Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Apr. 30, 2016 | Jul. 27, 2016 | Oct. 31, 2015 | |
Document and Entity Information: | |||
Entity Registrant Name | SUNWIN STEVIA INTERNATIONAL, INC. | ||
Document Type | 10-K | ||
Document Period End Date | Apr. 30, 2016 | ||
Amendment Flag | false | ||
Entity Central Index Key | 806,592 | ||
Current Fiscal Year End Date | --04-30 | ||
Entity Common Stock, Shares Outstanding | 199,632,803 | ||
Entity Public Float | $ 24,781,423 | ||
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 | FY |
SUNWIN STEVIA INTERNATIONAL, IN
SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 900,071 | $ 241,967 |
Accounts receivable, net of allowance for doubtful accounts of $1,202,610 and $1,207,075, respectively | 2,099,503 | 678,456 |
Accounts receivable - related party | 3,632,876 | 3,761,758 |
Inventories, net | 4,526,580 | 5,288,409 |
Prepaid expenses and other current assets | 2,787,371 | 467,054 |
Total Current Assets | 13,946,401 | 10,437,644 |
Investment in real estate held for resale | 311,467 | 331,306 |
Property and equipment, net | 9,154,077 | 12,085,570 |
Intangible assets, net | 433,565 | 758,740 |
Land use rights, net | 2,032,693 | 2,222,061 |
Other long-term asset | 2,092,778 | 168,060 |
Total Assets | 27,970,981 | 26,003,381 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 6,860,826 | 3,812,138 |
Loans payable | 2,263,387 | 1,714,873 |
Deferred grant income | 0 | 295,809 |
Due to related party | 1,277,248 | 958,475 |
Total Current Liabilities | 10,401,461 | 6,781,295 |
STOCKHOLDERS' EQUITY: | ||
Common stock, $0.001 par value, 200,000,000 shares authorized; 199,632,803 and 173,882,803 shares issued and outstanding as of April 30, 2016 and 2015, respectively | 199,633 | 173,883 |
Additional paid-in capital | 37,681,279 | 33,479,529 |
Accumulated deficit | (25,214,532) | (20,417,666) |
Accumulated other comprehensive income | 4,903,140 | 5,986,340 |
Total Stockholders' Equity | 17,569,520 | 19,222,086 |
Total Liabilities and Stockholders' Equity | $ 27,970,981 | $ 26,003,381 |
"SUNWIN STEVIA INTERNATIONAL, I
"SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Revenues: | ||
Revenues | $ 9,316,735 | $ 11,430,118 |
Revenues - related party | 8,698,333 | 6,081,939 |
Total revenues | 18,015,068 | 17,512,057 |
Cost of revenues | 16,041,136 | 14,167,851 |
Gross profit | 1,973,932 | 3,344,206 |
Operating expenses: | ||
Selling expenses | 1,327,803 | 1,353,596 |
General and administrative expenses | 3,195,818 | 4,696,527 |
Loss on disposition of property and equipment | 1,622,762 | 1,651,881 |
Research and development expenses | 836,168 | 253,966 |
Total operating expenses, net | 6,982,551 | 7,955,970 |
Loss from operations | (5,008,619) | (4,611,764) |
Other income (expenses): | ||
Other income (expenses) | 215,556 | 45,984 |
Grant income | 283,505 | 519,185 |
Interest income | 983 | 2,572 |
Interest expense - related party | (158,631) | (289,693) |
Interest expense | (124,397) | (79,082) |
Total other income (expense) | 217,016 | 198,966 |
Loss before income taxes | (4,791,603) | (4,412,798) |
Provision for income taxes | 5,263 | 109,341 |
Net loss | (4,796,866) | (4,522,139) |
Comprehensive loss | ||
Net loss | (4,796,866) | (4,522,139) |
Foreign currency translation adjustment | (1,083,200) | 242,520 |
Total Comprehensive loss | $ (5,880,066) | $ (4,279,619) |
Net loss per common share: | ||
Net Loss per share-basic and diluted | $ (0.03) | $ (0.03) |
Weighted average common shares outstanding - basic and diluted | 182,066,546 | 173,882,803 |
SUNWIN STEVIA INTERNATIONAL, I4
SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock Amount | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | Total Stockholders' Equity |
Balance at Apr. 30, 2014 | $ 173,883 | $ 33,479,529 | $ (15,895,527) | $ 5,743,820 | $ 23,501,705 | |
Net loss | $ (4,522,139) | (4,522,139) | (4,522,139) | |||
Foreign currency translation adjustment | 242,520 | 242,520 | ||||
Balance at Apr. 30, 2015 | 19,222,086 | 173,883 | 33,479,529 | (20,417,666) | 5,986,340 | 19,222,086 |
Common stock issued for services | 1,750 | 400,750 | 402,500 | |||
Common stock issued for future services | $ 1,000 | $ 144,000 | $ 145,000 | |||
Common stock issued for employee compensation | 23,000 | 3,657,000 | 3,680,000 | |||
Net loss | (4,796,866) | (4,796,866) | $ (4,796,866) | |||
Foreign currency translation adjustment | (1,083,200) | (1,083,200) | ||||
Balance at Apr. 30, 2016 | $ 17,569,520 | $ 199,633 | $ 37,681,279 | $ (25,214,532) | $ 4,903,140 | $ 17,569,520 |
SUNWIN STEVIA INTERNATIONAL, I5
SUNWIN STEVIA INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (4,796,866) | $ (4,522,139) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation expense | 994,648 | 2,032,240 |
Amortization of intangible assets | 325,175 | 325,175 |
Amortization of land use right | 55,619 | 57,494 |
Loss on disposition of property and equipment | 1,622,762 | 1,651,881 |
Allowance for doubtful accounts | $ 101,485 | 111,876 |
Recovery of bad debts reserves | (62,755) | |
Stock issued for services | 402,500 | |
Non - cash employees' compensation / bonus | $ 511,111 | 1,684,122 |
Gain from transferred of investment in real estate held for resale as employees' compensation / bonus | (42,989) | |
Changes in operating assets and liabilities: | ||
Accounts receivable and notes receivable | (1,563,159) | 1,334,060 |
Accounts receivable - related party | (98,258) | (2,770,733) |
Inventories | 453,800 | (1,976,823) |
Prepaid expenses and other current assets | (1,024,337) | 529,068 |
Accounts payable and accrued expenses | 3,230,458 | 1,035,458 |
Deferred grant income | (283,505) | (340,094) |
Taxes payable | 109,734 | 73,752 |
Other long-term asset | 7,875 | |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 49,042 | (880,407) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (402,180) | (359,758) |
NET CASH USED IN INVESTING ACTIVITIES | (402,180) | (359,758) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from loans | 1,326,172 | 500,643 |
Repayment of short-term loans | (662,299) | (814,054) |
Advance due from related parties | 8,559,771 | 905,738 |
Repayment of related party advances | (8,184,835) | (311,334) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 1,038,809 | 280,993 |
EFFECT OF EXCHANGE RATE ON CASH | (27,567) | 5,576 |
NET CHANGE IN CASH | 658,104 | (953,596) |
Cash | 241,967 | 1,195,563 |
Cash | 900,071 | 241,967 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION: | ||
Cash paid for income taxes | 5,263 | 24,781 |
Cash paid for interest | $ 146,741 | 284,940 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Property and equipments acquired on credit as payable | $ 310,611 |
Note 1 - Organization, Nature o
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies | NOTE 1 - ORGANIZATION, NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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. For the fiscal years 2016 and 2015, 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 Shengwang 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. Therefore, the non-controlling interest of $2,109,028 in our balance sheet as of April 30, 2012 has been eliminated to reflect our 100% interest in Qufu Shengwang. On July 1, 2012, Qufu Shengwang entered into 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 2014, 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 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 manager 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. BASIS OF PRESENTATION Our consolidated financial statements include the accounts of Sunwin and all our wholly-owned including those operating outside the United States, and are prepared in accordance with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation. USE OF ESTIMATES The preparation of 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 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 April 30, 2016, we held $900,071, of our cash and cash equivalents with commercial banking institutions in the PRC, and $0 with banks in the United States. In the PRC, there is no equivalent federal deposit insurance as in the United States, so the amounts held in banks in the PRC are not insured. We have not experienced any losses in such bank accounts through April 30, 2016. 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 April 30, 2016 and 2015, the allowance for doubtful accounts was $1,202,610 and $1,207,075, respectively. During the year ended April 30, 2016, the Company has no recovered of old accounts receivable, which had been reserved for in prior years. 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. On April 30, 2016 and 2015, the Company recorded a reserve for obsolete or slow-moving inventories of $107,658 and $608,186, respectively. 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 twenty 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 Accounting Standards Codification ("ASC"), 360-10-35-17 of the Financial Accounting Standards Board (FASB), we examine the possibility of decreases in the value of property and equipment 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 loss on disposition of property and equipment of $1,622,762 and $1,651,881 as of April 30, 2016 and 2015, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS We follow the ASC Section 825-10-50-10 for disclosures regarding the fair value of financial instruments and have 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, loans receivable, prepayments and other current assets, accounts payable and accrued expenses, and taxes payable, 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 April 30, 2016 and April 30, 2015 amounted to $254,759 and $43,046, 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 April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future. BASIC AND DILUTED LOSS PER SHARE Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted 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 us, subject to anti-dilution limitations. The following table presents a reconciliation of basic and diluted net income per ordinary share: For Fiscal Years Ended April 30, 2016 2015 Numerator: Net loss $ (4,796,866) $ (4,522,139) Numerator for basic EPS, loss applicable to common stockholders $ (4,796,866) $ (4,522,139) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Effect of dilutive securities: Warrants 0 0 Denominator for diluted earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.03) $ (0.03) 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 April 30, 2016 RMB 6.47 to $1.00 As of April 30, 2015 RMB 6.09 to $1.00 Year ended April 30, 2016 RMB 6.35 to $1.00 Year ended April 30, 2015 RMB 6.14 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 fiscal year 2016 and 2015 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. On April 30, 2016, we had $900,071 cash held in PRC bank accounts, which is not insured. We have not experienced any losses in such accounts through April 30, 2016. 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 in the accompanying consolidated statements of operations and comprehensive loss. Research and development costs are incurred on a project specific basis. Research and development costs were $836,168 and $253,966 for fiscal years 2016 and 2015, respectively. SHIPPING COSTS Shipping costs are included in selling expenses and totaled $260,630 and $294,868 for fiscal years 2016 and 2015, respectively. RECLASSIFICATIONS Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position. RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the FASB issued ASU 2016-08, " Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" Revenue from Contracts with Customers (Topic 606) In March 2016, the FASB issued ASU 2016-09, " Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients 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. GOING CONCERN Our consolidated financial statements have been prepared assuming we will continue as a going concern. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended April 30, 2016 contained a qualification as to our ability to continue as a going concern. For the year ended April 30, 2016, the Company has incurred a net loss of approximately $4.8 million. The Company also has accumulated deficit of $25.2 million and its cash balance and revenues generated are not currently sufficient and cannot be projected to cover operating expenses for the next twelve months from the date of this report. These factors raise doubt as to the ability of the Company to continue as a going concern. Management's plans include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely basis, obtain additional working capital funds through debt and equity financings, and restructure on-going operations to eliminate inefficiencies to raise cash balance in order to meet its anticipated cash requirements for the next twelve months from the date of this report. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company's ongoing capital expenditures, working capital, and other requirements. Management intends to make every effort to identify and develop sources of funds. The outcome of these matters cannot be predicted at this time. There can be no assurance that any additional financings will be available to the Company on satisfactory terms and conditions, if at all. The ability of the Company to continue as a going concern is dependent upon its ability to achieve profitable operations and raise additional capital. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amount or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. |
Note 2 -investment in Real Esta
Note 2 -investment in Real Estate Held For Resale | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 2 -investment in Real Estate Held For Resale | NOTE 2 -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 meterd (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. 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 accompanying consolidated statements of operations and comprehensive loss for the fiscal year ended April 30, 2015. As of April 30, 2016 and 2015, investment in real estate held for resale amounted to $311,467 and $331,306, respectively. The remaining apartments have been sold to a third party subsequent to April 30, 2016, see Note 17. |
Note 3 - Inventories
Note 3 - Inventories | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 3 - Inventories | NOTE 3 - INVENTORIES On April 30, 2016 and 2015, inventories consisted of the following: April 30, 2016 April 30, 2015 Raw materials $ 2,287,572 $ 2,582,593 Work in process 1,221,115 344,742 Finished goods 1,125,551 2,969,260 Inventories, gross 4,634,238 5,896,595 Less: reserve for obsolete inventory (107,658) (608,186) Inventories, net $ 4,526,580 $ 5,288,409 |
Note 4 - Property and Equipment
Note 4 - Property and Equipment | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 4 - Property and Equipment | NOTE 4 - PROPERTY AND EQUIPMENT On April 30, 2016 and 2015, property and equipment consisted of the following: (Estimated Life) April 30, 2016 April 30, 2015 Office equipment (3-7 Years) $ 39,800 $ 66,194 Auto and trucks (5-10 Years) 492,620 949,097 Manufacturing equipment (10-20 Years) 5,240,451 7,415,898 Buildings (20 Years) 8,667,889 10,172,060 Construction in process 583,954 536,365 Gross Property and Equipment 15,024,714 19,139,614 Less: accumulated depreciation (5,870,637) (7,054,044) Property and equipment, net $ 9,154,077 $ 12,085,570 For fiscal years 2016 and 2015, depreciation expense totaled $994,648 and $2,032,240, of which $679,115 and $606,865 was included in cost of revenues, respectively, and of which $315,533 and $1,425,375 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 5 - Intangible Assets
Note 5 - Intangible Assets | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 5 - Intangible Assets | NOTE 5 - 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 OnlySweet, including any trademarks, trademark registrations and applications, service marks, service mark registrations and applications, copyrights, copyright registrations and applications, trade dress, 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 "OnlySweet 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 OnlySweet Name Rights and related technologies as well as the fair value of the Wild Flavors distribution Agreement. For fiscal years 2016 and 2015, amortization expense amounted to $325,175 and $325,175, respectively. Intangible assets consisted of the following: (Estimated Life) April 30, 2016 April 30, 2015 OnlySweet 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 (1,192,309) (867,134) Intangible assets, net $ 433,565 $ 758,740 |
Note 6- Land Use Right
Note 6- Land Use Right | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 6- Land Use Right | NOTE 6- LAND USE RIGHT Land use right consisted of the following: (Estimated Life) April 30, 2016 April 30, 2015 Land use right (45 Years) $ 2,455,519 $ 2,613,787 Less: accumulated amortization (422,826) (391,726) Land use right, net $ 2,032,693 $ 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 fiscal years 2016 and 2015, amortization expense related to land use rights amounted to $55,619 and $57,494, respectively. |
Note 7 - Related Party Transact
Note 7 - Related Party Transactions | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 7 - Related Party Transactions | NOTE 7 - RELATED PARTY TRANSACTIONS Accounts receivable - related party and revenue - related party For fiscal years 2016 and 2015, we recorded revenue - related party of $8,698,333 and $6,081,939, respectively, related to sales of products to Qufu Shengwang Import and Export Corporation, a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. On April 30, 2016 and 2015, we had $3,632,876 and $3,761,758 in accounts receivable - related party, respectively, due from Qufu Shengwang Import and Export Corporation. Due to (from) related parties From time to time, we received advances from related parties and advance funds to related parties for working capital purposes. We received advances from related parties for working capital totaled $8,559,771 and $905,738 in fiscal years 2016 and 2015, respectively, and we repaid to related parties a total of $8,184,835 and $311,334, respectively. In fiscal years 2016 and 2015, interest expense related to due to related parties amounted to $158,631 and $289,693, respectively, which were included in interest expense in the accompanying consolidated statements of operations and comprehensive loss, and in connection with the advances of $821,693 (RMB5,000,000) and $1,314,708 (RMB 8,000,000) from Shangdong Shengwang Pharmaceutical., Co., Ltd. (“Pharmaceutical Corporation”), a Chinese entity owned by our Chairman, Mr. Laiwang Zhang. These advances bear interest at the rate of 9.225% per annum and we have repaid these two loans 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 $788,825 (RMB 4,800,000) and $1,314,708 (RMB 8,000,000) from the Pharmaceutical Corporation, at a lowered interest rate of 7.65% per annum. The other advances bear no interest and are payable on demand, including the working capital we borrowed from Mr. Laiwang Zhang. On April 30, 2016, the balance we owed Qufu Shengwang Import and Export Co., Ltd. and Shandong Shengwang Pharmaceutical Co., Ltd. of $366,875 and $910,373, respectively. On For fiscal years 2016 and 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, 2014 $ 248,873 $ 106,308 $ 0 $ 355,181 Working capital advances from related parties 444,079 346,622 115,037 905,738 Repayments (197,206) (114,128) 0 (311,334) Effect of foreign currency exchange 1,070 7,820 0 8,890 Balance due to related parties, April 30, 2015 $ 496,816 $ 346,622 $ 115,037 $ 958,475 Working capital advances from related parties 2,450,644 2,450,644 75,705 8,559,771 Repayments (2,427,493) (2,427,493) (192,076) (8,184,835) Effect of foreign currency exchange (54,599) (2,898) 1,334 (56,163) Balance due to related parties, April 30, 2016 $ 910,373 $ 366,875 $ 0 $ 1,277,248 |
Note 8 - Prepaid Expenses and O
Note 8 - Prepaid Expenses and Other Current Assets | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 8 - Prepaid Expenses and Other Current Assets | NOTE 8 - PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets on April 30, 2016 and 2015 totaled $2,787,371 and $467,054, respectively. As of April 30, 2016, prepaid expenses and other current assets includes $1,220,523 prepayments to suppliers for merchandise that had not been shipped to us and services that had not been provided to us, $1,371,667 prepayment for employees' stock-based compensation, and $195,181 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. On December 1, 2015, we entered into three year employment agreements with four employees. Pursuant to employment agreements, we issued a total of 23 million shares of the Company's common stock to them, valued at $3,680,000, as employees' stock-based compensations over three-year term of their employment from December 1, 2015 through November 30, 2018. We will amortize these compensations over three years from December 1, 2015 to November 30, 2018 and we recognized $511,111 as stock-based compensation expenses during fiscal year 2016. We also have recoded the remaining balance of the stock-based compensation of $3,168,889 as prepaid compensation, of which $1,371,667 included in prepaid expenses and other current assets and $1,942,222 included in the other long-term asset in the accompanying consolidated balance sheet at April 30, 2016. On April 25, 2016, we entered into an one year consulting service agreement with Dr. Yuejian (James) Wang. Pursuant to the terms of the consulting service agreement for fiscal year 2017, we will issue a total of 1,000,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as compensation for the services to be provided from May 1, 2016 through April 30, 2017. On April 27, 2016, we issued 1,000,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as a prepaid payment of the consulting service fee, valued at $145,000, which included in the prepaid expenses and other current assets in the accompanying consolidated balance at April 30, 2016. We will amortize this prepaid consulting service fee through fiscal 2017 over twelve months. During the third quarter of fiscal 2013, Qufu Shengwang paid Qufu Public Auction Center (the "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 $460,195 and $442,691 as of April 30, 2016 and 2015 and the remaining balance of $150,556 and $168,060 has been classified to other long-term asset at April 30, 2016 and 2015, respectively. |
Note 9 - Grant Income
Note 9 - Grant Income | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 9 - Grant Income | NOTE 9 - 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 2016 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 April 30, 2016 and 2015, the balance of deferred grant income is $0 and $295,809, respectively. For the years ended April 30, 2016 and 2015, grant income amounted to $283,505 and $519,185 in the accompanying consolidated statements of operations and comprehensive loss, respectively. |
Note 10 - Accounts Payable and
Note 10 - Accounts Payable and Accrued Expenses | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 10 - Accounts Payable and Accrued Expenses | NOTE 10 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses included the following as of April 30, 2016 and 2015: Account April 30, 2016 April 30, 2015 Accounts payable $ 4,869,026 $ 2,000,329 Advanced from customers 10,042 58,434 Accrued salary payable 105,131 192,444 Tax payable 254,615 156,336 Deferred revenue 71,604 0 Other payable* 1,550,408 1,404,595 Total accounts payable and accrued expenses $ 6,860,826 $ 3,812,138 * On April 30, 2016, other payables consists of commission payable of $67,683; general liability, worker's compensation, and medical insurance payable of $439,706; accrued R&D payable of $78,794; consulting fee payable of $248,748, union and education fees payable of $297,728 and other miscellaneous payables of $417,749. On April 30, 2015, other payables consists of commission payable of $75,260; general liability, worker's compensation, and medical insurance payable of $204,488; accrued R&D payable of $83,813; consulting fee payable of $82,169, union and education fees payable of $305,081 and other miscellaneous payables of $653,785. At April 30, 2016 and 2015, advances from multiple individual lenders of 2,263,387 and $1,714,873 have been classified to short-term loans, respectively. |
Note 11 -loan Payable
Note 11 -loan Payable | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 11 -loan Payable | NOTE 11 -LOAN PAYABLE Loans payable consisted of short-term loans obtained from various individual lenders that are due within one year for working capital purpose. These loans can be renewed with 10 day advance notice prior to maturity date. At April 30, 2016 and 2015, short-term loans consisted of the following: April 30, 2016 April 30, 2015 Loans from multiple non-related individuals, for the term of three months, with monthly interest rate of 2% obtained during January 31, 2015 to February 2, 2015 which was repaid on maturity date $ 0 $ 505,341 Loan from Min Wu, an employee of Qufu Shengren, due on October 5, 2015 with annual interest rate of 12% at October 6, 2014, which was repaid on maturity date 0 18,077 Loan from Min Wu, an employee of Qufu Shengren, due on October 5, 2016 with annual interest rate of 10% at October 6, 2015 23,175 0 Loan from Weidong Cai, an employee of Qufu Shengren, due on September 22, 2015 with annual interest rate of 12% at September 23, 2014, which was repaid on maturity date 0 123,255 Loan from Weidong Cai, an employee of Qufu Shengren, due on September 21, 2016 with annual interest rate of 10% at September 22, 2015 129,778 0 Loan from Jianjun Yan, non-related individual, due on October 6, 2015 with annual interest rate of 10% at October 7, 2014, which renewed on October 7, 2015 1,004,232 1,068,200 Multiple loans from Jianjun Yan, non-related individual, due from October 5, 2016 through April 9, 2017, with annual interest rate of 10%, which were obtained during October 6, 2015 through April 10, 2016 892,995 0 Loan from Junzhen Zhang, non-related individual, due to October 5, 2016, with annual interest rate of 10% at October 6, 2015 23,175 0 Loan from Jian Chen, non-related individual, due on January 26, 2017, with annual interest rate of 10% at January 27, 2016 112,783 0 Loan from Qing Kong, non-related individual, due on March 6, 2017, with annual interest rate of 10% at March 7, 2016 61,799 0 Loan from Guihai Chen, non-related individual, due on March 10, 2017, with annual interest rate of 10% at March 11, 2016 15,450 0 Total $ 2,263,387 $ 1,714,873 For the fiscal years ended April 30, 2016 and 2015, interest expense related to short-term loans amounted to $124,397 and $79,082, respectively, which were included in interest expense in the accompanying consolidated statements of operations and comprehensive loss. |
Note 12 - Income Taxes
Note 12 - Income Taxes | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 12 - Income Taxes | NOTE 12 - INCOME TAXES We account for income taxes under ASC 740, "Expenses - Income Taxes Our subsidiaries in the PRC are governed by the Income Tax Law of the People's Republic of China concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws (the PRC Income Tax Law"). Pursuant to the PRC Income Tax Law, our PRC subsidiaries are subject to tax at a maximum statutory rate of 25% (inclusive of state and local income taxes). The components of loss before income tax consisted of the following: Fiscal Years Ended April 30, 2016 2015 U.S. Operations $ (1,345,518) $ (430,936) Chinese Operations (3,446,085) (3,981,862) Total $ (4,791,603) $ (4,412,798) The table below summarizes the reconciliation of our income tax provision (benefit) computed at the statutory U.S. Federal rate and the actual tax provision: Fiscal Years Ended April 30, 2016 2015 Income tax benefit at federal statutory rate $ (1,629,145) $ (1,500,351) State income taxes, net of federal benefit (191,664) (176,512) Permanent differences - 36,608 U.S. tax rate in excess of foreign tax rate - (56,858) Valuation allowances 1,826,072 1,806,454 Tax provision $ 5,263 $ 109,341 We have a net operating loss ("NOL") carry forward for U.S. income tax purposes aggregating approximately $9,300,000 at April 30, 2016 expiring through the tax year 2035, subject to the Internal Revenue Code Section 382, which places a limitation on the amount of taxable income that can be offset by net operating losses after a change in ownership. In addition, to U.S. NOL's, we have a PRC NOL for our Chinese operations as of April 30, 2016 of approximately $19,079,000, that expires in 2021. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Included in the deferred tax asset is the aforementioned NOL and the tax benefit associated with the issuance of stock-based compensation. The realization of the deferred tax assets is dependent on future taxable income, in addition to the exercise of stock options; we are not able to predict if such future taxable income will be more likely than not sufficient to utilize the benefit. As such, we do not believe the benefit is more likely than not to be realized and we recognize a full valuation allowance for those deferred tax assets. Our deferred tax assets as of April 30, 2016 and 2015 are as follows: Fiscal Years Ended April 30, 2016 2015 Deferred tax assets from NOL carry forwards $ 8,304,000 $ 7,800,000 Total deferred tax asset 8,304,000 7,800,000 Valuation allowance (8,304,000) (7,800,000) Deferred tax asset, net of allowance $ 0 $ 0 |
Note 13 - Stockholders' Equity
Note 13 - Stockholders' Equity | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 13 - Stockholders' Equity | NOTE 13 - STOCKHOLDERS' EQUITY Common stock At April 30, 2016 and 2015, we are authorized to issue 200,000,000 shares of common stock. We had 199,632,803 and 173,882,803 shares issued and outstanding on April 30, 2016 and 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 amortized this consulting service fee through fiscal 2016 over twelve months and recorded $252,500 as stock-based compensation expense during fiscal 2016. 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 issued 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 and January 14, 2016, we issued 500,000 and 250,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as payment of the consulting service fee, valued at $100,000 and $50,000, respectively. We amortized this consulting service fee through fiscal 2016 over twelve months and recorded $150,000 as stock-based compensation expense during fiscal 2016. On December 1, 2015, we entered into three years employment agreements with four employees. Pursuant to employment agreements, we issued a total of 23 million shares of the Company's common stock, valued at $3,680,000, as employees' stock-based compensations over three-year term of their employment from December 1, 2015 through November 30, 2018. We will amortize these compensations over three years from December 1, 2015 to November 30, 2018 and we recognized $511,111 as stock-based compensation expenses during fiscal 2016. We also have recoded the remaining balance of the stock-based compensation of $3,168,889 as prepaid compensation, of $1,226,667 included in prepaid expenses and other current assets and $1,942,222 included in the other long-term asset in the accompanying condensed consolidated balance sheet as of April 30, 2016. On April 25, 2016, we entered into an one year consulting service agreement with Dr. Yuejian (James) Wang. Pursuant to the terms of the consulting service agreement for fiscal year 2017, we will issue a total of 1,000,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as compensation for the services to be provided from May 1, 2016 through April 30, 2017. On April 27, 2016, we issued 1,000,000 shares of the Company's common stock to Dr. Yuejian (James) Wang as prepaid payment of the consulting service fee, valued at $145,000, which included in the prepaid expenses and other current assets in the accompanying consolidated balance at April 30, 2016. We will amortize this prepaid consulting service fee through fiscal 2017 over twelve months. |
Note 14 - Segment Information
Note 14 - Segment Information | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 14 - Segment Information | NOTE 14 - SEGMENT INFORMATION The following information is presented in accordance with ASC Topic 280, "Segment Reporting", for fiscal 2016 and 2015; 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. Financial information with respect to these reportable business segments for the fiscal years 2016 and 2015 is as follows: Fiscal Years Ended April 30, 2016 2015 Revenues: Chinese medicine - third party $ 2,405,944 $ 2,333,789 Chinese medicine - related party 0 0 Total Chinese medicine 2,405,944 2,333,789 Stevioside - third party 6,910,791 9,096,329 Stevioside - related party 8,698,333 6,081,939 Total Stevioside 15,609,124 15,178,268 Total segment and consolidated revenues $ 18,015,068 $ 17,512,057 Interest expense: Chinese medicine $ 0 $ 0 Stevioside (283,028) (368,775) Corporate and other 0 0 Total segment and consolidated interest expense $ (283,028) $ (368,775) Depreciation and amortization: Chinese medicine $ 373,370 $ 531,343 Stevioside 676,897 1,558,391 Corporate and other 325,175 325,175 Total segment and consolidated depreciation and amortization $ 1,375,442 $ 2,414,909 Loss before income taxes: Chinese medicine $ 432,377 $ 393,308 Stevioside 3,338,883 3,913,729 Corporate and other 1,020,343 105,761 Total consolidated loss before income taxes $ 4,791,603 $ 4,412,798 April 30, 2016 April 30, 2015 Segment tangible assets: Chinese medicine $ 1,614,531 $ 2,285,114 Stevioside 7,539,546 9,800,456 Corporate and other 0 0 Total consolidated assets $ 9,154,077 $ 12,085,570 |
Note 15 -commitments and Contin
Note 15 -commitments and Contingencies | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 15 -commitments and Contingencies | NOTE 15 -COMMITMENTS AND CONTINGENCIES All of our facilities described below are located in the Shuyuan Economic Zone of Qufu City, of the Shandong Province, including our traditional Chinese medicine facilities which moved from 6 Youpeng Road of Qufu City to Shuyuan Economic Zone during fiscal year 2015. In October 2002 Qufu Natural Green entered into a lease agreement with Shangwang Pharmaceutical Corporation, an affiliate, which covers approximately 54,000 square-foot facility used in our traditional Chinese medicine business. The lease expired on October 1, 2012, after that, Shangwang Pharmaceutical Corporation allows Qufu Natural Green to use the facility for free until further agreement was reached. In fiscal 2015, Qufu Natural Green did not enter into any new agreements with Pharmaceutical Corporation and has moved its traditional Chinese medicine facilities to our existing location in Shuyuan Economic Zone after payment of $30,120 as a lump sum rent compensation for the additional usage of the facility prior to moving out to Shengwang Pharmaceutical Corporation. 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 within 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 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. 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 accompanying consolidated statements of operations and comprehensive loss for the fiscal year ended April 30, 2015. As of April 30, 2016 and 2015, investment in real estate held for resale amounted to $311,467 and $331,306, respectively. The remaining apartments have been sold to a third party subsequent to April 30, 2016, see Note 17. |
Note 16 - Concentrations and Cr
Note 16 - Concentrations and Credit Risk | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 16 - Concentrations and Credit Risk | NOTE 16 - CONCENTRATIONS AND CREDIT RISK (i) Customer Concentrations For fiscal years 2016 and 2015, customers accounting for 10% or more of the Company's revenue were as follows: Net Sales For Fiscal Years, 2016 2015 Chinese Medicine Stevioside Chinese Medicine Stevioside Qufu Shengwang Import and Export Co., Ltd (1) - 48.3% - 40.1% China Chemical (Qingdao) Industries, Co., Ltd - - - 12.7% Beijing Haomiao Huifeng Pharmaceutical Co., Ltd - - 10.2% - Total - 48.3% 10.2% 52.8% (1) Qufu Shengwang Import and Export Co., Ltd is a related party, an entity owned by Mr. Laiwang Zhang. (ii) Vendor Concentrations For fiscal years 2016 and 2015, suppliers accounting for 10% or more of the Company's purchase were as follows: Net Purchases For Fiscal Years, 2016 2015 Chinese Medicine Stevioside Chinese Medicine Stevioside Shandong Heze Zhongshun Pharmaceutical Co., Ltd - - 11.6% - Qufu Longheng Fuel Materials Co., Ltd - - 16.4% - Gansu Fanzhi Bio Tech Co., Ltd - - 13.1% - Gansu Puhua Stevioside Development Co., Ltd - - 20.8% Qingdao Runhao Stevioside High-tech Co., Ltd - - 18.0% Juiquan Shengwang Agricultural Cooperatives - 23.4% Zhucheng Haotian Pharmaceutical Co., Ltd - 21.7% - - Total - 45.1% 41.1% 38.8% (iii) Credit Risk Financial instruments which potentially subject us to concentrations of credit risk consist principally of cash and cash equvalents and trade accounts receivable. We place our cash and cash equivalents with high credit quality financial institutions in the United States and the PRC. At April 30, 2016, we had $900,071 of cash 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 April 30, 2016. 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 17 - Subsequent Events
Note 17 - Subsequent Events | 12 Months Ended |
Apr. 30, 2016 | |
Notes | |
Note 17 - Subsequent Events | NOTE 17 - SUBSEQUENT EVENTS On May 5, 2016, Qufu Natural Green entered into an agreement with Shandong Jinglucheng Real Estate Development Co., Ltd., formerly known as Qufu Jinxuan Real Estate Development Co., Ltd., to sell the remaining ten units of the thirty apartment units in China to Mr. Linghe Zhu, an unaffiliated third party buyer, for a total purchase price of RMB5,024,000 (approximately $776,507). As per the Purchase Agreement, the buyer shall directly pay RMB3,024,000 (approximately $467,388) to Shandong Jinglucheng Real Estate Development Co., Ltd. for the balance that Qufu Natural Green owed to Shandong Jinglucheng Real Estate Development Co., Ltd., and pay RMB2,000,000 (approximately $309,119) to Qufu Natural Green before May 31, 2016. The Company received the payment of RMB2,000,000 on May 24, 2016. See Note 2 and Note 15. |
Note 1 - Organization, Nature23
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Use of Estimates (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Use of Estimates | USE OF ESTIMATES The preparation of 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 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 1 - Organization, Nature24
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 April 30, 2016, we held $900,071, of our cash and cash equivalents with commercial banking institutions in the PRC, and $0 with banks in the United States. In the PRC, there is no equivalent federal deposit insurance as in the United States, so the amounts held in banks in the PRC are not insured. We have not experienced any losses in such bank accounts through April 30, 2016. |
Note 1 - Organization, Nature25
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Accounts Receivable (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 April 30, 2016 and 2015, the allowance for doubtful accounts was $1,202,610 and $1,207,075, respectively. During the year ended April 30, 2016, the Company has no recovered of old accounts receivable, which had been reserved for in prior years. |
Note 1 - Organization, Nature26
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Inventories (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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. On April 30, 2016 and 2015, the Company recorded a reserve for obsolete or slow-moving inventories of $107,658 and $608,186, respectively. |
Note 1 - Organization, Nature27
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Property and Equipment (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 twenty 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 Accounting Standards Codification ("ASC"), 360-10-35-17 of the Financial Accounting Standards Board (FASB), we examine the possibility of decreases in the value of property and equipment 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 1 - Organization, Nature28
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Long-lived Assets (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 loss on disposition of property and equipment of $1,622,762 and $1,651,881 as of April 30, 2016 and 2015, respectively. |
Note 1 - Organization, Nature29
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS We follow the ASC Section 825-10-50-10 for disclosures regarding the fair value of financial instruments and have 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, loans receivable, prepayments and other current assets, accounts payable and accrued expenses, and taxes payable, approximate their fair values because of the short maturity of these instruments. |
Note 1 - Organization, Nature30
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Taxes Payable (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 April 30, 2016 and April 30, 2015 amounted to $254,759 and $43,046, respectively, consisted primarily of VAT taxes. |
Note 1 - Organization, Nature31
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Revenue Recognition (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 1 - Organization, Nature32
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Income Taxes (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 April 30, 2016, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future. |
Note 1 - Organization, Nature33
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Basic and Diluted Loss Per Share | BASIC AND DILUTED LOSS PER SHARE Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted 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 us, subject to anti-dilution limitations. The following table presents a reconciliation of basic and diluted net income per ordinary share: For Fiscal Years Ended April 30, 2016 2015 Numerator: Net loss $ (4,796,866) $ (4,522,139) Numerator for basic EPS, loss applicable to common stockholders $ (4,796,866) $ (4,522,139) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Effect of dilutive securities: Warrants 0 0 Denominator for diluted earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.03) $ (0.03) |
Note 1 - Organization, Nature34
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Foreign Currency Translation (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Foreign Currency Translation | 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 April 30, 2016 RMB 6.47 to $1.00 As of April 30, 2015 RMB 6.09 to $1.00 Year ended April 30, 2016 RMB 6.35 to $1.00 Year ended April 30, 2015 RMB 6.14 to $1.00 |
Note 1 - Organization, Nature35
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Comprehensive Loss (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 fiscal year 2016 and 2015 included net loss and unrealized gains (losses) from foreign currency translation adjustments. |
Note 1 - Organization, Nature36
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Stock-based Compensation (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
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 1 - Organization, Nature37
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Research and Development (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Research and Development | RESEARCH AND DEVELOPMENT Research and development costs are expensed as incurred in the accompanying consolidated statements of operations and comprehensive loss. Research and development costs are incurred on a project specific basis. Research and development costs were $836,168 and $253,966 for fiscal years 2016 and 2015, respectively. |
Note 1 - Organization, Nature38
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Shipping Costs (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Shipping Costs | SHIPPING COSTS Shipping costs are included in selling expenses and totaled $260,630 and $294,868 for fiscal years 2016 and 2015, respectively. |
Note 1 - Organization, Nature39
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies) | 12 Months Ended |
Apr. 30, 2016 | |
Policies | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the FASB issued ASU 2016-08, " Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)" Revenue from Contracts with Customers (Topic 606) In March 2016, the FASB issued ASU 2016-09, " Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In April 2016, the FASB issued ASU 2016-10, " Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016, the FASB issued ASU 2016-12, " Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients 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 1 - Organization, Nature40
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Earnings Per Share, Basic and Diluted | For Fiscal Years Ended April 30, 2016 2015 Numerator: Net loss $ (4,796,866) $ (4,522,139) Numerator for basic EPS, loss applicable to common stockholders $ (4,796,866) $ (4,522,139) Denominator: Denominator for basic earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Effect of dilutive securities: Warrants 0 0 Denominator for diluted earnings per share - weighted average number of common shares outstanding 182,066,546 173,882,803 Basic and diluted loss per common share: Loss per share - basic and diluted $ (0.03) $ (0.03) |
Note 3 - Inventories_ Schedule
Note 3 - Inventories: Schedule of Inventory, Current (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Inventory, Current | April 30, 2016 April 30, 2015 Raw materials $ 2,287,572 $ 2,582,593 Work in process 1,221,115 344,742 Finished goods 1,125,551 2,969,260 Inventories, gross 4,634,238 5,896,595 Less: reserve for obsolete inventory (107,658) (608,186) Inventories, net $ 4,526,580 $ 5,288,409 |
Note 5 - Intangible Assets_ Sch
Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Finite-Lived Intangible Assets | (Estimated Life) April 30, 2016 April 30, 2015 OnlySweet 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 (1,192,309) (867,134) Intangible assets, net $ 433,565 $ 758,740 |
Note 6- Land Use Right_ Schedul
Note 6- Land Use Right: Schedule of Other Assets (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Other Assets | (Estimated Life) April 30, 2016 April 30, 2015 Land use right (45 Years) $ 2,455,519 $ 2,613,787 Less: accumulated amortization (422,826) (391,726) Land use right, net $ 2,032,693 $ 2,222,061 |
Note 7 - Related Party Transa44
Note 7 - Related Party Transactions: Schedule of Related Party Transactions (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Related Party Transactions | Shandong Shengwang Pharmaceutical Co., Ltd. Qufu Shengwang Import and Export Co., Ltd. Mr. Laiwang Zhang Total Balance due to related parties, April 30, 2014 $ 248,873 $ 106,308 $ 0 $ 355,181 Working capital advances from related parties 444,079 346,622 115,037 905,738 Repayments (197,206) (114,128) 0 (311,334) Effect of foreign currency exchange 1,070 7,820 0 8,890 Balance due to related parties, April 30, 2015 $ 496,816 $ 346,622 $ 115,037 $ 958,475 Working capital advances from related parties 2,450,644 2,450,644 75,705 8,559,771 Repayments (2,427,493) (2,427,493) (192,076) (8,184,835) Effect of foreign currency exchange (54,599) (2,898) 1,334 (56,163) Balance due to related parties, April 30, 2016 $ 910,373 $ 366,875 $ 0 $ 1,277,248 |
Note 10 - Accounts Payable an45
Note 10 - Accounts Payable and Accrued Expenses: Schedule of Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Accounts Payable and Accrued Liabilities | Account April 30, 2016 April 30, 2015 Accounts payable $ 4,869,026 $ 2,000,329 Advanced from customers 10,042 58,434 Accrued salary payable 105,131 192,444 Tax payable 254,615 156,336 Deferred revenue 71,604 0 Other payable* 1,550,408 1,404,595 Total accounts payable and accrued expenses $ 6,860,826 $ 3,812,138 |
Note 12 - Income Taxes_ Schedul
Note 12 - Income Taxes: Schedule of Income before Income Tax, Domestic and Foreign (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Income before Income Tax, Domestic and Foreign | Fiscal Years Ended April 30, 2016 2015 U.S. Operations $ (1,345,518) $ (430,936) Chinese Operations (3,446,085) (3,981,862) Total $ (4,791,603) $ (4,412,798) |
Note 12 - Income Taxes_ Sched47
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Components of Income Tax Expense (Benefit) | Fiscal Years Ended April 30, 2016 2015 Income tax benefit at federal statutory rate $ (1,629,145) $ (1,500,351) State income taxes, net of federal benefit (191,664) (176,512) Permanent differences - 36,608 U.S. tax rate in excess of foreign tax rate - (56,858) Valuation allowances 1,826,072 1,806,454 Tax provision $ 5,263 $ 109,341 |
Note 14 - Segment Information_
Note 14 - Segment Information: Schedule of Segment Reporting Information, by Segment (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Segment Reporting Information, by Segment | Fiscal Years Ended April 30, 2016 2015 Revenues: Chinese medicine - third party $ 2,405,944 $ 2,333,789 Chinese medicine - related party 0 0 Total Chinese medicine 2,405,944 2,333,789 Stevioside - third party 6,910,791 9,096,329 Stevioside - related party 8,698,333 6,081,939 Total Stevioside 15,609,124 15,178,268 Total segment and consolidated revenues $ 18,015,068 $ 17,512,057 Interest expense: Chinese medicine $ 0 $ 0 Stevioside (283,028) (368,775) Corporate and other 0 0 Total segment and consolidated interest expense $ (283,028) $ (368,775) Depreciation and amortization: Chinese medicine $ 373,370 $ 531,343 Stevioside 676,897 1,558,391 Corporate and other 325,175 325,175 Total segment and consolidated depreciation and amortization $ 1,375,442 $ 2,414,909 Loss before income taxes: Chinese medicine $ 432,377 $ 393,308 Stevioside 3,338,883 3,913,729 Corporate and other 1,020,343 105,761 Total consolidated loss before income taxes $ 4,791,603 $ 4,412,798 |
Note 16 - Concentrations and 49
Note 16 - Concentrations and Credit Risk: Schedule of Revenue by Major Customers by Reporting Segments (Tables) | 12 Months Ended |
Apr. 30, 2016 | |
Tables/Schedules | |
Schedule of Revenue by Major Customers by Reporting Segments | Net Sales For Fiscal Years, 2016 2015 Chinese Medicine Stevioside Chinese Medicine Stevioside Qufu Shengwang Import and Export Co., Ltd (1) - 48.3% - 40.1% China Chemical (Qingdao) Industries, Co., Ltd - - - 12.7% Beijing Haomiao Huifeng Pharmaceutical Co., Ltd - - 10.2% - Total - 48.3% 10.2% 52.8% |
Note 1 - Organization, Nature50
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) - $ / shares | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Weighted Average Number of Shares Issued, Basic | 182,066,546 | 173,882,803 |
Weighted Average Number of Shares Outstanding, Diluted | 182,066,546 | 173,882,803 |
Net Loss per share-basic and diluted | $ (0.03) | $ (0.03) |
Note 1 - Organization, Nature51
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Foreign Currency Translation (Details) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Foreign Currency Exchange Rate, Translation | 6.47 | 6.09 |
Note 1 - Organization, Nature52
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Research and Development (Details) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Research and Development Expense | $ 836,168 | $ 253,966 |
Note 1 - Organization, Nature53
Note 1 - Organization, Nature of Operations and Summary of Significant Accounting Policies: Shipping Costs (Details) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Shipping, Handling and Transportation Costs | $ 260,630 | $ 294,868 |
Note 2 -investment in Real Es54
Note 2 -investment in Real Estate Held For Resale (Details) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Investment in real estate held for resale | $ 311,467 | $ 331,306 |
Note 3 - Inventories_ Schedul55
Note 3 - Inventories: Schedule of Inventory, Current (Details) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Inventory, Raw Materials, Gross | $ 2,287,572 | $ 2,582,593 |
Inventory, Work in Process, Gross | 1,221,115 | 344,742 |
Inventory, Finished Goods, Gross | 1,125,551 | 2,969,260 |
Inventory, Gross | 4,634,238 | 5,896,595 |
Inventories, net | $ 4,526,580 | $ 5,288,409 |
Note 4 - Property and Equipme56
Note 4 - Property and Equipment: PROPERTY AND EQUIPMENT Table (Details) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Machinery and Equipment, Gross | $ 5,240,451 | $ 7,415,898 |
Buildings and Improvements, Gross | 8,667,889 | 10,172,060 |
Construction in Progress, Gross | 583,954 | 536,365 |
Property, Plant and Equipment, Gross | 15,024,714 | 19,139,614 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (5,870,637) | (7,054,044) |
Property and equipment, net | $ 9,154,077 | $ 12,085,570 |
Note 5 - Intangible Assets (Det
Note 5 - Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Amortization of intangible assets | $ 325,175 | $ 325,175 |
Note 5 - Intangible Assets_ S58
Note 5 - Intangible Assets: Schedule of Finite-Lived Intangible Assets (Details) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Finite-Lived Intangible Assets, Gross | $ 1,625,874 | $ 1,625,874 |
Finite-Lived Intangible Assets, Net | $ 433,565 | $ 758,740 |
Note 7 - Related Party Transa59
Note 7 - Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Interest Paid, Net | $ 158,631 | $ 289,693 |
Note 10 - Accounts Payable an60
Note 10 - Accounts Payable and Accrued Expenses: Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) | Apr. 30, 2016 | Apr. 30, 2015 |
Details | ||
Accounts Payable | $ 4,869,026 | $ 2,000,329 |
Customer Advances, Current | 10,042 | 58,434 |
Taxes Payable, Current | 254,615 | 156,336 |
Deferred Revenue | 71,604 | 0 |
Accounts Payable, Other, Current | 1,550,408 | 1,404,595 |
Accounts Payable and Accrued Liabilities, Current | $ 6,860,826 | $ 3,812,138 |
Note 12 - Income Taxes_ Sched61
Note 12 - Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Apr. 30, 2016 | Apr. 30, 2015 | |
Details | ||
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount | $ (1,629,145) | $ (1,500,351) |
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | (191,664) | (176,512) |
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount | $ 1,826,072 | $ 1,806,454 |
Note 13 - Stockholders' Equity
Note 13 - Stockholders' Equity (Details) - shares | Apr. 30, 2016 | Apr. 27, 2016 | Jan. 14, 2016 | Dec. 01, 2015 | Aug. 11, 2015 | May 06, 2015 | Apr. 30, 2015 |
Details | |||||||
Shares, Outstanding | 199,632,803 | 173,882,803 | |||||
Shares, Issued | 1,000,000 | 250,000 | 23,000,000 | 500,000 | 1,000,000 |