Exhibit 99.2
DELTA TECHNOLOGY HOLDINGS LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
January 31, 2019 | ||||||||||||||
Delta Tech | Pro Forma adjustments | Notes | Pro Forma | |||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 5,499,929 | $ | 1,690,533 | (a)(b) | 7,249,929 | ||||||||
Trade and other receivables | 13,414,988 | (13,193,178 | ) | (a) | 221,810 | |||||||||
Inventories | 4,713,392 | (4,703,647 | ) | (a) | 9,745 | |||||||||
Total current assets | $ | 23,628,309 | $ | (16,206,292 | ) | $ | 7,422,017 | |||||||
Property, plant and equipment, net | 41,405,172 | (41,029,053 | ) | (a) | 376,119 | |||||||||
Land use rights | 1,910,720 | (1,910,720 | ) | (a) | - | |||||||||
Intangible assets | 58,063 | - | 58,063 | |||||||||||
Other noncurrent assets | 279,077 | - | 279,077 | |||||||||||
Deferred tax assets | 512,883 | (512,883 | ) | (a) | - | |||||||||
Total assets | $ | 67,794,224 | $ | (59,658,948 | ) | $ | 8,135,276 | |||||||
LIABILITIES AND SHAREHOLDERS’ (DIFICIT) EQUITY | ||||||||||||||
Liabilities | ||||||||||||||
Trade and other payables | $ | 21,422,092 | $ | (21,029,650 | ) | (a) | $ | 392,442 | ||||||
Bank borrowings | 63,979,028 | (63,979,028 | ) | (a) | - | |||||||||
Income tax payables | 182,431 | (182,431 | ) | (a) | - | |||||||||
Deferred tax liabilities | 592,061 | (592,061 | ) | (a) | - | |||||||||
Total liabilities | 86,175,612 | (85,783,170 | ) | 392,442 | ||||||||||
Shareholders’ Equity | ||||||||||||||
Common Stock | 2,266 | - | 2,266 | |||||||||||
Additional paid-in capital | 55,819,373 | (6,242,348 | ) | (a) | 49,577,025 | |||||||||
Statutory reserves | 7,180,500 | (7,180,500 | ) | (a) | - | |||||||||
(Accumulated losses)/Retained earnings | (87,910,135 | ) | 46,156,289 | (a)(c) | (41,754,008 | ) | ||||||||
Accumulated other comprehensive income (loss) | 6,526,608 | (6,609,219 | ) | (a) | (82,449 | ) | ||||||||
Total Shareholders’ (Deficit)/Equity | (18,381,388 | ) | 26,124,222 | 7,802,301 | ||||||||||
Total Liabilities and Shareholders’ (Deficit)/Equity | $ | 67,794,224 | $ | (59,658,948 | ) | $ | 8,135,276 |
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DELTA TECHNOLOGY HOLDINGS LIMITED
UNAUDITED PRO FORMA CONDENSED COMBINED INCOME STATEMENTS
FOR THE EIGHT MONTHS ENDED JANUARY 31, 2019
For the eight months ended January 31, 2019 | ||||||||||||||
Delta Tech | Pro Forma adjustments | Notes | Pro Forma | |||||||||||
Revenue | $ | 22,309,297 | $ | (22,204,299 | ) | (d) | $ | 104,998 | ||||||
Cost of sales | (22,444,919 | ) | 22,391,716 | (d) | (53,203 | ) | ||||||||
Gross profit | (135,622 | ) | 187,417 | 51,795 | ||||||||||
Operating expenses | ||||||||||||||
Selling expenses | (1,909,176 | ) | 1,873,957 | (d) | (35,219 | ) | ||||||||
General and administrative expenses | (2,052,427 | ) | 1,649,208 | (d) | (403,219 | ) | ||||||||
Total operating expenses | (3,961,603 | ) | 3,523,165 | (438,438 | ) | |||||||||
Other income (expenses) | ||||||||||||||
Interest expenses | (444,604 | ) | 444,604 | (d) | - | |||||||||
Interest income | 652 | - | 652 | |||||||||||
Other expenses, net | (89,957 | ) | 89,951 | (d) | (6 | ) | ||||||||
Total other (expenses) income | (533,909 | ) | 534,555 | 646 | ||||||||||
Loss before income taxes | (4,631,134 | ) | 4,245,137 | (385,997 | ) | |||||||||
Income tax expense | - | - | - | |||||||||||
Net loss | $ | (4,631,134 | ) | $ | 4,245,137 | $ | (385,997 | ) | ||||||
Loss per Share- Basic and Diluted | $ | (0.33 | ) | $ | 0.30 | $ | (0.03 | ) | ||||||
Weighted Average Shares Outstanding-Basic and Diluted | 13,857,988 | 13,857,988 | 13,857,988 |
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
(a) | These adjustments reflect the elimination of assets and liabilities attributable to the special chemical business which is to be spin-off or disposed of. | |
(b) | This adjustment reflects the receipt of cash consideration at the closing of the transaction of US$1,750,000, after reduction for transaction costs and cash, as of January 31, 2019. | |
(c) | This adjustment reflects the loss on the spin-off or disposal transaction based on the net assets as of January 31, 2019. This estimated gain has not been reflected in the Pro Forma Consolidated Statements of Operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustment under the terms of the agreement. | |
(d) | These adjustments reflect the elimination of operating revenues, costs and expenses attributable to the special chemical business which is to be spin-off or disposed of. | |
(e) | On December 31, 2018 the Company entered into a certain securities purchase agreement (the “SPA”) with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act pursuant to which the Company agreed to sell 7,500,000 shares of its Ordinary shares, par value $0.0001 per share at a per share purchase price of $0.55 up to an aggregate gross proceeds of four million one hundred twenty-five thousand dollars ($4,125,000). On January 20, we closed the transaction by issuance of 7,500,000 shares and receipt of the gross proceeds. As of January 31, 2019, Delta Tech’s cash and cash equivalents of $5,499,929 included the gross proceeds. |
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