Exhibit 99.3
AIXIN LIFE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2022
AIXIN LIFE INTERNATIONAL, INC. | YUNNAN RUNCANGSHENG TECHNOLOGY COMPANY LIMITED | PRO FORMA ADJUSTMENTS | PRO FORMA CONSOLIDATED | ||||||||||||||
ASSETS | |||||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 8,129,696 | $ | 706,753 | $ | - | $ | 8,836,449 | |||||||||
Restricted cash | 61,588 | - | 61,588 | ||||||||||||||
Accounts receivable, net | 60,548 | 239,681 | (51,712 | ) | {d} | 248,517 | |||||||||||
Accounts receivable, related party | - | 220,746 | 220,746 | ||||||||||||||
Other receivables and prepaid expense | 46,702 | 15,024 | 61,726 | ||||||||||||||
Advance to suppliers | 143,421 | 112,684 | 256,105 | ||||||||||||||
Advance to related parties | 82,374 | - | 82,374 | ||||||||||||||
Inventory | 291,918 | 394,745 | 686,663 | ||||||||||||||
Total Current Assets | 8,816,247 | 1,689,633 | # | (51,712 | ) | 10,454,168 | |||||||||||
Non-Current Assets | |||||||||||||||||
Investment | - | - | 6,194,762 | {b} | - | ||||||||||||
(6,194,762 | ) | {c} | |||||||||||||||
Goodwill | 5,705,562 | {c} | 5,705,562 | ||||||||||||||
Property and equipment, net | 221,958 | 1,809,711 | 2,031,669 | ||||||||||||||
Intangible assets, net | 594 | - | 594 | ||||||||||||||
Deferred tax asset | 16,951 | - | 16,951 | ||||||||||||||
Security deposits | 89,578 | - | 89,578 | ||||||||||||||
Operating lease right-of-use assets | 1,444,683 | 3,382 | 1,448,065 | ||||||||||||||
Total Non-Current Assets | 1,773,764 | 1,813,093 | # | 5,705,562 | 9,292,419 | ||||||||||||
Total Assets | $ | 10,590,011 | $ | 3,502,726 | # | $ | 5,653,850 | $ | 19,746,587 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
Current Liabilities | |||||||||||||||||
Accounts payable | $ | 472,857 | $ | 200,067 | $ | 6,194,762 | {b} | $ | 6,815,974 | ||||||||
(51,712 | ) | {d} | |||||||||||||||
Accounts payable-related party | - | 170,895 | 170,895 | ||||||||||||||
Unearned revenue | 153,308 | 55,727 | 209,035 | ||||||||||||||
Taxes payable | 214,761 | 22,932 | 237,693 | ||||||||||||||
Accrued liabilities and other payables | 1,051,912 | 1,620,489 | 2,672,401 | ||||||||||||||
Interest payable | - | 11,127 | 11,127 | ||||||||||||||
Loan from third parties | 89,578 | - | 89,578 | ||||||||||||||
Government grant payable | - | 978,647 | 978,647 | ||||||||||||||
Operating lease liabilities - current | 799,839 | 16,124 | 815,963 | ||||||||||||||
Advance from related parties | 2,431,138 | 364,243 | (402,397 | ) | {a} | 2,392,984 | |||||||||||
Total Current Liabilities | 5,213,393 | 3,440,251 | 5,740,653 | 14,394,297 | |||||||||||||
Non-Current Liabilities | |||||||||||||||||
Operating lease liabilities - noncurrent | 614,791 | - | 614,791 | ||||||||||||||
Total Non-Current Liabilities | 614,791 | - | 614,791 | ||||||||||||||
Total Liabilities | 5,828,184 | 3,440,251 | 5,740,653 | 15,009,088 | |||||||||||||
Stockholders’ Equity | |||||||||||||||||
Common stock | 500 | - | 500 | ||||||||||||||
Additional paid in capital | 14,272,563 | 133,678 | (133,678 | ) | {a}{c} | 14,272,563 | |||||||||||
Statutory reserve | 151,988 | - | 151,988 | ||||||||||||||
Accumulated deficit | (10,360,963 | ) | (79,461 | ) | 58,662 | {c} | (10,381,762 | ) | |||||||||
Accumulated other comprehensive income (loss) | 697,739 | 8,258 | (11,787 | ) | {c} | 694,210 | |||||||||||
Total Stockholders’ Equity | 4,761,827 | 62,475 | (86,803 | ) | 4,737,499 | ||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 10,590,011 | $ | 3,502,726 | $ | 5,653,850 | $ | 19,746,587 |
See accompanying notes to pro forma consolidated financial statements
F-1 |
AIXIN LIFE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
AIXIN LIFE INTERNATIONAL, INC. | YUNNAN RUNCANGSHENG TECHNOLOGY COMPANY LIMITED | PRO FORMA ADJUSTMENTS | PRO FORMA CONSOLIDATED | ||||||||||||||
Revenue | |||||||||||||||||
Products | $ | 385,628 | $ | 295,375 | $ | (63,681 | ) | {d} | $ | 617,322 | |||||||
Room revenue | 94,716 | - | 94,716 | ||||||||||||||
Food and beverage revenue | 292,519 | - | 292,519 | ||||||||||||||
Others | 66,702 | - | 66,702 | ||||||||||||||
Total revenues, net | 839,565 | 295,375 | 1,071,259 | ||||||||||||||
Operating costs and expenses: | |||||||||||||||||
Cost of goods sold | 278,522 | 125,850 | (63,681 | ) | {d} | 340,691 | |||||||||||
Hotel operating costs | 929,719 | - | 929,719 | ||||||||||||||
Selling expenses | 389,618 | 8,788 | 398,406 | ||||||||||||||
General and administrative expenses | 519,471 | 200,297 | 719,768 | ||||||||||||||
Provision for bad debts | 47,857 | - | 47,857 | ||||||||||||||
Stock-based compensation | 185,770 | - | 185,770 | ||||||||||||||
Total operating costs and expenses | 2,350,957 | 334,935 | 2,622,211 | ||||||||||||||
Loss from operations | (1,511,392 | ) | (39,560 | ) | (1,550,952 | ) | |||||||||||
Non-operating income (expenses) | |||||||||||||||||
Interest income | 2,612 | 551 | 3,163 | ||||||||||||||
Other income | 29,655 | 18,210 | 47,865 | ||||||||||||||
Other expenses | (260 | ) | - | (260 | ) | ||||||||||||
Total non-operating income, net | 32,007 | 18,761 | 50,768 | ||||||||||||||
Loss before income tax | (1,479,385 | ) | (20,799 | ) | (1,500,184 | ) | |||||||||||
Income tax expense | 965 | - | 965 | ||||||||||||||
Net loss | (1,480,350 | ) | (20,799 | ) | (1,501,149 | ) | |||||||||||
Other comprehensive items | |||||||||||||||||
Foreign currency translation loss | (13,084 | ) | (3,529 | ) | (16,613 | ) | |||||||||||
Comprehensive loss | $ | (1,493,434 | ) | $ | (24,328 | ) | $ | (1,517,762 | ) | ||||||||
Loss per share | $ | (0.030 | ) | $ | - | $ | (0.030 | ) | |||||||||
Weighted average shares outstanding | 49,999,891 | - | 49,999,891 |
See accompanying notes to pro forma consolidated financial statements
F-2 |
AIXIN LIFE INTERNATIONAL, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEAR ENDED DECEMBER 31, 2021
AIXIN LIFE INTERNATIONAL, INC. | YUNNAN RUNCANGSHENG TECHNOLOGY COMPANY LIMITED | PRO FORMA ADJUSTMENTS | PRO FORMA CONSOLIDATED | |||||||||||||
Revenue | ||||||||||||||||
Products | $ | 742,624 | $ | 783,149 | $ | 1,525,773 | ||||||||||
Advertising | 1,944,811 | - | 1,944,811 | |||||||||||||
Room revenue | 114,086 | - | 114,086 | |||||||||||||
Food and beverage revenue | 201,755 | - | 201,755 | |||||||||||||
Others | 62,957 | - | 62,957 | |||||||||||||
Total revenues, net | 3,066,233 | 783,149 | 3,849,382 | |||||||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of goods sold | 535,485 | 445,796 | 981,281 | |||||||||||||
Hotel operating costs | 744,594 | - | 744,594 | |||||||||||||
Selling expenses | 470,798 | 61,283 | 532,081 | |||||||||||||
General and administrative expenses | 1,033,830 | 301,313 | 1,335,143 | |||||||||||||
Reversal of for bad debts | (63,076 | ) | - | (63,076 | ) | |||||||||||
Stock-based compensation | 371,540 | - | 371,540 | |||||||||||||
Total operating costs and expenses | 3,093,171 | 808,392 | 3,901,563 | |||||||||||||
Loss from operations | (26,938 | ) | (25,243 | ) | (52,181 | ) | ||||||||||
Non-operating income (expenses) | ||||||||||||||||
Interest income | 4,113 | 56 | 4,169 | |||||||||||||
Other income | 63,064 | 4 | 63,068 | |||||||||||||
Other expenses | (33,154 | ) | - | (33,154 | ) | |||||||||||
Total non-operating income, net | 34,023 | 60 | 34,083 | |||||||||||||
Income (loss) before income tax | 7,085 | (25,183 | ) | (18,098 | ) | |||||||||||
Income tax expense | 274,321 | 10,582 | 284,903 | |||||||||||||
Net loss | (267,236 | ) | (35,765 | ) | (303,001 | ) | ||||||||||
Other comprehensive items | ||||||||||||||||
Foreign currency translation income | 122,283 | 2,332 | 124,615 | |||||||||||||
Comprehensive loss | $ | (144,953 | ) | $ | (33,433 | ) | $ | (178,386 | ) | |||||||
Loss per share | $ | (0.005 | ) | $ | - | $ | (0.006 | ) | ||||||||
Weighted average shares outstanding | 49,999,891 | - | 49,999,891 |
See accompanying notes to pro forma consolidated financial statements
F-3 |
AIXIN LIFE INTERNATIONAL, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - INTRODUCTION
On July 19, 2022, HK Aixin International Group Co., Limited (“HK Aixin”), a wholly owned subsidiary of Aixin Life International, Inc (“Aixin Life” or the “Company”) entered into an Equity Transfer Agreement (the “Transfer Agreement”) with Yunnan Shengshengyuan Technology Co., Ltd, and Yun Chen (the “Sellers”), the shareholders of Yunnan Runcangsheng Technology Company Ltd. (“Yunnan Runcangsheng”). Yunnan Shengshengyuan owns in excess of 95% of the outstanding equity the Yunnan Runcangsheng. The remaining equity interest is owned by Yun Chen. Pursuant to the Transfer Agreement, HK Aixin agreed to purchase all of the outstanding equity of Yunnan Runcangsheng for an aggregate purchase price of RMB 45,082,600, or approximately US$6.3 million (“Purchase Price”). In contemplation of the transaction, Yunnan Runcangsheng will prepare a balance sheet based upon its books and records as of December 31, 2021. Consummation of the acquisition is subject to the completion of an audit of the financial statements of Yunnan Runcangsheng showing that the net worth of Yunnan Runcangsheng as of December 31, 2021, is no less than RMB 1,530,000. In addition, if the net worth of Yunnan Runcangsheng as of December 31, 2021, as shown by the audit is less than 97% of the net worth on the balance sheet as of that date initially prepared by Yunnan Runcangsheng, the purchase price shall be reduced by the amount of the deficiency (“Adjusted Purchase Price”). In addition to transferring their respective equity interest in Yunnan Runcangsheng by the Sellers, both Sellers agree to forgive any loans Yunnan Runcangsheng due to them. The Transfer Agreement also provides that Aixin Life will be the beneficiary of any profit generated by Yunnan Runcangsheng commencing January 1, 2022, and bear any loss it incurs from and after such date.
NOTE 2 - BASIS OF PRESENTATION
The unaudited pro forma consolidated balance sheet as of June 30, 2022 combines the historical balance sheets of Aixin Life and Yunnan Runcangsheng as if the Transactions had occurred on June 30, 2022. The unaudited pro forma consolidated statements of operations and comprehensive loss for the six months ended June 30, 2022 and for the year ended December 31, 2021 combine the historical consolidated statements of operations and comprehensive loss of Aixin Life and Yunnan Runcangsheng, and have been prepared as if the Transactions had closed on January 1, 2022 and 2021, respectively. The unaudited pro forma consolidated 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 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 consolidated company.
NOTE 3 – PRO FORMA ADJUSTMENTS
The following adjustments were made in the preparation of the unaudited pro forma consolidated balance sheet and unaudited pro forma consolidated statements of operations and comprehensive loss:
{a} Forgiveness of $402,397 outstanding balance of due to related parties at December 31, 2021 by the Sellers.
{b} Represents the Adjusted Purchase Price to be paid by Aixin Life. The Adjusted Purchase Price is based on the Purchase Price of $6,311,564, decreased by $116,802 resulting from the audited net worth of Yunnan Runcangsheng as of December 31, 2021, being less than 97% of the net worth on the balance sheet as of that date initially prepared by Yunnan Runcangsheng.
{c} Represents the goodwill arising from the Adjusted Purchase Price exceeded the net assets of Yunnan Runcangsheng.
{d} To eliminate the accounts payable to and purchase from Runcangsheng as of and during the six months ended June 30, 2022.
F-4 |