Jinzanghuang Tibet (JZHG) research, news, and more from GeoInvesting

Company description

Sun, 29 Mar 2009 04:00:00 GMT

Leling Jinzanghuang Biotech Co., Ltd became public via a reverse merger transaction on January 12, 2009.

Leling Jinzanghuang Biotech Co., Ltd. is a Tibetan pharmaceutical and nutraceutical product distribution company. Leling Jinzanghuang was founded in November 2008 under the laws of the People’s Republic of China with registered capital of 3.5 million RMB ($513,450). Leling Jinzanghuang’s executive offices and operations are located at Fu Qian Road South End (Westside), Leling City, Shangdong Province, in eastern China. Leling Jinzanghuang engages in the distribution of the pharmaceutical and nutraceutical products that Tibetans have used for centuries to treat diseases and facilitate health. The distributed products are classified by Leling Leling Jinzanghuang in three major categories: pharmaceuticals, therapeutic supplements, and dietary supplements.

Liquidity Requirements

Mon, 12 Dec 2011 05:00:00 GMT

Despite our sizeable cash reserves, we borrowed $29,460 from a related party during the quarter ended September 30, 2011. The loans are taken in order to obtain U.S. Dollars to pay our expenses in the United States, including accounting and legal expenses and the expenses that attend the listing of our common stock on the U.S. markets. The procedure required in order to obtain government approval of a conversion of Renminbi into Dollars is time-consuming and laborious. For that reason, until we complete a financing in U.S. Dollars or obtain some other source of U.S. Dollars, we will continue to borrow Dollars from related parties as needed.

Over the long term, our expectation is that we will utilize our capital resources as well as any additional investments that we secure in order to expand our presence in the market for Tibetan medicine. At the present time, however, we are able to operate profitably without significant additional investment. Moreover, our observation of the equity markets indicates that we would be unlikely to obtain financing on favorable terms at this time. Accordingly, our near term plan is to continue the program that we initiated during the past year, utilizing the resources available to us.

Liquidity Requirements

Wed, 23 Nov 2011 05:00:00 GMT

To date our operations have been funded by the contributions to capital by our founders and the net cash provided by our operations. As a result, at September 30, 2011 we had no bank debt and only a $65,370 obligation to a related party. At the same time, we had $3,632,284 in cash at September 30, 2011 as well as working capital totaling $4,292,377, an increase of $1,679,480 since our last fiscal year ended on June 30, 2011. So our capital resources are more than sufficient to fund our operations for the coming year as they are currently structured.

Comments & Business Outlook

Wed, 23 Nov 2011 05:00:00 GMT

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Three Months Ended September 30,
	2011		2010
REVENUE
Pharmaceutical products	$	-	$	26,673
Services		2,564,583		-
		2,564,583		26,673
COST OF SALES
Pharmaceutical products		-		24,299
Services		233,832		-
Business and sales related tax		129,312		-
		363,144		24,299

GROSS PROFIT		2,201,439		2,374

COSTS AND EXPENSES
General and Administrative Expenses		114,639		33,879
OPERATING INCOME (LOSS)		2,086,800		(31,505	)

OTHER INCOME		1,054		6,933

INCOME (LOSS) BEFORE INCOME TAX		2,087,854		(24,572	)

INCOME TAX		475,566		-

NET INCOME (LOSS)		1,612,288		(24,572	)

LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		82,676		(1,558	)

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		1,529,612		(23,014	)

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain, net of tax		71,619		19,927

COMPREHENSIVE INCOME (LOSS)		1,601,231		(3,087	)

LESS: OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS		4,693		16,069

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	1,596,538	$	(19,156	)

Basic and diluted earnings (loss) per common share	$	0.04	$	(0.00	)

Weighted average number of shares outstanding		40,665,063		40,665,063

Our sauna store program began in October 2010 with a trial group of 50 sauna stores. At the end of December 2010 we added another 50 stores to our program, and then added another 50 at the end of March 2011. As a result, our revenue from advisory services increased from quarter to quarter. The revenue growth was roughly proportionate to the growth in number of stores, except that the third quarter was particularly profitable. This occurred because the Chinese Spring Festival in February affords most Chinese workers from one to two weeks of vacation, during which time the sauna stores experience a sharp increase in business.

Comments & Business Outlook

Thu, 17 Feb 2011 05:00:00 GMT

JINZANGHUANG TIBET PHARMACEUTICALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

		THREE MONTHS ENDED DECEMBER 31,				SIX MONTHS ENDED DECEMBER 31,
		2010		2009		2010		2009

REVENUE
	-Pharmaceutical products	$	-	$	323,536	$	26,673	$	548,486
	-Services		553,038		-		553,038		-
			553,038		323,536		579,711		548,486

COSTS OF REVENUE
	-Pharmaceutical product sales		-		219,860		24,299		391,716
	-Services		68,872		-		68,872		-
			68,872		219,860		93,171		391,716

GROSS PROFIT			484,166		103,676		486,540		156,770

COSTS AND EXPENSES
General and Administrative Expenses			64,858		60,958		98,737		145,428

INCOME (LOSS) BEFORE INCOME TAX			419,308		42,718		387,803		11,342

INCOME TAX			106,993		16,875		100,060		19,111

NET INCOME (LOSS)			312,315		25,843		287,743		(7,769	)

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			15,995		2,489		14,437		2,665

NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY			296,320		23,354		273,306		(10,434	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustment			20,011		21		39,938		1,365

COMPREHENSIVE INCOME (LOSS)			316,331		23,375		313,244		(9,069	)

LESS: OTHER COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			10,512		-		26,581		36

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY		$	305,819	$	23,375	$	286,663	$	(9,105	)



Basic and diluted earnings per common share		$	0.01	$	0.00	$	0.01	$	(0.00	)

Weighted average number of shares outstanding			40,665,063		40,645,063		40,665,063		40,645,063

On October 8, 2010, Leling JZH entered into a joint venture with Shandong JZH to market to the sauna store industry. Leling JZH entered into an agency agreement with Shenyang Jintao Technology Co., Ltd., which has introduced 50 sauna stores to Shandong JZH and Leling JZH. Shandong JZH sells its Tibetan medicine products to the sauna stores and Leling JZH provides training service to each store to coach how to provide sauna service through using the products sold byShandong JZH. At each month end, each store sends a usage record to Leling JZH. Leling JZH also makes a physical inventory count quarterly to compare remaining inventory with the quantity delivered by Shandong JZH. According to the agreement signed with each store, once products are used, each sauna store will pay 40% of the total sauna service fee to Leling JZH. This arrangement provides Leling JZH with a revenue stream for which it incurs very little direct cost, as the product manufacture and distribution is entirely the responsibility of Shandong JZH. In addition, entry into this new market has not forced us to incur significant start-up costs, as we have used the same employees and same facilities for the sauna market as carried on our prior product distribution activities. On October 8, 2010, Leling JZH entered into a joint venture with Shandong JZH to market to the sauna store industry. Leling JZH entered into an agency agreement with Shenyang Jintao Technology Co., Ltd., which has introduced 50 sauna stores to Shandong JZH and Leling JZH. Shandong JZH sells its Tibetan medicine products to the sauna stores and Leling JZH provides training service to each store to coach how to provide sauna service through using the products sold byShandong JZH. At each month end, each store sends a usage record to Leling JZH. Leling JZH also makes a physical inventory count quarterly to compare remaining inventory with the quantity delivered by Shandong JZH. According to the agreement signed with each store, once products are used, each sauna store will pay 40% of the total sauna service fee to Leling JZH. This arrangement provides Leling JZH with a revenue stream for which it incurs very little direct cost, as the product manufacture and distribution is entirely the responsibility of Shandong JZH. In addition, entry into this new market has not forced us to incur significant start-up costs, as we have used the same employees and same facilities for the sauna market as carried on our prior product distribution activities.

Leling Jinzanghuang continues to sell products designed to provide health protection as its base business. During the six months ended December 31, 2010 it also offered puer tea for sale. We consider the market prospects to be hopeful; so the Company is seeking more customers step by step. During the six months ended December 31, 2010, however, product sales remained low, with no sales at all during the quarter ended December 31, 2010, as we lack the capital necessary to fund a market surge. During the six months ended December 31, 2010 product sales, all of which were made to two customers, contributed only $27,123 to our revenue. In contrast, during the six months ended December 31, 2009, our sales of products manufactured by Shandong Jinzanghuang yielded $548,486 in revenue.

Our operating results for the three and six month periods ended December 31, 2010 were superior to those of the prior year periods, however, since we introduced a second revenue stream in October 2010. We now have arrangements with 50 sauna stores, where we have trained the staff to utilize the products they purchase from Shandong JZH in the sauna services they perform. In exchange for training and advice, we receive 40% of the revenue from the stores. This new business yielded $553,038 in revenue during the three and six month periods ended December 31, 2010. The cost of the sales consists almost entirely of the $1,203 per store fee that we pay to Shenyang Jintao Technology Co., Ltd., which serves as our agent in managing this business, plus the salary of our training staff. As a result, our gross margin for the six months ended December 31, 2010 was 84%. During the six months ended December 31, 2009, we achieved a 28% gross margin.

Liquidity Requirements

Thu, 17 Feb 2011 05:00:00 GMT

Our business plan contemplates that we will obtain $5 million to $10 million in additional capital during 2010 and 2011. The funds are needed in order to:

● Relocate our headquarters from Shandong to Beijing, where we will have greater access to marketing channels;

● Implement our direct marketing program, including development of an online presence;

● Acquire the rights to pharmaceuticals and nutraceuticals that will complement our existing product line;

● Carry on clinical trials of pharmaceuticals required to obtain SFDA approval;

● Establish franchisees throughout China; and

● Implement an advertising and marketing program adequate to assure us of substantial market presence.

Our plan is to sell a portion of our equity in order to obtain the necessary funds, which will reduce the equity share of our existing shareholders. To date, however, we have received no commitment from any source for funds.

CFO Trail

Mon, 13 Sep 2010 04:00:00 GMT

On August 26, 2010 Yang An resigned from his position as a member of the Registrant’s Board of Directors and as an officer of the Registrant. On the same date Zeng Yiling resigned from his position as the Registrant’s Chief Financial Officer.

Reverse Merger Activity

Sun, 29 Mar 2009 04:00:00 GMT

Leling Jinzanghuang Biotech Co., Ltd, a Tibetan health products company, goes public via a reverse merger transaction on January 12, 2009. Upon completion of the Share Exchange, there were 40,644,780 shares common stock issued and outstanding.

The company has yet to generate any significant revenues, as the market for Tibetan pharmaceuticals in China is only a very small portion of the overall medical market in China. The annual production of Tibetan medicine amounts to approximately 1500 tons with more than 293 items marketed. However, the growth rate of the market for Tibetan pharmaceuticals is substantial. One factor spurring growth has been the willingness of Chinese regulators to accredit products based on Tibetan medicine. At the present time, this accreditation includes:

14 products that have been listed on the Protected Chinese Traditional Medicine List;
24 products that have been included in the National Medicine Index;
218 products that have been certified by the SFDA; and
20+ products that have registered trademarks in China.

Source: SEC Form 8K (January 12, 2009)

Liquidity Requirements

Sun, 29 Mar 2009 04:00:00 GMT

Our business plan contemplates that we will obtain $5 million to $10 million in additional capital during 2009 and 2010.

Source: SEC Form 8K (January 12, 2009. Page 12)