Exhibit 99.4
TEEN EDUCATION GROUP, INC.
UNAUDITED PRO FORMA CONSOLODATED
FINANCIAL STATEMENTS
JUNE 30, 2010
TEEN EDUCATION GROUP, INC.
INDEX TO UNAUDITED PRO FORMA CONSOLODATED
FINANCIAL STATEMENTS
PAGE (S) | ||||
Pro Forma Consolidated Balance Sheet as of June 30, 2010 (Unaudited) | 1 | |||
Pro Forma Consolidated Statement of Operations for the Six Months Ended June 30, 2010 (Unaudited) | 2 | |||
Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2009 Year Ended (Unaudited) | 3 | |||
Notes to Consolidated Pro Forma Financial Statements (Unaudited) | 4-5 |
PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2010
(UNAUDITED)
Hongkong Charter | Pro Forma | Pro Forma | ||||||||||||||
Teen Education | International Group Limited | Adjustments | Consolidated Total | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash & cash equivalents | $ | - | $ | 2,786,069 | $ | 2,786,069 | ||||||||||
Accounts receivable, net of allowance for doubtful accounts | - | 1,148,177 | 1,148,177 | |||||||||||||
Other receivables, net of allowance for doubtful accounts | - | 171,341 | 171,341 | |||||||||||||
Inventories | - | 3,676,681 | 3,676,681 | |||||||||||||
Value added tax recoverable | - | 237,292 | 237,292 | |||||||||||||
Advance to vendors | - | 1,037,363 | 1,037,363 | |||||||||||||
Prepaid expenses | - | 52,037 | 52,037 | |||||||||||||
Loan to outside parties | 1,327,159 | 1,327,159 | ||||||||||||||
Total current assets | - | 10,436,119 | 10,436,119 | |||||||||||||
Property, plant and equipment, net | - | 310,280 | 310,280 | |||||||||||||
Total Assets | $ | - | $ | 10,746,399 | $ | 10,746,399 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Short-term loans | $ | - | $ | 3,686,554 | $ | 3,686,554 | ||||||||||
Accounts payable | 2,500 | 748,310 | (2,500 | )a | 748,310 | |||||||||||
Officers advances | 22,453 | - | (22,453 | )a | - | |||||||||||
Advance from customers | - | 103,978 | 103,978 | |||||||||||||
Accrued expenses and other liabilities | - | 10,462 | 10,462 | |||||||||||||
Taxes payable | - | 59,578 | 59,578 | |||||||||||||
Due to related parties | - | 5,936,768 | 5,936,768 | |||||||||||||
Total current liabilities | 24,953 | 10,545,650 | 10,545,650 | |||||||||||||
Total Liabilities | 24,953 | 10,545,650 | 10,545,650 | |||||||||||||
Stockholders' equity | ||||||||||||||||
Preferred Stock, $0.01 par value, 5,000,000 shares authorized, none issued or outstanding at June 30, 2010 | - | - | - | |||||||||||||
Common Stock, $0.001 par value, 100,000,000 shares authorized, 2,500,000 shares issued and outstanding at June 30, 2010 | 2,250 | - | 250 | a,b | 2,500 | |||||||||||
Additional paid-in capital | 27,750 | 144,697 | (30,249 | ) a,b | 142,197 | |||||||||||
Retained earnings (deficit) | (54,953 | ) | 56,876 | 54,953 | a,b | 56,876 | ||||||||||
Accumulated other comprehensive loss | - | (824 | ) | (824 | ) | |||||||||||
Total stockholders' equity | (24,953 | ) | 200,749 | 200,749 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | - | $ | 10,746,399 | $ | 10,746,399 |
The accompanying notes are an integral part of these condensed consolidated financial statements
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TEEN EDUCATION GROUP, INC
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2010
(UNAUDITED)
Hongkong Charter | Pro Forma | Pro Forma | ||||||||||||||
Teen Education | International Group Limited | Adjustments | Consolidated Total | |||||||||||||
Revenues | $ | - | $ | 2,988,534 | $ | 2,988,534 | ||||||||||
Cost of revenue | - | 2,333,577 | 2,333,577 | |||||||||||||
Gross profit | - | 654,957 | 654,957 | |||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | 5,770 | 617,879 | (5,770 | ) a | 617,879 | |||||||||||
Total operating expenses | 5,770 | 617,879 | 617,879 | |||||||||||||
Operating income (loss) | (5,770 | ) | 37,078 | 37,078 | ||||||||||||
- | ||||||||||||||||
Other expenses | - | |||||||||||||||
Interest expenses | - | (7,395 | ) | (7,395 | ) | |||||||||||
Other expenses | - | 46,201 | 46,201 | |||||||||||||
Total other expense | - | 38,806 | 38,806 | |||||||||||||
Income before income taxes | (5,770 | ) | 75,884 | 75,884 | ||||||||||||
Provision for income taxes | - | (9,755 | ) | (9,755 | ) | |||||||||||
Net income (loss) | $ | (5,770 | ) | $ | 85,639 | $ | 85,639 | |||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | - | (824 | ) | (824 | ) | |||||||||||
Comprehensive income (loss) | $ | (5,770 | ) | $ | 84,815 | $ | 84,815 | |||||||||
Basic and diluted income per common share | ||||||||||||||||
Basic | $ | (0.00 | ) | $ | 84.81 | $ | 0.03 | |||||||||
Diluted | $ | (0.00 | ) | $ | 84.81 | $ | 0.03 | |||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 2,250,000 | 1,000 | 2,500,000 | |||||||||||||
Diluted | 2,250,000 | 1,000 | 2,500,000 |
The accompanying notes are an integral part of these condensed consolidated financial statements
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TEEN EDUCATION GROUP, INC
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
(UNAUDITED)
Hongkong Charter | Pro Forma | Pro Forma | ||||||||||||||
Teen Education | International Group Limited | Adjustments | Consolidated Total | |||||||||||||
Revenues | $ | - | $ | 2,683,808 | $ | 2,683,808 | ||||||||||
Cost of revenue | - | 1,717,486 | 1,717,486 | |||||||||||||
Gross profit | - | 966,322 | 966,322 | |||||||||||||
Operating expenses | ||||||||||||||||
Selling, general and administrative expenses | 8,335 | 744,737 | (8,335 | ) a | 744,737 | |||||||||||
Total operating expenses | 8,335 | 744,737 | 744,737 | |||||||||||||
Operating income (loss) | (8,335 | ) | 221,585 | 221,585 | ||||||||||||
Other expenses | ||||||||||||||||
Interest expenses | - | (2,239 | ) | (2,239 | ) | |||||||||||
Other expenses | - | (55,788 | ) | (55,788 | ) | |||||||||||
Total other expense | - | (58,027 | ) | (58,027 | ) | |||||||||||
Income before income taxes | (8,335 | ) | 163,558 | 163,558 | ||||||||||||
Provision for income taxes | - | 75,021 | 75,021 | |||||||||||||
Net income (loss) | $ | (8,335 | ) | $ | 88,537 | $ | 88,537 | |||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustment | - | (438 | ) | (438 | ) | |||||||||||
Comprehensive income (loss) | $ | (8,335 | ) | $ | 88,099 | $ | 88,099 | |||||||||
Basic and diluted income per common share | ||||||||||||||||
Basic | $ | (0.00 | ) | $ | 88.10 | $ | 0.04 | |||||||||
Diluted | $ | (0.00 | ) | $ | 88.10 | $ | 0.04 | |||||||||
Weighted average common shares outstanding | ||||||||||||||||
Basic | 2,250,000 | 1,000 | 2,500,000 | |||||||||||||
Diluted | 2,250,000 | 1,000 | 2,500,000 |
The accompanying notes are an integral part of these condensed consolidated financial statements
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TEEN EDUCATION GROUP, INC.
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1-ORGANIZATION AND BASIS OF PRESENTATION
Teen Education Group, Inc. was incorporated on April 16, 2007 in the State of Delaware, primarily engaged in the business of providing a financial literacy and money management educational program for teenagers on a fee for service offered basis.
On November 12, 2010, Teen Education Group, Inc., (“Teen Education”, “We”, “us”, “our” or the “Company”) and its majority shareholder, Mr. Robert L. Wilson, entered into a Share Exchange Agreement with Hongkong Charter International Group Limited, (“Hongkong Limited”), a company incorporated in Hongkong Special Administrative Region of the People’s Republic of China (the “PRC”), and Qun Hu, the majority shareholder of Hongkong Limited.
Hongkong Limited is engaged in automotive parts distribution and automotive maintenance services in the PRC through its wholly-owned subsidiary, Shanghai Vomart Auto Parts Co., Ltd.
Pursuant to the terms of a share exchange agreement, dated November 12, 2010, by and among the Company, Robert L. Wilson, the majority shareholder of the Company (the “Majority Shareholder”), Hongkong Charter International Group Limited, a Hongkong company (“Hongkong Limited”), and Qun Hu, the sole shareholder of Hongkong Limited (the “Hongkong Limited Shareholder”), the Company acquired all of the outstanding shares of Hongkong Limited from the Hongkong Limited Shareholder. In exchange, we issued to the Hongkong Limited Shareholder, his designees or assigns, 2,250,000 shares of the Company’s common stock which represent approximately 90% of the issued and outstanding shares of the Company’s common stock on a fully diluted basis as of and immediately after the closing of the share exchange transaction (the “Share Exchange”). In addition, Hongkong Limited Shareholder, Mr. Hu paid $350,000 in cash directly to the Majority Shareholder, Mr. Wilson, as additional consideration to Mr. Wilson for the Company’s common stock that he owned. The $350,000 additional consideration did not have any impact on Hongkong Limited as the payment was made between Mr. Hu and Mr. Wilson.
Pursuant to the terms of the Exchange Agreement, Robert L. Wilson, the majority shareholder of the Company, cancelled a total of 2,000,000 shares of the Company’s common stock, which represents 100% of his security interests in the Company.
Pursuant to the Exchange Agreement, Hongkong Limited became a wholly owned subsidiary of the Company. The sole director of the Company approved the Exchange Agreement and the transactions contemplated under the Exchange Agreement. The directors of Hongkong Limited approved the Exchange Agreement and the transactions contemplated hereunder.
As a further condition of the Share Exchange, on the Closing Date, Robert L. Wilson resigned as the sole director of the Company, effective on such date that is ten (10) calendar days after the Company mails an Information Statement to the Company’s shareholders prepared pursuant to Rule 14f-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to the Exchange Agreement, and further, appointed Qun Hu to the Company’s board of directors (the “Board”). The following persons were appointed as officers of our Company: Mr. Zhoufeng Shen was appointed as the Company’s President and Chief Executive Officer and Ms. Xiaomei Wang was appointed as the Company’s Chief Financial Officer.
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TEEN EDUCATION GROUP, INC.
NOTES TO THE UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited pro forma consolidated balance sheet as of June 30, 2010, and the unaudited pro forma consolidated statements of operations for the six months ended June 30, 2010 and for the year ended December 31, 2009 have been presented as if the share exchange had occurred as of June 30, 2010.
The acquisition will be accounted for as a reverse merge under the purchase method of accounting since there was a change of control. In accordance with FASB 141R, Hongkong Limited and its subsidiaries are the accounting acquirers. Accordingly, Hongkong Limited and its subsidiaries will be treated as the continuing entity for accounting purposes.
The unaudited pro forma consolidated financial statements do not necessarily represent the actual results that would have been achieved had the companies been combined at the beginning of the year, nor may they be indicative of future operations. These unaudited pro forma consolidated financial statements should be read in conjunction with the companies’ respective historical financial statements and notes included thereto. The following unaudited pro forma adjustments are included in the accompanying unaudited pro forma consolidated balance sheet as of June 30, 2010 and the unaudited pro forma consolidated statement of operations for the six months ended June 30, 2010 and for the year ended December 31, 2009 to reflect the acquisition of Hongkong Limited by Teen Education:
a. | To record the spin-off of Teen Education ’ s assets and liabilities prior to the Share Exchange; |
b. | These adjustments reflect the recapitalization as a result of the transactions related to the Share Exchange. |
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