10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from              to             

Commission File No. 333-108715

Joway Health Industries Group Inc.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	98-0221494
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
No. 2, Baowang Road, Baodi Economic Development Zone, Tianjin, PRC 301800	86-22-22533666
(Address of Principal Executive Offices)	(Issuer’s Telephone Number)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x    No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨    No x

The number of shares outstanding of the Issuer’s Common Stock as of August 14, 2013 was 20,054,000 shares.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 4. Controls and Procedures	32
PART II - OTHER INFORMATION	33
Item 1. Legal Proceedings	33
Item 1A. Risk Factors	33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3. Defaults Upon Senior Securities	33
Item 4. Mine Safety Disclosures	33
Item 5. Other Information	33
Item 6. Exhibits	33
SIGNATURES	34

2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements included in this Form 10-Q reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	Page
Condensed Consolidated Balance Sheets as of June 30, 2013 (Unaudited) and December 31, 2012	4
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and the Six Months Ended June 30, 2013 and 2012 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012 (Unaudited)	6
Notes to Unaudited Condensed Consolidated Financial Statements	7-21

3

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2013		2012
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	611,590	$	522,145
Short-term investment		-		1,266,604
Accounts receivable		-		11,594
Other receivables		81,226		46,727
Inventories		1,279,077		1,254,705
Advances to suppliers		251,395		276,953
Prepaid taxes		446,164		211,760
Prepaid expense		11,000		42,898
Total current assets		2,680,452		3,633,386
PROPERTY, PLANT AND EQUIPMENT, net		6,198,876		6,316,360
OTHER ASSETS:
Long-term investment		242,397		237,488
Intangible assets, net		657,630		656,211
Long-term prepaid expenses		190,964		192,825
Total other assets		1,090,991		1,086,524
Total assets	$	9,970,319	$	11,036,270
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	24,900	$	39,948
Advances from customers		5,937		20,265
Other payables		55,934		69,080
Due to related parties		104,915		121,515
Total current liabilities		191,686		250,808
COMMITMENTS		-		-
STOCKHOLDERS' EQUITY:
Preferred stock - par value $0.001; 1,000,000 shares authorized; no shares issued and outstanding		-		-
Common stock - par value $0.001; 200,000,000 shares authorized; 20,054,000 and 20,036,000 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively		20,054		20,036
Additional paid-in-capital		7,361,665		7,361,143
Statutory reserves		354,052		354,052
Retained earnings		868,331		2,089,151
Accumulated other comprehensive income		1,174,531		961,080
Total stockholders' equity		9,778,633		10,785,462
Total liabilities and stockholders' equity	$	9,970,319	$	11,036,270

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

4

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)

	Three months ended June 30,						Six months ended June 30,
	2013			2012			2013			2012
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
REVENUES	$	306,712		$	425,683		$	484,606		$	1,216,315
COST OF REVENUES		125,761			111,355			181,016			306,736
GROSS PROFIT		180,951			314,328			303,590			909,579
Selling expenses		159,540			181,636			246,977			354,147
General and administrative expenses		535,228			619,561			1,058,898			1,041,348
OPERATING EXPENSES		694,768			801,197			1,305,875			1,395,495
(LOSS) FROM OPERATIONS		(513,817	)		(486,869	)		(1,002,285	)		(485,916	)
Interest income		235			3,298			486			4,616
Other income		2,593			570			7,649			9,309
Other expenses		(144,653	)		(316	)		(146,422	)		(364	)
OTHER (EXPENSES) INCOME, NET		(141,825	)		3,552			(138,287	)		13,561
(LOSS) BEFORE INCOME TAXES		(655,642	)		(483,317	)		(1,140,572	)		(472,355	)
INCOME TAXES		78,870			8,931			80,248			12,379
NET (LOSS)		(734,512	)		(492,248	)		(1,220,820	)		(484,734	)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment		153,886			9,121			213,451			85,583
COMPREHENSIVE (LOSS)	$	(580,626	)	$	(483,127	)	$	(1,007,369	)	$	(399,151	)
NET (LOSS) PER COMMON SHARE, BASIC AND DILUTED	$	(0.04	)	$	(0.02	)	$	(0.06	)	$	(0.02	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED		20,051,231			20,036,000			20,043,657			20,031,648

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

5

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six months ended June 30,
	2013			2012
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$	(1,220,820	)	$	(484,734	)
Adjustments to reconcile net income to net cash used in operating activities
Depreciation		278,158			253,851
Amortization		13,817			9,096
Stock-based compensation		540			18,000
Changes in operating assets and liabilities:
Accounts receivable, trade		11,594			5,929
Other receivables		(34,499	)		(15,374	)
Inventories		(24,372	)		(307,676	)
Advances to suppliers		25,558			(53,920	)
Prepaid expense		31,898			(3,542	)
Accounts payable		(15,048	)		56,858
Advances from customers		(14,328	)		(10,003	)
Other payable		(11,237	)		(3,510	)
Salary and welfare payable		(1,909	)		14,426
Taxes payable		(234,404	)		(51,766	)
Net cash (used in) operating activities		(1,195,052	)		(572,365	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment		-			(135,749	)
Redemption of investment		1,266,604			-
Net cash provided by (used in) investing activities		1,266,604			(135,749	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of due to related parties		(16,600	)		(148,018	)
Net cash (used in) financing activities		(16,600	)		(148,018	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		34,493			79,031
NET INCREASE (DECREASE) IN CASH		89,445			(777,101	)
CASH, beginning of period		522,145			3,372,189
CASH, end of period	$	611,590		$	2,595,088
SUPPLEMENTAL DISCLOSURES:
Income taxes paid	$	171,696		$	15,700
Interest paid	$	-		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

6

JOWAY HEALTH INDUSTRIES GROUP INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1  – ORGANIZATION

The unaudited condensed consolidated financial statements include the financial statements of Joway Health Industries Group Inc. (referred to herein as “Joway Health”), its subsidiaries, and variable interest entities (“VIEs”) where Joway Health is deemed the primary beneficiary. Joway Health, its subsidiaries and VIEs are collectively referred to herein as the “Company”, “we” and “us”.

Joway Health (formerly G2 Ventures, Inc.) was originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Joway Health entered into a Share Exchange Agreement (the “Share Exchange”) with the sole stockholder of Dynamic Elite International Limited. As a result of the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Joway Health and the stockholders of Dynamic Elite acquired approximately 76.08% of the issued and outstanding stock of Joway Health. The share exchange transaction resulted in the shareholders of Dynamic Elite acquiring a majority voting interest in Joway Health. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes. The reverse acquisition process utilizes the capital structure of Joway Health and the assets and liabilities of Dynamic Elite recorded at historical cost. On December 22, 2010, Joway Health changed its jurisdiction of incorporation from the State of Texas to the State of Nevada.

Dynamic Elite International Limited (referred to herein as “Dynamic Elite”) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability company (a BVI company). Dynamic Elite engages in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary, Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People’s Republic of China (“PRC”). Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.

Tianjin Junhe Management Consulting Co., Ltd. (referred to herein as “Junhe Consulting”) conducts its business through Tianjin Joway Shengshi Group Co., Ltd. that is consolidated as a variable interest entity.

Tianjin Joway Shengshi Group Co., Ltd. (referred to herein as “Joway Shengshi”) was incorporated in PRC on May 17, 2007. Joway Shengshi is currently owned 99% by Jinghe Zhang, the Company’s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental Shengtang Trading Import & Export Trading Co., Ltd are subsidiaries of Joway Shengshi.

Shenyang Joway Electronic Technology Co., Ltd. (referred to herein as “Joway Technology”) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water Machines and Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010 to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned subsidiary of Joway Shengshi.

Tianjin Joway Decoration Engineering Co., Ltd. (referred to herein as “Joway Decoration”) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline Activated Water Machines, Tourmaline Wellness House for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition, Joway Decoration became a wholly-owned subsidiary of Joway Shengshi.  Jingyun Chen is currently the General Manager of Joway Decoration.

7

Tianjin Oriental Shengtang Import & Export Trading Co., Ltd (referred to herein as “Shengtang Trading”) was incorporated on September 18, 2009 in the PRC. It engages in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July 28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became a wholly-owned subsidiary of Joway Shengshi.

The following table lists the Company and its subsidiaries:

Name	Domicile and Date of Incorporation	Paid in Capital	Percentage of Effective Ownership	Principal Activities
Joway Health Industries Group Inc.	March 21, 2003, Nevada	USD 20,054	86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors	Investment Holding
Dynamic Elite International Limited	June 2, 2010, British Virgin Islands	USD 10,000	100% owned by Joway Health Industries Group Inc.	Investment Holding
Tianjin Junhe Management Consulting Co., Ltd.	September 15, 2010, PRC	USD 20,000	100% owned by Dynamic Elite International Limited	Advisory
Tianjin Joway Shengshi Group Co., Ltd.	May 17, 2007, PRC	USD 7,216,140.72	99% owned by Jinghe Zhang,  and 1% owned  by Baogang Song	Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products
Shenyang Joway Electronic Technology Co., Ltd.	March 28, 2007, PRC	USD 142,072.97	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.	April 22, 2009, PRC	USD 292,367.74	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.	September 18, 2009, PRC	USD 292,463.75	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of tourmaline products

8

On September 16, 2010, prior to the share exchange, Junhe Consulting entered into a series of contractual agreements (the “Contractual Agreements”) with Joway Shengshi and Joway Shengshi’s owners. The following is a brief description of the Contractual Agreements entered into between Junhe Consulting and Joway Shengshi or Joway Shengshi’s owners：

1. Consulting Services Agreement. Pursuant to the consulting services agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to advise, consult, manage and operate Joway Shengshi, and collect and own all of the net profits of the Operating Entities.

2. Operating Agreement. Under the operating agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to recommend director candidates and appoint the senior executives of Joway Shengshi, approve any transactions that may materially affect the assets, liabilities, rights or operations of Joway Shengshi, and guarantee the contractual performance by Joway Shengshi of any agreements with third parties, in exchange for a pledge by Joway Shengshi of its accounts receivable and assets.

3. Voting Rights Proxy Agreement. Under the voting rights proxy agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have vested their collective voting control over Joway Shengshi to Junhe Consulting and will only transfer their respective equity interests in Joway Shengshi to Junhe Consulting or its designee.

4. Option Agreement. Under the option agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have granted Junhe Consulting the irrevocable right and option to acquire all of their equity interests in Joway Shengshi.

5. Equity Pledge Agreement. Under the equity pledge agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have pledged all of their rights, titles and interests in Joway Shengshi to Junhe Consulting to guarantee Joway Shengshi’s performance of its obligations under the Consulting Services Agreement.

As a result of the Contractual Agreements, Joway Shengshi is effectively a variable interest entity of Junhe Consulting. Accordingly, the Company through its wholly-owned subsidiary Junhe Consulting, consolidates Joway Shengshi’s results of operation, assets and liabilities in its financial statements.

In connection with the Share Exchange and as consideration for entering into the VIE Agreements the shareholders of Joway Shengshi, entered into a Call Option Agreement with the sole shareholder of Crystal Globe (the controlling shareholder of Dynamic Elite), pursuant to which the shareholders of Joway Shengshi have the right to purchase up to 100% of the shares of Crystal Globe at an aggregate price equal to $20,000 over the next three years. The Call Option vests as to 34% of the shares of Crystal Globe on April 2, 2011 and as to 33% on April 2 of 2012 and 2013. As a result, the shareholders of Joway Shengshi are now the indirect beneficial owners of the shares of the Company held by Crystal Globe.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2012 which was filed on April 1, 2013.

9

Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.

Basis of Consolidation

The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.

Pursuant to Accounting Standards Codification Topic 810, “Consolidation”, Joway Shengshi, as a VIE of Junhe Consulting, has been consolidated in the Company’s financial statements. Joway Shengshi’s sales are included in the Company’s total sales, its income from operations is consolidated with the Company’s, and the Company’s net income includes all of Joway Shengshi’s net income.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain in full the economic benefits. Accordingly, the non–controlling interests have no economic interest in the VIEs.

Foreign Currency Translation

The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.

	For the six months ended June 30,				For the year ended December 31,
	2013		2012		2012
Period ended RMB: USD Exchange rate		6.1882		6.3197		6.3161
Average RMB: USD Exchange rate		6.24794		6.3255		6.31984

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Foreign currency translation adjustments have been reported as comprehensive income in the consolidated financial statements and totaled $153,886 and $9,121 for the three months ended June 30, 2013 and 2012, respectively, and $213,451 and $85,583 for the six months ended June 30, 2013 and 2012, respectively.

10

Other Comprehensive Income

Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Concentrations of Credit Risk

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

● Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

● Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

● Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of June 30, 2013 and December 31, 2012, based on a review of its outstanding balances, the Company allowance for doubtful accounts had a zero balance, respectively.

11

Inventories

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of June 30, 2013 and December 31, 2012, respectively, the Company has no reserves for inventories.

Advances to suppliers

Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totaled $251,395 and $276,953 as of June 30, 2013 and December 31, 2012, respectively.

Long-term Investments

Investments in which the Company has a 20% to 50% interest are accounted for by the equity method. Under the equity method the carrying value of the investment is adjusted for the Company’s proportionate share of the investee’s income or loss.

Investments in which the Company has less than a 20% interest are accounted for by the cost method. Under the cost method, investments are carried at cost and income is recorded when dividends are received from those investments.

Property, Plant, and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

Building	20 years
Operating Equipment	10 years
Office furniture and equipment	3 or 5 years
Vehicles	10 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Intangible assets

Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.

12

Impairment of Long-Lived Assets

Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the six months ended June 30, 2013 and 2012.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return as defined in ASC 605-15-25-4. Sales are presented net of value added tax (VAT).

For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.

Shipping costs

Shipping costs are included in selling expenses and totaled $3,146 and $16,009 for the three months ended June 30, 2013 and 2012, respectively, and $7,715 and $24,187 for the six months ended June 30, 2013 and 2012, respectively.

Income Taxes

The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.

According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

13

Subsequent Events

The Company evaluates subsequent events for purposes of recognition or disclosure through the date that the financial statements are issued.

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which is codified in ASC Topic 210, Balance Sheet. This pronouncement contains new disclosure requirements about a company’s right of setoff and related arrangements associated with its financial and derivative instruments. ASU 2011-11 will be effective retrospectively for annual and interim periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income.  For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.  For public entities, the amendments are effective prospectively for annual reporting periods beginning after December 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

NOTE 3  – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	June 30,		December 31,
	2013		2012
Accounts receivable	$	-	$	11,594
Less: Allowance for bad debt		-		-
Accounts receivable	$	-	$	11,594

As of the periods presented, the Company has no allowance for bad debts, because the Management, based on their analysis, considers all the accounts receivable to be collectible.

14

NOTE 4  – INVENTORIES

Inventories consisted of the following:

	June 30,		December 31,
	2013		2012
Raw materials	$	285,407	$	287,560
		6,853		6,850
Finished goods		946,481		920,829
Low value consumables		40,336		39,466
Total	$	1,279,077	$	1,254,705

Low value consumables represent low priced and easily worn articles and are amortized on equal-split amortization method. Pursuant to this method, half value of the low value consumable should be amortized once used and the remaining half value should be amortized when disposed.

NOTE 5   – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	June 30,			December 31,
	2013			2012
Building	$	6,098,652		$	5,974,918
Operating Equipment		385,441			377,636
Office furniture and equipment		338,299			331,449
Vehicles		1,100,500			1,078,215
Total		7,922,892			7,762,218
Less: accumulated depreciation		(1,724,016	)		(1,445,858	)
Property, plant and equipment, net	$	6,198,876		$	6,316,360

Depreciation expense for the three months ended June 30, 2013 and 2012 amounted to $147,758 and $122,377, respectively, and for the six months ended June 30, 2013 and 2012 amounted to $278,158 and $253,851, respectively.

15

NOTE 6   – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	June 30,			December 31,
	2013			2012
Land use rights	$	667,086		$	653,578
Other intangible assets		85,350			83,622
Total		752,436			737,200
Less: accumulated amortization		(94,806	)		(80,989	)
Intangible assets, net	$	657,630		$	656,211

Amortization expense of intangible assets for the three months ended June 30, 2013 and 2012 was $7,391 and $4,380, respectively, and for the six months ended June 30, 2013 and 2012 amounted to $13,817 and $9,096, respectively.

The estimated amortization expense for the next five years is as follows:

Estimated amortization expense for
the year ending December 31,	Amount
2013	$	25,704
2014	$	25,704
2015	$	25,704
2016	$	25,704
2017	$	25,704
Thereafter	$	527,691

NOTE 7   – RELATED PARTY TRANSACTIONS

Payables due to related parties consist of the following:

	June 30,		December 31,
	2013		2012
Shenyang Joway Industrial Development Co., Ltd.	$	56,498	$	71,539
Jinghe Zhang		48,417		49,976
Total	$	104,915	$	121,515

Transactions with Shenyang Joway

Shenyang Joway Industrial Development Co., Ltd. (“Shenyang Joway”) was formed in 2005 in Shenyang, China by Mr. Jinghe Zhang and three other individuals. Mr. Zhang holds more than 50% of the equity in Shenyang Joway. Shenyang Joway was in the business of marketing and distributing clothing and related products to other companies.  In 2009, Mr. Zhang decided to shut down the operations of Shenyang Joway in order to focus his attention on Joway Shengshi’s business.  Shenyang Joway has ceased operations, although it still exists as a legal entity, and Joway Shengshi was able to find new suppliers with no material adverse impact to the Company.

● On January 15, 2009, Joway Shengshi entered into a sales contract with Shenyang Joway, pursuant to which Joway Shengshi agreed to purchase inventory of $27,560 from Shenyang Joway.

● On February 15, 2009, Joway Shengshi entered into an Equipment Sales Contract with Shenyang Joway. Pursuant to the agreement, Joway Shengshi agreed to purchase certain operating and office equipment in the amount of $158,832 from Shenyang Joway.

16

● On December 1, 2009, we, through our subsidiary Joway Shengshi, entered into a royalty-free license agreement with Shenyang Joway. Pursuant to the license agreement, we are authorized to use the trademark “Xi” for a term of nine years.

● On December 20, 2009, Joway Shengshi entered into a sales contract with Shenyang Joway. Pursuant to the sales contract, Joway Shengshi agreed to purchase inventory of $137,395 from Shenyang Joway.

● On May 7, 2007, the Company’s subsidiary Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  On May 10, 2007, the Company’s subsidiary Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  Through December 31, 2008, Joway Technology advanced $58,568 to Shenyang Joway, which was paid off by Shenyang Joway to Joway Technology in 2009. Through December 31, 2010, Shenyang Joway advanced an aggregate of $791,701 to Joway Shengshi and Joway Technology of which $735,203 has been repaid. For the six months ended June 30, 2013, the Company repaid $15,041 of these advances. As of June 30, 2013, the total unpaid principal balance due Shenyang Joway for advances was $56,498. Shenyang Joway ceased operations at the end of 2009.

Transactions with Jinghe Zhang

● On December 1, 2009, the Company, through its subsidiary Joway Shengshi, entered into a royalty-free license agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the license agreement, we are authorized to use the trademark “Joway” for a term of nine years and five patents from December 1, 2009 till the expiration dates of the patents.

● On May 10, 2007, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Shengshi’s term of operation. During the period beginning May 17, 2007 (inception of Joway Shengshi) through December 31, 2009, Joway Shengshi received cash advances in the aggregate principal amount of $4,637,397 from Jinghe Zhang of which $4,588,980 has been repaid. For the six months ended June 30, 2013, the Company repaid $1,559 of these advances. As of June 30, 2013, the total unpaid principal balance due Jinghe Zhang for advances was $48,417.

● On May 10, 2007, Joway Technology entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Technology. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Technology’s term of operation. During the period beginning March 28, 2007 (inception of Joway Technology) through December 31, 2010, Joway Technology received cash advances in the aggregate principal amount of $22,031 from Jinghe Zhang all of which has been repaid. As of June 30, 2013, the total unpaid principal balance due Jinghe Zhang for advances was $0.

The amounts owed to related parties are non-interest bearing and have no specified repayment terms.

NOTE 8   – INCOME TAXES

The Company operations in the People’s Republic of China are subject to the Income Tax Law of the People’s Republic of China. Pursuant to the PRC Income Tax Laws, the Company is subject to the Enterprise Income Tax (“EIT”) which is generally a statutory rate of 25% beginning January 2008, on income as reported in its statutory financial statements after appropriate tax adjustments.  The Company’s subsidiary, Joway Decoration, as a wholesale and retail enterprise, was subject to taxable income at a verified rate of 5% of revenue in 2012 pursuant to “Measures for Verification Collection of Enterprise Income Tax” issued by the PRC State Administration of Taxation and changed to subject to EIT from 2013.

17

The table below summarizes the differences between the PRC statutory federal rate and the Company’s effective tax rate:

	For the six months ended June 30,
	2013			2012
Tax computed at China statutory rates		25	%		25	%
Effect of reduced rate on Joway Decoration (1)		0			(12	%)
Tax adjustment from China tax authority for 2012 income tax (2)		(7	%)		0
Effect of losses		(25	%)		(16	%)
Effective rate		(7	%)		(3	%)

(1)   Pursuant to Measures for Verification Collection of Enterprise Income Tax issued by the PRC State Administration of Taxation, Joway Decoration, as a wholesale and retail enterprise, was subject to taxable income at a verified rate of 5% of revenue for the year of 2012.

(2)   The Company’s 2012 Corporate Income Tax Filing in China was reviewed by the PRC tax authority and reduced the Company’s income tax deduction for the 2012 taxable year. As a result, the Company paid additional income tax of $70,224.

NOTE 9  – STATUTORY RESERVES

Pursuant to the laws and regulations of the PRC, annual income of the Company’s subsidiaries is required to be partly allocated to the statutory reserves funds after the payment of the PRC income taxes. The allocation to the statutory reserves funds should be at least 10% of income after tax until the reserves reaches 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus the reserve funds are not available for distribution except in liquidation. As of June 30, 2013, the Company had allocated $354,052 to statutory reserves.

NOTE 10  –  SEGMENTS

In 2013 and 2012, the Company operated in three reportable business segments: (1) Healthcare Knitgoods Series, (2) Daily Healthcare and Personal Care Series and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.  Information with respect to these reportable business segments is as follows:

For the three months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	65,704	$	17,831	$	47,873	$	(103,862	)	$	33,236	$	555,287
Daily Healthcare and Personal Care Series		112,399		40,198		72,201		(183,689	)		56,857		287,026
Wellness House and Activated Water Machine Series		128,609		67,732		60,877		(226,266	)		65,056		632,156
Segment Totals	$	306,712	$	125,761	$	180,951		(513,817	)	$	155,149		1,474,469
Other Expense, net								(141,825	)
Income Tax								78,870
Unallocated Assets													8,481,145
Net Loss							$	(734,512	)
Total Assets												$	9,955,614

18

For the three months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	189,583	$	47,786	$	141,797	$	(214,153	)	$	56,453	$	411,633
Daily Healthcare and Personal Care Series		96,884		27,958		68,926		(100,960	)		28,849		219,930
Wellness House and Activated Water Machine Series		139,216		35,611		103,605		(171,756	)		41,455		848,480
Segment Totals	$	425,683	$	111,355	$	314,328		(486,869	)	$	126,757		1,480,043
Other Income, net								3,552
Income Tax								8,931
Unallocated Assets													10,578,693
Net Loss							$	(492,248	)
Total Assets												$	12,058,736

For the six months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	99,892	$	28,847	$	71,045	$	(198,133	)	$	60,185	$	555,287
Daily Healthcare and Personal Care Series		175,863		57,997		117,866		(356,039	)		105,957		287,026
Wellness House and Activated Water Machine Series		208,851		94,172		114,679		(448,113	)		125,833		632,156
Segment Totals	$	484,606	$	181,016	$	303,590		(1,002,285	)	$	291,975		1,474,469
Other Expense, net								(138,287	)
Income Tax								80,248
Unallocated Assets													8,481,145
Net Loss							$	(1,220,820	)
Total Assets												$	9,955,614

19

For the six months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	539,501	$	122,767	$	416,734	$	(202,241	)	$	116,631	$	411,633
Daily Healthcare and Personal Care Series		245,320		68,265		177,055		(104,406	)		53,034		219,930
Wellness House and Activated Water Machine Series		431,494		115,704		315,790		(179,269	)		93,282		848,480
Segment Totals	$	1,216,315	$	306,736	$	909,579		(485,916	)	$	262,947		1,480,043
Other Income, net								13,561
Income Tax								12,379
Unallocated Assets													10,578,693
Net Loss							$	(484,734	)
Total Assets												$	12,058,736

NOTE 11  - FRANCHISE REVENUES

The Company enters into franchising agreements to develop retail outlets for the Company's products. The agreements provide that franchisees will sell Company products exclusively at a predetermined retail price. In exchange the Company provides them with geographic exclusivity, discounted products, training and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment. The agreements also prohibit franchisees from selling competitor’s products. The agreements do not require any initial franchise fees from the franchisees, nor do they require the franchisees to pay continuing royalties. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The Company does not act to manage the franchisees’ levels of product. Franchisees hold periodic conferences, assisted by the Company’s marketing department, to promote product awareness and the introduction of new products. The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The franchising agreements are cancelable at the Company’s discretion if franchisees violate the terms of the agreements.

The following is a breakdown of revenue between franchise and non-franchise customers:

	For the three months ended June 30,				For the six months ended June 30,
	2013		2012		2013		2012
Sales to franchise customers	$	302,666	$	366,554	$	446,764	$	1,103,953
Sales to non-franchise customers		4,046		59,129		37,842		112,362
Total sales	$	306,712	$	425,683	$	484,606	$	1,216,315

20

NOTE 12  - INVESTMENT

Long-Term Investment:

On August 28, 2011, Joway Shengshi and Tianjin Hezhi Pharmaceutical Co., Ltd. (referred to herein as “Tianjin Hezhi”) entered a cooperative contract, pursuant to which Joway Shengshi and Tianjin Hezhi established a new company named Tianjin Joway Hezhi Pharmaceutical Co., Ltd. (referred to herein as “Joway Hezhi”) with registered capital of RMB 20,000,000. Joway Hezhi was incorporated on October 21, 2011 with initial registered capital of RMB5,000,000. It will engage in the production and distribution of Chinese-Western preparations, health food, healthcare products, medical instruments and plain food. On October 11, 2011, Joway Shengshi contributed RMB 1,500,000 and owned 30% of Joway Hezhi. As of the date of this Report, Joway Hezhi is in the early preparatory period and has no operations.

Short-Term Investment:

At December 31, 2012, the Company had a short-term wealth-management certificate with Industrial and Commercial Bank of China. This is classified as a level 2 investment within the fair value hierarchy. During the six months ended June 30, 2013, all of this short-term investment was liquidated and the funds were returned to the company.

21

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operation.

The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q and with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2013.

FORWARD-LOOKING STATEMENTS:

Certain statements made in this report may constitute “forward-looking statements on our current expectations and projections about future events.” These forward-looking statements involve known or unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases you can identify forward-looking statements by some words such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions, and are subject to a number of risks and uncertainties. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. These forward-looking statements are made as of the date of this report, and we assume no obligation to update these forward-looking statements whether as a result of new information, future events, or otherwise, other than as required by law. In light of these assumptions, risks, and uncertainties, the forward-looking events discussed in this report might not occur and actual results and events may vary significantly from those discussed in the forward-looking statements.

Overview

General

We develop, manufacture, market, distribute, and sell products, including knit goods, daily healthcare and personal care products, and wellness house and activated water machine products, that are coated, embedded or filled with tourmaline. Most of our products, such as clothing, bedding, and mattresses are purchased as finished products which we then coat and/or infuse with liquid or granular tourmaline using one or more of our manufacturing techniques. We conduct all of our operations in Tianjin City, China and distribute most of our products to more than 200 franchisees in China. Our franchisees, in turn, sell the products to their customers. All of our revenues to date have been generated by sales to customers located in the PRC.

All of our operations are conducted through Joway Shengshi and its three subsidiaries, Joway Technology, Joway Decoration, and Shengtang Trading. Joway Shengshi engages in the manufacturing and distribution of tourmaline health-related products such as knit goods, and daily healthcare and personal care products. Joway Technology and Joway Decoration engage in the manufacturing and distribution of activated water machines and wellness houses. We utilize our Shengtang Trading subsidiary to purchase raw materials, which are then sold to Joway Shengshi and Joway Decoration.

22

Beginning in 2009, we began to develop a franchise network to distribute our healthcare knit goods, daily healthcare products and personal care products. Through these franchisees, we were able to significantly increase sales of our healthcare knit goods segment and daily healthcare and personal care segment. In 2010, we began distributing our wellness house and activated water machine products through our franchise network.

Description of Selected Income Statement Items

Revenues. We generate revenue from sales of our Healthcare Knit goods Series, Daily Healthcare and Personal Care Series and Wellness House and Activated Water Machine Series.

Cost of goods sold.  Cost of goods sold consists of costs directly attributable to production, including the cost of raw materials, salaries for staff engaged in production activity, electricity, depreciation, packing materials, and related expenses.

Operating expenses.  Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Sales and marketing expenses consist primarily of salaries and traveling expenses of our marketing department employees, transportation expenses, and advertising expenses. General and administrative expenses consist primarily of salaries of our administrative department employees, payroll taxes and benefits, general office expenses and depreciation. We expect administrative expenses to continue to increase as we incur expenses related to costs of compliance with U.S. securities laws and regulations, and our reporting obligations thereunder, including increased audit and legal fees and investor relations expenses.

Other (expense) income.  Our other (expense) income consists primarily of interest income, subsidy income, other revenue from sales of obsolete equipment and other expenses related to the tax penalty amountsrequested by PRC tax authority after a review of our 2012 tax filings of corporate income andvalue added tax (VAT).

Income taxes.  According to the revised Enterprise Income Tax Law effective as of January 1, 2008, the income tax rate of our PRC subsidiaries is generally 25%. Joway Health Industries Group Inc. was established under the laws of the State of Nevada and is subject to U.S. federal income tax and Nevada annual reporting requirements. No provision for income taxes in the United States has been made as the Company has no income taxable in the United States. The Company’s PRC subsidiaries expect to use their retained earnings to support their PRC operations, and do not expect to declare any dividends within the foreseeable future.

Results of Operations

The following table sets forth certain information regarding our results of operations.

	For the three months ended June 30,							For the six months ended June 30,
		2013			2012			2013			2012
REVENUES		$	306,712		$	425,683		$	484,606		$	1,216,315
COST OF REVENUES			125,761			111,355			181,016			306,736
GROSS PROFIT			180,951			314,328			303,590			909,579
OPERATING EXPENSES			694,768			801,197			1,305,875			1,395,495
(LOSS) FROM OPERATIONS			(513,817	)		(486,869	)		(1,002,285	)		(485,916	)
OTHER (EXPENSE) INCOME, NET			(141,825	)		3,552			(138,287	)		13,561
(LOSS) BEFORE INCOME TAXES			(655,642	)		(483,317	)		(1,140,572	)		(472,355	)
INCOME TAXES			78,870			8,931			80,248			12,379
NET (LOSS)			(734,512	)		(492,248	)		(1,220,820	)		(484,734	)

23

Business Segments

In 2013 and 2012, we operated in three reportable business segments: (1) Healthcare Knitgoods, (2) Daily Healthcare and Personal Care Products and (3) Wellness House and Activated Water Machine Products. The following table sets forth the contributions of each reportable business segment in dollars and as a percent of revenue:

For the three months ended June 30, 2013

	Healthcare Knitgood Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	65,704			21.4	%	$	112,399			36.6	%	$	128,609			41.9	%	$	306,712
COST OF REVENUES		17,831			14.2	%		40,198			32.0	%		67,732			53.9	%		125,761
GROSS PROFIT		47,873			26.5	%		72,201			39.9	%		60,877			33.6	%		180,951
GROSS MARGIN		72.9	%					64.2	%					47.3	%					59.0	%
OPERATING EXPENSES		151,735			21.8	%		255,890			36.8	%		287,143			41.3	%		694,768
(LOSS) FROM OPERATIONS	$	(103,862	)		20.2	%	$	(183,689	)		35.7	%	$	(226,266	)		44.0	%	$	(513,817	)

For the three months ended June 30, 2012

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	189,583			44.5	%	$	96,884			22.8	%	$	139,216			32.7	%	$	425,683
COST OF REVENUES		47,786			42.9	%		27,958			25.1	%		35,611			32.0	%		111,355
GROSS PROFIT		141,797			45.1	%		68,926			21.9	%		103,605			33.0	%		314,328
GROSS MARGIN		74.8	%					71.1	%					74.4	%					73.8	%
OPERATING EXPENSES		355,950			44.4	%		169,886			21.2	%		275,361			34.4	%		801,197
(LOSS) FROM OPERATIONS	$	(214,153	)		44.0	%	$	(100,960	)		20.7	%	$	(171,756	)		35.3	%	$	(486,869	)

For the six months ended June 30, 2013

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	99,892			20.6	%	$	175,863			36.3	%	$	208,851			43.1	%	$	484,606
COST OF REVENUES		28,847			15.9	%		57,997			32.0	%		94,172			52.0	%		181,016
GROSS PROFIT		71,045			23.4	%		117,866			38.8	%		114,679			37.8	%		303,590
GROSS MARGIN		71.1	%					67.0	%					54.9	%					62.6	%
OPERATING EXPENSES		269,178			20.6	%		473,905			36.3	%		562,792			43.1	%		1,305,875
(LOSS) FROM OPERATIONS	$	(198,133	)		19.8	%	$	(356,039	)		35.5	%	$	(448,113	)		44.7	%	$	(1,002,285	)

For the six months ended June 30, 2012

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	539,501			44.4	%	$	245,320			20.2	%	$	431,494			35.5	%	$	1,216,315
COST OF REVENUES		122,767			40.0	%		68,265			22.3	%		115,704			37.7	%		306,736
GROSS PROFIT		416,734			45.8	%		177,055			19.5	%		315,790			34.7	%		909,579
GROSS MARGIN		77.2	%					72.2	%					73.2	%					74.8	%
OPERATING EXPENSES		618,975			44.4	%		281,461			20.2	%		495,059			35.5	%		1,395,495
(LOSS) FROM OPERATIONS	$	(202,241	)		41.6	%	$	(104,406	)		21.5	%	$	(179,269	)		36.9	%	$	(485,916	)

For The Three Months Ended June 30, 2013 Compared to June 30, 2012

Revenue. For the three months ended June 30, 2013, revenue was $306,712 compared to $425,683 for the three months ended June 30, 2012, a decrease of $118,971 or 27.9%. This decrease was mainly due to the decrease in revenue from healthcare knit goods segment, most products of which are durable consumables with three or more years of life cycle. Our old franchisees’ demand for our products for the second quarter of 2013 may have been affected because of the large amount of our main products they purchased in the end of 2010. Further, from the year of 2012, in order to concentrate on high-quality franchisees we strengthened the enforcement of the terms of our franchise agreements and policies after focusing mostly on increasing franchise stores in 2011. As a result, the number of our new franchisees decreased compared to the number in the second quarter of 2012, which also caused a decrease in revenue.

24

Revenue from healthcare knit goods segment decreased by $123,879 or 65.3% to $65,704 for the three months ended June 30, 2013 from $189,583 for the three months ended June 30, 2012. This decrease was mainly due to $0.06 million of decrease in sales of our mattress products. Our mattress products are durable consumables which have three or more years of life cycle, and our revenues for the second quarter of 2013 may have been negatively impacted by the large orders of this product by our franchisees in the end of 2010 and the decrease of our new franchisees.

Revenue from daily healthcare and personal care products increased by $15,515 or 16% to $112,399 for the three months ended June 30, 2013 from $96,884 for the three months ended June 30, 2012. This was primarily due to the increase in sales of TourmalineWaist Protector and Xin-Nao-Ling Fish Oil Soft Gel.

Revenue from wellness houses and activated water machines decreased by $10,607 or 7.6% to $128,609 for the three months ended June 30, 2013 from $139,216 for the three months ended June 30, 2012. This decrease was mainly due to the decrease in sales of Foot Sauna Bucket.

Cost of Goods Sold.  For the three months ended June 30, 2013, cost of goods sold was $125,761 compared to $111,355 for the three months ended June 30, 2012, an increase of $14,406 or 12.9%. This increase was mainly due to wellness houses and activated water machines segment and daily healthcare and personal care segment

Cost of goods sold for healthcare knit goods segment decreased to $17,831 for the three months ended June 30, 2013 from $47,786 for the three months ended June 30, 2012, a decrease of $29,955 or 62.7%. This decrease was mainly due to the decrease in sales.

Cost of goods sold for the daily healthcare and personal care segment increased to $40,198 for the three months ended June 30, 2013 from $27,958 for the three months ended June 30, 2012, an increase of $12,240 or 43.8%. This increase was primarily due to the increase in the cost of our Xin-Nao-Ling Fish Oil Soft Gel as a result of the increase in sales.

Cost of goods sold for our wellness house and activated water machine segment increased to $67,732 for the three months ended June 30, 2013 from $35,611 for the three months ended June 30, 2012, an increase of $32,121 or 90.2%. This increase was mainly due to the increase in the cost of our wellness house as a result of the increase in sales.

Gross profit. Our gross profit decreased by $133,377 or 42.4% to $180,951 for the three months ended June 30, 2013, compared to $314,328 for the three months ended June 30, 2012. This decrease was mainly due to the decrease in gross profit for healthcare knit goods segment and wellness houses and activated water machines segment. Our gross margin decreased from 73.8% for the three months ended June 30, 2012 to 59% for the three months ended June 30, 2013. This decrease was mainly due to the decrease in the gross margin of our wellness houses and activated water machines segment. .

Gross profit for the healthcare knit goods segment decreased by $93,924 or 66.2% to $47,873 for the three months ended June 30, 2013 compared to $141,797 for the three months ended June 30, 2012. This decrease was mainly due to decreased sales of our mattress products, which have higher gross margins.  The gross margins of healthcare knit goods segment slightly decreased from 74.8% for the three months ended June 30, 2012 to 72.9% for the three months ended June 30, 2013. The reduced output of our healthcare knit goods caused higher cost rate and lower gross profit margin.

Gross profit of daily healthcare and personal care segment increased by $3,275 or 4.8% to $72,201 for the three months ended June 30, 2013, compared to $68,926 for the three months ended June 30, 2012. This increase was primarily due to the increase in sales. The gross margin of daily healthcare and personal care segment decreased from 71.1% for the three months ended June 30, 2012 to 64.2% for the three months ended June 30, 2013. This decrease was mainly due to the decrease in sales of our cosmetic products, which have higher gross profit margin.

25

Gross profit of the wellness house and activated water machine segments decreased by $42,728 or 41.2% to $60,877 for the three months ended June 30, 2013, compared to $103,605 for the three months ended June 30, 2012. This decrease was mainly due to the decrease in gross profit of Foot Sauna Bucket and wellness house for family use. The gross margin of our wellness house and activated water machine segments decreased from 74.4% for the three months ended June 30, 2012 to 47.3% for the three months ended June 30, 2013. This decrease was mainly due to the more discount to our franchisees.

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses decreased by $106,429, or 13.3%, from $801,197 for the three months ended June 30, 2012 to $694,768 for the three months ended June 30, 2013. This decrease was mainly due to the decrease of marketing fees and attorney fee. Operating expenses for healthcare knit goods segment decreased by $204,215 or 57.4% to $151,735 for the three months ended June 30, 2013 from $355,950 for the three months ended June 30, 2012. Operating expenses for daily healthcare and personal care segment increased by $86,004 or 50.6% to $255,890 for the three months ended June 30, 2013 from $169,886 for the three months ended June 30, 2012. Operating expenses for our wellness house and activated water machine segment increased by $11,782 or 4.3% to $287,143 for the three months ended June 30, 2013 from $275,361 for the three months ended June 30, 2012.

Income from operations. As a result of the foregoing, our income from operations was negative $513,817 for the three months ended June 30, 2013, compared to negative $486,869 for the three months ended June 30, 2012, a decrease of $26,948. This decrease was mainly due to the increase in cost.

Income taxes. Our income tax expenses were $78,870 for the three months ended June 30, 2013, compared to $8,931 for the three months ended June 30, 2012. The increase was due to an additional income tax for the year of 2012 requested by PRC tax authority after a review of our 2012 Corporate Income Tax Filing.

Net income. For the three months ended June 30, 2013, our net income was negative $734,512 compared to negative $492,248 for the three months ended June 30, 2012. This decrease was mainly due to decrease in our income from operations and other income.

For the six months Ended June 30, 2013 Compared to June 30, 2012

Revenue. For the six months ended June 30, 2013, revenue was $484,606 compared to $1,216,315 for the six months ended June 30, 2012, a decrease of $731,709 or 60.2%. This decrease was mainly due to the decrease in revenue from healthcare knit goods segment and wellness houses and activated water machines segment. The following three main reasons caused the decrease in revenue for these two segments in 2013. First, most products of our healthcare knit goods segment and wellness houses and activated water machines segment are durable consumables which have three or more years of life cycle. Our franchisees’ demand for our products for the first half of 2013 may have been affected because of the large amount of our main products they purchased in the end of 2010. Second, the demand to our products has been affected by the slowdown of the economy because China’s GDP growth dropped to 7.6% in the first half of 2013, compared with 7.8% in the first half of 2012. Finally, from the year of 2012, in order to concentrate on high-quality franchisees we strengthened the enforcement of the terms of our franchise agreements and policies after focusing mostly on increasing franchise stores in 2011. As a result, the number of our franchisees decreased compared to the number in the first half of 2012, which also caused a decrease in revenue.

Revenue from healthcare knit goods segment decreased by $439,609, or 81.5% to $99,892 for the six months ended June 30, 2013 from $539,501 for the six months ended June 30, 2012. This decrease was mainly due to the decrease in sales of our mattress products.

Revenue from daily healthcare and personal care products decreased by $69,457 or 28.3% to $175,863 for the six months ended June 30, 2013 from $245,320 for the six months ended June 30, 2012. This was primarily due to the decrease in sales of our cosmetic products.

Revenue from wellness houses and activated water machines decreased by $222,643 or 51.6% to $208,851 for the six months ended June 30, 2013 from $431,494 for the six months ended June 30, 2012. This decrease was mainly due to the decrease in sales of Foot Sauna Bucket.

26

Cost of Goods Sold.  For the six months ended June 30, 2013, cost of goods sold was $181,016 compared to $306,736 for the six months ended June 30, 2012, a decrease of $125,720, or 41%. This decrease was mainly due to a decrease in sales.

Cost of goods sold for healthcare knit goods segment decreased to $28,847 for the six months ended June 30, 2013 from $122,767 for the six months ended June 30, 2012, a decrease of $93,920 or 76.5%. This decrease was mainly due to the decrease in the cost of our mattress products.

Cost of goods sold for the daily healthcare and personal care segment decreased to $57,997 for the six months ended June 30, 2013 from $68,265 for the six months ended June 30, 2012, a decrease of $10,268 or 15%. This decrease was mainly due to the decrease in the cost of our cosmetic products.

Cost of goods sold for our wellness house and activated water machine segment decreased to $94,172 for the six months ended June 30, 2013 from $115,704 for the six months ended June 30, 2012, a decrease of $21,532 or 18.6%. This decrease was mainly due to the decrease in the cost of Foot Sauna Bucket.

Gross profit. Our gross profit decreased by $605,989 or 66.6% to $303,590 for the six months ended June 30, 2013, compared to $909,579 for the six months ended June 30, 2012. This decrease was primarily due to the decrease in gross profit for healthcare knit goods segment and wellness house and activated water machine segment. In addition, our gross margin decreased from 74.8% for the six months ended June 30, 2012 to 62.6% for the six months ended June 30, 2013. This decrease was mainly due to wellness house and activated water machine segment.

Gross profit for the healthcare knit goods segment decreased by $345,689 or 83% to $71,045 for the six months ended June 30, 2013 compared to $416,734 for the six months ended June 30, 2012. This decrease was mainly due to the decrease in gross profit for our mattress products. The gross margins of healthcare knit goods segment decreased from 77.2% for the six months ended June 30, 2012 to 71.1% for the six months ended June 30, 2013. The reduced output of our healthcare knit goods caused higher cost rate and lower gross profit margin.

Gross profit of daily healthcare and personal care segment decreased by $59,189 or 33.4% to $ 117,866 for the six months ended June 30, 2013, compared to $177,055 for the six months ended June 30, 2012. This decrease was primarily due to the decrease in gross profit of our cosmetic products. Our gross margin of daily healthcare and personal care segment decreased from 72.2% for the six months ended June 30, 2012 to 67% for the six months ended June 30, 2013. This decrease was mainly due to the decrease in sales of our cosmetic products, which have higher gross margins.

Gross profit of the wellness house and activated water machine segments decreased by $201,111 or 63.7% to $114,679 for the six months ended June 30, 2013, compared to $315,790 for the six months ended June 30, 2012. This decrease was mainly due to the decrease in sales of Foot Sauna Bucket. The gross margin of our wellness house and activated water machine segments decreased from 73.2% for the six months ended June 30, 2012 to 54.9% for the six months ended June 30, 2013.This decrease was mainly due to the more discount to our franchisees.

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses decreased by $89,620, or 6.4%, from $1,395,495 for the six months ended June 30, 2012 to $1,305,875 for the six months ended June 30, 2013. This decrease was mainly due to the decrease of conference expenses. Operating expenses for healthcare knit goods segment decreased by $349,797 or 56.5% to $269,178 for the six months ended June 30, 2013 from $618,975 for the six months ended June 30, 2012. Operating expenses for daily healthcare and personal care segment increased by $192,444 or 68.4% to $473,905 for the six months ended June 30, 2013 from $281,461 for the six months ended June 30, 2012. Operating expenses for our wellness house and activated water machine segment increased by $67,733 or 13.7% to $562,792 for the six months ended June 30, 2013 from $495,059 for the six months ended June 30, 2012. These changes were due to the fact that we put more marketing and sales efforts on our wellness house and activated water machine segment and daily healthcare and personal care segment in place of healthcare knit goods segment.

27

Income from operations. As a result of the foregoing, our income from operations was negative $1,002,285 for the six months ended June 30, 2013, compared to negative $485,916 for the six months ended June 30, 2012, a decrease of $516,369. This decrease was mainly due to the decrease in sales.

Income taxes. Our income tax expenses were $80,248 for the six months ended June 30, 2013, compared to $12,379 for the six months ended June 30, 2012. The increase was due to an additional income tax for the year of 2012 requested by PRC tax authority after a review of our 2012 Corporate Income Tax Filing.

Net income. Our net income was negative $1,220,820 for the six months ended June 30, 2013, compared to negative $484,734 for the six months ended June 30, 2012. This decrease was mainly due to the decrease in sales.

Franchising

We enter into franchise agreements to develop retail outlets for our products. These agreements provide that franchisees will sell our products exclusively. In exchange, we provide them with geographic exclusivity, discounted products, training, and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion, and presentment. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The Agreements are cancelable at our discretion if franchisees violate the terms of the agreements.

The following is a breakdown of revenue between franchise and non-franchise customers:

	For the three months ended June 30,				For the six months ended June 30,
	2013		2012		2013		2012
Sales to franchise customers	$	302,666	$	366,554	$	446,764	$	1,103,953
Sales to non-franchise customers		4,046		59,129		37,842		112,362
Total sales	$	306,712	$	425,683	$	484,606	$	1,216,315

Liquidity and Capital Resources

Our cash at the beginning of the six months ended June 30, 2013 was $522,145 and increased to $611,590 by the end of June 30, 2013, an increase of $89,445. This increase was mainly due to the recovery of Marketable Security in Industrial and Commercial Bank of China in the amount of $1,266,604. On June 30, 2013, we had net working capital of $2,488,766, a decrease of $893,812 from $3,382,578 on December 31, 2012.

Our cash flow information summary is as follows:

	For the six months ended June 30,
	2013			2012
Net cash provided by (used in)：
Operating activities	$	(1,195,052	)		(572,365	)
Investing activities		1,266,604			(135,749	)
Financing activities	$	(16,600	)		(148,018	)

28

Net Cash Used In Operating Activities

Net cash used in operating activities was $1,195,052 for the six months ended June 30, 2013 compared to $572,365 for the six months ended June 30, 2012. This increase was primarily due to the reduced cash collection driven by $736,086 of decrease in net income.

For the six months ended June 30, 2013, cash was mainly used to cover the loss of $1,220,820 and pay taxes of 234,404, which were primarily offset by an add-back of $278,158 of depreciation for non-cash expense.

For the six months ended June 30, 2012, cash was mainly used to cover the loss of $484,734 and purchase materials of $307,676, which were primarily offset by an add-back of $253,851 of depreciation for non-cash expense.

Net Cash Provided by (Used In) Investing Activities

Net cash provided by investing activities was $1,266,604 for the six months ended June 30, 2013, compared to $135,749 of net cash used in for the six months ended June 30, 2012. For the six months ended June 30, 2013, we took back our short-term wealth-management product, a kind of Marketable Security in Industrial and Commercial Bank of China in the amount of $1,266,604, which was invested in 2012. For the six months ended June 30, 2012, cash was mostly used to remodel our training building in the amount of $0.12 million.

Net Cash Used In Financing Activities

Net cash used in financing activities was $16,600 for the six months ended June 30, 2013, compared to $148,018 for the six months ended June 30, 2012. The cash was used to repay Jinghe Zhang and Shenyang Joway for advances made in prior periods.

On May 10, 2007, our operating subsidiaries, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreements, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. These advances are interest free, unsecured and are repayable upon demand. During the period beginning May 17, 2007 (inception of Joway Shengshi) through December 31, 2010, Joway Shengshi received cash advances in the aggregate principal amount of $4,637,397 from Jinghe Zhang. We repaid $1,559 and $131,036 of these advances for the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013, the total unpaid principal balance due Jinghe Zhang for advances made to Joway Shengshi was $48,417.

On May 7, 2007, our operating subsidiary, Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  On May 10, 2007, our subsidiary, Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  Pursuant to these agreements, Shenyang Joway advanced an aggregate of $791,701 to Joway Shengshi and Joway Technology through December 31, 2010. We repaid $15,041 and $16,982 of these advances for the six months ended June 30, 2013 and 2012, respectively. As of June 30, 2013, the total unpaid principal balance due Shenyang Joway for advances was $56,498.  Shenyang Joway ceased operations at the end of 2009, although it still exists as a legal entity.

The Company has sufficient liquidity from internal and external sources to meet the Company’s operating cash needs over the next 12 months even if Mr. Zhang and Shenyang Joway were to demand immediate repayment of the remaining balance under these loans and no longer wish to provide future loans to us.

29

STATUTORY RESERVES

Pursuant to the laws and regulations of the PRC, the Company’s PRC subsidiaries are required to allocate a portion of their after-tax income to statutory reserves funds. The minimum statutory reserves allocation is 10% of after-tax income until the reserves reach 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus, the reserve funds are not available for distribution except in liquidation. As of June 30, 2013, the Company had allocated $354,052 to statutory reserves.

Critical Accounting Policies

Management’s discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that the following reflect the more critical accounting policies that currently affect our financial condition and results of operations.

Basis of Consolidation

The accompanying consolidated financial statements include Joway Health, its wholly owned subsidiaries, and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation. Pursuant to Accounting Standards Codification Topic 810 “Consolidation,” Joway Shengshi, as a VIE of Junhe Consulting, have been consolidated in our financial statements. Joway Shengshi’s sales are included in our total sales, its income from operations is consolidated with ours, and our net income includes all of Joway Shengshi’s net income. Based on the various VIE Agreements, we are able to exercise control over the VIEs, and to obtain the full economic benefits. Accordingly, the non–controlling interests have no economic interest in the VIEs.

Revenue Recognition

We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

With respect to sales of product to both franchisee and non-franchisee customers, we prepare product shipment upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for franchisee customers or for non-franchisee customers. We recognize revenue when the product is shipped. We do not sell product to any customers with a right of return as defined in ASC 605-15-25-4. Sales are presented net of value added tax (VAT).

We recognize revenue on the sale of our wellness houses under the completed contract method. At the time when we enter into a contract with a customer to build a wellness house, the customer pays a deposit of at least one-half of the sales price. We consider the contract to be completed when all significant costs have been incurred and the customer accepts the project in writing by signing in the appropriate place on the contract. At this time the customer will also pay any remaining balance on the contract. We recognize the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a wellness house generally does not exceed five days.

Accounts Receivable

Accounts receivable are carried at net realizable value. We provide reserves for potential credit losses on accounts receivable. Management reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customers’ credit worthiness, current economic trends, and changes in customer’s payment patterns to evaluate the adequacy of these reserves.

30

Inventories

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow is determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. Management regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required.

Property, Plant, and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

Building	20 years
Operating Equipment	10 years
Office furniture and equipment	3 or 5 years
Vehicles	10 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of income and other comprehensive income. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Recent Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which is codified in ASC Topic 210, Balance Sheet. This pronouncement contains new disclosure requirements about a company’s right of setoff and related arrangements associated with its financial and derivative instruments. ASU 2011-11 will be effective retrospectively for annual and interim periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on our consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. We do not anticipate that the adoption of this standard will have a material effect on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income.  For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.  For public entities, the amendments are effective prospectively for annual reporting periods beginning after December 15, 2012, with early adoption permitted. We do not anticipate that the adoption of this standard will have a material effect on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

31

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of our disclosure controls and procedures as defined in SEC Rules 13a-15(e) and 15d-15(e) as of the end of the period covered by this quarterly report. The purpose of this evaluation is to determine if, as of Evaluation Date, our disclosure controls and procedures were operating effectively such that the information, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2013, our disclosure controls and procedures were not effective, based on the material weakness described below:

We did not have sufficient skilled accounting personnel that are either qualified as Certified Public Accountants in the U.S. or that have received education from U.S. institutions or other educational programs that would provide enough relevant education relating to U.S. GAAP. The Company’s CFO and Financial Manager have worked for U.S. listed companies but have limited experience with U.S. GAAP and are not U.S. Certified Public Accountants. Further, our operating subsidiaries are based in China, and in accordance with PRC laws and regulations, are required to comply with PRC GAAP, rather than U.S. GAAP. Thus, the accounting skills and understanding necessary to fulfill the requirements of U.S. GAAP-based reporting, including the preparation of financial statements and consolidation, are inadequate, and determined to be a material weakness.

Remediation Initiative

● We have started a training program in the principles and rules of U.S. GAAP, SEC reporting requirements and the application thereof. The program is provided by an independent training institution, for our finance and accounting personnel, including our Chief Financial Officer, Financial Manager and others.

● We are in the process of designing a program to provide ongoing company-wide training regarding the Company’s internal controls, with particular emphasis on our finance and accounting staff.

● We have implemented an internal review process over financial reporting to review all recent accounting pronouncements and to verify that the accounting treatment identified in such report have been fully implemented and confirmed by our internal control department.

● In 2011 we established the position of internal audit manager. In September 2011, we hired an internal audit manager who implemented an internal review process over financial reporting to review all recent accounting pronouncements and to verify that the accounting treatments identified in such report have been fully implemented and confirmed by our internal control department.We are seeking a potential candidate who has sufficient experience in internal control and audit to fill the position vacated in July 2012 by the internal audit manager. As an alternative, we also consider hiring an external professional organization to undertake the work.

We believe that the foregoing steps will remediate the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

32

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting for the six months ended June 30, 2013 that materially affected, or were reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

As of the date of this filing, there have been no material changes from the risk factors disclosed in Part I, Item 1A (Risk Factors) contained in our Annual Report on Form 10-K for the year ended December 31, 2012. We operate in a changing environment that involves numerous known and unknown risks and uncertainties that could materially affect our operations. The risks, uncertainties and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2012 may cause our actual results, performances and achievements to be materially different from those expressed or implied by our forward-looking statements. If any of these risks or events occurs, our business, financial condition or results of operations may be adversely affected.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of Chief Executive Officer of Periodic Report pursuant to Rule 13a-14a and Rule 14d-14(a). *
31.2	Certification of Chief Financial Officer of Periodic Report pursuant to Rule 13a-14a and Rule 15d-14(a). *
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. *
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. *
101.INS	XBRL Instance Document*
101.SCH	XBRL Schema Document*
101.CAL	XBRL Calculation Linkbase Document*
101.LAB	XBRL Label Linkbase Document*
101.PRE	XBRL Presentation Linkbase Document*
101.DEF	XBRL Definition Linkbase Document*

      * Filed herewith

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DATE: August 14, 2013

Joway Health Industries Group Inc.
By:	/s/ Jinghe Zhang
	Jinghe Zhang
	President and Chief Executive Officer
By:	/s/ Yuan Huang
	Yuan Huang
	Chief Financial Officer

34 

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Jinghe Zhang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the six months ended June 30, 2013 of Joway Health Industries Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013

/S/ Jinghe Zhang

Jinghe Zhang

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Yuan Huang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the six months ended June 30, 2013 of Joway Health Industries Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2013

/S/ Yuan Huang

Yuan Huang

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jinghe Zhang, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Joway Health Industries Group Inc. for the six months ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Joway Health Industries Group Inc.

Date: August 14, 2013

By:	/S/ Jinghe Zhang
	Jinghe Zhang
	Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Yuan Huang, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Joway Health Industries Group Inc. for the six months ended June 30, 2013 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Joway Health Industries Group Inc.

Date: August 14, 2013

By:	/S/ Yuan Huang
	Yuan Huang
	Chief Financial Officer

XML

Investment

6 Months Ended

Jun. 30, 2013

Investment [Abstract]

INVESTMENT

NOTE 12  - INVESTMENT

Long-Term Investment:

On August 28, 2011, Joway Shengshi and Tianjin Hezhi Pharmaceutical Co., Ltd. (referred to herein as “Tianjin Hezhi”) entered a cooperative contract, pursuant to which Joway Shengshi and Tianjin Hezhi established a new company named Tianjin Joway Hezhi Pharmaceutical Co., Ltd. (referred to herein as “Joway Hezhi”) with registered capital of RMB 20,000,000. Joway Hezhi was incorporated on October 21, 2011 with initial registered capital of RMB5,000,000. It will engage in the production and distribution of Chinese-Western preparations, health food, healthcare products, medical instruments and plain food. On October 11, 2011, Joway Shengshi contributed RMB 1,500,000 and owned 30% of Joway Hezhi. As of the date of this Report, Joway Hezhi is in the early preparatory period and has no operations.

Short-Term Investment:

At December 31, 2012, the Company had a short-term wealth-management certificate with Industrial and Commercial Bank of China. This is classified as a level 2 investment within the fair value hierarchy. During the six months ended June 30, 2013, all of this short-term investment was liquidated and the funds were returned to the company.

XML

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income [Abstract]
REVENUES	$ 306,712	$ 425,683	$ 484,606	$ 1,216,315
COST OF REVENUES	125,761	111,355	181,016	306,736
GROSS PROFIT	180,951	314,328	303,590	909,579
Selling expenses	159,540	181,636	246,977	354,147
General and administrative expenses	535,228	619,561	1,058,898	1,041,348
OPERATING EXPENSES	694,768	801,197	1,305,875	1,395,495
(LOSS) FROM OPERATIONS	(513,817)	(486,869)	(1,002,285)	(485,916)
Interest income	235	3,298	486	4,616
Other income	2,593	570	7,649	9,309
Other expenses	(144,653)	(316)	(146,422)	(364)
OTHER (EXPENSES) INCOME, NET	(141,825)	3,552	(138,287)	13,561
(LOSS) BEFORE INCOME TAXES	(655,642)	(483,317)	(1,140,572)	(472,355)
INCOME TAXES	78,870	8,931	80,248	12,379
NET (LOSS)	(734,512)	(492,248)	(1,220,820)	(484,734)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment	153,886	9,121	213,451	85,583
COMPREHENSIVE (LOSS)	$ (580,626)	$ (483,127)	$ (1,007,369)	$ (399,151)
NET (LOSS) PER COMMON SHARE, BASIC AND DILUTED	$ (0.04)	$ (0.02)	$ (0.06)	$ (0.02)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED	20,051,231	20,036,000	20,043,657	20,031,648

XML

Property, Plant and Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 5   – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	June 30,			December 31,
	2013			2012
Building	$	6,098,652		$	5,974,918
Operating Equipment		385,441			377,636
Office furniture and equipment		338,299			331,449
Vehicles		1,100,500			1,078,215
Total		7,922,892			7,762,218
Less: accumulated depreciation		(1,724,016	)		(1,445,858	)
Property, plant and equipment, net	$	6,198,876		$	6,316,360

Depreciation expense for the three months ended June 30, 2013 and 2012 amounted to $147,758 and $122,377, respectively, and for the six months ended June 30, 2013 and 2012 amounted to $278,158 and $253,851, respectively.

XML

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Intangible Assets [Abstract]

Summary of intangible assets

	June 30,			December 31,
	2013			2012
Land use rights	$	667,086		$	653,578
Other intangible assets		85,350			83,622
Total		752,436			737,200
Less: accumulated amortization		(94,806	)		(80,989	)
Intangible assets, net	$	657,630		$	656,211

Estimated amortization expense

Estimated amortization expense for
the year ending December 31,	Amount
2013	$	25,704
2014	$	25,704
2015	$	25,704
2016	$	25,704
2017	$	25,704
Thereafter	$	527,691

XML

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2012 which was filed on April 1, 2013.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.

Basis of Consolidation

Basis of Consolidation

The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.

Pursuant to Accounting Standards Codification Topic 810, “Consolidation”, Joway Shengshi, as a VIE of Junhe Consulting, has been consolidated in the Company’s financial statements. Joway Shengshi’s sales are included in the Company’s total sales, its income from operations is consolidated with the Company’s, and the Company’s net income includes all of Joway Shengshi’s net income.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain in full the economic benefits. Accordingly, the non–controlling interests have no economic interest in the VIEs.

Foreign Currency Translation

Foreign Currency Translation

The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.

	For the six months ended June 30,				For the year ended December 31,
	2013		2012		2012
Period ended RMB: USD Exchange rate		6.1882		6.3197		6.3161
Average RMB: USD Exchange rate		6.24794		6.3255		6.31984

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Foreign currency translation adjustments have been reported as comprehensive income in the consolidated financial statements and totaled $153,886 and $9,121 for the three months ended June 30, 2013 and 2012, respectively, and $213,451 and $85,583 for the six months ended June 30, 2013 and 2012, respectively.

Other Comprehensive Income

Other Comprehensive Income

Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

● Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

● Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

● Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Cash and Cash Equivalents

Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts Receivable

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of June 30, 2013 and December 31, 2012, based on a review of its outstanding balances, the Company allowance for doubtful accounts had a zero balance, respectively.

Inventories

Inventories

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of June 30, 2013 and December 31, 2012, respectively, the Company has no reserves for inventories.

Advances to suppliers

Advances to suppliers

Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totaled $251,395 and $276,953 as of June 30, 2013 and December 31, 2012, respectively.

Long-term Investments

Long-term Investments

Investments in which the Company has a 20% to 50% interest are accounted for by the equity method. Under the equity method the carrying value of the investment is adjusted for the Company’s proportionate share of the investee’s income or loss.

Investments in which the Company has less than a 20% interest are accounted for by the cost method. Under the cost method, investments are carried at cost and income is recorded when dividends are received from those investments.

Property, Plant, and Equipment

Property, Plant, and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

Building	20 years
Operating Equipment	10 years
Office furniture and equipment	3 or 5 years
Vehicles	10 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Intangible assets

Intangible assets

Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the six months ended June 30, 2013 and 2012.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return as defined in ASC 605-15-25-4. Sales are presented net of value added tax (VAT).

For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.

Shipping costs

Shipping costs

Shipping costs are included in selling expenses and totaled $3,146 and $16,009 for the three months ended June 30, 2013 and 2012, respectively, and $7,715 and $24,187 for the six months ended June 30, 2013 and 2012, respectively.

Income Taxes

Income Taxes

The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.

According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

Subsequent Events

Subsequent Events

The Company evaluates subsequent events for purposes of recognition or disclosure through the date that the financial statements are issued.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which is codified in ASC Topic 210, Balance Sheet. This pronouncement contains new disclosure requirements about a company’s right of setoff and related arrangements associated with its financial and derivative instruments. ASU 2011-11 will be effective retrospectively for annual and interim periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income.  For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.  For public entities, the amendments are effective prospectively for annual reporting periods beginning after December 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

XML

Franchise Revenues (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Breakdown of revenue between franchise and non-franchise customers
REVENUES	$ 306,712	$ 425,683	$ 484,606	$ 1,216,315
Sales to franchise customers [Member]
Breakdown of revenue between franchise and non-franchise customers
REVENUES	302,666	366,554	464,764	1,103,953
Sales to non-franchise customers [Member]
Breakdown of revenue between franchise and non-franchise customers
REVENUES	$ 4,046	$ 59,129	$ 37,842	$ 112,362

XML

Intangible Assets (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Summary of intangible assets
Land use rights	$ 667,086	$ 653,578
Other intangible assets	85,350	83,622
Total	752,436	737,200
Less: accumulated amortization	(94,806)	(80,989)
Intangible assets, net	$ 657,630	$ 656,211

XML

Segments (Tables)

6 Months Ended

Jun. 30, 2013

Segments [Abstract]

Schedule of segment reporting

For the three months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	65,704	$	17,831	$	47,873	$	(103,862	)	$	33,236	$	555,287
Daily Healthcare and Personal Care Series		112,399		40,198		72,201		(183,689	)		56,857		287,026
Wellness House and Activated Water Machine Series		128,609		67,732		60,877		(226,266	)		65,056		632,156
Segment Totals	$	306,712	$	125,761	$	180,951		(513,817	)	$	155,149		1,474,469
Other Expense, net								(141,825	)
Income Tax								78,870
Unallocated Assets													8,481,145
Net Loss							$	(734,512	)
Total Assets												$	9,955,614

For the three months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	189,583	$	47,786	$	141,797	$	(214,153	)	$	56,453	$	411,633
Daily Healthcare and Personal Care Series		96,884		27,958		68,926		(100,960	)		28,849		219,930
Wellness House and Activated Water Machine Series		139,216		35,611		103,605		(171,756	)		41,455		848,480
Segment Totals	$	425,683	$	111,355	$	314,328		(486,869	)	$	126,757		1,480,043
Other Income, net								3,552
Income Tax								8,931
Unallocated Assets													10,578,693
Net Loss							$	(492,248	)
Total Assets												$	12,058,736

For the six months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	99,892	$	28,847	$	71,045	$	(198,133	)	$	60,185	$	555,287
Daily Healthcare and Personal Care Series		175,863		57,997		117,866		(356,039	)		105,957		287,026
Wellness House and Activated Water Machine Series		208,851		94,172		114,679		(448,113	)		125,833		632,156
Segment Totals	$	484,606	$	181,016	$	303,590		(1,002,285	)	$	291,975		1,474,469
Other Expense, net								(138,287	)
Income Tax								80,248
Unallocated Assets													8,481,145
Net Loss							$	(1,220,820	)
Total Assets												$	9,955,614

For the six months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	539,501	$	122,767	$	416,734	$	(202,241	)	$	116,631	$	411,633
Daily Healthcare and Personal Care Series		245,320		68,265		177,055		(104,406	)		53,034		219,930
Wellness House and Activated Water Machine Series		431,494		115,704		315,790		(179,269	)		93,282		848,480
Segment Totals	$	1,216,315	$	306,736	$	909,579		(485,916	)	$	262,947		1,480,043
Other Income, net								13,561
Income Tax								12,379
Unallocated Assets													10,578,693
Net Loss							$	(484,734	)
Total Assets												$	12,058,736

XML

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2013

Income Taxes [Abstract]

Summary of differences between the PRC statutory federal rate and the Company's effective tax rate

	For the six months ended June 30,
	2013			2012
Tax computed at China statutory rates		25	%		25	%
Effect of reduced rate on Joway Decoration (1)		0			(12	%)
Tax adjustment from China tax authority for 2012 income tax (2)		(7	%)		0
Effect of losses		(25	%)		(16	%)
Effective rate		(7	%)		(3	%)

(1)   Pursuant to Measures for Verification Collection of Enterprise Income Tax issued by the PRC State Administration of Taxation, Joway Decoration, as a wholesale and retail enterprise, was subject to taxable income at a verified rate of 5% of revenue for the year of 2012.

(2)   The Company’s 2012 Corporate Income Tax Filing in China was reviewed by the PRC tax authority and reduced the Company’s income tax deduction for the 2010 taxable year. As a result, the Company paid additional income tax of $70,224.

XML

Segments (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Reportable business segments
Sales	$ 306,712	$ 425,683	$ 484,606	$ 1,216,315
COGS	125,761	111,355	181,016	306,736
Gross profit	180,951	314,328	303,590	909,579
Income (loss) from operations	(513,817)	(486,869)	(1,002,285)	(485,916)
Depreciation and amortization	155,149	126,757	291,975	262,947
Assets	1,474,469	1,480,043	1,474,469	1,480,043
Other Income, net	(141,825)	3,552	(138,287)	13,561
Income Tax	78,870	8,931	80,248	12,379
Unallocated Assets	8,481,145	10,578,693	8,481,145	10,578,693
Net income (loss)	(734,512)	(492,248)	(1,220,820)	(484,734)
Total Assets	9,970,319	12,058,736	9,970,319	12,058,736	11,036,270
Healthcare Knitgoods Series [Member]
Reportable business segments
Sales	65,704	189,583	99,892	539,501
COGS	17,831	47,786	28,847	122,767
Gross profit	47,873	141,797	71,045	416,734
Income (loss) from operations	(103,862)	(214,153)	(198,133)	(202,241)
Depreciation and amortization	33,236	56,453	60,185	116,631
Assets	555,287	411,633	555,287	411,633
Daily Healthcare and Personal Care Series [Member]
Reportable business segments
Sales	112,399	96,884	175,863	245,320
COGS	40,198	27,958	57,997	68,265
Gross profit	72,201	68,926	117,866	177,055
Income (loss) from operations	(183,689)	(100,960)	(356,039)	(104,406)
Depreciation and amortization	56,857	28,849	105,957	53,034
Assets	287,026	219,930	287,026	219,930
Wellness House and Activated Water Machine Series [Member]
Reportable business segments
Sales	128,609	139,216	208,851	431,494
COGS	67,732	35,611	94,172	115,704
Gross profit	60,877	103,605	114,679	315,790
Income (loss) from operations	(226,266)	(171,756)	(448,113)	(179,269)
Depreciation and amortization	65,056	41,455	125,833	93,282
Assets	$ 632,156	$ 848,480	$ 632,156	$ 848,480

XML

Accounts Receivable (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Summary of accounts receivable
Accounts receivable		$ 11,594
Less: Allowance for bad debt
Accounts receivable		$ 11,594

XML

Intangible Assets (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Intangible Assets (Textual)
Amortization expense of intangible assets	$ 7,391	$ 4,380	$ 13,817	$ 9,096

XML

Franchise Revenues (Details Textual)	6 Months Ended
	Jun. 30, 2013
Franchise Revenues (Textual)
Term of franchising agreements	3 years

XML

Summary of Significant Accounting Policies (Details)	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012
Period ended RMB: USD Exchange rate [Member]
Foreign currency exchange rate translation: RMB to USD
Exchange Rate, Translation	6.1882	6.3161	6.3197
Average RMB: USD Exchange rate [Member]
Foreign currency exchange rate translation: RMB to USD
Exchange Rate, Translation	6.24794	6.31984	6.3255

XML

Income Taxes (Details)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Summary of differences between the PRC statutory federal rate and the Company's effective tax rate
Tax computed at China statutory rates	25.00%	25.00%
Effect of reduced rate on Joway Decoration	0.00%	(12.00%)
Tax adjustment from China tax authority for 2012 income tax (2)	(7.00%)	0.00%
Effect of losses	(25.00%)	(16.00%)
Effective rate	(7.00%)	(3.00%)

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Summary of payables due to related parties

	June 30,		December 31,
	2013		2012
Shenyang Joway Industrial Development Co., Ltd.	$	56,498	$	71,539
Jinghe Zhang		48,417		49,976
Total	$	104,915	$	121,515

XML

Organization

6 Months Ended

Jun. 30, 2013

Organization [Abstract]

ORGANIZATION

NOTE 1  – ORGANIZATION

The unaudited condensed consolidated financial statements include the financial statements of Joway Health Industries Group Inc. (referred to herein as “Joway Health”), its subsidiaries, and variable interest entities (“VIEs”) where Joway Health is deemed the primary beneficiary. Joway Health, its subsidiaries and VIEs are collectively referred to herein as the “Company”, “we” and “us”.

Joway Health (formerly G2 Ventures, Inc.) was originally incorporated under the laws of the State of Texas on March 21, 2003. On September 21, 2010, Joway Health entered into a Share Exchange Agreement (the “Share Exchange”) with the sole stockholder of Dynamic Elite International Limited. As a result of the Share Exchange, Dynamic Elite became a wholly-owned subsidiary of Joway Health and the stockholders of Dynamic Elite acquired approximately 76.08% of the issued and outstanding stock of Joway Health. The share exchange transaction resulted in the shareholders of Dynamic Elite acquiring a majority voting interest in Joway Health. Generally accepted accounting principles in the United States of America require that the company whose shareholders retain the majority interest in the combined business be treated as the acquirer for accounting purposes. The reverse acquisition process utilizes the capital structure of Joway Health and the assets and liabilities of Dynamic Elite recorded at historical cost. On December 22, 2010, Joway Health changed its jurisdiction of incorporation from the State of Texas to the State of Nevada.

Dynamic Elite International Limited (referred to herein as “Dynamic Elite”) was incorporated under the laws of the British Virgin Islands on June 2, 2010 as a limited liability company (a BVI company). Dynamic Elite engages in manufacturing and distributing tourmaline products in China. Its wholly owned subsidiary, Tianjin Junhe Management Consulting Co., Ltd. was incorporated on September 15, 2010 in Tianjin, People’s Republic of China (“PRC”). Other than the equity interest in Junhe Consulting, Dynamic Elite does not own any assets or conduct any operations.

Tianjin Junhe Management Consulting Co., Ltd. (referred to herein as “Junhe Consulting”) conducts its business through Tianjin Joway Shengshi Group Co., Ltd. that is consolidated as a variable interest entity.

Tianjin Joway Shengshi Group Co., Ltd. (referred to herein as “Joway Shengshi”) was incorporated in PRC on May 17, 2007. Joway Shengshi is currently owned 99% by Jinghe Zhang, the Company’s current CEO and President and 1% by Song Baogang. Joway Shengshi engages in manufacturing and distributing tourmaline products in China. Shenyang Joway Electronic Technology Co., Ltd., Tianjin Joway Decoration Engineering Co., Ltd. and Tianjin Oriental Shengtang Trading Import & Export Trading Co., Ltd are subsidiaries of Joway Shengshi.

Shenyang Joway Electronic Technology Co., Ltd. (referred to herein as “Joway Technology”) was originally named Liaoning Joway Technology Engineering Co., Ltd. which was incorporated on March 28, 2007 in PRC. The name was changed on June 22, 2011. It engages in the distribution of Tourmaline Activated Water Machines and Tourmaline Wellness Houses. Prior to July 25, 2010, Joway Shengshi owned 90.91% of Joway Technology. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Technology on July 25, 2010 to acquire the remaining 9.09% of the share of Joway Technology. As a result of the share acquisition, Joway Technology became a wholly-owned subsidiary of Joway Shengshi.

Tianjin Joway Decoration Engineering Co., Ltd. (referred to herein as “Joway Decoration”) was incorporated on April 22, 2009 in PRC. It engages in the distribution of Tourmaline Activated Water Machines, Tourmaline Wellness House for family use and Tourmaline Wellness House materials. Prior to July 9, 2010, Joway Shengshi owned 90% of Joway Decoration. Joway Shengshi entered into a share acquisition agreement with Jingyun Chen, another stockholder of Joway Decoration on July 9, 2010 to acquire the remaining 10% of the shares of Joway Decoration. As a result of the share acquisition, Joway Decoration became a wholly-owned subsidiary of Joway Shengshi.  Jingyun Chen is currently the General Manager of Joway Decoration.

Tianjin Oriental Shengtang Import & Export Trading Co., Ltd (referred to herein as “Shengtang Trading”) was incorporated on September 18, 2009 in the PRC. It engages in purchasing raw materials which it sells to other companies of the group. Prior to July 28, 2010, Joway Shengshi owned 95% of Shengtang Trading. Joway Shengshi entered into a share acquisition agreement with Wang Aiying, another stockholder of Shengtang Trading on July 28, 2010 to acquire the remaining 5% of the shares of Shengtang Trading. As a result of the share acquisition, Shengtang Trading became a wholly-owned subsidiary of Joway Shengshi.

The following table lists the Company and its subsidiaries:

Name	Domicile and Date of Incorporation	Paid in Capital	Percentage of Effective Ownership	Principal Activities
Joway Health Industries Group Inc.	March 21, 2003, Nevada	USD 20,054	86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors	Investment Holding
Dynamic Elite International Limited	June 2, 2010, British Virgin Islands	USD 10,000	100% owned by Joway Health Industries Group Inc.	Investment Holding
Tianjin Junhe Management Consulting Co., Ltd.	September 15, 2010, PRC	USD 20,000	100% owned by Dynamic Elite International Limited	Advisory
Tianjin Joway Shengshi Group Co., Ltd.	May 17, 2007, PRC	USD 7,216,140.72	99% owned by Jinghe Zhang,  and 1% owned  by Baogang Song	Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products
Shenyang Joway Electronic Technology Co., Ltd.	March 28, 2007, PRC	USD 142,072.97	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.	April 22, 2009, PRC	USD 292,367.74	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.	September 18, 2009, PRC	USD 292,463.75	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of tourmaline products

On September 16, 2010, prior to the share exchange, Junhe Consulting entered into a series of contractual agreements (the “Contractual Agreements”) with Joway Shengshi and Joway Shengshi’s owners. The following is a brief description of the Contractual Agreements entered into between Junhe Consulting and Joway Shengshi or Joway Shengshi’s owners ¼š

1. Consulting Services Agreement. Pursuant to the consulting services agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to advise, consult, manage and operate Joway Shengshi, and collect and own all of the net profits of the Operating Entities.

2. Operating Agreement. Under the operating agreement between Junhe Consulting and Joway Shengshi, Junhe Consulting has the right to recommend director candidates and appoint the senior executives of Joway Shengshi, approve any transactions that may materially affect the assets, liabilities, rights or operations of Joway Shengshi, and guarantee the contractual performance by Joway Shengshi of any agreements with third parties, in exchange for a pledge by Joway Shengshi of its accounts receivable and assets.

3. Voting Rights Proxy Agreement. Under the voting rights proxy agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have vested their collective voting control over Joway Shengshi to Junhe Consulting and will only transfer their respective equity interests in Joway Shengshi to Junhe Consulting or its designee.

4. Option Agreement. Under the option agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have granted Junhe Consulting the irrevocable right and option to acquire all of their equity interests in Joway Shengshi.

5. Equity Pledge Agreement. Under the equity pledge agreement between Joway Shengshi’s owners and Junhe Consulting, the owners of Joway Shengshi have pledged all of their rights, titles and interests in Joway Shengshi to Junhe Consulting to guarantee Joway Shengshi’s performance of its obligations under the Consulting Services Agreement.

As a result of the Contractual Agreements, Joway Shengshi is effectively a variable interest entity of Junhe Consulting. Accordingly, the Company through its wholly-owned subsidiary Junhe Consulting, consolidates Joway Shengshi’s results of operation, assets and liabilities in its financial statements.

In connection with the Share Exchange and as consideration for entering into the VIE Agreements the shareholders of Joway Shengshi, entered into a Call Option Agreement with the sole shareholder of Crystal Globe (the controlling shareholder of Dynamic Elite), pursuant to which the shareholders of Joway Shengshi have the right to purchase up to 100% of the shares of Crystal Globe at an aggregate price equal to $20,000 over the next three years. The Call Option vests as to 34% of the shares of Crystal Globe on April 2, 2011 and as to 33% on April 2 of 2012 and 2013. As a result, the shareholders of Joway Shengshi are now the indirect beneficial owners of the shares of the Company held by Crystal Globe.

XML

Accounts Receivable

6 Months Ended

Jun. 30, 2013

Accounts Receivable [Abstract]

ACCOUNTS RECEIVABLE

NOTE 3  – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	June 30,		December 31,
	2013		2012
Accounts receivable	$	-	$	11,594
Less: Allowance for bad debt		-		-
Accounts receivable	$	-	$	11,594

As of the periods presented, the Company has no allowance for bad debts, because the Management, based on their analysis, considers all the accounts receivable to be collectible.

XML

Intangible Assets

6 Months Ended

Jun. 30, 2013

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 6   – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	June 30,			December 31,
	2013			2012
Land use rights	$	667,086		$	653,578
Other intangible assets		85,350			83,622
Total		752,436			737,200
Less: accumulated amortization		(94,806	)		(80,989	)
Intangible assets, net	$	657,630		$	656,211

Amortization expense of intangible assets for the three months ended June 30, 2013 and 2012 was $7,391 and $4,380, respectively, and for the six months ended June 30, 2013 and 2012 amounted to $13,817 and $9,096, respectively.

The estimated amortization expense for the next five years is as follows:

Estimated amortization expense for
the year ending December 31,	Amount
2013	$	25,704
2014	$	25,704
2015	$	25,704
2016	$	25,704
2017	$	25,704
Thereafter	$	527,691

XML

Inventories

6 Months Ended

Jun. 30, 2013

Inventories [Abstract]

INVENTORIES

NOTE 4  – INVENTORIES

Inventories consisted of the following:

	June 30,		December 31,
	2013		2012
Raw materials	$	285,407	$	287,560
Packages		6,853		6,850
Finished goods		946,481		920,829
Low value consumables		40,336		39,466
Total	$	1,279,077	$	1,254,705

Low value consumables represent low priced and easily worn articles and are amortized on equal-split amortization method. Pursuant to this method, half value of the low value consumable should be amortized once used and the remaining half value should be amortized when disposed.

XML

Related Party Transactions (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Summary of payables due to related parties
Due to related parties	$ 104,915	$ 121,515
Shenyang Joway Industrial Development Co., Ltd. [Member]
Summary of payables due to related parties
Due to related parties	56,498	71,539
Jinghe Zhang [Member]
Summary of payables due to related parties
Due to related parties	$ 48,417	$ 49,976

XML

Franchise Revenues (Tables)

6 Months Ended

Jun. 30, 2013

Franchise Revenues [Abstract]

Schedule franchise revenue

	For the three months ended June 30,				For the six months ended June 30,
	2013		2012		2013		2012
Sales to franchise customers	$	302,666	$	366,554	$	446,764	$	1,103,953
Sales to non-franchise customers		4,046		59,129		37,842		112,362
Total sales	$	306,712	$	425,683	$	484,606	$	1,216,315

XML

Summary of Significant Accounting Policies (Details 1)	6 Months Ended
	Jun. 30, 2013
Building [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	20 years
Operating Equipment [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	10 years
Office furniture and equipment [Member] | Maximum [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	5 years
Office furniture and equipment [Member] | Minimum [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	3 years
Vehicles [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	10 years

XML

Property, Plant and Equipment (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Property Plant and Equipment (Textual)
Depreciation	$ 147,758	$ 122,377	$ 278,158	$ 253,851

XML

Investment (Details) (CNY)	Oct. 21, 2011	Oct. 11, 2011	Aug. 28, 2011
Investment (Textual)
Capital			20,000,000
Initial registered capital	5,000,000
Ownership percentage		30.00%
Amount contributed to capital		1,500,000

XML

Statutory Reserves (Details) (USD $)	Jun. 30, 2013
Statutory Reserves (Textual)
Statutory reserves	$ 354,052

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	20,054,000	20,036,000
Common stock, shares outstanding	20,054,000	20,036,000

XML

Statutory Reserves

6 Months Ended

Jun. 30, 2013

Statutory Reserves [Abstract]

STATUTORY RESERVES

NOTE 9  – STATUTORY RESERVES

Pursuant to the laws and regulations of the PRC, annual income of the Company’s subsidiaries is required to be partly allocated to the statutory reserves funds after the payment of the PRC income taxes. The allocation to the statutory reserves funds should be at least 10% of income after tax until the reserves reaches 50% of the entities’ registered capital or members’ equity. The reserve funds are not transferable to the Company in the form of cash dividends, loans or advances. Thus the reserve funds are not available for distribution except in liquidation. As of June 30, 2013, the Company had allocated $354,052 to statutory reserves.

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)	$ (1,220,820)	$ (484,734)
Adjustments to reconcile net income to net cash used in operating activities
Depreciation	278,158	253,851
Amortization	13,817	9,096
Stock-based compensation	540	18,000
Changes in operating assets and liabilities:
Accounts receivable, trade	11,594	5,929
Other receivables	(34,499)	(15,374)
Inventories	(24,372)	(307,676)
Advances to suppliers	25,558	(53,920)
Prepaid expense	31,898	(3,542)
Accounts payable	(15,048)	56,858
Advances from customers	(14,328)	(10,003)
Other payable	(11,237)	(3,510)
Salary and welfare payable	(1,909)	14,426
Taxes payable	(234,404)	(51,766)
Net cash (used in) operating activities	(1,195,052)	(572,365)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment		(135,749)
Redemption of investment	1,266,604
Net cash provided by (used in) investing activities	1,266,604	(135,749)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of due to related parties	(16,600)	(148,018)
Net cash (used in) financing activities	(16,600)	(148,018)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	34,493	79,031
NET INCREASE (DECREASE) IN CASH	89,445	(777,101)
CASH, beginning of period	522,145	3,372,189
CASH, end of period	611,590	2,595,088
SUPPLEMENTAL DISCLOSURES:
Income taxes paid	171,696	15,700
Interest paid

XML

Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012
CURRENT ASSETS:
Cash	$ 611,590	$ 522,145
Short-term investment		1,266,604
Accounts receivable		11,594
Other receivables	81,226	46,727
Inventories	1,279,077	1,254,705
Advances to suppliers	251,395	276,953
Prepaid taxes	446,164	211,760
Prepaid expense	11,000	42,898
Total current assets	2,680,452	3,633,386
PROPERTY, PLANT AND EQUIPMENT, net	6,198,876	6,316,360
OTHER ASSETS:
Long-term investment	242,397	237,488
Intangible assets, net	657,630	656,211
Long-term prepaid expenses	190,964	192,825
Total other assets	1,090,991	1,086,524
Total assets	9,970,319	11,036,270
CURRENT LIABILITIES:
Accounts payable	24,900	39,948
Advances from customers	5,937	20,265
Other payables	55,934	69,080
Due to related parties	104,915	121,515
Total current liabilities	191,686	250,808
COMMITMENTS
STOCKHOLDERS' EQUITY:
Preferred stock - par value $0.001; 1,000,000 shares authorized; no shares issued and outstanding
Common stock - par value $0.001; 200,000,000 shares authorized; 20,054,000 and 20,036,000 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	20,054	20,036
Additional paid-in-capital	7,361,665	7,361,143
Statutory reserves	354,052	354,052
Retained earnings	868,331	2,089,151
Accumulated other comprehensive income	1,174,531	961,080
Total stockholders' equity	9,778,633	10,785,462
Total liabilities and stockholders' equity	$ 9,970,319	$ 11,036,270

XML

Organization (Details) (USD $)			6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Joway Health Industries Group Inc. [Member]	Jun. 30, 2013 Dynamic Elite International Limited [Member]	Jun. 30, 2013 Tianjin Junhe Management Consulting Co., Ltd. [Member]	Jun. 30, 2013 Tianjin Joway Shengshi Group Co., Ltd. [Member]	Jun. 30, 2013 Shenyang Joway Electronic Technology Co., Ltd. [Member]	Jun. 30, 2013 Tianjin Joway Decoration Engineering Co., Ltd. [Member]	Jun. 30, 2013 Tianjin Oriental Shengtang Import & Export Trading Co., Ltd. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation			March 21, 2003, Nevada	June 2, 2010, British Virgin Islands	September 15, 2010, PRC	May 17, 2007, PRC	March 28, 2007, PRC	April 22, 2009, PRC	September 18, 2009, PRC
Paid in Capital	$ 7,361,665	$ 7,361,143	$ 20,054	$ 10,000	$ 20,000	$ 7,216,140.72	$ 142,072.97	$ 292,367.74	$ 292,463.75
Percentage of Effective Ownership			86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors	100% owned by Joway Health Industries Group Inc.	100% owned by Dynamic Elite International Limited	99% owned by Jinghe Zhang, and 1% owned by Baogang Song	100% owned by Tianjin Joway Shengshi Group Co., Ltd	100% owned by Tianjin Joway Shengshi Group Co., Ltd	100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities			Investment Holding	Investment Holding	Advisory	Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products	Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House	Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House	Distribution of tourmaline products

XML

Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Summary of property, plant and equipment

	June 30,			December 31,
	2013			2012
Building	$	6,098,652		$	5,974,918
Operating Equipment		385,441			377,636
Office furniture and equipment		338,299			331,449
Vehicles		1,100,500			1,078,215
Total		7,922,892			7,762,218
Less: accumulated depreciation		(1,724,016	)		(1,445,858	)
Property, plant and equipment, net	$	6,198,876		$	6,316,360

XML

Income Taxes (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Income Taxes (Textual)
Statutory rate	25.00%	25.00%
Verified rate of tax	5.00%
Additional income tax paid		$ 70,224

XML

Intangible Assets (Details 1) (USD $)	Jun. 30, 2013
Summary of estimated amortization expense
2013	$ 25,704
2014	25,704
2015	25,704
2016	25,704
2017	25,704
Thereafter	$ 527,691

XML

Inventories (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Summary of inventories
Raw materials	$ 285,407	$ 287,560
Packages	6,853	6,850
Finished goods	946,481	920,829
Low value consumables	40,336	39,466
Total	$ 1,279,077	$ 1,254,705

XML

Property, Plant and Equipment (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Summary of property, plant and equipment
Total	$ 7,922,892	$ 7,762,218
Less: accumulated depreciation	(1,724,016)	(1,445,858)
Property, plant and equipment, net	6,198,876	6,316,360
Building [Member]
Summary of property, plant and equipment
Total	6,098,652	5,974,918
Operating Equipment [Member]
Summary of property, plant and equipment
Total	385,441	377,636
Office furniture and equipment [Member]
Summary of property, plant and equipment
Total	338,299	331,449
Vehicles [Member]
Summary of property, plant and equipment
Total	$ 1,100,500	$ 1,078,215

XML

Income Taxes

6 Months Ended

Jun. 30, 2013

Income Taxes [Abstract]

INCOME TAXES

NOTE 8   – INCOME TAXES

The Company operations in the People’s Republic of China are subject to the Income Tax Law of the People’s Republic of China. Pursuant to the PRC Income Tax Laws, the Company is subject to the Enterprise Income Tax (“EIT”) which is generally a statutory rate of 25% beginning January 2008, on income as reported in its statutory financial statements after appropriate tax adjustments.  The Company’s subsidiary, Joway Decoration, as a wholesale and retail enterprise, was subject to taxable income at a verified rate of 5% of revenue in 2012 pursuant to “Measures for Verification Collection of Enterprise Income Tax” issued by the PRC State Administration of Taxation and changed to subject to EIT from 2013.

The table below summarizes the differences between the PRC statutory federal rate and the Company’s effective tax rate:

	For the six months ended June 30,
	2013			2012
Tax computed at China statutory rates		25	%		25	%
Effect of reduced rate on Joway Decoration (1)		0			(12	%)
Tax adjustment from China tax authority for 2012 income tax (2)		(7	%)		0
Effect of losses		(25	%)		(16	%)
Effective rate		(7	%)		(3	%)

(1)   Pursuant to Measures for Verification Collection of Enterprise Income Tax issued by the PRC State Administration of Taxation, Joway Decoration, as a wholesale and retail enterprise, was subject to taxable income at a verified rate of 5% of revenue for the year of 2012.

(2)   The Company’s 2012 Corporate Income Tax Filing in China was reviewed by the PRC tax authority and reduced the Company’s income tax deduction for the 2012 taxable year. As a result, the Company paid additional income tax of $70,224.

XML

Organization (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2013	Oct. 11, 2011	Sep. 21, 2010	Jun. 30, 2013 Tianjin Joway Shengshi Group Co., Ltd. [Member]	Jul. 25, 2010 Joway Shengshi to Joway Technology [Member]	Jul. 09, 2010 Joway Shengshi to Joway Decoration [Member]	Jul. 28, 2010 Joway Shengshi to Shengtang Trading [Member]	Apr. 02, 2011 Joway Shengshi to Crystal Globe [Member]	Jun. 30, 2013 Crystal Globe [Member]	Apr. 02, 2013 Crystal Globe [Member]	Apr. 02, 2012 Crystal Globe [Member]	Apr. 02, 2011 Crystal Globe [Member]
Organization (Textual)
Percentage of shares acquired by Dynamic Elite International Limited from Joway Health			76.08%						86.80%
Ownership percentage		30.00%		99.00%	90.91%	90.00%	95.00%
Business acquisition percentage of remaining voting interests acquired				1.00%	9.09%	10.00%	5.00%
Percentage of right to purchase of shares								100.00%
Aggregate price to purchase of shares								$ 20,000
Percentage of Call Option vests										33.00%	33.00%	34.00%
Call Option expiration term under VIE Agreements	3 years

XML

Related Party Transactions (Details Textual) (USD $)		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Shenyang Joway Industrial Development Co., Ltd. [Member]	Dec. 01, 2009 Shenyang Joway Industrial Development Co., Ltd. [Member]	Dec. 31, 2008 Shenyang Joway Industrial Development Co., Ltd. [Member] Joway Technology and Shenyang Joway Agreement [Member]	Jun. 30, 2013 Shenyang Joway Industrial Development Co., Ltd. [Member] Shenyang Joway, Joway Technology and Joway Shengshi Agreement [Member]	Dec. 31, 2010 Shenyang Joway Industrial Development Co., Ltd. [Member] Shenyang Joway, Joway Technology and Joway Shengshi Agreement [Member]	Dec. 20, 2009 Shenyang Joway Industrial Development Co., Ltd. [Member] Inventory [Member]	Jan. 15, 2009 Shenyang Joway Industrial Development Co., Ltd. [Member] Inventory [Member]	Feb. 15, 2009 Shenyang Joway Industrial Development Co., Ltd. [Member] Operating and office equipment [Member]	Jun. 30, 2013 Jinghe Zhang [Member]	Jun. 30, 2013 Jinghe Zhang [Member] Jinghe Zhang And Joway Technology Agreement [Member]	Dec. 31, 2010 Jinghe Zhang [Member] Jinghe Zhang And Joway Technology Agreement [Member]	Jan. 15, 2009 Jinghe Zhang [Member] Jinghe Zhang And Joway Technology Agreement [Member]	Dec. 01, 2009 Jinghe Zhang [Member] Trademarks [Member] Jinghe Zhang and Joway Shengshi Agreement [Member]	Dec. 01, 2009 Jinghe Zhang [Member] Patents [Member] Jinghe Zhang and Joway Shengshi Agreement [Member] Asset
Related Party Transactions (Textual)
Ownership Percentage		More than 50% of the equity.
Purchase obligation							$ 137,395	$ 27,560	$ 158,832
License agreement period			9 years											9 years
Number of patents used															5
Interest-free, unsecured advances for working capital				58,568		791,701						22,031	4,637,397
Repayment of advances	15,041				735,203					1,559	4,588,980
Unpaid advances					56,498						48,417
Operating capital advances, aggregate principal amount											$ 0

XML

Franchise Revenues

6 Months Ended

Jun. 30, 2013

Franchise Revenues [Abstract]

FRANCHISE REVENUES

NOTE 11  - FRANCHISE REVENUES

The Company enters into franchising agreements to develop retail outlets for the Company's products. The agreements provide that franchisees will sell Company products exclusively at a predetermined retail price. In exchange the Company provides them with geographic exclusivity, discounted products, training and support. The agreements also require franchisees to adhere to certain standards of product merchandising, promotion and presentment. The agreements also prohibit franchisees from selling competitor’s products. The agreements do not require any initial franchise fees from the franchisees, nor do they require the franchisees to pay continuing royalties. The agreements do not require the franchisees to purchase any minimum levels of product, but do require that they make at least one purchase during each year. The Company does not act to manage the franchisees’ levels of product. Franchisees hold periodic conferences, assisted by the Company’s marketing department, to promote product awareness and the introduction of new products. The franchising agreements are generally for terms of three years and are renewable at the mutual agreement of both parties. The franchising agreements are cancelable at the Company’s discretion if franchisees violate the terms of the agreements.

The following is a breakdown of revenue between franchise and non-franchise customers:

	For the three months ended June 30,				For the six months ended June 30,
	2013		2012		2013		2012
Sales to franchise customers	$	302,666	$	366,554	$	446,764	$	1,103,953
Sales to non-franchise customers		4,046		59,129		37,842		112,362
Total sales	$	306,712	$	425,683	$	484,606	$	1,216,315

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7   – RELATED PARTY TRANSACTIONS

Payables due to related parties consist of the following:

	June 30,		December 31,
	2013		2012
Shenyang Joway Industrial Development Co., Ltd.	$	56,498	$	71,539
Jinghe Zhang		48,417		49,976
Total	$	104,915	$	121,515

Transactions with Shenyang Joway

Shenyang Joway Industrial Development Co., Ltd. (“Shenyang Joway”) was formed in 2005 in Shenyang, China by Mr. Jinghe Zhang and three other individuals. Mr. Zhang holds more than 50% of the equity in Shenyang Joway. Shenyang Joway was in the business of marketing and distributing clothing and related products to other companies.  In 2009, Mr. Zhang decided to shut down the operations of Shenyang Joway in order to focus his attention on Joway Shengshi’s business.  Shenyang Joway has ceased operations, although it still exists as a legal entity, and Joway Shengshi was able to find new suppliers with no material adverse impact to the Company.

● On January 15, 2009, Joway Shengshi entered into a sales contract with Shenyang Joway, pursuant to which Joway Shengshi agreed to purchase inventory of $27,560 from Shenyang Joway.

● On February 15, 2009, Joway Shengshi entered into an Equipment Sales Contract with Shenyang Joway. Pursuant to the agreement, Joway Shengshi agreed to purchase certain operating and office equipment in the amount of $158,832 from Shenyang Joway.

● On December 1, 2009, we, through our subsidiary Joway Shengshi, entered into a royalty-free license agreement with Shenyang Joway. Pursuant to the license agreement, we are authorized to use the trademark “Xi” for a term of nine years.

● On December 20, 2009, Joway Shengshi entered into a sales contract with Shenyang Joway. Pursuant to the sales contract, Joway Shengshi agreed to purchase inventory of $137,395 from Shenyang Joway.

● On May 7, 2007, the Company’s subsidiary Joway Shengshi entered into an agreement with Shenyang Joway pursuant to which Joway Shengshi and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  On May 10, 2007, the Company’s subsidiary Joway Technology and Shenyang Joway entered into an agreement pursuant to which Joway Technology and Shenyang Joway agreed to provide each other with interest-free, unsecured advances for working capital.  Through December 31, 2008, Joway Technology advanced $58,568 to Shenyang Joway, which was paid off by Shenyang Joway to Joway Technology in 2009. Through December 31, 2010, Shenyang Joway advanced an aggregate of $791,701 to Joway Shengshi and Joway Technology of which $735,203 has been repaid. For the six months ended June 30, 2013, the Company repaid $15,041 of these advances. As of June 30, 2013, the total unpaid principal balance due Shenyang Joway for advances was $56,498. Shenyang Joway ceased operations at the end of 2009.

Transactions with Jinghe Zhang

● On December 1, 2009, the Company, through its subsidiary Joway Shengshi, entered into a royalty-free license agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the license agreement, we are authorized to use the trademark “Joway” for a term of nine years and five patents from December 1, 2009 till the expiration dates of the patents.

● On May 10, 2007, Joway Shengshi entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Shengshi. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Shengshi’s term of operation. During the period beginning May 17, 2007 (inception of Joway Shengshi) through December 31, 2009, Joway Shengshi received cash advances in the aggregate principal amount of $4,637,397 from Jinghe Zhang of which $4,588,980 has been repaid. For the six months ended June 30, 2013, the Company repaid $1,559 of these advances. As of June 30, 2013, the total unpaid principal balance due Jinghe Zhang for advances was $48,417.

● On May 10, 2007, Joway Technology entered into a cash advance agreement with Jinghe Zhang, our President, Chief Executive Officer and director. Pursuant to the agreement, Jinghe Zhang agreed to advance operating capital to Joway Technology. The advances are interest free, unsecured, and have no specified repayment terms. The agreement is valid throughout Joway Technology’s term of operation. During the period beginning March 28, 2007 (inception of Joway Technology) through December 31, 2010, Joway Technology received cash advances in the aggregate principal amount of $22,031 from Jinghe Zhang all of which has been repaid. As of June 30, 2013, the total unpaid principal balance due Jinghe Zhang for advances was $0.

The amounts owed to related parties are non-interest bearing and have no specified repayment terms.

XML

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s functional currency is the Chinese Renminbi (“RMB”); however, the accompanying unaudited condensed consolidated financial statements have been translated and presented in United States Dollars (“USD”). All significant inter-company transactions and balances have been eliminated. The consolidated financial statements include all adjustments that, in the opinion of management, are necessary to make the financial statements not misleading.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2013. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s form 10-K for the fiscal year ended December 31, 2012 which was filed on April 1, 2013.

Use of Estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from those estimates.

Basis of Consolidation

The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries and controlled VIEs. All significant inter-company accounts and transactions have been eliminated in the consolidation.

Pursuant to Accounting Standards Codification Topic 810, “Consolidation”, Joway Shengshi, as a VIE of Junhe Consulting, has been consolidated in the Company’s financial statements. Joway Shengshi’s sales are included in the Company’s total sales, its income from operations is consolidated with the Company’s, and the Company’s net income includes all of Joway Shengshi’s net income.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain in full the economic benefits. Accordingly, the non–controlling interests have no economic interest in the VIEs.

Foreign Currency Translation

The accompanying consolidated financial statements are presented in USD. The functional currency of the Company is RMB. The consolidated financial statements are translated into United States dollars from RMB at period-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Equity accounts are translated at their historical exchange rates when the equity transactions occurred. The resulting transaction adjustments are recorded as a component of stockholders’ equity. Gains and losses from foreign currency transactions are included in net income.

	For the six months ended June 30,				For the year ended December 31,
	2013		2012		2012
Period ended RMB: USD Exchange rate		6.1882		6.3197		6.3161
Average RMB: USD Exchange rate		6.24794		6.3255		6.31984

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

Foreign currency translation adjustments have been reported as comprehensive income in the consolidated financial statements and totaled $153,886 and $9,121 for the three months ended June 30, 2013 and 2012, respectively, and $213,451 and $85,583 for the six months ended June 30, 2013 and 2012, respectively.

Other Comprehensive Income

Other comprehensive income is defined as the change in equity during the period from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners, and is not included in the computation of income tax expense or benefit. Accumulated other comprehensive income represents the accumulated balance of foreign currency translation adjustments.

Concentrations of Credit Risk

The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC's economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash. Substantially all of the Company’s cash is maintained with state-owned banks within the PRC, and no deposits are covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any risks on its cash in bank accounts.

Fair Value of Financial Instruments

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

● Level 1—defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;

● Level 2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

● Level 3—defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The carrying amounts reported in the balance sheets for cash, accounts receivable, other receivable, accounts payable, other payable, and amounts due from related parties generally approximate their fair market values based on the short-term maturity of these instruments. ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Cash and Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at any point during the period of the financial statements presented. Balances at financial institutions or state-owned banks within the PRC are not covered by insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. On a periodic basis, the Company reviews the composition of the accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these allowances. Accounts are written off after exhaustive efforts at collection. As of June 30, 2013 and December 31, 2012, based on a review of its outstanding balances, the Company allowance for doubtful accounts had a zero balance, respectively.

Inventories

Inventories are stated at the lower of cost, as determined by the specific identification method on contract level (for each individual contract, inventories cost flow are determined by weighted-average method), or the net realizable value, which is determined on selling prices less any further costs expected to be incurred for completion and disposal. The Company regularly evaluates the composition of its inventories to identify slow-moving and obsolete inventories to determine whether a valuation allowance is required. As of June 30, 2013 and December 31, 2012, respectively, the Company has no reserves for inventories.

Advances to suppliers

Advances to suppliers represent the cash paid in advance for inventory items or construction in progress. The advance payments are meant to ensure preferential pricing and delivery. The amounts advanced under such arrangements totaled $251,395 and $276,953 as of June 30, 2013 and December 31, 2012, respectively.

Long-term Investments

Investments in which the Company has a 20% to 50% interest are accounted for by the equity method. Under the equity method the carrying value of the investment is adjusted for the Company’s proportionate share of the investee’s income or loss.

Investments in which the Company has less than a 20% interest are accounted for by the cost method. Under the cost method, investments are carried at cost and income is recorded when dividends are received from those investments.

Property, Plant, and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation, and include expenditures that substantially increase the useful lives of existing assets.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives are as follows:

Building	20 years
Operating Equipment	10 years
Office furniture and equipment	3 or 5 years
Vehicles	10 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss is included in the consolidated statements of operations. Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Significant renewals and betterment to buildings and equipment are capitalized. Leasehold improvements are depreciated over the lesser of the useful life or the life of the lease.

Intangible assets

Intangible assets mainly consist of land use rights. All land located in the PRC is owned by the government and cannot be sold to any individual or company. The land use rights granted to the Company are being amortized using the straight-line method over the lease term of 50 years. Other intangible assets are software programs that are amortized over their estimated useful life of 10 years.

Impairment of Long-Lived Assets

Long-lived assets of the Company are reviewed annually as to whether their carrying value has become impaired, pursuant to the guidelines established in FASB ASC 360. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from the related operations. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company did not record any impairment loss for the six months ended June 30, 2013 and 2012.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the purchase price is fixed or determinable and collectability is reasonably assured.

With respect to sales of product to both franchisee and non-franchisee customers, the Company prepares product shipments upon the receipt of a customer’s purchase order. Sales prices are based on fixed price lists that are different depending on whether the price list is for a franchisee customer or for non-franchisee customers. The Company recognizes revenue when the product is shipped. The Company does not sell product to any customers with a right of return as defined in ASC 605-15-25-4. Sales are presented net of value added tax (VAT).

For Tourmaline Wellness House sales, the Company recognizes revenue under the completed contract method. Customers contact the Company with requests to construct a Wellness House. The Company and the customer enter into a contract, at which time the customer pays a deposit of at least one-half of the sales price. A contract is considered completed when all significant costs have been incurred and the project has been accepted by the customer. The contracts have a place for the customer to sign indicating their acceptance of the completed Wellness House. At this time the customer will also pay any remaining balance on the contract. The Company recognizes the full contract revenue at this point. Contract costs consist primarily of materials and labor costs. The construction period of a Wellness House generally does not exceed five days.

Shipping costs

Shipping costs are included in selling expenses and totaled $3,146 and $16,009 for the three months ended June 30, 2013 and 2012, respectively, and $7,715 and $24,187 for the six months ended June 30, 2013 and 2012, respectively.

Income Taxes

The Company is governed by the Income Tax Law and associated legislations of the PRC. The Company accounts for income taxes in accordance with FASB ASC 740 “Income Taxes”, which is an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Realization of deferred tax assets is dependent upon future earnings, if any, of which the timing and amount are uncertain.

According to ASC 740, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

Subsequent Events

The Company evaluates subsequent events for purposes of recognition or disclosure through the date that the financial statements are issued.

Recently Issued Accounting Pronouncements

In December 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, which is codified in ASC Topic 210, Balance Sheet. This pronouncement contains new disclosure requirements about a company’s right of setoff and related arrangements associated with its financial and derivative instruments. ASU 2011-11 will be effective retrospectively for annual and interim periods beginning on or after January 1, 2013. The adoption of this standard did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Intangibles--Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” This ASU states that an entity has the option first to assess qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the indefinite-lived intangible asset is impaired. Under the guidance in this ASU, an entity also has the option to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to performing the quantitative impairment test. The amendments in this ASU are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income.” ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required to be reclassified in its entirety to net income.  For other amounts that are not required to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments do not change the current requirements for reporting net income or other comprehensive income in financial statements.  For public entities, the amendments are effective prospectively for annual reporting periods beginning after December 15, 2012, with early adoption permitted. The Company does not anticipate that the adoption of this standard will have a material effect on the Company’s unaudited condensed consolidated financial statements.

XML

Segments (Details Textual)	6 Months Ended
	Jun. 30, 2013 Segment	Jun. 30, 2012 Segment
Segments (Textual)
Number of Reportable Segments	3	3

XML

Summary of Significant Accounting Policies (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Oct. 11, 2011
Schedule of Equity Method Investments [Line Items]
Ownership percentage						30.00%
Summary of Significant Accounting Policies (Textual)
Foreign currency translation adjustment	$ 153,886	$ 9,121	$ 213,451	$ 85,583
Advances to suppliers	251,395		251,395		276,953
Minimum interest on investments	20.00%		20.00%
Amortizing intangible assets using the straight-line method over the lease term	10 years		10 years
Amortization of other intangible assets over their estimated useful life			50 years
Construction period of a Wellness House	5 days		5 days
Selling expenses [Member]
Component of Operating Other Cost and Expense [Line Items]
Shipping costs included in selling expenses	$ 3,146	$ 16,009	$ 7,715	$ 24,187
Maximum [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	50.00%		50.00%
Minimum [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	20.00%		20.00%

XML

Organization (Tables)

6 Months Ended

Jun. 30, 2013

Organization [Abstract]

Summary of List of Company and its subsidiaries

Name	Domicile and Date of Incorporation	Paid in Capital	Percentage of Effective Ownership	Principal Activities
Joway Health Industries Group Inc.	March 21, 2003, Nevada	USD 20,054	86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors	Investment Holding
Dynamic Elite International Limited	June 2, 2010, British Virgin Islands	USD 10,000	100% owned by Joway Health Industries Group Inc.	Investment Holding
Tianjin Junhe Management Consulting Co., Ltd.	September 15, 2010, PRC	USD 20,000	100% owned by Dynamic Elite International Limited	Advisory
Tianjin Joway Shengshi Group Co., Ltd.	May 17, 2007, PRC	USD 7,216,140.72	99% owned by Jinghe Zhang,  and 1% owned  by Baogang Song	Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products
Shenyang Joway Electronic Technology Co., Ltd.	March 28, 2007, PRC	USD 142,072.97	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd.	April 22, 2009, PRC	USD 292,367.74	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of Wellness House for family use and Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Oriental Shengtang Import & Export Trading Co., Ltd.	September 18, 2009, PRC	USD 292,463.75	100% owned by Tianjin Joway Shengshi Group Co., Ltd	Distribution of tourmaline products

XML

Segments

6 Months Ended

Jun. 30, 2013

Segments [Abstract]

SEGMENTS

NOTE 10  –  SEGMENTS

In 2013 and 2012, the Company operated in three reportable business segments: (1) Healthcare Knitgoods Series, (2) Daily Healthcare and Personal Care Series and (3) Wellness House and Activated Water Machine Series. The Company's reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations.  Information with respect to these reportable business segments is as follows:

For the three months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	65,704	$	17,831	$	47,873	$	(103,862	)	$	33,236	$	555,287
Daily Healthcare and Personal Care Series		112,399		40,198		72,201		(183,689	)		56,857		287,026
Wellness House and Activated Water Machine Series		128,609		67,732		60,877		(226,266	)		65,056		632,156
Segment Totals	$	306,712	$	125,761	$	180,951		(513,817	)	$	155,149		1,474,469
Other Expense, net								(141,825	)
Income Tax								78,870
Unallocated Assets													8,481,145
Net Loss							$	(734,512	)
Total Assets												$	9,955,614

For the three months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	189,583	$	47,786	$	141,797	$	(214,153	)	$	56,453	$	411,633
Daily Healthcare and Personal Care Series		96,884		27,958		68,926		(100,960	)		28,849		219,930
Wellness House and Activated Water Machine Series		139,216		35,611		103,605		(171,756	)		41,455		848,480
Segment Totals	$	425,683	$	111,355	$	314,328		(486,869	)	$	126,757		1,480,043
Other Income, net								3,552
Income Tax								8,931
Unallocated Assets													10,578,693
Net Loss							$	(492,248	)
Total Assets												$	12,058,736

For the six months ended June 30, 2013

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	99,892	$	28,847	$	71,045	$	(198,133	)	$	60,185	$	555,287
Daily Healthcare and Personal Care Series		175,863		57,997		117,866		(356,039	)		105,957		287,026
Wellness House and Activated Water Machine Series		208,851		94,172		114,679		(448,113	)		125,833		632,156
Segment Totals	$	484,606	$	181,016	$	303,590		(1,002,285	)	$	291,975		1,474,469
Other Expense, net								(138,287	)
Income Tax								80,248
Unallocated Assets													8,481,145
Net Loss							$	(1,220,820	)
Total Assets												$	9,955,614

For the six months ended June 30, 2012

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knitgoods Series	$	539,501	$	122,767	$	416,734	$	(202,241	)	$	116,631	$	411,633
Daily Healthcare and Personal Care Series		245,320		68,265		177,055		(104,406	)		53,034		219,930
Wellness House and Activated Water Machine Series		431,494		115,704		315,790		(179,269	)		93,282		848,480
Segment Totals	$	1,216,315	$	306,736	$	909,579		(485,916	)	$	262,947		1,480,043
Other Income, net								13,561
Income Tax								12,379
Unallocated Assets													10,578,693
Net Loss							$	(484,734	)
Total Assets												$	12,058,736

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventories [Abstract]

Summary of inventories

	June 30,		December 31,
	2013		2012
Raw materials	$	285,407	$	287,560
Packages		6,853		6,850
Finished goods		946,481		920,829
Low value consumables		40,336		39,466
Total	$	1,279,077	$	1,254,705

XML

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2013

Summary of Significant Accounting Policies [Abstract]

Foreign currency exchange rate translation: RMB to USD

	For the six months ended June 30,				For the year ended December 31,
	2013		2012		2012
Period ended RMB: USD Exchange rate		6.1882		6.3197		6.3161
Average RMB: USD Exchange rate		6.24794		6.3255		6.31984

Summary of estimated useful lives of fixed assets

Building	20 years
Operating Equipment	10 years
Office furniture and equipment	3 or 5 years
Vehicles	10 years

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 14, 2013
Document And Entity Information [Abstract]
Entity Registrant Name	Joway Health Industries Group Inc
Entity Central Index Key	0001263364
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock Shares Outstanding		20,054,000

XML

Accounts Receivable (Tables)

6 Months Ended

Jun. 30, 2013

Accounts Receivable [Abstract]

Summary of accounts receivable

	June 30,		December 31,
	2013		2012
Accounts receivable	$	-	$	11,594
Less: Allowance for bad debt		-		-
Accounts receivable	$	-	$	11,594