10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

☐ 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  ☒    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  ☒   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	☒

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

The number of shares outstanding of the Issuer’s Common Stock as of November 13, 2015 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	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II - OTHER INFORMATION		32
Item 1.	Legal Proceedings	32
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 September 30, 2015 (Unaudited) and December 31, 2014	4
Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and the Nine Months Ended September 30, 2015 and 2014 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2015 and 2014 (Unaudited)	6
Notes to Unaudited Condensed Consolidated Financial Statements	7-20

3

JOWAY HEALTH INDUSTRIES GROUP INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	2015			2014
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
Cash	$	698,542		$	542,672
Accounts receivable		-			26,192
Other receivables		56,212			61,633
Inventories		694,852			760,143
Advances to suppliers		104,147			135,883
Prepaid taxes		58,303			77,719
Prepaid expense		3,777			1,083
Total current assets		1,615,833			1,605,325
PROPERTY, PLANT AND EQUIPMENT, net		5,343,831			5,725,926
OTHER ASSETS:
Intangible assets, net		587,115			624,543
Total other assets		587,115			624,543
Total assets	$	7,546,779		$	7,955,794
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	81,429		$	33,529
Advances from customers		338,265			149,616
Other payables		53,334			48,432
Due to related parties		133,007			43,051
Total current liabilities		606,035			274,628
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 shares issued and outstanding at September 30, 2015 and December 31, 2014		20,054			20,054
Additional paid-in-capital		7,361,665			7,361,665
Statutory reserves		354,052			354,052
Accumulated deficits		(1,800,015	)		(1,288,374	)
Accumulated other comprehensive income		1,004,988			1,233,769
Total stockholders' equity		6,940,744			7,681,166
Total liabilities and stockholders' equity	$	7,546,779		$	7,955,794

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

(UNAUDITED)

	Three months ended September 30,						Nine months ended September 30,
	2015			2014			2015			2014
REVENUES	$	858,128		$	490,749		$	2,410,328		$	991,166
COST OF REVENUES		290,731			238,129			816,202			459,796
GROSS PROFIT		567,397			252,620			1,594,126			531,370
Selling expenses		174,367			116,704			620,719			341,092
General and administrative expenses		430,476			344,330			1,445,237			1,143,974
OPERATING EXPENSES		604,843			461,034			2,065,956			1,485,066
LOSS FROM OPERATIONS		(37,446	)		(208,414	)		(471,830	)		(953,696	)
Interest income		171			100			512			373
Other income		2,039			27,527			25,762			27,991
Other expenses		(49,482	)		(4,964	)		(52,867	)		(7,098	)
OTHER INCOME (EXPENSE), NET		(47,272	)		22,663			(26,593	)		21,266
LOSS BEFORE INCOME TAXES		(84,718	)		(185,751	)		(498,423	)		(932,430	)
INCOME TAXES (BENEFITS)		(4,265	)		(2	)		13,218			1,697
NET LOSS		(80,453	)		(185,749	)		(511,641	)		(934,127	)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment		(309,078	)		1,715			(228,781	)		(60,720	)
COMPREHENSIVE LOSS	$	(389,531	)	$	(184,034	)	$	(740,422	)	$	(994,847	)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$	(0.00	)	$	(0.01	)	$	(0.03	)	$	(0.05	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED		20,054,000			20,054,000			20,054,000			20,054,000

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

(UNAUDITED)

	Nine months ended September 30,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(511,641	)	$	(934,127	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation		283,868			354,832
Amortization		13,574			17,732
Changes in operating assets and liabilities:
Accounts receivable, trade		26,192			1,486
Other receivables		5,421			(2,196	)
Inventories		69,768			223,779
Advances to suppliers		31,736			63,512
Prepaid expense		(2,694	)		5,029
Accounts payable		47,900			(14,543	)
Advances from customers		188,649			141,144
Other payable		1,815			1,036
Salary and welfare payable		3,087			(15,259	)
Taxes payable		19,416			31,374
Net cash provided by (used in) operating activities		177,091			(126,201	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment		(165,512	)		(1,974	)
Redemption of long-term investment		-			245,339
Net cash provided by (used in) investing activities		(165,512	)		243,365
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to (from) related parties		89,956			(26,922	)
Net cash provided by (used in) financing activities		89,956			(26,922	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		54,335			(55,548	)
NET INCREASE IN CASH		155,870			34,694
CASH, beginning of period		542,672			477,642
CASH, end of period	$	698,542		$	512,336
SUPPLEMENTAL DISCLOSURES:
Income taxes paid	$	23,457		$	2,883
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”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. 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.

Operating results for the nine month period ended September 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. 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, 2014 which was filed on March 31, 2015.

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.

9

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” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

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 nine months ended September 30,				For the year ended December 31,
	2015		2014		2014
Period ended RMB: USD Exchange rate		6.3538		6.156		6.1535
Average RMB: USD Exchange rate		6.1606		6.15023		6.14821

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.

10

Foreign currency translation adjustments have been reported as comprehensive income in the consolidated financial statements and totaled ($309,078) and $1,715 for the three months ended September 30, 2015 and 2014, respectively, and ($228,781) and ($60,720) for the nine months ended September 30, 2015 and 2014, 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

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.

11

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 September 30, 2015 and December 31, 2014, 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 September 30, 2015 and December 31, 2014, the Company recorded $137,535 and $142,012 for inventory valuation allowance, respectively.

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 $104,147 and $135,883 as of September 30, 2015 and December 31, 2014, 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

12

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 nine months ended September 30, 2015 and 2014.

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 $17,704 and $7,516 for the three months ended September 30, 2015 and 2014, respectively, and $63,611 and $16,100 for the nine months ended September 30, 2015 and 2014, 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.

13

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.

Basic and Diluted Earnings per Share

The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine months periods ended September 30, 2015 and 2014.

Segment Information

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.

For the nine months ended September 30, 2015 and the year ended December 31, 2014, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods 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.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs–Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU No. 2015-4, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year for all entities. Accordingly, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently assessing the timing of its adoption and the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted on a retrospective basis. The Company elected to adopt ASU 2015-03 early, effective in the nine months ended September 30, 2015.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities are currently required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to measurement period adjustments that occur after the effective date of the guidance with earlier application permitted for financial statements that have not been issued. The Company elected to adopt ASU 2015-16 early, effective in the nine months ended September 30, 2015.

14

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	September 30,		December 31,
	2015		2014
Accounts receivable	$	-	$	26,192
Less: allowance for bad debt		-		-
	$	-	$	26,192

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.

NOTE 4 – INVENTORIES

Inventories consisted of the following:

	September 30,			December 31,
	2015			2014
Raw materials	$	194,108		$	197,027
Packages		-			663
Finished goods		598,182			663,187
Low value consumables		40,097			41,278
Total		832,387			902,155
Less: impairment loss		(137,535	)		(142,012	)
Inventory, net	$	694,852		$	760,143

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 of.

15

As of September 30, 2015 and December 31, 2014, the Company recognized $137,535 and $142,012, respectively, as a reserve for impairment loss from inventory.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	September 30,			December 31,
	2015			2014
Building	$	6,230,395		$	6,433,198
Operating Equipment		375,734			387,964
Office furniture and equipment		344,466			344,290
Vehicles		1,157,695			1,041,065
Total		8,108,290			8,206,517
Less: accumulated depreciation		(2,764,459	)		(2,480,591	)
Property, plant and equipment, net	$	5,343,831		$	5,725,926

Depreciation expense for the three months ended September 30, 2015 and 2014 amounted to $6,293 and $119,377, respectively, and for the nine months ended September 30, 2015 and 2014 amounted to $283,868 and $354,832, respectively.

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,			December 31,
	2015			2014
Land use rights	$	649,699		$	670,847
Other intangible assets		83,126			85,832
Total		732,825			756,679
Less: accumulated amortization		(145,710	)		(132,136	)
Intangible assets, net	$	587,115		$	624,543

Amortization expense of intangible assets for the nine months ended September 30, 2015 and 2014 amounted to $13,574 and $17,732, respectively.

16

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

Estimated amortization expense for
the year ending December 31,	Amount
2015	$	23,889
2016	$	23,889
2017	$	23,889
2018	$	23,889
2019	$	23,889
Thereafter	$	505,098

NOTE 7 – RELATED PARTY TRANSACTIONS

Payables due to related parties consist of the following:

	September 30,		December 31,
	2015		2014
Shenyang Joway Industrial Development Co., Ltd.	$	2,293	$	6,073
Jinghe Zhang		130,714		36,978
Total	$	133,007	$	43,051

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

● 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 $789,408 has been repaid. For the nine months ended September 30, 2015 and 2014, the Company repaid $3,780 and $23,647 of these advances, respectively. As of September 30, 2015, the total unpaid principal balance due Shenyang Joway for advances was $2,293.

● Shenyang Joway ceased operations at the end of 2009.

17

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, the Company’s 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 September 30, 2015, Joway Shengshi received cash advances in the aggregate principal amount of $4,731,168 from Jinghe Zhang of which $4,600,454 has been repaid. The Company received $93,736 of advance from Jinghe Zhang for the nine months ended September 30, 2015 and repaid $3,275 of advances to Jinghe Zhang for the nine months ended September 30, 2014. As of September 30, 2015, the total unpaid principal balance due Jinghe Zhang for advances was $130,714.

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

	For the nine months ended September 30,
	2015			2014
Tax computed at China statutory rates		25	%		25	%
Effect of losses		(25	%)		(25	%)
Effective rate		0	%		0	%

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 September 30, 2015, the Company had allocated $354,052 to statutory reserves.

18

NOTE 10 – SEGMENTS

In 2015 and 2014, the Company operated in three reportable business segments: (1) Healthcare Knit Goods 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 September 30, 2015 

	Sales		COGS		Gross profit		Income (Loss) from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	235,663	$	55,714	$	179,949	$	21,645		$	1,681	$	230,120
Daily Healthcare and Personal Care Series		230,785		73,031		157,754		(17,054	)		1,646		189,146
Wellness House and Activated Water Machine Series		391,680		161,986		229,694		(42,037	)		2,793		349,851
Segment Totals	$	858,128	$	290,731	$	567,397		(37,446	)	$	6,122		769,117
Other Expense, net								(47,272	)
Income Benefits								(4,265	)
Unallocated Assets													6,777,662
Net Loss							$	(80,453	)
Total Assets												$	7,546,779

For the three months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	112,191	$	55,186	$	57,005	$	(30,633	)	$	28,694	$	375,396
Daily Healthcare and Personal Care Series		118,184		50,059		68,125		(26,146	)		30,227		264,027
Wellness House and Activated Water Machine Series		260,374		132,884		127,490		(151,635	)		66,592		312,643
Segment Totals	$	490,749	$	238,129	$	252,620		(208,414	)	$	125,513		952,066
Other Income, net								22,663
Income Benefits								(2	)
Unallocated Assets													7,295,935
Net Loss							$	(185,749	)
Total Assets												$	8,248,001

19

For the nine months ended September 30, 2015

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	754,594	$	187,142	$	567,452	$	(79,330	)	$	93,119	$	230,120
Daily Healthcare and Personal Care Series		504,016		166,134		337,882		(94,125	)		62,197		189,146
Wellness House and Activated Water Machine Series		1,151,718		462,926		688,792		(298,375	)		142,126		349,851
Segment Totals	$	2,410,328	$	816,202	$	1,594,126		(471,830	)	$	297,442		769,117
Other Expense, net								(26,593	)
Income Tax								13,218
Unallocated Assets													6,777,662
Net Loss							$	(511,641	)
Total Assets												$	7,546,779

For the nine months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	258,999	$	125,659	$	133,340	$	(254,718	)	$	97,354	$	375,396
Daily Healthcare and Personal Care Series		269,277		120,329		148,948		(254,510	)		101,217		264,027
Wellness House and Activated Water Machine Series		462,890		213,808		249,082		(444,468	)		173,993		312,643
Segment Totals	$	991,166	$	459,796	$	531,370		(953,696	)	$	372,564		952,066
Other Income, net								21,266
Income Tax								1,697
Unallocated Assets													7,295,935
Net Loss							$	(934,127	)
Total Assets												$	8,248,001

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 September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Sales to franchise customers	$	621,030	$	338,884	$	1,767,370	$	731,075
Sales to non-franchise customers		237,098		151,865		642,958		260,091
Total sales	$	858,128	$	490,749	$	2,410,328	$	991,166

20

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 March 31, 2014.

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 100 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.

21

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.

We are a holding company with no material operations of our own. 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 manufacture 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 manufacture 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.

As a holding company, our ability to pay dividends and other cash distributions to our shareholders depends in part upon dividends and other distributions paid to us by our PRC subsidiaries. The amount of dividends paid by our PRC subsidiaries to us primarily depends on the service fees paid to our PRC subsidiaries from Joway Shengshi and its subsidiaries, and, to a lesser degree, our PRC subsidiaries’ retained earnings. Conducting our operations through contractual arrangements with Joway Shengshi and its subsidiaries has a risk that we may lose the power to direct the activities that most significantly affect the economic performance of Joway Shengshi and its subsidiaries, which may result in our being unable to consolidate their financial results with our results and may impair our access to their cash flow from operations and thereby reduce our liquidity.

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.

Other (expense) income. Our other (expense) income consists primarily of interest income, investment income and bank service fee.

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.

Results of Operations

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

22

	For the three months ended September 30,						For the nine months ended September 30,
	2015			2014			2015			2014
REVENUES	$	858,128		$	490,749		$	2,410,328		$	991,166
COST OF REVENUES		290,731			238,129			816,202			459,796
GROSS PROFIT		567,397			252,620			1,594,126			531,370
OPERATING EXPENSES		604,843			461,034			2,065,956			1,485,066
LOSS FROM OPERATIONS		(37,446	)		(208,414	)		(471,830	)		(953,696	)
OTHER (EXPENSE) INCOME, NET		(47,272	)		22,663			(26,593	)		21,266
LOSS BEFORE INCOME TAXES		(84,718	)		(185,751	)		(498,423	)		(932,430	)
INCOME TAXES (BENEFITS)		(4,265	)		(2	)		13,218			1,697
NET LOSS	$	(80,453	)	$	(185,749	)	$	(511,641	)	$	(934,127	)

Business Segments

In 2015 and 2014, we operated in three reportable business segments: (1) Healthcare Knit Goods, (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 September 30, 2015

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	235,663			27.5	%	$	230,785			26.9	%	$	391,680			45.6	%	$	858,128
COST OF REVENUES		55,714			19.2	%		73,031			25.1	%		161,986			55.7	%		290,731
GROSS PROFIT		179,949			31.7	%		157,754			27.8	%		229,694			40.5	%		567,397
GROSS MARGIN		76.4	%					68.4	%					58.6	%					66.1	%
OPERATING EXPENSES		158,304			26.2	%		174,808			28.9	%		271,731			44.9	%		604,843
INCOME (LOSS) FROM OPERATIONS	$	21,645			-57.8	%	$	(17,054	)		45.5	%	$	(42,037	)		112.3	%	$	(37,446	)

For the three months ended September 30, 2014

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated Water Machine Series			% of Total			Total
REVENUES	$	112,191			22.9	%	$	118,184			24.1	%	$	260,374			53.1	%	$	490,749
COST OF REVENUES		55,186			23.2	%		50,059			21.0	%		132,884			55.8	%		238,129
GROSS PROFIT		57,005			22.6	%		68,125			27.0	%		127,490			50.5	%		252,620
GROSS MARGIN		50.8	%					57.6	%					49.0	%					51.5	%
OPERATING EXPENSES		87,638			19.0	%		94,271			20.4	%		279,125			60.5	%		461,034
LOSS FROM OPERATIONS	$	(30,633	)		14.7	%	$	(26,146	)		12.5	%	$	(151,635	)		72.8	%	$	(208,414	)

For the nine months ended September 30, 2015

23

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and Personal Care Series			% of Total			Wellness House and Activated  Water Machine Series			% of Total			Total
REVENUES	$	754,594			31.3	%	$	504,016			20.9	%	$	1,151,718			47.8	%	$	2,410,328
COST OF REVENUES		187,142			22.9	%		166,134			20.4	%		462,926			56.7	%		816,202
GROSS PROFIT		567,452			35.6	%		337,882			21.2	%		688,792			43.2	%		1,594,126
GROSS MARGIN		75.2	%					67.0	%					59.8	%					66.1	%
OPERATING EXPENSES		646,782			31.3	%		432,007			20.9	%		987,167			47.8	%		2,065,956
LOSS FROM OPERATIONS	$	(79,330	)		16.8	%	$	(94,125	)		19.9	%	$	(298,375	)		63.2	%	$	(471,830	)

For the nine months ended September 30, 2014

	Healthcare Knitgoods Series			% of Total			Daily Healthcare and  ersonal Care Series			% of Total			Wellness House and Activated  Water Machine Series			% of Total			Total
REVENUES	$	258,999			26.1	%	$	269,277			27.2	%	$	462,890			46.7	%	$	991,166
COST OF REVENUES		125,659			27.3	%		120,329			26.2	%		213,808			46.5	%		459,796
GROSS PROFIT		133,340			25.1	%		148,948			28.0	%		249,082			46.9	%		531,370
GROSS MARGIN		51.5	%					55.3	%					53.8	%					53.6	%
OPERATING EXPENSES		388,058			26.1	%		403,458			27.2	%		693,550			46.7	%		1,485,066
LOSS FROM OPERATIONS	$	(254,718	)		26.7	%	$	(254,510	)		26.7	%	$	(444,468	)		46.6	%	$	(953,696	)

For The Three Months Ended September 30, 2015 Compared to September 30, 2014

Revenue. For the three months ended September 30, 2015, revenue was $858,128 compared to $490,749 for the three months ended September 30, 2014, an increase of $367,379 or 74.9%. In 2015, we put more effort on product promotion, which resulted in bigger sales in every segment for the third quarter of 2015.

Revenue from healthcare knit goods segment increased by $123,472 or 110.1% to $235,663 for the three months ended September 30, 2015 from $112,191 for the three months ended September 30, 2014. This increase was mainly due to the increase in sales of our best-selling mattress products, which were influenced greatly by our marketing tactics.

Revenue from daily healthcare and personal care products increased by $112,601 or 95.3% to $230,785 for the three months ended September 30, 2015 from $118,184 for the three months ended September 30, 2014. This was primarily due to the increase in sales of our tourmaline shawls.

Revenue from wellness houses and activated water machines increased by $131,306 or 50.4% to $391,680 for the three months ended September 30, 2015 from $260,374 for the three months ended September 30, 2014. This increase was mainly due to a steadily increase in the wellness house usages. Since the second quarter of 2014, we have built more wellness houses and strengthened our promotion on wellness houses, which attracted more customers for wellness houses.

Cost of Goods Sold. For the three months ended September 30, 2015, cost of goods sold was $290,731 compared to $238,129 for the three months ended September 30, 2014, an increase of $52,602 or 22.1%. This increase was mainly due to the increase in the cost of wellness house and activated water machine segment and daily healthcare and personal care segment.

Cost of goods sold for healthcare knit goods segment increased to $55,714 for the three months ended September 30, 2015 from $55,186 for the three months ended September 30, 2014, an increase of $528 or 1%. This increase was due to the increase in sales.

24

Cost of goods sold for the daily healthcare and personal care segment increased to $73,031 for the three months ended September 30, 2015 from $50,059 for the three months ended September 30, 2014, an increase of $22,972 or 45.9%. This increase was due to the increase in the cost of tourmaline shawls as a result of the increase in sales.

Cost of goods sold for our wellness house and activated water machine segment increased to $161,986 for the three months ended September 30, 2015 from $132,884 for the three months ended September 30, 2014, an increase of $29,102 or 21.9%. This increase was mainly due to the increase in the cost of the construction of our wellness house as a result of the increase in sales.

Gross profit. Our gross profit increased by $314,777 or 124.6% to $567,397 for the three months ended September 30, 2015, compared to $252,620 for the three months ended September 30, 2014. This increase was mainly due to the increase in sales. Our gross margin increased from 51.5% for the three months ended September 30, 2014 to 66.1% for the three months ended September 30, 2015. This increase was mainly due to the increased gross margin in healthcare knit goods segment.

Gross profit for the healthcare knit goods segment increased by $122,944 or 215.7% to $179,949 for the three months ended September 30, 2015 compared to $57,005 for the three months ended September 30, 2014. This increase was mainly due to increase in gross profit from our mattress products. The gross margins of healthcare knit goods segment increased from 50.8% for the three months ended September 30, 2014 to 76.4% for the three months ended September 30, 2015. The growing output of our healthcare knit goods caused lower cost rate and higher gross profit margin.

Gross profit of daily healthcare and personal care segment increased by $89,629 or 131.6% to $157,754 for the three months ended September 30, 2015, compared to $68,125 for the three months ended September 30, 2014. This increase was mainly due to the increased profit of tourmaline shawls as a result of the increase in sales. The gross margin of daily healthcare and personal care segment increased from 57.6% for the three months ended September 30, 2014 to 68.4% for the three months ended September 30, 2015. This increase was mainly due to the increased sales price.

Gross profit of the wellness house and activated water machine segments increased by $102,204 or 80.2% to $229,694 for the three months ended September 30, 2015, compared to $127,490 for the three months ended September 30, 2014. This increase was mainly due to the increase in gross profit from wellness houses. The gross margin of our wellness house and activated water machine segments increased from 49% for the three months ended September 30, 2014 to 58.6% for the three months ended September 30, 2015. This increase was mainly due to the significant increase in customers of wellness houses which have higher gross profit margin.

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses increased by $143,809 or 31.2%, from $461,034 for the three months ended September 30, 2014 to $604,843 for the three months ended September 30, 2015. This increase was mainly due to the increase of marketing expenses. Operating expenses for healthcare knit goods segment increased by $70,666 or 80.6% to $158,304 for the three months ended September 30, 2015 from $87,638 for the three months ended September 30, 2014. Operating expenses for daily healthcare and personal care segment increased by $80,537 or 85.4% to $174,808 for the three months ended September 30, 2015 from $94,271 for the three months ended September 30, 2014. Operating expenses for our wellness house and activated water machine segment decreased by $7,394 or 2.6% to $271,731 for the three months ended September 30, 2015 from $279,125 for the three months ended September 30, 2014.

Loss from operations. As a result of the foregoing, our loss from operations was $37,446 for the three months ended September 30, 2015, compared to our loss of $208,414 for the three months ended September 30, 2014, a decrease of $170,968. The improvement at loss from operations was mainly due to the increase in sales.

Income taxes. Our income tax expenses were negative $4,265 for the three months ended September 30, 2015, compared to negative $2 for the three months ended. The negative income tax for the third quarter of 2015 and 2014 were due to the change of currency translation rate.

Net loss. For the three months ended September 30, 2015, our net loss was $80,453 compared to $185,749 for the three months ended September 30, 2014. The improvement at net loss was mainly due to increase in sales.

25

For the Nine Months Ended September 30, 2015 Compared to September 30, 2014

Revenue. For the nine months ended September 30, 2015, revenue was $2,410,328 compared to $991,166 for the nine months ended September 30, 2014, an increase of $1,419,162 or 143.2%. This increase was mainly due to the increase in revenue from wellness house and activated water machine segment and healthcare knit goods segment.

Revenue from healthcare knit goods segment increased by $495,595, or 191.4% to $754,594 for the nine months ended September 30, 2015 from $258,999 for the nine months ended September 30, 2014. This increase was mainly due to the increase in sales of our mattress products.

Revenue from daily healthcare and personal care products increased by $234,739 or 87.2% to $504,016 for the nine months ended September 30, 2015 from $269,277 for the nine months ended September 30, 2014. This was primarily due to the increase in sales of our tourmaline shawls.

Revenue from wellness houses and activated water machines increased by $688,828 or 148.8% to $1,151,718 for the nine months ended September 30, 2015 from $462,890 for the nine months ended September 30, 2014. This increase was mainly due to the increase in customers of wellness houses.

Cost of Goods Sold. For the nine months ended September 30, 2015, cost of goods sold was $816,202 compared to $459,796 for the nine months ended September 30, 2014, an increase of $356,406, or 77.5%. This increase was mainly due to the increase in the cost of wellness house and activated water machine segment.

Cost of goods sold for healthcare knit goods segment increased to $187,142 for the nine months ended September 30, 2015 from $125,659 for the nine months ended September 30, 2014, an increase of $61,483 or 48.9%. This increase was mainly due to the increase in the cost of our mattress products.

Cost of goods sold for the daily healthcare and personal care segment increased to $166,134 for the nine months ended September 30, 2015 from $120,329 for the nine months ended September 30, 2014, an increase of $45,805 or 38.1%. This increase was mainly due to the increase in the cost of our tourmaline shawls.

Cost of goods sold for our wellness house and activated water machine segment increased to $462,926 for the nine months ended September 30, 2015 from $213,808 for the nine months ended September 30, 2014, an increase of $249,118 or 116.5%. This increase was mainly due to the increase in the cost of the construction of our wellness houses.

Gross profit. Our gross profit increased by $1,062,756 or 200% to $1,594,126 for the nine months ended September 30, 2015, compared to $531,370 for the nine months ended September 30, 2014. This increase was primarily due to the increase in gross profit for wellness house and activated water machine segment and healthcare knit goods segment. Our gross margin increased from 53.6% for the nine months ended September 30, 2014 to 66.1% for the nine months ended September 30, 2015. This increase was mainly due to healthcare knit goods segment and daily healthcare and personal care segment.

Gross profit for the healthcare knit goods segment increased by $434,112 or 325.6% to $567,452 for the nine months ended September 30, 2015 compared to $133,340 for the nine months ended September 30, 2014. This increase was mainly due to the increase in gross profit for our mattress products. The gross margins of healthcare knit goods segment increased from 51.5% for the nine months ended September 30, 2014 to 75.2% for the nine months ended September 30, 2015. This increase was mainly due to the increased price of all our healthcare knit goods products. In addition, the growing output of our healthcare knit goods caused lower cost rate and higher gross profit margin.

Gross profit of daily healthcare and personal care segment increased by $188,934 or 126.8% to $337,882 for the nine months ended September 30, 2015, compared to $148,948 for the nine months ended September 30, 2014. This increase was primarily due to the increase in gross profit of our tourmaline shawls, as a result of the increase in sales. Our gross margin of daily healthcare and personal care segment increased from 55.3% for the nine months ended September 30, 2014 to 67% for the nine months ended September 30, 2015. This increase was mainly due to the increase in sale of our tourmaline shawls, which has higher gross margin. In addition, we raised the sales price of our daily healthcare and personal care products in 2015.

26

Gross profit of the wellness house and activated water machine segments increased by $439,710 or 176.5% to $688,792 for the nine months ended September 30, 2015, compared to $249,082 for the nine months ended September 30, 2014. This increase was mainly due to the increase in gross profit from wellness houses. The gross margin of our wellness house and activated water machine segments increased from 53.8% for the nine months ended September 30, 2014 to 59.8% for the nine months ended September 30, 2015. It was mainly due to the increased gross profit from wellness houses, which have higher gross profit.

Operating expenses. Our total operating expenses consist of sales and marketing expenses and general and administrative expenses. Our total operating expenses increased by $580,890 or 39.1%, from $1,485,066 for the nine months ended September 30, 2014 to $2,065,956 for the nine months ended September 30, 2015. This increase was mainly due to the increase of conference expenses and building maintenance expenses. Operating expenses for healthcare knit goods segment increased by $258,724 or 66.7% to $646,782 for the nine months ended September 30, 2015 from $388,058 for the nine months ended September 30, 2014. Operating expenses for daily healthcare and personal care segment increased by $28,549 or 7.1% to $432,007 for the nine months ended September 30, 2015 from $403,458 for the nine months ended September 30, 2014. Operating expenses for our wellness house and activated water machine segment increased by $293,617 or 42.3% to $987,167 for the nine months ended September 30, 2015 from $693,550 for the nine months ended September 30, 2014.

Loss from operations. As a result of the foregoing, our loss from operations was $471,830 for the nine months ended September 30, 2015, compared to $953,696 for the nine months ended September 30, 2014, a decrease of $481,866. The improvement at loss from operations was due to the increase in sales.

Income taxes. Our income tax expenses were $13,218 for the nine months ended September 30, 2015, compared to $1,697 for the nine months ended September 30, 2014. This increase was due to the increased income of Joway Decoration.

Net loss. Our net loss was $511,641 for the nine months ended September 30, 2015, compared to $934,127 for the nine months ended September 30, 2014. The improvement at net loss was mainly due to the increase 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 September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Sales to franchise customers	$	621,030	$	338,884	$	1,767,370	$	731,075
Sales to non-franchise customers		237,098		151,865		642,958		260,091
Total sales	$	858,128	$	490,749	$	2,410,328	$	991,166

27

Liquidity and Capital Resources

Our cash at December 31, 2014 was $542,672 and increased to $698,542 at September 30, 2015, an increase of $155,870. This increase was mainly provided by our operating activities. On September 30, 2015, we had net working capital of $1,009,798, a decrease of $320,899 from $1,330,697 on December 31, 2014.

Our cash flow information summary is as follows:

	For the nine months ended September 30,
	2015			2014
Net cash provided by (used in):
Operating activities	$	177,091		$	(126,201	)
Investing activities	$	(165,512	)	$	243,365
Financing activities	$	89,956		$	(26,922	)

Net Cash Provided By (Used In) Operating Activities

Net cash provided by operating activities was $177,091 for the nine months ended September 30, 2015, compared to $126,201 used in operating activities for the nine months ended September 30, 2014. This was primarily due to less loss of $422,486 from our improved operating results, which was offset by more expenditures of $154,011 in inventory.

For the nine months ended September 30, 2015, cash was mainly used to cover the loss of $511,641, which were primarily offset by an add-back of $283,868 of depreciation for non-cash expense, the increase in advances from customer of $188,649, the decrease in inventory purchase of $69,768 and the increase in accounts payable of $47,900.

For the nine months ended September 30, 2014, cash was mainly used to cover the loss of $934,127, which was primarily offset by an add-back of $354,832 of depreciation for non-cash expense, the decrease in inventory purchase of $223,779 and the increase in advances from customer of $141,144.

Net Cash Provided By (Used In) Investing Activities

Net cash used in investing activities was $165,512 for the nine months ended September 30, 2015, compared to $243,365 provided by investing activities for the nine months ended September 30, 2014.

For the nine months ended September 30, 2015, we expended $165,512 on purchase of vehicles and office equipment. For the nine months ended September 30, 2014, we withdrew our investment from Joway Hezhi in the amount of RMB 1,500,000 or $245,339 on June 26, 2014.

Net Cash Provided By (Used In) Financing Activities

Net cash provided by financing activities was $89,956 for the nine months ended September 30, 2015, compared to $26,922 used in financing activities for the nine months ended September 30, 2014.

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 $3,780 and $23,647 of these advances for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the total unpaid principal balance due Shenyang Joway for advances was $2,293. Shenyang Joway ceased operations at the end of 2009, although it still exists as a legal entity.

28

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 September 30, 2015, Joway Shengshi received cash advances in the aggregate principal amount of $4,731,168 from Jinghe Zhang. We received $93,736 of advance for the nine months ended September 30, 2015 and repaid $3,275 of advances for the nine months ended September 30, 2014. As of September 30, 2015, the total unpaid principal balance due Jinghe Zhang for advances made to Joway Shengshi was $130,714.

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 any of our operating units.

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 September 30, 2015, the Company had allocated $354,052 to statutory reserves.

Off Balance Sheet Items

Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:

● any obligation under certain guarantee contracts,

● any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets,

● any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and

● any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us.

We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations. In the ordinary course of business, we enter into operating lease commitments, purchase commitments and other contractual obligations. These transactions are recognized in our financial statements in accordance with generally accepted accounting principles in the United States.

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.

29

Basis of Consolidation

The accompanying consolidated financial statements include Joway Health 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” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

Based on the various Contractual Agreements, we believe we are able to exercise control over the VIEs, and to obtain the full economic benefits. We believe that the terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. We also believe that the minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for us to exercise our rights under the exclusive option agreement. A simple majority vote of our board of directors is required to pass a resolution to exercise our rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, we believe this gives us the power to direct the activities that most significantly impact VIEs’ economic performance. T We believe that our ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give us the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in our total sales, their incomes or losses from operations are consolidated with ours, and our net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

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 customerto 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.

30

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.

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

We do not anticipate that the adoption of recently issued accounting pronouncements to have a material effect on our condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

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.

31

Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2015, 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.

● In 2011 we established the position of internal audit manager. From September 2011 to July 2012, 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. Currently, we are still in the process of seeking for a proper candidate to perform as our internal audit manager.

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.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting for the nine months ended September 30, 2015 that materially affected, or were reasonably likely to materially affect our internal control over financial reporting.

32

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, 2014. 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, 2014 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.

	Joway Health Industries Group Inc.
Date: November 13, 2015	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 nine months ended September 30, 2015 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: November 13, 2015	/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 nine months ended September 30, 2015 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: November 13, 2015	/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 nine months ended September 30, 2015 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: November 13, 2015	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 nine months ended September 30, 2015 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: November 13, 2015	By:	/S/ Yuan Huang
		Yuan Huang
		Chief Financial Officer

XML

Intangible Assets (Details 1)	Sep. 30, 2015 USD ($)
Summary of estimated amortization expense
2015	$ 23,889
2016	23,889
2017	23,889
2018	23,889
2019	23,889
Thereafter	$ 505,098

XML

Franchise Revenues (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Breakdown of revenue between franchise and non-franchise customers
Total sales	$ 858,128	$ 490,749	$ 2,410,328	$ 991,166
Sales to franchise customers [Member]
Breakdown of revenue between franchise and non-franchise customers
Total sales	621,030	338,884	1,767,370	731,075
Sales to non-franchise customers [Member]
Breakdown of revenue between franchise and non-franchise customers
Total sales	$ 237,098	$ 151,865	$ 642,958	$ 260,091

XML

Segments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Reportable business segments
Sales	$ 858,128	$ 490,749	$ 2,410,328	$ 991,166
COGS	290,731	238,129	816,202	459,796
Gross profit	567,397	252,620	1,594,126	531,370
Loss from operations	(37,446)	(208,414)	(471,830)	(953,696)
Depreciation and amortization	6,122	125,513	297,442	372,564
Assets	769,117	952,066	769,117	952,066
Other (expense) income, net	(47,272)	22,663	(26,593)	21,266
Income Tax	(4,265)	(2)	13,218	1,697
Unallocated Assets	6,777,662	7,295,935	6,777,662	7,295,935
Net loss	(80,453)	(185,749)	(511,641)	(934,127)
Total Assets	7,546,779	8,248,001	7,546,779	8,248,001	$ 7,955,794
Healthcare Knit Goods Series [Member]
Reportable business segments
Sales	235,663	112,191	754,594	258,999
COGS	55,714	55,186	187,142	125,659
Gross profit	179,949	57,005	567,452	133,340
Loss from operations	(21,645)	(30,633)	(79,330)	(254,718)
Depreciation and amortization	1,646	28,694	93,119	97,354
Assets	230,120	375,396	230,120	375,396
Daily Healthcare and Personal Care Series [Member]
Reportable business segments
Sales	230,785	118,184	504,016	269,277
COGS	73,031	50,059	166,134	120,329
Gross profit	157,754	68,125	337,882	148,948
Loss from operations	(17,054)	(26,146)	(94,125)	(254,510)
Depreciation and amortization	1,646	30,227	62,197	101,217
Assets	189,146	264,027	189,146	264,027
Wellness House and Activated Water Machine Series [Member]
Reportable business segments
Sales	391,680	260,374	1,151,718	462,890
COGS	161,986	132,884	462,926	213,808
Gross profit	229,694	127,490	688,792	249,082
Loss from operations	(42,037)	(151,635)	(298,375)	(444,468)
Depreciation and amortization	2,793	66,592	142,126	173,993
Assets	$ 349,851	$ 312,643	$ 349,851	$ 312,643

XML

Accounts Receivable (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary of accounts receivable
Accounts receivable		$ 26,192
Less: allowance for bad debt
Accounts receivable, Total		$ 26,192

XML

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2015

Income Taxes [Abstract]

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

	For the nine months ended  September 30,
	2015			2014
Tax computed at China statutory rates		25	%		25	%
Effect of losses		(25	%)		(25	%)
Effective rate		0	%		0	%

XML

Related Party Transactions (Details Textual)		9 Months Ended
	Dec. 01, 2009 Segment	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2008 USD ($)
Shenyang Joway Industrial Development Co., Ltd. [Member]
Related Party Transactions (Textual)
Ownership Percentage		More than 50% of the equity.
Repayment of advances		$ 2,293
Shenyang Joway Industrial Development Co., Ltd. [Member] | Joway Technology and Shenyang Joway Agreement [Member]
Related Party Transactions (Textual)
Interest-free, unsecured advances for working capital					$ 58,568
Shenyang Joway Industrial Development Co., Ltd. [Member] | Shenyang Joway, Joway Technology and Joway Shengshi Agreement [Member]
Related Party Transactions (Textual)
Interest-free, unsecured advances for working capital				$ 791,701
Repayment of advances		3,780	$ 23,647	$ 789,408
Jinghe Zhang [Member]
Related Party Transactions (Textual)
Repayment of advances		93,736	$ 3,275
Unpaid advances		130,714
Jinghe Zhang [Member] | Jinghe Zhang And Joway Technology Agreement [Member]
Related Party Transactions (Textual)
Repayment of advances		4,600,454
Operating capital advances, aggregate principal amount		$ 4,731,168
Jinghe Zhang [Member] | Trademarks [Member] | Jinghe Zhang and Joway Shengshi Agreement [Member]
Related Party Transactions (Textual)
License agreement period	9 years
Jinghe Zhang [Member] | Patents [Member] | Jinghe Zhang and Joway Shengshi Agreement [Member]
Related Party Transactions (Textual)
Number of patents used | Segment	5

XML

Property, Plant and Equipment (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Property Plant and Equipment (Textual)
Depreciation expense	$ 6,293	$ 119,377	$ 283,868	$ 354,832

XML

Segments (Details Textual) - Segment	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Segments (Textual)
Number of Reportable Segments	3	3

XML

Inventories

9 Months Ended

Sep. 30, 2015

Inventories [Abstract]

INVENTORIES

NOTE 4 – INVENTORIES

Inventories consisted of the following:

	September 30,			December 31,
	2015			2014
Raw materials	$	194,108		$	197,027
Packages		-			663
Finished goods		598,182			663,187
Low value consumables		40,097			41,278
Total		832,387			902,155
Less: impairment loss		(137,535	)		(142,012	)
Inventory, net	$	694,852		$	760,143

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 of.

As of September 30, 2015 and December 31, 2014, the Company recognized $137,535 and $142,012, respectively, as a reserve for impairment loss from inventory.

XML

Income Taxes (Details)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
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 losses	(25.00%)	(25.00%)
Effective rate	0.00%	0.00%

XML

Organization (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2015	Apr. 02, 2013	Apr. 02, 2012	Apr. 02, 2011	Sep. 21, 2010	Jul. 28, 2010	Jul. 25, 2010	Jul. 09, 2010
Organization (Textual)
Percentage of shares acquired by Dynamic Elite International Limited from Joway Health					76.08%
Tianjin Joway Shengshi Group Co., Ltd. [Member]
Organization (Textual)
Ownership percentage	99.00%
Business acquisition percentage of remaining voting interests acquired	1.00%
Joway Shengshi to Joway Technology [Member]
Organization (Textual)
Ownership percentage							90.91%
Business acquisition percentage of remaining voting interests acquired							9.09%
Joway Shengshi to Joway Decoration [Member]
Organization (Textual)
Ownership percentage								90.00%
Business acquisition percentage of remaining voting interests acquired								10.00%
Joway Shengshi to Shengtang Trading [Member]
Organization (Textual)
Ownership percentage						95.00%
Business acquisition percentage of remaining voting interests acquired						5.00%
Joway Shengshi to Crystal Globe [Member]
Organization (Textual)
Percentage of right to purchase of shares	100.00%
Aggregate price to purchase of shares	$ 20,000
Call Option expiration term under VIE Agreements	3 years
Crystal Globe [Member]
Organization (Textual)
Percentage of Call Option vests		33.00%	33.00%	34.00%

XML

Organization (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
List of Company and its subsidiaries
Paid in Capital	$ 7,361,665	$ 7,361,665
Joway Health Industries Group Inc. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	March 21, 2003, Nevada
Paid in Capital	$ 20,054
Percentage of Effective Ownership	86.8% owned by Crystal Globe Limited 13.2%owned by other institutional and individual investors
Principal Activities	Investment Holding
Dynamic Elite International Limited [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	June 2, 2010, British Virgin Islands
Paid in Capital	$ 10,000
Percentage of Effective Ownership	100% owned by Joway Health Industries Group Inc.
Principal Activities	Investment Holding
Tianjin Junhe Management Consulting Co., Ltd. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	September 15, 2010, PRC
Paid in Capital	$ 20,000
Percentage of Effective Ownership	100% owned by Dynamic Elite International Limited
Principal Activities	Advisory
Tianjin Joway Shengshi Group Co., Ltd. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	May 17, 2007, PRC
Paid in Capital	$ 7,216,140.72
Percentage of Effective Ownership	99% owned by Jinghe Zhang, and 1% owned by Baogang Song
Principal Activities	Production and distribution of Healthcare Knit Goods and Daily Healthcare and Personal Care products
Shenyang Joway Electronic Technology Co., Ltd. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	March 28, 2007, PRC
Paid in Capital	$ 142,072.97
Percentage of Effective Ownership	100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities	Distribution of Tourmaline Activated Water Machine and construction of Tourmaline Wellness House
Tianjin Joway Decoration Engineering Co., Ltd. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	April 22, 2009, PRC
Paid in Capital	$ 292,367.74
Percentage of Effective Ownership	100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities	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. [Member]
List of Company and its subsidiaries
Domicile and Date of Incorporation	September 18, 2009, PRC
Paid in Capital	$ 292,463.75
Percentage of Effective Ownership	100% owned by Tianjin Joway Shengshi Group Co., Ltd
Principal Activities	Distribution of tourmaline products

XML

Income Taxes (Details Textual)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Taxes (Textual)
Statutory rate	25.00%	25.00%

XML

Summary of Significant Accounting Policies (Details)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Period ended RMB: USD Exchange rate [Member]
Foreign currency exchange rate translation: RMB to USD
Exchange rate, Translation	6.3538	6.1535	6.156
Average RMB: USD Exchange rate [Member]
Foreign currency exchange rate translation: RMB to USD
Exchange rate, Translation	6.1606	6.14821	6.15023

XML

Summary of Significant Accounting Policies (Details 1)	9 Months Ended
	Sep. 30, 2015
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] | Minimum [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	3 years
Office furniture and equipment [Member] | Maximum [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	5 years
Vehicles [Member]
Summary of estimated useful lives of fixed assets
Estimated useful lives	10 years

XML

Accounts Receivable

9 Months Ended

Sep. 30, 2015

Accounts Receivable [Abstract]

ACCOUNTS RECEIVABLE

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	September 30,		December 31,
	2015		2014
Accounts receivable	$	-	$	26,192
Less: allowance for bad debt		-		-
	$	-	$	26,192

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

Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Summary of Significant Accounting Policies (Textual)
Foreign currency translation adjustment	$ (309,078)	$ 1,715	$ (228,781)	$ (60,720)
Advances to suppliers	$ 104,147		$ 104,147		$ 135,883
Minimum interest on investments	20.00%		20.00%
Land use rights , Lease term			50 years
Amortization of other intangible assets, Estimated useful life			10 years
Construction period of a Wellness House			5 days
Measurement of tax position			50.00%
Valuation allowance for inventory	$ 137,535		$ 137,535		$ 142,012
Maximum [Member]
Summary of Significant Accounting Policies (Textual)
Ownership percentage	50.00%		50.00%
Minimum [Member]
Summary of Significant Accounting Policies (Textual)
Ownership percentage	20.00%		20.00%
Selling and Marketing Expense [Member]
Summary of Significant Accounting Policies (Textual)
Shipping costs included in selling expenses	$ 17,704	$ 7,516	$ 63,611	$ 16,100

XML

Intangible Assets (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Intangible Assets (Textual)
Amortization expense of intangible assets	$ 13,574	$ 17,732

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2015	Dec. 31, 2014
CURRENT ASSETS:
Cash	$ 698,542	$ 542,672
Accounts receivable		26,192
Other receivables	$ 56,212	61,633
Inventories	694,852	760,143
Advances to suppliers	104,147	135,883
Prepaid taxes	58,303	77,719
Prepaid expense	3,777	1,083
Total current assets	1,615,833	1,605,325
PROPERTY, PLANT AND EQUIPMENT, net	5,343,831	5,725,926
OTHER ASSETS:
Intangible assets, net	587,115	624,543
Total other assets	587,115	624,543
Total assets	7,546,779	7,955,794
CURRENT LIABILITIES:
Accounts payable	81,429	33,529
Advances from customers	338,265	149,616
Other payables	53,334	48,432
Due to related parties	133,007	43,051
Total current liabilities	$ 606,035	$ 274,628
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 shares issued and outstanding at September 30, 2015 and December 31, 2014	$ 20,054	$ 20,054
Additional paid-in-capital	7,361,665	7,361,665
Statutory reserves	354,052	354,052
Accumulated deficits	(1,800,015)	(1,288,374)
Accumulated other comprehensive income	1,004,988	1,233,769
Total stockholders' equity	6,940,744	7,681,166
Total liabilities and stockholders' equity	$ 7,546,779	$ 7,955,794

XML

Statutory Reserves (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Statutory Reserves (Textual)
Statutory reserves allocation percentage	10.00%
Income after tax until the reserves reaches percentage	50.00%
Statutory reserves	$ 354,052	$ 354,052

XML

Organization

9 Months Ended

Sep. 30, 2015

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 owners¼š 

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

Inventories (Details Textual) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Inventories (Textual)
Impairment loss from inventory	$ 137,535	$ 142,012

XML

Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

Summary of property, plant and equipment

	September 30,			December 31,
	2015			2014
Building	$	6,230,395		$	6,433,198
Operating Equipment		375,734			387,964
Office furniture and equipment		344,466			344,290
Vehicles		1,157,695			1,041,065
Total		8,108,290			8,206,517
Less: accumulated depreciation		(2,764,459	)		(2,480,591	)
Property, plant and equipment, net	$	5,343,831		$	5,725,926

XML

Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary of property, plant and equipment
Total	$ 8,108,290	$ 8,206,517
Less: accumulated depreciation	(2,764,459)	(2,480,591)
Property, plant and equipment, net	5,343,831	5,725,926
Building [Member]
Summary of property, plant and equipment
Total	6,230,395	6,433,198
Operating Equipment [Member]
Summary of property, plant and equipment
Total	375,734	387,964
Office furniture and equipment [Member]
Summary of property, plant and equipment
Total	344,466	344,290
Vehicles [Member]
Summary of property, plant and equipment
Total	$ 1,157,695	$ 1,041,065

XML

Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

Summary of payables due to related parties

	September 30,		December 31,
	2015		2014
Shenyang Joway Industrial Development Co., Ltd.	$	2,293	$	6,073
Jinghe Zhang		130,714		36,978
Total	$	133,007	$	43,051

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2015

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”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. 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.

Operating results for the nine month period ended September 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. 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, 2014 which was filed on March 31, 2015.

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” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

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 nine months ended  September 30,				For the year ended December 31,
	2015		2014		2014
Period ended RMB: USD Exchange rate		6.3538		6.156		6.1535
Average RMB: USD Exchange rate		6.1606		6.15023		6.14821

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 ($309,078) and $1,715 for the three months ended September 30, 2015 and 2014, respectively, and ($228,781) and ($60,720) for the nine months ended September 30, 2015 and 2014, 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

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 September 30, 2015 and December 31, 2014, 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 September 30, 2015 and December 31, 2014, the Company recorded $137,535 and $142,012 for inventory valuation allowance, respectively.

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 $104,147 and $135,883 as of September 30, 2015 and December 31, 2014, 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 nine months ended September 30, 2015 and 2014.

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 $17,704 and $7,516 for the three months ended September 30, 2015 and 2014, respectively, and $63,611 and $16,100 for the nine months ended September 30, 2015 and 2014, 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.

Basic and Diluted Earnings per Share

The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine months periods ended September 30, 2015 and 2014.

Segment Information

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.

For the nine months ended September 30, 2015 and the year ended December 31, 2014, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods 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.

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs–Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU No. 2015-4, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year for all entities. Accordingly, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently assessing the timing of its adoption and the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted on a retrospective basis. The Company elected to adopt ASU 2015-03 early, effective in the nine months ended September 30, 2015.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities are currently required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to measurement period adjustments that occur after the effective date of the guidance with earlier application permitted for financial statements that have not been issued. The Company elected to adopt ASU 2015-16 early, effective in the nine months ended September 30, 2015.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
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	20,054,000
Common stock, shares outstanding	20,054,000	20,054,000

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

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”). Accordingly, they do not include all of the information and the footnotes required by generally accepted accounting principles for complete financial statements. 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.

Operating results for the nine month period ended September 30, 2015 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2015. 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, 2014 which was filed on March 31, 2015.

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” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

Based on the various Contractual Agreements, the Company is able to exercise control over the VIEs, and to obtain the full economic benefits. The terms of the exclusive option agreement are currently exercisable and legally enforceable under PRC laws and regulations. The minimum amount of consideration permitted by the applicable PRC law to exercise the option does not represent a financial barrier or disincentive for the Company to exercise its rights under the exclusive option agreement. A simple majority vote of the Company’s board of directors is required to pass a resolution to exercise its rights under the exclusive option agreement, for which consent of the shareholder of VIEs is not required. Therefore, this gives the Company the power to direct the activities that most significantly impact VIEs’ economic performance. The Company’s ability to exercise effective control, together with the consulting service agreements and the equity pledge agreements, give the Company the rights to receive substantially all of the economic benefits from VIEs in consideration for the services provided by its wholly owned subsidiaries in China. Accordingly, as the primary beneficiary of VIEs and in accordance with U.S. GAAP, Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading, as VIEs of Junhe Consulting, has been consolidated in the Company’s financial statements. Sales from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading are included in the Company’s total sales, their incomes or losses from operations are consolidated with the Company’s, and the Company’s net income or loss includes net income or loss from Joway Shengshi, Joway Technology, Joway Decoration, and Shengtang Trading.

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 nine months ended  September 30,				For the year ended December 31,
	2015		2014		2014
Period ended RMB: USD Exchange rate		6.3538		6.156		6.1535
Average RMB: USD Exchange rate		6.1606		6.15023		6.14821

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 ($309,078) and $1,715 for the three months ended September 30, 2015 and 2014, respectively, and ($228,781) and ($60,720) for the nine months ended September 30, 2015 and 2014, 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

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 September 30, 2015 and December 31, 2014, 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 September 30, 2015 and December 31, 2014, the Company recorded $137,535 and $142,012 for inventory valuation allowance, respectively.

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 $104,147 and $135,883 as of September 30, 2015 and December 31, 2014, 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 nine months ended September 30, 2015 and 2014.

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 $17,704 and $7,516 for the three months ended September 30, 2015 and 2014, respectively, and $63,611 and $16,100 for the nine months ended September 30, 2015 and 2014, 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.

Basic and Diluted Earnings per Share

Basic and Diluted Earnings per Share

The Company reports earnings per share in accordance with FASB ASC 260 “Earnings per share”. The Company’s basic earnings per share are computed using the weighted average number of shares outstanding for the periods presented. Diluted earnings per share are computed based on the assumption that any dilutive options or warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, the Company’s outstanding stock warrants are assumed to be exercised, and funds thus obtained were assumed to be used to purchase common stock at the average market price during the period. There were no dilutive instruments outstanding during the nine months periods ended September 30, 2015 and 2014.

Segment Information

Segment Information

The Company follows FASB ASC 280-Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance.

For the nine months ended September 30, 2015 and the year ended December 31, 2014, management has determined that the Company is operating in three reportable business segments, (1) Healthcare Knit Goods 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.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs–Contracts with Customers (Subtopic 340-40). The amendments in ASU 2014-09 supersede most current revenue recognition requirements. The core principal of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company can apply the amendments using one of the following two methods: (i) retrospectively to each prior reporting period presented, or (ii) retrospectively with the cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU No. 2015-4, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 by one year for all entities. Accordingly, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently assessing the timing of its adoption and the impact of adopting this guidance on its consolidated financial statements and the implementation approach to be used.

In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and interim periods beginning after December 15, 2015, with early adoption permitted on a retrospective basis. The Company elected to adopt ASU 2015-03 early, effective in the nine months ended September 30, 2015.

In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. ASU 2015-16 requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Entities are currently required to retrospectively apply adjustments made to provisional amounts recognized in a business combination. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The guidance is to be applied prospectively to measurement period adjustments that occur after the effective date of the guidance with earlier application permitted for financial statements that have not been issued. The Company elected to adopt ASU 2015-16 early, effective in the nine months ended September 30, 2015.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 13, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	Joway Health Industries Group Inc.
Entity Central Index Key	0001263364
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Filer Category	Smaller Reporting Company
Entity Common Stock Shares Outstanding		20,054,000

XML

Organization (Tables)

9 Months Ended

Sep. 30, 2015

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

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements of Operations and Comprehensive Loss [Abstract]
REVENUES	$ 858,128	$ 490,749	$ 2,410,328	$ 991,166
COST OF REVENUES	290,731	238,129	816,202	459,796
GROSS PROFIT	567,397	252,620	1,594,126	531,370
Selling expenses	174,367	116,704	620,719	341,092
General and administrative expenses	430,476	344,330	1,445,237	1,143,974
OPERATING EXPENSES	604,843	461,034	2,065,956	1,485,066
LOSS FROM OPERATIONS	(37,446)	(208,414)	(471,830)	(953,696)
Interest income	171	100	512	373
Other income	2,039	27,527	25,762	27,991
Other expenses	(49,482)	(4,964)	(52,867)	(7,098)
OTHER INCOME (EXPENSE), NET	(47,272)	22,663	(26,593)	21,266
LOSS BEFORE INCOME TAXES	(84,718)	(185,751)	(498,423)	(932,430)
INCOME TAXES (BENEFITS)	(4,265)	(2)	13,218	1,697
Net loss	(80,453)	(185,749)	(511,641)	(934,127)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment	(309,078)	1,715	(228,781)	(60,720)
COMPREHENSIVE LOSS	$ (389,531)	$ (184,034)	$ (740,422)	$ (994,847)
NET LOSS PER COMMON SHARE, BASIC AND DILUTED	$ 0.00	$ (0.01)	$ (0.03)	$ (0.05)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING, BASIC AND DILUTED	20,054,000	20,054,000	20,054,000	20,054,000

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 7 – RELATED PARTY TRANSACTIONS

Payables due to related parties consist of the following:

	September 30,		December 31,
	2015		2014
Shenyang Joway Industrial Development Co., Ltd.	$	2,293	$	6,073
Jinghe Zhang		130,714		36,978
Total	$	133,007	$	43,051

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

● 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 $789,408 has been repaid. For the nine months ended September 30, 2015 and 2014, the Company repaid $3,780 and $23,647 of these advances, respectively. As of September 30, 2015, the total unpaid principal balance due Shenyang Joway for advances was $2,293.

● 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, the Company’s 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 September 30, 2015, Joway Shengshi received cash advances in the aggregate principal amount of $4,731,168 from Jinghe Zhang of which $4,600,454 has been repaid. The Company received $93,736 of advance from Jinghe Zhang for the nine months ended September 30, 2015 and repaid $3,275 of advances to Jinghe Zhang for the nine months ended September 30, 2014. As of September 30, 2015, the total unpaid principal balance due Jinghe Zhang for advances was $130,714.

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

XML

Intangible Assets

9 Months Ended

Sep. 30, 2015

Intangible Assets [Abstract]

INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,			December 31,
	2015			2014
Land use rights	$	649,699		$	670,847
Other intangible assets		83,126			85,832
Total		732,825			756,679
Less: accumulated amortization		(145,710	)		(132,136	)
Intangible assets, net	$	587,115		$	624,543

Amortization expense of intangible assets for the nine months ended September 30, 2015 and 2014 amounted to $13,574 and $17,732, respectively.

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

Estimated amortization expense for
the year ending December 31,	Amount
2015	$	23,889
2016	$	23,889
2017	$	23,889
2018	$	23,889
2019	$	23,889
Thereafter	$	505,098

XML

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Intangible Assets [Abstract]

Summary of intangible assets

	September 30,			December 31,
	2015			2014
Land use rights	$	649,699		$	670,847
Other intangible assets		83,126			85,832
Total		732,825			756,679
Less: accumulated amortization		(145,710	)		(132,136	)
Intangible assets, net	$	587,115		$	624,543

Summary of estimated amortization expense

Estimated amortization expense for
the year ending December 31,	Amount
2015	$	23,889
2016	$	23,889
2017	$	23,889
2018	$	23,889
2019	$	23,889
Thereafter	$	505,098

 

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2015

Summary of Significant Accounting Policies [Abstract]

Summary of gains and losses from foreign currency transactions

	For the nine months ended  September 30,				For the year ended December 31,
	2015		2014		2014
Period ended RMB: USD Exchange rate		6.3538		6.156		6.1535
Average RMB: USD Exchange rate		6.1606		6.15023		6.14821

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

Segments

9 Months Ended

Sep. 30, 2015

Segments [Abstract]

SEGMENTS

NOTE 10 – SEGMENTS

In 2015 and 2014, the Company operated in three reportable business segments: (1) Healthcare Knit Goods 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 September 30, 2015 

	Sales		COGS		Gross profit		Income (Loss) from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	235,663	$	55,714	$	179,949	$	21,645		$	1,681	$	230,120
Daily Healthcare and Personal Care Series		230,785		73,031		157,754		(17,054	)		1,646		189,146
Wellness House and Activated Water Machine Series		391,680		161,986		229,694		(42,037	)		2,793		349,851
Segment Totals	$	858,128	$	290,731	$	567,397		(37,446	)	$	6,122		769,117
Other Expense, net								(47,272	)
Income Benefits								(4,265	)
Unallocated Assets													6,777,662
Net Loss							$	(80,453	)
Total Assets												$	7,546,779

For the three months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	112,191	$	55,186	$	57,005	$	(30,633	)	$	28,694	$	375,396
Daily Healthcare and Personal Care Series		118,184		50,059		68,125		(26,146	)		30,227		264,027
Wellness House and Activated Water Machine Series		260,374		132,884		127,490		(151,635	)		66,592		312,643
Segment Totals	$	490,749	$	238,129	$	252,620		(208,414	)	$	125,513		952,066
Other Income, net								22,663
Income Benefits								(2	)
Unallocated Assets													7,295,935
Net Loss							$	(185,749	)
Total Assets												$	8,248,001

For the nine months ended September 30, 2015

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	754,594	$	187,142	$	567,452	$	(79,330	)	$	93,119	$	230,120
Daily Healthcare and Personal Care Series		504,016		166,134		337,882		(94,125	)		62,197		189,146
Wellness House and Activated Water Machine Series		1,151,718		462,926		688,792		(298,375	)		142,126		349,851
Segment Totals	$	2,410,328	$	816,202	$	1,594,126		(471,830	)	$	297,442		769,117
Other Expense, net								(26,593	)
Income Tax								13,218
Unallocated Assets													6,777,662
Net Loss							$	(511,641	)
Total Assets												$	7,546,779

For the nine months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	258,999	$	125,659	$	133,340	$	(254,718	)	$	97,354	$	375,396
Daily Healthcare and Personal Care Series		269,277		120,329		148,948		(254,510	)		101,217		264,027
Wellness House and Activated Water Machine Series		462,890		213,808		249,082		(444,468	)		173,993		312,643
Segment Totals	$	991,166	$	459,796	$	531,370		(953,696	)	$	372,564		952,066
Other Income, net								21,266
Income Tax								1,697
Unallocated Assets													7,295,935
Net Loss							$	(934,127	)
Total Assets												$	8,248,001

XML

Income Taxes

9 Months Ended

Sep. 30, 2015

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

	For the nine months ended September 30,
	2015			2014
Tax computed at China statutory rates		25	%		25	%
Effect of losses		(25	%)		(25	%)
Effective rate		0	%		0	%

XML

Statutory Reserves

9 Months Ended

Sep. 30, 2015

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 September 30, 2015, the Company had allocated $354,052 to statutory reserves.

XML

Franchise Revenues

9 Months Ended

Sep. 30, 2015

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 September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Sales to franchise customers	$	621,030	$	338,884	$	1,767,370	$	731,075
Sales to non-franchise customers		237,098		151,865		642,958		260,091
Total sales	$	858,128	$	490,749	$	2,410,328	$	991,166

XML

Inventories (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary of inventories
Raw materials	$ 194,108	$ 197,027
Packages		663
Finished goods	$ 598,182	663,187
Low value consumables	40,097	41,278
Total	832,387	902,155
Less: impairment loss	(137,535)	(142,012)
Inventory, net	$ 694,852	$ 760,143

XML

Inventories (Tables)

9 Months Ended

Sep. 30, 2015

Inventories [Abstract]

Summary of inventories

	September 30,			December 31,
	2015			2014
Raw materials	$	194,108		$	197,027
Packages		-			663
Finished goods		598,182			663,187
Low value consumables		40,097			41,278
Total		832,387			902,155
Less: impairment loss		(137,535	)		(142,012	)
Inventory, net	$	694,852		$	760,143

XML

Segments (Tables)

9 Months Ended

Sep. 30, 2015

Segments [Abstract]

Schedule of segment reporting

For the three months ended September 30, 2015 

	Sales		COGS		Gross profit		Income (Loss) from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	235,663	$	55,714	$	179,949	$	21,645		$	1,681	$	230,120
Daily Healthcare and Personal Care Series		230,785		73,031		157,754		(17,054	)		1,646		189,146
Wellness House and Activated Water Machine Series		391,680		161,986		229,694		(42,037	)		2,793		349,851
Segment Totals	$	858,128	$	290,731	$	567,397		(37,446	)	$	6,122		769,117
Other Expense, net								(47,272	)
Income Benefits								(4,265	)
Unallocated Assets													6,777,662
Net Loss							$	(80,453	)
Total Assets												$	7,546,779

For the three months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	112,191	$	55,186	$	57,005	$	(30,633	)	$	28,694	$	375,396
Daily Healthcare and Personal Care Series		118,184		50,059		68,125		(26,146	)		30,227		264,027
Wellness House and Activated Water Machine Series		260,374		132,884		127,490		(151,635	)		66,592		312,643
Segment Totals	$	490,749	$	238,129	$	252,620		(208,414	)	$	125,513		952,066
Other Income, net								22,663
Income Benefits								(2	)
Unallocated Assets													7,295,935
Net Loss							$	(185,749	)
Total Assets												$	8,248,001

For the nine months ended September 30, 2015

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	754,594	$	187,142	$	567,452	$	(79,330	)	$	93,119	$	230,120
Daily Healthcare and Personal Care Series		504,016		166,134		337,882		(94,125	)		62,197		189,146
Wellness House and Activated Water Machine Series		1,151,718		462,926		688,792		(298,375	)		142,126		349,851
Segment Totals	$	2,410,328	$	816,202	$	1,594,126		(471,830	)	$	297,442		769,117
Other Expense, net								(26,593	)
Income Tax								13,218
Unallocated Assets													6,777,662
Net Loss							$	(511,641	)
Total Assets												$	7,546,779

For the nine months ended September 30, 2014

	Sales		COGS		Gross profit		Loss from operations			Depreciation and amortization		Assets
Healthcare Knit Goods Series	$	258,999	$	125,659	$	133,340	$	(254,718	)	$	97,354	$	375,396
Daily Healthcare and Personal Care Series		269,277		120,329		148,948		(254,510	)		101,217		264,027
Wellness House and Activated Water Machine Series		462,890		213,808		249,082		(444,468	)		173,993		312,643
Segment Totals	$	991,166	$	459,796	$	531,370		(953,696	)	$	372,564		952,066
Other Income, net								21,266
Income Tax								1,697
Unallocated Assets													7,295,935
Net Loss							$	(934,127	)
Total Assets												$	8,248,001

XML

Franchise Revenues (Details Textual)	9 Months Ended
	Sep. 30, 2015
Franchise Revenues (Textual)
Term of franchising agreements	3 years

XML

Related Party Transactions (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary of payables due to related parties
Due to related parties	$ 133,007	$ 43,051
Shenyang Joway Industrial Development Co., Ltd. [Member]
Summary of payables due to related parties
Due to related parties	2,293	6,073
Jinghe Zhang [Member]
Summary of payables due to related parties
Due to related parties	$ 130,714	$ 36,978

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (511,641)	$ (934,127)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation	283,868	354,832
Amortization	13,574	17,732
Changes in operating assets and liabilities:
Accounts receivable, trade	26,192	1,486.00
Other receivables	5,421	(2,196)
Inventories	69,768	223,779
Advances to suppliers	31,736	63,512
Prepaid expense	(2,694)	5,029
Accounts payable	47,900	(14,543)
Advances from customers	188,649	141,144
Other payable	1,815	1,036
Salary and welfare payable	3,087	(15,259)
Taxes payable	19,416	31,374
Net cash provided by (used in) operating activities	177,091	(126,201)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment	$ (165,512)	(1,974)
Redemption of long-term investment		245,339
Net cash provided by (used in) investing activities	$ (165,512)	243,365
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to (from) related parties	89,956	(26,922)
Net cash provided by (used in) financing activities	89,956	(26,922)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	54,335	(55,548)
NET INCREASE IN CASH	155,870	34,694
CASH, beginning of period	542,672	477,642
CASH, end of period	698,542	512,336
SUPPLEMENTAL DISCLOSURES:
Income taxes paid	$ 23,457	$ 2,883
Interest paid

XML

Property, Plant and Equipment

9 Months Ended

Sep. 30, 2015

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	September 30,			December 31,
	2015			2014
Building	$	6,230,395		$	6,433,198
Operating Equipment		375,734			387,964
Office furniture and equipment		344,466			344,290
Vehicles		1,157,695			1,041,065
Total		8,108,290			8,206,517
Less: accumulated depreciation		(2,764,459	)		(2,480,591	)
Property, plant and equipment, net	$	5,343,831		$	5,725,926

Depreciation expense for the three months ended September 30, 2015 and 2014 amounted to $6,293 and $119,377, respectively, and for the nine months ended September 30, 2015 and 2014 amounted to $283,868 and $354,832, respectively.

XML

Franchise Revenues (Tables)

9 Months Ended

Sep. 30, 2015

Franchise Revenues [Abstract]

Schedule franchise revenue

	For the three months ended September 30,				For the nine months ended September 30,
	2015		2014		2015		2014
Sales to franchise customers	$	621,030	$	338,884	$	1,767,370	$	731,075
Sales to non-franchise customers		237,098		151,865		642,958		260,091
Total sales	$	858,128	$	490,749	$	2,410,328	$	991,166

XML

Intangible Assets (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Summary of intangible assets
Land use rights	$ 649,699	$ 670,847
Other intangible assets	83,126	85,832
Total	732,825	756,679
Less: accumulated amortization	(145,710)	(132,136)
Intangible assets, net	$ 587,115	$ 624,543

XML

Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2015

Accounts Receivable [Abstract]

Summary of accounts receivable

	September 30,		December 31,
	2015		2014
Accounts receivable	$	-	$	26,192
Less: allowance for bad debt		-		-
	$	-	$	26,192