EX-99.2 3 ex99-2.htm

 

Exhibit 99.2

 

ADDENTAX GROUP CORP.

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

FOR THE YEAR ENDED

 

MARCH 31, 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 financial statements as of March 31, 2017 and for the year ended March 31, 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-K for the year ended March 31, 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 audited financial statements for the year ended December 31, 2016, included as Exhibit 99.2 to this Current Report on Form 8-K. 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 March 31, 2017. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on April 1, 2016.

 

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 MARCH 31, 2017

 

ASSETS
   ATXG   Yingxi   Pro Forma Adjustments   Notes   Pro Forma Combined 
CURRENT ASSETS                         
Cash and cash equivalents  $-   $227,949   $       $227,949 
Accounts receivables, net   -    5,012,623              5,012,623 
Inventories, net   -    274,204              274,204 
Other receivables   7,915    858,587              866,502 
Advances to suppliers   -    423,337              423,337 
Amounts due from related parties   -    191,159              191,159 
Total current assets   7,915    6,987,859              6,995,774 
                          
NON-CURRENT ASSETS
Plant and equipment, net   -    685,050              685,050 
Goodwill   -    929,662              929,662 
Total non-current assets   -    1,614,712              1,614,712 
TOTAL ASSETS  $7,915   $8,602,571   $        $8,610,486 
                          
LIABILITIES AND EQUITY
CURRENT LIABILITIES                         
Accounts payable  $2,196   $2,106,611   $        $2,108,807 
Amount due to related parties   19,322    2,515,107              2,534,429 
Advances from customers   -    364,564              364,564 
Accrued expenses and other payables   -    392,688              392,688 
Payable for acquisition of business   -    3,025,751              3,025,751 
Income tax payable   -    13,133              13,133 
Total current liabilities   21,518    8,417,854              8,439,372 
TOTAL LIABILITIES  $21,518   $8,417,854   $        $8,439,372 
                          
EQUITY                         
Registered capital  $48,567   $100,000   $400,000        $548,567 
Additional paid in capital   -    -    (462,170)        (462,170)
Retained earnings   (62,170)   56,271    62,170         56,271 
Statutory reserve   -    21,539              21,539 
Accumulated other comprehensive income   -    6,907              6,907 
Total equity   (13,603)   184,717              171,114 
TOTAL LIABILITIES AND EQUITY  $7,915   $8,602,571   $        $8,610,486 

 

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

 

 

 

 

ADDENTAX GROUP CORP.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

FOR THE YEAR ENDED MARCH 31, 2017

 

   ATXG   Yingxi   Pro Forma Adjustments   Notes   Pro Forma Combined 
REVENUEs  $-   $2,413,505   $       $2,413,505 
                          
COST OF REVENUES   -    2,053,447              2,053,447 
                          
GROSS PROFIT   -    360,058              360,058 
                          
Selling and marketing   -    (736)             (736)
General and administrative   (27,123)   (292,537)             (319,660)
                          
INCOME FROM OPERATIONS   (27,123)   66,785              39,662 
                          
OTHER INCOME, NET   -    2,677              2,677 
                          
INCOME BEFRE INCOME TAX EXPENSE   (27,123)   69,462              42,339 
                          
INCOME TAX EXPENSE   -    (13,191)             (13,191)
                          
NET INCOME   (27,123)   56,271              29,148 
Loss from discontinued operations   (21,526)   -              (21,526)
Loss on disposal of assets   (3,968)   -              (3,968)
Foreign currency translation gain   -    6,907              6,907 
TOTAL COMPREHENSIVE INCOME   (52,617)   63,178              10,561 
                          
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:

 

   Year ended
March 31, 2017		 
Pro forma net income  $29,148 
      
Weighted-average shares outstanding:     
Pro forma shares   506,920,000 
      
Earnings per share     
Basic and diluted  $0.00