Attached files
| file | filename |
|---|---|
| 8-K - Nova Lifestyle, Inc. | stevens8k062811.htm |
| EX-4.1 - Nova Lifestyle, Inc. | ex4-1.htm |
| EX-3.2 - Nova Lifestyle, Inc. | ex3-2.htm |
| EX-2.1 - Nova Lifestyle, Inc. | ex2-1.htm |
| EX-2.2 - Nova Lifestyle, Inc. | ex2-2.htm |
| EX-3.3 - Nova Lifestyle, Inc. | ex3-3.htm |
| EX-3.4 - Nova Lifestyle, Inc. | ex3-4.htm |
| EX-3.5 - Nova Lifestyle, Inc. | ex3-5.htm |
| EX-2.3 - Nova Lifestyle, Inc. | ex2-3.htm |
| EX-10.2 - Nova Lifestyle, Inc. | ex10-2.htm |
| EX-21.1 - Nova Lifestyle, Inc. | ex21-1.htm |
| EX-10.7 - Nova Lifestyle, Inc. | ex10-7.htm |
| EX-10.6 - Nova Lifestyle, Inc. | ex10-6.htm |
| EX-10.4 - Nova Lifestyle, Inc. | ex10-4.htm |
| EX-10.8 - Nova Lifestyle, Inc. | ex10-8.htm |
| EX-99.1 - Nova Lifestyle, Inc. | ex99-1.htm |
| EX-10.5 - Nova Lifestyle, Inc. | ex10-5.htm |
| EX-10.3 - Nova Lifestyle, Inc. | ex10-3.htm |
Exhibit 99.2
NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
AS OF MARCH 31, 2011 (UNAUDITED)
NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
CONTENTS
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Financial Statements
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Pro forma Consolidated Balance Sheet as of March 31, 2011 (unaudited)
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1
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Pro forma Consolidated Statement of Operations for the three months ended March 31, 2011 (unaudited)
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2
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Pro forma Consolidated Statement of Operations for the year ended December 31, 2010 (unaudited)
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3
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Notes to Pro forma Consolidated Financial Statements
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4
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NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2011 (UNAUDITED)
| (1) | (2) | ||||||||||||||||
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NOVA LIFESTYLE
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NOVA FURNITURE
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Pro forma
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Pro forma
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| Adjustments |
Combined
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ASSETS
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(historical)
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(historical)
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|||||||||||||||
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Current Assets
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|||||||||||||||||
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Cash and cash equivalents
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$ | -- | $ | 575,787 | $ | 575,787 | |||||||||||
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Accounts receivable
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-- | 6,931,753 | 6,931,753 | ||||||||||||||
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Advance to suppliers
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-- | 271,796 | 271,796 | ||||||||||||||
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Inventory
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-- | 1,795,264 | 1,795,264 | ||||||||||||||
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Due from related parties
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-- | 1,025,635 | 1,025,635 | ||||||||||||||
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Other current assets
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-- | 288,185 | 288,185 | ||||||||||||||
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Deferred tax asset
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-- | 116,402 | 116,402 | ||||||||||||||
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Total Current Assets
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-- | 11,004,822 | 11,004,822 | ||||||||||||||
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Non-Current Assets
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|||||||||||||||||
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Heritage and Cultural assets
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-- | 123,930 | 123,930 | ||||||||||||||
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Plant, property and equipment, net
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-- | 8,341,579 | 8,341,579 | ||||||||||||||
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Construction in progress
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-- | 76,261 | 76,261 | ||||||||||||||
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Intangible assets, net
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-- | 473,834 | 473,834 | ||||||||||||||
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Total Non-Current Assets
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-- | 9,015,604 | 9,015,604 | ||||||||||||||
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Total Assets
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$ | -- | $ | 20,020,426 | $ | 20,020,426 | |||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities
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Accounts payable
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$ | 19,655 | $ | 2,385,913 | (19,655 | ) |
(B)
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$ | 2,385,913 | ||||||||
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Advance from customers
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-- | 25,269 | 25,269 | ||||||||||||||
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Note payable
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-- | -- | 80,000 |
(A)
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80,000 | ||||||||||||
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Accrued expenses and other payables
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-- | 849,622 | 849,622 | ||||||||||||||
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Taxes payable
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-- | 380,862 | 380,862 | ||||||||||||||
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Due to related party
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-- | 110,288 | 110,288 | ||||||||||||||
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Total current liabilities
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19,655 | 3,751,954 | 3,831,954 | ||||||||||||||
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Non-Current Liabilities
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Deferred rent payable
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-- | 46,867 | 46,867 | ||||||||||||||
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Deferred tax liability, net
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-- | 1,288 | 1,288 | ||||||||||||||
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Income taxes payable
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-- | 2,372,619 | 2,372,619 | ||||||||||||||
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Total Non-Current Liabilities
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-- | 2,420,774 | 2,420,774 | ||||||||||||||
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Total Liabilities
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19,655 | 6,172,728 | 6,252,728 | ||||||||||||||
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Contingencies and Commitments
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Stockholders' Equity
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Common stock
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2,596 | 10,000 | 2,304 |
(A)
(B)
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14,900 | ||||||||||||
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Additional paid in capital
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13,144 | 13,302,500 | (98,044 | ) |
(A)
(B)
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13,217,600 | |||||||||||
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Subscription receivable
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(2,400,000 | ) | (2,400,000 | ) | |||||||||||||
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Statutory reserve
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6,241 | 6,241 | |||||||||||||||
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Accumulated other comprehensive income
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1,716,144 | 1,716,144 | |||||||||||||||
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Retained earnings
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(35,395 | ) | 1,212,813 | 35,395 |
(B)
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1,212,813 | |||||||||||
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Total Stockholders' Equity
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(19,655 | ) | 13,847,698 | 13,767,698 | |||||||||||||
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Total Liabilities and Stockholders' Equity
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$ | -- | $ | 20,020,426 | $ | 20,020,426 | |||||||||||
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(1) Source: unaudited financial statements of Nova Lifestyle, Inc. (Formerly: Stevens Resources, Inc.) as of March 31, 2011, as filed in the Quarterly Report on Form 10-Q filed with the SEC on May 11, 2011.
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(2) Source: unaudited consolidated financial statements of Nova Furniture Limited as of March 31, 2011, as filed in this Form 8-K filed with the SEC.
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| (A) Reflection of 5-for-1 stock split and cancellation of 10,000,000 shares in exchange for $80,000 by the former shareholder of Nova Lifestyle, Inc. (Formerly: Stevens Resources, Inc.); and the issuance of 11,920,000 shares (post stock split) to the shareholders of Nova Furniture Limited, resulting in 14,900,000 total shares outstanding of Nova Lifestyle, Inc. after the reverse merger. | |||||||||||||
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(B) Elimination of Nova Lifestyle Inc. capital accounts and accumulated deficit as result of recapitalization, and reflection of payment of all liabilities of Nova Lifestyle, Inc. prior to closing.
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See accompanying notes to pro forma combined financial statements.
1
NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2011 (UNAUDITED)
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(1) | (2) | |||||||||||||||
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NOVA LIFESTYLE
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NOVA FURNITURE
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Pro forma
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Pro forma
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Adjustments
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Combined
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(historical)
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(historical)
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Net sales
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$ | -- | $ | 5,632,790 | $ | -- | $ | 5,632,790 | |||||||||
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Cost of sales
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-- | 3,843,629 | -- | 3,843,629 | |||||||||||||
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Gross profit
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-- | 1,789,161 | -- | 1,789,161 | |||||||||||||
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Operating expenses
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Selling expenses
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-- | 220,476 | -- | 220,476 | |||||||||||||
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General and administrative expenses
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2,933 | 326,553 | 57,500 |
(C)
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386,986 | ||||||||||||
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Total operating expenses
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2,933 | 547,029 | 57,500 | 607,462 | |||||||||||||
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Income from operations
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(2,933 | ) | 1,242,132 | (57,500 | ) | 1,181,699 | |||||||||||
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Non-operating income (expenses)
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Non-operating income
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4,962 | ||||||||||||||||
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Foreign exchange transaction loss
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-- | (23,198 | ) | -- | (23,198 | ) | |||||||||||
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Financial expenses
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-- | (9,389 | ) | -- | (9,389 | ) | |||||||||||
| - | |||||||||||||||||
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Total non-operating expenses, net
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-- | (27,625 | ) | -- | (27,625 | ) | |||||||||||
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Income before income tax
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(2,933 | ) | 1,214,507 | (57,500 | ) | 1,154,074 | |||||||||||
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Income tax expense
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-- | 208,965 | -- | 208,965 | |||||||||||||
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Net income
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$ | (2,933 | ) | $ | 1,005,542 | $ | (57,500 | ) | $ | 945,109 | |||||||
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Earnings per share
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$ | 0.06 | |||||||||||||||
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Weighted average shares outstanding
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14,900,000 | ||||||||||||||||
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(1) Source: unaudited financial statements of Nova Lifestyle, Inc. (Formerly: Stevens Resources, Inc.) as of March 31, 2011, as filed in the Quarterly Report on Form 10-Q filed with the SEC on May 11, 2011.
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(2) Source: unaudited consolidated financial statements of Nova Furniture Limited as of March 31, 2011, as filed in this Form 8-K filed with the SEC.
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| (C) To record pro forma compensation expense for employment agreements of named executive officers. |
See accompanying notes to pro forma combined financial statements.
2
NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010 (UNAUDITED)
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(1) | (2) | |||||||||||||||
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NOVA LIFESTYLE
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NOVA FURNITURE
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Pro forma
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Pro forma
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||||||||||||||
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Adjustments
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Combined
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||||||||||||||||
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(historical)
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(historical)
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||||||||||||||||
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Net sales
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$ | -- | $ | 28,818,982 | $ | -- | $ | 28,818,982 | |||||||||
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Cost of sales
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-- | 21,242,024 | -- | 21,242,024 | |||||||||||||
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Gross profit
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-- | 7,576,958 | -- | 7,576,958 | |||||||||||||
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Operating expenses
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|||||||||||||||||
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Selling expenses
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-- | 959,673 | -- | 959,673 | |||||||||||||
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General and administrative expenses
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27,846 | 1,205,881 | 230,000 |
(C)
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1,463,727 | ||||||||||||
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Loss on disposal of plant, property and equipment
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-- | 144,732 | -- | 144,732 | |||||||||||||
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Total operating expenses
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27,846 | 2,310,286 | 230,000 | 2,568,132 | |||||||||||||
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Income from operations
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(27,846 | ) | 5,266,672 | (230,000 | ) | 5,008,826 | |||||||||||
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Non-operating income (expenses)
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Non-operating income
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-- | 58,477 | 58,477 | ||||||||||||||
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Non-operating expenses
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-- | (633 | ) | -- | (633 | ) | |||||||||||
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Foreign exchange transaction loss
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-- | (66,419 | ) | -- | (66,419 | ) | |||||||||||
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Financial expense
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-- | (20,007 | ) | -- | (20,007 | ) | |||||||||||
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Total non-operating expenses, net
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-- | (28,582 | ) | -- | (28,582 | ) | |||||||||||
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Income before income tax
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(27,846 | ) | 5,238,090 | (230,000 | ) | 4,980,244 | |||||||||||
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Income tax expense
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-- | 1,035,081 | -- | 1,035,081 | |||||||||||||
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Net income
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$ | (27,846 | ) | $ | 4,203,009 | $ | (230,000 | ) | $ | 3,945,163 | |||||||
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Earnings per share
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$ | 0.26 | |||||||||||||||
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Weighted average shares outstanding
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14,900,000 | ||||||||||||||||
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(1) Source: unaudited financial statements of Nova Lifestyle, Inc. (Formerly: Stevens Resources, Inc.) as of March 31, 2011, as filed in the Quarterly Report on Form 10-Q filed with the SEC on May 11, 2011; audited financial statements as of September 30, 2010, as filed in the Annual Report on Form 10-K as filed with the SEC on December 29, 2010; and unaudited financial statements as of March 31, 2010, as filed in the Quarterly Report on Form 10-Q filed with the SEC on May 17, 2010.
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(2) Source: audited consolidated financial statements of Nova Furniture Limited as of December 31, 2010, as filed in this Form 8-K filed with the SEC.
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| (C) To record pro forma compensation expense for employment agreements of named executive officers. |
See accompanying notes to pro forma combined financial statements.
3
NOVA LIFESTYLE, INC.
AND NOVA FURNITURE LIMITED AND SUBSIDIARIES
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
Effective as of June 27, 2011, in anticipation of the Share Exchange Agreement and related transactions described below, the Company changed its name from Stevens Resources, Inc. to Nova Lifestyle, Inc. (“Nova Lifestyle” or the “Company”) through a merger with the Company’s wholly owned, non-operating subsidiary established solely to change the Company’s name pursuant to Nevada law. Concurrently with this action, the Company authorized a 5-for-1 forward split of the Company’s common stock effective June 27, 2011. Prior to the forward split, the Company had 2,596,000 shares of its common stock outstanding, and, after giving effect to the forward split, the Company had 12,980,000 shares of its common stock outstanding. The effect of stock split has been retroactively restated.
On June 30, 2011, Nova Lifestyle entered into and consummated a series of agreements that resulted in the acquisition of all of the ordinary shares of Nova Furniture Limited (“Nova Furniture” or “Nova Furniture BVI”), a corporation organized under the laws of the British Virgin Islands (“BVI”). Pursuant to the terms of a Share Exchange Agreement and Plan of Reorganization dated June 30, 2011 (the “Share Exchange Agreement”), Nova Lifestyle issued 11,920,000 shares of its common stock to the shareholders of Nova Furniture in exchange for their 10,000 ordinary shares of Nova Furniture, consisting of all of its issued and outstanding capital stock. Concurrently with the Share Exchange Agreement and as a condition thereof, the Company entered into an agreement with its former president and director, pursuant to which he returned 10,000,000 shares of the Company’s common stock to the Company for cancelation in exchange for $80,000. The $80,000 was a 90-day note bearing interest at 0.46% per annum payable to the former shareholder. Upon completion of the foregoing transactions, the Company had 14,900,000 shares of its common stock issued and outstanding.
The accompanying pro forma consolidated balance sheet presents the accounts of Nova Lifestyle and Nova Furniture as if the acquisition of Nova Furniture by Nova Lifestyle occurred on March 31, 2011. The accompanying pro forma consolidated statements of operations present the accounts of Nova Lifestyle and Nova Furniture including its subsidiaries, Nova Furniture (Dongguan) Co., Ltd. (“Nova Dongguan”), Nova Furniture Macao Commercial Offshore Limited (“Nova Macao”) and Nova Dongguan Chinese Style Furniture Museum (“Nova Museum”), for the three months ended March 31, 2011, and for the year ended December 31, 2010, as if the acquisition occurred on January 1, 2011, and January 1, 2010, for the purpose of the statements of operations, respectively. For accounting purposes, the transaction is being accounted for as a recapitalization of Nova Furniture because Nova Furniture’s shareholders will own the majority of the shares and will exercise significant influence over the operating and financial policies of the consolidated entity and Nova Lifestyle was a non-operating public shell prior to the acquisition. Pursuant to Securities and Exchange Commission (“SEC”) rules, the merger or acquisition of a private operating company into a non-operating public shell with nominal net assets is considered a capital transaction in substance, rather than a business combination.
The following adjustments would be required if the acquisition occurred as indicated above:
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a.
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Reflection of 5-for-1 stock split and cancellation of 10,000,000 shares in exchange for $80,000 by the former shareholder of Nova Lifestyle and the issuance of 11,920,000 shares (post stock split) to the shareholders of Nova Furniture, resulting in 14,900,000 total shares outstanding of Nova Lifestyle after the reverse merger .
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b.
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Elimination of Nova Lifestyles capital accounts and accumulated deficit as result of recapitalization, and reflection of payment of all liabilities of Nova Lifestyle prior to closing.
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c.
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To record pro forma compensation expense for employment agreements of named executive officers.
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4