[ü ] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
NEVADA | 56-2416925 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
None | Not applicable |
Large accelerated filer | Accelerated filer | |||
Non-accelerated filer | Smaller reporting company | [ü ] | ||
(Do not check if smaller reporting company) |
Page No. | ||||
Part I | ||||
Item 1. | Business. | 1 | ||
Item 1A. | Risk Factors | |||
Item 1B. | Unresolved Staff Comments. | |||
Item 2. | Properties. | |||
Item 3. | Legal Proceedings. | |||
Item 4. | (Removed and Reserved). | |||
Part II | ||||
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 18 | ||
Item 6. | Selected Financial Data. | |||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | |||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. | |||
Item 8. | Financial Statements and Supplementary Data. | |||
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | |||
Item 9A. | Controls and Procedures. | |||
Item 9B. | Other Information. | |||
Part III | ||||
Item 10. | Directors, Executive Officers and Corporate Governance. | |||
Item 11. | Executive Compensation. | |||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | |||
Item 13. | Certain Relationships and Related Transactions, and Director Independence. | |||
Item 14. | Principal Accountant Fees and Services. | |||
Part IV | ||||
Item 15. | Exhibits, Financial Statement Schedules. | |||
Signatures |
When used in this report, the terms: | |||
- | “Sunwin”, “we”, “us” and the “Company” refers to Sunwin International Neutraceuticals, Inc., a Nevada corporation, and our subsidiaries; | ||
- | “Sunwin Tech” refers to our wholly owned subsidiary Sunwin Tech Group, Inc., a Florida corporation; | ||
- | “Qufu Natural Green” refers to our wholly owned subsidiary Qufu Natural Green Engineering Co., Ltd., a Chinese limited liability company; | ||
- | “Shengya Veterinary Medicine” refers to, Shengya Veterinary Medicine Co., Ltd., a Chinese limited liability company, and a formerly wholly owned subsidiary of Qufu Natural | ||
- | “Sunwin Stevia International” refers to our wholly owned subsidiary Sunwin Stevia International Corp., a Florida corporation, which was converted to Sunwin USA, LLC a Delaware limited liability | ||
- | “Sunwin USA” refers to Sunwin USA, LLC, a Delaware limited liability company, a 55% owned equity method investment; | ||
- | “Sunwin Canada” refers to our formerly wholly owned subsidiary Sunwin (Canada) Pharmaceutical Ltd., a Canadian | ||
- | “Qufu Shengwang” refers to Qufu Shengwang Stevia Biology and Science Co., Ltd., a Chinese limited liability company. Qufu Natural Green owns a 60% interest in Qufu Shengwang; and | ||
- | “Qufu Shengren” refers to Qufu Shengren Pharmaceutical Co., Ltd., a Chinese limited liability company, and a wholly owned subsidiary of Qufu Natural Green. | ||
We also use the following terms when referring to certain related parties: | |||
- | “Pharmaceutical Corporation” refers to Shandong Shengwang Pharmaceutical Co., Ltd., a Chinese limited liability company which is controlled by Mr. Laiwang Zhang, President, Chairman and a principal shareholder of our company; | ||
- | “Shandong Group” refers to Shandong Shengwang Group Co., Ltd., a Chinese limited liability company, controlled by Mr. Zhang; and | ||
- | “ |
ITEM 1. | BUSINESS |
- | Stevioside, and | ||
- | Chinese |
- | single traditional Chinese medicine extracts; | ||
- | compound traditional Chinese medicine extracts; and | ||
- | purified extracts, including active parts and monomer compounds such as soy isoflavone. |
- | Tianfulai Bio-Tech Technology Co., Ltd. (Beijing) where we are seeking to develop the traditional Chinese medicine polysaccharide anthone extract powder for forage; and | ||
- | Beijing Medical University and China Agriculture University. |
Function | Number of Employees | |||
Management and administration | ||||
Manufacturing and production | ||||
Quality control and research and development | ||||
Sales and marketing | 23 | |||
Total |
ITEM 1A. | RISK FACTORS |
- | the Chinese government will continue its pursuit of economic reform policies; | ||
- | the economic policies, even if pursued, will be successful; | ||
- | economic policies will not be significantly altered from time to time; or | ||
- | business operations in China will not become subject to the risk of nationalization. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
ITEM 3. | LEGAL PROCEEDINGS |
ITEM 4. | (REMOVED AND RESERVED) |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High | Low | |||||||||||||||
Fiscal 2009 | ||||||||||||||||
May 1, 2008 through July 31, 2008 | $ | 0.39 | $ | 0.22 | ||||||||||||
August 1, 2008 through October 31, 2008 | $ | 0.29 | $ | 0.10 | ||||||||||||
November 1, 2008 through January 31, 2009 | $ | 0.47 | $ | 0.10 | ||||||||||||
February 1, 2009 through April 30, 2009 | $ | 0.38 | $ | 0.15 | ||||||||||||
High | Low | |||||||||||||||
Fiscal 2010 | ||||||||||||||||
May 1, 2009 through July 31, 2009 | $ | 0.23 | $ | 0.15 | $ | 0.23 | $ | 0.15 | ||||||||
August 1, 2009 through October 31, 2009 | $ | 0.28 | $ | 0.17 | $ | 0.28 | $ | 0.17 | ||||||||
November 1, 2009 through January 31, 2010 | $ | 0.31 | $ | 0.19 | $ | 0.31 | $ | 0.19 | ||||||||
February 1, 2010 through April 30, 2010 | $ | 0.58 | $ | 0.24 | $ | 0.58 | $ | 0.24 | ||||||||
Fiscal 2011 | ||||||||||||||||
May 1, 2010 through July 31, 2010 | $ | 0.69 | $ | 0.41 | ||||||||||||
August 1, 2010 through October 31, 2010 | $ | 0.45 | $ | 0.28 | ||||||||||||
November 1, 2010 through January 31, 2011 | $ | 0.37 | $ | 0.21 | ||||||||||||
February 1, 2011 through April 30, 2011 | $ | 0.38 | $ | 0.24 | ||||||||||||
ITEM 6. | SELECTED FINANCIAL DATA |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
- | Stevioside; and | ||
- | Chinese |
- | single traditional Chinese medicine extracts; | ||
- | compound traditional Chinese medicine extracts; and | ||
- | purified extracts, including active parts and monomer compounds such as soy isoflavone. |
- | Chinese domestic food and | ||
- | In July 2011, the European Union announced that steviol glucoside derived from the | ||
- | Southeast and South Asia, particularly Japan, South Korea, and India have renewed and increased their interest in |
Fiscal Years Ended April 30, | |||||||||||||||
2010 | 2009 | $ Difference | % Difference | ||||||||||||
Total Revenues | $ | 14,492,959 | $ | 22,209,912 | $ | (7,716,953 | ) | (35 | ) | % | |||||
Cost of Sales | 11,931,027 | 17,129,874 | (5,198,847 | ) | (30 | ) | % | ||||||||
Gross Profit | 2,561,932 | 5,080,038 | (2,,518,106 | ) | (50 | ) | % | ||||||||
Operating Expenses: | |||||||||||||||
Selling Expenses | 1,106,288 | 1,694,900 | (588,612 | ) | (35 | ) | % | ||||||||
General and Administrative | 5,920,582 | 2,827,771 | 3,092,811 | 109 | % | ||||||||||
Loss on disposition of property and equipment | 156,865 | 156,865 | N/A | ||||||||||||
Loss on equity investment | 275,966 | 275,966 | N/A | ||||||||||||
Total operating Expenses | 7,459,701 | 4,522,671 | 2,937,030 | 65 | % | ||||||||||
(loss) income from operations | (4,897,768 | ) | 557,367 | (5,455,136 | ) | N/A | |||||||||
Other income (expense) | (188,939 | ) | 135,483 | (757,253 | ) | N/A | |||||||||
Net income (loss) before income tax provision | (5,086,708 | ) | 692,850 | (5,779,558 | ) | N/A | |||||||||
Income taxes | (9,979 | ) | (307,527 | ) | 297,548 | (97 | ) | % | |||||||
Net (loss) income | (5,096,687 | ) | 385,323 | (5,482,010 | ) | N/A | |||||||||
(Loss) gain on foreign currency translation | (3,756 | ) | 638,675 | (642,431 | ) | N/A | |||||||||
Comprehensive (loss) income | $ | (5,100,443 | ) | $ | 1,023,998 | $ | (6,124,441 | ) | N/A |
For the Year Ended April 30, 2011 | ||||||||||||||||||||||||||||
Chinese Medicine | Stevioside | Corporate and Other | Consolidated | |||||||||||||||||||||||||
Revenues | 2,274,651 | 100.0 | % | 7,307,980 | 100.0 | % | - | 9,582,631 | 100.0 | % | ||||||||||||||||||
Cost of goods sold | 2,088,098 | 91.8 | % | 6,042,753 | 82.7 | % | 8,130,851 | 84.8 | % | |||||||||||||||||||
Gross profit | 186,553 | 8.2 | % | 1,265,227 | 17.3 | % | - | 1,451,780 | 15.2 | % | ||||||||||||||||||
(Gain) loss on disposal of | ||||||||||||||||||||||||||||
property and equipment | (1,024 | ) | 0.0 | % | 1,181,325 | 16.2 | % | - | 1,180,301 | 12.3 | % | |||||||||||||||||
Other operating expenses | 1,535,652 | 67.5 | % | 3,635,718 | 49.7 | % | 280,563 | 5,451,933 | 56.9 | % | ||||||||||||||||||
Other income | 8,661 | 0.4 | % | 34,580 | 0.5 | % | 11,425 | 54,666 | 0.6 | % | ||||||||||||||||||
Loss from continuing operations | ||||||||||||||||||||||||||||
before taxes and | ||||||||||||||||||||||||||||
noncontrolling interest | (1,339,414 | ) | (58.9) | % | (3,517,236 | ) | (48.1) | % | (269,138 | ) | (5,125,788 | ) | (53.5) | % | ||||||||||||||
For the Year Ended April 30, 2010 | ||||||||||||||||||||||||||||
Chinese Medicine | Stevioside | Corporate and Other | Consolidated | |||||||||||||||||||||||||
Revenues | 2,119,689 | 100.0 | % | 10,730,828 | 100.0 | % | - | 12,850,517 | 100.0 | % | ||||||||||||||||||
Cost of goods sold | 1,692,479 | 79.8 | % | 9,221,077 | 85.9 | % | 10,913,556 | 84.9 | % | |||||||||||||||||||
Gross profit | 427,210 | 20.2 | % | 1,509,751 | 14.1 | % | - | 1,936,961 | 15.1 | % | ||||||||||||||||||
(Gain) loss on disposal of | ||||||||||||||||||||||||||||
property and equipment | - | 0.0 | % | 156,865 | 1.5 | % | - | 156,865 | 1.2 | % | ||||||||||||||||||
Other operating expenses | 1,532,400 | 72.3 | % | 470 | 0.0 | % | 1,184,751 | 2,717,621 | 21.1 | % | ||||||||||||||||||
Other income (expense) | - | 0.0 | % | 18,877 | 0.2 | % | (222,232 | ) | (203,355 | ) | (1.6) | % | ||||||||||||||||
Loss from continuing operations | ||||||||||||||||||||||||||||
before taxes and | ||||||||||||||||||||||||||||
noncontrolling interest | (1,105,191 | ) | (52.1) | % | 1,371,293 | 12.8 | % | (1,406,983 | ) | (1,140,881 | ) | (8.9) | % |
Stevioside | Chinese and Veterinary Medicine | Corporate and Other | Total | |||||||||||||||||||||||||||||
Fiscal Year Ended April 30, | ||||||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||||||||
Revenues | $ | 10,730,828 | $ | 14,513,553 | $ | 3,762,131 | $ | 7,696,359 | $ | - | $ | - | $ | 14,492,959 | $ | 22,209,912 | ||||||||||||||||
Cost of Sales | 9,221,076 | 11,582,643 | 2,709,951 | 5,547,231 | - | - | 11,931,027 | 17,129,874 | ||||||||||||||||||||||||
Gross Profit | 1,509,752 | 2,930,910 | 1,052,180 | 2,149,128 | - | - | 2,561,932 | 5,080,038 | ||||||||||||||||||||||||
Total Operating Expenses | 3,143,437 | 2,324,789 | 3,407,479 | 1,842,468 | 908,785 | 355,414 | 7,459,701 | 4,522,671 | ||||||||||||||||||||||||
Total Income (Loss) from Operations | $ | (1,633,686 | ) | $ | 606,121 | $ | (2,355,298 | ) | $ | 306,660 | $ | (908,785 | ) | $ | (355,414 | ) | $ | (4,897,769 | ) | $ | 557,367 |
(All figures are a percentage of Revenues) | Stevioside | Chinese and Veterinary Medicine | Total | |||||||||||||||||||||
For fiscal years ended April 30, | ||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | |||||||||||||||||||
Cost of Sales | 86 | % | 80 | % | 72 | % | 72 | % | 82 | % | 77 | % | ||||||||||||
Selling Expenses | 5 | % | 5 | % | 16 | % | 13 | % | 8 | % | 8 | % | ||||||||||||
General & Administrative Expenses | 21 | % | 11 | % | 74 | % | 11 | % | 41 | % | 11 | % | ||||||||||||
Total Operating Expenses | 27 | % | 16 | % | 90 | % | 24 | % | 51 | % | 20 | % |
For the year ended April 30, 2010 | For the year ended April 30, 2009 | |||||||||||||||||||||||
Stevia China | SUWN USA | Total stevia segment | Stevia China | SUWN USA | Total stevia segment | |||||||||||||||||||
(Equity method) | (Consolidation) | |||||||||||||||||||||||
Revenues | 10,730,828 | 10,730,828 | 13,900,838 | 612,715 | 14,513,553 | |||||||||||||||||||
Cost of revenues | 9,221,076 | 9,221,076 | 11,155,714 | 426,929 | 11,582,643 | |||||||||||||||||||
Gross Profit | 1,509,752 | 1,509,752 | 2,745,124 | 185,786 | 2,930,910 | |||||||||||||||||||
- | - | |||||||||||||||||||||||
Loss on Equity Investment | 275,966 | 275,966 | ||||||||||||||||||||||
Other Operating Expenses | 2,867,471 | 2,867,471 | 1,798,103 | 526,686 | 2,324,789 | |||||||||||||||||||
- | - | |||||||||||||||||||||||
(LOSS) INCOME FROM OPERATIONS | (1,357,719 | ) | (275,966 | ) | (1,633,685 | ) | 947,021 | (340,900 | ) | 606,121 | ||||||||||||||
- | - | |||||||||||||||||||||||
Total Other Income (Expense) | 18,701 | 18,701 | 5,014 | (3,682 | ) | 1,332 | ||||||||||||||||||
INCOME TAXES | 7,415 | 7,415 | 217,251 | 217,251 | ||||||||||||||||||||
NET (LOSS) INCOME | (1,346,433 | ) | (275,966 | ) | (1,622,399 | ) | 724,756 | (337,218 | ) | 387,538 |
For the Years Ended April 30, | ||||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
Sunwin USA | Sunwin USA | |||||||
Loss in investment under the equity method | $ | (275,966 | ) | $ | (189,520 | ) | ||
NET LOSS | $ | (275,966 | ) | $ | (189,520 | ) |
April 30, | |||||||||||||||||
2010 | 2009 | $ Increase/Decrease | % Increase/Decrease | ||||||||||||||
Working Capital | $ | 18,786,249 | $ | 19,881,064 | $ | (1,094,815 | ) | (6 | ) | % | |||||||
Cash | $ | 12,746,756 | $ | 10,487,165 | $ | 2,259,591 | 22 | % | |||||||||
Accounts receivable, net | 2,803,482 | 4,011,446 | (1,207,964 | ) | (30 | ) | % | ||||||||||
Inventories, net | 5,696,533 | 7,415,809 | (1,719,276 | ) | (23 | ) | % | ||||||||||
Prepaid expenses and other current assets | 287,383 | 294,210 | (6,827 | ) | (2 | ) | % | ||||||||||
Total current assets | 21,794,416 | 22,208,630 | (414,214 | ) | (2 | ) | % | ||||||||||
Property and equipment, net | 17,138,123 | 19,121,340 | (1,983,217 | ) | (10 | ) | % | ||||||||||
Land use rights | 2,237,404 | 2,289,267 | (51,863 | ) | (2 | ) | % | ||||||||||
Total Assets | $ | 41,317,470 | $ | 43,619,237 | $ | (2,301,767 | ) | (5 | ) | % | |||||||
Accounts payable and accrued expenses | $ | 2,855,584 | $ | 2,098,967 | $ | 756,617 | 36 | % | |||||||||
Other current payables | - | 10,000 | (10,000 | ) | (100 | ) | % | ||||||||||
Taxes payable | 151,105 | 160,021 | (8,916 | ) | (6 | ) | % | ||||||||||
Due to related party | 1,478 | 58,578 | (57,100 | ) | (97 | ) | % | ||||||||||
Total current liabilities | 3,008,167 | 2,327,566 | 680,601 | 29 | % | ||||||||||||
Derivative Liability | 347,936 | - | 347,936 | ||||||||||||||
Other payables | 157,816 | 157,830 | (14 | ) | nm | ||||||||||||
Total liabilities | $ | 3,513,919 | $ | 2,485,396 | $ | 1,028,523 | 41 | % |
April 30, | ||||||||||||||||
2011 | 2010 | Increase (Decrease) | % | |||||||||||||
Current assets: | ||||||||||||||||
Cash | $ | 10,563,413 | $ | 10,416,522 | $ | 146,891 | 1.4 | % | ||||||||
Accounts receivable, net | 2,080,332 | 2,092,197 | (11,865 | ) | (0.6) | % | ||||||||||
Accounts receivable-related party | 204,664 | 138,945 | 65,719 | 47.3 | % | |||||||||||
Note receivable | 505,260 | - | 505,260 | n/a | ||||||||||||
Inventories, net | 3,327,914 | 5,118,009 | (1,790,095 | ) | (35.0) | % | ||||||||||
Prepaid taxes | 43,359 | 121,317 | (77,958 | ) | (64.3) | % | ||||||||||
Prepaid expenses and other current assets | 62,664 | 113,332 | (50,668 | ) | (44.7) | % | ||||||||||
Assets of discontinued operations | - | 5,590,166 | (5,590,166 | ) | (100.0) | % | ||||||||||
Total current assets | 16,787,606 | 23,590,488 | (6,802,882 | ) | (28.8) | % | ||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable and accrued expenses | $ | 2,495,777 | $ | 2,447,121 | $ | 48,656 | 2.0 | % | ||||||||
Taxes payable | 118,351 | 136,630 | (18,279 | ) | (13.4) | % | ||||||||||
Liabilities of discontinued operations | - | 582,232 | (582,232 | ) | (100.0) | % | ||||||||||
Total current liabilities | 2,614,128 | 3,165,983 | (551,855 | ) | (17.4) | % |
April 30, 2010 | April 30, 2009 | |||||||
China | $ | 11,696,648 | $ | 10,100,869 | ||||
United States | 1,049,651 | 380,487 | ||||||
Canada | 457 | 5,809 | ||||||
Total | $ | 12,746,756 | $ | 10,487,165 |
2011 | 2010 | |||||||
Net loss from continuing operations | $ | (5,125,788 | ) | $ | (3,856,359 | ) | ||
Depreciation, amortization, stock-based | ||||||||
compensation and other non-cash | ||||||||
gains and losses | 4,126,710 | 4,359,795 | ||||||
(Increase) decrease in accounts receivable | (473,199 | ) | 356,777 | |||||
Increase in inventory | 1,431,626 | 420,874 | ||||||
Increase in accounts payable, | ||||||||
accrued expenses and other payables | 437,728 | 661,610 | ||||||
Discontinued operations | 11,528 | (824,170 | ) | |||||
Other, net | 139,024 | 353,229 | ||||||
Total cash provided by operating activities | $ | 547,629 | $ | 1,471,756 |
April 30, 2011 | April 30, 2010 | |||||||
China | $ | 10,532,233 | $ | 9,366,871 | ||||
United States | 31,180 | 1,049,651 | ||||||
Total | $ | 10,563,413 | $ | 10,416,522 |
• | Any obligation under certain guarantee contracts, | ||
• | Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, | ||
• | Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in stockholder’s equity in our statement of financial position, and | ||
• | Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us. |
- | Our ability to complete agreements with Domino Sugar and Wild Flavors. | ||
- | Our revenues have declined in the past two fiscal years and there are no assurances they will return to historic levels in future periods; | ||
- | Dependence upon continued market acceptance of our stevioside products, | ||
- | Competition and low barriers to entry to the market in which we sell our products; | ||
- | Our dependence on the services of our | ||
- | |||
Our inability to control the cost of our raw materials; | |||
- | The limitation on our ability to receive and use our | ||
- | Our operations are subject to government regulation. If we fail to comply with the applicable regulations, our ability to operate in future periods could be in jeopardy; | ||
- | |||
The absence of various corporate governance measures which may reduce stockholders’ protections against interested director transactions, conflicts of interest and other matters; | |||
- | The effect of changes resulting from the political and economic policies of the Chinese government on our assets and operations located in the PRC; |
- | The impact of economic reform policies in the PRC; | ||
- | The influence of the Chinese government over the manner in which our Chinese subsidiaries must conduct our business activities; | ||
- | The | ||
- | Regulations relating to offshore investment activities by Chinese residents may increase the administrative burden we face and create regulatory uncertainties that may limit or adversely affect our ability to complete a business combination with PRC companies. | ||
- | The lack of various legal protections in certain agreements to which we are a party and which are material to our operations which are customarily contained in similar contracts prepared in the United States; | ||
- | Our ability to enforce our rights due to policies regarding the regulation of foreign investments in China; | ||
- | Difficulties stockholders may face who seek to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders | ||
- | Our ability to comply with the United States Foreign Corrupt Practices Act which could subject us to penalties and other adverse consequences; | ||
- | Provisions of our articles of incorporation and bylaws may delay or prevent a take-over which may not be in the best interests of our stockholders; | ||
- | Adverse affects on the liquidity of our stock because it currently trades below $5.00 per share, is quoted on the OTC bulletin board, and is considered a “penny stock;” and | ||
- | The impact on our stock price due to future sales of restricted stock held by existing shareholders. |
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
ITEM | CONTROLS AND PROCEDURES. |
ITEM 9B. | OTHER INFORMATION. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
Name | Age | Positions | |||
Laiwang Zhang | President and Chairman | ||||
Dongdong Lin | Chief Executive Officer, Secretary and Director | ||||
Fanjun Wu | Chief Financial Officer | ||||
Chengxiang Yan | Director and General Manager of Qufu Natural Green |
- | honest and ethical conduct; | ||
- | full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements; | ||
- | compliance with applicable laws, rules and regulations; | ||
- | the prompt reporting violation of the code; and | ||
- | accountability for adherence to the Code. |
- | understands generally accepted accounting principles and financial statements; | ||
- | is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves; | ||
- | has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements; | ||
- | understands internal controls over financial reporting; and | ||
- | understands audit committee functions. |
ITEM 11. | EXECUTIVE COMPENSATION. |
- | our principal executive officer or other individual serving in a similar capacity; | ||
- | our two most highly compensated executive officers other than our principal executive officer who made in excess of $100,000 in fiscal | ||
- | up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at April 30, |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Total ($) | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Total ($) | ||||||||||||||||||||||||||||||
Laiwang Zhang (1) | 2010 | $ | 117,002 | $ | 2,925 | 0 | 0 | $ | 119,927 | 2011 | $ | 179,778 | $ | 2,996 | 0 | 0 | $ | 182,774 | ||||||||||||||||||||||||
2009 | 0 | 0 | 0 | 0 | 0 | 2010 | $ | 117,002 | $ | 2,925 | 0 | 0 | $ | 119,927 | ||||||||||||||||||||||||||||
Dongdong Ling (2) | 2010 | 37,892 | 2,925 | 0 | 0 | 40,817 | 2011 | $ | 53,933 | $ | 2,996 | 0 | 0 | $ | 56,929 | |||||||||||||||||||||||||||
2009 | 8,378 | 8,900 | 0 | 0 | 17,278 | 2010 | $ | 37,892 | $ | 2,925 | 0 | 0 | $ | 40,817 | ||||||||||||||||||||||||||||
FangJun Wu (3) | 2010 | 36,179 | 2,925 | 0 | 0 | 39,104 | ||||||||||||||||||||||||||||||||||||
2009 | 3,240 | 0 | 0 | 0 | 3,240 | |||||||||||||||||||||||||||||||||||||
(1) | Mr. Zhang has served as our President and Chairman of the Board of Directors since April 2004. |
(2) | Ms. Lin has served as our Chief Executive Officer since February 2005. |
OPTION AWARDS | OPTION AWARDS | STOCK AWARDS | OPTION AWARDS | STOCK AWARDS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of securities underlying unexercised options (#) exercisable (b) | Number of securities underlying unexercised options (#) unexercisable (c) | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested (#) (j) | Number of securities underlying unexercised options (#) exercisable (b) | Number of securities underlying unexercised options (#) unexercisable (c) | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) d) | Option exercise price ($) (e) | Option expiration date (f) | Number of shares or units of stock that have not vested (#) (g) | Market value of shares or units of stock that have not vested ($) (h) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) (i) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested (#) (j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Laiwang Zhang | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dongdong Lin | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fanjun Wu | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
- | each person who is known by us to be the beneficial owner of more than five percent of our outstanding common stock; | ||
- | each director; | ||
- | each named executive officer; and | ||
- | all named executive officers and directors as a group. |
NAME OF BENEFICIAL OWNER | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | % OF CLASS | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | % OF CLASS | ||||||||||||
Laiwang Zhang (1) | 11,275,699 | 6.9 | % | 4,721,257 | 3.0 | % | ||||||||||
Dongdong Lin (1) | 4,984,108 | 3.1 | % | 4,984,108 | 3.2 | % | ||||||||||
Chengxiang Yan (1) | - | - | - | - | ||||||||||||
Fanjun Wu (1) | 1,732,052 | 1.1 | % | 1,732,552 | 1.1 | % | ||||||||||
All officers and directors as a group (four persons) | 17,991,859 | 11.1 | % | 10,450,238 | 6.5 | % | ||||||||||
Wild Flavors, Inc. (2) | 46,666,666 | 22.2 | % | |||||||||||||
WILD Flavors, Inc. (2) | 46,666,666 | 25.4 | % |
1 | Amounts include shares of common stock beneficially owned. No officers of directors hold options or warrants to purchase common stock. |
2 | Amount includes 20,000,000 shares of our common stock owned of record and five year warrants to purchase 26,666,666 shares of common stock with an exercise price of $0.35 per share issued pursuant to a securities purchase agreement with |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) | ||||||||||
Plan category | ||||||||||||
Plans approved by our shareholders: | ||||||||||||
2005 Equity Compensation Plan | 0 | N/A | 0 | |||||||||
2006 Equity Compensation Plan | 0 | N/A | 0 | |||||||||
Plans not approved by shareholders: | ||||||||||||
None. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
2010 | 2009 | 2011 | 2010 | |||||||||||||
Audit Fees | $ | 90,000 | $ | 90,000 | $ | 90,000 | $ | 90,000 | ||||||||
Audit - Related Fees | - | - | - | |||||||||||||
Tax Fees | 7,500 | - | 6,500 | 7,500 | ||||||||||||
All Other Fees | - | - | - | |||||||||||||
$ | 97,500 | $ | 90,000 | $ | 96,500 | $ | 97,500 |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES. |
Exhibit No. | Description of Exhibit | ||
3.1 | Articles of Incorporation (Incorporated by reference to the Annual Report on Form 10-KSB for the fiscal year ended April 30, 2000). | ||
3.2 | Certificate of Amendment to Articles of Incorporation (Incorporated by reference to the Form 8-K/A as filed on July 30, 2004). | ||
3.3 | By-Laws (Incorporated by reference to the Annual Report on Form 10-KSB for the fiscal year ended April 30, 2000). | ||
4.1 | Form of $0.65 common stock purchase warrant (Incorporated by reference to the Report on Form 8-K as filed on March 23, 2007). | ||
4.2 | Common Stock Purchase Warrant between Sunwin International Neutraceuticals, Inc. and Wild Flavors, Inc. dated February 5, 2009 (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed on February 11, 2009). |
4.3 | Stockholders Agreement dated February 5, 2009 Sunwin International Neutraceuticals, Inc., Laiwang Zhang, Dongdong Lin, Xingyuan Li, Junzhen Zhang, Xiangsheng Kong, Weidong Chai, Laiwang Zhang, Fanjun Wu and Wild Flavors, Inc. (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as filed on February 11, 2009). | ||
10.1 | Share Exchange Agreement dated April 30, 2004 between Network USA, Inc. and the stockholders of Sunwin Tech Group, Inc. (Incorporated by reference to the Report on Form 8-K as filed with on May 12, 2004). | ||
10.2 | Stock Purchase Agreement between Sunwin Tech Group, Inc., Qufu Natural Green Engineering Company, Limited and Shandong Shengwang Pharmaceutical Group Corporation (Incorporated by reference to the Annual Report on Form 10-K for the fiscal year ended April 30, 2004). | ||
10.3 | + | 2005 Equity Compensation Plan (Incorporated by reference to the Report on Form 8-K as filed on April 28, 2005). | |
10.4 | Lease agreement dated October 1, 2002 between Shandong Shengwang Pharmaceutical Corporation and Qufu Natural Green Engineering Co., Ltd. (Incorporated by reference to the Annual Report on Form 10-KSB/A for the fiscal year ended April 30, 2005). | ||
10.5 | Lease agreement dated October 6, 2002 between Qufu LuCheng Chiya Resident Commitment and Qufu Natural Green Engineering Co., Ltd. (Incorporated by reference to the Annual Report on Form 10-KSB/A for the fiscal year ended April 30, 2005). | ||
10.6 | Lease agreement dated April 1, 2004 between Qufu ShengDa Industry Co., Ltd. and Qufu Natural Green Engineering Co., Ltd.( Incorporated by reference to the Annual Report on Form 10-KSB/A for the fiscal year ended April 30, 2005). | ||
10.7 | Stock Purchase Agreement dated February 7, 2006 between Sunwin International Neutraceuticals, Inc., Qufu Natural Green Engineering Company and Shandong Shengwang Pharmaceutical Group Corporation (Incorporated by reference to the Quarterly Report on Form 10-QSB for the period ended January 31, 2006). | ||
10.8 | + | 2006 Equity Compensation Plan (Incorporated by reference to the Quarterly Report on Form 10-QSB for the period ended January 31, 2006). | |
10.9 | Subscription Agreement (Incorporated by reference to the Report on Form 8-K as filed on March 23, 2007). | ||
10.10 | Acquisition Agreement by and among Qufu Natural Green Engineering Co., Ltd. and Qufu Shengwang Stevia Biology and Science Co., Ltd. and Shandong Shengwang Group, Co., Ltd. dated June 30, 2008 (Incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K as filed on July 7, 2008). | ||
10.11 | Stock Sale And Purchase Agreement between Sunwin International Neutraceuticals, Inc. and Shandong Shengwang Group Co., Ltd. (Incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K as filed on July 7, 2008). | ||
10.12 | Amendment to the June 30, 2008 Acquisition Agreement by and among Qufu Natural Green Engineering Co., Ltd. and Qufu Shengwang Stevia Biology and Science Co., Ltd. and Shandong Shengwang Group Co., Ltd. dated September 2, 2008. (Incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K as filed on September 8, 2008). | ||
10.13 | Amendment to the June 30, 2008 Stock Sale and Purchase Agreement between Sunwin International Neutraceuticals, Inc. and Shandong Shengwang Group Co., Ltd. dated September 2, 2008 (Incorporated by reference Exhibit 10.16 to the Current Report on Form 8-K as filed on September 8, 2008). |
November 18, 2008 Second Amendment to Acquisition Agreement by and among Qufu Natural Green Engineering Co., Ltd. and Qufu Shengwang Stevia Biology and Science Co., Ltd. and Shandong Shengwang Group, Co., Ltd. dated as of June 30, 2008 (Incorporated by reference Exhibit 10.19 to the Current Report on Form 8-K as filed on November 26, 2008). | |||
10.15 | November 18, 2008 Second Amendment to Stock Sale And Purchase Agreement between Sunwin International Neutraceuticals, Inc. and Shandong Shengwang Group Co., Ltd. dated as of June 30, 2008 (Incorporated by reference Exhibit 10.20 to the Current Report on Form 8-K as filed on November 26, 2008). | ||
10.16 | Securities Purchase Agreement between Sunwin International Neutraceuticals, Inc. and Wild Flavors, Inc. dated February 5, 2009 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed on February 11, 2009). | ||
10.17 | Form of Operating Agreement between Sunwin International Neutraceuticals, Inc. and Wild Flavors, Inc. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed on February 11, 2009). |
10.18 | Distributorship Agreement dated February 5, 2009 among Sunwin International Neutraceuticals, Inc., Sunwin Stevia International Corp. and Wild Flavors, Inc. (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K as filed on February 11, 2009). | ||
10.19 | Consulting and Management Agreement between Sunwin International Neutraceuticals, Inc. and China Direct Investments, Inc. dated as of April 29, 2009. (Incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K filed on July 29, 2009). | ||
10.20 | Stock Sale and Purchase Agreement dated June 29, 2010 among Qufu Natural Green Engineering, Shengya Veterinary Medicine Co., Ltd., and Mr. Laiwang Zhang (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 7, 2010). | ||
14.1 | Code of Ethics (Incorporated by reference to Exhibit 14 to the Registration Statement on Form SB-2 as filed on May 27, 2005). | ||
21.1 | * | Subsidiaries of the registrant. | |
31.1 | * | Section 302 Certificate of the Chief Executive Officer. | |
31.2 | * | Section 302 Certificate of Chief Financial Officer. | |
32.1 | * | Section 906 Certificate of Chief Executive Officer and Chief Financial Officer. | |
Sunwin International Neutraceuticals, Inc. | ||
July 29, | By: | /s/ Dongdong Lin |
Dongdong Lin, Chief Executive Officer and Director, (Principal Executive Officer) |
Signature | Title | Date | |||
/s/ Laiwang Zhang | President and Chairman | July 29, | |||
Laiwang Zhang | |||||
/s/ Dongdong Lin | Chief Executive Officer and Director (Principal Executive Officer) | July | |||
Dongdong Lin | |||||
/s/ Fanjun Wu | Chief Financial Officer (Principal Financial and Accounting Officer) | July 29, | |||
Fanjun Wu | |||||
/s/ Chengxiang Yan | Director | July 29, | |||
Chengxiang Yan |
Page | |
Report of Independent Registered Public Accounting Firm | F |
Consolidated Financial Statements: | |
Consolidated Balance Sheets | F |
Consolidated Statements of Operations | F |
Consolidated Statement of Stockholders’ Equity | F |
Consolidated Statements of Cash Flows | F |
Notes to Consolidated Financial Statements | F |
/s/ Sherb & Co., LLP | ||
Certified Public Accountants | ||
| New York, NY | |
July 29, | 2011 |
CONSOLIDATED BALANCE SHEETS | ||||||||
April 30, 2010 | April 30, 2009 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 12,746,756 | $ | 10,487,165 | ||||
Accounts receivable, net of allowance for doubtful accounts of $1,504,170 and $817,923, respectively | 2,803,482 | 4,011,446 | ||||||
Accounts receivable-related party | 138,945 | - | ||||||
Inventories, net | 5,696,533 | 7,415,809 | ||||||
Prepaid taxes | 121,317 | - | ||||||
Prepaid expenses and other assets | 287,383 | 294,210 | ||||||
Total Current Assets | 21,794,416 | 22,208,630 | ||||||
Equity method investment | 147,527 | - | ||||||
Property and equipment, net | 17,138,123 | 19,121,340 | ||||||
Land use right | 2,237,404 | 2,289,267 | ||||||
Total Assets | $ | 41,317,470 | $ | 43,619,237 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | $ | 2,855,584 | $ | 2,098,967 | ||||
Taxes payable | 151,105 | 160,021 | ||||||
Due to related party | 1,478 | 58,578 | ||||||
Other current payables | - | 10,000 | ||||||
Total Current Liabilities | 3,008,167 | 2,327,566 | ||||||
Derivative liability | 347,936 | - | ||||||
Other payables | 157,816 | 157,830 | ||||||
Total Liabilities | 3,513,919 | 2,485,396 | ||||||
SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC. STOCKHOLDERS' EQUITY | ||||||||
Preferred stock ($.001 Par Value; 1,000,000 shares authorized; | ||||||||
No shares issued and outstanding) | - | - | ||||||
Common stock ($.001 Par Value; 200,000,000 shares authorized; | ||||||||
160,240,827 and 149,902,927 shares issued and outstanding at | ||||||||
April 30, 2010 and 2009, respectively) | 160,241 | 149,903 | ||||||
Additional paid-in capital | 29,095,572 | 27,712,257 | ||||||
Retained earnings | 2,274,215 | 6,826,215 | ||||||
Other comprehensive income - foreign currency | 3,824,713 | 3,828,469 | ||||||
Total Sunwin International Neutraceuticals, Inc. stockholders' equity | 35,354,741 | 38,516,844 | ||||||
Non-controlling interest | 2,448,810 | 2,616,997 | ||||||
Total stockholders' equity | 37,803,551 | 41,133,841 | ||||||
Total Liabilities and Stockholders' Equity | $ | 41,317,470 | $ | 43,619,237 | ||||
See notes to consolidated financial statements |
April 30, | ||||||||
2011 | 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 10,563,413 | $ | 10,416,522 | ||||
Accounts receivable, net of allowance for doubtful accounts of | ||||||||
$1,098,240 and $519,777, respectively | 2,080,332 | 2,092,197 | ||||||
Accounts receivable - related party | 204,664 | 138,945 | ||||||
Note receivable | 505,260 | - | ||||||
Inventories, net | 3,327,914 | 5,118,009 | ||||||
Prepaid taxes | 43,359 | 121,317 | ||||||
Prepaid expenses and other current assets | 62,664 | 113,332 | ||||||
Assets of discontinued operations | - | 5,590,166 | ||||||
Total Current Assets | 16,787,606 | 23,590,488 | ||||||
Equity method investment | - | 147,527 | ||||||
Property and equipment, net | 13,967,964 | 15,342,051 | ||||||
Land use rights | 2,303,112 | 2,237,404 | ||||||
Total Assets | $ | 33,058,682 | $ | 41,317,470 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued expenses | 2,495,776 | 2,447,121 | ||||||
Taxes payable | 118,351 | 136,630 | ||||||
Derivative liability | 5,203 | 347,936 | ||||||
Liabilities of discontinued operations | - | 582,232 | ||||||
Total Current Liabilities | 2,619,330 | 3,513,919 | ||||||
STOCKHOLDERS' EQUITY: | ||||||||
Preferred stock ($.001 par value; 1,000,000 shares authorized; No shares issued and outstanding) | - | - | ||||||
Common stock ($.001 par value; 200,000,000 shares authorized; 155,522,809 and 160,240,827 shares issued and outstanding at April 30, 2011 and 2010) | 155,523 | 160,241 | ||||||
Additional paid-in capital | 28,390,279 | 29,095,572 | ||||||
(Accumulated deficit) retained earnings | (4,477,522 | ) | 2,274,215 | |||||
Accumulated other comprehensive income | 4,262,044 | 3,824,713 | ||||||
Total Sunwin International Neutraceuticals, Inc. stockholders' equity | 28,330,324 | 35,354,741 | ||||||
Noncontrolling interest | 2,109,028 | 2,448,810 | ||||||
Total Stockholders' Equity | 30,439,352 | 37,803,551 | ||||||
Total Liabilities and Stockholders' Equity | $ | 33,058,682 | $ | 41,317,470 |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
For the Year Ended April 30, | ||||||||
2010 | 2009 | |||||||
Revenues | $ | 14,060,990 | $ | 22,209,912 | ||||
Revenues - related party | 431,969 | - | ||||||
Total Revenues | $ | 14,492,959 | $ | 22,209,912 | ||||
Cost of revenues | 11,931,027 | 17,129,874 | ||||||
Gross Profit | 2,561,932 | 5,080,038 | ||||||
OPERATING EXPENSES: | ||||||||
Loss on equity investment | 275,966 | - | ||||||
Selling expenses | 1,106,288 | 1,694,900 | ||||||
Loss on disposition of property and equipment | 156,865 | - | ||||||
General and administrative | 5,920,582 | 2,827,771 | ||||||
Total Operating Expenses | 7,459,701 | 4,522,671 | ||||||
(LOSS) INCOME FROM OPERATIONS | (4,897,769 | ) | 557,367 | |||||
OTHER INCOME (EXPENSE): | ||||||||
Loss on equity investment | (222,404 | ) | - | |||||
Other (expense) income | (19,843 | ) | 83,281 | |||||
Interest income | 53,308 | 52,202 | ||||||
Total Other (Expense) Income | (188,939 | ) | 135,483 | |||||
(LOSS) INCOME BEFORE INCOME TAXES AND NONCONTROLLING INTEREST | (5,086,708 | ) | 692,850 | |||||
INCOME TAXES | (9,979 | ) | (307,527 | ) | ||||
NET (LOSS) INCOME | (5,096,687 | ) | 385,323 | |||||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | 168,187 | 114,973 | ||||||
NET (LOSS) INCOME ATTRIBUTABLE TO SUNWIN INTERNATIONAL NEUTRACUETICALS, INC. | (4,928,500 | ) | 500,296 | |||||
NET (LOSS) INCOME PER COMMON SHARE - BASIC AND DILUTED: | ||||||||
Net (loss) income per common share - basic | $ | (0.03 | ) | $ | 0.00 | |||
Net (loss) income per common share - diluted | $ | (0.03 | ) | $ | 0.00 | |||
Weighted Average Common Shares Outstanding - basic | 152,845,870 | 100,996,013 | ||||||
Weighted Average Common Shares Outstanding - diluted | 152,845,870 | 101,464,350 | ||||||
See notes to consolidated financial statements |
For the Year Ended April 30, | ||||||||
2011 | 2010 | |||||||
Revenues | $ | 9,109,279 | $ | 12,418,548 | ||||
Revenues - related party | 473,352 | 431,969 | ||||||
Total revenues | 9,582,631 | 12,850,517 | ||||||
Cost of revenues | 8,130,851 | 10,913,556 | ||||||
Gross profit | 1,451,780 | 1,936,961 | ||||||
Operating expenses: | ||||||||
Loss on equity investment | 147,527 | 275,966 | ||||||
Loss on disposition of property and equipment | 1,180,301 | 156,865 | ||||||
Selling expenses | 570,718 | 784,954 | ||||||
General and administrative expenses | 4,733,688 | 4,367,014 | ||||||
Total operating expenses | 6,632,234 | 5,584,799 | ||||||
- | ||||||||
Operating loss | (5,180,454 | ) | (3,647,837 | ) | ||||
- | ||||||||
Other income (expense): | - | |||||||
Gain (loss) on change in fair value of derivative liability | 6,165 | (222,404 | ) | |||||
Other income (expense) | 390 | (20,562 | ) | |||||
Interest income | 48,111 | 44,423 | ||||||
Total other income (expense) | 54,666 | (198,543 | ) | |||||
Loss from continuing operations before income taxes | ||||||||
and noncontrolling interest | (5,125,788 | ) | (3,846,380 | ) | ||||
Discontinued operations: | ||||||||
Loss from discontinued operations | (135,736 | ) | (1,240,328 | ) | ||||
Gain on disposal of discontinued operations | 11,450 | - | ||||||
Total loss from discontinued operations | (124,286 | ) | (1,240,328 | ) | ||||
Loss before income taxes and noncontrolling interest | (5,250,074 | ) | (5,086,708 | ) | ||||
- | ||||||||
Income taxes | - | (9,979 | ) | |||||
Net loss | (5,250,074 | ) | (5,096,687 | ) | ||||
Less: loss attributatble to noncontrolling interest | 339,782 | 168,187 | ||||||
Net loss attributable to Sunwin International Neutracueticals, Inc. | (4,910,292 | ) | (4,928,500 | ) | ||||
Basic and diluted loss per common share: | ||||||||
Loss from continuing operations | $ | (0.03 | ) | $ | (0.02 | ) | ||
Loss from discontinue operations | (0.00 | ) | (0.01 | ) | ||||
Loss per common share | $ | (0.03 | ) | $ | (0.03 | ) | ||
Weighted average common shares outstanding - basic and diluted | 157,261,152 | 152,845,870 | ||||||
Amount attributable to Sunwin International Neutracueticals, Inc. | ||||||||
Loss from continuing operations, net of tax | $ | (4,786,006 | ) | $ | (3,688,172 | ) | ||
Loss from discontinued operations, net of tax | (124,286 | ) | (1,240,328 | ) | ||||
Net loss | $ | (4,910,292 | ) | $ | (4,928,500 | ) | ||
SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Year Ended April 30, 2010 and 2009 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunwin International Neutraceuticals, Inc. Shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sunwin International Neutraceuticals, Inc. Shareholders | Common Stock, $.001 Par Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock, $.001 Par Value | Number of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive | Treasury Stock | Noncontrolling Interest | Comprehensive Income | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Amount | Additional Paid-in Capital | Retained Earnings | Subscription Receivable | Accumulated Other Comprehensive Loss | Noncontrolling Interest | Comprehensive Income | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 30, 2008 | 87,006,936 | $ | 87,007 | $ | 17,218,066 | $ | 6,325,919 | $ | (372,900 | ) | $ | 3,189,794 | $ | - | $ | - | $ | 26,447,886 | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for acquisition | 40,609,681 | 40,610 | 7,083,483 | 7,124,093 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling interest in Qufu Shengwang | 2,731,970 | 2,731,970 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock sold for cash | 20,000,000 | 20,000 | 2,970,000 | 2,990,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for placement fee | 1,000,000 | 1,000 | (1,000 | ) | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Placement fee paid | (100,000 | ) | (100,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Warrants | 1,286,310 | 1,286 | 191,660 | 192,946 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subscription receivable | 372,900 | 372,900 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of stock based compensation | - | 350,048 | - | - | 350,048 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income for the year | - | - | - | 500,296 | - | (114,973 | ) | 385,323 | 385,323 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 638,675 | - | 638,675 | 638,675 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 638,675 | 638,675 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | - | - | - | - | - | - | - | 1,023,998 | 1,023,998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 30, 2009 | 149,902,927 | $ | 149,903 | $ | 27,712,257 | $ | 6,826,215 | $ | - | $ | 3,828,469 | $ | 2,616,997 | 1,023,998 | $ | 41,133,841 | 149,902,927 | $ | 149,903 | $ | 27,712,257 | $ | 6,826,215 | $ | 3,828,469 | $ | - | $ | 2,616,997 | 1,023,998 | $ | 41,133,841 | ||||||||||||||||||||||||||||||||
Common stock issued for services | 2,700,000 | 2,700 | 747,300 | 750,000 | 2,700,000 | 2,700 | 747,300 | 750,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Warrants | 7,637,900 | 7,638 | 1,138,047 | 1,145,685 | 7,637,900 | 7,638 | 1,138,047 | 1,145,685 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle- adoption of ASC 815 effective January 1, 2009 | (502,032 | ) | 376,500 | (125,532 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting principle-adoption of EITF 07-05 effective January 1, 2009 | (502,032 | ) | 376,500 | (125,532 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income for the year | - | - | - | (4,928,500 | ) | - | (168,187 | ) | (5,096,687 | ) | (5,096,687 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the year | - | - | - | (4,928,500 | ) | - | (168,187 | ) | (5,096,687 | ) | (5,096,687 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | (3,756 | (3,756 | ) | (3,756 | ) | (3,756 | ) | (3,756 | ) | (3,756 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | (3,756 | ) | (3,756 | ) | (3,756 | ) | (3,756 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | - | - | - | - | - | - | - | (4,076,445 | ) | (5,100,443 | ) | - | - | - | - | - | - | (5,100,443 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Balance, April 30, 2010 | 160,240,827 | $ | 160,241 | $ | 29,095,572 | $ | 2,274,215 | $ | - | $ | 3,824,713 | $ | 2,448,810 | $ | (4,076,445 | ) | 37,803,551 | 160,240,827 | 160,241 | 29,095,572 | 2,274,215 | 3,824,713 | - | 2,448,810 | 37,803,551 | |||||||||||||||||||||||||||||||||||||||
See notes to consolidated financial statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued for services | 2,350,872 | 2,350 | 671,893 | 674,243 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Warrants | 749,655 | 750 | 111,699 | 112,449 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Treasury stock related to disposition of subsidiary | (3,674,716 | ) | (3,674,716 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cancellation of treasury stock | (7,818,545 | ) | (7,818 | ) | (1,825,453 | ) | (1,841,445 | ) | 3,674,716 | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of derivative liability to additional paid-in capital associated with the exercise of warrants to purchase 749,655 common shares | 336,568 | 336,568 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss for the year | - | - | - | (4,910,292 | ) | - | (339,782 | ) | (5,250,074 | ) | (5,250,074 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Realized gain of foreign currency translation from sale of subsidiary | (1,243,481 | ) | (1,243,481 | ) | (1,243,481 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | 1,680,812 | 1,680,812 | 1,680,812 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | 1,680,812 | 437,331 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | - | - | - | - | - | - | - | 437,331 | (4,812,743 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, April 30, 2011 | 155,522,809 | $ | 155,523 | $ | 28,390,279 | $ | (4,477,522 | ) | $ | 4,262,044 | $ | - | $ | 2,109,028 | $ | 30,439,352 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For the Year Ended April 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net (loss) income | $ | (5,096,687 | ) | $ | 385,323 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation | 1,864,605 | 1,660,915 | ||||||
Loss on change in fair value of derivative liability | 222,404 | - | ||||||
Amortization of land use rights | 51,647 | 34,285 | ||||||
Stock based consulting fees | 750,000 | 350,048 | ||||||
Loss on equity investment | 275,966 | - | ||||||
Impairment of inventory | 555,215 | - | ||||||
Loss on disposition of property and equipment | 156,865 | - | ||||||
Allowance for doubtful accounts | 686,147 | 337,975 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | 450,629 | (70,902 | ) | |||||
Inventories | 996,490 | (1,229,143 | ) | |||||
Prepaid expenses and other current assets | 4,802 | 213,864 | ||||||
Prepaid taxes | (121,287 | ) | - | |||||
Accounts payable and accrued expenses | 433,322 | (800,474 | ) | |||||
Accounts receivable due from related parties | (138,910 | ) | - | |||||
Other payable | 399,446 | - | ||||||
Other current payable | (10,000 | ) | - | |||||
Taxes payable | (8,899 | ) | (207,102 | ) | ||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,471,755 | 674,789 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Cash contributed to equity method investment | (260,569 | ) | (2,500,000 | ) | ||||
Cash acquired in acquisition | - | 2,660,519 | ||||||
Proceeds from property and equipment disposal | 877,514 | - | ||||||
Purchase of property and equipment | (917,989 | ) | (405,405 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (301,044 | ) | (244,886 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from sale of common stock and exercise of warrants | 1,145,685 | 3,192,946 | ||||||
Payments for placement fee | - | (110,000 | ) | |||||
Repayment of related party advances | (57,100 | ) | - | |||||
Proceeds from short term loan | - | 10,000 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,088,585 | 3,092,946 | ||||||
EFFECT OF EXCHANGE RATE ON CASH | 295 | 153,180 | ||||||
NET INCREASE IN CASH | 2,259,591 | 3,676,029 | ||||||
CASH - beginning of fiscal year | 10,487,165 | 6,811,136 | ||||||
CASH - end of fiscal year | $ | 12,746,756 | $ | 10,487,165 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for taxes | $ | 198,203 | $ | - | ||||
Cash paid for interest | $ | - | $ | 3,682 | ||||
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES | ||||||||
Fair value of assets acquired-Qufu Shengwang | $ | - | $ | 7,011,682 | ||||
Liabilities assumed-Qufu Shengwang | $ | - | $ | 181,756 | ||||
Issuance of common stock in connection with acquisition per final purchase price | $ | - | $ | 4,026,851 | ||||
Issuance of common stock in connection with acquisition and refundable per final purchase price | $ | - | $ | 2,173,562 | ||||
Negative goodwill allocated to property and equipment acquired | $ | - | $ | 71,104 | ||||
Fair value of assets acquired-Qufu Shengren | $ | - | $ | 6,137,919 | ||||
Liabilities assumed-Qufu Shengren | $ | - | $ | 2,501,367 | ||||
Common stock issued for Qufu Shengren acquisition | $ | - | $ | 3,097,242 | ||||
Negative goodwill allocated to property and equipment acquired | $ | - | $ | 593,310 | ||||
Fair value of non-cash assets contributed to equity method investment | $ | 239,107 | $ | - | ||||
Fair value of liabilities contributed to equity method investment | $ | 76,183 | $ | - | ||||
See notes to consolidated financial statements. |
For the Year Ended April 30, | ||||||||
2011 | 2010 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (5,250,073 | ) | $ | (5,096,687 | ) | ||
Loss from discontinued operations | 124,286 | 1,240,328 | ||||||
Adjustments to reconcile net loss to net cash | ||||||||
provided by operating activities | ||||||||
Depreciation expense | 1,467,342 | 1,662,686 | ||||||
(Gain) loss on change in fair value of derivative liability | (6,165 | ) | 222,404 | |||||
Amortization of land use rights | 52,905 | 51,647 | ||||||
Equity in loss of equity method investees | 147,527 | 275,966 | ||||||
Stock issued in exchange for services | 183,127 | 750,000 | ||||||
Loss on disposition of property and equipment | 1,173,036 | 156,865 | ||||||
Inventory impairment charge | 573,130 | 555,215 | ||||||
Allowance for doubtful accounts | 535,808 | 686,147 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (416,443 | ) | 495,687 | |||||
Accounts receivable - related party | (56,756 | ) | (138,910 | ) | ||||
Inventories | 1,431,626 | 420,874 | ||||||
Prepaid expenses and other current assets | 106,983 | 136,364 | ||||||
Tax receivable | 32,041 | (121,287 | ) | |||||
Accounts payable and accrued expenses | 235,734 | 692,528 | ||||||
Taxes payable | 25,213 | (30,917 | ) | |||||
Other current liabilities | 176,781 | 337,016 | ||||||
Net cash provided by continuing operations | 536,101 | 2,295,926 | ||||||
Net cash provided by (used in) discontinued operations | 11,528 | (824,170 | ) | |||||
NET CASH PROVIDED BY OPERATING ACTIVITIES | 547,629 | 1,471,756 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Cash contributed to equity method investee | - | (260,569 | ) | |||||
Increase in note receivable | (505,260 | ) | - | |||||
Proceeds from the sale of property and equipment | 39,462 | 877,514 | ||||||
Purchases of property and equipment | (530,156 | ) | (909,691 | ) | ||||
Net cash used in discontinued operations | (210 | ) | (8,298 | ) | ||||
NET CASH USED IN INVESTING ACTIVITIES | (996,164 | ) | (301,044 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Repayment of related party advances | - | (57,100 | ) | |||||
Proceeds from exercise of warrants | 112,449 | 1,145,685 | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES | 112,449 | 1,088,585 | ||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 482,977 | 295 | ||||||
NET CHANGE IN CASH | 146,891 | 2,259,591 | ||||||
Cash at beginning of year | 10,416,522 | 8,156,931 | ||||||
Cash at end of year | $ | 10,563,413 | $ | 10,416,522 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||||||||
Cash paid for income taxes | $ | - | $ | 198,203 | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Fair value of non-cash assets contributed to | ||||||||
equity method investment | $ | - | $ | 239,107 | ||||
Fair value of liabilities contributed to equity method investment | $ | - | $ | 76,183 |
- | Stevioside; and | ||
- | Chinese |
- | Qufu Natural Green Engineering Co., Ltd., a Chinese limited liability company “Qufu Natural |
- | Qufu Shengren Pharmaceutical Co., Ltd., a Chinese limited liability company, “Qufu Shengren”, and a wholly owned subsidiary of Qufu Natural |
- | Qufu Shengwang Stevia Biology and Science Co., Ltd., a Chinese limited liability company, “Qufu Shengwang”. Qufu Natural Green owns a 60% interest in Qufu |
- | Sunwin Tech Group, Inc., a Florida corporation (“Sunwin Tech”) |
April 30, 2011 | April 30, 2010 | ||||||
Dividend Yield | 0 | % | 0 | % | |||
Volatility | 107 | % | 158 | % | |||
Risk Free Rate | 0.22 | % | 1.51 | % | |||
Expected Term (Years) | $ | 0.89 | $ | 1.89 | |||
Asset Price | $ | 0.36 | $ | 0.52 | |||
Exercise Price |
May 1, 2009 | April 30, 2010 | |||||||
Dividend Yield | 0 | % | 0 | % | ||||
Volatility | 140 | % | 158 | % | ||||
Risk Free Rate | 1.39 | % | 1.51 | % | ||||
Expected Term | 2.92 | 1.89 | ||||||
Asset Price | $ | 0.20 | $ | 0.52 | ||||
Exercise Price | $ | 0.15 | $ | 0.15 |
Level 1: | Observable inputs such as quoted market prices in active markets for identical assets or |
Level 2: | Observable market-based inputs or unobservable inputs that are corroborated by market |
Level 3: | Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions. |
For Fiscal Years Ended April 30, | For Fiscal Years Ended April 30, | ||||||||||||||||
2010 | 2009 | 2011 | 2010 | ||||||||||||||
Numerator: | |||||||||||||||||
Net (loss) income | $ | (4,928,500 | ) | $ | 500,296 | ||||||||||||
Net loss attributable to Sunwin International Neutraceuticals, Inc. | $ | (4,910,292) | $ | (4,928,500 | ) | ||||||||||||
Numerator for basic EPS, loss applicable to common stock holders | $ | (4,928,500 | ) | $ | 500,296 | $ | (4,910,292) | $ | (4,928,500 | ) | |||||||
Denominator: | |||||||||||||||||
Denominator for basic earnings per share - weighted average number of common shares outstanding | 152,845,870 | 100,996,013 | 157,261,152 | 152,845,870 | |||||||||||||
Stock Awards, Options, and Warrants(1) | 468,337 | ||||||||||||||||
Stock Awards, Options, and Warrants | - | - | |||||||||||||||
Denominator for diluted earnings per share - adjusted weighted average outstanding average number of common shares outstanding | 152,845,870 | 101,464,350 | 157,261,152 | 152,845,870 | |||||||||||||
Basic and Diluted loss Per Common Share: | |||||||||||||||||
Earnings per share - basic | $ | (0.03 | ) | $ | 0.00 | $ | (0.03 | ) | $ | (0.03 | ) | ||||||
Earnings per share - diluted | $ | (0.03 | ) | $ | 0.00 | $ | (0.03 | ) | $ | (0.03 | ) |
For the Years Ended April 30 | ||||||||
2010 | 2009 | |||||||
Net (loss) income | $ | (5,096,687) | $ | 385,323 | ||||
Other comprehensive (loss) income, net of tax | ||||||||
Foreign currency translation (loss) gain, net of tax | (3,756 | ) | 638,675 | |||||
Comprehensive (loss) income | (5,100,443 | ) | 1,023,998 | |||||
Comprehensive loss attributable to non-controlling interests | 168,187 | 114,973 | ||||||
Comprehensive (loss) income attributable to Sunwin International Neutraceuticals, Inc. | $ | (4,932,256 | ) | $ | 1,138,971 |
2010 | 2009 | |||||||
Net loss | $ | (5,250,074 | ) | $ | (5,096,687) | |||
Other comprehensive (loss) income, net of tax | ||||||||
Realized gain from foreign currency translation due to sale of subsidiary | (1,243,481) | -- | ||||||
Foreign currency translation gain (loss), net of tax | 1,680,812 | (3,756) | ||||||
Comprehensive loss | (4,812,743 | ) | (5,100,443) | |||||
Comprehensive loss attributable to noncontrolling interests | 339,782 | 168,187 | ||||||
Comprehensive loss attributable to Sunwin International Neutraceuticals, Inc. | $ | (4,472,961 | ) | $ | (4,932,256) |
2010 | 2009 | 2011 | 2010 | |||||||||||||
Raw materials | $ | 1,754,424 | $ | 3,136,205 | $ | 736,533 | $ | 1,346,590 | ||||||||
Work in process | 164,623 | 265,295 | 179,585 | 164,623 | ||||||||||||
Finished goods | 4,236,678 | 4,297,066 | 3,099,869 | 4,017,610 | ||||||||||||
6,155,725 | 7,698,566 | 4,015,987 | 5,528,823 | |||||||||||||
Less: reserve for obsolete inventory | (459,192 | ) | (282,757 | ) | (688,073) | (410,814 | ) | |||||||||
$ | 5,696,533 | $ | 7,415,809 | $ | 3,327,914 | $ | 5,118,009 |
Estimated Life | 2010 | 2009 | Estimated Life | 2011 | 2010 | |||||||||||||
Office Equipment | 5-7 Years | $ | 195,774 | $ | 215,966 | 5-7 Years | $ | 39,568 | $ | 46,609 | ||||||||
Auto and Trucks | 10 Years | 772,924 | 375,157 | 10 Years | 796,099 | 760,672 | ||||||||||||
Manufacturing Equipment | 20 Years | 13,185,329 | 16,032,086 | 20 Years | 11,364,168 | 11,686,621 | ||||||||||||
Buildings | 20 Years | 8,106,022 | 8,062,991 | 20 Years | 6,607,434 | 6,472,068 | ||||||||||||
Construction in Process | 5,469 | 161,492 | 5,469 | |||||||||||||||
Gross Property and Equipment | 22,265,518 | 24,847,692 | 18,807,269 | 18,971,439 | ||||||||||||||
Less: Accumulated Depreciation | (5,127,395 | ) | (5,726,352 | ) | (4,839,305 | ) | (3,629,388 | ) | ||||||||||
Net Property and Equipment | $ | 17,138,123 | $ | 19,121,340 | $ | 13,967,964 | $ | 15,342,051 |
Estimated Life | 2010 | 2009 | Estimated Life | 2011 | 2010 | |||||||||||||
Land Use Right | 43.5 years | $ | 2,323,503 | $ | 2,323,710 | 43.5 years | $ | 2,448,171 | $ | 2,323,503 | ||||||||
Less: Accumulated Amortization | (86,099 | ) | (34,443 | (145,059 | ) | (86,099 | ) | |||||||||||
Net Land Use Right | $ | 2,237,404 | $ | 2,289,267 | $ | 2,303,112 | $ | 2,237,404 |
2010 | 2009 | |||||||
Due to Ma Qiang | $ | - | $ | 57,100 | ||||
Due to Pharmaceutical Corporation | 1,478 | 1,478 | ||||||
Total | $ | 1,478 | $ | 58,578 |
Fiscal Years Ended April 30, | Fiscal Years Ended April 30, | |||||||||||||||
2010 | 2009 | 2011 | 2010 | |||||||||||||
U.S. Operations | $ | (1,406,983 | ) | $ | (657,519 | ) | $ | (269,138 | ) | $ | (1,406,983 | ) | ||||
Chinese Operations | (3,679,725 | ) | 1,157,815 | (4,980,936 | ) | (3,679,725 | ) | |||||||||
Total | $ | (5,086,708 | ) | $ | 500,296 | $ | (5,250,074 | ) | $ | (5,086,708 | ) |
Fiscal Years Ended April 30, | Fiscal Years Ended April 30, | |||||||||||||||
2010 | 2009 | 2011 | 2010 | |||||||||||||
Federal, State and Local | $ | - | $ | - | $ | - | $ | -- | ||||||||
Peoples Republic of China - Federal and Local | - | 307,527 | - | 9,979 | ||||||||||||
Total | $ | - | $ | 307,527 | $ | - | $ | 9,979 |
Fiscal Years Ended April 30, | Fiscal Years Ended April 30, | |||||||||||||||
2010 | 2009 | 2011 | 2010 | |||||||||||||
Income tax (benefit) provision at Federal statutory rate | $ | (1,728,000 | ) | $ | 236,000 | $ | (1,742,000 | ) | $ | (1,728,000 | ) | |||||
State income taxes, net of Federal Benefit | (234,000 | ) | 32,000 | (236,000 | ) | (234,000 | ) | |||||||||
Temporary differences | 135,000 | |||||||||||||||
Permanent differences | 86,000 | 86,000 | ||||||||||||||
U.S. tax rate in excess of foreign tax rate | 510,000 | (214,000 | ) | 491,000 | 510,000 | |||||||||||
Benefit of loss | 1,376,000 | 254,000 | 1,487,000 | 1,376,000 | ||||||||||||
Increase in valuation allowance for share-based transaction | (135,000 | ) | ||||||||||||||
Tax provision | $ | 10,000 | $ | 308,000 | $ | - | $ | 10,000 |
Fiscal Years Ended April 30, | ||||||||
2010 | 2009 | |||||||
Deferred tax assets from NOL carry forwards | $ | 2,514,000 | $ | 1,288,000 | ||||
Temporary differences – share based compensation | 1,177,000 | 1,070,000 | ||||||
Total deferred tax asset | 3,691,000 | 2,358,000 | ||||||
Valuation allowance | (3,691,000 | ) | (2,358,000 | ) | ||||
Deferred tax asset, net of allowance | $ | - | $ | - |
Purchase price | $ | 4,026,851 | ||
Net Assets Acquired: | ||||
Total Assets | 7,011,682 | |||
Minus: Liabilities | (181,756 | ) | ||
Total Net Assets | 6,829,926 | |||
*60% ownership | ||||
Net Assets Acquired: | 4,097,956 | |||
Net Assets acquired in excess of purchase price; Allocated to Property and Equipment | $ | 71,105 |
Purchase Price | $ | 3,097,242 | ||
Net Assets Acquired (March 31, 2009): | ||||
Total Assets | 6,137,919 | |||
Minus: Liabilities | (2,501,367 | ) | ||
Total Net Assets | 3,636,552 | |||
*100% ownership | ||||
Net Assets Acquired: | 3,636,552 | |||
Net Assets acquired in excess of purchase price; Allocated to property and equipment | $ | 539,310 |
Fiscal Years Ended April 30, | ||||||||
2011 | 2010 | |||||||
Deferred tax assets from NOL carry forwards | $ | 4,001,000 | $ | 2,514,000 | ||||
Temporary differences – share based compensation | 1,177,000 | 1,177,000 | ||||||
Total deferred tax asset | 5,178,000 | 3,691,000 | ||||||
Valuation allowance | (5,178,000 | ) | (3,691,000 | ) | ||||
Deferred tax asset, net of allowance | $ | - | $ | - |
SUNWIN INTERNATIONAL NEUTRACUETICALS, INC. AND SUBSIDIARIES | ||||||||||||||||||||
UNAUDITED PRO-FORMA STATEMENTS OF OPERATIONS | ||||||||||||||||||||
For the fiscal year ended April 30, 2009 | ||||||||||||||||||||
Sunwin | ||||||||||||||||||||
Sunwin | Qufu | Qufu | Pro-forma | International | ||||||||||||||||
International | Shengwang | Shengren | Adjustments | Pro-forma | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||
REVENUES | $ | 21,691,675 | $ | 602,194 | $ | 114,254 | $ | - | $ | 22,408,123 | ||||||||||
COST OF SALES | 16,550,294 | 626,813 | 89,156 | - | $ | 17,266,263 | ||||||||||||||
GROSS PROFIT | 5,141,381 | (24,619 | ) | 25,098 | - | 5,141,860 | ||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Stock-based consulting expense | 350,047 | - | 350,047 | |||||||||||||||||
Selling Expenses | 1,660,944 | 43,993 | 3,442 | - | 1,708,379 | |||||||||||||||
General and Administrative | 2,291,251 | 232,232 | 31,723 | - | 2,555,206 | |||||||||||||||
Total Operating Expenses | 4,302,242 | 276,225 | 35,165 | - | 4,613,632 | |||||||||||||||
INCOME (LOSS) FROM OPERATIONS | 839,139 | (300,844 | ) | (10,067 | ) | - | 528,228 | |||||||||||||
OTHER INCOME: | ||||||||||||||||||||
Other income (expenses) | 84,890 | (1,609 | ) | 51 | - | 83,332 | ||||||||||||||
Interest Income | 50,130 | 3,105 | 415 | - | 53,650 | |||||||||||||||
Total Other Income | 135,020 | 1,496 | 466 | - | 136,982 | |||||||||||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 974,159 | (299,348 | ) | (9,601 | ) | - | 665,210 | |||||||||||||
INCOME TAXES: | (307,527 | ) | - | - | (307,527 | ) | ||||||||||||||
INCOME (LOSS) BEFORE PROVISION FOR NONCONTROLLING INTEREST | 666,632 | (299,348 | ) | (9,601 | ) | - | 357,683 | |||||||||||||
NONCONTROLLING INTEREST | - | - | - | 119,739 | 119,739 | |||||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO SUWN | $ | 666,632 | $ | (299,348 | ) | $ | (9,601 | ) | $ | 119,739 | $ | 477,422 | ||||||||
OTHER COMPREHENSIVE INCOME: | ||||||||||||||||||||
Foreign currency translation gain | 629,584 | 156,240 | 5,513 | - | 791,337 | |||||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | 1,296,216 | $ | (143,108 | ) | $ | (4,088 | ) | $ | 119,739 | $ | 1,268,759 | ||||||||
NET INCOME PER COMMON SHARE-BASIC AND DILUTED | ||||||||||||||||||||
Net income per common share-basic | $ | 0.00 | ||||||||||||||||||
Net income per common share-diluted | $ | 0.00 | ||||||||||||||||||
Weighted common shares outstanding-basic | 123,451,788 | |||||||||||||||||||
Weighted common shares outstanding-diluted | 123,920,125 |
Balance at April 30, 2009 | $ | - | ||
Initial investment on May 11, 2009 | 423,493 | |||
Loss on equity investment | (275,966 | ) | ||
Balance at April 30, 2010 | $ | 147,527 |
Balance at April 30, 2009 | $ | - | ||
Initial investment on May 11, 2009 | 423,493 | |||
Loss on equity investment | (275,966 | ) | ||
Balance at April 30, 2010 | 147,527 | |||
Loss on equity investment | (147,527 | ) | ||
Balance at April 30, 2011 | $ | - |
For the Year Ended April 30, | ||||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
Sunwin USA | Sunwin USA | |||||||
Loss in investment under the equity method | $ | (275,966 | ) | $ | (189,520 | ) | ||
NET LOSS | $ | (275,966 | ) | $ | (189,520 | ) |
Shares | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||
Outstanding at April 30, 2008 | 9,696,590 | 0.65 | * | |||||||||||||
Granted | 26,666,666 | 0.35 | ||||||||||||||
Exercised | (1,286,310 | ) | 0.15 | |||||||||||||
Forfeited | - | - | ||||||||||||||
Outstanding at April 30, 2009 | 35,076,946 | 0.30 | 35,076,946 | $ | 0.30 | |||||||||||
Granted | - | - | ||||||||||||||
Exercised | (7,637,900 | ) | 0.15 | (7,637,900 | ) | 0.15 | ||||||||||
Forfeited | - | - | ||||||||||||||
Warrants exercisable at April 30, 2010 | 27,439,046 | 0.34 | ||||||||||||||
Outstanding at April 30, 2010 | 27,439,046 | 0.34 | ||||||||||||||
Granted | ||||||||||||||||
Exercised | (749,655 | ) | 0.15 | |||||||||||||
Forfeited | ||||||||||||||||
Outstanding at April 30, 2011 | 26,689,391 | $ | 0.35 |
Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||||||
$ | 0.15 | 772,380 | 1.92 | $ | 0.15 | 772,380 | $ | 0.15 | ||||||||||||||
$ | 0.35 | 26,666,666 | 3.77 | $ | 0.35 | 26,666,666 | $ | 0.35 | ||||||||||||||
27,439,046 | $ | 0.31 | 27,439,046 | $ | 0.31 |
Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
Range of Exercise Prices | Shares | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Shares | Weighted Average Exercise Price | |||||||||||||||||
$ | 0.15 | 22,725 | 0.89 | $ | 0.15 | 22,725 | $ | 0.15 | ||||||||||||||
$ | 0.35 | 26,666,666 | 2.77 | $ | 0.35 | 26,666,666 | $ | 0.35 | ||||||||||||||
26,899,391 | 2.77 | 26,899,391 | $ | 0.35 |
Period: | Total | Total | ||||||
Period Ended April 30, 2011 | $ | 23,400 | ||||||
Period Ended April 30, 2012 | $ | 23,400 | $ | 30,713 | ||||
Period Ended April 30, 2013 | $ | 9,750 | $ | 17,063 | ||||
Period Ended April 30, 2014 | $ | 7,313 | ||||||
Thereafter | $ | 0 | $ | 0 |
2011 | 2010 | |||||||
Revenues | $ | 326,284 | $ | 1,642,442 | ||||
Cost of Revenue | 203,489 | 1,017,471 | ||||||
Gross profit | 122,795 | 624,971 | ||||||
Operating and other non-operating expenses | (258,531 | ) | (1,865,299 | ) | ||||
Loss from discontinued operations | (135,736 | ) | (1,240,328 | ) | ||||
Gain from disposal of discontinued operations | 11,450 | - | ||||||
Total loss from discontinued operations | $ | (124,286 | ) | $ | (1,240,328 | ) |
For the Year Ended April 30, 2011 | ||||||||||||||||
Chinese Medicine | Stevioside | Corporate and Other | Consolidated | |||||||||||||
Revenues | $ | 2,274,651 | $ | 7,307,980 | $ | - | $ | 9,582,631 | ||||||||
Cost of goods sold | 2,088,098 | 6,042,753 | 8,130,851 | |||||||||||||
Gross profit | 186,553 | 1,265,227 | - | 1,451,780 | ||||||||||||
(Gain) loss on disposal of | ||||||||||||||||
property and equipment | (1,024 | ) | 1,181,325 | - | 1,180,301 | |||||||||||
Depreciation and amortization | 4,383 | 949,050 | 953,433 | |||||||||||||
Other operating expenses | 1,531,270 | 2,686,667 | 280,563 | 4,498,500 | ||||||||||||
Interest income | 8,487 | 34,365 | 5,260 | 48,111 | ||||||||||||
Other income | 174 | 215 | 6,165 | 6,554 | ||||||||||||
Loss from continuing operations | ||||||||||||||||
before taxes and | ||||||||||||||||
noncontrolling interest | $ | (1,339,415 | ) | $ | (3,517,236 | ) | $ | (269,138 | ) | $ | (5,125,788 | ) | ||||
For the Year Ended April 30, 2010 | ||||||||||||||||
Chinese Medicine | Stevioside | Corporate and Other | Consolidated | |||||||||||||
Revenues | $ | 2,119,689 | $ | 10,730,828 | $ | - | $ | 12,850,517 | ||||||||
Cost of goods sold | 1,692,479 | 9,221,077 | 10,913,556 | |||||||||||||
Gross profit | 427,210 | 1,509,751 | - | 1,936,961 | ||||||||||||
(Gain) loss on disposal of | ||||||||||||||||
property and equipment | - | 156,865 | - | 156,865 | ||||||||||||
Depreciation and amortization | 3,274 | 548,607 | - | 551,881 | ||||||||||||
Other operating expenses | 1,529,127 | 2,162,174 | 1,184,751 | 4,876,052 | ||||||||||||
Interest income | 17,581 | 26,670 | 172 | 44,423 | ||||||||||||
Other expense | (12,769 | ) | (7,793 | ) | (222,404 | ) | (242,966 | ) | ||||||||
Loss from continuing operations | ||||||||||||||||
before taxes and | ||||||||||||||||
noncontrolling interest | $ | (1,100,379 | ) | $ | (1,339,018 | ) | $ | (1,406,983 | ) | $ | (3,846,380 | ) |
Year Ended April 30, 2010 | ||||||||||||||||
Stevioside | Chinese and Veterinary Medicines | Corporate and Other | Consolidated | |||||||||||||
Net revenues | $ | 10,730,828 | $ | 3,762,131 | - | $ | 14,492,959 | |||||||||
Gross profit | 1,509,751 | 1,052,181 | - | 2,561,932 | ||||||||||||
Depreciation and amortization | 1,574,595 | 290,010 | - | 1,864,605 | ||||||||||||
Operating income | 1,633,686 | (2,355,298 | ) | 908,785 | 187,173 | |||||||||||
Interest income | 26,670 | 26,466 | 172 | 53,308 | ||||||||||||
Net loss attributable to | ||||||||||||||||
Sunwin International Neutraceuticals, Inc. | (1,454,213 | ) | (2,343,270 | ) | (1,131,017 | ) | (4,928,500 | ) | ||||||||
Segment assets | $ | 29,879,999 | $ | 10,239,710 | $ | 1,197,761 | $ | 41,317,470 |
Stevioside | Chinese and Veterinary Medicines | Corporate and Other | Consolidated | |||||||||||||
Revenues | $ | 14,513,553 | $ | 7,696,359 | $ | - | $ | 22,209,912 | ||||||||
Gross Profit | 2,930,910 | 2,149,128 | - | 5,080,038 | ||||||||||||
Depreciation and amortization | 1,343,012 | 317,903 | - | 1,660,915 | ||||||||||||
Operating income | 606,121 | 306,660 | (355,414 | ) | 557,367 | |||||||||||
Interest income | 2,941 | 49,153 | 108 | 52,202 | ||||||||||||
Net income attributable to Sunwin International Neutraceuticals, Inc. | 547,973 | 265,260 | (312,937 | ) | 500,296 | |||||||||||
Segment assets | $ | 27,659,284 | $ | 15,830,475 | $ | 129,478 | $ | 43,619,237 |