Attached files
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
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Vallant Pictures |
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Entertainment Co., |
China Media |
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Limited |
Inc. |
Pro |
Pro Forma |
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(historical) |
(historical) |
Forma |
Consolidated |
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9/30/2009 |
7/31/2009 |
Adjustments |
Balance Sheet |
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Cash |
$ | 5,284 | $ | 1,871 | $ | - | $ | 7,155 | |||||||||
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Accounts receivables, net |
1,526,353 | - | 1,526,353 | ||||||||||||||
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Notes receivable |
3,370,190 | - | 3,370,190 | ||||||||||||||
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Total current assets |
4,901,827 | 1,871 | - | 4,903,698 | |||||||||||||
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Fixed assets, net |
94,828 | - | 94,828 | ||||||||||||||
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Intangibles Assets, net |
66,189 | - | 66,189 | ||||||||||||||
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Other assets |
73,265 | - | 73,265 | ||||||||||||||
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Asset held for sale |
1,172,240 | - | 1,172,240 | ||||||||||||||
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Film cost |
594,912 | - | 594,912 | ||||||||||||||
| $ | 6,903,261 | $ | 1,871 | $ | - | $ | 6,905,132 | ||||||||||
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Accounts payable |
$ | 171,158 | $ | 2,016 | $ | - | $ | 173,174 | |||||||||
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Accrued liabilities |
4,678 | - | 4,678 | ||||||||||||||
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Short term debt |
117,224 | - | 117,224 | ||||||||||||||
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Due to related parties |
89,867 | - | 89,867 | ||||||||||||||
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Total current liabilities |
382,927 | 2,016 | - | 384,943 | |||||||||||||
| Minority interest | 2,155,643 | - | 2,155,643 | ||||||||||||||
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Common Stock |
1 | 397 | (1 | ) |
(a) |
397 | |||||||||||
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Additional paid-in capital |
8,750,656 | 166,728 | (396 | ) |
(a) |
8,750,260 | |||||||||||
| (166,728 | ) |
(a) |
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Accumulated other comprehensive income |
748,427 | - | 748,427 | ||||||||||||||
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Accumulated deficit |
(5,134,393 | ) | (167,270 | ) | 167,125 |
(a) |
(5,134,538 | ) | |||||||||
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Total stockholders' equity |
4,364,691 | (145 | ) | - | 4,364,546 | ||||||||||||
| $ | 6,903,261 | $ | 1,871 | $ | - | $ | 6,905,132 | ||||||||||
1
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATION
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Vallant Pictures |
Pro Forma |
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Entertainment Co., |
China Media |
Consolidated |
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Limited |
Inc. |
Statements of | |||||||||||
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(historical) |
(b) |
Pro Forma |
Operation | ||||||||||
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Year ended 6/30/09 |
12 Months ended 7/31/09 |
Adjustments |
Year ended 6/30/09 |
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Revenues |
$ | 1,675,455 | $ | - |
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$ | 1,675,455 | ||||||
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Cost of revenues |
800,431 | - |
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800,431 | |||||||||
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Gross profit |
875,024 | - |
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875,024 | |||||||||
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Selling, general and administrative |
153,098 | 83,241 | 236,339 | ||||||||||
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Depreciation and amortization expense |
92,860 | - | 92,860 | ||||||||||
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Operating income (loss) |
629,066 | (83,241 | ) | 545,825 | |||||||||
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Other income: |
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Interest income |
278,331 | - | 278,331 | ||||||||||
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Net income before minority interest |
907,397 | (83,241 | ) | 824,156 | |||||||||
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Minority interest |
(340,391 | ) | - | (340,391 | ) | ||||||||
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Net income (loss) |
$ | 567,006 | $ | (83,241 | ) | $ | 483,765 | ||||||
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Other Comprehensive Income |
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Foreign currency translation |
18,125 | - | 18,125 | ||||||||||
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Comprehensive Income |
$ | 585,131 | $ | (83,241 | ) | $ | 501,890 | ||||||
2
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATION
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Vallant Pictures |
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Entertainment Co., |
Pro Forma |
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Limited |
China Media |
Consolidated Statements |
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(historical) |
Inc. |
Pro Forma |
of Operation |
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Quarter ended 9/30/09 |
Quarter ended 7/31/09 |
Adjustments |
Quarter ended 9/30/09 |
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Revenues |
$ | - | - |
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$ | - | |||||||
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Cost of revenues |
- | - |
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- | |||||||||
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Gross profit |
- | - |
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- | |||||||||
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Selling, general and administrative |
24,671 | 58,428 | 83,099 | ||||||||||
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Depreciation and amortization expense |
15,600 | - | 15,600 | ||||||||||
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Operating loss |
(40,271 | ) | (58,428 | ) | (98,699 | ) | |||||||
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Other income: |
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Interest income |
- | - | - | ||||||||||
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Net loss before minority interest |
(40,271 | ) | (58,428 | ) | (98,699 | ) | |||||||
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Minority interest |
15,058 | - | 15,058 | ||||||||||
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Net loss |
$ | (25,213 | ) | (58,428 | ) | $ | (83,641 | ) | |||||
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Other Comprehensive Income |
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Foreign currency translation |
(1,182 | ) | - | (1,182 | ) | ||||||||
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Comprehensive Income |
$ | (26,395 | ) | (58,428 | ) | $ | (84,823 | ) | |||||
3
NOTES TO THE UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – BASIS OF PRESENTATION
On July 7, 2009, China Media Inc. (the “Company”) and Fullead Overseas Limited, a company incoporated under the laws of the British Virgin Islands (the “Buyer”), entered into a share purchase agreement (the “Share Purchase Agreement”), pursuant to which the Buyer agreed to purchase a total of 32,500,000 shares of
the Company’s common stock, representing 85% of the total issued and outstanding shares of common stock of the Company on a fully-diluted basis. Bin Li, the Company’s Director, is the owner and sole Director of the Buyer.
On September 16, 2009, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with Vallant Pictures Entertainment Co., Ltd., a company incorporated under the laws of the British Virgin Islands (“Vallant”) and Bin Li, the Company’s Director and the former sole shareholder of Vallant. According
to the terms of the Share Exchange Agreement, the Company agreed to acquire the sole issued and outstanding common share of Vallant from Bin Li in exchange for 7,000 shares of the Company’s common stock.
On November 30, 2009, the Company closed the transactions contemplated by the Share Exchange Agreement and acquired Vallant as its wholly owned subsidiary. Vallant has entered into a series of contractual obligations with Xi’An TV Media Co., Ltd., a company incorporated under
the laws of the People’s Republic of China (“Xi’An TV”) that is engaged in the business of producing and developing television programming for the Chinese market, as well as the holders of 62.61% of the voting shares of Xi’An TV.
The share exchange is being accounted for as a reverse merger, since the former sole shareholder of Vallant, Bin Li, acquired the majority of the Company’s common stock with the aim of completing the share exchange with Vallant, and Vallant is deemed to be the accounting acquirer in the reverse merger. Consequently, the assets and liabilities
and the historical operations that will be reflected in the consolidated financial statements for periods prior to the Share Exchange Agreement will be those of Vallant and will be recorded at the historical cost basis. After the completion of the Share Exchange Agreement, the Company’s consolidated financial statements will include the assets and liabilities of both Vallant and the Company, the historical operations of Vallant and the operations of the Company and its subsidiaries from the closing
date of the Share Exchange Agreement.
These pro forma consolidated financial statements are prepared assuming the above transaction occurred on September 30, 2009 (as to the balance sheet) and on July 1, 2008 (as to the income statements).
Audited financial statements of Vallant and the Company have been used in the preparation of these pro forma consolidated financial statements. These pro forma consolidated financial statements should be read in conjunction with the historical financial statements of Vallant and the Company.
Note 2 – PRO FORMA ASSUMPTIONS AND ADJUSTMENTS
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(a) |
To eliminate the equity of the accounting acquiree, China Media Inc., and to reflect the recapitalization of the common stock and additional paid in capital as a result of the reverse merger. |
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(b) |
The historical income statement for the 12 months ended July 31, 2009 for China Media Inc. is derived from the following historical income statements: the income statement for the year ended January 31, 2009 plus the income statement for the six months ended July 31, 2009 less the income statement for the six months ended July 31, 2008. |