BEIJING, June 29, 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
- Revenues for the six months ended December 31, 2020 were $596,981, as compared to $577,645 in the same period of 2019.
- The Company continues to add incremental HNW clientele, with
new HNW clients transacting with Puhui totaling 42 for the six
months ended December 31, 2020, as
compared to 98 for the six months ended December 31, 2019.
- As of December 31, 2020, the
Company's subsidiary served as manager or general partner of five
funds with an aggregate of approximately $21.1 million under management, as compared to
four funds with an aggregate of approximately $23.5 million as of December 31, 2019.
- As of June 1, 2021, the Company
maintained sales and service locations based in Beijing, Shanghai, Suzhou, Qingdao and Hong
Kong.
- Puhui had approximately $1.0
million of cash and approximately $0.5 million of working capital as of
December 31, 2020, as compared to
approximately $0.7 million of cash
and approximately $2.3 million of
working capital as of June 30,
2020.
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
- Since our fiscal year ended June 30,
2017, Puhui's core business has been the marketing of wealth
management product advisory services 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 1,148 clients as of
December 31, 2020. This compares to
1,106 clients as of June 30,
2020.
Asset Management
- Starting in June 2017, Puhui also
launched its in-house asset management business. As of December 31, 2020, the Company's subsidiaries
served as manager or general partner of five funds with an
aggregate of approximately $21.1
million under management, compared to $21.6 million under management as of June 30, 2020. The decrease was primarily due to
dividends to investors and subscription and recurring management
fees.
Revenues
- The Company categorizes revenues into third-party revenues and
related-party revenues. Revenues mainly include one-time
commissions, recurring service fees and recurring management fees.
Related party revenues consist primarily of one-time commission
fees charged for affiliates or recurring management fees received
from fund/limited partnership where the Company's subsidiaries
serve as manager or general partner. The Company's affiliate is an
entity under common control of one of its principal
shareholders.
- Total revenues were $596,981 for
the six months ended December 31,
2020, compared to $577,645 in
the six-month period in 2019, an increase of $19,336, or 3.3%. The overall increase was mainly
due to the slight increase in one-time commissions and recurring
management fees.
Cost of Revenues
- Puhui's cost of revenues consist of compensation paid to
financial product development team members along with benefits. The
Company's cost of revenues were $157,233 and $132,334 for the six months ended December 31, 2020 and 2019, an increase of
$24,899, or 18.8%. Cost of revenues
for the six months ended December 31,
2020 slightly increased mainly due to increase in headcount
in product development team.
Operating Expenses
- The Company's operating expenses decreased to $2.9 million from $4.0
million in the same period in 2019, a decrease of
$1.1 million, or 27.8%, largely due
to a decrease in both selling expenses and general and
administrative expenses. The decrease in selling expenses was
mainly due to the disposal of four office locations and only have
57 employees as of December 31, 2020,
a decrease from 110 in 2019 due to the impact of COVID-19. The
decrease in general and administrative expenses was primarily due
to an approximately $275,000 decrease
in professional fees and an approximately $210,000 decrease in other general and
administrative expense.
Net Loss Attributable to Puhui
Wealth
- Net loss Attributable to Puhui
Wealth for the six-month period ended December 31, 2020 was $2.4
million, as compared to $3.0
million for the six month period ended December 31, 2019, a decrease of $0.5 million, or 17.8%, due to the above
reasons.
Liquidity and Capital Resources
- Management believes that the Company currently has enough cash
over the next twelve months to operate at its current levels. Based
on its current revenue and expense projection, the Company believes
it will generate approximately the same amount of revenue in the
coming year as compared to the current year as the Company and
China are both recovering from the
impact of the pandemic. In addition, several investments made by
the Company's managed funds are expected to be liquidated and the
Company is entitled to additional performance bonuses. If the
Company's revenue does not achieve its expected level, management
plans to implement cost saving measures to reduce operating cash
outflow. Furthermore, the Company's principal shareholder has
committed to provide financial support to fund the Company's
working capital needs whenever necessary.
- Given the COVID-19 pandemic, and because substantially all of
the Company's business operations and its workforce are
concentrated in China and the
U.S., the Company's business, results of operations, and financial
condition have been adversely affected during the six months ended
December 31, 2020.
- As of December 31, 2020, the
Company had cash of approximately $1.0
million, as compared to $0.7
million as of June 30,
2020.
- As of December 31, 2020, the
Company had approximately $0.5
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 reopened our offices in June
2020 as COVID-19 was under control in China. Due to regulations about public
gatherings, the Company was not able to hold meetings and seminars
for customers and have reduced the headcount of our sales and
marketing departments.
- Due to the nature of the Company's business, the impact of the
closure on operational capabilities was not significant, as most of
Puhui's work force continued working offsite during such
closure.
- Puhui's customers have been negatively impacted by the
outbreak, which reduced their budgets for investment during the six
months ended December 31, 2020. As a
result, our expansion of revenue increased though revenue has been
negatively impacted for the six months ended December 31, 2020.
- For the six months ended December 31,
2020, Puhui's business was impacted by the uncertainty in
the macroeconomic outlook as a result of slower economic growth and
the impact of COVID-19. Investors became increasingly conservative
in investing in financial products, especially products based on
equities in China. As such, the
aggregate value of wealth management products the Company
distributed decreased.
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
interest
|
|
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
outstanding as of December 31, 2020 and June 30, 2020
|
|
-
|
|
-
|
Ordinary shares,
$0.001 par value, 49,000,000 shares authorized,
11,507,558 shares issued and outstanding
as of December 31, 2020 and June 30, 2020
|
|
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
|
View original
content:https://www.prnewswire.com/news-releases/puhui-wealth-investment-management-co-ltd-announces-financial-results-for-the-six-months-ended-december-31-2020-301322412.html
SOURCE Puhui Wealth Investment Management Co., Ltd.