Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Jan. 31, 2015 | Mar. 13, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | DTS8 COFFEE COMPANY, LTD. | |
Entity Central Index Key | 1499361 | |
Document Type | 10-Q | |
Document Period End Date | 31-Jan-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -26 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | Yes | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 33,991,666 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2015 |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Jan. 31, 2015 | Apr. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Cash and cash equivalents | $45,857 | $33,339 |
Accounts receivable | 69,240 | 69,526 |
Prepaid expenses | 15,337 | 8,459 |
Inventories | 116,854 | 36,647 |
Total Current Assets | 247,288 | 147,971 |
Property, plant and equipment, net | 59,574 | 72,418 |
Investment in joint venture company, at cost | 162,800 | |
Goodwill, net | 3,010,758 | 3,010,758 |
TOTAL ASSETS | 3,480,420 | 3,231,147 |
Accounts payable and accruals | 320,433 | 104,406 |
Loans from related parties | 754,158 | 730,446 |
Total Current Liabilities | 1,074,591 | 834,852 |
STOCKHOLDERS’ EQUITY (DEFICIT) | ||
Common stock, 75,000,000 shares authorized, $0.001 par value:33,991,666 and 30,708,333 shares issued and outstanding as of January 31, 2015 and April 30, 2014, respectively | $33,991 | $30,708 |
Additional paid-in capital | 6,990,209 | 6,442,992 |
Accumulated deficit | -4,613,044 | -4,072,787 |
Accumulated other comprehensive income | -5,327 | -4,618 |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) | 2,405,829 | 2,396,295 |
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT) | $3,480,420 | $3,231,147 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) | Jan. 31, 2015 | Apr. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock, $0.001 par value, authorzied | 75,000,000 | 75,000,000 |
Common stock, $0.001 par value, issued | 33,991,666 | 30,708,333 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2015 | Jan. 31, 2014 | Jan. 31, 2015 | Jan. 31, 2014 | |
Income Statement [Abstract] | ||||
Sales | $96,733 | $90,327 | $270,572 | $232,562 |
Cost of sales | 66,540 | 73,337 | 175,890 | 160,326 |
Gross profit | 30,193 | 16,990 | 94,682 | 72,236 |
Marketing expenses | 5,940 | 11,823 | 19,775 | 22,225 |
General and administrative expenses | 125,039 | 596,195 | 615,164 | 799,552 |
TOTAL OPERATING EXPENSES | 130,979 | 608,018 | 634,939 | 821,777 |
NET LOSS | -100,786 | -591,028 | -540,257 | -749,541 |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation loss adjustment | -315 | -1,588 | -709 | -4,620 |
TOTAL COMPREHENSIVE LOSS | ($101,101) | ($592,616) | ($540,966) | ($754,161) |
BASIC AND DILUTED NET LOSS PER COMMON SHARE | $0 | ($0.02) | ($0.02) | ($0.03) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 33,863,985 | 26,729,637 | 32,598,767 | 26,432,500 |
Shareholders_Equity_Unaudited
Shareholders Equity (Unaudited) (USD $) | 9 Months Ended | 12 Months Ended |
Jan. 31, 2015 | Apr. 30, 2014 | |
Stock issued for services, in shares | 1,420,000 | 0 |
Stock issued for services | $271,000 | $0 |
Stock issued for for cash, in shares | 1,863,333 | 0 |
Stock issued for cash | 279,500 | 0 |
Foreign currency translation adjustment | -709 | 0 |
Net loss | -540,257 | 0 |
Balance, in shares | 0 | 0 |
Balance | 2,405,829 | 2,396,295 |
Common Stock | ||
Stock issued for services, in shares | 1,420,000 | 0 |
Stock issued for services | 1,420 | 0 |
Stock issued for for cash, in shares | 1,863,333 | 0 |
Stock issued for cash | 1,863 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss | 0 | 0 |
Balance, in shares | 33,991,666 | 30,708,333 |
Balance | 33,991 | 30,708 |
Additional Paid-In Capital | ||
Stock issued for services, in shares | 0 | 0 |
Stock issued for services | 269,580 | 0 |
Stock issued for for cash, in shares | 0 | 0 |
Stock issued for cash | 277,637 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss | 0 | 0 |
Balance, in shares | 0 | 0 |
Balance | 6,990,209 | 6,442,992 |
Other Comprehensive Income / Loss | ||
Stock issued for services, in shares | 0 | 0 |
Stock issued for services | 0 | 0 |
Stock issued for for cash, in shares | 0 | 0 |
Stock issued for cash | 0 | 0 |
Foreign currency translation adjustment | -709 | 0 |
Net loss | 0 | 0 |
Balance, in shares | 0 | 0 |
Balance | -5,327 | -4,618 |
Retained Earnings / Accumulated Deficit | ||
Stock issued for services, in shares | 0 | 0 |
Stock issued for services | 0 | 0 |
Stock issued for for cash, in shares | 0 | 0 |
Stock issued for cash | 0 | 0 |
Foreign currency translation adjustment | 0 | 0 |
Net loss | -540,257 | 0 |
Balance, in shares | 0 | 0 |
Balance | ($4,613,044) | ($4,072,787) |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Jan. 31, 2015 | Jan. 31, 2014 | |
Statement of Cash Flows [Abstract] | ||
Net loss | ($540,257) | ($749,541) |
Depreciation | 12,877 | 15,070 |
Loss on disposal of fixed assets | 360 | |
Common shares issued for services | 271,000 | 517,000 |
Accounts receivable | 523 | -15,157 |
Prepaid expenses | -6,837 | -15,051 |
Inventories | -79,945 | 6,114 |
Due to related parties and shareholder | 21,179 | 0 |
Accounts payable and accruals | 57,501 | 104,418 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | -263,599 | -137,147 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase property plant and equipment | -175 | -693 |
Cash paid for investment in joint venture company | -5,000 | |
NET CASH USED IN INVESTING ACTIVITIES | -5,175 | -693 |
Shares issued for cash | 279,500 | |
Advance from share offering subscription | 95,000 | |
Repayment to related parties | -37,280 | |
Loan from related parties | 70,000 | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 279,500 | 127,614 |
Effect of exchange rate changes on cash and cash equivalents | 1,792 | 2,277 |
NET INCREASE (DECREASE) IN CASH | 12,518 | -7,949 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 33,339 | 19,591 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 45,857 | 11,642 |
Income taxes paid | ||
Interest paid | ||
Payable investment in joint venture | $107,800 |
Organization_and_Description_o
Organization and Description of Business | 9 Months Ended |
Jan. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS |
DTS8 Coffee Company, Ltd. (the "Company") was incorporated in the State of Nevada on March 27, 2009. Effective January 22, 2013, the Company changed its name from Berkeley Coffee & Tea, Inc. to DTS8 Coffee Company, Ltd. On April 30, 2012, the Company acquired one hundred percent (100%) of the issued and outstanding capital stock of DTS8 Holdings Co., Ltd. (“DTS8 Holdings”), a corporation organized and existing since June 2008 under the laws of Hong Kong, and which owns DTS8 Coffee (Shanghai) Co., Ltd. (“DTS8 Coffee”), a wholly owned foreign subsidiary entity (“WOFE”) corporation organized and existing in Shanghai since January 19, 2009, under the laws of the People’s Republic of China. | |
In March 2013, the Company established a 100% owned subsidiary of DTS8 Coffee called DTS8 Coffee (Huzhou) Co. Ltd. (“DTS8 Huzhou”) in Huzhou, Zhejiang Province, China, which is approximately a two hour drive from Shanghai. DTS8 Huzhou is a coffee roaster equipped with the standard procedures to ensure that it meets regulatory requirements for food safety and sanitation in China. | |
Effective June 10, 2014, the Company owned a 19% equity interest in a joint venture company, Don Manuel (Shanghai) Investment Management Co. Ltd. (the “JV Company”), established in the Shanghai Tax Free Zone, to own, manage and operate Café De La Don Manuel branded coffee cafes throughout China. The JV Company opened its first coffee café in Shanghai, China, in October 2014. | |
DTS8 Holdings, through its subsidiaries DTS8 Coffee and DTS8 Huzhou, is a gourmet coffee roasting, marketing and wholesale distribution company. The Company’s office and coffee storage facility is located in Shanghai, China, and its coffee roasting facility is located in Nanxun Town, Huzhou, Zhejiang Province, China. The Company is in the business of roasting, marketing and selling gourmet roasted coffee to customers in Shanghai and other parts of China. It sells gourmet roasted coffee under the “DTS8 Coffee” label through distribution channels that reach consumers at restaurants, multi-location coffee shops, and offices. |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Jan. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | NOTE 2 – BASIS OF PRESENTATION |
The accompanying interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X as promulgated by the Securities and Exchange Commission (the “SEC”). In the opinion of management, the financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the results for the periods presented. | |
The accompanying interim consolidated financial statements have been prepared to present the consolidated statements of financial position, the consolidated statements of operations and comprehensive income/(loss), consolidated statements of changes in stockholders’ equity and consolidated cash flows of the Company for the period ended January 31, 2015, for inclusion in the Company’s Form 10-Q for purposes of complying with the rules and regulations of the SEC as required by Article 8 of Regulation S-X. The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) using the Company specific information where available and allocations and estimates where data is not maintained on the Company specific basis within its books and records. Due to the allocations and estimates used to prepare the financial statements, they may not reflect the financial position, cash flows and results of operations of the Company in the future or its operations, cash flows and financial position. | |
The preparation of financial statements in accordance with US GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues, goodwill impairment and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of the Company's financial position and results of operations. | |
Certain amounts from prior periods have been reclassified to conform to the current period presentation. This reclassification has resulted in no changes to the Company’s accumulated deficit or net loss presented. |
Going_Concern_Uncertainty
Going Concern Uncertainty | 9 Months Ended |
Jan. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainty | NOTE 3 – GOING CONCERN UNCERTAINTY |
The accompanying interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. The Company has incurred material losses from operations. At January 31, 2015, the Company had an accumulated deficit in addition to limited cash, limited revenue and unprofitable operations. For the nine months ended January 31, 2015, the Company sustained net losses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is contingent upon its ability to obtain additional financing and to generate revenue and cash flow to meet its obligations on a timely basis. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||
Jan. 31, 2015 | |||
Accounting Policies [Abstract] | |||
Summary of Significant Accounting Policies | NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, who are responsible for their integrity and objectivity. These accounting policies conform to US GAAP and have been consistently applied in the preparation of the financial statements. | |||
Basis of Preparation | |||
The accompanying interim consolidated financial statements have been prepared to present the consolidated statements of financial position, consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in stockholders’ equity and consolidated cash flows of the Company for the nine months ended January 31, 2015, and have been prepared in accordance with US GAAP. | |||
Basis of Consolidation | |||
The accompanying consolidated financial statements include the accounts of the Company, DTS8 Holdings Co., Ltd., DTS8 Coffee (Shanghai) Co., Ltd., and DTS8 Coffee (Huzhou) Co. Ltd. All significant inter-company transactions and balances have been eliminated upon consolidation. | |||
Use of Estimates | |||
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues, goodwill impairment and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. | |||
Concentrations of Credit Risk | |||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. As of January 31, 2015, and April 30, 2014, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the People’s Republic of China, which management believes are of high credit quality. With respect to accounts receivable, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for accounts receivable and maintains an allowance for doubtful accounts of accounts receivable if necessary. | |||
Cash and Cash Equivalents | |||
Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. As at January 31, 2015, and April 30, 2014, cash and cash equivalents consisted of cash only. | |||
Receivables and Allowance for Doubtful Accounts | |||
Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the period based on management’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its customers. As of January 31, 2015, and April 30, 2014 there was no allowance for doubtful debts. | |||
Inventories | |||
Inventories are stated at the lower of cost or market. The cost for inventories is determined using the first-in, first-out method. The cost includes all expenditures incurred in bringing the goods to the point of sale and putting them in a sellable condition. In assessing the ultimate realization of inventories, management makes judgments as to future demand requirements compared to current or committed inventory levels. The Company estimates the demand requirements based on market conditions, forecasts prepared by its customers, sales contracts and orders in hand. In addition, the Company estimates net realizable value based on intended use, current market value and inventory aging analyses. The Company writes down inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions. Inventories principally consist of green coffee beans, roasted coffee beans and packing supplies. | |||
Property and Equipment | |||
Property and equipment are recorded at cost. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on straight-line basis over their estimated useful lives as set out below. Major remodels and improvements are capitalized. Maintenance and repairs that do not improve or extend the life of the respective assets are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income. | |||
Useful life | Residue value | ||
Machinery equipment | 10 years | 10% | |
Office equipment | 5 years | 10% | |
Production equipment | 5 years | 10% | |
Leasehold Improvements | 3 years | 0% | |
Impairment of Long-Lived assets | |||
The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets for the periods ended January 31, 2015, and April 30, 2014. | |||
Impairment of Goodwill | |||
Upon the acquisition of DTS8 Holdings on April 30, 2012, the Company recognised $4,402,737 of goodwill. Goodwill is the excess of the acquisition cost of DTS8 Holdings on April 30, 2012, over the cost of net identifiable assets over the fair value of the amounts assigned to assets acquired and liabilities assumed. Goodwill is tested annually for impairment. The test is performed more frequently if events or changes in circumstances indicate that goodwill might be impaired. Impairment is tested by comparing fair value of the goodwill to its carrying value. Any excess of carrying value over fair value is charged to earnings in the period in which impairment is determined. The Financial Accounting Standard ASU 2011-08 “Intangibles – Goodwill and Other – Testing Goodwill for Impairment” allows the Company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company would not be required to calculate the fair value unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. There are a number of events and circumstances for the Company to consider in conducting the qualitative assessment. Management must complete this review by following the steps in ASC 350-20-35-3C to evaluate the fair value of the goodwill. As part of the review of the goodwill and on the understanding that examples included in ASC 350-20-35-3C are not exhaustive lists of items that should be considered, management must consider all known events and circumstances that could trigger an impairment of goodwill. | |||
Fair Value of Financial Instruments | |||
ASC 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows: | |||
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |||
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. It is management’s opinion that as of January 31, 2015 and April 30, 2014, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates. | |||
Revenue Recognition | |||
The Company derives its revenue from the sale of roasted coffee. Revenue is recognized when persuasive evidence of an arrangement exists, delivery occurs, the sales price is fixed or determinable and collectability is reasonably assured. Coffee is considered delivered when title and risk have been transferred to the customer. Retail sales are recorded when payment is tendered at the point of sale. Wholesale sales are recorded upon delivery of coffee to the customers. In the People’s Republic of China, a value added tax (“VAT”) of 17% on invoiced amount is collected on behalf of tax authorities. Revenues represent the invoiced value of goods sold, net of VAT. | |||
Advertising and Promotion Costs | |||
Advertising and promotion costs are expensed as incurred. For the periods ended January 31, 2015 and 2014, the Company did not incur any advertising costs. | |||
Income Taxes | |||
The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. | |||
Comprehensive Income | |||
The Company has adopted ASC 220, “Reporting Comprehensive Income”, which requires inclusion of foreign currency translation adjustments, reported separately in its statement of stockholders' equity, in other comprehensive income. During the periods presented, other comprehensive income includes cumulative translation adjustment from foreign currency translation. | |||
Foreign Currency Translation | |||
The Company’s functional and reporting currency is United States Dollars (“USD”). The functional currency of the Company’s subsidiaries DTS8 Coffee and DTS8 Huzhou in the People’s Republic of China is Chinese currency Renminbi (“RMB”). Since RMB is not freely convertible into foreign currencies, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. | |||
The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. | |||
For financial reporting purposes, the financial statements of the Company’s subsidiaries DTS8 Coffee and DTS8 Huzhou in the People’s Republic of China are maintained in RMB and translated into USD. Balance sheet accounts with the exception of equity are translated using the closing exchange rate in effect at the balance sheet date, income and expense accounts are translated using the average exchange rate prevailing during the reporting period and the equity accounts were stated at their historical exchange rate. | |||
Adjustments resulting from the translation of RMB to USD, included in accumulated other comprehensive income (loss) in shareholder’s equity, were losses of $5,327 and $4,618, as of January 31, 2015, and April 30, 2014, respectively. | |||
The exchange rates used for foreign currency translation were as follows (USD$1 =MB): | |||
Period | Balance Sheet | Annual | |
Covered | Date Rates | Average Rates | |
31-Jan-15 | 6.137 | 6.1475 | |
30-Apr-14 | 6.158 | 6.1483 | |
31-Jan-14 | 6.105 | 6.152 | |
Related Parties | |||
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. | |||
Earnings per Share | |||
Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company did not have dilutive securities for the periods ended January 31, 2015, and 2014. | |||
Stock Issued for Services | |||
The Company accounts for stock-based compensation to employees in accordance with ASC 718 which requires companies to measure the cost of services received in exchange for an award of an equity instrument based upon the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Stock-based compensation awards to non-employees are accounted for in accordance with ASC 505-50. | |||
Investment in Joint Venture Company | |||
The Company uses the cost method to record investment in the common stock of the JV Company, Don Manuel (Shanghai) Investment Management Co. Ltd., in accordance with ASC 325-20. The Company’s 19% equity interest in the JV Company does not provide it the ability to exercise significant influence. The majority controlling shareholder controls all the decision making related to financial and operational affairs of the JV Company. Accordingly, the JV Company is not subject to significant influence by the Company. | |||
Recently Issued Accounting Pronouncements | |||
Management believes that none of the recently adopted accounting pronouncements will have a material effect on the Company’s financial position, results of operations, or cash flows. |
Inventory
Inventory | 9 Months Ended | |||
Jan. 31, 2015 | ||||
Inventory Disclosure [Abstract] | ||||
Inventory | NOTE 5 – INVENTORY | |||
Inventories consist of the following: | ||||
31-Jan-15 | 30-Apr-14 | |||
Raw materials - Green beans | $96,748 | $16,280 | ||
Finished products - Roasted coffee | $12,104 | $11,560 | ||
Packing products | $8,002 | $8,807 | ||
Total | $116,854 | $36,647 | ||
Property_and_Equipment
Property and Equipment | 9 Months Ended | |||
Jan. 31, 2015 | ||||
Property, Plant and Equipment [Abstract] | ||||
Property and Equipment | NOTE 6 – PROPERTY AND EQUIPMENT | |||
The following is a summary of property and equipment and accumulated depreciation: | ||||
31-Jan-15 | 30-Apr-14 | |||
Machinery | $ | 97,578 | 97,450 | |
Production equipment | 4,888 | 5,040 | ||
Office equipment | 15,400 | 15,589 | ||
Leasehold improvements | 17,924 | 32,316 | ||
Less accumulated depreciation | -76,216 | -77,977 | ||
Property, plant and equipment, net | $ | 59,574 | 72,418 | |
Depreciation expenses were $12,877 and $15,070 for the nine months ended January 31, 2015, and 2014, respectively. |
Goodwill
Goodwill | 9 Months Ended | ||
Jan. 31, 2015 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | NOTE 7 – GOODWILL | ||
On April 30, 2012, the Company’s acquisition of DTS8 Holdings resulted in recording of goodwill of $4,402,737. As detailed in ASC 350 “Intangibles-Goodwill”, the Company tests for goodwill impairment at end of its fiscal year and whenever events or changes in circumstances indicate that the carrying amount of the assets exceeds its fair value and may not be recoverable. | |||
On April 30, 2014, in accordance with ASC 350-20-35-3A, the Company performed a test for goodwill impairment. Management completed a qualitative analysis to determine whether it was more likely than not that the fair value of a reporting entity is less than its carrying amount, including goodwill. To complete this review, management followed the steps in ASC 350-20-35-3C to evaluate the fair value of the goodwill. As part of management’s review of the goodwill and on the understanding that examples included in ASC 350-20-35-3C are not exhaustive lists of items that should be considered, management considered all known events, and circumstances that could trigger an impairment of goodwill. Management concluded that events rose indicating impairment of the goodwill during the year ended April 30, 2014. The general economic conditions in Shanghai, China, are considered positive. However, the events indicating impairment included the Company’s inability to raise large public or private equity financing in the United States. The Company’s ability to access capital to fund its business operations remained weak and challenging during the year ended April 30, 2014. The differing cultures, consumer preferences, corruption, anti-Chinese sentiments, diverse uncertain government regulations, tax systems and currency regulations are business risks impacting the Company’s current operations. In addition, there are no assurance that the Company will be able to obtain additional new license, permits or other approvals on a cost-effective basis or in a timely manner to prevent disruption to its business and operations in Huzhou, and Shanghai, China. In addition, the Company has limited revenue and accumulated losses. It requires working capital to fund its business, and be successful in generating increased revenue. Accordingly, based on a qualitative assessment, it is more likely than not that its fair value is less than its carrying amount of the goodwill. | |||
Management carried out the second step of the impairment testing procedure. It included determining the recoverable amount, book value and fair value of the reporting unit. The fair value of the reporting unit was established (non-affiliate shares multiplied by volume weighted average price of the shares at April 30, 2014) and the implied fair value of the goodwill was then computed. The recorded goodwill value exceeded the implied value of the goodwill. Accordingly, management recognized $1,391,979 goodwill impairment charge to the goodwill of $4,402,737. Therefore, $1,391,979 goodwill impairment adjustment for the year ended April 30, 2014 was expensed. It is possible that the assumptions used by management related to the evaluation may change or that actual results may vary significantly from management’s estimates. As a result, additional impairment charges may occur in the future. | |||
Changes in the carrying amount of the goodwill for the periods ended January 31, 2015 and April 30, 2014, are as follows: | |||
30-Apr-13 | Goodwill, net of impairment | $4,402,737 | |
Impairment charge for the year ended April 30, 2014 | $1,391,979 | ||
April 30 2014 | Goodwill, net of impairment | $3,010,758 | |
Impairment charge for the period ended January 31, 2015 | - | ||
31-Jan-15 | Goodwill, net of impairment | $3,010,758 | |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Jan. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 – RELATED PARTY TRANSACTIONS |
Related party transactions are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. | |
Upon the acquisition of DTS8 Holdings on April 30, 2012, the Company assumed a loan from Sean Tan to DTS8 Holdings. As of January 31, 2015 and April 30, 2014, $120,000 and $120,000, respectively, was recorded as loan from related parties. Sean Tan is the Company’s Chief Executive Officer and director. No interest payment was due. The loan from related parties bears no interest and has no fixed term of repayment. Sean Tan has agreed not to demand payment within the next fiscal year. | |
On March 31, 2011, the Company entered into a management agreement with Sean Tan, the Company’s officer and director, to serve as the President and Chief Executive Officer of the Company. Mr. Tan’s engagement commenced on March 1, 2011, and shall continue on a year-to-year basis until terminated by either party upon 60 days prior written notice to the other party. The monthly management fee payment of $6,000 to Mr. Tan is paid in arrears on the last day of each month. For the periods ended January 31, 2015, and April 30, 2014, the Company owed Mr. Tan $98,000 and $99,000, respectively, for the management fees. | |
The spouse of the Company’s Chief Executive Officer and director loaned the Company $13,557 as of January 31, 2015, and $13,143 as of April 30, 2014, recorded as a loan from related parties. The loan from related parties bears no interest and has no fixed term of repayment. | |
On April 30, 2012, upon its acquisition of DTS8 Holdings, the Company assumed a loan payable of $382,396 owed by DTS8 Coffee (Shanghai) Co. Ltd to a consultant who provides accounting and financial reporting services to the Company through his company from time to time on a monthly basis. The amounts owed as loan payable as of January 31, 2015 and April 30, 2014, were $380,701 and $379,403, respectively. The loan is unsecured, non-interest bearing, has no fixed term of repayment, and is repayable on demand, and the consultant has agreed not to demand payment within the next fiscal year. In addition, for the periods ended January 31, 2015 and April 30, 2014, the Company owed the consultant $141,900 and $118,900, respectively, for consulting services provided to the Company. Neither the consultant nor his company is a shareholder of the Company. | |
As of January 31, 2015, the Company had sold $1,669 of roasted 100% Colombian coffee to the JV Company. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Jan. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 – COMMITMENTS AND CONTINGENCIES |
The Company leases its corporate office and coffee distribution and storage facility located at Building B, #439, Jinyuan Ba Lu, Jiangqiao Town, Jiading District, Shanghai 201812, China. Lease commenced on October 1, 2013, and expires on September 30, 2017. The leased area is approximately 92 square meters (990 square feet). | |
The Company also leases a warehouse for its coffee roasting and manufacturing at 801 Jiahe Road, 2nd Floor, Nanxun Town, Huzhou City, 313009, Zhejiang, China. The leased area is approximately 1,041 square meters (11,205 square feet). The lease commenced on August 16, 2013, and expires on August 17, 2015. | |
Total lease payments for the periods ended January 31, 2015 and 2014 were $26,983 and $18,278, respectively. |
Common_Stock
Common Stock | 9 Months Ended |
Jan. 31, 2015 | |
Equity [Abstract] | |
Common Stock | NOTE 10 – COMMON STOCK |
At January 31, 2015, the Company’s authorized capital was 75,000,000 shares of common stock with a par value of $0.001 and 33,991,666 shares were issued and outstanding. | |
In July 2014, the Company issued 1,000,000 restricted shares of common stock to a consultant at a fair market price of $0.16 per share as payment for consulting services. Total value of the services, valued at the fair market price, was $160,000 which was expensed as consulting fees. | |
In July 2014, the Company issued 500,000 restricted shares of common stock at a price of $0.15 per share for cash proceeds of $75,000. | |
In October 2014, the Company issued 300,000 restricted shares of common stock to a director at a fair market price of $0.31 per share as payment for consulting services. Total value of the services, valued at the fair market price, was $93,000 which was expensed as consulting fees. | |
In October 2014, the Company issued 930,000 restricted shares of common stock at a price of $0.15 per share for cash proceeds of $139,500. | |
In January 2015, the Company issued 433,333 restricted shares of common stock at a price of $0.15 per share for cash proceeds of $65,000. | |
In January 2015, the Company issued 120,000 restricted shares of common stock to a consultant at a fair market price of $0.15 per share as payment for consulting services. Total value of the services, valued at the fair market price, was $18,000 which was expensed as consulting fees. |
Contracts_and_Agreements
Contracts and Agreements | 9 Months Ended |
Jan. 31, 2015 | |
Guarantees [Abstract] | |
Contracts and Agreements | NOTE 11 – CONTRACTS AND AGREEMENTS |
On March 31, 2011, the Company entered into a management agreement with Sean Tan, the Company’s officer and director to serve as the President and Chief Executive Officer of the Company. Mr. Tan’s engagement commenced on March 1, 2011, and shall continue on a year-to-year basis until terminated by either party upon 60 days prior written notice to the other party. The monthly management fee payment of $6,000 to Mr. Tan is paid in arrears on the last day of each month. | |
In July 2014, the Company amended an agreement with a consultant to provide sales-related services to the Company until April 2015. The Company issued 1,000,000 shares of common stock for payment of the consulting fees in lieu of cash for an aggregate consideration of $160,000, the estimated fair market value of these shares. It was determined that $0.16 was the fair market value per share and $160,000 was expensed as consulting fees in the period ended January 31, 2015. |
Investments_in_Joint_Venture_C
Investments in Joint Venture Company | 9 Months Ended |
Jan. 31, 2015 | |
Investments, All Other Investments [Abstract] | |
Investments in Joint Venture Company | |
NOTE 12 – INVESTMENT IN JOINT VENTURE COMPANY | |
Effective June 10, 2014, the Company owned a 19% equity interest in a joint venture company, Don Manuel (Shanghai) Investment Management Co. Ltd., established in the Shanghai Tax Free Zone, to own, manage and operate Café De La Don Manuel branded coffee cafes throughout China. The agreement governing the creation and operation of the JV Company is dated May 27, 2014, and is valid until May 27, 2025. The registered capital of the JV Company is RMB 5 million (approximately $830,000). The Company’s share of the cash investment is $162,800 for the 19% equity interest. The Company paid $55,000 and the balance of $107,800 is recorded as a payable. The first café of the JV Company opened in October 2014. The flagship café is located in the Bund area of Shanghai. | |
Concentration_Risk
Concentration Risk | 9 Months Ended |
Jan. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Concentration Risk | NOTE 13 – CONCENTRATION RISK |
The Company conducts business in Shanghai, China. Consequently, any political, economic and social unrest and/or instability in China may adversely affect the Company’s business operations. In particular, instability in the supply of raw green beans into China could result in a decrease in the availability of coffee beans needed for the continued operation and growth of the Company’s business. It could also lead to an increase in the purchasing costs and increased operating costs. This may adversely affect the Company’s business. | |
As of January 31, 2015, approximately 88% of the Company’s revenue was derived from one customer. The Company anticipates in the future that the reliance on one customer will decline, as it obtains new customers and increases its revenue. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Jan. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS |
The Company has evaluated the subsequent events from the balance sheet date through the date the financial statements were issued, and determined that no significant events have occurred. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||
Jan. 31, 2015 | |||
Accounting Policies [Abstract] | |||
Basis of Preparation | Basis of Preparation | ||
The accompanying interim consolidated financial statements have been prepared to present the consolidated statements of financial position, consolidated statements of operations and comprehensive income (loss), consolidated statements of changes in stockholders’ equity and consolidated cash flows of the Company for the nine months ended January 31, 2015, and have been prepared in accordance with US GAAP. | |||
Basis of Consolidation | Basis of Consolidation | ||
The accompanying consolidated financial statements include the accounts of the Company, DTS8 Holdings Co., Ltd., DTS8 Coffee (Shanghai) Co., Ltd., and DTS8 Coffee (Huzhou) Co. Ltd. All significant inter-company transactions and balances have been eliminated upon consolidation. | |||
Use of Estimates | Use of Estimates | ||
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues, goodwill impairment and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results could differ materially from those estimates. | |||
Concentrations of Credit Risk | Concentrations of Credit Risk | ||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. As of January 31, 2015, and April 30, 2014, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in the People’s Republic of China, which management believes are of high credit quality. With respect to accounts receivable, the Company extends credit based on an evaluation of the customer’s financial condition. The Company generally does not require collateral for accounts receivable and maintains an allowance for doubtful accounts of accounts receivable if necessary. | |||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||
Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. As at January 31, 2015, and April 30, 2014, cash and cash equivalents consisted of cash only. | |||
Receivables and Allowance for Doubtful Accounts | Receivables and Allowance for Doubtful Accounts | ||
Trade accounts receivable are recorded at net realizable value and do not bear interest. No allowance for doubtful accounts was made during the period based on management’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company evaluates its allowance for doubtful accounts based upon knowledge of its customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis. The review process evaluates all account balances with amounts outstanding for 60 days and other specific amounts for which information obtained indicates that the balance may be uncollectible. The Company does not have any off-balance-sheet credit exposure related to its customers. As of January 31, 2015, and April 30, 2014 there was no allowance for doubtful debts. | |||
Inventories | Inventories | ||
Inventories are stated at the lower of cost or market. The cost for inventories is determined using the first-in, first-out method. The cost includes all expenditures incurred in bringing the goods to the point of sale and putting them in a sellable condition. In assessing the ultimate realization of inventories, management makes judgments as to future demand requirements compared to current or committed inventory levels. The Company estimates the demand requirements based on market conditions, forecasts prepared by its customers, sales contracts and orders in hand. In addition, the Company estimates net realizable value based on intended use, current market value and inventory aging analyses. The Company writes down inventories for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventories and their estimated market value based upon assumptions about future demand and market conditions. Inventories principally consist of green coffee beans, roasted coffee beans and packing supplies. | |||
Property and Equipment | Property and Equipment | ||
Property and equipment are recorded at cost. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on straight-line basis over their estimated useful lives as set out below. Major remodels and improvements are capitalized. Maintenance and repairs that do not improve or extend the life of the respective assets are charged to expense as incurred. Upon sale or disposition, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income. | |||
Useful life | Residue value | ||
Machinery equipment | 10 years | 10% | |
Office equipment | 5 years | 10% | |
Production equipment | 5 years | 10% | |
Leasehold Improvements | 3 years | 0% | |
Impairment of Long-Lived assets | Impairment of Long-Lived assets | ||
The Company accounts for impairment of property and equipment and amortizable intangible assets in accordance with ASC 360, “Accounting for Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of”, which requires the Company to evaluate a long-lived asset for recoverability when there is event or circumstance that indicate the carrying value of the asset may not be recoverable. An impairment loss is recognized when the carrying amount of a long-lived asset or asset group is not recoverable (when carrying amount exceeds the gross, undiscounted cash flows from use and disposition) and is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. There was no impairment of long-lived assets for the periods ended January 31, 2015, and April 30, 2014. | |||
Impairment of Goodwill | Impairment of Goodwill | ||
Upon the acquisition of DTS8 Holdings on April 30, 2012, the Company recognised $4,402,737 of goodwill. Goodwill is the excess of the acquisition cost of DTS8 Holdings on April 30, 2012, over the cost of net identifiable assets over the fair value of the amounts assigned to assets acquired and liabilities assumed. Goodwill is tested annually for impairment. The test is performed more frequently if events or changes in circumstances indicate that goodwill might be impaired. Impairment is tested by comparing fair value of the goodwill to its carrying value. Any excess of carrying value over fair value is charged to earnings in the period in which impairment is determined. The Financial Accounting Standard ASU 2011-08 “Intangibles – Goodwill and Other – Testing Goodwill for Impairment” allows the Company to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The Company would not be required to calculate the fair value unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. There are a number of events and circumstances for the Company to consider in conducting the qualitative assessment. Management must complete this review by following the steps in ASC 350-20-35-3C to evaluate the fair value of the goodwill. As part of the review of the goodwill and on the understanding that examples included in ASC 350-20-35-3C are not exhaustive lists of items that should be considered, management must consider all known events and circumstances that could trigger an impairment of goodwill. | |||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||
ASC 820 “Fair Value Measurements and Disclosures”, adopted January 1, 2008, defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current receivables and payables qualify as financial instruments. Management concluded the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available. The three levels are defined as follows: | |||
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||
Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. | |||
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value. It is management’s opinion that as of January 31, 2015 and April 30, 2014, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheet. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates. | |||
Revenue Recognition | Revenue Recognition | ||
The Company derives its revenue from the sale of roasted coffee. Revenue is recognized when persuasive evidence of an arrangement exists, delivery occurs, the sales price is fixed or determinable and collectability is reasonably assured. Coffee is considered delivered when title and risk have been transferred to the customer. Retail sales are recorded when payment is tendered at the point of sale. Wholesale sales are recorded upon delivery of coffee to the customers. In the People’s Republic of China, a value added tax (“VAT”) of 17% on invoiced amount is collected on behalf of tax authorities. Revenues represent the invoiced value of goods sold, net of VAT. | |||
Advertising and Promotion Costs | Advertising and Promotion Costs | ||
Advertising and promotion costs are expensed as incurred. For the periods ended January 31, 2015 and 2014, the Company did not incur any advertising costs. | |||
Income Taxes | Income Taxes | ||
The Company uses the asset and liability method of accounting for income taxes pursuant to ASC 740 “Income Taxes”. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The provision for income taxes represents current taxes payable net of the change during the period in deferred tax assets and liabilities. | |||
Comprehensive Income | Comprehensive Income | ||
The Company has adopted ASC 220, “Reporting Comprehensive Income”, which requires inclusion of foreign currency translation adjustments, reported separately in its statement of stockholders' equity, in other comprehensive income. During the periods presented, other comprehensive income includes cumulative translation adjustment from foreign currency translation. | |||
Foreign Currency Translation | Foreign Currency Translation | ||
The Company’s functional and reporting currency is United States Dollars (“USD”). The functional currency of the Company’s subsidiaries DTS8 Coffee and DTS8 Huzhou in the People’s Republic of China is Chinese currency Renminbi (“RMB”). Since RMB is not freely convertible into foreign currencies, all foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC. | |||
The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income (loss) for the respective periods. | |||
For financial reporting purposes, the financial statements of the Company’s subsidiaries DTS8 Coffee and DTS8 Huzhou in the People’s Republic of China are maintained in RMB and translated into USD. Balance sheet accounts with the exception of equity are translated using the closing exchange rate in effect at the balance sheet date, income and expense accounts are translated using the average exchange rate prevailing during the reporting period and the equity accounts were stated at their historical exchange rate. | |||
Adjustments resulting from the translation of RMB to USD, included in accumulated other comprehensive income (loss) in shareholder’s equity, were losses of $5,327 and $4,618, as of January 31, 2015, and April 30, 2014, respectively. | |||
The exchange rates used for foreign currency translation were as follows (USD$1 =MB): | |||
Period | Balance Sheet | Annual | |
Covered | Date Rates | Average Rates | |
31-Jan-15 | 6.137 | 6.1475 | |
30-Apr-14 | 6.158 | 6.1483 | |
31-Jan-14 | 6.105 | 6.152 | |
Related Parties | Related Parties | ||
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. | |||
Earnings per Share | Earnings per Share | ||
Basic earnings per share are computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company did not have dilutive securities for the periods ended January 31, 2015, and 2014. | |||
Stock Issued for Services | Stock Issued for Services | ||
The Company accounts for stock-based compensation to employees in accordance with ASC 718 which requires companies to measure the cost of services received in exchange for an award of an equity instrument based upon the grant-date fair value of the award. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. Stock-based compensation awards to non-employees are accounted for in accordance with ASC 505-50. | |||
Investment in Joint Venture Company | Investment in Joint Venture Company | ||
The Company uses the cost method to record investment in the common stock of the JV Company, Don Manuel (Shanghai) Investment Management Co. Ltd., in accordance with ASC 325-20. The Company’s 19% equity interest in the JV Company does not provide it the ability to exercise significant influence. The majority controlling shareholder controls all the decision making related to financial and operational affairs of the JV Company. Accordingly, the JV Company is not subject to significant influence by the Company. | |||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements | ||
Management believes that none of the recently adopted accounting pronouncements will have a material effect on the Company’s financial position, results of operations, or cash flows. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||
Jan. 31, 2015 | |||
Accounting Policies [Abstract] | |||
Property and Equipment | Useful life | Residue value | |
Machinery equipment | 10 years | 10% | |
Office equipment | 5 years | 10% | |
Production equipment | 5 years | 10% | |
Leasehold Improvements | 3 years | 0% | |
Exchange Rates used for Foreign Currency Translation | Period | Balance Sheet | Annual |
Covered | Date Rates | Average Rates | |
31-Jan-15 | 6.137 | 6.1475 | |
30-Apr-14 | 6.158 | 6.1483 | |
31-Jan-14 | 6.105 | 6.152 |
Inventory_Tables
Inventory (Tables) | 9 Months Ended | |||
Jan. 31, 2015 | ||||
Inventory Disclosure [Abstract] | ||||
Inventories | 31-Jan-15 | 30-Apr-14 | ||
Raw materials - Green beans | $96,748 | $16,280 | ||
Finished products - Roasted coffee | $12,104 | $11,560 | ||
Packing products | $8,002 | $8,807 | ||
Total | $116,854 | $36,647 |
Goodwill_Tables
Goodwill (Tables) | 9 Months Ended | ||
Jan. 31, 2015 | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Changes in Goodwill | 30-Apr-13 | Goodwill, net of impairment | $4,402,737 |
Impairment charge for the year ended April 30, 2014 | $1,391,979 | ||
April 30 2014 | Goodwill, net of impairment | $3,010,758 | |
Impairment charge for the period ended January 31, 2015 | - | ||
31-Jan-15 | Goodwill, net of impairment | $3,010,758 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Jan. 31, 2015 | Apr. 30, 2014 |
Property, Plant and Equipment [Abstract] | ||
Machinery | $97,578 | $97,450 |
Production equipment | 4,888 | 5,040 |
Office equipment | 15,400 | 15,589 |
Leasehold improvements | 17,924 | 32,316 |
Less accumulated depreciation | -76,216 | -77,977 |
Property, plant and equipment, net | $59,574 | $72,418 |