UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
[X]
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly
period ended:
March 31,
2009
[ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the
transition period from ____________ to _____________
Commission File
Number: 333-83375
HONG
KONG WINALITE GROUP, INC.
(Exact Name of
Registrant as Specified in Its Charter)
Nevada
|
|
87-0575571
|
(State or
other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
1204-06,
12/F
WAI
FUNG PLAZA, 664 NATHAN ROAD,
MONGKOK,
KOWLOON, HONG KONG
(Address of
principal executive offices, Zip Code)
(852)
2388-3928
(Registrant’s
telephone number, including area code)
606, 6/F, Ginza Plaza, 2A Sai Yeung
Choi Street South, Mongkok, Kowloon, Hong Kong
________________________________________________________________________________
(Former name,
former address and former fiscal year, if changed since last
report)
Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes
x
No
¨
Indicate by check
mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes
¨
No
¨
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer
¨
|
Accelerated
filer
¨
|
Non-accelerated
filer
¨
|
Smaller
reporting company
x
|
(Do not
check if a smaller reporting company)
|
|
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes
o
No
x
The number of
shares outstanding of each of the issuer’s classes of common stock, as of May
15, 2009 is as follows
:
Class of
Securities
|
Shares
Outstanding
|
Common Stock, $0.0
01 par
value
|
49,740,933
|
TABLE OF
CONTENTS
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
|
ii
|
|
|
PART
I. FINANCIAL INFORMATION
|
1
|
|
|
ITEM
1.
FINANCIAL
STATEMENTS.
|
1
|
|
|
Condensed
Consolidated Statements of Income and Other Comprehensive
Income
|
3
|
|
|
Condensed
Consolidated Balance Sheets
|
4
|
|
|
Condensed
Consolidated Statements of Cash Flows
|
5
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
6
|
|
|
ITEM
2.
MANAGEMENT’S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
14
|
|
|
ITEM
4.
CONTROLS AND
PROCEDURES.
|
19
|
|
|
PART
II. OTHER INFORMATION
|
20
|
|
|
ITEM
6.
EXHIBITS.
|
20
|
|
|
SIGNATURES
|
21
|
Cautionary
Note Regarding Forward Looking Statements
This Quarterly
Report on Form 10-Q, including Part I, Item 2 – “Management’s Discussion and
Analysis of Financial Condition and Results of Operations,” contains
forward-looking statements that are based on the beliefs of our management, and
involve risks and uncertainties, as well as assumptions, that, if they ever
materialize or prove incorrect, could cause actual results to differ materially
from those expressed or implied by such forward-looking statements. The words
“believe,” “expect,” “anticipate,” “project,” “targets,” “optimistic,” “intend,”
“aim,” “will” or similar expressions are intended to identify forward-looking
statements. All statements, other than statements of historical fact, are
statements that could be deemed forward-looking statements, including statements
regarding our expected working capital levels and needs; any projections of
sales, earnings, revenue, margins or other financial items; any statements of
the plans, strategies and objectives of management for future operations; any
statements regarding future economic conditions or performance; any statements
of belief or intention; and any statements of assumptions underlying any of the
foregoing. Forward looking statements may involve risks and uncertainties, known
or unknown to us, that could cause results to differ materially from
management’s expectations as projected in such forward-looking
statements. These risks and uncertainties are discussed in “Item 1A.
Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2008 and subsequent SEC filings. All forward-looking
statements included in this report are based on information available to us on
the date of this report. We assume no obligation and do not intend to update
these forward-looking statements, except as required by law.
PART
I.
FINANCIAL
INFORMATION
ITEM
1. FINANCIAL STATEMENTS.
Hong
Kong Winalite Group, Inc.
Condensed
Consolidated Financial Statements
For
the three months ended
March
31, 2009 and 2008
(Stated
in US Dollars)
Hong Kong Winalite
Group, Inc.
Condensed Consolidated
Financial Statements
Three months ended
March 31, 2009 and 2008
Index to Condensed
Consolidated Financial Statements
|
Pages
|
Condensed
Consolidated Statements of Income and Other Comprehensive
Income
|
3
|
Condensed
Consolidated Balance Sheets
|
4
|
Condensed
Consolidated Statements of Cash Flows
|
5
|
Notes to
Condensed Consolidated Financial Statements
|
6-13
|
Hong
Kong Winalite Group, Inc.
Condensed
Consolidated
Statements of Income and Other Comprehensive Income
Three
months ended March 31, 2009 and 2008
(Unaudited)
(Stated
in US Dollars)
|
|
Three
months ended
|
|
|
|
March
31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
2,601,184
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
(1,308,161
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
1,293,023
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
(131,920
|
)
|
|
|
(56,243
|
)
|
|
|
|
|
|
|
|
|
|
Income/(loss)
before income taxes
|
|
|
1,161,103
|
|
|
|
(56,243
|
)
|
|
|
|
|
|
|
|
|
|
Income
taxes - Note 5
|
|
|
(170,518
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
|
990,585
|
|
|
$
|
(56,243
|
)
|
|
|
|
|
|
|
|
|
|
Other
comprehensive expense
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments
|
|
|
(409
|
)
|
|
|
(1,790
|
)
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss)
|
|
$
|
990,176
|
|
|
$
|
(58,033
|
)
|
|
|
|
|
|
|
|
|
|
Earnings/(loss)
per share - basic and diluted
|
|
$
|
0.02
|
|
|
$
|
(0.001
|
)
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding
|
|
|
|
|
|
|
|
|
-
basic and diluted
|
|
|
49,740,933
|
|
|
|
49,740,933
|
|
See
accompanying Notes to Condensed Consolidated Financial Statements
Hong
Kong Winalite Group, Inc.
Condensed
Consolidated Balance Sheets
As
of March 31, 2009 and December 31, 2008
(Stated
in US Dollars)
|
|
March
31,
|
|
|
December
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Trade receivables (net of
allowance for doubtful account of
$Nil in 2009 and
2008)
|
|
$
|
3,266,005
|
|
|
$
|
2,622,583
|
|
|
Other receivables
|
|
|
49,864
|
|
|
|
88,607
|
|
|
Cash and cash
equivalents
|
|
|
363,035
|
|
|
|
307,558
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current assets
|
|
|
3,678,904
|
|
|
|
3,018,748
|
|
|
Property,
plant and equipment, net - Note 6
|
|
|
177,147
|
|
|
|
130,591
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
3,856,051
|
|
|
$
|
3,149,339
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Trade
payables
|
|
$
|
217,990
|
|
|
$
|
1,127,986
|
|
|
Sales
deposits received
|
|
|
1,024,723
|
|
|
|
-
|
|
|
Other
payables
|
|
|
227,273
|
|
|
|
207,812
|
|
|
Accrued
expenses
|
|
|
82,076
|
|
|
|
21,286
|
|
|
Amount due
to a director - Note 8
|
|
|
105,830
|
|
|
|
755,466
|
|
|
Tax
payable
|
|
|
314,530
|
|
|
|
143,336
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
|
1,972,422
|
|
|
|
2,255,886
|
|
|
Deferred
taxes
|
|
|
15,514
|
|
|
|
15,514
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
1,987,936
|
|
|
|
2,271,400
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENT
AND CONTINGENCIES - Note 9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY
|
|
|
|
|
|
|
|
|
|
Preferred
stock: par value $0.001 per share;
|
|
|
|
|
|
|
|
|
|
authorized
1,000,000 shares; none issued and outstanding
|
|
|
|
|
|
|
|
|
|
Common
stock: par value $0.001 per share - Note 10
|
|
|
|
|
|
|
|
|
|
authorized
500,000,000 shares; issued and
outstanding 49,740,933
shares
|
|
|
49,741
|
|
|
|
49,741
|
|
|
Additional
paid in capital – Note 10
|
|
|
19,079
|
|
|
|
19,079
|
|
|
Accumulated
other comprehensive income
|
|
|
4,845
|
|
|
|
5,254
|
|
|
Retained
earnings
|
|
|
1,794,450
|
|
|
|
803,865
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
STOCKHOLDERS’ EQUITY
|
|
|
1,868,115
|
|
|
|
877,939
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
3,856,051
|
|
|
$
|
3,149,339
|
|
|
See
accompanying Notes to Condensed Consolidated Financial Statements
Hong
Kong Winalite Group, Inc.
Condensed
Consolidated Statements of Cash Flows
Three
months ended March 31, 2009 and 2008
(Unaudited)
(Stated
in US Dollars)
|
|
Three
months ended
March
31,
|
|
|
|
2009
|
|
|
2008
|
|
Cash
flows from operating activities
|
|
|
|
|
|
|
Net
income/(loss)
|
|
$
|
990,585
|
|
|
$
|
(56,243
|
)
|
Adjustment
to reconcile net income/(loss) to net cash
|
|
|
|
|
|
|
|
|
provided
by/(used in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,204
|
|
|
|
-
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Trade
receivables
|
|
|
(643,272
|
)
|
|
|
-
|
|
Other
receivables
|
|
|
38,733
|
|
|
|
(2,162
|
)
|
Trade
payables
|
|
|
(909,765
|
)
|
|
|
-
|
|
Sales
deposits received
|
|
|
1,024,485
|
|
|
|
-
|
|
Other
payables
|
|
|
19,457
|
|
|
|
(453,346
|
)
|
Accrued
expenses
|
|
|
60,777
|
|
|
|
|
|
Tax
payable
|
|
|
170,518
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash
flows provided by/(used in) operating activities
|
|
|
757,722
|
|
|
|
(511,751
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows
from investing activities
|
|
|
|
|
|
|
|
|
Payments to
acquire property, plant and equipment
|
|
|
(52,758
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash
flows used in investing activities
|
|
|
(52,758
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Cash flows
from financing activities
|
|
|
|
|
|
|
|
|
(Repayment
to)/advance from a director
|
|
|
(649,485
|
)
|
|
|
545,917
|
|
|
|
|
|
|
|
|
|
|
Net cash
flows (used in)/provided by financing activities
|
|
|
(649,485
|
)
|
|
|
545,917
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
|
|
(2
|
)
|
|
|
233
|
|
|
|
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
|
|
55,477
|
|
|
|
34,399
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents - beginning of period
|
|
|
307,558
|
|
|
|
61,500
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents - end of period
|
|
$
|
363,035
|
|
|
$
|
95,899
|
|
|
|
|
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Income
taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
See
accompanying Notes to Condensed Consolidated Financial Statements
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
(Stated in US
Dollars)
1. Corporate
information
Hong Kong
Winalite Group, Inc. (the “Company”) was incorporated in the State of Nevada on
January 22, 1998. The Company’s shares are quoted for trading on the
Over-The-Counter Bulletin Board in the United States of America.
On October 30,
2007, the subsidiary of the Company, The Hong Kong Winalite Group Limited
(“Winalite”), a limited company incorporated in Hong Kong, entered into a
financial advisory agreement (“FAA”), with HFG International Limited (“HFG”), a
Hong Kong corporation. Under the FAA, HFG agreed to provide Winalite
with financial advisory and consulting services in implementing a restructuring
plan, facilitating Winalite’s going public transaction, and advising Winalite on
matters related to Winalite’s post-going-public-transaction
period. In consideration for these services, HFG was paid a fee of
$80,000 after completion of a due diligence investigation of Winalite and a fee
of $400,000 following the closing of the going public transaction during 2008.
Winalite also granted HFG certain registration rights. Timothy P.
Halter, who immediately prior to consummation of the transactions contemplated
by the Share Exchange Agreement beneficially owned approximately 87.5% of the
Company issued and outstanding capital stock, is the principal shareholder and
Chief Financial Officer of HFG.
Pursuant to a
Share Exchange Agreement dated December 28, 2007, the Company acquired a 100%
ownership interest in Winalite on September 10, 2007, in consideration for the
issuance of the Company’s 48,000,000 common shares (as adjusted for a
7.352380958-for-1 reverse stock split on January 7, 2008 (the “Reverse Stock
Split”)) to the former shareholders of Winalite (the “Winalite Former
Shareholders”).
The aforesaid
transaction was completed on December 28, 2007 and thereafter Winalite became a
wholly owned subsidiary of the Company and the Winalite Former Shareholders
became the majority shareholders of the Company. This transaction
constituted a reverse takeover transaction (“RTO”).
On May 1, 2008,
the Company entered in a master purchase and supply agreement ("MPSA”) with
Shenzhen Yuelang Techno Industrial Company Limited ("Yuelang"), an independent
third party. Pursuant to the MPSA, the Company will purchase certain products
from Yuelang at prices set out in the MPSA. The MPSA has an indefinite term but
may be terminated on six months’ notice by either party or upon specified
events, such as the insolvency of either party.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
1. Corporate
information (Cont'd)
On May 1, 2008,
the Company entered into the following agreements with independent distributors
("Distributors"), namely the exclusive international distribution agreements
("Distribution Agreements"), consulting and management services agreements
("Services Agreements") and license agreements ("License
Agreements"). Pursuant to the Distribution Agreements, the
Distributors will purchase products from the Company and resell those products
through direct marketing and/or other channels in their assigned and exclusive
territories. The Distribution Agreements have an initial term of five years,
which will be automatically renewed for additional one year period unless the
Company indicates in writing its desire to the contrary more than thirty days
before the end of the term. Pursuant to the Services Agreements, the Company has
agreed to provide certain consulting and management services to the Distributors
at a pre-determined hourly rate agreed by both parties. The Services
Agreements may be terminated at any time by the Company, and upon sixty days’
advance notice by the Distributors, by written notice delivered to the
non-terminating party. Pursuant to the License Agreements, the
Company has agreed to license to each Distributor certain intellectual property
solely for use in their assigned and exclusive territories in connection with
the marketing, sale and distribution of the Company’s products. Each Distributor
has agreed to pay the Company a license fee in an amount equal to 10% of the
monetary amount of Distributor’s orders for the products placed with the
Company. The License Agreements will expire when the Distribution Agreements are
terminated.
2. Description
of business
The Company is a
holding company that operates through its direct, wholly-owned Hong Kong
subsidiary, Winalite. The Company had been in development stage until May 2008.
Following the RTO as detailed in Note 1, the Company through its subsidiary
commenced its business in marketing and selling personal health and hygiene
products in May 2008.
3.
Basis of
presentation
The accompanying unaudited condensed
consolidated financial statements of the Company and its subsidiaries have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission (the “
SEC”
) including the inst
ructions to Form 10-Q and Regulation
S-X. Certain information and note disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles in the United States of America ("US GAAP") have been condensed
or omitt
e
d from these statements pursuant to such
rules and regulation and, accordingly, they do not include all the information
and notes necessary for comprehensive consolidated financial statements and
should be read in conjunction with our audited consolidated
financial statements for the year ended
December 31, 2008, included in our Annual Report on Form 10-K for the year ended
December 31, 2008.
In the opinion of the management of the
Company, all adjustments, which are of a normal recurring nature,
necessar
y for a fair
statement of the results for the three-month periods have been
made. Results for the interim period presented are not necessarily
indicative of the results that might be expected for the entire fiscal
year.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
4. Summary
of significant accounting policies
Principles of
consolidation
The consolidated
financial statements include the accounts of the Company and its subsidiary,
Winalite. All significant inter-company accounts and transactions
have been eliminated in consolidation.
Revenue
recognition
Revenue from
sales of the products and license fees are recognized when the significant risks
and rewards of ownership of the product have been transferred to the
distributors at the time when the products are delivered to its customers, the
sales price is fixed or determinable and collection is reasonably
assured.
Allowance of doubtful
accounts
The Company
establishes an allowance for doubtful accounts based on management’s assessment
of the collectibility of trade receivables. A considerable amount of
judgment is required in assessing the amount of the allowance.
During the
reporting period, management establishes the general provisioning policy to make
allowance equivalent to 100% of the gross amount of trade receivables due over 1
year. Additional specific provision is made against trade receivables
aged less than 1 year to the extent that they are considered to be doubtful. Bad
debts are written off when identified.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
4. Summary
of significant accounting policies (Cont’d)
Concentrations
on credit risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and cash equivalents and trade
receivables. As of March 31, 2009, substantially all of the Company’s
cash and cash equivalents were held by major financial institutions in Hong
Kong, which management believes are of high credit quality. With
respect to trade receivables, the Company does not require collateral for trade
receivables.
During the
reporting periods, customers who represented 10% or more of the Company’s
consolidated sales are:
|
|
|
Three
months ended
|
|
|
|
|
March
31,
|
|
|
|
|
(Unaudited)
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Winalite
Japan Co. Ltd*
|
|
$
|
457,852
|
|
|
$
|
-
|
|
|
Winalite
Global Sdn Bhd*
|
|
|
650,195
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,108,047
|
|
|
$
|
-
|
|
* All these
customers are independent third party distributors.
Recently
issued accounting pronouncements
In April 2009,
the Financial Accounting Standards and Board (“ FASB”) issued three FASB Staff
Positions (“FSPs”) to provide additional application guidance and enhance
disclosures regarding fair value measurements and impairments of securities. FSP
FAS No.157-4, “Determining Fair Value When the Volume and Level of Activity for
the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly,” provides guidelines for making fair value measurements
more consistent with the principles presented in SFAS No.157. FSP FAS No.107-1
and APB No.28-1, “Interim Disclosures about Fair Value of Financial
Instruments,” enhances consistency in financial reporting by increasing the
frequency of fair value disclosures. FSP FAS No.115-2 and FAS No.124-2,
“Recognition and Presentation of Other-Than-Temporary Impairments,” provides
additional guidance designed to create greater clarity and consistency in
accounting for and presenting impairment losses on securities. These three FSPs
are effective for interim and annual periods ending after June 15, 2009, with
early adoption permitted for periods ending after March 15, 2009. We adopted the
provisions of these FSPs for the period ended March 31, 2009. The adoption of
these FSPs had no material effect on the Company's financial
statements.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
4. Summary
of significant accounting policies (Cont’d)
Recently
issued accounting pronouncements (Cont
’
d)
In May 2008, the
FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting
Principles”, which is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” However, transition provisions have been provided in the
unusual circumstance that the application of the provisions of this Statement
results in a change in practice. The adoption of this statement had
no material effect on the Company's financial statements.
In March 2008,
the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and
Hedging Activities - an amendment to FASB Statement No. 133". SFAS No. 161 is
intended to improve financial standards for derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity's financial position, financial
performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under FASB
Statement No.133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption
encouraged. The adoption of this statement had no material effect on
the Company's financial statements.
In December 2007,
the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial
Statements-an amendment of ARB No. 51”. SFAS No.160 establishes
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. The guidance
will become effective for the fiscal year beginning after December 15,
2008. The adoption of this statement had no material effect on the
Company's financial statements.
In December 2007,
the FASB issued SFAS No. 141 (Revised) “Business Combinations”. SFAS No. 141
(Revised) establishes principles and requirements for how the acquirer of a
business recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree. The Statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. The
guidance will become effective for the fiscal year beginning after December 15,
2008. The adoption of this statement had no material effect on the Company's
financial statements.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
United
States
The Company is
subject to the United States of America tax law. No provision for the
US federal income tax has been made as the Company had no taxable income for the
reporting period. The statutory tax rate is 35%.
Hong
Kong
The Company’s
subsidiary operating in Hong Kong is subject to profit tax rate of 16.5% on the
estimated assessable profits.
In July 2006, the
FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“FIN 48”). This Interpretation requires recognition and measurement
of uncertain income tax positions using a “more-likely-than-not”
approach. The Company adopted FIN 48 on January 1,
2007. Management evaluated the Company’s tax position and considered
that additional provision for uncertainty in income taxes is not necessary as of
March 31, 2009.
6. Property,
plant and equipment
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
Costs:
|
|
|
|
|
|
|
|
Office
equipment
|
|
$
|
2,012
|
|
|
$
|
-
|
|
|
Leasehold
improvements
|
|
|
50,748
|
|
|
|
-
|
|
|
Motor
vehicles
|
|
|
130,591
|
|
|
|
130,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
183,351
|
|
|
|
130,591
|
|
|
Accumulated
depreciation
|
|
|
(6,204
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
177,147
|
|
|
$
|
130,591
|
|
7. Earnings/(loss)
per share
During the
reporting period, the Company did not issue any dilutive instruments.
Accordingly, the reported basic and diluted earnings/(loss) per share are the
same.
8. Amount
due to a director
The amount is
interest-free, unsecured and repayable on demand.
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
9. Commitment
and contingencies
As of March 31,
2009, the Company had no capital commitments.
(b)
Operating lease
arrangement
As of March 31,
2009, the Company had a non-cancelable operating lease for its
office. The lease will expire in February 2011 and the expected
payments are as follows:
|
Within one
year
|
|
|
$76,778
|
|
|
Two to five
years
|
|
|
115,059
|
|
|
|
|
|
|
|
|
|
|
|
$191,837
|
|
The rental
expense relating to the operating lease was $11,847 and nil for the three months
ended March 31, 2009 and 2008, respectively.
10. Common
stock and additional paid-in capital
|
|
|
Common
stock
|
|
|
|
|
|
|
|
Number
of
|
|
|
|
|
|
|
|
|
|
|
shares
as
|
|
|
|
|
|
|
|
|
|
|
adjusted
for
|
|
|
|
|
|
Additional
|
|
|
|
|
Reverse
|
|
|
|
|
|
paid-in
|
|
|
|
|
Stock
Split
|
|
|
Amount
|
|
|
capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of
shares for RTO
|
|
|
48,000,000
|
|
|
$
|
48,000
|
|
|
$
|
(48,000
|
)
|
|
Issuance of
shares of Winalite
|
|
|
-
|
|
|
|
-
|
|
|
|
61,645
|
|
|
Recapitalization
|
|
|
1,740,933
|
|
|
|
1,741
|
|
|
|
5,434
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2008 and
March
31, 2009
|
|
|
49,740,933
|
|
|
$
|
49,741
|
|
|
$
|
19,079
|
|
|
(a)
|
On December
28, 2007, the Company issued 48,000,000 shares as adjusted for the Reverse
Stock Split of common stock, par value $0.001 per share, to the Winalite
Former Shareholders in exchange for 100% of the outstanding capital stock
of Winalite.
|
|
|
|
|
(b)
|
The
Company’s issued and outstanding number of shares of common stock
immediately prior to the RTO is 1,740,933 shares as adjusted for the
Reverse Stock Split, and are accounted for at $7,175 of net book value at
the time of the
RTO.
|
Hong
Kong Winalite Group, Inc.
Notes
to Condensed Consolidated Financial Statements
10. Common
stock and additional paid-in capital (Cont'd)
|
(c)
|
On January
7, 2008, the Company implemented a 7.352380958-for-1 Reverse Stock
Split. Immediately following the Reverse Stock Split, the
Company has 49,740,933 shares of common stock issued and
outstanding. The effect of Reverse Stock Split has been
retroactively reflected in these financial statements. All
references to weighted average number of shares outstanding and per share
amounts included in the accompanying financial statements and notes
reflect the Reverse Stock Split and its retroactive
effects.
|
11. Segment
information
The Company
operates in a single segment, being marketing and selling personal health and
hygiene products.
All of the
Company’s long-lived assets are located in Hong Kong. Geographic
information about the revenues classified based on locations of the customers,
is set out as follows:
|
|
|
Three
months ended
|
|
|
|
|
March
31
|
|
|
|
|
(Unaudited)
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
USA
|
|
$
|
223,673
|
|
|
$
|
-
|
|
|
Japan
|
|
|
503,637
|
|
|
|
-
|
|
|
Malaysia
|
|
|
715,215
|
|
|
|
-
|
|
|
Korea
|
|
|
207,019
|
|
|
|
-
|
|
|
Philippines
|
|
|
154,046
|
|
|
|
|
|
|
Lithuania
|
|
|
172,909
|
|
|
|
-
|
|
|
Germany
|
|
|
157,033
|
|
|
|
-
|
|
|
Peru
|
|
|
157,190
|
|
|
|
-
|
|
|
Australia
|
|
|
106,959
|
|
|
|
|
|
|
Others
|
|
|
203,503
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,601,184
|
|
|
$
|
-
|
|
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Use
of Certain Defined Terms
Except as
otherwise indicated by the context, references to “we,” “us,” “our,” or “the
Company” are references to the combined business of Hong Kong Winalite Group,
Inc., a Nevada corporation, and its wholly-owned Hong Kong operating subsidiary,
The Hong Kong Winalite Group Limited, or Winalite. Unless the context otherwise
requires, all references to: (i) “PRC” and “China” are to the People’s Republic
of China; (ii) “$” are to United States dollars; (iii) “HK Dollars” are to Hong
Kong dollars, the legal currency of Hong Kong; (iv) “Exchange Act” are to the
Securities Exchange Act of 1934, as amended; and (v) “SEC” are to the U.S.
Securities and Exchange Commission.
Overview
We are a holding
company that only operates through our direct, wholly-owned Hong Kong
subsidiary, The Hong Kong Winalite Group Limited, or Winalite. We started our
business in marketing and selling personal health and hygiene products in early
May 2008. We procure all of the goods that we sell from an independent
manufacturer in the mainland China and sell them to consumers internationally
through our contracted direct-selling distributors and wholesale and retail
establishments. We generate our revenues in three principal ways:
from the resale at a profit of products manufactured to our specifications, from
the delivery of consulting, management, technical, marketing, financial and/or
other services to our distributors, and from the license of the Winalite mark
and brand to the manufacturer and distributors of our products.
Our products are
manufactured by an independent third party, Shenzhen Yuelang Techno Industrial
Company Limited, or the Manufacturer, under a master purchase and supply
agreement, or MPSA, entered into on May 1, 2008. Pursuant to the
MPSA, we purchase our products from the Manufacturer on an open account basis
pursuant to separate purchase orders and resell those products to certain
distributors as more particularly described below. The prices we pay
for the products are set by the MPSA and may only be changed by agreement of the
parties. The Manufacturer is responsible for marking and labeling the
products and their packaging, and for quality control according to the
specifications set forth in the MPSA and subject to our
inspection. With the exception of the PRC market, the Manufacturer is
required to supply exclusively to us and is not permitted to manufacture or sell
the same or functionally equivalent products to any other party.
We currently sell
the products in Malaysia, Taiwan, Indonesia, Singapore, Thailand, Vietnam, the
Philippines, the USA, Peru, Japan, Korea and Georgia pursuant to exclusive
international distribution agreements, or Distribution Agreements that we
entered into with twelve independent third party distributors, or the
Distributors on May 1, 2008 (seven agreements), August 25, 2008 (one agreement),
December 1, 2008 (two agreements), January 10, 2009 (one agreement) and February
1, 2009 (one agreement). The Distributors purchase from us the
products we buy from the Manufacturer, and resell those products through direct
marketing and/or other channels in their assigned, exclusive
territories. The Distributors are responsible for promoting sales of
our products in their territories, maintaining adequate sales forces, and other
customary functions. As we expand, we anticipate appointing
additional distributors for new territories.
In addition to
selling our products to our Distributors, we provide certain consulting,
management, technical, marketing, financial and/or other services to our
Distributors in exchange for certain fees pursuant to separate consulting and
management services agreements, or Service Agreements, that we entered into with
our Distributors. Pursuant to separate license agreements, or License
Agreements, entered into with our Distributors, we also license the Winalite
mark and brand and certain other intellectual property to our Distributors,
solely for use in their assigned, exclusive territories, and solely for the
purpose of carrying out their activities under the Distribution Agreements, for
a license fee in an amount equal to 10% of the monetary amount of the
Distributor’s orders for products placed with us.
To increase our
product variety and increase profits, we entered into a Supply Agreement with
MYWATER, INC. on September 12, 2008 and ordered a new product called the Energy
Stone. The functions of the Energy Stone are (1) accelerating blood circulation;
(2) relieving pain; (3) improving the power of concentration; (4) relieving
fatigue; (5) stabilizing autonomic nervous system; and (6) accelerating
metabolism by activating cellular functions. The Company starts the
distribution in January 01, 2009.
We classify the
products that we sell into five categories: (1) ultra-thin regular anionic
sanitary pads; (2) ultra-thin long anionic sanitary pads; (3) anionic
pantiliners; (4) baby diapers and (5) energy stones.
The sanitary pads,
pantiliners and baby diapers that we sell are patented in the PRC and such
patents are owned by the Manufacturer. These products have been tested by
various independent Chinese agencies, including SGS-CSTC Standards Technical
Services Co., Ltd., Shanghai Textile Industry Technology Intendance, National
Paper Product Quality Control Institution Shanghai Office, and East China Normal
University.
First Quarter
Financial Performance Highlights
We experienced
strong demand for our products and services during the first fiscal quarter of
2009, which resulted in growth in our revenues and net income.
The following are
some financial highlights for the first quarter of 2009:
·
|
Our
revenues were $
2,601,184
.
|
|
|
·
|
Gross
margin was
49.71
%.
|
|
|
·
|
Gross
profit was $
1,293,023
.
|
|
|
·
|
Net income
was $
990,585
.
|
|
|
·
|
Basic and
diluted earnings per share wer
e
$
0.0
2
.
|
Results
of Operations: Three Months Ended March 31, 2009 Compared to Three Months Ended
March 31, 2008
The following
table summarizes the results of our operations during the three-month period
ended March 31, 2009. We were not operating during the three-month
period ended March 31, 2008 and have therefore provided no data for such
period.
|
Item
|
|
|
Three
Months Ended
March
31, 2009
|
|
|
|
|
|
In
Thousands
|
|
|
As
a percentage of net revenues
|
|
Revenues
|
|
|
$
|
2,601
|
|
|
|
100
|
%
|
|
Cost of
sales
|
|
|
$
|
(1,308
|
)
|
|
|
50.29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
$
|
1,293
|
|
|
|
49.71
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
$
|
(132
|
)
|
|
|
5.07
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
|
$
|
1,161
|
|
|
|
44.64
|
%
|
|
Income
taxes
|
|
|
$
|
(171
|
)
|
|
|
6.57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
$
|
990
|
|
|
|
38.07
|
%
|
Revenue
s
.
Our re
venue
s
are
generated from sales
and license fee income
of our
personal health and
hygiene products
.
R
evenue
s
w
ere
$
2,601,184
for the three-mo
nth period ended
March 31, 2009. We are principally a trading company. Goods are directly
purchased from suppliers and sold to distributors. Revenues were rather stable
since we have signed agreement with each distributor.
Cost of
Sales
.
Our cost of sales was $
1,308,161
for the three-month period ended March
31, 2009. As a percentage of revenue
s
, the cost of good
s sales during such period was
50.29
%. Cost of sales represented the cost of
purchase from suppliers.
Gross
Profit
. Our gross
profit was $
1,293,023
for the three-month period ended March
31, 2009. Gross profit as a percentage of revenue
s
during suc
h period was
49.71
%.
Operating
Expenses
.
Our
operating
expenses were $
131,920
for the three-month period ended March
31, 2009. As a percentage of revenue
s
,
operating
expenses during such period was
5.07
%. Our operating expenses mainly
represented
the
salary, office rental expenses and legal
fee expenses.
By
expanding our business, we plan to
recruit more staff in future.
Income before Income
Taxes
. Income
before income taxes
was $
1,161,103
for the three-month period ended March
31, 2009. Income
before income taxes as a percentage of revenue
s
during such period was
44.64
%.
Income
Taxes
:
United
States
The Company is
subject to the United States of America tax law. No provision for the
US federal income tax has been made as the Company had no taxable income for the
reporting period. The statutory tax rate is 35%.
Hong
Kong
The Company is
subject to a profits tax rate of 16.5% on the estimated assessable profits
during the reporting period.
Income
Taxes
.
I
ncome taxes
were $
170,518
for the thr
ee-month period ended March 31,
2009. Income
taxes as a percentage of
revenue
s
during such period were
6.57
%.
Net
Income
.
Our net income was $990,585
or the three-month period ended March
31, 2009. Net income as a percentage of revenue
s
during such
period
was
38.0
7
%.
Segment
Information
The Company
operates in a single segment, being the marketing and sale of personal health
and hygiene products. Additional information can be found at Note 11
of our unaudited condensed consolidated financial statements contained under
Part I, Item 1 – “Financial Statements” above.
Inflation
Inflation does
not materially affect our business or the results of our
operations.
Liquidity
and Capital Resources
General
As of March 31,
2009, we had cash and cash equivalents (excluding restricted cash) of $
363,035
.
The following table provides detailed information about our net cash flow for
the three-month period ended March 31, 2009.
Item
|
|
|
|
|
Cash
Flow
Three Months
Ended
March
3
1
,
200
9
|
|
Net cash
provided by operating activities
|
|
|
|
|
|
$
|
757,722
|
|
Net cash
used in investing activities
|
|
|
|
|
|
$
|
(52,758
|
)
|
Net cash
used in financing activities
|
|
|
|
|
|
$
|
(649,485
|
)
|
Effect of
exchange rate changes on cash
|
|
|
|
|
|
$
|
(2
|
)
|
Cash and
cash equivalents, beginning of period
|
|
|
|
|
|
$
|
307,558
|
|
Cash and
cash equivalents, end of period
|
|
|
|
|
|
$
|
363,035
|
|
Operating
Activities
Net cash provided
by operating activities was $
757,722
for the three-month period ended March 31, 2009. Such amount of cash provided by
operating activities was mainly attributable to the sales of our products during
the three-month ended March 31, 2009.
Investing
Activities
Net cash used in
investing activities
was
$
52
,
758
for
the three-month period ended March 31, 2009. Such amount of cash used
in investing activities was attributable to purchasing office equipment and
leasehold improvements.
Financing
Activities
Net cash used in
financing activities was $
649,485
for the three-month period ended March 31, 2009. Such amount of cash used in
financing activities was attributable to the repayment of advance from our
Chairperson and President, Ms. Hu, as described below.
As of March 31,
2009, we had no bank loans or other debt outstanding other than amounts due to
our Chairperson and President, Ms. Hu. During 2008, our Chairperson and
President, Ms. Hu, provided approximately
5.9
million HK Dollars as working capital to the Company. The Company had
repaid approximately
5.04
million HK Dollars to Ms. Hu. during the three-month ended period March 31,
2009. The amount is interest-free, unsecured and repayable on
demand.
Effect of Exchange Rate
Changes on Cash
The effect of
exchange rate changes on the Company’s cash was
$
2
f
or
t
he three-month period ended March 31,
2009.
Outlook
In 2009, we
intend to develop relationships with many other distributors in new
countries. We expect to continue to develop new products, and to
enter into agreements with additional distributors for distribution of our
products both within China and other countries. We expect that our
revenues will continue to increase as we expand into new markets and increase
our market share within existing markets.
Critical Accounting
Policies
Principles of
consolidation
The consolidated
financial statements include the accounts of the Company and its subsidiary,
Winalite. All significant inter-company accounts and transactions
have been eliminated in consolidation.
Revenue
recognition
Revenue from
sales of the products and license fees are recognized when the significant risks
and rewards of ownership of the product have been transferred to the buyer
distributors at the time when the products are delivered to its customers, the
sales price is fixed or determinable and collection is reasonably
assured.
Allowance of doubtful
accounts
The Company
establishes an allowance for doubtful accounts based on management’s assessment
of the collectibility of trade receivables. A considerable amount of
judgment is required in assessing the amount of the allowance.
During the
reporting period, management establishes the general provisioning policy to make
allowance equivalent to 100% of the gross amount of trade receivables due over 1
year. Additional specific provision is made against trade receivables
aged less than 1 year to the extent that they are considered to be doubtful. Bad
debts are written off when identified.
Concentrations
on credit risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and cash equivalents and trade
receivables. As of March 31, 2009, substantially all of the Company’s
cash and cash equivalents were held by major financial institutions in Hong
Kong, which management believes are of high credit quality. With
respect to trade receivables, the Company does not require collateral for trade
receivables.
During the
reporting periods, customers who represented 10% or more of the Company’s
consolidated sales are:
|
|
|
Three
months ended
|
|
|
|
|
March
31,
|
|
|
|
|
(Unaudited)
|
|
|
|
|
2009
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
Winalite
Japan Co. Ltd*
|
|
$
|
457,852
|
|
|
$
|
-
|
|
|
Winalite
Global Sdn Bhd*
|
|
|
650,195
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,108,047
|
|
|
$
|
-
|
|
* All these
customers are independent third party distributors.
Recently
issued accounting pronouncements
In April 2009,
the Financial Accounting Standards and Board (“ FASB”) issued three FASB Staff
Positions (“FSPs”) to provide additional application guidance and enhance
disclosures regarding fair value measurements and impairments of securities. FSP
FAS No.157-4, “Determining Fair Value When the Volume and Level of Activity for
the Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly,” provides guidelines for making fair value measurements
more consistent with the principles presented in SFAS No.157. FSP FAS No.107-1
and APB No.28-1, “Interim Disclosures about Fair Value of Financial
Instruments,” enhances consistency in financial reporting by increasing the
frequency of fair value disclosures. FSP FAS No.115-2 and FAS No.124-2,
“Recognition and Presentation of Other-Than-Temporary Impairments,” provides
additional guidance designed to create greater clarity and consistency in
accounting for and presenting impairment losses on securities. These three FSPs
are effective for interim and annual periods ending after June 15, 2009, with
early adoption permitted for periods ending after March 15, 2009. We adopted the
provisions of these FSPs for the period ended March 31, 2009. The adoption of
these FSPs had no material effect on the Company's financial
statements.
In May 2008, the
FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting
Principles”, which is effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” However, transition provisions have been provided in the
unusual circumstance that the application of the provisions of this Statement
results in a change in practice. The adoption of this statement had
no material effect on the Company's financial statements.
In March 2008,
the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and
Hedging Activities - an amendment to FASB Statement No. 133". SFAS No. 161 is
intended to improve financial standards for derivative
instruments and
hedging activities by requiring enhanced disclosures to enable investors to
better understand their effects on an entity's financial position, financial
performance, and cash flows. Entities are required to provide enhanced
disclosures about: (a) how and why an entity uses derivative instruments; (b)
how derivative instruments and related hedged items are accounted for under FASB
Statement No.133 and its related interpretations; and (c) how derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. It is effective for financial statements
issued for fiscal years beginning after November 15, 2008, with early adoption
encouraged. The adoption of this statement had no material effect on
the Company's financial statements.
In December 2007,
the FASB issued SFAS No. 160 “
Noncontrolling Interests in
Consolidated Financial Statements-an amendment of ARB No. 51”. SFAS
No.160 establishes accounting and reporting standards for the
noncontrolling
interest in a subsidiary and for the deconsolidation of a
subsidiary. The guidance will become effective for the fiscal year
beginning after December 15, 2008. The adoption of this statement had
no material effect on the Company's financial statements.
In December 2007, the FASB issued
SFAS No. 141 (Revised) “Business Combinations
”. SFAS No. 141 (Revised)
establishes principles and requirements for how the acquirer of a business
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree. The Statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. The
guidance will become effective for the fiscal year beginning after December 15,
2008. The adoption of this statement had no material effect on the Company's
financial statements.
Off-Balance
Sheet Arrangements
We do not have
any off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures, or capital resources that is material to investors.
ITEM
4. CONTROLS AND PROCEDURES.
Evaluation
of Disclosure Controls and Procedures
The Company
conducted an evaluation under the supervision of the Chief Executive Officer and
Chief Financial Officer (its principal executive officer and principal financial
officer, respectively), regarding the effectiveness of the Company’s disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) as of March 31, 2009. Based on the aforementioned evaluation,
management has concluded that the Company’s disclosure controls and procedures
were effective as of March 31, 2009.
Changes
in Internal Control Over Financial Reporting.
There have been
no changes in our Company’s internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during
the first quarter of fiscal year 2009 that have materially affected, or are
reasonably likely to materially affect, our Company’s internal control over
financial reporting.
PART
II.
OTHER
INFORMATION
The following exhibits
are filed as part of this report or incorporated by reference:
No.
|
Description
|
|
|
10.1
|
Employment
Agreement, dated January 1, 2009, by and between the Company and Hongxing
Gao (incorporated by reference to the Company’s Current Report on Form
8-K/A dated January 7, 2009).
|
|
|
10.2
|
The
Company’s 2009 Equity Incentive Plan (incorporated by reference to the
Company’s Annual Report on Form 10-K for the fiscal year ended December
31, 2008).
|
31.1*
|
Rule
13a-14(a) Certification of Chief Executive Officer.
|
|
|
31.2*
|
Rule
13a-14(a) Certification of Chief Financial Officer.
|
|
|
32.1**
|
Certification
of Chief Executive Officer furnished pursuant to 18 U.S.C. Section
1350.
|
|
|
32.2**
|
Certification
of Chief Financial Officer furnished pursuant to 18 U.S.C. Section
1350.
|
SIGNATURES
In accordance
with Section 13 or 15(d) of the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: May
15, 2009
|
HONG
KONG WINALITE GROUP, INC.
|
|
|
|
|
|
|
|
By:
/s/ Hongxing
Gao
Hongxing
Gao
Chief
Executive Officer
(Principal
Executive Officer)
|
|
|
|
By:
/s/ Jianquan
Li
Jianquan
Li
Chief
Financial Officer
(Principal
Financial and Accounting
Officer)
|