EX-99.2 3 ex99-2.htm

 

EXHIBIT 99.2

 

FDCTECH, INC

UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 31, 2020

(Currency expressed in United States Dollars)

 

   FDCTech   AD Advisory Services   Total  

Pro Forma

Adjustments

(Note 3)

  

Pro Forma

Combined

 
   (USD)   (USD)   (USD)       (USD) 
Assets                         
Current assets:                         
Cash  $22,467   $99,353   $121,820    -   $121,820 
Accounts receivable, net   16,541    -    16,541    -    16,541 
Other current assets   27,878    45,614    73,492    -    73,492 
Total Current assets   66,886    144,967    211,853         211,853 
Capitalized software, net   632,324    -    632,324    -    632,324 
Prepaid and other acquired identifiable intangible assets   2,918,303    -    2,918,303    (77,510)   2,840,793 
Total non-current assets   3,550,627    -    3,550,627         3,473,117 
Total assets  $3,617,513   $144,967   $3,762,480        $3,684,970 
Liabilities and Stockholders’ Deficit                         
Current liabilities:                         
Accounts payable & other current liabilities  $116,500   $67,457   $183,957    -   $183,957 
Line of credit   39,071    -    39,071    -    39,071 
Payroll tax payable   125,387    -    125,387    -    125,387 
Related-party convertible notes payable - current   1,000,000    -    1,000,000    -    1,000,000 
Related-party accrued interest - current   256,908    -    256,908    -    256,908 
Cares act- paycheck protection program advance   29,412    -    29,412    -    29,412 
Total Current liabilities   1,567,278    67,457    1,634,735         1,634,735 
SBA loan – non-current   144,900    -    144,900    -    144,900 
Cares act- paycheck protection program advance – non-current   21,220    -    21,220    -    21,220 
Accrued interest – non-current   3,856    -    3,856    -    3,856 
Total liabilities   1,737,254    67,457    1,804,711    -    1,804,711 
Commitments and Contingencies (Note 9)   -    -    -           
Stockholders’ Deficit:                         
Preferred stock, par value $0.0001   400    -    400    -    400 
Common stock, par value $0.0001   11,387    -    11,387    -    11,387 
Additional paid-in capital   1,972,018    15,403    1,987,421    (15,403)   1,972,018 
Accumulated deficit   (1,493,984)   62,107    (1,431,877)   (62,107)   (1,493,984)
Total FDCTech stockholders’ equity   489,821    77,510    567,330         489,821 
Non-controlling interest   1,390,438    -    1,390,438         1,390,438 
Total liabilities and stockholders’ deficit  $3,617,513   $144,967   $3,762,480        $3,684,970 

 

See accompanying notes to unaudited proforma condensed combined financial statements

 

 

 

 

FDCTECH INC.

UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2020

(Currency expressed in United States Dollars)

 

   FDCTech   AD Advisory Services   Total   Proforma Adjustments (Note 3)   Proforma Combined 
   (USD)   (USD)   (USD)       (USD) 
Revenues  $215,409   $4,663,632    4,879,041                -    4,879,041 
Cost of sales   251,959    4,228,417    4,480,376    -    4,480,376 
Gross Profit   (36,550)   435,214    398,664         398,664 
Operating expenses:                         
General and administrative   337,634    415,836    753,470    -    753,470 
Sales and marketing   24,526    -    24,526    -    24,526 
Total operating expenses   362,160    415,836    777,996         777,996 
Operating loss   (398,710)   19,379    (379,331)        (379,331)
Other income (expense):                         
Related-party interest expense   (60,000)   -    (60,000)   -    (60,000)
Other interest expense   (3,856)   -    (3,856)   -    (3,856)
Other income (expense)   4,076    60,906    64,982    -    64,982 
Total other expense   (59,780)   60,906    1,126         1,126 
Loss before provision for income taxes   (458,490)   80,285    (378,205)        (378,205)
Provision for income taxes   -    -    -    -    - 
Net loss  $(458,490)  $80,285    (378,205)        (378,205)
Net loss per common share, basic and diluted  $(0.01)  $    (0.01)        (0.01)
Weighted average number of common shares outstanding basic and diluted   69,312,787         69,312,787         69,312,787 

 

See accompanying notes to unaudited proforma condensed combined financial statements

 

 

 

 

FDCTECH, INC

UNAUDITED PROFORMA CONDENSED COMBINED BALANCE SHEET AS OF SEPTEMBER 30, 2021

(Currency expressed in USD)

 

   FDCTech   AD Advisory Services   Total  

Pro Forma

Adjustments

(Note 3)

  

Pro Forma

Combined

 
   (USD)   (USD)   (USD)       (USD) 
Assets                         
Current assets:                         
Cash  $4,251   $106,618   $110,869    -   $110,869 
Accounts receivable, net   49,498    -    49,498    -    49,498 
Other current assets   702,430    45,283    747,713         747,713 
Total Current assets   756,179    151,901    908,080         908,080 
Capitalized software, net   632,177    -    632,177    -    632,177 
Prepaid and other acquired identifiable intangible assets   3,004,621    -    3,004,621    (91,847)   2,912,774 
Total non-current assets   3,636,798    -    3,636,798         3,544,951 
Total assets  $4,392,977   $151,901   $4,544,878        $4,453,030 
Liabilities and Stockholders’ Deficit                         
Current liabilities:                         
Accounts payable & other current liabilities  $351,015   $60,053   $411,068    -   $411,068 
Line of credit   39,614    -    39,614    -    39,614 
Payroll tax payable   155,203    -    155,203    -    155,203 
Related-party advances   95,000    -    95,000    -    95,000 
Cares act- paycheck protection program advance   46,393    -    46,393    -    46,393 
Total Current liabilities   687,226    60,053    747,279         747,279 
SBA loan – non-current   141,826    -    141,826    -    141,826 
Cares act- paycheck protection program advance – non-current   4,239    -    4,239    -    4,239 
Accrued interest – non-current   7,799    -    7,799    -    7,799 
Total liabilities   841,090    60,053    901,143    -    901,143 
Commitments and Contingencies (Note 9)   -    -    -           
Stockholders’ Deficit:                         
Preferred stock, par value $0.0001   400    -    400    -    400 
Common stock, par value $0.0001   13,391    -    13,391    -    13,391 
Additional paid-in capital   4,619,575    14,465    4,634,040    (14,465)   4,619,575 
Accumulated deficit   (2,471,917)   77,382    (2,394,535)   (77,382)   (2,471,917)
Total FDCTech stockholders’ equity   2,161,449    91,847    2,253,296    (91,847)   2,161,449 
Non-controlling interest   1,390,438    -    1,390,438         1,390,438 
Total liabilities and stockholders’ deficit  $4,392,977   $151,901   $4,544,878        $4,453,030 

 

See accompanying notes to unaudited proforma condensed combined financial statements

 

 

 

 

FDCTECH INC.

UNAUDITED PROFORMA CONDENSED C3OMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021

(Currency expressed in United States Dollars)

 

   FDCTech   AD Advisory Services   Total   Proforma Adjustments (Note 3)   Proforma Combined 
   (USD)   (USD)   (USD)       (USD) 
Revenues  $221,003   $4,577,866    4,798,869       -    4,798,869 
Cost of sales   205,847    4,101,305    4,307,152    -    4,307,152 
Gross Profit   15,156    476,561    491,717         491,717 
Operating expenses:                         
General and administrative   487,320    451,630    938,950    -    938,950 
Sales and marketing   499,320    -    499,320    -    499,320 
Total operating expenses   986,640    451,630    1,438,270         1,438,270 
Operating loss   (971,484)   24,931    (946,553)        (946,553)
Other income (expense):                         
Related-party interest expense   (10,399)   -    (10,399)   -    (10,399)
Other interest expense   (2,942)   -    (2,942)   -    (2,942)
Other income (expense)   6,892    2    6,894    -    6,894 
Total other expense   (6,449)   2    (6,447)        (6,447)
Loss before provision for income taxes   (977,933)   24,933    (953,000)        (953,000)
Provision for income taxes   -    -    -    -    - 
Net loss  $(977,933)  $24,933    (953,000)        (953,000)
Net loss per common share, basic and diluted  $(0.01)  $     (0.01)        (0.01)
Weighted average number of common shares
outstanding basic and diluted		   83,150,225         83,150,225         83,150,225 

 

See accompanying notes to unaudited proforma condensed combined financial statements

 

 

 

 

FDCTECH, INC

NOTES TO UNAUDITED PROFORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars)

(Unaudited)

 

We have based the following unaudited proforma condensed combined financial statements on the historical financial statements of FDCTech, Inc. (“FDCTech” or the “Company”) and AD Advisory Services Pty Ltd. (“AD “) after giving effect to our Acquisition of AD (“the Acquisition”) and the assumptions and adjustments described in the accompanying notes to the unaudited proforma condensed combined financial statements.

 

Note 1. Basis of Proforma Presentation

 

The unaudited proforma condensed combined financial statements are not intended to represent or indicate the results of operations or financial position of FDCTech that would have been reported had FDCtech completed the Acquisition as of the dates presented. You should not take the proforma as representative of the future results of operations or the Company’s financial position.

 

The unaudited proforma financial statements, including its notes, do not reflect any potential operating efficiencies and cost savings that FDCTech may achieve concerning the combined companies. The unaudited proforma condensed combined financial statements and corresponding notes should be read in conjunction with the historical financial statements of FDCTech included in the annual report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC “) on March 3, 2021, and the subsequent quarterly report on Form 10-Q for the nine months ended September 30, 2021, filed with the SEC on November 05, 2021, and in conjunction with the historical financial statements of AD Advisory Services Pty Ltd. included in this Form 8-K/A.

 

We present the unaudited proforma condensed combined balance sheet as of December 31, 2020, as if the Acquisition occurred on December 31, 2020. The unaudited proforma condensed combined statement of operations and comprehensive income/(loss) of the FDCTech and AD for the year ended December 31, 2020, has been prepared by combining the FDCTech and ADs historical consolidated results for the year ended December 31, 2020. The Company estimates the preliminary purchase price on the intrinsic value of AD instead of the share price of $0.034 on December 31, 2020. As a result, we estimated the implied value of AD to be $2,995,813 based on the Management discounted cash flow model.

 

The unaudited proforma combined statement of operations and comprehensive loss for the nine months ended September 30, 2021, has been prepared by combining the FDCTech and ADs historical consolidated results for the nine months ended September 30, 2021.

 

Note 2. Acquisition of AD Advisory Services Pty Ltd. (AD.)

 

On December 22, 2021, the Company entered into a Share Exchange Agreement (the “Agreement”) with AD. Financial Services Pty Ltd ACN 628 331 117 of Level 38/71 Eagle St, Brisbane, Queensland, Australia, 4000 (“ADFP” or “Target”). According to the Agreement, the Company acquired 51% of ADFP’s issued and outstanding shares of capital stock in exchange for 45,000,000 (the “Consideration”) newly issued “restricted” common shares. The operating and licensed entity of ADFP is AD Advisory Services Pty Ltd. ADFP owns one hundred percent (100%) equity interest in AD. As a result, the Company is 51% owner of AD.

 

Our wealth management business is subject to enhanced regulatory scrutiny and is regulated by multiple regulators in Australia. The Australian Securities and Investments Commission (ASIC) administers a licensing regime for ‘financial services’ providers where AD holds an Australian Financial Services Licence (AFSL) and meets various compliance, conduct, and disclosure obligations. AD is an Australian-regulated wealth management company with 20 offices, 28 advisors, and $530+ million funds under advice.

 

The Company completed the acquisitions of AD on December 22, 2021 (“the Acquisition Date”).

 

Note 3. Proforma Adjustments

 

Foreign Currency Translation and Re-measurement

 

The Company translates its foreign operations to US dollar following ASC 830, “Foreign Currency Matters.”

 

 

 

 

Translation of amounts from the local currency, Australia Dollar (“AUD”) of AD into US$1.00 has been made at the following exchange rates for the respective dates:

 

Exchange rate at the reporting end date:

 

   September 30, 2021   December 31, 2020 
USD: AUD  $1.3831   $1.2989 

 

Average exchange rate for the period:

 

   January 1, 2021, to September 30, 2021   January 1, 2020, to December 31, 2020 
USD: AUD  $1.3182   $1.4480 

 

The Company subsidiary’s functional currency is AUD and reporting currency is the US dollar.

 

The Company translates its records into US dollar as follows:

 

  ● Assets and liabilities at the rate of exchange in effect at the balance sheet date
  ● Equities at historical rate
  ● Revenue and expense items at the average rate of exchange prevailing during the period

 

The Purchase Price Allocation

 

The Company estimates the preliminary purchase price to be based on the intrinsic value of AD instead of the Company’s share price of $0.44 on December 31, 2020. As a result, we estimate the implied value of AD to be $2,995,813 based on the Management discounted cash flow model. The Company used Lever 3 Fair Value analysis adjusted for other reasonably available information, including liquidity discount, the Company’s size, historical negative cash flow, and other risks.

 

The book value of AD on December 31, 2020, was $77,510. Therefore, the implied difference between the implied value and book value of AD was $2,918,303. The Company attributed the implied difference to acquired identifiable intangible assets based on AD’s assets under management and regulatory licenses. The Company did not record impairment for the fiscal year ended December 31, 2020, and nine months ended September 30, 2021.

 

Adjustments

 

I.We have included the following pro forma adjustments in the unaudited pro forma condensed combined balance sheet and combined statement of operations for the year ended December 31, 2020:

 

A)To record the following adjustments to shareholders’ equity:

 

  i) Adjustments to FDCTech stockholders’ equity

 

Balance before pro forma adjustments  $(567,330)
Elimination of pre-acquisition equity account of AD Advisory Services Pty Ltd.   (77,510)
Pro Forma Combined as of December 31, 2020  $(489,821)

 

B)To record the following adjustments to current assets:

 

  i) Adjustments to prepaid and other acquired identifiable intangible assets

 

Balance before pro forma adjustments  $2,918,303 
Decrease in acquired identifiable intangible assets   (77,510)
Pro Forma Combined as of December 31, 2020  $2,840,793 

 

 

 

 

There are no intercompany transactions.

 

II.The following pro forma adjustments are included in the unaudited pro forma condensed combined balance sheet and combined statement of operations for the year ended September 30, 2021:

 

C)To record the following adjustments to shareholders’ equity:

 

  i) Adjustments to stockholders’ equity

 

Balance before pro forma adjustments   $ 2,253,296  
Elimination of pre-acquisition equity account of AD Advisory Services Pty Ltd.     (91,847 )
Pro Forma Combined as of September 30, 2021   $ 2,161,449  

 

D)To record the following adjustments to current assets:

 

  i) Adjustments to prepaid and other acquired identifiable intangible assets

 

Balance before pro forma adjustments   $ 3,004,621  
Decrease in acquired identifiable intangible assets     (91,847 )
Pro Forma Combined as of September 30, 2021   $ 2,912,774  

 

There are no intercompany transactions.