UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
FORM 10-Q/A
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30,
2014
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to______
Commission File Number: 001-34567
CHINA YIDA HOLDING, CO.
(Exact name of registrant as specified in its
charter)
Nevada |
|
50-0027826 |
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.) |
|
|
|
28/F Yifa Building, No. 111 Wusi Road
Fuzhou, Fujian, P. R. China |
|
350003 |
(Address of principal executive offices) |
|
(Zip Code) |
+ 86 (591) 28082230
(Registrant's telephone number, including area
code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes x No o
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Yes x No o
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
|
o |
|
Accelerated filer |
|
o |
Non-accelerated filer |
|
o (Do not check
if a smaller reporting company) |
|
Smaller reporting company |
|
x |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes o No x
Indicate the number of shares outstanding of each of the issuer’s
classes of common stock as of the latest practicable date.
Class |
|
Shares
outstanding as of November 11, 2014
|
Common stock, $.001 par value |
|
3,914,580 |
EXPLANATORY
NOTE
The
purpose of this Amendment No. 1 (“Amendment No. 1”) to our Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2014 (the “Original 10-Q”), filed with the Securities and Exchange Commission (the “Commission”)
on November 14, 2014, is to restate our company’s unaudited financial statements and related disclosures (including, without
limitation, those contained under Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations)
contained in the Original 10-Q to reclassify proceeds from disposal of discontinued operations as cash flows from investing activities
and to eliminate the cash flows between continuing and discontinued operations.
On
January 27, 2015, our management concluded, and the Audit Committee approved the conclusion, that we previously incorrectly classified
certain proceeds from disposal of discontinued operations as cash flows from financing activities and incorrectly presented the
cash flows between continuing and discontinued operations without elimination. We are therefore filing this Amendment No. 1 to
correct the classification of cash flow resulted from proceeds from disposal of discontinued
entity and to eliminate the cash flows between continuing and discontinued operations.
As
several parts of the Original 10-Q are amended and/or restated by this Amendment No. 1, for convenience, we have repeated the
entire text of the Original 10-Q, as amended and/or restated by this Amendment No. 1. Readers should therefore read and rely on
this Amendment No. 1 in lieu of the Original 10-Q.
This
Amendment No. 1 also contains currently dated officer certifications as Exhibits 31.1, 31.2, 32.1 and 32.2.
Except
as amended and/or restated by this Amendment No. 1, no other changes have been made to the Original 10-Q. This Amendment
No. 1 speaks as of the original filing date of the Original 10-Q and does not reflect events that may have occurred subsequent
to such original filing date.
PART 1 -FINANCIAL INFORMATION
Item 1. Financial Statements.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Index to consolidated financial statements
|
Page |
|
|
Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013 |
2 |
|
|
Consolidated Statements of Income and Comprehensive Income for the nine months and three months ended September 30, 2014 and 2013 |
3 |
|
|
Consolidated Statements of Cash Flows for the nine months ended September 30, 2014 and 2013 |
4 |
|
|
Notes to the Consolidated Financial Statements |
5 - 31 |
CHINA
YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
| |
September 30, | | |
December 31, | |
| |
2014 | | |
2013 | |
| |
(UNAUDITED) | | |
(AUDITED) | |
ASSETS | |
| | |
| |
Current assets | |
| | |
| |
Cash and cash equivalents | |
$ | 5,981,829 | | |
$ | 2,157,738 | |
Accounts receivable | |
| 700,376 | | |
| 571,637 | |
Other receivables, net | |
| 211,150 | | |
| 268,835 | |
Advances and prepayments | |
| 1,704,112 | | |
| 1,361,194 | |
Prepayment - current portion | |
| 844,664 | | |
| 659,050 | |
Current assets of discontinued operations | |
| - | | |
| 587,329 | |
Total current assets | |
| 9,442,131 | | |
| 5,605,783 | |
| |
| | | |
| | |
Property and equipment, net | |
| 183,141,620 | | |
| 182,719,628 | |
Intangible assets, net | |
| 46,614,410 | | |
| 47,837,641 | |
Long-term prepayments | |
| 2,147,440 | | |
| 2,707,374 | |
Non-current assets of discontinued operations | |
| - | | |
| 37,730,857 | |
Total assets | |
$ | 241,345,601 | | |
$ | 276,601,283 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Short-term loans | |
$ | 4,549,369 | | |
$ | 2,454,108 | |
Long-term debt, current portion | |
| 1,218,581 | | |
| 6,871,502 | |
Accounts payable | |
| 640,709 | | |
| 565,694 | |
Accrued expenses and other payables | |
| 1,598,877 | | |
| 1,019,391 | |
Due to related parties | |
| 41,855,609 | | |
| 35,596,962 | |
Taxes payable | |
| 55,790 | | |
| 27,895 | |
Current liabilities of discontinued operations | |
| - | | |
| 2,110,055 | |
Total current liabilities | |
| 49,918,935 | | |
| 48,645,607 | |
| |
| | | |
| | |
Long-term debt | |
| 76,283,166 | | |
| 78,531,462 | |
Non-current liabilities of discontinued operations | |
| - | | |
| 8,135,018 | |
Total liabilities | |
| 126,202,101 | | |
| 135,312,087 | |
| |
| | | |
| | |
Equity | |
| | | |
| | |
Preferred stock ($0.0001 par value, 10,000,000 shares authorized, none issued and outstanding) | |
| - | | |
| - | |
Common stock ($0.001 par value, 100,000,000 shares authorized, 3,914,580 and 3,914,580 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively) | |
| 3,915 | | |
| 3,915 | |
Additional paid in capital | |
| 49,163,705 | | |
| 49,163,705 | |
Accumulated other comprehensive income | |
| 17,249,950 | | |
| 18,388,750 | |
Retained earnings | |
| 46,176,600 | | |
| 71,183,496 | |
Statutory reserve | |
| 2,549,330 | | |
| 2,549,330 | |
Total equity | |
| 115,143,500 | | |
| 141,289,196 | |
Total liabilities and equity | |
$ | 241,345,601 | | |
$ | 276,601,283 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
CHINA
YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| |
Nine Months Ended September 30, | | |
Three Months Ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Net revenue | |
| | |
| | |
| | |
| |
Advertisement | |
$ | - | | |
$ | 2,899,844 | | |
$ | - | | |
$ | 318,434 | |
Tourism | |
| 9,030,961 | | |
| 6,891,455 | | |
| 3,870,984 | | |
| 2,616,382 | |
| |
| | | |
| | | |
| | | |
| | |
Total net revenue | |
| 9,030,961 | | |
| 9,791,299 | | |
| 3,870,984 | | |
| 2,934,816 | |
| |
| | | |
| | | |
| | | |
| | |
Cost of revenue | |
| | | |
| | | |
| | | |
| | |
Advertisement | |
| - | | |
| 2,038,196 | | |
| - | | |
| 271,213 | |
Tourism | |
| 6,784,170 | | |
| 3,104,123 | | |
| 2,471,661 | | |
| 1,145,681 | |
| |
| | | |
| | | |
| | | |
| | |
Total cost of revenue | |
| 6,784,170 | | |
| 5,142,319 | | |
| 2,471,661 | | |
| 1,416,894 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
| 2,246,791 | | |
| 4,648,980 | | |
| 1,399,323 | | |
| 1,517,922 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
Selling expenses | |
| 7,717,558 | | |
| 6,566,556 | | |
| 2,906,081 | | |
| 2,243,762 | |
General and administrative expenses | |
| 5,555,330 | | |
| 4,160,079 | | |
| 1,967,665 | | |
| 1,669,838 | |
| |
| | | |
| | | |
| | | |
| | |
Total operating expenses | |
| 13,272,888 | | |
| 10,726,635 | | |
| 4,873,746 | | |
| 3,913,600 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (11,026,097 | ) | |
| (6,077,655 | ) | |
| (3,474,423 | ) | |
| (2,395,678 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| | |
Other expense, net | |
| (399,986 | ) | |
| (560,284 | ) | |
| (618,142 | ) | |
| (527,976 | ) |
Interest income | |
| 7,448 | | |
| 75,499 | | |
| 2,975 | | |
| 4,817 | |
Interest expense | |
| (6,460,899 | ) | |
| (3,280,394 | ) | |
| (1,999,487 | ) | |
| (928,581 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total other expenses | |
| (6,853,437 | ) | |
| (3,765,179 | ) | |
| (2,614,654 | ) | |
| (1,451,740 | ) |
| |
| | | |
| | | |
| | | |
| | |
Loss before income tax and non-controlling interest | |
| (17,879,534 | ) | |
| (9,842,834 | ) | |
| (6,089,077 | ) | |
| (3,847,418 | ) |
| |
| | | |
| | | |
| | | |
| | |
Less: Provision for income tax | |
| - | | |
| 132,830 | | |
| - | | |
| 961 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss from continuing operations | |
| (17,879,534 | ) | |
| (9,975,664 | ) | |
| (6,089,077 | ) | |
| (3,848,379 | ) |
| |
| | | |
| | | |
| | | |
| | |
Discontinued Operation | |
| | | |
| | | |
| | | |
| | |
(Loss) income from discontinued operations, net of income taxes | |
| (616,732 | ) | |
| (782,692 | ) | |
| (83,796 | ) | |
| 220,202 | |
(Loss) gain on disposal of subsidiary, net of income taxes | |
| (6,510,630 | ) | |
| 999,133 | | |
| (6,510,630 | ) | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Net (loss) income from discontinued operations, net of income taxes | |
| (7,127,362 | ) | |
| 216,441 | | |
| (6,594,426 | ) | |
| 220,202 | |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
| (25,006,896 | ) | |
| (9,759,223 | ) | |
| (12,683,503 | ) | |
| (3,628,177 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to non-controlling interest: | |
| | | |
| | | |
| | | |
| | |
Net loss from discontinued operation | |
| - | | |
| 102,215 | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to China Yida Holding Co. | |
$ | (25,006,896 | ) | |
$ | (9,657,008 | ) | |
$ | (12,683,503 | ) | |
$ | (3,628,177 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss | |
$ | (25,006,896 | ) | |
$ | (9,759,223 | ) | |
$ | (12,683,503 | ) | |
$ | (3,628,177 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other comprehensive income | |
| | | |
| | | |
| | | |
| | |
Foreign currency translation (loss) gain | |
| (1,138,800 | ) | |
| 3,573,349 | | |
| 143,407 | | |
| 681,539 | |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive loss | |
| (26,145,696 | ) | |
| (6,185,874 | ) | |
| (12,540,096 | ) | |
| (2,946,638 | ) |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive loss attributable to non-controlling interest | |
| - | | |
| 390,730 | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Comprehensive loss attributable to China Yida Holding Co. | |
$ | (26,145,696 | ) | |
$ | (5,795,144 | ) | |
$ | (12,540,096 | ) | |
$ | (2,946,638 | ) |
| |
| | | |
| | | |
| | | |
| | |
Amounts attributable to common stockholders: | |
| | | |
| | | |
| | | |
| | |
Net loss from continuing operations, net of income taxes | |
| (17,879,534 | ) | |
| (9,975,664 | ) | |
| (6,089,077 | ) | |
| (3,848,379 | ) |
Net income from discontinued operations, net of income taxes | |
| (7,127,362 | ) | |
| 318,656 | | |
| (6,594,426 | ) | |
| 220,202 | |
Net loss attributable to common stockholders | |
| (25,006,896 | ) | |
| (9,657,008 | ) | |
| (12,683,503 | ) | |
| (3,628,177 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net loss attributable to common stockholders per share - basic and diluted: | |
| | | |
| | | |
| | | |
| | |
- Basic & diluted earnings/(loss) per share from continuing operations | |
$ | (4.57 | ) | |
$ | (2.55 | ) | |
$ | (1.56 | ) | |
$ | (0.98 | ) |
- Basic & diluted earnings/(loss) per share from discontinued operations | |
$ | (1.82 | ) | |
$ | 0.08 | | |
$ | (1.68 | ) | |
$ | 0.06 | |
- Basic & diluted earnings/(loss) per share attributable to common stockholders | |
$ | (6.39 | ) | |
$ | (2.47 | ) | |
$ | (3.24 | ) | |
$ | (0.92 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average shares outstanding | |
| | | |
| | | |
| | | |
| | |
- Basic | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | |
- Diluted | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | |
The
accompanying notes are an integral part of these unaudited consolidated financial statements.
CHINA
YIDA HOLDING CO. AND SUBSIDIARIES |
CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
| |
For The
Nine Months Ended September 30, | |
| |
2014 | | |
2013 | |
| |
(Restated) | | |
| |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | |
| |
Net loss | |
$ | (25,006,896 | ) | |
$ | (9,657,008 | ) |
Loss from discontinued operations | |
| 616,732 | | |
| 782,692 | |
Adjustments to reconcile net income to net cash provided
by operating activities: | |
| | | |
| | |
Loss on disposal of discontinued operation | |
| 6,510,630 | | |
| (999,133 | ) |
Depreciation | |
| 6,412,392 | | |
| 3,090,269 | |
Amortization | |
| 893,871 | | |
| 1,355,439 | |
Amortization of financing costs | |
| - | | |
| 111,976 | |
Noncontrolling interest | |
| - | | |
| (102,215 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Accounts receivable | |
| (132,831 | ) | |
| (398,206 | ) |
Other receivables, net | |
| 28,156 | | |
| (2,031,734 | ) |
Advances and prepayments | |
| (352,702 | ) | |
| (3,573,044 | ) |
Accounts payable | |
| 79,007 | | |
| 98,765 | |
Accrued expenses and other payables | |
| 587,164 | | |
| 3,247,724 | |
Taxes payable | |
| 55,851 | | |
| (444,929 | ) |
Net cash used in continuing operations | |
| (10,308,625 | ) | |
| (8,519,404 | ) |
Net cash provided
by (used in) discontinued operations | |
| 675,366 | | |
| (1,093,625 | ) |
Net cash used
in operating activities | |
| (9,633,259 | ) | |
| (9,613,029 | ) |
| |
| | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
Proceed from disposal of discontinued entities | |
| 35,570,385 | | |
| 9,616,155 | |
Additions to property and equipment | |
| (8,097,950 | ) | |
| (71,652,052 | ) |
Change in long-term prepayments
for acquisition of property, equipment and land use rights | |
| 351,457 | | |
| (304,269 | ) |
Net cash provided by (used in) continuing operations | |
| 27,823,892 | | |
| (62,340,166 | ) |
Net cash provided
by (used in) discontinued operations | |
| 471,410 | | |
| (480,122 | ) |
Net cash provided
by (used in) investing activities | |
| 28,295,302 | | |
| (62,820,288 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
Repayment of obligation under airtime rights commitment | |
| - | | |
| (1,567,134 | ) |
Proceeds from short-term loans | |
| 4,554,327 | | |
| 4,021,038 | |
Repayment of short-term loans | |
| (2,439,818 | ) | |
| (1,608,415 | ) |
Proceeds from long-term loans | |
| 40,175,667 | | |
| 53,077,703 | |
Repayment of long-term loans | |
| (47,495,120 | ) | |
| (12,223,956 | ) |
Proceeds from loans from related
parties | |
| 6,483,770 | | |
| 27,117,207 | |
Net cash (used in) provided by continuing operations | |
| 1,278,826 | | |
| 68,816,442 | |
Net cash used
in discontinued operations | |
| (16,196,038 | ) | |
| (999,514 | ) |
Net cash (used
in) provided by financing activities | |
| (14,917,212 | ) | |
| 67,816,928 | |
| |
| | | |
| | |
EFFECT OF EXCHANGE RATE CHANGES
ON CASH | |
| (174,502 | ) | |
| 88,662 | |
| |
| | | |
| | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | |
| 3,570,329 | | |
| (4,527,727 | ) |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD | |
| 2,415,575 | (1) | |
| 6,572,994 | (3) |
CASH AND CASH EQUIVALENTS, ENDING OF PERIOD | |
$ | 5,985,904 | (2) | |
$ | 2,045,267 | (4) |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURES: | |
| | | |
| | |
Non-cash investing activities: | |
| | | |
| | |
Transfer from construction in
progress to property and equipment | |
$ | - | | |
$ | 70,772,638 | |
| |
| | | |
| | |
Cash paid during the period for: | |
| | | |
| | |
Income tax | |
$ | - | | |
$ | 525,184 | |
Interest | |
$ | 6,404,999 | | |
$ | 5,248,955 | |
| (1) | Included
cash and cash equivalents from continuing and discontinued operations of $2,157,738 and
$257,837, respectively. |
| | |
| (2) | Included
cash and cash equivalents from continuing and discontinued operations of $5,981,829 and
$4,075, respectively. |
| | |
| (3) | Included
cash and cash equivalents from continuing and discontinued operations of $3,542,459 and
$3,030,535, respectively. |
| | |
| (4) | Included
cash and cash equivalents from continuing and discontinued operations of $1,306,390 and
$738,877, respectively. |
The
accompanying notes are an integral part of these consolidated financial statements
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS |
China Yida Holding Co. (“China Yida”)
and its subsidiaries (collectively the "Company”, “we”, “us”, or “our”)
engage in tourism and advertisement businesses in the People’s Republic of China.
Keenway Limited was incorporated under the
laws of the Cayman Islands on May 9, 2007 for the purpose of functioning as an off-shore holding company to obtain ownership interests
in Hong Kong Yi Tat International Investment Co., Ltd (“Hong Kong Yi Tat”), a company incorporated under the laws of
Hong Kong. Immediately prior to the Merger (defined below), Mr. Chen Minhua and his wife, Ms. Fan Yanling, were the majority
shareholders of Keenway Limited.
On November 19, 2007, we entered into a share
exchange and stock purchase agreement with Keenway Limited, Hong Kong Yi Tat, and with the shareholders of Keenway Limited
at that time, including Chen Minhua, Fan Yanling, Zhang Xinchen, Extra Profit International Limited, and Lucky Glory International
Limited (collectively, the “Keenway Limited Shareholders”), pursuant to which in exchange for all of their shares of
Keenway Limited common stock, the Keenway Limited Shareholders received 18,180,649 newly issued shares (or 90,903,246 shares prior
to the reverse stock split on November 16, 2012) of our common stock and 728,359 shares (or 3,641,796 shares prior to the reverse
stock split on November 16, 2012) of our common stock which was transferred from some of our then existing shareholders (the “Merger”).
As a result of the closing of the Merger, the Keenway Limited Shareholders owned approximately 94.5% of our then issued and
outstanding shares on a fully diluted basis and Keenway Limited became our wholly owned subsidiary.
Hong Kong Yi Tat was incorporated as the holding
company of our operating entities, Fujian Jintai Tourism Development Co., Ltd., and Fujian Jiaoguang Media Co., Ltd., Yida (Fujian)
Tourism Group Limited, and Fujian Yida Tulou Tourism Development Co., Ltd. (“Tulou”). Hong Kong Yi Tat does
not have any other operation.
Fujian Jintai Tourism Development Co., Ltd.
(“Fujian Jintai”) has a wholly owned subsidiary, Fuzhou Hongda Commercial Services Co., Ltd., (“Hongda”). The
operation of Fujian Jintai is to develop the Great Golden Lake, one of our tourism destinations.
Hongda does not have any operation except for
owning 100% of the ownership interest in Fuzhou Fuyu Advertising Co., Ltd. (“Fuyu”) which is engaged in the operations
of our media business. On March 15, 2010, Hongda entered into an equity transfer agreement with Fujian Yunding Tourism Industrial
Co., Ltd, (currently known as Yida (Fujian) Tourism Group Limited, “Fujian Yunding”), pursuant to which Fujian Yunding
acquired 100% of the issued and outstanding shares of Fuyu from Hongda at the aggregate purchase price of RMB 3,000,000. As
a result, Fujian Yunding became the 100% holding company of Fuyu. Hongda ceased business and deregistered on December 2, 2011.
Fujian Jintai originally also owned 100% of
the ownership interest in Fujian Yintai Tourism Co., Ltd. (“Yintai”). On March 15, 2010, Fujian Jintai entered into
an equity transfer agreement with Fujian Yunding, pursuant to which Fujian Yunding acquired 100% of the issued and outstanding
common stock of Yintai from Fujian Jintai at the aggregate purchase price of RMB 5,000,000. As a result, Yintai became a wholly
owned subsidiary of Fujian Yunding. Yintai was deregistered on November 18, 2010.
Fujian Yida Tulou Tourism Development Co.,
Ltd.’s (“Tulou”) primary business relates to the operation of the Hua’An Tulou cluster, one of our tourism
destinations.
On April 12, 2010, our operating subsidiary
“Fujian Yunding Tourism Industrial Co., Ltd.” changed its name to “Yida (Fujian) Tourism Group Limited”
for our expanding business in operations of domestic tourism destinations in China by acquiring new tourism destinations. Yida
(Fujian) Tourism Group Limited’s (“Fujian Yida”) primary business relates to the operations of our Yunding tourism
destination and all of our newly engaged tourism destinations, and the management of our media business.
On March 16, 2010, Fujian Yida formed a wholly
owned subsidiary, Yongtai Yunding Resort Management Co., Ltd. (“Yongtai Yunding”) which currently has no material business
operations. We plan to develop Yongtai Yunding into a business entity primarily focusing on the operations of our Yunding tourism
destination.
Fujian Jiaoguang Media Co., Ltd. (“Fujian
Jiaoguang”) and the Company’s contractual relationship comply with the requirements of the Accounting Standard Codification
("ASC") 810, to consolidate Fujian Jiaoguang’s financial statements as a Variable Interest Entity. During
the current period, Fujian Jiaoguang had no material business operations.
Fuzhou Fuyu Advertising Co., Ltd. (“Fuyu”)
concentrates on the mass media segment of our business. Its primary business is focused on advertisements, including
media publishing, television, cultural and artistic communication activities, and performance operation and management activities.
On April 15, 2010, we entered into agreement
with Anhui Xingguang Group to set up a subsidiary - Anhui Yida Tourism Development Co., Ltd. ("Anhui Yida") by investing
60% of the equity interest, and Anhui Xingguang Group owns 40% of the equity interest of Anhui Yida. The total paid-in capital
of Anhui Yida was $14,687,307 (equals RMB 100 million). Anhui Yida's primary business relates to the operation of our tourism destinations,
specifically, Ming dynasty culture tourist destination.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. |
ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED) |
On July 6, 2010, Fujian Yida formed a wholly
owned subsidiary, Jiangxi Zhangshu (Yida) Tourism Development Co., Ltd. (“Jiangxi Zhangshu”) which currently has no
material business operations. The initial paid-in capital of Jiangxi Zhangshu was $2,937,461 (RMB 20 million). On July 5, 2011,
Fujian Yida and Fuyu further injected capital amounted to RMB 49 million and RMB1 million, respectively, to Jiangxi Zhangshu. On
March 20, 2012, Fujian Yida and Fuyu further injected capital amounted to RMB 29.4 million and RMB 0.6 million, respectively, to
Jiangxi Zhangshu, and the total paid-in capital increased to $15,842,337 (RMB100 million). We plan to develop Jiangxi Zhangshu
into a business entity primarily focusing on the operations of a new tourist destination.
On July 7, 2010, Fujian Yida formed a wholly
owned subsidiary, Jiangxi Fenyi (Yida) Tourism Development Co., Ltd. (“Jiangxi Fenyi”) which currently has no material
business operations. The initial paid-in capital of Jiangxi Fenyi was $1,762,477 (RMB 12 million). On July 7, 2011,
Fujian Yida further injected capital amounted to RMB 48 million to Jiangxi Fenyi and the total paid-in capital increased to $9,391,876
(RMB 60 million). We plan to develop Jiangxi Fenyi into a business entity primarily focusing on the operations of a new tourist
destination.
On June 24, 2011, Fujian Yida formed a wholly
owned subsidiary, Fujian Yida Travel Service Co., Ltd (the “Yida Travel”). The total paid-in capital of Yida Travel
was $1,546,670 (RMB 10 million). Its primary business is to conduct domestic and international traveling services in
China, including operating the direct sales of travel services for our current tourist destinations at the Great Golden Lake, Yunding
Recreational Park, and Hua’An Tulou Cluster, and our three tourist destinations currently under construction, Ming Dynasty
Entertainment World, China Yang-sheng (Nourishing Life) Paradise, and the City of Caves.
On May 11, 2012, Jiangxi Zhangshu formed a
wholly owned subsidiary, Zhangshu (Yida) Real Estate Development Co., Ltd. (“Zhangshu Development”). The total
paid-in capital of Zhangshu Development was $792,532 (RMB 5 million). Its primary business is to conduct business of real estate
development and sales in China.
On May 16, 2012, Anhui Yida formed a wholly
owned subsidiary, Bengbu (Yida) Real Estate Development Co., Ltd. (the “Bengbu Yida”). The total paid-in capital of
Bengbu Yida was $1,268,050 (RMB 8 million). Its primary business is to conduct business of real estate development in China.
On May 22, 2012, Jiangxi Zhangshu formed a
wholly owned subsidiary, Zhangshu (Yida) Investment Co., Ltd. (the “Zhangshu Investment”). The total paid-in capital
of Zhangshu Investment was $792,532 (RMB 5 million). Its primary business is to conduct real estate investment, project management
and consulting in China.
On June 6, 2012, Jiangxi Fenyi formed a wholly
owned subsidiary, Fenyi (Yida) Property Development Co., Ltd. (“Fenyi Development”). The total paid-in capital
of Fenyi Development was $792,532 (RMB 5 million). Its primary business is to conduct business of real estate development and sales
in China.
On July 20, 2012, Anhui Yida formed a wholly
owned subsidiary, Bengbu (Yida) Investment Co., Ltd. (“Bengbu Investment”). The total paid-in capital of Bengbu Investment
was $792,532 (RMB 5 million). Its primary business is to conduct real estate investment, project management and consulting in China.
On July 30, 2012, Fujian Yida formed a wholly
owned subsidiary, Fujian (Yida) Culture and Tourism Performing Arts Co., Ltd. (“Yida Arts”). The total paid-in capital
of Yida Arts was $792,532 (RMB 5 million). Its primary business is to operate performance and show events at Yunding Park.
On June 3, 2013, Fujian Yida entered into a
stock transfer agreement with Anhui Xingguang Investment Group Ltd (“Purchaser”), pursuant to which Fujian Yida agreed
to transfer its 60% interest in Anhui Yida to the Purchaser for 60 million RMB, or $9.72 million, The Purchaser assumed all the
assets and liabilities of Anhui Yida.
On June 26, 2013, Fujian Yida formed a wholly
owned subsidiary, Yunding Hotel Management Co., Ltd. (“Yunding Hotel”). The total paid-in capital of Yunding Hotel
was $4,860,000 (RMB 30 million). Its primary business is to operate and manage the hotel and its facilities at Yunding Park.
On June 24, 2014, Jiangxi Zhangshu formed a
wholly owned subsidiary, Jiangxi Yida Travel Service Co., Ltd (“Jiangxi Travel”). The total paid-in capital of Zhangshu
Development was $48,691 (RMB 0.3 million). Its primary business is to conduct domestic and international traveling services in
China.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The Company’s consolidated financial
statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern,
which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company
has incurred significant negative cash flows from operative activities, and continuing net losses and working capital deficits
that allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s
ability to obtain adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate
capital, it could be forced to cease operations. The accompanying consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
Management’s Plan to Continue as a Going
Concern
In order to continue as a going concern, the
Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the
Company include (1) obtaining capital from the sale of its substantial assets, (2) generating and recovery of tourism revenue,
and (3) short-term and long-term borrowings from banks, stockholders or other related party(ies). However, management cannot provide
any assurance that the Company will be successful in accomplishing any of its plans.
The ability of the Company to continue as a
going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually
to secure other sources of financing and attain profitable operations.
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The unaudited consolidated financial statements
of China Yida Holding, Co. and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting principles
for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do
not include all the information and footnotes required by accounting principles generally accepted in the United States of America
for annual financial statements. However, the information included in these interim financial statements reflects all
adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair
presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim
periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet
information as of December 31, 2013 was derived from the audited consolidated financial statements included in the Company’s
Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that report. Certain
comparative amounts have been reclassified to conform to the current period's presentation.
a. Basis of presentation
The accompanying consolidated financial statements
have been prepared in conformity with accounting principles generally accepted in the United States of America. The functional
currency is the Chinese Renminbi, however the accompanying consolidated financial statements have been translated and presented
in United States Dollars ($).
b. Principles of consolidation
The accompanying consolidated financial statements
include the accounts of China Yida and its wholly-owned subsidiaries Keenway Limited, Hong Kong Yi Tat, Fuyu, Fujian
Yida, Tulou, Yongtai Yunding, Jiangxi Zhangshu, Jiangxi Fenyi, Yida Travel, Fenyi Development, Zhangshu Development, Zhangshu Investment, Yida
Arts, Yunding hotel, Jiangxi Travel and the accounts of its variable interest entity, Fujian Jiaoguang. All significant inter-company
accounts and transactions have been eliminated in consolidation
Consolidation of Variable Interest Entities
According to the requirements of ASC 810, an
Interpretation of Accounting Research Bulletin No. 51 that requires a Variable Interest Entity ("VIE"), the Company has
evaluated the economic relationships of Fujian Jiaoguang which signed an exclusive right agreement with the Company. Therefore,
Fujian Jiaoguang is considered to be a VIE, as defined by ASC Topic 810-10, of which the Company is the primary beneficiary.
The carrying amount and classification of Fujian
Jiaoguang’s assets and liabilities included in the Consolidated Balance Sheets are as follows:
| |
September 30,
2014 | | |
December 31, 2013 | |
Total current assets * | |
$ | 6,470,528 | | |
$ | 12,244,845 | |
Total assets | |
$ | 6,478,166 | | |
$ | 12,252,536 | |
Total current liabilities # | |
$ | 15,318,650 | | |
$ | 11,193,422 | |
Total liabilities | |
$ | 15,318,650 | | |
$ | 11,193,422 | |
* Including intercompany receivables of $6,463,934
and $12,231,075 as at September 30, 2014 and December 31, 2013, respectively, to be eliminated in consolidation.
# Including intercompany payables of $15,288,021
and $11,169,092 as at September 30, 2014 and December 31, 2013, respectively, to be eliminated in consolidation.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
Although Fujian Jiaoguang no longer
had revenues, its bank account still has to be maintained active with certain cash flows to support its expenses. As
such, Fujian Jiaoguang transferred funds from and to the Company’s directly-owned subsidiaries, which resulted in intercompany
receivables and payables. Since Fujian Jiaoguang is a variable interest entity subject to consolidation, the balances of its
intercompany receivables and payables are eliminated against the corresponding account balances at the Company’s directly-owned
subsidiaries at the consolidation level.
c.
Use of estimates and assumptions
The preparation of the consolidated financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management
makes these estimates using the best information available at the time the estimates are made. However, actual results could differ
materially from those results. The most significant estimates reflected in the consolidated financial statements include depreciation,
useful lives of property and equipment, deferred income taxes, useful life of intangible assets and contingencies. Estimates and
assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements in the
period they are determined to be necessary.
d. Cash and cash equivalents
The Company considers all cash on hand
and in banks, certificates of deposit and other highly-liquid investments with original maturities of three months or less, when
purchased, to be cash and cash equivalents. As of September 30, 2014 and December 31, 2013, the Company has uninsured deposits
in banks of approximately $5,956,000 and $2,147,000.
e. Accounts receivable
The Company maintains reserves for potential
credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts,
customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate
the adequacy of these reserves. Based on the management’s judgment, no allowance for doubtful accounts is required at the
balance sheet dates.
f. Advances and prepayments
The Company advances funds to certain
vendors for purchase of its construction materials and necessary services. Based on the management’s judgment, no allowance
for advances and prepayments were assessed and recorded as of September 30, 2014 and December 31, 2013, respectively.
g. Property and equipment
Property and equipment are recorded at cost
less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of
improvements that extends the life of property, and equipment are capitalized. These capitalized costs may include structural improvements,
equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.
Depreciation for financial reporting purposes
is provided using the straight-line method over the estimated useful lives of the assets or lease term as follows:
Building |
20 years |
Electronic Equipment |
5 to 8 years |
Transportation Equipment |
8 years |
Office Furniture |
5 to 8 years |
Leasehold Improvement and Attractions |
Lesser of term of the lease or the estimated useful lives of the assets |
h. Intangible assets
Intangible assets consist of acquisition of
management right of tourist resort, commercial airtime rights and land use rights for tourism resorts. They are amortized
on the straight line basis over their respective lease periods. The lease period of management right, commercial airtime rights
and land use rights is 30 years, 3 years and 40 years, respectively.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
i. Impairment
The Company reviews long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated
undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists,
an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.
Assets are grouped and evaluated at the lowest
level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers
historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount
of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset
exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying
amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows
as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available,
judgments and projections are considered necessary. There was no impairment of long-lived assets as of September 30, 2014 and December
31, 2013.
j. Revenue recognition
Revenue is recognized at the date of service
rendered to customers when a formal arrangement exists, the price is fixed or determinable, the services rendered, no other significant
obligations of the Company exist and collectability is reasonably assured. Payments received before satisfaction of all of the
relevant criteria for revenue recognition are recorded as unearned revenue.
Revenues from advance resort ticket sales are
recognized when the tickets are used. Revenues from our contractors who have tourism contracts with us are generally recognized
over the period of the applicable agreements commencing with the tourists visiting the resort. The Company also sells admission
and activities tickets for a resort which the Company has the management right.
The Company sells the television airtime to
third parties. The Company records advertising sales when advertisements are aired.
The Company has no allowance for product returns
or sales discounts because services that are rendered and accepted by the customers are normally not refundable and discounts are
normally not granted after service has been rendered.
Profit sharing costs are recorded as cost of
revenue. Profit sharing arrangements with the local governments for the management rights (see Note 14):
For the nine months ended September 30, 2014 |
|
| |
Tulou | |
| |
| | |
Gross receipts | |
$ | 486,126 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 43,856 | |
Total paid to the local governments | |
| 43,856 | |
| |
| | |
Net receipts | |
$ | 442,270 | |
For the nine months ended September 30, 2013 |
|
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 512,986 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 45,953 | |
Total paid to the local governments | |
| 45,953 | |
| |
| | |
Net receipts | |
$ | 467,033 | |
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
For the three months ended September 30, 2014 |
|
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 126,818 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 11,441 | |
Total paid to the local governments | |
| 11,441 | |
| |
| | |
Net receipts | |
$ | 115,377 | |
For the three months ended September 30, 2013
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 177,774 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 15,638 | |
Total paid to the local governments | |
| 15,638 | |
| |
| | |
Net receipts | |
$ | 162,136 | |
k. Advertising costs
The Company expenses the cost of advertising
as incurred or, as appropriate, the first time the advertising takes place. Advertising costs for the nine months ended September
30, 2014 and 2013 were $1,772,762 and $1,095,450, respectively. Advertising costs for the three months ended September 30, 2014
and 2013 were $920,266 and $296,730, respectively.
l. Post-retirement and post-employment benefits
Full time employees of subsidiaries
of the Company participate in a government mandated multi-employer defined contribution plan pursuant to which certain pension
benefits, medical care, employee housing, and other welfare benefits are provided to employees. Chinese labor regulations require
that the subsidiaries of the Company make contributions to the government for these benefits based on a certain percentages of
employees’ salaries. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts
for such employee benefits, which were expensed as incurred, were $230,450 and $163,734 for the nine months ended September 30,
2014 and 2013, respectively, and were $136,598 and $52,750 for the three months ended September 30, 2014 and 2013 respectively.
Other than the above, neither the Company nor its subsidiaries provide any other post-retirement or post-employment benefits.
m. Foreign currency translation
The Company uses the United States dollar ("U.S.
dollars") for financial reporting purposes. The Company’s subsidiaries maintain their books and records in their functional
currency, being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation
purposes, the Company translates the subsidiaries' assets and liabilities into U.S. dollars using the applicable exchange rates
prevailing at the balance sheet dates, and the statements of income are translated at average exchange rates during the reporting
periods. Gain or loss on foreign currency transactions are reflected on the income statement. Gain or loss on financial statement
translation from foreign currency are recorded as a separate component in the equity section of the balance sheet and is included as
part of accumulated other comprehensive income. The functional currency of the Company and its subsidiaries in China
is the Chinese Renminbi.
n. Income taxes
Income taxes are accounted for under the asset
and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation
allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized.
There were no deferred income tax assets as of September 30, 2014 and December 31, 2013, respectively.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
The Company applied the provisions of ASC 740-10-50, “Accounting
For Uncertainty In Income Taxes”, which provides clarification related to the process associated with accounting for uncertain
tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has
passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment
to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations
for any given quarterly or annual period based, in part, upon the results of operations for the given period. At September 30,
2014, management considered that the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions
in the future.
China Yida is subject to U.S. Federal and California
state examination by tax authorities for years after 2008, and the PRC tax authority for years after 2007.
o. Fair values of financial instruments
The carrying amounts reported in the consolidated
financial statements for current assets and currently liabilities approximate fair value due to the short-term nature of these
financial instruments. The carrying amount of long-term loans approximates fair value since the interest rates associated with
the debts approximate the current market interest rates.
The Company adopted ASC 820-10, “Fair
Value Measurements and Disclosures”, which establishes a single authoritative definition of fair value and a framework for
measuring fair value and expands disclosure of fair value measurements for both financial and nonfinancial assets and liabilities.
This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does
not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market
prices), the income approach (present value of future income or cash flows) and the cost approach (cost to replace the service
capacity of an asset or replacement cost). For purposes of ASC 820-10-15, nonfinancial assets and nonfinancial liabilities would
include all assets and liabilities other than those meeting the definition of a financial asset or financial liability as defined
in ASC-820-10-15-15-1A.
p. Stock-based compensation
The Company records stock-based compensation
expense pursuant to ASC 718-10, "Share Based Payment Arrangement ” which requires companies to measure compensation
cost for stock-based employee compensation plans at fair value at the grant date and recognize the expense over the employee's
requisite service period. The Company’s expected volatility assumption is based on the historical volatility of Company’s
stock or the expected volatility of similar entities. The expected life assumption is primarily based on historical exercise patterns
and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the
U.S. Treasury yield curve in effect at the time of grant.
Stock-based compensation expense is recognized
based on awards expected to vest, and there were no estimated forfeitures as the Company has a short history of issuing options.
ASC 718-10 requires forfeitures to be estimated at the time of grant and revised in subsequent periods, if necessary, if actual
forfeitures differ from those estimates.
q. Earnings per share (EPS)
Earnings per share is calculated in accordance
with ASC 260. Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings
per share is based on the assumption that all dilutive convertible shares and stock instruments were converted or exercised. Options
and warrants are assumed to be exercised at the beginning of the period if the average stock price for the period is greater than
the exercise price of the warrants and options.
r. Statutory Reserves
In accordance with the relevant laws and regulations
of the PRC and the articles of association of the Company, the Company is required to allocate 10% of their net income reported
in the PRC statutory accounts, after offsetting any prior years’ losses, to the statutory surplus reserve, on an annual basis.
When the balance of such reserve reaches 50% of the respective registered capital of the subsidiaries, any further allocation is
optional.
As at September 30, 2014, the statutory reserve
of the subsidiaries already reached 50% of the registered capital of the subsidiaries and the Company did not have any further
allocation on it.
The statutory surplus reserves can be used
to offset prior years’ losses, if any, and may be converted into registered capital, provided that the remaining balances
of the reserve after such conversion is not less than 25% of registered capital. The statutory surplus reserve is non-distributable.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
s. Segment reporting
ASC 250, "Disclosure About Segments
of an Enterprise and Related Information" requires use of the "management approach" model for segment reporting.
The management approach model is based on the way a company’s management organizes segments within the company for making
operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure,
management structure, or any other manner in which management disaggregates a company. Prior to July 2013, the Company had two
reportable segments: advertisement and tourism. Now the company has only one reportable segment which is tourism.
t. Dividend Policy
Under the laws governing foreign invested enterprises
in China, dividend distribution and liquidation are allowed but subject to special procedures under the relevant laws and rules.
Any dividend payments will be subject to the decision of the Board of Directors and subject to foreign exchange rules governing
such repatriation. Any liquidation is subject to both the relevant government agency’s approval and supervision as well as
the foreign exchange control.
u. Reclassifications
Except for the classification for discontinued
operations, certain classifications have been made to the prior year financial statements to conform to the current year presentation.
The reclassifications have no impact on the Company’s 2013 Consolidated Statements of Income and Comprehensive Income and
Consolidated Statements of Cash Flows.
v. Recent accounting pronouncements
In August
2014, FASB issued ASU 2014-15 – Presentation of Financial Statements – Going Concern (Subtopic 205-40). The amendments
in this Update states the disclosure of uncertainties about an entity’s ability to continue as a going concern. An entity’s
management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about
the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued
(or available to be issued). When management identifies conditions or events that raise substantial doubt, management should consider
whether its plans will alleviate the substantial doubt.
When substantial
doubt is raised but is alleviated by management’s plans, the entity should disclose following information: (a) Principal
conditions or events that raised substantial doubt (before consideration of management’s plans); (b) Management’s evaluation
of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; (c) Management’s
plans that alleviated the substantial doubt.
When substantial
doubt is raised but is not alleviated by management’s plans,, an entity should include a statement in the footnotes indicating
that there is substantial doubt about the entity’s ability to continue as a going concern within one year after the date
that the financial statements are issued (or available to be issued), and disclose the following information: (a) Principal conditions
or events that raise substantial doubt; (b) Management’s evaluation of the significance of those conditions or events in
relation to the entity’s ability to meet its obligations; (c) Management’s plans that are intended to mitigate the
conditions or events that raise the substantial doubt.
The amendments
in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods
thereafter. Early application is permitted. The Company is still in progress of evaluating future impact of adopting this standard.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) |
In May 2014, the FASB issued ASU 2014-09, Revenue
from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict
the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. To achieve the core principle, an entity should apply the following steps:
Step 1: Identify the contract(s) with a customer.
Step 2: Identify the performance obligations
in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the
performance obligations in the contract.
Step 5: Recognize revenue when (or as) the
entity satisfies a performance obligation.
w. Restatement
of Previously Issued Financial Statements
The
Company has restated its consolidated financial statements as of and for the nine months ended September 30, 2014 to correct errors
identified in the Statement of Cash Flows. The restatement corrects the classification of cash flow resulted from proceeds from
disposal of discontinued entity and eliminates the cash flows between continuing and discontinued operations. The restatement
has no impact on the Company’s Consolidated Balance Sheets or Consolidated Statements of Income and Comprehensive Income.
The
effects of the adjustments on the Company’s previously issued financial statements for the nine months ended September 30,
2014 are summarized as follows:
Selected
Consolidation Statements of Cash Flows information for the nine months
ended September 30, 2014.
| |
Previously | | |
Effect of | | |
As | |
| |
Reported | | |
Restatement | | |
Restated | |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | |
| | |
| |
Proceeds from disposal of discontinued entity | |
$ | - | | |
$ | 35,570,385 | | |
$ | 35,570,385 | |
Net cash provided by (used in) continuing operations | |
| (7,746,493 | ) | |
| 35,570,385 | | |
| 27,823,892 | |
Net cash provided by (used in) investing activities | |
| (7,275,083 | ) | |
| 35,570,385 | | |
| 28,295,302 | |
| |
| | | |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | | |
| | |
Proceeds from disposal of discontinued entity | |
| 35,570,385 | | |
| (35,570,385 | ) | |
| - | |
Proceeds from discontinued entities | |
| 23,480,855 | | |
| (23,480,855 | ) | |
| - | |
Repayment to discontinued entities | |
| (38,277,859 | ) | |
| 38,277,859 | | |
| - | |
Net cash provided by continuing operations | |
| 22,052,207 | | |
| (20,773,381 | ) | |
| 1,278,826 | |
Net cash used in discontinued operations | |
| (1,399,034 | ) | |
| (14,797,004 | ) | |
| (16,196,038 | ) |
Net cash provided by (used in) financing activities | |
| 20,653,173 | | |
| (35,570,385 | ) | |
| (14,917,212 | ) |
Certain classifications have been
made to the prior year financial statements to conform to the current year presentation.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED) |
An entity should
disclose sufficient information to enable users of financial statements to understand the nature, amount, timing, and uncertainty
of revenue and cash flows arising from contracts with customers. For a public entity, the amendments in this Update are effective
for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early
application is not permitted. For all other entities (nonpublic entities), the amendments in this Update are effective for annual
reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018.
A nonpublic entity may elect to apply this guidance earlier. The Company has begun evaluating future impact of adopting this standard
on the Company’s consolidated financial position and operating results.
In April 2014,
the FASB issued ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360).
The amendments in this Update change the requirements for reporting discontinued operations in Subtopic 205-20. A discontinued
operation may include a component of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal
of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the
disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results.
The amendments in this Update require an entity to present, for each comparative period, the assets and liabilities of a disposal
group that includes a discontinued operation separately in the asset and liability sections, respectively, of the statement of
financial position. The amendments in this Update require a public business entity and a not-for-profit entity that has issued,
or is a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market to
provide disclosures about a disposal of an individually significant component of an entity that does not qualify for discontinued
operations presentation in the financial statements. The amendments in this Update require all other entities to provide disclosures
about a disposal of an individually significant component of an entity that does not qualify for discontinued operations presentation
in the financial statements. The amendments in this Update expand the disclosures about an entity’s significant continuing
involvement with a discontinued operation. Those disclosures are required until the results of operations of the discontinued
operation in which an entity retains significant continuing involvement are no longer presented separately as discontinued operations
in the statement where net income is reported (or statement of activities for a not-for-profit entity). The adoption of this standard
is not expected to have a material impact on the Company’s consolidated financial position and results of operations.
In January 2014,
the FASB issued ASU 2014-02, Intangibles-Goodwill and Other (Topic 350): Accounting for Goodwill. The amendments in this Update
allow an accounting alternative for the subsequent measurement of goodwill. An entity within the scope of the amendments that
elects the accounting alternative in this Update should amortize goodwill on a straight-line basis over 10 years, or less than
10 years if the entity demonstrates that another useful life is more appropriate. An entity that elects the accounting alternative
is further required to make an accounting policy election to test goodwill for impairment at either the entity level or the reporting
unit level. Goodwill should be tested for impairment when a triggering event occurs that indicates that the fair value of an entity
(or a reporting unit) may be below its carrying amount. The disclosures required under this alternative are similar to existing
U.S. generally accepted accounting principles (GAAP). However, an entity that elects the accounting alternative is not required
to present changes in goodwill in a tabular reconciliation. The accounting alternative, if elected, should be applied prospectively
to goodwill existing as of the beginning of the period of adoption and new goodwill recognized in annual periods beginning after
December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. Early application is permitted.
The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position
and results of operations.
In December
2013, the FASB issued ASU 2013-12, “Definition of a Public Business Entity”. The Board has decided that it should
proactively determine which entities would be within the scope of the Private Company Decision-Making Framework: A Guide for Evaluating
Financial Accounting and Reporting for Private Companies (Guide). This will aim to minimize the inconsistency and complexity of
having multiple definitions of, or a diversity in practice as to what constitutes, a nonpublic entity and public entity within
U.S. generally accepted accounting principles (GAAP) on a going-forward basis. This Update addresses those issues by defining
public business entity. The Accounting Standards Codification includes multiple definitions of the terms nonpublic entity and
public entity. The amendment in this Update improves U.S. GAAP by providing a single definition of public business entity for
use in future financial accounting and reporting guidance. The amendment does not affect existing requirements. There is no actual
effective date for the amendment in this Update. However, the term public business entity will be used in Accounting Standards
Updates which are the first Updates that will use the term public business entity. The adoption of this standard is not expected
to have a material impact on the Company’s consolidated financial position and results of operations.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
3. |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED) |
In July 2013,
the FASB issued ASU 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating
Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” An unrecognized tax benefit, or a portion of
an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset. To the extent
a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under
the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a
tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend
to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements
as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available
is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming
disallowance of the tax position at the reporting date. For public entities, the guidance is effective prospectively for reporting
periods beginning after December 15, 2013. For nonpublic entities, the guidance is effective prospectively for reporting periods
beginning after December 15, 2014. Early adoption is permitted. The adoption of this standard is not expected to have a material
impact on the Company’s consolidated financial position and results of operations.
In February
2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated
Other Comprehensive Income.” This ASU does not change the current requirements for reporting net income or other
comprehensive income in financial statements. However, this guidance requires an entity to provide information about
the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required
to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified
out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is
required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts
that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference
to other disclosures required under U.S. GAAP that provide additional detail about those amounts. For public entities,
the guidance is effective prospectively for reporting periods beginning after December 15, 2012. For nonpublic entities,
the guidance is effective prospectively for reporting periods beginning after December 15, 2013. Early adoption is
permitted. The adoption of this standard is not expected to have a material impact on the Company’s consolidated
financial position and results of operations.
4. |
OTHER RECEIVABLES, NET |
Other receivables
consist of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | |
| |
Advance to employees | |
$ | 107,158 | | |
$ | 125,824 | |
Security deposits | |
| 40,088 | | |
| 104,730 | |
Other | |
| 63,904 | | |
| 38,281 | |
| |
| 211,150 | | |
| 268,835 | |
Less: Allowance | |
| - | | |
| - | |
| |
$ | 211,150 | | |
$ | 268,835 | |
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
5. |
ADVANCES AND PREPAYMENTS |
Advances and
prepayments consist of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
Advance payments
related to land use rights | |
$ | 819,635 | | |
$ | 814,000 | |
Advance payments related
to hotel facilities of Yunding resort | |
| 267,308 | | |
| 354,461 | |
Advance payments related
to facilities of Yang-Sheng Paradise | |
| 180,333 | | |
| 27,900 | |
Other | |
| 436,836 | | |
| 164,833 | |
| |
| 1,704,112 | | |
| 1,361,194 | |
Less:
Allowance | |
| - | | |
| - | |
| |
$ | 1,704,112 | | |
$ | 1,361,194 | |
As of
September 30, 2014, advance payments related to land use rights represents the payment made by Fujian Yida and Fenyi Yida. Fujian
Yida made advance payments to the local government of Yongtai County of $808,378 (RMB 4.98 million) for the acquisition of land
use rights. Fenyi Yida made advance payments to the local government of $11,257 (RMB 0.07 million) for the acquisition of land
use rights during the nine months ended September 30, 2014.
As of December
31, 2013, advance payments related to land use rights represents the payment made by Fujian Yida. Fujian Yida made advance payments
to the local government of Yongtai County of $814,000 (RMB 4.98 million) for the acquisition of land use rights.
As of September
30, 2014 and December 31, 2013, advance payments related to facilities of Yang-Sheng Paradise were $180,333 and $27,900, respectively.
As of September
30, 2014 and December 31, 2013, advance payments related to hotel facilities of Yunding resort were $267,308 and $354,461, respectively.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
6. |
PROPERTY AND EQUIPMENT, NET |
Property and equipment consist of
the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | | |
| | |
Buildings, improvements, and attractions | |
$ | 192,731,457 | | |
$ | 187,404,825 | |
Electronic equipment | |
| 4,071,181 | | |
| 3,705,166 | |
Transportation equipment | |
| 2,890,994 | | |
| 2,602,218 | |
Office furniture | |
| 1,003,754 | | |
| 235,306 | |
| |
| 200,697,386 | | |
| 193,947,515 | |
Less: Accumulated depreciation | |
| (17,555,766 | ) | |
| (11,227,887 | ) |
Property and equipment, net | |
$ | 183,141,620 | | |
$ | 182,719,628 | |
Depreciation
expense for the nine months ended September 30, 2014 and 2013 were $6,412,392 and $3,090,269 respectively.
Depreciation
expense for the three months ended September 30, 2014 and 2013 were $2,473,273 and $1,071,774, respectively.
7. |
INTANGIBLE ASSETS, NET |
Intangible assets
consist of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | |
| |
Land use right | |
$ | 47,965,661 | | |
$ | 48,299,182 | |
Commercial airtime rights | |
| - | | |
| 6,882,616 | |
| |
| 47,965,661 | | |
| 55,181,798 | |
Accumulated amortization | |
| (1,351,251 | ) | |
| (7,344,157 | ) |
Intangible assets, net | |
$ | 46,614,410 | | |
$ | 47,837,641 | |
Commercial
airtime rights
On August 1,
2010, the Company entered into a commercial airtime rights agreement with a television station. Under the terms of the agreement,
the Company can obtain commercial airtime and resell to advertisers from August 1, 2010 to July 31, 2013 for a monthly fee of
$163,607 (RMB 1,000,000) for the period from August 1, 2010 to July 31, 2011. The fee is increased by 20% annually on every
August 1. From August 1, 2011 to July 31, 2012, the monthly fee is $196,329 (RMB 1,200,000). From August
31, 2012 to July 30, 2013, the monthly fee will be $235,594 (RMB 1,440,000) for the period. The agreement can
be renewed for two additional years, with mutual agreement between the parties. Since the Company is reselling the commercial
airtime to advertisers, the Company has present-valued the monthly payments, including the 20% annual increase, using
the market borrowing rate of 7% for three years and recorded $6,882,616 (RMB 42,067,917) as commercial airtime rights
as an intangible asset, $7,146,363 (RMB 43,680,000) as an obligation under airtime rights commitment, and
$263,747 (RMB 1,612,083) as deferred interest at inception.
At inception,
the Company had made an initial assessment that there is no assurance the Company will exercise the option for two additional
years and therefore, the Company has only considered the present value of the monthly fee for the first three years under the
terms of the agreement.
As of September
30, 2014, the commercial airtime rights have been fully amortized.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
7. |
INTANGIBLE ASSETS, NET (CONTINUED) |
Land use
right
For the nine
months ended September 30, 2014 and 2013, amortization expense amounted to $893,871 and $1,355,439, respectively.
For
the three months ended September 30, 2014 and 2013, amortization expense amounted to $297,453 and $205,317, respectively.
Estimated amortization
for the next five years and thereafter is as follows:
As of September 30, | |
| |
2015 | |
$ | 1,191,828 | |
2016 | |
| 1,191,828 | |
2017 | |
| 1,191,828 | |
2018 | |
| 1,191,828 | |
2019 | |
| 1,191,828 | |
Thereafter | |
| 40,655,270 | |
| |
$ | 46,614,410 | |
Long-term prepayments
consist of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
Prepayments for project planning,
assessments and consultation fees | |
$ | 1,547,426 | | |
$ | 1,989,648 | |
Prepayment for cooperative development | |
| 411,400 | | |
| 488,828 | |
Others | |
| 188,614 | | |
| 228,898 | |
| |
$ | 2,147,440 | | |
$ | 2,707,374 | |
Prepayments
for project planning, assessments and consultation fees represent advances relating to the planning, assessment and consultation
for the development of tourism destinations in Jiangxi province.
In 2008, Hong
Kong Yi Tat entered into a Tourist Destination Cooperative Development Agreement with Yongtai County Government with respect to
the development of Yunding Park pursuant to which Fujian Yida is obligated to pay RMB 5.0 million, or approximately $0.82 million,
to the Yongtai County People’s Government over the course of the first 10 years of the Agreement. By the end of 2013, the
Company had fulfilled this obligation with total payments made in the amount of approximately $818,036 (RMB 5.0 million) recorded
as prepayments for cooperative development to be expensed throughout the term of the Agreement. As of September 30, 2014 and December
31, 2013, prepayments for cooperative development amounted to $411,400 and $488,828, respectively.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
Short-term
loans
Short-term loans
represent borrowings from commercial banks that are due within one year. These loans consisted of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | |
| |
Loan
from China Minsheng Banking Corp, Ltd., interest rate at 7% per annum, due June 10, 2015, (a) | |
$ | 2,599,639 | | |
$ | - | |
| |
| | | |
| | |
Loan
from Fujian Haixia Bank (formerly known as Merchant bank of Fuzhou), interest rate at 9.6% per annum, due June 20, 2015, collateralized
by the personal guarantees by two of the Company’s directors. (b) | |
| 1,949,730 | | |
| - | |
| |
| | | |
| | |
Loan
from Fujian Haixia Bank (formerly known as Merchant bank of Fuzhou), interest rate at 8.7% per annum, due October 17, 2014,
guaranteed by Fujian Jintai Tourism Development Co., Ltd. and Yida Travel Service Co. Ltd. (c) | |
| - | | |
| 2,454,108 | |
Total | |
$ | 4,549,369 | | |
$ | 2,454,108 | |
|
(a) |
On June 2014, the Company borrowed
an amount of $2,599,639 (RMB 16 million) due on June 10, 2015 from China Minsheng Banking
Corp, Ltd., with the interest rate at 7% per annum.
|
|
(b) |
On June 2014, the Company borrowed
an amount of $1,949,730 (RMB 12 million) due on June 20, 2015 from Fujian Haixia Bank,
with the interest rate at 9.6% per annum.
|
|
(c) |
On October 2013, the Company
borrowed an amount of $2,454,108 (RMB 15 million) due on October 17, 2014 from Fujian
Haixia Bank, with the interest rate at 8.7% per annum. For the nine months ended September
30, 2014, the Company repaid the loan of $2,454,108 (RMB 15 million).
|
Interest
expense for the nine months ended September 30, 2014 and 2013 amounted to $207,836 and $173,713, respectively. Interest
expense for the three months ended September 30, 2014 and 2013 amounted to $101,614 and $105,652, respectively. The
interest expense for the nine months ended September 30, 2014 and 2013 of $0 and $62,675, respectively, was capitalized as part
of construction in progress. The interest expense for the three months ended September 30, 2014 and 2013 that amounted to $0 and
$29,018, respectively, was capitalized as part of construction in progress.
Long-term
debt
Long term debt
consists of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | |
| |
Loan
from China Construction Bank, interest rate at 6.55% and 7.86% per annum, final installment due on August 5, 2022, collateralized
by the fixed assets of Fujian Yida and personal guarantees by two of the Company’s directors as additional collateral.
(Note (c)) | |
$ |
40,131,932
| | |
$ |
- | |
| |
| | |
| |
Loan
from China Minsheng Banking Corp, Ltd., interest rate at 9% per annum, final installment due on November 30, 2019, secured
by the land use right of Jiangxi Zhangshu, collateralized by the personal guarantees by two of the Company’s directors.
(Note (a)) | |
| 37,369,815 | | |
| 53,990,380 | |
| |
| | | |
| | |
Loan
from China Minsheng Banking Corp, Ltd., interest rate at 12.50% per annum, final installment due on March 6, 2015, secured
by the land use rights of Fujian Yida and the right to collect resort ticket sales at Yunding resort as additional collateral.
(Note (b)) | |
| - | | |
| 24,541,082 | |
| |
| | | |
| | |
Loan
from China Minsheng Banking Corp, Ltd., interest rate at 11.97% per annum, final installment due on November 20, 2014, secured
by credit guarantee of Fujian Jintai, collateralized by the fixed assets of Fujian Yida, and collateralized by the personal
guarantees by two of the Company’s directors. (Note (d)) | |
| - | | |
| 6,871,502 | |
| |
| | | |
| | |
| |
| 77,501,747 | | |
| 85,402,964 | |
Less: current portion | |
| (1,218,581 | ) | |
| (6,871,502 | ) |
Total | |
$ | 76,283,166 | | |
$ | 78,531,462 | |
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
9. |
BANK LOANS (CONTINUED) |
Note:
(a) |
$12,998,197 (RMB 80,000,000) and $24,371,618 (RMB
150,000,000) will be due in each twelve-month period as of September 30, 2019 and 2020, respectively. |
|
|
(b) |
$24,541,082 (RMB 150,000,000) has been paid off during the nine months
ended September 30, 2014.
|
|
|
(c) |
$2,599,639
(RMB 16,000,000), $3,574,504 (RMB 22,000,000), $4,386,891 (RMB 27,000,000), $5,199,279 (RMB 32,000,000), $6,092,905 (RMB
37,500,000), $6,986,531 (RMB 43,000,000) and $10,073,602 (RMB 62,000,000) will be due in each twelve-month period as of
September 30, 2016, 2017, 2018, 2019, 2020, 2021 and 2022, respectively.
|
(d) |
$6,871,502 (RMB 42,000,000) has been repaid in full amount during the
nine months ended September 30, 2014.
|
Interest expense
for the nine months ended September 30, 2014 and 2013 amounted to $6,253,064 and $5,986,257, respectively. Interest
expense for the three months ended September 30, 2014 and 2013 amounted to $1,897,874 and $2,318,648, respectively. The
interest expense for the nine months ended September 30, 2014 and 2013 of $0 and $2,861,905, respectively, was capitalized as
part of construction in progress. The interest expense for the three months ended September 30, 2014 and 2013 that amounted to
$0 and $1,475,997, respectively, was capitalized as part of construction in progress.
10. |
ACCRUED EXPENSES AND OTHER PAYABLES |
Accrued expenses
and other payables consist of the following:
| |
September 30,
2014 | | |
December 31,
2013 | |
| |
| | |
| |
Accrued payroll | |
$ | 582,481 | | |
$ | 587,176 | |
Security deposits payable | |
| 451,367 | | |
| 93,235 | |
Unearned revenue | |
| 200,529 | | |
| 78,058 | |
Accrued local government fees | |
| 209,439 | | |
| 210,895 | |
Welfare payable | |
| 13,199 | | |
| 13,291 | |
Other | |
| 141,862 | | |
| 36,736 | |
| |
$ | 1,598,877 | | |
$ | 1,019,391 | |
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
The Company
is subject to Hong Kong (“HK”) and People’s Republic of China (“PRC”) profit tax. For certain operations
in HK and PRC, the Company has incurred net accumulated operating losses for income tax purposes.
United
States
The Company
is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes
have been made as the Company has no taxable income for the period. The applicable income tax rate for the Company was 35% for
the each of the six months ended September 30, 2014 and 2013. Net operating loss at September 30, 2014, which can be used to offset
future taxable income, was approximately $3,815,202. No tax benefit has been realized since a valuation allowance has offset the
deferred tax asset resulting from the net operating losses.
Cayman
Islands
Keenway Limited,
a wholly owned subsidiary of the Company, is incorporated in the Cayman Islands and, under the current laws of the Cayman Islands,
is not subject to income taxes.
Hong Kong
Hong Kong Yi
Tat, a wholly owned subsidiary of the Company, is incorporated in Hong Kong. Hong Kong Yi Tat is subject to Hong Kong taxation
on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. No provisions for income taxes have
been made as Hong Kong Yi Tat has no taxable income for the period. The applicable statutory tax rate for the subsidiary was 16.5%
for each of the nine months ended September 30, 2014 and 2013.
PRC
Effective on
January 1, 2008, the PRC Enterprise Income Tax Law, EIT Law, and Implementing Rules impose an unified enterprise income tax rate
of 25% on all domestic-invested enterprises and foreign investment enterprises in PRC, unless they qualify under certain limited
exceptions. As such, starting from January 1, 2008, the Company’s subsidiaries in PRC are subject to an enterprise income
tax rate of 25%.
Provision for
income tax consists of the following:
| |
For
The Nine Months Ended September 30, | | |
For
The Three Months Ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
| |
| | |
| | |
| | |
| |
Current | |
| | |
| | |
| | |
| |
USA | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
China | |
| - | | |
| 132,830 | | |
| - | | |
| 961 | |
| |
| - | | |
| 132,830 | | |
| - | | |
| 961 | |
Deferred | |
| | | |
| | | |
| | | |
| | |
USA | |
| | | |
| | | |
| | | |
| | |
Deferred tax asset for
NOL carry forwards | |
| 65,233 | | |
| 80,682 | | |
| 20,157 | | |
| 13,741 | |
Valuation
allowance | |
| (65,233 | ) | |
| (80,682 | ) | |
| (20,157 | ) | |
| (13,741 | ) |
| |
| - | | |
| - | | |
| - | | |
| - | |
China | |
| | | |
| | | |
| | | |
| | |
Current portion | |
| | | |
| | | |
| | | |
| | |
Temporary
difference from general and administrative expenses | |
| - | | |
| - | | |
| - | | |
| - | |
Net
changes in deferred income tax under current portion | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Non current portion | |
| | | |
| | | |
| | | |
| | |
Deferred tax asset for
NOL carry forwards | |
| 6,830,556 | | |
| 2,629,822 | | |
| 3,927,167 | | |
| 973,946 | |
Valuation
allowance | |
| (6,830,556 | ) | |
| (2,629,822 | ) | |
| (3,927,167 | ) | |
| (973,946 | ) |
Net
changes in deferred income tax under non-current portion | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Net
deferred income tax expenses (benefit) | |
| - | | |
| - | | |
| - | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Total
provision for income tax | |
$ | - | | |
$ | 132,830 | | |
$ | - | | |
$ | 961 | |
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
11. |
INCOME TAX (CONTINUED) |
The following
is a reconciliation of the provision for income taxes at the PRC and Hong Kong tax rate to the income taxes reflected in the Statement
of Income:
| |
For
The Nine Months Ended September 30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
Tax expense at statutory rate -
US | |
| 35.0 | % | |
| 35.0 | % |
Changes in valuation allowance - US | |
| (35.0 | %) | |
| (35.0 | %) |
Tax expense at statutory rate - HK | |
| 16.5 | % | |
| 16.5 | % |
Changes in valuation allowance - HK | |
| (16.5 | %) | |
| (16.5 | %) |
Foreign income tax rate - PRC | |
| 25.0 | % | |
| 25.0 | % |
Other (a) | |
| (25.00 | %) | |
| (26.35 | %) |
Effective income tax rates | |
| (0.00 | %) | |
| (1.35 | %) |
(a) |
Other represents expenses incurred by the Company
that are not deductible for PRC income taxes and changes in valuation allowance for PRC entities for the nine months ended
September 30, 2014 and 2013, respectively. |
In assessing
the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income during the periods in which the net operating losses and temporary differences become deductible. Management
considered projected future taxable income and tax planning strategies in making this assessment.
The change in
total allowance for the nine months ended September 30, 2014 and 2013 was an increase of $6,895,789 and $2,710,503 respectively.
The change in
total allowance for the three months ended September 30, 2014 and 2013 was an increase of $3,947,324 and $987,685 respectively.
(1) REVERSE
SPLIT
Effective November
19, 2012, the Company conducted a 1-for-5 Reverse Stock Split of all issued and outstanding shares of its common stock. Upon the
effect of the Reverse Stock Split, the Company’s issued and outstanding shares reduced from 19,571,785 to 3,914,580. Except
as otherwise specified, all information in these consolidated financial statements and notes and all share and per share information
has been retroactively adjusted for all periods presented to reflect the reverse stock split, as if the Reverse Stock Split had
occurred at the beginning of the earliest period presented.
(2) WARRANTS
The remaining
773,812 Class A Warrants expired on September 6, 2011.
CHINA YIDA HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(3) STOCK-BASED
COMPENSATION
On June 10,
2009 (the “Grant Date”), the Company entered into a Non-qualified Stock Option Agreement with one of the Company’s
directors, pursuant to which, the Company issued the director non-qualified stock options (the “Stock Options”) to
purchase a total of 6,000 shares of the Company’s common stock as compensation for his services to be rendered as the Company’s
director. One half of the Stock Options shall vest on the sixth month anniversary of the Grant Date (the “First
Vesting Date”) and become exercisable at an exercise price equal to the market price of the Company’s common stock
on the First Vesting Date and the second half of Stock Options shall vest on the twelfth month anniversary of the Grant Date (the
“Second Vesting Date”) and become exercisable at an exercise price equal to the market price of the Company’s
common stock on the Second Vesting Date.
On January 21,
2011 (the “CFO Stock Option Grant Date”), the Company entered into a Non-qualified Stock Option Agreement with the
Company’s former Chief Financial Officer, pursuant to which, the Company issued non-qualified stock options (the “CFO
Stock Options”) to purchase a total of 15,000 shares of the Company’s common stock as compensation for his services
to be rendered as the Company’s Chief Financial Officer. 3,000 CFO Stock Options vested on the CFO Stock Option Grant Date;
4,000 CFO Stock Options shall vest on the one-year anniversary of the CFO Grant Date; 4,000 CFO Stock Options shall vest on the
second-year anniversary of the CFO Grant Date; and 4,000 CFO Stock Options shall vest on the third-year anniversary of the CFO
Grant Date. The exercise price for all of the shares was determined as the fair value of our common stock using the
closing price on the grant date.
On November
5, 2011, our former CFO submitted a letter of resignation resigning from his position. The resignation was effective as of December
31, 2011. Under the Non-qualified Stock Option Agreement, if CFO is removed from office for cause prior to the 21 st day
of January, 2012, any outstanding stock options held by him which are not vested and exercisable by him immediately prior to resignation
shall terminate as of the date of removal, and any outstanding stock options held by CFO which is vested and exercisable immediately
prior to removal shall be exercisable at any time prior to the expiration date of such stock option or within one-year after the
date of removal, whichever is shorter. As a result, 12,000 CFO Stock Options were forfeited as of December 31, 2011. On January
6, 2012, our former CFO transferred options to purchase 3,000 shares to Mr. Minhua Chen, our Chief Executive Officer, as a gift.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
On January 21,
2011 (the “VPIR Stock Option Grant Date”), the Company entered into a Non-qualified Stock Option Agreement with the
Company’s former Corporate Secretary and VP of Investor Relation (“VPIR”), pursuant to which, the Company issued
non-qualified stock options (the “VPIR Stock Options”) to purchase a total of 15,000 shares of the Company’s
common stock as compensation for his services to be rendered as the Company’s VP of Investor Relation. 3,000 VPIR Stock
Options shall vest on the VPIR Stock Option Grant Date; 4,000 VPIR Stock Options shall vest on the one-year anniversary of the
VPIR Grant Date; 4,000 VPIR Stock Options shall vest on the second-year anniversary of the VPIR Grant Date; and 4,000 VPIR Stock
Options shall vest on the third-year anniversary of the VPIR Grant Date. The exercise price for all of the shares was determined
as the fair value of our common stock using the closing price on the grant date.
On November
5, 2011, our former VPIR submitted a letter of resignation resigning from his position. The resignation was effective as of December
31, 2011. Under the Non-qualified Stock Option Agreement, if VPIR is removed from office for cause prior to the 21 st day
of January, 2012, any outstanding stock option held by him which is not vested and exercisable by him immediately prior to resignation
shall terminate as of the date of removal, and any outstanding stock options held by VPIR which is vested and exercisable immediately
prior to removal shall be exercisable at any time prior to the expiration date of such stock option or within one-year after the
date of removal, whichever is shorter. As a result, 12,000 VPIR Stock Options were forfeited as of December 31, 2011. On January
6, 2012, our former VPIR transferred options to purchase 3,000 shares to Mr. Minhua Chen, our Chief Executive Officer, as a gift.
On March 17,
2011 (the “ID Stock Option Grant Date”), the Company entered into a Non-qualified Stock Option Agreement with the
Company’s Independent Director, pursuant to which, the Company issued non-qualified stock options (the “ID Stock Options”)
to purchase a total of 6,000 shares of the Company’s common stock as compensation for his services to be rendered as the
Company’s Independent Director. One half of the ID Stock Options vested on the ID Grant Date and the second half of ID Stock
Options vested on June 10, 2011. The exercise price for all of the shares was determined as the fair value of our common
stock using the closing price on the grant date.
On July 27,
2011, the Company entered into an agreement with the Company’s Independent Director, pursuant to which, the Company granted
4,000 restricted shares of the Company’s common stock as compensation for his services to be rendered as the Company’s
Independent Director from June 10, 2011 to June 9, 2012. The estimated value of the 4,000 shares was $73,000 on June 10, 2011.
On May 24, 2012, the 4,000 restricted shares were issued.
The Company
valued the stock options using the Black-Scholes model with the following assumptions:
Type
of Stock Option | |
Number
of Options | | |
Expected
Term | | |
Expected
Volatility | | |
Dividend
Yield | | |
Risk Free
Interest Rate | |
Options to Independent Director,
June 10, 2009 | |
| 6,000 | | |
| 5.25 | | |
| 356 | % | |
| 0 | % | |
| 3.11 | % |
Options to Chief Financial Officer, January 21,
2011 | |
| 15,000 | | |
| 6.25 | | |
| 60 | % | |
| 0 | % | |
| 3.44 | % |
Options to VP of Investor Relation, January 21,
2011 | |
| 15,000 | | |
| 6.25 | | |
| 60 | % | |
| 0 | % | |
| 3.44 | % |
Options to Independent Director, March 17, 2011 | |
| 6,000 | | |
| 6.25 | | |
| 60 | % | |
| 0 | % | |
| 3.25 | % |
The following is a summary of the
option activity:
| |
Number of
Options | |
| |
| |
Outstanding as of December 31, 2013 | |
| 18,000 | |
Granted | |
| - | |
Exercised | |
| - | |
Forfeited | |
| - | |
Outstanding as of September 30, 2014 | |
| 18,000 | |
For the nine
months ended September 30, 2014 and 2013, the Company recognized $0 and $0, respectively, as stock-based compensation expense,
which was included in general and administrative expenses.
For the three
months ended September 30, 2014 and 2013, the Company recognized $0 and $0, respectively, as stock-based compensation expense,
which was included in general and administrative expenses.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
13. |
DISCONTINUED
OPERATIONS |
On June 3, 2013,
Fujian Yida entered into a stock transfer agreement with Anhui Xingguang Investment Group Ltd (“Purchaser”), pursuant
to which Fujian Yida agreed to transfer its 60% interest in Anhui Yida to the Purchaser for RMB 60 million, or $9.72 million and
the Purchaser agreed to assume all the assets and liabilities of Anhui Yida.
On August
26, 2014, Hong Kong Yi Tat entered into a certain share transfer agreement with Fujian Taining Great Golden Lake Tourism Economic
Development Industrial Co., Ltd. (the “Purchaser”), pursuant to which Hong Kong Yi Tat agreed to sell 100% of its
equity interest in Fujian Jintai to the Purchaser (the “Sale”) for a price of RMB 228,801,359, or approximately $37
million (the “Purchase Price”).
The Company has reclassified the
assets and liabilities of the discontinued entity in the accompanied financial statements.
Following table summarizes the classification
of assets and liabilities of the discontinued entity as at December 31, 2013.
Fujian
Jintai |
Current assets | |
| |
Cash | |
$ | 257,837 | |
Other receivable | |
| 169,728 | |
Others | |
| 159,764 | |
Current assets of discontinued
operations | |
| 587,329 | |
Add
back: Intercompany receivable elimination | |
| 38,562,409 | |
Current assets of discontinued
operations before intercompany elimination | |
| 39,149,738 | |
| |
| | |
Non-current assets | |
| | |
Property, plant &
equipment, net | |
| 33,917,060 | |
Long-term prepayments | |
| 457,576 | |
Intangible
assets, net | |
| 3,356,220 | |
Non-current assets of
discontinued operations | |
| 37,730,856 | |
| |
| | |
Current liabilities | |
| | |
Long-term loan, current
portion | |
| 2,032,002 | |
Accrued
expenses and other payables | |
| 78,053 | |
Current liabilities of
discontinued operations | |
| 2,110,055 | |
Add
back: Intercompany receivable elimination | |
| 23,705,298
| |
Current liabilities of
discontinued operations before intercompany elimination | |
| 25,815,353
| |
| |
| | |
Non-current liabilities | |
| | |
Long-term loan | |
| 8,135,018 | |
Non-current liabilities
of discontinued operations | |
$ | 8,135,018 | |
At the
date of disposal August 26, 2014, the Company recorded $616,732 as loss from operations of discontinued entity and $6,510,630
as loss on disposal of discontinued entity.
Following
is the Gain/Loss Calculation for disposal of Fujian Jintai.
Fujian
Jintai Gain/Loss calculation |
| |
| |
Net assets of the Company as
of December 31, 2013 | |
$ | 42,930,223
| |
| |
| | |
Less: Loss from discontinued
operations through September 30, 2014 | |
| 616,732 | |
Less:
Other comprehensive loss through September 30, 2014 | |
| 229,044 | |
Net assets of the
Company at the date of disposal | |
$ | 42,084,447 | |
Proceeds from disposal,
gross | |
| 37,175,063 | |
Less: Capital gains tax | |
| (1,601,246 | ) |
| |
| | |
Proceeds
from disposal, net of capital gains tax | |
$ | 35,573,817 | |
| |
| | |
Loss
on disposal of discontinued operations | |
$ | 6,510,630 | |
13. |
DISCONTINUED
OPERATIONS (CONTINUED) |
The results
of Anhui Yida and Fujian Jintai have been presented as a discontinued operation in the consolidated statements of income and comprehensive
income. Selected operating results for the discontinued business are presented in the following tables:
| |
For
The Nine Months Ended September 30, 2014 | | |
| |
| |
Fujian
Jintai | | |
Anhui
Yida | | |
Total | |
| |
| | |
| | |
| |
Net revenue | |
$ | 3,492,327 | | |
$ | - | | |
$ | 3,492,327 | |
Cost of revenue | |
| (1,828,348 | ) | |
| - | | |
| (1,828,348 | ) |
Selling expenses | |
| (904,667 | ) | |
| - | | |
| (904,667 | ) |
General, and administrative
expenses | |
| (605,331 | ) | |
| - | | |
| (605,331 | ) |
Interest expense | |
| (443,108 | ) | |
| | | |
| (443,108 | ) |
Interest income | |
| 692 | | |
| - | | |
| 692 | |
Other
expense, net | |
| (328,297 | ) | |
| - | | |
| (328,297 | ) |
Net
Loss | |
$ | (616,732 | ) | |
$ | - | | |
$ | (616,732 | ) |
| |
For
The Three Months Ended September 30, 2014 | | |
| |
| |
Fujian
Jintai | | |
Anhui
Yida | | |
Total | |
| |
| | |
| | |
| |
Net revenue | |
$ | 1,506,174 | | |
$ | - | | |
$ | 1,506,174 | |
Cost of revenue | |
| (596,571 | ) | |
| - | | |
| (596,571 | ) |
Selling expenses | |
| (310,298 | ) | |
| - | | |
| (310,298 | ) |
General, and administrative
expenses | |
| (130,054 | ) | |
| - | | |
| (130,054 | ) |
Interest expense | |
| (87,468 | ) | |
| - | | |
| (87,468 | ) |
Interest Income | |
| 12 | | |
| - | | |
| 12 | |
Other
expense, net | |
| (465,591 | ) | |
| - | | |
| (465,591 | ) |
Net
Loss | |
$ | (83,796 | ) | |
$ | - | | |
$ | (83,796 | ) |
| |
For
The Nine Months Ended September 30, 2013 | | |
| |
| |
Fujian
Jintai | | |
Anhui
Yida | | |
Total | |
| |
| | |
| | |
| |
Net Revenue | |
$ | 3,606,706 | | |
$ | - | | |
$ | 3,606,706 | |
Cost of Revenue | |
| (1,941,750 | ) | |
| - | | |
| (1,941,750 | ) |
Selling expenses | |
| (1,154,815 | ) | |
| - | | |
| (1,154,815 | ) |
General, and administrative
expenses | |
| (757,146 | ) | |
| (256,306 | ) | |
| (1,013,452 | ) |
Interest expense | |
| (207,348 | ) | |
| - | | |
| (207,348 | ) |
Interest Income | |
| 7,188 | | |
| 1,007 | | |
| 8,195 | |
Other
expense, net | |
| (79,991 | ) | |
| (237 | ) | |
| (80,228 | ) |
Net
Loss | |
$ | (527,156 | ) | |
$ | (255,536 | ) | |
$ | (782,692 | ) |
| |
For
The Three Months Ended September 30, 2013 | | |
| |
| |
Fujian
Jintai | | |
Anhui
Yida | | |
Total | |
| |
| | |
| | |
| |
Net revenue | |
$ | 1,741,215 | | |
$ | - | | |
$ | 1,741,215 | |
Cost of revenue | |
| (748,163 | ) | |
| - | | |
| (748,163 | ) |
Selling expenses | |
| (511,891 | ) | |
| - | | |
| (511,891 | ) |
General, and administrative
expenses | |
| (236,013 | ) | |
| - | | |
| (236,013 | ) |
Interest expense | |
| (738 | ) | |
| - | | |
| (738 | ) |
Interest income | |
| 2,182 | | |
| - | | |
| 2,182 | |
Other
expense, net | |
| (26,390 | ) | |
| - | | |
| (26,390 | ) |
Net
Income | |
$ | 220,202 | | |
$ | - | | |
$ | 220,202 | |
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
14. |
COMMITMENTS AND CONTINGENCIES |
(1) Operating
commitments
Operating commitments
consist of leases for office space under various operating lease agreements which expire in April 2021.
Operating lease
agreements generally contain renewal options that may be exercised at the Company’s discretion after the completion of the
terms. The Company’s obligations under various operating leases are as follows:
As of September 30, | |
| |
2015 | |
$ | 135,193 | |
2016 | |
| 66,903 | |
2017 | |
| 27,119 | |
2018 | |
| 27,152 | |
2019 | |
| 27,209 | |
Thereafter | |
| 891,428 | |
Total
minimum payments | |
$ | 1,175,004 | |
The Company
incurred rental expenses of $163,774 and $191,039 for the nine months ended September 30, 2014 and 2013, respectively.
The Company
incurred rental expenses of $64,720 and $47,870 for the three months ended September 30, 2014 and 2013, respectively.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
14. |
COMMITMENTS AND CONTINGENCIES (CONTINUED) |
(2) Compensation
for using natural resources commitments
In December
2008, Tulou entered into a Tourist Resources Development Agreement with Hua’an County Government (“Hua’an government”)
which is related to pay compensation fees for using natural resources in Tulou. The Company agreed to pay (1) 16% of
gross ticket sales in the first five years; (2) 20% of gross ticket sales in the second five years; (3) 23% of gross ticket sales
in the third five years; (4) 25% of gross ticket sales in the fourth five years; (5) 28% of gross ticket sales in the fifth five
years; (6) 30% in twenty six years and thereafter when the ticket price of the Clusters is RMB60 ($9.50 USD) or above per person.
The Company
paid approximately $43,856 and $45,953 to the Hua’an government for the nine months ended September 30, 2014 and 2013, respectively,
and recorded as selling expenses.
The Company
paid approximately $11,441 and $15,638 to the Hua’an government for the three months ended September 30, 2014 and 2013,
respectively, and recorded as selling expenses.
(3) Litigation
The Company’s
management does not expect the legal proceedings involving the Company would have a material impact on the Company’s consolidated
financial position or results of operations.
15. |
DUE TO RELATED PARTIES |
As of September
30, 2014, the Company had $38,933,299 and $2,922,310 due to Fujian Xinhengji Advertisement Co., Ltd and Mr. Minhua Chen, respectively.
As of December 31, 2013, the Company had $31,397,840 and $4,199,122 due to Fujian Xinhengji Advertisement Co., Ltd and Mr. Minhua
Chen, respectively. Mr. Minhua Chen, the Chief Executive Officer and Chairman of the Company, is the Chairman of Fujian Xinhengji
Advertisement Co., Ltd. Those loans are unsecured, bear no interest, and due on demand.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
Basic earnings
per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares
outstanding during the period. Diluted earnings per share reflects the potential dilution of securities by including other potential
common stock, including convertible preferred stock, stock options and warrants, in the weighted average number of common shares
outstanding for the period, if dilutive. The numerators and denominators used in the computations of basic and dilutive
earnings per share are presented in the following table:
Basic and
diluted:
| |
For
The Nine Months Ended September 30, | | |
For
The Three Months Ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Amounts attributable to common stockholders: | |
| | |
| | |
| | |
| |
Net
loss from continuing operations, net of income taxes | |
$ | (17,879,534 | ) | |
$ | (9,975,664 | ) | |
$ | (6,089,077 | ) | |
$ | (3,848,379 | ) |
Net income
from discontinued operations, net of income taxes | |
| (7,127,362 | ) | |
| 318,656 | | |
| (6,594,426 | ) | |
| 220,202 | |
Net
loss attributable to common stockholders | |
$ | (25,006,896 | ) | |
$ | (9,657,008 | ) | |
$ | (12,683,503 | ) | |
$ | (3,628,177 | ) |
Net
loss attributable to common stockholders per share - basic and diluted: | |
| | | |
| | | |
| | | |
| | |
- Basic & diluted
loss per share from continuing operations | |
$ | (4.57 | ) | |
$ | (2.55 | ) | |
$ | (1.56 | ) | |
$ | (0.98 | ) |
- Basic & diluted
(loss)earnings per share from discontinued operations | |
| (1.82 | ) | |
| 0.08 | | |
| (1.68 | ) | |
| 0.06 | |
- Basic & diluted
loss per share attributable to common stockholders | |
$ | (6.39 | ) | |
$ | (2.47 | ) | |
$ | (3.24 | ) | |
$ | (0.92 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and Diluted weighted average
outstanding shares of common stock | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | | |
| 3,914,580 | |
Potential common shares outstanding as of September 30, 2014: | |
| | | |
| | | |
| | | |
| | |
Warrants outstanding | |
| - | | |
| - | | |
| - | | |
| - | |
Options outstanding | |
| 18,000 | | |
| 18,000 | | |
| 18,000 | | |
| 18,000 | |
For the nine
months and three months ended September 30, 2014 and 2013, 18,000 options were not included in the diluted earnings per share
because the average stock price was lower than the strike price of these options.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
During the nine
months ended September 30, 2014 and 2013, the Company was organized into two main business segments: advertisement and tourism.
The primary business relates to tourism at Yunding resort, Yang-sheng Paradise, and Tulou resort. The Company offers bamboo rafting,
parking lot service, photography services, hotel lodging and ethnic cultural communications. The primary business related to advertisement
is focused on advertisements, including media publishing, television, cultural and artistic communication activities, and performance
operation and management activities. The following table presents a summary of operating information and certain balance sheet
information for the two segments for the three months ended:
| |
For
The Nine Months Ended September 30, | | |
For
The Three Months Ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Revenues: | |
| | |
| | |
| | |
| |
Advertisement | |
$ | - | | |
$ | 2,899,844 | | |
$ | - | | |
$ | 318,434 | |
Tourism | |
| 9,030,961 | | |
| 6,891,455 | | |
| 3,870,984 | | |
| 2,616,382 | |
Total | |
| 9,030,961 | | |
| 9,791,299 | | |
| 3,870,984 | | |
| 2,934,816 | |
| |
| | | |
| | | |
| | | |
| | |
Operating income (loss): | |
| | | |
| | | |
| | | |
| | |
Advertisement | |
| - | | |
| 432,016 | | |
| - | | |
| (70,506 | ) |
Tourism | |
| (11,026,097 | ) | |
| (6,280,582 | ) | |
| (3,474,423 | ) | |
| (2,286,280 | ) |
Other | |
| - | | |
| (229,089 | ) | |
| - | | |
| (38,892 | ) |
Total | |
| (11,026,097 | ) | |
| (6,077,655 | ) | |
| (3,474,423 | ) | |
| (2,395,678 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss): | |
| | | |
| | | |
| | | |
| | |
Advertisement | |
| - | | |
| 255,844 | | |
| - | | |
| (79,865 | ) |
Tourism | |
| (17,879,534 | ) | |
| (10,000,950 | ) | |
| (6,089,077 | ) | |
| (3,729,217 | ) |
Other | |
| - | | |
| (230,558 | ) | |
| - | | |
| (39,297 | ) |
Net loss from continuing
operations | |
| (17,879,534 | ) | |
| (9,975,664 | ) | |
| (6,089,077 | ) | |
| (3,848,379 | ) |
Net
(loss)income from discontinued operations | |
| (7,127,362 | ) | |
| 216,441 | | |
| (6,594,426 | ) | |
| 220,202 | |
Total | |
| (25,006,896 | ) | |
| (9,759,223 | ) | |
| (12,683,503 | ) | |
| (3,628,177 | ) |
| |
| | | |
| | | |
| | | |
| | |
Capital expenditure: | |
| | | |
| | | |
| | | |
| | |
Advertisement | |
| - | | |
| - | | |
| - | | |
| - | |
Tourism | |
| 8,097,950 | | |
| 71,652,052 | | |
| 7,703,366 | | |
| 25,693,791 | |
Total | |
$ | 8,097,950 | | |
$ | 71,652,052 | | |
$ | 7,703,366 | | |
$ | 25,693,791 | |
| |
September 30,
2014 | | |
December 31,
2013 | |
Intangible assets: | |
| | |
| |
Advertisement | |
$ | - | | |
$ | - | |
Tourism | |
| 46,614,410 | | |
| 47,837,641 | |
Total | |
$ | 46,614,410 | | |
$ | 47,837,641 | |
Identifiable assets: | |
| | |
| |
Advertisement | |
$ | - | | |
$ | 33,537 | |
Tourism | |
| 241,345,601 | | |
| 238,239,127 | |
Others | |
| - | | |
| 10,433 | |
Assets
of continuing operations | |
| 241,345,601 | | |
| 238,283,097 | |
Assets
of discontinued operations | |
| - | | |
| 38,318,186 | |
Total | |
$ | 241,345,601 | | |
$ | 276,601,283 | |
Others represent
reconciling amounts including certain assets which are excluded from segments and adjustments to eliminate inter-company transactions.
CHINA YIDA
HOLDING, CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
(UNAUDITED)
Management has
evaluated subsequent events through the date which the consolidated financial statements were issued. All subsequent events requiring
recognition as of September 30, 2014 have been incorporated into these unaudited consolidated financial statements and there are
no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events”.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
The
following discussion of our financial condition and results of operations should also be read in conjunction with our unaudited
consolidated financial statements and the notes to those financial statements appearing elsewhere in this Form 10-Q. The following
discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ
from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2013, filed on March 31, 2014 (the “Annual Report”). Although
management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there
is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different
from expectations expressed in this report.
Overview
We were
formed on June 4, 1999 to serve as a vehicle to effect a merger, capital stock exchange, asset acquisition or other similar business
combination with a company having its primary operations in the PRC. On November 19, 2007, we consummated the acquisition of Keenway
Limited, Hong Kong Yi Tat International Investment Co., Ltd (“Hong Kong Yi Tat”), and the then shareholders of Keenway
Limited, including Minhua Chen, Yanling Fan, Xinchen Zhang, Extra Profit International Limited, and Lucky Glory International
Limited, received shares of our common stock.
We currently
operate Hua’An Tulou cluster (“Tulou” or the “Earth Buildings”) tourist destination (World Culture
Heritage), Yunding Recreational Park (Large-scale National Recreational Park), covering over 300 square kilometers in total, and
China Yang-Sheng Paradise. As of September 30, 2014, through our wholly owned subsidiaries in China, we have entered into two
cooperation agreements respectively with the local Chinese government agents, namely, (i) the Jiangxi Province Zhangshu Municipal
Government, (ii) the Fenyi County, Xinyu City, Jiangxi Province Government. Under these agreements, we have obtained:
|
(i) |
the
right to construction and development of the Royal Hot Spring World project, |
|
|
|
|
(ii) |
the right to invest
in construction and development of China Yang-sheng (Nourishing Life) Paradise Project (“Yang-sheng Paradise”)
(including the projects: (a) Salt Water Hot Spring SPA & Health Center, (b) Yang-sheng Holiday Resort, (c) World Yang-sheng
Cultural Museum, (d) International Camphor Tree Garden, (e) Chinese Medicine and Herb Museum, (f) Yang-sheng Sports Club,
(g) Old Town of Chinese Traditional Medicine, and (h) various other Yang-sheng related projects and tourism real estate projects)
with a forty (40) year exclusive right to develop, operate and manage a variety of caves, hot springs and other natural and
cultural tourist resources identified in the Meng Mountain area, and various caves and tourist resources of the Dagang Mountain
located in Fenyi County, Xinyu City, Jiangxi Province (“City of Caves”), and |
Advertising
business had been our primary source of revenue for the last two years before January 2013 because the tourism business has experienced
serious disruptions from flooding and severe weather while the new advertisement regulatory restriction was not enforced by the
local government. Our tourism business has become the primary source of our revenue since first quarter of 2013. The revenue from
advertising has ceased as the new advertisement regulatory restrictions are enforced. The revenue from tourism has been increased.
However, any increase in tourism revenue will depend on the recovery of Great Golden Lake from flooding and the progress we make
in developing our existing and new projects in our other tourist destinations. Our tourism business is seasonal, we have visitors
to our parks throughout the year. In 2015, we will continue to develop and construct the new Jiangxi projects. As of September
30, 2014, the first phase project of City of Caves in Jiangxi has been completed and expected to open in the first quarter of
2015.
We are
subject to risks common to companies operating in China, including risks inherent in our commercialization efforts, uncertainty
of regulatory approvals and laws, the need for future capital, and retention of key employees. We cannot provide assurance that
we will generate revenues or achieve and sustain profitability in the future.
Factors
Affecting Our Performance
Tourism
Business
For the
tourism business, our revenue is driven by the reputation of our tourist destinations. We strive to present quality tourist attractions
that offer our visitors diverse entertainment, including catering, hotel, transportation, and shopping. We generate our revenue
from our visitors and tourists. We incur many costs associated with operating the tourist business, including, administration
fees, business traveling fees, land use rights fees, and revenue sharing fees.
We began
to generate revenue after the grand openings of Yang-sheng Paradise which opened in October 2013, due to the terrible weather,
financial funding and the difficult level of the cave construction, City of Caves has postponed the trial opening in the first
quarter of 2015, we believe that we will be able to maintain the high gross profit margins in the tourism segment. Also, we expect
Yunding to continue to grow. Our tourism business has become the primary source of our revenue since first quarter
of 2013.
Discontinued
Operations
On June
3, 2013, Yida (Fujian) Tourism Group Limited. (“Fujian Yida”), our subsidiary, entered into a stock transfer agreement
with Anhui Xingguang Investment Group Ltd (“Anhui Xingguang”), pursuant to which Fujian Yida agreed to transfer its
60% interest in Anhui Yida Tourism Development Co. Ltd. (“Anhui Yida”) to Anhui Xingguang for RMB 60 million, or $9.72
million. Anhui Xingguang also assumed all the assets and liabilities of Anhui Yida.
On August
26, 2014, Hong Kong Yi Tat entered into a certain share transfer agreement with Fujian Taining Great Golden Lake Tourism Economic
Development Industrial Co., Ltd. (the “Purchaser”), pursuant to which Hong Kong Yi Tat agreed to sell 100% of its
equity interest in Fujian Jintai to the Purchaser (the “Sale”) for a price of RMB 228,801,359, or approximately $37
million. (the “Purchase Price”).
Net loss
from the discontinued operations was $616,732 and $782,692 for the nine months ended September 30, 2014 and 2013, respectively.
Net loss
from the discontinued operations was $83,796 and net income from discontinued operation was $220,202 for the three months ended
September 30, 2014 and 2013, respecively.
As a
result of the share transfer described above, the Results of Operation set forth below does not reflect the operations for Fujian
Jintai, Anhui Yida and its wholly owned subsidiaries: Bengbu (Yida) Real Estate Development Co., Ltd. (“Bengbu Yida”)
and Bengbu (Yida) Investment Co., Ltd. (“Bengbu Investment”). The results of operations of Fujian jintai, Anhui Yida
and its subsidiaries have been presented as discontinued operations. Therefore, management’s discussion and analysis set
forth herein below are based on the results of continuing operations.
2014
Outlook
As we
terminated our advertising business in July 2013, we plan to focus on tourism business only. In 2014, we continued the construction
and development of two new tourism projects, the Yang-sheng Paradise in Zhangshu City, Jiangxi province, and the City of Caves
in Fenyi City, Jiangxi province, which represent our commitment to expanding our business operations by applying our current business
model to the development of other valuable tourist destinations outside Fujian province and throughout China. We expect to open
City of Caves to the public in the first quarter of 2015.
Results
of Operations
Results of Operations
for the three months ended September 30, 2014 and 2013
Prior
to July 2013, the Company was organized into two main business segments, tourism and advertisement. The following table presents
a summary of operating information for the three months ended September 30, 2014 and 2013:
| |
For
The Three Months Ended | | |
Increase/
(Decrease) | | |
Increase/ (Decrease) |
| |
September
30, | | |
U.S.
Dollar | | |
Percentage |
(All
amounts, other than percentage, in U.S. Dollar) | |
2014 | | |
2013 | | |
($) | | |
(%) |
Net revenue | |
| | | |
| | | |
| | | |
|
Advertisement | |
$ | - | | |
$ | 318,434 | | |
$ | (318,434 | ) | |
(100.00) |
Tourism | |
| 3,870,984 | | |
| 2,616,382 | | |
| 1,254,602 | | |
47.95 |
Total
net revenue | |
| 3,870,984 | | |
| 2,934,816 | | |
| 936,168 | | |
31.90 |
| |
| | | |
| | | |
| | | |
|
Cost of revenue | |
| | | |
| | | |
| | | |
|
Advertisement | |
| - | | |
| 271,213 | | |
| (271,213 | ) | |
(100.00) |
Tourism | |
| 2,471,661 | | |
| 1,145,681 | | |
| 1,325,980 | | |
115.74 |
Total
cost of revenue | |
| 2,471,661 | | |
| 1,416,894 | | |
| 1,054,767 | | |
74.44 |
| |
| | | |
| | | |
| | | |
|
Gross profit | |
| 1,399,323 | | |
| 1,517,922 | | |
| (118,599 | ) | |
(7.81) |
| |
| | | |
| | | |
| | | |
|
Selling expenses | |
| 2,906,081 | | |
| 2,243,762 | | |
| 662,319 | | |
29.52 |
General
and administrative expenses | |
| 1,967,665 | | |
| 1,669,838 | | |
| 297,827 | | |
17.84 |
Loss from operations | |
| (3,474,423 | ) | |
| (2,395,678 | ) | |
| (1,078,745 | ) | |
45.03 |
Other expense, net | |
| (618,142 | ) | |
| (527,976 | ) | |
| (90,165 | ) | |
17.08 |
Interest income | |
| 2,975 | | |
| 4,817 | | |
| (1,842 | ) | |
(38.24) |
Interest expense | |
| (1,999,487 | ) | |
| (928,581 | ) | |
| (1,070,906 | ) | |
115.33 |
Less:
Provision for income tax | |
| - | | |
| 961 | | |
| (961 | ) | |
(100.00) |
Net loss from continuing
operations | |
| (6,089,077 | ) | |
| (3,848,379 | ) | |
| (2,240,698 | ) | |
58.22 |
Net
(loss) income from on discontinued operations | |
| (6,594,426 | ) | |
| 220,202 | | |
| (6,814,628 | ) | |
(3,094.72) |
| |
| | | |
| | | |
| | | |
|
Net
Loss | |
$ | (12,683,503 | ) | |
$ | (3,628,177 | ) | |
$ | (9,055,326 | ) | |
249.58 |
Net Revenue
Net revenue
from continuing operations increased by approximately $0.94 million or approximately 31.9%, from approximately $2.93 million for
the three months ended September 30, 2013 to approximately $3.87 million for the three months ended September 30, 2014. The
increase in net revenue was primarily due to the increase in the revenue from tourism revenue which was partially offset by the
decrease in advertisement revenue.
Advertisement
Advertisement
revenue decreased by approximately $0.32 million or 100%, from approximately $0.32 million for the three months ended September
30, 2013 to $0 for the three months ended September 30, 2014. The decrease was because the agreement with FETV expired in July
2013 which caused the decrease in advertisement revenue from FETV.
We generated
no revenue from the “Journey through China on the Train” program for the three months ended September 30, 2014 and
2013. The Company lost all the clients since the railway program was broadcasted manually by train attendants and we had no control
over the frequency of program broadcasting. We terminated the “Journey through China on the Train” program from March
of 2013.
Tourism
Tourism
revenue increased by approximately $1.25 million or approximately 47.95% from approximately $2.62 million for the three months
ended September 30, 2013 to approximately $3.87 million for the three months ended September 30, 2014, including approximately
$2.95 million from Yunding Park, an increase of $0.52 million or 20%, $0.13 million from Hua’an Tulou, a decrease of $0.06
million or 32%, and $0.79 million from China Yang-sheng paradise for the three months ended September 30, 2014, as compared to
the same period in 2013. The primary sources of the revenues are ticket sales, tour shuttle bus fees, and restaurants. The
increase in tourism business was primarily due to the revenue increase at China Yang-sheng paradise, the newly opened tourism
destination, and an increase in the number of tourists at Yunding Park due to effective promotion. We have to provide deeper ticket
discount due to the fierce competition among the destinations. Also the tourist consumption had also decreased. The gross revenue
increased due to increase in the number of tourist attracted by the reduced ticket fee. We expect the fierce competition and the
reduced tourist consumption to continue in the near future.
Cost
of Revenue
Cost
of revenues increased by approximately $1.05 million or approximately 74.44%, from approximately $1.42 million for the three months
ended September 30, 2013 to approximately $2.47 million for the three months ended September 30, 2014. The increase in cost
of revenue was primarily due to an increase in cost of revenue of tourism, partially offset by a decrease in cost of revenue of
advertisement.
Advertisement
Cost
of revenue from advertisement decreased by approximately $0.27 million or 100%, from approximately $0.27 million for the three
months ended September 30, 2013 to $0 for the three months ended September 30, 2014. The decrease was because the agreement with
FETV expired in July 2013 so there was no revenue or cost incurred for the three months ended September 30, 2014.
Tourism
Cost
of revenue from tourism increased by approximately $1.32 million or approximately 115.74%, from approximately $1.15 million for
the three months ended September 30, 2013 to approximately $2.47 million for the three months ended September 30, 2014. The increase
was primarily due to the increase in tourists and sales activities at China Yang-sheng paradise and Yunding Park, and depreciation
cost for the new construction completed for tourism destinations.
Gross
profit
Gross
profit decreased approximately $0.12 million, or approximately 7.81%, from approximately $1.52 million for the three months ended
September 30, 2013 to $1.4 million for the three months ended September 30, 2014. Our gross margin was approximately 36.15% for
the three months ended September 30, 2014, compared to gross margin of approximately 51.72% for the three months ended September
30, 2013, representing a decrease of approximately 16 percentage points.
Advertisement
Gross
profit from advertisement decreased by approximately $0.05 million, or 100%, from approximately $0.05 million for the three months
ended September 30, 2013 to $0 for the three months ended September 30, 2014. Gross margin from advertisement was 0% for the three
months ended September 30, 2014, compared to approximately 14.83% for the three months ended September 30, 2013. The decrease
was because the agreement with FETV expired in July 2013.
Tourism
Gross
profit from tourism decreased approximately $0.07 million, or approximately 4.85%, from approximately $1.47 million for the three
months ended September 30, 2013 to approximately $1.4 million for the three months ended September 30, 2014. Our gross margin
from tourism was approximately 36.15% for the three months ended September 30, 2014, compared to gross margin of approximately
56.21% for the three months ended September 30, 2013. The decrease of gross margin was primarily attributable to the
increase of the cost of revenue which include the increase in sales activities at China Yang-sheng paradise and Yunding Park,
and depreciation cost for the new construction completed for tourism destinations.
Selling
Expenses
Selling
expenses were approximately $2.9 million for the three months ended September 30, 2014, compared to approximately $2.24 million
for the three months ended September 30, 2013, which represents an increase of approximately $0.66 million, or approximately 29.52%.
The increase in selling expense was primarily due to the increase of the sales activities at China Yang-sheng paradise and Yunding
Park during the three months ended September 30, 2014.
General
and Administrative Expenses
General
and administrative expenses were approximately $1.97 million for the three months ended September 30, 2014, compared to approximately
$1.67 million for the three months ended September 30, 2013, which represents an increase of approximately $0.3 million, or approximately
17.84%. This increase was due to the increase of administrative expenses for the operation of China Yang-sheng paradise, City
of Caves, and Yunding Park during the three months ended September 30, 2014.
Interest
expense.
Interest
expense was approximately $2 million for the three months ended September 30, 2014, representing an increase of approximately
$1.07 million or approximately 115.33%, compared to the approximately $0.93 million for the three months ended September 30, 2013.
The increase in interest expense was primarily because part of the interest expense for the three months ended September 30, 2013
was capitalized as part of construction in progress.
Net Loss
As a
result of the above factors, we have net loss of approximately $12.68 million for the three months ended September 30, 2014 as
compared to net loss of approximately $3.63 million for the three months ended September 30, 2013, representing an increase of
loss of approximately $9.05 million or approximately 249.58%. The increase of loss was primarily attributable to the decrease
in advertisement revenue because the agreement with FETV expired in July 2013, the increase in cost of revenue and general and
administrative expenses for the operation of China Yang-sheng paradise for the three months ended September 30, 2014 as compared
with that for the three months ended September 30, 2013.
Results
of Operations for the nine months ended September 30, 2014 and 2013
Prior
to July, 2013, the Company is organized into two main business segments, tourism and advertisement. The following table presents
a summary of operating information for the nine months ended September 30, 2014 and 2013:
| |
For
The Nine Months Ended | | |
Increase/
(Decrease) | | |
Increase/ (Decrease) |
| |
September
30 | | |
U.S.
Dollar | | |
Percentage |
(All
amounts, other than percentage, in U.S. Dollar) | |
2014 | | |
2013 | | |
($) | | |
(%) |
Net revenue | |
| | | |
| | | |
| | | |
|
Advertisement | |
$ | - | | |
$ | 2,899,844 | | |
$ | (2,899,844 | ) | |
(100.00) |
Tourism | |
| 9,030,961 | | |
| 6,891,455 | | |
| 2,139,506 | | |
31.05 |
Total
net revenue | |
| 9,030,961 | | |
| 9,791,299 | | |
| (760,338 | ) | |
(7.77) |
| |
| | | |
| | | |
| | | |
|
Cost of revenue | |
| | | |
| | | |
| | | |
|
Advertisement | |
| - | | |
| 2,038,196 | | |
| (2,038,196 | ) | |
(100.00) |
Tourism | |
| 6,784,170 | | |
| 3,104,123 | | |
| 3,680,047 | | |
118.55 |
Total
cost of revenue | |
| 6,784,170 | | |
| 5,142,319 | | |
| 1,641,851 | | |
31.93 |
| |
| | | |
| | | |
| | | |
|
Gross profit | |
| 2,246,791 | | |
| 4,648,980 | | |
| (2,402,189 | ) | |
(51.67) |
| |
| | | |
| | | |
| | | |
|
Selling expenses | |
| 7,717,558 | | |
| 6,566,556 | | |
| 1,151,002 | | |
17.53 |
General
and administrative expenses | |
| 5,555,330 | | |
| 4,160,079 | | |
| 1,395,251 | | |
33.54 |
Loss from operations | |
| (11,026,097 | ) | |
| (6,077,655 | ) | |
| (4,948,442 | ) | |
81.42 |
Other expense, net | |
| (399,986 | ) | |
| (560,284 | ) | |
| 160,298 | | |
(28.61) |
Interest income | |
| 7,448 | | |
| 75,499 | | |
| (68,051 | ) | |
(90.13) |
Interest expense | |
| (6,460,899 | ) | |
| (3,280,394 | ) | |
| (3,180,505 | ) | |
96.95 |
Less:
Provision for income tax | |
| - | | |
| 132,830 | | |
| (132,830 | ) | |
(100.00) |
Net loss from
continuing operations | |
| (17,879,534 | ) | |
| (9,975,664 | ) | |
| (7,903,870 | ) | |
79.23 |
Net
loss from discontinued operations | |
| (7,127,362 | ) | |
| 216,441 | | |
| (7,343,803 | ) | |
(3,392.98) |
| |
| | | |
| | | |
| | | |
|
Net Loss | |
| (25,006,896 | ) | |
| (9,759,223 | ) | |
| (15,247,673 | ) | |
156.24 |
Net
loss attributable to non-controlling interest: | |
| - | | |
| 102,215 | | |
| (102,215 | ) | |
(100.00) |
Net
loss attributable to China Yida Holding Co. | |
$ | (25,006,896 | ) | |
$ | (9,657,008 | ) | |
$ | (15,349,888 | ) | |
158.95 |
Net Revenue
Net revenue
decreased by approximately $0.76 million or approximately 7.77%, from approximately $9.79 million for the nine months ended September
30, 2013 to approximately $9.03 million for the nine months ended September 30, 2014. The decrease in net revenue was primarily
due to the decrease in the revenue from advertisement revenue which was partially offset by an increase in tourism.
Advertisement
Advertisement
revenue decreased by approximately $2.9 million or 100%, from approximately $2.9 million for the nine months ended September 30,
2013 to $0 for the nine months ended September 30, 2014. The decrease was because the agreement with FETV expired in July 2013
which caused the decrease in advertisement revenue from FETV.
We generated
no sales from the “Journey through China on the Train” program for the nine months ended September 30, 2014 as compared
to approximately $0.06 million for the nine months ended September 30, 2013. The Company lost all the clients since the railway
program is broadcasted manually by train attendants and we had no control over the frequency of program broadcasting, we terminated
“Journey through China on the Train” program in March of 2013.
Tourism
Tourism
revenue increased by approximately $2.14 million or approximately 31.05% from approximately $6.89 million for the nine months
ended September 30, 2013 to approximately $9.03 million for the nine months ended September 30, 2014, including approximately
$7.2 million from Yunding Park, an increase of $0.83 million or 13%, $0.49 million from Hua’an Tulou, a decrease of $0.03
million or 6%, and $1.34 million from China Yang-sheng paradise for the nine months ended September 30, 2014, as compared to the
same period in 2013. The primary sources of the revenues are ticket sales, tour shuttle bus fees, and restaurants. The
increase in tourism business was primarily due to the revenue increase at China Yang-sheng paradise, the newly opened tourism
destinations, and Yunding Park due to effective marketing promotion activities and advertisement in China that led to an increase
in number of tourists. We have to provide deeper ticket discount due to the fierce competition among the destinations. Also the
tourist consumption had also decreased. The gross revenue increased due to the increase in the number of tourists attracted by
the reduced ticket fee. We expect the fierce competition and the reduced tourist consumption to continue in the near future.
Cost
of Revenue
Cost
of revenues increased by approximately $1.64 million or approximately 31.93%, from approximately $5.14 million for the nine months
ended September 30, 2013 to approximately $6.78 million for the nine months ended September 30, 2014. The increase in cost
of revenue was primarily due to an increase in cost of revenue of tourism, partially offset by a decrease in cost of revenue of
advertisement.
Advertisement
Cost
of revenue from advertisement decreased by approximately $2.04 million or 100%, from approximately $2.04 million for the nine
months ended September 30, 2013 to $0 for the nine months ended September 30, 2014. The decrease was also because the agreement
with FETV expired in July 2013 so there was no cost incurred with for the nine months ended September 30, 2014.
Tourism
Cost
of revenue from tourism increased by approximately $3.68 million or approximately 118.55%, from approximately $3.1 million for
the nine months ended September 30, 2013 to approximately $6.78 million for the nine months ended September 30, 2014. The increase
was primarily due to the increase in tourists and sales activities at China Yang-sheng paradise and Yunding Park, and depreciation
cost for the new construction completed for tourism destinations.
Gross
profit
Gross
profit decreased approximately $2.4 million, or approximately 51.67%, from approximately $4.65 million for the nine months ended
September 30, 2013 to $2.25 million for the nine months ended September 30, 2014. Our gross margin was approximately 24.88% for
the nine months ended September 30, 2014, compared to gross profit margin of approximately 47.48% for the nine months ended September
30, 2013, representing a decrease of approximately 23 percentage points.
Advertisement
Gross
profit from advertisement decreased by approximately $0.86 million, or 100%, from approximately $0.86 million for the nine months
ended September 30, 2013 to $0 for the nine months ended September 30, 2014. Gross margin from advertisement was 0% for the nine
months ended September 30, 2014, compared to approximately 29.71% for the nine months ended September 30, 2013. The decrease was
because the agreement with FETV expired in July 2013.
Tourism
Gross
profit from tourism decreased approximately $1.54 million, or approximately 40.68%, from approximately $3.79 million for the nine
months ended September 30, 2013 to approximately $2.25 million for the nine months ended September 30, 2014. Our gross margin
from tourism was approximately 24.88% for the nine months ended September 30, 2014, compared to gross profit margin of approximately
54.96% for the nine months ended September 30, 2013. The decrease of gross margin was primarily attributable to the
increase of the cost of revenue in connection to the increase in sales activities at China Yang-sheng paradise and Yunding Park,
and depreciation cost for the new construction completed for tourism destinations.
Selling
Expenses
Selling
expenses were approximately $7.72 million for the nine months ended September 30, 2014, compared to approximately $6.57 million
for the nine months ended September 30, 2013, which represents an increase of approximately $1.15 million, or approximately 17.53%.
The increase in selling expense was primarily due to the increase in variable costs and advertisement expenses at China Yang-sheng
paradise during the nine months ended September 30, 2014.
General
and Administrative Expenses
General
and administrative expenses were approximately $5.56 million for the nine months ended September 30, 2014, compared to approximately
$4.16 million for the nine months ended September 30, 2013, which represents an increase of approximately $1.4 million, or approximately
33.54%. This increase was due to the increase of administrative expenses for the operation of China Yang-sheng paradise, City
of Caves and Yunding Park during the nine months ended September 30, 2014.
Interest
expense.
Interest
expense was approximately $6.46 million for the nine months ended September 30, 2014, representing an increase of approximately
$3.18 million or approximately 96.95%, compared to the approximately $3.28 million for the nine months ended September 30, 2013.
The increase in interest expense was primarily because part of the interest expense for the nine months ended September 30, 2013
was capitalized as part of construction in progress.
Income
Tax
Income
tax was $0 for the nine months ended September 30, 2014, representing a decrease of approximately $0.13 million or 100%, compared
to the approximately $0.13 million income tax for the nine months ended September 30, 2013. The decrease was because the agreement
with FETV expired in July 2013.
Net Loss
As a
result of the above factors, we have net loss of approximately $25.01 million for the nine months ended September 30, 2014 as
compared to net loss of approximately $9.66 million for the nine months ended September 30, 2013, representing an increase of
loss of approximately $15.35 million or approximately 158.95%. The increase of loss was primarily attributable to the decrease
in advertisement revenue because the agreement with FETV expired in July 2013, the increase in cost of revenue and general and
administrative expenses for the operation of China Yang-sheng paradise, and the cost related to disposal of Fujian Jintai for
the nine months ended September 30, 2014 as compared with that for the nine months ended September 30, 2013.
Liquidity
and Capital Resources
Our principal
source of liquidity during the three months ended September 30, 2014 was primarily the proceeds from loans from related parties.
As of
September 30, 2014, we had cash and cash equivalents of approximately $5.98 million as compared to approximately $2.16 million
as of December 31, 2013, representing an increase of $3.82 million. Our principal source of liquidity during the nine months ended
September 30, 2014 was primarily resulted from proceeds from disposal of Fujian Jintai of approximately $35.57 million and from
loans from related parties of approximately $6.5 million for the nine months ended September 30, 2014.
As of
September 30, 2014 and December 31, 2013, our working capital deficits were approximately $40.48 million and $43.04 million, respectively.
The following table sets forth a summary
of our cash flows for the years indicated:
| |
For
the Nine Months Ended September 30, | |
| |
2014 | | |
2013 | |
| |
| | |
| |
Net cash used in operating activities of continuing operations | |
$ | (10,308,625 | ) | |
$ | (8,519,404 | ) |
Net cash provided by (used in) investing activities of continuing operations | |
$ | 27,823,892 | | |
$ | (62,340,166 | ) |
Net cash (used in) provided by financing activities of continuing operations | |
$ | 1,278,826 | | |
$ | 68,816,442 | |
Net cash used in discontinued operations | |
$ | (15,049,262 | ) | |
$ | (2,573,261 | ) |
Net cash used in operating activities of continuing operations was approximately $10.31 million
for the nine months ended September 30, 2014, compared to approximately $8.52 million for the nine months ended September 30,
2013. The increase of $1.79 million was primarily due to the net loss of $25.01 million for the nine months ended September
30, 2014 as compared to the net loss of $9.66 million for the nine months ended September 30, 2013.
Net cash provided by investing activities
of continuing operations was approximately $27.82 million for the nine months ended September 30, 2014, compared to the net cash
used in investing activities of continuing operations of approximately $62.34 million for the nine months ended September 30,
2013. The increase of approximately $90.16 million was primarily due to the decrease of $45.61 million in the construction
cost related to China Yang-sheng Paradise which had been completed during the year ended December 31, 2013 and the proceeds from
disposal of Fujian Jintai of approximately $35.57 million during the nine months ended September 30, 2014.
Net cash provided by financing activities
of continuing operations amounted to approximately $1.28 million for the nine months ended September 30, 2014, compared to the
net cash provided by financing activities of continuing operations of approximately $68.82 million for the nine months ended September
30, 2013, representing a decrease of approximately $67.54 million. The decrease in net cash provided by financing activities
was mainly because the net repayment of bank loans was $5.2 million (total repayment of loans of $49.93 million netting total
proceeds from loans of $44.73 million off) during the nine months ended September 30, 2014 as compared to the net proceeds from
bank loans was of $43.27 million (total proceeds from loans of $57.1 million netting total repayment of loans of $13.83 million
off) during the nine months ended September 30, 2013.
Bank loans
As of September 30, 2014,
the Company had four bank loans from four institutional lenders for the development of the tourism destinations.
1. |
A loan for approximately $2.6 million
from China Minsheng Banking Corp, Ltd. The loan bears interest at 7% per annum, and is due on June 10, 2015.
|
2. |
A loan for approximately $1.95 million from Fujian Haixia Bank (formerly known as Merchant bank of Fuzhou). The loan bears interest at 9.6% per annum, and is due on June 20, 2015. |
|
|
3. |
A loan for approximately $37.37 million from China Minsheng Banking Corp, Ltd. It bears interest rate at 9% per annum. $12,998,197 (RMB 80,000,000) and $24,371,618 (RMB 150,000,000) will be due in each twelve-month period as of September 30, 2019 and 2020, respectively. It is secured by the land use right of Jiangxi Zhangshu, and collateralized by the personal guarantees by two of the Company’s directors. |
4. |
A loan for approximately $40.13 million from China Construction
Bank. It bears interest at 6.55% and 7.86% per annum. $2,599,639 (RMB 16,000,000), $3,574,504 (RMB 22,000,000), $4,386,891
(RMB 27,000,000), $5,199,279 (RMB 32,000,000), $6,092,905 (RMB 37,500,000), $6,986,531 (RMB 43,000,000) and $10,073,602 (RMB 62,000,000)
will be due in each twelve-month period as of September 30, 2016, 2017, 2018, 2019, 2020, 2021 and 2022, respectively. It is secured
by the fixed assets of Fujian Yida, and collateralized by the personal guarantees of two of the Company’s directors. |
In the coming 12 months, we have approximately
$5.77 million in bank loans that will mature. We plan to replace these loans with new bank loans in approximately the same aggregate
amounts.
We believe we can arrange capitals or
funds for construction projects based on the actual cash flow expenditures, which means we can accelerate the construction when
we have more cash flows and we can slow down the construction when we are lack of funds.
Obligations Under Material Contracts
Below is a table setting forth the Company’s material
contractual obligations as of September 30, 2014:
| |
| | |
Payment due by period | |
Contractual Obligations | |
Total | | |
1 year | | |
1-3 years | | |
3-5 years | | |
More than 5 years | |
| |
| | |
| | |
| | |
| | |
| |
Bank Loans | |
$ | 82,051,116 | | |
$ | 5,767,950 | | |
$ | 6,174,143 | | |
$ | 22,584,367 | | |
$ | 47,524,656 | |
Operating Lease Obligations | |
| 1,175,004 | | |
| 135,193 | | |
| 94,022 | | |
| 54,361 | | |
| 891,428 | |
Total | |
$ | 83,226,120 | | |
$ | 5,903,143 | | |
$ | 6,268,165 | | |
$ | 22,638,728 | | |
$ | 48,416,084 | |
Compensation For Using Nature Resources
Commitments
In December 2008, Tulou entered into
a Tourist Resources Development Agreement with Hua’an County Government (“Hua’an government”) which is
related to pay compensation fees for using natural resources in Tulou. The Company agreed to pay (1) 16% of gross ticket
sales in the first five years; (2) 20% of gross ticket sales in the second five years; (3) 23% of gross ticket sales in the third
five years; (4) 25% of gross ticket sales in the fourth five years; (5) 28% of gross ticket sales in the fifth five years; (6)
30% in twenty six years and thereafter when the ticket price of the Clusters is RMB60 ($9.50 USD) or above per person.
The Company paid approximately $43,856
and $45,953 to the Hua’an government for the nine months ended September 30, 2014 and 2013, respectively, and recorded as
selling expenses.
The Company paid approximately $11,441
and $15,638 to the Hua’an government for the three months ended September 30, 2014 and 2013, respectively, and recorded as
selling expenses.
Critical Accounting Policies
The preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions,
estimates, and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our consolidated
financial statements. These accounting policies are important for an understanding of our financial condition and results of operations.
Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations
and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about
the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly
sensitive because of their significance to financial statements and because of the possibility that future events affecting the
estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies
involve the most significant estimates and judgments used in the preparation of our consolidated financial statements.
Basis of presentation
The unaudited consolidated financial
statements of China Yida Holding, Co. and Subsidiaries have been prepared in accordance with U.S. generally accepted accounting
principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly,
they do not include all the information and footnotes required by accounting principles generally accepted in the United States
of America for annual financial statements. However, the information included in these interim financial statements
reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary
for the fair presentation of the consolidated financial position and the consolidated results of operations. Results
shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated
balance sheet information as of December 31, 2013 was derived from the audited consolidated financial statements included in the
Company’s Annual Report on Form 10-K. These interim financial statements should be read in conjunction with that
report. Certain comparative amounts have been reclassified to conform to the current period's presentation.
Principles of consolidation
The accompanying consolidated financial
statements include the accounts of China Yida and its wholly-owned subsidiaries Keenway Limited, Hong Kong Yi Tat, Fuyu,
Fujian Yida, Tulou, Yongtai Yunding, Jiangxi Zhangshu, Jiangxi Fenyi, Yida Travel, Fenyi Development, Zhangshu Development, Zhangshu
Investment, Yida Arts, Yunding hotel, Jiangxi Travel and the accounts of its variable interest entity, Fujian Jiaoguang.
All significant inter-company accounts and transactions have been eliminated in consolidation.
Consolidation of Variable Interest
Entities
According to the requirements of ASC
810, an Interpretation of Accounting Research Bulletin No. 51 that requires a Variable Interest Entity ("VIE"), the Company
has evaluated the economic relationships of Fujian Jiaoguang which signed an exclusive right agreement with the Company. Therefore,
Fujian Jiaoguang is considered to be a VIE, as defined by ASC Topic 810-10, of which the Company is the primary beneficiary.
The carrying amount and classification
of Fujian Jiaoguang’s assets and liabilities included in the Consolidated Balance Sheets are as follows:
| |
September 30,
2014 | | |
December 31, 2013 | |
Total current assets * | |
$ | 6,470,528 | | |
$ | 12,244,845 | |
Total assets | |
$ | 6,478,166 | | |
$ | 12,252,536 | |
Total current liabilities # | |
$ | 15,318,650 | | |
$ | 11,193,422 | |
Total liabilities | |
$ | 15,318,650 | | |
$ | 11,193,422 | |
* Including intercompany receivables
of $6,463,934 and $12,231,075 as at September 30, 2014 and December 31, 2013, respectively, to be eliminated in consolidation.
# Including intercompany payables of
$15,288,021 and $11,169,092 as at September 30, 2014 and December 31, 2013, respectively, to be eliminated in consolidation.
Although Fujian Jiaoguang no longer had revenues, its bank account still has to be maintained active with certain cash
flows to support its expenses. As such, Fujian Jiaoguang transferred funds from and to the Company’s directly-owned
subsidiaries, which resulted in intercompany receivables and payables. Since Fujian Jiaoguang is a variable interest entity
subject to consolidation, the balances of its intercompany receivables and payables are eliminated against the corresponding account
balances at the Company’s directly-owned subsidiaries at the consolidation level.
Use of estimates and assumptions
The preparation of the consolidated
financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting
periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual
results could differ materially from those results. The most significant estimates reflected in the consolidated financial statements
include depreciation, useful lives of property and equipment, deferred income taxes, useful life of intangible assets and contingencies.
Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the consolidated financial statements
in the period they are determined to be necessary.
Property and equipment
Property and equipment are recorded
at cost less accumulated depreciation. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The
cost of improvements that extends the life of property, and equipment are capitalized. These capitalized costs may include structural
improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.
Depreciation for financial reporting
purposes is provided using the straight-line method over the estimated useful lives of the assets or lease term as follows:
Building |
20 years |
Electronic Equipment |
5 to 8 years |
Transportation Equipment |
8 years |
Office Furniture |
5 to 8 years |
Leasehold Improvement and Attractions |
Lesser of term of the lease or the estimated useful lives of the assets |
Intangible assets
Intangible assets consist of acquisition
of management right of tourism destinations, commercial airtime rights and land use rights for tourism destinations. They
are amortized on the straight line basis over their respective lease periods. The lease period of management right, commercial
airtime rights and land use rights is 30 years, 3 years and 40 years, respectively.
Impairment
The Company reviews long-lived assets
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable
through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever
any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.
Assets are grouped and evaluated at
the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The
Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares
the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying
amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by
comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting
expected future cash flows as the rate the Company utilizes to evaluate potential investments. The Company estimates fair value
based on the information available, judgments and projections are considered necessary. There was no impairment of long-lived assets
as of September 30, 2014 and December 31, 2013.
Revenue recognition
Revenue is recognized at the date of
service rendered to customers when a formal arrangement exists, the price is fixed or determinable, the services rendered, no other
significant obligations of the Company exist and collectability is reasonably assured. Payments received before satisfaction of
all of the relevant criteria for revenue recognition are recorded as unearned revenue.
Revenues from advance tourism destinations
ticket sales are recognized when the tickets are used. Revenues from our contractors who have tourism contracts with us are generally
recognized over the period of the applicable agreements commencing with the tourists visiting the tourism destinations. The Company
also sells admission and activities tickets for a tourism destination which the Company has the management right.
The Company sells the television airtime
to third parties. The Company records advertising sales when advertisements are aired.
The Company has no allowance for product
returns or sales discounts because services that are rendered and accepted by the customers are normally not refundable and discounts
are normally not granted after service has been rendered.
Profit sharing costs are recorded as
cost of revenue. Profit sharing arrangements with the local governments for the management rights (see Note 14):
For the nine months ended September 30, 2014
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 486,126 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 43,856 | |
Total paid to the local governments | |
| 43,856 | |
| |
| | |
Net receipts | |
$ | 442,270 | |
For the nine months ended September 30, 2013
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 512,986 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 45,953 | |
Total paid to the local governments | |
| 45,953 | |
| |
| | |
Net receipts | |
$ | 467,033 | |
For the three months ended September 30, 2014
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 126,818 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 11,441 | |
Total paid to the local governments | |
| 11,441 | |
| |
| | |
Net receipts | |
$ | 115,377 | |
For the three months ended September 30, 2013
| |
Tulou | |
| |
| |
Gross receipts | |
$ | 177,774 | |
| |
| | |
Profit sharing costs | |
| - | |
Nature resource compensation expenses | |
| 15,638 | |
Total paid to the local governments | |
| 15,638 | |
| |
| | |
Net receipts | |
$ | 162,136 | |
Foreign currency translation
The Company uses the United States dollar
("U.S. dollars") for financial reporting purposes. The Company's subsidiaries maintain their books and records in their
functional currency, being the primary currency of the economic environment in which their operations are conducted. In general,
for consolidation purposes, the Company translates the subsidiaries' assets and liabilities into U.S. dollars using the applicable
exchange rates prevailing at the balance sheet dates, and the statements of income are translated at average exchange rates during
the reporting periods. Gain or loss on foreign currency transactions are reflected on the income statement. Gain or loss on financial
statement translation from foreign currency are recorded as a separate component in the equity section of the balance sheet and
is included as part of accumulated other comprehensive income. The functional currency of the Company and its subsidiaries in China
is the Chinese Renminbi.
Income taxes
Income taxes are accounted for under
the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will
not be realized. There were no deferred income tax assets as of September 30, 2014 and December 31, 2013, respectively.
The Company applied the provisions of
ASC 740-10-50, “Accounting For Uncertainty In Income Taxes”, which provides clarification related to the process associated
with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until
the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit
period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to
the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations
for the given period. At September 30, 2014, management considered that the Company had no uncertain tax positions, and will continue
to evaluate for uncertain positions in the future.
China Yida is subject to U.S. Federal
and California state examination by tax authorities for years after 2008, and the PRC tax authority for years after 2007.
Fair values of financial instruments
The carrying amounts reported in the
consolidated financial statements for current assets and currently liabilities approximate fair value due to the short-term nature
of these financial instruments. The carrying amount of long-term loans approximates fair value since the interest rates associated
with the debts approximate the current market interest rates.
The Company adopted ASC 820-10, “Fair
Value Measurements and Disclosures”, which establishes a single authoritative definition of fair value and a framework for
measuring fair value and expands disclosure of fair value measurements for both financial and nonfinancial assets and liabilities.
This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does
not require any new fair value measurements, but discusses valuation techniques, such as the market approach (comparable market
prices), the income approach (present value of future income or cash flows) and the cost approach (cost to replace the service
capacity of an asset or replacement cost). For purposes of ASC 820-10-15, nonfinancial assets and nonfinancial liabilities would
include all assets and liabilities other than those meeting the definition of a financial asset or financial liability as defined
in ASC-820-10-15-15-1A.
Stock-based compensation
The Company records stock-based compensation
expense pursuant to ASC 718-10, "Share Based Payment Arrangement,” which requires companies to measure compensation
cost for stock-based employee compensation plans at fair value at the grant date and recognize the expense over the employee's
requisite service period. The Company’s expected volatility assumption is based on the historical volatility of Company’s
stock or the expected volatility of similar entities. The expected life assumption is primarily based on historical exercise patterns
and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the
U.S. Treasury yield curve in effect at the time of grant.
Stock-based compensation expense is
recognized based on awards expected to vest, and there were no estimated forfeitures as the Company has a short history of issuing
options. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised in subsequent periods, if necessary,
if actual forfeitures differ from those estimates.
Recent accounting pronouncements
In
August 2014, FASB issued ASU 2014-15 – Presentation of Financial Statements – Going Concern (Subtopic 205-40). The
amendments in this Update states the disclosure of uncertainties about an entity’s ability to continue as a going concern.
An entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial
doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements
are issued (or available to be issued). When management identifies conditions or events that raise substantial doubt, management
should consider whether its plans will alleviate the substantial doubt.
When
substantial doubt is raised but is alleviated by management’s plans, the entity should disclose following information: (a)
Principal conditions or events that raised substantial doubt (before consideration of management’s plans); (b) Management’s
evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations;
(c) Management’s plans that alleviated the substantial doubt.
When
substantial doubt is raised but is not alleviated by management’s plans,, an entity should include a statement in the footnotes
indicating that there is substantial doubt about the entity’s ability to continue as a going concern within one year after
the date that the financial statements are issued (or available to be issued), and disclose the following information: (a) Principal
conditions or events that raise substantial doubt; (b) Management’s evaluation of the significance of those conditions or
events in relation to the entity’s ability to meet its obligations; (c) Management’s plans that are intended to mitigate
the conditions or events that raise the substantial doubt.
The
amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim
periods thereafter. Early application is permitted. The Company is still in progress of evaluating future impact of adopting this
standard.
In May 2014, the FASB issued ASU 2014-09,
Revenue from Contracts with Customers (Topic 606). The core principle of the guidance is that an entity should recognize revenue
to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services. To achieve the core principle, an entity should apply the following
steps:
Step 1: Identify the contract(s) with
a customer.
Step 2: Identify the performance obligations
in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price
to the performance obligations in the contract.
Step 5: Recognize revenue when (or as)
the entity satisfies a performance obligation.
An entity should disclose sufficient
information to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash
flows arising from contracts with customers. For a public entity, the amendments in this Update are effective for annual reporting
periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.
For all other entities (nonpublic entities), the amendments in this Update are effective for annual reporting periods beginning
after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. A nonpublic entity may elect
to apply this guidance earlier. The Company has begun evaluating future impact of adopting this standard on the Company’s
consolidated financial position and operating results.
In April 2014, the FASB issued ASU 2014-08,
Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360). The amendments in this Update
change the requirements for reporting discontinued operations in Subtopic 205-20. A discontinued operation may include a component
of an entity or a group of components of an entity, or a business or nonprofit activity. A disposal of a component of an entity
or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic
shift that has (or will have) a major effect on an entity’s operations and financial results. The amendments in this Update
require an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued
operation separately in the asset and liability sections, respectively, of the statement of financial position. The amendments
in this Update require a public business entity and a not-for-profit entity that has issued, or is a conduit bond obligor for,
securities that are traded, listed, or quoted on an exchange or an over-the-counter market to provide disclosures about a disposal
of an individually significant component of an entity that does not qualify for discontinued operations presentation in the financial
statements. The amendments in this Update require all other entities to provide disclosures about a disposal of an individually
significant component of an entity that does not qualify for discontinued operations presentation in the financial statements.
The amendments in this Update expand the disclosures about an entity’s significant continuing involvement with a discontinued
operation. Those disclosures are required until the results of operations of the discontinued operation in which an entity retains
significant continuing involvement are no longer presented separately as discontinued operations in the statement where net income
is reported (or statement of activities for a not-for-profit entity). The adoption of this standard is not expected to have a material
impact on the Company’s consolidated financial position and results of operations.
In January 2014, the FASB issued ASU
2014-02, Intangibles-Goodwill and Other (Topic 350): Accounting for Goodwill. The amendments in this Update allow an accounting
alternative for the subsequent measurement of goodwill. An entity within the scope of the amendments that elects the accounting
alternative in this Update should amortize goodwill on a straight-line basis over 10 years, or less than 10 years if the entity
demonstrates that another useful life is more appropriate. An entity that elects the accounting alternative is further required
to make an accounting policy election to test goodwill for impairment at either the entity level or the reporting unit level. Goodwill
should be tested for impairment when a triggering event occurs that indicates that the fair value of an entity (or a reporting
unit) may be below its carrying amount. The disclosures required under this alternative are similar to existing U.S. generally
accepted accounting principles (GAAP). However, an entity that elects the accounting alternative is not required to present changes
in goodwill in a tabular reconciliation. The accounting alternative, if elected, should be applied prospectively to goodwill existing
as of the beginning of the period of adoption and new goodwill recognized in annual periods beginning after December 15, 2014,
and interim periods within annual periods beginning after December 15, 2015. Early application is permitted. The adoption of this
standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.
In December 2013, the FASB issued ASU
2013-12, “Definition of a Public Business Entity”. The Board has decided that it should proactively determine which
entities would be within the scope of the Private Company Decision-Making Framework: A Guide for Evaluating Financial Accounting
and Reporting for Private Companies (Guide). This will aim to minimize the inconsistency and complexity of having multiple definitions
of, or a diversity in practice as to what constitutes, a nonpublic entity and public entity within U.S. generally accepted accounting
principles (GAAP) on a going-forward basis. This Update addresses those issues by defining public business entity. The Accounting
Standards Codification includes multiple definitions of the terms nonpublic entity and public entity. The amendment in this Update
improves U.S. GAAP by providing a single definition of public business entity for use in future financial accounting and reporting
guidance. The amendment does not affect existing requirements. There is no actual effective date for the amendment in this Update.
However, the term public business entity will be used in Accounting Standards Updates which are the first Updates that will use
the term public business entity. The adoption of this standard is not expected to have a material impact on the Company’s
consolidated financial position and results of operations.
In July 2013, the FASB issued ASU 2013-11,
“Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar
Tax Loss, or a Tax Credit Carryforward Exists.” An unrecognized tax benefit, or a portion of an unrecognized tax benefit,
should be presented in the financial statements as a reduction to a deferred tax asset. To the extent a net operating loss carryforward,
a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction
to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable
jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose,
the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred
tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax
asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. For
public entities, the guidance is effective prospectively for reporting periods beginning after December 15, 2013. For nonpublic
entities, the guidance is effective prospectively for reporting periods beginning after December 15, 2014. Early adoption is permitted.
The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position
and results of operations.
In February 2013, the FASB issued ASU
2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” This
ASU does not change the current requirements for reporting net income or other comprehensive income in financial statements. However,
this guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income
by component. In addition, an entity is required to present, either on the face of the statement where net income is
presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line
items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety
in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety
to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail
about those amounts. For public entities, the guidance is effective prospectively for reporting periods beginning after
December 15, 2012. For nonpublic entities, the guidance is effective prospectively for reporting periods beginning after
December 15, 2013. Early adoption is permitted. The adoption of this standard is not expected to have a material
impact on the Company’s consolidated financial position and results of operations.
Inflation and Seasonality
Our operating results and operating
cash flows historically have not been materially affected by inflation or seasonality.
Off Balance Sheet Arrangements
We do not have any off balance sheet
arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, sales or expenses, results of operations, liquidity or capital expenditures, or capital resources that are material
to an investment in our securities.
ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOUSURES ABOUT MARKET RISK.
Not applicable because we are a small
reporting company.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures.
Our disclosure controls and procedures
are designed to ensure (i) that information required to be disclosed by us in the reports we file or submit under the Exchange
Act are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms; and
(ii) that information required to be disclosed by us in the reports it files or submits under the Exchange Act is accumulated and
communicated to our management, including our principal executive and principal financial officer, or persons performing similar
functions, as appropriate to allow timely decisions regarding required disclosure. As of September 30, 2014, we carried out an
evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is
defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon
that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by
this report, our disclosure controls and procedures were not effective.
Changes in internal control over financial reporting.
During the period covered by this report,
there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) that has materially affected, or is reasonably likely to materially affect our internal control over financial
reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
There has been no material change to
our risk factors from those presented in our Form 10-K for the fiscal year ended December 31, 2013.
Item 2. Unregistered Sales of Equity Securities and Use
of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
No. | |
Description |
10.1 | |
Fixed Assets Loan Agreement with Fujian
Branch of China Construction Bank dated September 4, 2014* |
10.2 | |
Fixed Assets Loan Agreement with Fujian Branch of
China Construction Bank dated September 24, 2014* |
10.3 | |
Fixed Assets Loan Agreement with Fujian Branch of
China Construction Bank dated August 1, 2014* |
31.1 | |
Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) |
31.2 | |
Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)) |
32.1 | |
Certification of Chief Executive Officer Pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** |
32.2 | |
Certification of Chief Financial Officer Pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 ** |
101.INS | |
XBRL Instance Document † |
101.SCH | |
XBRL Taxonomy Extension Schema Document † |
101.CAL | |
XBRL Taxonomy Extension Calculation Linkbase Document † |
101.DEF | |
XBRL Taxonomy Extension Definition Linkbase Document † |
101.LAB | |
XBRL Taxonomy Extension Label Linkbase Document † |
101.PRE | |
XBRL Taxonomy Extension Presentation Linkbase Document † |
* | |
Filed with the Original 10-Q. |
| |
|
** | |
In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed. |
| |
|
† | |
Furnished herewith. XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|
CHINA YIDA HOLDING, CO. |
|
|
|
Date: March 5, 2015 |
By: |
/s/ Minhua Chen |
|
|
Minhua Chen
Chief Executive Officer
(Principal Executive Officer) |
|
|
|
|
By: |
/s/ Yongxi Lin |
|
|
Yongxi Lin
Chief Financial Officer
(Principal Financial Officer) |
52
Exhibit 31.1
Certification of Chief Executive Officer
Required by Rule 13a-14(a) (17 CFR 240.13a-14(a))
I, Minhua Chen, certify that:
1. |
I have reviewed this Form 10-Q/A of China Yida Holding Co.; |
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report; |
|
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
(b) |
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Minhua Chen
Minhua Chen
Chief Executive Officer
(Principal Executive Officer) |
|
|
Date: March 5, 2015
|
|
|
Exhibit 31.2
Certification of Chief Financial OfficerRequired
by Rule 13a-14(a) (17 CFR 240.13a-14(a))
I, Yongxi Lin, certify that:
1. |
I have reviewed this Form 10-Q/A of China Yida Holding Co.; |
|
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report; |
|
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have: |
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
|
|
(b) |
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Yongxi Lin
Yongxi Lin
Chief Financial Officer
(Principal Financial Officer) |
|
|
Date: March 5, 2015
|
|
|
Exhibit 32.1
Certification Pursuant To
18 U.S.C. Section 1350
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of China Yida Holding
Co. (the “Company”) on Form 10-Q/A for the period ended September 30, 2014 as filed with the Securities and
Exchange Commission (the “Report”), I, Minhua Chen, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.
/s/ Minhua Chen
Minhua Chen
Chief Executive Officer
(Principal Executive Officer) |
|
|
Date: March 5, 2015
|
|
|
A signed original of this written statement required by Section
906 has been provided to China Yida Holding Co. and will be retained by China Yida Holding Co.and furnished to the Securities and
Exchange Commission or its staff upon request.
Exhibit 32.2
Certification Pursuant To
18 U.S.C. Section 1350
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report of China Yida Holding
Co. (the “Company”) on Form 10-Q/A for the period ended September 30, 2014 as filed with the Securities and
Exchange Commission (the “Report”), I, Yongxi Lin, Chief Financial Officer of the Company, certify, pursuant to
18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.
/s/ Yongxi Lin
Yongxi Lin
Chief Financial Officer
(Principal Financial Officer) |
|
|
Date: March 5, 2015
|
|
|
A signed original of this written statement required by Section
906 has been provided to China Yida Holding Co. and will be retained by China Yida Holding Co.and furnished to the Securities
and Exchange Commission or its staff upon request.
Grafico Azioni China Yida Holding, Co. (NASDAQ:CNYD)
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Da Lug 2024 a Ago 2024
Grafico Azioni China Yida Holding, Co. (NASDAQ:CNYD)
Storico
Da Ago 2023 a Ago 2024