Big Tree Group, Inc. - FORM 8-K/A - EX-99.2 - UNAUDITED PRO FORMA BALANCE SHEET AS OF SEPTEMBER 30, 2011 AND UNAUDITED PRO FOR - March 6, 2012

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EX-23.1 - CONSENT OF SHERB & CO, LLP - Big Tree Group, Inc.exh23-1.htm
EX-99.1 - AUDITED FINANCIAL STATEMENTS OF SHANTOU BIG TREE TOYS CO., LTD AS OF DECEMBER 31 - Big Tree Group, Inc.exh99-1.htm
8-K/A - FORM 8-K/A AMENDMENT NO.2 - Big Tree Group, Inc.tnsx8-ka.htm

Exhibit 99.2
The following unaudited pro forma financial statements of Transax International Limited (“TNSX”) are based on, and should be read in conjunction with:
 
1.
TNSX’s audited financial statements for the fiscal year ended December 31, 2010, its unaudited financial statements for the quarter ended September 30, 2011 and the related notes thereto, which are incorporated by reference into this Current Report on Form 8-K;
 
2.
The audited financial statements of Shantou Big Tree Toys Co., Ltd. (“BT Shantou”) for the years ended December 31, 2010 and 2009, the unaudited consolidated financial statements of Big Tree International Co., Limited, a Brunei Company, ("BT Brunei") and BT Shantou, collectively referred to as "Big Tree", for the nine months ended September 30, 2011 and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" for such periods, all of which appear in sections of this report.
 
The pro forma financial statements give effect to the reverse acquisition and recapitalization of TNSX and the consolidation of BT Brunei and BT Shantou, as a wholly owned subsidiary, as well as the additional shares of convertible preferred stock in conjunction with the reverse acquisition and recapitalization, as if the transaction had taken place on the date or at the beginning of the periods presented. The convertible preferred stock was accounted for as equity in accordance with Financial Accounting Standards Board ("FASB"), Accounting Standard Codification ("ASC") 505 as they provide for automatic conversion into our common shares after giving effect to a 1 for 700 reverse share split ( the "Reverse Stock Split").
 
In addition, on December 30, 2011, TNSX shareholder, Stephen Walters assigned $538,313 of debt to CDII, which was converted into 520,000 shares of Series B preferred stock and will, in turn, will be converted into 520,000 shares of TNSX common stock after giving effect to a 1 for 700 reverse share split. Other $310,566 debt was exchanged to 300,006 shares of same class of convertible preferred stock.
 
The unaudited pro forma financial statements of TNSX 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 recapitalization transactions actually been consummated on the date or at the beginning of the periods presented.

 
- 1 -
 
 
TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
  
PROFORMA CONSOLIDATED BALANCE SHEET
  
September 30, 2011
  
                           
   
Transax International
 Historical
    
Big Tree
 Historical
    
Pro Forma
 Adjustments
      
Pro Forma
 Consolidated
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
      
(Unaudited)
  
ASSETS
                          
CURRENT ASSETS:
                          
Cash
  
$
38,942
    
$
139,742
              
178,684.00
  
Accounts receivable
            
3,901,546
              
3,901,546.00
  
Inventories
            
221,005
              
221,005.00
  
Other receivable
            
225,995
              
225,995.00
  
Prepaid taxes
            
36,099
              
36,099.00
  
Prepaid expenses and other assets
  
$
277
      
116,601
              
116,878.00
  
Total current assets
    
39,219
      
4,640,988
              
4,680,207
  
                             
-
  
Property and equipment, net
    
328
      
39,487
              
39,815
  
Intangible assets, net
            
14,239
              
14,239
  
Total assets
  
$
39,547
    
$
4,694,714
    
$
-
      
$
4,734,261
  
                               
-
  
LIABILITIES AND SHAREHOLDERS' EQUITY
                                  
CURRENT LIABILITIES:
                              
-
  
Loans payable - related party
  
$
98,376
                      
$
98,376
  
Convertible loan - related party
  
$
149,555
                        
149,555
  
Accounts payable and accrued expenses
    
22,580
      
194,919
               
217,499
 
Advance from customers
            
901,905
                
901,905
  
Salary payable
            
30,133
                
30,133
  
Other payable
            
398,420
                
398,420
  
Taxes payable
            
21,777
                
21,777
  
Due to related parties
    
614,337
      
1,703,991
     
(848,878
)
 (a)
    
1,469,450
 
Total current liabilities
    
884,848
      
3,251,145
      
(848,878
)
      
3,287,115
  
                               
-
  
          Total Liabilities
    
884,848
      
3,251,145
      
(848,878
)
      
3,287,115
  
                               
-
  
SHAREHOLDERS' EQUITY:
                              
-
  
Common stock
    
961
                      
$
961
  
Additional paid-in capital
    
9,821,550
      
697,045
      
(9,818,934
)
 (c)
    
699,661
  
(Accumulated deficit ) Retained earning
    
(10,667,812
)
    
677,188
      
10,667,812
  
 (b)
    
677,188
  
Accumulated other comprehensive income
            
69,336
                
69,336
  
Total shareholders' equity
    
(845,301
)
    
1,443,569
      
848,878
        
1,447,146
  
                                   
Total liabilities and equity
  
$
39,547
    
$
4,694,714
    
$
-
      
$
4,734,261
  


 
- 2 -
 

 
(a)
Represents $538,313 due to related party assigned by the debt holder to China Direct Investment, Inc. ("CDII"), which has been converted to Series B Convertible Preferred Stock, and will then converted to 520,000 shares of TNSX common shares after giving effect to a 1 for 700 reverse stock split. Also represents other $310,566 debt exchanged to same class of convertible preferred stock.
(b)
Represents elimination of TNSX accumulated deficit by charging to additional paid in capital to reflect the recapitalization of Big Tree.
(c )
Represents: (1) $538,313 of Series B Convertible Preferred Stock as explained in note (a) above, and (2) a charge of $10,667,812 to eliminate the accumulated deficit of TNSX.
The adjustment also includes 6,500,000 shares of Series C Preferred Stock issued to BT Hong Kong as the recapitalization, and 2,542,777 shares of Series B preferred stock issued to CDII as consulting fee. The Series C Convertible Preferred Stock will automatically be converted into same number of TNSX common stock after giving effect to a 1 for 700 reverse split. The Series B Convertible Preferred Stock are valued at $1.75 per share based on the quoted TNSX common stock price on December 30, 2011, on the closing date. The Series B Convertible Preferred Stock was accounted for as increase in additional paid in capital as the cost of the recapitalization was charged to additional paid in capital.


 
- 3 -
 


TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
  
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
  
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011
  
                       
   
Transax International Limited
 Historical
    
Big Tree
 Historical
    
Pro Forma
 Adjustments
      
Pro Forma
 Consolidated
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
      
(Unaudited)
  
                           
Net revenues
        
$
17,137,266
            
$
17,137,266
  
Cost of sales
          
15,111,298
              
15,111,298
  
Gross profit
    
-
      
2,025,968
              
2,025,968
  
                             
-
  
Operating expenses:
                            
-
  
Selling expenses
            
91,529
              
91,529
  
General and administrative
    
195,157
      
716,999
              
912,156
  
Total operating expenses
    
195,157
      
808,528
      
-
        
1,003,685
  
                               
-
  
Operating income (loss)
    
(195,157
)
    
1,217,440
      
-
        
1,022,283
  
                               
-
  
Other income (expenses):
                              
-
  
Foreign currency exchange gain (loss)
    
(14,285
)
                      
(14,285
)
Gain from derivative liability
    
485,563
              
(485,563 
)
(c)
    
-
  
Registration rights penalty recovery
    
160,000
              
(160,000 
) 
(c)
    
-
  
Interest expense - related party
    
(27,087
)
                      
(27,087
)
Other income (expense)
            
17,088
                
17,088
  
Interest income
            
193
                
193
  
Total other income (expenses)
    
604,191
      
17,281
      
(645,563
) 
      
(24,091
)
                               
-
  
Net income from continuing operations before income taxes
    
409,034
      
1,234,721
      
(645,563
) 
      
998,192
  
                               
-
  
Discontinued operations:
                              
-
  
Gain from sale of discontinued operation
    
8,706,785
              
(8,706,785 
) 
(b)
    
-
  
Loss from discontinued operations
    
(538,872
)
            
538,872 
  
(b)
    
-
  
Total income from discontinued operations
    
8,167,913
      
-
      
(8,167,913 
) 
      
-
  
Income before income taxes
    
8,576,947
      
1,234,721
      
(8,813,476 
) 
      
998,192
  
                                   
Income taxes
            
(20,199
)
              
(20,199
)
                                   
Net income
    
8,576,947
      
1,214,522
      
(8,813,476
) 
      
977,993
  
                               
-
  
Convertible preferred stock dividends
    
(24,833
)
            
24,833 
  
 (c)
    
-
  
                               
-
  
Net income allocatable to common stockholders
  
$
8,552,114
    
$
1,214,522
    
$
(8,788,643
)
    
$
977,993
  
                                   
                                   
Net income per common share (Basic)
  
$
0.09
                      
$
0.01
  
Net income per common share (Diluted)
  
$
0.02
                      
$
0.00
  
Weighted average shares outstanding
                            
Basic
    
96,078,960
                        
96,078,960
  
Diluted
    
484,559,179
              
6,693,920,800
  
(a)
    
7,178,479,979
  


 
- 4 -
 
 
(a)
Represents the dilution effect from shares of TNSX convertible preferred stock issued in conjunction with the reverse acquisition on the closing date, Which includes:
(1) 4,550,000,000 additional shares from the convertible preferred stock issued to Big Tree shareholder, Lins International.
(2) 1,779,920,800 additional shares from the convertible preferred stock issued to CDII as consulting fee for the recapitalization, and
(3) 364,000,000 additional shares from the convertible preferred stock owned by CDII prior to the recapitalization.
NOTE: All the additional shares above are calculated before the expected 1 for 700 reverse stock split because the expected reverse stock split has not occurred as of the recapitalization closing date.
(b)
Represents elimination of operating results related to Transax International Limited’s discontinued operations, as per Rule 11-02 of Regulation S-X.
(c)
Represents elimination of operating results related only to Transax International Limited, but not related to the continuing operations of Big Tree, as per Rule 11-02(a) of Regulation S-X.


 
- 5 -
 



TRANSAX INTERNATIONAL LIMITED AND SUBSIDIARIES
  
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
  
FOR THE YEAR ENDED DECEMBER 31, 2010
  
                           
   
Transax International Limited
 Historical
    
Big Tree
 Historical
    
Pro Forma
 Adjustments
      
Pro Forma
 Consolidated
  
                       
(Unaudited)
  
Revenues
        
$
2,193,725
            
$
2,193,725
  
Revenues – related party
          
537,745
              
537,725
  
Total revenues
          
2,731,470
              
2,731,470
  
Cost of sales
          
2,533,951
              
2,533,951
  
Gross profit
    
-
      
197,519
              
197,519
  
                             
-
  
Operating expenses:
                            
-
  
Selling expenses
            
83,936
              
83,936
  
General and administrative
    
338,152
      
194,172
              
532,324
  
Total operating expenses
    
338,152
      
278,108
      
-
        
616,260
  
                               
-
  
Net loss from continuing operations before income taxes
    
(338,152
)
    
(80,589
)
    
-
        
(418,741
)
                               
-
  
Other income (expenses):
                              
-
  
Foreign currency exchange gain (loss)
    
16,728
                        
16,728
  
Gain from derivative liability
    
142,524
              
(142,524 
) 
(c)
    
-
  
Gain from forfeiture of deposit on sale of subsidiary
    
937,700
              
(937,700 
)
(c)
    
-
  
Interest expense - related party
    
(58,710
)
                      
(58,710
)
Other income (expense)
            
(7,152
)
              
(7,152 
) 
Interest income
            
396
                
396 
  
Total other income (expenses)
    
1,038,242
      
(6,756
)
    
(1,080,224
)
      
(48,738
)
                               
-
  
Net income (loss) from continuing operations before income taxes
    
700,090
      
(87,345
)
    
(1,080,224
)
      
(467,479
)
                               
-
  
Discontinued operations:
                              
-
  
Gain from sale of discontinued operation
                              
-
  
Loss from discontinued operations
    
(2,794,865
)
            
2,794,865 
  
(b)
    
-
  
Total loss from discontinued operations
    
(2,794,865
)
    
-
      
2,794,865 
        
-
  
Loss before income taxes
    
(2,094,775
)
    
(87,345
)
    
1,714,641 
        
(467,479
)
                                   
Income taxes
            
(7,212
)
              
(7,212
)
                                   
Net (loss) income
    
(2,094,775
)
    
(94,557
)
    
1,714,641
        
(474,691
)
                               
-
  
Convertible preferred stock dividends
    
(100,100
)
            
100,100 
  
(c)
    
-
  
                               
-
  
Net income (loss) allocatable to common stockholders
  
$
(2,194,875
)
  
$
(94,557
)
  
$
1,814,741
      
$
(474,691
)
                                   
Net income (loss) per common share (Basic)
  
$
(0.02
)
                    
$
(0.01
)
Net income (loss) per common share (Diluted)
  
$
(0.03
)
                    
$
(0.00
)
                                   
Weighted common shares outstanding
                                  
Basic
    
92,005,723
                        
92,005,723
  
Diluted
    
1,200,589,473
              
6,693,920,800
  
(a)
    
7,894,510,273
  



 
- 6 -
 

 
(a)
Represents the dilution effect from shares of TNSX convertible preferred stock issued in conjunction with the reverse acquisition on the closing date, Which includes:
(1) 4,550,000,000 additional shares from the convertible preferred stock issued to Big Tree shareholder, Lins International.
(2) 1,779,920,800 additional shares from the convertible preferred stock issued to CDII as consulting fee for the recapitalization, and
(3) 364,000,000 additional shares from the convertible preferred stock owned by CDII prior to the recapitalization.
NOTE: All the additional shares above are calculated before the expected 1 for 700 reverse stock split because the expected reverse stock split has not occurred as of the recapitalization closing date.
(b)
Represents elimination of operating results related to Transax International Limited’s discontinued operations, as per Rule 11-02 of Regulation S-X.
(c)
Represents elimination of operating results related only to Transax International Limited, but not related to the continuing operations of Big Tree, as per Rule 11-02(a) of Regulation S-X.
 

 
- 7 -
 

Big Tree Group, Inc. Reports