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8-K - FORM 8-K - THT Heat Transfer Technology, Inc. | tht011310f8k.htm |
Exhibit 99.1
THT Heat Transfer Technology, Inc. | |
Unaudited Pro Forma Condensed | |
Combined Financial Statements | |
(Stated in US dollars) |
THT Heat Transfer Technology, Inc.
Unaudited Pro
Forma Condensed Combined Financial Statements
Index to Unaudited Pro Forma Condensed Combined Financial
Statements
Pages | |
Introduction to Unaudited Pro Forma Condensed Combined Financial Statements | 1 |
Unaudited Pro Forma Condensed Combined Balance Sheet | 2 |
Unaudited Pro Forma Condensed Combined Statement of Income and Comprehensive Income | 3 |
Notes to Unaudited Pro Forma Condensed Combined Financial Statements | 4 |
THT Heat Transfer Technology, Inc.
Introduction to Unaudited Pro Forma Condensed Combined Financial
Statements
The following pro forma condensed combined financial statements are presented to illustrate the estimated effects of the acquisition (the Exchange Transaction) of Megaway International Holdings Limited (Megaway) by THT Heat Transfer Technology, Inc. (the Company) on the Companys historical financial position and results of operations.
Megaway is a holding company that owns 100% of the outstanding capital stock of Star Wealth International Holdings Limited (Star Wealth). Star Wealth is a holding company that owns the entire equity interest of Siping City Juyuan Hanyang Plate Heat Exchanger Co. Ltd (Siping Juyuan). Siping Juyuan owns 75% of the equity interest of Beijing Juyuan Hanyang Heat Exchange Equipment Co., Ltd. (Beijing Juyuan).
The pro forma condensed combined balance sheet as of December 31, 2008 assumes the Exchange Transaction was consummated on that date. The pro forma condensed combined statement of income and comprehensive income assumes the Exchange Transaction was consummated as of January 1, 2008.
We have derived our historical financial data for the year ended December 31, 2008 from our report previously filed with the Securities and Exchange Commission.
Megaway and Star Wealth were incorporated on April 8, 2009 and March 25, 2009 respectively. Accordingly, the financial figures of Megaway and Star Wealth in the pro forma condensed combined financial statements were reported nil. We have derived the historical financial data of Siping Juyuan and Beijing Juyuan for the year ended December 31, 2008 from the audited consolidated financial statements of Siping Juyuan.
The information presented in the pro forma combined financial statements does not purport to represent what the Companys financial position or results of operations would have been had the Exchange Transaction occurred as of the dates indicated, nor is it indicative of our future financial position or results of operations for any period. You should not rely on this information as being indicative of the forecast and historical results that would have been achieved had the companies always been combined or the future results that the combined companies will experience after the Exchange Transaction.
The pro forma adjustments are based upon available information and certain assumptions that the management of the Company believes are reasonable under the circumstances.
These pro forma condensed combined financial statements are unaudited and should be read in conjunction with the accompanying notes and assumptions and the historical financial statements and related notes of the Company and Siping Juyuan.
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THT Heat Transfer Technology, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of
December 31, 2008
(Stated in US Dollars)
The | Star | Siping | ||||||||||||||||||
Company | Megaway | Wealth | Juyuan | |||||||||||||||||
As of | As of | As of | As of | |||||||||||||||||
December | December | December | December | Pro forma | Pro forma | |||||||||||||||
31, 2008 | 31, 2008 | 31, 2008 | 31, 2008 | adjustment | combined | |||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | - | $ | - | $ | - | $ | 12,579,087 | $ | - | $ | 12,579,087 | ||||||||
Restricted cash | - | - | - | 1,593,840 | - | 1,593,840 | ||||||||||||||
Trade receivables, net | - | - | - | 6,845,284 | - | 6,845,284 | ||||||||||||||
Bills receivable | - | - | - | 531,054 | - | 531,054 | ||||||||||||||
Other receivables, prepayments and deposits | - | - | - | 2,194,125 | - | 2,194,125 | ||||||||||||||
Income tax recoverable | - | - | - | 99,166 | - | 99,166 | ||||||||||||||
Inventories | - | - | - | 10,812,511 | - | 10,812,511 | ||||||||||||||
Deferred taxes | - | - | - | 112,641 | - | 112,641 | ||||||||||||||
Total current assets | - | - | - | 34,767,708 | - | 34,767,708 | ||||||||||||||
Retention receivable | - | - | - | 224,932 | - | 224,932 | ||||||||||||||
Counter guarantee receivable | - | - | - | 205,380 | - | 205,380 | ||||||||||||||
Property, plant and equipment, net | - | - | - | 5,865,659 | - | 5,865,659 | ||||||||||||||
Land use rights | - | - | - | 1,014,012 | - | 1,014,012 | ||||||||||||||
TOTAL ASSETS | $ | - | $ | - | $ | - | $ | 42,077,691 | $ | - | $ | 42,077,691 | ||||||||
LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Trade payables | $ | - | $ | - | $ | - | $ | 2,389,539 | $ | - | $ | 2,389,539 | ||||||||
Bills payable | - | - | - | 733,500 | - | 733,500 | ||||||||||||||
Other payables and accrued expenses | - | - | - | 11,789,152 | - | 11,789,152 | ||||||||||||||
Short-term bank loans | - | - | - | 4,418,604 | - | 4,418,604 | ||||||||||||||
Current maturities of long-term loan | - | - | - | 586,800 | - | 586,800 | ||||||||||||||
Amount due to majority shareholders | 35,121 | - | - | - | (35,121 | ) | [2] | - | ||||||||||||
Total current liabilities | 35,121 | - | - | 19,917,595 | (35,121 | ) | 19,917,595 | |||||||||||||
Long-term loan | - | - | - | 3,374,100 | - | 3,374,100 | ||||||||||||||
TOTAL LIABILITIES | 35,121 | - | - | 23,291,695 | (35,121 | ) | 23,291,695 | |||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||
MINORITY INTEREST | - | - | - | 318,894 | - | 318,894 | ||||||||||||||
STOCKHOLDERS (DEFICIT) EQUITY | ||||||||||||||||||||
Preferred stock: par value of $0.001 per share | ||||||||||||||||||||
Authorized 10 million shares | ||||||||||||||||||||
None issued and outstanding | ||||||||||||||||||||
Common stock: par value of $0.001 per share | ||||||||||||||||||||
Authorized 40 million shares | ||||||||||||||||||||
Issued and outstanding 14.8 million shares | 313 | - | - | 8,194,500 | (8,180,013 | ) | [2] | 14,800 | ||||||||||||
Additional paid-in capital | 687 | - | - | 5,831,200 | 8,179,013 | [2] | 14,010,900 | |||||||||||||
Statutory reserves | - | - | - | 429,938 | - | 429,938 | ||||||||||||||
Accumulated other comprehensive income | - | - | - | 772,000 | - | 772,000 | ||||||||||||||
(Accumulated deficit) retained earnings | (36,121 | ) | - | 3,239,464 | 36,121 | [2] | 3,239,464 | |||||||||||||
TOTAL STOCKHOLDERS (DEFICIT) EQUITY | (35,121 | ) | - | - | 18,785,996 | 35,121 | 18,785,996 | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY | $ | - | $ | - | $ | - | $ | 42,077,691 | $ | - | $ | 42,077,691 |
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THT Heat Transfer Technology, Inc.
Unaudited Pro Forma Condensed Combined Statements of Income
and Comprehensive Income
Year ended December 31, 2008
(Stated in US Dollars)
The | Star | Siping | |||||||||||||||||
Company | Megaway | Wealth | Juyuan | ||||||||||||||||
Year | Year | Year | Year | ||||||||||||||||
ended | ended | ended | ended | ||||||||||||||||
December | December | December | December | Pro forma | Pro forma | ||||||||||||||
31, 2008 | 31, 2008 | 31, 2008 | 31, 2008 | adjustment | combined | ||||||||||||||
Net sales | $ | - | $ | - | $ | - | $ | 32,466,806 | $ | - | $ | 32,466,806 | |||||||
Cost of sales | - | - | - | (22,240,292 | ) | - | (22,240,292 | ) | |||||||||||
Gross profit | - | - | - | 10,226,514 | - | 10,226,514 | |||||||||||||
Operating expenses | |||||||||||||||||||
Administrative expenses | 8,617 | - | - | 2,197,310 | - | 2,205,927 | |||||||||||||
Research and development costs | - | - | - | 1,013,090 | - | 1,013,090 | |||||||||||||
Selling expenses | - | - | - | 3,552,313 | - | 3,552,313 | |||||||||||||
8,617 | - | - | 6,762,713 | - | 6,771,330 | ||||||||||||||
(Loss) income from operation | (8,617 | ) | - | - | 3,463,801 | - | 3,455,184 | ||||||||||||
Interest income | - | - | - | 21,628 | - | 21,628 | |||||||||||||
Other income | - | - | - | 337,251 | - | 337,251 | |||||||||||||
Interest expense | - | - | - | (494,575 | ) | - | (494,575 | ) | |||||||||||
(Loss) income before income taxes and minority interest | (8,617 | ) | - | - | 3,328,105 | - | 3,319,488 | ||||||||||||
Income taxes | - | - | - | (343,623 | ) | - | (343,623 | ) | |||||||||||
Minority interest | - | - | - | 11,782 | - | 11,782 | |||||||||||||
Net (loss) income | $ | (8,617 | ) | $ | - | $ | - | $ | 2,996,264 | $ | - | $ | 2,987,647 | ||||||
Other comprehensive income | |||||||||||||||||||
Foreign currency translation adjustments | - | - | - | 541,142 | - | 541,142 | |||||||||||||
Total comprehensive (loss) income | $ | (8,617 | ) | $ | - | $ | - | $ | 3,537,406 | $ | - | $ | 3,528,789 | ||||||
(Loss) earnings per share: basic and diluted | $ | (0.03 | ) | N/A | N/A | N/A | $ | 0.20 | |||||||||||
Weighted average number of shares outstanding: basic and diluted | 312,730 | N/A | N/A | N/A | 14,919,981 | [3] |
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THT Heat Transfer Technology, Inc.
Notes to Unaudited Pro Forma Condensed Combined Financial
Statements
(Stated in US Dollars)
[1] |
On June 30, 2009, the Company issued 14,800,000 shares to the sole shareholder of Megaway, Wisetop International Holdings Limited, in exchange for 100% of the issued and outstanding shares of Megaway. The Exchange Transaction is deemed to be a reverse acquisition. The Company (the legal acquirer) is considered the accounting acquiree and Megaway (the legal acquiree) is considered the accounting acquirer. The consolidated financial statements of the combined entity will in substance be those of Megaway, with the assets and liabilities, and revenues and expenses of the Company being included effective from the date of consummation of the Exchange Transaction. The Company is deemed to be a continuation of the business of Megaway. The Companys issued and outstanding stocks prior to the Exchange Transaction are accounted for at their net book value and no goodwill is recognized. |
[2] |
To recapitalize for the Exchange Transaction. |
[3] |
The pro forma financial statements assume the Exchange Transaction occurred as of January 1, 2008. The pro forma weighted average number of shares is calculated as follows: |
Previously existing number of shares of the Company as of January 1, 2008, adjusted retrospectively for the forward stock split (see (a) below) and cancellation of shares (see (b) below) | 119,981 | |
Issue of 14,800,000 shares for the Share Exchange | 14,800,000 | |
Pro forma weighted average number of shares as of December 31, 2008 | 14,919,981 |
(a) |
On June 3, 2009, the Companys board of directors authorized a 1.92-for-1 forward stock split of the Companys issued and outstanding shares of common stock. The effect of this forward stock split is reflected retroactively | |
(b) |
As a condition precedent to the consummation of the Share Exchange Agreement, the Company entered into a cancellation agreement with the major stockholder of the Company immediately before the Share Exchange Agreement to cancel 4,805,387 shares of the Companys issued and outstanding common stock owned by the major stockholder. The effect of this cancellation is reflected retroactively | |
The Company did not have any dilutive instrument during the year ended December 31, 2008 nor any dilutive instrument was issued in connection with the Exchange Transaction. Accordingly, the reported basic and diluted earning per share is the same. |
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