Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 18, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | China Senior Living Industry International Holding Corporation | |
Entity Central Index Key | 805,729 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer | No | |
Is Entity a Voluntary Filer | No | |
Is Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 56,560,007 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 25,852 | $ 4,270 |
Accounts receivable - related party, net | 215 | 1,141 |
Related party receivable | 967,124 | 945,317 |
Total current assets | 993,191 | 950,728 |
Non-current asset | ||
Intangible asset | 202 | 199 |
TOTAL ASSETS | 993,393 | 950,927 |
Current liabilities | ||
Accrued and other liabilities | 148,476 | 133,248 |
Related party advances | 389 | 3,263 |
Related party payable | 345,319 | 358,367 |
TOTAL LIABILITIES | 494,184 | 494,878 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0 shares issued and outstanding | ||
Common stock, $0.001 par value; 200,000,000 shares authorized, 56,560,007 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively | 56,560 | 56,560 |
Additional Paid in Capital | 1,083,474 | 1,083,474 |
Statutory reserve | 53,594 | 53,594 |
Accumulated other comprehensive loss | (65,843) | (72,883) |
Accumulated deficit | (628,576) | (664,696) |
Total Stockholders' equity | 499,209 | 456,049 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 993,393 | $ 950,927 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 200,000,000 | 200,000,000 |
Common stock shares issued | 56,560,007 | 56,560,007 |
Common stock shares outstanding | 56,560,007 | 56,560,007 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Condensed Consolidated Statements Of Income And Comprehensive Income | ||
Revenues - related party | $ 118,397 | $ 115,728 |
Cost of revenues | 78,171 | 84,065 |
Gross profit | 40,226 | 31,663 |
Operating expenses | ||
General and administrative expenses | 4,108 | 32,759 |
Operating income/(loss) | 36,118 | (1,096) |
Other income | ||
Interest income | 2 | 11 |
Total other income | 2 | 11 |
Earnings/(loss) before tax | 36,120 | (1,085) |
Income tax | ||
Net income/(loss) | 36,120 | (1,085) |
Other comprehensive income: | ||
Foreign currency translation gain | 7,040 | 6,087 |
Comprehensive income | $ 43,160 | $ 5,002 |
Basic | $ 0 | $ 0 |
Diluted | $ 0 | $ 0 |
Weighted average number of Common shares outstanding | ||
Basic | 56,560,007 | 56,000,007 |
Diluted | 56,560,007 | 56,000,007 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net income/(loss) | $ 36,120 | $ (1,085) |
Increase in other receivable | (58,934) | |
(Increase)/decrease in related party receivable | (13,596) | 4,829 |
Increase in accrued liabilities | 81 | 22,276 |
(Decrease)/increase in related party advances | (2,903) | 1,516 |
Net cash provided by/(used in) operating activities | 19,702 | (31,398) |
Cash flows from financing activities | ||
Increase in related party payable | 1,874 | 8,586 |
Net cash provided by financing activities | 1,874 | 8,586 |
Net increase/(decrease) of cash and cash equivalents | 21,576 | (22,812) |
Effect of foreign currency translation on cash and cash equivalents | 6 | 692 |
Cash and cash equivalents - beginning of period | 4,270 | 42,166 |
Cash and cash equivalents - end of period | 25,852 | 20,046 |
Supplementary cash flow information: | ||
Interest received | 2 | 11 |
Interest paid | ||
Income taxes paid |
ORGANIZATION, BASIS OF PRESENTA
ORGANIZATION, BASIS OF PRESENTATION, AND PRINCIPAL ACTIVITIES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 1 - ORGANIZATION, BASIS OF PRESENTATION, AND PRINCIPAL ACTIVITIES | (a) Organization history China Senior Living Industry International Holding Corporation (the Company), formerly known as China Forestry, Inc., was incorporated under the laws of the State of Nevada on January 13, 1986 under the name of Patriot Investment Corporation. The Company engaged in the business of plantation and sale of garden plants. On July 15, 2010, the Company entered into a Share Exchange with Financial International (Hong Kong) Holdings Co. Limited (FIHK). From April 1, 2010 to May 20, 2011, FIHK had a series of contractual arrangements with Hanzhong Hengtai Bio-Tech Limited (Hengtai), a company organized and existing under the laws of the Peoples Republic of China that is engaged in the plantation and sale of garden plants used for landscaping, including Chinese Yew, Aesculus, Dove Tree and Dendrobium. On May 20, 2011, FIHK exercised its rights under the Exclusive Option Agreement to direct Xian Qi Ying Senior Living, Inc. (formerly known as Xian Qi Ying Bio-Tech Limited), a company organized and existing under the laws of the Peoples Republic of China (Qi Ying), the indirect wholly owned subsidiary of FIHK, to acquire all of the equity capital of Hengtai. The Exclusive Option Agreement was exercised in a manner that the shareholders of Hengtai transferred all of their equity capital in Hengtai to Qi Ying. At or about the same time, Spone Limited, a company organized and existing under the laws of the Hong Kong SAR of the Peoples Republic of China (Spone), acquired all of the capital stock of Qi Ying, so that it became a direct wholly owned subsidiary of Spone. FIHK then acquired all of the capital stock of Spone, so that it became a direct wholly owned subsidiary of FIHK. As a result, Hengtai became an indirect wholly owned subsidiary of FIHK and also accordingly became the indirect wholly owned subsidiary of us. On June 15, 2012, the Company effected a 1-for-10 reverse stock split of the Companys issued and outstanding shares of common stock. The par value and number of authorized shares of the common stock remained unchanged. All references to number of shares and per share amounts included in these consolidated financial statements and the accompanying notes have been adjusted to reflect the reverse stock split retroactively. On September 8, 2015, the Company changed its name from China Forestry, Inc. to China Senor Living Industry International Holding Corporation. On September 29, 2015, Qi Ying entered into a set of VIE Agreements with Shaanxi Yifuge Investments and Assets Co, Ltd (YFG) and YFG became the Companys affiliated operating company in China. As consideration for the entry of the VIE agreement, the Company will issue 33,600,000 shares of common stock to Jingcao Wu, a director of the Company. As a result, YFG became a variable interest entity (VIE) and was included in the consolidated group. The transaction between Qi Ying and YFG has been accounted for as a recapitalization of YFG where the Company (the legal acquirer) is considered the accounting acquiree and YFG (the legal acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of YFG. Accordingly, the financial data included in the accompanying consolidated financial statements for all periods prior to September 29, 2015 is that of the accounting acquirer, YFG. The historical stockholders equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the transaction occurred as of the beginning of the first period presented. On September 29, 2015, the Board of Director also approved the transfer of Qi Yings equity ownership in Hengtai to Zhenheng Shao, Zhenzhong Shao, and Yongli Yang. As a result, we ceased the business of plantation and sale of garden plants and became engaged in senior living and senior care business through YFG. On December 31, 2015, YFG changed its name from Shaanxi Yifuge Investments and Assets Co., Ltd to Shaanxi Jinjiangshan Senior Living Management Co. Ltd (JJS). (b) Basis of presentation The Companys consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP). This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Companys principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the Peoples Republic of China (PRC) or in the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Companys subsidiaries to present them in conformity with US GAAP. (c) Principal activities The Company is engaged in rendering management services to senior homes by providing healthcare, medical staff, meal preparation, and general care for the elderly in Xianyang City, Shaanxi Province, Peoples Republic of China. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | (a) Method of Accounting The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting. (b) Principles of consolidation The accompanying consolidated financial statements which include the Company, its wholly owned subsidiaries, FIHK, Spone, Qi Ying, and its variable interest entity, JJS, are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated in consolidation. In accordance with FASB ASC 810, Consolidation of Variable Interest Entities, variable interest entities, or VIEs, are generally entity that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. In connection with the adoption of this ASC 810, the Company concludes that JJS is a VIE and Qi Ying is the primary beneficiary. The financial statements of JJS are then consolidated with Qi Yings financial statements. As of March 31, 2017, the detailed identities of the consolidating subsidiaries are as follows: Place of Attributable Registered Name of Company incorporation equity interest % capital Financial International (Hong Kong) Holdings Company Limited Hong Kong 100 % HKD 10,000,000 Spone Limited Hong Kong 100 % HKD 1 Xian Qi Ying Senior Living, Inc (Qi Ying) PRC 100 % RMB 50,000 Shaanxi Jinjiangshan Senior Living Management Co. Ltd PRC Variable Interest Entity, with Qi Ying as the primary beneficiary RMB 3,000,000 (c) Use of estimates The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the 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. 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. (d) Cash and cash equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. (e) Accounts receivable Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. (f) Revenue recognition The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured The Companys revenue consists of management services rendered to senior homes. Service revenue is recognized when the service is performed. (g) Cost of revenue The cost for providing management services is comprised of direct labor wages and purchasing cost of food for preparing meals for the seniors. (h) General & administrative expenses General and administrative expenses include general overhead such as the office rental and utilities. (i) Advertising All advertising costs are expensed as incurred. For the three-month period ended March 31, 2017 and 2016, there was no advertising costs incurred. (j) Income taxes The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred 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. A valuation allowance is 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 realization is uncertain. The Company has implemented ASC Topic 740, Accounting for Income Taxes. Income tax liabilities computed according to the Peoples Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain. Effective January 1, 2008, PRC government implemented a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as two-year exemption followed by three-year half exemption hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises that were already participating in tax holidays before January 1, 2008, to continue enjoying the tax holidays until they had been fully utilized. In order to encourage enterprises to operate senior homes, PRC tax law provides a tax holiday by waiving the income tax for entities operating in this industry. According to the Minfa (2015) No. 33 Advice to Encourage Private Capital to Participate in the Development of Pension Services, jointly issued by ten ministries which include the Ministry of Civil Affairs and the Ministry of Finance of the Peoples Republic of China, the Company is entitled to benefit from the sales tax exemption and business tax exemption policy. As such, the Company is not subject to income tax as of March 31, 2017. (k) Stock-based compensation We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock. The expense is recognized over the service period for awards expected to vest. For nonemployee stock-based awards, we calculate the fair value of the award on the date of grant in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipients performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. The Black-Scholes option valuation model is used to estimate the fair value of the warrants or options granted. The model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the warrants or options granted. (l) Earnings per share Basic earnings per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. (m) Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $- and $12,386 from retained earnings to statutory reserves for the three-month period ended March 31, 2017 and for the year ended December 31, 2016, respectively. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprises PRC registered capital. The amount is not available for payment of dividends. (n) Foreign currency translation The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Hong Kong Dollars (HKD). The financial statements are translated into United States dollars from the functional currencies at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. 3/31/2017 12/31/2016 3/31/2016 Period end/Year end RMB: 6.8905 6.9437 6.4479 US$ exchange rate Average period/yearly RMB: 6.8882 6.6430 6.5395 US$ exchange rate Period end/Year end HKD: 7.7705 7.7543 7.7545 US$ exchange rate Average period/yearly HKD: 7.7602 7.7617 7.7734 US$ exchange rate The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. (o) Financial Instruments The Companys financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: · Level 1 inputs to the valuation methodology are quoted prices 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 asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities from Equity, and ASC 815. As of March 31, 2017 and December 31, 2016, the Company did not identify any assets and liabilities whose carrying amounts were required to be adjusted in order to present them at fair value. At March 31, 2017: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 25,852 $ - $ - $ 25,852 Total financial assets $ 25,852 $ - $ - $ 25,852 At December 31, 2016: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 4,270 $ - $ - $ 4,270 Total financial assets $ 4,270 $ - $ - $ 4,270 (p) Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. (q) Comprehensive income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Companys current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss. The Company uses FASB ASC Topic 220, Reporting Comprehensive Income. Comprehensive income is comprised of net income and all changes to the statements of stockholders equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the three-month period ended March 31, 2017 and 2016 included net income and foreign currency translation adjustments. (r) Subsequent events The Company evaluated for subsequent events through the issuance date of the Companys financial statements. (s) Unaudited interim financial information These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2017. The consolidated balance sheets and certain comparative information as of December 31, 2016 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 2016 (2016 Annual Financial Statements), included in the Companys 2016 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2016 Annual Financial Statements. (t) Recent accounting pronouncements On February 25, 2016, the FASB issued ASU 2016-02 Leases (Topic 842), its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASBs new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to: · Applying judgment and estimating. · Managing the complexities of data collection, storage, and maintenance. · Enhancing information technology systems to ensure their ability to perform the calculations necessary for compliance with reporting requirements. · Refining internal controls and other business processes related to leases. · Determining whether debt covenants are likely to be affected and, if so, working with lenders to avoid violations. · Addressing any income tax implications. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein. On March 17, 2016, the FASB issued ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends the principal-versus-agent implementation guidance and illustrations in the Boards new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standards principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standards control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer. Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. On January 23, 2017, the FASB issued ASU 2017-03, which amends certain SEC guidance in the FASB Accounting Standards Codification in response to SEC staff announcements made at the September 22, 2016, and November 17, 2016, EITF meetings. The announcements addressed the following topics: · The additional qualitative disclosures that a registrant is expected to provide when it cannot reasonably estimate the impact that ASUs 2014-09, 2016-02, and 2016-13 will have in applying the guidance in SAB Topic 11.M (announcement made at the September 22, 2016, EITF meeting). · Guidance in ASC 323 related to the amendments made by ASU 2014-01 regarding use of the proportional amortization method in accounting for investments in qualified affordable housing projects (announcement made at the November 17, 2016, EITF meeting). Unless otherwise indicated, the Company is currently evaluating the impact that the pronouncements will have on the Companys consolidated financial statements. As of March 31, 2017, there are no other recently issued accounting standards not yet adopted that would or could have a material effect on the Companys financial statements. |
(LOSS)_EARNINGS PER SHARE
(LOSS)/EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 3 - (LOSS)/EARNINGS PER SHARE | For the three-month ended 3/31/2017 3/31/2016 Basic (Loss)/Earnings Per Share: Numerator: Net (loss)/income used in computing basic (loss)/earnings per share $ 36,120 $ (1,085 ) Denominator: Weighted average common shares outstanding 56,560,007 56,000,007 Basic (loss)/earnings per share: $ 0.00 $ (0.00 ) Diluted (Loss)/Earnings Per Share: Numerator: Net (loss)/income used in computing diluted (Loss)/Earnings per share $ 36,120 $ (1,085 ) Denominator: Weighted average common shares outstanding 56,560,007 56,000,007 Diluted (loss)/earnings per share $ 0.00 $ (0.00 ) |
ACCOUNTS RECEIVABLE - RELATED P
ACCOUNTS RECEIVABLE - RELATED PARTY | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 4 - ACCOUNTS RECEIVABLE - RELATED PARTY | Accounts receivable - related party consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) 215 1,141 The balance represents service fees earned that the Company has not collected as of balance sheet date in connection with the services rendered to Xianyang during the period. The balance of the receivable is unsecured, interest-free and has no fixed terms of repayment. It is neither past due nor impaired. Management believes that the amount will be repaid in the next billing cycle, and, therefore, did not provide any allowances for bad debts during the three-month period ended March 31, 2017 and 2016. Xianyang is controlled by the management of the Company. |
RELATED PARTY RECEIVABLES
RELATED PARTY RECEIVABLES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 5 - RELATED PARTY RECEIVABLES | Related party receivables consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Wu, Jingmeng $ 967,124 $ 945,317 Related party receivable represented the following: Advances made by the Company to Mr. Wu, Jingmeng. Mr. Wu is the deputy general manager of the Company. The funds will be used by Mr. Wu to pay for construction of a second senior home in Xianyang City, Shaanxi Province. The Company will provide management services to this new senior home after the construction is completed. The receivable had no impact on earnings. The balance of related party receivables is unsecured, interest-free and has no fixed terms of repayment. It is neither past due nor impaired. Management believes the amounts are recoverable. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 6 - INTANGIBLE ASSETS, NET | Intangible assets consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Software, at cost $ 335 $ 331 Less accumulated amortization (133 ) (132 ) $ 202 $ 199 Amortization expense was not charged for the three-month period ended March 31, 2017 and 2016. |
ACCRUED AND OTHER LIABLITIES
ACCRUED AND OTHER LIABLITIES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 7 - ACCRUED AND OTHER LIABLITIES | Accrued and other liabilities consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Wages payable $ 19,206 $ 19,048 Accrued professional and consulting fees 129,270 114,200 $ 148,476 $ 133,248 |
RELATED PARTY ADVANCES
RELATED PARTY ADVANCES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 8 - RELATED PARTY ADVANCES | Related party advances consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) $ 389 $ 3,263 Related party advances represented advances received in connection with services that have not yet been rendered to Xianyang but are expected to be in the future. Xianyang is controlled by the management of the Company. |
RELATED PARTY PAYABLE
RELATED PARTY PAYABLE | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 9 - RELATED PARTY PAYABLE | Related party payable consisted of the following as of March 31, 2017 and December 31, 2016: 3/31/2017 12/31/2016 Liu, Shengli $ 210,178 $ 210,178 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) 135,141 148,189 345,319 358,367 Mr. Liu, Shengli is the former Chairman, President, and Director of the company. Mr. Liu had paid some necessary overseas consulting and advising fees, lawyer fees, and accounting fees on behalf of the company. The loan is unsecured and have no fixed terms of repayment, and are therefore deemed payable on demand. Xianyang is controlled by the management of the Company. Xianyang from time to time paid some of the professional fees on behalf of the company. The loan is unsecured and have no fixed terms of repayment, and are therefore deemed payable on demand. |
LEASE COMMITMENTS
LEASE COMMITMENTS | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 10 - LEASE COMMITMENTS | On January 4, 2013, the Company entered into an operating lease agreement with a related party leasing for office space located in Xianyang City, Shaanxi Province. The lease expires on December 31, 2045. No deposit is paid with this lease. As of March 31, 2017 and December 31, 2016, the Company had commitments for future minimum lease payments under a non-cancelable operating lease as follows: Period 3/31/2017 12/31/2016 Year 1 $ 2,786 $ 2,765 Year 2 2,786 2,765 Year 3 2,786 2,765 Year 4 2,786 2,765 Year 5 2,786 2,765 Thereafter 66,178 66,362 Total $ 80,108 $ 80,187 Rental expenses for the three-month period ended March 31, 2017 and 2016 were 697 and 734, respectively. Rental expenses are recognized on a straight line basis. |
INCOME TAX
INCOME TAX | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 11 - INCOME TAX | All of the Companys operations are in the PRC, and in accordance with the relevant tax laws and regulations. The corporate income tax rate in China is 25%. In order to encourage enterprises to operate senior homes, PRC tax law provides a tax holiday by waiving the income tax for entities operating in this industry. According to the Minfa (2015) No. 33 Advice to Encourage Private Capital to Participate in the Development of Pension Services, jointly issued by ten ministries which include the Ministry of Civil Affairs and the Ministry of Finance of the Peoples Republic of China, the Company is entitled to benefit from the sales tax exemption and business tax exemption policy. As such, the Company is not subject to income tax as of December 31, 2016. As of the date of this report, the Company does not expect that this tax exemption policy will terminate in the near future. The Company is subject to US Federal tax laws. The Company has not recognized an income tax benefit for its operating losses in the United States because the Company does not expect to commence active operations in the United States. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Deferred tax asset is calculated based on the statutory average rate of 34%. FIHK and Spone are incorporated in Hong Kong and are subject to Hong Kong profits tax at a tax rate of 16.5%. No provision for Hong Kong profits tax has been made as FIHK and Spone had no taxable income during the reporting period. The Company has not recognized an income tax benefit for its operating losses in Hong Kong because the Company does not expect to commence active operations in Hong Kong. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Deferred tax asset is calculated based on the statutory average rate of 16.5%. The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for the three-month period ended March 31, 2017 and 2016: 3/31/2017 3/31/2016 Income attributed to PRC operations $ 37,366 $ 29,116 Loss attributed to US and HK entities (1,246 ) (30,201 ) Income/(loss) before tax $ 36,120 $ (1,085 ) PRC Statutory Tax at 25% Rate 9,030 7,279 Effect of tax exemption granted (9,030 ) (7,279 ) Income tax - - Per Share Effect of Tax Exemption 3/31/2017 3/31/2016 Effect of tax exemption granted $ 9,030 $ 7,279 Weighted-Average Shares Outstanding Basic 56,560,007 56,000,007 Per share effect $ 0.00 0.00 The difference between the U.S. federal statutory income tax rate and the Companys effective tax rate was as follows for the periods ended March 31, 2017 and 2016: 3/31/2017 3/31/2016 U.S. federal statutory income tax rate 34 % 34 % Lower rates in PRC, net (9 %) (9 %) Tax holiday for senior care industry (25 %) (25 %) The Companys effective tax rate 0 % 0 % |
RELATED PARTY TRANSACTION
RELATED PARTY TRANSACTION | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 12 - RELATED PARTY TRANSACTION | For the three-month period ended March 31, 2017 and 2016, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company: For the three-month period ended 3/31/2017 3/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) $ 118,397 $ 115,728 |
CONCENTRATIONS AND RISKS
CONCENTRATIONS AND RISKS | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 13 - CONCENTRATIONS AND RISKS | A. Concentration As of March 31, 2017, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company. As of March 31, 2017, the Company has a material balance due from a related party. There is a concentration risk if the balance is not repaid and would create a material impact in the Companys financial position and liquidity. Cash deposits with banks are held in financial institutions in China, which are insured with deposit protection up to RMB500,000 (approximately $72,563). Accordingly, the Company does not have a concentration of credit risk related to bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk. B. Economic and Political Risks The Companys operations are mainly conducted in the PRC. Accordingly, the Companys business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. The Companys operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Companys results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 14 - SEGMENT INFORMATION | As of and for the three-month period ended March 31, 2017 and 2016, all revenues of the Company represented the provision of management services to senior homes. No financial information by business segment is presented. Furthermore, as all revenues are derived from the PRC, no geographic information by geographical segment is presented. |
GOING CONCERN UNCERTAINTIES
GOING CONCERN UNCERTAINTIES | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 15 - GOING CONCERN UNCERTAINTIES | These financial statements have been prepared assuming that Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future. As of March 31, 2017, the Company had accumulated deficits of $628,576 due to the substantial losses in operations in prior years, and a related party owed a significant balance to the Company that has not been repaid, which has limited the Companys liquidity. Managements plan to support the Company in operations and to maintain its business strategy is to raise funds through public and private offerings and to rely on officers and directors to perform essential functions with minimal compensation. If we do not raise all of the money we need from public or private offerings, we will have to find alternative sources, such as loans or advances from our officers, directors or others. Such additional financing may not become available on acceptable terms and there can be no assurance that any additional financing that the Company does obtain will be sufficient to meet its needs in the long term. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. If we require additional cash and cannot raise it, we will either have to suspend operations or cease business entirely. The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2017 | |
Notes to Financial Statements | |
Note 16 - SUBSEQUENT EVENTS | The Company has evaluated subsequent events through the issuance of the consolidated financial statements and no subsequent events were identified that required adjustment to a disclosure in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Method of Accounting | The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting. |
Principles of consolidation | The accompanying consolidated financial statements which include the Company, its wholly owned subsidiaries, FIHK, Spone, Qi Ying, and its variable interest entity, JJS, are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated in consolidation. In accordance with FASB ASC 810, Consolidation of Variable Interest Entities, variable interest entities, or VIEs, are generally entity that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. In connection with the adoption of this ASC 810, the Company concludes that JJS is a VIE and Qi Ying is the primary beneficiary. The financial statements of JJS are then consolidated with Qi Yings financial statements. As of March 31, 2017, the detailed identities of the consolidating subsidiaries are as follows: Place of Attributable Registered Name of Company incorporation equity interest % capital Financial International (Hong Kong) Holdings Company Limited Hong Kong 100 % HKD 10,000,000 Spone Limited Hong Kong 100 % HKD 1 Xian Qi Ying Senior Living, Inc (Qi Ying) PRC 100 % RMB 50,000 Shaanxi Jinjiangshan Senior Living Management Co. Ltd PRC Variable Interest Entity, with Qi Ying as the primary beneficiary RMB 3,000,000 |
Use of Estimates | The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the 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. 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. |
Cash and Cash Equivalents | The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
Accounts receivable | Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. |
Revenue Recognition | The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The Companys revenue consists of management services rendered to senior homes. Service revenue is recognized when the service is performed. |
Cost of revenue | The cost for providing management services is comprised of direct labor wages and purchasing cost of food for preparing meals for the seniors. |
General & administrative expenses | General and administrative expenses include general overhead such as the office rental and utilities. |
Advertising | All advertising costs are expensed as incurred. For the three-month period ended March 31, 2017 and 2016, there was no advertising costs incurred. |
Income Taxes | The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred 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. A valuation allowance is 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 realization is uncertain. The Company has implemented ASC Topic 740, Accounting for Income Taxes. Income tax liabilities computed according to the Peoples Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain. Effective January 1, 2008, PRC government implemented a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as two-year exemption followed by three-year half exemption hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises that were already participating in tax holidays before January 1, 2008, to continue enjoying the tax holidays until they had been fully utilized. In order to encourage enterprises to operate senior homes, PRC tax law provides a tax holiday by waiving the income tax for entities operating in this industry. According to the Minfa (2015) No. 33 Advice to Encourage Private Capital to Participate in the Development of Pension Services, jointly issued by ten ministries which include the Ministry of Civil Affairs and the Ministry of Finance of the Peoples Republic of China, the Company is entitled to benefit from the sales tax exemption and business tax exemption policy. As such, the Company is not subject to income tax as of March 31, 2017. |
Stock-based Compensation | We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock. The expense is recognized over the service period for awards expected to vest. For nonemployee stock-based awards, we calculate the fair value of the award on the date of grant in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipients performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. The Black-Scholes option valuation model is used to estimate the fair value of the warrants or options granted. The model includes subjective input assumptions that can materially affect the fair value estimates. The model was developed for use in estimating the fair value of traded options or warrants. The expected volatility is estimated based on the most recent historical period of time equal to the weighted average life of the warrants or options granted. |
Earnings Per Share | Basic earnings per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. |
Statutory reserves | Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $- and $12,386 from retained earnings to statutory reserves for the three-month period ended March 31, 2017 and for the year ended December 31, 2016, respectively. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprises PRC registered capital. The amount is not available for payment of dividends. |
Foreign Currency Translation | The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are the Renminbi (RMB) and the Hong Kong Dollars (HKD). The financial statements are translated into United States dollars from the functional currencies at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. 3/31/2017 12/31/2016 3/31/2016 Period end/Year end RMB: 6.8905 6.9437 6.4479 US$ exchange rate Average period/yearly RMB: 6.8882 6.6430 6.5395 US$ exchange rate Period end/Year end HKD: 7.7705 7.7543 7.7545 US$ exchange rate Average period/yearly HKD: 7.7602 7.7617 7.7734 US$ exchange rate The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. |
Financial Instruments | The Companys financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: · Level 1 inputs to the valuation methodology are quoted prices 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 asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities from Equity, and ASC 815. As of March 31, 2017 and December 31, 2016, the Company did not identify any assets and liabilities whose carrying amounts were required to be adjusted in order to present them at fair value. At March 31, 2017: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 25,852 $ - $ - $ 25,852 Total financial assets $ 25,852 $ - $ - $ 25,852 At December 31, 2016: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 4,270 $ - $ - $ 4,270 Total financial assets $ 4,270 $ - $ - $ 4,270 |
Commitments and Contingencies | Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Comprehensive Income | Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Companys current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss. The Company uses FASB ASC Topic 220, Reporting Comprehensive Income. Comprehensive income is comprised of net income and all changes to the statements of stockholders equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the three-month period ended March 31, 2017 and 2016 included net income and foreign currency translation adjustments. |
Subsequent Events | The Company evaluated for subsequent events through the issuance date of the Companys financial statements. |
Unaudited interim financial information | These unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the year ending December 31, 2017. The consolidated balance sheets and certain comparative information as of December 31, 2016 are derived from the audited consolidated financial statements and related notes for the year ended December 31, 2016 (2016 Annual Financial Statements), included in the Companys 2016 Annual Report on Form 10-K. These unaudited interim condensed consolidated financial statements should be read in conjunction with the 2016 Annual Financial Statements. |
Recent accounting pronouncements | On February 25, 2016, the FASB issued ASU 2016-02 Leases (Topic 842), its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASBs new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to: · Applying judgment and estimating. · Managing the complexities of data collection, storage, and maintenance. · Enhancing information technology systems to ensure their ability to perform the calculations necessary for compliance with reporting requirements. · Refining internal controls and other business processes related to leases. · Determining whether debt covenants are likely to be affected and, if so, working with lenders to avoid violations. · Addressing any income tax implications. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein. On March 17, 2016, the FASB issued ASU 2016-08 Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which amends the principal-versus-agent implementation guidance and illustrations in the Boards new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standards principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standards control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer. Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. On January 23, 2017, the FASB issued ASU 2017-03, which amends certain SEC guidance in the FASB Accounting Standards Codification in response to SEC staff announcements made at the September 22, 2016, and November 17, 2016, EITF meetings. The announcements addressed the following topics: · The additional qualitative disclosures that a registrant is expected to provide when it cannot reasonably estimate the impact that ASUs 2014-09, 2016-02, and 2016-13 will have in applying the guidance in SAB Topic 11.M (announcement made at the September 22, 2016, EITF meeting). · Guidance in ASC 323 related to the amendments made by ASU 2014-01 regarding use of the proportional amortization method in accounting for investments in qualified affordable housing projects (announcement made at the November 17, 2016, EITF meeting). Unless otherwise indicated, the Company is currently evaluating the impact that the pronouncements will have on the Companys consolidated financial statements. As of March 31, 2017, there are no other recently issued accounting standards not yet adopted that would or could have a material effect on the Companys financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Summary Of Significant Accounting Policies Tables | |
Summury of detailed identities of consolidating subsidiaries | Place of Attributable Registered Name of Company incorporation equity interest % capital Financial International (Hong Kong) Holdings Company Limited Hong Kong 100 % HKD 10,000,000 Spone Limited Hong Kong 100 % HKD 1 Xian Qi Ying Senior Living, Inc (Qi Ying) PRC 100 % RMB 50,000 Shaanxi Jinjiangshan Senior Living Management Co. Ltd PRC Variable Interest Entity, with Qi Ying as the primary beneficiary RMB 3,000,000 |
Summry of accompanying financial statements in USD | 3/31/2017 12/31/2016 3/31/2016 Period end/Year end RMB: 6.8905 6.9437 6.4479 US$ exchange rate Average period/yearly RMB: 6.8882 6.6430 6.5395 US$ exchange rate Period end/Year end HKD: 7.7705 7.7543 7.7545 US$ exchange rate Average period/yearly HKD: 7.7602 7.7617 7.7734 US$ exchange rate |
Summary assets and liability carrying amount to adjusted at fair value | At March 31, 2017: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 25,852 $ - $ - $ 25,852 Total financial assets $ 25,852 $ - $ - $ 25,852 At December 31, 2016: Quoted in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total Financial assets: Cash $ 4,270 $ - $ - $ 4,270 Total financial assets $ 4,270 $ - $ - $ 4,270 |
(LOSS)_EARNINGS PER SHARE (Tabl
(LOSS)/EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Lossearnings Per Share Tables | |
(Loss)/Earnings Per Share | For the three-month ended 3/31/2017 3/31/2016 Basic (Loss)/Earnings Per Share: Numerator: Net (loss)/income used in computing basic (loss)/earnings per share $ 36,120 $ (1,085 ) Denominator: Weighted average common shares outstanding 56,560,007 56,000,007 Basic (loss)/earnings per share: $ 0.00 $ (0.00 ) Diluted (Loss)/Earnings Per Share: Numerator: Net (loss)/income used in computing diluted (Loss)/Earnings per share $ 36,120 $ (1,085 ) Denominator: Weighted average common shares outstanding 56,560,007 56,000,007 Diluted (loss)/earnings per share $ 0.00 $ (0.00 ) |
ACCOUNTS RECEIVABLE - RELATED25
ACCOUNTS RECEIVABLE - RELATED PARTY (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Receivable - Related Party Tables | |
Accounts Receivable - Related Party | 3/31/2017 12/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) 215 1,141 |
RELATED PARTY RECEIVABLES (Tabl
RELATED PARTY RECEIVABLES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Receivables Tables | |
Summry of related party receivables | 3/31/2017 12/31/2016 Wu, Jingmeng $ 967,124 $ 945,317 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets Net Tables | |
Intangible assets | 3/31/2017 12/31/2016 Software, at cost $ 335 $ 331 Less accumulated amortization (133 ) (132 ) $ 202 $ 199 |
ACCRUED AND OTHER LIABLITIES (T
ACCRUED AND OTHER LIABLITIES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued And Other Liablities Tables | |
Accrued and other liabilities | 3/31/2017 12/31/2016 Wages payable $ 19,206 $ 19,048 Accrued professional and consulting fees 129,270 114,200 $ 148,476 $ 133,248 |
RELATED PARTY ADVANCES (Tables)
RELATED PARTY ADVANCES (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Advances Tables | |
Summary of related party advances | 3/31/2017 12/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) $ 389 $ 3,263 |
RELATED PARTY PAYABLE (Tables)
RELATED PARTY PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Payable Tables | |
Summary of related party payable | 3/31/2017 12/31/2016 Liu, Shengli $ 210,178 $ 210,178 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) 135,141 148,189 345,319 358,367 |
LEASE COMMITMENTS (Tables)
LEASE COMMITMENTS (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Lease Commitments Tables | |
Summary of commitments for future minimum lease payments under a non-cancelable operating lease | Period 3/31/2017 12/31/2016 Year 1 $ 2,786 $ 2,765 Year 2 2,786 2,765 Year 3 2,786 2,765 Year 4 2,786 2,765 Year 5 2,786 2,765 Thereafter 66,178 66,362 Total $ 80,108 $ 80,187 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Tables | |
Statutory and effective tax expenses | 3/31/2017 3/31/2016 Income attributed to PRC operations $ 37,366 $ 29,116 Loss attributed to US and HK entities (1,246 ) (30,201 ) Income/(loss) before tax $ 36,120 $ (1,085 ) PRC Statutory Tax at 25% Rate 9,030 7,279 Effect of tax exemption granted (9,030 ) (7,279 ) Income tax - - |
Per Share Effect of Tax Exemption | 3/31/2017 3/31/2016 Effect of tax exemption granted $ 9,030 $ 7,279 Weighted-Average Shares Outstanding Basic 56,560,007 56,000,007 Per share effect $ 0.00 0.00 |
U.S. federal statutory income tax rate | 3/31/2017 3/31/2016 U.S. federal statutory income tax rate 34 % 34 % Lower rates in PRC, net (9 %) (9 %) Tax holiday for senior care industry (25 %) (25 %) The Companys effective tax rate 0 % 0 % |
RELATED PARTY TRANSACTION (Tabl
RELATED PARTY TRANSACTION (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transaction Tables | |
Related Party Transaction | For the three-month period ended 3/31/2017 3/31/2016 Xianyang Yifuge Elderly Apartment Co., Ltd. (Xianyang) $ 118,397 $ 115,728 |
ORGANIZATION, BASIS OF PRESEN34
ORGANIZATION, BASIS OF PRESENTATION, AND PRINCIPAL ACTIVITIES (Details) - shares | 1 Months Ended | 3 Months Ended | |
Jun. 15, 2012 | Mar. 31, 2017 | Sep. 29, 2015 | |
State Country Name | Nevada | ||
Date Of Incorporation | Jan. 13, 1986 | ||
Reverse stock split | 1-for-10 | ||
VIE Agreement [Member] | Jingcao Wu [Member] | |||
Common stock shares reserved for future issuance | 33,600,000 |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Name of Company | Nevada |
Hong Kong | |
Name of Company | Financial International (Hong Kong) Holdings Company Limited |
Place of incorporation | Hong Kong |
Attributable equity interest | 100.00% |
Registered capital | HKD 10,000,000 |
Spone Limited | |
Name of Company | Spone Limited |
Place of incorporation | Hong Kong |
Attributable equity interest | 100.00% |
Registered capital | HKD 1 |
Qi Ying | |
Name of Company | Xian Qi Ying Senior Living, Inc (Qi Ying) |
Place of incorporation | PRC |
Attributable equity interest | 100.00% |
Registered capital | RMB 50,000 |
Shaanxi Jinjiangshan | |
Name of Company | Shaanxi Jinjiangshan Senior Living Management Co. Ltd |
Place of incorporation | PRC |
Attributable equity interest description | Variable Interest Entity, with Qi Ying as the primary beneficiary |
Registered capital | RMB 3,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Year end RMB [Member] | |||
Foreign currency translation exchange rate | 6.8905 | 6.9437 | 6.4479 |
Average yearly RMB [Member] | |||
Foreign currency translation exchange rate | 6.8882 | 6.6430 | 6.5395 |
Year end HKD [Member] | |||
Foreign currency translation exchange rate | 7.7705 | 7.7543 | 7.7545 |
Average yearly HKD [Member] | |||
Foreign currency translation exchange rate | 7.7602 | 7.7617 | 7.7734 |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Financial assets: | ||
Cash | $ 25,852 | $ 4,270 |
Total financial assets | 25,852 | 4,270 |
Fair Value, Inputs, Level 1 [Member] | ||
Financial assets: | ||
Cash | 25,852 | 4,270 |
Total financial assets | 25,852 | 4,270 |
Fair Value, Inputs, Level 2 [Member] | ||
Financial assets: | ||
Cash | ||
Total financial assets | ||
Fair Value, Inputs, Level 3 [Member] | ||
Financial assets: | ||
Cash | ||
Total financial assets |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Appropriations to statutory reserves | $ 12,386 | ||
Tax rate | 34.00% | 34.00% | |
Appropriations to statutory reserves, description | PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprises PRC registered capital | ||
January 1, 2008 [Member] | PRC [Member] | |||
Tax rate | 25.00% | ||
Tax term | two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers |
(LOSS)_EARNINGS PER SHARE (Deta
(LOSS)/EARNINGS PER SHARE (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic (Loss)/Earnings Per Share: | ||
Net (loss)/income used in computing basic (loss)/earnings per share | $ 36,120 | $ (1,085) |
Weighted average common shares outstanding | 56,560,007 | 56,000,007 |
Basic (loss)/earnings per share | $ 0 | $ 0 |
Diluted (Loss)/Earnings Per Share: | ||
Net (loss)/income used in computing diluted (loss)/earnings per share | $ 36,120 | $ (1,085) |
Weighted average common shares outstanding | 56,560,007 | 56,000,007 |
Diluted (loss)/earnings per share | $ 0 | $ 0 |
ACCOUNTS RECEIVABLE - RELATED40
ACCOUNTS RECEIVABLE - RELATED PARTY (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts receivable - related party | $ 215 | $ 1,141 |
Xianyang Yifuge Elderly Apartment Co., Ltd. | ||
Accounts receivable - related party | $ 215 | $ 1,141 |
RELATED PARTY RECEIVABLES (Deta
RELATED PARTY RECEIVABLES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Related party receivables | $ 967,124 | $ 945,317 |
Wu, Jing Meng | ||
Related party receivables | $ 967,124 | $ 945,317 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Intangible asset | $ 202 | $ 199 |
Software [Member] | ||
Software, at cost | 335 | 331 |
Less accumulated amortization | (133) | (132) |
Intangible asset | $ 202 | $ 199 |
ACCRUED AND OTHER LIABLITIES (D
ACCRUED AND OTHER LIABLITIES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued And Other Liablities Details | ||
Wages payable | $ 19,206 | $ 19,048 |
Accrued professional and consulting fees | 129,270 | 114,200 |
Accrued and other liabilities | $ 148,476 | $ 133,248 |
RELATED PARTY ADVANCES (Details
RELATED PARTY ADVANCES (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Related party advances | $ 389 | $ 3,263 |
Xianyang Yifuge Elderly Apartment Co., Ltd. | ||
Related party advances | $ 389 | $ 3,263 |
RELATED PARTY PAYABLE (Details)
RELATED PARTY PAYABLE (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Related party payable | $ 345,319 | $ 358,367 |
Liu, Shengli [Member] | ||
Related party payable | 210,178 | 210,178 |
Xianyang Yifuge Elderly Apartment Co., Ltd. | ||
Related party payable | $ 135,141 | $ 148,189 |
LEASE COMMITMENTS (Details)
LEASE COMMITMENTS (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Inventories Details | ||
Year 1 | $ 2,786 | $ 2,765 |
Year 2 | 2,786 | 2,765 |
Year 3 | 2,786 | 2,765 |
Year 4 | 2,786 | 2,765 |
Year 5 | 2,786 | 2,765 |
Thereafter | 66,178 | 66,362 |
Total | $ 80,108 | $ 80,187 |
LEASE COMMITMENTS (Details Narr
LEASE COMMITMENTS (Details Narrative) - USD ($) | Jan. 04, 2013 | Mar. 31, 2017 | Mar. 31, 2016 |
Rental expenses | $ 697 | $ 734 | |
Xianyang City [Member] | |||
Operating lease expiration date | Dec. 31, 2045 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income/(loss) before tax | $ 36,120 | $ (1,085) |
PRC Statutory Tax at 25% Rate | 9,030 | 7,279 |
Effect of tax exemption granted | (9,030) | (7,279) |
Income tax | ||
PRC [Member] | ||
Income loss attributed to operations | 37,366 | 29,116 |
US and HK [Member] | ||
Income loss attributed to operations | $ (1,246) | $ (30,201) |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Details 1 | ||
Effect of tax exemption granted | $ 9,030 | $ 7,279 |
Weighted-Average Shares Outstanding Basic | 56,560,007 | 56,000,007 |
Per share effect | $ .00 | $ .00 |
INCOME TAX (Details 2)
INCOME TAX (Details 2) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Tax Details 1 | ||
U.S. federal statutory income tax rate | 34.00% | 34.00% |
Lower rates in PRC, net | (9.00%) | (9.00%) |
Tax holiday for senior care industry | (25.00%) | (25.00%) |
The Company’s effective tax rate | 0.00% | 0.00% |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income tax rate | 0.00% | 0.00% |
China [Member] | ||
Income tax rate | 25.00% | |
United States [Member] | ||
Deferred tax asset statutory average rate | 34.00% | |
Hong Kong | ||
Income tax rate | 16.50% | |
Deferred tax asset statutory average rate | 16.50% |
RELATED PARTY TRANSACTION (Deta
RELATED PARTY TRANSACTION (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue | $ 118,397 | $ 115,728 |
Xianyang Yifuge Elderly Apartment Co., Ltd. | ||
Revenue | $ 118,397 | $ 115,728 |
RELATED PARTY TRANSACTION (De53
RELATED PARTY TRANSACTION (Details Narrative) | Mar. 31, 2017 | Dec. 31, 2016 |
Related Party Transaction Details Narrative | ||
Percentage of represented revenue by one client | 100.00% | 100.00% |
CONCENTRATIONS AND RISKS (Detai
CONCENTRATIONS AND RISKS (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Concentrations And Risks Details Narrative | ||
Cash deposits held with bank | $ 72,563 | |
Percentage of represented revenue by one client | 100.00% | 100.00% |
GOING CONCERN UNCERTAINTIES (De
GOING CONCERN UNCERTAINTIES (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Going Concern Uncertainties Details Narrative | ||
Accumulated deficit | $ (628,576) | $ (664,696) |