UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the six-month period ended September 30, 2021

HAPPINESS DEVELOPMENT GROUP LIMITED

(Exact name of registrant as specified in its charter)

No. 11, Dongjiao East Road, Shuangxi, Shunchang, Nanping City

Fujian Province, People’s Republic of China
+86-0599-782-8808

(Address of Principal Executive Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form40-F.

Form 20-F ☒   Form40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

EXPLANATORY NOTE

Happiness Development Group Limited (the “Company”) is furnishing this Form 6-K to provide six-month interim financial statements and incorporate such financial statements into the Company’s registration statements referenced below.

This Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration Number 333-253602) and on Form F-3 (Registration Number 333-250026), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

FORWARD LOOKING STATEMENT

This Report of Foreign Private Issuer on Form 6-K filed by Happiness Development Group Limited (together with our subsidiaries, unless the context indicates otherwise, “we,” “us,” “our,” or the “Company”), contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. The information in this Report on Form 6-K is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this Form 6-K is filed, and the Company does not intend to update any of the forward-looking statements after the date this Report on Form 6-K is filed to confirm these statements to actual results, unless required by law.

Recent Development

Registered Direct Offering

The Company entered into certain securities purchase agreement (the “Purchase Agreement”) on June 25, 2021 relating to the offer and sale of 1,240,000 ordinary shares (the “Shares”), par value $0.0005 per share (the “Ordinary Shares”) in a registered direct offering (the “Offering”). Pursuant to the Purchase Agreement, the Shares were sold at a per share purchase price of $1.74, for gross proceeds of $2,157,600, before deducting the estimated offering expenses. The Offering closed on July 1, 2021.

The Company intends to use the net proceeds from the Offering for the development of the Company’s auto business under the brand of “Taochejun,” working capital and other general corporate purposes.

This offering was made pursuant to an effective shelf registration statement on Form F-3 (File No. 333-250026) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective on November 23, 2020.

Results of Operations

The following information is derived from our Unaudited Financial Results for the Six Months Ended September 30, 2021 and 2020, attached hereto as Exhibit 99.1.

Revenues

We generated $46,884,584 in revenues for the six months ended September 30, 2021, representing an increase of $25,007,350 or 114.3%, as compared with $21,877,234 for the six months ended September 30, 2020. The increase was primarily due to the new goods or service provided including ecommerce sale, automobile sale and advertising service in 2021, offset the decrease of revenue in healthcare products.

Our sales from the healthcare products had dropped down significantly from $21,805,489for the six months ended September 30, 2020 to $11,669,522 for the six months ended September 30, 2021 due to the adverse impact of COVID-19 starting from January 2020. As continuous spreading of COVID-19 in different provinces in China, the performance of our experience stores was greatly impaired. During the six months ended September 30, 2021, we closed 70% experience stores to avoid further losses.

In September 2020, we started our ecommerce sales, the revenue of which for the six months ended September 30, 2021 was $21,485,231. In October 2020, we began providing the internet information and advertising service to individuals or small companies whose businesses need exposure online. For the six months ended September 30, 2021, the information service revenue reached $8,252,060.

In November 2020, we started engaging in selling automobiles to companies or individual customers and built our own brand “Taochejun” in May 2021. Through Taochejun, we aim to build a network among car dealers in China, especially in the third- and fourth-tier cities. During the six months ended September 30, 2021, the revenue from selling automobiles was $5,477,770.

Cost of Revenue 

Cost of revenue increased by $28,910,716 or 235.1%, from $12,299,331 for the six months ended September 30, 2020 to $41,210,047 for the six months ended September 30, 2021. Gross margin were 12.1% and 43.8% for the six months ended September 30, 2021 and 2020, respectively.

Selling and Marketing Expenses

The selling expenses increased by $7,936,691, or 214.5%, from $3,699,676 for the six months ended September 30, 2020 to $11,636,367 for the six months ended September 30, 2021, the increase was primarily due to higher allowance costs, advertising costs, and subsidies to our experience store operators to support their continuity of insufficient business for the prolonged COVID-19 period.

General and Administrative Expenses

The general and administrative expenses increased from $1,441,736 for the six months ended September 30, 2020 to $3,780,718 for the six months ended September 30, 2021, representing an increase of $2,338,982, or 162.2%. The increase was primarily due to the increased costs, including the service charges by internet search engine of key words, brand promotion costs for online store sales and, the share-based compensation cost.

Research and Development Expenses

The research and development expenses increased from $746,898 for the six months ended September 30, 2020 to $789,482 for the six months ended September 30, 2021, representing a slight increase of $42,584, or 5.7%.

(Loss) Income from Operations

We incurred loss from operations of $10,532,030 for the six months ended September 30, 2021, compared to income from operations of $3,689,593 for the six months ended September 30, 2020. Most of the loss was attributed to the performance of the healthcare products segment due to the continuous negative impacts on COVID-19 in different provinces in China. We closed 70% experience stores continuously to avoid further losses.

Income Tax

We incurred income tax expense of $149,429 for the six months ended September 30, 2021, representing a decrease of $573,429 or 79.3%, compared to $722,858 for the six months ended September 30, 2020. The decrease was primarily due to the increasing operating expenses deriving from the new business segments including online stores, the internet information and advertising service and automobiles.

Net Loss

As a result of the foregoing, net loss amounted to $10,543,174 for the six months ended September 30, 2021, compared to net income of $3,186,115 for the six months ended September 30, 2020.

Liquidity and Capital Resources

As of September 30, 2021 and March 31, 2021, we had cash and cash equivalents of $45,710,044 and $36,558,752, respectively. We did not have any other short-term investments.

As of September 30, 2021 and March 31, 2021, our current assets were $86,826,418 and $95,097,618, respectively, and our current liabilities were $12,857,938 and $15,107,629, respectively.

Operating activities

Net cash provided by operating activities was approximately $6.8 million for the six months ended September 30, 2021, compared to net cash of approximately $8.6 million for the six months ended September 30, 2020.

Net cash provided by operating activities for the six months ended September 30, 2021 was mainly due to the decrease of other payables and accrued liabilities approximately $12.6 million, offset by increase of accounts receivable and prepaid expenses of approximately $6.7 million and $15.6 million, respectively.

Investing activities

Net cash used in investing activities was approximately $0.3 million for the six months ended September 30, 2021, as compared to approximately $1.23 million for the six months ended September 30, 2020, due to the new acquisitions and procurements of the equipment and intangible assets.

Financing activities

Net cash provided by financing activities was approximately $2.0 million for the six months ended September 30, 2021, as compared to approximately $1.2 million for the six months ended September 30, 2020.

Net cash provided by financing activities for the six months ended September 30, 2021 was mainly due to repayment to the short-term bank loans of approximately $1.3 million, offset by an approximately $2.2 million capital contribution from issue of new shares and the proceeds from short-term bank loans amounted to $1.1 million.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company’s year-end financial statements, which could result in significant differences from this unaudited financial information.