Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
On March 12, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with Chan Heng Fai, the founder, Chairman and Chief Executive Officer of the Company, for four proposed transactions, consisting of (i) purchase of certain warrants (the “Warrants”) to purchase 1,500,000,000 shares of Alset International Limited (“Alset International”), which was valued at $28,363,966; (ii) purchase of all of the issued and outstanding stock of LiquidValue Development Pte Ltd. (“LVD”), which was valued at $173,395; (iii) purchase of 62,122,908 ordinary shares in True Partners Capital Holding Limited (HKG: 8657) (“True Partners”), which was valued at $6,729,629; and (iv) purchase of 4,775,523 shares of the common stock of American Pacific Bancorp Inc. (“APB”), which was valued at $28,653,138. The total amount of above four transactions was $63,920,129, payable on the Closing Date by the Company, in four convertible promissory notes (collectively, the “Alset CPNs”). Subject to the approval of the Company’s shareholders, the Alset CPNs shall be convertible into shares of the Company’s common stock, par value $0.001 per share, at a conversion price equal of $5.59 per share. This conversion price is equivalent to the average of the five closing share prices of the Company’s common stock preceding January 4, 2021, as quoted by Bloomberg L.P.
The following unaudited pro forma combined financial statements were prepared by applying certain pro forma adjustments to the historical financial statements of the Company. The pro forma adjustments give effect to the four transactions described above.
The unaudited pro forma combined statements of operations for our fiscal years ended December 31, 2020 and 2019, respectively, give effect to the four transactions as if they had occurred on January 1st of each year.
We determined that the four transactions described above were transactions between entities under common control, similar to a pooling of interest under APB Opinion 16. FASB ASC Topic 805, Business Combinations (“ASC 805”) provides guidance to present financial statements.
These unaudited pro forma consolidated financial statements do not purport to represent what our results of operations or financial condition would have been had the four transactions actually occurred on the assumed dates, nor do they purport to project our results of operations or financial condition for any future period or future date. You should read these unaudited pro forma combined financial statements in conjunction with the historical financial statements, including the related notes.
For the Years Ended December 31, 2020 and 2019
(Expressed in U.S. Dollars, except number of shares)
Alset EHome International 2020 | American Pacific Bancorp 2020 | Pro Forma Adjustments * | Pro Forma 2020 | Alset EHome International 2019 | American Pacific Bancorp 2019 | Pro Forma Adjustments * | Pro Forma 2019 | |
Revenue | (Audited) | (Audited) | (Unaudited) | (Audited) | (Audited) | (Unaudited) | ||
Property Sales | $13,643,689 | $- | $13,643,689 | $22,855,446 | $- | $22,855,446 | ||
Biohealth Product Sales | 2,594,511 | - | 2,594,511 | 1,371,298 | - | 1,371,298 | ||
Others | - | - | - | 31,209 | - | 31,209 | ||
Total Revenue | 16,238,200 | - | 16,238,200 | 24,257,953 | - | 24,257,953 | ||
Operating Expenses | ||||||||
Cost of Sales | 12,085,574 | - | 12,085,574 | 19,968,757 | - | 19,968,757 | ||
General and Administrative | 5,843,067 | 369,882 | 261,739 | 6,474,688 | 5,860,144 | 347,489 | 232,266 | 6,439,899 |
Inventory Written Off | - | - | - | 141,265 | - | 141,265 | ||
Impairment of Real Estate | - | - | - | 5,230,828 | - | 5,230,828 | ||
Other Operating Expenses | - | - | 600,270 | 600,270 | - | - | 327,477 | 327,477 |
Total Operating Expenses | 17,928,641 | 369,882 | 19,160,532 | 31,200,994 | 347,489 | 32,108,226 | ||
- | ||||||||
Operating Losses From Continuing Operations | (1,690,441) | (369,882) | (2,922,332) | (6,943,041) | (347,489) | (7,850,273) | ||
Other Income (Expense) | ||||||||
Interest Income | 16,321 | 49,020 | 65,341 | 52,145 | 48,582 | 100,727 | ||
Interest Expense | (147,640) | - | (147,640) | (372,902) | - | (372,902) | ||
Gain on Disposal of Subsidiary | - | - | - | 299,255 | - | 299,255 | ||
Net Gain in the Unconsolidated Period | 61,346 | - | 61,346 | - | - | - | ||
Foreign Exchange Transaction Loss | (354,392) | - | (354,392) | (341,415) | - | (341,415) | ||
Unrealized Gain (Loss) on Securities Investment | (1,750,454) | 55,788 | (1,978,434) | (3,673,100) | 320,032 | (123,663) | 196,369 | |
Realized Gain on Securities Investment | 1,115 | - | 1,115 | 7,944 | - | 7,944 | ||
Loss on Investment on Security by Equity Method | (227,643) | - | (227,643) | - | - | - | ||
Other Expense | (73,041) | (73,041) | - | - | - | |||
Other Income | 119,334 | 2,581 | 543,490 | 665,405 | 17,414 | 1,490 | 115 | 19,019 |
Total Other Income (Expense), Net | (2,282,013) | 34,348 | (3,682,609) | (17,527) | (73,591) | (91,003) | ||
Net Loss from Continuing Operations Before Income Taxes | (3,972,454) | (335,534) | (6,604,941) | (6,960,568) | (421,080) | (7,941,276) | ||
- | ||||||||
Income Tax Expense from Continuing Operations | (8,543) | - | (8,543) | (431,388) | - | (431,388) | ||
Net Loss Income from Continuing Operations | (3,980,997) | (335,534) | (6,613,484) | (7,391,956) | (421,080) | (8,372,664) | ||
Loss from Discontinued Operations, Net of Tax | (417,438) | - | (417,438) | (661,472) | - | (661,472) | ||
Net Loss | (4,398,435) | (335,534) | (7,030,922) | (8,053,428) | (421,080) | (9,034,136) | ||
Net Loss Attributable to Non-Controlling Interest | (1,881,559) | (45,498) | (1,927,057) | (2,822,963) | (57,098) | (2,880,061) | ||
Net Loss Income Attributable to Common Stockholders | $(2,516,876) | $(5,103,865) | $(5,230,465) | $(6,154,075) | ||||
Other Comprehensive Income (Loss), Net | ||||||||
Unrealized Gain on Securities Investment | 19,486 | 19,486 | (55,213) | (55,213) | ||||
Foreign Currency Translation Adjustment | 1,148,898 | 1,148,898 | 10,028 | 10,028 | ||||
Comprehensive Loss | (3,230,051) | (5,862,538) | (8,098,613) | (9,079,321) | ||||
Comprehensive Loss Attributable to Non-controlling Interests | (1,314,761) | (45,498) | (1,360,259) | (2,836,998) | (57,098) | (2,894,096) | ||
Comprehensive Loss Attributable to Common Stockholders | $(1,915,290) | $(4,502,279) | $(5,261,615) | $(6,185,225) | ||||
Net Income (Loss) Per Share - Basic and Diluted | ||||||||
Continuing Operations | $(0.27) | $(0.57) | $(0.47) | $(0.57) | ||||
Discontinued Operations | $(0.03) | $(0.04) | $(0.05) | $(0.05) | ||||
Net Loss Per Common Share | $(0.30) | $(0.61) | $(0.52) | $(0.61) | ||||
Weighted Average Common Shares Outstanding - Basic and Diluted | 8,352,425 | 8,352,425 | 10,001,000 | 10,001,000 |
Unaudited Pro Forma Consolidated Balance Sheets
Alset EHome International as Reported December 31, 2020 | American Pacific Bancorp as Reported December 31, 2020 (1) | Pro Forma Adjustments * | Pro Forma December 31, 2020 | Alset EHome International as Reported December 31, 2019 | American Pacific Bancorp as Reported December 31, 2019 (1) | Pro Forma Adjustments * | Pro Forma December 31, 2019 | |
Assets: | (Audited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) | (Audited) | (Unaudited) | (Unaudited) |
Current Assets: | ||||||||
Cash | $22,124,491 | $1,848,455 | $492,977 | $24,465,923 | $2,774,587 | $449,115 | $257,437 | $3,481,139 |
Restricted Cash | 6,769,533 | - | 6,769,533 | 4,447,678 | - | 4,447,678 | ||
Account Receivables, Net | 1,366,194 | - | 1,366,194 | 170,442 | - | 170,442 | ||
Other Receivables | 270,222 | 279,177 | 95,177 | 644,576 | 681,677 | 256,140 | 937,817 | |
Note Receivables - Related Parties | 624,986 | 24,583 | 649,569 | - | - | - | ||
Prepaid Expenses | 1,470,680 | - | 1,470,680 | 145,186 | - | 145,186 | ||
Inventory | 90,068 | - | 90,068 | 116,698 | - | 116,698 | ||
Investment in Securities at Fair Value | 48,857,483 | 313,343 | 6,652,477 | 55,823,303 | 3,015,698 | 257,555 | 10,803,192 | 14,076,445 |
Investment in Securities at Cost | 280,516 | - | 280,516 | 200,128 | - | 200,128 | ||
Deposits | 47,019 | - | 47,019 | 70,208 | - | 70,208 | ||
Current Assets from Discontinued Operations | - | - | - | 139,431 | - | 139,431 | ||
Total Current Assets | 81,901,192 | 2,465,558 | 91,607,381 | 11,761,733 | 962,810 | 23,785,172 | ||
Real Estate | ||||||||
Properties under Development | 20,505,591 | - | 20,505,591 | 23,884,704 | - | 23,884,704 | ||
Operating Lease Right-Of-Use Asset | 574,754 | - | 574,754 | 146,058 | - | 146,058 | ||
Deposit | 249,676 | - | 249,676 | - | - | - | ||
Loan Receivable | - | 840,000 | 840,000 | - | - | - | ||
Property and Equipment, Net | 85,365 | - | 85,365 | 80,285 | - | 80,285 | ||
Total Assets | $103,316,578 | $3,305,558 | $113,862,767 | $35,872,780 | $962,810 | $47,896,219 | ||
Liabilities and Stockholders' Equity: | ||||||||
Current Liabilities: | ||||||||
Accounts Payable and Accrued Expenses | $1,553,132 | $117,188 | $1,670,320 | $3,995,001 | $49,397 | $2,972 | $4,047,370 | |
Accrued Interest - Related Parties | - | - | - | 834,536 | - | 834,536 | ||
Deferred Revenue | 2,867,226 | - | 2,867,226 | 258,594 | - | 258,594 | ||
Builder Deposits | 1,262,336 | - | 1,262,336 | 890,069 | - | 890,069 | ||
Operating Lease Liability | 381,412 | - | 381,412 | 58,865 | - | 58,865 | ||
Notes Payable | 172,706 | - | 172,706 | 157,105 | - | 157,105 | ||
Notes Payable - Related Parties | 1,526,208 | - | 64,743,952 | 66,270,160 | 410,000 | - | 66,185,213 | 66,595,213 |
Income Tax Payable | - | - | - | 420,327 | - | 420,327 | ||
Current Liabilities from Discontinued Operations | - | - | - | 7,021 | - | 7,021 | ||
Total Current Liabilities | 7,763,020 | 117,188 | 72,624,160 | 7,031,518 | 49,397 | 73,269,100 | ||
Long-Term Liabilities: | ||||||||
Builder Deposits | - | - | - | 1,555,200 | - | 1,555,200 | ||
Operating Lease Liability | 193,342 | - | 193,342 | 91,330 | - | 91,330 | ||
Note Payable, Net of Discount | 636,362 | - | 636,362 | - | - | - | ||
Notes Payable - Related Parties | - | - | - | 4,971,401 | - | 4,971,401 | ||
Total Liabilities | 8,592,724 | 117,188 | 73,453,864 | 13,649,449 | 49,397 | 79,887,031 | ||
Stockholders' Equity: | ||||||||
Preferred Stock | - | 4,917 | (4,917) | -** | - | - | ||
Common Stock | 8,570 | 55,248 | (55,248) | 8,570** | 10,001 | 50,331 | (50,331) | 10,001 |
Additional Paid In Capital | 97,950,440 | 4,142,448 | (55,057,499) | 47,035,389 | 54,263,717 | 1,541,791 | (54,726,709) | 1,078,799 |
Accumulated Deficit | (43,010,991) | (1,014,243) | (2,733,485) | (46,758,719) | (40,494,115) | (678,709) | (469,780) | (41,642,604) |
Accumulated Other Comprehensive Income | 2,153,318 | - | (9,980) | 2,143,338 | 1,468,269 | - | (4,593) | 1,463,676 |
Equity Attributable to Stockholders of the Company | 57,101,337 | 3,188,370 | 2,428,578 | 15,247,872 | 913,413 | (39,090,128) | ||
Non-controlling Interests | 37,622,517 | - | 357,808 | 37,980,325 | 6,975,459 | - | 123,857 | 7,099,316 |
Total Stockholders' Equity | 94,723,854 | 3,188,370 | 40,408,903 | 22,223,331 | 913,413 | (31,990,812) | ||
Total Liabilities and Stockholders' Equity | $103,316,578 | $3,305,558 | $113,862,767 | $35,872,780 | $962,810 | $47,896,219 |
*Proforma Adjustments:
(1)
4,775,523 common shares of APB represented 86.4% of APB’s total outstanding shares as of March 12, 2021, the date the PSA was entered with Mr. Chan Heng Fai. In the Unaudited Proforma Financial Statements, we assume the same ownership in the years of 2020 and 2019 and as of December 31, 2020 and 2019. We adjusted non-controlling interest of APB in both Unaudited Pro Forma Consolidated Balance Sheets and Unaudited Pro Forma Consolidated Statements of Operations and Other Comprehensive Loss.
(2)
True Partners Capital Holding Limited (HKG: 8657) started trading on Hong Kong Stock Exchange at October 16, 2020. We assume the fair value of 62,122,908 ordinary shares of Ture Partners was $8,629,280 on January 1, 2020 and 2019, the fair value on October 16, 2020, which was calculated under the closing market price on that day.
(3)
The Company started trading on November 24, 2020. We assumed the market share price of the Company was $5.59 per share or less, the conversion price on the four promissory notes, as of January 1, 2020 and 2019. Based on this assumption, no Beneficiary Conversion Feature (“BCF”) was recorded in the pro forma financial statements. However, BCF may be recorded in the future actual financial statements under ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity and may have huge impact on the future actual financial statements. Based on the Company’s stock price on March 12, 2021, the agreement date as the commitment date of BCF, the BCF intrinsic value is approximately $50 million, which will be recorded as debt discount and amortized on a monthly basis until the expiration date of the promissory notes or the conversion date, whichever is earlier.
**Preferred Stock and Common Stock
In both Unaudited Pro Forma Consolidated Balance Sheets and Unaudited Pro Forma Consolidated Statements of Operations and Other Comprehensive Loss, we do not include the transaction that Mr. Chan Heng Fai exchanged his common stock to preferred stock on May 3, 2021. The management expects that he will convert the preferred stock back to common stock in a short period.