Form: 8-K/A

Current report filing

October 5, 2011

EXHIBIT 99.3
 
CHINA YOUTH MEDIA, INC.
INTRODUCTION TO PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
 
Pro Forma Financial Information.

The following unaudited pro forma condensed combined financial statements give effect to the merger between China Youth Media, Inc. (“China Youth”) and Midwest Energy Emissions Control Corp (“Midwest”) in accordance with ASC 805-20. The transaction contemplated under the merger agreement is deemed to be a reverse acquisition, where China Youth Media, Inc. (the legal acquirer) is considered the accounting acquiree and Midwest Energy Emissions Corp. (the legal acquiree) is considered the accounting acquirer.  The assets and liabilities of Midwest are recorded at their historical cost with the capital structure of China Youth Media, Inc.  No goodwill will be recorded in the transaction.  China Youth is deemed a continuation of the business of Midwest and the historical financial statements of Midwest will become the historical financial statements of China Youth Media, Inc. The unaudited pro forma information is presented for illustration purposes only in accordance with the assumptions set forth below and in the notes to the pro forma condensed combined financial statements.
 
The unaudited pro forma condensed combined balance sheet as of March 31, 2011 combines the balance sheets of China Youth and Midwest and gives pro forma effect to (i) China Youth’s conversion of convertible notes and accrued salary as if the conversion had occurred March 31, 2011, (ii) the issuance of 20 shares of common stock by Midwest for $50,000 as if the transaction had occurred on March 31, 2011, (iii) the decision to discontinue China Youth’s subsidiaries as if the decision had been made on March 31, 2011, and (iv) the reverse merger between China Youth and Midwest, in which Midwest is deemed to be the acquiring entity for accounting purposes, as if the reverse merger had been completed as of March 31, 2011. The unaudited pro forma condensed combined statements of operations for the year ended December 31, 2010 and the three month period ended March 31, 2011 combines the statement of operations of China Youth Media, Inc. and Midwest and gives pro forma effect to these transactions as if they were completed on December 31, 2010.
 
The unaudited pro forma balance sheet and statements of operations should be read in conjunction with the separate historical financial statements of Midwest, which was filed on Form 8-K on June 27, 2011 and the historical financial statements of the China Youth, as filed with the Securities and Exchange Commission and issued on Form10-K and 10-Q for the year ended December 31, 2010 and for the period ended March 31, 2011.  These pro forma condensed combined financial statements may not be indicative of what would have occurred if the acquisition had actually occurred on the indicated dates and they should not be relied upon as an indication of future results of operations.
 
 
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CHINA YOUTH MEDIA, INC.
PRO FORMA CONDENSED BALANCE SHEETS
MARCH 31, 2011
(UNAUDITED)
 
   
Midwest Energy Emissions Corp.
   
China Youth
 Media, Inc.
   
Pro Forma
Adjustments
   
Pro Forma
Combined
 
ASSETS
                       
                         
CURRENT ASSETS
                       
Cash
  $ 50,779     $ 53,530     $ -     $ 104,309  
Accounts receivable, net
    -       1,181       -       1,181  
Other current assets
    104,167       1,852       -       106,019  
Total current assets
    154,946       56,563       -       211,509  
                                 
Property and Equipment, Net
    1,007,945       35,946       -       1,043,891  
                                 
Other Asset
                               
Intangible assets, net of accumulated amortization
    86,766       2,000       -       88,766  
TOTAL ASSETS
  $ 1,249,657     $ 94,509     $ -     $ 1,344,166  
                                 
LIABILITIES AND STOCKHOLDERS'  EQUITY (DEFICIT)
                               
                                 
CURRENT LIABILITIES
                               
Accounts payable and accrued expenses
  $ 419,439     $ 372,412     $ -     $ 791,851  
Advances payable - related party
    526,870       -       -       526,870  
Note payable - related party
    154,102       140,242       -       294,344  
Total current liabilities
    1,100,411       512,654       -       1,613,065  
                                 
Note payable
    741,073       50,000       -       791,073  
Beneficial conversion feature
    -       (116,071 )     -       (116,071 )
TOTAL LIABILITIES
    1,841,484       446,583       -       2,288,067  
                                 
STOCKHOLDERS' EQUITY (DEFICIT)
                               
Preferred stock
                               
Series A Preferred Stock
    -       -       -       -  
Series B Preferred Stock
            -       10       10  
Common stock
    10,000       334,727       (10,000 )     334,727  
Additional paid-in capital
    337,218       23,746,266       (24,423,077 )     (339,593 )
Accumulated other comprehensive income
    -       (16,525 )     16,525       -  
Accumulated deficit
    (939,045 )     (24,416,542 )     24,416,542       (939,045 )
                                 
Total stockholders' deficit
    (591,827 )     (352,074 )     -       (943,901 )
                                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
  $ 1,249,657     $ 94,509     $ -     $ 1,344,166  
 
(A)  
– Represents the effect of the reverse merger on Stockholders’ Equity (Deficit).
 
 
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CHINA YOUTH MEDIA, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
MARCH 31, 2011
 (UNAUDITED)
 
   
Midwest Energy
   
China Youth
    Pro Forma     Pro Forma  
   
Emissions Corp.
   
 Media, Inc.
   
Adjustments
   
Combined
 
REVENUE
                       
Sales
  $ -     $ -     $ -     $ -  
                                 
Total revenue
    -       -       -       -  
                                 
OPERATING EXPENSES
                               
License Maintenance Fees
    325,000       -       -       325,000  
Research and development
    102,418       -       -       102,418  
Selling, general and administrative expenses
    82,726       -       -       82,726  
Professional Fees
    57,522       -       -       57,522  
                                 
Total operating expenses
    567,666       -       -       567,666  
                                 
Operating loss
    (567,666 )     -       -       (567,666 )
                                 
Other Income (expense)
                               
Interest income (expense)
    (18,527 )     -       -       (18,527 )
Foreign Exchage
    (537 )     -       -       (537 )
                                 
Total other income (expense)
    (19,064 )     -       -       (19,064 )
                                 
                                 
NET LOSS FROM CONTINUING OPERATIONS
    (586,730 )     -       -       (586,730 )
                                 
NET LOSS FROM DISCONTINUED OPERATIONS
    -       (140,251 )     -       (140,251 )
                                 
NET LOSS
    (586,730 )     (140,251 )     -       (726,981 )
                                 
 Comprehensive Loss
                               
Foreign currency translation adjustment
    -       (16,525 )     -       (16,525 )
Net loss
    (586,730 )     (140,251 )     -       (726,981 )
COMPREHENSIVE LOSS
  $ (586,730 )   $ (156,776 )   $ -     $ (743,506 )
                                 
                                 
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
                               
                                 
CONTINUING OPERATIONS
                            -  
DISCONTINUED OPERATIONS
                            -  
                            $ -  
                                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
                            334,727,476  
 
 
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CHINA YOUTH MEDIA, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
DECEMBER 31, 2010
 (UNAUDITED)
 
   
Midwest Energy
   
China Youth
    Pro Forma     Pro Forma  
   
Emissions Corp.
   
 Media, Inc.
   
Adjustments
   
Combined
 
REVENUE
                       
Sales
  $ 7,000     $ -     $ -     $ 7,000  
                                 
Total revenue
    7,000       -       -       7,000  
                                 
OPERATING EXPENSES
                               
License Maintenance Fees
    100,000       -       -       100,000  
Research and development
    125,834       -       -       125,834  
General and administrative expenses
    94,174       -       -       94,174  
Professional Fees
    149,655       -       -       149,655  
Amortization of license fees
    5,882       -       -       5,882  
                                 
Total operating expenses
    475,545       -       -       475,545  
                                 
Operating loss
    (468,545 )     -       -       (468,545 )
                                 
Other Income (expense)
                               
Interest income (expense)
    -       -       -       -  
Foreign Exchage
    (3,020 )     -       -       (3,020 )
                                 
Total other income (expense)
    (3,020 )     -       -       (3,020 )
                                 
                                 
NET LOSS FROM CONTINUING OPERATIONS
    (471,565 )     -       -       (471,565 )
                                 
NET LOSS FROM DISCONTINUED OPERATIONS
    -       (4,117,192 )     -       (4,117,192 )
                                 
NET LOSS
    (471,565 )     (4,117,192 )     -       (4,588,757 )
                                 
 Comprehensive Loss
                               
Foreign currency translation adjustment
    -       (705 )     -       (705 )
Net loss
    (471,565 )     (4,117,192 )     -       (4,588,757 )
COMPREHENSIVE LOSS
  $ (471,565 )   $ (4,117,897 )   $ -     $ (4,589,462 )
                                 
                                 
NET LOSS PER COMMON SHARE - BASIC AND DILUTED:
                               
                                 
CONTINUING OPERATIONS
                            (0.00 )
DISCONTINUED OPERATIONS
                            (0.03 )
                            $ (0.03 )
                                 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
                            159,365,971  

 
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