|
BIRCH
BRANCH, INC.
|
|
(SUCCESSOR
OF SHUN CHENG HOLDINGS HONGKONG LIMITED)
|
|
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
|
|
MARCH
31, 2010
|
|
(Amounts
expressed in US Dollars)
|
|
Historical
|
Historical
|
Pro
Forma
|
Combined
|
||||||||||||||||
|
Shun
Cheng HK
|
BRBH
|
Adjustments
|
Note
|
Pro
Forma
|
|||||||||||||||
|
ASSETS
|
|||||||||||||||||||
|
Current
assets:
|
|||||||||||||||||||
|
Cash
|
$ | 5,613,965 | $ | 9,847 | $ | 5,623,812 | |||||||||||||
|
Restricted
cash
|
49,589,715 | - | 49,589,715 | ||||||||||||||||
|
Bank
notes receivable
|
4,800,512 | - | 4,800,512 | ||||||||||||||||
|
Trade
receivables, net
|
19,756,586 | - | 19,756,586 | ||||||||||||||||
|
Inventories,
net
|
36,439,197 | - | 36,439,197 | ||||||||||||||||
|
Deposits,
prepaid expenses, and other current assets
|
62,861,032 | 395 | 62,861,427 | ||||||||||||||||
|
Total
current assets
|
179,061,007 | 10,242 | 179,071,249 | ||||||||||||||||
|
Deposits
for construction projects
|
11,926,400 | - | 11,926,400 | ||||||||||||||||
|
Property,
plant and equipment, net
|
64,288,271 | - | 64,288,271 | ||||||||||||||||
|
Long-term
investments
|
19,811,597 | - | 19,811,597 | ||||||||||||||||
|
Total
assets
|
$ | 275,087,275 | $ | 10,242 | $ | 275,097,517 | |||||||||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||||||||||||||||||
|
Current
liabilities:
|
|||||||||||||||||||
|
Bank
notes payable
|
$ | 62,755,080 | $ | - | $ | 62,755,080 | |||||||||||||
|
Accounts
payable
|
36,120,615 | 680 | 36,121,295 | ||||||||||||||||
|
Accounts
payable - related party
|
- | 7,500 | (7,500 | ) |
(b)
|
- | |||||||||||||
|
Accrued
expense - related party
|
- | 13,419 | (13,419 | ) |
(b)
|
- | |||||||||||||
|
Notes
payable - related party
|
- | 105,000 | (105,000 | ) |
(b)
|
- | |||||||||||||
|
Accrued
liabilities
|
7,032,087 | - | 7,032,087 | ||||||||||||||||
|
Income
tax payable
|
8,823,109 | - | 8,823,109 | ||||||||||||||||
|
Loans
payable
|
64,857,847 | - | 64,857,847 | ||||||||||||||||
|
Other
payable
|
6,313,108 | - | 6,313,108 | ||||||||||||||||
|
Capital
lease obligation, current portion
|
1,332,279 | - | 1,332,279 | ||||||||||||||||
|
Total
current liabilities
|
187,234,125 | 126,599 | 187,234,805 | ||||||||||||||||
|
Loans
payable to related party
|
35,645,982 | - | 35,645,982 | ||||||||||||||||
|
Deferred
income
|
5,193,019 | - | 5,193,019 | ||||||||||||||||
|
Capital
lease obligation, less current portion
|
4,821,815 | - | 4,821,815 | ||||||||||||||||
|
Total
liabilities
|
232,894,941 | 126,599 | 232,895,621 | ||||||||||||||||
|
Shareholders'
equity (Deficit)
|
|||||||||||||||||||
|
Preferred
stock, authrozied 50,000,000 shares, no par value,
|
|||||||||||||||||||
|
none
ussed or outstanding
|
- | - | - | ||||||||||||||||
|
Common
stock, authroized 500,000,000 shares, no par value,
|
|||||||||||||||||||
|
1,708,123
issued and outstanding
|
- | 65,613 | (65,613 | ) |
(a)
|
- | |||||||||||||
|
Owners’
capital (SC Coke)
|
6,395,907 | - | (6,395,907 | ) |
(a)
|
- | |||||||||||||
|
Additional
paid in capital
|
- | 152,877 | 6,117,111 |
(a)
|
6,405,469 | ||||||||||||||
| 9,562 |
(a)
|
||||||||||||||||||
| 125,919 |
(b)
|
||||||||||||||||||
|
Surplus
reserve
|
234,683 | - | 234,683 | ||||||||||||||||
|
Deferred
loan fee, net of amortization
|
- | (1,814 | ) | 1,814 |
(a)
|
- | |||||||||||||
|
Retained
earnings (Accmulated deficit)
|
32,549,158 | (5,173 | ) | 5,173 |
(a)
|
32,549,158 | |||||||||||||
|
Accmulated
(deficit) during development stage
|
- | (327,860 | ) | 327,860 |
(a)
|
- | |||||||||||||
|
Accumulated
other comprehensive income
|
2,602,278 | - | 2,602,278 | ||||||||||||||||
|
Total
shareholders' (deficit)
|
41,782,026 | (116,357 | ) | 41,791,588 | |||||||||||||||
|
Noncontrolling
interest
|
410,308 | - | 410,308 | ||||||||||||||||
|
Total
stockholders' equity
|
42,192,334 | (116,357 | ) | 42,201,896 | |||||||||||||||
|
|
|||||||||||||||||||
|
Total
liabilities and stockholders' equity
|
$ | 275,087,275 | $ | 10,242 | $ | 275,097,517 | |||||||||||||
|
BIRCH
BRANCH, INC.
|
|
(SUCCESSOR
OF SHUN CHENG HOLDINGS HONGKONG LIMITED)
|
|
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
|
|
THREE
MONTHS ENDED MARCH 31, 2010
|
|
(Amounts
expressed in US Dollars)
|
|
Historical
|
Historical
|
Pro
Forma
|
Combined
|
||||||||||||||||
|
Shun
Cheng HK
|
BRBH
|
Adjustments
|
Note
|
Pro
Forma
|
|||||||||||||||
|
Revenues
|
$ | 64,417,320 | $ | - | $ | 64,417,320 | |||||||||||||
|
Cost
of revenues
|
59,443,601 | - | 59,443,601 | ||||||||||||||||
|
Gross
profit
|
4,973,719 | - | 4,973,719 | ||||||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Sales
and marketing
|
863,374 | - | 863,374 | ||||||||||||||||
|
General
and administrative
|
1,728,459 | 6,519 | (5,154 | ) |
(b)
|
1,729,824 | |||||||||||||
|
Total
operating expenses
|
2,591,833 | 6,519 | 2,593,198 | ||||||||||||||||
|
Income
(loss) from operations
|
2,381,886 | (6,519 | ) | 2,375,367 | |||||||||||||||
|
Other
income (expense):
|
|||||||||||||||||||
|
Interest
income
|
311,735 | 311,735 | |||||||||||||||||
|
Interest
expense
|
(1,235,748 | ) | (1,785 | ) | 1,785 |
(b)
|
(1,235,748 | ) | |||||||||||
|
Other
income (expense), net
|
103,994 | 103,994 | |||||||||||||||||
|
Total
other expense
|
(820,019 | ) | (1,785 | ) | (820,019 | ) | |||||||||||||
|
Income
(loss) before provision for income taxes
|
1,561,867 | (8,304 | ) | 1,555,348 | |||||||||||||||
|
Provision
for (benefit from) income taxes
|
502,139 | 502,139 | |||||||||||||||||
|
Net
income (loss)
|
1,059,728 | (8,304 | ) | 1,053,209 | |||||||||||||||
|
Less:
attributable to the noncontrolling interest
|
(62,536 | ) | (62,536 | ) | |||||||||||||||
|
Net
income (loss) attributable to Henan Shuncheng
|
|||||||||||||||||||
|
Group
Coal Coke Co., Ltd.
|
$ | 1,122,264 | $ | (8,304 | ) | $ | 1,115,745 | ||||||||||||
|
BIRCH
BRANCH, INC.
|
|
(SUCCESSOR
OF SHUN CHENG HOLDINGS HONGKONG LIMITED)
|
|
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS
|
|
YEAR
ENDED DECEMBER 31, 2009
|
|
(Amounts
expressed in US Dollars)
|
|
Historical
|
Historical
|
Pro
Forma
|
Combined
|
||||||||||||||||
|
Shun
Cheng HK
|
BRBH
|
Adjustments
|
Note
|
Pro
Forma
|
|||||||||||||||
|
Revenues
|
$ | 206,729,105 | $ | - | $ | 206,729,105 | |||||||||||||
| - | |||||||||||||||||||
|
Cost
of revenues
|
173,409,405 | - | 173,409,405 | ||||||||||||||||
| - | |||||||||||||||||||
|
Gross
profit
|
33,319,700 | - | 33,319,700 | ||||||||||||||||
|
Operating
expenses:
|
|||||||||||||||||||
|
Sales
and marketing
|
3,862,220 | - | 3,862,220 | ||||||||||||||||
|
General
and administrative
|
9,710,677 | 31,135 | (20,948 | ) |
(b)
|
9,720,864 | |||||||||||||
|
Total
operating expenses
|
13,572,897 | 31,135 | 13,583,084 | ||||||||||||||||
| - | |||||||||||||||||||
|
Income
from operations
|
19,746,803 | (31,135 | ) | 19,736,616 | |||||||||||||||
|
Other
income (expense):
|
|||||||||||||||||||
|
Interest
income
|
898,656 | 898,656 | |||||||||||||||||
|
Interest
expense
|
(2,139,702 | ) | (5,745 | ) | 5,745 |
(b)
|
(2,139,702 | ) | |||||||||||
|
Investment
income
|
2,536,668 | 2,536,668 | |||||||||||||||||
|
Other
income (expense), net
|
152,105 | 152,105 | |||||||||||||||||
|
Total
other income (expense)
|
1,447,727 | (5,745 | ) | 1,447,727 | |||||||||||||||
| - | |||||||||||||||||||
|
Income
before provision for income taxes
|
21,194,530 | (36,880 | ) | 21,184,343 | |||||||||||||||
|
Provision
for income taxes
|
5,344,855 | - | 5,344,855 | ||||||||||||||||
|
Net
income
|
15,849,675 | (36,880 | ) | 15,839,488 | |||||||||||||||
|
Less:
net income attributable to the noncontrolling
interest
|
104,012 | - | 104,012 | ||||||||||||||||
|
Net
income attributable to Henan Shuncheng
|
|||||||||||||||||||
|
Group
Coal Coke Co., Ltd.
|
$ | 15,745,663 | $ | (36,880 | ) | $ | 15,735,476 | ||||||||||||