BEIJING, June 30, 2021 /PRNewswire/ -- Puhui Wealth Investment Management Co., Ltd. (Nasdaq: PHCF) ("Puhui" or the "Company"), a third-party wealth management service provider with a focus on wealth management services for high net worth ("HNW") individuals and corporate clients, today announced its financial results for the six months ended December 31, 2020. The Company also filed these results on Form 6-K with the Securities and Exchange Commission, which can be viewed at www.sec.gov. All amounts in this press release are in USD unless otherwise noted.
Financial and Operating Highlights
Mr. Zhe Ji, the Chairman and CEO of the Company stated, "We managed to achieve growth in revenue during the six month period ended December 31, 2020, largely due to the considerable growth in China's wealth management industry. This was achieved despite the impact from the COVID-19 pandemic and uncertainty in the macroeconomic outlook. After reopening our offices in June 2020, Puhui has successfully navigated its business in attracting new and repeat clients and increasing purchases by existing clients that consist of high-net-worth individuals and small and medium enterprises in China. We are solely focused on incrementally growing our top line in a profitable manner as we continue to build on our solid relationships with our customer base."
Mr. Ji continued, "In 2019, Puhui acquired 100% of the shares of Granville Financial Services Company Limited ("Granville"), a registered Exchange Participant of The Stock Exchange of Hong Kong Ltd. This allowed our company to expand our operations outside of Mainland China into Hong Kong and to take advantage of their financial qualifications and licenses to broaden the Company's existing product portfolio. We are now seeing an increase in cash inflow as a result of the Granville acquisition. We are confident in the Company's ability to expand into overseas markets, which will allow our clients to take advantage of potential IPOs in the Hong Kong markets while de-risking our portfolio through geographical diversification."
Mr. Ji concluded, "We have begun to compile steady gains in our investment portfolio, largely due to considerable growth in our medical and healthcare investments. Since its founding, Puhui has invested in 16 medical projects on behalf of its clients, with two IPOs. We are seeing a broader number of companies monetize operations through IPOs on China's stock exchange, the Hong Kong Stock Exchange, and European and U.S. capital markets. Our goal is to position the Company appropriately to take advantage of this on behalf of our HNW clients with a new and varied array of financial products that leverage cross-border and alternative-asset investments."
Financial Review for the Six Months Ended December 31, 2020
Wealth Management
Asset Management
Revenues
Cost of Revenues
Operating Expenses
Net Loss Attributable to Puhui Wealth
Liquidity and Capital Resources
About Puhui Wealth Investment Management Co., Ltd.
Headquartered in Beijing, China and founded in 2013, Puhui is a third-party wealth management service provider focusing on marketing financial products (including private equity and other diversified products and services) to, and managing funds for, individuals and corporate clients in the PRC. On December 27, 2018, the Company's ordinary shares were listed and began trading listed on the Nasdaq Capital Market (ticker: PHCF).
Additional information about Puhui can be found at the Company's corporate website: www.puhuiwealth.com.
Additional Disclosure Concerning COVID-19
The impacts of COVID-19 on Puhui's business, financial condition, and results of operations include, but are not limited to, the following:
Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the financial impact related to the outbreak of and response to the COVID-19 outbreak cannot be reasonably estimated at this time.
Forward Looking Statement
This news release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that indicate future events or trends or are not statements of historical matters. These statements are based on our management's current expectations and beliefs, as well as a number of assumptions concerning future events.
Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control and all of which could cause actual results to differ materially from the results discussed in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in our reports filed with the Securities and Exchange Commission, which are available, free of charge, on the SEC's website at www.sec.gov.
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS |
||||
For the Six Months Ended December 31, |
||||
2020 |
2019 |
|||
REVENUES |
||||
Revenues |
$ |
124,320 |
$ |
462,560 |
Revenues - related parties |
472,661 |
115,085 |
||
Total revenues |
596,981 |
577,645 |
||
OPERATING EXPENSES |
||||
Cost of revenues |
(157,233) |
(132,334) |
||
Selling expenses |
(361,632) |
(1,017,176) |
||
General and administrative expenses |
(2,349,118) |
(2,822,029) |
||
Total operating expenses |
(2,867,983) |
(3,971,539) |
||
LOSS FROM OPERATIONS |
(2,271,002) |
(3,393,894) |
||
OTHER INCOME (EXPENSES) |
||||
Interest income |
35,039 |
64,445 |
||
Other finance expenses |
(90,217) |
(103,706) |
||
Other income, net |
13,910 |
38,057 |
||
Total other expenses, net |
(41,268) |
(1,204) |
||
LOSS BEFORE INCOME TAXES |
(2,312,270) |
(3,395,098) |
||
(BENEFITS OF) PROVISION FOR INCOME TAXES |
||||
Current |
- |
- |
||
Deferred |
(123,002) |
32,035 |
||
Total income tax (benefits) provision |
(123,002) |
32,035 |
||
NET LOSS |
(2,189,268) |
(3,427,133) |
||
Less: net income (loss) attributable to noncontrolling interest |
258,589 |
(447,733) |
||
NET LOSS ATTRIBUTABLE TO PUHUI WEALTH |
$ |
(2,447,857) |
$ |
(2,979,400) |
NET LOSS |
$ |
(2,189,268) |
$ |
(3,427,133) |
OTHER COMPREHENSIVE INCOME |
||||
Foreign currency translation adjustment |
110,405 |
190,158 |
||
COMPREHENSIVE LOSS |
$ |
(2,078,863) |
$ |
(3,236,975) |
Less: comprehensive income (loss) attributable to noncontrolling |
261,272 |
(453,786) |
||
COMPREHENSIVE LOSS ATTRIBUTABLE TO PUHUI WEALTH |
$ |
(2,340,135) |
$ |
(2,783,189) |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES |
||||
Basic and diluted |
11,507,558 |
11,507,558 |
||
LOSS PER SHARE |
||||
Basic and diluted |
$ |
(0.21) |
$ |
(0.26) |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
|||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||||||||||
December 31, |
June 30, |
||||||||||||||
2020 |
2020 |
||||||||||||||
ASSETS |
|||||||||||||||
CURRENT ASSETS |
|||||||||||||||
Cash |
$ |
961,493 |
$ |
744,436 |
|||||||||||
Short-term investments |
414,755 |
515,729 |
|||||||||||||
Accounts receivables |
111,036 |
454,411 |
|||||||||||||
Accounts receivables - related parties |
895,799 |
1,138,498 |
|||||||||||||
Other receivables |
105,943 |
100,302 |
|||||||||||||
Other receivables - related party |
1,432,205 |
1,284,676 |
|||||||||||||
Prepaid expenses |
1,040,370 |
1,122,164 |
|||||||||||||
Total current assets |
4,961,601 |
5,360,216 |
|||||||||||||
PROPERTY AND EQUIPMENT, NET |
343,569 |
436,325 |
|||||||||||||
OTHER ASSETS |
|||||||||||||||
Long-term security deposits |
340,970 |
422,783 |
|||||||||||||
Right-of-use assets |
792,553 |
1,285,145 |
|||||||||||||
Long-term prepaid expenses |
1,198,950 |
1,599,647 |
|||||||||||||
Deferred tax assets, net |
295,445 |
159,720 |
|||||||||||||
Intangible asset, net |
869,738 |
918,787 |
|||||||||||||
Goodwill |
1,864,053 |
1,864,053 |
|||||||||||||
Total other assets |
5,361,709 |
6,250,135 |
|||||||||||||
Total assets |
$ |
10,666,879 |
$ |
12,046,676 |
|||||||||||
LIABILITIES AND EQUITY |
|||||||||||||||
CURRENT LIABILITIES |
|||||||||||||||
Acquisition payable |
$ |
368,439 |
$ |
368,439 |
|||||||||||
Deferred revenue |
1,106,300 |
1,061,162 |
|||||||||||||
Other payables and accrued liabilities |
1,043,308 |
630,457 |
|||||||||||||
Other payables - related party |
483 |
6,334 |
|||||||||||||
Operating lease liabilities - current |
547,589 |
841,041 |
|||||||||||||
Financing lease liabilities - current |
50,256 |
44,791 |
|||||||||||||
Taxes payable |
71,066 |
86,656 |
|||||||||||||
Current portion of long-term debt |
1,254,953 |
25,835 |
|||||||||||||
Total current liabilities |
4,442,394 |
3,064,715 |
|||||||||||||
NON-CURRENT LIABILITIES |
|||||||||||||||
Operating lease liabilities |
273,240 |
486,970 |
|||||||||||||
Financing lease liabilities |
49,126 |
68,826 |
|||||||||||||
Loan from related parties |
686,375 |
- |
|||||||||||||
Long-term debt |
2,488 |
1,145,825 |
|||||||||||||
Total non-current liabilities |
1,011,229 |
1,701,621 |
|||||||||||||
Total liabilities |
5,453,623 |
4,766,336 |
|||||||||||||
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) |
||||
December 31, |
June 30, |
|||
2020 |
2020 |
|||
COMMITMENTS AND CONTINGENCIES |
||||
EQUITY |
||||
Preferred shares, $0.001 par value, 1,000,000 shares authorized, 0 shares issued and |
- |
- |
||
Ordinary shares, $0.001 par value, 49,000,000 shares authorized, |
11,508 |
11,508 |
||
Additional paid-in capital |
21,911,045 |
21,911,045 |
||
Accumulated deficit |
(15,715,146) |
(13,267,289) |
||
Accumulated other comprehensive income (loss) |
24,710 |
(83,012) |
||
Total equity attributable to controlling shareholders |
6,232,117 |
8,572,252 |
||
Noncontrolling interest |
(1,018,861) |
(1,291,912) |
||
Total equity |
5,213,256 |
7,280,340 |
||
Total liabilities and equity |
$ |
10,666,879 |
$ |
12,046,676 |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
For the Six Months Ended December 31, |
||||
2020 |
2019 |
|||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
Net loss |
$ |
(2,189,268) |
$ |
(3,427,133) |
Adjustments to reconcile net loss to net cash |
||||
used in operating activities: |
||||
Depreciation and amortization |
172,173 |
95,187 |
||
Amortization of operating lease right-of-use assets |
579,786 |
358,820 |
||
Impairment loss on equity securities |
- |
14,371 |
||
Loss from disposal of subsidiaries |
21,397 |
- |
||
Deferred tax provision (benefits) |
(123,002) |
32,034 |
||
Change in operating assets and liabilities |
||||
Accounts receivables |
368,009 |
1,432,389 |
||
Accounts receivables - related parties |
327,037 |
- |
||
Other receivables |
113,037 |
51,572 |
||
Prepaid expenses |
106,661 |
(16,514) |
||
Long-term prepaid expenses |
409,702 |
387,055 |
||
Accounts payable |
- |
165,109 |
||
Deferred revenue |
(43,408) |
1,303,676 |
||
Other payables and accrued liabilities |
369,050 |
(31,319) |
||
Operating lease liabilities |
(597,352) |
(371,283) |
||
Taxes payable |
(22,116) |
(43,148) |
||
Net cash used in operating activities |
(508,294) |
(49,184) |
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||
Proceeds from sales of short-term investments |
139,507 |
7,600 |
||
Loans receivable to related parties |
(36,931) |
- |
||
Advances to related parties |
- |
349,996 |
||
Purchases of property and equipment |
- |
(262,570) |
||
Cash acquired from Granville, net of purchase price paid |
- |
125,365 |
||
Net cash provided by investing activities |
102,576 |
220,391 |
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
Loan from related parties |
664,387 |
- |
||
Financing lease liabilities payments |
(23,017) |
(3,515) |
||
Principal payments of long-term debt |
(13,300) |
(12,107) |
||
Net cash provided by (used in) financing activities |
628,070 |
(15,622) |
||
EFFECT OF EXCHANGE RATE ON CASH |
(5,295) |
50,800 |
||
INCREASE IN CASH |
217,057 |
206,385 |
||
CASH, beginning of period |
744,436 |
2,004,625 |
||
CASH, end of period |
$ |
961,493 |
$ |
2,211,010 |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) |
||||
For the Six Months Ended December 31, |
||||
2020 |
2019 |
|||
SUPPLEMENTAL CASH FLOW INFORMATION: |
||||
Cash paid for income tax |
$ |
- |
$ |
- |
Cash paid for interest |
$ |
- |
$ |
192,619 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING |
||||
ACTIVITIES |
||||
Initial recognition of right-of-use assets and lease liabilities |
$ |
- |
$ |
1,889,558 |
Acquisition of Granville offset with prepayment |
$ |
- |
$ |
2,447,259 |
Acquisition of Granville with payables |
$ |
- |
$ |
537,631 |
Purchase of fixed asset with financing lease |
$ |
- |
$ |
139,790 |
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