Attached files
| file | filename |
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| 8-K/A - 8-K/A - Bionovate Technologies Corp. | form8ka.htm |
MJP International Ltd.
Pro Forma Consolidated Financial Statements
(Unaudited)
Set forth below are the unaudited pro forma consolidated statements of operations for the three months ended September 30, 2016 and the year ended June 30, 2016 and the consolidated balance sheet as of September 30, 2016 (together with the notes to the unaudited pro forma consolidated financial statements, the “pro forma financial statements”), of MJP International Ltd. (the “Company” or “MJPI”). The pro forma financial statements have been prepared based on certain pro forma adjustments to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2016 and our Quarterly Report on Form 10-Q for the three months ended September 30, 2016. The pro forma financial statements should be read in conjunction with such historical consolidated financial statements, including the related financial statement notes.
On February 5, 2016, Energy Alliance Labs Inc., a Delaware corporation (“Energy Alliance”), incorporated on February 5, 2016, entered into an agreement to acquire 80% of the issued and outstanding equity interests of Human Energy Alliance Laboratories Corp., an unrelated Company (“HEAL”), from certain shareholders of HEAL for $80,000. The cash for the acquisition of shares was transferred to the shareholders on November 1, 2016 and that is when the acquisition closed.
Subsequent to the transfer of cash, the previous shareholders of MJPI own 80% of the issued and outstanding shares of HEAL.
On October 28, 2016, MJP International Ltd., a publicly traded Company listed on the OTC reporting under US GAAP (“MJPI”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Liao Zu Guo, an individual residing in China, whereby MJPI issued 4,000,000 shares of its common stock in exchange for 100% of the issued and outstanding equity interests of Energy Alliance.
Subsequent to the execution of the Share Exchange Agreement, Liao Zu Gao became a member of the Board of Directors of MJPI and became a majority shareholder with a total of 19.89% of the total issued and outstanding common shares.
As a result of the business combination through its wholly owned subsidiary, Energy Alliance, the Company is providing financial information about HEAL rather than financial statements of Energy Alliance. Energy Alliance provided publicly available financial statements in reports filed with the SEC on November 24, 2016.
The Company’s unaudited pro forma consolidated financial statements were prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma consolidated financial statements. The Company’s unaudited pro forma consolidated financial statements also do not give effect to the potential impact of current financial conditions, anticipated synergies, operating efficiencies or cost savings that may result from the acquisition described above.
1
MJP International Ltd.
PROFORMA CONSOLIDATED BALANCE SHEET
September 30, 2016
(UNAUDITED)
|
MJPI
|
Energy Alliance
|
HEAL
|
Adjustments
(1) |
Adjustments
(2) |
TOTAL
|
|||||||||||||||||||
|
Assets
|
||||||||||||||||||||||||
| Current | ||||||||||||||||||||||||
|
Cash
|
$ | 1,567 | $ | 80,000 | $ | 3,754 | $ | - | $ | (80,000 | ) | $ | 5,321 | |||||||||||
|
Inventory
|
- | - | 1,869 | - | 1,869 | |||||||||||||||||||
|
Total current assets
|
1,567 | 80,000 | 5,623 | - | (80,000 | ) | 7,190 | |||||||||||||||||
|
Intra company
|
- | 4,000 | (4,000 | ) | - | - | - | |||||||||||||||||
|
Intangible assets and goodwill
|
- | - | - | 135,290 | 95,034 | 230,324 | ||||||||||||||||||
|
Total assets
|
$ | 1,567 | $ | 84,000 | $ | 1,623 | $ | 135,290 | $ | 15,034 | $ | 237,514 | ||||||||||||
|
Liabilities
|
||||||||||||||||||||||||
|
Accounts payable and accrued liabilities
|
$ | 22,804 | $ | 1,051 | $ | 8,301 | $ | - | $ | - | $ | 32,156 | ||||||||||||
|
Advances from related party
|
132,136 | 18,239 | - | - | - | 150,375 | ||||||||||||||||||
|
Loan payable
|
- | - | 3,464 | - | - | 3,464 | ||||||||||||||||||
|
Estimated warranty liabilities
|
- | - | 8,650 | - | - | 8,650 | ||||||||||||||||||
|
Total current liabilities
|
154,940 | 19,290 | 20,415 | - | - | 194,645 | ||||||||||||||||||
|
Stockholders’ Equity (Deficit)
|
||||||||||||||||||||||||
|
Capital stock
|
1,611 | 3,500 | 60 | 400 | (60 | ) | 2,011 | |||||||||||||||||
| (3,500 | ) | - | ||||||||||||||||||||||
|
Additional paid-in capital
|
112,195 | 76,500 | 108,420 | 199,600 | (108,420 | ) | 311,795 | |||||||||||||||||
| (76,500 | ) | - | ||||||||||||||||||||||
|
Retained earnings (Deficit accumulated)
|
(284,128 | ) | (15,290 | ) | (127,272 | ) | 15,290 | 127,272 | (284,128 | ) | ||||||||||||||
|
Accumulated other comprehensive income
|
16,949 | - | - | - | - | 16,949 | ||||||||||||||||||
|
Non-controlling interest
|
- | - | - | - | (3,758 | ) | (3,758 | ) | ||||||||||||||||
|
Total stockholders’ equity (deficit)
|
(153,373 | ) | 64,710 | (18,792 | ) | 135,290 | - | 42,869 | ||||||||||||||||
|
Total liabilities and stockholders’ equity
|
$ | 1,567 | $ | 84,000 | $ | 1,623 | $ | 135,290 | $ | 15,034 | $ | 237,514 | ||||||||||||
2
JP International Ltd.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
For the period ended September 30, 2016
(UNAUDITED)
|
HEAL
|
Energy Alliance
|
MJPI
|
|
|||||||||||||
|
3M ended
|
3M ended
|
3M ended
|
Pro Forma
|
|||||||||||||
|
Revenues
|
$
|
3,394
|
$
|
-
|
$
|
5,432
|
$
|
8,826
|
||||||||
|
Cost of goods sold
|
1,788
|
-
|
4,518
|
6,306
|
||||||||||||
|
Gross profit
|
1,606
|
-
|
914
|
2,520
|
||||||||||||
|
Operating expenses
|
||||||||||||||||
|
Marketing expenses
|
681
|
-
|
-
|
681
|
||||||||||||
|
Professional fees
|
10,122
|
-
|
1,664
|
11,786
|
||||||||||||
|
Freight & delivery
|
1,206
|
-
|
-
|
1,206
|
||||||||||||
|
Other general and administrative expenses
|
344
|
-
|
3,245
|
3,589
|
||||||||||||
|
Total operating expenses
|
12,353
|
-
|
4,909
|
17,262
|
||||||||||||
|
Loss from operations
|
(10,747
|
)
|
-
|
(3,995
|
)
|
(14,742
|
)
|
|||||||||
|
Net loss
|
$
|
(10,747
|
)
|
$
|
-
|
$
|
(3,995
|
)
|
$
|
(14,742
|
)
|
|||||
|
Attributed to non-controlling interest
|
$
|
(2,149
|
)
|
|||||||||||||
3
MJP International Ltd.
PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
|
HEAL
|
HEAL
|
HEAL
|
HEAL
|
Energy Alliance
|
MJPI
|
||||||||||||||||||||
|
Year ended
December 31, 2015
(a)
|
6 Months ended
June 30, 2016
(b)
|
6 Months ended
June 30, 2015
(c)
|
Adjusted
Year ended
June 30, 2016
(d) =(a)+(b)-(c)
|
Inception
(Feb 5, 2016)
to
June 30,
2016
(d)
|
Year ended
June 30, 2016
(e)
|
Proforma
(c+d+e)
|
|||||||||||||||||||
|
Revenues
|
$
|
66,856
|
$
|
15,843
|
$
|
35,468
|
$
|
47,231
|
$
|
-
|
$
|
6,118
|
$
|
53,349
|
|||||||||||
|
Cost of goods sold
|
50,949
|
9,656
|
25,800
|
34,805
|
-
|
5,110
|
39,915
|
||||||||||||||||||
|
Gross profit
|
15,907
|
6,187
|
9,668
|
12,426
|
-
|
1,008
|
13,434
|
||||||||||||||||||
|
Operating Expenses
|
|||||||||||||||||||||||||
|
Marketing expenses
|
8,620
|
2,366
|
5,014
|
5,972
|
-
|
-
|
5,972
|
||||||||||||||||||
|
Professional fees
|
2,062
|
400
|
1,457
|
1,005
|
13,765
|
20,212
|
34,982
|
||||||||||||||||||
|
Freight & delivery
|
11,037
|
3,336
|
7,523
|
6,850
|
-
|
-
|
6,850
|
||||||||||||||||||
|
Other general and administrative expenses
|
21,163
|
4,178
|
2,003
|
23,338
|
474
|
19,157
|
42,969
|
||||||||||||||||||
|
Total operating expenses
|
42,882
|
10,280
|
15,997
|
37,165
|
14,239
|
39,369
|
90,773
|
||||||||||||||||||
|
Loss from operation
|
(26,975
|
)
|
(4,093
|
)
|
(6,329
|
)
|
(24,739
|
)
|
(14,239
|
)
|
(38,361)
|
(77,339)
|
|||||||||||||
|
Interest expenses
|
(1,595
|
)
|
(471
|
)
|
-
|
(2,066
|
)
|
-
|
-
|
(2,066)
|
|||||||||||||||
|
Impairment of marketable security
|
(25,650
|
)
|
-
|
-
|
(25,650
|
)
|
-
|
-
|
(25,650)
|
||||||||||||||||
|
Loss from operations
|
(54,220
|
)
|
(4,564
|
)
|
(6,329
|
)
|
(52,455
|
)
|
(14,239
|
)
|
(38,361)
|
(105,055)
|
|||||||||||||
|
Net Loss
|
$
|
(54,220
|
)
|
$
|
(4,564
|
)
|
$
|
(6,329
|
)
|
$
|
(52,455
|
)
|
$
|
(14,239
|
)
|
$
|
(38,361)
|
$ |
(105,055)
|
||||||
|
Attributed to non-controlling interest
|
$
|
(10,491)
|
|||||||||||||||||||||||
4
MJP International Ltd.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
The unaudited pro forma consolidated financial statements present the impact of the acquisition on our financial position and results of operations. The pro forma adjustments have been prepared as if the November 1, 2016 acquisition of HEAL through its wholly owned subsidiary, Energy Alliance had taken place as of September 30, 2016, in the case of the pro forma consolidated balance sheet, and as if the acquisition had taken place as of July 1, 2015 in the case of the pro forma consolidated statements of operations for the three months ended September 30, 2016 and year ended June 30, 2016.
The unaudited pro forma consolidated financial statements are subject to a number of estimates, assumptions and other uncertainties, and do not purport to be indicative of the actual results of operations that would have occurred had the acquisition reflected therein in fact occurred on the dates specified, nor do such financial statements purport to be indicative of the results of operations that may be achieved in the future. In addition, as discussed in the accompanying notes, the unaudited pro forma consolidated financial statements include pro forma allocations of the purchase price of the acquired assets based upon preliminary estimates of the fair values of the assets acquired and liabilities assumed in connection with the acquisition and are subject to change.
The adjustments to the pro forma consolidated balance sheet as of September 30, 2016 are as follows:
On October 28, 2016, MJPI entered into a Share Exchange with Liao Zu Guo, an individual residing in China, whereby MJPI issued 4,000,000 shares of its common stock in exchange for 100% of the issued and outstanding equity interests of Energy Alliance, incorporated on February 5, 2016.
The definition of a business under ASC 805-10-55 consists of inputs and processes applied to those inputs that have the ability to create outputs. Although businesses usually have outputs, outputs are not required for an integrated set to qualify as a business. Based on the criteria set out in ASC 805-10-55 the Company determined Energy Alliance, which was formed for the sole purpose of acquiring HEAL, does not constitute a business.
We accounted for the acquisition of Energy Alliance as an acquisition of assets that do not qualify as a business instead of business combination.
The acquisition of Energy Alliance is accounted for as follows:
|
Consideration given up:
|
||||
|
Share issued:
|
4,000,000 | |||
|
Share price on October 28, 2016
|
$ | 0.05 | ||
|
Fair value of equity instrument
|
$ | 200,000 | ||
|
Assets acquired/liabilities assumed:
|
||||
|
Net assets
|
$ | 84,000 | ||
|
Net liabilities
|
$ | (19,290 | ) | |
|
Recognized intangible assets
|
$ | 135,290 | ||
|
Total
|
$ | 200,000 | ||
The Company recognized intangible assets of $135,290, representing the value of the unexecuted purchase agreement that Energy Alliance holds in HEAL at the time of acquisition by MJPI.
5
MJP International Ltd.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
On February 5, 2016, Energy Alliance entered into an agreement to acquire 80% of the issued and outstanding equity interests of HEAL from certain shareholders of HEAL for $80,000. The cash for the acquisition of shares was transferred to the shareholders on November 1, 2016 and that is when the acquisition closed.
Subsequent to the transfer of cash, the previous shareholders of MJPI own 80% of the issued and outstanding shares of HEAL.
The Company treated the acquisition of HEAL as business combination with the acquirer being Energy Alliance, a wholly owned subsidiary of MJPI.
|
Consideration given up:
|
||||
|
Cash
|
$ | 80,000 | ||
|
Assets acquired/liabilities assumed:
|
||||
|
Net assets
|
$ | 4,498 | ||
|
Net liabilities
|
$ | (19,532 | ) | |
|
Recognized goodwill
|
$ | 95,034 | ||
|
Total
|
$ | 80,000 | ||
The Company recognized goodwill of HEAL of $95,034 and recorded non-controlling interest of ($3,758) which reflects income attributable to the 20% non-controlling interest in HEAL. Further, upon consolidation of Energy Alliance and HEAL all intercompany balances and equity have been eliminated.
The preliminary purchase price allocation of HEAL is shown above. The final purchase price allocation will be determined when the Company has completed detailed valuations. The final purchase price allocation may differ from these estimates and could be materially different from the preliminary allocation used in the proforma adjustments.
6