EX-99.3 7 tgsi_ex993.htm EX-99.3 tgsi_ex993.htm

EXHIBIT 99.3

 

Pro Forma Combined Financial Statements

 

The following pro forma balance sheet has been derived from the balance sheet of TGS International Ltd. at May 31, 2018, and adjusts such information to give the effect of the acquisition of Arcus Mining Holdings Limited, a Seychelles corporation, as if the acquisition had occurred at May 31, 2018. The following pro forma EPS statement has been derived from the income statement of Arcus Mining Holdings Limited and adjusts such information to give the effect that the acquisition by TGS International Ltd. at June 30, 2018 and May 31, 2018, respectively. The pro forma balance sheet and EPS statement is presented for informational purposes only and does not purport to be indicative of the financial condition that would have resulted if the acquisition had been consummated at May 31, 2018 or June 30, 2018.

 

 

 

Arcus Mining Holdings Limited

June 30, 2018

$

 

 

TGS International Ltd.

May 31, 2018

$

 

 

Adjustment

 

 

Proforma

$

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 217,796

 

 

 

 9,199

 

 

 

 (9,199 )

A

 

 217,796

 

Other receivables

 

 

 109,850

 

 

 

 -

 

 

 

 

 

 

 

 109,850

 

Prepayments and deposits

 

 

 157,077

 

 

 

 2,086

 

 

 

 (2,086 )

A

 

 157,077

 

Total current assets

 

 

 484,723

 

 

 

 11,285

 

 

 

 

 

 

 

 484,723

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 1,670,244

 

 

 

 7,438

 

 

 

 (7,438 )

A

 

 1,670,244

 

Intangible assets

 

 

 1,097,362

 

 

 

 -

 

 

 

 

 

 

 

 1,097,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

 3,252,329

 

 

 

 18,723

 

 

 

 

 

 

 

 3,252,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Deficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued charges

 

 

 210,762

 

 

 

 -

 

 

 

 

 

 

 

 210,762

 

Other payables

 

 

 364,311

 

 

 

 24,866

 

 

 

 (24,866 )

A

 

 364,311

 

Loans from related persons

 

 

 764,899

 

 

 

 71,956

 

 

 

 (71,956 )

A

 

 764,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

 1,339,972

 

 

 

 96,822

 

 

 

 

 

 

 

 1,339,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts due to shareholders

 

 

 9,102,551

 

 

 

 -

 

 

 

 (8,848,710 )

C

 

 253,841

 

Provision for asset retirement obligations

 

 

 30,251

 

 

 

 -

 

 

 

 

 

 

 

 30,251

 

Provision for exploration asset compensation

 

 

 109,627

 

 

 

 -

 

 

 

 

 

 

 

 109,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 10,582,401

 

 

 

 96,822

 

 

 

 

 

 

 

 1,733,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficiency

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock and preferred stock, non-voting, par value $0.0001 per share - 200,000,000 common stock and 100,000,000 preferred stock, non-voting, authorized -13,530,000 common stock issued and outstanding

 

 

 100

 

 

 

 1,353

 

 

 

 700

 

B

 

 1,403

 

 

 

 

 

 

 

 

 

 

 

 

 (650 )

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (884,971 )

D

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 884,871

 

C

 

 

 

Additional paid in capital

 

 

 -

 

 

 

 33,094

 

 

 

 (34,447 )

A

 

 8,847,407

 

 

 

 

 

 

 

 

 

 

 

 

 650

 

A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (700 )

B

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 7,963,839

 

C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 884,971

 

D

 

 

 

Accumulated loss

 

 

 (7,046,930 )

 

 

 (111,996 )

 

 

 111,996

 

A

 

 (7,046,930 )

Accumulated other comprehensive loss

 

 

 (283,242 )

 

 

 (550 )

 

 

 550

 

A

 

 (283,242 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ deficiency

 

 

 (7,330,072 )

 

 

 (78,099 )

 

 

 

 

 

 

 1,518,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficiency

 

 

 3,252,329

 

 

 

 18,723

 

 

 

 

 

 

 

 3,252,329

 

 

See notes to financial statements

 

 
 
 
 

 

PRO FORMA EPS (UNAUDITED)

   

 

 

Arcus Mining Holdings Limited

Six Months

Ended

June 30,

2018

$

 

 

Arcus Mining Holdings Limited

Year

Ended

December 31,

2017

$

 

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

 

 

 

Net loss

 

 

 (670,931 )

 

 

 (1,230,969 )

Other comprehensive loss

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 (54,847 )

 

 

 135,385

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

 (725,778 )

 

 

 (1,095,584 )

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

 (0.048 )

 

 

 (0.088 )

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

 

 14,030,000

 

 

 

 14,030,000

 

 

See notes to financial statements

 

 
 
 
 

 

Unaudited Notes to Pro Forma Combined Financial Statements

 

On September 14, 2018, the Company entered into a Share Exchange Agreement with Arcus and the Selling Stockholders, pursuant to which the Selling Shareholders agreed to sell all of their ordinary shares of Arcus to the Company in exchange for an aggregate of 7,000,000 shares of common stock of the Company. On the Closing Date, Arcus transferred its mining business to the Registrant. The directors and stockholders of the Company and of Arcus have approved the Share Exchange Agreement and the transactions contemplated thereunder.

 

Immediately prior to the Share Exchange, 6,500,000 shares of our outstanding common stock were cancelled and retired.

 

As a result of the transactions described above, we became the record and beneficial owner of 100% of the share capital of Arcus and therefore own 100% of the share capital of its subsidiaries and Variable Interest Entities indirectly.

 

As a result of the Share Exchange, the cancellation of 6,500,000 shares and the issuance of 7,000,000 shares, we will have 14,030,000 shares of common stock issued and outstanding.

 

The transaction was regarded as a reverse merger whereby Arcus was considered to be the accounting acquirer as it retained control of TGSI after the Share Exchange.

 

All amounts of TGSI were reversed as the net assets assumed by Arcus in the reverse merger were $0.

 

The consolidated financial statements reflect all predecessor statements of income and cash flow activities and include the accounts of Arcus Mining Holdings Limited, and its subsidiaries and Variable Interest Entities (VIEs). Arcus (and its historical financial statements) is the continuing entity for financial reporting purposes.

 

The preceding unaudited pro forma combined balance sheet represents the combined financial position of Arcus as of June 30, 2018, as if the reverse merger acquisition occurred on June 30, 2018

 

The unaudited pro forma combined financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if the reverse acquisition of Arcus had been consummated as of the beginning of the period indicated, nor is necessarily indicative of the resulted of future operations.

 

Assumptions and Adjustments:

 

A)

 Per the terms of the Share Exchange, TGSI was delivered with zero assets and zero liabilities at time of closing and TGSI will also cancel 6,500,000 shares;

 

B)

At closing and pursuant to the Exchange Agreement, we acquired all of the issued and outstanding capital stock of Arcus in exchange for the issuance of 7,000,000 common stock shares; 

 

C)

On August 15, 2018, Arcus and Mr. Chi Kin Loo agreed to repay the debts of $8,848,710 by issuing common stock to Mr. Loo at $10 each. Thus Arcus issued 884,871 common stock and $7,963,839 as additional paid in capital; and

 

D)

At closing, common stock of Arcus will be reclassified to additional paid-in-capital to reflect the additional shares of common stock issued as part of the Share Exchange.