UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

On January 31, 2017 (the “Closing Date”), we entered into a share exchange agreement (the “Exchange Agreement”) by and among us, The Pride Group (QLD) Pty Ltd., an Australian corporation (“Pride”), Turquino Equity LLC (“Turquino”) and Xxxxxxx Xxxx Xxxxxxx and Xxxxx Xxxxxx Xxxxxxx as Trustees of the Xxxxxxx Family Trust (the “Xxxxxxx Trust” and together with Turquino, the “Pride Shareholders”). Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx, our Chief Executive Officer and Chief Financial Officer, respectively, are each a managing partner of Xxxxxxxx.

Pursuant to the exchange agreement, we acquired all of the issued and outstanding capital stock of Pride from the Pride Shareholders in exchange for an aggregate of 3,800,000 shares of our common stock (the “Acquisition Shares”).

The unaudited pro forma combined balance sheet as of December 31, 2016 giving effect to the contribution transactions as if they had occurred on the balance sheet date, and statements of operations for the year ended December 31, 2016 include the historical statements of operations of the combined companies, giving effect to the contribution transactions as if they had occurred at the beginning of the period. This information is only a summary, and you should read it in conjunction with the company’s historical financial statements and related notes and management’s discussion and analysis of financial condition and results of operations contained in H/Cell’s annual reports, quarterly reports and other information on file with the SEC. As a result, the combination of H/Cell and Pride pursuant to the exchange agreement is considered a business combination of companies under common control and will be accounted for in a manner similar to a pooling-of-interests.

We have prepared the unaudited pro forma combined financial statements based on available information, using assumptions that we believe are reasonable. These unaudited pro forma combined financial statements are being provided for informational purposes only. They do not purport to represent our actual financial position or results of operations had the exchange agreement occurred on the dates specified, nor do they project our results of operations or financial position for any future period or date.

The unaudited pro forma condensed combined statements of operations do not reflect any adjustments for non-recurring items or anticipated synergies resulting from the combination. Pro forma adjustments are based on certain assumptions and other information that are subject to change as additional information becomes available. Accordingly, the adjustments included in our financial statements published after the completion of the combination may vary from the adjustments included in these unaudited pro forma condensed combined financial statements below.

H/CELL ENERGY CORPORATION

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF DECEMBER 31, 2016

		H/Cell				Pride				Pro Forma Adjustment				Pro Forma Combined
		December 31, 2016
ASSETS
Current Assets
Cash and Cash Equivalents		$	292,887			$	244,980			$	-			$	537,867
Accounts and retainage receivable, net			-				650,886				-				650,886
Prepaid Expenses			13,329				839				-				14,168
Costs in Excess of Billings			247				91,657				-				91,904
Total Current Assets			306,463				988,362				-				1,294,825
Property and equipment, net of accumulated depreciation			-				99,816				-				99,816
Security deposits, and other non-current assets			2,400				6,097				-				8,497
TOTAL ASSETS		$	308,863			$	1,094,275			$	-			$	1,403,138
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts Payable and Accrued Expenses		$	6,000			$	707,237			$	-			$	713,237
Billings in Excess of Costs			7,847				75,691				-				83,538
Sales Tax Payable			-				114,086				-				114,086
Due to Stockholders			-				-				-				-
Total Current Liabilities			13,847				897,014				-				910,861
Stockholders’ Equity
Common Stock			313				-				380	(a)			693
Preferred Stock			-				-				-				-
Paid-in-Capital			778,938				504,484				(380	)(a)			1,283,042
Retained Earnings			(484,235	)			(307,223	)			-				(791,458	)
Total Stockholders’ Equity			295,016				197,261				-				492,277
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		$	308,863			$	1,094,275			$	-			$	1,403,138

(a) To reflect 3,800,000 common shares issued as consideration in the share exchange agreement.

H/CELL ENERGY CORPORATION

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2016

		H/Cell				Pride (AUD to USD)				Pro Forma Adjustment				Pro Forma Combined
		December 31, 2016
Revenue
Contracts		$	8,553			$	5,060,904			$	-			$	5,069,457
Related Party			12,374				-				-				12,374
Total Revenue			20,927				5,060,904				-				5,081,831
Cost of Goods Sold
Contracts			9,882				3,334,976				-				3,344,858
Related Party			10,627				-				-				10,627
Total Cost of Goods Sold			20,509				3,334,976				-				3,355,485
Gross Profit		$	418			$	1,725,928			$	-			$	1,726,346
Operating Expenses
Research and Development			2,000				-				-				2,000
General and Administrative Expenses			476,833				1,901,430				-				2,378,263
Total Operating Expenses			478,833				1,901,430				-				2,380,263
Loss before other income and expense		$	(478,415	)		$	(175,502	)		$	-			$	(653,917	)
Income Tax Provision (Benefit)			-				-				-				-
Other Income
Gain on disposition of equipment			-				(25,350	)			-				(25,350	)
Other income			-				1,391				-				1,391
Total Other Income			-				(23,959	)			-				(23,959	)
Net Income (Loss)		$	(478,415	)		$	(199,461	)		$	-			$	(677,876	)
Other Comprehensive Loss
Foreign currency translation difference			-				(25,695	)			-			$	(25,695	)
Total Comprehensive Gain (Loss)			-				(225,156	)			-				(225,156	)
Stockholders Equity, Beginning of Year			453,581				249,193				-				702,774
Stockholders Equity, End of Year		$	295,016			$	197,261			$	-			$	492,277