EX-99.2 9 basic8kex992020205.txt UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET Exhibit 99.2 The pro-forma unaudited combined financial statements reflect the effect of the Transfer Agreement between Basic Empire Corporation and China Tailong Holdings Company as of September 30, 2004, for Balance Sheet purposes, and for the year ended December 31, 2003 and the nine-month period ended September 30, 2004 for Statement of Operations purposes. The unaudited pro-forma combined financial data and the notes thereto should be read in conjunction with our historical combined financial statements. The unaudited pro-forma combined financial data is based upon certain assumptions and estimates of management that are subject to change. The unaudited pro-forma combined financial data is presented for illustrative purposes only and is not necessarily indicative of any future results of operations or the results that might have occurred if the transactions had actually occurred on the indicated date.
BASIC EMPIRE CORPORATION UNAUDITED PRO FORMA COMBINED BALANCE SHEET SEPTEMBER 30, 2004 China Tailong Holdings Pro Forma Basic Empire Company Adjustments Pro Forma Limited (4) (Unaudited) (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 174,857 $ 10,130 $ 184,987 Accounts receivable, net -- 7,594,856 7,594,856 Prepayments and other receivables -- 116,981 116,981 Amounts due from directors -- 1,506 1,506 Amount due from a related company -- 7,833 7,833 Receivable from joint venture partner -- 899,188 899,188 Inventories -- 1,782,288 1,782,288 ------------ ------------ ------------ Total current assets 174,857 10,412,782 10,587,639 PROPERTY, PLANT AND EQUIPMENT, net -- 1,149,878 1,149,878 ------------ ------------ ------------ $ 174,857 $ 11,562,660 $ 11,737,517 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Installment loan $ -- $ 3,790 $ 3,790 Accounts payable -- 1,895,321 1,895,321 Accrued liabilities and other payables -- 486,656 486,656 Amounts due to shareholders -- 6,820 6,820 Amounts due to related companies -- 43,388 43,388 Amounts due to director -- 115,953 115,953 Income tax payable -- 820,972 820,972 ------------ ------------ ------------ Total current liabilities -- 3,372,900 3,372,900 (3) 325,435 MINORITY INTEREST -- -- (2) 493,544 818,979 ------------ ------------ ------------ -- 3,372,900 4,191,879 ------------ ------------ ------------ STOCKHOLDERS' EQUITY Common stock 1,089 1 (1) 10,695 11,785 Additional paid-in capital 389,406 450,575 (1) (226,333) 568,590 (2) (45,058) Accumulated other comprehensive income -- 21,714 (2) (2,171) 19,543 Accumulated earnings (deficit) (215,638) 7,717,470 (2) (446,315) 6,945,720 ------------ ------------ ------------ (3) (325,435) Total stockholders' equity 174,857 8,189,760 (1) 215,638 7,545,638 ------------ ------------ ------------ $ 174,857 $ 11,562,660 $ 11,737,517 ============ ============ ============
Notes to Unaudited Pro Forma Balance Sheet 1. To reflect issuance of common stock to shareholders of China Tailong 2. To record the 10% minority interest on beginning accumulated earnings 3. To record the 10% minority interest share of income 4. Includes the combined balance sheet of China Tailong Holding and Pacific Dragon Fertilizers Limited.
BASIC EMPIRE CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2004 China Tailong Holdings Pro Forma Basic Empire Company Adjustments Pro Forma Limited (2) (Unaudited) (Unaudited) Revenue $ -- $ 13,007,651 $ 13,007,651 Cost of revenue -- (6,863,833) (6,863,833) ------------ ------------ ------------ Gross profit -- 6,143,818 6,143,818 Operating expenses Selling expenses -- (1,083,122) (1,083,122) Administrative expenses -- (297,860) (297,860) ------------ ------------ ------------ Total Operating expenses -- (1,380,982) (1,380,982) ------------ ------------ ------------ Income from operations -- 4,762,836 4,762,836 Other operating expenses (44,143) (36,141) (80,284) ------------ ------------ ------------ Income from operations (44,143) 4,726,695 4,682,552 Non-operating income (expense) Other revenue -- 275 275 Finance costs -- (1,022) (1,022) ------------ ------------ ------------ Income (loss) before minority interest and (44,143) 4,725,948 4,681,805 income taxes Minority interest -- -- (1) (325,435) (325,435) ------------ ------------ ------------ Income (loss) before income taxes (44,143) 4,725,948 4,356,370 Income tax -- (1,471,627) (1,471,627) ------------ ------------ ------------ Net income (loss) $ (44,143) $ 3,254,321 $ 2,884,743 ============ ============ ============ Income (loss) per weighted-average share of common stock outstanding, computed on net income (loss) - basic and fully diluted Nil 0.25 ============ ============ Weighted-average number of shares outstanding - basic and fully diluted 11,359,273 11,359,273 ============ ============
Notes to Unaudited Pro Forma Statement of Operations 1. To record the 10% minority interest share of income 2. Includes the combined operations of China Tailong Holdings and Pacific Dragon Fertilizers Limited.
BASIC EMPIRE CORPORATION UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 2003 China Tailong Holdings Pro Forma Basic Empire Company Adjustments Pro Forma Limited (2) (Unaudited) (Unaudited) Revenue $ -- $ 12,179,847 $ 12,179,847 Cost of revenue -- (6,450,245) (6,450,245) ------------ ------------ ------------ Gross profit -- 5,729,602 5,729,602 Operating expenses Selling expenses -- (1,867,311) (1,867,311) Administrative expenses -- (835,715) (835,715) ------------ ------------ ------------ Total Operating expenses -- (2,703,026) (2,703,026) ------------ ------------ ------------ Income from operations -- 3,026,576 3,026,576 Other operating expenses -- -- -- ------------ ------------ ------------ Income from operations -- 3,026,576 3,026,576 Non-operating expenses Finance costs -- (3,269) (3,269) ------------ ------------ ------------ Income before minority interest and income taxes -- 3,023,307 3,023,307 Minority interest -- -- (1) (200,673) (200,673) ------------ ------------ ------------ Income before income taxes -- 3,023,307 2,822,634 Income tax -- (1,016,577) (1,016,577) ------------ ------------ ------------ Net income $ -- $ 2,006,730 $ 1,806,057 ============ ============ ============ Income per weighted-average share of common stock outstanding, computed on net income - basic and fully diluted Nil $ 0.16 ============ ============ Weighted-average number of shares outstanding - basic and fully diluted 11,359,273 11,359,273 ============ ============
Notes to Unaudited Pro Forma Statement of Operations 1. To record the 10% minority interest share of income 2. Includes the combined operations of China Tailong Holdings and Pacific Dragon Fertilizers Limited.