Attached files
EXHIBIT 99.4
GREAT
EAST BOTTLES & DRINKS (CHINA) HOLDINGS, INC.
UNAUDITED
PRO-FORMA COMBINED BALANCE SHEET
December
31, 2009
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GEBD
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Upjoy
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United
Joy
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Greatgrand
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Equity
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Pro-forma
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|||||||||||||||||||
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Historical
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Historical
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Historical
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Historical
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Adjustments
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Combined
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ASSETS
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CURRENT ASSETS
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Cash
and cash equivalents
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$ | 394,948 | $ | 40,270 | $ | 1,185,292 | $ | 10,229 | $ | - | $ | 1,630,739 | ||||||||||||
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Pledged
deposits
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3,608,354 | 6,163,611 | - | - | - | 9,771,965 | ||||||||||||||||||
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Accounts
receivable
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2,542,714 | 1,219,279 | 1,243,804 | 615,044 | - | 5,620,841 | ||||||||||||||||||
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Tax
recoverable
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- | - | 1,295 | - | - | 1,295 | ||||||||||||||||||
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Inventories
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1,946,783 | 483,640 | 1,243,947 | 674,040 | - | 4,348,410 | ||||||||||||||||||
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Prepaid
expenses and other receivables
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1,543,278 | 148,110 | 198,730 | 183,539 | - | 2,073,657 | ||||||||||||||||||
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Total current
assets
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10,036,077 | 8,054,910 | 3,873,068 | 1,482,852 | - | 23,446,907 | ||||||||||||||||||
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PROPERTY,
PLANT & EQUIPMENT, NET
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21,090,348 | 2,362,744 | 5,520,777 | 4,687,192 | - | 33,661,061 | ||||||||||||||||||
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LAND
USE RIGHT, NET OF AMORTIZATION
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339,338 | - | 274,778 | - | - | 614,116 | ||||||||||||||||||
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TOTAL
ASSETS
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$ | 31,465,763 | $ | 10,417,654 | $ | 9,668,623 | $ | 6,170,044 | $ | - | $ | 57,722,084 | ||||||||||||
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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LIABILITIES
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CURRENT
LIABILITIES
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Bank
loans
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$ | 4,252,099 | $ | 1,320,774 | $ | 2,240,218 | $ | 153,922 | $ | - | $ | 7,967,013 | ||||||||||||
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Accounts
payable
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1,447,459 | 690,980 | 1,628,079 | 865,834 | - | 4,632,352 | ||||||||||||||||||
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Notes
payables
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1,725,727 | - | - | - | - | 1,725,727 | ||||||||||||||||||
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Accrued
expenses and other payables
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293,388 | 5,966 | 1,073,070 | 98,473 | - | 1,470,897 | ||||||||||||||||||
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Tax
payable
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404,417 | 59,118 | - | 73,985 | - | 537,520 | ||||||||||||||||||
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Amount
due to a shareholder
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58,194 | 8,163,296 | 4,032,066 | 4,147,669 | 29,997 | 16,431,222 | ||||||||||||||||||
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Total
current liabilities
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8,181,284 | 10,240,134 | 8,973,433 | 5,339,883 | 29,997 | 32,764,731 | ||||||||||||||||||
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LONG-TERM
BANK LOAN
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2,606,602 | - | 398,096 | 131,014 | - | 3,135,712 | ||||||||||||||||||
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TOTAL
LIABILITIES
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$ | 10,787,886 | $ | 10,240,134 | $ | 9,371,529 | $ | 5,470,897 | $ | 29,997 | $ | 35,900,443 | ||||||||||||
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STOCKHOLDERS’
EQUITY
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Common
stock
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400,000 | 10,000 | 10,000 | 10,000 | (30,000 | ) | 400,000 | |||||||||||||||||
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Additional
paid in capital
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9,885,277 | - | - | - | (6,648,171 | ) | 3,237,106 | |||||||||||||||||
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Capital
reserves
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2,668,465 | - | - | - | (1,749,319 | ) | 919,146 | |||||||||||||||||
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Retained
earnings/(accumulated deficits)
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3,750,838 | (133,609 | ) | 61,280 | 213,765 | (3,133,875 | ) | 758,399 | ||||||||||||||||
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Accumulated
other comprehensive income
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3,848,500 | 301,129 | 225,814 | 475,382 | (3,293,662 | ) | 1,557,163 | |||||||||||||||||
| $ | 20,553,080 | $ | 177,520 | $ | 297,094 | $ | 699,147 | $ | (14,855,027 | ) | $ | 6,871,814 | ||||||||||||
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Noncontrolling
interests
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124,797 | - | - | - | 14,825,030 | 14,949,827 | ||||||||||||||||||
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TOTAL
STOCKHOLDERS’ EQUITY
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$ | 20,677,877 | $ | 177,520 | $ | 297,094 | $ | 699,147 | $ | (29,997 | ) | $ | 21,821,641 | |||||||||||
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TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 31,465,763 | $ | 10,417,654 | $ | 9,668,623 | $ | 6,170,044 | $ | - | $ | 57,722,084 | ||||||||||||
GREAT
EAST BOTTLES & DRINKS (CHINA) HOLDINGS, INC.
UNAUDITED
PRO-FORMA COMBINED STATEMENTS OF OPERATIONS
AND
COMPREHENSIVE INCOME
Year
Ended December 31, 2009
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GEBD
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Upjoy
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United
Joy
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Greatgrand
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Intercompany
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Noncontrolling
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Pro-forma
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||||||||||||||||||||||
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Historical
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Historical
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Historical
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Historical
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eliminations
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interests
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Combined
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REVENUE
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$ | 34,602,296 | $ | 13,378,563 | $ | 18,772,484 | $ | 4,115,453 | $ | (23,022,971 | ) | $ | - | $ | 47,845,825 | |||||||||||||
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COST
OF SALES
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28,016,307 | 12,026,171 | 15,824,924 | 3,064,836 | (23,022,971 | ) | - | 35,909,267 | ||||||||||||||||||||
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GROSS
MARGIN
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6,585,989 | 1,352,392 | 2,947,560 | 1,050,617 | - | - | 11,936,558 | |||||||||||||||||||||
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EXPENSES
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Selling and
distribution
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318,646 | 196,248 | 457,419 | 59,266 | - | - | 1,031,579 | |||||||||||||||||||||
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General and
administrative
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2,716,293 | 273,295 | 954,593 | 374,618 | - | - | 4,318,799 | |||||||||||||||||||||
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OPERATING
INCOME
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3,551,050 | 882,849 | 1,535,548 | 616,733 | - | - | 6,586,180 | |||||||||||||||||||||
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OTHER
INCOME/(EXPENSE)
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Other
income
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255,177 | 16,779 | 113,765 | 65,203 | - | - | 450,924 | |||||||||||||||||||||
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Bank
interest income
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98,790 | 67,558 | 456 | 239 | - | - | 167,043 | |||||||||||||||||||||
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Bank loan
interest
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(496,901 | ) | (63,691 | ) | (165,992 | ) | (28,983 | ) | - | - | (755,567 | ) | ||||||||||||||||
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Other expense
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(374,200 | ) | (217,694 | ) | (13,465 | ) | (2,723 | ) | - | - | (608,082 | ) | ||||||||||||||||
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TOTAL
OTHER INCOME/(EXPENSE)
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(517,134 | ) | (197,048 | ) | (65,236 | ) | 33,736 | - | - | (745,682 | ) | |||||||||||||||||
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INCOME
BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTERESTS
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3,033,916 | 685,801 | 1,470,312 | 650,469 | - | - | 5,840,498 | |||||||||||||||||||||
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PROVISION
FOR INCOME TAXES
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1,159,279 | - | - | - | - | - | 1,159,279 | |||||||||||||||||||||
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INCOME
BEFORE MINORITY INTERESTS
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1,874,637 | 685,801 | 1,470,312 | 650,469 | - | - | 4,681,219 | |||||||||||||||||||||
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MINORITY
INTERESTS
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10,376 | - | - | - | - | 3,625,110 | 3,635,486 | |||||||||||||||||||||
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NET
INCOME
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$ | 1,864,261 | $ | 685,801 | 1,470,312 | 650,469 | $ | - | $ | (3,625,110 | ) | $ | 1,045,733 | |||||||||||||||
GREAT
EAST BOTTLES & DRINKS (CHINA) HOLDINGS, INC.
NOTES
TO UNAUDITED PRO-FORMA COMBINED FINANCIAL STATEMENTS
Year
Ended December 31, 2009
NOTE 1 BASIS OF
PRESENTATION
On
December 30, 2009, Great East Bottles & Drinks (China) Holdings, Inc. (the
“Company”) entered into various asset reorganization arrangements:
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i)
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Great
East Bottles and Drinks (BVI) Inc. (“GEBD BVI”), a wholly owned subsidiary
of the Company, reorganized its investment holding structure in Great East
Packaging International Limited (“GEPI”), Great East Packaging (Nanjing)
Limited (“GEPNJ”) and Great East Packaging (Xian) Limited
(“GEPXA”).
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In this
reorganization, GEPNJ and GEPXA each allotted 9,999 shares at $1 each to Great
East (Overseas) Packaging Limited (“GEOP”) which is an indirectly subsidiary of
GEPI. Total consideration is $19,998. Immediately after the
completion of the share allotment, GEOP became the controlling shareholder of
GEPNJ and GEPXA.
GEPNJ
owns a 100% equity interest in Nanjing Great East Packaging Co., Ltd., which is
principally engaged in the production of beverage bottles in Nanjing, the PRC.
GEPXA owns a 100% equity interest in Xian Great East Packaging Co., Ltd., which
is principally engaged in the production of beverage bottles in Xian, the
PRC.
GEPI owns
an 84% equity interest in Hangzhou Great East Packaging Co., Ltd. (“HZGE”),
which is principally engaged in the production of beverage bottles in Hangzhou,
the PRC. HZGE owns a 100% equity interest in GEOP.
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ii)
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GEBD
BVI entered into various agreements for assets reorganization with Great
East Packaging Holdings Limited (“GEPH”). The Company considers
GEPH to be a related party as the Company’s majority shareholder, Mr. Guy
A-Tsan Chung, owned 74.25% of the Company and was an affiliate of GEPH as
of December 31, 2009. GEPH owns United Joy International Limited (“United
Joy”), Greatgrand Global Limited (“Greatgrand”) and Upjoy Holdings Limited
(“Upjoy”), and is a related party with a common ultimate
shareholder. Pursuant to the
agreements:
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(a)
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GEOP
subscribed for 9,999 new shares at $1 each in each of United Joy,
Greatgrand and Upjoy, respectively. Total consideration is
$29,997.
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(b)
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In
exchange, GEPI granted GEPH an option to subscribe for 9,638,769 ordinary
shares of GEPI, or a 60% equity interests in the enlarged share capital of
GEPI, exercisable for 3 years, ending December 31, 2012, with an exercise
price of $1.
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(c)
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In
addition, GEBD BVI disposed of its entire interests in Best Key Investment
Limited (“Best Key”) to Top Sharp Investments Limited (“Top Sharp”) at a
consideration of HK$1. Best Key owns a 15% equity interest in
HZGE. The Company considers Top Sharp to be a related party as
the Company’s majority shareholder, Mr. Guy A-Tsan Chung, owned 74.25% of
the Company and was an affiliate of Top Sharp as of December 31,
2009.
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United
Joy owns a 100% equity interest in Nanjing Crystal Pines Beverages &
Packaging Co. Ltd, which is principally engaged in the production of OEM bottled
water in Nanjing and Hefei, the PRC. Greatgrand owns a 100% equity interest in
Shenyang Great East Packaging Co. Ltd, which is principally engaged in the
production of beverage bottles in Shenyang, the PRC. Upjoy owns a 100% equity
interest in Hangzhou Crystal Pines Beverages & Packaging Co. Ltd, which is
principally engaged in the production of OEM bottled water in Hangzhou and
Taizhou, the PRC.
The above
arrangements completed at close of December 31, 2009 and the option granted to
GEPH was deemed exercised on the same date. Immediately after the
completion of the above reorganization arrangements, GEPI owned all of the
operating units of the Company, and the Company’s effective interests in GEPI
decreased from 99% to 33.6%.
The
assets transferred between entities under common control are accounted for at
historical cost similar to a pooling of interest. Financial results
of United Joy, Greatgrand and Upjoy each, together with the impact on disposal
of Best Key and deemed exercise of share option, were consolidated on an
“as-if-pooling” basis.
NOTE 2 PRO-FORMA
FINANCIAL STATEMENTS
The
pro-forma combined consolidated financial statements have been developed from
the audited accounts of GEBD, Upjoy, United Joy and Greatgrand. The pro-forma
combined consolidated financial statements should be read in conjunction with
the separate historical financial statements of GEBD, Upjoy, United Joy and
Greatgrand, respectively.
NOTE 3 PRO-FORMA
ADJUSTMENTS
The
pro-forma adjustments included in the combined consolidated financial statements
are as follows:
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(a)
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Elimination
of share capital of Upjoy, United Joy and
Greatgrand.
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(b)
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Recognized
noncontrolling interests in shareholders’ equity and results for the
year.
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(c)
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Elimination
of inter-company transactions
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