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 |