Spring Pharmaceutical Group Inc (OTC:CYIG)

Third Quarter 2018 Financial Results

• Total revenues increased by 13.3% to $19.49 million with growth in sales across all three product categories. Sales of acer truncatum seed oil were particularly strong, increasing by 23.6% to $5.08 million and accounted for 26.1% of total revenues.
• After the deduction of non-controlling interest, net income attributable to the Company was $4.34 million, or $0.15 per basic and diluted share for the three months ended December 31, 2018, compared to $2.78 million, or $0.09 per basic and diluted share, for the same period of the prior fiscal year.

"For the fiscal third quarter ended December 31, 2018, revenues grew by 13.3% (or 18.2% as measured in RMB) to $19.49 million with growth across all three product categories while net income increased by 56.4% to $4.48 million, highlighting continuing momentum in our businesses," commented Mr. Tinghe Yan, Chairman and Chief Executive Officer of the Company.

Mr. Yan continued, "More exciting was that we have started harvesting seed pods from our self-grown acer truncatum bunge tree bases since November 2018, leading to solid increase in both revenues and margin for our acer truncatum seed oil business for the fiscal third quarter. With the rest of the acer truncatum bunge trees at our 5,880 mu planting bases set to become commercially productive one after another in the next two to three years, we are well positioned to further grow and integrate our acer truncatum seed oil business. Looking ahead, we firmly believe that our self-grown planting bases, modern production facilities, strong R&D capabilities, combined with our powerful direct sales model, give us significant competitive advantages in pricing, production and distribution in the long run."

JINING, China, Nov. 27, 2018 /PRNewswire/ -- Spring Pharmaceutical Group, Inc. (OTCQB: CYIG) ("Spring Pharmaceutical" or the "Company") today announced that it has started reaping seed pods from over 700,000 trees, or approximately 10% of the total of approximately 7,000,000 trees, at its 5,880 mu truncatum bunge planting bases (the "Planting Bases"). This marks the first harvest of seed pods from acer truncatum trees grown by the Company since the Company started the development of its own Planting Bases in June 2013. The Company expects to reap over 300 tons of seed pods at the Planting Bases through December 31, 2018 that can be used for production of approximately 30 tons of acer truncatum seed oil.  Before harvesting its own seed pods, the Company has been dependent on purchases of all its seed pods from third party vendors since July 2015.

"Since June 2013, we have invested over $49 million in the Planting Bases and planted over 7,000,000 acer truncatum bunge trees. As the remaining crops of seed pods will be gradually ready for production as the trees mature during the next three or four years, depending upon the timing of their harvest, we believe this further strengthens our market position as a fully integrated, industrial-scale acer truncatum seed oil producer. With self-grown planting bases, modern oil production facilities, and direct sale channels, we believe that our acer truncatum seed oil business has competitive advantages in pricing, production and distribution," said Tinghe Yan, Chairman and Chief Executive Officer of Spring Pharmaceutical.

Third Quarter Financial Results

• Total revenues increased by 34.7% to $18.68 million with growth in sales across all three product categories. Sales of acer truncatum seed oil were particularly strong, increasing by 215.2% to $4.70 million and accounted for 25.2% of total revenues.
• Net income attributable to the Company was $4.08 million, or $0.14 per share, compared to $2.24 million, or $0.08 per share, for the same period of the prior fiscal year.

"We are pleased to report strong results that exceeded our expectations for the fiscal second quarter ended September 30, 2018. With revenues and net income attributable to the Company increasing by 34.7% and 82.4%, respectively, during our second quarter, thanks to growth across all three product categories as well as significant improvement in margins, we believe that our fiscal second quarter results highlight continuing strength in our business," said Mr. Tinghe Yan, Chairman and Chief Executive Officer of the Company.

"We are also making progress with our strategic plan and initiatives for fiscal year 2019 that include the change of our company's name in August to "Spring Pharmaceutical Group, Inc." ; and the successful convening in October of the first Annual Meeting of Stockholders  in our history as a public company that attracted over 85 attendees.. We are optimistic about the prospect of our business and are committed to delivering consistent, profitable growth to return our investors," concluded Mr. Yan.

JINING, China, Aug. 31, 2018 /PRNewswire/ -- China YCT International Group, Inc. (CYIG) (the "Company") today announced that on August 28, 2018, the Company filed an amendment to its Articles of Incorporation with the State of Delaware in accordance with the provisions of Section 242 of the General Corporation Law of Delaware to change its name to "Spring Pharmaceutical Group, Inc." The new name is effective today, August 31, 2018. The Company's ticker symbol, "CYIG", will remain unchanged.

Tinghe Yan, Chairman and Chief Executive Officer, said, "Changing our corporate name to Spring Pharmaceutical Group is important for us as we continue to execute on our long-term growth strategy and seek to improve value to our shareholders. As previously announced, we have filed a registration statement on Form S-1 with the SEC and have applied to up-list to the Nasdaq Capital Market, which will allow us to tap into broader capital market resources."

JINING, China, July 17, 2018 /PRNewswire/ -- China YCT International Group, Inc. (CYIG) (the "Company") today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC") relating to a proposed public offering of shares of its common stock, par value $0.001 per share, for gross proceeds of $7,500,000, excluding the proceeds from the sale of additional shares of common stock to cover over-allotments, if any. The number of shares to be offered and the price range for the proposed offering have not yet been determined. China YCT International Group, Inc. has applied to list its common stock on The Nasdaq Capital Market.

Maxim Group LLC will act as the sole book-running manager for the proposed offering.

A registration statement relating to these securities has been filed with the SEC, but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. The proposed offering will be made only by means of a prospectus

		YEARS ENDED MARCH 31,
		2016				2015
Sales		$	47,827,108			$	37,943,113
Cost of Goods Sold			26,554,022				18,573,370
Gross Profit			21,273,086				19,369,743
Operating Expenses
Selling Expenses			3,759,920				3,234,248
General &Administrative Expenses			4,446,983				3,448,660
Research & Development Expenses			724,287				887,782
Impairment of patent			1,114,942				-
Total operating expenses			10,046,132				7,570,690
Income from operations			11,226,954				11,799,053
Interest income			30,850				86,019
Income before income tax provision			11,257,804				11,885,072
Income tax provision			2,841,035				2,994,599
Net income			8,416,769				8,890,473
Other comprehensive income (loss)
Foreign currency translation adjustment			(3,914,783	)			114,919
Comprehensive income		$	4,501,986			$	9,005,392
Earnings per common share
Basic and Diluted		$	0.28			$	0.30
Weighted average number of common shares outstanding
Basic and Diluted			29,709,706				29,693,296

Item 1.01 Entry into a Material Definitive Agreement.

Effective December 21, 2015, the Company and William W. Uchimoto Law ("Uchimoto") agreed to terminate the Company's engagement of Uchimoto dated July 1, 2015 and the common stock purchase warrant executed by the Company in favor of Uchimoto on August 1, 2015. The Company has no further obligations to Uchimoto.

		THREE MONTHS ENDED SEPTEMBER 30,								SIX MONTHS ENDED SEPTEMBER 30,
		2015				2014				2015				2014
Revenue		$	14,123,738			$	8,674,157			$	25,609,490			$	16,854,129
Cost of Goods Sold			7,901,332				4,331,805				13,704,308				8,570,575
Gross Profit			6,222,406				4,342,352				11,905,182				8,283,554
Operating Expenses
Selling Expenses			902,961				619,764				1,672,806				1,186,642
General &Administrative Expenses			877,158				560,589				1,631,226				1,262,168
Research & Development Expenses			222,009				226,836				412,577				478,101
Total operating expenses			2,002,128				1,407,189				3,716,609				2,926,911
Income from operation			4,220,278				2,935,163				8,188,573				5,356,643
Interest income			8,750				20,463				21,605				52,489
Income before income tax			4,229,028				2,955,626				8,210,178				5,409,132
Income tax			1,059,265				738,907				2,035,970				1,283,163
Net income			3,169,763				2,216,719				6,174,208				4,125,969
Other comprehensive income (loss)
Foreign currency translation adjustment			(3,121,306	)			(71,893	)			(2,765,241	)			(77,648	)
Comprehensive income		$	48,457			$	2,144,826			$	3,408,967			$	4,048,321
Earnings per common share
Basic and Diluted		$	0.11			$	0.07			$	0.21			$	0.14
Weighted average number of common shares outstanding
Basic and Diluted			29,700,690				29,663,023				29,700,690				29,663,023

Management Discussion and Analysis

Revenue
 
During the three months ended June 30, 2015, we realized $11,485,752 in revenue, representing an increase of 40.4% or $3,305,780 as compared to $8,179,972 for the same period in 2014.  Revenue increased from increased sales of both the Huoliyuan capsules and the health care products. We increased advertising and promotion of our Huoliyuan capsules after obtaining the certification pursuant to the criteria set forth by the Good Manufacturing Practices (revised 2010) issued by China Food and Drug Administration (hereafter referred to as new GMP) in the third quarter of 2014. Starting with this quarter, we also increased the promotion and sales of the health care products through our distributors’ greater marketing effort on recruiting new customers.
 
Part of our revenues was generated by us as the distributor for the products manufactured by Shandong YCT. We entered into a Purchase & Sale Contract with Shandong YCT on December 26, 2006, which sets forth the wholesale price that we pay to Shandong YCT for each of the products it produces. On February 9, 2010 and February 26, 2015, we renewed the Purchase and Sale Contract with Shandong YCT for a term of five years ending on February 28, 2015 and for a term of two years ending on February 28, 2017, respectively. Pursuant to the contract renewed on February 26, 2015, we can purchase 10 products from Shandong YCT on fixed prices, with the products selected by us according to their sales volume and profit. During the three months ended June 30, 2015, 31.8% of our total revenue was generated as the distributor of Shandong YCT, as compared to 32.3% during the three months ended June 30, 2014.
 
The sale of  Huoliyuan Capsule accounted for 68.2% of our revenue during the three months ended June 30, 2015, compared to 67.7% during the three months ended June 30, 2014. Since July 2010, the Company has become not only a distributor of Shandong YCT but also a manufacturer and distributor of our own product, Huoliyuan Capsule. Since late 2011, we have made great effort  marketing and developing new customers for Huoliyuan Capsule. As a result, we obtained new customers and expanded our sales of Huoliyuan Capsules.

Net Income

As a result of above, during the three months ended June 30, 2015, we realized net income of $3,004,445,  representing a 57.4% or $1,095,196 increase, compared to $1,909,249 during the three months ended June 30, 2014. The increase was mainly due to the higher revenue from sales of both Huoliyuan Capsule and health care products in the three months ended June 30, 2015.

Item 1.01 Entry into a Material Definitive Agreement.

On August 1, 2015, the Company executed a warrant (the “Warrant”) in favor of William W. Uchimoto Law (the “Holder”), an independent third party. The Warrant will be released to the Holder should the Company receive a notice that its Common Stock has been approved for listing on The NASDAQ Stock Market or such other mutually agreeable United States registered national securities exchange (the “Notice”) and will be released on the date of such Notice, provided the Notice is received on or before July 13, 2016. The Warrant was executed in consideration for the Holder agreeing to advise the Company and to make a listing application for the Company’s securities on a United States national securities exchange and such other matters as are referred to the Holder. Should the Warrant be released, the number of shares of Common Stock issuable upon exercise of the Warrant will equal six percent (6%) of the total issued and outstanding shares (on a fully diluted basis) of the Company’s common stock on the date of the Notice. The Warrant will be exercisable at price of $0.36 per share on a cashless exercise basis. Based on the number of issued and outstanding shares as of August 1, 2015 (on a fully diluted basis), the Warrant would be exercisable for 1,938.041 shares of Common Stock, which amount is subject to adjustment should the Company issue any additional shares of Common Stock or options, rights or warrants to receive common stock, or securities convertible into common stock, prior the date of the Notice. The Company’s common stock issuable upon exercise of the Warrant shall receive piggy-back registration rights and not be subject to any trading lock-up once issued. The Warrant shall be transferrable at the election of the Holder.

CHINA YCT INTERNATIONAL GROUP, INC.

Management Discussion and Analysis

Revenue
 
During the year ended March 31, 2015, we realized $37,943,113 in revenue, representing an increase of 11.4% or $3,880,481 as compared to $34,062,632 for the same period in 2014. We increased advertising and promotion of our Huoliyuan Capsule since obtaining the certification pursuant to the criteria set forth by the Good Manufacturing Practices (revised 2010) issued by China Food and Drug Administration (hereafter referred to as new GMP) in the third quarter of 2014.
 
Part of our revenues was generated by distributing products manufactured by Shandong YCT. We entered into a Purchase & Sale Contract with Shandong YCT on December 26, 2006, which sets forth the wholesale price that we pay to Shandong YCT for each of the products it produces. On February 26, 2015, we renewed the Purchase and Sale Contract with Shandong YCT for a term of two years ending on February 28, 2017.. Pursuant to the renewed contract, we can purchase 10 products from Shandong YCT at fixed prices, with the products selected according to their sales volume and profit. During the year ended March 31, 2015, 28.6% of our total revenue was generated as the distributor of Shandong YCT, compared to 32.2% during the year ended March 31, 2014.
 
Huoliyuan Capsules accounted for 71.4% of our revenue during the year ended March 31, 2015, compared to 67.8% during the year ended March 31, 2014. Since July 2010, the Company has become not only a distributor of Shandong YCT but also a manufacturer and distributor of our own products, Huoliyuan Capsule. Since late 2011, we have made great effort on marketing and developing new customers for our self-produced drug – Huoliyuan Capsule. As a result, we obtained new customers and expanded our sales of Huoliyuan Capsule.

Net Income
 
As a result of above, during the year ended March 31, 2015, we realized net income of $8,890,473, representing a 9.5% or $769,499 increase, compared to $8,120,974 during the year ended March 31, 2014. The increase was mainly due to the higher sales volume of Huoliyuan Capsules in the year ending March 31, 2015.

Item 4.01: Changes In Registrant’s Certifying Accountant

On February 25, 2015, CHINA YCT INTERNATIONAL GROUP, INC.(the “Company” or “Registrant”) dismissed its independent registered public accounting firm, GZTY CPA GROUP, LLC (“GZTY”) and engaged PARITZ & COMPANY, P.A. (“PC”) to assume the role of the Company’s new independent registered public accounting firm. The Company’s Board of Directors (the “Board”) made the decision and adopted resolutions on February 25, 2015 to dismiss GZTY and retain PC effective February 25, 2015.

GZTY’s report on the Company's consolidated financial statements as of and for the fiscal years ended March 31, 2014 and 2013did not contain an adverse opinion or a disclaimer of opinion, andwere not qualified or modified as to uncertainty, audit scope or accounting principles.

During the years ended March 31, 2014 and 2013, and through February 25, 2015, there were no disagreements with GZTY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of GZTY would have caused it to make reference to the subject matter of the disagreements in connection with its report.

The Company has provided GZTY a copy of the statements made in response to this Item 4.01 and a letter addressed to the Securities and Exchange Commission stating whether or not GZTY agrees with such statements is attached as an exhibit to this form.

CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

UNIT: USD$

		FOR THE THREE MONTHS ENDED								FOR THE NINE MONTHS ENDED
		December 31, 2014				December 31, 2013				December 31, 2014				December 31, 2013
Sales Revenue		$	9,511,534			$	8,276,400			$	26,365,663			$	24,633,947
Cost of Goods Sold			4,826,870				3,639,944				13,397,445				11,314,805
Gross Profit			4,684,664				4,636,456				12,968,218				13,319,142
Selling Expenses			1,309,858				856,021				2,496,500				1,946,148
G&A Expense			1,024,914				894,674				2,287,081				2,026,062
R&D Expenses			87,949				60,634				566,050				708,158
Total expense			2,422,721				1,811,329				5,349,631				4,680,368
Income from operation			2,261,943				2,825,127				7,618,587				8,638,774
Interest income (Expense)			19,542				20,764				72,031				49,496
Profit before tax			2,281,485				2,845,891				7,690,618				8,688,270
Income tax			615,188				649,154				1,898,351				2,130,015
Net income			1,666,297				2,196,737				5,792,267				6,558,255
Other comprehensive income
Foreign currency translation adjustment			387,442				537,410				309,794				1,453,667
Comprehensive income		$	2,053,739			$	2,734,147			$	6,102,061			$	8,011,922
Basic and diluted income per common share
Basic and Diluted			0.06				0.07				0.20				0.22
Weighted average number of common shares outstanding
Basic and Diluted			29,700,690				29,663,023				29,690,953				29,663,023

 

 

Management Discussion and Analysis

 

Sales Revenue (Net)

 
During the three months ended December 31, 2014, we had net sales of $9,511,534, as compared with net sales of $8,276,400 for the same period in 2013, an increase of $1,235,134, or 14.9%, mainly from increased revenue from Huoliyuan Capsules.

 

Since September 2009, we started to engage in the production and distribution of our own non-prescription drug, Huoliyuan Capsule, which is patented in China, and developed distribution channels for the drug. Our sales have increased since September 2009 as a result of the establishment of our manufacturing and distribution channels of Huoliyuan Capsule. Since July 2010, the Company changed from being solely a distributor of Shandong YCT to both a manufacturer and distributor of our own products, the Huoliyuan Capsules. As a result, we obtained new customers and expanded our sales of Huoliyuan Capsules. The Huoliyuan Capsule product accounted for 72.5% of our revenue for the three months ended December 31, 2014, compared to 68.3% for the three months ended December 31, 2013. In this quarter, we added new packaging (1*1) in addition to the existing packaging (1*2), which boosted revenue for Huoliyuan Capsule sales.

 

We entered into a purchase and sale contract with Shandong Yong Chun Tang (“Shandong YCT”) on December 26, 2006 (the “Purchase and Sale Contract”), which sets forth the wholesale price that we pay to Shandong YCT for distributing their products. On February 9, 2010, we renewed the Purchase and Sale Contract with Shandong YCT for a term of five years ending on March 31, 2015. Pursuant to the renewed contract, we can purchase 10 types of health care supplement products from Shandong YCT on a fixed price, which were selected according to their sales volume and profit margin. For the three months ended December 31, 2014, 27.5% of our revenue was from the sale of the health care supplement products, compared to 31.7% in the three months ended December 31, 2013.

Net Income

 

As a result of the above factors, we had a net income of $1,666,297 during the three months ended December 31, 2014, compared with a net income of $2,196,737 during the three months ended December 31, 2013.

 

 

CHINA YCT INTERNATIONAL GROUP, INC.

 

 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

 

														UNIT: USD$
		FOR THE THREE MONTHS ENDED								FOR THE SIX MONTHS ENDED
		September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
Sales Revenue		$	8,674,157			$	8,136,960			$	16,854,129			$	16,357,547
Cost of Goods Sold			4,331,805				3,698,551				8,570,575				7,674,862
Gross Profit			4,342,353				4,438,409				8,283,554				8,682,685
Selling Expenses			619,764				546,441				1,186,642				1,090,128
G&A Expense			560,589				551,480				1,262,168				1,131,388
R&D Expenses			226,836				60,265				478,101				647,524
Total expense			1,407,189				1,158,186				2,926,911				2,869,040
Income from operation			2,935,163				3,280,222				5,356,643				5,813,645
Interest income (Expense)			20,463				-				52,489				28,732
Profit before tax			2,955,626				3,280,222				5,409,132				5,842,377
Income tax			738,907				840,322				1,283,163				1,480,861
Net income			2,216,719				2,439,900				4,125,969				4,361,516
Other comprehensive income
Foreign currency translation adjustment			(71,893	)			307,174				(77,648	)			916,257
Comprehensive income		$	2,144,826			$	2,747,074			$	4,048,321			$	5,277,773
Basic and diluted income per common share
Basic and Diluted			0.07				0.08				0.14				0.15
Weighted average number of common shares outstanding
Basic and Diluted			29,663,023				29,663,023				29,663,023				29,663,023

 

Management Discussion and Analysis

 

Net Sales Revenue

During the three months ended September 30, 2014, we had net sales revenue of $8,674,157, as compared with $8,136,960 for the same period in 2013, an increase of $537,197, or 6.6% due to market conditions.

 

We entered into a purchase and sale contract with Shandong Yong Chun Tang (“Shandong YCT”) on December 26, 2006 (the “Purchase and Sale Contract”), which sets forth the wholesale price that we pay to Shandong YCT for distributing their products. On February 9, 2010, we renewed the Purchase and Sale Contract with Shandong YCT for a term of five years ending on February 28, 2015. Pursuant to the renewed contract, we can purchase 10 types of health care supplement products from Shandong YCT on a fixed price, which were selected according to their sales volume and profit margin. For the three months ended September 30, 2014, 30.7% of our revenue was from the sale of the health care supplement products of Shandong YCT, compared to 32.6% in the three months ended September 30, 2013.

 

Since September 2009, we started to engage in the production and distribution of our own non-prescription drug, Huoliyuan Capsule, which is patented in China, and developed distribution channels for the drug. Our sales have increased since September 2009 as a result of the establishment of our manufacturing and distribution channels of Huoliyuan Capsule. Since July 2010, the Company changed from being solely a distributor of Shandong YCT to both a manufacturer and distributor of our own products, the Huoliyuan Capsules. As a result, we obtained new customers and expanded our sales of Huoliyuan Capsules. The Huoliyuan Capsule product accounted for 69.3% of our revenue for the three months ended September 30, 2014, compared to 67.4% for the three months ended September 30, 2013.

 

Net Income

 

As a result of the above factors, we had a net income of $2,216,719during the three months ended September 30, 2014, compared with a net income of $2,439,900 during the three months ended September 30, 2013, a decrease of $223,181 or approximately 9.1%. .

 

 

SHANDONG, China, Aug. 15, 2014 (GLOBE NEWSWIRE) -- In order to expand their market and increase sales, China YCT International Group, Inc (CYIG) signed a strategic cooperation agreement with Xi'an Putian Pharmacy LLP on 8th August 2014. Therefore, Putian Pharmacy, as the sales agency, will be allowed to sell Huoliyuan capsules in 15 Chinese provinces, which indicates that the sales network of Huoliyuan capsules has captured all provincial markets in China by expanding market share as well as increasing unit sales.

CYIG is a biotechnology company, mainly focused on producing medicines and selling organic healthcare products. It is also dedicated to laying a solid foundation for building a nationwide sales and marketing network. Additionally, CYIG will be offering more incentives to strategic partners to encourage them to create more value for CYIG.

Mr. Xuzhong Ding, the director of marketing and sales for CYIG, said, "Reaching the agreement with Putian Pharmacy accelerates the market development in South-West China, which then pushes CYIG into the entire Chinese market and lays a solid foundation for meeting a pre-determined sales target. Finally, I hope that our cooperation will lead to a better future."

CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

UNIT: USD$ 

		FOR THE THREE MONTHS ENDED
		June 30, 2014				June 30, 2013
Sales Revenue		$	8,179,972			$	8,220,587
Cost of Goods Sold			4,238,770				3,976,310
Gross Profit			3,941,202				4,244,277
Selling Expenses			566,878				543,686
G&A Expense			701,580				579,908
R&D Expenses			251,265				587,259
Total expense			1,519,723				1,710,853
Income from operation			2,421,479				2,533,424
Interest income (Expense)			32,026				28,732
Profit before tax			2,453,505				2,562,156
Income tax			544,256				640,539
Net income			1,909,249				1,921,617
Foreign currency translation adjustment			(5,755	)			609,083
Comprehensive income		$	1,903,494			$	2,530,700
Basic and diluted income per common share
Basic and Diluted			0.06				0.06
Weighted average number of common shares outstanding
Basic and Diluted			29,671,265				29,663,023

Management Discussion and Analysis

Net Sales

During the three months ended June 30, 2014, we realized $8,179,972 of sales revenue, a slight decrease of 0.5% or $40,616 as compared to $8,220,587 for the same period in 2013.

We entered into a Purchase & Sale Contract with Shandong Yong Chun Tang (“Shandong YCT”) on December 26, 2006, which sets forth the wholesale price that we pay to Shandong YCT for distributing their products. On February 9, 2010, we renewed the Purchase and Sale Contract with Shandong YCT for a term of five years ending on February 28, 2015. Pursuant to the renewed contract, we can purchase 10 products from Shandong YCT on a fixed price, which were selected according to the sales volume and profit margin. For the three months ended June 30, 2014, 32.3% of our revenues were from the sale of the ten types of health care supplement products, compared to 33.6% in the three months ended June 30, 2013.

Since September 2009, we started to engage in the production and distribution of our own patented drug, Huoliyuan Capsule, and developed distribution channels for the drug. Our sales have increased since September 2009 as a result of the establishment of our manufacturing and distribution of Huoliyuan Capsule. Starting from July 2010, the Company changed from being a distributor of Shandong YCT to both a manufacturer and distributor of our own products, the Huoliyuan Capsules. As a result, we obtained new customers and expanded our sales of Huoliyuan Capsules. The Huoliyuan Capsule product accounted for 67.7% of our revenue for the three months ended June 30, 2014, compared to 66.4% for the three months ended June 30, 2013.

Net Income

During the three months ended June 30, 2014, we realized net income of $1,909,249, representing a 0.6% or $12,368 increase as compared to $1,921,617 during the three months ended June 30, 2013.

SHANDONG, China, July 30, 2014 (GLOBE NEWSWIRE) -- The government of Sishui County, in Shandong Province, China recently launched the Forestation Project of 2014, in which government sectors such as Forestry, Technology as well as Agriculture all attended for the promotion of Acer Truncatum planting. Local farmer units, cooperatives, as well as local farmers were arranged to plant the acer truncatum by local authorities in the pre-determined fields of hills and mountains. This activity is aimed at expanding the amount of land in which Acer Truncatum is planted in, and to lay a good foundation for future planting activities with government requests, scientific planning and coordination.

Sishui County, as the national verdurization model county, concentrated on forestation projects and environmental protection activities. As afforestation is regarded as the most important concern to the government of Sishui, the 2014 Forestation Project in Jining City was held in Sishui County.

The local government is dedicated to helping and supporting the Acer Truncatum project, especially in the area of basement building, research platforms, talent recruitment and the promotion of acer truncatum. This dedication accelerates the development of the Acer Truncatum project, and also ensures the supply of sufficient raw materials for Acer Truncatum related products.

The CEO of CYIG, Mr. Yan Tinghe said, "The promotion of Acer Truncatum planting is like adding a pair of wings to our company, as we can have more spaces to develop. Moreover, we are aiming to improve our Acer Truncatum-related products to make our company stronger, bigger as well as greater. Thus, we must make full use of the resource and take the right chance."

SHANDONG, China, July 22, 2014 (GLOBE NEWSWIRE) -- China YCT International Group, Inc (OTC:CYIG) has recently held a work conference with Nanjing Forestry University (NFU). The two sides had in-depth communications about the company development and the future of acer truncatum as well as the cooperation plan.

Cao Fu Liang, Principal of the NFU stated at the conference that after several years cooperation with CYIG, both have achieved a lot of scientific goals in gingko research and production. During this time, CYIG took on some governmental programs including the national Torch Program, the Provincial and National Enriching People and County programs and were awarded a second place in the China national scientific progress prize.

As a high-tech enterprise, the Company built a technologically innovative platform consisting of provincial engineering technology research center and the preparation engineering laboratory. The researchers in the Center consist of more than 20 professionals and many other engineers of which 60% of them are senior level. The Center is equipped with provincial standardized experimental facilities and is thus suited to national and provincial research plans and tests, and sets down products techniques and processes for the Company. The Center holds 4 national invention patents.

The Laboratory contains 2 workshops. The natural medicine extraction shop is responsible for extracting, isolating and purifying the functional ingredients from the gingko aglycone flavonoids and acer truncatum at the same time. The shop can also deal with a hundred more Chinese medical herbs extraction and purification.

Based on downstream products of gingko and acer truncatum, the biological feed shop adopted biological fermentation and enzyme technology to produce antibiotic-free additives which could replace the antibiotic additives has now being widely used in cultivation industry.

Mr. Tinghe Yan,The CEO of CYIG commented that, "CYIG has grown up as time goes by and now became a famous China pharmaceutical company with rapid growth. Adhere to the enterprise purpose of 'casting quality and building the brand in the future, CYIG is stepping onto the worldwide stage and embracing the new period of fast development."

With the development of our society and the evolvement of the human being, health has became the most concerned thing. CYIG views the public healthcare as its duty and therefore helps people by their various kind of medicine products to make a better society and world.

The Strategy leads the development and innovation drives the progress. Under the Five Years Development Plan of CYIG, the company implements the strategy for the project to rapidly expand the business scale and market share. We will carry forward the company's advanced culture, strive to explore a new business model, commit to the enterprise long-term value creation, and provide consumers good quality and efficient products and services. Meanwhile, we will actively fulfill the social responsibility, return our shareholders, customers, society and employees with fruitful results from the development of enterprise, realize the aim of 'the pursuit of profits'".

CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

UNIT: USD$
		FOR THE YEARS ENDED
		March 31, 2014				March 31, 2013
Sales Revenue		$	34,062,632			$	33,102,883
Cost of Goods Sold			16,134,479				16,177,786
Gross Profit			17,928,153				16,925,097
Selling Expenses			2,898,160				2,869,188
G&A Expense			3,077,177				3,116,425
R&D Expenses			1,234,393				1,756,053
Total expense			7,209,730				7,741,666
Income from operation			10,718,423				9,183,431
Interest income (Expense)			79,364				105,722
Unrealized gain on derivative			-				8,297,884
Profit before tax			10,797,787				17,587,037
Income tax			2,676,813				2,326,031
Net income			8,120,974				15,261,006
Other comprehensive income
Foreign currency translation adjustment			841,999				453,773
Comprehensive income		$	8,962,973			$	15,714,779
Basic and diluted income per common share
Basic and Diluted			0.27				0.28
Weighted average number of common shares outstanding
Basic and Diluted			29,663,023				55,217,197

Management Discussion and Analysis

Net Sales

During the year ended March 31, 2014, we realized $34,062,632 in revenue, representing an increase of 2.9% or $959,749 as compared to $33,102,883 for the same period in 2013. We increased advertising and promotion of our Huoliyuan capsules since obtaining the certification pursuant to the criteria set forth by the Good Manufacturing Practices (revised 2010) issued by China Food and Drug Administration (hereafter referred to as new GMP) in the third quarter.

Part of our revenues were generated by us as the distributor for the products manufactured by Shandong YCT. We entered into a Purchase & Sale Contract with Shandong YCT on December 26, 2006, which sets forth the wholesale price that we pay to Shandong YCT for each of the products it produces. On February 9, 2010, we renewed the Purchase and Sale Contract with Shandong YCT for a term of five years ending on February 28, 2015. Pursuant to the renewed contract, we can purchase 10 products from Shandong YCT on fixed prices, with the products selected according to their sales volume and profit. During the year ended March 31, 2014, we generated of 32.2% our total revenue as the distributor of Shandong YCT, as compared to 35.0% during the year ended March 31, 2013.

The product of Huoliyuan Capsule accounted for 67.8% of our revenue during the year ended March 31, 2014, compared to 61.6% during the year ended March 31, 2013. Since July 2010, the company changed from being a distributor of Shandong Yong Chun Tang to both a manufacturer and distributor of our own products, Huoliyuan Capsule. Since late 2011, we have made great effort on marketing and developing new customers for our self-produced drug – Huoliyuan Capsule. As a result, we obtained new customers and expanded our sales of Huoliyuann Capsules.

Net Income

As a result of above, during the year ended March 31, 2014, we realized net income of $8,120,974, representing a 46.8% or $7,140,032 decrease, compared to $15,261,006 during the year ended March 31, 2013. The decrease was mainly due to the other income of $8,297,884 related to the Termination Agreement in the fiscal year ended March 31, 2013; there were no such other income for the year ended March 31, 2014.

Management Discussion and Analysis

Results of Operations

Net Sales
 
During the three months ended December 31, 2013, we had net sales of $8,276,400, as compared with net sales of $6,922,363 for the same period in 2012, an increase of $1,354,037, or 19.6%. We increased advertising and promotion of our Huoliyuan capsules and spent $158,750 during the three months ended December 31, 2013 after obtaining the certification pursuant to the criteria set forth by the Good Manufacturing Practices (revised 2010) issued by China Food and Drug Administration (hereafter referred to as new GMP).  We did not conduct any advertising or promotion in the first two quarters of this fiscal year.
 
We entered into a purchase and sale contract with Shandong Yong Chun Tang Bioengineering Co., Ltd. (“Shandong YCT”) on December 26, 2006 (the “Purchase and Sale Contract”), which sets forth the wholesale price that we pay Shandong YCT for distributing their products.  On February 9, 2010, we renewed the Purchase and Sale Contract with Shandong YCT for another five years ending on February 28, 2015.  Pursuant to the renewed contract, we can purchase 10 types of health care supplement products from Shandong YCT on a fixed price, which were selected according to their sales volume and profit margin.  For the three months ended December 31, 2013, 31.7% of our revenue was from the sale of the health care supplement products, compared to 38.1% in the three months ended December 31, 2012.
 
Since September 2009, we started to engage in the production and distribution of our own prescription drug, Huoliyuan Capsule, which is patented in China, and developed distribution channels for the drug.  Our sales have increased since September 2009 as a result of the establishment of our manufacturing and distribution channels of Huoliyuan Capsule.  Since July 2010, the Company changed from being solely a distributor of Shandong YCT to both a manufacturer and distributor of our own products, the Huoliyuan Capsules.  As a result, we obtained new customers and expanded our sales of Huoliyuan Capsules.  The Huoliyuan Capsule product accounted for 68.3% of our revenue for the three months ended December 31, 2013, compared to 59.6% for the three months ended December 31, 2012.

Net Income
 
As a result of the above factors, we had a net income of $2,196,737 during the three months ended December 31, 2013, compared with a net income of $4,648,852 during the three months ended December 31, 2012.

GeoTeam calculated non gaap EPS for the third quarter 2013 of $0.07 vs $0.02

CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

 

UNIT: USD$
		FOR THE THREE MONTHS ENDED
		June 30, 2013				June 30, 2012
Sales Revenue		$	8,220,587			$	8,916,979
Cost of Goods Sold			3,976,310				4,368,921
Gross Profit			4,244,277				4,548,058
Selling Expenses			543,686				870,204
G&A Expense			579,908				487,383
R&D Expenses			587,259				222,566
Total expense			1,710,853				1,580,153
Income from operation			2,533,424				2,967,905
Interest income (Expense)			28,732				28,031
Profit before tax			2,562,156				2,995,936
Income tax			640,539				743,226
Net income			1,921,617				2,252,710
Other comprehensive income:
Foreign currency translation adjustment			609,083				(40,878	)
Comprehensive income		$	2,530,700				2,211,832
Basic and diluted income per common share
Basic and Diluted			0.06				0.03
Weighted average number of common shares outstanding
Basic and Diluted			29,663,023				73,782,832

 CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

UNIT: USD$  

 

		FOR THE YEARS ENDED
		March 31, 2013				March 31, 2012
Sales Revenue		$	33,102,883			$	37,588,937
Cost of Goods Sold			16,177,786				17,410,659
Gross Profit			16,925,097				20,178,278
Selling Expenses			2,869,188				3,517,514
G&A Expense			3,116,425				5,753,505
R&D Expenses			1,756,053				848,753
Total expense			7,741,666				10,119,772
Income from operation			9,183,431				10,058,506
Interest income (Expense)			105,722				304,928
Other income (Expense)			8,297,884				(37,212,379	)
Profit before tax			17,587,037				(26,848,944	)
Income tax			2,326,031				2,955,424
Net income			15,261,006				(29,804,368	)
Other comprehensive income
Foreign currency translation adjustment			453,773				1,299,863
Comprehensive income		$	15,714,779			$	(28,504,505	)
Basic and diluted income per common share
Basic and Diluted			0.28				0.00
Weighted average number of common shares outstanding
Basic and Diluted			55,217,197				73,868,110

CHINA YCT INTERNATIONAL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

 

UNIT: USD$

 

		FOR THE YEARS ENDED
		March 31, 2012				March 31, 2011
Sales Revenue		$	37,588,937			$	33,465,334
Cost of Goods Sold			17,410,659				16,181,183
Gross Profit			20,178,278				17,284,151
Selling Expenses			3,517,514				2,649,477
G&A Expense			5,753,505				752,026
R&D Expenses			848,753				280,385
Total expense			10,119,772				3,681,888
Income from operation			10,058,506				13,602,263
Interest income (Expense)			304,928				22,769
Other income (Expense)			(37,212,379	)			-
Profit before tax			(26,848,944	)			13,625,032
Income tax			2,955,424				3,410,265
Net income			(29,804,368	)			10,214,768
Other comprehensive income
Foreign currency translation adjustment			1,299,863				1,329,603
Comprehensive income		$	(28,504,505	)		$	11,544,371
Basic and diluted income per common share
Basic and Diluted			(0.40	)			0.32
Weighted average number of common shares outstanding
Basic and Diluted			73,780,610				35,762,801

 

 

The Form 10K-A is being amended to restate our previously issued financial statements for the year ended March 31, 2011. On February 28, 2011, we acquired a United States patent which was accounted for as an acquisition of an asset. However, we recognized the contingent considerations which would be accounted for under the acquisition of a business. Therefore, we overstated the fair value of the patent. We have restated our financial statements to correct this error. The changes in the financial statements at March 31, 2011 include, but are not limted to, a decrease in the amount recorded for net intangible assets by $23,195,331 a decrease in the amount reccoded as a contingent liability by $23,391,902 and an increase of $147,428 in retained earnings. We have also provided additional explanation as to (i) the intended purposes of the patent, (ii) the lack of accounts receivable as of March 31, 2011 and (iii) additional disclosure regarding the tax treatment of the acquisition of the patent.

CHINA YCT INTERNATIONAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)

 

														UNIT: USD$
		FOR THE THREE MONTHS								FOR THE NINE MONTHS
		ENDED								ENDED
		December 31,				December 31,				December 31,				December 31,
		2011				2010				2011				2010
Sales Revenue		$	10,112,489			$	9,886,824			$	26,477,760			$	21,301,142
Cost of Goods Sold			4,712,730				4,613,157				11,894,299				10,788,613
Gross Profit			5,399,758				5,273,667				14,583,461				10,512,529
Selling Expenses			713,694				843,458				2,505,249				1,776,853
G&A Expense			2,050,421				352,096				5,651,412				855,011
R&D Expenses			183,693				111,221				577,514				233,210
Total expense			2,947,808				1,306,775				8,734,175				2,865,074
Income from operation			2,451,951				3,966,892				5,849,286				7,647,455
Interest income (Expense)			65,818				18,273				209,953				18,273
Other income (Expense)			-				580,211				-				580,211
Profit before tax			2,517,769				4,565,376				6,059,239				8,245,939
Income tax			992,840				1,141,919				1,878,207				2,085,719
Net income			1,524,929				3,423,457				4,181,032				6,160,220
Other comprehensive income
Foreign currency translation adjustment			216,785				510,647				852,472				2,199,600
Compenhensive income		$	1,741,714			$	3,934,104			$	5,033,504			$	8,359,820
Basic and diluted income per common share
Basic and Diluted			0.02				0.12				0.06				0.21
Weighted average number of common shares outstanding
Basic and Diluted			73,780,610				29,473,902				73,780,610				29,473,902

GeoTeam® Note: 2011 vs. 2010 third quarter adjusted EPS was $0.04 vs. $0.12.

On October 21, 2011, the Company entered into an Amendment Agreement with L.Y. Research to amend the purchase agreement of one of its two subidiaries, dated as of February 28, 2011, and amended and restated as of August 15, 2011 (the “Purchase Agreement”).

The Amendment Agreement added the following terms:

(1)   In the event that the Company cannot, within one year from October 21, 2011, either (i) raise a minimum of $20M in gross proceeds from a debt or equity financing, or a series of debt and/or equity financings, or (ii) list its common stock on NASDAQ or a major foreign stock exchange, then the shares issued pursuant to the Purchase Agreement shall be returned to the Company and the LY Patent shall be returned to LY Research and the Purchase Agreement, as amended, shall be cancelled and of no further force or effect; and

(2)   LY Research agrees that it waives its right to (i) vote the shares and (ii) receive any dividends or other distributions from the Company until the earlier of (a) completion of the financing or (b) the listing of the shares of common stock of the Company on NASDAQ or a major foreign stock exchange.

Related Party Relationship:

From January 2006 until January 2007 management of Shandong Spring Pharmaceutical was engaged in developing the company’s manufacturing facility and distribution network. In January 2007 Shandong Spring Pharmaceutical commenced revenue-producing activities; specifically distributing products manufactured by Shandong Yong Chun Tang Bioengineering Co., Ltd. (“Shandong Yong Chun Tang”), which is owned by Yan Tinghe, the Chairman of Shandong Spring Pharmaceutical.

China YCT International Group, Inc.  entered into an agreement as of February 28 2011, with L.Y. Research Corporation (“LY Research”), Pursuant to the Agreement, the Company will acquire 100% of the issued and outstanding stock of L.Y.(HK) Biotech Limited, a corporation organized under the laws of Hong Kong, (“HK Biotech”). The assets of HK Biotech include HK Biotech’s US patent No. 6,475,531 B1, titled “Safe Botanical Drug for Treatment and Prevention of Influenza and Increasing Immune Function”. HK Biotech is a development stage company. The closing of the transactions contemplated by the Agreement are subject to customary closing conditions.

Consideration. In consideration for the purchase of the LYHK Shares, the Buyer shall issue Seller the following:

GeoTeam® Note:

The price tag of this acquisition seems high given that the target is a development stage company. Couple this with the fact that this company needs to raise  money makes dilution a forgone conclusion.

CHINA YCT INTERNATIONAL GROUP, INC. CONSOLIDATED STATEMENT OF OPERATIONS
		FOR THE YEARS ENDED MARCH 31,
		2010				2009
Sales Revenue		$	32,012,404			$	25,817,447
Cost of Goods Sold			14,201,533				11,323,587
Gross Profit			17,810,871				14,493,860
			-
Selling Expenses			3,570,477				3,488,941
G&A Expense			1,269,668				678,381
R&D Expenses			322,270				181,531
Total expense			5,162,415				4,348,853
Income from operation			12,648,456				10,145,007
Interest expense			-
Other income (Expense)			21,345				(83,798	)
Profit before tax			12,669,801				10,061,209
Income tax			3,216,742				2,579,666
Net income			9,453,059				7,481,543
Other comprehensive income
Foreign currency translation adjustment			22,188				272,813
Compenhensive income		$	9,475,247			$	7,754,356
Basic and diluted income per common share
Basic and Diluted			0.32				0.26
Weighted average number of common shares outstanding
Basic and Diluted			29,425,695				29,380,073

GeoTeam® Note: Fourth quarter 2010 vs. 2009: $0.10 vs $0.04

During the year ended March 31, 2010, we realized $32,012,404 in revenue, representing an increase of 24% or $6,194,957 as compared to $25,817,447 for the same period of 2009. During the past year of operations, a total of 35 products each contributed to revenue, including health care supplements, cosmetics and toiletries and daily necessities, and no single product has accounted for more than 20% of our revenue, reflecting that the company was and is not heavily reliant on the sales of any single production line.
 
In March 2010, the Company purchased a patent from Shandong YCT for $6.74 million, which enables the Company to manufacture and distribute Huoliyuan Capsule that was newly introduced by the Company. Huoliyuan Capsule is a self-manufactured product by the Company which bears a higher gross profit margin as compared to products manufactured by Shandong Yong Chun Tang. We expect that  in 2011, the revenue generated from Huoliyuan, which is in house produced, willaccount for 40% of our total annual sales.
 
The patent the Company bought from Shandong YCT in March 2010 represents an exclusive right (subject to rights retained by Shandong YCT) in China to use an aglycone type and purification method of biotransformation in gingko product manufacturing process, with a remaining legal life of 16.5 years.  The Company is amortizing the cost on a straight line basis over 16.5 years. During fiscal year 2009, which ended on March 31, 2009, Shandong Spring Pharmaceutical realized $25,817,447 in revenue.  For the year of 2010, which ended on March 31, 2010, the Company realized $32,012,404 in revenue, including 12% of the total revenue generated by the distribution of our new product Huoliyuan Capsule. The overall increase in revenue year over year was approximately 24%.
 
 88% of our total revenue was contributed by the resale of products purchased by Shandong Spring Pharmaceutical from Shandong Yong Chun Tang. The purchases were made pursuant to a Purchase & Sale Contract dated December 26, 2006, which sets forth the wholesale price that Shandong Spring Pharmaceutical pays to Shandong Yong Chun Tang for each of the 34 products governed by the Contract. 

Since Shandong Spring Pharmaceutical was not an exclusive distributor for Shandong Yong Chun Tang during this period, its resale prices are determined in large part by competition.  For that reason, the gross margin realized by Shandong Spring Pharmaceutical was nearly identical in each quarter of this fiscal year, averaging 56%, despite the significant growth in sales from year to year.

The profits from our health and beauty aid distribution business are adequate to fund our ongoing operations. In order to fully implement its business plan, however, Shandong Spring Pharmaceutical will require a large capital infusion to finance the creation of state-of-the-art facilities for the extraction of compounds from gingko and the formulation of products based on those compounds. The patent the Company bought from Shandong YCT in March 2010 represents an exclusive right in China to use an aglycone type and purification method of biotransformation in gingko product manufacturing process, with a remaining legal life of 16.5 years. The Company is amortizing the cost on a straight line basis over 16.5 years.

Based on our current operating plan, we believe that existing cash and cash equivalents balances, as well as cash forecast by management to be generated by operations will be sufficient to meet our working capital and capital requirements for our current operations. Our operations have produced positive cash flow, with $14,097,423 provided by operating activities for the year ended March 31, 2010. We did not have accounts receivable outstanding as of March 31, 2010. We expect our marketing activities to continue to operate cash-positively. We commenced our own manufacturing operations during this year, which has put some pressure on our cash flow. In the ongoing basis, we may be required to seek additional capital and reduce certain spending as needed. 

 In order to fully implement our business plan, however, we will require capital contributions far in excess of our current asset value. Our budget for bringing our manufacturing facility to an operating level that assures profitability is $10 million. To fully implement our business plan - including development of a facility to utilize our proprietary method of extracting flavones from ginkgo by using enzyme technology - we will need $40 million. Our expectation, therefore, is that we will seek to access the capital markets in both the U.S. and China to obtain the funds we require.

On June 28, 2010 Zhang Jirui resigned from his position as President and Chief Financial Officer for China YCT International Group, Inc. Mr. Zhang will remain a member of the Board of Directors. On the same date the Board of Directors appointed Li Chuanmin to serve as Chief Financial Officer. Information regarding Mr. Li follows.

Notwithstanding the efficiencies that we expect to realize from continued growth, we expect that several factors will cause our selling, general and administrative expenses to increase in the coming months:

• If we are successful in obtaining the funds to complete our manufacturing facility, we will initiate manufacturing activities. This will cause us to incur facility costs and the expense of administrative personnel.
• Although we have $4.32 million in property, plant and equipment on our balance sheet, we are not recording any significant amount of depreciation, since we have not put our facility into service yet. When we commence manufacturing, we will begin to depreciate our property – which will have a substantially larger book value at that time – and incur the expense as a general expense to the extent it is not allocable to cost of goods sold.

Source: SEC Form 10Q ( For the quarterly period ended June 30, 2009, page21)

Net income for the fourth quarter was $1.02 million, or diluted income per share of $0.03, compared to net income of $1.6 million, or diluted income per share of $0.05 in the fourth quarter of fiscal year 2008.

 "During the fourth quarter of fiscal year 2009, we felt the effects of the global economic slowdown," stated Mr. Yan Tinghe, the Company's Chairman. "In addition, with an earlier than normal start to the Chinese New Year this year, there was an extended period of minimized business activity for our dealers."

Source: Marketwire (June 30, 2009)

'We believe that the mid- to long-term market opportunity for our products is growing at noticeable speed. Moreover, we have strengthened our balance sheet by reducing other receivable and current liabilities,' Mr. Yan continued. 'While the impact of the global economic slowdown will persist for the foreseeable future, we are seeing stronger operating results quarter-to- quarter, and we believe that, on a year-to-year basis, we will continue our strong growth into fiscal year 2010.'

Source: PR Newswire (February 18, 2009)

GeoTeam Comment:

The outlook appears positive, but the inference to mid- to long-term opportunity and referring to year over year growth could raise some questions regarding short-term growth. 

CYIG reported preliminary results for its fiscal 2009 third quarter ended December:

• Sales Increased 60.4% Compared to FYQ3 2008 to $8.63 million.
• Net earnings increased 125% to approximately $2.19 million compared to FYQ3 2008 net   income of $0.97 million.

GeoTeam® Comment:  The company did not provide an EPS figure for the third quarter. Extrapolating EPS from the outstanding shares of 29.3 million yields about $.07 .  However, using 29.3 million shares may be a little presumptuous, on a going forward basis, as a result of some commentary from the second quarter SEC filling:

"In order to fully implement our business plan, however, we will require capital contributions far in excess of our current asset value. Our budget for bringing our manufacturing facility to an operating level that assures profitability is $10 million. To fully implement our business plan - including development of a facility to utilize our proprietary method of extracting flavones from ginkgo by using enzyme technology - we will need $40 million. Our expectation, therefore, is that we will seek to access the capital markets in both the U.S. and China to obtain the funds we require. At the present time, however, we do not have commitments of funds from any source."

This may cause some investors to approach CYIG with caution until more details on this matter become available. 

 Source: Marketwire (January 26, 2009)

Guidance Report:

"The Company expects the positive trend in its financial performance to continue into the last quarter of fiscal year 2009 and through fiscal year 2010. In addition, the Company expects to improve its revenue in 2010 by contributing more in advertising via nationwide multi-media outlets."

Source: Marketwire (January 26, 2009)