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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Willcox International Holdings Inc (PK) | USOTC:WINH | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.30 | 0.10 | 0.396 | 0.00 | 21:02:14 |
|
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended September 30, 2016
|
|
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from _____ to _____ |
|
|
WINHA INTERNATIONAL GROUP LIMITED
(Name of Registrant in its Charter)
|
|
Nevada
|
47-2450462
|
(State of Other Jurisdiction of incorporation or organization)
|
(I.R.S. Employer I.D. No.)
|
|
|
3rd Floor, No. 19 Changyi Road, Changmingshui Village
Wuguishan Town, Zhongshan City, P.R. China 528458
|
|
(Address of Principal Executive Offices)
|
Yile Center, 5 Xinzhong Avenue, Suite 918
Shiqi District, Zhongshan, P.R. China 528400
|
(Former Address, if Changed Since Last Report)
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
Non-accelerated filer
☐
|
Smaller reporting company
☒
|
|
Page No
|
|
Part I
|
Financial Information
|
|
Item 1.
|
Financial Statements (unaudited):
|
|
Consolidated Balance Sheets (Unaudited) – September 30, 2016 and March 31, 2016
|
1
|
|
Consolidated Statements of Income and Other Comprehensive Income (Unaudited) - for the Three and Six Months Ended September 30, 2016 and 2015
|
3
|
|
Consolidated Statement of Changes in Stockholders Equity (Unaudited) for the Six Months Ended September 30, 2016
|
5
|
|
Consolidated Statements of Cash Flows (Unaudited) – for the Six Months Ended September 30, 2016 and 2015
|
6
|
|
Notes to Consolidated Financial Statements (Unaudited)
|
8
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
35
|
Item 3
|
Quantitative and Qualitative Disclosures about Market Risk
|
41
|
Item 4.
|
Controls and Procedures
|
41
|
Part II
|
Other Information
|
|
Item 1.
|
Legal Proceedings
|
42
|
Items 1A.
|
Risk Factors
|
42
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
42
|
Item 3.
|
Defaults upon Senior Securities
|
42
|
Item 4.
|
Mine Safety Disclosures
|
43
|
Item 5.
|
Other Information
|
43
|
Item 6.
|
Exhibits
|
43
|
Signatures
|
44
|
ASSETS
|
September 30,
2016
|
March 31,
2016
|
||||||
(Unaudited)
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
6,563,778
|
$
|
21,548,630
|
||||
Accounts receivable
|
3,878,510
|
1,417,860
|
||||||
Inventories
|
581,307
|
1,523,959
|
||||||
Advances to suppliers
|
81,282
|
151,230
|
||||||
Prepaid expenses
|
2,705,771
|
174,010
|
||||||
Deferred tax assets
|
6,541
|
32,810
|
||||||
Total current assets
|
13,817,189
|
24,848,499
|
||||||
Property, plant and equipment, net
|
11,844,443
|
1,847,977
|
||||||
Website - net
|
-
|
45,676
|
||||||
Prepaid expenses - noncurrent
|
2,993,597
|
-
|
||||||
Deferred registration costs
|
-
|
212,312
|
||||||
TOTAL ASSETS
|
$
|
28,655,229
|
$
|
26,954,464
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
September 30,
2016
|
March 31,
2016
|
||||||
(Unaudited)
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
200,758
|
$
|
208,866
|
||||
Convertible debt
|
-
|
5,435,466
|
||||||
Advances from customers
|
30,632
|
769,814
|
||||||
Taxes payable
|
1,641,182
|
1,683,909
|
||||||
Accrued expenses
|
141,511
|
246,387
|
||||||
Loan from stockholder
|
907,804
|
477,199
|
||||||
Total current liabilities
|
2,921,887
|
8,821,641
|
||||||
Stockholders' equity:
|
||||||||
Common stock, $0.001 par value per share, 200,000,000 shares authorized; 49,989,500 shares issued and outstanding as of September 30, 2016 and March 31, 2016
|
49,990
|
49,990
|
||||||
Additional paid-in capital
|
21,626,775
|
21,626,775
|
||||||
Statutory reserve
|
803,908
|
497,443
|
||||||
Accumulated (deficit)
|
(6,420,927
|
)
|
(11,096,421
|
)
|
||||
Other comprehensive (loss)
|
(652,232
|
)
|
(230,584
|
)
|
Sub-total
|
15,407,514
|
10,847,203
|
||||||
Noncontrolling interests
|
10,325,828
|
7,285,620
|
||||||
Total stockholders' equity
|
25,733,342
|
18,132,823
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
28,655,229
|
$
|
26,954,464
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Revenues
|
$
|
14,866,148
|
$
|
9,756,224
|
$
|
28,783,982
|
$
|
15,397,117
|
||||||||
Cost of revenues
|
8,570,699
|
4,124,953
|
14,993,435
|
7,137,807
|
||||||||||||
Gross profit
|
6,295,449
|
5,631,271
|
13,790,547
|
8,259,310
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and marketing
|
431,058
|
214,027
|
991,670
|
413,735
|
||||||||||||
General and administrative
|
557,733
|
263,179
|
1,080,076
|
621,417
|
||||||||||||
Financial expenses
|
6,689
|
6,558
|
16,232
|
7,108
|
||||||||||||
Total operating expenses
|
995,480
|
483,764
|
2,087,978
|
1,042,260
|
||||||||||||
Income from operations
|
5,299,969
|
5,147,507
|
11,702,569
|
7,217,050
|
||||||||||||
Other non-operating income
|
975
|
-
|
5,057
|
1,085
|
||||||||||||
Other non-operating (expenses)
|
(456,365
|
)
|
(328
|
)
|
(456,365
|
)
|
-
|
|||||||||
Total non-operating (expense) income
|
(455,390
|
)
|
(328
|
)
|
(451,308
|
)
|
1,085
|
|||||||||
Income before provision for income taxes
|
4,844,579
|
5,147,179
|
11,251,261
|
7,218,135
|
||||||||||||
Provision for income taxes
|
1,416,852
|
1,261,690
|
2,947,995
|
1,817,227
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
|
2016
|
2015
|
2016
|
2015
|
||||||||||||
Net income before noncontrolling interest
|
3,427,727
|
3,885,489
|
8,303,266
|
5,400,908
|
||||||||||||
Noncontrolling interest
|
1,371,091
|
-
|
3,321,307
|
-
|
||||||||||||
Net income attributable to common stockholders
|
$
|
2,056,636
|
$
|
3,885,489
|
$
|
4,981,959
|
$
|
5,400,908
|
||||||||
Earnings per common share, basic and diluted
|
$
|
0.04
|
$
|
0.08
|
$
|
0.10
|
$
|
0.11
|
||||||||
Weighted average shares outstanding, basic and diluted
|
49,989,500
|
49,989,500
|
49,989,500
|
49,989,500
|
||||||||||||
Other Comprehensive income:
|
||||||||||||||||
Net income
|
$
|
3,427,727
|
$
|
3,885,489
|
$
|
8,303,266
|
$
|
5,400,908
|
||||||||
Foreign currency translation adjustment
|
(76,011
|
)
|
(346,926
|
)
|
(702,747
|
)
|
(246,844
|
)
|
||||||||
Comprehensive income
|
3,351,716
|
3,538,563
|
7,600,519
|
5,154,064
|
||||||||||||
Comprehensive income attributable to noncontrolling
|
||||||||||||||||
Interest
|
1,340,403
|
-
|
3,040,207
|
-
|
||||||||||||
Comprehensive income attributable to commonstockholders
|
$
|
2,011,313
|
$
|
3,538,563
|
$
|
4,560,312
|
$
|
5,154,064
|
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
(Deficit)
|
Other
Comprehensive Income
(Loss)
|
Statutory
Reserve
Fund
|
Non-
controlling
Interests
|
Total
|
||||||||||||||||||||||
Balance, March 31, 2016
|
$
|
49,990
|
$
|
21,626,775
|
$
|
(11,096,421
|
)
|
$
|
(230,584
|
)
|
$
|
497,443
|
$
|
7,285,620
|
$
|
18,132,823
|
||||||||||||
Net income
|
-
|
-
|
4,981,959
|
-
|
-
|
3,321,307
|
8,303,266
|
|||||||||||||||||||||
Appropriation of statutory reserve
|
-
|
-
|
(306,465
|
)
|
-
|
306,465
|
-
|
-
|
||||||||||||||||||||
Other comprehensive (loss)
|
-
|
-
|
-
|
(421,648
|
)
|
-
|
(281,099
|
)
|
(702,747
|
)
|
||||||||||||||||||
Balance, September 30, 2016
|
$
|
49,990
|
$
|
21,626,775
|
$
|
(6,420,927
|
)
|
$
|
(652,232
|
)
|
$
|
803,908
|
$
|
10,325,828
|
$
|
25,733,342
|
Six Months Ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
8,303,266
|
$
|
5,400,908
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Write off deferred registration costs
|
212,312
|
- | ||||||
Write off the website
|
46,167
|
-
|
||||||
Decrease in deferred tax assets
|
26,552
|
-
|
||||||
Depreciation and amortization
|
231,303
|
73,809
|
||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) in accounts receivable
|
(2,460,650
|
)
|
(56,176
|
)
|
||||
Decrease in inventories
|
942,652
|
830,599
|
||||||
Decrease in advances to suppliers
|
69,948
|
72,016
|
||||||
(Increase) decrease in prepaid expenses
|
(5,525,358
|
)
|
71,420
|
|||||
(Decrease) increase in accounts payable
|
(8,108
|
)
|
84,663
|
|||||
(Decrease) in advances from customers
|
(739,182
|
)
|
(168,799
|
)
|
||||
(Decrease) increase in taxes payable
|
(42,727
|
)
|
1,222,709
|
|||||
(Decrease) increase in accrued expenses
|
(104,875
|
)
|
4,350
|
|||||
Net cash provided by operating activities
|
951,300
|
7,535,499
|
||||||
Cash flows from investing activities:
|
||||||||
Payments for website expansion
|
-
|
(9,827
|
)
|
|||||
Purchase of fixed assets
|
(10,397,016
|
)
|
(326,482
|
)
|
||||
Net cash (used in) investing activities
|
(10,397,016
|
)
|
(336,309
|
)
|
Six Months Ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from financing activities:
|
||||||||
Additional capital contribution
|
-
|
816,001
|
||||||
Proceeds from redeemable convertible notes
|
-
|
564,200
|
||||||
Repayment of redeemable convertible notes
|
(5,435,466
|
)
|
-
|
|||||
Proceeds from stockholder loan-net
|
370,605
|
26,345
|
||||||
Net cash (used in) provided by financing activities
|
(5,064,861
|
)
|
1,406,546
|
|||||
Effect of exchange rate changes on cash
|
(474,275
|
)
|
(240,257
|
)
|
||||
Net change in cash
|
(14,984,852
|
)
|
8,365,479
|
|||||
Cash, beginning of period
|
21,548,630
|
1,103,726
|
||||||
Cash, end of period
|
$
|
6,563,778
|
$
|
9,469,205
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
191,844
|
$
|
-
|
||||
Cash paid for income taxes
|
$
|
2,921,604
|
$
|
558,410
|
||||
Noncash financing activities:
|
||||||||
Payment of accrued expenses and other payables by shareholder in the form of a loan
|
$
|
60,000
|
$
|
26,345
|
Percentage
of
Shares
|
Shares
issued
|
|||||||
Zhuowei Zhong
|
7
|
%
|
5,040,000
|
|||||
Beijing Ruihua Future Investment Management Co. Ltd.
|
5
|
%
|
3,600,000
|
|||||
Donghe Group Limited
|
5
|
%
|
3,600,000
|
|||||
Xinxi Zhong.
|
5
|
%
|
3,600,000
|
|||||
Zhifei Huang
|
4
|
%
|
2,880,000
|
|||||
Chun Yan Winne Lam
|
3
|
%
|
2,160,000
|
|||||
Sub Total
|
29
|
%
|
20,880,000
|
|||||
Individual Suppliers
|
11
|
%
|
7,920,000
|
|||||
Total
|
40
|
%
|
28,800,000
|
1. |
ORGANIZATION AND BUSINESS (CONTINUED)
|
September 30,
2016
|
March 31,
2016
|
|||||||
Balance sheet items, except for stockholders' equity, as of period end
|
$
|
0.1499
|
$
|
0.1550
|
||||
For the three months ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.1500
|
$
|
0.1593
|
For the six months ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.1515
|
$
|
0.1612
|
September 30,
2016
|
March 31,
2016
|
|||||||
Balance sheet items, except for stockholders' equity, as of period end
|
$
|
0.7634
|
$
|
0.7668
|
||||
For the three months ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.7577
|
N/A
|
|||||
For the six months ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.7517
|
N/A
|
1.
|
Initial stage (planning), whereby the related costs are expensed.
|
2.
|
Development stage (web application, infrastructure, graphics), whereby the related costs are capitalized and amortized once the website is ready for use. Costs for development of content for the website may be expensed or capitalized depending on the circumstances of the expenditures.
|
3.
|
Operating stage, whereby the related costs are expensed as incurred. Upgrades are usually expensed, unless they add additional functionality.
|
a)
|
Retail stores - The Company recognizes sales revenue from its seven retail stores, net of sales taxes and estimated sales returns at the time it sells merchandise to the customer. Customer purchases of shopping cards are not recognized as revenue until the card is redeemed when the customer purchases merchandise by using the shopping card.
During the three months ended September 30, 2016, the Company transferred control of the retail stores in Sanshui, Shunde, Chancheng, Xiaolan, Dongguan and Guangzhou to six independent individuals.
|
b)
|
Custom-made sales - The Company started "Custom-made" sales in August 2014. The target customers are commercial customers who can order online or in the Company's local stores and make full payment on site. All orders are forwarded to Zhongshan Winha immediately, which arranges the delivery. Revenue from the sale of products is recognized upon delivery to customers provided that there are no uncertainties regarding customer acceptance, there is persuasive evidence of an arrangement, and the sales price is fixed and determinable. Revenue generated from custom-made sales was $9,880,153 and $6,191,296, $19,696,330 and $10,799,960, respectively, for three and six months ended September 30, 2016 and 2015, respectively.
|
c)
|
Franchise and management fees - During the three months ended September 30, 2015, the Company commenced franchising the use of the Company's trademark, name identification and other business resources. The franchisee is required to pay franchise fees and management fees to Zhongshan Winha. Franchise fee revenue from franchise sales is recognized only when all material services or conditions relating to the sale have been substantially performed or satisfied by the Company. The franchise and management fees recognized by the Company were $1,792,979 and $517,452, $3,285,710 and $517,452, respectively, for the three and six months ended September 30, 2016 and 2015, and are included in revenue.
|
d)
|
Wholesale - During the three months ended September 30, 2016, the Company entered into agreements with six individuals to assume the operations of the retail stores located in Sanshui, Shunde, Chancheng, Xiaolan, Dongguan and Guangzhou. Revenues are derived from the sale of food products to these six stores. The Company recognizes revenue for product sales upon transfer of title to the six stores. Stores purchase orders and/or contracts are generally used to determine the existence of an arrangement. Shipping documents and the completion of any store acceptance requirements, when applicable, are used to verify product delivery. The Company assesses whether a price is fixed or determinable based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
|
During the three and six months ended September 30, 2016, wholesale revenue of $1,867,379 was generated from these six stores. |
Level 1 Inputs –
|
Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
|
Level 2 Inputs –
|
Inputs other than the quoted prices in active markets that are observable either directly or indirectly.
|
Level 3 Inputs –
|
Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.
|
September 30,
2016
|
March 31,
2016
|
|||||||
(Unaudited)
|
||||||||
Furniture, fixtures and equipment
|
$
|
1,095,990
|
$
|
1,131,124
|
||||
Leasehold improvements
|
591,360
|
629,536
|
||||||
Motor vehicles
|
350,014
|
361,967
|
||||||
Greenhouses
|
453,137
|
-
|
||||||
Fruit orchards
|
9,848,364
|
-
|
||||||
12,338,865
|
2,122,627
|
|||||||
Less: accumulated depreciation
|
(494,422
|
)
|
(274,650
|
)
|
||||
$
|
11,844,443
|
$
|
1,847,977
|
Year Ending March 31,
|
Amount
|
|||
2017
|
$
|
123,888
|
||
2018
|
255,559
|
|||
2019
|
253,822
|
|||
2020
|
1,247,282
|
|||
Thereafter
|
10,071,204
|
|||
Total
|
$
|
11,951,755
|
Three Months Ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Current
|
$
|
1,430,329
|
$
|
1,261,690
|
||||
Deferred
|
(13,477
|
)
|
-
|
|||||
$
|
1,416,852
|
$
|
1,261,690
|
Six Months Ended
September 30,
|
||||||||
2016
|
2015
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Current
|
$
|
2,974,547
|
$
|
1,817,227
|
||||
Deferred
|
(26,552
|
)
|
-
|
|||||
$
|
2,947,995
|
$
|
1,817,227
|
For the three months ended
September 30,
|
For the six months ended
September 30,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Statutory rate - PRC
|
25.0
|
%
|
25.0
|
%
|
25.0
|
%
|
25.0
|
%
|
||||||||
Change in valuation allowance
|
4.3
|
%
|
0.4
|
%
|
1.2
|
%
|
0.5
|
%
|
||||||||
Other
|
0.5
|
%
|
(0.9
|
%)
|
0.2
|
%
|
(0.3
|
%)
|
||||||||
Effective income tax rate
|
29.8
|
%
|
24.5
|
%
|
26.4
|
%
|
25.2
|
%
|
September 30,
|
March 31,
|
|||||||
2016
|
2016
|
|||||||
(Unaudited)
|
||||||||
Net operating loss carryforwards
|
$
|
6,492,763
|
$
|
6,333,864
|
||||
Inventory intercompany profit
|
6,541
|
2,596
|
||||||
Less: valuation allowance
|
(6,492,763
|
) |
(6,303,650
|
) | ||||
Net deferred tax asset
|
$
|
6,541
|
$
|
32,810
|
ASSETS
|
March 31,
2016
|
|||
Investment in subsidiaries
|
$
|
11,050,554
|
||
TOTAL ASSETS
|
$
|
11,050,554
|
LIABILITIES AND
STOCKHOLDERS
'
EQUITY
|
March 31,
2016
|
|||
Accrued Expenses
|
$
|
45,000
|
||
Stockholder loans
|
158,351
|
|||
Total Liabilities
|
$
|
203,351
|
||
Stockholders' equity
|
||||
Common stock, $0.0001 par value; 200,000,000 shares authorized; 49,989,500 shares issued and outstanding as of March 31, 2016
|
49,990
|
|||
Additional paid-in capital
|
21,626,775
|
|||
Statutory reserve
|
497,443
|
|||
Accumulated (deficit)
|
(11,096,421
|
)
|
Other comprehensive (loss)
|
(230,584
|
)
|
||
Total stockholders' equity
|
10,847,203
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
11,050,554
|
Year Ended
|
||||
March 31,
2016
|
||||
Revenues
|
||||
Share of earnings from investment in subsidiaries
|
$
|
7,761,602
|
||
Operating expenses
|
||||
Stock compensation
|
(15,865,042
|
)
|
||
General and administrative
|
(161,732
|
)
|
||
Net (loss)
|
$
|
(8,265,172
|
)
|
Year Ended
March 31,
2016
|
||||
Cash flows from operating activities
|
||||
Net (loss)
|
$
|
(8,265,172
|
)
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
||||
Share of earnings from investment in subsidiaries
|
(7,761,602
|
)
|
||
Stock compensation
|
15,865,042
|
|||
Increase in accrued expenses and other payables
|
161,732
|
|||
Net cash provided by (used in) operating activities
|
-
|
|||
Net change in cash
|
-
|
|||
Cash, beginning of period
|
-
|
|||
Cash, end of period
|
$
|
-
|
||
Noncash financing activities:
|
||||
Payment of accrued expenses and other payables by shareholder
|
$
|
161,732
|
|
%
|
|||||||||||
|
2016
|
2015
|
Change
|
|||||||||
Revenue
|
$
|
14,866,148
|
$
|
9,756,224
|
52
|
%
|
||||||
Cost of Goods Sold
|
(8,570,699
|
)
|
(4,124,953
|
)
|
108
|
%
|
||||||
Gross profit
|
6,295,449
|
5,631,271
|
12
|
%
|
||||||||
Total operating expenses
|
995,480
|
483,764
|
106
|
%
|
||||||||
Income from operations
|
5,299,969
|
5,147,507
|
3
|
%
|
||||||||
Income before provision for income taxes
|
4,844,579
|
5,147,179
|
(6
|
%)
|
||||||||
Provision for income taxes
|
1,416,852
|
1,261,690
|
12
|
%
|
||||||||
Net income
|
3,427,727
|
3,885,489
|
(12
|
%)
|
||||||||
Earnings per share
|
0.04
|
0.08
|
(50
|
%)
|
|
%
|
|||||||||||
|
2016
|
2015
|
Change
|
|||||||||
Revenue
|
$
|
28,783,982
|
$
|
15,397,117
|
87
|
%
|
||||||
Cost of Goods Sold
|
(14,993,435
|
)
|
(7,137,807
|
)
|
110
|
%
|
||||||
Gross profit
|
13,790,547
|
8,259,310
|
67
|
%
|
||||||||
Total operating expenses
|
2,087,978
|
1,042,260
|
100
|
%
|
||||||||
Income from operations
|
11,702,569
|
7,217,050
|
62
|
%
|
||||||||
Income before provision for income taxes
|
11,251,261
|
7,218,135
|
56
|
%
|
||||||||
Provision for income taxes
|
2,947,995
|
1,817,227
|
62
|
%
|
||||||||
Net income
|
8,303,266
|
5,400,908
|
54
|
%
|
||||||||
Earnings per share
|
0.10
|
0.11
|
(9
|
%)
|
·
|
During the year ended March 31, 2016 we initiated franchising operations, and sold 26 franchises, which were supplemented by an additional 18 franchises during the six months ended September 30, 2016. Franchise operations contributed $3,285,710 to revenue during the six months ended September 30, 2016, consisting of upfront franchise fees of $1,408,223 and monthly administrative fees.
|
·
|
During the three months ended September 30, 2016, we stopped leasing our retail stores in Sanshui, Shunde, Chancheng, Xiaolan, Dongguan and Guangzhou, outsourced them to six independent individuals. We continued marketing of our products to these stores, which contributed $1,867,379 to our revenues for the three and six months ended September 30, 2016.
|
|
2016
|
2015
|
||||||
Retail stores
|
$
|
1,325,637
|
$
|
3,121,628
|
||||
Custom-made
|
9,880,153
|
6,191,296
|
||||||
Franchises
|
1,792,979
|
443,300
|
||||||
Wholesale
|
1,867,379
|
- | ||||||
Total
|
$ |
14,866,148
|
$ |
9,756,224
|
|
September 30,
|
September 30,
|
||||||
|
2016
|
2015
|
||||||
Retail stores
|
$
|
3,934,563
|
$
|
4,079,705
|
||||
Custom-made
|
19,696,330
|
10,799,960
|
||||||
Franchises
|
3,285,710
|
517,452
|
||||||
Wholesale
|
1,867,379
|
- | ||||||
Total
|
$ |
28,783,982
|
$ |
15,397,117
|
|
Six months
ended
September 30,
2016
|
Six months
ended
September 30,
2015
|
||||||
Net cash provided by operating activities
|
$
|
951,300
|
$
|
7,535,499
|
||||
Net cash (used in) investing activities
|
$
|
(10,397,016
|
)
|
$
|
(336,309
|
)
|
||
Net cash (used in) provided by financing activities
|
$
|
(5,064,861
|
)
|
$
|
1,406,546
|
·
|
We have not achieved the desired level of corporate governance with regard to identifying and measuring the risk of material misstatement. Because of our limited internal resources, we lack key monitoring mechanisms such as independent directors and audit committee to oversee and monitor the Company's risk management, business strategies and financial reporting procedures.
|
·
|
We have not designed and implemented controls to maintain appropriate segregation of duties in our manual and computer-based business processes which could affect the Company's purchasing controls, the limits on the delegation of authority for expenditures, and the proper review of manual journal entries.
|
·
|
Our accounting department personnel have limited knowledge and experience in US GAAP and reports with the Securities and Exchange Commission (the "SEC"). To remediate the material weakness, the management has hired an external consultant with extensive experience in US GAAP and reports to the SEC, who is responsible for assisting the Company with (i) the preparation of its financial statements in accordance with US GAAP and (ii) its periodic reports with the SEC.
|
Item 4.
|
Mine Safety Disclosures.
|
|
Not Applicable.
|
Item 5.
|
Other Information.
|
|
None.
|
Item 6.
|
Exhibits
|
31
|
Rule 13a-14(a) Certification - CEO and CFO
|
32
|
Rule 13a-14(b) Certification
|
101.INS
|
XBRL Instance
|
101.SCH
|
XBRL Schema XBRL Schema
|
101.CAL
|
XBRL Calculation
|
101.DEF
|
XBRL Definition
|
101.LAB
|
XBRL Label
|
101.PRE
|
XBRL Presentation
|
|
WINHA INTERNATIONAL GROUP LIMITED.
|
|
||||
|
|
|
|
|||
Date: November 21, 2016
|
By:
|
/s/ Chung Yan Winnie Lan
|
|
|||
|
|
Chung Yan Winnie Lan, Chief Executive Officer, Chief Financial and Accounting Officer
|
|
1 Year Willcox (PK) Chart |
1 Month Willcox (PK) Chart |
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