EX-99.3 7 ex99-3.htm

 

Exhibit 99.3

 

AIXIN LIFE INTERNATIONAL, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF MARCH 31, 2021

 

   AIXIN LIFE INTERNATIONAL, INC.   AIXINTANG PHARMACIES   AIXIN SHANGYAN HOTEL  

Pro forma

Adjustments

     

Pro forma

Combined

 
                        
ASSETS                            
Current Assets                            
Cash and cash equivalents  $7,638,444   $79,178   $7,404    (6,837,105)   {b}  $887,921 
Accounts receivable, net   -    21,768    24,521            46,289 
Accounts receivable,related party   -    -    60,015            60,015 
Other receivables and prepaid expense   35,090    84,100    131,743            250,933 
Advance to suppliers   157,338    1,857    -            159,195 
Prepaid taxes   -    -    2,156            2,156 
Inventory   147,074    107,980    206,777            461,831 
 Total Current Assets   7,977,946    294,883    432,616    (6,837,105)      1,868,340 
Non-Current Assets                            
Property and equipment, net   60,393    6,523    312,813            379,729 
Intangible assets, net   -    -    3,807            3,807 
Security deposits   -    -    91,578            91,578 
Operating lease right-of-use assets   59,289    227,685    1,846,931            2,133,905 
 Total Non-Current Assets   119,682    234,208    2,255,129           2,609,019 
Total Assets  $8,097,628   $529,091   $2,687,745   $(6,837,105)     $4,477,359 
                             
LIABILITIES AND STOCKHOLDERS’ EQUITY                            
Current Liabilities                            
Accounts payable   38,964    72,442    231,695    (304,137)   {a}   38,964 
Unearned revenue   2,746    -    285,577    (285,577)   {a}   2,746 
Taxes payable   209,829    -    -            209,829 
Accrued expenses and other payables   510,811    82,917    272,161    (355,078)   {a}   510,811 
Loan from third parties             455,562    (455,562)   {a}   - 
Operating lease liabilities - current   35,019    84,787    631,982            751,788 
Advance from related parties   101,929    1,271,115    1,356,649    (2,627,764)   {a}   101,929 
 Total Current Liabilities   899,298    1,511,261    3,233,626    (4,028,118)      1,616,067 
Non-Current Liabilities                            
Operating lease liabilities - noncurrent   24,270    142,898    1,214,949            1,382,117 
 Total Non-Current Liabilities   24,270    142,898    1,214,949    -       1,382,117 
 Total Liabilities   923,568    1,654,159    4,448,575    (4,028,118)      2,998,184 
Stockholders’ Equity                            
 Common stock   500    -    -            500 
 Additional paid in capital   11,208,650    249,399    152,207    (2,808,987)   {a} {b}   8,801,269 
 Statutory reserve   151,988    -    -            151,988 
 Accumulated deficit   (4,743,009)   (1,336,096)   (1,849,812)           (7,928,917)
 Accumulated other comprehensive income (loss)   555,931    (38,371)   (63,225)           454,335 
 Total Stockholders’ Equity   7,174,060    (1,125,068)   (1,760,830)   (2,808,987)      1,479,175 
Total Liabilities and Stockholders’ Equity  $8,097,628   $529,091   $2,687,745   $(6,837,105)     $4,477,359 

 

See accompanying notes to pro forma combined financial statements

 

F-1

 

 

AIXIN LIFE INTERNATIONAL, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2021

 

   AIXIN LIFE INTERNATIONAL, INC.   AIXINTANG PHARMACIES   AIXIN SHANGYAN HOTEL  

Pro forma

Adjustments

  

Pro forma

Combined

 
                     
Revenue                         
Products  $203,294   $-   $-        $203,294 
Advertising   494,864    -    -         494,864 
Pharmacy revenue   -    144,703    -         144,703 
Hotel revenue   -    -    352,247         352,247 
Total revenues, net   698,158    144,703    352,247    -    1,195,108 
                          
Operating costs and expenses:                         
 Cost of goods sold   135,659    103,305    -         238,964 
 Hotel operating costs   -    -    518,505         518,505 
 Selling expenses   53,194    142,417    71,585         267,196 
 General and administrative expenses   194,250    43,669    82,200         320,119 
 Stock-based compensation   92,885    -    -         92,885 
 Total operating costs and expenses   475,988    289,391    672,290    -    1,437,669 
                          
Income (loss) from operations   222,170    (144,688)   (320,043)       (242,561)
                          
Non-operating income (expenses)                         
 Interest income   1,218    50    8         1,276 
 Other income   160    1,165    21,782         23,107 
 Other expenses   (1,846)   -              (1,846)
 Total non-operating income (expenses), net   (468)   1,215    21,790         22,537 
                          
Income (loss) before income tax   221,702    (143,473)   (298,253)        (220,024)
                          
Income tax expense   -    -              - 
                          
Net income (loss)  $221,702   $(143,473)  $(298,253)       $(220,024)
                          
Other comprehensive items                         
 Foreign currency translation (loss)   (32,609)   5,575    9,212         (17,822)
                          
Comprehensive income (loss)  $189,093   $(137,898)  $(289,041)       $(237,846)
                          
Earnings per share  $0.00   $-   $-        $(0.00)
                          
Weighted average shares outstanding   49,999,891    -    -    -    49,999,891 

 

See accompanying notes to pro forma combined financial statements

 

F-2

 

 

AIXIN LIFE INTERNATIONAL, INC.

UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2020

 

   AIXIN LIFE INTERNATIONAL, INC.   AIXINTANG PHARMACIES  

AIXIN SHANGYAN

HOTEL

  

Pro forma

Adjustments

  

Pro forma

Combined

 
                     
Revenue                    
Products  $580,712   $-   $-             $580,712 
Advertising   1,870,343    -    -         1,870,343 
Pharmacy revenue   -    1,264,427    -         1,264,427 
Hotel revenue             1,074,151         1,074,151 
Total revenues, net   2,451,055    1,264,427    1,074,151         4,789,633 
                          
Operating costs and expenses:                         
 Cost of goods sold   224,675    933,081    -         1,157,756 
 Hotel operating costs   -    -    1,537,307         1,537,307 
 Selling expenses   244,200    435,348    116,564         796,112 
 General and administrative expenses   802,556    84,359    164,466         1,051,381 
 Provision for bad debts   13,624    -    22,227         35,851 
 Stock-based compensation   371,540    -              371,540 
 Total operating costs and expenses   1,656,595    1,452,788    1,840,564         4,949,947 
                          
Income (loss) from operations   794,460    (188,361)   (766,413)        (160,314)
                          
Non-operating income (expenses)                         
 Interest income   537,580    120    31         537,731 
 Interest expense   -    (8)   -         (8)
 Other income   28,924    5,518    82,398         116,840 
 Other expenses   (3,326)   (2,658)   (5,121)        (11,105)
 Total non-operating income, net   563,178    2,972    77,308         643,458 
                          
Income (loss) before income tax   1,357,638    (185,389)   (689,105)        483,144 
                          
Income tax expense   340,127    28    -         340,155 
                          
Net income (loss)  $1,017,511   $(185,417)  $(689,105)       $142,989 
                          
Other comprehensive items                         
 Foreign currency translation (loss)   437,059    (62,354)   (86,642)        288,063 
                          
Comprehensive income (loss)  $1,454,570   $(247,771)  $(775,747)       $431,052 
                          
Earnings per share  $0.02   $-   $-        $0.00 
                          
Weighted average shares outstanding   65,609,450    -    -         65,609,450 

  

See accompanying notes to pro forma combined financial statements

 

F-3 

 

 

AIXIN LIFE INTERNATIONAL, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

 

NOTE 1 - INTRODUCTION

 

On May 25, 2021, HK Aixin International Group Co., Limited (“HK Aixin”), a wholly owned subsidiary of Aixin Life International, Inc (“Aixin Life”) entered into an Equity Transfer Agreement (the “Transfer Agreement”) with Chengdu Aixintang Pharmacy Co., Ltd. and certain affiliated entities, each of which operates a pharmacy (“Aixintang Pharmacies”) and its three shareholders, Quanzhong Lin, major shareholder, the Chairman and President of Aixin Life, Ting Li and Xiao Ling Li (“Transferor”). Mr. Lin owns in excess of 95% of the outstanding equity the Aixintang Pharmacies. The remaining equity interest is owned by Ting Li and Xiao Ling Li.

 

Pursuant to the Transfer Agreement, HK Aixin agreed to purchase all of the outstanding equity of Aixintang Pharmacies for an aggregate purchase price of RMB 34,635,845, or approximately US$5,308,257 (“Transfer Price”). The Transfer Price will be reduced by an amount equal to any amounts paid or distributed by any of the Aixintang Pharmacies to the Transferor after December 31, 2020 and increased by an amount contributed to any of the Aixintang Pharmacies by the Transferor after such date. The Transfer Price, as adjusted in accordance with this Section, is referred to as the “Adjusted Transfer Price.”

 

On May 25, 2021, Aixin Life International, Inc (“Aixin Life” or the “Company”) entered into an Equity Transfer Agreement with Chengdu Aixin Shangyan Hotel Management Co., Ltd (“Aixin Shangyan Hotel”), and its two shareholders Quanzhong Lin and Yirong Shen (“Transferor”) (of which, Quanzhong Lin, is also the Chairman and President and major shareholder of Aixin Life). Pursuant to the Agreement (the “Hotel Purchase Agreement”), Aixin Life agreed to purchase 100% ownership of Aixin Shangyan Hotel from Mr. Lin and Ms. Shen. Eighty percent of the equity of Aixin Shangyan Hotel is owned by Mr. Lin. The balance is owned by Ms. Shen. Under the terms of the Hotel Purchase Agreement, Aixin Life agreed to purchase all of the outstanding equity of Aixin Shangyan Hotel for a purchase price of RMB 7,598,887, or approximately $1,164,598, (“Transfer Price”). The Transfer Price will be reduced by an amount equal to any amounts paid or distributed by Aixin Shangyan Hotel to the Transferor after December 31, 2020 and will be increased by an amount equal to any amounts contributed to Aixin Shangyan Hotel by the Transferor after December 31, 2020. The Transfer Price, as adjusted in accordance with this Section, is referred to as the “Adjusted Transfer Price.”

 

NOTE 2 - BASIS OF PRESENTATION

 

The unaudited pro forma condensed combined balance sheet as of March 31, 2021 combines the historical balance sheets of Aixin Life, Aixintang Pharmacies, and Aixin Shangyan Hotel as if the Transactions had occurred on March 31, 2021. The unaudited pro forma combined statements of operations and comprehensive income for the three months ended March 31, 2021 and for the year ended December 31, 2020 combine the historical consolidated statements of operations and comprehensive income (loss) of Aixin Life, Aixintang Pharmacies, and Aixin Shangyan Hotel, and have been prepared as if the Transactions had closed on January 1, 2020. The unaudited pro forma condensed combined financial statements have also been adjusted to give effect to pro forma events that are directly attributable to the Transactions, factually supportable and expected to have a continuing impact on the combined results.

 

The unaudited pro forma condensed combined financial information was prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Aixin Life, Aixintang Pharmacies, and Aixin Shangyan Hotel are under common control and ownership.

 

The preliminary unaudited pro forma information is presented solely for informational purposes and is not necessarily indicative of the consolidated results of operations or financial position that might have been achieved for the periods or dates indicated, nor is it necessarily indicative of the future results of the combined company.

 

NOTE 3 – PRO FORMA ADJUSTMENTS

 

The following adjustments were made in the preparation of the unaudited pro forma condensed consolidated combined balance sheet and unaudited pro forma condensed consolidated combined statements of income and comprehensive income:

 

{a} Pursuant to the Transfer Agreement and Hotel Purchase Agreement, the actual or potential creditor’s rights and debts of Aixintang Pharmacies and Aixin Shangyan Hotel prior to the date of equity transfer shall be owned and undertaken by the Transferor. After the transfer, the Transferor shall independently assume the liability for litigations or losses of Aixintang Pharmacies and Aixin Shangyan Hotel caused by the actual or potential debts prior to the date of equity transfer.

 

{b} Represents the proceeds made by Aixin Life based on the Adjusted Transfer Price. The Adjusted Transfer Price is based on the Transfer Price of $5,308,257, increased by $122,567 contributed to Aixintang Pharmacies by Mr. Lin during the three months ended March 31, 2021, and the Transfer Price of $1,164,598, increased by $241,683 contributed to Aixin Shangyan Hotel by Mr. Lin during the three months ended March 31, 2021.

 

F-4