Attached files
| file | filename |
|---|---|
| 8-K/A - FORM 8-K/A - XcelMobility Inc. | form8ka.htm |
EXHIBIT 99.1 The pro forma financial information for the year ended December 31, 2012 and for the six months ended June 30, 2013 of Xcelmobility Inc. and its subsidiaries concerning the Acquisition.
PRO FORMA CONDENSED COMBINED FINANCIAL DATA
The following pro forma condensed combined statement of operations of XcelMobility Inc. (“XCLL”) or the ("Company") gives effect to the merger of XCLL and Shenzhen Jifu Communication Technology Co., Ltd ("Jifu”) as if such transaction occurred at the beginning of the periods presented. The pro forma condensed combined statement of operations for the year ended December 31, 2012 is derived from the audited financial statements of XCLL and Jifu for the year ended December 31, 2012. The unaudited pro forma condensed combined statement of operations for the six months ended June 30, 2013 is derived from the financial statements of XCLL and Jifu for the six months ended June 30, 2013.
The audited and unaudited pro forma condensed combined balance sheets at December 31, 2012 and June 30, 2013 give effect to the Merger of XCLL and Jifu as if such transaction occurred on January 1, 2012. The audited and unaudited pro forma condensed combined balance sheet is derived from the historical balance sheets of XCLL and Jifu as of December 31, 2012 and June 30, 2013.
The audited and unaudited pro forma condensed combined financial data do not reflect the effects of any anticipated changes to be made by XCLL in its operations from the historical operations and are presented for informational purposes only and should not be construed to be indicating (i) the results of operations or the financial position of XCLL that actually would have occurred had the proposed merger been consummated as of the dates indicated or (ii) the results of operation or the financial position of XCLL in the future. The proposed Merger is expected to be accounted for as a merger and acquisition and it is the intention of the parties to continue the operations of XCLL and its subsidiaries, and Jifu as the subsidiary of XCLL.
The following pro forma condensed combined financial data and notes are qualified in their entirety by reference to, and should be read in conjunction with, "Management's Discussion and Analysis of Financial Condition and Results of Operation” of XCLL, the consolidated financial statements and notes thereto of XCLL and Jifu and other historical information included elsewhere in this filing.
XcelMobility Inc.
Pro forma Condensed Combined Balance Sheet
As of December 31, 2012
| XCLL | JIfu | Adjustments | Pro Forma | |||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 98,739 | $ | 40,132 | $ | 138,871 | ||||||
| Trade accounts receivable | 19,309 | - | 19,309 | |||||||||
| Other receivables, net | 5,615 | 20,897 | 26,512 | |||||||||
| Inventory | 348 | - | 348 | |||||||||
| Prepaid expense | 8,887 | - | 8,887 | |||||||||
| Advances to suppliers | 3,372 | - | 3,372 | |||||||||
| Advances to an unrelated party | - | 298,654 | 298,654 | |||||||||
| Advances to related parties | - | 60,308 | 60,308 | |||||||||
| Consumables | - | 4 | 4 | |||||||||
| 136,270 | 419,995 | 556,265 | ||||||||||
| Property, plant and equipment, net | 90,375 | 26,330 | 116,705 | |||||||||
| Goodwill | - | - | 1,034,370 | (3) | 1,034,370 | |||||||
| Total assets | $ | 226,645 | $ | 446,325 | $ | 1,707,340 | ||||||
| Liabilities and stockholders’ deficit | ||||||||||||
| Accounts payable | $ | 76,594 | $ | - | $ | 76,594 | ||||||
| Other payables and accrued expenses | 109,147 | 26,002 | 135,149 | |||||||||
| Other taxes payables | - | 7,687 | 7,687 | |||||||||
| Deferred revenue | 78,811 | - | 78,811 | |||||||||
| Convertible notes, net of debt discount | 69,960 | - | 69,960 | |||||||||
| Derivative liability | 423,480 | - | 423,480 | |||||||||
| Accrued interest | 140,520 | - | 140,520 | |||||||||
| 898,512 | 33,689 | 932,201 | ||||||||||
| Convertible notes, net of debt discount | 291,047 | - | 291,047 | |||||||||
| Deferred revenue | 20,130 | - | 20,130 | |||||||||
| Total liabilities | $ | 1,209,689 | $ | 33,689 | $ | 1,243,378 | ||||||
| NET LIABILITIES | $ | (983,044 | ) | $ | 412,636 | $ | 463,962 | |||||
| Stockholders’ (deficit) equity: | ||||||||||||
| Common stock/Register capital | $ | 60,000 | $ | 362,472 | $ | 27,000 | (1) | $ | 90,000 | |||
| (362,472 | )(2) | |||||||||||
| 3,000 | (4) | |||||||||||
| Additional paid-in capital | 131,562 | - | (27,000 | )(1) | 1,708,404 | |||||||
| 362,472 | (2) | |||||||||||
| 1,034,370 | (3) | |||||||||||
| 207,000 | (4) | |||||||||||
| Accumulated deficit | (1,207,650 | ) | (63,950 | ) | (210,000 | )(4) | (1,481,600 | ) | ||||
| Accumulated other comprehensive loss | 33,044 | 114,114 | 147,158 | |||||||||
| Total stockholders’ (deficit)/equity | $ | (983,044 | ) | $ | 412,636 | $ | 463,962 |
XcelMobility Inc.
Pro forma Condensed Combined Statement of
Operations
For the Year Ended December 31, 2012
| XCLL | Jifu | Adjustments | Pro Forma | |||||||||
| Net sales | $ | 277,406 | $ | 520,954 | $ | 798,360 | ||||||
| Cost of revenue | 17,953 | 8,856 | 26,809 | |||||||||
| Gross profit (loss) | $ | 259,453 | $ | 512,098 | $ | 771,551 | ||||||
| Selling expense | 41,136 | 49,982 | 91,118 | |||||||||
| General and administrative expenses | 986,908 | 494,968 | 1,481,876 | |||||||||
| Total Operating Expenses | $ | 1,028,044 | $ | 544,950 | $ | 1,572,994 | ||||||
| Income (loss) from operations | $ | (768,591 | ) | $ | (32,852 | $ | (801,443 | ) | ||||
| Other income (expenses) | ||||||||||||
| Interest income | 853 | - | 853 | |||||||||
| Interest expense | (122,268 | ) | - | (122,268 | ) | |||||||
| Amortisation of debt discount | (340,816 | ) | (340,816 | ) | ||||||||
| Gain on derivative | 669,329 | - | 669,329 | |||||||||
| Other income | 126,724 | 53,323 | 180,047 | |||||||||
| Income (loss) from operations before income taxes | $ |
(434,769 |
) | $ | 20,471 | $ | (414,298 | ) | ||||
| Income tax provision | - | - | - | |||||||||
| Net income (loss) | $ | (434,769 | ) | $ | 20,471 | $ | (414,298 | ) | ||||
| Foreign currency translation gain(loss) | 2,381 | 3,086 | 5,467 | |||||||||
| Comprehensive loss | $ | (432,388 | ) | $ | 23,557 | $ | (408,831 | ) | ||||
| Per share information – basic and fully diluted: | ||||||||||||
| Weighted average shares outstanding | 60,000,000 | 27,000,000 | (1) | 90,000,000 | ||||||||
| 3,000,000 | (4) | |||||||||||
| Net earnings (loss) per share, basic | $ | (0.01 | ) | $ | (0.00 | ) |
XcelMobility Inc.
Unaudited Pro forma Condensed Combined
Balance Sheet
As of June 30, 2013
| XCLL | JIfu | Adjustments | Pro Forma | |||||||||
| Assets | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 137,100 | $ | 153,371 | $ | 290,471 | ||||||
| Trade accounts receivable | 26,099 | 1,394,425 | 1,420,524 | |||||||||
| Other receivables, net | 4,675 | 332,883 | 337,558 | |||||||||
| Inventory | 355 | 665 | 1,020 | |||||||||
| Prepaid expense | 9,071 | - | 9,071 | |||||||||
| 177,300 | 1,881,344 | 2,058,644 | ||||||||||
| Property, plant and equipment, net | 80,500 | 23,334 | 103,834 | |||||||||
| Goodwill | - | - | 1,034,370 | (3) | 1,034,370 | |||||||
| Total assets | $ | 257,800 | $ | 1,904,678 | $ | 3,196,848 | ||||||
| Liabilities and stockholders’ deficit | ||||||||||||
| Accounts payable | $ | - | $ | 381,158 | $ | 381,158 | ||||||
| Other payables and accrued expenses | 356,434 | 610,682 | 967,116 | |||||||||
| Other taxes payables | 45,043 | 57,208 | 102,251 | |||||||||
| Deferred revenue | 60,703 | - | 60,703 | |||||||||
| Derivative liability | 423,480 | - | 423,480 | |||||||||
| Accrued interest | 943 | - | 943 | |||||||||
| 886,603 | 1,049,048 | 1,935,651 | ||||||||||
| Convertible notes, net of debt discount | 381,791 | - | 381,791 | |||||||||
| Accrued interest | 87,843 | - | 87,843 | |||||||||
| Total liabilities | $ | 1,356,237 | $ | 1,049,048 | $ | 2,405,285 | ||||||
| NET ASSETS/(LIABILITIES) | $ | (1,098,437 | ) | $ | 855,630 | $ | 791,563 | |||||
| Stockholders’ (deficit) equity: | ||||||||||||
| Common stock/Register capital | $ | 71,972 | $ | 362,472 | $ | 27,000 | (1) | $ | 101,972 | |||
| (362,472 | )(2) | |||||||||||
| 3,000 | (4) | |||||||||||
| Additional paid-in capital | 677,276 | - | (27,000 | )(1) | 2,254,118 | |||||||
| 362,472 | (2) | |||||||||||
| 1,034,370 | (3) | |||||||||||
| 207,000 | (4) | |||||||||||
| Accumulated deficit | (1,921,420 | ) | 383,074 | (210,000 | )(4) | (1,748,346 | ) | |||||
| Accumulated other comprehensive loss | 73,735 | 110,084 | 183,819 | |||||||||
| Total stockholders’ (deficit)/equity | $ | (1,098,437 | ) | $ | 855,630 | $ | 791,563 |
XcelMobility Inc.
Unaudited Pro forma Condensed Combined
Statement of Operations
For the Six Months Ended June 30, 2013
| XCLL | Jifu | Adjustments | Pro Forma | |||||||||
| Net sales | $ | 42,402 | $ | 1,929,970 | $ | 1,972,372 | ||||||
| Cost of revenue | 11 | 697,392 | 697,403 | |||||||||
| Gross profit (loss) | $ | 42,391 | $ | 1,232,578 | $ | 1,274,969 | ||||||
| Selling expense | 8,634 | 42,557 | 51,191 | |||||||||
| General and administrative expenses | 707,401 | 862,754 | 1,570,155 | |||||||||
| Total Operating Expenses | $ | 716,035 | $ | 905,311 | $ | 1,621,346 | ||||||
| Income (loss) from operations | $ | (673,644 | ) | 4327,267 | $ | (346,377 | ) | |||||
| Other income (expenses) | ||||||||||||
| Interest income | 208 | - | 208 | |||||||||
| Interest expense | (36,081 | ) | - | (36,081 | ) | |||||||
| Amortisation of debt discount | (329,463 | ) | (329,463 | ) | ||||||||
| Gain on derivative | 309,687 | - | 309,687 | |||||||||
| Other income | 15,524 | 119,756 | 135,280 | |||||||||
| Income (loss) from operations before income taxes | $ | (713,769 | ) | $ | 447,023 | $ | (266,746 | ) | ||||
| Income tax provision | - | - | - | |||||||||
| Net income (loss) | $ | (713,769 | ) | $ | 447,023 | (266,746 | ) | |||||
| Foreign currency translation gain(loss) | 17,116 | (4,030 | ) | 13,086 | ||||||||
| Comprehensive loss | $ | (696,653 | ) | $ | 442,993 | $ | (253,660 | ) | ||||
| Per share information – basic and fully diluted: | ||||||||||||
| Weighted average shares outstanding | 64,022,491 | 27,000,000 | (1) | 94,022,491 | ||||||||
| 3,000,000 | (4) | |||||||||||
| Net earnings (loss) per share, basic | $ | (0.01 | ) | $ | (0.00 | ) |
XcelMobility Inc.
Notes to Unaudited Pro Forma Condensed
Combined Financial Statements
Note 1. Description of the Transaction
On May 7, 2013, the shareholders of Jifu (“Jifu Shareholders”) entered into and consummated a Stock Purchase Agreement (“the Agreement”) with Shenzhen CC Power Investment Consulting Co., Ltd (“CC Power”), a company organized under the laws of the People’s Republic of China and an indirect wholly-owned subsidiary of XcelMobility Inc. (“XCLL”), a Nevada corporation. The detail agreement was filed to the SEC on Form 8K, Exhibit 2.1 at May 13, 2013.
Pursuant to the terms and conditions of the Agreement, XCLL will issue an aggregate of 27,000,000 shares of the XCLL’s common stock (the “Purchase Shares”) to the Jifu Shareholders as consideration for Jifu entering into certain controlling agreements (the “VIE Agreement”) with CC Power. CC Power will effectively own Jifu through the various conditions prescribed in the VIE Agreements. The Company will also grant 3,000,000 shares (the “Luo Shares”, together with the Purchase Shares, the “Shares’”) to Mr. Hui Luo (“Mr. Luo”).
The Shares will be released to the Jifu Shareholders and Mr. Luo after the Company has reviewed Jifu’s coming audited financial statements for the year ended December 31, 2013. If Jifu has achieved net revenue of $4,000,000 for the year ended December 31, 2013 (the “Target”), then the Company will release the Shares to the Jifu Shareholders and Mr. Luo in their full respective amounts. If Jifu has not achieved the Target by the end of the calendar year, the Company will reduce the amount of shares of common stock to be issued to the Jifu Shareholders and Mr. Luo in accordance with a formula set forth in the Agreement and release the Shares to the Jifu Shareholders and Mr. Luo in their respective reduced amounts. The Agreement has been approved by the boards of directors of XCLL, CC Power, and Jifu, and the Jifu Shareholders.
Following the closing, there will be no change of control in XCLL. The transaction is being accounted for as a “stock acquisition,” since the stockholders of Jifu will obtain 28.72% of the entire XCLL common shares following the completion of the transaction. XCLL is the legal and accounting acquirer in this merger and acquisition. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements for periods prior to the transaction will be the combination of XCLL, its subsidiary and Jifu, and will be recorded at the historical cost basis since the fair market value of Jifu is closed to its historical value. After completion of the transaction, XCLL’s consolidated financial statements will include the assets and liabilities of XCLL, its subsidiary and Jifu, and the shareholders’ equity of XCLL; the historical operations of XCLL, its subsidiary, and Jifu, and the operations of XCLL, its subsidiary and Jifu from the closing date of the transaction.
Note 2. Presentation
The Pro forma condensed consolidated financial statements gives effect to the transaction as if occurred at the beginning of the periods presented.
Note 3. Adjustments
The Pro-forma Condensed Combined Financial Statements consist of four adjustments and were listed and explained as below:
| (1) |
To record the 27,000,000 shares of Common stock at $0.001 par value issued by XCLL pursuant to the Stock Purchase Agreement, under the assumption that Jifu will achieve the Target with net revenue of $4,000,000 for the year ended December 31, 2013. | |
| (2) |
To eliminate the $362,472 registered capital of Jifu and paid in capital of the pro-forma group. | |
| (3) |
To record the estimated goodwill $1,034,370 derived from the acquisition of Jifu against the paid in capital of the pro-forma group. | |
| (4) |
To record the 3,000,000 shares of Common stock at $0.001 par value issued by XCLL to Mr. Luo pursuant to the Stock Purchase Agreement, under the assumption that Jifu will achieve the Target with net revenue of $4,000,000 for the year ended December 31, 2013. |