Attached files
Exhibit 99.3
LEVIATHAN MINERALS GROUP, INC.
NOTES TO UNAUDITED CONDENSED PRO FORMA FINANCIAL STATEMENTS
JUNE 30, 2011
On August 18, 2011, we changed our corporate name from “DE Acquisition 3, Inc.” to “Leviathan Minerals Group Incorporated”, whereby our wholly owned subsidiary (formed for the purpose of effecting the change in our corporate name) was merged with and into the Company and the Company adopted the name of the subsidiary and changed our fiscal year end to December 31, 2011. We effected the name change to better reflect the nature of the business operations expected to be acquired.
On August 22, 2011 (the “Effective Date”), DE Acquisition 3, Inc. (the “Company”) entered into an Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Top Yield Holdings Limited, a British Virgin Islands company (“Top Yield”), the holders of 100% of the issued and outstanding equity interests of Top Yield (the “Top Yield Shareholders”), PT HavilahAbadi Sejahtera, a company incorporated in the Republic of Indonesia (“PTHAS”), and the holder of 99% of the issued and outstanding equity interests of PTHAS, PT Aega Prima, a company incorporated in the Republic of Indonesia (“PT Aega”), the holder of 80% of the issued and outstanding equity interests of PT Aega, PT Alam Lestari Kencana, a company incorporated in the Republic of Indonesia (“PT ALK”), and the holder of 99% of the issued and outstanding equity interests of PT ALK, Europe-China Commercial Union Holding Limited, a British Virgin Islands company (“ECC”), and the holder of 100% of the issued and outstanding equity interests of ECC, Crown Sail Limited, a British Virgin Islands company (“CS”), and the holder of 100% of CS.
Pursuant to the Securities Purchase Agreement, we issued $5,020,000 of Notes. The Notes bear interest at 10% with a maturity date of February 18, 2013 unless declared due and payable by the investor upon the occurrence of an Event of Default (as defined in the Notes). The amount due under the Notes shall be converted into Common Stock (i) immediately upon the effective date of the listing of the Common Stock on any national securities exchange in the United States or (ii) at the discretion of the investor. The Notes are currently convertible into 1,181,177 shares of Common Stock.
The following unaudited pro forma balance sheet as of June 30, 2011 and the unaudited pro forma statement of income are derived from the historical financial statements of the Company and Top Yieldand have been prepared to give effect to the acquisition of the Top Yieldshares and the issuance of the Notes as at January 1, 2011. The unaudited pro forma balance sheet is presented as if the closing of Agreement had occurred as of January 1, 2011. The unaudited pro forma condensed combined statement of income is presented as if the closing of the Agreement had occurred on January 1, 2011.
The following unaudited pro forma financial statements have been prepared for illustrative purposes only and do not purport to reflect the results the combined company may achieve in future periods or the historical results that would have been obtained. These unaudited pro forma financial statements, including the notes hereto, should be read in conjunction with (i) the historical financial statements for the Company and (ii) the historical financial statements of Top Yield.
PRO FORMA ADJUSTMENTS
NOTE 1. These unaudited pro forma combined financial statements reflect the following pro forma adjustments:
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(a).
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To record the acquisition of the shares of Top Yield in exchange for 16,705,406shares of the Company.
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(b).
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To record the issuance of the $5,020,000 Notes and accrued and unpaid interest through June 30, 2011.
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NOTE 2. DE Acquisition 3’s balance sheet presented below is as of May 31, 2011and its statement of income is for the three months ended May 31, 2011. Adjustments were not made to bring DE Acquisitions financial statements to June 30, 2011 as the adjustments were not significant. Top Yield’s balance sheet is as of June 30, 2011 and its statement of income is for the six months ended June 30, 2011. Top Yield’s fiscal period will remain December 31, 2011.
1
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LEVIATHAN MINERALS GROUP INCORPORATED
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Unaudited Condensed Combining Proforma Balance Sheet
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June 30, 2011
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DE Acquisition 3, Inc.
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Top Yield Holdings, Limited
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Proforma Adjustments
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Consolidated Proforma
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Assets
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Current assets
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Cash and cash equivalents
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$ | - | $ | 2,512,319 | $ | 5,020,000 | $ | 7,532,319 | ||||||||
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Accounts receivable
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- | 9,819,555 | 9,819,555 | |||||||||||||
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Restricted cash
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- | 56,738 | 56,738 | |||||||||||||
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Prepaid expenses and deposit
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- | 1,105,261 | 1,105,261 | |||||||||||||
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Inventory
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- | 2,576,920 | 2,576,920 | |||||||||||||
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Other receivables
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- | 2,027,462 | 2,027,462 | |||||||||||||
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Due from related parties
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- | 871,080 | 871,080 | |||||||||||||
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Total current assets
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- | 18,969,335 | 5,020,000 | 23,989,335 | ||||||||||||
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Non-current assets
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- | |||||||||||||||
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Property, plant and equipment, net
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- | 3,875,081 | 3,875,081 | |||||||||||||
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Intangible assets, net
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- | 52,177 | 52,177 | |||||||||||||
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Total non-current assets
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- | 3,927,258 | - | 3,927,258 | ||||||||||||
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Total Assets
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$ | - | $ | 22,896,593 | $ | 5,020,000 | $ | 27,916,593 | ||||||||
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Liabilities and Shareholders' Equity
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Accounts payable
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$ | - | $ | 1,076,628 | $ | 1,076,628 | ||||||||||
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Accrued expenses and other payables
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- | 5,279,053 | 251,000 | 5,530,053 | ||||||||||||
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Taxes payable
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- | 19,642 | 19,642 | |||||||||||||
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Due to related parties
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- | 5,901,968 | 5,901,968 | |||||||||||||
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Total current liabilities
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- | 12,277,291 | 251,000 | 12,528,291 | ||||||||||||
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Subdordinated debt
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- | - | 5,020,000 | $ | 5,020,000 | |||||||||||
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Total liabilities
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- | 12,277,291 | 5,271,000 | 17,548,291 | ||||||||||||
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Shareholders' Equity
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Registered and paid-in-capital
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15,158 | 101 | 15,259 | |||||||||||||
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Retained earnings
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(15,158 | ) | 7,544,346 | (251,000 | ) | 7,278,188 | ||||||||||
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Other comprehensive income
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Effects of foreign current conversion
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- | 733,381 | 733,381 | |||||||||||||
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Non-operating income/(loss)
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- | 2,009,863 | 2,009,863 | |||||||||||||
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Total shareholders' equity
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- | 10,287,691 | (251,000 | ) | 10,036,691 | |||||||||||
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Non-controlling interest
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- | 331,611 | 331,611 | |||||||||||||
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Total Equity
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- | 10,619,302 | (251,000 | ) | 10,368,302 | |||||||||||
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Total Liabilities and Shareholders' Equity
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$ | - | $ | 22,896,593 | $ | 5,020,000 | $ | 27,916,593 | ||||||||
2
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LEVIATHAN MINERALS GROUP INCORPORATED
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Unaudited Condensed Combining Proforma Statement of Income
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For the Six Months Ended June 30, 2011
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DE Acquisition 3, Inc.
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Top Yield Holdings, Limited
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Proforma Adjustments
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Consolidated Proforma
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Net sales
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$ | - | $ | 33,257,980 | $ | 33,257,980 | ||||||||||
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Cost of sales
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- | (27,637,871 | ) | (27,637,871 | ) | |||||||||||
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Gross profit
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- | 5,620,109 | 5,620,109 | |||||||||||||
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Selling expenses
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- | (1,119,004 | ) | (1,119,004 | ) | |||||||||||
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Administrative expenses
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(11,224 | ) | (2,725,001 | ) | (2,736,225 | ) | ||||||||||
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Other operating expenses
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- | - | - | |||||||||||||
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Other operating income
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- | - | - | |||||||||||||
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Income from operations
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(11,224 | ) | 1,776,104 | 1,764,880 | ||||||||||||
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Other income
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429,328 | 429,328 | ||||||||||||||
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Interest expense
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- | - | (251,000 | ) | (251,000 | ) | ||||||||||
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Income before tax
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(11,224 | ) | 2,205,432 | (251,000 | ) | 1,943,208 | ||||||||||
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Income tax
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- | - | - | |||||||||||||
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Net income
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$ | (11,224 | ) | $ | 2,205,432 | $ | (251,000 | ) | $ | 1,943,208 | ||||||
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Non-controlling interest income
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- | (21,901 | ) | (21,901 | ) | |||||||||||
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Net income available to shareholder
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$ | (11,224 | ) | $ | 2,227,333 | $ | (251,000 | ) | $ | 1,965,109 | ||||||
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Other comprehensive income
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Unrealized appreciation for investment in
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subsidiary stock
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- | 290,000 | 290,000 | |||||||||||||
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Total Other comprehensive income
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$ | (11,224 | ) | $ | 2,517,333 | $ | (251,000 | ) | $ | 2,255,109 | ||||||
3
LEVIATHAN MINERALS GROUP, INC.
NOTES TO UNAUDITED CONDENSED PRO FORMA FINANCIAL STATEMENTS
DECEMBER 31, 2010
On August 18, 2011, we changed our corporate name from “DE Acquisition 3, Inc.” to “Leviathan Minerals Group Incorporated”, whereby our wholly owned subsidiary (formed for the purpose of effecting the change in our corporate name) was merged with and into the Company and the Company adopted the name of the subsidiary. We effected the name change to better reflect the nature of the business operations expected to be acquired.
On August 22, 2011 (the “Effective Date”), DE Acquisition 3, Inc. (the “Company”) entered into an Agreement and Plan of Share Exchange (the “Exchange Agreement”) with Top Yield Holdings Limited, a British Virgin Islands company (“Top Yield”), the holders of 100% of the issued and outstanding equity interests of Top Yield (the “Top Yield Shareholders”), PT HavilahAbadi Sejahtera, a company incorporated in the Republic of Indonesia (“PTHAS”), and the holder of 99% of the issued and outstanding equity interests of PTHAS, PT Aega Prima, a company incorporated in the Republic of Indonesia (“PT Aega”), the holder of 80% of the issued and outstanding equity interests of PT Aega, PT Alam Lestari Kencana, a company incorporated in the Republic of Indonesia (“PT ALK”), and the holder of 99% of the issued and outstanding equity interests of PT ALK, Europe-China Commercial Union Holding Limited, a British Virgin Islands company (“ECC”), and the holder of 100% of the issued and outstanding equity interests of ECC, Crown Sail Limited, a British Virgin Islands company (“CS”), and the holder of 100% of CS.
Pursuant to the Securities Purchase Agreement, we issued $5,020,000 of Notes. The Notes bear interest at 10% with a maturity date of February 18, 2013 unless declared due and payable by the investor upon the occurrence of an Event of Default (as defined in the Notes). The amount due under the Notes shall be converted into Common Stock (i) immediately upon the effective date of the listing of the Common Stock on any national securities exchange in the United States or (ii) at the discretion of the investor. The Notes are currently convertible into 1,181,177 shares of Common Stock.
The following unaudited pro forma statement of income are derived from the historical financial statements of the Company and Top Yield and have been prepared to give effect to the acquisition of the Top Yield shares and the issuance of the Notes as at January 1, 2010. The unaudited pro forma condensed combined statement of income is presented as if the closing of the Agreement had occurred on January 1, 2010.
The following unaudited pro forma financial statements have been prepared for illustrative purposes only and do not purport to reflect the results the combined company may achieve in future periods or the historical results that would have been obtained. These unaudited pro forma financial statements, including the notes hereto, should be read in conjunction with (i) the historical financial statements for the Company and (ii) the historical financial statements of Top Yield.
PRO FORMA ADJUSTMENTS
NOTE 1. These unaudited pro forma combined financial statements reflect the following pro forma adjustments:
|
(a).
|
To record the acquisition of the shares of Top Yield in exchange for 16,705,406 shares of the Company.
|
|
(b).
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To record the issuance of the $5,020,000 Notes and accrued and unpaid interest through December 31, 2010.
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NOTE 2. DE Acquisition 3’s statement of income is for the year ended February 28, 2011. Adjustments were not made to bring DE Acquisition 3’s financial statements to December 31, 2010 as the adjustments were not significant. Top Yield’s statement of income is for the year ended December 31, 2010. Top Yield’s fiscal period will remain December 31, 2011.
4
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LEVIATHAN MINERALS GROUP INCORPORATED
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Unaudited Condensed Combining Proforma Statement of Income
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For the Year Ended December 31, 2010
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DE Acquisition 3, Inc.
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Top Yield Holdings, Limited
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Proforma Adjustments
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Consolidated Proforma
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Net sales
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$ | - | $ | 2,952,426 | $ | 2,952,426 | ||||||||||
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Cost of sales
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- | (919,674 | ) | (919,674 | ) | |||||||||||
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Gross profit
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- | 2,032,752 | 2,032,752 | |||||||||||||
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Selling expenses
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- | (28,820 | ) | (28,820 | ) | |||||||||||
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Administrative expenses
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(2,795 | ) | (2,448 | ) | (5,243 | ) | ||||||||||
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Other operating expenses
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- | - | - | |||||||||||||
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Other operating income
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- | 3,610,323 | 3,610,323 | |||||||||||||
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Income from operations
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(2,795 | ) | 5,611,807 | 5,609,012 | ||||||||||||
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Interest expense
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- | - | (502,000 | ) | (502,000 | ) | ||||||||||
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Income before tax
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(2,795 | ) | 5,611,807 | (502,000 | ) | 5,107,012 | ||||||||||
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Income tax
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- | - | - | |||||||||||||
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Net income
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$ | (2,795 | ) | $ | 5,611,807 | $ | (502,000 | ) | $ | 5,107,012 | ||||||
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Other comprehensive income
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Effects of foreign currency conversion
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- | 81,233 | 81,233 | |||||||||||||
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Non-operating income
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- | 3,467,874 | 3,467,874 | |||||||||||||
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Non-operating expense
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- | (281,500 | ) | (281,500 | ) | |||||||||||
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Total Other comprehensive income
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$ | (2,795 | ) | $ | 8,879,414 | $ | (502,000 | ) | $ | 8,374,619 | ||||||
5