View:

 

 

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

 

February 14, 2018

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 February 14, 2018, iFresh Inc. (the “Company”) issued a press release announcing financial results for the quarter ended December 31, 2017. A copy of the press release making the announcement is attached as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

Exhibit No.   Description
     
99.1   Press release dated February 14, 2018

 

 1 

 

 

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 February 15, 2018

 

iFRESH, INC.

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

 

 

2

 

 

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 Third Quarter Financial Results

 

NEW YORK, Feb. 14, 2018 -- iFresh, Inc. (“iFresh” or “the Company”) (NASDAQ: IFMK), a leading Asian American grocery supermarket chain and online grocer, today reported unaudited financial results for the third quarter ended December 31, 2017.

 

Fiscal 2018 Third Quarter Highlights:

 

·Total net sales increased $0.9 million, or 3% to $35.9 million, from $34.9 million in the prior year period.

 

·Gross profit for the third quarter ended December 31, 2017 increased by 2%, to $7.5 million, compared to $7.4 million in the prior year period.

 

Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to see an increase in total net sales in the quarter ended December 31, 2017. We reported a net loss this quarter mainly due to the impact of Hurricane Irma and the additional expenses related to four newly acquired stores, three of which are in the process of being renovated and are not yet generating revenue. In addition, due to the warehouse dispute with the landlord of our Ming’s warehouse, sales have been limited due to the lack of warehouse space.

 

The rent dispute with the landlord of Ming’s warehouse went to trial and concluded on August 29, 2017 with a jury verdict in favor of the Company. The verdict awarded Ming's damages of almost 2 million dollars, with another $2,250 each month. The verdict is subject to appeal.

 

We remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. In the quarter ended December 31, 2017, we acquired two new stores, New York Mart CT, Inc. and New York Mart N. Miami Inc. The two stores are expected to open in the first quarter of 2018 after renovation. Once finished, NYM N. Miami will become one of the largest Asian supermarkets in South Florida.

 

 

 

 

 

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

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

www.dgipl.com

 

 

 

For the coming Chinese New Year, we are ready to capture opportunities with iFresh’s unique products and integrated supply chain. We look forward to updating you on our performance in the near future,” concluded Mr. Deng.

 

Third Quarter 2018 Results

 

Net Sales

 

For the three months ended December 31, 2017, net sales were $35.9 million, an increase of $0.9 million, or 3%, from $34.9 million for the three months ended December 31, 2016. This was driven by a retail segment net sales increase of 1%, to $28.2 million, from $27.9 million in the third quarter of fiscal 2017, and a wholesale segment net sales increase of $0.7 million, to $7.7 million, from $7.0 million for the three months ended December 31, 2016.

 

Gross Profit

 

Gross profit for the third quarter ended December 31, 2017 increased by 2%, to $7.5 million, compared to $7.4 million in the prior year period. Gross margin was 21.0% and 21.2% for the quarter ended December 31, 2017 and 2016, respectively.

 

Selling, General and Administrative Expenses

 

SG&A expense was $7.8 million for the three months ended December 31, 2017, compared to $6.5 million in the same period of the last fiscal year, which was mainly attributable to increased payroll expenses and the additional expenses related to four stores acquired in July and October, 2017, three of which are in the process of being renovated and are not yet generating revenue.

 

Net Income (loss)

 

Net loss was $0.3 million for the three months ended December 31, 2017, a decrease of $0.9 million, or 146%, from $0.6 million of net income for the three months ended December 31, 2016, mainly attributable to impact of Hurricane Irma, increased general and administrative expenses and higher interest expenses.

 

 2 

 

 

 

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

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

www.dgipl.com

 

 

 

Cash, Liquidity and Financial Position

 

As of December 31, 2017, the Company had cash and cash equivalents of approximately $0.9 million, compared to $2.5 million as of March 31, 2017. Working capital was $8.4 million as of December 31, 2017, compared to $13.4 million as of March 31, 2017. As of December 31, 2017, the Company had $1.2 million of bank loans due within one year.

 

For the nine months ended December 31, 2017, net cash used in operating activities was approximately $ 0.6 million. Net cash used in investing activities was $3.8 million. Net cash provided by financing activities was $2.8 million.

 

About iFresh, Inc.

 

iFresh Inc., headquartered in Long Island City, New York, is a leading Asian American grocery supermarket chain and online grocer. With nine retail supermarkets along the US eastern seaboard (with additional stores in Glen Cove, Miami and Connecticut opening soon), two in-house wholesale businesses strategically located in cities with a highly concentrated Asian population, and six iFresh-managed stores, iFresh 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 produce 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.

 

 3 

 

 

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)

 

  

December 31,

2017

 

March 31,

2017

ASSETS      
Current assets:      
Cash and cash equivalents  $902,823   $2,508,362 
Accounts receivable, net   4,898,740    2,272,011 
Inventories, net   11,519,616    9,796,984 
Prepaid expenses and other current assets   2,439,880    981,017 
Advances to related parties   9,552,534    14,852,083 
Total current assets   29,313,593    30,410,457 
Property and equipment, net   16,874,362    9,290,674 
Intangible assets, net   1,200,002    1,300,001 
Security deposits   1,232,506    912,346 
Deferred income taxes   389,435    86,799 
Total assets  $49,009,898   $42,000,277 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $16,470,850    12,364,071 
Deferred revenue   139,029    206,737 
Borrowings against lines of credit - current, net   1,191,224    1,144,568 
Notes payable, current   143,056    262,578 
Capital lease obligations - current   60,498    51,376 
Accrued expenses   875,943    730,392 
Taxes payable   1,395,717    1,769,398 
Other payables - current   605,098    501,213 
Total current liabilities   20,881,415    17,030,333 
Borrowings against lines of credit & term loan - non-current, net   16,126,222    12,779,838 
Notes payable - non-current   269,228    379,376 
Capital lease obligations - non-current   83,410    59,907 
Deferred rent   6,286,568    5,424,134 
Other payables - non-current   67,800    34,800 
Total liabilities   43,714,643    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, 14,220,548 and 14,103,033 shares issued and outstanding as of December 31, 2017 and March 31, 2017, respectively   1,422    1,410 
Additional paid-in capital   8,602,729    9,075,025 
Accumulated deficit   (3,308,896)   (2,784,546)
Total shareholders’ equity   5,295,255    6,291,889 
Total liabilities and shareholders’ equity  $49,009,898    42,000,277 

 

 4 

 

 

 

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
  For the nine
months ended
  

December 31,

2017

 

December 31,

2016

 

December 31,

2017

 

December 31,

2016

             
Net sales  $33,702,943   $32,327,248   $94,595,598   $90,874,879 
Net sales-related parties   2,160,248    2,589,866    7,136,011    6,219,027 
Total net sales   35,863,191    34,917,114    101,731,609    97,093,906 
Cost of sales   24,696,520    23,805,176    69,164,715    66,960,139 
Cost of sales-related parties   1,811,041    1,916,501    5,763,537    4,602,080 
Occupancy costs   1,834,247    1,791,325    5,670,852    5,396,778 
Gross profit   7,521,383    7,404,112    21,132,505    20,134,909 
                     
Selling, general and administrative expenses   7,760,568    6,485,191    22,721,595    18,841,217 
Income (Loss) from operations   (239,185)   918,921    (1,589,090)   1,293,692 
Interest expense, net   (214,452)   (62,260)   (590,835)   (152,551)
Other income   133,526    249,834    1,352,941    758,274 
Income(Loss) before income taxes   (320,111)   1,106,495    (826,984)   1,899,415 
Income tax provision (benefit)   (39,061)   497,929    (302,635)   854,743 
Net income (Loss)  $(281,050)  $608,566   $(524,349)  $1,044,672 
                     
Net income (loss) per share:                    
Basic  $(0.02)  $0.05   $(0.04)  $0.09 
Diluted  $(0.02)  $0.05   $(0.04)  $0.09 
Weighted average shares outstanding:                    
Basic   14,219,132    12,000,000    14,167,599    12,000,000 
Diluted   14,219,132    12,000,000    14,167,599    12,000,000 

 

 5 

 

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 Nine months Ended
  

December 31,

2017

 

December 31,

2016

Cash flows from operating activities      
Net income (loss)  $(524,349)  $1,044,672 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation expense   1,277,863    1,165,643 
Amortization expense   236,874    99,999 
Share based compensation   297,536    - 
Deferred income taxes   (302,636)   312,360 
Changes in operating assets and liabilities:          
Accounts receivable   (2,626,729)   (741,643)
Inventories   (1,722,632)   (1,321,821)
Prepaid expenses and other current assets   (1,548,863)   (142,192)
Security deposits   (140,744)   159,240 
Accounts payable   4,053,328    4,194,650 
Deferred revenue   (67,708)   55,040 
Accrued expenses   145,551    (28,263)
Taxes payable   (373,681)   (461,390)
Deferred rent   522,546    403,644 
Other liabilities   136,883    635 
Net cash provided by (used in) operating activities   (636,761)   4,740,574 
Cash flows from investing activities          
Advances to related parties   (2,127,694)   (5,820,890)
Acquisition of property and equipment   (1,664,630)   (732,329)
Cash proceeds from acquisitions   13,836    - 
Net cash used in investing activities   (3,778,488)   (6,553,219)
Cash flows from financing activities          
Borrowings against lines of credit   3,200,000    200,000 
Borrowings against term loan   1,050,000    - 
Proceeds from borrowings against term loan   -    15,000,000 
Repayments on lines of credit borrowings   (993,835)   (3,791,794)
Proceeds from borrowings on notes payable   -    288,129 
Repayments on notes payable   (397,335)   (175,465)
Payments on capital lease obligations   (49,120)   (38,024)
Deferred financing cost   -    (162,500)
Change in restricted cash   -    (1,030,000)
Net cash provided by financing activities   2,809,710    10,290,346 
Net increase (decrease) in cash and cash equivalents   (1,605,539)   8,477,701 
Cash and cash equivalents at beginning of the period   2,508,362    551,782 
Cash and cash equivalents at the end of the period  $902,823   $9,029,483 
Supplemental disclosure of cash flow information          
Cash paid for interest  $541,134   $150,314 
Cash paid for income taxes  $-   $1,316,133 
Supplemental disclosure of non-cash investing and financing activities          
Capital expenditures funded by capital lease obligations and notes payable  $249,411   $288,129 
Stock issued for Glen Cove acquisition  $645,500   $- 
Accrual of deferred financing costs  $-   $750,000 

 

Contact:

 

Dragon Gate Investment Partners LLC

 

Tel: +1(646)-801-2803

 

Email: ifmk@dgipl.com

 

 

6