BEIJING, Oct. 30, 2020 /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 year ended June
30, 2020. The Company also filed these results on Form 20-F
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
- Revenues for the year ended June 30,
2020 were approximately $2.2
million, compared to approximately $3.2 million in the prior year.
- The Company continues to add incremental HNW clientele, with
new HNW clients transacting with Puhui totaling 116 for the year
ended June 30, 2020.
- As of June 30, 2020, the
Company's subsidiary served as manager or general partner of five
funds with an aggregate of approximately $21.6 million under management.
- As of June 30, 2020, the Company
maintained 7 offices based in Beijing (3), Shanghai, Suzhou, Qingdao and Hong
Kong.
- On December 3, 2019, Puhui
acquired 100% of the shares of Granville Financial Services Company
Limited ("Granville") for HK$29,390,000, or approximately $3.8 million. The purpose of the acquisition of
Granville is to expand the Company's operations outside of Mainland
China into Hong Kong and take
advantage of financial qualifications and licenses to broaden the
Company's existing product portfolio.
- Puhui had approximately $0.7
million of cash and approximately $2.3 million of working capital as of
June 30, 2020, as compared to
approximately $2.0 million of cash
and approximately $7.4 million of
working capital as of June 30,
2019.
Mr. Zhe Ji, the Chairman and CEO
of the Company, stated, "There was a considerable impact from the
COVID-19 pandemic on our business during the past fiscal year, as
our offices remained closed between February and June 2020. Since that time, we have begun to see
business return due to a combination of strong relationships with
our customers along with demand for investment and financial
planning expertise in China's
wealth management industry following the pandemic. While it was a
challenging period, we did take the opportunity to focus on
operational improvements through providing our workforce with the
ability to service clients remotely. We are in a stronger position
today to handle any potential challenges in the future than prior
to the pandemic."
Mr. Ji continued, "We believe that the fundamental aspects of
our independent wealth management business have increased value in
the current volatile market environment. HNW clientele across
China are continuing to seek an
independent advisor that provides access to several investment
products without bias. At Puhui, we are solely focused on aligning
our available products with whatever financial objectives our
clients are seeking. Our acquisition of Granville in December 2019 represented our first entry into
the international market, which increases our potential customer
base over time. Our focus for the remainder of the year is to add
new HNW customers that can take advantage of our product offering,
and intend to be active in marketing as well as optimizing our
branch network in the coming months."
Financial Review for the Fiscal Year Ended June 30, 2020
Wealth Management
- Since fiscal year ended June 30,
2017, Puhui's core business has been the marketing of
financial products to HNW clients and small and medium enterprises
in China. As a growing independent
wealth management service provider, the Company maintains a sizable
client base, consisting of 1,106 clients as of June 30, 2020 (495 of which have purchased
products the Company markets more than once). This compares to 990
clients as of June 30, 2019, with 282
purchasing products more than once.
Asset Management
- Starting in June 2017, Puhui also
launched its in-house asset management business. As of June 30, 2020, the Company's subsidiaries served
as manager or general partner of five funds with an aggregate of
approximately $21.6 million under
management, compared to approximately $23.0
million under management as of June
30, 2019.
Revenues
- The Company categorizes revenues into third-party revenues and
related-party revenues. Revenue mainly includes one-time
commission, recurring services fees and recurring management fees.
Related party revenues consist primarily of one-time commission
fees we charged for our affiliates or management fees we received
from fund/limited partnerships where the Company's subsidiaries
serves as manager or general partner.
- Total revenues were approximately $2.2
million for the year ended June 30,
2020, compared to approximately $3.2
million in the prior year, a decrease of approximately
$1.0 million. The overall decline was
mainly due to the decrease in one-time commissions and recurring
services fees as a result of the decrease in the aggregate value of
wealth management products distributed. Puhui's customers were
negatively impacted by the COVID-19 pandemic, which reduced their
budgets for investment in 2020.
Cost of Revenues
- Puhui's cost of revenues consists of compensation paid to
financial product development team members along with benefits. The
Company's cost of revenues were $202,637 and $316,718 for the years ended June 30, 2020 and 2019 respectively, a decrease
of $114,081.As the Company
experienced slower revenue growth and product distribution, cost of
revenue decreased accordingly.
Operating Expense
- The Company's operating expenses increased to approximately
$6.7 million from approximately
$5.7 million in the prior year, an
increase of approximately $1.0
million, largely due to an increase in general and
administrative expenses. The increase in general and administrative
expenses was mainly due to additional consulting fees for business
development including the acquisition of Granville. As the Company
acquired Granville in December 2019,
Granville's general and administrative expenses and amortization of
intangible assets were also included.
Net Loss Attributable to Puhui Wealth
- Net loss attributable to Puhui Wealth for the year ended
June 30, 2020 was approximately
$4.0 million, or $(0.35) per basic and diluted share based on 11.5
million weighted average number of ordinary shares, as compared to
net loss of approximately $2.5
million, or $(0.23) per basic
and diluted share based on 10.8 million weighted average number of
ordinary shares for the year ended June 30,
2019.
Liquidity and Capital Resources
- The Company historically financed its operations primarily
through cash flows from operations, additional capital
contributions from shareholders and short-term advances from
related parties. Going forward, the Company will rely on its cash
flows from operations and may have to consider supplementing its
available sources of funds through additional borrowings either
from financial institutions in China or from its major shareholders.
- As of June 30, 2020, the Company
had cash of approximately $0.7
million, as compared to approximately $2.0 million as of June
30, 2019.
- As of June 30, 2020, the Company
had approximately $2.3 million of
working capital.
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:
- The Company temporally closed its offices and implemented
work-from-home policy beginning in February
2020, as required by relevant PRC regulatory authorities. We
reopened our offices in June 2020 as
the situation improved in China.
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.
Investor
Relations:
|
|
The Equity Group
Inc.
|
In China
|
Adam Prior, Senior
Vice President
|
Lucy Ma,
Associate
|
(212)
836-9606
|
+86 10 5661
7012
|
aprior@equityny.com
|
lma@equityny.com
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
|
|
For the Years Ended
June 30,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
REVENUES
|
|
|
|
|
Revenues
|
$
|
1,481,980
|
$
|
3,052,371
|
Revenues - related
parties
|
|
697,500
|
|
128,263
|
Total
revenues
|
|
2,179,480
|
|
3,180,634
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
Cost of
revenues
|
|
(202,637)
|
|
(316,718)
|
Selling
expenses
|
|
(1,517,968)
|
|
(2,005,367)
|
General and
administrative expenses
|
|
(4,977,537)
|
|
(3,427,040)
|
Total
operating expenses
|
|
(6,698,142)
|
|
(5,749,125)
|
|
|
|
|
|
LOSS FROM
OPERATIONS
|
|
(4,518,662)
|
|
(2,568,491)
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
Interest
income
|
|
74,824
|
|
62,967
|
Other finance
expenses
|
|
(191,238)
|
|
(206,081)
|
Other income,
net
|
|
126,858
|
|
808
|
Total
other income (expenses), net
|
|
10,444
|
|
(142,306)
|
|
|
|
|
|
LOSS BEFORE INCOME
TAXES
|
|
(4,508,218)
|
|
(2,710,797)
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
|
|
Current
|
|
-
|
|
11,803
|
Deferred
|
|
179,449
|
|
380,302
|
Total
income tax provision
|
|
179,449
|
|
392,105
|
|
|
|
|
|
NET LOSS
|
|
(4,687,667)
|
|
(3,102,902)
|
|
|
|
|
|
Less: Net loss
attributable to noncontrolling interest
|
|
(641,719)
|
|
(645,716)
|
|
|
|
|
|
NET LOSS ATTRIBUTABLE
TO PUHUI WEALTH
|
$
|
(4,045,948)
|
$
|
(2,457,186)
|
|
|
|
|
|
NET LOSS
|
$
|
(4,687,667)
|
$
|
(3,102,902)
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
Foreign currency
translation adjustment
|
|
159,935
|
|
(271,194)
|
|
|
|
|
|
COMPREHENSIVE
LOSS
|
$
|
(4,527,732)
|
$
|
(3,374,096)
|
|
|
|
|
|
Less: Comprehensive
loss attributable to noncontrolling interest
|
|
(650,730)
|
|
(672,272)
|
|
|
|
|
|
COMPREHENSIVE LOSS
ATTRIBUTABLE TO PUHUI WEALTH
|
$
|
(3,877,002)
|
$
|
(2,701,824)
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF ORDINARY SHARES
|
|
|
|
|
Basic and
diluted
|
|
11,507,558
|
|
10,793,017
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
Basic and
diluted
|
$
|
(0.35)
|
$
|
(0.23)
|
|
|
|
|
|
|
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
ASSETS
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
Cash
|
$
|
744,436
|
$
|
2,004,625
|
Short-term
investments
|
|
515,729
|
|
706,226
|
Accounts
receivables
|
|
454,411
|
|
1,853,041
|
Accounts
receivables - related parties
|
|
1,138,498
|
|
1,013,135
|
Other
receivables
|
|
100,302
|
|
213,252
|
Other receivables -
related party
|
|
1,284,676
|
|
1,647,858
|
Prepaid
expenses
|
|
1,122,164
|
|
1,278,133
|
Total current
assets
|
|
5,360,216
|
|
8,716,270
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
436,325
|
|
223,385
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
Long-term security
deposits
|
|
422,783
|
|
384,860
|
Acquisition
prepayment
|
|
-
|
|
2,447,259
|
Right-of-use
assets
|
|
1,285,145
|
|
-
|
Long-term prepaid
expenses
|
|
1,599,647
|
|
2,247,872
|
Deferred tax assets,
net
|
|
159,720
|
|
347,195
|
Intangible asset,
net
|
|
918,787
|
|
10,241
|
Goodwill
|
|
1,864,053
|
|
-
|
Total other
assets
|
|
6,250,135
|
|
5,437,427
|
|
|
|
|
|
Total
assets
|
$
|
12,046,676
|
$
|
14,377,082
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
Acquisition
payable
|
$
|
368,439
|
$
|
-
|
Deferred
revenue
|
|
1,061,162
|
|
227,622
|
Other payables and
accrued liabilities
|
|
630,457
|
|
808,328
|
Other payables -
related party
|
|
6,334
|
|
-
|
Operating lease
liabilities - current
|
|
841,041
|
|
-
|
Financing lease
liabilities - current
|
|
44,791
|
|
-
|
Taxes
payable
|
|
86,656
|
|
10,512
|
Current portion of
long-term debt
|
|
25,835
|
|
315,983
|
Total current
liabilities
|
|
3,064,715
|
|
1,362,445
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
Operating lease
liabilities - noncurrent
|
|
486,970
|
|
-
|
Financing lease
liabilities - noncurrent
|
|
68,826
|
|
-
|
Long-term
debt
|
|
1,145,825
|
|
1,206,565
|
Total non-current
liabilities
|
|
1,701,621
|
|
1,206,565
|
|
|
|
|
|
Total
liabilities
|
|
4,766,336
|
|
2,569,010
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
(Continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Preferred shares,
$0.001 par value, 1,000,000 shares authorized, 0 shares issued
and
|
|
-
|
|
-
|
|
outstanding as of
June 30, 2020 and June 30, 2019
|
|
|
|
|
|
Ordinary shares,
$0.001 par value, 49,000,000 shares authorized,
|
|
11,508
|
|
11,508
|
|
11,507,558 shares
issued and outstanding
|
|
|
|
|
|
as of June 30,
2020 and June 30, 2019
|
|
|
|
|
|
Additional paid-in
capital
|
|
21,911,045
|
|
21,911,045
|
|
Accumulated
deficit
|
|
(13,267,289)
|
|
(9,221,341)
|
|
Accumulated other
comprehensive loss
|
|
(83,012)
|
|
(251,958)
|
|
|
Total equity
attributable to controlling shareholders
|
|
8,572,252
|
|
12,449,254
|
|
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
(1,291,912)
|
|
(641,182)
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
7,280,340
|
|
11,808,072
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
12,046,676
|
$
|
14,377,082
|
|
|
|
|
|
|
|
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
For the Years Ended
June 30,
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net loss
|
$
|
(4,687,667)
|
$
|
(3,102,902)
|
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
269,812
|
|
135,939
|
|
|
|
Amortization of
operating lease right-of-use assets
|
|
795,912
|
|
|
|
|
|
Loss on disposal of
property and equipment
|
|
-
|
|
78
|
|
|
|
Impairment loss on
equity securities
|
|
-
|
|
5,628
|
|
|
|
Loss from disposal of
subsidiaries
|
|
-
|
|
32,641
|
|
|
|
Gain from disposal of
marketable securities
|
|
(5,271)
|
|
-
|
|
|
|
Loss from equity
method investment
|
|
3,547
|
|
-
|
|
|
|
Deferred tax
provision
|
|
179,449
|
|
380,302
|
|
|
Change in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivables
|
|
1,356,454
|
|
(242,674)
|
|
|
|
Accounts receivables
- related parties
|
|
(155,986)
|
|
-
|
|
|
|
Other
receivables
|
|
93,383
|
|
(402,174)
|
|
|
|
Prepaid
expenses
|
|
60,961
|
|
(932,928)
|
|
|
|
Long-term prepaid
expenses
|
|
644,554
|
|
(2,248,912)
|
|
|
|
Accounts
payable
|
|
(1,413)
|
|
-
|
|
|
|
Deferred
revenue
|
|
847,265
|
|
(298,954)
|
|
|
|
Other payables and
accrued liabilities
|
|
41,609
|
|
156,724
|
|
|
|
Other payables -
related parties
|
|
6,384
|
|
(190,666)
|
|
|
|
Operating lease
liabilities
|
|
(752,682)
|
|
-
|
|
|
|
Taxes
payable
|
|
165,353
|
|
(426,597)
|
|
|
|
|
Net cash used in
operating activities
|
|
(1,138,336)
|
|
(7,134,495)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Proceeds from sales
of short-term investments
|
|
178,237
|
|
365,462
|
|
Purchases of
short-term investments
|
|
(1,425)
|
|
(24,347)
|
|
Loans receivable to
related party
|
|
-
|
|
(1,661,514)
|
|
Repayment from
related parties
|
|
318,194
|
|
-
|
|
Acquisition
prepayment
|
|
-
|
|
(2,042,460)
|
|
Purchases of property
and equipment
|
|
(288,372)
|
|
(159,514)
|
|
Proceeds from sale of
property and equipment
|
|
-
|
|
990
|
|
Cash acquired from
Granville, net of purchase price paid
|
|
125,365
|
|
-
|
|
Purchase of
intangible asset
|
|
-
|
|
(12,644)
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
331,999
|
|
(3,534,027)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Proceeds from
issuance of ordinary shares through IPO, net
|
|
-
|
|
8,032,912
|
|
Financing lease
liabilities
|
|
(24,984)
|
|
-
|
|
Principal payments of
long-term debt
|
|
(309,450)
|
|
-
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
(334,434)
|
|
8,032,912
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
(119,418)
|
|
(168,805)
|
|
|
|
|
|
|
|
|
|
INCREASE IN
CASH
|
|
(1,260,189)
|
|
(2,804,415)
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
year
|
|
2,004,625
|
|
4,809,040
|
|
|
|
|
|
|
|
|
|
CASH, end of
year
|
$
|
744,436
|
$
|
2,004,625
|
|
|
|
|
|
|
|
For the Years Ended
June 30,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION:
|
|
|
|
|
|
Cash paid for income
tax
|
$
|
-
|
|
240,508
|
|
Cash paid for
interest
|
$
|
192,312
|
|
197,999
|
|
|
|
|
|
NON-CASH TRANSACTIONS
OF INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
Prepaid IPO costs to
be net against IPO proceeds
|
$
|
-
|
|
733,478
|
|
Initial recognition
of right-of-use assets and lease liabilities
|
$
|
2,091,977
|
|
-
|
|
Acquisition of
Granville offset with prepayment
|
$
|
2,447,259
|
|
-
|
|
Acquisition of
Granville with payables
|
$
|
368,439
|
|
-
|
|
Purchase of fixed
asset with financing lease
|
$
|
139,566
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/puhui-wealth-investment-management-co-ltd-announces-financial-results-for-the-fiscal-year-ended-june-30-2020-301164008.html
SOURCE Puhui Wealth Investment Management Co., Ltd.