Exhibit 99.2
Unaudited combined pro forma financial statements as of December 31, 2013
SINO PAYMENTS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On January 1, 2014, Sino Payments, Inc. (“Company” or “SINO”), a public reporting company, exchange for 100% of the issued and outstanding shares of in Value Exchange Int’l (China) Limited (“VEI CHN”) by i) newly issued 12,000,000 shares of SINO common stock to the majority stockholder of VEI CHN; and ii) 166,667 shares of SINO common stock held by VEI CHN to be transferred to the majority stockholder of VEI CHN. This transaction resulted in the owners of VEI CHN obtaining a majority voting interest in SINO. The merger of VEI CHN into SINO, which has nominal net assets, results in VEI CHN having control of the combined entity.
For financial reporting purposes, the transaction represents a "reverse merger" rather than a business combination and SINO is deemed to be the accounting acquiree in the transaction. The transaction is being accounted for as a reverse merger and recapitalization. SINO is the legal acquirer but accounting acquiree for financial reporting purposes and VEI CHN is the acquired company but accounting acquirer. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the transaction will be those of VEI CHN and will be recorded at the historical cost basis of VEI CHN, and no goodwill will be recognized in this transaction. The consolidated financial statements after completion of the transaction will include the assets and liabilities of VEI CHN and SINO, and the historical operations of SINO and the combined operations of VEI CHN from the initial closing date of the transaction.
The following unaudited pro forma condensed combined financial statements for the year ended December 31, 2013, the date of the latest publicly available annual financial information for the Company, have been prepared based on certain pro forma adjustments to our historical financial statements set forth in our Annual Report on Form 10-KT for the year ended December 31, 2013, as filed with the Securities and Exchange Commission, and are qualified in their entirety by reference to such historical financial statements and related notes contained in the report. The historic financial statements for VEI CHN were derived from audited financial statements for the year ended December 31, 2013. The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes and with the historical consolidated financial statements and related notes thereto.
The unaudited pro forma condensed combined balance sheet has been prepared as if the transaction had occurred as of December 31, 2014. The unaudited pro forma condensed combined statements of operations have been prepared as if this transaction had occurred on January 1, 2013.
These unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. Such information is not necessarily indicative of the operating results or financial position that would have occurred had the acquisition been completed at the dates indicated or what would be any future periods.
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SINO PAYMENTS, INC. |
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET |
AS OF DECEMBER 31, 2013 |
| SINO | | VEI CHN | | Pro Forma Adjustments | | SINO Pro Forma |
ASSETS | | | | | | | | | | | |
Cash and cash equivalents | $ | - | | $ | 5,371 | | $ | - | | $ | 5,371 |
Accounts receivable, net | | - | | | 617,735 | | | - | | | 617,735 |
Accounts receivable from a related company, net | | - | | | 132,071 | | | - | | | 132,071 |
Amounts due from related parties | | - | | | 977,528 | | | (33,412) | | | 944,116 |
Other receivables and prepayments | | - | | | 39,265 | | | - | | | 39,265 |
Deferred tax assets | | - | | | 34,876 | | | - | | | 34,876 |
Property, plant and equipment | | - | | | 140,437 | | | - | | | 140,437 |
Total assets | $ | - | | $ | 1,947,283 | | $ | (33,412) | | $ | 1,913,871 |
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LIABILITIES AND EQUITY | | | | | | | | | | | |
Accounts payable | $ | - | | $ | 136,695 | | $ | - | | $ | 136,695 |
Other payables and accrued liabilities | | 98,786 | | | 527,353 | | | - | | | 626,139 |
Deferred income | | - | | | 158,049 | | | - | | | 158,049 |
Amount due to a director | | - | | | 452,633 | | | - | | | 452,633 |
Amounts due to related parties | | 38,214 | | | 680,439 | | | (33,338) | | | 685,315 |
Deferred tax liabilities | | - | | | 6,676 | | | - | | | 6,676 |
Total liabilities | | 137,000 | | | 1,961,845 | | | (33,338) | | | 2,065,507 |
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Shareholders’ equity | | | | | | | | | | | |
Common stock | | 146 | | | 128 | | | (8) | | | 266 |
Additional paid-in capital | | 1,483,476 | | | - | | | (1,409,788) | | | 73,688 |
Subscription receivable | | (210,826) | | | - | | | - | | | (210,826) |
(Accumulated deficit) / Retained earnings | | (1,409,796) | | | 1,867 | | | 1,409,796 | | | 1,867 |
Accumulated other comprehensive loss | | - | | | (16,557) | | | (74) | | | (16,631) |
Total shareholders’ deficit | | (137,000) | | | (14,562) | | | (74) | | | (151,636) |
Total liabilities and shareholders’ deficit | $ | - | | $ | 1,947,283 | | $ | (33,412) | | $ | 1,913,871 |
See accompanying notes to unaudited pro forma condensed combined financial statements.
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SINO PAYMENTS, INC. |
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS |
FOR THE YEAR ENDED DECEMBER 31, 2013 |
| | | | | | | | | | | | |
| | SINO | | VEI CHN | | Pro Forma Adjustments | | SINO Pro Forma |
Net Revenues | | $ | - | | $ | 2,769,028 | | $ | - | | $ | 2,769,028 |
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Cost of revenue | | | - | | | (1,950,974) | | | - | | | (1,950,974) |
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Gross profit (loss) | | | - | | | 818,054 | | | - | | | 818,054 |
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General and administrative expenses | | | (121,377) | | | (800,601) | | | - | | | (921,978) |
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Income (loss) from operations | | | (121,377) | | | 17,453 | | | - | | | (103,924) |
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Other income (expenses) | | | (87,237) | | | 177,225 | | | - | | | 89,988 |
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Income (loss) before Provision for income taxes | | | (208,614) | | | 194,678 | | | - | | | (13,936) |
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Income taxes | | | - | | | (36,307) | | | - | | | (36,307) |
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Net income (loss) | | | (208,614) | | | 158,371 | | | - | | | (50,243) |
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Other comprehensive loss: | | | | | | | | | | | | |
Foreign currency translation loss | | | - | | | (3,138) | | | - | | | (3,138) |
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Comprehensive (loss) / income | | $ | (208,614) | | $ | 155,233 | | $ | - | | $ | (53,381) |
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Net loss per share, basic and diluted | | $ | 0.02 | | | | | | | | $ | 0.00 |
Weighted average number of shares outstanding | | | 12,690,431 | | | | | | | | | 24,690,431 |
See accompanying notes to unaudited pro forma condensed combined financial statements.
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SINO PAYMENTS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NOTES TO THE UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The historical financial information is derived from our historical financial statements and the historical financial statements of VEI CHN. The pro forma adjustments have been prepared as if the reverse merger occurred on December 31, 2013, for the balance sheet, and on January 1, 2013, for the statements of operations.
Note 2. Pro Forma Adjustments and Assumptions
(a)
Reflects 100% of the assets, liabilities, income and expenses of VEI CHN.
(b)
Reflects elimination of intercompany balances.
(c)
Reflects:
1)
the issuance of 12,000,000 shares of SINO common stock at $0.19 per share, the closing price of SINO stock on January 1, 2014, the date of the transaction; and
2)
removing SINO accumulated deficit and adjusting equity for the recapitalization.
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