CHINA HEALTH INDUSTRIES HOLDINGS, INC. FORWARD LOOKING STATEMENTS
We make certain forward-looking statements in this report. Statements concerning
our future operations, prospects, strategies, financial condition, future
economic performance (including growth and earnings), demand for our services,
and other statements of our plans, beliefs, or expectations, including the
statements contained under this caption as well as under captions elsewhere in
this document, are forward-looking statements. In some cases, these statements
are identifiable through the use of words such as "anticipate", "believe",
"estimate", "expect", "intend", "plan", "project", "target", "can", "could",
"may", "should", "will", "would", and similar expressions. The forward-looking
statements we make are not guarantees of future performance and are subject to
various assumptions, risks, and other factors that could cause actual results to
differ materially from those suggested by these forward-looking statements.
These risks and uncertainties, together with the other risks described from time
to time in reports and documents that we file with the
Important factors that could cause actual results to differ from those in the forward-looking statements include, without limitation, the following:
? the effect of political conditions, economic conditions, market conditions, and
geopolitical events;
? legislative and regulatory changes that affect our business;
? the availability of funds and working capital; and
? the actions and initiatives of current and potential competitors.
Except as required by applicable laws, regulations, or rules, we do not undertake any responsibility to publicly release any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by any forward-looking statements.
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this report.
Except as otherwise indicated by the context, references in this report to "we",
"us", "our", "the Registrant", "our Company", or "the Company" are to
Business Overview
Our principal business operations are conducted through our wholly-owned subsidiaries, Humankind and HLJ Huimeijia.
The Company owns a GMP-certified plant and production facilities and has the
capacity to produce 21 different CFDA-approved medicines, 14 CFDA-approved
health supplement products and 8 hemp derivative products in soft capsule, hard
capsule, tablet, granule, oral liquid forms. These products address the needs of
some key sectors in
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HLJ Huimeijia was founded on
We have developed the following products that are derived from hemp and obtained
business license to manufacture and sell these products. We have begun to sell
these products since
Affected by COVID-19, the company ceased production in
From
Serial No.Name 1 Hemp Oil 2 Hemp Protein Powder 3 Hemp Polypeptide 4 Collagen Peptide 5 Natural Hemp Essence Repair Lotion 6 Natural Hemp Revitalizing Essence 7 Natural Hemp Anit-aging BrighteningEye Cream 8 Natural Hemp Frozen Age Nourishing Cream
We sell our products directly to end customers through our own sales personnel
as well as our sales agents, operating primarily in
Due to the outbreak of COVID-19 and the lock-down policy in
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Results of Operations
Three months ended
The following table summarizes the top lines of the results of our operations
for the three months ended
March 31, March 31,
2020 2019 Variance %
Revenues $ 2,423,720 $ 2,202,739 $ 220,981 10.03 %
Humankind 2,421,935 $ 2,192,680 $ 229,255 10.46 %
HLJ Huimeijia 1,785 10,059 (8,274 ) (82.25 )%
Cost of Goods Sold $ 566,692 $ 506,623 $ 60,069 11.86 %
Humankind 565,409 $ 492,569 $ 72,840 14.79 %
HLJ Huimeijia 1,283 14,054 (12,771 ) (90.87 )%
Gross Profit $ 1,857,028 $ 1,696,116 $ 160,912 9.49 %
Humankind 1,856,526 1,700,111 156,415 9.20 %
HLJ Huimeijia 502 (3,995 ) 4,497 112.57 %
Revenue
Total revenues increased by
Our total cost of sales increased by
Our gross margin increased by
Sales by Product Line
The following table summarizes a breakdown of our sales by major product line
for the three months ended
March 31, 2020 March 31, 2019
% of % of
Sales US$ Sales Sales US$ Sales
Hemp Derivative Products $ 2,084,249 85.99 % $ 1,401,639 63.63 %
Health Products 339,110 13.99 % 792,364 35.97 %
Medical Drugs 361 0.01 % 8,736 0.40 %
Total $ 2,423,720 100.00 % $ 2,202,739 100.00 %
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Operating Expenses
The following table summarizes our operating expenses for the three months ended
March 31, March 31,
2020 2019 Variance %
Operating Expenses
Selling, general and administrative $ 389,009 $ 449,177 $ (60,168 ) (13.40 )%
Depreciation and amortization 145,817 180,166 (34,349 ) (19.07 )%
Total Operating Expenses $ 534,826 $ 629,343 $ (94,517 ) (15.02 )%
Total operating expenses for the three months ended
Interest Income and Interest Expense
Interest income was
Interest expense was $nil for the three months ended
Income Taxes
Income taxes increased by
Net Income and Net Income Per Share
Net income was
Net income per share was
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Nine months ended
The following table summarizes the top lines of the results of our operations
for the nine months ended
March 31, March 31,
2020 2019 Variance %
Revenues $ 7,899,632 $ 7,058,721 $ 840,911 11.91 %
Humankind 7,862,018 $ 7,003,073 $ 858,945 12.27 %
HLJ Huimeijia 37,614 55,648 (18,034 ) (32.41 )%
Cost of Goods Sold $ 1,762,098 $ 1,668,440 $ 93,658 5.61 %
Humankind 1,721,279 $ 1,599,002 $ 122,277 7.65 %
HLJ Huimeijia 40,819 69,438 (28,619 ) (41.22 )%
Gross Profit $ 6,137,534 $ 5,390,281 $ 747,253 13.86 %
Humankind 6,140,739 5,404,071 736,668 13.63 %
HLJ Huimeijia (3,205 ) (13,790 ) 10,585 76.76 %
Revenue
Total revenues increased by
Our total cost of sales increased by
Our gross margin increased by
Sales by Product Line
The following table summarizes a breakdown of our sales by major product line
for the nine months ended
March 31, 2020 March 31, 2019
% of % of
Sales US$ Sales Sales US$ Sales
Hemp Derivative Products $ 6,295,569 79.69 % 4,768,616 67.56 %
Health Products 1,572,186 19.90 % 2,246,143 31.82 %
Medical Drugs 31,877 0.40 % 43,962 0.62 %
Total $ 7,899,632 100.00 % $ 7,058,721 100.00 %
Operating Expenses
The following table summarizes our operating expenses for the nine months ended
March 31, March 31,
2020 2019 Variance %
Operating Expenses
Selling, general and administrative $ 1,389,300 $ 1,469,472 $ (80,172 ) (5.46 )%
Depreciation and amortization 435,733 464,446 (28,713 ) (6.18 )%
Total Operating Expenses $ 1,825,033 $ 1,933,918 $ (108,885 ) (5.63 )%
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Total operating expenses for the nine months ended
Interest Income
Interest income was
Income Taxes
Income taxes increased by
Net Income and Net Income Per Share
Net income was
Net income per share was
Liquidity and Capital Resources
We believe our current working capital position, together with our expected future cash flows from operations and loans from our major shareholder will be adequate to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. However, this belief is based upon many assumptions and is subject to numerous risks, and there can be no assurance that we will not require additional funding in the future.
The following table summarizes our cash and cash equivalents positions, our
working capital, and our cash flow activities as of
March 31, June 30,
2020 2019
Cash and cash equivalents $ 36,593,609 $ 35,219,487
Working capital $ 32,539,427 $ 29,595,941
Inventories $ 840,597 $ 954,019
2020 2019
For the nine months ended March 31 :
Cash provided by (used in):
Operating activities $ 2,044,984 $ 3,206,439
Investing activities $ (152,362 ) $ (208,581 )
Financing activities $ - $ -
For the nine months ended
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For the nine months ended
Our working capital as of
Net cash provided by operating activities was
Net cash provided by operating activities was
Other than as described in this report, we have no present agreements or commitments with respect to any material acquisitions of businesses, products, product rights, technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of, and/or investments in, products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.
Related Party Debts
We had related party debts in the amount of
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that are currently material or reasonably likely to be material to our financial position or results of operations.
Critical Accounting Policies and Estimates
We prepare the unaudited condensed consolidated financial statements in accordance with US GAAP. These accounting principles require us to make judgments, estimates and assumptions on the reported amounts of assets and liabilities at the end of each fiscal period, and the reported amounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information, and assumptions that we believe to be reasonable.
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There have been no material changes during the nine months ended
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