Attached files
Exhibit 9.01(b)
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Basis of presentation
The unaudited pro forma consolidated financial statements of The Parkview Group., Inc. (“Parkview”), in the opinion of management, include all material adjustments directly attributable to the share exchange contemplated by a share exchange agreement, dated November 10, 2010, by and among Dynamic Ally, a British Virgin Islands company (“Dynamic Ally”) and the stockholders of 100% of Dynamic Ally’s common stock, on the one hand, and Parkview and certain holders of Parkview’s issued and outstanding common stock and the holders of 100% of Parkview’s common stock, on the other hand (the “Share Exchange). Pursuant to the share exchange agreement, on November 10, 2010, Parkview issued to the shareholders of Dynamic Ally 6,577,551 shares of common stock, par value $0.001 per share, in the aggregate in exchange for all of the issued and outstanding shares of Dynamic Ally held by its shareholders. As a result, Dynamic Ally became a wholly-owned subsidiary of Parkview. The pro forma consolidated statement of operations includes the accounts of Parkview and Dynamic Ally.
Dynamic Ally is a holding company that owns 100% of Ningguo Taiyang Incubation Plant Co., Ltd. (“Ningguo”), which is a wholly foreign-owned enterprise (“WFOE”) under the laws of the Peoples’ Republic of China (“PRC” or “China”). On May 26, 2010, Ningguo entered into and consummated a series of contracts with Anhui Taiyang Poultry Co, Ltd. (“Anhui Taiyang”), a PRC limited liability company and breeder and seller of ducks and duck parts, by which Ningguo will provide certain consulting and operating services to Anhui Taiyang. These agreements include a consulting services agreement, operating agreement, option agreement, equity pledge agreement, and voting rights proxy agreement. Through these contractual agreements, Dynamic Ally, by way of Ningguo, effectively controls the business of Anhui Taiyang upon closing of the Share Exchange Agreement.
The unaudited pro forma statement of operations for the six months ended June 30, 2010 was prepared as if Parkview’s acquisition of Dynamic Ally was consummated on January 1, 2010. The unaudited pro forma statement of operations for the year ended December 31, 2010 was prepared as if Parkview’s acquisition of Dynamic Ally was consummated on January 1, 2009. The unaudited pro forma balance sheet was prepared as if the transaction was consummated on June 30, 2010.
The unaudited pro forma consolidated financial statements have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which actually would have resulted had the acquisition transaction occurred on the dates indicated and are not necessarily indicative of the results that may be expected in the future.
F-67
The Parkview Group, Inc.
Unaudited Pro Forma Balance Sheets
As at June 30, 2010
(Expressed in United States Dollars)
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The Parkview Group, Inc.
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Dynamic Ally Ltd.
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Pro Forma Adjustments
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Pro Forma Consolidated
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ASSETS
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Current assets
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Cash and cash equivalents
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$ | 3,346 | $ | 1,859,417 | $ | 1,862,763 | ||||||||||
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Trade accounts receivable, net
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3,331,053 | 3,331,053 | ||||||||||||||
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Loans receivable
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3,026,839 | 3,026,839 | ||||||||||||||
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Inventories, net
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2,861,977 | 2,861,977 | ||||||||||||||
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Prepaid and other current assets
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1,778,361 | 1,778,361 | ||||||||||||||
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Proceeds receivable from sale of fertilizer plant
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1,845,106 | 1,845,106 | ||||||||||||||
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Due from related parties
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376,119 | 376,119 | ||||||||||||||
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Total current assets
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3,346 | 15,078,872 | — | 15,082,218 | ||||||||||||
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Construction in progress
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4,665,664 | 4,665,664 | ||||||||||||||
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Property, plant and equipment, net
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904 | 14,351,228 | 14,352,132 | |||||||||||||
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Land use rights
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10,500,689 | 10,500,689 | ||||||||||||||
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Other long term assets
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1,949,507 | 1,949,507 | ||||||||||||||
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Total assets
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$ | 4,250 | $ | 46,545,960 | $ | — | $ | 46,550,210 | ||||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities
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Trade accounts payable and accrued expenses
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$ | 2,345,139 | $ | 2,345,139 | ||||||||||||
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Other accounts payable
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5,988,585 | 5,988,585 | ||||||||||||||
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Loans payable, current portion
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13,659,196 | 13,659,196 | ||||||||||||||
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Convertible loan payable
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608,967 | 608,967 | ||||||||||||||
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Total current liabilities
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— | 22,601,887 | — | 22,601,887 | ||||||||||||
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Loans payable, long term portion
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5,989,325 | 5,989,325 | ||||||||||||||
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Total liabilities
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— | 28,591,212 | — | 28,591,212 | ||||||||||||
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Shareholders’ equity
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Common stock
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527 | 10,000 | (7,919 | ) | 2,608 | |||||||||||
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Additional paid-in capital
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170,533 | — | 19,528,874 | 19,699,407 | ||||||||||||
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Retained earnings (accumulated deficit)
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(166,810 | ) | 17,439,833 | (19,520,955 | ) | (2,247,932 | ) | |||||||||
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Cumulative translation adjustment
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504,915 | 504,915 | ||||||||||||||
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Total equity
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4,250 | 17,954,748 | — | 17,958,998 | ||||||||||||
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Total liabilities and shareholders’ equity
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$ | 4,250 | $ | 46,545,960 | $ | — | $ | 46,550,210 | ||||||||
F-68
The Parkview Group, Inc.
Unaudited Pro Forma Statements of Operations
For the Six Months Ended June 30, 2010
(Expressed in United States Dollars)
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The Parkview Group, Inc.
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Dynamic Ally Ltd.
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Pro Forma Adjustments
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Pro Forma Consolidated
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Revenues
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$ |
19,646,570
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$
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19,646,570
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Cost of goods sold
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16,221,751
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16,221,751
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Gross Profit
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— | 3,424,819 | — | 3,424,819 | ||||||||||||
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Sales and marketing expenses
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22,860
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22,860
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General and administrative expenses
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16,668 | 1,324,147 | 2,081,122 | 3,421,937 | ||||||||||||
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Operating profit
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(16,668 | ) | 2,077,812 | (2,081,122 | ) | (19,978 | ) | |||||||||
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Other income
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1,772,121
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1,772,121
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Subsidy income
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108,543
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108,543
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Interest expense, net
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(805,948
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) |
(805,948
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) | ||||||||||||
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Operating income before income taxes
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(16,668 | ) | 3,152,528 | (2,081,122 | ) | 1,054,738 | ||||||||||
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Income tax expense
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—
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Net income
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$ | (16,668 | ) | $ | 3,152,528 | $ | (2,081,122 | ) | $ | 1,054,738 | ||||||
F-69
The Parkview Group, Inc.
Unaudited Pro Forma Statements of Operations
For the Year Ended December 31, 2009
(Expressed in United States Dollars)
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The Parkview Group, Inc.
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Dynamic Ally Ltd.
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Pro Forma Adjustments
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Pro Forma Consolidated
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Revenues
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$ | 6,500 | $ | 28,859,699 | $ | 28,866,199 | ||||||||||
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Cost of goods sold
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24,670,485 | 24,670,485 | ||||||||||||||
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Gross Profit
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6,500 | 4,189,214 | — | 4,195,714 | ||||||||||||
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Sales and marketing expenses
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55,425 | 55,425 | ||||||||||||||
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General and administrative expenses
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67,319 | 1,347,787 | 2,081,122 | 3,496,228 | ||||||||||||
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Operating profit
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(60,819 | ) | 2,786,002 | (2,081,122 | ) | 644,061 | ||||||||||
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Other income
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(81,736 | ) | (81,736 | ) | ||||||||||||
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Subsidy income
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339,981 | 339,981 | ||||||||||||||
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Interest expense, net
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(554,924 | ) | (554,924 | ) | ||||||||||||
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Operating income before income taxes
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(60,819 | ) | 2,489,323 | (2,081,122 | ) | 347,382 | ||||||||||
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Income tax expense
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— | |||||||||||||||
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Net income
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$ | (60,819 | ) | $ | 2,489,323 | $ | (2,081,122 | ) | $ | 347,382 | ||||||
F-70
The Parkview Group, Inc.
Unaudited Notes to Pro Forma Financial Statements
(Expressed in United States Dollars)
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1.
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Parkview’s acquisition of Dynamic Ally is deemed to be a reverse acquisition. In accordance with the Accounting and Financial Reporting Interpretations and Guidance prepared by the Staff of the Securities and Exchange Commission, Parkview (the legal acquirer) is considered the accounting acquiree and Dynamic Ally (the legal acquiree) is considered the accounting acquirer. From and after the reverse acquisition, the consolidated financial statements of the consolidated entities will in substance be those of Dynamic Ally, with the assets and liabilities, and revenues and expenses, of Parkview being included effective from the date of consummation of reverse acquisition. Parkview is deemed to be a continuation of business of Dynamic Ally. The outstanding common stock of Parkview prior to the reverse acquisition will be accounted for at their net book value and no goodwill will be recognized.
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2.
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There were no inter-company transactions or balances between Parkview and Dynamic Ally during the periods covered by the pro forma consolidated financial statements.
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3.
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Pro forma adjustments to the balance sheets at June 30, 2010 include (a) elimination of the common stock and retained earnings of Dynamic Ally as required by reverse merger accounting, and (b) $2,081,122 of stock based compensation expense recognized for 1,040,561 shares issued in the Share Exchange to service providers in exchange for services rendered, as if those shares had been issued on June 30, 2010, of which $2,081 was allocated to common stock and $2,079,041 was allocated to additional paid-in capital.
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4.
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Pro forma adjustments to the statement of operations for the six months ended June 30, 2010 and for the year ended December 31, 2009 include $2,081,122 of stock based compensation expense recognized for 1,040,561 shares issued in the Share Exchange to service providers in exchange for services rendered, as if those shares had been issued on January 1, 2010 and January 1, 2009, respectively.
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5.
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Dynamic Ally was incorporated in the British Virgin Islands on March 2, 2010. The historical financial statements presented herein for Dynamic Ally reflect the consolidated financial results of Dynamic Ally, Ningguo, and Taiyang on a retroactive basis since May 2006, which is the date that Taiyang was established and started operations.
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6.
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Immediately after the acquisition of Dynamic Ally by Parkview on November 10, 2010, Parkview consummated a financing for the sale of units for the aggregate gross proceeds of $5,000,056, at a price of $8.00 per unit. Each unit consists of (i) four (4) shares of Common Stock and (ii) a warrant to purchase one (1) share of common stock at an exercise price of $4.00. This transaction is not reflected in the pro forma financial statements since it occurred subsequent to completion of the Share Exchange.
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F-71