Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
1. ORGANIZATION, BASIS OF PRESENTATION, AND PRINCIPAL ACTIVITIES
(a)
Organization history
China Senior Living Industry International Holding Corporation (the "Company"), formerly known as China Forestry, Inc., was incorporated under the laws of the State of Nevada on January 13, 1986 under the name of Patriot Investment Corporation. The Company engaged in the business of plantation and sale of garden plants.
On July 15, 2010, the Company entered into a Share Exchange with Financial International (Hong Kong) Holdings Co. Limited ("FIHK").
From April 1, 2010 to May 20, 2011, FIHK had a series of contractual arrangements with Hanzhong Hengtai Bio-Tech Limited ("Hengtai"), a company organized and existing under the laws of the People's Republic of China that is engaged in the plantation and sale of garden plants used for landscaping, including Chinese Yew, Aesculus, Dove Tree and Dendrobium.
On May 20, 2011, FIHK exercised its rights under the Exclusive Option Agreement to direct Xi'an Qi Ying Senior Living, Inc. (formerly known as Xi'an Qi Ying Bio-Tech Limited), a company organized and existing under the laws of the People's Republic of China ("Qi Ying"), the indirect wholly owned subsidiary of FIHK, to acquire all of the equity capital of Hengtai. The Exclusive Option Agreement was exercised in a manner that the shareholders of Hengtai transferred all of their equity capital in Hengtai to Qi Ying. At or about the same time, Spone Limited, a company organized and existing under the laws of the Hong Kong SAR of the People's Republic of China ("Spone"), acquired all of the capital stock of Qi Ying, so that it became a direct wholly owned subsidiary of Spone. FIHK then acquired all of the capital stock of Spone, so that it became a direct wholly owned subsidiary of FIHK. As a result, Hengtai became an indirect wholly owned subsidiary of FIHK and also accordingly became the indirect wholly owned subsidiary of us.
On June 15, 2012, the Company effected a 1-for-10 reverse stock split of the Company's issued and outstanding shares of common stock. The par value and number of authorized shares of the common stock remained unchanged. All references to number of shares and per share amounts included in these consolidated financial statements and the accompanying notes have been adjusted to reflect the reverse stock split retroactively.
On September 8, 2015, the Company changed its name from China Forestry, Inc. to China Senor Living Industry International Holding Corporation.
On September 29, 2015, Qi Ying entered into a set of VIE Agreements with Shaanxi Yifuge Investments and Assets Co, Ltd ("YFG") and YFG became the Company's affiliated operating company in China. As consideration for the entry of the VIE agreement, the Company will issue 33,600,000 shares of common stock to Jincao Wu, a director of the Company. As a result, YFG became a variable interest entity ("VIE") and was included in the consolidated group.
The transaction between Qi Ying and YFG has been accounted for as a recapitalization of YFG where the Company (the legal acquirer) is considered the accounting acquiree and YFG (the legal acquiree) is considered the accounting acquirer. As a result of this transaction, the Company is deemed to be a continuation of the business of YFG. Accordingly, the financial data included in the accompanying consolidated financial statements for all periods prior to September 29, 2015 is that of the accounting acquirer, YFG. The historical stockholders' equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the transaction occurred as of the beginning of the first period presented.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
On September 29, 2015, the Board of Director also approved the transfer of Qi Ying's equity ownership in Hengtai to Zhenheng Shao, Zhenzhong Shao, and Yongli Yang.
As a result, we ceased the business of plantation and sale of garden plants and became engaged in senior living and senior care business through YFG.
On December 31, 2015, YFG changed its name from Shaanxi Yifuge Investments and Assets Co., Ltd to Shaanxi Jinjiangshan Senior Living Management Co. Ltd ("JJS").
(b)
Basis of presentation
The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP").
This basis of accounting differs in certain material respects from that used for the preparation of the books of account of the Company's principal subsidiaries, which are prepared in accordance with the accounting principles and the relevant financial regulations applicable to enterprises with limited liabilities established in the People's Republic of China ("PRC") or in the accounting standards used in the places of their domicile. The accompanying consolidated financial statements reflect necessary adjustments not recorded in the books of account of the Company's subsidiaries to present them in conformity with US GAAP.
(c)
Principal activities
The Company
is engaged in rendering management services to
senior homes
by providing healthcare, medical staff, meal preparation, and general care for the elderly
in Xianyang City, Shaanxi Province, People's Republic of China.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Method of Accounting
The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.
(b)
Principles of consolidation
The
accompanying
consolidated financial statements which include the Company
,
its
wholly owned
subsidiaries
, FIHK, Spone, Qi Ying, and its variable interest entity, JJS,
are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated
in consolidation
.
In accordance with FASB ASC 810, Consolidation of Variable Interest Entities, variable interest entities, or VIEs, are generally entity that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. In connection with the adoption of this ASC 810, the Company concludes that JJS is a VIE and Qi Ying is the primary beneficiary. The financial statements of JJS are then consolidated with Qi Ying's financial statements.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
As of
March 31
, 201
6
, the detailed identities of the consolidating subsidiaries are as follows:
|
|
Place of
|
|
|
Attributable
|
|
|
Registered
|
|
Name of Company
|
|
incorporation
|
|
|
equity interest %
|
|
|
capital
|
|
|
|
|
|
|
|
|
|
|
|
Financial International (Hong Kong)
|
|
Hong Kong
|
|
|
100%
|
|
|
HKD
|
|
Holdings Company Limited
|
|
|
|
|
|
|
|
10,000,000
|
|
|
|
|
|
|
|
|
|
|
|
Spone Limited
|
|
Hong Kong
|
|
|
100%
|
|
|
HKD 1
|
|
|
|
|
|
|
|
|
|
|
|
Xi'an Qi Ying Senior Living, Inc
|
|
PRC
|
|
|
100%
|
|
|
RMB 50,000
|
|
("Qi Ying")
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shaanxi
Jinjiangshan Senior Living
Management Co. Ltd
|
|
PRC
|
|
|
Variable Interest Entity,
with Qi Ying as the
|
|
|
RMB
3,000,000
|
|
|
|
|
|
|
primary beneficiary
|
|
|
|
|
(c)
Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates.
(d)
Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
(e)
Revenue recognition
The Company records revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price to the customer is fixed or determinable, and collectability is reasonably assured.
The Company's revenue consists of management services rendered to senior homes.
Service revenue is recognized when the service is performed.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
(f)
Cost of revenue
The cost for providing management services is comprised of direct labor wages and purchasing cost of food for preparing meals for the seniors.
(g)
General & administrative expenses
General and administrative expenses include general overhead such as the office rental and utilities.
(h)
Income taxes
The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.
The Company has implemented ASC Topic 740, "Accounting for Income Taxes." Income tax liabilities computed according to the People's Republic of China (PRC) tax laws are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of fixed assets and intangible assets for financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is created to evaluate deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize that tax benefit, or that future realization is uncertain.
Effective January 1, 2008, PRC government implemented a new 25% tax rate across the board for all enterprises regardless of whether domestic or foreign enterprise without any tax holiday which is defined as "two-year exemption followed by three-year half exemption" hitherto enjoyed by tax payers. As a result of the new tax law of a standard 25% tax rate, tax holidays terminated as of December 31, 2007. However, PRC government has established a set of transition rules to allow enterprises that were already participating in tax holidays before January 1, 2008, to continue enjoying the tax holidays until they had been fully utilized.
In order to encourage enterprises to operate senior homes, PRC tax law provides a tax holiday by waiving the income tax for entities operating in this industry.
According to the Minfa (2015) No. 33 "Advice to Encourage Private Capital to Participate in the Development of Pension Services", jointly issued by ten ministries which include the Ministry of Civil Affairs and the Ministry of Finance
of the People's Republic of China, the Company is entitled to benefit from the sales tax exemption and business tax exemption policy.
As such, the Company is not subject to income tax as of
March 31
, 201
6
.
(i)
Earnings per share
Basic
earnings per share is computed on the basis of the weighted average number of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.
Dilution is computed by applying the treasury stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
(j)
Statutory reserves
Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. The Company transferred $
-
and $1
5,208
from retained earnings to statutory reserves for the
three months period
ended
March, 31
2016
and the year ended December 31, 201
5
, respectively. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise's PRC registered capital.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
(k)
Foreign currency translation
The accompanying financial statements are presented in United States dollars. The functional currenc
ies
of the Company
are
the Renminbi (RMB)
and the Hong Kong Dollars (HKD)
. The financial statements are translated into United States dollars from
the functional currencies
at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
|
|
3
/3
1
/201
6
|
|
|
12/31/201
5
|
|
|
3
/3
1
/201
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
end
/Year end
RMB:
|
|
|
6.4479
|
|
|
|
6.4907
|
|
|
|
6.1091
|
|
US$ exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period/yearly
RMB:
|
|
|
6.5395
|
|
|
|
6.2175
|
|
|
|
6.1358
|
|
US$ exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
end
/Year end
HKD
:
|
|
|
7.7545
|
|
|
|
7.7504
|
|
|
|
7.7538
|
|
US$ exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average period/yearly
HKD
:
|
|
|
7.7734
|
|
|
|
7.7521
|
|
|
|
7.7553
|
|
US$ exchange rate
|
|
|
|
|
|
|
|
|
|
|
|
|
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation.
(l)
Financial Instruments
The Company's financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:
|
·
|
Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.
|
|
·
|
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
|
·
|
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
As of
March 31
, 201
6
and December 31, 201
5
, the Company did not identify any assets and liabilities whose carrying amounts were required to be adjusted in order to present them at fair value.
At
March
31,
2016:
|
|
Quoted in
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
Active
Markets
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
for Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
20,046
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
20,046
|
|
Total financial assets
|
|
$
|
20,046
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
20,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At
December 31
,
2015:
|
|
Quoted in
|
|
|
Significant
|
|
|
|
|
|
|
|
|
|
|
|
Active
Markets
|
|
|
Other
|
|
|
Significant
|
|
|
|
|
|
|
|
for Identical
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
|
Assets
|
|
|
Inputs
|
|
|
Inputs
|
|
|
|
|
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
42,166
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
42,166
|
|
Total financial assets
|
|
$
|
42,166
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
42,166
|
|
(m)
Commitments and contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
(n)
Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company's current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.
The Company uses FASB ASC Topic 220, "Reporting Comprehensive Income". Comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Comprehensive income for the
periods
ended
March 31
, 201
6
and
201
5
included net income and foreign currency translation adjustments.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
(o)
Subsequent Events
The Company evaluated for subsequent events through the issuance date of the Company's financial statements.
(p)
Unaudited Interim Financial Information
These unaudited interim condensed
consolidated
financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the
year
ending December 31, 201
6
.
(q)
Recent accounting pronouncements
On January 5, 2016, the FASB issued ASU 2016-01 "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities", which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017.
On February 25, 2016, the FASB issued ASU 2016-02 "Leases (Topic 842)", its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASB's new revenue recognition standard (e.g., those related to evaluating when profit can be recognized).
Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to:
|
·
|
Applying judgment and estimating.
|
|
·
|
Managing the complexities of data collection, storage, and maintenance.
|
|
·
|
Enhancing information technology systems to ensure their ability to perform the calculations necessary for compliance with reporting requirements.
|
|
·
|
Refining internal controls and other business processes related to leases.
|
|
·
|
Determining whether debt covenants are likely to be affected and, if so, working with lenders to avoid violations.
|
|
·
|
Addressing any income tax implications.
|
The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein.
On March 15, 2016, the FASB issued ASU 2016-07 "Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting", which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis of the investor's previously held interest and the equity method would be applied subsequently from the date on which the investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method.
The guidance in the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU's effective date. Additional transition disclosures are not required upon adoption.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
On March 17, 2016, the FASB issued ASU 2016-08 "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)", which amends the principal-versus-agent implementation guidance and illustrations in the Board's new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standard's principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard's control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is "a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer." Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others.
The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard.
On March 30, 2016, the FASB issued ASU 2016-09 "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting", which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows.
The ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods.
The Company is currently evaluating the impact that the pronouncements will have on the Company's consolidated financial statements.
As of March 31, 2016, there are no other recently issued accounting standards not yet adopted that would or could have a material effect on the Company's financial statements.
3. (LOSS)/EARNINGS PER SHARE
|
|
Three months ended
|
|
|
|
3/31/2016
|
|
|
3
/31/201
5
|
|
Basic (loss)/earnings Per Share:
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
Net (loss
)/
income used in computing basic
(loss)/earnings per share
|
|
$
|
(1,085
|
)
|
|
$
|
26,466
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding
|
|
|
56,000,007
|
|
|
|
53,280,007
|
|
Basic
(loss)/earnings
per share:
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share:
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
Net income used in computing diluted
(loss)/earnings
per share
|
|
$
|
(1,085
|
)
|
|
$
|
26,466
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding
|
|
|
56,000,007
|
|
|
|
56,000,007
|
|
Diluted
(loss)/earnings
per share
|
|
$
|
(0.00
|
)
|
|
$
|
0.00
|
|
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
4
.
RELATED PARTY RECEIVABLES
Related party receivables consisted of the following as of
March
3
1
, 201
6
and December 31, 201
5
:
|
|
3
/3
1
/201
6
|
|
|
12/31/201
5
|
|
|
|
|
|
|
|
|
|
|
Wu, Jing Meng
|
|
$
|
843,791
|
|
|
$
|
843,025
|
|
Related party receivable represented advances made by the Company to Mr. Wu, the deputy general manager of the Company. The funds will be used by Mr. Wu to pay for construction of a second senior home in Xianyang City, Shaanxi Province. The Company will provide management services to this new senior home after the construction is completed. The receivable had no impact on earnings. The balance of related party receivables is unsecured, interest-free and has no fixed terms of repayment. It is neither past due nor impaired. Management believes the amounts are recoverable.
5
. RELATED PARTY
ADVANCES
Related party
advances
consisted of the following as of
March 31
, 201
6
and December 31, 201
5
:
|
|
3/
3
1
/201
6
|
|
|
12/31/201
5
|
|
|
|
|
|
|
|
|
|
|
Xianyang Yifuge
Elderly Apartment Co., Ltd. ("Xianyang")
|
|
$
|
2,847
|
|
|
$
|
1,322
|
|
Related party advances represented advances received in connection with services that have not yet been rendered to Xianyang but are expected to be in the future
.
Xianyang is controlled by the management of the Company.
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
6
.
RELATED PARTY PAYABLE
Related party
payable
consisted of the following as of
March
3
1
, 201
6
and December 31, 201
5
:
|
|
3/
3
1
/201
6
|
|
|
12/31/201
5
|
|
|
|
|
|
|
|
|
|
|
Liu, Shengli
|
|
$
|
210,178
|
|
|
$
|
210,178
|
|
Xianyang Yifuge Elderly
Apartment Co., Ltd.
|
|
|
8,586
|
|
|
|
-
|
|
|
|
|
218,764
|
|
|
|
210,178
|
|
Mr. Liu, Shengli is the
former Chairman,
President, and Director of the company.
Mr. Liu
had
paid
some necessary
overseas consulting and advising fees, lawyer fees, and accounting fees on behalf of the company. The loan is unsecured and have no fixed terms of repayment, and are therefore deem
ed
payable on demand.
Xianyang is controlled by the management of the Company
. Xianyang from time to time paid some of the professional fees on behalf of the company.
The
loan
is unsecured and have no fixed terms of repayment, and are therefore deem
ed
payable on demand.
7
.
LEASE COMMITMENTS
On January 4, 2013, the Company entered into an operating lease agreement with a related party leasing for office space located in Xianyang City, Shaanxi Province. The lease expires on December 31, 2045. As of March 31, 2016 and December 31, 2015, the Company had commitments for future minimum lease payments under a non-cancelable operating lease as follows:
Period
|
|
3
/3
1
/201
6
|
|
|
12
/31/201
5
|
|
|
|
|
|
|
|
|
|
|
Year 1
|
|
$
|
2,233
|
|
|
$
|
2,958
|
|
Year 2
|
|
|
2,978
|
|
|
|
2,958
|
|
Year 3
|
|
|
2,978
|
|
|
|
2,958
|
|
Year 4
|
|
|
2,978
|
|
|
|
2,958
|
|
Year 5
|
|
|
2,978
|
|
|
|
2,958
|
|
Year 6 and after
|
|
|
74,443
|
|
|
|
73,952
|
|
Total
|
|
$
|
88,588
|
|
|
$
|
88,742
|
|
China Senior Living Industry International Holding Corporation
Notes to Condensed
Consolidated
Financial Statements
As of and for the three-month period ended March
3
1
, 201
6
(Stated in U.S. Dollars)
8. RELATED PARTY TRANSACTION
As of March 31, 2016 and 2015, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company:
|
|
3/
3
1
/201
6
|
|
|
3
/31/201
5
|
|
|
|
|
|
|
|
|
|
|
Xianyuang Yifuge Elderly Apartment Co., Ltd.
|
|
$
|
115,728
|
|
|
$
|
130,389
|
|
9. CONCENTRATIONS AND RISKS
A.
Concentration
As of
March
3
1
, 201
6
, the Company had one client which represented 100% of the revenue. The client is a related party. The related party is controlled by the management of the Company.
B.
Economic and Political Risks
The Company's operations are mainly conducted in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC.
The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
10.
SEGMENT INFORMATION
For
the three-
month
periods
ended
March
3
1
, 201
6
and 201
5
, all revenues of the Company represented the provision of management services to senior homes. No financial information by business segment is presented. Furthermore, as all revenues are derived from the PRC, no geographic information by geographical segment is presented.