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United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

   

Form 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

November 12, 2017

Date of Report (Date of earliest event reported)

 

iFresh, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware   001-38013   102-80-6434
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

2-39 54th Avenue
Long Island City, NY
  11101
(Address of Principal Executive Offices)   (Zip Code)

 

Registrant's telephone number, including area code: (718) 628-6200

 

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐       Written communications pursuant to Rule 425 under the Securities Act

☐       Soliciting material pursuant to Rule 14a-12 under the Exchange Act

☐       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

☐       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On November 15, 2017, iFresh Inc. (the “Company”) issued a press release announcing financial results for the quarter ended September 30, 2017. A copy of the press release making the announcement is attached as Exhibit 99.1.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On November 12, 2017, Dr. Henry Lee resigned from his position as a director of the Company. Dr. Lee indicated that his resignation was for personal reasons.

 

On the same day, the Company’s Board of Directors appointed Adam (Xin) He to the Company’s Board of Directors. Mr. He will serve on the Audit , Compensation and Nominating Committees of the Board and will serve as the Chairman of the Audit Committee. The Board also determined that Mr. He qualifies as an audit committee financial expert under applicable rules.

 

Mr. He has served as Chief Financial Officer of Wanda America Investment Holding Co. since May 2012, and has managed two projects for Wanda Commercial Properties Group (HKG: 3699) since February 2015. Mr. He served as Chief Financial Officer of AMC Entertainment Holdings, Inc.(NYSE: AMC) from August 2012 to February 2015, a publicly traded company principally involved in the theatrical exhibition business owning and operating 660 theatres primarily located in the United States. He served as board advisor to Professional Diversify Network (Nasdaq: IPDN) in Chicago, and an independent director for Energy Focus Inc. (Nasdaq: EFOI) in Cleveland from July 2014 to April 2015. From December 2010 to May 2012, he served as Financial Controller of Xinyuan Real Estate Co.(NYSE: XIN), a publicly traded developer of large scale, high quality residential real estate projects. Previously, Mr. He served as an auditor at Ernst & Young, LLP in New York, and held various roles at Chinatex Corporation. Mr. He obtained a Master of Science in Taxation from Central University of Finance and Economics in Beijing, and a Master of Science in Accounting from Seton Hall University in New Jersey. He is a Certified Public Accountant.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.   Description
     
99.1   Press release dated November 15, 2017

 

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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 hereunto duly authorized.

 

Dated November 16, 2017

 

iFRESH, INC.


By: /s/ Long Deng  
Name: Long Deng  
Title: Chairman and Chief Executive Officer  

 

 

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Exhibit 99.1

 

150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

WWW.DGIPL.COM

 

 

 

iFresh, Inc. Reports Fiscal 2018 Second Quarter Financial Results

 

NEW YORK, Nov. 14, 2017 -- iFresh, Inc. (“iFresh” or “the Company”) (Nasdaq: IFMK), a leading Asian American grocery supermarket chain and online grocer in the United States, today reported unaudited financial results for the fiscal 2018 second quarter ended September 30, 2017.

 

Fiscal 2018 Second Quarter Highlights:

 

Total net sales increase of 5% to $33.3 million, compared to $31. 9 million in the second quarter of fiscal 2017
Retail segment net sales increase of 3% to $26.8 million, compared to $26 million in the second quarter of fiscal 2017
Total wholesale segment net sales increase of 12% to $6.6 million, compared to $5.9 million in the second quarter of fiscal 2017
Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million compared to $6.4 million in the prior year period

 

Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to report an increase in total net sales and double-digit wholesale segment growth in the quarter ended September 30, 2017. We report decreased net income in the quarter due to the increase of selling, general and administrative expenses, and higher interest expenses.

 

For the remainder of calendar year 2017, we remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. The Orlando store we acquired in July 2017 has contributed $0.8 million revenue to net retail sales. The operation of our recently acquired stores in North Miami Beach and Milford will be reflected in our financial statement for the quarter ended December 31, 2017. We are also in the process of standardizing the presentation of our storefronts and improving our brand image and recognition.

 

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150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

 

We are ready to capture the opportunities in our growing market in the coming holiday season and expect to improve our bottom-line performance in the next quarter. We look forward to updating you on our performance in the near future,” concluded Mr. Deng.

 

Second Quarter 2018 Results

 

Net Sales

 

For the three months ended September 30, 2017, net sales were $33.3 million, an increase of $1.5 million, or 5%, from $31.9 million for the three months ended September 30, 2016. This was driven by a retail segment net sales increase of 3%, to $26.8 million, from $26 million in the second quarter of fiscal 2017, and a wholesale segment net sales increase of $0.7 million, to $6.6 million, from $5.9 million for the three months ended September 30, 2016.

 

Gross Profit

 

Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million, compared to $6.4 million in the prior year period. Gross margin was 20.2% and 20.0% for the quarter ended September 30, 2017 and 2016, respectively.

 

Selling, General and Administrative Expenses

 

SG&A expense was $7.5 million in the three months ended September 30, 2017, compared to $6.1 million in the same period of the last fiscal year, which was mainly attributable to increased payroll expenses and the additional expenses related to two stores newly acquired on July 13, 2017.

 

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150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

 

Net Income

 

Net income was $25,234 for the three months ended September 30, 2017, a decrease of $0.23 million, or 90%, from $0.26 million of net income for the three months ended September 30, 2016, mainly attributable to the increase in selling, general and administrative expenses and higher interest expenses.

 

Cash, Liquidity and Financial Position

 

As of September 30, 2017, the Company had cash and cash equivalents of $1.0 million, compared to $2.5 million as of March 31, 2017. Working capital was $15.7 million as of September 30, 2017 compared to $13.4 million as of March 31, 2017. As of September 30, 2017, the Company had $1.2 million of bank loans due within one year.

 

For the six months ended September 30, 2017, net cash used in operating activities was $1.0 million. Net cash used in investing activities was $3.2 million. Net cash provided by financing activities was $2.7 million.

 

About iFresh, Inc.

 

iFresh Inc., headquartered in New York, New York, is a leading Asian American grocery supermarket chain and online grocer. With nine retail supermarkets along the US eastern seaboard and two in-house wholesale businesses strategically located in cities with a highly concentrated Asian population, the Company aims to satisfy the increasing demands of Asian Americans, whose purchasing power has been growing rapidly, for fresh and culturally unique produce, seafood and other groceries that are not found in mainstream supermarkets. With an in-house proprietary delivery network, online sales channel and strong relations with farms that produce Chinese specialty vegetables and fruits, iFresh is able to offer fresh, high-quality specialty perishables at competitive prices to a growing base of customers. For more information, please visit: http://www.ifreshmarket.com/.

 

Forward-Looking Statements

 

This announcement contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this announcement include, but are not limited to, statements regarding our disclosure concerning the Company’s operations, cash flows, financial position and dividend policy.

 

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150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

 

iFRESH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

   September 30,   March 31, 
   2017   2017 
ASSETS          
Current assets:          
Cash and cash equivalents  $1,016,352   $2,508,362 
Accounts receivable, net   3,345,880    2,272,011 
Inventories, net   11,322,782    9,796,984 
Prepaid expenses and other current assets   1,874,874    981,017 
Advances to related parties   16,665,703    14,852,083 
Total current assets   34,225,591    30,410,457 
Property and equipment, net   10,008,894    9,290,674 
Intangible assets, net   1,233,335    1,300,001 
Security deposits   1,089,777    912,346 
Deferred income taxes   350,373    86,799 
Total assets  $46,907,970   $42,000,277 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $14,101,997    12,364,071 
Deferred revenue   201,470    206,737 
Borrowings against term loan-current, net   1,167,764    1,144,568 
Notes payable, current   241,434    262,578 
Capital lease obligations, current   48,581    51,376 
Accrued expenses   802,993    730,392 
Taxes payable   1,507,106    1,769,398 
Other payables, current   481,653    501,213 
Total current liabilities   18,552,998    17,030,333 
Borrowings against lines of credit & term loan-non-current, net   15,745,693    12,779,838 
Notes payable, non-current   380,784    379,376 
Capital lease obligations, non-current   82,013    59,907 
Deferred rent   5,893,684    5,424,134 
Other payables, non-current   67,800    34,800 
Total liabilities   40,722,972    35,708,388 
           
Commitments and contingencies          
           
Shareholders’ equity          
Preferred shares, $.0001 par value, 1,000,000 shares authorized; none issued.   -    - 
Common stock, $0.0001 par value; 100,000,000 shares authorized, 14,173,033 and 14,103,033 shares issued and outstanding as of September 30, 2017 and March 31, 2017, respectively   1,417    1,410 
Additional paid-in capital   9,211,426    9,075,025 
Accumulated deficit   (3,027,845)   (2,784,546)
Total shareholders’ equity   6,184,998    6,291,889 
Total liabilities and shareholders’ equity  $46,907,970    42,000,277 

 

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150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

 

iFRESH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

   For the three months ended 
   September 30,   September 30, 
   2017   2016 
Net sales  $30,764,800   $29,862,331 
Net sales-related parties   2,575,092    2,024,569 
Total net sales   33,339,892    31,886,900 
Cost of sales   22,765,456    22,376,055 
Cost of sales-related parties   1,960,566    1,354,187 
Occupancy costs   1,893,762    1,765,386 
Gross profit   6,720,108    6,391,272 
           
Selling, general and administrative expenses   7,476,204    6,130,117 
Income (Loss) from operations   (756,096)   261,155 
Interest expense, net   (208,844)   (46,718)
Other income   1,017,510    263,203 
Income(Loss) before income taxes   52,570    477,640 
Income tax provision (benefit)   27,336    219,279 
Net income (Loss)  $25,234   $258,361 
           
Net income (loss) per share:          
Basic  $0.002   $0.02 
Diluted  $0.002   $0.02 
Weighted average shares outstanding:          
Basic   14,166,440    12,000,000 
Diluted   14,166,440    12,000,000 

 

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150 East 58th Street, 20th Floor, New York, NY 10155

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

 

iFRESH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

   For the Six months ended 
   September 30,   September 30, 
   2017   2016 
Cash flows from operating activities          
Net income (loss)  $(243,299)  $436,106 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation expense   832,667    778,508 
Amortization expense   157,916    66,666 
Share based compensation   267,400    - 
Inventory provision   -    14,339 
           
Deferred income tax expense (benefit)   (263,574)   130,396 
           
Changes in operating assets and liabilities:          
Accounts receivable   (1,073,869)   (170,849)
Inventories   (1,525,798)   (546,362)
Prepaid expenses and other current assets   (893,856)   (103,643)
Security deposits   (98,013)   168,695 
Accounts payable   1,737,926    1,809,871 
Deferred revenue   (5,268)   66,424 
Accrued expenses   72,601    24,108 
Taxes payable   (262,292)   (93,126)
Deferred rent   290,653    296,116 
Other liabilities   13,439    40,199 
Net cash provided by (used in) operating activities   (993,367)   2,917,448 
Cash flows from investing activities          
Advances made to related parties   (1,943,197)   (2,445,980)
Acquisition of property and equipment   (1,241,261)   (607,533)
Cash proceeds received from acquisition of Glen Cove   5,631    - 
Net cash used in investing activities   (3,178,827)   (3,053,513)
Cash flows from financing activities          
Proceeds from borrowings against lines of credit   2,500,000    200,000 
Proceeds from borrowings against term loan   1,050,000    - 
Repayments on lines of credit borrowings   (652,199)   (82,000)
Proceeds from borrowings on notes payable   -    288,129 
Repayments on notes payable   (187,401)   (116,857)
Payments on capital lease obligations   (30,216)   (26,345)
Net cash provided by financing activities   2,680,184    262,927 
Net increase (decrease) in cash and cash equivalents   (1,492,010)   126,862 
Cash and cash equivalents at beginning of the period   2,508,362    551,782 
Cash and cash equivalents at the end of the period  $1,016,352   $678,644 
Supplemental disclosure of cash flow information          
Cash paid for interest  $327,900   $90,649 
Cash paid for income taxes  $296,067   $592,325 
Supplemental disclosure of non-cash investing and financing activities          
Capital expenditures funded by capital lease obligations and notes payable  $217,193   $288,129 
Stock issued for Glen Cove Acquisition  $645,500   $- 

 

Contact:

Dragon Gate Investment Partners LLC

Tel: +1(646)-801-2803

Email: ifmk@dgipl.com

 

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