Attached files
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| 8-K/A - NEW ENERGY SYSTEMS GROUP FORM 8-K - NEW ENERGY SYSTEMS GROUP | form8ka.htm |
| EX-99.1 - EXHIBIT 99.1 - NEW ENERGY SYSTEMS GROUP | ex991.htm |
Exhibit 99.2
NEW ENGEGY SYSTEMS GROUP AND
KIM FAI SOLAR ENERGY TECHNOLOGY CO., LTD
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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Pro Forma Consolidated Financial Statements:
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Pro Forma Consolidated Balance Sheet as of September 30, 2010
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F-2
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Pro Forma Consolidated Statements of Income and Comprehensive Income for the Nine Months Ended September 30, 2010
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F-3 |
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Pro Forma Consolidated Statements of Income and Comprehensive Income for the Year Ended December 31, 2009
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F-4 |
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Notes to Pro Forma Consolidated Financial Statements
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F-5
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F-1
NEW ENERGY SYSTEMS GROUP
KIM FAI SOLAR ENERGY TECHNOLOGY CO., LTD
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2010
(UNAUDITED)
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New Energy
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Kim Fai
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Pro Forma
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Pro Forma
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| (1) | (2) |
Adjustments
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Consolidated
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ASSETS
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(historical)
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(historical)
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CURRENT ASSETS
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Cash and equivalents
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$ | 8,898,046 | $ | 766,465 | $ | 9,664,511 | ||||||||||||
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Accounts receivable
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18,775,653 | 1,507,559 | 20,283,212 | |||||||||||||||
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Inventory
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2,052,490 | 293,686 | 2,346,176 | |||||||||||||||
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Prepaid expenses
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62,831 | - | 62,831 | |||||||||||||||
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Other receivables
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38,340 | 8,356 | 46,696 | |||||||||||||||
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Due from shareholders
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267,357 | - | 267,357 | |||||||||||||||
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TOTAL CURRENT ASSETS
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30,094,717 | 2,576,066 | - | 32,670,783 | ||||||||||||||
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NONCURRENT ASSETS
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Plant, property & equipment, net
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895,111 | 141,352 | 1,036,463 | |||||||||||||||
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Goodwill
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28,452,196 | - | 27,098,196 | A | 55,550,392 | |||||||||||||
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Intangible assets, net
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20,695,543 | - | 20,695,543 | |||||||||||||||
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TOTAL NONCURRENT ASSETS
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50,042,850 | 141,352 | 27,098,196 | 77,282,398 | ||||||||||||||
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TOTAL ASSETS
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$ | 80,137,567 | $ | 2,717,418 | $ | 27,098,196 | $ | 109,953,181 | ||||||||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES
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Accounts payable and accrued expenses
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$ | 9,437,250 | $ | 1,368,556 | $ | 10,805,806 | ||||||||||||
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Other payable
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$ | 13,000,000 | B | 13,000,000 | ||||||||||||||
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Taxes payable
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2,148,788 | 309,306 | 2,458,094 | |||||||||||||||
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Loan payable to related party
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537,225 | - | 537,225 | |||||||||||||||
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Note payable
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- | - | ||||||||||||||||
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TOTAL CURRENT LIABILITIES
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12,123,263 | 1,677,862 | 13,000,000 | 26,801,125 | ||||||||||||||
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DEFERRED TAX LIABILITY
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3,998,137 | - | - | 3,998,137 | ||||||||||||||
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TOTAL LIABILITIES
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16,121,400 | 1,677,862 | 13,000,000 | 30,799,262 | ||||||||||||||
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SHAREHOLDER'S EQUITY
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Preferred stock, $.001 par value, 7,575,757 shares authorized, issued and outstanding
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7,576 | - | 7,576 | |||||||||||||||
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Common stock, $.001 par value, 140,000,000 shares authorized, 11,863,390 shares issued and outstanding
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11,863 | - | 1,913 | A | 13,776 | |||||||||||||
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Additional paid in capital
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53,667,474 | 354,787 | 14,601,397 | A | 68,623,658 | |||||||||||||
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Statutory reserve
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2,070,081 | 179,655 | - | A | 2,249,736 | |||||||||||||
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Other comprehensive income
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1,617,647 | 40,937 | (40,937 | ) | A | 1,617,647 | ||||||||||||
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Retained earnings
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8,583,769 | 464,177 | (464,177 | ) | A | 8,583,769 | ||||||||||||
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Less: Deferred compensation
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(1,942,243 | ) | - | (1,942,243 | ) | |||||||||||||
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TOTAL SHAREHOLDERS' EQUITY
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64,016,167 | 1,039,556 | 14,098,196 | 79,153,919 | ||||||||||||||
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
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$ | 80,137,567 | $ | 2,717,418 | $ | 27,098,196 | $ | 109,953,181 | ||||||||||
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(1) Source: unaudited financial statements of New Energy Systems Group as of September 30, 2010
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as filed in Quarterly Report on Form 10Q filed with the SEC on November 15, 2010.
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(2) Source: unaudited financial statements of Kim Fai Solar Energy Technology Co., Ltd. included in this 8-K.
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(A) Allocation of the purchase price to the fair value of assets acquired and liabilities assumed. The excess purchase price of $27,098,196 is allocated to goodwill.
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(B) Payment of outstanding balance of $13 million for cash portion of the acquisition price.
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See accompanying notes to pro forma consolidated financial statements
F-2
NEW ENERGY SYSTEMS GROUP AND
KIM FAI SOLAR ENERGY TECHNOLOGY CO., LTD
PRO FORMA CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2010
(UNAUDITED)
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New Energy
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Kim Fai
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Pro forma
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Pro Forma
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Adjustments
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Consolidated
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(historical)
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(historical)
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Net Revenue
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$ | 72,218,535 | $ | 13,236,410 | $ | 85,454,945 | ||||||||||
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Cost of Revenue
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52,432,544 | 9,050,711 | 61,483,255 | |||||||||||||
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Gross Profit
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19,785,991 | 4,185,699 | - | 23,971,690 | ||||||||||||
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Operating expenses:
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Selling
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369,251 | 78,561 | 447,812 | |||||||||||||
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General and administrative
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4,319,026 | 322,653 | 4,641,679 | |||||||||||||
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Total operating expenses
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4,688,277 | 401,214 | - | 5,089,491 | ||||||||||||
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Income from operations
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15,097,714 | 3,784,485 | - | 18,882,199 | ||||||||||||
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Non-operating income (expenses):
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Interest income (expense)
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63,824 | 7,261 | 71,085 | |||||||||||||
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Miscellaneous income
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7,031 | - | 7,031 | |||||||||||||
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Total non-operating expenses
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70,855 | 7,261 | - | 78,116 | ||||||||||||
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Income before income tax
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15,168,569 | 3,791,746 | - | 18,960,315 | ||||||||||||
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Income tax
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3,545,827 | 834,184 | - | 4,380,011 | ||||||||||||
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Net income
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11,622,742 | 2,957,562 | - | 14,580,304 | ||||||||||||
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Other comprehensive item
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Foreign currency translation
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391,661 | 17,862 | - | 409,523 | ||||||||||||
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Comprehensive Income
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$ | 12,014,403 | $ | 2,975,424 | $ | - | $ | 14,989,827 | ||||||||
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Earnings per share - basic
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0.98 | 1.55 | 1.06 | |||||||||||||
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Earnings per share - diluted
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0.92 | 1.55 | 1.00 | |||||||||||||
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Weighted average shares outstanding
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11,863,390 | 1,913,265 | 13,776,655 | |||||||||||||
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Diluted average shares outstanding
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12,623,411 | 1,913,265 | 14,536,676 | |||||||||||||
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(1) Source: unaudited financial statements of New Energy Systems Group
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for the nine months ended September 30, 2010 as filed in Form 10-Q filed with the SEC on November 15, 2010.
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(2) Source: unaudited financial statements of Kim Fai Solar Energy Technology Co., Ltd. included in this Form 8-K.
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See accompanying notes to pro forma consolidated financial statements
F-3
NEW ENERGY SYSTEMS GROUP AND
KIM FAI SOLAR ENERGY TECHNOLOGY CO., LTD
PRO FORMA CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
YEAR ENDED DECEMBER 31, 2009
(UNAUDITED)
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New Energy
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Kim Fai
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Pro forma
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Pro Forma
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Adjustments
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Consolidated
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(historical)
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(historical)
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Net Revenue
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$ | 26,375,890 | $ | 12,240,567 | $ | 38,616,457 | ||||||||||
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Cost of Revenue
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18,331,539 | 9,005,208 | 27,336,747 | |||||||||||||
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Gross Profit
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8,044,351 | 3,235,359 | - | 11,279,710 | ||||||||||||
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Operating expenses:
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Selling
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124,845 | 109,501 | 234,346 | |||||||||||||
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General and administrative
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1,213,783 | 398,171 | 1,611,954 | |||||||||||||
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Total operating expenses
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1,338,628 | 507,672 | - | 1,846,300 | ||||||||||||
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Income from operations
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6,705,723 | 2,727,687 | - | 9,433,410 | ||||||||||||
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Non-operating income (expenses):
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Interest
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(49,436 | ) | (63,295 | ) | (112,731 | ) | ||||||||||
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Other
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(5,794 | ) | - | (5,794 | ) | |||||||||||
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Total non-operating expenses
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(55,230 | ) | (63,295 | ) | - | (118,525 | ) | |||||||||
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Income before income tax
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6,650,493 | 2,664,392 | - | 9,314,885 | ||||||||||||
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Income tax
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813,098 | 510,145 | - | 1,323,243 | ||||||||||||
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Net income
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5,837,395 | 2,154,247 | - | 7,991,642 | ||||||||||||
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Other comprehensive item
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Foreign currency translation
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81,816 | (190 | ) | - | 81,626 | |||||||||||
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Comprehensive Income
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$ | 5,919,211 | $ | 2,154,057 | $ | - | $ | 8,073,268 | ||||||||
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Earnings per share - basic
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0.91 | 1.13 | 0.96 | |||||||||||||
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Earnings per share - diluted
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0.82 | 1.13 | 0.88 | |||||||||||||
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Weighted average shares outstanding
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6,393,067 | 1,913,265 | 8,306,332 | |||||||||||||
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Diluted average shares outstanding
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7,150,642 | 1,913,265 | 9,063,907 | |||||||||||||
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(1) Source: audited financial statements of New Energy Systems Group
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for the year ended December 31, 2009 as filed in Form 10-K filed with the SEC on April 15, 2010.
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(2) Source: unaudited financial statements of Kim Fai Solar Energy Technology Co., Ltd. included in this Form 8-K.
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See accompanying notes to pro forma consolidated financial statements
F-4
KIM FAI SOLAR ENERGY TECHNOLOGY CO., LTD
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
On November 10, 2010, New Energy Systems Group’s (the “Company”) subsidiary, Shenzhen Anytone Technology Co. Ltd, executed a share exchange agreement (the “Agreement”) to acquire the equity interest of Shenzhen Kim Fai Solar Energy Technology Co., Ltd. (“Kim Fai”), a Chinese company engaged in the development and sale of solar application products and solar energy batteries, with Kim Fai’s shareholders. The price for 100% of the outstanding stock of Kim Fai was $28,137,753, of which $13,000,000 is to be paid in cash and the remaining is to be paid in the form of restricted shares of common stock of the Company for aggregate of 1,913,265 shares.
The fair value of the shares issued for the Kim Fai acquisition was determined by multiplying the shares issued in connection with the transaction by the stock price of New Energy at the acquisition date, which was $7.9. As of today, the Company issued to the shareholders of Kim Fai, 1,913,265 shares of restricted common stock and will pay $13,000,000 with no interest by November 10, 2011.
The accompanying pro forma consolidated balance sheet presents the accounts of New Energy and Kim Fai as if the acquisition of Kim Fai by New Energy occurred on September 30, 2010 for balance sheet purposes. The accompanying pro forma consolidated statements of income and comprehensive income present the accounts of New Energy and Kim Fai for the nine months ended September 30, 2010 and for the year ended December 31, 2009 as if the acquisition occurred on January 1, 2010 and January 1, 2009, respectively. The fair values of the assets acquired and liabilities assumed at agreement date are used for the purpose of purchase price allocation. The excess of the purchase price over the fair value of the net assets acquired of $27,098,196 is recorded as goodwill.
The following adjustments would be required if the acquisition of Kim Fai by New Energy occurred as indicated above:
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A)
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Allocation of the net purchase price to the fair value of assets acquired and liabilities assumed. The excess purchase price of $27,098,196 is allocated to goodwill.
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B)
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Payment of outstanding balance of $13 million cash of the acquisition price, which is non-interest bearing and payable by November 10, 2011.
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F-5