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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.05 | -25.00% | 0.15 | 0.05 | 0.20 | 0.15 | 0.15 | 0.15 | 500 | 21:04:47 |
|
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended September 30, 2017
|
|
[ ] 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)
|
|
Page No
|
|
Prelim.
|
Transient Investment Company
|
i
|
Part I Financial Information
|
||
Item 1.
|
Financial Statements (unaudited):
|
|
Consolidated Balance Sheets– September 30, 2017 (Unaudited) and March 31, 2017
|
1
|
|
Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - for the Three and Six Months Ended September 30, 2017 and 2016
|
2
|
|
Consolidated Statement of Changes in Stockholders Equity (Unaudited) for the Six Months Ended September 30, 2017
|
4
|
|
Consolidated Statements of Cash Flows (Unaudited) – for the Six Months Ended September 30, 2017 and 2016
|
5
|
|
Notes to the Consolidated Financial Statements (Unaudited)
|
7
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
25
|
Item 3
|
Quantitative and Qualitative Disclosures about Market Risk
|
31
|
Item 4.
|
Controls and Procedures
|
31
|
Part II Other Information
|
||
Item 1.
|
Legal Proceedings
|
32
|
Items 1A.
|
Risk Factors
|
32
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
32
|
Item 3.
|
Defaults upon Senior Securities
|
32
|
Item 4.
|
Mine Safety Disclosures
|
32
|
Item 5.
|
Other Information
|
32
|
Item 6.
|
Exhibits
|
33
|
Signatures
|
33
|
ASSETS
|
September 30,
2017
|
March 31,
2017
|
||||||
(Unaudited)
|
||||||||
Cash and cash equivalents
|
$
|
1,192,141
|
$
|
-
|
||||
Equity investment
|
14,596,559
|
13,042,386
|
||||||
TOTAL ASSETS
|
$
|
15,788,700
|
$
|
13,042,386
|
||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
75,863
|
$
|
57,045
|
||||
Accrued expenses
|
22,000
|
30,000
|
||||||
Loan from stockholder
|
168,680
|
118,680
|
||||||
Total current liabilities
|
266,543
|
205,725
|
||||||
Commitments and contingent liabilities
|
-
|
-
|
||||||
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, 2017 and March 31, 2017
|
49,990
|
49,990
|
||||||
Additional paid-in capital
|
16,021,164
|
16,021,164
|
||||||
(Deficit)
|
(1,114,148
|
)
|
(3,235,951
|
)
|
||||
Other comprehensive (loss) income
|
565,151
|
1,458
|
||||||
Total stockholders' equity
|
15,522,157
|
12,836,661
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
15,788,700
|
$
|
13,042,386
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Revenues
|
$
|
-
|
$
|
14,866,148
|
$
|
-
|
$
|
28,783,982
|
||||||||
Cost of revenues
|
-
|
8,570,699
|
-
|
14,993,435
|
||||||||||||
Gross profit
|
-
|
6,295,449
|
-
|
13,790,547
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Selling and marketing
|
-
|
431,058
|
-
|
991,670
|
||||||||||||
General and administrative
|
37,424
|
557,733
|
60,818
|
1,080,076
|
||||||||||||
Financial expenses
|
-
|
6,689
|
-
|
16,232
|
||||||||||||
Total operating expenses
|
37,424
|
995,480
|
60,818
|
2,087,978
|
||||||||||||
(Loss) income from operations
|
(37,424
|
)
|
5,299,969
|
(60,818
|
)
|
11,702,569
|
||||||||||
(Loss) income of equity investment
|
(81,131
|
)
|
-
|
2,182,621
|
-
|
|||||||||||
Non-operating income (expense):
|
||||||||||||||||
Other non-operating income
|
-
|
975
|
-
|
5,057
|
||||||||||||
Other non-operating (expenses)
|
-
|
(456,365
|
)
|
-
|
(456,365
|
)
|
||||||||||
Total non-operating income (expense)
|
(81,131
|
)
|
(455,390
|
)
|
2,182,621
|
(451,308
|
)
|
|||||||||
(Loss) income before provision for income taxes
|
(118,555
|
)
|
4,844,579
|
2,121,803
|
11,251,261
|
|||||||||||
Provision for income taxes
|
-
|
1,416,852
|
-
|
2,947,995
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
|
2017
|
2016
|
2017
|
2016
|
||||||||||||
Net (loss) income before noncontrolling interest
|
(118,555
|
)
|
3,427,727
|
2,121,803
|
8,303,266
|
|||||||||||
Noncontrolling interest
|
-
|
1,371,091
|
-
|
3,321,307
|
||||||||||||
Net (loss) income attributable to common stockholders
|
(118,555
|
)
|
2,056,636
|
2,121,803
|
4,981,959
|
|||||||||||
Earnings per common share, basic and diluted
|
$
|
0.00
|
$
|
0.04
|
$
|
0.04
|
$
|
0.10
|
||||||||
Weighted average shares outstanding, basic and diluted
|
49,989,500
|
49,989,500
|
49,989,500
|
49,989,500
|
||||||||||||
Other Comprehensive income:
|
||||||||||||||||
Net (loss) income
|
(118,555
|
)
|
3,427,727
|
2,121,803
|
8,303,266
|
|||||||||||
Foreign currency translation adjustment
|
290,865
|
(76,011
|
)
|
563,693
|
(702,747
|
)
|
||||||||||
Comprehensive (loss) income
|
172,310
|
3,351,716
|
2,685,496
|
7,600,519
|
||||||||||||
Comprehensive income attributable to noncontrolling
|
||||||||||||||||
Interest
|
-
|
1,340,403
|
-
|
3,040,207
|
||||||||||||
Comprehensive (loss) income attributable to commonstockholders
|
$
|
172,310
|
$
|
2,011,313
|
$
|
2,685,496
|
$
|
4,560,312
|
Common
Stock
|
Additional Paid-in Capital
|
(Deficit)
|
Other Comprehensive Income (Loss)
|
Total
|
||||||||||||||||
Balance, March 31, 2017
|
$
|
49,990
|
$
|
16,021,164
|
$
|
(3,235,951
|
)
|
$
|
1,458
|
$
|
12,836,661
|
|||||||||
Net income
|
-
|
-
|
2,121,803
|
563
,693
|
2,685,496
|
|||||||||||||||
Balance, September 30, 2017
|
$
|
49,990
|
$
|
16,021,164
|
$
|
(1,114,148
|
)
|
$
|
565,151
|
$
|
15,522,157
|
Six Months Ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
2,121,803
|
$
|
8,303,266
|
||||
(Loss) of equity investment
|
(2,182,621
|
)
|
-
|
|||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||
Write off deferred registration costs
|
212,312
|
|||||||
Write off of website
|
46,167
|
|||||||
Decrease in deferred tax assets
|
26,552
|
|||||||
Depreciation and amortization
|
-
|
231,303
|
||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) in accounts receivable
|
-
|
(2,460,650
|
)
|
|||||
Decrease in inventories
|
-
|
942,652
|
||||||
Decrease in advances to suppliers
|
-
|
69,948
|
||||||
(Increase) in prepaid expenses
|
-
|
(5,525,358
|
)
|
|||||
Increase (decrease) in accounts payable
|
18,818
|
(8,108
|
)
|
|||||
Accounts payable paid by shareholder
|
50,000
|
|||||||
(Decrease) in advances from customers
|
-
|
(739,182
|
)
|
|||||
(Decrease) in taxes payable
|
-
|
(42,727
|
)
|
|||||
(Decrease) in accrued expenses
|
(8,000
|
)
|
(104,875
|
)
|
||||
Net cash provided by operating activities
|
-
|
951,300
|
||||||
Cash flows from investing activities:
|
||||||||
Dividends received from investment
|
1,192,141
|
|||||||
Purchase of fixed assets
|
-
|
(10,397,016
|
)
|
|||||
Net cash provided by (used in) investing activities
|
1,192,141
|
(10,397,016
|
)
|
Six Months Ended
September 30,
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from stockholder loan-net
|
-
|
370,605
|
||||||
Repayment of redeemable convertible notes
|
-
|
(5,435,466
|
)
|
|||||
Net cash (used in) financing activities
|
-
|
(5,064,861
|
)
|
|||||
Effect of exchange rate changes on cash
|
-
|
(474,275
|
)
|
|||||
Net change in cash
|
1,192,141
|
(14,984,852
|
)
|
|||||
Cash, beginning of year
|
-
|
21,548,630
|
||||||
Cash, end of year
|
$
|
1,192,141
|
$ |
6,563,778
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
-
|
$ |
191,844
|
||||
Cash paid for income taxes
|
$
|
-
|
$ |
2,921,604
|
||||
Noncash financing activities:
|
||||||||
Payment of accrued expenses and other payables by shareholder in the form of a loan
|
$
|
50,000
|
$ |
60,000
|
1. |
ORGANIZATION AND BUSINESS
|
Percentage
of Shares
|
Bonus
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
|
|||||
Total
|
29
|
%
|
20,880,000
|
September 30,
2017
|
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Balance sheet items, except for stockholders' equity, as of period end
|
N/A
|
$
|
0.1451
|
|||||
For the
three months ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(Unaudited)
|
||||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
N/A
|
$
|
0.1500
|
For the
six months ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
N/A
|
$
|
0.1515
|
September 30,
2017
|
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Balance sheet items, except for stockholders' equity, as of period end
|
$
|
0.7844
|
$
|
0.7644
|
||||
For the
three months ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.7894
|
$
|
0.7577
|
||||
For the
six months ended
September 30,
|
||||||||
2017
|
2016
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Amounts included in the statements of operations and changes in stockholders' equity
|
$
|
0.7704
|
$
|
0.7517
|
1. |
Retail stores - The Company recognizes sales revenue from its 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.
|
2. |
Custom-made sales - 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 $19,696,330, respectively, for three and six months ended September 30, 2016.
|
3. |
Franchise and management fees
|
September 30,
2017
|
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Equity investment - beginning
|
$
|
13,042,386
|
$ |
13,141,799
|
||||
Investment income (loss)
|
2,182,621
|
(103,635
|
)
|
|||||
Other comprehensive (loss) gain
|
(504,188
|
) |
4,222
|
|||||
Dividend declared (approximately USD $0.026 per share)
|
(1,166,554
|
) | - | |||||
Equity investment - ending
|
$
|
13,554,265
|
$ |
13,042,386
|
Six Months
Ended
Sept. 30,
2017
|
Year Ended
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Revenues
|
$
|
36,088,453
|
$
|
22,107,355
|
||||
Gross profit
|
$
|
13,799,433
|
$
|
8,825,839
|
||||
Net income (loss)
|
$
|
4,864,321
|
$
|
(230,969
|
)
|
|||
As at
September 30,
2017
|
As at
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Total assets
|
$
|
38,050,937
|
$
|
43,293,241
|
||||
Total liabilities
|
$
|
2,357,737
|
$
|
3,438,626
|
Three Months Ended
September 30,
|
Six Months Ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Current
|
$
|
-
|
$
|
1,430,329
|
$
|
-
|
$
|
2,974,547
|
||||||||
Deferred
|
-
|
(13,477
|
)
|
-
|
(26,552
|
)
|
||||||||||
$
|
-
|
$
|
1,416,852
|
$
|
-
|
$
|
2,947,995
|
For the
three months ended
September 30,
|
For the
six months ended
September 30,
|
|||||||||||||||
2017
|
2016
|
2017
|
2016
|
|||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
Statutory rate
|
34
|
%
|
25.0
|
%
|
34
|
%
|
25.0
|
%
|
||||||||
Change in valuation allowance
|
(34
|
%)
|
4.3
|
%
|
(34
|
%)
|
1.2
|
%
|
||||||||
Other
|
-
|
0.5
|
%
|
-
|
0.2
|
%
|
||||||||||
Effective income tax rate
|
-
|
29.8
|
%
|
-
|
26.4
|
%
|
September 30,
2017
|
March 31,
2017
|
|||||||
(Unaudited)
|
||||||||
Net operating loss carryforwards
|
$
|
7,239,616
|
$ |
7,239,616
|
||||
Less: valuation allowance
|
(7,239,616
|
(7,239,616
|
) | |||||
Net deferred tax asset
|
$
|
-
|
$ | - |
·
|
For the three and six months ended September 30, 2017:
|
|
o
|
the consolidated operations of Winha International and its immediate subsidiaries, but not including Australian Winha and its subsidiaries; plus
|
|
o
|
44.87% of the net income recorded by Australian Winha and its subsidiaries during the three and six months ended September 30, 2017.
|
|
·
|
For the three and six months ended September 30, 2016: the consolidated operations of Winha International and its subsidiaries, including Zhongshan Winha.
|
Three Months
Ended
Sept. 30, 2016
|
Six Months
Ended
Sept. 30, 2016
|
|||||||
Off-the-shelf products
|
$
|
3,193,016
|
$
|
5,801,942
|
||||
Custom-made products
|
9,880,153
|
19,696,330
|
||||||
Franchises
|
1,792,979
|
3,285,710
|
||||||
$
|
14,866,148
|
$
|
28,783,982
|
At Sept. 30, 2017
|
||||
Current Assets:
|
||||
Cash and cash equivalents
|
$
|
15,947,427
|
||
Accounts receivable
|
9,714,471
|
|||
Inventory
|
722,128
|
|||
Prepaid expenses
|
1,381,148
|
|||
Other
|
450,768
|
|||
Deferred tax asset
|
1,916,220
|
|||
Total current assets
|
30,132,162
|
|||
Property, plant and equipment, net
|
5,649,672
|
|||
Long-term investment
|
599,859
|
|||
Prepaid expenses - noncurrent
|
1,438,568
|
|||
Other
|
230,676
|
|||
Total assets
|
$
|
38,050,937
|
||
Current liabilities:
|
||||
Accounts payable and accrued expenses
|
$
|
293,099
|
||
Advances from customers
|
257,449
|
|||
Taxes payable
|
1,547,855
|
|||
Loan from shareholders
|
259,334
|
|||
Total liabilities
|
2,357,737
|
|||
Shareholders' equity
|
35,693,200
|
|||
Total liabilities and shareholders' equity
|
$
|
38,050,937
|
·
|
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 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 20, 2017
|
By:
|
/s/ Fuxiao Shi
|
|
|
|
Fuxiao Shi, Chief Executive Officer, Chief Financial and Accounting Officer
|
1 Year Willcox (PK) Chart |
1 Month Willcox (PK) Chart |
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