| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Jul. 31, 2019 |
| Accounting Policies [Abstract] | |
| Liquidity | Liquidity In assessing the Company’s liquidity,
the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity
needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing in the
form of loans payable and loans from related parties have been utilized to finance the working capital requirements of the Company
and acquisitions of businesses. As of July 31, 2019, the Company’s working deficit was approximately $1.9 million and the
Company had cash of approximately $3.5 million. Although the Company believes that it can realize its current assets in the normal
course of business, the Company’s ability to repay its current obligations will depend on the future realization of its current
assets and the future operating revenues generated from its operations. The Company expects to realize the balance
of its current assets within the normal operating cycle of a twelve month period. If the Company is unable to realize its current
assets within the normal operating cycle of a twelve month period, the Company may have to consider supplementing its available
sources of funds through the following sources:
● the Company will continuously seek equity financing (including an a proposed underwritten public offering pursuant to a registration statement on Form S-1 filed with the SEC on February 1, 2019) to support its working capital;
● other available sources of financing from PRC banks and other financial institutions;
● financial support and credit guarantee commitments from the Company’s related parties. Based on the above considerations, the
Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements
and current liabilities as they become due one year from the date of this report. However, there is no assurance that management
will be successful in their plans. There are a number of factors that could potentially arise that could undermine the Company’s
plans, such as changes in the demand for the Company’s products or installations, PRC government policy, economic conditions,
and competitive pricing in the industries that the Company operates in. The Company’s management has considered
whether there is a going concern issue due to the Company’s recurring losses from operations. Based upon the continuing financial
support and credit guarantee commitments from the Company’s related parties to provide the necessary funds to the Company
to continue its operations should the need arise, the management of the Company believes that it has alleviated the going concern
issue. |
| Basis of presentation | Basis of presentation The consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Company’s consolidated financial statements are expressed in U.S. dollars. |
| Principles of consolidation | Principles of consolidation The consolidated financial statements include
the financial statements of the Company, its subsidiaries, the VIEs for which the Company or its subsidiary is the primary beneficiary
and the VIEs’ subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
| Use of estimates and assumptions | Use of estimates and assumptions The preparation of consolidated financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the
Company’s consolidated financial statements include the estimated cost used to calculate the percentage of completion recognized
in the Company’s revenues, the useful lives of property, plant and equipment, impairment of long-lived assets, allowance
for accounts receivable doubtful accounts, allowance for inventory obsolescence reserve, allowance for advance to suppliers doubtful
accounts, allowance for deferred tax assets, fair value of the assets and the liabilities of the entities acquired through its
business combination, valuation of warranty reserves, contingent consideration liabilities, and the accrual of potential liabilities.
Actual results could differ from these estimates. |
| Variable interest entities | Variable interest entities On September 30, 2018, Xiangtian Shenzhen
terminated the VIE Agreements as part of its restructuring to facilitate the shift of business focus between entities controlled
by the Company. After the restructuring, the Company’s headquarter is now located in the city of Xianning, Hubei Province,
and Sanhe Xiangtian, the Company’s previous headquarters, located in the city of Sanhe, Hebei Province, has become the Company’s
sales office. The VIE Agreements include the following:
● Framework Agreement on Business Cooperation, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian;
● Exclusive Management, Consulting and Training and Technical Service Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian;
● Exclusive Option Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and Shanhe Xiangtian Shareholders;
● Equity Pledge Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and the Shanhe Xiangtian Shareholders;
● Know-How Sub-License Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; and
● Powers of Attorney of the Sanhe Xiangtian Shareholders dated July 25, 2014. In connection with the termination of the
VIE Agreements, on September 30, 2018, Sanhe Xiangtian transferred its 100% equity interest of Xianning Xiangtian to the Sanhe
Xiangtian Shareholders and the Sanhe Xiangtian Shareholders transferred their 100% equity interest of Sanhe Xiangtian to Xianning
Xiangtian. As a result of the foregoing equity transfers, Sanhe Xiangtian became a wholly owned subsidiary of Xianning Xiangtian. On the same day, the Company, through Xiangtian
Shenzhen and Xiangtian HK, entered into the New VIE Agreements, pursuant to which Xianning Xiangtian became the Company’s
new contractually controlled affiliate. The principal terms of the agreements entered
into among Xianning Xiangtian and Xiangtian Shenzhen, the primary beneficiary, are described below:
● Framework Agreement on Business Cooperation
● Agreement of Exclusive Management, Consulting and Training and Technical Service
● Exclusive Option Agreement
● Equity Pledge Agreement
● Know-How Sub-License Agreement
● Power of Attorney
● Spousal Consent Letters The Framework Agreement and the Exclusive
Management Agreement have initial terms of ten years but each contains a renewal provision that allows Xiangtian Shenzhen to extend
the term of such agreements at its sole option by written notice with no limitation as to such extensions. The Know-How Sub-License
Agreement is valid for the duration of Xianning Xiangtian’s operation. The other agreements are of unlimited duration. The Company’s total assets and liabilities
presented in the accompanying consolidated financial statements represent substantially all of total assets and liabilities of
the VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities.
The following financial statement amounts and balances of the VIE were included in the accompanying consolidated financial statements
as of July 31, 2019 and 2018 and for the years ended July 31, 2019, 2018 and 2017, respectively:
July 31, July 31,
Current assets $ 22,287,078 $ 33,240,433
Current assets of discontinued operations 4,441,772 -
Non-current assets 26,783,807 25,568,517
Non-current assets of discontinued operations 9,537,179 -
Total assets $ 63,049,836 $ 58,808,950
Current liabilities $ 23,617,149 $ 46,576,026
Current liabilities of discontinued operations 1,499,012 -
Non-current liabilities 279,764 7,205,133
Total liabilities $ 25,395,925 $ 53,781,159
For the year ended For the year ended For the year ended
Revenues $ 53,126,913 $ 15,269,788 $ 9,502,952
Gross Profit $ 12,910,123 $ 2,632,324 $ 1,296,745
Income (loss) from continuing operations $ 3,296,310 $ 144,953 $ (4,089,881 )
Net loss from continuing operations attributable to XT Energy Group, Inc. $ (78,826 ) $ (380,049 ) $ (4,124,909 )
Net income from discontinued operations attributable to XT Energy Group, Inc. 946,037 - -
Net income (loss) attributable to XT Energy Group, Inc. $ 867,211 $ (380,049 ) $ (4,124,909 ) |
| Business Combinations | Business Combinations The purchase price of an acquired company
is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their
estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired
business are included in the Company’s operating results from the date of acquisition. |
| Cash | Cash Cash denominated in RMB with a U.S. dollar
equivalent of $3,250,535 and $14,207,358 at July 31, 2019 and 2018, respectively, were held in accounts at financial institutions
located in the PRC‚ which is not freely convertible into foreign currencies. In addition, these balances are not covered
by insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors
their credit worthiness. The Company, its subsidiaries and VIE have not experienced any losses in such accounts and do not believe
the cash is exposed to any significant risk. As of July 31, 2019 and 2018, cash balance of $177,107 and $2,481, respectively, were
maintained at U.S. financial institutions, and were insured by the Federal Deposit Insurance Corporation or other programs subject
to certain limitations up to $250,000 per depositor. As of July 31, 2019 and 2018, cash balance of $26,288 and $26,402, respectively,
were maintained at financial institutions in Hong Kong, and were insured by the Hong Kong Deposit Protection Board up to a limit
of HK $500,000 (approximately $64,000). |
| Restricted Cash | Restricted Cash Restricted cash represents cash held by
banks as guarantee deposit collateralizing notes payable pending to be released back to unrestricted cash. In November 2016, the FASB issued ASU No.
2016-18, Statement of Cash Flows (230): Restricted Cash. The amendments in this update require that a statement of cash flows explain
the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted
cash equivalents. For public business entities, the amendments in this update are effective for fiscal years beginning after December
15, 2017, and interim periods within those annual periods. Earlier adoption is permitted. The amendments in this update should
be applied using a retrospective transition method to each period presented. On August 1, 2018, the Company adopted this guidance
on a retrospective basis. |
| Short-term Investment | Short-term Investment Short-term investment consists of time
deposit placed with a bank, which contains a fixed or variable interest rate and has original maturity within one year. Such investment
is permitted to be redeemed early without penalties prior to maturity. Given the short-term nature, the carrying value of short-term
investment approximates its fair value. The Company does not intend to withdraw early. There was no other-than-temporary impairment
of short-term investment for the years ended July 31, 2019, 2018 and 2017. |
| Notes Receivable | Notes Receivable Notes receivable represents commercial
notes due from various customers where the customers’ banks have guaranteed the payments. The notes are noninterest bearing
and normally paid within three to six months. The Company has the ability to submit requests for payments to the customer’s
banks earlier than the scheduled payments date, but will incur an interest charge and a processing fee. |
| Accounts Receivable, net | Accounts Receivable, net Accounts receivables, net, are recognized
and carried at original invoiced amount less an allowance for any uncollectible accounts. The Company uses the aging method to
estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debts determined
by management are based on historical experience as well as the current economic climate and are applied to customers’ balances
categorized by the number of months the underlying invoices have remained outstanding. Management reviews its receivables on a
regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account
balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection
is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and
update it if necessary. |
| Inventories, net | Inventories, net Inventories, net, consist of raw materials,
work in progress and finished goods and are stated at the lower of cost or net realizable value using the weighted average method.
When appropriate, impairment to inventories are recorded to write down the cost of inventories to their net realizable value. |
| Advances to Suppliers, net | Advances to Suppliers, net Advances to suppliers, net, are cash deposited
or advanced to outside vendors or services providers for future inventory purchases or future services. This amount is refundable
and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories
or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers
on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances
are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not
probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update
it if necessary. As of July 31, 2019 and 2018, there were no such allowances. |
| Contract Assets | Contract Assets The differences between the timing of the
Company’s revenue recognized (based on costs incurred) and customer billings (based on unconditional rights to receive the
consideration in the contractual terms) results in changes to the Company’s contract asset or contract liability positions.
Provisions for estimated losses of contract assets on uncompleted contracts are made in the period in which such losses are determined. |
| Prepaid Expenses | Prepaid Expenses Prepaid expenses represent advance payments
made to vendors for services such as rent, consulting and certification. |
| Other Receivables | Other Receivables Other receivables primarily include advances
to employees, receivables from sales of equipment, and other deposits. Management regularly reviews the aging of receivables and
changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered
uncollectable are written off against allowances after exhaustive efforts at collection are made. No allowance was required as
of July 31, 2019 and 2018. |
| Other Receivables - Related Parties | Other Receivables – Related Parties Other receivables – related parties
presents advances to management of the Company for business development and travel advances. |
| Loans Receivables | Loans Receivables Loans receivables represents interest free
advances to the former shareholder of Hubei Jinli by the Company prior to the acquisition of Hubei Jinli on June 30, 2018. These
advances were unsecured and due on demand. Full outstanding balance in amount of $1,759,428 as of July 31, 2018 was repaid in August
2018. |
| Property, Plant and Equipment, net | Property, Plant and Equipment, net Property, plant and equipment are stated
at cost net of accumulated depreciation and impairment losses. Depreciation is provided over the estimated useful lives of the
assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking
into account the assets’ estimated residual value:
Classification Estimated Useful Life Estimated Residual Value
Plant and buildings 5-20 years 0-5%
Machinery equipment 5-10 years 0-5%
Computer and office equipment 3-10 years 0-5%
Vehicles 5-10 years 0-5%
Plant improvement and fixtures Shorter of lease term or estimated useful live of 5 - 20 years 0-5% 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 and other comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while
additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. Construction-in-progress represents contractor
and labor costs, design fees and inspection fees in connection with the construction of the Company’s synthetic fuel raw
materials production line, factory plantation, fire safety equipment installation, piping and plant improvement. No depreciation
is provided for construction-in-progress until it is completed and placed into service. |
| Intangible Assets, net | Intangible Assets, net Intangible assets, net, are stated at cost,
less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of
the assets as follows:
Classification Estimated Useful Life
Land use rights 50 years
Technology know-hows 10 years
Patents, licenses and certifications 3-10 years
Software 3 years All land in the PRC is owned by the government;
however, the government grants “land use rights.” The Company has obtained rights to use various parcels of land for
50 years through the acquisition of Hubei Jinli in June 2018 and through the acquisition of Wine Co. in December 2018. Technology know-hows, including LSC Hand-Held
Diesel Pump, CB-39 Motor Oil Pump, 0-16 MPa series hydraulic cylinder, brake cylinder and hydraulic value, and certain special
operating and production licenses were acquired through the acquisition of Hubei Jinli and Tianjin Jiabaili in June 2018 and through
the acquisition of Herbal Wine Co. and Wine Co. in December 2018 with estimated finite useful lives between 4.5 years to 10 years. Certain PV panel certifications were contributed
by the Company’s noncontrolling interest shareholders as capital contribution in March 2018 with an estimated finite useful
lives of 10 years. The Company also acquired a safety production
license and an accounting software with a finite useful life of 3 years in June 2018 and January 2019, respectively. |
| Goodwill | Goodwill Goodwill represents the excess of the consideration
paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition.
Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may
have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written
off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive loss. Impairment
losses on goodwill are not reversed. The Company reviews the carrying value
of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more
frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred. The Company has
the opinion to access qualitative factors to determine whether it is necessary to perform the two-step in accordance with ASC 350-20.
If the Company believes, as a result of the qualitative carrying amount, the two-step quantities impairment test described below
is required. The first step compares the fair values
of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying
amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit
exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s
goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business acquisition with the
allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess
of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill.
Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash
flow. If
impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements
of operations and comprehensive loss. Impairment losses on goodwill are not reversed. For the years ended July 31, 2019, 2018
and 2017, an impairment of $339,221, $0, and $0, respectively were recorded for goodwill. |
| Impairment for Long-Lived Assets | Impairment for Long-Lived Assets Long-lived assets, including plant and
equipment and intangible with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant
adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset
may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets
are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from
the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the
asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based
on a discounted cash flows approach or, when available and appropriate, to comparable market values. For
the years ended July 31, 2019, 2018 and 2017, an impairment of $644,382, $0,
and $0, respectively were recorded for intangible assets. |
| Subscription Receivable | Subscription Receivable Subscription receivable represents unpaid capital contribution
from its shareholders. |
| Fair Value Measurement | Fair Value Measurement The Company applies the provisions of Accounting
Standards Codification (“ASC”) Subtopic 820-10, “Fair Value Measurements”, for fair value measurements
of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed
at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures
about fair value measurements. Fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions
that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy
that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority
to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority
to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy
are as follows:
● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. The following table sets forth by level
within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on
a recurring basis as of July 31, 2019 and 2018:
Financial Assets Carrying Fair Value
Measurements at
Level 1 Level 2 Level 3
Short-term investment $ 435,787 $ 435,787 $ - $ -
Financial Liabilities Carrying Fair Value
Measurements at
Level 1 Level 2 Level 3
Contingent payment consideration liabilities (see Note 3) $ 331,505 $ - $ - $ 331,505 The following is a reconciliation of the
beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis on level 3 measurements
for the years ended July 31, 2019 and 2018:
July 31, July 31,
Beginning balance $ 331,505 $ -
Contingent liability obligated from business combinations - 341,411
Change in estimated contingent liabilities 243,658 -
Release from level 3 measurement due to contingent payments has been finalized (570,322 )
Exchange rate effect (4,841 ) (9,906 )
Ending balance $ - $ 331,505 The Company believes the carrying amount
reported in the consolidated balance sheet for cash, restricted cash, notes receivable, accounts receivable, inventories, advance
to suppliers, contract assets, prepaid expenses, other receivables, loan receivables, deposit for investments, short-term loans,
accounts payable, advances from customers, other payables and accrued liabilities, tax payables and short-term investment payable
approximate fair value because of the short-term nature of such instruments. The carrying amount of long-term investment payable
reported in the consolidated balance sheets at carrying value, which approximates fair value as the rate of amortization of investment
payment discount used were similar to interest rate charged by the bank in the PRC. As of July 31, 2019 and 2018, long-term investment
payable balance was $279,764, net of discount of $25,999, and $7,205,133, net of discount of $869,173, respectively. |
| Discontinued operations | Discontinued operations In accordance with ASU No. 2014-08, Reporting
Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group
of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that
has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the
criteria in paragraph 205-20-45-1E to be classified as discontinued operations. When all of the criteria to be classified as discontinued
operations are met, including management having the authority to approve the action and committing to a plan to sell the entity,
the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total
assets and liabilities separate from the balances of the continuing operations. At the same time, the results of discontinued operations,
less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss)
of continuing operations in accordance with ASC 205-20-45. See Note 4 – Discontinued operations. |
| Revenue Recognition | Revenue Recognition On August 1, 2018, the Company adopted
Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC Topic 606) using the modified
retrospective method for contracts that were not completed as of July 31, 2018. This did not result in an adjustment to the retained
earnings upon adoption of this new guidance as the Company’s revenue was recognized based on the amount of consideration
expected to receive in exchange for satisfying the performance obligations. The core principle underlying the revenue
recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount
that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to
identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time,
based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized over time
for the Company’s sale and installation of power generation systems and are recognized at a point in time for the Company’s
sale of products. The ASU requires the use of a new five-step
model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with
the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable
consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction
price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the
performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result
in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition
policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new
guidance and confirmed that there were no differences in the pattern of revenue recognition. Sale and installation of power generation systems Sales of power generation system in conjunction
of system installation are generally recognized based on the Company’s efforts or inputs to the satisfaction of a performance
obligation using an input measure method, which essentially the same as the percentage of completion method prior to August 1,
2018 for its installation project. Therefore, take into account the costs, estimated earnings and revenue to date on contracts
not yet completed. Revenue recognized is that percentage of the total contract price that costs expended to date bear to anticipated
final total costs, based on current estimates of costs to complete. Contract costs include all direct material and labor costs
and those indirect costs related to contract performance, such as indirect labor and supplies. Adjustments to the original estimates
of the total contract revenue, total contract costs, or the extent of progress toward completion are often required as work progresses.
Such changes and refinements in estimation are reflected in reported results of operations as they occur; if material, the effects
of changes in estimates are disclosed in the notes to the consolidated financial statements. The key assumptions used in the estimate
of costs to complete relate to the unit material cost, the quantity of materials to be used, the installation cost and those indirect
costs related to contract performance. The estimate of unit material cost is reviewed and updated on a quarterly basis, based on
the updated information available in the supply markets. The estimate of material quantity to be used for completion and the installation
cost is also reviewed and updated on a quarterly basis, based on the updated information on the progress of project execution.
If the supply market conditions or the progress of project execution were different, it is likely that materially different amounts
of contract costs would be used in the input method of accounting. Thus the uncertainty associated with those estimates may impact
the Company’s consolidated financial statements. Selling, general, and administrative costs are charged to expense as incurred.
At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the consolidated
financial statements. Claims for additional contract costs are recognized upon a signed change order from the customer. The installation revenues and sales of
equipment and system component are combined and considered as one performance obligation. The promises to transfer the equipment
and system component and installation are not separately identifiable, which is evidencing by the fact that the Company provides
a significant services of integrating the goods and services into a power generation system for which the customer has contracted.
The Company currently does not have any modification of contract and the contract currently does not have any variable consideration. The Company’s sale and installation
of power generation systems revenue for the years ended July 31, 2019, 2018 and 2017 were $391,837, $5,456,463, and $7,299,943,
respectively. Sales of products The
Company continues to derive its revenues from sales contracts with its customers with revenues being recognized upon delivery
of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the
customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. Such
revenues are recognized at a point in time after all performance obligations are satisfied and based on when control of goods
transfer to a customer, which is generally similar to when its delivery has occurred prior to August 1, 2018. The Company’s disaggregate sale of
products streams for the years ended July 31, 2019, 2018 and 2017 are summarized as follows:
For the Year Ended For the Year Ended For the Year Ended
Revenues – sales of products
PV panels and others $ 23,321,989 $ 5,583,858 $ 2,221,428
Air compression equipment and other components 1,373,196 1,101,744 -
Heat pumps 8,771,452 1,533,845 -
High-grade synthetic fuel 12,957,944 1,351,215 -
Hydraulic parts and electronic components 6,310,495 242,663 -
Wine and herbal wine 2,107,593 - -
Total revenue – sales of products 54,842,669 9,813,325 2,221,428
Less: revenues – sales of products from discontinued operations (2,107,593 ) - -
Revenues – sales of products from continuing operations $ 52,735,076 $ 9,813,325 $ 2,221,428 Gross versus Net Revenue Reporting In the normal course of the Company’s
trading business, the Company orders products directly from its suppliers and drop ships the products directly to its customers.
In these situations, the Company generally collects the sales proceeds directly from its customers and pays for the inventory purchases
to its suppliers separately. The determination of whether revenues should be reported on a gross or net basis is based on the Company’s
assessment of whether it is the principal or an agent in the transaction. In determining whether the Company is the principal or
an agent, the Company follows the accounting guidance for principal-agent considerations. Because the Company is not the primary
obligor and is not responsible for (i) fulfilling the resale products delivery, (ii) establishing the selling prices for delivery
of the resale products, (iii) performing all billing and collection activities including retaining credit risk and (iv) baring
the back-end risk of inventory loss with respect to any product return from its customer, the Company has concluded that it is
the agent in these arrangements, and therefore reports revenues and cost of revenues on a net basis. |
| Warranty | Warranty The Company generally provides limited
warranties for work performed under its contracts. At the time a sale is recognized, the Company records estimated future warranty
costs under ASC 460. Such estimated costs for warranties are estimated at completion and these warrants are not service warranties
separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s
best estimate. There were no such reserves recorded for the years ended July 31, 2019 and 2018. No right of return exists on sales
of inventory. As of July 31, 2019 and 2018, accrued warranty expense amounted to $65,182 and $65,791, respectively, and classified
in the caption “other payables and accrued liabilities” in the accompanying consolidated balance sheets. |
| Advertising costs | Advertising Costs Advertising costs are expensed as incurred
and included in selling and general and administrative expenses. Advertising costs amounted to $63,595, $12,892, and $1,896 for
the years ended July 31, 2019, 2018, and 2017, respectively. |
| Employee benefit | Employee Benefit The full-time employees of the Company
are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other
welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on
certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC
regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans
were $248,904, $151,167, and $131,923 for the years ended July 31, 2019, 2018, and 2017, respectively. |
| Research and development ("R&D") | Research and development (“R&D”) Research and development expenses include
salaries and other compensation-related expenses paid to the Company’s research and product development personnel while they
are working on R&D projects, as well as raw materials used for the R&D projects. R&D expenses amounted to $323,216,
$3,677 and $0 for the years ended July 31, 2019, 2018 and 2017, respectively. |
| Value added taxes | Value Added Taxes The Company is subject to value added tax
(“VAT”). Revenue from sales of goods purchased from other entities is generally subject to VAT at the rate of 13% starting
in April 2019, 16% starting in April 2018 and 17% prior to April 2018 and prior for all of its products except Herbal Wine which
is at the rate of 3%. The Company is entitled to a refund for VAT already paid on goods purchased. The VAT balance is recorded
in other payables on the consolidated balance sheets. Revenues are presented net of applicable VAT. |
| Income taxes | Income Taxes The Company accounts for income taxes in
accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for
items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted
by the balance sheet date. Deferred taxes are accounted for using
the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets
and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable
tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences
can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized
or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited
or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized
as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with
a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50%
likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit
is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the
period incurred. PRC tax returns filed in 2014 to 2018 are subject to examination by any applicable tax authorities. |
| Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company follows the provisions of the
Financial Accounting Standards Board (the “FASB”) ASC 220 “Reporting Comprehensive Income”. Comprehensive
income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to
owners. The Company had other comprehensive loss of ($492,428), ($114,539) and ($180,921) for the years ended July 31, 2019, 2018,
and 2017, respectively, from foreign currency translation adjustments. |
| Foreign Currency Translation | Foreign Currency Translation The reporting currency of the Company is
the U.S. dollar. The functional currency of the Company is the RMB as substantially all of the Company’s PRC subsidiaries’
operations use this denomination. Foreign denominated monetary assets and liabilities are translated into their United States dollar
equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated
at the exchange rates prevailing at the transaction date. Revenues and expenses are translated at average rates of exchange during
the year. Gains or losses resulting from foreign currency transactions are included in results of operations. For the purpose of presenting these financial
statements of subsidiaries in PRC, the Company’s assets and liabilities are expressed in U.S. dollars at the exchange rate
on the balance sheet date, which is 6.8841 and 6.8204 as of July 31, 2019 and 2018, respectively; stockholders’ equity accounts
are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the
period, which is 6.8340, 6.5013, and 6.8160 for the years ended July 31, 2019, 2018 and 2017, respectively. The resulting translation
adjustments are reported under accumulated other comprehensive income (loss) in the stockholders’ equity section of the consolidated
balance sheets. For the purpose of presenting these financial
statements of the subsidiary in Hong Kong, the Company’s assets and liabilities are expressed in U.S. dollars at the exchange
rate on the balance sheet date, which is 7.8275 and 7.8490 as of July 31, 2019 and 2018, respectively; stockholders’ equity
accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate
during the period, which is 7.8369, 7.8280 and 7.7696 for the years ended July 31, 2019,2018 and 2017, respectively. The resulting
translation adjustments are reported under accumulated other comprehensive loss in the stockholders’ equity section of the
consolidated balance sheets. |
| Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic
earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number
of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted
loss per share gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options
or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares
assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using
the if-converted method. Loss per share excludes all potential dilutive shares of common stock if their effect is anti-dilutive. |
| Statutory Reserves | Statutory Reserves Pursuant to the laws applicable to the
PRC, PRC entities must make appropriations from after-tax profit to the non-distributable statutory surplus reserve fund. Subject
to certain cumulative limits, the statutory surplus reserve fund requires annual appropriations of 10% of after-tax profit until
the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted
in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations
should be made to the reserve fund. For foreign invested enterprises, the annual appropriation for the reserve fund cannot be less
than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC
GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net
income after tax to offset against the accumulate loss. For the years ended July 31, 2019 and 2018, the Company has contributed
$572,642 and $108,487, respectively, to the statutory reserves. |
| Contingencies | Contingencies From time to time, the Company is a party
to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when
they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are
expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation
individually or in the aggregate would have a material adverse impact on the Company’s consolidated financial position, results
of operations and cash flows. |
| Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02,
Leases (Topic 842), to increase the transparency and comparability about leases among entities. The new guidance requires lessees
to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures
about leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and
requires a modified retrospective approach to adoption assuming the Company will remain an emerging growth company at that date.
Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017-13, which to clarify effective dates that public
business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that otherwise
would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial
statements or financial information in another entity’s filing with the SEC adopting ASC Topic 842 for annual reporting periods
beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15,
2020. ASU No. 2017-13 also amended that all components of a leveraged lease be recalculated from inception of the lease based
on the revised after tax cash flows arising from the change in the tax law, including revised tax rates. The difference between
the amounts originally recorded and the recalculated amounts must be included in income of the year in which the tax law is enacted.
The Company adopted ASU 2016-02 on August 1, 2019. The Company adopted the practical expedient that allows lessees to treat the
lease and non-lease components of a lease as single lease component. The impact of the adoption of the Topic 842, as of August
1, 2019, the Company recognized approximately $2.9 million right of use (“ROU”) assets and approximately $2.3 million
lease liabilities. The adoption of this standard resulted in the recording of operating lease assets and operating lease liabilities
as of August 1, 2019, with no related impact on the Company’s consolidated statement of changes in stockholders’ equity or consolidated
statements of operations and comprehensive loss. The recognition of ROU assets and lease liabilities are based on the present value
of the remaining lease payments over the lease term with a term of longer than 12 months. Since the implicit rate for
the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information
available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate
of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in
a similar economic environment and over a similar term of 4.75% and 4.90% of PRC borrowing rate as of August 1, 2019. In February 2018, the FASB issued ASU
2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated
Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic
220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related
tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all
entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of
the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting
periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which
financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in
the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate
income tax rate in the Tax Cuts and Jobs Act is recognized. Management does not believe the adoption of this ASU would have a
material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018-13,
“Fair Value Measurement (Topic 820): Disclosure Framework —Changes to the Disclosure Requirements for Fair Value Measurement”
(“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value
Measurement”. ASU 2018-13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures
for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional
disclosures for Level 3 fair value measurements. ASU 2018-13 is effective for the Company for annual and interim reporting periods
beginning August 1, 2020. The Company is currently evaluating the impact of this new standard on its consolidated financial statements
and related disclosures. In May 2019, the FASB issued ASU 2019-05,
which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses
on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial
assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added
Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13
also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when
fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale
Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably
elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted
transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies
for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply
with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. ASU 2019-05
is effective for the Company for annual and interim reporting periods beginning August 1, 2020. The Company is currently evaluating
the impact of this new standard on its consolidated financial statements and related disclosures. Other recent accounting pronouncements
issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities
and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future
financial statements. |
