Acquisition and assumes the transactions occurred as of January 1, 2006. The pro forma unaudited consolidated financial information is presented for illustrative purposes only. It is not necessarily indicative of the operating results or financial position that would have occurred if the Acquisition had been consummated at the beginning of the period indicated, nor is such information indicative of the future operating results or financial position of Online Vacation Center Holdings Corp. after the Acquisition.

PF-4

ONLINE VACATION CENTER HOLDINGS CORP. AND DUNHILL VACATIONS, INC.

PRO FORMA COMBINED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

(UNAUDITED)


	Online Vacation Center Holdings Corp.		Dunhill Vacations, Inc.		Effect of Dunhill Vacations, Inc. Acquisition				Post Acquisition
NET REVENUES	$	7,785,361	$	123,088	$	—			$	7,908,449

OPERATING EXPENSES:
Sales and marketing		2,907,698		107,069		—				3,014,767
General and administrative		4,213,517		11,250		—				4,224,767
Depreciation and amortization		136,496		918		—				137,414

INCOME FROM OPERATIONS		527,650		3,851		—				531,501

Interest income (expense), net		16,924		—						16,924
										—
Income before provision/(benefit) for income taxes		544,574		3,851						548,425
										—
Provision (benefit) for income taxes		306,721		—		1,579		(1)		308,300

NET INCOME	$	237,853	$	3,851	$	(1,579	)		$	240,125

Weighted average shares outstanding - Basic		17,289,996		1,000		49,000				17,339,996

EARNINGS PER SHARE - Basic	$	0.01	$	3.85					$	0.01

Weighted average shares outstanding - Diluted		17,746,920		1,000		49,000				17,796,920

EARNINGS PER SHARE - Diluted	$	0.01	$	3.85					$	0.01

PF-5

ONLINE VACATION CENTER HOLDINGS CORP. AND DUNHILL VACATIONS, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS

NOTE

FOR THE YEAR ENDED DECEMBER 31, 2006

(1)

Represents application of Online Vacation Center Holdings Corp’s statutory tax rate of 41% to Dunhill Vacation, Inc.’s-tax income.

PF-6