Exhibit 99.1
DRAGON VICTORY INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, | March 31, | September 30, | March 31, | |||||||||||||
2018 | 2018 | 2017 | 2017 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 1,735,037 | $ | 3,937,490 | $ | 8,546,582 | $ | 3,222,361 | ||||||||
Trade accounts receivable,net | 2,761,771 | 1,610,865 | 1,855,393 | 673,678 | ||||||||||||
Inventory,net | - | - | - | - | ||||||||||||
Other receivables and prepayments | 922,748 | 1,233,425 | 308,980 | 90,413 | ||||||||||||
Related party receivables | 368,502 | 266,959 | 40,180 | 67,145 | ||||||||||||
Short-term investments | 6,920,070 | 4,744,328 | 1,997,792 | - | ||||||||||||
Deferred tax asset | - | - | - | - | ||||||||||||
Total current assets | 12,708,128 | 11,793,067 | 12,748,927 | 4,053,597 | ||||||||||||
Non-current assets | ||||||||||||||||
Investment | 75,547 | 75,547 | 75,105 | 72,563 | ||||||||||||
Property, plant and equipment,net | 1,026,484 | 1,060,376 | 18,643 | 32,824 | ||||||||||||
Intangible assets,net | 1,154 | 1,369 | 711 | 812 | ||||||||||||
Other assets | 75,523 | 87,339 | 22,310 | 52,739 | ||||||||||||
TOTAL ASSETS | 13,886,836 | 13,017,698 | 12,865,696 | 4,212,535 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities | ||||||||||||||||
Accounts payable | 35,750 | 52,955 | 35,203 | 63,483 | ||||||||||||
Taxes payable | 1,801,995 | 1,670,273 | 1,196,752 | 830,605 | ||||||||||||
Accrued liabilities and other current liabilities | 351,512 | 236,277 | 188,954 | 253,913 | ||||||||||||
Related party payable | 193,232 | 64,698 | 64,436 | 42,960 | ||||||||||||
Total current liabilities | 2,382,489 | 2,024,203 | 1,485,345 | 1,190,961 | ||||||||||||
TOTAL LIABILITIES | 2,382,489 | 2,024,203 | 1,485,345 | 1,190,961 | ||||||||||||
COMMITMENTS & CONTINGENCIES | - | - | - | - | ||||||||||||
EQUITY | ||||||||||||||||
Dragon Victory Stockholders' Equity | ||||||||||||||||
Ordinary Shares, $0.0001 par value, 500,000,000 shares authorized; 11,421,393 shares issued and outstanding, respectively | 1,142 | 1,142 | 1,142 | 1,000 | ||||||||||||
Additional paid-in capital | 8,929,968 | 8,929,968 | 8,924,380 | 1,053,607 | ||||||||||||
Statutory reserves | 433,479 | 433,479 | 65,331 | 65,331 | ||||||||||||
Retained earnings | 2,604,888 | 1,876,236 | 2,443,103 | 2,051,252 | ||||||||||||
Accumulated other comprehensive income | (190,072 | ) | (168,540 | ) | (53,605 | ) | (149,616 | ) | ||||||||
Total Dragon Victory stockholders’ equity | 11,779,405 | 11,072,285 | 11,380,351 | 3,021,574 | ||||||||||||
Noncontrolling interest | (275,058 | ) | (78,790 | ) | - | - | ||||||||||
TOTAL EQUITY | 11,504,347 | 10,993,495 | 11,380,351 | 3,021,574 | ||||||||||||
TOTAL LIABILITIES AND STOCHOLDERS' EQUITY | $ | 13,886,836 | $ | 13,017,698 | $ | 12,865,696 | $ | 4,212,535 |
See Accompanying Notes to the Financial Statements
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DRAGON VICTORY INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
For the Six Months Ended | ||||||||
September 30, | September 30, | |||||||
2018 | 2017 | |||||||
Revenues | $ | 2,336,132 | $ | 1,885,736 | ||||
Operating expenses | ||||||||
Selling, general and administrative expenses | 2,018,154 | 1,314,943 | ||||||
Total Operating expenses | 2,018,154 | 1,314,943 | ||||||
Income (Loss) from operation | 317,978 | 570,793 | ||||||
Other income (expenses): | ||||||||
Gain on sale of investments | - | - | ||||||
Impairment on investments | - | - | ||||||
Shared loss from equity method investments | - | - | ||||||
Other income | 14,157 | - | ||||||
Other expenses | (9,818 | ) | (580 | ) | ||||
Interest income | 338,570 | 50,692 | ||||||
Interest expense | (1,240 | ) | - | |||||
Total other income (expenses) | 341,669 | 50,112 | ||||||
Income (loss) before tax | 659,647 | 620,905 | ||||||
Income tax | - | (229,057 | ) | |||||
Net income (loss) including noncontrolling interest | 659,647 | 391,848 | ||||||
Less: Net income (loss) attributable to noncontrolling interest | (69,005 | ) | - | |||||
Net income attributable to Dragon Victory | $ | 728,652 | $ | 391,848 | ||||
Net income including noncontrolling interest | $ | 659,647 | $ | 391,848 | ||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation loss | (148,792 | ) | 96,011 | |||||
Comprehensive income (loss) including noncontrolling interest | $ | 510,855 | $ | 487,859 | ||||
Less: Comprehensive (income) loss attributable to noncontrolling interest | $ | (196,268 | ) | $ | - | |||
Comprehensive income (loss) attributable to Dragon Victory | $ | 707,122 | $ | 487,861 | ||||
Earnings per share attributable to Dragon Victory common stockholders | ||||||||
Basic | $ | 0.06 | $ | 0.04 | ||||
Diluted | $ | 0.06 | $ | 0.04 | ||||
Weighted average shares outstanding-Dragon Victory | ||||||||
Basic | 11,421,394 | 10,124,275 | ||||||
Diluted | 11,421,394 | 10,124,275 |
See Accompanying Notes to the Financial Statements
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DRAGON VICTORY INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended | ||||||||
September 30, | September 30, | |||||||
2018 | 2017 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash flows from operating activities | ||||||||
Net income (loss) including noncontrolling interest | $ | 675,024 | $ | 377,726 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||||||||
Depreciation and amortization | 45,689 | 18,691 | ||||||
Bad debt expense | - | - | ||||||
Gain on sale of investments | - | - | ||||||
Impairment on investments | - | - | ||||||
Loss from equity method investments | - | - | ||||||
Changes in assets and liabilities | - | - | ||||||
Increase in inventory | - | - | ||||||
Increase in accounts receivables | (1,170,646 | ) | (1,148,224 | ) | ||||
Increase in other receivables and prepayments | 300,661 | (203,156 | ) | |||||
Decrease (Increase) in related party receivables | (103,284 | ) | 30,262 | |||||
Increase in other current assets | - | - | ||||||
(Increase)/decrease in deferred tax asset | - | - | ||||||
Decrease in other assets | 12,019 | (26,588 | ) | |||||
Increase/(Decrease) in accounts payables | (17,503 | ) | - | |||||
Increase in taxes payable | 133,980 | 331,582 | ||||||
Increase/(Decrease) in accrued liabilities and other current liabilities | 132,503 | (59,537 | ) | |||||
INTERCO-Receivables from/Payables to Parent/Subsidiary | - | - | ||||||
Net cash (used in)/provided by operating activities | 8,443 | (679,244 | ) | |||||
Cash flows from investing activities | ||||||||
Investment in affiliated entities | - | - | ||||||
Acquisitions of investments | (2,213,062 | ) | (1,965,362 | ) | ||||
Increase in related party receivables | - | (1,424 | ) | |||||
Purchase of equipment and improvements | (10,519 | ) | (3,483 | ) | ||||
Decrease in rent and utility deposits | - | 31,753 | ||||||
Purchase of intangible assets | (479 | ) | - | |||||
INTERCO-Investment from/(into) Parent/Subsidiary | - | - | ||||||
Net cash (used in)/provided by investing activities | (2,224,060 | ) | (1,938,516 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of ordinary shares | - | 7,731,271 | ||||||
Capital contribution from owners | 892,167 | 139,644 | ||||||
Proceeds from capital lease | - | - | ||||||
Repayment of capital lease | - | - | ||||||
Increase in related party payable | 128,727 | 20,001 | ||||||
INTERCO-Proceeds from registered capital/shares issuance | - | |||||||
Net cash provided by/(used in) financing activities | 1,020,894 | 7,890,916 | ||||||
Net Increase/(decrease) of Cash and Cash Equivalents | (1,194,723 | ) | 5,273,156 | |||||
Effect of foreign currency translation on cash and cash equivalents | (1,007,730 | ) | 51,065 | |||||
Cash and cash equivalents–beginning of year | 3,937,490 | 3,222,361 | ||||||
Cash and cash equivalents–end of year | $ | 1,735,037 | $ | 8,546,582 | ||||
Supplemental cash flow disclosures | ||||||||
Interest received | $ | - | $ | 49,583 | ||||
Interest paid | $ | - | $ | 11,477 | ||||
Income taxes paid | $ | 285,749 | $ | - |
See Accompanying Notes to the Financial Statements
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