Attached files
Exhibit 99.5.1
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INDEX TO UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS | ||
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Introduction to Unaudited Pro-Forma Consolidated Financial Statements | 2-4 | |
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Unaudited Pro-Forma Consolidated Balance Sheet |
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| as of December 31, 2010 | 5-6 |
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Unaudited Pro-Forma Consolidated Statements of Income and |
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| Comprehensive Income for the Nine Months Ended December 31, 2010 | 7-8 |
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Unaudited Pro-Forma Consolidated Statements of Income and |
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| Comprehensive Income for the Year Ended March 31, 2010 | 9-10 |
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INTRODUCTION TO UNAUDITED PRO-FORMA
CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro-forma consolidated financial statements give effect to (i) the sale of 2,291,100 shares of common stock of Studio II Brands, INC. (the “Company” or “Studio II”) for $218,676, (ii) the acquisition (“Acquisition”) of Hippo Lace Limited (“HLL”) and its subsidiary Legend Sun Limited (“Legend Sun”) by the Company.
The following unaudited pro-forma consolidated financial statements and accompanying notes should be read in conjunction with:
| - | audited consolidated financial statements and related notes of HLL at March 31, 2010 and from December 11, 2009 (date of inception) through March 31, 2010; |
| - | unaudited consolidated historical financial statements and related notes of HLL at December 31, 2010 and for the nine months period from April 1, 2010 through December 31, 2010; |
| - | audited financial statements of the Company at March 31, 2010 and for the year then ended; |
| - | unaudited financial statement of the Company for the nine months ended December 31, 2010. |
The Share Exchange Transaction
Closing of the exchange transaction under the terms of the Exchange Agreement described in Item 1.01 was completed on February 10, 2011. As a result of closing of the share exchange transaction, the Company acquired HLL and its wholly-owned subsidiary, Legend Sun, both of which became wholly-owned subsidiaries of the Company.
The terms of the Exchange Agreement were determined through arms length negotiations between the Company and HLL. Execution of the Exchange Agreement and closing of the share exchange transaction were approved on behalf of the Company by its board of directors, and on behalf of HLL by its board of directors and by all of its shareholders.
Prior to closing under the Exchange Agreement, the Company had a total of 9,608,176 shares of common stock issued and outstanding following the issuance of 5,862,500 shares of Studio II Common Stock to 21 individuals for cash consideration of $5,862.5, or $0.001 per share on November 19, 2010. The individuals included the Company’s director and/or executive
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officer with a total of 5,688,000 shares. As a result of closing under the Exchange Agreement, the Company has a total of 11,899,276 shares of its common stock issued and outstanding, of which 9,608,176 shares, or approximately 80.75%, are owned by previously existing shareholders of the Company, with the balance of 2,291,100 shares, or approximately 19.25%, are owned by persons who were previously shareholder of HLL.
The Company acquired a 100% interest in HLL on February 10, 2011 and acquired control of and consolidates HLL as of February 10, 2011 in accordance with ASC 810. The pro-forma statements of operations set forth below for the nine months ended December 31, 2010 and for the year ended March 31, 2010 incorporate information from the unaudited consolidated financial statements of HLL for the nine months ended December 31, 2010 and from its audited consolidated financial statements for the period from December 11, 2009 (Inception) through March 31, 2010, as well as from the unaudited financial statements of Studio II.
In conjunction with the Acquisition, the Company issued 2,291,100 shares of its Common Stock to the stockholders of HLL which amounted to $218,676 or approximately $0.09 per share to acquire all of the issued and outstanding shares of Common Stock in HLL. The following unaudited pro-forma consolidated financial statements have been prepared to reflect the above-mentioned transactions.
The pro-forma balance sheet assumes the Acquisition and share exchange (together the “Transactions”) took place on December 31, 2010. The pro-forma statements of operations assume the Transactions took place on the first day of each of the periods presented.
We are providing this information to aid you in your analysis of the financial aspects of the Transactions. The unaudited pro-forma information is not necessarily indicative of the financial position or results of operations that may have actually occurred had the Transactions taken place on the dates noted, or the future financial position or operating results of the combined company.
The unaudited pro-forma combined financial information is not necessarily indicative of the operation results that would have actually been achieved if the Transactions had been consummated as of the beginning of the period indicated, nor is it necessarily indicative of the future operating results of the combined business.
UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS ADJUSTMENTS
The following adjustments are used to derive the pro-forma financial statements presented below:
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(1)
To record the issuance of 2,291,100 shares of Studio II Common Stock to HLL stockholders upon consummation of the Acquisition valued at $218,676, and to eliminate HLL’s equity in connection with the Acquisition;
(2)
To record the contribution of capital by stockholder upon consummation of the Acquisition;
(3)
To eliminate the deficit of HLL in connection with the Acquisition.
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STUDIO II BRANDS, INC. | |||||||
UNAUDITED PRO-FORMA CONSOLIDATED BALANCE SHEET | |||||||
AS OF DECEMBER 31, 2010 | |||||||
(IN U.S. DOLLARS) | |||||||
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| Consolidated | Pro-forma adjustment | Pro-forma | |||
| Studio II | Hippo Lace |
| (1) | (2) | (3) | Consolidated |
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ASSETS |
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CURRENTS ASSETS |
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Cash | $5,863 | $ 25,369 |
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| $ 31,232 |
Due from related party | - | 12,985 |
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| 12,985 |
Accounts receivable | - | 10,273 |
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| 10,273 |
Other receivable | - | 5,895 |
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| 5,895 |
Inventories | - | 2,031 |
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| 2,031 |
Total current assets | 5,863 | 56,553 |
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| 62,416 |
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Property and equipment | - | 111,564 |
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| 111,564 |
Security deposits | - | 41,216 |
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| 41,216 |
Goodwill | - | 32,101 |
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| 32,101 3 2,101 |
Investment in a subsidiary | - | - |
| 218,676 | (202,771) | (15,905) | - |
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TOTAL ASSETS | $5,863 | $ 241,434 |
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| $ 247,297 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable | $ - | $ 12,423 |
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| $ 12,423 |
Income tax payable | - | 6,233 |
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| 6,233 |
Due to related party | - - | 6,687 |
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| 6,687 |
Other payable | 4,676 | 15,960 |
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| 20,636 |
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Payable to Stockholder | 127,012 | - |
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| 127,012 |
TOTAL CURRENT LIABILITIES | 131,688 | 41,303 |
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| 172,991 |
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Stockholder's loan | - | 184,226 |
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| (184,226) |
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TOTAL LIABILITIES | 131,688 | 225,529 |
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| 172,991 |
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STOCKHOLDERS' EQUITY |
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Common stock (100,000,000 shares authorized; Par value $0.001; 11,899,276 share issued and outstanding) |
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9,609 | 1 |
| 2,291 |
| (1) | 11,900 | |
Additional paid in capital | 42,486 | - |
| 216,385 | (18,545) |
| 240,326 |
Retained earnings | (177,920) | 15,904 |
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| (15,904) | (177,920) |
TOTAL STOCKHOLDERS' EQUITY | (125,825) | 15,905 |
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| 74,306 |
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$5,863 | $ 241,434 |
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| $ 247,297 | |
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STUDIO II BRANDS, INC. | ||||||||||
UNAUDITED PRO-FORMA CONSOLIDATED | ||||||||||
STATEMENT OF INCOME AND COMPREHENSIVE INCOME | ||||||||||
FOR THE NINE MONTHS ENDED DECEMBER 31, 2010 | ||||||||||
(IN U.S. DOLLARS) | ||||||||||
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| Consolidated | Pro-forma adjustment | Pro-forma | ||||||
| Studio II | Hippo Lace |
| (1) | (2) | (3) | Consolidated | |||
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Sales | $ - | $ 274,551 |
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| $ 274,551 | |||
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Cost of sales | - | (83,090) |
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| (83,090) | |||
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Gross profit | - | 191,461 |
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| 191,461 | |||
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OPERATING EXPENSES |
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Administrative and general expenses | (31,549) | (186,833) |
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| (218,382) | |||
TOTAL OPERATING EXPENSES | (31,549) | (186,833) |
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| (218,382) | |||
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NET OPERATING (LOSS)/INCOME BEFORE INCOME TAXES |
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(31,549) | 4,628 |
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| (26,921) | ||||
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OTHER INCOME/(EXPENSES) |
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Other income | - | 3,587 |
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| 3,587 | |||
Other expenses | - | (770) |
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| (770) | |||
TOTAL OTHER INCOME, NET | - | 2,817 |
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| 2,817 | |||
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(LOSS)/INCOME BEFORE INCOME TAXES | (31,549) | 7,445 |
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| (24,104) | |||
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INCOME TAXES EXPENSES | - | (3,812) |
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| (3,812) | |||
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NET (LOSS)/INCOME AND COMPREHENSIVE INCOME |
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$ (31,549) | $ 3,633 |
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| $ (27,916) | ||||
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Net Earning/(Loss) Per Common Share Basic and fully diluted | $ (0.007) | $ 3,633 |
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| $ (0.002) | |||
WEIGHTED AVERAGE SHARES OUTSTANDING | 4,641,040 | 1 |
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| 11,899,276 | |||
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STUDIO II BRANDS, INC. | |||||||
UNAUDITED PRO-FORMA CONSOLIDATED | |||||||
STATEMENT OF INCOME AND COMPREHENSIVE LOSS | |||||||
FOR THE YEAR ENDED MARCH 31, 2010 | |||||||
(IN U.S. DOLLARS) | |||||||
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| Consolidated | Pro-forma adjustment | Pro-forma | |||
| Studio II | Hippo Lace |
| (1) | (2) | (3) | Consolidated |
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Sales | $ - | $ 56,930 |
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| $ 56,930 |
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Cost of sales | - | 18,864 |
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| 18,864 |
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Gross profit | - | 38,066 |
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| 38,066 |
OPERATING EXPENSES |
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Administrative and general expenses | (38,008) | (79,873) |
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| (117,881) |
TOTAL OPERATING EXPENSES | (38,008) | (79,873) |
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| (117,881) |
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NET OPERATING LOSS BEFORE |
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INCOME TAXES | (38,008) | (41,807) |
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| (79,815) |
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OTHER INCOME/(EXPENSES) |
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Other income | - | 61,635 |
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| 61,635 |
Other expenses | - | (5,136) |
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| (5,136) |
TOTAL OTHER INCOME, NET | - | 56,499 |
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| 56,499 |
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NET OPERATING (LOSS)/INCOME BEFORE INCOME TAXES |
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(38,008) | 14,692 |
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| (23,316) | |
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INCOME TAXES EXPENSES | - | (2,421) |
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| (2,421) |
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NET (LOSS)/INCOME AND |
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COMPREHENSIVE INCOME | $ (38,008) | $ 12,271 |
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| $ (25,737) |
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Net Earning/(Loss) Per Common Share |
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Basic and fully diluted | $(0.01) | $ 12,271 |
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| $ (0.002) |
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WEIGHTED AVERAGE SHARES OUTSTANDING | 3,745,676 | 1 |
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| 11,899,276 |
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