EX-99.2 3 ex99-2.htm

 

Exhibit 99.2

 

ADDENTAX GROUP CORP.

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

FOR THE INTERIM PERIOD ENDED JUNE 30, 2017

 

 
 

 

On December 28, 2016, Addentax Group Corp (“ATXG” or the “Registrant”) acquired 250,000,000 shares of the issued and outstanding stock of Yingxi Industrial Chain Group Co., Ltd., a company incorporated under the laws of the Republic of Seychelles (“Yingxi”). The 250,000,000 shares of Yingxi were acquired from the members of Yingxi in a share exchange transaction in return for the issuance of 500,000,000 shares of common stock of ATXG. The 250,000,000 shares of Yingxi constitute 100% of its issued and outstanding stock, and as a result of the transaction, Yingxi became a wholly-owned subsidiary of ATXG. And following the consummation of the acquisition and giving effect to the securities exchanged in the offering, the members of Yingxi will beneficially own approximately ninty-nine (99%) of the issued and outstanding Common Stock of the Registrant.

 

The pro forma condensed combined financial statements as of June 30, 2017, and for the interim period ended June 30, 2017, have been prepared based on certain pro forma adjustments to the Registrant historical financial statements set forth in the Annual Report of the Registrant on Form 10-Q for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission, and are qualified in their entirety by reference to such historical financial statements and related notes contained in those reports. The historical financial statements for Yingxi were derived from interim financial statements for the interim period ended June 30, 2017, included as Exhibit 99.1 to Form 8-K/A as filed on May 15, 2018. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical consolidated financial statements and related notes thereto.

 

The unaudited pro forma condensed combined balance sheet has been prepared as if the transaction had occurred as of June 30, 2017. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on April 1, 2017.

 

These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed at the dates indicated or what would be any future periods.

 

 
 

 

ADDENTAX GROUP CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF JUNE 30, 2017

 

    ASSETS     Pro Forma            Pro Forma   
    ATXG     Yingxi     Adjustments     Notes     Combined  
CURRENT ASSETS                                        
Cash and cash equivalents   $ -     $ 1,101,571     $               $ 1,101,571  
Accounts receivables, net     -       5,647,006                       5,647,006  
Inventories, net     -       295,175                       295,175  
Other receivables     5,831       1,341,760                       1,347,591  
Advances to suppliers     -       812,162                       812,162  
Amounts due from related parties     -       20,440                       20,440  
Total current assets     5,831       9,218,114                       9,223,945  
                                         
NON-CURRENT ASSETS                                        
Plant and equipment, net     -       648,372                       648,372  
Goodwill     -       929,662                       929,662  
Total non-current assets     -       1,578,034                       1,578,034  
TOTAL ASSETS   $ 5,831     $ 10,796,148     $               $ 10,801,979  
                                         
      LIABILITIES AND EQUITY                          
CURRENT LIABILITIES                                        
Accounts payable   $ 395     $ 2,876,618     $               $ 2,877,013  
Amount due to related parties     42,987       2,735,352                       2,779,339  
Advances from customers     -       227,679                       227,679  
Accrued expenses and other payables     -       4,488,498                       4,488,498  
Income tax payable     -       1,985                       1,985  
Total current liabilities     44,382       10,330,132                       10,374,514  
TOTAL LIABILITIES   $ 44,382     $ 10,330,132     $               $ 10,374,514  
                                         
EQUITY                                        
Registered capital   $ 506,920     $ 100,000     $ (100,000 )           $ 506,920  
Additional paid in capital     41,647       -       (487,118 )             (445,471 )
Treasury stock     (500,000 )      -       500,000               -  
Retained earnings     (87,118 )     353,847       87,118               353,847  
Statutory reserve     -       21,539                       21,539  
Accumulated other comprehensive income     -       (9,370 )                     (9,370 )
Total equity     (38,551 )     466,016                       427,465  
TOTAL LIABILITIES AND EQUITY   $ 5,831     $ 10,796,148     $               $ 10,801,979  

 

See accompanying notes to unaudited pro forma condensed combined financial statements.

 

 
 

 

ADDENTAX GROUP CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

FOR THE INTERIM PERIOD ENDED JUNE 30, 2017

 

   ATXG   Yingxi   Pro Forma Adjustments   Notes   Pro Forma Combined 
REVENUES  $-   $8,605,502   $                    $8,605,502 
                          
COST OF REVENUES   -    7,622,281              7,622,281 
                          
GROSS PROFIT   -    983,221              983,221 
                          
Selling and marketing   -    (18,877)             (18,877)
General and administrative   (24,948)   (662,996)             (687,944)
                          
INCOME FROM OPERATIONS   (24,948)   301,348              276,400 
                          
OTHER INCOME, NET   -    249              249 
                          
INCOME BEFRE INCOME TAX EXPENSE   (24,948)   301,597              276,649 
                          
INCOME TAX EXPENSE   -    (4,021)             (4,021)
                          
NET INCOME   (24,948)   297,576              272,628 
Foreign currency translation loss   -    (16,277)             (16,277)
TOTAL COMPREHENSIVE INCOME   (24,948)   281,299              256,351 
                          
EARNINGS PER SHARE                         
Basic and diluted   (0.00)                  0.00 
                          
SHARES OUTSTANDING                         
Basic and diluted   6,920,000                   506,920,000 

 

See accompanying notes to unaudited pro forma condensed combined financial statements.

 

 
 

 

ADDENTAX GROUP CORP.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

1. BASIS OF PRESENTATION

 

The historical consolidated financial statements have been adjusted in the pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the business combination, (2) factually supportable and (3) with respect to the pro forma condensed combined statements of operations, expected to have a continuing impact on the combined results following the business combination. The business combination was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. As the acquirer for accounting purposes, the Company has estimated the fair value of Yingxi’s assets acquired and liabilities assumed and conformed the accounting policies of Yingxi to its own accounting policies. The pro forma combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

2. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS

 

The pro forma adjustments are based on management preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma condensed combined financial information:

 

  (a) Represents (1) 500,000,000 newly-issued shares of Common Stock of the Registrant, and (2) removing the Registrant’s accumulated deficit and adjusting equity for recapitalization.

 

3. EARNINGS PER SHARE

 

The following table illustrates the calculation of pro forma earnings per share:

 

   Interim period ended
June 30, 2017		 
Pro forma net income  $310,242 
      
Weighted-average shares outstanding:     
Pro forma shares   506,920,000 
      
Earnings per share     
Basic and diluted  $0.00