Cang Bao Tian Xia International Art Trade Center, Inc. - FORM 10-K - EX-99.1 - PRO FORMA FINANCIAL STATEMENTS

Attached files

file	filename
EX-31.1 - CERTIFICATION - Cang Bao Tian Xia International Art Trade Center, Inc.	txcb_ex31z1.htm
EX-32.1 - CERTIFICATION - Cang Bao Tian Xia International Art Trade Center, Inc.	txcb_ex32z1.htm
10-K - ANNUAL REPORT - Cang Bao Tian Xia International Art Trade Center, Inc.	txcb_10k.htm

Exhibit 99.1

Pro Forma Financial Statements:

CANG BAO TIAN XIA INTERNATIONAL ART TRADE CENTER INC.

PRO FORMA CONSOLIDATED BALANCE SHEETS

As of June 30, 2020

(Unaudited)


	Zhi Yuan Limited and Subsidiaries			Cang Bao Tian Xia International Art Trade Center, Inc.			Adjustments			Pro Forma

ASSETS
Current assets
Cash and cash equivalents	$	2,715,689		$	—					$	2,715,689
Inventory		319,031			—						319,031
Advance to suppliers		2,425,359			—						2,425,359
Advance to suppliers - related parties		69,355			—						69,355
Due from related party		41,502			—						41,502
Prepayment and other current assets, net		42,841			—						42,841
Total current assets		5,613,777			—						5,613,777
Non-current assets
Property, plant and equipment, net		11,706			—						11,706
Intangible assets		322,557			—						322,557
Operating lease right of use asset, net		638,023			—						638,023
Total non-current assets		972,286			—						972,286
Total Assets	$	6,586,063		$	—					$	6,586,063

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expense	$	5,694,519		$	16,000					$	5,710,519
Advance from customers		451,193			—						451,193
Due to related party		—			95,045						95,045
Operating lease liabilities - current		585,831			—						585,831
Total current liabilities		6,731,543			111,045						6,842,588
Non-current liabilities
Operating lease liabilities - noncurrent		235,811			—						235,811
Total liabilities		6,967,354			111,045						7,078,399

Shareholders' equity
Series A Preferred Stock		—			9,920						9,920
Common stock		1			35,319			74,999			110,319
Additional paid-in capital		6,264,147			20,509,840			(75,000	)		26,698,987
Registered capital subscription receivable		(6,264,148	)		—			1			(6,264,147	)
Accumulated deficit		(415,312	)		(20,666,124	)					(21,081,436	)
Accumulated other comprehensive income		34,021			—						34,021
Total shareholders' equity		(381,291	)		(111,045	)					(492,336	)
Total Liabilities and Shareholders' Equity	$	6,586,063		$	—					$	6,586,063

CANG BAO TIAN XIA INTERNATIONAL ART TRADE CENTER INC.

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the year ended June 30, 2020

(Unaudited)


	Zhi Yuan Limited and Subsidiaries			Cang Bao Tian Xia International Art Trade Center, Inc.			Adjustments	Pro Forma

Net revenues	$	6,919,614		$	—			$	6,919,614
Cost of revenues		1,836,728			—				1,836,728
Gross margin		5,082,886			—				5,082,886
Operating expenses:
Selling expense		1,652,557			—				1,652,557
General and administrative		2,693,361			84,539				2,777,900
Total operating expenses		4,345,918			84,539				4,430,457

Loss from operations		736,968			(84,539	)			652,429

Other income/(loss)
Interest income		9,091			—				9,091
Other income (expense)		(61,695	)		—				(61,695	)
Total other income(loss)		(52,604	)		—				(52,604	)

Operating income (loss) before income taxes		684,364			(84,539	)			599,825
Provision for income taxes expense		12,675			—				12,675
Net income (loss)		671,689			(84,539	)			587,150
Other comprehensive income (loss)
Net income (loss)		671,689			(84,539	)			587,150
Foreign currency translation adjustment		27,271			—				27,271
Total comprehensive income (loss)	$	698,960		$	(84,539	)		$	614,421

Income (Loss) per share
Basic								$	0.01
Diluted								$	0.00
Weighted average shares outstanding
Basic									110,319,245
Diluted									4,078,319,245

CANG BAO TIAN XIA INTERNATIONAL ART TRADE CENTER INC.

PRO FORMA CONSOLIDATED BALANCE SHEETS

As of June 30, 2019

(Unaudited)


	Zhi Yuan Limited and Subsidiaries			Cang Bao Tian Xia International Art Trade Center, Inc.			Adjustments			Pro Forma

ASSETS
Current assets
Cash and cash equivalents	$	4,677,454		$	—					$	4,677,454
Inventory		415,029			—						415,029
Advance to suppliers		705,787			—						705,787
Prepayment and other current assets, net		15,947			—						15,947
Total current assets		5,814,217			—						5,814,217
Non-current assets
Property, plant and equipment, net		6,042			—						6,042
Intangible assets		429,269			—						429,269
Operating lease right of use asset, net		874,255			—						874,255
Total non-current assets		1,309,566			—						1,309,566
Total Assets	$	7,123,783		$	—					$	7,123,783

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expense	$	4,904,130		$	10,650					$	4,914,780
Accounts payable - related parties		138,321			—						138,321
Advance from customers		2,258,241			—						2,258,241
Due to related party		539			15,856						16,395
Operating lease liabilities - current		346,757			—						346,757
Total current liabilities		7,647,988			26,506						7,674,494
Non-current liabilities
Operating lease liabilities - noncurrent		556,046			—						556,046
Total liabilities		8,204,034			26,506						8,230,540

Shareholders' equity
Series A Preferred Stock		—			9,920						9,920
Common stock		—			35,319			75,000			110,319
Additional paid-in capital		—			20,509,840			(75,000	)		20,434,840
Shares Subscription Receivable		—			—						—
Accumulated deficit		(1,086,998	)		(20,581,585	)					(21,668,583	)
Accumulated other comprehensive income		6,747			—						6,747
Total shareholders' equity		(1,080,251	)		(26,506	)					(1,106,757	)
Total Liabilities and Shareholders' Equity	$	7,123,783		$	—					$	7,123,783

CANG BAO TIAN XIA INTERNATIONAL ART TRADE CENTER INC.

PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the year ended June 30, 2019

(Unaudited)


	Zhi Yuan Limited and Subsidiaries			Cang Bao Tian Xia International Art Trade Center, Inc.			Adjustments	Pro Forma
Net revenues	$	1,766,705		$	—			$	1,766,705
Cost of revenues		1,279,665			—				1,279,665
Gross margin		487,040			—				487,040
Operating expenses:
Selling expense		926,059			—				926,059
General and administrative		650,747			48,856				699,603
Total operating expenses		1,576,806			48,856				1,625,662
Loss from operations		(1,089,766	)		(48,856	)			(1,138,622	)

Other income/(loss)
Interest income		2,768			—				2,768
Total other income(loss)		2,768			—				2,768

Operating loss before income taxes		(1,086,998	)		(48,856	)			(1,135,854	)
Provision for income taxes expense									—
Net loss		(1,086,998	)		(48,856	)			(1,135,854	)

Other comprehensive loss
Net loss		(1,086,998	)		(48,856	)			(1,135,854	)
Foreign currency translation adjustment		6,837			—				6,837
Total comprehensive loss	$	(1,080,161	)	$	(48,856	)		$	(1,129,017	)

Income (Loss) per share
Basic								$	(0.01	)
Diluted
Weighted average shares outstanding
Basic									110,319,245
Diluted									110,319,245

NOTE 1 – PRO FORMA AND BASIS OF PRESENTATION

The unaudited pro forma financial statements are based on historical financial statements of Cang Bao Tian Xia International Art Trade Center Inc. (“Cang Bao”) and its subsidiaries, Zhi Yuan Limited and its subsidiaries and variable interest entities, as if the Share Exchange transaction below had closed at the beginning of the year.

On July 27, 2020 (the “Closing Date”), beneficial shareholders of Zhi Yuan Limited (the “Shareholders”) entered into a Share Exchange Agreement (the “Exchange Agreement”) with Can Bao Tian Xia International Art Trade Center, Inc. (“Cang Bao”). Pursuant to the terms of the Exchange Agreement, the Shareholders agreed to sell to Cang Bao, and Cang Bao agreed to purchase, all shares of Zhi Yuan Limited held by them, which shares represent 100% of the issued and outstanding shares of Zhi Yuan Limited. In exchange, Cang Bao agreed to issue to the Shareholders an aggregate of 75,000,000 shares of Cang Bao common stock, representing approximately 67.98% of Cang Bao’s total issued and outstanding common stock (the “Share Exchange”).

The entities operate an online and offline cultural exchange service platform, through which dedicated to create industry standards for art investment and creating a model of online art exchanges and transactions, which allows collectors, artists, art dealers and owners to access a much larger art trading market, allowing them to engage with a wide range of collectibles or artwork investors.

[txcb_ex99z1002.gif]

For financial reporting purpose, the transaction is classified as a business combination under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the Share Exchange, and that control is not transitory.

NOTE 2 – ADJUSTMENTS

(a) Cang Bao issued 75,000,000 shares of its common stock in exchange for all of the outstanding shares in ZhiYuan.

(b) To eliminate ZhiYuan and subsidiaries’ historical shares capital amounts, assuming the ZhiYuan 's original stockholders will exchange their shares in ZhiYuan for the Cangbao US shares.

Cang Bao Tian Xia International Art Trade Center, Inc. - FORM 10-K - EX-99.1 - PRO FORMA FINANCIAL STATEMENTS - October 13, 2020

Attached files

Cang Bao Tian Xia International Art Trade Center, Inc. Reports