EX-99.3 5 fs32018a2ex99-3_yangtzeriver.htm UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS

Exhibit 99.3

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

The Unaudited Pro Forma Condensed Combined Financial Statements, which we refer to as the Pro Forma Financial Statements, presented below are derived from the historical consolidated financial statements of Yangtze River Port and Logistics Limited (“YRIV”) and Wuhan Economic Development Port Limited (“Wuhan EDP” or “WEDP”). The Pro Forma Financial Statements are prepared as a business combination reflecting YRIV’s acquisition of Wuhan EDP as if the acquisition had been completed on January 1, 2015 for statement of income purposes and as if YRIV’s acquisition of Wuhan EDP had been completed on March 31, 2018, for balance sheet purposes.

 

The Pro Forma Financial Statements are developed from (a) the unaudited consolidated financial statements of YRIV for the quarterly period ended March 31, 2018, (b) the unaudited consolidated financial statements of Wuhan EDP for the quarterly period ended March 31, 2018, (c) the audited consolidated financial statements of YRIV for the years ended December 31, 2017, 2016 and 2015, and (d) the audited consolidated financial statements of Wuhan EDP for the years ended December 31, 2017, 2016 and 2015.

 

The historical financial statements have been adjusted to give effect to pro forma events that are related and/or directly attributable to the business combination, are factually supportable and are expected to have a continuing impact on the combined results. The adjustments presented on the Pro Forma Financial Statements have been identified and presented to provide relevant information necessary for an accurate understanding of the combined company upon consummation of the business combination.

 

The historical financial statements of YRIV and Wuhan EDP have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and presented in US Dollars. The Pro Forma Financial Statements included herein are prepared under US GAAP and presented in US Dollars. Following the consummation of the business combination, the combined entity intends to prepare its consolidated financial statements under US GAAP and present such consolidated financial statements in US Dollars.

 

The historical financial information of YRIV was derived from the unaudited financial statements of YRIV for the three months ended March 31, 2018 and 2017 in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 and the audited financial statements of YRIV for the years ended December 31, 2017, 2016 and 2015 were included its Annual Report on Form 10-K/A for the fiscal year ended December 31, 2017.. The historical financial information of Wuhan EDP was derived from the unaudited financial statements of Wuhan EDP for the three months ended March 31, 2018 and 2017 and the audited financial statements of Wuhan EDP for the years ended December 31, 2017, 2016 and 2015 are included elsewhere in Amendment No. 2 to the Registration Statement on this Form S-3. This information should be read together with YRIV and Wuhan EDP’s audited and unaudited financial statements and related notes, and “Wuhan Economic Development Port Limited - Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Amendment No. 2 to the Registration Statement on Form S-3.

 

The Pro Forma Financial Statements are for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the Pro Forma Financial Statements as being indicative of the historical results that would have been achieved had the companies always been combined or the future results that the combined company will experience. YRIV and Wuhan EDP have not had any historical relationship prior to the business combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

 

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS AT MARCH 31, 2018

(In USD)

 

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   Combined 
ASSETS                
Current assets                
Cash and cash equivalents  $694,920   $75,114    (41,128)(b1)  $728,906 
Accounts receivable   -    528,056         528,056 
Advance to suppliers   -    103,536         103,536 
Other receivables and prepayments   4,454,989    1,651,602    (2,806,247)(b1)   3,300,344 
Inventories   -    26,250         26,250 
Total current assets   5,149,909    2,384,558         4,687,092 
                     
Non-current assets                    
Property and equipment, net   60,455    64,654,393    (54,338)(b1)   64,660,510 
Land use rights, net   -    114,866,193         114,866,193 
Port operating rights, net   -    243,411,948         243,411,948 
Other intangible assets, net   -    252,938         252,938 
Goodwill   -    -           24,093,339(b3)   24,093,339 
Real estate property completed   32,654,696    -    (32,654,696)(b1)   - 
Real estate properties and land lots under development   378,228,271    -    (378,228,271)(b1)   - 
Deferred tax assets   6,354,881    7,603    (6,354,881)(b1)   7,603 
Total non-current assets   417,298,303    423,193,075         447,292,531 
                     
Total Assets  $422,448,212   $425,577,633        $451,979,623 
                     
LIABILITIES AND EQUITY                    
Liabilities                    
Current liabilities                    
Accounts payable  $5,701,257   $106,427    (5,701,257)(b1)  $106,427 
Interest payable   -    63,976         63,976 
Accrued expenses and other current liabilities   50,267,469    3,977,306    (35,908,272)(b1)   18,336,503 
Due to related parties   34,510,347    12,704,758    (33,235,343)(b1)   13,979,762 
Convertible note   79,303,316    0    91,000,000(a)   170,303,316 
Current loans payable   -    2,913,822         2,913,822 
Total current liabilities   169,782,389    19,766,289         205,703,806 
                     
Non-current loans payable   45,846,414    37,575,892    (45,846,414)(b1)   37,575,892 
Deferred revenue   -    1,880,516         1,880,516 
Total non-current liabilities   45,846,414    39,456,408         39,456,408 
                     
Total Liabilities   215,628,803    59,222,697         245,160,214 
                     
Equity                    
Common stock   17,234    -         17,234 
Paid-in capital   -    20,993,245    (20,993,245)(b2)   - 
Additional paid-in capital   243,614,178    411,215,520    (411,215,520)(b2)   243,614,178 
Accumulated losses   (44,288,454)   (62,557,346)   62,557,346(b2)   (44,288,454)
Accumulated other comprehensive loss   7,476,451    (3,296,483)   3,296,483(b2)   7,476,451 
Total Equity   206,819,409    366,354,936         206,819,409 
                     
Total Liabilities and Equity  $422,448,212   $425,577,633        $451,979,623 

 

Note A - Derived from the unaudited historical condensed balance sheet of Yangtze River Port and Logistics Limited as at March 31, 2018.

 

Note B - Derived from the unaudited historical condensed balance sheet of Wuhan Economic Development Port Limited as at March 31, 2018.

 

2

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2018

(In USD)

 

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   As Adjusted 
                 
Revenue  $-   $746,585        $746,585 
Costs of revenue   -    (679,296)        (679,296)
Gross profit (loss)   -    67,289         67,289 
                     
Selling, general and administrative expenses   (1,149,088)   (2,198,174)   442,717(c)   (2,904,545)
Loss from operations   (1,149,088)   (2,130,885)        (2,837,256)
                     
Other income (expenses)                    
Other income, net   1,543    9,346         10,889 
Interest income   22    44         66 
Interest expenses   (2,182,807)   (531,748)   678,655(c)   (2,035,900)
Total other expenses   (2,181,242)   (522,358)        (2,024,945)
                     
Loss before income taxes   (3,330,330)   (2,653,243)        (812,311)
Income taxes benefits   280,343    -    (280,343)(c)   - 
Net loss  $(3,049,987)  $(2,653,243)       $(812,311)
                     
Net loss attributable to:                    
- Common shareholders   (3,049,987)   (2,653,243)        (812,311)
- Non-controlling interests        -         - 
                     
Loss per share - basic and diluted                  (0.00)
                     
Weighted average shares outstanding                    
    Basic                  172,344,446 
    Diluted                  172,344,446 

 

Note A - Derived from the unaudited historical condensed statement of operations of Yangtze River Port and Logistics Limited for the three months ended March 31, 2018.

 

Note B - Derived from the unaudited historical condensed statement of operations of Wuhan Economic Development Port Limited for the three months ended March 31, 2018.

 

3

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2017

(In USD)

  

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   As Adjusted 
                 
Revenue  $-   $2,217,747        $2,217,747 
Costs of revenue   -    (2,418,276)        (2,418,276)
Gross profit (loss)   -    (200,529)        (200,529)
                     
Selling, general and administrative expenses   (5,076,347)   (8,822,677)   1,941,533(c)   (11,957,491)
Loss from operations   (5,076,347)   (9,023,206)        (12,158,020)
                     
Other income (expenses)                    
Other income, net   7,284    77,002    590(c)   84,876 
Interest income   296    357    (109)(c)   544 
Interest expenses   (8,221,483)   (2,196,698)   2,221,483(c)   (8,196,698)
Total other expenses   (8,213,903)   (2,119,339)        (8,111,278)
                     
Loss before income taxes   (13,290,250)   (11,142,545)        (20,269,298)
Income taxes benefits   1,040,873    -    (1,040,873)(c)   - 
Net loss  $(12,249,377)  $(11,142,545)       $(20,269,298)
                     
Net loss attributable to:                    
- Common shareholders  $(12,249,377)  $(10,869,492)       $(19,996,245)
- Non-controlling interests  $-   $(273,053)       $(273,053)
                     
Loss per share - basic and diluted                 $(0.11)
                     
Weighted average shares outstanding                    
    Basic                  188,465,024 
    Diluted                  172,344,446 

 

Note A - Derived from the audited historical condensed statement of operations of Yangtze River Port and Logistics Limited for the year ended December 31, 2017.

 

Note B - Derived from the audited historical condensed statement of operations of Wuhan Economic Development Port Limited for the year ended December 31, 2017.

 

4

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2017

(In USD) (Unaudited)

  

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   As Adjusted 
                 
Revenue  $-   $545,711        $545,711 
Costs of revenue   -    (543,371)        (543,371)
Gross profit (loss)   -    2,340         2,340 
                     
Selling, general and administrative expenses   (747,206)   (2,146,428)   (510,965)(c)   (3,404,599)
Loss from operations   (747,206)   (2,144,088)        (3,402,259)
                     
Other income (expenses)                    
Other income, net   -    9,195         9,195 
Interest income   38    92    (5)(c)   125 
Interest expenses   (2,127,056)   (571,292)   627,056(c)   (2,071,292)
Total other expenses   (2,127,018)   (562,005)        (2,061,972)
                     
Loss before income taxes   (2,874,224)   (2,706,093)        (1,340,287)
Income taxes benefits   284,503    -    (284,503)(c)   - 
Net loss  $(2,589,721)  $(2,706,093)       $(1,340,287)
                     
Net loss attributable to:                    
- Common shareholders   (2,589,721)   (2,639,013)        (1,273,207)
- Non-controlling interests        (67,080)        (67,080)
                     
Loss per share - basic and diluted                  (0.01)
                     
Weighted average shares outstanding                    
Basic                  238,936,113 
Diluted                  238,936,113 

 

Note A - Derived from the unaudited historical condensed statement of operations of Yangtze River Port and Logistics Limited for the three months ended March 31, 2017.

 

Note B - Derived from the unaudited historical condensed statement of operations of Wuhan Economic Development Port Limited for the three months ended March 31, 2017.

 

5

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

(In USD)

  

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   As Adjusted 
                 
Revenue  $-   $1,581,575        $1,581,575 
Costs of revenue   -    (2,404,920)        (2,404,920)
Gross profit (loss)   -    (823,345)        (823,345)
                     
Selling, general and administrative expenses   (5,448,523)   (9,294,898)   2,149,618(c)   (12,593,803)
Loss from operations   (5,448,523)   (10,118,243)        (13,417,148)
                     
Other income (expenses)                    
Other income, net   3,413    87,545         90,958 
Interest income   229    1,336    (34)(c)   1,531 
Interest expenses   (8,424,794)   (2,535,209)   2,424,794(c)   (8,535,209)
Total other expenses   (8,421,152)   (2,446,328)        (8,442,720)
                     
Loss before income taxes   (13,869,675)   (12,564,571)        (21,859,868)
Income taxes benefits   1,143,595    3,405    (1,143,595)(c)   3,405 
Net loss  $(12,726,080)  $(12,561,166)       $(21,856,463)
                     
Net loss attributable to:                    
- Common shareholders  $(12,726,080)  $(12,274,935)       $(21,570,232)
- Non-controlling interests  $-   $(286,231)       $(286,231)
                     
Loss per share - basic and diluted                 $(0.12)
                     
Weighted average shares outstanding                    
    Basic                  177,459,678 
    Diluted                  177,459,678 

 

Note A - Derived from the audited historical condensed statement of operations of Yangtze River Port and Logistics Limited for the year ended December 31, 2016.

 

Note B - Derived from the audited historical condensed statement of operations of Wuhan Economic Development Port Limited for the year ended December 31, 2016.

 

6

 

 

YANGTZE RIVER PORT AND LOGISTICS LIMITED

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2015

(In USD)

 

   Historical   Pro forma 
   YRIV - Note A   WEDP - Note B   Adjustments   As Adjusted 
                 
Revenue  $-   $1,036,243        $1,036,243 
Costs of revenue   -    (2,072,536)        (2,072,536)
Gross profit (loss)   -    (1,036,293)        (1,036,293)
                     
Selling, general and administrative expenses   (4,559,223)   (7,721,666)   2,510,867(c)   (9,770,022)
Loss from operations   (4,559,223)   (8,757,959)        (10,806,315)
                     
Other income (expenses)                    
Other income, net   (2,363)   56,081    2,214(c)   55,932 
Interest income   55    1,639    (55)(c)   1,639 
Interest expenses   (3,199,031)   (3,380,941)   3,001,771(c)   (3,578,201)
Total other expenses   (3,201,339)   (3,323,221)        (3,520,630)
                     
Loss before income taxes   (7,760,562)   (12,081,180)        (14,326,945)
Income taxes benefits   1,378,700    (46,577)   (1,378,700)(c)   (46,577)
Net loss  $(6,381,862)  $(12,127,757)       $(14,373,522)
                     
Net loss attributable to:                    
- Common shareholders  $(6,381,862)  $(12,127,703)       $(14,373,468)
- Non-controlling interests  $-   $(54)       $(54)
                     
Loss per share - basic and diluted                 $(0.09)
                     
Weighted average shares outstanding                    
    Basic                  151,682,554 
    Diluted                  151,682,554 

 

Note A - Derived from the audited historical condensed statement of operations of Yangtze River Port and Logistics Limited for the year ended December 31, 2015.

 

Note B - Derived from the audited historical condensed statement of operations of Wuhan Economic Development Port Limited for the year ended December 31, 2015.

 

7

 

  

Notes to the Pro Forma Financial Statements

 

1. Description of Transactions

 

On December 26, 2017, Yangtze River Port and Logistics Limited (the “Company”) entered into an agreement (the “Purchase Agreement”) with shareholders holding 100% of the equity interest (the “Acquiree Shareholders”) of Wuhan Economic Development Port Limited (the “Acquiree”) to acquire all the interests of Acquiree; and the Acquiree Shareholders will acquire all the equity interest held by the Company in Energetic Mind Limited, a BVI company and a wholly-owned subsidiary of the Company. Energetic Mind Limited holds 100% interest in Ricofeliz Capital (HK) Ltd., a Hong Kong company that holds 100% capital stock of Wuhan Yangtze River Newport Logistics Co., Ltd., a wholly foreign-owned enterprise formed under the laws of the People’s Republic of China that primarily engages in the business of real estate and infrastructural development with a port logistics center located in Wuhan, Hubei Province of China.

 

The consideration of the acquisition transaction will be first offset against both parties of the target companies leaving the balance of RMB 600 million (or approximately USD $91 million) to be paid by the Company to the Acquiree Shareholders.

 

2. Pro Forma Adjustments

 

(a)The Pro Forma Balance Sheet has been adjusted to record the issuance of $91,000,000 of YRIV convertible note for cash as part of the consideration of the acquisition transaction

 

(b)This entry reflects the preliminary allocation of the purchase price to identifiable net assets acquired and the excess purchase price to goodwill as follows:

 

         Energetic     
     Cash   Mind Limited   Total 
  Total consideration: cash and  100% equity interest of Energetic Mind Limited  $91,000,000   $299,448,275   $390,448,275(b1)
                  
  Preliminary estimate of fair value of identifiable net assets acquired          $366,354,936(b2)
                  
  Goodwill          $24,093,339(b3)

 

(c)This entry reflects the elimination of the income and expenses due to the disposition of Energetic Mind Limited.

 

8