EX-99.3 30 v077896_ex99-3.htm
UNAUDITED PRO FORMA FINANCIAL INFORMATION

  Subsequent to the Share Exchange, Alpha Nutra, Inc. changed its name to China Broadband, Inc. As the name change went into effect on May 4, 2007, references in these financial statements are to “Alpha Nutra, Inc.”

The following unaudited pro forma combined balance sheet as of December 31, 2006 combines the audited historical balance sheet of Alpha Nutra, Inc. as of December 31, 2006, the audited historical balance sheet of China Broadband Ltd., a recently acquired Cayman Islands company, as of December 31, 2006 and Jinan Guangdian Jia He Broadband Company, Ltd. a recently acquired Republic of China company as of December 31, 2006. The following unaudited pro forma combined balance sheet as of December 31, 2005 includes only the audited historical balance sheet of Alpha Nutra, Inc. as of December 31, 2005 and Jinan Guangdian Jia He Broadband Company, Ltd., as China Broadband Ltd., was formed during the year ended December 31, 2006. The following unaudited pro forma combined statement of operations for the year ended December 31, 2006 combines the audited historical statement of operations of Alpha Nutra, Inc. for the year ended December 31, 2006, the audited historical consolidated statement of operations of China Broadband Ltd. for the year ended December 31, 2006 and Jinan Guangdian Jia He Broadband Company, Ltd., for the year ended December 31, 2006, giving effect to the merger as if it had been consummated at the beginning of the period presented. The following unaudited pro forma combined statement of operations for the year ended December 31, 2005 includes only the audited historical statement of operations of Alpha Nutra, Inc. and Jinan Guangdian Jia He Broadband Company, Ltd., for the year ended December 31, 2006, as China Broadband Ltd. was formed during the year ended December 31, 2006.

The unaudited pro forma combined financial information should be read in conjunction with the audited historical financial statements and related notes of Alpha Nutra, Inc. which are incorporated by reference into this 8-K and the audited historical financial statements and related notes of China Broadband Ltd. and Jinan Guangdian Jia He Broadband Company, Ltd. which are included as an exhibit in this 8-K .
 
The unaudited pro forma combined financial information excludes costs associated with the integration and consolidation of the companies.
 
This unaudited pro forma combined financial information is not necessarily indicative of the operating results and financial position that might have been achieved had the merger occurred as of the beginning of the earliest period presented, nor are they necessarily indicative of operating results and financial position which may occur in the future.

 
UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
 
December 31, 2006
 
       
China
  
Jinan
          
   
Alpha Nutra
  
Broadband
  
Broadband
          
   
December 31,
  
December 31,
  
December 31,
      
Pro Forma
  
   
2006
  
2006
  
2006
  
Adjustments
  
Combined
  
ASSETS
                      
                       
Current assets:
                                
Cash
  
$
-
  
$
53,170
  
$
21,625
        
$
74,795
  
Escrow cash
    
-
   
50,000
   
-
         
50,000
 
Accounts receivable, net
    
-
   
-
   
-
         
-
 
Inventories
    
-
   
-
   
1,569,904
         
1,569,904
 
Prepaid expenses and other current assets
    
-
   
-
   
106,829
         
106,829
 
Total current assets
    
-
   
103,170
   
1,698,358
   
-
   
1,801,528
 
                                 
Property and equipment, net
    
-
   
-
   
10,014,215
         
10,014,215
 
Issuance costs associated with private placement offering
    
-
   
103,653
   
-
         
103,653
 
Other assets
    
-
   
-
   
-
         
-
 
                                 
 
  
$
 -  
$
206,823
  
$
11,712,573
  
$
-
  
$
11,919,396
  
                                 
LIABILITIES AND STOCKHOLDER'S EQUITY
                                
                                 
Current liabilities:
                                
Accounts payable and accrued expenses
  
$
-
  
$
6,762
  
$
2,105,747
        
$
2,112,509
  
Taxes payable
                
25,767
         
25,767
 
Advance Payments
                
1,007,807
         
1,007,807
 
Amount due to related company
                
13,677,237
         
13,677,237
 
Convertible notes payable
    
-
   
325,000
   
-
         
325,000
 
Total current liabilities
    
-
   
331,762
   
16,816,558
   
-
   
17,148,320
 
                                 
Convertible notes payable
    
-
   
-
   
-
         
-
 
Other liabilities
    
-
   
-
   
-
         
-
 
Total liabilities
    
-
   
331,762
   
16,816,558
   
-
   
17,148,320
 
                                 
Minority interest payable (receivable)
    
-
   
-
   
-
   
(2,269,619
)
  
(2,269,619
)
                                 
Stockholder's equity:
                                
Common stock
    
535
   
50,000
   
-
         
50,535
 
Additional paid-in capital
    
6,705,918
   
-
   
-
         
6,705,918
 
Retained Earnings (Accumulated Deficit)
    
(6,706,453
)
  
(174,939
)
  
(4,995,862
)
  
2,269,619
   
(9,607,635
)
Note receivable from stockholders
                            
-
 
Accumulated other comprehensive income
          
-
   
(108,123
)
        
(108,123
)
Total stockholder's equity
    
-
   
(124,939
)
  
(5,103,985
)
  
2,269,619
   
(2,959,305
)
                                 
 
  
$
 -  
$
206,823
  
$
11,712,573
  
$
-
  
$
11,919,396
  
 

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
 
For Year Ended December 31, 2006
 
       
China
  
Jinan
          
   
Alpha Nutra
  
Broadband
  
Broadband
          
   
Twelve
  
Twelve
  
Twelve
          
   
 Months Ended
  
 Months Ended
  
 Months Ended
          
   
December 31, 2006
  
December 31, 2006
  
December 31, 2006
      
Pro Forma
  
   
Historical
  
Historical
  
Historical
  
Adjustments
  
Combined
  
                       
Sales
  
$
-
  
$
-
  
$
2,899,451
  
$
-
  
$
2,899,451
  
                                 
Cost of Sales
    
-
   
-
   
1,187,734
   
-
   
1,187,734
 
                                 
Gross Margin
    
-
   
-
   
1,711,717
   
-
   
1,711,717
 
                                 
Operating expenses:
                                
Formation costs
    
-
   
168,177
   
-
   
-
   
168,177
 
Selling, general and administrative
    
-
   
-
   
233,233
   
-
   
233,233
 
 
    
-
    
-
    
-
   
-
   
-
 
                                 
Earnings before interest, depreciation and amortization
    
-
   
(168,177
)
  
1,478,484
   
-
   
1,310,307
 
                                 
Depreciation and amortization and impairment
    
-
   
-
   
6,110,360
   
-
   
6,110,360
 
                                 
Income (loss) from operations
    
-
   
(168,177
)
  
(4,631,876
)
  
-
   
(4,800,053
)
                                 
Interest and other income (expense), net
    
-
   
(6,762
)
  
-
   
-
   
(6,762
)
                                 
Income (loss) before income tax provision
    
-
   
(174,939
)
  
(4,631,876
)
  
-
   
(4,806,815
)
                                 
Income tax provision
    
-
   
-
   
-
   
-
   
-
 
                                 
Income Loss before minority interest
    
-
   
(174,939
)
  
(4,631,876
)
  
-
   
(4,806,815
)
                                 
Minority Interest
    
-
   
-
   
-
   
2,269,619
   
2,269,619
 
                                 
Net income (loss)
  
$
-
  
$
(174,939
)
$
(4,631,876
)
$
2,269,619
  
$
(2,537,196
)
                                 
Earnings (loss) per share:
                                
Primary
  
$
-
                    
$
(4.75
)
                                 
Fully diluted
  
$
-
                    
$
(4.75
)
                                 
Weighted average number of common and common
                                
equivalent shares outstanding:
                                
Primary
    
534,494
                     
534,494
 
                                 
Fully diluted
    
534,494
                     
534,494
 
 
 

UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
 
December 31, 2005
 
       
China
  
Jinan
          
   
Alpha Nutra
  
Broadband
  
Broadband
          
   
December 31,
  
December 31,
  
December 31,
      
Pro Forma
  
   
2005
  
2005
  
2005
  
Adjustments
  
Combined
  
ASSETS
                      
                       
Current assets:
                                
Cash
  
$
-
  
$
-
  
$
42,723
        
$
42,723
  
Escrow cash
    
-
   
-
   
-
         
-
 
Accounts receivable, net
    
-
   
-
   
-
         
-
 
Inventories
    
-
   
-
   
1,848,073
         
1,848,073
 
Prepaid expenses and other current assets
    
-
   
-
   
195,804
         
195,804
 
Total current assets
    
-
   
-
   
2,086,600
   
-
   
2,086,600
 
                                 
Property and equipment, net
    
-
   
-
   
9,940,023
         
9,940,023
 
Construction-in-progress
    
-
   
-
   
3,119,995
         
3,119,995
 
Other assets
    
-
   
-
   
-
         
-
 
                                 
 
   $  -  
$
-
  
$
15,146,618
  
$
-
  
$
15,146,618
  
                                 
LIABILITIES AND STOCKHOLDER'S EQUITY
                                
                                 
Current liabilities:
                                
Accounts payable and accrued expenses
  
$
-
  
$
-
  
$
3,012,943
        
$
3,012,943
  
Taxes payable
                
14,686
         
14,686
 
Advance Payments
                
973,173
         
973,173
 
Amount due to related company
                
11,514,136
         
11,514,136
 
Convertible notes payable
    
-
   
-
   
-
         
-
 
Total current liabilities
    
-
   
-
   
15,514,938
   
-
   
15,514,938
 
                                 
Convertible notes payable
    
-
   
-
   
-
         
-
 
Other liabilities
    
-
   
-
   
-
         
-
 
Total liabilities
    
-
   
-
   
15,514,938
   
-
   
15,514,938
 
                                 
Minority interest payable (receivable)
    
-
   
-
   
-
   
(178,353
)
  
(178,353
)
                                 
Stockholder's equity:
                                
Common stock
    
535
   
-
   
-
         
535
 
Additional paid-in capital
    
6,705,918
   
-
   
-
         
6,705,918
 
Retained Earnings (Accumulated Deficit)
    
(6,706,453
)
  
-
   
(363,986
)
  
178,353
   
(6,892,086
)
Note receivable from stockholders
                            
-
 
Accumulated other comprehensive income
          
-
   
(4,334
)
        
(4,334
)
Total stockholder's equity
    
-
   
-
   
(368,320
)
  
178,353
   
(189,967
)
                                 
 
   $ -  
$
-
  
$
15,146,618
  
$
-
  
$
15,146,618
  
 
 
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
 
For Year Ended December 31, 2005

 
  
 
  
China
  
Jinan
  
 
  
 
  
 
  
Alpha Nutra
  
Broadband
  
Broadband
  
 
  
 
  
 
 
Twelve
 
Twelve
 
Twelve
          
 
  
 Months Ended
  
 Months Ended
  
Months Ended
  
 
  
 
  
 
  
December 31, 2005
  
December 31, 2005
  
December 31, 2005
  
 
  
Pro Forma
  
 
  
Historical
  
Historical
  
Historical
  
Adjustments
  
Combined
  
 
  
 
  
 
  
 
  
 
  
 
  
Sales
  
$
-
  
$
-
  
$
2,821,667
  
$
-
  
$
2,821,667
  
 
    
 
    
 
    
 
    
 
    
 
  
Cost of Sales
    
-
   
-
   
1,445,898
   
-
   
1,445,898
 
 
    
 
    
 
    
 
    
 
    
 
  
Gross Margin
    
-
   
-
   
1,375,769
   
-
   
1,375,769
 
 
    
 
    
 
    
 
    
 
    
 
  
Operating expenses:
    
 
    
 
    
 
    
 
    
 
  
Formation costs
    
-
   
-
   
-
   
-
   
-
 
Selling, general and administrative
    
500,000
   
-
   
273,323
   
-
   
773,323
 
 
    
-
    
-
   
-
   
-
   
-
 
 
    
 
    
 
    
 
    
 
    
 
  
Earnings before interest, depreciation and amortization
    
(500,000
)
  
-
   
1,102,446
   
-
   
602,446
 
 
    
 
    
 
    
 
    
 
    
 
  
Depreciation and amortization and impairment
    
-
   
-
   
1,466,432
   
-
   
1,466,432
 
 
    
 
    
 
    
 
    
 
    
 
  
Income (loss) from operations
    
(500,000
)
  
-
   
(363,986
)
  
-
   
(863,986
)
 
    
 
    
 
    
 
    
 
    
 
  
Interest and other income (expense), net
    
-
   
-
   
-
   
-
   
-
 
 
    
 
    
 
    
 
    
 
    
 
  
Income (loss) from continuing operations before Min Int
    
(500,000
)
  
-
   
(363,986
)
  
-
   
(863,986
)
 
    
 
    
 
    
 
    
 
    
 
  
Minority Interest
    
-
   
-
   
-
   
178,353
   
178,353
 
 
    
 
    
 
    
 
    
 
    
 
  
Income (loss) from continuing operations
    
(500,000
)
  
-
   
(363,986
)
  
178,353
   
(685,633
)
 
    
 
    
 
    
 
    
 
    
 
  
Discontinued operations, net of tax
    
 
    
 
    
 
    
 
    
 
  
Loss from discontinued operations, net of tax ($0)
    
(474,306
)
  
-
   
-
   
-
   
(474,306
)
 
    
 
    
 
    
 
    
 
    
 
  
Loss from discontinued operations
    
(474,306
)
  
-
   
-
   
-
   
(474,306
)
 
    
 
    
 
    
 
    
 
    
 
  
Net income (loss)
  
$
(974,306
)
$
-
  
$
(363,986
)
$
178,353
  
$
(1,159,939
)
 
    
 
    
 
    
 
    
 
    
 
  
Earnings (loss) per share:
    
 
    
 
    
 
    
 
    
 
  
Continuing Operations
  
$
(0.10
)
  
 
    
 
    
 
  
$
(0.17
)
 
    
 
    
 
    
 
    
 
    
 
  
Fully diluted
  
$
(0.09
)
  
 
    
 
    
 
  
$
(0.09
)
 
    
 
    
 
    
 
    
 
    
 
  
Weighted average number of common and common
    
 
    
 
    
 
    
 
    
 
  
equivalent shares outstanding:
    
 
    
 
    
 
    
 
    
 
  
Basic & Diluted
    
5,232,046
   
 
    
 
    
 
    
5,232,046