Document and Entity Information
Document and Entity Information | 6 Months Ended |
May 31, 2016shares | |
Document and Entity Information: | |
Entity Registrant Name | CHINA GEWANG BIOTECHNOLOGY, INC. |
Document Type | 10-Q |
Document Period End Date | May 31, 2016 |
Amendment Flag | false |
Entity Central Index Key | 1,489,902 |
Current Fiscal Year End Date | --11-30 |
Entity Common Stock, Shares Outstanding | 75,000,000 |
Entity Filer Category | Smaller Reporting Company |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
Trading Symbol | cgwb |
CHINA GEWANG BIOTECHNOLOGY, INC
CHINA GEWANG BIOTECHNOLOGY, INC. AND SUBSIDIARIES - Consolidated Balance Sheets - USD ($) | May 31, 2016 | Nov. 30, 2015 | |
Current Assets: | |||
Cash | $ 16,691,199 | $ 8,669,034 | |
Accounts receivable | 3,598,376 | 267,868 | |
Inventory | 22,244 | 156,778 | |
Prepaid expenses | 1,547,652 | 201,369 | |
Total current assets | 21,859,471 | 9,295,049 | |
Property, plant and equipment, net | 117,433 | 65,860 | |
Other assets: | |||
Equity investment | 1,874,927 | ||
Total Assets | 23,851,831 | 9,360,909 | |
Current Liabilities: | |||
Accounts payable | 1,235,947 | ||
Taxes payable | 406,607 | 64,153 | |
Accrued expenses and other payables | 40,925 | 175,086 | |
Loans from stockholder | 218,069 | 166,106 | |
Other payable - equity investment | 1,000,000 | ||
TOTAL CURRENT LIABILITIES | 2,901,548 | 405,345 | |
Stockholders' equity: | |||
Common stock | [1] | 75,000 | 45,500 |
Additional paid-in capital | 16,811,095 | 6,525,743 | |
Retained earnings | 4,016,081 | 2,270,416 | |
Statutory reserve fund | 443,757 | 281,766 | |
Other comprehensive (loss) | (561,982) | (252,022) | |
Stockholders' equity before noncontrolling interests | 20,783,951 | 8,871,403 | |
Non-controlling interests | 166,332 | 84,161 | |
Total Stockholders' equity | 20,950,283 | 8,955,564 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 23,851,831 | $ 9,360,909 | |
[1] | $0.001 par value, 75,000,000 shares authorized; 75,000,000 and 45,500,000 shares issued and outstanding as of May 31, 2016 and November 30, 2015 respectively |
Statement of Financial Position
Statement of Financial Position - Parenthetical - $ / shares | May 31, 2016 | Nov. 30, 2015 |
Statement of Financial Position | ||
Common Stock, Shares Authorized | 75,000,000 | 75,000,000 |
Common Stock, Shares Issued | 75,000,000 | 45,500,000 |
Common Stock, Shares Outstanding | 75,000,000 | 45,500,000 |
Common Stock, Par Value | $ 0.001 | $ 0.001 |
CHINA GEWANG BIOTECHNOLOGY, IN4
CHINA GEWANG BIOTECHNOLOGY, INC. AND SUBSIDIARIES - Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Income Statement | ||||
REVENUE | $ 5,437,183 | $ 1,045,750 | $ 6,655,281 | $ 2,006,612 |
Cost of goods sold | (3,025,001) | (284,699) | (3,367,609) | (547,058) |
Gross profit | 2,412,182 | 761,051 | 3,287,672 | 1,459,554 |
OPERATING EXPENSES: | ||||
Selling and marketing | 649,302 | 174,677 | 919,973 | 328,645 |
General and administrative | 122,978 | 131,230 | 259,939 | 188,253 |
TOTAL OPERATING EXPENSES | 772,280 | 305,907 | 1,179,912 | 516,898 |
Operating income | 1,639,902 | 455,144 | 2,107,760 | 942,656 |
Other income: | ||||
Interest income | 6,327 | 1,431 | 11,095 | 3,871 |
Other non-operating income | 1,490 | |||
Total other income | 6,327 | 1,431 | 12,585 | 3,871 |
Income before provision for income taxes | 1,646,229 | 456,575 | 2,120,345 | 946,527 |
Provision for income taxes | 416,553 | 114,623 | 539,969 | 237,610 |
Equity in income of investee | 408,275 | 408,275 | ||
Net income before noncontrolling interests | 1,637,951 | 341,952 | 1,988,651 | 708,917 |
Noncontrolling interest | (62,483) | (15,474) | (80,995) | (32,077) |
Net income attributable to common stockholders | $ 1,575,468 | $ 326,478 | $ 1,907,656 | $ 676,840 |
Earnings per common share | $ 0.03 | $ 0.01 | $ 0.03 | $ 0.02 |
Weighted average shares outstanding | 60,543,478 | 37,456,522 | 55,882,514 | 36,489,011 |
Comprehensive income: | ||||
Net income before noncontrolling interests | $ 1,637,951 | $ 341,952 | $ 1,988,651 | $ 708,917 |
Foreign currency translation adjustment | (122,371) | 25,735 | (308,784) | 5,558 |
Total comprehensive income | 1,515,580 | 367,687 | 1,679,867 | 714,475 |
Comprehensive income attributable to noncontrolling interests | (72,978) | (16,760) | (82,171) | (32,355) |
Net comprehensive income attributable to common stockholders | $ 1,442,602 | $ 350,927 | $ 1,597,696 | $ 682,120 |
CHINA GEWANG BIOTECHNOLOGY, IN5
CHINA GEWANG BIOTECHNOLOGY, INC. AND SUBSIDIARIES - Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
May 31, 2016 | May 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 1,988,651 | $ 708,917 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 24,761 | 13,915 |
(Income) from equity investment | (408,275) | |
Changes in operating assets and liabilities: | ||
(Increase) in accounts receivable | (3,330,508) | (222,905) |
Decrease (increase) in inventory | 134,534 | (46,444) |
(Increase) in prepaid expenses | (1,346,283) | (35,401) |
Increase (decrease) in accounts payable | 1,235,947 | (7,225) |
(Decrease) in advances from customers | (56,930) | |
Increase in taxes payable | 342,454 | 13,908 |
(Decrease) increase in accrued liabilities and other payables | (82,198) | 75,053 |
Net cash (used in) provided by operating activities | (1,440,917) | 442,888 |
Cash flows from investing activities: | ||
Purchase of equipment | (78,677) | (24,550) |
Net cash (used in) investing activities | (78,677) | (24,550) |
Cash flows from financing activities: | ||
Proceeds from stockholder loans | 38,106 | |
Proceeds from sale of common stock | 9,848,200 | |
Net cash provided by financing activities | 9,848,200 | 38,106 |
Effect of exchange rate changes on cash | (306,441) | 5,558 |
Net change in cash | 8,022,165 | 462,002 |
Cash, Beginning of Period | 8,669,034 | 3,012,812 |
Cash, End of Period | 16,691,199 | 3,474,814 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | ||
Cash paid income taxes | 264,032 | 229,218 |
Payable for purchase of equity investment | 1,000,000 | |
Additional paid-in capital - equity in excess of purchase price of investee under common control | 466,652 | |
Noncash financing activities: | ||
Payment of accrued expenses and other payables by shareholder | $ 52,190 | $ 40,797 |
1. Organization
1. Organization | 6 Months Ended |
May 31, 2016 | |
Notes | |
1. Organization | 1. ORGANIZATION Majority-owned subsidiary: Gewang Selenium China Gewang Biotechnology, Inc. (the Company), formerly known as Rich Star Development, was incorporated under the laws of the State of Nevada on May 29, 2009. From its inception until the closing of the reverse merger described below, the Company was a development-stage company in the business of distributing designer clothing and footwear from established brands to customers around the world. On April 20, 2015, the Company completed a reverse merger transaction through a share exchange with the stockholders of Biotechnology International Holding Ltd. (Biotechnology International), whereby the Company acquired 100% of the outstanding shares of Biotechnology International in exchange for 32,000,000 shares of its common stock, representing 90.14% of the issued and outstanding shares of common stock. As a result of the reverse merger, Biotechnology International became the Companys wholly-owned subsidiary and the former Biotechnology International stockholders became our controlling stockholders. The share exchange transaction was treated as a reverse acquisition, with Biotechnology International as the acquirer and the Company as the acquired party for accounting purposes. On January 8, 2015, the Company filed a certificate of amendment to its articles of incorporation to change its name from Rich Star Development to China Gewang Biotechnology, Inc. As a result of the transaction with Biotechnology The Company conducts its operations through its controlled consolidated variable interest entity (VIE), Guangdong Gewang. Guangdong Gewang, incorporated under the laws of the Peoples Republic of China (PRC) on June 2010, is primarily engaged in the sale of selenium supplements within the PRC. It is a member of the Chinese Selenium Supplements Association. On April 6, 2015, Gewang Selenium (the WFOE), a wholly-owned subsidiary of Hong Kong Gewang, entered into a series of contractual arrangements (the VIE agreements). The VIE agreements include (i) an Exclusive Technical Service and Business Consulting Agreement; (ii) a Proxy Agreement, (iii) Share Pledge Agreement and, (iv) Call Option Agreement with the stockholders of Guangdong Gewang. Exclusive Technical Service and Business Consulting Agreement: Proxy Agreement: Call Option Agreement: Share Pledge Agreement: Equity investment: Guangdong Tianmei On April 28, 2016, the Company's wholly-owned subsidiary, Biotechnology International, entered into an investment agreement with Guangdong Tianmei. Guangdong Tianmei was organized in May 2015, and is engaged in the business of distributing selenium-rich bottled water and also functions as a placement agent for a variety of products from various manufacturers, all within the PRC. The investment agreement provided that Biotechnology International would pay US$1,000,000 to acquire a 30% interest in an Australian corporation to be formed, which would indirectly own all of the equity in Guangdong Tianmei. The acquisition by Biotechnology International of 30% of Tianmei Beverage Group Corporation Limited, an Australian corporation ("Tianmei Australia") was completed in May 2016, at which time Tianmei Australia acquired ownership, through subsidiaries, of Guangdong Tianmei. The investment agreement provided that payment of the $1,000,000 purchase price was due on June 20, 2016, which was paid on June 17, 2016. As a result of the entry into the foregoing agreements, the Company has a corporate structure which is set forth as follows: |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
May 31, 2016 | |
Notes | |
2. Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of accounting and presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include those of the Company, its wholly owned subsidiaries and the VIE, Guangdong Gewang. The Company is the primary beneficiary of the VIE. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim consolidated financial statements of the Company as of May 31, 2016, and for the three and six months ended May 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the rules and regulations of the Securities and Exchange Commission (the SEC) which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally required by accounting principles generally accepted in the United States of America for annual financial statements. The interim consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Companys Form 10-K filed with the SEC. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the three and six months ended May 31, 2016 and 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending November 30, 2016. The Company uses the equity method of accounting for its equity investments. The investments are under common control and can be significantly influenced. Under the equity method, investments are carried at cost and increased or decreased by the Companys pro-rata share of earnings or losses. The carrying costs of these investments are also increased or decreased to reflect additional contributions or withdrawals of capital. Any difference in the book equity and the Companys pro-rata share of the net assets of the investment will be reported as gain or loss at the liquidation of the investment. Losses in excess of the investments are recorded when the Company is committed to provide additional financial support. The Company uses the equity method for investment of 30% because the Company has the ability to exercise significant influence over these entities. All consolidated financial statements and notes to the consolidated financial statements are presented in United States dollars (US Dollar or US$ or $). Variable interest entity Pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 810, Consolidation Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIEs economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entitys determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de - facto agents, have the unilateral ability to exercise those rights. Guangdong Gewangs actual stockholders do not hold any kick-out rights that affect the consolidation determination. Through the VIE agreements disclosed in Note 1, the Company is deemed the primary beneficiary of Guangdong Gewang. Accordingly, the results of Guangdong Gewang have been included in the accompanying consolidated financial statements. Guangdong Gewang has no assets that are collateral for or restricted solely to settle their obligations. The creditors of Guangdong Gewang do not have recourse to the Companys general credit. The following financial statement amounts and balances of Guangdong Gewang have been included in the accompanying consolidated financial statements: May 31, 2016 November 30, 2015 (Unaudited) TOTAL ASSETS $ 21,976,575 $ 9,360,262 TOTAL LIABILITIES $ 16,185,970 $ 5,240,643 Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net income $ 1,250,901 $ 356,884 $ 1,619,907 $ 766,135 Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Foreign currency translations Almost all of the Company assets are located in the PRC. The functional currency for the Companys operations is the Renminbi (RMB). The Company uses the United States Dollar (US Dollar or US$ or $) for financial reporting purposes. The financial statements of the Company have been translated into US Dollars in accordance with FASB ASC Section 830, Foreign Currency Matters All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date. Equity accounts have been translated at their historical exchange rates when the capital transactions occurred. Statements of income (loss) and comprehensive income (loss), changes in stockholders equity and cash flows have been translated using the average exchange rate for the periods presented. Adjustments resulting from the translation of the Companys financial statements are recorded as other comprehensive income (loss). The exchange rates used to translate amounts in RMB into US Dollars for the purposes of preparing the financial statements are as follows: May 31, 2016 November 30, 2015 (Unaudited) Balance sheet items, except for stockholders equity, as of periods end 0.1519 0.1561 Three Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1537 0.1631 Six Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1535 0.1629 Foreign currency translation adjustments of $ (122,371) and $25,735 for the three months ended May 31, 2016 and 2015, respectively, and $ (308,784) and $5,558 for the six months ended May 31, 2016 and 2015, respectively, have been reported as other comprehensive income (loss). Other comprehensive income (loss) of the Company consists entirely of foreign currency translation adjustments. Although PRC government regulations now allow convertibility of the RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that the RMB could be converted into US Dollars at that rate or any other rate. The value of the RMB against the US Dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRCs political and economic conditions. Any significant revaluation of the RMB may materially affect the Companys financial condition in terms of US Dollar reporting. In August 2015, the PRC devalued its currency by approximately 3.5%; in January 2016 the PRC devalued its currency by an additional 0.5%. Further devaluations of its currency could occur. Revenue recognition Revenues are primarily derived from selling selenium related products to contract distributors, and from our retail stores. The Companys revenue recognition policies comply with FASB ASC 605 Revenue Recognition. The Companys revenues for the three and six months ended May 31, 2016 and 2015 were comprised as follows: Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 ( Un audited) (Unaudited) ( Un audited) (Unaudited) Wholesale $ 4,949,592 $ 670,393 $ 5,778,677 $ 1,298,376 Retail 487,591 375,357 876,604 708,236 $ 5,437,183 $ 1,045,750 $ 6,655,281 $ 2,006,612 Shipping costs Shipping costs incurred by the Company are recorded as selling expenses. Shipping costs for the three and six months ended May 31, 2016 and 2015 were $24,427 and $10,160, respectively, and $39,453 and $19,480, respectively. Advertising costs Advertising costs are charged to operations when incurred. For the three and six months ended May 31, 2016 and 2015, advertising expenses were $23,057 and $22,019, respectively, and $44,519 and $39,096, respectively. Cash and cash equivalents The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts receivable Accounts receivable are recorded at the contract amount after deduction of trade discounts and, allowances, if any, and do not bear interest. The allowance for doubtful accounts, when necessary, is the Companys best estimate of the amount of probable credit losses from accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of May 31, 2016 and November 30, 2015, accounts receivable was $3,598,376 and $267,868, respectively. The Company believes that its accounts receivable are fully collectable and determined that an allowance for doubtful accounts was not necessary. Inventory Inventory, comprised principally of boxed selenium capsules, selenium-glossy ganoderma capsules and selenium powder, is valued at the lower of cost or market. The value of inventory is determined using the first-in, first-out method. The Company periodically estimates an inventory allowance for estimated unmarketable inventories when necessary. Inventory amounts are reported net of such allowances, if any. There were no allowances for inventory as of May 31, 2016 and November 30, 2015. Fair value of financial instruments FASB ASC 820, Fair Value Measurement Level 1 Inputs Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs Inputs based on valuation techniques that are both unobservable and significant to the overall fair value measurements. ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash and cash equivalents, accounts receivable, inventory, prepaid expenses, equity investment, accounts payable, payable for equity investment, taxes payable, a ccrued liabilities and other payables, and loan from stockholder, approximated their fair values Prepaid expenses Prepaid expenses primarily consist of promotion expenses, rent, advertising expenses and licensing fees. Prepaid promotion expenses represent payments made to promotion companies for distributing products to retail stores. In March 2016, the Company entered into agreements with 4 promotion companies. Prepaid promotion expenses as of May 31, 2016 and November 30, 2015 were $1,391,200 and $0, respectively. On January 5, 2011, the Company entered into a license agreement for the technology utilized for the manufacture of its products from an unrelated third party for five years from January 2011 to December 2015. On December 30, 2015, the Company renewed the license agreement for another five years to December 2020 at $91,137 (RMB 600,000) each year. The related prepaid licensing fees of $53,163 and $7,805 were included in prepaid expenses on the balance sheets as of May 31, 2016 and November 30, 2015, respectively. The license provides for renewal options. Since this agreement requires the advance payment of the annual licensing fee, there were no payments remaining under this agreement as of May 31, 2016 and November 30, 2015. Impairment of long-live assets The Company applies FASB ASC 360, Property, Plant and Equipment Statutory reserve fund Pursuant to corporate law of the PRC, the Company is required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of the Companys registered capital. The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after use is not less than 25% of registered capital. The statutory reserve fund was $443,757 and $281,766 as of May 31, 2016 and November 30, 2015, respectively. Income taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of May 31, 2016 and November 30, 2015, the Company does not have a liability for any unrecognized tax benefits. The Companys tax filings are subject to examination by the tax authorities. The tax years of 2013 to 2014 remain open to examination by tax authorities in the PRC. The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows: United States The Company is subject to United States tax at graduated rates from 15% to 35%. No provisions for income tax in the United States have been made as the Company had no U.S. taxable income for the three and six months ended May 31, 2016 and 2015 British Virgin Islands ( BVI) Biotechnology International is incorporated in the BVI and is governed by the income tax laws of the BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%. Hong Kong Hong Kong Gewang is incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non-Hong Kong source income. The People's Republic of China (PRC) Gewang Selenium and Guangdong Gewang are subject to an Enterprise Income Tax at 25% and file their own tax returns. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards Text Block | 6 Months Ended |
May 31, 2016 | |
Notes | |
Recently Issued Accounting Standards Text Block | 3. RECENTLY ISSUED ACCOUNTING STANDARDS In February 2016, the Financial Accounting Standards Board ("FASB) issued Accounting Standards Update ("ASU") ASU 2016-02 Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact of our pending adoption of the new standard on our financial statements. In July 2015, the FASB issued ASU 2015-11 (Subtopic 330) - Simplifying the Measurement of Inventory, which provides guidance to companies who account for inventory using either the first-in, first-out (FIFO) or average cost methods. The guidance states that companies should measure inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. This accounting standard update is not expected to have a material impact on the Companys consolidated financial statements. In March 2015, the FASB issued ASU 2015-03 Interest Imputation of Interest (Subtopic 835-30). This ASU addressed the simplification and presentation of debt issuance costs by presenting them in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts or premiums. This accounting standard update is not expected to have a material impact on the Companys consolidated financial statements. In January 2015, the FASB issued ASU 2015-01 Income Statement Extraordinary and Unusual Items (Subtopic 225-20). This ASU addressed the simplification of income statement presentation by eliminating the concept of extraordinary items. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This accounting standard update is not expected to have a material impact on the Companys consolidated financial statements. In August 2014, the FASB issued authoritative guidance that requires an entitys management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entitys ability to continue as a going concern and requires additional disclosures if certain criteria are met. This guidance is effective for fiscal periods ending after December 15, 2016, with early adoption permitted. This accounting standard update is not expected to have a material impact on the Companys consolidated financial statements. |
4. Related Party Transactions
4. Related Party Transactions | 6 Months Ended |
May 31, 2016 | |
Notes | |
4. Related Party Transactions | 4. RELATED PARTY TRANSACTIONS The Company obtained demand loans from one of its stockholders which are non-interest bearing. The loans of $ 218,069 as of May 31, 2016 and $ 166,106 as of November 30, 2015 are reflected as loans from stockholder. The Company entered into a promotion agreement with Guangdong Tianmei Selenium-Rich Beverage Chain Co., LTD, a related party (Tianmei). Prepaid promotion expenses as of May 31, 2016 and November 30, 2015 were $ 26,576 and $ 0 , respectively. The Company entered into an agreement with Tianmei on June 10, 2015 to license the usage of the Companys trademark for 10 years. Trademark revenue recorded for the three and six months ended May 31, 2016 and 2015 were $ 0 , $ 1,490 , $ 0 , and $ 0 , respectively. The future commitment is approximately $1,500 each year. Equity investment On April 28, 2016 the Company's wholly-owned subsidiary, Biotechnology International, entered into an investment agreement with Guangdong Tianmei. At that time, 88% of the equity in Guangdong Tianmei was owned by two individuals who together own 22% of the Company's outstanding shares. The investment agreement provided that Biotechnology International would pay US$1,000,000 to acquire a 30% interest in an Australian corporation to be formed, which would indirectly own all of the equity in Guangdong Tianmei. The acquisition by Biotechnology International of 30% Tianmei Australia was completed in May 2016, at which time Tianmei Australia acquired ownership, through subsidiaries, of Guangdong Tianmei. The investment agreement provided that payment of the $1,000,000 purchase price was due on June 20, 2016, which was paid in full on June 17, 2016. The net worth of Guangdong Tianmei at the time of the acquisition was $4,888,840, 30% of which is $1,466,652. Because the Company and Guangdong Tianmei were under common control at the time of the acquisition, the $466,652 by which the Company's share of the net worth of Guangdong Tianmei exceeded the purchase price has been recorded as an increase to additional paid-in capital. The changes in the equity investment are summarized as follows: May 31, 2016 November 30, 2015 (Unaudited) Initial investment $ 1,466,652 $ - Pro rata share of net income 408,275 - Investment, end of period/year $ 1,874,927 $ - The following is a summary of results of operations of the investee for the period from April 29, 2016 to May 31, 2016: Revenue $ 3,084,190 Cost of revenue $ 869,244 Expenses $ 854,030 Net income $ 1,360,916 |
5. Leases
5. Leases | 6 Months Ended |
May 31, 2016 | |
Notes | |
5. Leases | 5. LEASES The Company leases its warehouse and office space from an unrelated third party under a one-year operating lease, which expired on July 1, 2016. The lease required the Company to prepay the total rent of $ 91,137 (RMB 600,000) in advance for one year. On June 29, 2016, the Company renewed the lease, which recommenced on July 2, 2016 and expires on July 1, 2017. The Company leases its Chancheng store from an unrelated third party. The lease, which expired on August 31, 2015, required the Company to prepay the rent of $ 42,311 (RMB 276,000) in advance for one year. The Company renewed this lease to August 31, 2016 and prepaid the rent of $55,188 (RMB 360,000) in advance for one year. The Company leases its Xiamen store from an unrelated third party. The lease expired on June 1, 2016 and had a renewal option. The Company decided not to renew the lease. The lease required the Company to prepay the rent of $ 55,188 (RMB 360,000) in advance for one year. The Company also leases its Changsha store form an unrelated third party. The lease, which expires on October 7, 2018, required the Company to prepay the rent of $63,798 (RMB 420,000) in advance for one year. On May 26, 2016, the Company terminated the lease with a $0 settlement fee. Rent expense for the three and six months ended May 31, 2016 and 2015 was $ 66,872 and $ 31,334 , respectively, and $ 133,557 and $ 62,554 , respectively. |
Other Current Assets
Other Current Assets | 6 Months Ended |
May 31, 2016 | |
Notes | |
Other Current Assets | 6. FIXED ASSETS Fixed assets as of May 31, 2016 and November 30, 2015 are summarized as follows: 2016 2015 (Unaudited) Electronic equipment $ 85,807 $ Motor vehicles 126,757 69,714 Office equipment 12,588 12,936 225,152 151,383 Less: accumulated depreciation (107,719) (85,523) Fixed assets - net $ 117,433 $ 65,860 For the three and six months ended May 31, 2016 and 2015, depreciation expense was $ 14,653 and $ 7,465 , respectively, and $ 24,761 and $ 13,915 , respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
May 31, 2016 | |
Notes | |
Income Taxes | 7. INCOME TAXES The provision for income taxes for the three and six months ended May 31, 2016 and 2015 consisted of the following Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 ( Un audited) (Unaudited) (Unaudited) (Unaudited) Current $ 416,553 $ 114,623 $ 539,969 $ 237,610 Deferred - - - - $ 416,553 $ 114,623 $ 539,969 $ 237,610 No provisions for income taxes in the United States have been made. The Company did not generate any income in the United States or otherwise have any U.S. taxable income. The Company does not believe that it has any U.S. Federal income tax liabilities with respect to any transactions that the Company or any of its subsidiaries may have engaged in through May 31, 2016. However, there can be no assurance that the IRS will agree with this position, and therefore the Company ultimately could be liable for U.S. Federal income taxes, interest and penalties. The tax years ended November 30, 2015, December 31, 2014, and 2013 remain open to examination by the IRS. The Company did not file its U.S. federal income tax returns, including, without limitation, information returns on Internal Revenue Service (IRS) Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations the short year tax return ended November 30, 2015 required to be filed as a result of the change in fiscal year. |
Concentration Risk, Credit Risk
Concentration Risk, Credit Risk, Policy | 6 Months Ended |
May 31, 2016 | |
Notes | |
Concentration Risk, Credit Risk, Policy | 8. CONCENTRATION OF CREDIT AND BUSINESS RISKS Cash and cash equivalents Substantially all of the Companys assets and bank accounts are in banks located in the PRC and are not covered by protection similar to that provided by the FDIC on funds held in United States banks. Major customers For the three and six months ended May 31, 2016, six customers counted for 74% and three customers counted for 52% of total sales, respectively. As of May 31, 2016, three customers accounted for 80% of accounts receivable, the largest being 34%. As of November 30, 2015, seven customers accounted for 90% of accounts receivable. Vulnerability Due to Operations in the PRC The Companys operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than twenty years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRCs political, economic and social conditions. There is also no guarantee that the PRC governments pursuit of economic reforms will be consistent or effective. The economy in the PRC has recently started to narrow. The Company believes that Gewang Seleniums contractual agreements with Guangdong Gewang are in compliance with PRC law and are legally enforceable. The stockholders of Guangdong Gewang are also the senior management of the Company and therefore the Company believes that they have no current interest in seeking to act contrary to the contractual agreements. However, Guangdong Gewang and its stockholders may fail to take certain actions required for the Companys business or to follow the Companys instructions despite their contractual obligations to do so. Furthermore, if Guangdong Gewang or its stockholders do not act in the best interests of the Company under the contractual agreements or any dispute relating to these contractual agreements remains unresolved, the Company will have to enforce its rights through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system. All of these contractual agreements are governed by the PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, these contracts would be interpreted in accordance with the PRC law and any disputes would be resolved in accordance with the PRC legal procedures. As a result, uncertainties in the PRC legal system could limit the Companys ability to enforce these contractual agreements, which could make it difficult to exert effective control over Guangdong Gewang, and the ability of Gewang Selenium to conduct the Companys business may be adversely affected. |
Stockholders' Equity Note Discl
Stockholders' Equity Note Disclosure | 6 Months Ended |
May 31, 2016 | |
Notes | |
Stockholders' Equity Note Disclosure | 9. ISSUANCE OF COMMON STOCK On January 18, 2016 the Company sold an aggregate of 12,000,000 shares of common stock to four individuals in a private offering. None of the purchasers were affiliated with the Company. The purchase price for the shares was three RMB (approximately US$0.4561) per share, or a total of 36 million RMB (approximately US$5,473,200). The purchase price was paid by the investors to Guangdong Gewang, which is managed by the Companys wholly-owned subsidiary and accounted for as a variable interest entity. On May 16, 2016 the Company sold an aggregate of 17,500,000 shares of common stock to two entities in a private offering. Neither of the purchasers were affiliated with the Company. The purchase price for the shares was US$0.25 per share, or a total of US$4,375,000. The purchase price was paid by the investors to Guangdong Gewang, which is managed by a wholly-owned subsidiary of the Company and accounted for as a variable interest entity. |
Parent Company Only Condensed F
Parent Company Only Condensed Financial Information | 6 Months Ended |
May 31, 2016 | |
Notes | |
Parent Company Only Condensed Financial Information | 10. PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION The following is the condensed financial information of China Gewang Biotechnology, Inc., the US parent, consisting of balance sheets as of May 31, 2016 and November 30, 2015, statements of income and cash flows for the three and six months ended May 31, 2016 and 2015. Condensed Balance Sheets ASSETS May 31, 2016 November 30, 2015 (Unaudited) Other receivable from Guangdong Gewang $ 14,848,200 $ 5,000,000 Investments in subsidiaries and VIE 5,999,738 3,977,483 TOTAL ASSETS $ 20,847,938 $ 8,977,483 LIABILITIES AND stockholders EQUITY Current liabilities: Accrued expenses $ 20,455 $ 33,375 Stockholder loans 209,864 156,866 Total current liabilities 230,319 190,241 Stockholders equity: Common stock, $0.001 par value, 75,000,000 shares authorized, 75,000,000 and 45,500,000 shares issued and outstanding as of May 31, 2016 and November 30, 2015, respectively 75,000 45,500 Additional paid-in capital 16,811,095 6,525,743 Retained earnings 3,849,749 2,186,255 Statutory reserve fund 443,757 281,766 Other comprehensive (loss) income (561,982) (252,022) Total stockholders equity 20,617,619 8,787,242 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 20,847,938 $ 8,977,483 Condensed Statements of Income Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Share of earnings from investments in subsidiaries and VIE $ 2,061,851 $ 355,353 $ 2,413,578 $ 730,145 Operating expenses: General and administrative (19,732) (28,875) (39,270) (53,304) Net income $ 2,042,119 $ 326,478 $ 2,374,308 $ 676,841 Condensed Statements of Cash Flows Six Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Cash flows from operating activities: Net income $ 2,374,308 $ 676,841 Adjustments to reconcile net income to net cash provided by (used in) operating activities Share of earnings from investment in subsidiaries and VIE (2,413,578) (730,145) Increase in accrued expenses and other liabilities 39,270 53,304 Net cash provided by (used in) operating activities - - Net change in cash - - Cash, beginning of period - - Cash, end of period $ - $ - Noncash financing activities: Payment of accrued expenses and other payables by shareholder $ 52,190 $ 40,797 Basis of Presentation The Company records its investment in its subsidiaries and VIE under the equity method of accounting. Such investments are presented as Investments in subsidiaries and VIE on the condensed balance sheets and the subsidiaries and VIE profits are presented as Share of earnings from investments in subsidiaries and VIE on the condensed statements of income. Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. The parent only financial information has been derived from the Companys consolidated financial statements and should be read in conjunction with the Companys consolidated financial statements. There were no cash transactions in the US parent company during the six months ended May 31, 2016. Restricted Net Assets Under the PRC laws and regulations, the Companys PRC subsidiaries and VIE are restricted in their ability to transfer certain of their net assets to the Company in the form of dividend payments, loans or advances. The restricted net assets of the Companys PRC subsidiaries and the VIE were approximately $20,848,000 and $8,977,000 as of May 31, 2016 and November 30, 2015, respectively. The Companys operations and revenues are conducted and generated in the PRC, and all of the Companys revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulations in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to the PRC foreign exchange control regulations that restrict the Companys ability to convert RMB into US Dollars. Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the Companys proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by its subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Companys PRC subsidiaries and VIE exceed 25% of the consolidated net assets of the Company. |
Subsequent Events
Subsequent Events | 6 Months Ended |
May 31, 2016 | |
Notes | |
Subsequent Events | 11. SUBSEQUENT EVENTS The Companys management has performed subsequent events procedures through July 15, 2016, which is the date the consolidated financial statements were available to be issued. Except for the issues discussed in Note 5, there were no subsequent events requiring adjustment to or disclosure in the consolidated financial statements. |
2. Summary of Significant Acc17
2. Summary of Significant Accounting Policies: Basis of Accounting and Presentation (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Basis of Accounting and Presentation | Basis of accounting and presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include those of the Company, its wholly owned subsidiaries and the VIE, Guangdong Gewang. The Company is the primary beneficiary of the VIE. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim consolidated financial statements of the Company as of May 31, 2016, and for the three and six months ended May 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and the rules and regulations of the Securities and Exchange Commission (the SEC) which apply to interim financial statements. Accordingly, they do not include all of the information and footnotes normally required by accounting principles generally accepted in the United States of America for annual financial statements. The interim consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Companys Form 10-K filed with the SEC. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented. The results of operations for the three and six months ended May 31, 2016 and 2015 are not necessarily indicative of the results to be expected for future quarters or for the year ending November 30, 2016. The Company uses the equity method of accounting for its equity investments. The investments are under common control and can be significantly influenced. Under the equity method, investments are carried at cost and increased or decreased by the Companys pro-rata share of earnings or losses. The carrying costs of these investments are also increased or decreased to reflect additional contributions or withdrawals of capital. Any difference in the book equity and the Companys pro-rata share of the net assets of the investment will be reported as gain or loss at the liquidation of the investment. Losses in excess of the investments are recorded when the Company is committed to provide additional financial support. The Company uses the equity method for investment of 30% because the Company has the ability to exercise significant influence over these entities. All consolidated financial statements and notes to the consolidated financial statements are presented in United States dollars (US Dollar or US$ or $). |
2. Summary of Significant Acc18
2. Summary of Significant Accounting Policies: Variable Interest Entity (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Variable Interest Entity | Variable interest entity Pursuant to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Section 810, Consolidation Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIEs economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entitys determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de - facto agents, have the unilateral ability to exercise those rights. Guangdong Gewangs actual stockholders do not hold any kick-out rights that affect the consolidation determination. Through the VIE agreements disclosed in Note 1, the Company is deemed the primary beneficiary of Guangdong Gewang. Accordingly, the results of Guangdong Gewang have been included in the accompanying consolidated financial statements. Guangdong Gewang has no assets that are collateral for or restricted solely to settle their obligations. The creditors of Guangdong Gewang do not have recourse to the Companys general credit. The following financial statement amounts and balances of Guangdong Gewang have been included in the accompanying consolidated financial statements: May 31, 2016 November 30, 2015 (Unaudited) TOTAL ASSETS $ 21,976,575 $ 9,360,262 TOTAL LIABILITIES $ 16,185,970 $ 5,240,643 Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net income $ 1,250,901 $ 356,884 $ 1,619,907 $ 766,135 |
2. Summary of Significant Acc19
2. Summary of Significant Accounting Policies: Use of Estimates (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies: Foreign Currency Translations (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Foreign Currency Translations | Foreign currency translations Almost all of the Company assets are located in the PRC. The functional currency for the Companys operations is the Renminbi (RMB). The Company uses the United States Dollar (US Dollar or US$ or $) for financial reporting purposes. The financial statements of the Company have been translated into US Dollars in accordance with FASB ASC Section 830, Foreign Currency Matters All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date. Equity accounts have been translated at their historical exchange rates when the capital transactions occurred. Statements of income (loss) and comprehensive income (loss), changes in stockholders equity and cash flows have been translated using the average exchange rate for the periods presented. Adjustments resulting from the translation of the Companys financial statements are recorded as other comprehensive income (loss). The exchange rates used to translate amounts in RMB into US Dollars for the purposes of preparing the financial statements are as follows: May 31, 2016 November 30, 2015 (Unaudited) Balance sheet items, except for stockholders equity, as of periods end 0.1519 0.1561 Three Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1537 0.1631 Six Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1535 0.1629 Foreign currency translation adjustments of $ (122,371) and $25,735 for the three months ended May 31, 2016 and 2015, respectively, and $ (308,784) and $5,558 for the six months ended May 31, 2016 and 2015, respectively, have been reported as other comprehensive income (loss). Other comprehensive income (loss) of the Company consists entirely of foreign currency translation adjustments. Although PRC government regulations now allow convertibility of the RMB for current account transactions, significant restrictions still remain. Hence, such translations should not be construed as representations that the RMB could be converted into US Dollars at that rate or any other rate. The value of the RMB against the US Dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRCs political and economic conditions. Any significant revaluation of the RMB may materially affect the Companys financial condition in terms of US Dollar reporting. In August 2015, the PRC devalued its currency by approximately 3.5%; in January 2016 the PRC devalued its currency by an additional 0.5%. Further devaluations of its currency could occur. |
2. Summary of Significant Acc21
2. Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Revenue Recognition | Revenue recognition Revenues are primarily derived from selling selenium related products to contract distributors, and from our retail stores. The Companys revenue recognition policies comply with FASB ASC 605 Revenue Recognition. The Companys revenues for the three and six months ended May 31, 2016 and 2015 were comprised as follows: Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 ( Un audited) (Unaudited) ( Un audited) (Unaudited) Wholesale $ 4,949,592 $ 670,393 $ 5,778,677 $ 1,298,376 Retail 487,591 375,357 876,604 708,236 $ 5,437,183 $ 1,045,750 $ 6,655,281 $ 2,006,612 |
2. Summary of Significant Acc22
2. Summary of Significant Accounting Policies: Shipping Costs (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Shipping Costs | Shipping costs Shipping costs incurred by the Company are recorded as selling expenses. Shipping costs for the three and six months ended May 31, 2016 and 2015 were $24,427 and $10,160, respectively, and $39,453 and $19,480, respectively. |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Policies: Advertising Costs (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Advertising Costs | Advertising costs Advertising costs are charged to operations when incurred. For the three and six months ended May 31, 2016 and 2015, advertising expenses were $23,057 and $22,019, respectively, and $44,519 and $39,096, respectively. |
2. Summary of Significant Acc24
2. Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Cash and Cash Equivalents | Cash and cash equivalents The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Accounts Receivable | Accounts receivable Accounts receivable are recorded at the contract amount after deduction of trade discounts and, allowances, if any, and do not bear interest. The allowance for doubtful accounts, when necessary, is the Companys best estimate of the amount of probable credit losses from accounts receivable. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of May 31, 2016 and November 30, 2015, accounts receivable was $3,598,376 and $267,868, respectively. The Company believes that its accounts receivable are fully collectable and determined that an allowance for doubtful accounts was not necessary. |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Policies: Inventory (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Inventory | Inventory Inventory, comprised principally of boxed selenium capsules, selenium-glossy ganoderma capsules and selenium powder, is valued at the lower of cost or market. The value of inventory is determined using the first-in, first-out method. The Company periodically estimates an inventory allowance for estimated unmarketable inventories when necessary. Inventory amounts are reported net of such allowances, if any. There were no allowances for inventory as of May 31, 2016 and November 30, 2015. |
2. Summary of Significant Acc27
2. Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Fair Value of Financial Instruments | Fair value of financial instruments FASB ASC 820, Fair Value Measurement Level 1 Inputs Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs Inputs based on valuation techniques that are both unobservable and significant to the overall fair value measurements. ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash and cash equivalents, accounts receivable, inventory, prepaid expenses, equity investment, accounts payable, payable for equity investment, taxes payable, a ccrued liabilities and other payables, and loan from stockholder, approximated their fair values |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Policies: Prepaid Expenses (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Prepaid Expenses | Prepaid expenses Prepaid expenses primarily consist of promotion expenses, rent, advertising expenses and licensing fees. Prepaid promotion expenses represent payments made to promotion companies for distributing products to retail stores. In March 2016, the Company entered into agreements with 4 promotion companies. Prepaid promotion expenses as of May 31, 2016 and November 30, 2015 were $1,391,200 and $0, respectively. On January 5, 2011, the Company entered into a license agreement for the technology utilized for the manufacture of its products from an unrelated third party for five years from January 2011 to December 2015. On December 30, 2015, the Company renewed the license agreement for another five years to December 2020 at $91,137 (RMB 600,000) each year. The related prepaid licensing fees of $53,163 and $7,805 were included in prepaid expenses on the balance sheets as of May 31, 2016 and November 30, 2015, respectively. The license provides for renewal options. Since this agreement requires the advance payment of the annual licensing fee, there were no payments remaining under this agreement as of May 31, 2016 and November 30, 2015. |
2. Summary of Significant Acc29
2. Summary of Significant Accounting Policies: Impairment of Long-live Assets (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Impairment of Long-live Assets | Impairment of long-live assets The Company applies FASB ASC 360, Property, Plant and Equipment |
2. Summary of Significant Acc30
2. Summary of Significant Accounting Policies: Statutory Reserve Fund (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Statutory Reserve Fund | Statutory reserve fund Pursuant to corporate law of the PRC, the Company is required to transfer 10% of its net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of the Companys registered capital. The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after use is not less than 25% of registered capital. The statutory reserve fund was $443,757 and $281,766 as of May 31, 2016 and November 30, 2015, respectively. |
2. Summary of Significant Acc31
2. Summary of Significant Accounting Policies: Income Taxes (Policies) | 6 Months Ended |
May 31, 2016 | |
Policies | |
Income Taxes | Income taxes The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. As of May 31, 2016 and November 30, 2015, the Company does not have a liability for any unrecognized tax benefits. The Companys tax filings are subject to examination by the tax authorities. The tax years of 2013 to 2014 remain open to examination by tax authorities in the PRC. The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows: United States The Company is subject to United States tax at graduated rates from 15% to 35%. No provisions for income tax in the United States have been made as the Company had no U.S. taxable income for the three and six months ended May 31, 2016 and 2015 British Virgin Islands ( BVI) Biotechnology International is incorporated in the BVI and is governed by the income tax laws of the BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%. Hong Kong Hong Kong Gewang is incorporated in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non-Hong Kong source income. The People's Republic of China (PRC) Gewang Selenium and Guangdong Gewang are subject to an Enterprise Income Tax at 25% and file their own tax returns. |
2. Summary of Significant Acc32
2. Summary of Significant Accounting Policies: Variable Interest Entity: Schedule of Consolidated Financial Statements Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Consolidated Financial Statements Text Block | May 31, 2016 November 30, 2015 (Unaudited) TOTAL ASSETS $ 21,976,575 $ 9,360,262 TOTAL LIABILITIES $ 16,185,970 $ 5,240,643 |
2. Summary of Significant Acc33
2. Summary of Significant Accounting Policies: Variable Interest Entity: Schedule of Consolidated Financial Statements Income Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Consolidated Financial Statements Income Text Block | Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Net income $ 1,250,901 $ 356,884 $ 1,619,907 $ 766,135 |
2. Summary of Significant Acc34
2. Summary of Significant Accounting Policies: Foreign Currency Translations: Schedule of Foreign Currency Translations Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Foreign Currency Translations Text Block | May 31, 2016 November 30, 2015 (Unaudited) Balance sheet items, except for stockholders equity, as of periods end 0.1519 0.1561 Three Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1537 0.1631 Six Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Amounts included in the statements of income and comprehensive income, changes in stockholders equity and cash flows for the periods presented 0.1535 0.1629 |
2. Summary of Significant Acc35
2. Summary of Significant Accounting Policies: Revenue Recognition: Schedule of Revenues Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Revenues Text Block | Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 ( Un audited) (Unaudited) ( Un audited) (Unaudited) Wholesale $ 4,949,592 $ 670,393 $ 5,778,677 $ 1,298,376 Retail 487,591 375,357 876,604 708,236 $ 5,437,183 $ 1,045,750 $ 6,655,281 $ 2,006,612 |
4. Related Party Transactions_
4. Related Party Transactions: Schedule of Changes in Equity Investment Table Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Changes in Equity Investment Table Text Block | May 31, 2016 November 30, 2015 (Unaudited) Initial investment $ 1,466,652 $ - Pro rata share of net income 408,275 - Investment, end of period/year $ 1,874,927 $ - |
4. Related Party Transactions37
4. Related Party Transactions: Schedule of Results of Operations Table Text Block (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Results of Operations Table Text Block | Revenue $ 3,084,190 Cost of revenue $ 869,244 Expenses $ 854,030 Net income $ 1,360,916 |
Other Current Assets_ Schedule
Other Current Assets: Schedule of Other Assets (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Other Assets | 2016 2015 (Unaudited) Electronic equipment $ 85,807 $ Motor vehicles 126,757 69,714 Office equipment 12,588 12,936 225,152 151,383 Less: accumulated depreciation (107,719) (85,523) Fixed assets - net $ 117,433 $ 65,860 |
Income Taxes_ Schedule of Compo
Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 ( Un audited) (Unaudited) (Unaudited) (Unaudited) Current $ 416,553 $ 114,623 $ 539,969 $ 237,610 Deferred - - - - $ 416,553 $ 114,623 $ 539,969 $ 237,610 |
Parent Company Only Condensed40
Parent Company Only Condensed Financial Information: Condensed Balance Sheet (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Condensed Balance Sheet | ASSETS May 31, 2016 November 30, 2015 (Unaudited) Other receivable from Guangdong Gewang $ 14,848,200 $ 5,000,000 Investments in subsidiaries and VIE 5,999,738 3,977,483 TOTAL ASSETS $ 20,847,938 $ 8,977,483 LIABILITIES AND stockholders EQUITY Current liabilities: Accrued expenses $ 20,455 $ 33,375 Stockholder loans 209,864 156,866 Total current liabilities 230,319 190,241 Stockholders equity: Common stock, $0.001 par value, 75,000,000 shares authorized, 75,000,000 and 45,500,000 shares issued and outstanding as of May 31, 2016 and November 30, 2015, respectively 75,000 45,500 Additional paid-in capital 16,811,095 6,525,743 Retained earnings 3,849,749 2,186,255 Statutory reserve fund 443,757 281,766 Other comprehensive (loss) income (561,982) (252,022) Total stockholders equity 20,617,619 8,787,242 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 20,847,938 $ 8,977,483 |
Parent Company Only Condensed41
Parent Company Only Condensed Financial Information: Condensed Income Statement (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Condensed Income Statement | Three Months Ended May 31, Six Months Ended May 31, 2016 2015 2016 2015 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Share of earnings from investments in subsidiaries and VIE $ 2,061,851 $ 355,353 $ 2,413,578 $ 730,145 Operating expenses: General and administrative (19,732) (28,875) (39,270) (53,304) Net income $ 2,042,119 $ 326,478 $ 2,374,308 $ 676,841 |
Parent Company Only Condensed42
Parent Company Only Condensed Financial Information: Condensed Cash Flow Statement (Tables) | 6 Months Ended |
May 31, 2016 | |
Tables/Schedules | |
Condensed Cash Flow Statement | Six Months Ended May 31, 2016 May 31, 2015 (Unaudited) (Unaudited) Cash flows from operating activities: Net income $ 2,374,308 $ 676,841 Adjustments to reconcile net income to net cash provided by (used in) operating activities Share of earnings from investment in subsidiaries and VIE (2,413,578) (730,145) Increase in accrued expenses and other liabilities 39,270 53,304 Net cash provided by (used in) operating activities - - Net change in cash - - Cash, beginning of period - - Cash, end of period $ - $ - Noncash financing activities: Payment of accrued expenses and other payables by shareholder $ 52,190 $ 40,797 |
1. Organization (Details)
1. Organization (Details) - shares | May 31, 2016 | Jan. 18, 2016 | Nov. 30, 2015 | Apr. 20, 2015 |
Details | ||||
Common Stock, Shares Issued | 75,000,000 | 12,000,000 | 45,500,000 | 32,000,000 |
2. Summary of Significant Acc44
2. Summary of Significant Accounting Policies: Variable Interest Entity: Schedule of Consolidated Financial Statements Text Block (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 |
Details | ||
Other Assets | $ 21,976,575 | $ 9,360,262 |
Liabilities | $ 16,185,970 | $ 5,240,643 |
2. Summary of Significant Acc45
2. Summary of Significant Accounting Policies: Variable Interest Entity: Schedule of Consolidated Financial Statements Income Text Block (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Net income before noncontrolling interests | $ 1,637,951 | $ 341,952 | $ 1,988,651 | $ 708,917 |
Guangdong Gewang | ||||
Net income before noncontrolling interests | $ 1,250,901 | $ 356,884 | $ 766,135 | $ 1,619,907 |
2. Summary of Significant Acc46
2. Summary of Significant Accounting Policies: Foreign Currency Translations: Schedule of Foreign Currency Translations Text Block (Details) - $ / shares | 3 Months Ended | 6 Months Ended | |||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Nov. 30, 2015 | |
Details | |||||
Balance Sheet Exchange Rate | $ 0.1519 | $ 0.1519 | $ 0.1561 | ||
Exchange Rate2 | $ 0.1537 | $ 0.1631 | $ 0.1535 | $ 0.1629 |
2. Summary of Significant Acc47
2. Summary of Significant Accounting Policies: Foreign Currency Translations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Foreign Currency Transaction Gain (Loss), before Tax | $ (122,371) | $ 25,735 | $ (308,784) | $ 5,558 |
2. Summary of Significant Acc48
2. Summary of Significant Accounting Policies: Revenue Recognition: Schedule of Revenues Text Block (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Wholesale Revenue | $ 4,949,592 | $ 670,393 | $ 5,778,677 | $ 1,298,376 |
Retail Revenue | 487,591 | 375,357 | 876,604 | 708,236 |
REVENUE | $ 5,437,183 | $ 1,045,750 | $ 6,655,281 | $ 2,006,612 |
2. Summary of Significant Acc49
2. Summary of Significant Accounting Policies: Shipping Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Shipping, Handling and Transportation Costs | $ 24,427 | $ 10,160 | $ 39,453 | $ 19,480 |
2. Summary of Significant Acc50
2. Summary of Significant Accounting Policies: Advertising Costs (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Advertising Expense | $ 23,057 | $ 22,019 | $ 44,519 | $ 39,096 |
2. Summary of Significant Acc51
2. Summary of Significant Accounting Policies: Accounts Receivable (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 |
Details | ||
Accounts receivable | $ 3,598,376 | $ 267,868 |
2. Summary of Significant Acc52
2. Summary of Significant Accounting Policies: Prepaid Expenses (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 |
Details | ||
Prepaid Promotion Expenses | $ 1,391,200 | $ 0 |
Prepaid Expense, Current | $ 53,163 | $ 7,805 |
2. Summary of Significant Acc53
2. Summary of Significant Accounting Policies: Statutory Reserve Fund (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 |
Details | ||
Statutory reserve fund | $ 443,757 | $ 281,766 |
4. Related Party Transactions (
4. Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Nov. 30, 2015 | |
Secured Demand Notes | $ 218,069 | $ 218,069 | $ 166,106 | ||
Prepaid Promotion Expenses | 1,391,200 | 1,391,200 | 0 | ||
Tianmei | |||||
Prepaid Promotion Expenses | 26,576 | 26,576 | $ 0 | ||
License Costs | $ 0 | $ 1,490 | $ 0 | $ 0 |
4. Related Party Transactions55
4. Related Party Transactions: Schedule of Changes in Equity Investment Table Text Block (Details) | May 31, 2016USD ($) |
Details | |
Equity Investment- Initial Investment | $ 1,466,652 |
Pro rata share of net income | 408,275 |
Investment- End of year | $ 1,874,927 |
4. Related Party Transactions56
4. Related Party Transactions: Schedule of Results of Operations Table Text Block (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
REVENUE | $ 5,437,183 | $ 1,045,750 | $ 6,655,281 | $ 2,006,612 | |
Net Income | $ 2,042,119 | $ 326,478 | $ 2,374,308 | $ 676,841 | |
Results of Operations of the Investee | |||||
REVENUE | $ 3,084,190 | ||||
Cost of Revenue | 869,244 | ||||
Other Expenses | 854,030 | ||||
Net Income | $ 1,360,916 |
5. Leases (Details)
5. Leases (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 8 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | Aug. 31, 2016 | |
Operating Leases, Rent Expense | $ 66,872 | $ 31,334 | $ 133,557 | $ 62,554 | |
Unrelated Third Party1 | |||||
Operating Leases, Rent Expense | $ 91,137 | ||||
Unrelated Third Party2 | |||||
Operating Leases, Rent Expense | 42,311 | ||||
Unrelated Third Party3 | |||||
Operating Leases, Rent Expense | $ 55,188 |
Other Current Assets_ Schedul58
Other Current Assets: Schedule of Other Assets (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 |
Details | ||
Property, Plant and Equipment, Other, Gross | $ 85,807 | $ 68,733 |
Motor Vehicles | 126,757 | 69,714 |
Furniture and Fixtures, Gross | $ 12,588 | $ 12,936 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Depreciation | $ 14,653 | $ 7,465 | $ 24,761 | $ 13,915 |
Income Taxes_ Schedule of Com60
Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Income Tax Expense (Benefit) | $ 416,553 | $ 114,623 | $ 539,969 | $ 237,610 |
Stockholders' Equity Note Dis61
Stockholders' Equity Note Disclosure (Details) - shares | May 31, 2016 | Jan. 18, 2016 | Nov. 30, 2015 | Apr. 20, 2015 |
Details | ||||
Common Stock, Shares Issued | 75,000,000 | 12,000,000 | 45,500,000 | 32,000,000 |
Parent Company Only Condensed62
Parent Company Only Condensed Financial Information: Condensed Balance Sheet (Details) - USD ($) | May 31, 2016 | Nov. 30, 2015 | |
Details | |||
Other Receivables, Net, Current | $ 14,848,200 | $ 5,000,000 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets | 5,999,738 | 3,977,483 | |
Assets, Noncurrent | 20,847,938 | 8,977,483 | |
Accrued Liabilities, Current | 20,455 | 33,375 | |
Other Loans Payable | 209,864 | 156,866 | |
Liabilities, Noncurrent | 230,319 | 190,241 | |
Common stock | [1] | 75,000 | 45,500 |
Additional paid-in capital | 16,811,095 | 6,525,743 | |
Retained Earnings | 3,849,749 | 2,186,255 | |
Statutory reserve fund | 443,757 | 281,766 | |
OtherComprehensiveIncome | (561,982) | (252,022) | |
Stockholders Equity Other | 20,617,619 | 8,787,242 | |
Liabilities and Stockholders Equity Other | $ 20,847,938 | $ 8,977,483 | |
[1] | $0.001 par value, 75,000,000 shares authorized; 75,000,000 and 45,500,000 shares issued and outstanding as of May 31, 2016 and November 30, 2015 respectively |
Parent Company Only Condensed63
Parent Company Only Condensed Financial Information: Condensed Income Statement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Variable Interest Entity, Measure of Activity, Revenues | $ 2,061,851 | $ 355,353 | $ 2,413,578 | $ 730,145 |
Other General and Administrative Expense | (19,732) | (28,875) | (39,270) | (53,304) |
Net Income | $ 2,042,119 | $ 326,478 | $ 2,374,308 | $ 676,841 |
Parent Company Only Condensed64
Parent Company Only Condensed Financial Information: Condensed Cash Flow Statement (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
May 31, 2016 | May 31, 2015 | May 31, 2016 | May 31, 2015 | |
Details | ||||
Net Income | $ 2,042,119 | $ 326,478 | $ 2,374,308 | $ 676,841 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Variable Interest Entity, Measure of Activity, Revenues | $ (2,061,851) | $ (355,353) | (2,413,578) | (730,145) |
Increase (Decrease) in Other Accrued Liabilities | 39,270 | 53,304 | ||
Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities | $ 52,190 | $ 40,797 |