EX-99.1 3 ex99_1.htm FINANCIAL INFORMATION

Exceed World, Inc.

Unaudited Pro Forma Condensed Combined Financial Information

 

The following unaudited pro forma condensed combined financial information and related notes present the historical condensed combined financial information of Exceed World, Inc. (hereinafter referred to as "Exceed World", the "Company," "we," "our," "us" and similar terms unless the context indicates otherwise) and Force International Holdings Limited ("Force Holdings"), which was incorporated in Hong Kong with limited liability and its subsidiaries (collectively referred to as the “Force Holdings Group”, after giving effect to the transfer of the School TV’s stock from the Company to Force Internationale Limited (the "Deconsolidation"). The unaudited pro forma condensed combined financial information gives effect to the Deconsolidation based on the assumptions, reclassifications, and adjustments described in the accompanying notes to the unaudited pro forma condensed combined financial information.

 

The unaudited pro forma condensed combined balance sheet as of June 30, 2018 is presented as if the Deconsolidation had occurred on June 30, 2018. The unaudited pro forma condensed combined statement of operations for the year ended September 30, 2017 is presented as if the Deconsolidation had occurred on October 1, 2016. The pro forma condensed combined financial statements do not necessarily reflect what the combined company’s financial condition or results of operations would have been had the acquisition occurred on the dates indicated. They also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

EXCEED WORLD, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
                     
      (A)   Less         Pro Forma
          Deconsolidation of   Pro Forma   Exceed World, Inc
      Exceed World, Inc   School TV Co., Ltd.    Adjustments   Consolidated
      June 30, 2018   June 30, 2018         June 30, 2018
      (Unaudited)   (Unaudited)         (Unaudited)
ASSETS                  
Current assets                  
  Cash and cash equivalents $ 13,773,034 $ 31,839 $   - $ 13,741,195
  Marketable securities   186,083                                     -     -   186,083
  Accounts receivable   1,107   1,107   　 -   -
  Inventories, net   496,669   78,570     -   418,099
  Prepaid expenses   1,086,339   1,122     -   1,085,217
  Due from related parties   50,076   118,216   (E) 208,583   140,443
  Other current assets   285,498                                     -     -   285,498
                     
Total current assets   15,878,806   230,854     208,583   15,856,535
                     
Prepaid expenses   347,806                                     -     -   347,806
Deferred income tax assets   271,027                                     -     -   271,027
Fixed assets, net   386,037                                     -     -   386,037
Intangible assets, net   3,050,098   633,656     -   2,416,442
Long-term receivable - related party   -                                     -   (D) 225,917   225,917
                     
Total assets $ 19,933,774 $ 864,510 $   434,500 $ 19,503,764
                     
LIABILITIES AND SHAREHOLDERS' EQUITY                  
Current liabilities                  
  Accounts payable $ 903,240 $ 5,470 $   - $ 897,770
  Due to related parties   775,042   247,696   (E) 208,583   735,929
  Accrued expenses   55,639   6,794     -   48,845
  Deferred income   3,102,770   807     -   3,101,963
  Other payables   1,764,352                                     -     -   1,764,352
  Current portion of capital lease obligations   9,535                                     -     -   9,535
  　   　   　     　   　
Total current liabilities   6,610,578   260,767     208,583   6,558,394
                     
Capital lease obligations, long-term portion   45,340                                     -     -   45,340
Long-term note payable   497,018   497,018     -   -
Long-term note payable – related party   -   225,917   (D) 225,917   -
Long term accrued interest   5,799                                     -     -   5,799
Long term deferred income   2,396   2,396     -   -
      　   　     　   　
Total liabilities   7,161,131   986,098     434,500   6,609,533
                     
Shareholders' equity (deficit)                  
Preferred stock   -                                     -     -   -
Common stock   3,270   4,262   (B) 4,262   3,270
Additional paid-in capital   149,598   2,330   (B)  (4,262)   143,383
      　   　   (C) 377   　
Accumulated earnings (deficit)   12,318,899    (128,798)   (C)  (377)   12,447,320
Accumulated other comprehensive income   300,876   618     -   300,258
                     
Total shareholders' equity (deficit)   12,772,643    (121,588)     -   12,894,231
                     
Total liabilities and shareholders' equity   19,933,774   864,510     434,500   19,503,764
                     

 

(A) On September 26, 2018, the Company acquired 100 % of the shares of Force International Holdings Limited. The unaudited pro forma condensed combined balance sheet as of June 30, 2018 is presented as if this merger transaction had occurred on June 30, 2018.

 

(B) This adjustment reflects the merger reserve in relation to the disposal of School TV.

 

(C) This adjustment reflects the reversal of the merger reserve for the acquisition of School TV in merger transaction.

 

(D) This adjustment represents the loan from e-Learning Laboratory Co. Ltd. to School TV. Prior to the Deconsolidation, the loan was considered as intercompany balances and was eliminated in consolidation. Subsequent to the Deconsolidation, the loan is recorded as long term receivable due from School TV.

 

(E) This adjustments represents the loan from e-Communications Co. Ltd. to School TV amounted at JPY10,000,000 ($90,367) and the amount due from Exceed World amounted at $118,216. Prior to the Deconsolidation, these amounts were considered as intercompany balances and were eliminated in consolidation. Subsequent to the Deconsolidation, these amounts are recorded as balances with related parties.

 

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EXCEED WORLD, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS  AND COMPREHENSIVE INCOME
                   
      (A)   Less       Pro Forma
          Deconsolidation of   Pro Forma   Exceed World, Inc
      Exceed World, Inc   School TV Co., Ltd.    Adjustments   Consolidated
      Year ended   Year ended       Year ended
      September 30, 2017   September 30, 2017       September 30, 2017
      (Unaudited)   　   　   (Unaudited)
                   
Revenues $                   36,860,282 $ 30,274 $ - $ 36,830,008
                 
Cost of revenues                     22,219,015   42,526   -   22,176,489
                 
Gross profit (loss)                     14,641,267    (12,252)   -   14,653,519
                 
Operating expenses                
  Selling, general and administrative expenses $                   10,841,436 $ 2,241 $ - $ 10,839,195
                   
Total operating expenses                     10,841,436   2,241   -   10,839,195
                   
Profit (loss) from operations                       3,799,831    (14,493)   -   3,814,324
                   
Other income                
  Other income                          158,856   -   1,871   160,727
  Change in fair value of marketable securities                          130,280   -   -   130,280
  Gain on disposal of a subsidiary                            56,363   -   -   56,363
Total other income                          345,499   -   1,871   347,370
                   
Other expenses                
  Interest expense                              2,801   3,929   1,871   743
Total other expense                              2,801   3,929   1,871   743
                   
Income (loss) before taxes                       4,142,529    (18,422)   -   4,160,951
                   
Income tax expense                          533,439   -   -   533,439
                   
Net  income (loss) $                     3,609,090 $  (18,422) $ - $ 3,627,512
                   
Other Comprehensive Income (loss)                
  Foreign currency translation adjustment                    (1,152,687)   183   -    (1,152,870)
                   
Total comprehensive Income (loss)                       2,456,403    (18,239)   -   2,474,642
                   
Basic and diluted net loss per common share $                              0.11 $   $   $ 0.11
                   
Weighted average number of common shares                     32,700,000           32,700,000
                   

(A) On September 26, 2018, the Company acquired 100% of the shares of Force International Holdings Limited. The unaudited proforma condensed combined statement of operations for the year ended September 30, 2017 is presented as if this merge transaction had occurred on October 1, 2016.

 

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