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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2004
OR
[ ] 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 000-33119
Yi Wan Group, Inc.
(Exact name of registrant as specified in its charter)
Florida 33-0960062
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
101 E. 52 Street, 9th Floor, New York, New York 10022
(Address of principal executive offices) (Zip Code)
(212) 752-9700
(Registrant's telephone number, including area code)
2 East Camino Real, Suite 202, Boca Raton, Florida 33432
(Former Address)
All Correspondence to:
Arthur S. Marcus, Esq.
Gersten, Savage, Kaplowitz, Wolf & Marcus, LLP
101 E. 52 Street, 9th Floor
New York, New York 10022
(212) 752-9700
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 [ ]
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) Yes
Yes [ ] No [X]
The number of shares outstanding of the issuer's common stock as of August 9,
2004 was 16,831,250.
YI WAN GROUP, INC.
TABLE OF CONTENTS
Page
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements 1
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures about Market Risks 15
Item 4. Controls and Procedures 15
PART II
OTHER INFORMATION
Item 1 Legal Proceedings 15
Item 2 Changes in Securities, Use of Proceeds 15
and Issuer Purchases of Equity Securities
Item 3 Defaults upon Senior Securities 15
Item 4 Submission of Matters to a Vote of Security Holders 16
Item 5 Other Information 16
Item 6 Exhibits and Reports on Form 8-K 16
PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
YI WAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2004 AND DECEMBER 31, 2003
-----------------------------------------
(See Report of Independent Registered Public Accounting Firm)
ASSETS
------
June 30, December 31,
2004 2003
------------- --------------
(Unaudited) (Audited)
------------- --------------
CURRENT ASSETS:
Cash $ 4,276,768 $ 3,365,842
Accounts receivable, net of allowance for doubtful accounts
of $6,455 at June 30, 2004 and December 31, 2003 1,522,376 1,612,710
Due from related parties 3,441,056 3,599,133
Inventories 493,986 513,432
Prepaid expenses 58,428 55,308
------------- --------------
Total current assets 9,792,614 9,146,425
------------- --------------
BUILDINGS, EQUIPMENT AND AUTOMOBILES, net 17,702,165 18,002,661
------------- --------------
OTHER ASSETS:
Intangible asset, net 1,564,827 1,590,561
Investment-others 118,983 --
Equipment held for sale 520,482 529,750
Deferred tax asset 31,631 31,718
Other non-current assets 753,624 369,075
------------- --------------
Total other assets 2,989,547 2,521,104
------------- --------------
Total assets $ 30,484,326 $ 29,670,190
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 303,962 $ 327,862
Accounts payable - related party -- 56,540
Accrued liabilities 946,055 733,261
Wages and benefits payable 310,764 301,815
Sales tax payable 887,898 873,208
Income taxes payable 849,698 1,049,331
Due to shareholders 88,797 89,044
Due to prior owners of joint ventures 4,932,273 4,932,273
Notes payable 59,642 64,809
------------- --------------
Total current liabilities 8,379,089 8,428,143
------------- --------------
MINORITY INTEREST 1,947,908 1,843,198
------------- --------------
SHAREHOLDERS' EQUITY:
Common stock, no par value, authorized 50,000,000 shares,
16,831,250 shares issued and outstanding 432,578 10,078
Paid-in-capital 5,118,000 5,115,222
Statutory reserves 10,655,821 10,655,821
Retained earnings 3,832,947 3,480,712
Accumulated other comprehensive income 117,983 137,016
------------- --------------
Total shareholders' equity 20,157,329 19,398,849
------------- --------------
Total liabilities and shareholders' equity $ 30,484,326 $ 29,670,190
============= ==============
The accompanying notes are an integral part of this statement.
- 1 -
YI WAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003
---------------------------------------------------------
(See Report of Independent Registered Public Accounting Firm)
Three months ended June 30, Six months ended June 30,
---------------------------- ----------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
NET SALES $ 2,958,485 $ 2,966,865 $ 5,800,206 $ 6,126,482
COST OF SALES 1,111,881 1,150,610 2,208,199 2,305,714
------------ ------------ ------------ ------------
GROSS PROFIT 1,846,604 1,816,255 3,592,007 3,820,768
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,128,359 1,065,974 2,251,804 2,196,377
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 718,245 750,281 1,340,203 1,624,391
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE) 2,551 4,443 7,041 19,722
------------ ------------ ------------ ------------
INCOME FROM CONTINUING OPERATIONS BEFORE
PROVISION FOR INCOME TAXES AND MINORITY INTEREST 720,796 754,724 1,347,244 1,644,113
PROVISION FOR INCOME TAXES 266,390 246,805 503,007 525,795
------------ ------------ ------------ ------------
INCOME BEFORE MINORITY INTEREST 454,406 507,919 844,237 1,118,318
MINORITY INTEREST (53,038) (36,164) (104,710) (87,252)
------------ ------------ ------------ ------------
NET INCOME 401,368 471,755 739,527 1,031,066
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment (19,363) (801) (19,033) (2,202)
------------ ------------ ------------ ------------
COMPREHENSIVE INCOME $ 382,005 $ 470,954 $ 720,494 $ 1,028,864
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES 16,509,861 16,506,250 16,508,046 16,506,250
============ ============ ============ ============
EARNINGS (LOSS) PER SHARE - BASIC AND DILUTED:
Comprehensive Earnings per share, basic and diluted $ 0.02 $ 0.03 $ 0.04 $ 0.06
============ ============ ============ ============
The accompanying notes are an integral part of this statement.
- 2 -
YI WAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
------------------------------------------------
(See Report of Independent Registered Public Accounting Firm)
Accumulated
other
Number Common Paid-in Statutory Retained comprehensive
of shares stock capital reserves earnings income Totals
------------ ------------ ------------ ----------- ------------ ----------- ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ----------- ------------ ----------- ------------
BALANCE, January 1, 2003, audited 16,506,250 $ 10,078 $ 5,109,656 $ 9,630,799 $ 2,909,810 $ 70,595 $ 17,730,938
Net income 1,031,066 1,031,066
Additions to paid in capital
(land use right) 2,778 2,778
Adjustment to statutory reserves 1,201,932 (1,201,932)
Foreign currency translation
adjustments (2,202) (2,202)
------------ ------------ ------------ ------------ ------------ ----------- -------------
BALANCE, June 30, 2003 16,506,250 $ 10,078 $ 5,112,434 $ 10,832,731 $ 2,738,944 68,393 18,762,580
Net income 564,858 564,858
Additions to paid in capital
(land use right) 2,788 2,788
Distribution of statutory reserves (176,910) 176,910
Foreign currency translation
adjustments 68,623 68,623
------------ ------------ ------------ ------------ ------------ ------------ -------------
BALANCE, January 1, 2004, audited 16,506,250 $ 10,078 $ 5,115,222 $ 10,655,821 $ 3,480,712 $ 137,016 $ 19,398,849
Net income 739,527 739,527
Additions to paid in capital
(land use right) 2,778 2,778
Adjustment to statutory reserves
Stock issued for future services 325,000 422,500 422,500
Deferred charge for future services (387,292) (387,292)
Foreign currency translation
adjustments (19,033) (19,033)
------------ ------------ ------------ ------------ ------------ ------------ -------------
BALANCE, June 30, 2004 16,831,250 $ 432,578 $ 5,118,000 $ 10,655,821 $ 3,832,947 $ 117,983 $ 20,157,329
============ ============ ============ ============ ============ ============ =============
The accompanying notes are an integral part of this statement.
- 3 -
YI WAN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
-----------------------------------------------
(See Report of Independent Registered Public Accounting Firm)
Six months ended June 30,
-----------------------------
2004 2003
------------ --------------
(Unaudited) (Unaudited)
------------ --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 739,527 $ 1,031,066
------------ --------------
Provided by operating activities:
Minority interest 104,710 87,252
Depreciation 689,806 733,462
Amortization 25,734 24,930
Amortization of consulting services 35,209 --
Land use cost 2,778 2,778
Deferred tax asset 87 (45,091)
Foreign currency translation adjustment (19,033) (2,202)
Decrease (increase) in accounts receivable 90,334 (130,630)
Decrease (increase) in related party receivables 158,077 (794,991)
Decrease (increase) in inventories 19,446 (85,831)
Increase in prepaid expenses (3,120) (22,846)
Increase in other non-current assets (384,549) (72,365)
(Decrease) increase in accounts payable (34,430) 49,366
Decrease in accounts payable - related party (56,540) (79,943)
Increase (decrease) in accrued liabilities 212,794 (79,484)
Increase in wages and benefits payable 8,949 8,564
Increase (decrease) in sales tax payable 14,690 (34,019)
Decrease in income taxes payable (199,633) (273,244)
Decrease in due to shareholder (247) --
------------ --------------
Net cash provided by operating activities 1,404,589 316,772
------------ --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of improvements and equipment (369,513) (40,972)
Increase in investment (118,983)
------------ --------------
Net cash used in investing activities (488,496) (40,972)
------------ --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Collections on note receivable -- 696,437
(Repayments) borrowings on notes payable (5,167) 7,323
------------ --------------
Net cash provided by financing activities (5,167) 703,760
------------ --------------
INCREASE IN CASH 910,926 979,560
CASH, beginning of period 3,365,842 2,135,154
------------ --------------
CASH, end of period $ 4,276,768 $ 3,114,714
============ ==============
The accompanying notes are an integral part of this statement.
- 4 -
YI WAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE REPORTING ENTITY
The financial statements of Yi Wan Group, Inc. and subsidiaries (referred to as
the Company or YWG in the accompanying consolidated financial statements)
include the activities and financial transactions of its subsidiaries, which are
as follows:
Percentage
Subsidiary Ownership
- ----------------------------------------------------- -------------
Shun De Yi Wan Communication Equipment
Plant Co., Ltd. (TELECOMMUNICATIONS) 100%
Jiao Zuo Yi Wan Hotel Co., Ltd. (HOTEL) 90
Qinyang Yi Wan Hotel Co., Ltd. (QINYANG) 80
Yi Wan Group, Inc. was incorporated under the laws of the State of Florida in
the United States in May 1999. Yi Wan Group, Inc. is authorized to issue
50,000,000 shares of no par value common stock and 20,000,000 shares of no par
value preferred stock. The Company's TELECOMMUNICATIONS, HOTEL and QINYANG
subsidiaries are incorporated under the laws of the People's Republic of China
(PRC).
The Company's subsidiaries are classified as Foreign Invested Enterprises (FIE)
in the PRC and are subject to the FIE laws of the PRC. The HOTEL and QINYANG are
Foreign Invested Enterprise Joint Ventures, known as FIEJV or sino-foreign joint
venture, and TELECOMMUNICATIONS is a Wholly Foreign Owned Enterprise company or
WFOE. All three of these companies are Chinese registered limited liability
companies, with legal structures similar to regular corporations and limited
liability companies organized under state laws in the United States. The
respective Articles of Association for these FIE subsidiaries provide a 30-year
term for the HOTEL and QINYANG companies and 15 years for the
TELECOMMUNICATIONS.
BASIS OF PRESENTATION
The financial statements represent the activities of Yi Wan Group, Inc. and its
subsidiaries. The consolidated financial statements of YWG include its
subsidiaries HOTEL, TELECOMMUNICATIONS and QINYANG. All significant
inter-company accounts and transactions have been eliminated in the
consolidation.
FOREIGN CURRENCY TRANSLATION
The reporting currency of YWG is the U.S. dollar. The Company's foreign
subsidiaries use their local currency, Renminbi, as their functional currency.
Results of operations and cash flow are translated at average exchange rates
during the period, and assets and liabilities are translated at the end of
period exchange rates. Translation adjustments resulting from this process are
included in accumulated other comprehensive income in the statement of
shareholders' equity. Transaction gains and losses that arise from exchange rate
fluctuations on transactions denominated in a currency other than the functional
currency are included in the results of operations of the subsidiaries as
incurred. These amounts are not material to the financial statements.
- 5 -
YI WAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - CONDENSED FINANCIAL STATEMENTS AND FOOTNOTES
The interim consolidated financial statements presented herein have been
prepared by the Company and include the unaudited accounts of YWG and its
subsidiaries TELECOMMUNICATIONS, HOTEL, and QINYANG. All significant
inter-company accounts and transactions have been eliminated in the
consolidation.
These condensed financial statements have been prepared in accordance with
generally accepted accounting principles of the United States of American for
interim financial information and the instructions to Form 10-Q and Article 10
of Regulation S-X. Certain information and footnote disclosures normally
included in financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. YWG believes the
disclosures made are adequate to ensure the information presented is not
misleading. The condensed consolidated financial statements should be read in
conjunction with the YWG's consolidated financial statements for the year ended
December 31, 2003 and notes thereto included in YWG's Form 10-K, which was filed
with the Securities and Exchange Commission on March 30, 2004.
In the opinion of management, the unaudited condensed consolidated financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position of the Company
as of June 30, 2004 and the results of operations for the three months and six
months ended June 30, 2004 and 2003, respectively. Interim results are not
necessarily indicative of an entire year of performance because of the impact of
seasonal and short-term variations.
NOTE 3 - INVENTORIES
Inventories are stated at the lower of cost or market using the first-in,
first-out basis and consists of the following:
June 30, December 31,
2004 2003
--------------- ----------------
(Unaudited) (Audited)
--------------- ----------------
Hotel inventory $ 221,920 $ 210,728
Telecommunication inventory 272,066 302,704
--------------- ----------------
Total inventories $ 493,986 $ 513,432
=============== ================
The HOTEL inventory consists of food products, alcohol, beverages and supplies.
At June 30, 2004, TELECOMMUNICATION's inventory are consisted of raw materials,
work in process, and finished goods, which amounted to $95,242, $72,739, and
$104,085, respectively.
NOTE 4 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid amounted to $702,640 and $844,014 for the six months ended
June 30, 2004 and 2003, respectively. No interest expense was paid for the six
months ended June 30, 2004 and 2003.
NON CASH TRANSACTION
In the period ending June 30, 2004, the Company acquired equipment in the amount
of $380,043 and paid cash of $369,513 and recorded a payable of $10,530 on the
accompanying balance sheet.
The Company issued 325,000 shares of common stock valued at $422,500 for
consulting services as further described in Note 9.
NOTE 5 - EARNINGS PER SHARE
The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" (SFAS 128). SFAS 128 requires the presentation of earnings
per share (EPS) as Basic EPS and Diluted EPS. There are no differences between
Basic and Diluted EPS for the six months ended June 30, 2004 and 2003. The
weighted average number of shares used to calculate EPS for the six months ended
June 30, 2004 (16,508,046) and 2003 (16,506,250) reflect only the shares
outstanding for those periods.
Weighted average number of shares outstanding as of June 30, 2004 is computed as
follows:
Dates Shares Weighted -
Outstanding Outstanding Days Average Shares
- ------------------------- ------------- ---------- ------------------
Year - 2004
- -------------------------
January 1 - June 30 16,506,250 181 2,987,631,250
June 30 - June 30 325,000 1 325,000
---------- ------------------
Totals 181 2,987,956,250
========== ==================
Weighted-average shares - 6 months 16,508,046
==================
April 1 - June 30 16,506,250 90 1,485,562,500
June 30 - June 30 325,000 1 325,000
---------- ------------------
Totals 90 1,485,887,500
========== ==================
Weighted-average shares - 3 months 16,509,861
==================
- 6 -
YI WAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - MINORITY INTEREST
Minority interest represents the outside shareholders' 10% ownership of the
common stock of Jiao Zuo Yi Wan Hotel Co., Ltd and 20% of the common stock of
Qinyang Yi Wan Hotel Co., Ltd.
NOTE 7 - HOTEL BOWLING OPERATIONS CEASED
The HOTEL ceased its bowling operation at the end of September 2003. The
Management of Hotel is in the process of finding potential buyers and
formalizing a plan to sell the equipment. As of June 30, 2004, the fair market
value of the bowling equipment has not been determined and no impairment of the
asset value has been calculated. As of June 30, 2004, the related equipment with
a net book value of $520,482 has been recorded as equipment held for sale; no
gain or loss has been recognized in the current period.
NOTE 8 - INVESTMENT - OTHERS
The Company is planning to launch a fast food chain business in Beijing, with
two outlets scheduled to open in August 2004. The balance in Investment - other
account represented cash deposit the Company made to the fast food chain,
totaling $118,983 as of June 30, 2004.
NOTE 9 - STOCK ISSUANCE
The Company has entered into two consulting agreements with individuals to
provide business and financial consulting services. These agreements expire May
31, 2005 and June 15, 2005, respectively. The Company has agreed to issue a
total of 325,000 shares of no par value common stock pursuant to a Form S-8 in
exchange for their services. The 325,000 shares of common stock has been
recorded at $1.30 per share or $422,500 based upon the trading price of the
shares at June 30, 2004. The Company has recorded a deferred charge to
shareholders' equity which represents the future consulting services to be
rendered. The Company is amortizing the consulting services over one year using
the straight line method which amounted to $35,209 for the period ending June
30, 2004. The 325,000 shares of common stock were issued to the consultants in
July 2004.
NOTE 10 - SEGMENT INFORMATION
YWG includes four major operating segments: restaurant, lodging, entertainment
and telecommunication equipment. YWG evaluates the performance of its segments
based primarily on operating profit before corporate expenses and depreciation
and amortization. The following table presents revenues and other financial
information by business segment for the periods presented:
Telecom- Inter-
munication segment
Hotel equipment elimination Totals
------------- ------------- ------------- -------------
TOTAL ASSETS:
June 30, 2004 $ 25,865,924 $ 6,782,220 $ (2,163,818) $ 30,484,326
============= ============= ============= =============
December 31, 2003 $ 24,667,327 $ 6,837,457 $ (1,834,594) $ 29,670,190
============= ============= ============= =============
- 7 -
YI WAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SEGMENT INFORMATION, (CONTINUED)
HOTEL
----------------------------------------------------------
Telecommu- Inter-
Entertain- nication segment
Restaurant Lodging ment Subtotals Telecommu elimination Totals
------------- ------------- ------------- -------------- ------------- ----------- --------------
THREE MONTHS ENDED JUNE 30, 2004
- --------------------------------
Net sales $ 1,300,314 $ 643,889 $ 457,372 $ 2,401,575 $ 556,910 $ $ 2,958,485
Cost of sales 669,557 41,670 66,895 778,122 333,759 1,111,881
------------- ------------- ------------- -------------- ------------- ----------- --------------
Gross profit 630,757 602,219 390,477 1,623,453 223,151 -- 1,846,604
Operating expenses 163,580 76,122 118,757 358,459 122,257 480,716
Depreciation and
amortization 436,393 5,479 441,872
Unallocated expenses 119,089 119,089
------------- ------------- ------------- -------------- ------------- ----------- --------------
Income from operations $ 467,177 $ 526,097 $ 271,720 709,512 95,415 -- 804,927
============= ============= =============
Interest income 5,547 4,062 9,609
Other income (expense) (7,058) (7,058)
Provision for income tax (233,105) (33,285) (266,390)
Corporate expenses (86,682)
-------------- ------------- ----------- --------------
Income before minority
interest $ 474,896 $ 66,192 $ -- $ 454,406
============== ============= =========== ==============
THREE MONTHS ENDED JUNE 30, 2003
- --------------------------------
Net sales $ 1,077,677 $ 554,028 $ 347,722 $ 1,979,427 $ 987,438 $ $ 2,966,865
Cost of sales 539,168 31,243 36,977 607,388 543,222 1,150,610
------------- ------------- ------------- -------------- ------------- ----------- --------------
Gross profit 538,509 522,785 310,745 1,372,039 444,216 -- 1,816,255
Operating expenses 143,928 78,896 74,696 297,520 191,911 489,431
Depreciation and
amortization 335,113 5,479 340,592
Unallocated expenses 235,951 235,951
------------- ------------- ------------- -------------- ------------- ----------- --------------
Income from operations $ 394,581 $ 443,889 $ 236,049 $ 503,455 $ 246,826 $ -- $ 750,281
============= ============= =============
Interest income 3,583 2,963 6,546
Other income (expense) (2,103) (2,103)
Provision for income tax (163,917) (82,888) (246,805)
-------------- ------------- ----------- --------------
Income before minority
interest $ 341,018 $ 166,901 $ -- $ 507,919
============== ============= =========== ==============
- 8 -
YI WAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 - SEGMENT INFORMATION, (CONTINUED)
HOTEL
---------------------------------------------------------
Telecommu- Inter-
Entertain- nication segment
Restaurant Lodging ment Subtotals Telecommu elimination Totals
------------- ------------- ------------- -------------- ------------- ----------- -----------
SIX MONTHS ENDED JUNE 30, 2004
- ------------------------------
Net sales $ 2,577,873 $ 1,177,025 $ 1,022,890 $ 4,777,788 $ 1,022,418 $ $ 5,800,206
Cost of sales 1,324,801 95,477 154,164 1,574,442 633,757 2,208,199
------------- ------------- ------------- -------------- -------------- ----------- -----------
Gross profit 1,253,072 1,081,548 868,726 3,203,346 388,661 -- 3,592,007
Operating expenses 323,478 168,189 248,730 740,397 228,024 968,421
Depreciation and
amortization 647,071 10,957 658,028
Unallocated expenses 441,476 441,476
------------- ------------- ------------- -------------- -------------- ----------- -----------
Income from operations $ 929,594 $ 913,359 $ 619,996 1,374,402 149,680 -- 1,524,082
============= ============= =============
Interest income 10,492 7,938 18,430
Other income (expense) (11,389) (11,389)
Provision for income tax (450,077) (52,930) (503,007)
Corporate expenses (183,879)
------------- -------------- - ----------- -----------
Income before minority
interest $ 923,428 $ 104,688 $ -- $ 844,237
============== ============== =========== ===========
SIX MONTHS ENDED JUNE 30, 2003
- ------------------------------
Net sales $ 2,271,933 $ 1,151,122 $ 887,279 $ 4,310,334 $ 1,816,148 $ -- $ 6,126,482
Cost of sales 1,142,063 81,571 90,174 1,313,808 991,906 2,305,714
------------- ------------- ------------- -------------- -------------- ----------- -----------
Gross profit 1,129,870 1,069,551 797,105 2,996,526 824,242 -- 3,820,768
Operating expenses 292,227 164,968 167,799 624,994 353,694 978,688
Depreciation and
amortization 676,133 10,957 687,090
Unallocated expenses 530,599 530,599
------------- ------------- ------------- -------------- -------------- ----------- -----------
Income from operations $ 837,643 $ 904,583 $ 629,306 $ 1,164,800 $ 459,591 $ -- $ 1,624,391
============= ============= =============
Interest income 6,252 4,643 10,895
Other income (expense) 8,827 8,827
Provision for income tax (370,907) (154,888) (525,795)
-------------- -------------- ----------- -----------
Income before minority
interest $ 808,972 $ 309,346 $ -- $ 1,118,318
============== ============== =========== ===========
- 9 -
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
FORWARD-LOOKING STATEMENTS
The following discussion of our financial condition and results of operations
should be read in conjunction with the consolidated financial statements and
related notes thereto. The following discussion contains forward-looking
statements. Yi Wan Group, Inc. is referred to herein as "we" or "our." The words
or phrases "would be," "will allow," "intends to," "will likely result," "are
expected to," "will continue," "is anticipated," "estimate," "project," or
similar expressions are intended to identify "forward-looking statements". Such
statements include those concerning expected financial performance, corporate
strategy, and operational plans. Actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
risks and uncertainties, including: (a) general economic conditions in China;
(b) regulatory factors in China that may lead to additional costs or otherwise
negatively affect our business; (c) whether we are able to manage our planned
growth efficiently, including whether our management will be able to: (i)
identify, hire, train, retain, motivate and manage required personnel or (ii)
successfully manage and exploit existing and potential market opportunities; (d)
whether we are able to generate sufficient revenues or obtain financing to
sustain and grow our operations; (e) whether we are able to successfully fulfill
our primary cash requirements which are explained below under "Liquidity and
Capital Resources"; (f) whether there will be continuing negative economic
effects upon China and the China hotel and tourist industries due to possible
continuing negative perceptions pertaining to SARS; and (g) whether worldwide
economic conditions will negatively affect the tourist industry in China and our
hotel related revenues. Statements made herein are as of the date of the filing
of this Form 10-Q with the Securities and Exchange Commission and should not be
relied upon as of any subsequent date. Unless otherwise required by applicable
law, we do not undertake, and we specifically disclaim any obligation, to update
any forward-looking statements to reflect occurrences, developments,
unanticipated events or circumstances after the date of such statement.
GENERAL
RESULTS OF OPERATIONS
As of June 30, 2004, we had $3,832,947 of retained earnings. As of June 30,
2004, we had cash of $4,276,768 and total shareholders' equity of $ 20,157,329.
For the six months ended June 30, 2004, we had revenues of $5,800,206 and
general, administrative and sales expenses of $2,251,804 respectively.
CONSOLIDATED RESULTS
(1) SALES. Consolidated sales decreased by $326,276, or approximately 5.33%,
from $6,126,482 for the six months ended June 30, 2003 to $5,800,206 for the six
months ended June 30, 2004. The 5.33% decrease was a direct result of a decrease
in sales of our telecommunications operations of $793,730 which was offset by an
increase in sales in our Hotel operations. The reasons for this decrease are (1)
our telecommunication operation has been unsuccessful in developing new products
to bring to the market, and (2) highly competitive industry. In addition the
Company is focusing more of its efforts in developing and promoting their hotel
and restaurant operations.
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(2) COST OF GOODS SOLD. Consolidated cost of goods sold decreased by $97,515,
from $2,305,714 for the six months ended June 30, 2003 to $2,208,199 for the six
months ended June 30, 2004. Cost of goods sold as a percentage of sales
increased by 0.43%, from 37.64% for the six months ended June 30, 2003 to 38.07%
for the six months ended June 30, 2004. The increase in cost of sales was due to
an increase in our cost of raw materials in our hotel operations due to an
increase in price for meat, eggs, vegetables and rice in comparison to last
year's prices. In addition in the prior year we sold discount cards to customers
to be used for discounts on hotel room rates. Based upon this successful
promotion in the current year we have offered additional discount cards which
can be used for various discounts in the restaurants, sauna and night club as
well as for room discounts.
(3) GROSS PROFIT. Consolidated gross profit decreased by $228,761, from
$3,820,768 for the six months ended June 30, 2003 to $3,592,007 for the six
months ended June 30, 2004. Gross profit as a percentage of sales decreased by
0.43%, from 62.36% for the six months ended June 30, 2003 to 61.93% for the six
months ended June 30, 2004. This decrease in gross profit as a percentage of
sales was the result of a decrease in sales and an increase in the cost of
materials and operating expense.
(4) SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
increased by $55,427, from $2,196,377 for the six months ended June 30, 2003 to
$2,251,804 for the six months ended June 30, 2004. The selling and
administrative expenses as a percentage of sales increased by 2.97%, from 35.85%
for the six months ended June 30, 2003 to 38.82% for the six months ended June
30, 2004. The increase in selling and administrative expenses as a percentage of
sales is attributed to an increase in corporate expenses such as water, fuel and
electricity and a decrease in sales in the telecommunications equipment
operation.
(5) NET INCOME. Consolidated net income decreased by $291,539, or approximately
28.28%, from $1,031,066 for the six months ended June 30, 2003 to $739,527 for
the six months ended June 30, 2004. The decrease was mainly due to: (1) a
decrease in sales; and (2) an increase in cost of raw materials and operating
costs in the hotel operation.
SEGMENTED RESULTS
(1) SALES. An itemization of each operating unit's data and an explanation of
significant changes are as follows:
Hotel operations: Sales increased by $467,454, or approximately 10.84%,
from $4,310,334 for the six months ended June 30, 2003 to $4,777,788 for the six
months ended June 30, 2004. The increase was a result of a new management team
and an improvement in marketing strategies.
Telecommunication operations: Sales decreased by $793,730, or
approximately 43.70%, from $1,816,148 for the six months ended June 30, 2003 to
$1,022,418 for the six months ended June 30, 2004. This decrease was a direct
result of (1) our telecommunication operation has been unsuccessful in
developing new products to bring to the market, and (2) highly competitive
industry. In addition the Company is focusing more of its efforts in developing
and promoting their hotel and restaurant operations instead of focusing on the
telecommunications operations.
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(2) COST OF GOODS SOLD. An itemization of each operating unit's data and an
explanation of significant changes are as follows:
Hotel operations: Cost of goods sold increased by $260,634, from
$1,313,808 for the six months ended June 30, 2003 to $1,574,442 for the six
months ended June 30, 2004. Cost of goods sold as a percentage of sales
increased by 2.47%, from 30.48% for the six months ended June 30, 2003 to 32.95%
for the six months ended June 30, 2004. The increase is attributed to an
increase in our cost of raw material due to an increase in price for meat, eggs,
vegetables and rice in comparison to last year's prices. In addition in the
prior year we sold discount cards to customers to be used for discounts on hotel
room rates. Based upon this successful promotion in the current year we have
offered additional discount cards which can be used for various discounts in the
restaurants, sauna and night club as well as for room discounts.
Telecommunication operations: Cost of goods sold decreased by $358,149,
from $991,906 for the six months ended June 30, 2003 to $633,757 for the six
months ended June 30, 2004. Cost of goods sold as a percentage of sales
increased to 61.99% for the six months ended June 30, 2004 from 54.62% for the
six months ended June 30, 2003. The increase in cost of goods sold as a
percentage of sales was a result of an increase in cost of raw materials and a
decrease in sales in the telecommunication operation.
(3) GROSS PROFIT. An itemization of each operating unit's data and an
explanation of significant changes are as follows:
Hotel operations: Gross profit increased by $206,820, from $2,996,526
for the six months ended June 30, 2003 to $3,203,346 for the six months ended
June 30, 2004. As a percentage of sales, gross profit decreased from 69.52% for
the six months ended June 30, 2003 to 67.05% for the six months ended June 30,
2004. The decrease in gross profit as a percentage of sales was due to an
increase in the cost of goods sold and increased promotional discounts as
explained above.
Telecommunication operations: Gross profit decreased by $435,581, from
$824,242 for the six months ended June 30, 2003 to $388,661 for the six months
ended June 30, 2004. As a percentage of sales, gross profit decreased from
45.38% for the six months ended June 30, 2003 to 38.01% for the six months ended
June 30, 2004. The decrease in gross profit as a percentage of sales was due to
an increase in the cost of materials and a decrease in sales.
(4) SELLING AND ADMINISTRATIVE EXPENSES. An itemization of each operating unit's
data and an explanation of significant changes are as follows:
Hotel operations: Selling and administrative expenses decreased by
$2,782, from $1,831,726 for the six months ended June 30, 2003 to $1,828,944 for
the six months ended June 30, 2004. Selling and administrative expenses as a
percentage of sales decreased to 38.28% for the six months ended June 30, 2004
from 42.50% for the six months ended June 30, 2003. This decrease was a result
of a decrease in our administrative and selling expenses, such as water,
electricity and fuel materials.
Telecommunication operations: Selling and administrative expenses
decreased by $125,670, from $364,651 for the six months ended June 30, 2003 to
$238,981 for the six months ended June 30, 2004. Selling and administrative
expenses as a percentage of sales increased to 23.37% for the six months ended
June 30, 2004 from 20.08% for the six months ended June 30, 2003. The increase
in selling and administrative expenses as a percentage of sales was a result of
a decrease in sales.
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(5) NET INCOME. An itemization of each operating unit's data and further
explanations of significant changes are as follows:
Hotel operations: Net income increased by $114,456, from $808,972, or
16.93% of sales, for the six months ended June 30, 2003 to $923,428, or 19.33%
of sales, for the six months ended June 30, 2004. The increase as a percentage
of sales was a result of a new management team and an improvement in marketing
strategies.
Telecommunications operations: Net income decreased by $204,658, from
$309,346 or 17.03% of sales, for the six months ended June 30, 2003 to $104,688,
or 10.24% of sales, for the six months ended June 30, 2004. The decrease was a
result of a decrease in sales and an increase in cost of raw materials, as
explained in the above paragraphs.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2004, net cash provided by operating activities was $1,404,589;
net cash used in investing activities was $488,496; and net cash used in
financing activities was $5,167.
As of June 30, 2003, net cash provided by operating activities was $316,772; net
cash used in investing activities was $40,972; and net cash provided by
financing activities was $703,760.
Net cash provided by operating activities increased by $1,087,817, from $316,772
for the six months ended June 30, 2003 to $1,404,589 for the six months ended
June 30, 2004, representing an increase of approximately 343.41%. The increase
in cash flow from operating activities reflects a decrease in related party
receivables and an increase in accounts receivable during the six months ended
June 30, 2004. Due to the nature of conducting business in China many financial
transaction are completed in cash, instead of by check or draft. Customarily,
officers, managers and employees of companies located in China, including our
personnel, are advanced cash on a daily basis to pay for normal business
operating expenses. These advances are accounted for when the officer or
employee submits the paid invoice to the accounting department to support the
receipt of goods and services.
Net cash used in investing activities increased by $447,524 to $488,496 for the
six months ended June 30, 2004, representing a 1092.27% increase, compared with
the $40,972 net cash used for the same period ended in 2003. The increase was
due to spending on equipment upgrades.
Net cash used in financing activities increased by $708,927 to $5,167 for the
six months ended June 30, 2004, representing a 100% increase, compared to
$703,760 provided by financing activities for the same period of 2003. The
increase was primarily due to full collections on existing notes receivable
prior to December 31, 2003.
Going forward, our primary requirements for cash consist of: (1) the continued
implementation of the Hotel and Telecommunications Divisions' existing business
model in China, and the general overhead and personnel related expenses in
support of this implementation; (2) continued promotional activities to increase
hotel related revenues; (3) the development costs of the hotel operations in
China; (4) the payment of cash contributions to the joint ventures under the
existing agreements; and (5) payments due to some of the
- 13 -
subsidiaries' former equity owners. We do not have any material commitments for
capital expenditures as of June 30, 2004. We anticipate that our current
operating activities will enable us to meet the anticipated cash requirements
for the 2004 fiscal year.
Historically, our subsidiary companies have financed operations principally
through cash generated from operations. Initial capitals for the Hotel and
Telecommunication operations come from shareholders' contributions and are as
follows: Hotel operations: $11,960,000; and Telecommunication operations:
$1,580,000. No bank loans were obtained for the Hotel or Telecommunications
operations. We have to make capital contributions to our subsidiaries by June
2004 to meet the capital registration requirement. Other investment requirements
include payments due of $7,371,730 and $4,932,273 to joint venture's former
partners. Since the Farm operation ceased on December 31, 2002, only $500,000
additional capital investment for the Telecommunication division remains
outstanding. The balances are to be funded from the profits generated from the
operations of the subsidiaries and, if necessary, equity financing. There is no
assurance, however, that equity financing can be obtained for the above
purposes. The joint venture's former partners extended the June 2003 payment
date to June 2004 for capital contributions. We intend to fund the hotel
operation's capital improvements from the positive cash flow generated from
hotel operations.
MANAGEMENT ASSUMPTIONS.
Management anticipates, based on internal forecasts and assumptions relating to
our operations, that existing cash and funds generated from operations will be
sufficient to meet working capital and capital expenditure requirements for at
least the next 12 months. In the event that plans change, our assumptions change
or prove inaccurate, or if other capital resources and projected cash flow
otherwise prove to be insufficient to fund operations (due to unanticipated
expense, technical difficulties, or otherwise), we could be required to seek
additional financing. There can be no assurance that we will be able to obtain
additional financing on terms acceptable to us, or at all.
EFFECTS OF INFLATION
We are subject to commodity price risks arising from price fluctuations in the
market prices of the various raw materials that comprise our products. Price
risks are managed by each business unit through productivity improvements and
cost-containment measures. Management does not believe that inflation risk is
material to our business or our consolidated financial position, results of
operations or cash flows.
EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATES
Our operating subsidiaries are located in China. These companies buy and sell
products in China using Chinese Renminbi as the functional currency. Based on
China government regulation, all foreign currencies under the category of
current accounts are allowed to be freely exchanged with hard currencies. During
the past two years of operation, there were no significant changes in exchange
rates; however, unforeseen developments may cause a significant change in
exchange rates.
OFF-BALANCE SHEET ARRANGEMENTS
- 14 -
None.
CONTRACTUAL OBLIGATIONS
Table of Contractual Obligations
- ------------------------------------- -----------------------------------------------------------------------
PAYMENT DUE BY PERIOD
- ------------------------------------- -----------------------------------------------------------------------
CONTRACTUAL OBLIGATIONS TOTAL LESS THAN 1-3 YEARS 3-5 YEARS MORE THAN
1 YEAR 5 YEARS
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Long-Term Debt Obligations None -- -- -- --
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Capital Lease Obligations None -- -- -- --
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Operating Lease Obligations None -- -- -- --
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Purchase Obligations None -- -- -- --
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Other Long-Term Liabilities None -- -- -- --
Reflected on the Registrant's
Balance Sheet under GAAP
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Total 0 -- -- -- --
- ------------------------------------- -------------- ------------ -------------- -------------- -------------
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not applicable.
Item 4 CONTROLS AND PROCEDURES
With the participation of management, our Chief Executive Officer and Chief
Financial Officer evaluated our disclosure controls and procedures within the 90
days preceding the filing date of this quarterly report. Based upon this
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures are effective in ensuring that
material information required to be disclosed is included in the reports that we
file with the Securities and Exchange Commission.
There were no significant changes in our internal control over financial
reporting to the knowledge of our management, or in other factors that have
materially affected or are reasonably likely to materially affect these internal
controls over financial reporting subsequent to the evaluation date.
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not applicable.
Item 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES
Not applicable.
Item 3. DEFAULT UPON SENIOR SECURITIES
- 15 -
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not applicable.
Item 5. OTHER INFORMATION
-----------------
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
3(i) Articles of Incorporation of the Registrant*
3(ii) Bylaws of the Registrant*
3.1 Jiaozuo Yi Wan Hotel Co., Ltd. Articles of Association*
3.2 Shunde Yi Wan Communication Equipment Plant Co., Ltd. Articles of
Association*
4 Form of Common Stock Certificate of the Registrant*
10.1 Form of Employment Agreement Jiaozuo Yi Wan Hotel Co., Ltd.*
10.2 Form of Employment Agreement Shunde Yi Wan Communication Equipment
Plant Co., Ltd.*
10.3 Land Use Permits of Shunde Yi Wan Communication Equipment Plant Co.,
Ltd.*
10.4 Land Use Permits of Jiaozuo Yi Wan Hotel Co., Ltd.*
10.5 Joint Venture Contract Jiaozuo Yi Wan Hotel Co., Ltd.*
10.6 Agreement of Shunde Yi Wan Communication Equipment Plant Co., Ltd.*
10.7 Agreement of Jiaozuo Yi Wan Maple Leaf High Technology Agriculture
Development Ltd., Co. on the Transfer of Equity Shares**
10.8 Agreement of Jiaozuo Yi Wan Hotel Co., Ltd. on the Transfer of
Equity Shares**
10.9 Transfer of Stock Rights and Property Rights Agreement of Jiaozuo Yi
Wan Maple Leaf High Technology Agriculture Development Co., Ltd.***
10.10 Qinyang Yi Wan Hotel Co., Ltd. Joint Venture Contract***
10.11 Joint Venture Contract with Qinyang Hotel***
10.12 Jiaozuo Foreign Trade and Economy Cooperation Bureau Reply about
Building Qinyang Yi Wan Hotel Co., Ltd.***
10.13 Agreement with Jiaozuo Yi Wan Maple Leaf High Technology
Agricultural Development Co., Ltd.***
10.14 Reply To The Transfer Of The Transfer Of The Stock Rights Of Jiaozuo
Yi Wan Maple Leaf High Technology Agricultural Development Co.,
Ltd.***
10.15 Consulting Agreement, dated as of April 15, 2004, between Yi Wan
Group, Inc. and Stanley Wunderlich, an individual*****
10.16 Consulting Agreement, dated as of June 15, 2004, between Yi Wan
Group, Inc. and Yale Yu, an individual*****
23.1 Consent of MOORE STEPHENS WURTH FRAZER AND TORBET, LLP for Yi Wan
Group, Inc. and Subsidiaries*
23.2 Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
Inc. Reviewed Financial Statements December 31, 2001 and 2000***
23.3 Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
Inc. Audited Financial Statements December 31, 2000 and 1999**
23.4 Consent of MOORE STEPHENS FRAZER AND TORBET, LLP for Yi Wan Group,
- 16 -
Inc. Subsidiaries Audited Financial Statements December 31, 1999 and
1998**
23.5 Consent of Independent Accountants for Yi Wan Group, Inc. Audited
Financial Statements December 31, 2002 and 2001***
23.6 Consent of Independent Accountants for Yi Wan Group, Inc. Audited
Financial Statements December 31, 2002 and 2003****
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
31.2 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 32.1 Certification pursuant to 18 U.S.C Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002
99.1 Application for the Transfer of the Stock Rights of Jiaozuo Yi Wan
Maple Leaf High Technology Agriculture Development Co., Ltd.***
99.2 Reply to the Transfer of the Transfer of the Stock Rights of Jiaozuo
Yi Wan Maple Leaf High Technology Agriculture Development Co.,
Ltd.***
- ----------------
* Denotes previously filed exhibit, filed with Form 10-12G/A on 11/07/01, SEC
File No. 000-33119, hereby incorporated by reference.
** Denotes previously filed exhibit, filed with Form 10-12G/A on 5/21/02, SEC
File No. 000-33119, hereby incorporated by reference
*** Denotes previously filed exhibit, filed with Form 10-K on 4/16/03, SEC File
No. 000-33119, hereby incorporated by reference
**** Denotes previously filed exhibit, filed with Form 10-K on 3/30/04, SEC File
No. 000-33119, hereby incorporated by reference
***** Denotes previously filed exhibit, filed with Form S-8 on 6/30/04, hereby
incorporated by reference
We hereby incorporate the following documents by reference: (a) our Form 10
Registration Statement filed on August 24, 2001 and amendments thereto filed on
November 7, 2001, January 7, 2002, February 7, 2002, March 28, 2002, and May 22,
2002; (b) our Form 10Q for the period ended September 30, 2001 filed on December
7, 2001 and an amendment thereto filed on February 6, 2002; (c) our Form 10K for
the period ended December 31, 2001 filed on April 1, 2002 and an amendment
thereto filed on May 22, 2002; (d) our Form 10Q for the period ended March 31,
2002 filed on May 14, 2002; (e) our Form 10Q for the period ended June 30, 2002
filed on August 13, 2002 and an amendment thereto filed on August 13, 2002 and
August 16, 2002; (f) our Form 10Q for the period ended September 30, 2002, filed
on November 14, 2002; (g) our Form 10K for the year ended December 31, 2002,
filed on April 16, 2003; (h) our Form 10Q for the period ended March 31, 2003,
filed on May 15, 2003; (i) our Form 10Q for the period ended June 30, 2003,
filed on August 14, 2003 and an amendment thereto filed on September 23, 2003;
(j) our Form 10Q for the period ended September 30, 2003, filed on November 14,
2003; (k) our Form 10K for the year ended December 31, 2003, filed on March 30,
2004; and (l) our Form 10Q for the period ended March 31, 2004, filed on May 14,
2004.
(b) Reports on Form 8-K
None
- 17 -
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.
Date: August 16, 2004 YI WAN GROUP, INC.
(Registrant)
/s/ CHENG WAN MING
---------------------------------------------
Name: Cheng Wan Ming
Title: President and Chief Executive Officer
- 18 -