Document and Entity Information
Document and Entity Information - USD ($) | 3 Months Ended | ||
Jul. 31, 2015 | Sep. 11, 2015 | Oct. 31, 2014 | |
Document and Entity Information: | |||
Entity Registrant Name | SUNWIN STEVIA INTERNATIONAL, INC. | ||
Document Type | 10-Q | ||
Document Period End Date | Jul. 31, 2015 | ||
Amendment Flag | false | ||
Entity Central Index Key | 806,592 | ||
Current Fiscal Year End Date | --04-30 | ||
Entity Common Stock, Shares Outstanding | 175,382,803 | ||
Entity Public Float | $ 20,406,423 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | No | ||
Entity Well-known Seasoned Issuer | No | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | Q1 |
SUNWIN STEVIA INTERNATIONAL, IN
SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 521,562 | $ 241,967 |
Accounts receivable, net of allowance for doubtful accounts of $1,184,743 and $1,207,075, respectively | 1,080,536 | 678,456 |
Accounts receivable - related party | 3,372,481 | 3,761,758 |
Inventories, net | 4,792,123 | 5,288,409 |
Prepaid expenses and other current assets | 770,474 | 467,054 |
Total Current Assets | 10,537,176 | 10,437,644 |
Investment in real estate held for resale | 325,177 | 331,306 |
Property and equipment, net | 11,572,830 | 12,085,570 |
Intangible assets, net | 677,447 | 758,740 |
Land use rights, net | 2,166,180 | 2,222,061 |
Other long-term asset | 165,248 | 168,060 |
Total Assets | 25,444,058 | 26,003,381 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 5,831,156 | 5,527,011 |
Deferred grant income | 181,460 | 295,809 |
Due to related party | 547,243 | 958,475 |
Total Current Liabilities | 6,559,859 | 6,781,295 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 174,882,803 and 173,882,803 shares issued and outstanding as of July 31, 2015 and April 30, 2015, respectively | 174,883 | 173,883 |
Additional paid-in capital | 33,731,028 | 33,479,529 |
Accumulated deficit | (20,652,511) | (20,417,666) |
Accumulated other comprehensive income | 5,630,799 | 5,986,340 |
Total Stockholders' Equity | 18,884,199 | 19,222,086 |
Total Liabilities and Stockholders' Equity | $ 25,444,058 | $ 26,003,381 |
"SUNWIN STEVIA INTERNATIONAL, I
"SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Revenues: | ||
Revenues | $ 1,902,677 | $ 2,950,901 |
Revenues - related party | 3,075,656 | 885,608 |
Total revenues | 4,978,333 | 3,836,509 |
Cost of revenues | 4,193,436 | 3,168,510 |
Gross profit | 784,897 | 667,999 |
Operating expenses: | ||
Selling expenses | 318,714 | 327,135 |
General and administrative expenses | 725,119 | 831,862 |
Research and development expenses | 11,542 | 725 |
Total operating expenses | 1,055,375 | 1,159,722 |
Loss from operations | (270,478) | (491,723) |
Other income (expense): | ||
Other income (expenses) | 4,160 | (16,655) |
Grant income | 110,865 | 94,660 |
Interest income | 489 | 563 |
Interest expense - related party | (41,466) | (47,739) |
Interest expense | (37,379) | (15,778) |
Total other income | 36,669 | 15,051 |
Loss before income taxes | (233,809) | (476,672) |
Provision for income taxes | 1,036 | 27,532 |
Net loss | (234,845) | (504,204) |
Comprehensive loss | ||
Net loss | (234,845) | (504,204) |
Foreign currency translation adjustment | (355,541) | (18,952) |
Total Comprehensive loss | $ (590,386) | $ (523,156) |
Net loss per common share: | ||
Net Loss per share-basic and diluted | $ (0.001) | $ (0.003) |
Weighted average common shares outstanding - basic and diluted | 174,687,151 | 173,882,803 |
SUNWIN STEVIA INTERNATIONAL, I4
SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (234,845) | $ (504,204) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation expense | 386,484 | 610,792 |
Amortization of intangible assets | 81,293 | 81,294 |
Amortization of land use right | 14,492 | 14,326 |
Stock issued for services | 100,625 | |
Allowance for doubtful accounts | 33,959 | |
Changes in operating assets and liabilities: | ||
Accounts receivable and notes receivable | (452,433) | 972,007 |
Accounts receivable - related party | 325,520 | 72,314 |
Inventories | 405,724 | (229,641) |
Prepaid expenses and other current assets | (318,334) | 167,718 |
Accounts payable and accrued expenses | 315,952 | (549,785) |
Deferred grant income | (110,865) | (94,660) |
Taxes payable | (1,580) | (2,397) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 545,992 | 537,764 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (4,478) | (471,605) |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (4,478) | (471,605) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Advance due to related party | 2,175,574 | 91,377 |
Repayment of related party advances | (2,579,703) | (64,813) |
NET CASH USED IN FINANCING ACTIVITIES | (404,129) | 26,564 |
EFFECT OF EXCHANGE RATE ON CASH | 142,210 | (1,016) |
NET CHANGE IN CASH | 279,595 | 91,707 |
Cash | 241,967 | 1,195,563 |
Cash | 521,562 | 1,287,270 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Cash paid for income taxes | 1,036 | 2,696 |
Cash paid for interest | 78,845 | $ 63,517 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipments acquired on credit as payable | $ 98,530 |
Note 1 - Organization and Opera
Note 1 - Organization and Operations | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 1 - Organization and Operations | NOTE 1 - ORGANIZATION AND OPERATIONS DESCRIPTION OF BUSINESS Sunwin Stevia International, Inc. ("Sunwin Stevia International"), a Nevada corporation, and its subsidiaries are referred to in this report as "we", "us", "our", "Sunwin" or the "Company". We sell stevioside, a natural sweetener, as well as herbs used in traditional Chinese medicines and veterinary products. Substantially all of our operations are located in the People's Republic of China (the "PRC"). We have built an integrated company with the sourcing and production capabilities designed to meet the needs of our customers. Our operations are organized into two operating segments related to our Stevioside and Chinese Medicine product lines., and subsidiaries included in continuing operations consisted of the following: - Qufu Natural Green Engineering Co., Ltd. ( "Qufu Natural Green"), a wholly owned by Sunwin Stevia International; - Qufu Shengren Pharmaceutical Co., Ltd. ("Qufu Shengren"), a wholly owned by Qufu Natural Green; - Qufu Shengwang Stevia Biology and Science Co., Ltd. ("Qufu Shengwang"), a wholly owned by Qufu Natural Green; - Sunwin Tech Group, Inc. ("Sunwin Tech"), a wholly owned by Sunwin Stevia International; and - Sunwin USA, LLC. ("Sunwin USA"), a wholly owned by Sunwin Stevia International. Stevioside Segment In our Stevioside segment, we produce and sell a variety of purified steviol glycosides with rebaudioside A and stevioside as the principal components, an all natural, low calorie sweetener, and OnlySweet, a stevioside based table top sweetener. Chinese Medicine Segment In our Chinese Medicine Segment, we manufacture and sell a variety of traditional Chinese medicine formula extracts which are used in products made for use by both humans and animals. Qufu Shengwang In fiscal 2009, Qufu Natural Green acquired a 60% interest in Qufu Shengwang from its shareholder, Shandong Group, for $4,026,851. The purchase price represented 60% of the value of the net tangible assets of Qufu Shengwang as of April 30, 2008. Shandong Group is owned by Laiwang Zhang, our President and Chairman of the Board of Directors. Qufu Shengwang manufactures and sells stevia -based fertilizers and feed additives. On September 30, 2011, Qufu Natural Green purchased the 40% equity interest in Qufu Shengwang owned by our Korean partner, Korea Stevia Company, Limited, for $626,125 in cash, and as a result of this repurchase transaction we now own 100% equity interest in all of the net assets of our subsidiary Qufu Shengwang. On July 1, 2012, Qufu Shengwang entered the Cooperation Agreement with Hegeng (Beijing) Organic Farm Technology Co, Ltd. ("Hegeng"), a Chinese manufacturer and distributor of bio-fertilizers and pesticides, to jointly develop bio-bacterial fertilizers based on the residues from our stevia extraction. Under the Cooperation Agreement, Hegeng provides strain and formula that we apply to the stevia residues to produce bio-bacterial fertilizers in the current facility of Qufu Shengwang. The bio-bacterial fertilizers will be distributed under Qufu Shengwang's name. No additional investment in the facility would be required. During the third quarter of fiscal 2013, we decided to suspend the agreement with Hegeng due to a lack of sales since the reaction to the products was lower than anticipated in fertilizer market. Currently we plan to use these assets to manufacture a variety of traditional Chinese medicine formula extracts. We started production in last quarter of fiscal 2014. Qufu Shengren In fiscal 2009, Qufu Natural Green acquired Qufu Shengren for $3,097,242. The purchase price was equal to the value of the assets of Qufu Shengren as determined by an independent asset appraisal in accordance with asset appraisal principles in the PRC. Prior to being acquired by us, Qufu Shengren was engaged in the production and distribution of bulk drugs and pharmaceuticals. Subsequent to the acquisition, Qufu Shengren produces and distributes steviosides with a full range of grades from rebaudioside-A 10 to 99. Sunwin USA In fiscal 2009, we entered into a distribution agreement with WILD Flavors to assist our 55% owned subsidiary, Sunwin USA, in the marketing and worldwide distribution of our stevioside-based sweetener products and issued WILD Flavors a 45% interest in Sunwin USA. On August 8, 2012, we entered into an Exchange Agreement with WILD Flavors pursuant to which we purchased its 45% membership interest in Sunwin USA for an aggregate consideration of approximately $1,625,874, which includes the issuance of 7,666,666 shares of our common stock valued at approximately $1,533,333 and a cash payment of $92,541. The transaction closed on August 20, 2012. On August 22, 2012, we issued 7,666,666 shares of our common stock and paid $92,541 cash to WILD Flavors. Under the terms of the agreement, WILD Flavors assumed certain pre-closing obligations of Sunwin USA totaling approximately $694,000, including trade accounts receivable, loans, health care and monthly expenses of an employee, potential chargebacks, bank fees and broker commissions incurred prior to the closing date. The agreement also contained customary joint indemnification and general releases. As a result of this transaction, we began consolidating the operations of Sunwin USA from the date of acquisition (August 20, 2012). In addition to the Exchange Agreement, on August 8, 2012 we entered into the following additional agreements with WILD Flavors or its affiliate: - We entered into an Amendment to Operating Agreement with WILD Flavors pursuant to which we are now the sole management of Sunwin USA and certain sections of the original agreement dated April 29, 2009 were cancelled as they were no longer relevant following our purchase of the minority interest in Sunwin USA described above; - We entered into a Termination of Distribution Agreement with WILD Flavors and Sunwin USA pursuant to which the Distribution Agreement dated February 5, 2009 was terminated; and - We entered into a Distributorship Agreement with WILD Procurement Gmbh, a Swiss corporation ("WILD Procurement") which is an affiliate of WILD Flavors. Under the terms of this agreement, we appointed WILD Procurement as a non-exclusive world-wide distributor for the resale of our stevia products. There are no minimum purchase quantities under the agreement, and the pricing and terms of each order will be negotiated by the parties at the time each purchase order is placed. The agreement restricts WILD Procurement from purchasing steviosides or other forms of stevia that are included in our products from sources other than our company under certain circumstances. In addition, at such time as we desire to offer new products, we must first offer WILD Procurement the non-exclusive right to distribute those products and the parties will have 60 days to reach mutually agreeable terms. The agreement contains certain representations by us as to the quality of the products we may sell WILD Procurement and the products' compliance with applicable laws and good manufacturing practices, as well as customary confidentiality and indemnification provisions. In the event WILD Procurement should fund research on stevia used in food, beverage or dietary supplement applications, and as a result of this research it develops new intellectual property, such intellectual property shall be the sole property of WILD Procurement. In the event we should jointly fund research, any new intellectual property developed from this effort will be jointly owned and each party will have the right to use the developed intellectual property in stevia-based products. The agreement is for an initial term of 12 months and will automatically renew for successive 12 month terms unless the agreement has been terminated by either party upon 45 days prior written notice. There are no assurances any purchase orders will be placed under the terms of the Distribution Agreement. The agreement may also be terminated by either party upon a material breach by the other party, or upon the filing of a bankruptcy petition, both subject to certain cure periods. In the event the agreement is terminated, WILD Procurement has the right to continue to distribute our products on a non-exclusive basis for 24 months upon terms and conditions to be negotiated by the parties. This agreement is still in effect as of today. |
Note 2 - Summary of Significant
Note 2 - Summary of Significant Accounting Policies | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 2 - Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") for interim financial reporting. The accompanying unaudited condensed consolidated financial statements for the interim periods presented are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented. Certain financial statement amounts relating to prior periods have been reclassified to conform to the current period presentation. These unaudited condensed consolidated interim financial statements should be read in conjunction with the financial statements and footnotes for the year ended April 30, 2015 included in our Form 10-K as filed with the SEC. The results of operations and cash flows for the three months ended July 31, 2015 are not necessarily indicative of the results of operations or cash flows which may be reported for future periods or the full fiscal year. The condensed consolidated balance sheet as of April 30, 2015 contained herein has been derived from the audited consolidated financial statements as of April 30, 2015, but not include all disclosures required by the U.S. GAAP. Our unaudited condensed consolidated financial statements include the accounts of Sunwin and all our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Our subsidiaries include the following: - Qufu Natural Green; - Qufu Shengren; - Qufu Shengwang; - Sunwin Tech; and - Sunwin USA As reflected in the accompanying unaudited condensed consolidated financial statements, during the three months ended July 31, 2015, the Company had a net loss of $234,845 and net cash provided by operations of $697,866. At July 31, 2015, we had working capital of $3.8 million, including cash of $0.5 million. We believe the Company has the ability to further implement its business plan, raise additional capital, generate more revenues, and collect receivables from the third party and related parties to increase the working capital. However, actual results could differ from our anticipation. USE OF ESTIMATES The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts, the allowance for obsolete inventory, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates. CASH AND CASH EQUIVALENTS We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash and equivalents. As of July 31, 2015, we held $521,495 of our cash and cash equivalents with commercial banking institutions in the PRC, and $67 with banks in the United States. As of April 30, 2015, we held $241,845 of our cash and cash equivalents with commercial banking institution in PRC, and $122 in the United States. In China, there is no equivalent federal deposit insurance as in the United States, so the amounts held in banks in China are not insured. We have not experienced any losses in such bank accounts through July 31, 2015. ACCOUNTS RECEIVABLE Accounts receivable and other receivable are reported at net realizable value. We have established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written off when it is determined that the amounts are uncollectible after exhaustive efforts on collection. On July 31, 2015 and April 30, 2015, the allowance for doubtful accounts was $1,184,743 and $1,207,075, respectively. INVENTORIES Inventories, consisting of raw materials, work in process, and finished goods related to our products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. At July 31, 2015 and April 30, 2015, the Company recorded a reserve for obsolete or slow-moving inventories of $596,934 and $608,186, respectively, in our Chinese Medicine Segment. PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation and amortization are provided using the straight line method over the estimated economic lives of the assets, which range from three to thirty years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. In accordance with paragraph 360-10-35-17 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification ("ASC"), we examine the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Included in property and equipment is construction-in-progress which consisted of factory improvements and machinery pending installation and included the costs of construction, machinery and equipment, and or any interest charges arising from borrowings used to finance these assets during the period of construction or installation of the assets if applicable. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed and ready for their intended use. LONG-LIVED ASSETS In accordance with ASC 360, we review and evaluate our long-lived assets, including property and equipment, intangible assets, and land use rights, for impairment or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates. Based on our evaluation, we have determined certain long-lived assets that are no longer useful for our operations, and we recorded a disposition loss of $0 and $1,651,881 at July 31, 2015 and April 30, 2015, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS We adopted ASC Section 820-10-35-37 to measure the fair value of our financial instruments. ASC Section 820-10-35-37 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The adoption of ASC Section 820-10-35-37 did not have an impact on our financial position or operating results, but did expand certain disclosures. ASC Section 820-10-35-37 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Section 820-10-35-37 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, taxes payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. TAXES PAYABLE We are required to charge for and to collect value added taxes (VAT) on our sales on behalf of the PRC tax authority. We record VAT that we billed our customers as VAT payable. In addition, we are required to pay value added taxes on our primary purchases. We record VAT that charged by our vendors as VAT receivable. We are required to file VAT return on a monthly basis with the PRC tax authority, which we are entitled to claim the VAT that we charged by vendors as VAT credit and these credits can be applied to our VAT payable that we billed our customers. Accordingly, these VAT payable and receivable are presented as net amounts for financial statement purposes. Taxes payable on July 31, 2015 and April 30, 2015 amounted to $152,892 and $156,336, respectively, consisted primarily of VAT taxes. REVENUE RECOGNITION Pursuant to the guidance of ASC Topic 605, we record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. GRANT INCOME Grants received from PRC government agencies are recognized as deferred grant income and recognized in the consolidated statements of operations and comprehensive loss as and when they are earned for the specific research and development projects for which these grants are received. INCOME TAXES The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes We file federal and state income tax returns in the United States for our corporate operations pursuant to the U.S. Internal Revenue Code of 1986, as amended, and file separate foreign tax returns for our Chinese subsidiaries pursuant to the China's Unified Corporate Income Tax Law. We apply the provisions of ASC 740-10-50, "Accounting for Uncertainty in Income Taxes", which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of July 31, 2015, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future. BASIC AND DILUTED EARNINGS PER SHARE Pursuant to ASC Section 260-10-45, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of ours, subject to anti-dilution limitations. The following table presents a reconciliation of basic and diluted net income per common share: For Three Months Ended July 31, 2015 2014 Numerator: Net loss attributable to Sunwin Stevia International, Inc. $ (234,845) $ (504,204) Numerator for basic EPS, loss applicable to common stock holders $ (234,845) $ (504,204) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 174,687,151 173,882,803 Stock awards, options, and warrants 0 0 Denominator for diluted earnings per share - adjusted weighted average outstanding average number of common shares outstanding 174,687,151 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.001) $ (0.003) FOREIGN CURRENCY TRANSLATION Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with ASC Section 830-20-35 and are included in determining net income or loss. The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company's operating subsidiaries is the Chinese Renminbi ("RMB"). In accordance with ASC 830-20-35, the consolidated financial statements were translated into United States dollars using balance sheet date rates of exchange for assets and liabilities, and average rates of exchange for the period for the income statements and cash flows. Equity accounts were stated at their historical rate. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in other comprehensive income or loss. RMB is not a fully convertible currency. 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, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars ("$") was made at the following exchange rates for the respective periods: As of July 31, 2015 RMB 6.20 to $1.00 As of April 30, 2015 RMB 6.09 to $1.00 Three months ended July 31, 2015 RMB 6.09 to $1.00 Three months ended July 31, 2014 RMB 6.16 to $1.00 COMPREHENSIVE LOSS Comprehensive loss is comprised of net loss and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three months ended July 31, 2015 and 2014 included net loss and unrealized gains (losses) from foreign currency translation adjustments. CONCENTRATIONS OF CREDIT RISK Substantially all of our operations are carried out in the PRC. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. Our operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. Our results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and trade accounts receivable. We place our cash with high credit quality financial institutions in the United States and China. At July 31, 2015, we had $521,495 of cash balance held in PRC banks, which is not insured. We have not experienced any losses in such accounts through July 31, 2015. Almost all of our sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, we believe that the concentration of credit risk with respect to trade accounts receivable is limited due to generally short payment terms. We also perform ongoing credit evaluations of our customers to help further reduce potential credit risk. STOCK BASED COMPENSATION Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the "measurement date." The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date. RESEARCH AND DEVELOPMENT Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying statements of operations. Research and development costs are incurred on a project specific basis. Research and development cost were $11,542 and $725 for the three months ended July 31, 2015 and 2014, respectively. SHIPPING COSTS Shipping costs are included in selling expenses and totaled $41,690 and $82,777 for the three months ended July 31, 2015 and 2014, respectively. RECENT ACCOUNTING PRONOUNCEMENTS In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU 2014-08 were effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The adoption of ASU 2014-08 did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from contracts with Customers (Topic 606)". This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The adoption of ASU 2014-98 is not expected to have a material impact on the Company's consolidated financial statements. In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company's consolidated financial statements. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date". The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, we have not determined whether implementation of such proposed standards would be material to our consolidated financial statements. |
Note 3 - Investment in Real Est
Note 3 - Investment in Real Estate Held For Resale | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 3 - Investment in Real Estate Held For Resale | NOTE 3 - INVESTMENT IN REAL ESTATE HELD FOR RESALE On August 25, 2011, Qufu Natural Green entered into an agreement with Qufu Jinxuan Real Estate Development Co., Ltd., an unaffiliated third party, to purchase thirty apartment units in China for investment. The total area of the apartment complex units is 4,500 square meters (48,438 square feet), for a total purchase price of RMB15,120,000 (approximately $2,484,799) (the "Purchase Price"), at RMB 3,360 (US$546) per square meter. The Company prepaid 80% of the Purchase Price, approximately $1,987,839, upon signing the agreement on August 25, 2011, and we classified investment in real estate held for resale as a long-term asset since we did not plan on selling the apartment units during the one year period. On February 9, 2015, the Company decided to award twenty apartment complex units, totaling 3,000 square meters (32,292 square feet), to certain management personnel and outstanding performers in our technical team for their past contribution made to the Company, which also served as an incentive to stimulate improvement in performance of other employees and attract future talents to serve the Company. These apartment units are valued at the fair market price of RMB3,448 (US$561) per square meter. Ms. Dongdong Lin, our Chief Executive Officer, received an apartment valued at $84,206 which was included in her fiscal 2015 compensation. Total non-cash employees' compensation / bonus recorded for this reward amounted to RMB10,344,000 (US$1,684,122) and as a result, we recognized a gain of RMB 264,000 (US$42,989) from the excess fair value of these twenty apartment units transferred to these employees. The non-cash employees' compensation / bonus has been classified and included in the general and administrative expenses in the consolidated statements of operations and comprehensive loss for the fiscal year ended April 30, 2015. As of July 31, 2015 and April 30, 2015, investment in real estate held for resale amounted to $325,177 and $331,306, respectively. |
Note 4 - Inventories
Note 4 - Inventories | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 4 - Inventories | NOTE 4 - INVENTORIES At July 31, 2015 and April 30, 2015, inventories consisted of the following: July 31, 2015 (unaudited) April 30, 2015 Raw materials $ 3,006,068 $ 2,582,593 Work in process 445,241 344,742 Finished goods 1,937,748 2,969,260 Inventories, gross 5,389,057 5,896,595 Less: reserve for obsolete inventory (596,934) (608,186) Inventories, net $ 4,792,123 $ 5,288,409 |
Note 5 - Property and Equipment
Note 5 - Property and Equipment | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 5 - Property and Equipment | NOTE 5 - PROPERTY AND EQUIPMENT At July 31, 2015 and April 30, 2015, property and equipment consisted of the following: (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Office equipment (1-10 Years) $ 64,942 $ 66,194 Auto and trucks (3-10 Years) 931,296 949,097 Manufacturing equipment (2-20 Years) 7,304,628 7,415,898 Buildings (5-30 Years) 9,976,738 10,172,060 Construction in process 598,316 536,365 Gross Property and Equipment 18,875,920 19,139,614 Less: accumulated depreciation (7,303,090) (7,054,044) Property and equipment, net $ 11,572,830 $ 12,085,570 For the three months ended July 31, 2015 and 2014, depreciation expense totaled $386,484 and $610,792, of which $281,871 and $131,512 was included in cost of revenues, respectively, and of which $104,613 and $479,280 was included in general and administrative expenses, respectively. Depreciation is not taken during the period of construction or equipment installation. Upon completion of the installation of manufacturing equipment or any construction in progress, construction in progress balances will be classified to their respective property and equipment category. |
NOTE 6 - Intangible Assets
NOTE 6 - Intangible Assets | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
NOTE 6 - Intangible Assets | NOTE 6 - INTANGIBLE ASSETS On August 8, 2012 the Company entered into an Exchange Agreement with WILD Flavors pursuant to which it purchased its 45% membership interest in Sunwin USA for an aggregate consideration of approximately $1,625,874, which includes the issuance of 7,666,666 shares of our common stock valued at approximately $1,533,333 and a cash payment of $92,541. In connection with the Exchange Agreement, WILD Flavor granted, transferred and assigned to Sunwin USA all of its rights, title and interest, and the trade name Only Sweet, including any trademarks, trademark registrations and applications, service marks, service mark registrations and applications, copyrights, copyright registrations and applications, trade address, trade names (whether or not registered or by whatever name or designation), owned, applied for, or registered in the name of, the WILD Flavor (the "Only Sweet Name Rights"). Additionally, we entered into a new Distributorship Agreement with WILD Procurement which is an affiliate of WILD Flavors, as discussed in Note 1. The transaction closed on August 20, 2012. The tangible assets of Sunwin USA were reduced from $1,825,804 to $1,625,874 as a result of the application of U.S. GAAP which requires elimination of the difference between the purchase price of the 45% membership interest in Sunwin USA and cost basis of the intangible assets recorded by Sunwin USA. Intangible assets have a useful life of five years and consist of the cost of Only Sweet Name Rights and related technologies as well as the fair value of the Wild Flavors distribution Agreement. For the three months ended July 31, 2015 and 2014, amortization expense amounted to $81,293 and $81,294, respectively. Intangible assets consisted of the following: (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Only Sweet name rights and related technologies (5 Years) $ 587,183 $ 587,183 Distribution agreement and related distribution channels (5 Years) 1,038,691 1,038,691 Intangible assets, gross 1,625,874 1,625,874 Less: accumulated amortization (948,427) (867,134) Intangible assets, net $ 677,447 $ 758,740 |
Note 7 - Land Use Rights
Note 7 - Land Use Rights | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 7 - Land Use Rights | NOTE 7 - LAND USE RIGHTS Land use right consisted of the following: (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Land use right (45 Years) $ 2,564,890 $ 2,613,787 Less: accumulated amortization (398,710) (391,726) Land use right, net $ 2,166,180 $ 2,222,061 In conjunction with our acquisition of Qufu Shengwang, we acquired land use rights for properties located in the PRC until March 14, 2054. For the three month periods ended July 31, 2015 and 2014, amortization expense related to land use rights amounted to $14,492 and $14,326, respectively. |
Note 8 - Related Party Transact
Note 8 - Related Party Transactions | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 8 - Related Party Transactions | NOTE 8 - RELATED PARTY TRANSACTIONS Accounts receivable - related party and revenue - related party On July 31, 2015 and April 30, 2015, we reported $3,372,481 and $3,761,758 in accounts receivable - related party, respectively, related to sales of products to Qufu Shengwang Import and Export Corporation, a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. For the three months ended July 31, 2015 and 2014, we had revenue - related party of $3,075,656 and $885,608, respectively, from Qufu Shengwang Import and Export Corporation, Due to (from) related parties From time to time, we receive advances from related parties and advance funds to related parties for working capital purposes. During the three months ended July 31, 2015 and 2014, we paid interest of $41,466 and $47,739, respectively, which in connection with the advances of $806,491 (RMB5,000,000) and $1,290,385 (RMB 8,000,000) from Shangdong Shengwang Pharmaceutical, Co., Ltd. ("Pharmaceutical Corporation"), a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. We have repaid these two advances with all accrued interests on May 8, 2015 and June 11, 2015, respectively. On May 22, 2015 and June 17, 2015, we received additional advances of $789,461 (RMB 4,800,000) and $1,311,949 (RMB 8,000,000) from the Pharmaceutical Corporation, at a lowered interest rate of 6.375% per annum. The other advances bear no interest and are payable on demand, including the working capital we borrowed from Mr. Laiwang Zhang in fiscal year 2015, which we repaid to him in the first quarter of fiscal 2016. On July 31, 2015 and April 30, 2015, due to (from) related party activities consisted of the following: Shandong Shengwang Pharmaceutical Co., Ltd. Qufu Shengwang Import and Export Co., Ltd. Mr. Laiwang Zhang Total Balance due to related parties, April 30, 2015 $ 496,816 $ 346,622 $ 115,037 $ 958,475 Working capital advances from related parties 2,101,410 74,164 0 2,175,574 Repayments (2,148,012) (316,864) (114,827) (2,579,703) Effect of foreign currency exchange (6,353) (540) (210) (7,103) Balance due to related parties, July 31, 2015 $ 443,861 $ 103,382 $ 0 $ 547,243 |
Note 9 - Prepaid Expenses and O
Note 9 - Prepaid Expenses and Other Current Assets | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 9 - Prepaid Expenses and Other Current Assets | NOTE 9 - PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets on July 31, 2015 and April 30, 2015 totaled $770,474 and $467,054, respectively. As of July 31, 2015, prepaid expenses and other current assets includes $643,332 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us and $127,142 for business related employees' advances. As of April 30, 2015, prepaid expenses and other current assets includes $155,796 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us and $311,258 for business related employees' advances. During the third quarter of fiscal 2013, Qufu Shengwang paid Qufu Public Auction Center $610,751 as deposit for renewing the land use right. The deposit is required for the Center to appraise the land use right, which we originally expected to receive the refund during fiscal year 2014. We received a total refund of $445,503 as of July 31, 2015 and the remaining balance of $165,248 and $168,060 has been classified to other long-term asset at July 31, 2015 and April 30, 2015, respectively. |
Note 10 - Grant Income
Note 10 - Grant Income | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 10 - Grant Income | NOTE 10 - GRANT INCOME During the third quarter of fiscal 2014 and second quarter of fiscal 2015, we received grant funding of $1,146,921 (RMB7,000,000) and $179,092 (RMB1,100,000), respectively, in exchange for commitments made by us to the local government of Qufu city to provide research and development for the planting of stevia plants, for the development of biological methods to improve lower-grade stevia product to higher grade stevia, and applying biological method to change the taste of stevia to meet market demand. The grant approved by local government totaled RMB10,000,000 of which we received RMB 8,100,000 and the grant term is for three years, from January 1, 2013 through December 31, 2015. The Company will pay 10% of this total grant to Shandong Chinese Medicine University for the collaboration with Professor Jingzhen Tian on the related research and development project and a research report is to be submitted to the local government by the end of December 2015 in order to pass inspection and examination for the completion of this commitment. Deferred grant income is being amortized as an increase to other income over a 3-year period using the straight line method over the grant term. At July 31, 2015 and April 30, 2015, the balance of deferred grant income is $181,460 and $295,809, respectively. For the three months ended July 31, 2015 and 2014, grant income amounted to $110,865 and $94,660 included in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss, respectively. |
Note 11 - Accounts Payable
Note 11 - Accounts Payable | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 11 - Accounts Payable | NOTE 11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses included the following as of July 31, 2015 and April 30, 2015: Account July 31, 2015 (unaudited) April 30, 2015 Accounts payable $ 2,882,945 $ 2,000,329 Advanced from customers 17,446 58,434 Accrued salary payable 48,293 192,444 Tax payable 151,892 156,336 Other payable* 2,730,580 3,119,468 Total accounts payable and accrued expenses $ 5,831,156 $ 5,527,011 On July 31, 2015, other payables consists of advances from multiple individuals of $1,277,481, commission payable of $64,518, general liability, worker's compensation, and medical insurance payable of $425,942; union and education fees payable of $302,496, consulting fee of $80,649 and other miscellaneous payables of $579,494. On April 30, 2015, other payables consists of advances from multiple individuals of $1,828,091, commission payable of $75,260, general liability, worker's compensation, and medical insurance payable of $204,488; union and education fees payable of $305,081, consulting fee of $82,169, accrued R&D payable of $83,813 and other miscellaneous payables of $540,566. |
Note 12 - Stockholders' Equity
Note 12 - Stockholders' Equity | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 12 - Stockholders' Equity | NOTE 12 - STOCKHOLDERS' EQUITY Common stock At July 31, 2015 and April 30, 2015, we are authorized to issue 200,000,000 shares of common stock. We had 174,882,803 and 173,882,803 shares issued and outstanding at July 31, 2015 and April 30, 2015, respectively. On May 6, 2015, we issued a total of 1,000,000 shares of our common stock to Dr. Yuejian (James) Wang for consulting services, valued at $252,500, for one year term of service agreement during fiscal 2016. We will amortize this consulting service fee through fiscal 2016 over twelve months and recorded $63,125 as stock-based compensation expense for the three months ended July 31, 2015. We did not issue our common stock to consultants or employees during fiscal year 2015. Common stock to be issued On August 11, 2015, we entered into an one year consulting service agreement with Dr. Yuejian (James) Wang, pursuant to the terms of the consulting service agreement; by December 31, 2015, we will issue a total of 750,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as compensation for the services provided and to be provided from May 1, 2015 through April 30, 2016. We will amortize this consulting service fee through fiscal year 2016 over twelve months and recorded $37,500 as stock-based compensation expense for the three months ended July 31, 2015. (See Note16 - Subsequent events) |
Note 13 - Segment Information
Note 13 - Segment Information | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 13 - Segment Information | NOTE 13 - SEGMENT INFORMATION The following information is presented in accordance with ASC Topic 280, "Segment Reporting", for the three months ended July 31, 2015 and 2014; we operated in three reportable business segments - (1) natural sweetener (stevioside), (2) traditional Chinese medicines and (3) corporate and other. Our reportable segments are strategic business units that offer different products and are managed separately based on the fundamental differences in their operations. Condensed financial information with respect to these reportable business segments for the three months ended July 31, 2015 and 2014 is as follows: Three Months Ended July 31, 2015 2014 Revenues: Chinese medicine - third party $ 544,173 $ 522,194 Chinese medicine - related party 0 0 Total Chinese medicine $ 544,173 $ 522,194 Stevioside - third party 1,358,504 2,428,707 Stevioside - related party 3,075,656 885,608 Total Stevioside 4,434,160 3,314,315 Total segment and consolidated revenues $ 4,978,333 $ 3,836,509 Interest income (expense): Chinese medicine $ 69 $ 139 Stevioside (78,425) (63,093) Corporate and other 0 0 Total segment and consolidated interest expense $ (78,356) $ (62,954) Depreciation and amortization: Chinese medicine $ 92,039 $ 20,608 Stevioside 390,230 685,804 Corporate and other 0 0 Total segment and consolidated depreciation and amortization $ 482,269 $ 706,412 Income (loss) before income taxes: Chinese medicine $ (24,194) $ 24,115 Stevioside (26,046) (459,138) Corporate and other (183,569) (69,181) Total consolidated loss before income taxes $ (233,809) $ (504,204) July 31, 2015 April 30, 2015 Segment tangible assets: Chinese medicine $ 2,126,344 $ 2,285,114 Stevioside 9,446,486 9,800,456 Corporate and other 0 0 Total consolidated assets $ 11,572,830 $ 12,085,570 |
Note 14 - Commitments and Conti
Note 14 - Commitments and Contingencies | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 14 - Commitments and Contingencies | NOTE 14 - COMMITMENTS AND CONTINGENCIES On August 25, 2011, Qufu Natural Green entered into an agreement with Qufu Jinxuan Real Estate Development Co., Ltd., an unaffiliated third party, to purchase thirty apartment units in China for investment. The total area of the apartment complex units is 4,500 square meters (48,438 square feet), for a total purchase price of RMB15,120,000 (approximately $2,484,799) (the "Purchase Price"), at RMB 3,360 (US$546) per square meter. The Company prepaid 80% of the Purchase Price, approximately $1,987,839, upon signing the agreement on August 25, 2011, and we classified investment in real estate held for resale as a long-term asset since we did not plan on selling the apartment units during the one year period. On February 9, 2015, the Company decided to award twenty apartment complex units, totaling 3,000 square meters (32,292 square feet), to certain management personnel and outstanding performers in our technical team for their past contribution made to the Company, which also served as an incentive to stimulate improvement in performance of other employees and attract future talents to serve the Company. These apartment units are valued at the fair market price of RMB3,448 (US$561) per square meter. Ms. Dongdong Lin, our Chief Executive Officer, received an apartment valued at $84,206 which was included in her fiscal 2015 compensation. Total non-cash employees' compensation / bonus recorded for this reward amounted to RMB10,344,000 (US$1,684,122) and as a result, we recognized a gain of RMB 264,000 (US$42,989) from the excess fair value of these twenty apartment units transferred to these employees. The non-cash employees' compensation / bonus has been classified and included in the general and administrative expenses in the consolidated statements of operations and comprehensive loss for the fiscal year ended April 30, 2015. As of July 31, 2015 and April 30, 2015, investment in real estate held for resale amounted to $325,177 and $331,306, respectively. |
Note 15 - Concentrations and Cr
Note 15 - Concentrations and Credit Risk | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 15 - Concentrations and Credit Risk | NOTE 15 - CONCENTRATIONS AND CREDIT RISK (i) Customer Concentrations For the three months ended July 31, 2015 and 2014, customers accounting for 10% or more of the Company's revenue were as follows: Net Sales For the three months ended July 31, 2015 For the three months ended July 31, 2014 Chinese Medicine Stevioside Chinese Medicine Stevioside Qufu Shengwang Import and Export Trade Co., Ltd(1) - 69.4% - 27.4% Qingdao Runde Biological Technology Co. Ltd - - - 26.6% Zhonghua (Qingdao) Industrial Co., Ltd. - - - 15.4% Guangdong Tengjun Veterinary Medicine Co., Ltd 12.5% - 10.8% - Beijing Haomiao Huifeng Pharmaceutical Co., Ltd 11.3% - - - Total 23.8% 69.4% 10.8% 69.4% (1) Qufu Shengwang Import and Export Co., Ltd is a related party, an entity owned by Mr. Laiwang Zhang. (ii) Vendor Concentrations For the three months ended July 31, 2015 and 2014, suppliers accounting for 10% or more of the Company's purchase were as follows: Net Purchases For the three months ended July 31, 2015 For the three months ended July 31, 2014 Chinese Medicine Stevioside Chinese Medicine Stevioside Shandong Xiwang Sugar Industry Co., Ltd - - 14.3% - Gansu Fanzhi Biology Technology Co.,Ltd 15.1% - 11.3% - Qufu Electricity Corp. 13.3% - 13.6% - Jiangyin Suxin Dry Equipment Co., Ltd - - 13.6% - Sishui Ruijin Pharmaceutical Co., Ltd 27.2% - - - Anguo Qiyetang Pharmaceutical Co., Ltd 10.3% - - - Dongtai Yandun Stevia Corp. - 23.8% - - Gansu Puhua Stevia Develop Co., Ltd - 11.2% - 21.3% Zhucheng Haotian Pharmaceutical Co., Ltd - 11.9% - - Mingguang Xingshi Stevia Corp. - - - 31.8% Ganzhou Julong High Tech Co., Ltd - - - 18.3% Total 65.9% 46.9% 52.8% 71.4% (iii) Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and trade accounts receivable. We place our cash with high credit quality financial institutions in the United States and the PRC. At July 31, 2015, we had $521,495 of cash balance held in PRC banks, where there is no equivalent of federal deposit insurance as in the United States. As a result, cash held in PRC financial institutions is not insured. We have not experienced any losses in such accounts through July 31, 2015. Almost all of our sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, we believe that the concentration of credit risk with respect to trade accounts receivable is limited due to generally short payment terms. We also perform ongoing credit evaluations of our customers to help further reduce potential credit risk. |
Note 16 - Subsequent Events
Note 16 - Subsequent Events | 3 Months Ended |
Jul. 31, 2015 | |
Notes | |
Note 16 - Subsequent Events | NOTE 16 - SUBSEQUENT EVENTS On August 11, 2015, we entered into an one year consulting service agreement with Dr. Yuejian (James) Wang, pursuant to the terms of the consulting service agreement; we will issue a total of 750,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as compensation for the services provided or to be provided from May 1, 2015 through April 30, 2016. On August 11, 2015, we issued 500,000 shares of the Company's common stock, part of the 750,000 shares of Company's common stock, to Dr. Yuejian (James)Wang as payment of the consulting service fee, valued at $100,000. The Company will issue the remaining 250,000 shares of common stock to Dr. Yuejian (James) Wang by December 31, 2015, depending on the completion of consulting services provided by Dr. Yuejian (James) Wang. |
Note 2 - Summary of Significa21
Note 2 - Summary of Significant Accounting Policies: Use of Estimates (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Use of Estimates | USE OF ESTIMATES The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts, the allowance for obsolete inventory, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets, and the value of stock-based compensation. Actual results could differ from those estimates. |
Note 2 - Summary of Significa22
Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS We consider all highly liquid investments with maturities of three months or less at the time of purchase to be cash and equivalents. As of July 31, 2015, we held $521,495 of our cash and cash equivalents with commercial banking institutions in the PRC, and $67 with banks in the United States. As of April 30, 2015, we held $241,845 of our cash and cash equivalents with commercial banking institution in PRC, and $122 in the United States. In China, there is no equivalent federal deposit insurance as in the United States, so the amounts held in banks in China are not insured. We have not experienced any losses in such bank accounts through July 31, 2015. |
Note 2 - Summary of Significa23
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable and other receivable are reported at net realizable value. We have established an allowance for doubtful accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written off when it is determined that the amounts are uncollectible after exhaustive efforts on collection. On July 31, 2015 and April 30, 2015, the allowance for doubtful accounts was $1,184,743 and $1,207,075, respectively. |
Note 2 - Summary of Significa24
Note 2 - Summary of Significant Accounting Policies: Inventories (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Inventories | INVENTORIES Inventories, consisting of raw materials, work in process, and finished goods related to our products, are stated at the lower of cost or market (estimated net realizable value) utilizing the weighted average method. An allowance is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserves for the difference between the cost and the market value. These reserves are recorded based on estimates. At July 31, 2015 and April 30, 2015, the Company recorded a reserve for obsolete or slow-moving inventories of $596,934 and $608,186, respectively, in our Chinese Medicine Segment. |
Note 2 - Summary of Significa25
Note 2 - Summary of Significant Accounting Policies: Property and Equipment (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation and amortization are provided using the straight line method over the estimated economic lives of the assets, which range from three to thirty years. Expenditures for major renewals and betterments that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. In accordance with paragraph 360-10-35-17 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification ("ASC"), we examine the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable. Included in property and equipment is construction-in-progress which consisted of factory improvements and machinery pending installation and included the costs of construction, machinery and equipment, and or any interest charges arising from borrowings used to finance these assets during the period of construction or installation of the assets if applicable. No provision for depreciation is made on construction-in-progress until such time as the relevant assets are completed and ready for their intended use. |
Note 2 - Summary of Significa26
Note 2 - Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Long-lived Assets | LONG-LIVED ASSETS In accordance with ASC 360, we review and evaluate our long-lived assets, including property and equipment, intangible assets, and land use rights, for impairment or when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from other asset groups. Our estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates. Based on our evaluation, we have determined certain long-lived assets that are no longer useful for our operations, and we recorded a disposition loss of $0 and $1,651,881 at July 31, 2015 and April 30, 2015, respectively. |
Note 2 - Summary of Significa27
Note 2 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We adopted ASC Section 820-10-35-37 to measure the fair value of our financial instruments. ASC Section 820-10-35-37 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value, and expands disclosure about such fair value measurements. The adoption of ASC Section 820-10-35-37 did not have an impact on our financial position or operating results, but did expand certain disclosures. ASC Section 820-10-35-37 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC Section 820-10-35-37 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity's own assumptions. The carrying amounts of our financial assets and liabilities, such as cash, accounts receivable, notes receivable, prepayments and other current assets, accounts payable, taxes payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. |
Note 2 - Summary of Significa28
Note 2 - Summary of Significant Accounting Policies: Taxes Payable (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Taxes Payable | TAXES PAYABLE We are required to charge for and to collect value added taxes (VAT) on our sales on behalf of the PRC tax authority. We record VAT that we billed our customers as VAT payable. In addition, we are required to pay value added taxes on our primary purchases. We record VAT that charged by our vendors as VAT receivable. We are required to file VAT return on a monthly basis with the PRC tax authority, which we are entitled to claim the VAT that we charged by vendors as VAT credit and these credits can be applied to our VAT payable that we billed our customers. Accordingly, these VAT payable and receivable are presented as net amounts for financial statement purposes. Taxes payable on July 31, 2015 and April 30, 2015 amounted to $152,892 and $156,336, respectively, consisted primarily of VAT taxes. |
Note 2 - Summary of Significa29
Note 2 - Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Revenue Recognition | REVENUE RECOGNITION Pursuant to the guidance of ASC Topic 605, we record revenue when persuasive evidence of an arrangement exists, product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. |
Note 2 - Summary of Significa30
Note 2 - Summary of Significant Accounting Policies: Grant Income (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Grant Income | GRANT INCOME Grants received from PRC government agencies are recognized as deferred grant income and recognized in the consolidated statements of operations and comprehensive loss as and when they are earned for the specific research and development projects for which these grants are received. |
Note 2 - Summary of Significa31
Note 2 - Summary of Significant Accounting Policies: Income Taxes (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Income Taxes | INCOME TAXES The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes We file federal and state income tax returns in the United States for our corporate operations pursuant to the U.S. Internal Revenue Code of 1986, as amended, and file separate foreign tax returns for our Chinese subsidiaries pursuant to the China's Unified Corporate Income Tax Law. We apply the provisions of ASC 740-10-50, "Accounting for Uncertainty in Income Taxes", which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our consolidated financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of July 31, 2015, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future. |
Note 2 - Summary of Significa32
Note 2 - Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Basic and Diluted Earnings Per Share | BASIC AND DILUTED EARNINGS PER SHARE Pursuant to ASC Section 260-10-45, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of ours, subject to anti-dilution limitations. The following table presents a reconciliation of basic and diluted net income per common share: For Three Months Ended July 31, 2015 2014 Numerator: Net loss attributable to Sunwin Stevia International, Inc. $ (234,845) $ (504,204) Numerator for basic EPS, loss applicable to common stock holders $ (234,845) $ (504,204) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 174,687,151 173,882,803 Stock awards, options, and warrants 0 0 Denominator for diluted earnings per share - adjusted weighted average outstanding average number of common shares outstanding 174,687,151 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.001) $ (0.003) |
Note 2 - Summary of Significa33
Note 2 - Summary of Significant Accounting Policies: Foreign Currency Transactions and Translations Policy (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Foreign Currency Transactions and Translations Policy | FOREIGN CURRENCY TRANSLATION Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Transactions and balances in other currencies are converted into U.S. dollars in accordance with ASC Section 830-20-35 and are included in determining net income or loss. The reporting currency of the Company is the U.S. dollar. The functional currency of the parent company is the U.S. dollar and the functional currency of the Company's operating subsidiaries is the Chinese Renminbi ("RMB"). In accordance with ASC 830-20-35, the consolidated financial statements were translated into United States dollars using balance sheet date rates of exchange for assets and liabilities, and average rates of exchange for the period for the income statements and cash flows. Equity accounts were stated at their historical rate. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in other comprehensive income or loss. RMB is not a fully convertible currency. 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, which are determined largely by supply and demand. Translation of amounts from RMB into United States dollars ("$") was made at the following exchange rates for the respective periods: As of July 31, 2015 RMB 6.20 to $1.00 As of April 30, 2015 RMB 6.09 to $1.00 Three months ended July 31, 2015 RMB 6.09 to $1.00 Three months ended July 31, 2014 RMB 6.16 to $1.00 |
Note 2 - Summary of Significa34
Note 2 - Summary of Significant Accounting Policies: Comprehensive Loss (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Comprehensive Loss | COMPREHENSIVE LOSS Comprehensive loss is comprised of net loss and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive loss for the three months ended July 31, 2015 and 2014 included net loss and unrealized gains (losses) from foreign currency translation adjustments. |
Note 2 - Summary of Significa35
Note 2 - Summary of Significant Accounting Policies: Concentrations of Credit Risk (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Concentrations of Credit Risk | CONCENTRATIONS OF CREDIT RISK Substantially all of our operations are carried out in the PRC. Accordingly, our business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. Our operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. Our results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and trade accounts receivable. We place our cash with high credit quality financial institutions in the United States and China. At July 31, 2015, we had $521,495 of cash balance held in PRC banks, which is not insured. We have not experienced any losses in such accounts through July 31, 2015. Almost all of our sales are credit sales which are primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, we believe that the concentration of credit risk with respect to trade accounts receivable is limited due to generally short payment terms. We also perform ongoing credit evaluations of our customers to help further reduce potential credit risk. |
Note 2 - Summary of Significa36
Note 2 - Summary of Significant Accounting Policies: Stock Based Compensation (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Stock Based Compensation | STOCK BASED COMPENSATION Stock-based compensation is accounted for based on the requirements of the Share-Based Payment topic of ASC 718 which requires recognition in the financial statements of the cost of employee and director services received in exchange for an award of equity instruments over the period the employee or director is required to perform the services in exchange for the award (presumptively, the vesting period). ASC 718 also requires measurement of the cost of employee and director services received in exchange for an award based on the grant-date fair value of the award. Pursuant to ASC 505-50, for share-based payments to consultants and other third-parties, compensation expense is determined at the "measurement date." The expense is recognized over the vesting period of the award. Until the measurement date is reached, the total amount of compensation expense remains uncertain. The Company records compensation expense based on the fair value of the award at the reporting date. The awards to consultants and other third-parties are then revalued, or the total compensation is recalculated, based on the then current fair value, at each subsequent reporting date. |
Note 2 - Summary of Significa37
Note 2 - Summary of Significant Accounting Policies: Research and Development (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Research and Development | RESEARCH AND DEVELOPMENT Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying statements of operations. Research and development costs are incurred on a project specific basis. Research and development cost were $11,542 and $725 for the three months ended July 31, 2015 and 2014, respectively. |
Note 2 - Summary of Significa38
Note 2 - Summary of Significant Accounting Policies: Shipping Costs (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Shipping Costs | SHIPPING COSTS Shipping costs are included in selling expenses and totaled $41,690 and $82,777 for the three months ended July 31, 2015 and 2014, respectively. |
Note 2 - Summary of Significa39
Note 2 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Jul. 31, 2015 | |
Policies | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU 2014-08 were effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The adoption of ASU 2014-08 did not have a material impact on the Company's consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, "Revenue from contracts with Customers (Topic 606)". This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The adoption of ASU 2014-98 is not expected to have a material impact on the Company's consolidated financial statements. In July 2015, The FASB has issued Accounting Standards Update (ASU) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. Topic 330, Inventory, currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. The amendments do not apply to inventory that is measured using last-in, first-out (LIFO) or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out (FIFO) or average cost. An entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using LIFO or the retail inventory method. The amendments in this Update more closely align the measurement of inventory in GAAP with the measurement of inventory in International Financial Reporting Standards. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The adoption of ASU 2015-11 is not expected to have a material impact on the Company's consolidated financial statements. In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date". The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, we have not determined whether implementation of such proposed standards would be material to our consolidated financial statements. |
Note 2 - Summary of Significa40
Note 2 - Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Earnings per Share Computation Table (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Earnings per Share Computation Table | For Three Months Ended July 31, 2015 2014 Numerator: Net loss attributable to Sunwin Stevia International, Inc. $ (234,845) $ (504,204) Numerator for basic EPS, loss applicable to common stock holders $ (234,845) $ (504,204) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 174,687,151 173,882,803 Stock awards, options, and warrants 0 0 Denominator for diluted earnings per share - adjusted weighted average outstanding average number of common shares outstanding 174,687,151 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.001) $ (0.003) |
Note 5 - Property and Equipme41
Note 5 - Property and Equipment: Property and equipment table (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Property and equipment table | (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Office equipment (1-10 Years) $ 64,942 $ 66,194 Auto and trucks (3-10 Years) 931,296 949,097 Manufacturing equipment (2-20 Years) 7,304,628 7,415,898 Buildings (5-30 Years) 9,976,738 10,172,060 Construction in process 598,316 536,365 Gross Property and Equipment 18,875,920 19,139,614 Less: accumulated depreciation (7,303,090) (7,054,044) Property and equipment, net $ 11,572,830 $ 12,085,570 |
NOTE 6 - Intangible Assets_ Sch
NOTE 6 - Intangible Assets: Schedule of Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Schedule of Intangible Assets and Goodwill | (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Only Sweet name rights and related technologies (5 Years) $ 587,183 $ 587,183 Distribution agreement and related distribution channels (5 Years) 1,038,691 1,038,691 Intangible assets, gross 1,625,874 1,625,874 Less: accumulated amortization (948,427) (867,134) Intangible assets, net $ 677,447 $ 758,740 |
Note 7 - Land Use Rights_ Land
Note 7 - Land Use Rights: Land use right table (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Land use right table | (Estimated Life) July 31, 2015 (unaudited) April 30, 2015 Land use right (45 Years) $ 2,564,890 $ 2,613,787 Less: accumulated amortization (398,710) (391,726) Land use right, net $ 2,166,180 $ 2,222,061 |
Note 8 - Related Party Transa44
Note 8 - Related Party Transactions: Schedule of due to related parties (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Schedule of due to related parties | Shandong Shengwang Pharmaceutical Co., Ltd. Qufu Shengwang Import and Export Co., Ltd. Mr. Laiwang Zhang Total Balance due to related parties, April 30, 2015 $ 496,816 $ 346,622 $ 115,037 $ 958,475 Working capital advances from related parties 2,101,410 74,164 0 2,175,574 Repayments (2,148,012) (316,864) (114,827) (2,579,703) Effect of foreign currency exchange (6,353) (540) (210) (7,103) Balance due to related parties, July 31, 2015 $ 443,861 $ 103,382 $ 0 $ 547,243 |
Note 11 - Accounts Payable_ Sch
Note 11 - Accounts Payable: Schedule of Accounts Payable and Accrued Liabilities (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Schedule of Accounts Payable and Accrued Liabilities | Account July 31, 2015 (unaudited) April 30, 2015 Accounts payable $ 2,882,945 $ 2,000,329 Advanced from customers 17,446 58,434 Accrued salary payable 48,293 192,444 Tax payable 151,892 156,336 Other payable* 2,730,580 3,119,468 Total accounts payable and accrued expenses $ 5,831,156 $ 5,527,011 |
Note 13 - Segment Information_
Note 13 - Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | Three Months Ended July 31, 2015 2014 Revenues: Chinese medicine - third party $ 544,173 $ 522,194 Chinese medicine - related party 0 0 Total Chinese medicine $ 544,173 $ 522,194 Stevioside - third party 1,358,504 2,428,707 Stevioside - related party 3,075,656 885,608 Total Stevioside 4,434,160 3,314,315 Total segment and consolidated revenues $ 4,978,333 $ 3,836,509 Interest income (expense): Chinese medicine $ 69 $ 139 Stevioside (78,425) (63,093) Corporate and other 0 0 Total segment and consolidated interest expense $ (78,356) $ (62,954) Depreciation and amortization: Chinese medicine $ 92,039 $ 20,608 Stevioside 390,230 685,804 Corporate and other 0 0 Total segment and consolidated depreciation and amortization $ 482,269 $ 706,412 Income (loss) before income taxes: Chinese medicine $ (24,194) $ 24,115 Stevioside (26,046) (459,138) Corporate and other (183,569) (69,181) Total consolidated loss before income taxes $ (233,809) $ (504,204) |
Note 13 - Segment Information47
Note 13 - Segment Information: Schedule of Segment Asset (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Schedule of Segment Asset | July 31, 2015 April 30, 2015 Segment tangible assets: Chinese medicine $ 2,126,344 $ 2,285,114 Stevioside 9,446,486 9,800,456 Corporate and other 0 0 Total consolidated assets $ 11,572,830 $ 12,085,570 |
Note 15 - Concentrations and 48
Note 15 - Concentrations and Credit Risk: Customer concentrations table (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Customer concentrations table | Net Sales For the three months ended July 31, 2015 For the three months ended July 31, 2014 Chinese Medicine Stevioside Chinese Medicine Stevioside Qufu Shengwang Import and Export Trade Co., Ltd(1) - 69.4% - 27.4% Qingdao Runde Biological Technology Co. Ltd - - - 26.6% Zhonghua (Qingdao) Industrial Co., Ltd. - - - 15.4% Guangdong Tengjun Veterinary Medicine Co., Ltd 12.5% - 10.8% - Beijing Haomiao Huifeng Pharmaceutical Co., Ltd 11.3% - - - Total 23.8% 69.4% 10.8% 69.4% |
Note 15 - Concentrations and 49
Note 15 - Concentrations and Credit Risk: Vendor concentrations table (Tables) | 3 Months Ended |
Jul. 31, 2015 | |
Tables/Schedules | |
Vendor concentrations table | Net Purchases For the three months ended July 31, 2015 For the three months ended July 31, 2014 Chinese Medicine Stevioside Chinese Medicine Stevioside Shandong Xiwang Sugar Industry Co., Ltd - - 14.3% - Gansu Fanzhi Biology Technology Co.,Ltd 15.1% - 11.3% - Qufu Electricity Corp. 13.3% - 13.6% - Jiangyin Suxin Dry Equipment Co., Ltd - - 13.6% - Sishui Ruijin Pharmaceutical Co., Ltd 27.2% - - - Anguo Qiyetang Pharmaceutical Co., Ltd 10.3% - - - Dongtai Yandun Stevia Corp. - 23.8% - - Gansu Puhua Stevia Develop Co., Ltd - 11.2% - 21.3% Zhucheng Haotian Pharmaceutical Co., Ltd - 11.9% - - Mingguang Xingshi Stevia Corp. - - - 31.8% Ganzhou Julong High Tech Co., Ltd - - - 18.3% Total 65.9% 46.9% 52.8% 71.4% |
Note 2 - Summary of Significa50
Note 2 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Cash and cash equivalents held in PRC | $ 521,495 | $ 241,845 |
Cash and cash equivalents held in US | $ 67 | $ 122 |
Note 2 - Summary of Significa51
Note 2 - Summary of Significant Accounting Policies: Accounts Receivable (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Allowance for Doubtful Accounts Receivable | $ 1,184,743 | $ 1,207,075 |
Note 2 - Summary of Significa52
Note 2 - Summary of Significant Accounting Policies: Inventories (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Reserve for obsolete or slow-moving inventories | $ 596,934 | $ 608,186 |
Note 2 - Summary of Significa53
Note 2 - Summary of Significant Accounting Policies: Long-lived Assets (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Disposition loss of long lived assets | $ 0 | $ 1,651,881 |
Note 2 - Summary of Significa54
Note 2 - Summary of Significant Accounting Policies: Taxes Payable (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
VAT payable | $ 152,892 | $ 156,336 |
Note 2 - Summary of Significa55
Note 2 - Summary of Significant Accounting Policies: Basic and Diluted Earnings Per Share: Earnings per Share Computation Table (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Numerator for basic EPS, loss applicable to common stock holders | $ (234,845) | $ (504,204) |
Weighted Average Number of Shares Issued, Basic | 174,687,151 | 173,882,803 |
Weighted Average Number of Shares Outstanding, Diluted | 174,687,151 | 173,882,803 |
Net Loss per share-basic and diluted | $ (0.001) | $ (0.003) |
Note 2 - Summary of Significa56
Note 2 - Summary of Significant Accounting Policies: Foreign Currency Transactions and Translations Policy (Details) | 3 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | |
Details | |||
Foreign Currency Exchange Rate, Translation | 6.20 | 6.09 | |
Average exchange rates | 6.09 | 6.16 |
Note 2 - Summary of Significa57
Note 2 - Summary of Significant Accounting Policies: Concentrations of Credit Risk (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Cash and cash equivalents held in PRC | $ 521,495 | $ 241,845 |
Note 2 - Summary of Significa58
Note 2 - Summary of Significant Accounting Policies: Research and Development (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Research and Development Expense | $ 11,542 | $ 725 |
Note 2 - Summary of Significa59
Note 2 - Summary of Significant Accounting Policies: Shipping Costs (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Shipping, Handling and Transportation Costs | $ 41,690 | $ 82,777 |
Note 3 - Investment in Real E60
Note 3 - Investment in Real Estate Held For Resale (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 | Aug. 25, 2011 |
Details | |||
Purchase price for apartment units held for sale | $ 2,484,799 | ||
Payment of purchase price for apartment units held for sale | $ 1,987,839 | ||
Investment in real estate held for resale | $ 325,177 | $ 331,306 |
Note 4 - Inventories (Details)
Note 4 - Inventories (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Inventory, Raw Materials, Gross | $ 3,006,068 | $ 2,582,593 |
Inventory, Work in Process, Gross | 445,241 | 344,742 |
Inventory, Finished Goods, Gross | 1,937,748 | 2,969,260 |
Inventory, Gross | 5,389,057 | 5,896,595 |
Reserve for obsolete inventory | (596,934) | (608,186) |
Inventories, net | $ 4,792,123 | $ 5,288,409 |
Note 5 - Property and Equipme62
Note 5 - Property and Equipment: Property and equipment table (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Office Equipment | $ 64,942 | $ 66,194 |
Auto and Trucks | 931,296 | 949,097 |
Machinery and Equipment, Gross | 7,304,628 | 7,415,898 |
Buildings and Improvements, Gross | 9,976,738 | 10,172,060 |
Construction in Progress, Gross | 598,316 | 536,365 |
Property, Plant and Equipment, Gross | 18,875,920 | 19,139,614 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (7,303,090) | (7,054,044) |
Property and equipment, net | $ 11,572,830 | $ 12,085,570 |
Note 5 - Property and Equipme63
Note 5 - Property and Equipment (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Total Depreciation Expense | $ 386,484 | $ 610,792 |
NOTE 6 - Intangible Assets (Det
NOTE 6 - Intangible Assets (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Aug. 22, 2012 | |
Details | |||
Share issued for acquisition | 7,666,666 | ||
Value of Shares issued for Acquisition | $ 1,533,333 | ||
Cash paid for acquisition | $ 92,541 | ||
Amortization of Acquired Intangible Assets | $ 81,293 | $ 81,294 |
NOTE 6 - Intangible Assets_ S65
NOTE 6 - Intangible Assets: Schedule of Intangible Assets and Goodwill (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Only Sweet name rights and related technologies | $ 587,183 | $ 587,183 |
Distribution agreement and related distribution channels | 1,038,691 | 1,038,691 |
Finite-Lived Intangible Assets, Gross | 1,625,874 | 1,625,874 |
Accumulated amortization of Intangible Assets | (948,427) | (867,134) |
Finite-Lived Intangible Assets, Net | $ 677,447 | $ 758,740 |
Note 7 - Land Use Rights_ Lan66
Note 7 - Land Use Rights: Land use right table (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Land use right, gross | $ 2,564,890 | $ 2,613,787 |
Accumulated amortization of Land Use Rights | (398,710) | (391,726) |
LandUseRight | $ 2,166,180 | $ 2,222,061 |
Note 7 - Land Use Rights (Detai
Note 7 - Land Use Rights (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Amortization expense - Land use rights | $ 14,492 | $ 14,326 |
Note 8 - Related Party Transa68
Note 8 - Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | |
Details | |||
Accounts receivable - related party | $ 3,372,481 | $ 3,761,758 | |
Revenue from Related Parties | 3,075,656 | $ 885,608 | |
Interest Paid, Net | $ 41,466 | $ 47,739 |
Note 8 - Related Party Transa69
Note 8 - Related Party Transactions: Schedule of due to related parties (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Due to Pharmaceutical Corporation | $ 443,861 | $ 496,816 |
Due to Qufu Shengwang | 103,382 | 346,622 |
Due to Laiwang Zhang | 0 | 115,037 |
Total Due to Related Party | 547,243 | $ 958,475 |
Working capital advances from related parties - Shangdong | 2,101,410 | |
Working capital advances from related parties - Qufu | 74,164 | |
Working capital advances from related parties - Zhang | 0 | |
Working capital advances from related parties | 2,175,574 | |
Repayments from related parties - Shandong | (2,148,012) | |
Repayments from related parties - Qufu | (316,864) | |
Repayments from related parties - Laiwang Zhang | (114,827) | |
Repayments from related parties | (2,579,703) | |
Effect of foreign currency exchange - Shangdong | (6,353) | |
Effect of foreign currency exchange - Qufu | (540) | |
Effect of foreign currency exchange - Laiwang Zhang | (210) | |
Effect of foreign currency exchange | $ (7,103) |
Note 9 - Prepaid Expenses and70
Note 9 - Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Prepaid expenses and other current assets | $ 770,474 | $ 467,054 |
Prepayments to suppliers | 643,332 | 155,796 |
Employee advances and others | $ 127,142 | $ 311,258 |
Note 10 - Grant Income (Details
Note 10 - Grant Income (Details) - USD ($) | 3 Months Ended | ||||
Jul. 31, 2015 | Jul. 31, 2014 | Apr. 30, 2015 | Oct. 31, 2014 | Jan. 26, 2014 | |
Details | |||||
Grant funding received | $ 179,092 | $ 1,146,921 | |||
Deferred grant income | $ 181,460 | $ 295,809 | |||
Grant income | $ 110,865 | $ 94,660 |
Note 11 - Accounts Payable_ S72
Note 11 - Accounts Payable: Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Accounts Payable | $ 2,882,945 | $ 2,000,329 |
Customer Advances, Current | 17,446 | 58,434 |
Accrued salary payable | 48,293 | 192,444 |
Taxes Payable, Current | 151,892 | 156,336 |
Accounts Payable, Other, Current | 2,730,580 | 3,119,468 |
Accounts Payable and Accrued Liabilities, Current | $ 5,831,156 | $ 5,527,011 |
Note 11 - Accounts Payable (Det
Note 11 - Accounts Payable (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Advances from multiple individuals | $ 1,277,481 | $ 1,828,091 |
Commission payable | 64,518 | 75,260 |
General liability, worker's compensation, and medical insurance payable | 425,942 | 204,488 |
Union and education fees payable | 302,496 | 305,081 |
Consulting fee | 80,649 | 82,169 |
Other miscellaneous payables | $ 579,494 | 540,566 |
Accrued R&D payable | $ 83,813 |
Note 12 - Stockholders' Equity
Note 12 - Stockholders' Equity (Details) - USD ($) | Aug. 11, 2015 | Jul. 31, 2015 | May. 06, 2015 | Apr. 30, 2015 |
Details | ||||
Shares, Outstanding | 174,882,803 | 173,882,803 | ||
Shares issued to Dr. Wang | 100,000 | 1,000,000 | ||
Value of shares issued to Dr. Wang | $ 500,000 | $ 252,500 |
Note 13 - Segment Information75
Note 13 - Segment Information: Schedule of Segment Reporting Information, by Segment (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Details | ||
Net revenues - Chinese Medicines | $ 544,173 | $ 522,194 |
Net revenues - Chinese medicine - related party | 0 | 0 |
Net revenues - Chinese medicine - Total | 544,173 | 522,194 |
Net revenues - Stevioside - third party | 1,358,504 | 2,428,707 |
Net revenues - Stevioside - related party | 3,075,656 | 885,608 |
Net revenues - Stevioside - Total | 4,434,160 | 3,314,315 |
Net revenues - Total segment and consolidated revenues | 4,978,333 | 3,836,509 |
Interest income - Chinese Medicines | 69 | 139 |
Interest income - Stevioside | (78,425) | (63,093) |
Interest income - Total segment and consolidated interest expense | (78,356) | (62,954) |
Depreciation and amortization - Chinese Medicines | 92,039 | 20,608 |
Depreciation and amortization - Stevioside | 390,230 | 685,804 |
Depreciation and amortization - Corporate and other | 0 | 0 |
Depreciation and amortization - Total segment and consolidated depreciation and amortization | 482,269 | 706,412 |
Loss before taxes and noncontrolling interest - Chinese Medicines | (24,194) | 24,115 |
Loss before taxes and noncontrolling interest - Stevioside | (26,046) | (459,138) |
Loss before taxes and noncontrolling interest - Corporate and other | (183,569) | (69,181) |
Income (loss) before income taxes - Total segment and consolidated depreciation and amortization | $ (233,809) | $ (504,204) |
Note 13 - Segment Information76
Note 13 - Segment Information: Schedule of Segment Asset (Details) - USD ($) | Jul. 31, 2015 | Apr. 30, 2015 |
Details | ||
Segment assets- Chinese Medicines | $ 2,126,344 | $ 2,285,114 |
Segment assets-Stevioside | 9,446,486 | 9,800,456 |
Segment assets-Corporate and other | 0 | 0 |
Segment assets-Total consolidated assets | $ 11,572,830 | $ 12,085,570 |
Note 14 - Commitments and Con77
Note 14 - Commitments and Contingencies (Details) | Aug. 25, 2011USD ($) |
Details | |
Purchase price for apartment units held for sale | $ 2,484,799 |
Payment of purchase price for apartment units held for sale | $ 1,987,839 |
Note 16 - Subsequent Events (De
Note 16 - Subsequent Events (Details) - USD ($) | Aug. 11, 2015 | May. 06, 2015 |
Details | ||
Value of shares issued to Dr. Wang | $ 500,000 | $ 252,500 |
Shares issued to Dr. Wang | 100,000 | 1,000,000 |