UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the Month of March 2016
Commission File No.: 333-204074
WINS FINANCE HOLDINGS INC.
7 Times Square
37TH Floor
New York NY 10036
(Address of Principal Executive Offices.)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Results of Operations and Financial Condition.
On March 10, 2016, Wins Finance Holdings Inc., issued a press release announcing financial results for the three and six months ended December 31, 2015. A copy of the press release making the announcement is attached as Exhibit 99.1.
Financial Statements and Exhibits.
| Exhibit No. | Description |
| 99.1 | Press release dated March 10, 2016 |
SIGNATURE
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.
Dated March 10, 2016
| WINS FINANCE HOLDINGS INC. | ||
| By: | /s/ Richard Xu | |
| Name: | Richard Xu | |
| Title: | Co-President | |
EXHIBIT INDEX
| Exhibit No. | Description |
| 99.1 | Press release dated March 10, 2016 |
Exhibit 99.1
Wins Finance Holdings Inc. Reports Unaudited Fiscal Second Quarter 2016 Financial Results
BEIJING and NEW YORK, March 10, 2016 -- Wins Finance Holdings Inc. (“Wins Finance” or the “Company”) (NASDAQ: WINS), a diversified investment and asset management company that provides integrated financing solutions to small and medium enterprises ("SMEs") in China, today announced its unaudited financial results for the quarter ended December 31, 2015.
Fiscal Second Quarter Financial and Operational Highlights
| · | Revenues were $2.3 million, compared to $3.3 million for the comparable period last year |
| · | Interest on short-term investments was $3.5 million, compared to $3.9 million for the comparable period last year |
| · | Net income attributable to Wins Finance was $3.4 million for the quarter ended December 31, 2015, compared to $5.9 million for the same period ended December 31, 2014. |
| · | Completed business combination with Wins Finance Group Limited. |
| · | Strengthened executive management team of Wins Finance Group Limited with addition of Jimmy Hao, Co-CEO, Amy He, CFO and Richard Xu, President |
| · | Executed an aggregate of $7.7 million in direct leasing contracts for tele-medical equipment with seven hospitals |
| · | Subsequent to the end of the quarter, received determination for continued listing on NASDAQ |
“2015 was a transformative year for Wins Finance highlighted by the business combination with Wins Finance Group Limited and our continued listing on NASDAQ,” said Jianming Hao, Chairman and Co-CEO. “The business combination was the first step in our long-term growth strategy focused on value accretive investment opportunities and assets that can be enhanced through the strategic involvement of Wins’ established management team and its familiarity with the Chinese investment community to generate long-term value for shareholders.”
"We remain optimistic in our long-term outlook and our ability to identify value,” Mr. Hao added. "In the near-term however, we expect our quarterly results to be impacted by our current exposure to the financial guarantee business in China. Demand for loans from Chinese Small and Medium Enterprise (SME) has declined significantly. In addition, during the past twelve months, the RMB has depreciated by more than 5% and interest rates have been cut by 1.25%.”
“In response to the challenges we are encountering in our guarantee business, we are taking aggressive measures to diversify our operations to augment our near-term strategy,” Mr. Hao continued. “Entering 2016, the company is accelerating its search for value accretive investment opportunities and assets in the United States as well as China, with the goal to balance our geographic footprint and risk over time.”
Renhui Mu, Co-CEO and COO of Wins Finance, added, “In the past three months, we have closed more than $33 million of financial leases and expect to ramp up this business in 2016. We plan to focus our attention on the medical equipment and new energy sectors, both of which offer significant opportunities for investment. As a result of the aging population and serious geographical imbalance in distribution of medical resources in China, demand for health care is growing. The new energy vehicle industry is expanding globally, and is an important component of global initiatives to reduce hydrocarbon consumption and carbon dioxide emissions. We expect these two sectors to continue to grow despite the economic slowdown and other macroeconomic factors. We expect our pipeline of leasing opportunities to increase during the first half of 2016, with associated revenues to begin in the second half of 2016 and beyond.”
Quarter Ended December 31, 2015 Results
Net Revenue
Wins Finance’s net revenue consists of commissions and fees generated from its financial guarantee services, net direct financing lease interest income, and advisory fees generated from its financial advisory and lease agency businesses. Net commissions and fees on financial guarantee services, net direct financing lease interest income, and financial advisory and lease agency income for the three months ended December 31, 2015 were $1.6 million, $0.3 million and 0.4million, respectively, accounting for 69.3%, 13.0% and 17.7%, respectively, of Wins Finance’s net revenue.
Net Revenues for the quarter ended December 31, 2015 were $2.3 million, a decrease of $1.0 million, or 31.4%, from $3.3 million for the same period ended December 31, 2014. The decrease was primarily attributable to (a) a decrease of $0.7 million in net commissions and fees on financial guarantee services and (b) a decrease of $0.4 million in financial advisory and lease agency income. Wins Finance’s two largest customers accounted for approximately 50.8% of the total outstanding balances of loans guaranteed by Wins Finance as of December 31, 2014. These two largest customers stand for$ $1.5 million revenue for the three months ended December 31, 2014. After the contracts these two customers expired in March, 2015, Wins Finance stopped providing guarantees for loans exceeding 10% of its net assets for any single customer in order to comply with the requirements of Interim Measures for Guarantee Business of the PRC. The expired guarantee contracts were not fully replaced with new contracts. The outstanding balance of loans guaranteed by the Company decreased to $ 126.0 million as of December 31, 2015, from $ 179.4 million as of December 31, 2014 which resulted in the decrease of net commission and financial advisory income in connection with providing financial solutions to these guarantee customers.
Interest on short-term investments
Interest on short-term investments decreased by $0.4 million to $3.5 million for the quarter ended December 31, 2015, compared to $3.9 million same period ended December 31, 2014. The decrease was primarily due to a decrease in the rate of return, partially offset by an increase in the average balances of the short-term investments.
Non-interest expenses
Non-interest expenses increased by $1.4 million, or 208.1%, to $2.1 million for the quarter ended December 31, 2015, compared to $0.7 million for the same period ended December 31, 2014. The increase was primarily attributable to costs associated with the business combination and increases in salaries, legal fees, auditing fees and consulting fees for investor relations in connection with being a public company.
Income taxes
Income tax expense decreased by $0.4 million, or 51.5%, to $0.4 million for the three months ended December 31, 2015, compared to $0.7 million for the three months ended December 31, 2014. The decrease was primarily attributable to a decrease in taxable income excluding interest on short-term investment, which is exempt from taxation.
Net income
Net income decreased by $2.5 million or 42.1% to $3.4 million for the quarter ended December 31, 2015, compared to $5.9 million for the same period ended December 31, 2014.
Cash and Cash Equivalents, Term Deposits and Restricted Cash
Cash and cash equivalents, term deposits and restricted cash together amounted to $70.2 million as of December 31, 2015.
Other Significant Events
Convertible Notes sold to CEO
On January 4, 2016, the Company announced the sale of $8.5 million of convertible notes to Mr. Jianming Hao, its Chairman and Co-Chief Executive Officer. Mr. Hao is the sole investor in the financing round. The Company intends to use the proceeds to accelerate the growth and expansion of its business. The convertible notes bear interest at 4% per annum and mature one year from the date of issuance. The conversion price of the notes is $12 per share.
Financial leasing in New Energy Vehicle Sector
On January 13, 2016, the Company announced that it entered into a purchase-and-lease-back agreement valued at RMB100 million (US$15.4 million) with Liaoning Sg Automotive Group Co., Ltd. ("SG Automotive Group"), a leading Shanghai Stock Exchange-listed automobile manufacturer that is focused on developing new energy vehicle technology.
Purchase-and-Lease for Medical Examination Equipment
On February 1, 2016, the Company announced that it entered into a purchase-and-lease-back agreement valued at RMB70 million (US$10.6 million) with Panjin Central hospital, a leading Third-Level Grade-A hospital in Liaoning Province, China.
About Wins Finance
Wins Finance is a diversified investment and asset management company headquartered in New York and listed on NASDAQ. The company is focused on identifying value accretive investment opportunities and assets in China and the United States that can be enhanced through the strategic involvement of Wins’ established management team and its familiarity with the Chinese investment community to help generate long-term value for shareholders. Wins Finance is well positioned to leverage its expertise and existing operations in China to build a comprehensive platform for the provision of lending and other financing solutions to the under-served small and medium enterprise segment. In addition, Wins Finance is strategically increasing its focus on investment opportunities in the United States, with the goal of increasing its global footprint and diversifying its operations. For more information, please visit www.winsholdings.com.
Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management’s current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks are described in the Company’s Current Report on Form 8-K dated October 26, 2015 and in the Company’s other filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
Company Contacts:
Richard Xu, President
Wins Finance Holdings Inc.
590 Madison Avenue, 21st FL
New York, NY 10022
Tel: 646-480-9882
Email: rxu@winsfinance.com
WINS FINANCE HOLDINGS INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| As of | ||||||||
| December 31, 2015 | June 30, 2015 | |||||||
| US$ | US$ | |||||||
| ASSETS | ||||||||
| Cash | 40,828,055 | 40,019,968 | ||||||
| Restricted cash | 29,339,887 | 28,494,217 | ||||||
| Short-term investment | 185,621,640 | 184,160,555 | ||||||
| Guarantee paid on behalf of guarantee service customers | 992,216 | 633,313 | ||||||
| Interest receivable | 305,989 | 247,912 | ||||||
| Net investment in direct financing leases | 40,526,820 | 25,829,055 | ||||||
| Deferred tax assets, net | 435,398 | 414,479 | ||||||
| Property and equipment, net | 1,315,676 | 915,416 | ||||||
| Other assets | 166,013 | 474,412 | ||||||
| TOTAL ASSETS | 299,531,694 | 281,189,327 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| LIABILITIES | ||||||||
| Bank loan for capital lease business | 15,827,167 | 511,825 | ||||||
| Interest payable | 17,495 | 49,719 | ||||||
| Income tax payable | 3,284,100 | 3,067,757 | ||||||
| Unearned income from financial guarantee services | 2,317,377 | 3,659,062 | ||||||
| Other liabilities | 6,596,936 | 4,123,385 | ||||||
| Convertible debt | 8,500,000 | - | ||||||
| Allowance on guarantee | 1,259,994 | 1,261,868 | ||||||
| Deferred income tax liability | 485,224 | 1,123,742 | ||||||
| Total Liabilities | 38,288,293 | 13,797,358 | ||||||
| SHARHOLDERS’ EQUITY | ||||||||
| Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 21,526,747 and 21,526,747 shares issued and outstanding at December31, 2015 and June 30, 2015, respectively) | 2,153 | 2,153 | ||||||
| Additional paid-in capital | 229,697,231 | 229,493,290 | ||||||
| Statutory reserve | 2,364,245 | 325 | ||||||
| Retained Earnings | 39,014,627 | 33,490,567 | ||||||
| Accumulated other comprehensive income/(loss) | (9,834,855 | ) | 4,405,634 | |||||
| Total Equity | 261,243,401 | 267,391,969 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 299,531,694 | 281,189,327 | ||||||
WINS FINANCE HOLDINGSINC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME (LOSS)
| Three months ended | Six months ended | |||||||||||||||||||
| December 31, 2015 | September 30, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2014 | ||||||||||||||||
| US$ | US$ | US$ | US$ | US$ | ||||||||||||||||
| Guarantee service income | ||||||||||||||||||||
| Commissions and fees on financial guarantee services | 1,664,116 | 1,751,579 | 2,263,067 | 3,415,695 | 4,427,436 | |||||||||||||||
| (Provision)/reversal of provision on financial guarantee services | (74,014 | ) | 319 | 20,015 | (73,695 | ) | 35,938 | |||||||||||||
| Commission and fees on guarantee services, net | 1,590,102 | 1,751,898 | 2,283,082 | 3,342,000 | 4,463,374 | |||||||||||||||
| Direct financing lease income | ||||||||||||||||||||
| Direct financing lease interest income | 497,613 | 473,752 | 604,233 | 971,365 | 1,169,495 | |||||||||||||||
| Interest expense for direct financing lease | (19,590 | ) | (5,350 | ) | (232,233 | ) | (24,940 | ) | (278,791 | ) | ||||||||||
| Provision for lease payment receivable | (180,275 | ) | (4,137 | ) | (121,440 | ) | (184,412 | ) | (129,128 | ) | ||||||||||
| Net direct financing lease interest income after provision for receivables | 297,748 | 464,265 | 250,560 | 762,013 | 761,576 | |||||||||||||||
| Financial advisory and lease agency income | 405,603 | - | 806,925 | 405,603 | 1,549,390 | |||||||||||||||
| Net revenue | 2,293,453 | 2,216,163 | 3,340,567 | 4,509,616 | 6,774,340 | |||||||||||||||
| Non-interest income | ||||||||||||||||||||
| Interest on short-term investment | 3,522,153 | 3,587,140 | 3,945,773 | 7,109,293 | 7,927,780 | |||||||||||||||
| Total non-interest income | 3,522,153 | 3,587,140 | 3,945,773 | 7,109,293 | 7,927,780 | |||||||||||||||
| Non-interest expense | ||||||||||||||||||||
| Business taxes and surcharge | (45,876 | ) | (126,961 | ) | (101,953 | ) | (172,837 | ) | (181,347 | ) | ||||||||||
| Salaries and employees surcharge | (363,376 | ) | (181,319 | ) | (113,633 | ) | (544,695 | ) | (188,368 | ) | ||||||||||
| Rental expenses | (68,048 | ) | (64,435 | ) | (40,747 | ) | (132,483 | ) | (82,237 | ) | ||||||||||
| Other operating expenses | (1,573,216 | ) | (570,504 | ) | (409,304 | ) | (2,143,720 | ) | (746,826 | ) | ||||||||||
| Total non-interest expense | (2,050,516 | ) | (943,219 | ) | (665,637 | ) | (2,993,735 | ) | (1,198,778 | ) | ||||||||||
| Income before taxes | 3,765,090 | 4,860,084 | 6,620,703 | 8,625,174 | 13,503,342 | |||||||||||||||
| Income tax expense | (267,364 | ) | (1,111,144 | ) | (1,185,904 | ) | (1,378,508 | ) | (2,514,563 | ) | ||||||||||
| Deferred tax expense/(benefit) | (85,253 | ) | 726,567 | 459,163 | 641,314 | 1,074,286 | ||||||||||||||
| NET INCOME | 3,412,473 | 4,475,507 | 5,893,962 | 7,887,980 | 12,063,065 | |||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Foreign currency translation adjustment | (4,663,119 | ) | (9,577,369 | ) | 129,121 | (14,240,489 | ) | 453,359 | ||||||||||||
| COMPREHENSIVE INCOME (LOSS) | (1,250,646 | ) | (5,101,862 | ) | 6,023,083 | (6,352,509 | ) | 12,516,424 | ||||||||||||
| Weighted-average ordinary shares outstanding – basic and diluted | 21,526,747 | 21,526,747 | 21,526,747 | 21,526,747 | 21,526,747 | |||||||||||||||
| Earnings per share – Basic and diluted | 0.16 | 0.21 | 0.27 | 0.37 | 0.56 | |||||||||||||||