CHINA EDUCATION INTERNATIONAL, INC. - FORM 8-K/A - EX-99.3 - UNAUDITED PRO FORMA BALANCE SHEET AS OF JUNE 30, 2011 - October 18, 2011

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8-K/A - FORM 8-K/A AMENDMENT NO. 1 - CHINA EDUCATION INTERNATIONAL, INC.ceii_8ka.htm
EX-99.2 - AUDITED FINANCIAL STATEMENTS OF MEIHUA SCHOOL AS OF JUNE 30, 2011 - CHINA EDUCATION INTERNATIONAL, INC.ceii_ex99-2.htm
 

 

Exhibit 99.3 
The following unaudited pro forma financial statements are based on, and should be read in conjunction with:

 
·
China Education International, Inc. (the “CEII’s”) unaudited financial statements for the six months ended June 30, 2011 filed in the CEII's Quarterly Report on From 10-Q and the related notes thereto.

 
·
The audited financial statements of Hefei Meihua Vocational Training School (the “Hefei Meihua School”) as of and for the period from inception (April 1, 2011) through June 30, 2011 and the related notes thereto.

The pro forma financial statements give effect to CEII’s acquisition of the Hefei Meihua School and through the entering into various contractual agreements between CEII and the Hefei Meihua School, giving rise to the consolidation of the Hefei Meihua School as a variable interest entity for which CEII is the primary beneficiary as if the transaction had taken place on the date or at the beginning of the period presented.

The unaudited pro forma financial statements are for informational purposes only, are not indications of future performance, and should not be considered indicative of actual results that would have been achieved had the acquisition of Meihua School actually been consummated on the dates or at the beginning of the periods presented.


 
 
 
 
 
 


CHINA EDUCATION INTERNATIONAL INC. AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET
June 30, 2011
 
   
China Education
    
Hefei
              
   
International, Inc.
    
Meihua School
    
Pro forma
  
Pro forma
  
Pro forma
   
Historical
    
Historical
    
Adjustments
  
Adjustments
  
Consolidated
ASSETS
                        
CURRENT ASSETS:
                        
Cash and cash equivalents
  
$
220,923
    
$
395,193
    
$
        
$
616,116
Prepaid expense
            
105,369
                
105,369
Prepaid expense - related parties
    
618,908
                        
618,908
Prepaid expense and other current assets
    
338,703
      
21,301
                
360,004
Total current assets
    
1,178,534
      
521,863
                
1,700,397
                                 
Restricted cash
    
128,495
                        
128,495
Prepaid expense - related parties
    
5,260,715
                        
5,260,715
Goodwill
    
200,334
              
8,658,678
(b)
      
8,859,012
Intangible, net
    
1,738,801
                        
1,738,801
Property and equipment, net
    
1,050,579
                        
1,050,579
                                 
Total assets
  
$
9,557,458
    
$
521,863
      
8,658,678
      
$
18,737,999
                                 
LIABILITIES AND EQUITY
                                
CURRENT LIABILITIES:
                                
Accounts payable and accrued expenses
  
$
606,569
    
$
      
$
        
$
606,569
Loan payable – related parties
    
150,000
                        
150,000
Due to related parties
    
666,735
                        
666,735
Other payable
            
28,763
                
28,763
Tax payable
            
46,409
                
46,409
Deferred revenue
    
644,585
                        
644,585
Total current liabilities
    
2,067,889
      
75,172
                
2,143,061
                                 
Deferred revenue - long term
    
356,205
                        
356,205
                                 
Total liabilities
    
2,424,094
      
75,172
                
2,499,266
                                 
SHAREHOLDERS' EQUITY:
                                
Common stock: $.001 par value, 22,806,150 shares issued and outstanding
    
22,806
              
3,000
(a)
      
25,806
Additional paid-in capital
    
22,266,211
      
497,406
      
8,997,000
(a)
(497,406
(c)
  
31,263,211
Shares subscribed
    
1,800,000
                        
1,800,000
Accumulated deficit
    
(17,136,808
)
    
(53,820
)
        
158,712
    
(17,031,916
Other comprehesive income - foreign currency
    
118,106
      
5,757
          
(2,628
    
121,235
Total China Education International, Inc. shareholders' equity
    
7,070,315
      
446,691
      
9,000,000
  
(341,322
    
16,175,684
Noncontrolling intrest
    
63,049
                        
63,049
Total shareholders' equity
    
7,133,364
      
446,691
      
9,000,000
  
(341,322
    
16,241,385
                                 
Total liabilities and stockholders' equity
  
$
9,557,458
    
$
521,863
      
9,000,000
  
(341,322
  
$
18,737,999

(a)           Denotes the issuance of 3,000,000 shares of CEII’s common stock at a fair value of $3.00 per share based on the closing price of CEII’s common stock on June 30, 2011.
(b)           Denotes the excess of the purchase price, on a pro forma basis, of the net assets acquired or controlled as of the balance sheet date.
(c)           Denotes elimination of equity in Meihua School at the date of acquisition.

The foregoing pro forma financial information is not necessarily indicative of the results that would have occurred had the acquisition of control of Meihua School taken place on June 30, 2011


 
 
 
 
 
 


 
CHINA EDUCATION INTERNATIONAL INC. AND SUBSIDIARIES
  
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
  
FOR THE SIX MONTHS ENDED JUNE 30, 2011
  
(Unaudited)
  
                         
   
China Education
    
Hefei
              
   
International, Inc.
    
Meihua School
    
Pro forma
    
Pro forma
  
   
Historical
    
Historical
    
Adjustments
    
Consolidated
  
Net revenues
  
$
2,546,860
    
$
220,178
    
$
      
$
2,767,038
  
Cost of sales
    
1,554,932
      
178,683
              
1,733,615
  
Gross profit
    
991,928
      
41,495
              
1,033,423
  
                                 
Operating expenses:
                                
General and administrative
    
596,313
      
64,491
              
660,804
  
Consulting expenses – related party
    
1,800,000
                      
1,800,000
  
Total operating expenses
    
2,396,313
      
64,491
              
2,460,804
  
Total operating loss
    
(1,404,385
)
    
(22,996
)
            
(1,427,381
)
                                 
Other income:
                                
Other income (expense)
    
861
      
(324
)
            
537
  
Interest income (expense)
    
(2,735
)
    
17
              
(2,718)
  
Subsidy income
    
14,517
                      
14,517
  
Total other income
    
12,643
      
(307
)
            
12,336
  
                                 
Loss before income tax
    
(1,391,742
)
    
(23,303
)
            
(1,519,937
)
                                 
Income tax
            
(30,517
)
            
(30,517
)
                                 
Net loss
    
(1,391,742
)
    
(53,820
)
            
(1,445,562
)
                                 
Net income attributable to noncontrolling interest
    
(63,049
)
                    
(63,049
)
Net loss attributable to China Education International, Inc.
  
$
(1,454,791
)
  
$
(53,820
)
  
$
      
$
(1,508,611
)
                                 
                                 
Net income (loss) per common share
                                
Basic & diluted
  
$
(0.07
)
                  
$
(0.07
)
                                 
Weighted average number of shares outstanding:
                                
Basic and diluted
    
21,137,642
              
3,000,000
(a)
    
24,137,642
  

 (a)           Reflects the issuance of 3,000,000 shares of CEII’s common stock in connection with the transaction effective, on a pro forma basis, as of January 1, 2011

CHINA EDUCATION INTERNATIONAL, INC. Reports