Exhibit 99.1
China HGS Reports First Quarter Results for the Fiscal Year 2022
China HGS Real Estate Inc. (NASDAQ: HGSH) (“China HGS” or the “Company”), a leading regional real estate developer headquartered in Hanzhong City, Shaanxi Province, China, today filed its financial results for the first quarter of fiscal 2022 ended December 31, 2021 with the U.S. Securities and Exchange Commission. An electronic copy of the quarterly report on Form 10-Q can be accessed on the SEC's website at www.sec.gov.
Highlights for the Fiscal 2021
· | Total revenues for the first quarter of fiscal 2022 were approximately $2.8 million, increased from approximately $2.7 million in the same period of last year. |
· | Net income for the first quarter of fiscal 2022 totaled approximately $0.4 million, comparing to the net income of approximately $0.3 million in the same period of last year. |
· | Basic and diluted net earnings per share attributable to shareholders for the first quarter of fiscal 2022 and 2021 were $0.01 |
CHINA HGS REAL ESTATE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, | September 30, | |||||||
2021 | 2021 | |||||||
ASSETS | (Unaudited) | |||||||
Cash | $ | 2,446,011 | $ | 170,001 | ||||
Restricted cash | 3,262,677 | 3,295,188 | ||||||
Contract assets | 13,295,920 | 13,723,793 | ||||||
Real estate property development completed | 87,665,296 | 88,145,841 | ||||||
Other assets | 5,587,779 | 8,358,925 | ||||||
Property, plant and equipment, net | 558,064 | 558,086 | ||||||
Security deposits | 1,976,924 | 1,955,202 | ||||||
Real estate property under development | 270,668,466 | 265,769,721 | ||||||
Due from local governments for real estate property development completed | 3,057,400 | 3,023,806 | ||||||
Total Assets | $ | 388,518,537 | $ | 385,000,563 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Construction loans | $ | 120,965,389 | $ | 119,636,222 | ||||
Accounts payable | 13,949,705 | 18,259,151 | ||||||
Other payables | 9,202,246 | 6,430,992 | ||||||
Construction deposits | 3,382,079 | 3,344,917 | ||||||
Contract liabilities | 1,687,087 | 1,886,075 | ||||||
Customer deposits | 21,801,521 | 19,803,917 | ||||||
Accrued expenses | 1,222,021 | 1,987,567 | ||||||
Taxes payable | 23,079,067 | 22,954,011 | ||||||
Total liabilities | 195,289,115 | 194,302,852 | ||||||
Commitments and Contingencies | ||||||||
Stockholders’ equity | ||||||||
Common stock, $0.001 par value, 50,000,000 shares authorized, 25,617,807 shares issued and outstanding at December 31, 2021 and September 30, 2021 | 25,617 | 25,617 | ||||||
Additional paid-in capital | 136,535,303 | 136,535,303 | ||||||
Statutory surplus | 11,095,939 | 11,095,939 | ||||||
Retained earnings | 41,056,265 | 40,691,955 | ||||||
Accumulated other comprehensive income | 4,516,298 | 2,348,897 | ||||||
Total stockholders’ equity | 193,229,422 | 190,697,711 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 388,518,537 | $ | 385,000,563 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
CHINA HGS REAL ESTATE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
Three months ended December 31, | ||||||||
2021 | 2020 | |||||||
Real estate sales | $ | 2,879,215 | $ | 2,755,262 | ||||
Less: Sales tax | (60,221 | ) | (23,538 | ) | ||||
Cost of real estate sales | (1,455,556 | ) | (1,853,642 | ) | ||||
Gross profit | 1,363,438 | 878,082 | ||||||
Operating expenses | ||||||||
Selling and distribution expenses | 219,787 | 79,345 | ||||||
General and administrative expenses | 631,927 | 305,925 | ||||||
Total operating expenses | 851,714 | 385,270 | ||||||
Operating income | 511,724 | 492,812 | ||||||
Interest income, net | 1,461 | 2,826 | ||||||
Other (expense), net | — | (105,858 | ) | |||||
Income before income taxes | 513,185 | 389,780 | ||||||
Provision for income taxes | 148,875 | 98,193 | ||||||
Net income | 364,310 | 291,587 | ||||||
Other Comprehensive income | ||||||||
Foreign currency translation adjustment | 2,167,401 | 6,991,159 | ||||||
Comprehensive income | $ | 2,531,711 | $ | 7,282,746 | ||||
Basic and diluted income per common share | ||||||||
Basic and diluted | $ | 0.01 | $ | 0.01 | ||||
Weighted average common shares outstanding | ||||||||
Basic and diluted | 25,617,807 | 22,525,693 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
CHINA HGS REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Accumulated | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Common Stock | Additional | Statutory | Retained | Comprehensive | ||||||||||||||||||||||||
Shares | Amount | Paid-in Capital | Surplus | Earnings | (loss) income | Total | ||||||||||||||||||||||
Balance at September 30, 2020 | 22,525,693 | $ | 22,525 | $ | 129,930,330 | $ | 10,458,395 | $ | 34,070,767 | $ | (7,039,490 | ) | $ | 168,325,821 | ||||||||||||||
Net income for the period | — | — | — | — | 291,587 | — | 291,587 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | 6,991,159 | 6,991,159 | |||||||||||||||||||||
Balance at December 31, 2020 (Unaudited) | 22,525,693 | $ | 22,525 | $ | 129,930,330 | $ | 10,458,395 | $ | 35,245,648 | $ | (48,331 | ) | $ | 175,608,567 | ||||||||||||||
Balance at September 30,2021 | 25,617,807 | $ | 25,617 | $ | 136,535,303 | $ | 11,095,939 | $ | 40,691,955 | $ | 2,348,897 | $ | 190,697,711 | |||||||||||||||
Net income for the period | — | — | — | — | 364,310 | — | 364,310 | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | 2,167,401 | 2,167,401 | |||||||||||||||||||||
Balance at December 31, 2021 (Unaudited) | 25,617,807 | $ | 25,617 | $ | 136,535,303 | $ | 11,095,939 | $ | 41,056,265 | $ | 4,516,298 | $ | 193,229,422 |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
CHINA HGS REAL ESTATE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended December 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 364,310 | $ | 291,587 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 6,203 | 12,253 | ||||||
Changes in operating assets and liabilities: | ||||||||
Contract assets | 578,638 | (529,410 | ) | |||||
Real estate property development completed | 1,455,556 | 1,853,642 | ||||||
Real estate property under development | (1,940,302 | ) | (1,297,396 | ) | ||||
Other current assets | 2,855,590 | (631,040 | ) | |||||
Accounts payable | (4,499,033 | ) | (111,208 | ) | ||||
Other payables | 698,061 | 229,180 | ||||||
Contract liabilities | (219,296 | ) | (5,191 | ) | ||||
Customer deposits | 1,772,351 | 1,721,198 | ||||||
Accrued expenses | (647,892 | ) | — | |||||
Taxes payables | 177,909 | (890,500 | ) | |||||
Net cash provided by operating activities | 602,095 | 643,115 | ||||||
Cash flow from financing activities: | ||||||||
Proceeds from prepaid subscriptions for sale of units | 2,000,000 | — | ||||||
Net cash provided by financing activities | 2,000,000 | — | ||||||
Effect of changes of foreign exchange rate on cash and restricted cash | (358,596 | ) | 166,542 | |||||
Net increase in cash and restricted cash | 2,243,499 | 809,657 | ||||||
Cash and restricted cash, beginning of period | 3,465,189 | 3,867,536 | ||||||
Cash and restricted cash, end of period | $ | 5,708,688 | $ | 4,677,193 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Interest paid | $ | — | $ | 136,674 | ||||
Income taxes paid | $ | — | $ | 63,765 | ||||
Representing: | ||||||||
Cash, end of period | $ | 2,446,011 | $ | 1,253,331 | ||||
Restricted, end of period | $ | 3,262,677 | $ | 3,423,862 | ||||
Total cash and restricted cash, end of period | $ | 5,708,688 | $ | 4,677,193 | ||||
Cash, beginning of period | $ | 170,001 | $ | 457,699 | ||||
Restricted, beginning of period | 3,295,188 | 3,409,837 | ||||||
Total cash and restricted cash, beginning of period | $ | 3,465,189 | $ | 3,867,536 | ||||
Non-cash activities: | ||||||||
Reclassification of interest payable to construction loan | $ | — | $ | 1,608,606 | ||||
Settlement of accounts payable with real estate property* | $ | 569,299 | $ | — | ||||
Settlement of account payables and account receivables* | $ | 2,758,731 | $ | — |
* | For the three months ended December 31, 2021, the Company settled accounts payable of $569,299 with a vender by disposal of certain real estate property completed in Hanzhong City Mingzhu Garden Phase II.. In addition, the Company settled other asset of $2,758,731 with the accounts payable balance with certain venders for the three months ended December 31, 2021. |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.