EX-99.5 6 ex99_5.htm EXHIBIT 99.5

 

EXHIBIT 99.5

Natural Health Farm Holdings, Inc.

 

CONTENTS

 

Introduction   F-1
     
Unaudited Pro Forma Condensed Combined Balance Sheet as at December 31, 2018   F-2
     
Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended December 31, 2018   F-3
     
Unaudited Pro Forma Condensed Combined Statements of Operations for the year ended September 30, 2018   F-4
     
Notes to Unaudited Pro Forma Condensed Combined Financial Information   F-5 - F-7

 

 F-1 
 

 

Natural Health Farm Holdings, Inc.

Unaudited Pro Forma Condensed Combined Balance Sheets

December 31, 2018

 

    Historical (Unaudited)     Prema Life Pty Ltd       GGLG Properties Pty Ltd        
    Natural
Health
Farms
Holdings,
Inc.		     Prema
Life Pty
Ltd		    

GGLG
Propertes

Pty
Ltd

     Pro Forma
Adjustments		     Pro Forma
Adjustments		       Pro Forma
Adjustments		     Pro Forma
Adjustments		     Pro Forma
Combined		  
ASSETS                    

Debit

(Credit)

    

Debit

(Credit)

      

Debit

(Credit)

    

Debit

(Credit)

        
Current Assets                                                                  
  Cash and cash equivalents   $ 13,044     $ 16,972     $ 4,084       -       -         -       -     $ 34,100  
  Accounts receivable     -       140,059       13,350       -       -         -       -       153,409  
  Advances receivable     85,000       -       -       -       -         -       -       85,000  
  Inventories     -       418,363       -       -       -         -       -       418,363  
  Other current assets     -       20,162       2,164       -       -         -       -       22,326  
Total Current Assets     98,044       595,556       19,598                                         713,198  
                                                                   
Property, plant and equipment, net     -       96,791       590,076       -       -         -       (55,958 )(4)     630,909  
Computer software, net     27,293       -       -       -       -         -       -       27,293  
Intangibles and goodwill                                     1,079,746 (3)       -       -       1,079,746  
Investment in Prema Life Pty Ltd     -       -       -       964,000 (1)     (964,000 )(3)       - (2)     - 4     -  
Investment in GGLG Properties Pty Ltd     -       -       -       -        -          254,000  (2)     (254,000)   (4)     -   
Total Assets   $ 125,337     $ 692,347     $ 609,674     $ 964,000     $ 115,746       $ 254,000     $ (309,958 )   $ 2,451,146  
                                                                   
LIABILITIES AND STOCKHOLDERS' DEFICIT
                                                                   
Current Liabilities                                                                  
  Accounts payable   $ 52,081     $ 125,926     $ 282,156       -       -         -       -     $ 460,163  
  Accrued expenses     5,832       529,409       14,365       -       -         -       -       549,606  
  Deferred revenue - related party     50,758       -       -       -       -         -       -       50,758  
  Deferred revenue - third party     43,527       -       -       -       -         -       -       43,527  
  Payable to affiliate     98,837       -       -       -       -         -       -       98,837  
  Note payable     40,000       -       -       -       -         -       -       40,000  
  Advance from related party - NH&E     -       215,144       -       -       -         -       -       215,144  
  Advance from director     14,500       -       -       -       -         -       -       14,500  
Total Current Liabilities     305,535       870,479       296,521                                         1,472,535  
                                                                   
Total Liabilities     305,535       870,479       296,521                                         1,472,535  
                                                                   
Commitments and Contingencies                                                                  
                                                                   
Stockholders' Equity (Deficit)                                                                  
  Common stock - $0.001 par value     161,860       783       1       (241 )     783         (63 )     1       162,164  
  Additional paid in capital     2,075,478       836,618       791,031       (963,759 )     836,618         (253,937 )     791,031       3,293,174  
  Stock subscriptions receivable     (1,218,000 )     -       -       -        -         -        -        (1,218,000 )
  Accumulated other comprehensive income
(loss)		     -       7,364       (35,091 )     -        7,364         -        (35,091 )     -  
  Loss (profit) attributable to non-controlling
interest		     -       (62,386 )     3,195       -        -          -        -        (59,191 )
  Accumulated deficit     (1,199,536 )     (960,511 )     (445,983 )     -        (960,511 )       -        (445,983 )     (1,199,536 )
Total Stockholders' Equity (Deficit)     (180,198 )     (178,132 )     313,153                                         978,611  
                                                                   
Total Liabilities and Stockholders' Equity
(Deficit)		   $ 125,337     $ 692,347     $ 609,674     $ 964,000     $ 115,746       $ 254,000     $ (309,958 )   $ 2,451,146  

  

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 F-2 
 

 

Natural Health Farm Holdings, Inc.

Unaudited Pro Forma Condensed Combined Statements of Operations

For The Three Months Ended December 31, 2018

  

  Historical (Unaudited)         
  Natural Health
Farms
Holdings, Inc.		   Prema Life
Pty Ltd		   GGLG
Properties Pty
Ltd		   Pro Forma
Adjustments		   Pro Forma
Combined		 
  Debit (Credit)                 
Revenues - related parties  $6,583   $-   $-    $   $6,583 
Revenues - non-related parties   115,167    323,044    14,647    14,647(5)   438,211 
Total Revenues   121,750    323,044    14,647    444,794      
                          
Cost of goods sold   28,488    223,836    -    -    252,324 
                          
Gross Profit   93,262    99,208    14,647    192,470      
                          
Operating Expenses                         
  Selling, general and administrative   46,313    226,527    4,916    (14,647)(5)   263,109 
  Research and development   -    -    -           
Total Operating Expenses   46,313    226,527    4,916    263,109      
                          
Income (Loss) from Operations   46,949    (127,319)   9,731    (70,639)     
                          
Other Income (Expense)                         
  Interest expense   (807)   -    (1,743)   -    (2,550)
Total Other Income (Expense)   (807)   -    (1,743)   (2,550)     
                          
Income (Loss) before Provision For Income Tax   46,142    (127,319)   7,988    (73,189)     
                          
Provision for Income Tax   -    -    -    -    - 
                          
Net Income (Loss)  $46,142   $(127,319)  $7,988    $   $(73,189)
                          
Non-controlling interest   -    62,386    (3,195)   -    59,191 
                          
Net income (loss) after non-controlling interest  $46,142   $(64,933)  $4,793   $(13,998)     
                          
Net income per common share - basic & diluted  $0.00                     
                          
Weighted average number of common shares
outstanding - basic and diluted		   161,647,674                     

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information 

 

 F-3 
 

 

Natural Health Farm Holdings, Inc.

Unaudited Pro Forma Condensed Combined Statements of Operations

For The Year Ended September 30, 2018

 

  Historical (Unaudited)         
  Natural Health
Farms Holdings,
Inc.		   Prema Life
Pty Ltd		   GGLG
Properties Pty
Ltd		   Pro Forma
Adjustments		   Pro Forma
Combined		 
             Debit (Credit)     
Revenues - related parties  $21,659   $-   $67,442   $67,442(6)  $21,659 
Revenues - non-related parties   32,106    2,083,771    -    -    2,115,877 
Total Revenues   53,765    2,083,771    67,442    2,137,536      
                          
Cost of goods sold   14,669    1,335,042    -    -    1,349,711 
                          
Gross Profit   39,096    748,729    67,442    787,825      
                          
Operating Expenses                         
 Selling, general and administrative   1,165,282    1,143,827    57,248    (67,442)(6)   2,298,915 
 Research and development   -    17,366    -    -    17,366 
Total Operating Expenses   1,165,282    1,161,193    57,248    2,316,281      
                          
Income (Loss) from Operations   (1,126,186)   (412,464)   10,194    (1,528,456)     
                          
Other Income (Expense)                         
  Interest expense   (1,026)   -    (53,581)   -    (54,607)
Total Other Income (Expense)   (1,026)   -    (53,581)   (54,607)     
                          
Loss before Provision For Income Tax   (1,127,212)   (412,464)   (43,387)   (1,583,063)     
                          
Provision for Income Tax   -    -    -    -    - 
                          
Net Loss  $(1,127,212)  $(412,464)  $(43,387)   $   $(1,583,063)
                          
Non-controlling interest   -    202,107    17,355    -    219,462 
                          
Net Loss after non-controlling interest  $(1,127,212)  $(210,357)  $(26,032)   $   $(1,363,601)
                          
Net income per common share - basic & diluted  $(0.01)                    
                          
Weighted average number of common shares
outstanding - basic and diluted		   154,691,466                     

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information 

 

 F-4 
 

 

Natural Health Farm Holdings Inc.

Notes to Unaudited Pro Forma Condensed Combined Financial Information

December 31, 2018

 

Note 1 – Description of the Transaction

 

On December 3, 2018, the Company agreed to purchase 51% of the issued and outstanding capital stock of Prema Life Pty Ltd by issuing 241,000 shares of its common stock valued at $964,000, and 60% of the issued and outstanding capital stock of GGLG Properties PTY Ltd by issuing 63,500 shares of its common stock valued at $254,000, respectively. On December 28, 2018, the parties mutually agreed to extend the closing date of the purchase transaction on January 1, 2019. The Company issued 304,500 shares of its common stock on December 3, 2018 in good faith for consummating the purchase.

 

All of the securities set forth above were issued pursuant to exemptions from registration under Section 4(2) and/or Reg. S of the Securities Act of 1933, as amended, as transactions by an issuer not involving any public offering. No general advertising or solicitation was used. All issued securities were affixed with appropriate legends restricting sales and transfers.

 

 

Note 2 – Basis of Pro Forma Presentation

 

The unaudited pro forma condensed combined balance sheet as of December 31, 2018 combines our historical balance sheet with the historical balance sheets of Prema Life and GGLG and has been prepared as if our acquisition of Prema Life and GGLG had occurred on December 31, 2018. The unaudited pro forma condensed combined statements of operations for the three months ended December 31, 2018 and for the year ended September 30, 2018 combine our historical statements of operations with Prema Life and GGLG’s historical statements of operations and have been prepared as if the acquisition had occurred on October 1, 2017. The historical financial information is adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are (1) directly attributable to the proposed acquisition, (2) factually supportable, and (3) with respect to the condensed combined statements of income, expected to have a continuing impact on the combined results.

 

We have accounted for the acquisition in this unaudited pro forma condensed combined financial information using the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations” (“ASC 805”). In accordance with ASC 805, we use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the Acquisition Date. Goodwill as of the Acquisition Date is measured as the excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired.

 

The pro forma adjustments described below were developed based on assumptions and estimates of NHF’s management, including assumptions relating to the consideration payable and the allocation thereof to the assets acquired and liabilities assumed from Prema Life and GGLG based on preliminary estimates of fair value. The final purchase consideration and the allocation of the purchase consideration may differ from that reflected in the unaudited pro forma condensed combined financial information after final valuation procedures are performed and amounts are finalized following the completion of the acquisition.

 

The unaudited pro forma condensed combined financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of the combined company would have been had the acquisition occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or financial position.

 

The Company expects to incur costs and realize benefits associated with integrating the operations of NHF, Prema Life and GGLG. The unaudited pro forma condensed combined financial information does not reflect the costs of any integration activities or any benefits that may result from operating efficiencies, revenue synergies, asset dispositions or other restructurings that could result from the acquisition. The unaudited pro forma condensed combined statement of operations does not reflect any non-recurring charges directly related to the acquisition that the combined company may incur upon completion of the transaction.

 

 F-5 
 

 

Note 3 – Estimated Preliminary Purchase Price Allocation

 

For the purpose of these Pro Forma Financial Statements, the estimated preliminary purchase price allocation to net assets acquired and liabilities assumed is based on their estimated fair values on the assumed acquisition date of December 31, 2018. Actual amounts on the acquisition date of January 1, 2019 may differ, however the Company does not believe this will result in a materially different allocation:

 

   Fair Value 
Assets Acquired  Prema Life   GGLG 
Cash and cash equivalents  $16,972   $4,084 
Accounts receivable   140,059    13,350 
Inventories   418,363    - 
Other current assets   20,162    2,164 
Goodwill   1,079,746    - 
Property, plant and equipment, net   96,791    530,923 
Total Assets Acquired  $1,772,093   $550,521 
           
Liabilities Assumed          
Accounts payable  $125,926   $282,156 
Accrued expenses   529,409    14,365 
Advances from related parties   215,144    - 
Total Liabilities Assumed  $870,479   $296,521 
           
Non-controlling interest   62,386    (3,195)
           
Purchase Price Allocated  $964,000   $254,000 

 

 

 

We believe the amount of goodwill resulting from the allocation of purchase consideration is primarily attributable to expected synergies from future growth and strategic advantages. In accordance with ASC 805, goodwill will not be amortized but instead will be tested for impairment at least annually and more frequently if certain indicators of impairment are present. In the event that goodwill has become impaired, we will record an expense for the amount impaired during the fiscal quarter in which the determination is made.

 

 F-6 
 

 

Note 4 – Pro Forma Adjustments

 

The following is a description of the unaudited pro forma adjustments reflected in the unaudited pro forma condensed combined financial information:

 

Adjustments to the pro forma condensed combined balance sheet:

 

(1) The pro forma adjustment records the investment in Prema Life by issuance of 241,000 shares of common stock of NHF valued at their fair value on the date of acquisition totaling $964,000.

 

(2) The pro forma adjustment records the investment in GGLG by issuance of 63,500 shares of common stock of NHF valued at their fair value on the date of acquisition totaling $254,000.

 

(3) The pro forma adjustment to total equity includes elimination of pre-acquisition equity balances of Prema Life as used in calculating goodwill.

  

 (4) The pro forma adjustment to total equity includes elimination of pre-acquisition equity balances of GGLG as used in calculating goodwill.

 

   Prema Life   GGLG 
Common Shares  $(783)  $(1)
Additional paid in capital   (836,618)   (791,031)
Accumulated other comprehensive income ( loss)   (7,364)   35,091 
Accumulated deficit   960,511    445,983 
Total pre-acquisition equity balances eliminated  $115,746   $(309,958)

 

Adjustments to the pro forma condensed combined statements of operations for the three months ended December 31, 2018:

 

(5) The pro forma adjustment records elimination of rent of $14,647 received by GGLG from Prema Life for the three months ended December 31, 2018.

 

Adjustments to the pro forma condensed combined statements of operations for the year ended September 30, 2018:

 

(6) The pro forma adjustment records elimination of rent of $14,647 received by GGLG from Prema Life for the year ended September 30, 2018.

 

 

F-7