Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Oct. 14, 2019 | Jan. 31, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | XT Energy Group, Inc. | ||
Entity Central Index Key | 0001472468 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --07-31 | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 31, 2019 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity File Number | 001-38426 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | NV | ||
Entity Ex Transition Period | false | ||
Entity Public Float | $ 770,675,375 | ||
Entity Common Stock, Shares Outstanding | 531,042,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Current assets | ||
Cash | $ 3,459,783 | $ 14,245,783 |
Restricted cash | 76,698 | |
Short-term investment | 435,787 | |
Notes receivable | 2,064,405 | 1,303,443 |
Accounts receivable, net | 3,928,854 | 5,142,780 |
Inventories, net | 6,839,579 | 5,141,533 |
Advances to suppliers, net | 4,723,258 | 1,101,472 |
Contract assets | 2,883,408 | |
Prepaid expenses | 1,551,203 | 1,364,501 |
Other receivables | 509,426 | 77,228 |
Other receivables - related parties | 6,537 | |
Loan receivables | 1,759,428 | |
Deposit for investment, net | 439,857 | |
Current assets of discontinued operations | 4,441,772 | |
Total current assets | 28,037,302 | 33,459,433 |
Other assets | ||
Property, plant and equipment, net | 15,061,856 | 11,966,233 |
Intangible assets, net | 7,789,979 | 9,260,643 |
Prepaid expenses - non-current | 192,327 | 208,498 |
Goodwill | 3,758,145 | 4,133,143 |
Other assets of discontinued operations | 9,537,179 | |
Total other assets | 36,339,486 | 25,568,517 |
Total assets | 64,376,788 | 59,027,950 |
Current liabilities | ||
Short-term loan - bank | 733,095 | |
Current maturities of long-term loan | 3,069,113 | |
Short-term loan - third party | 175,943 | |
Short-term loans - related parties | 20,145,446 | |
Accounts payable | 3,164,927 | 5,349,445 |
Accounts payable - related party | 9,554 | |
Advance from customers | 15,599,402 | 8,326,929 |
Other payables and accrued liabilities | 2,117,660 | 2,424,228 |
Other payables - related parties and director | 6,375,385 | 4,230,118 |
Income taxes payable | 858,662 | 898,424 |
Current maturities of investment payable | 136,314 | 2,505,871 |
Current maturities of investment payable - related parties | 204,648 | 507,143 |
Current liabilities of discontinued operations | 1,499,012 | |
Total current liabilities | 29,965,564 | 48,365,755 |
Other liabilities | ||
Investment payable | 6,700,774 | |
Investment payable - related parties | 279,764 | 504,359 |
Total other liabilities | 279,764 | 7,205,133 |
Total liabilities | 30,245,328 | 55,570,888 |
Commitments and contingencies | ||
Equity | ||
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued and outstanding | ||
Common stock: $0.001 par value, 1,000,000,000 shares authorized, 531,042,000 and 591,042,000 shares issued and outstanding as of July 31, 2019 and 2018 | 531,042 | 591,042 |
Additional paid-in capital | 40,680,195 | 9,860,068 |
Subscription receivable | (250,000) | (310,000) |
Statutory reserves | 572,642 | 108,487 |
Accumulated deficit | (8,292,847) | (6,743,399) |
Accumulated other comprehensive loss | (1,425,617) | (932,061) |
Total XT Energy Group, Inc. common stockholders' equity | 31,815,415 | 2,574,137 |
Noncontrolling interests | 2,316,045 | 882,925 |
Total equity | 34,131,460 | 3,457,062 |
Total liabilities and equity | $ 64,376,788 | $ 59,027,950 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jul. 31, 2019 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 531,042,000 | 591,042,000 |
Common stock, shares outstanding | 531,042,000 | 591,042,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue: | |||
Significant customer, former related party | $ 1,679,679 | $ 1,155,524 | $ 6,798,985 |
Other customers | 51,442,378 | 13,956,373 | 2,551,798 |
Other related parties | 4,856 | 157,891 | 170,588 |
Total revenue | 53,126,913 | 15,269,788 | 9,521,371 |
Cost of sales | 40,216,790 | 12,631,464 | 8,543,207 |
Gross profit | 12,910,123 | 2,638,324 | 978,164 |
Operating expenses: | |||
Selling expenses | 1,671,658 | 301,648 | 33,436 |
General and administrative expenses | 7,607,643 | 3,301,433 | 2,560,480 |
Research and development expenses | 323,216 | 3,677 | |
(Recovery) provision for doubtful accounts | 422,684 | (119,003) | 1,395,152 |
Impairment of advances to suppliers | 1,404,565 | ||
Impairment loss of intangible assets and goodwill | 983,603 | ||
Impairment loss of deposit for investment | 320,457 | ||
Change in estimated contingent liabilities | 243,658 | ||
Total operating expenses | 11,572,919 | 3,487,755 | 5,393,633 |
Income (loss) from operations | 1,337,204 | (849,431) | (4,415,469) |
Other income (expenses) | |||
Other (expense) income, net | (244,578) | 22,114 | 8,222 |
Interest income | 36,912 | 7,837 | 1,329 |
Interest expense | (955,433) | (299,795) | |
Total other (expenses) income, net | (1,163,099) | (269,844) | 9,551 |
Income (loss) before income taxes | 174,105 | (1,119,275) | (4,405,918) |
Income tax expense | (1,964,238) | (180,147) | (158,241) |
Loss from continuing operations | (1,790,133) | (1,299,422) | (4,564,159) |
Net income from discontinued operations, net of applicable income taxes | (1,051,152) | ||
Net loss | (738,981) | (1,299,422) | (4,564,159) |
Less: Net income attributable to noncontrolling interest from continuing operations | 241,197 | 66,883 | |
Less: Net income attributable to noncontrolling interest from discontinued operations | 105,115 | ||
Net loss attributable to XT Energy Group, Inc. | (1,085,293) | (1,366,305) | (4,564,159) |
Net loss | (738,981) | (1,299,422) | (4,564,159) |
Foreign currency translation adjustment | (492,428) | (114,539) | (180,921) |
Total comprehensive loss | (1,231,409) | (1,413,961) | (4,745,080) |
Less: Comprehensive income attributable to non-controlling interest | 347,440 | 24,036 | |
Comprehensive loss attributable to XT Energy Group, Inc. | $ (1,578,849) | $ (1,437,997) | $ (4,745,080) |
Earnings (loss) per common share - basic and diluted | |||
Continuing operations | $ 0 | $ 0 | $ (0.01) |
Discontinued operations | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding - basic and diluted | 574,723,319 | 591,042,000 | 591,042,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Preferred stock | Common stock | Additional paid-in capital | Subscription receivable | Accumulated deficit Statutory reserves | Accumulated deficit Unrestricted | Accumulated other comprehensive loss | Noncontrolling interests | Total |
Balance at Jul. 31, 2016 | $ 591,042 | $ 9,713,675 | $ (310,000) | $ (812,935) | $ (679,448) | $ 8,502,334 | |||
Balance, shares at Jul. 31, 2016 | 591,042,000 | ||||||||
Rent contributed by shareholders | 6,000 | 6,000 | |||||||
Cancellation of lease obligation to shareholders recorded as capital contribution | 242,880 | 242,880 | |||||||
Foreign currency translation adjustment | (180,921) | (180,921) | |||||||
Net loss attributable to XT Energy Group, Inc. | (4,564,159) | ||||||||
Net loss | (4,564,159) | (4,564,159) | |||||||
Balance at Jul. 31, 2017 | $ 591,042 | 9,962,555 | (310,000) | (5,377,094) | (860,369) | 4,006,134 | |||
Balance, shares at Jul. 31, 2017 | 591,042,000 | ||||||||
Rent contributed by shareholders | 6,000 | 6,000 | |||||||
Allocation of acquired statutory reserves | (108,487) | 108,487 | |||||||
Foreign currency translation adjustment | (71,692) | (42,847) | (114,539) | ||||||
Net loss attributable to XT Energy Group, Inc. | (1,366,305) | (1,366,305) | |||||||
Contribution from noncontrolling interest | 858,889 | 858,889 | |||||||
Net income attributable to noncontrolling interest | 66,883 | 66,883 | |||||||
Net loss | (1,299,422) | ||||||||
Balance at Jul. 31, 2018 | $ 591,042 | 9,860,068 | (310,000) | 108,487 | (6,743,399) | (932,061) | 882,925 | 2,574,137 | |
Balance, shares at Jul. 31, 2018 | 591,042,000 | ||||||||
Contribution by shareholder | 30,820,127 | 30,820,127 | |||||||
Statutory reserves | 464,155 | (464,155) | |||||||
Cancellation of issued shares | $ (60,000) | 60,000 | |||||||
Cancellation of issued shares, shares | (60,000,000) | ||||||||
Foreign currency translation adjustment | (493,556) | 1,128 | (492,428) | ||||||
Net loss attributable to XT Energy Group, Inc. | (1,085,293) | (1,085,293) | |||||||
Contribution by noncontrolling interest shareholder | 223,487 | 223,487 | |||||||
Noncontrolling interest from acquisitions | 862,193 | 862,193 | |||||||
Net income attributable to noncontrolling interest | 346,312 | 862,193 | |||||||
Net loss | (738,981) | ||||||||
Balance at Jul. 31, 2019 | $ 531,042 | $ 40,680,195 | $ (250,000) | $ 572,642 | $ (8,292,847) | $ (1,425,617) | $ 2,316,045 | $ 31,815,415 | |
Balance, shares at Jul. 31, 2019 | 531,042,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (738,981) | $ (1,299,422) | $ (4,564,159) |
Net income from discontinued operations | 1,051,152 | ||
Net loss from continuing operations | (1,790,133) | (1,299,422) | (4,564,159) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation expense | 999,036 | 439,314 | 281,722 |
Amortization expense | 752,826 | 88,534 | |
Deferred tax expense | 9,469 | ||
Provision for warranty reserve | 65,833 | ||
(Recovery of) allowance for doubtful accounts | 422,684 | (119,003) | 1,395,152 |
Impairment of advances to supplies | 1,404,565 | ||
Impairment of inventories | 263,720 | 337,000 | |
Impairment of intangible assets and goodwill | 983,603 | ||
Impairment of deposit for investment | 320,457 | ||
Gain from sales of equipment | (28,794) | (30,923) | |
Amortization of debt discount | 493,102 | 43,328 | |
Rent contributed by shareholders | 6,000 | 6,000 | |
Change in estimated contingent liabilities | 243,658 | ||
Changes in operating assets and liabilities | |||
Notes receivable | (778,690) | (1,367,420) | |
Accounts receivable | 752,206 | (1,484,806) | 292,492 |
Inventories | (2,022,141) | (4,360,895) | 1,188,831 |
Advances to suppliers | (3,658,604) | 198,312 | 2,020,867 |
Contract assets | 2,877,670 | (8,114) | (2,206,250) |
Prepaid expenses | (186,442) | (1,648,103) | |
Other receivables | (515,237) | (59,506) | 302,927 |
Other current assets | 129,463 | ||
Accounts payable | (2,150,670) | 372,445 | 164,176 |
Accounts payable - related party | 9,624 | ||
Advance from customers | 7,403,404 | 8,243,425 | (148,934) |
Other payables and taxes payable | (566,724) | 587,463 | 274,561 |
Net cash provided by (used in) operating activities from continuing operations | 3,824,555 | (389,902) | 944,246 |
Net cash provided by operating activities from discontinued operations | 1,474,719 | ||
Net cash used in operating activities | 5,299,274 | (389,902) | 944,246 |
Cash flows from investing activities: | |||
Cash acquired through business combination | 36,806 | ||
Payment to former shareholders on businesses acquired | (10,065,638) | (6,780,190) | |
Purchases of property, plant and equipment | (4,144,467) | (582,463) | (1,989,195) |
Proceeds from sales of equipment | 65,847 | 923,436 | |
Purchase of short-term investment | (438,982) | ||
Refund of (deposit for) long-term investment | 118,525 | (461,447) | |
Purchase of intangible assets | (2,081) | (5,537) | |
Other assets | 176,055 | ||
Collection of loan receivable | 1,755,926 | ||
Loan to third party | (309,170) | ||
Net cash used in investing activities from continuing operations | (12,710,870) | (7,178,565) | (1,813,140) |
Net cash used in investing activities from discontinued operations | (9,737,061) | ||
Net cash used in investing activities | (22,447,931) | (7,178,565) | (1,813,140) |
Cash flows from financing activities: | |||
(Repayments to) borrowings from related parties | 2,107,638 | 1,381,757 | 947,729 |
Capital contribution from stockholders | 30,820,127 | ||
Contribution by noncontrolling interest shareholder | 223,487 | ||
Payments of short-term loan - bank | (3,794,642) | (1,384,340) | |
(Payments of) Proceeds from third party loan | (175,593) | 184,579 | |
Proceeds from related party loans | 15,218,028 | 21,134,257 | |
Payments of related party loans | (35,323,383) | ||
Proceeds from note payable | 77,261 | ||
Payments of note payable | (77,261) | ||
Net cash provided by financing activities from continuing operations | 9,075,662 | 21,316,253 | 947,729 |
Net cash used in financing activities from discontinued operations | (442,946) | ||
Net cash provided by financing activities | 8,632,716 | 21,316,253 | 947,729 |
Effect of exchange rate change on cash and restricted cash | (263,462) | (658,972) | (148,086) |
Net change in cash and restricted cash | (8,779,403) | 13,088,814 | (69,251) |
Cash and restricted cash - beginning of year | 14,245,783 | 1,156,969 | 1,226,220 |
Cash and restricted cash - end of year | 5,466,380 | 14,245,783 | 1,156,969 |
Less: Cash and restricted cash from discontinued operations | (1,929,899) | ||
Cash and restricted cash from continuing operations, end of year | 3,536,481 | 14,245,783 | 1,156,969 |
Supplemental disclosure of cash flow information: | |||
Interest paid | 164,250 | 27,016 | |
Income tax paid | 1,988,722 | 20,446 | 46,405 |
Supplemental non-cash investing and financing information: | |||
Cancellation of lease obligation recorded as capital contribution | 242,880 | ||
Rent contributed by shareholders | 6,000 | 6,000 | |
Businesses acquired through investment payable | 11,619,514 | ||
Contingent liability obligated from business combinations | 347,777 | ||
Loan to third party offset with investment payable | 943,150 | ||
Receipt of intangible assets from noncontrolling interest capital contribution | 858,887 | ||
Receipt of property, plant and equipment from deposit made in prior year | 2,151,703 | ||
Purchase of property, plant and equipment paid by a third party | 380,024 | ||
Other receivables outstanding from sales of equipment | 300,874 | ||
Noncontrolling interest from acquisitions | $ 862,193 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Reconciliation of cash and restricted cash) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Statement of Cash Flows [Abstract] | |||
Cash | $ 3,459,783 | $ 14,245,783 | $ 1,156,969 |
Restricted cash | 76,698 | ||
Total cash and restricted cash shown in the consolidated statements of cash flows from continuing operations | $ 3,536,481 | $ 14,245,783 | $ 1,156,969 |
Nature of Business and Organiza
Nature of Business and Organization | 12 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization XT Energy Group, Inc., formerly known as Xiangtian (USA) Air Power Co. Ltd. (the “Company” or “XT Energy”) was incorporated in the State of Delaware on September 2, 2008 as Goa Sweet Tours Ltd. On April 17, 2012, the Company entered into certain share purchase agreements, by and among Luck Sky International Investment Holdings Limited (“Luck Sky”), an entity owned and controlled by Zhou Deng Rong, the former Chief Executive Officer and director of the Company, and certain of the Company’s former stockholders who owned, in the aggregate, 7,200,000 shares of the Company’s common stock (90% of the then outstanding shares). On May 15, 2012, Luck Sky purchased all 7,200,000 shares for an aggregate of $235,000. Effective May 29, 2012, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.” On May 30, 2014, the Company purchased 100% of the issued and outstanding shares of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“Xiangtian HK”) from its sole shareholder, Zhou Jian, who is also the Chairman of the Company. As a result of the acquisition, Xiangtian HK became the Company’s wholly owned subsidiary and the wholly owned subsidiary of Xiangtian HK in the People’s Republic of China (“China,” or the “PRC”), Luck Sky (Shenzhen) Aerodynamic Electricity Limited (“Xiangtian Shenzhen”) became the Company’s indirect subsidiary through Xiangtian HK. Effective October 31, 2016, the Company was reincorporated in Nevada as a result of its merger with and into its wholly owned Nevada subsidiary. The Company is engaged in a variety of energy-related businesses through its subsidiaries and controlled entities in China. One of the businesses is in the field of Compressed Air Energy Storage in China and the Company produces electricity generation systems that combine its compressed air storage technology with photovoltaic (“PV”) panels to achieve a continuous supply of power under weather conditions that are unfavorable to the generation of electricity from PV panels alone. The sales and installation of power generation systems and PV systems and the sales of PV panels, air compression equipment and heat pump products have been carried out through the Company’s variable interest entities (“VIEs”), formerly Sanhe Luck Sky Electrical Engineering Co., Ltd. (“Sanhe Xiangtian”) and now Xianning Xiangtian Energy Holding Group Co. Ltd. (“Xianning Xiangtian”), formerly known as Xianning Sanhe Power Equipment Manufacturing Co. Ltd. In March 2018, Xianning Xiangtian formed Xiangtian Zhongdian (Hubei) New Energy Co. Ltd. (“Xiangtian Zhongdian”), a joint venture in China, in which Xianning Xiangtian holds a 70% ownership interest with the remaining 30% ownership held by Nanjing Zhongdian Photovoltaic Co. Ltd. Xiangtian Zhongdian is in the business of manufacturing and sales of PV panels. In April 2018, Xianning Xiangtian formed a wholly owned subsidiary, Jingshan Sanhe Xiangtian New Energy Technology Co. Ltd. (“Jingshan Sanhe”), which is engaged in the business of researching, manufacturing and sales of high-grade synthetic fuel products. In June 2018, Xianning Xiangtian acquired Hubei Jinli Hydraulic Co., Ltd. (“Hubei Jinli”), which is engaged in the business of manufacturing and sales of hydraulic parts and electronic components, and acquired Tianjin Jiabaili Petroleum Products Co. Ltd. (“Tianjin Jiabaili”), which is engaged in the business of manufacturing and sales of petroleum products (See Note 3 – Business combinations). In August 2018, Xianning Xiangtian formed a wholly owned subsidiary, Xianning Xiangtian Trade Co. Ltd. (“Xiangtian Trade”), which engaged in trading general merchandise. In September and October 2018, January 2019 and March 2019, Mr. Jian Zhou, the Company’s Chairman and principal shareholder as well as a shareholder of Xianning Xiangtian, and Zhou Deng Rong, the Company’s former Chief Executive Officer and director, injected an aggregate of Renminbi (“RMB”) 209,260,000 (approximately $30.8 million) as capital contribution to Xianning Xiangtian. On November 5, 2018, the Company changed its name to XT Energy Group, Inc. through a merger with and into a newly formed, wholly-owned subsidiary, which subsidiary was formed for purposes of the name change. In December 2018, Xianning Xiangtian acquired 90% of the equity interest in each of Hubei Rongentang Wine Co., Ltd. (“Wine Co.”), which is engaged in the business of manufacturing and sales of wine, and Hubei Rongentang Herbal Wine Co., Ltd. (“Herbal Wine Co.,” collectively with “Wine Co.,” “Rongentang”), which is engaged in the business of manufacturing and sales of herbal wine products (See Note 3 – Business combinations). On May 24, 2019, the Company’s Board of Directors (the “Board”), discussed a plan to pursue the potential sale of all its ownership interest in Herbal Wine Co. and Wine Co. in order to shift its business focus on its energy related business. Therefore, the result of operations was presented as discontinued operations as of and for the year ended July 31, 2019 consolidated financial statements. (See Note 4 – Discontinued operations). Reorganization On September 30, 2018, Xiangtian Shenzhen terminated its variable interest entity agreements (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 headquarters is located in the city of Xianning, Hubei Province, and Sanhe Xiangtian, the Company’s previous headquarters, located in the city of Sanhe, Hebei Province, became 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 all the shareholders of Sanhe Xiangtian (“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 a new series of variable interest entity agreements (“New VIE Agreements”), pursuant to which Xianning Xiangtian became the Company’s new contractually controlled affiliate. The New VIE Agreements allow the Company to: ● exercise effective control over Xianning Xiangtian; ● receive substantially all of the economic benefits of Xianning Xiangtian; and ● have an exclusive option to purchase all or part of the equity interests in Xianning Xiangtian when and to the extent permitted by the laws of the PRC. Framework Agreement on Business Cooperation Pursuant to the Framework Agreement on Business Cooperation between Xiangtian Shenzhen and Xianning Xiangtian, the parties agreed to enter into a series of agreements, including Agreement of Exclusive Management, Consulting and Training and Technical Service, Know-How Sub-License Agreement, Equity Pledge Agreement, Exclusive Option Agreement and Power of Attorney. Specifically, Xiangtian Shenzhen will dispatch an operative team to Xianning Xiangtian to assist with Xianning Xiangtian with its planning and managing and regular business operations. The parties agree to share the cooperation profits as set forth in the New VIE Agreements. The term of cooperation is 10 years and may be unilaterally extended by Xiangtian Shenzhen. Agreement of Exclusive Management, Consulting and Training and Technical Service Pursuant to the Agreement of Exclusive Management, Consulting and Training and Technical Service between Xiangtian Shenzhen and Xianning Xiangtian, Xianning Xiangtian engaged Xiangtian Shenzhen to provide consulting, training, management services and technical support exclusively for a term of 10 years, which may be unilaterally extended by Xiangtian Shenzhen. Xianning Xiangtian agrees to pay Xiangtian Shenzhen a service fee equal to one hundred percent (100%) of Xianning Xiangtian’s net income determined pursuant to the generally accepted accounting principles, payable quarterly. Exclusive Option Agreement Pursuant to the Exclusive Option Agreement among Xiangtian Shenzhen, Xiangtian HK, Xianning Xiangtian and the shareholders holding an aggregate of 100% of Xianning Xiangtian’s equity interest (“Xianning Xiangtian Shareholders”), the Xianning Xiangtian Shareholders irrevocably granted Xiangtian Shenzhen and Xiangtian HK an exclusive option to purchase from them, at its discretion, to the extent permitted under the PRC law, all or part of their equity interest in Xianning Xiangtian, and the purchase price will be the lowest price permitted by applicable PRC laws. The timing, method and times of exercise of this option to purchase is within Xiangtian Shenzhen and Xiangtian HK’s sole discretion. In addition, each of the Xianning Xiangtian Shareholders agrees to waive their respective preemptive right when the other shareholder transfers the equity interest of Xianning Xiangtian to Xiangtian Shenzhen or its designated party. The Xianning Xiangtian Shareholders further agree, among other things, without prior written consent of Xiangtian Shenzhen and Xiangtian HK, not to transfer, sell or pledge their equity interest of Xianning Xiangtian. Without the prior written consent of Xiangtian Shenzhen and Xiangtian HK, Xianning Xiangtian may not amend its articles of association, change the amount and structure of its registered capital or sell any of its assets or beneficial interest. Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among Xiangtian Shenzhen, Xianning Xiangtian and the Xianning Xiangtian Shareholders, the Xianning Xiangtian Shareholders pledged all of their respective equity interest in Xianning Xiangtian to Xiangtian Shenzhen to guarantee the performance of Xianning Xiangtian’s obligations under the New VIE Agreements, other than the Equity Pledge Agreement. Xiangtian Shenzhen will be deemed to have created the encumbrance of first order in priority on the pledged equity interest. In the event of any breach of the VIE Agreements, other than this Equity Pledge Agreement, or failure to satisfy the guaranteed obligations, Xiangtian Shenzhen will have the right to dispose of the pledged equity interest. The Xianning Xiangtian Shareholders may receive dividends or share profits only with prior consent from Xiangtian Shenzhen, and such dividends and profits will be deposited into a bank account designated by and under supervision of Xiangtian Shenzhen and to be used for repayment of any liability due to any breach of the VIE Agreements by Xianning Xiangtian or the Xianning Xiangtian Shareholders. The agreement will remain effective until the termination of the VIE Agreements, other than this Equity Pledge Agreement. Know-How Sub-License Agreement Pursuant to the Know-How Sub-License Agreement between Xiangtian Shenzhen and Xianning Xiangtian, Xiangtian Shenzhen agreed to grant an exclusive and non-transferable sublicense to use the patents, patent applications and all related trade secrets and technology and improvements on photovoltaic installation and the air energy storage power generation technology (“Technology”) but without sublease right in the territory of China, exclusive of the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region for the purpose of the agreement. Xianning Xiangtian agreed to pay Xiangtian Shenzhen a quarterly royalty fee equal to five percent (5%) of Xianning Xiangtian’s gross revenue of each quarter. The shareholders of Xianning Xiangtian pledged all of their equity interest of Xianning Xiangtian as collateral for the royalty fee payable under this agreement. The agreement will remain effective throughout the entire duration of Xianning Xiangtian operations, unless terminated by Xiangtian Shenzhen with a 30-day prior written notice. Power of Attorney Pursuant to the Powers of Attorney executed by the Xianning Xiangtian Shareholders, each of the shareholders irrevocably appointed Xiangtian Shenzhen as his attorney-in-fact to exercise any and all rights as a shareholder of Xianning Xiangtian, including, but not limited to, the right to attend shareholders’ meetings, to execute shareholders’ resolutions, to sell, assign, transfer or pledge any or all of his equity interest of Xianning Xiangtian, to vote as a shareholder for all matters, as well as full power to execute equity transfer agreement as referenced in the Exclusive Option Agreement and to perform under the Exclusive Option Agreement and Equity Pledge Agreement without limitation. Xiangtian Shenzhen is also authorized to transfer, allocate or use any cash dividends and non-cash income in accordance with the respective shareholder’s instructions and to exercise all the necessary rights associated with the equity interest at Xiangtian Shenzhen’s sole discretion and without the consent of the Xianning Xiangtian Shareholders. The Powers of Attorney will remain effective as long as the Xianning Xiangtian Shareholders remain the shareholders of Xianning Xiangtian. Spousal Consent Letters Pursuant to the Spousal Consent Letters, each of the spouses of the Xianning Xiangtian Shareholders unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Exclusive Option Agreement and Power of Attorney entered by her spouse and the disposal of equity interest of Xianning Xiangtian held by her spouse. Each of the spouses also agreed that she will not assert any rights over the equity interest in Xianning Xiangtian held by and registered in the name of her respective spouse. The Xianning Xiangtian Shareholders’ actions to perform, amend or termination the above-mentioned agreement do not need their spouses’ authorization or consent. In addition, in the event that any of the spouses obtains any equity interest in Xianning Xiangtian held by her respective spouse for any reason, such spouse agrees to enter into similar contractual arrangements. All of the Company’s operations are through its VIEs located in the PRC. The accompanying consolidated financial statements reflect the activities of XT Energy and each of the following entities: Name Background Ownership Xiangtian HK ● A Hong Kong company 100% owned by XT Energy Xiangtian BVI ● A British Virgin Islands company 100% owned by XT Energy Xiangtian Shenzhen ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Xiangtian HK Sanhe Xiangtian ● A PRC limited liability company ● Incorporated on July 8, 2013 ● Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter Xianning Xiangtian ● A PRC limited liability company ● Incorporated on May 30, 2016 ● Manufacturing and sales of air compression equipment and heat pump products 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter Xiangtian Zhongdian ● A PRC limited liability company ● Incorporated on March 7, 2018 ● Manufacturing and sales of PV panels 70% owned by Xianning Xiangtian Jingshan Sanhe ● A PRC limited liability company ● Incorporated on April 17, 2018 ● Researching, manufacturing and sales of high-grade synthetic fuel products 100% owned by Xianning Xiangtian Hubei Jinli ● A PRC limited liability company ● Incorporated on December 27, 2004 and acquired on June 30, 2018 ● Manufacturing and sales of hydraulic parts and electronic components 100% owned by Xianning Xiangtian Tianjin Jiabaili ● A PRC limited liability company ● Incorporated on April 10, 2007 and acquired on June 30, 2018 ● Manufacturing and sales of petroleum products 100% owned by Xianning Xiangtian Xiangtian Trade ● A PRC limited liability company ● Incorporated on August 9, 2018 ● Expected to engage in trading chemical raw materials to support fuel production 100% owned by Xianning Xiangtian Wine Co.* ● A PRC limited liability company ● Incorporated on August 9, 2011 and acquired on December 14, 2018 ● Manufacturing and sales of wine products 90% owned by Xianning Xiangtian Herbal Wine Co.* ● A PRC limited liability company ● Incorporated on August 9, 2018 and acquired on December 14, 2018 ● Manufacturing and sales of herbal wine products 90% owned by Xianning Xiangtian *See Note 4 – Discontinued operations for details. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies 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 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 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 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 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 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 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 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 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 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 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, 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, 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 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 represent advance payments made to vendors for services such as rent, consulting and certification. 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 presents advances to management of the Company for business development and travel advances. 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 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, 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 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 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 represents unpaid capital contribution from its shareholders. 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 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 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 significan |
Business Combinations
Business Combinations | 12 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Business combinations | Note 3 – Business combinations Acquisition of Hubei Jinli On June 21, 2018, Xianning Xiangtian entered into a share purchase agreement (the "Jinli Agreement") with Sheng Zhou and Heping Zhang, former shareholders of Hubei Jinli (collectively the "Jinli Sellers"). Neither Xianning Xiangtian nor its affiliates have any material relationship with the Jinli Sellers other than with respect to the Jinli Agreement. Pursuant to the Jinli Agreement, Xianning Xiangtian agreed to acquire 100% of the capital stock of Hubei Jinli collectively held by the Jinli Sellers (the "Jinli Acquisition"), for an aggregate consideration of RMB 150 million (approximately $23.18 million), consisting of the following: (a) RMB 40 million (approximately $6.18 million) in cash (the "Jinli Cash Portion"); and (b) shares of the Company's common stock (the "Jinli Stock Portion") which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian's common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli's existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). The existing bank loan did not count toward the purchase price as it is considered to be assumed debt as part of the Hubei Jinli's net assets. Pursuant to the Jinli Agreement, the Jinli Cash Portion shall be paid within seven days of the Jinli Agreement, and the Jinli Acquisition shall be closed within one month after payment of the Jinli Cash Portion. On June 21, 2018, Xianning Xiangtian, entered into a supplemental agreement to the Stock Purchase Agreement (the "Supplement Agreement") with the Jinli Sellers, pursuant to which the Jinli Sellers have the right to demand that Xianning Xiangtian pay RMB 80.07 million (approximately $12.37 million) plus interest to repurchase the Stock Portion if the Company does not list its common stock on the Nasdaq Stock Market by June 21, 2019. This clause was automatically forfeited after the payment term was amended on August 11, 2018. On June 30, 2018, the parties consummated the Jinli Acquisition. Pursuant to the Supplement Agreement, after the Jinli Acquisition, should Hubei Jinli's annual net profit (the "Jinli Net Profit") exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 10% of the Jinli Net Profit. On August 25, 2018, Xianning Xiangtian and the Jinli Sellers amended this annual net profit sharing clause to define the annual net profit sharing period to be one year from June 21, 2018 to June 20, 2019. On August 11, 2018, Xianning Xiangtian and the Jinli Sellers amended the payment term of the Jinli Stock Portion which shall have a value equal to RMB 80.07 million (approximately $12.37 million) to comprise three cash installments of 1) first installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2019, 2) second installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2020, and 3) third installment of RMB 30.07 million (approximately $4.75 million) payable by June 20, 2021. The Company's acquisition of Hubei Jinli was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Hubei Jinli based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the consideration transferred to acquire Hubei Jinli at the date of acquisition: Cash $ 6,040,015 Present value of cash installments 10,996,129 Contingent purchase prices payment 137,561 Total consideration at fair value $ 17,173,705 The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Hubei Jinli based on a valuation performed by an independent valuation firm engaged by the Company: Fair Value Cash $ 33,402 Accounts receivable, net 2,561,863 Inventories, net 455,247 Advances to suppliers 143,129 Other receivables 8,622 Loan receivables 2,434,381 Plant and equipment, net 6,550,446 Intangible assets, net 7,899,887 Deferred tax assets 9,295 Goodwill 3,906,599 Total assets 24,002,871 Short-term loan - bank (2,114,005 ) Current maturities of long-term loan (3,160,828 ) Accounts payable (357,188 ) Advance from customers (4,099 ) Other payables and accrued liabilities (844,926 ) Other payables - related party (30,200 ) Income taxes payable (317,920 ) Total liabilities (6,829,166 ) Net assets acquired $ 17,173,705 Approximately $3.9 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of Xianning Xiangtian and Hubei Jinli. None of the goodwill is expected to be deductible for income tax purposes. The change in fair value measurement of contingent liability amounted to $441,199 for the year ended July 31, 2019 and the contingent liability increased to $570,322. The following pro forma combined results of operations present the Company's financial results as if the acquisition of Hubei Jinli had been completed on August 1, 2017. The pro forma results do not reflect operating efficiencies or potential cost savings which may result from the consolidation of operations. Accordingly, the pro forma financial information is not necessarily indicative of the results of operations that the Company would have recognized had it completed the transaction on August 1, 2017. Future results may vary significantly from the results in this pro forma information because of future events and transactions, as well as other factors. For the Years Ended July 31, July 31, (Unaudited) (Unaudited) Revenue $ 19,049,576 $ 11,649,664 Cost of revenue 14,409,989 9,496,952 Gross profit 4,639,587 2,152,712 Total operating expenses 4,359,578 6,235,229 Income (loss) from operations 280,009 (4,082,517 ) Other income (expenses), net (530,989 ) (13,796 ) Loss before income taxes (250,980 ) (4,096,313 ) Income tax expense (337,243 ) (242,822 ) Net loss attributable to XT Energy Group, Inc. (588,223 ) (4,339,135 ) Less: Net income attributable to non-controlling interest 66,883 - Net loss attributable to XT Energy Group, Inc. $ (655,106 ) $ (4,339,135 ) Weighted average number of common shares outstanding - basic and diluted 591,042,000 591,042,000 Net loss per common share - basic and diluted $ (0.00 ) $ (0.01 ) Acquisition of Tianjin Jiabaili On June 21, 2018, Xianning Xiangtian entered into a share purchase agreement (the "Jiabaili Agreement") with Wenhe Han and Guifen Wang, former shareholders of Tianjin Jiabaili (collectively the "Jiabaili Sellers"). Neither Xianning Xiangtian nor its affiliates have any material relationship with the Jiabaili Sellers other than with respect to the Jiabaili Agreement. Pursuant to the Jiabaili Agreement, Xianning Xiangtian agreed to acquire 90% of the capital stock of Tianjin Jiabaili collectively held by the Jiabaili Sellers (the "Jiabaili Acquisition"), for an aggregate consideration of RMB 6,120,000 (approximately $0.9 million), consisting of the following: (a) RMB 3,672,000 (approximately $0.5 million) in cash (the "Jiabaili Cash Portion"); and (b) shares of the Company's common stock (the "Jiabaili Stock Portion") which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). On June 30, 2018, the parties consummated the Jiabaili Acquisition. On August 12, 2018, Xianning Xiangtian and the Jiabaili Sellers amended the ownership transfer from 90% to 100% and the full payment term of acquisition price of RMB 6,800,000 (approximately $1.0 million) amended to be all cash payment. In addition, Xianning Xiangtian will indefinitely provide 10% of profit sharing of Tianjin Jiabaili to the Jiabaili Sellers. The Company's acquisition of Tianjin Jiabaili was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Tianjin Jiabaili based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the consideration transferred to acquire Tianjin Jiabaili at the date of acquisition: Cash $ 1,026,803 Contingent purchase prices payment 203,850 Total consideration at fair value $ 1,230,653 The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Tianjin Jiabaili based on a valuation performed by an independent valuation firm engaged by the Company: Fair Value Cash $ 2,731 Other current assets 2,065 Intangible assets, net 875,802 Goodwill 350,055 Total assets 1,230,653 Total liabilities - Net assets acquired $ 1,230,653 Approximately $0.4 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of Xianning Xiangtian and Tianjin Jiabaili. None of the goodwill is expected to be deductible for income tax purposes. During the year ended July 31, 2019, the Company determined that Tianjin Jiabaili operation would not be able to begin production due to misrepresentation of the production facility of Tianjin Jiabaili from the former shareholders of Tianjin Jiabiali. As a result, the Company recognized impairment of loss of its intangible assets and goodwill of $983,603 for the year ended July 31, 2019. The contingent profit sharing purchase price payment has also been reduced to $0 as the Company is not expecting to generate any profit from Tianjin Jiabaili. Also see Note 17 – Commitments and Contingencies with the former shareholders of Tianjin Jiabaili. For the year ended July 31, 2018, the impact of the acquisition of Tianjin Jiabaili to the pro forma consolidated statements of operations and other comprehensive loss was not material. Acquisition of Wine Co. and Herbal Wine Co. On December 21, 2018, Xianning Xiangtian completed its acquisition (the "Transaction") of 90% of the equity interests in each of Wine Co. and Herbal Wine Co., each a limited liability company incorporated in the PRC, pursuant to an equity investment agreement dated December 14, 2018 (the "Agreement"), by and between Xianning Xiangtian and the Rongentang Shareholders, who are unrelated to the Company or Xianning Xiangtian. Wine Co. is engaged in the business of manufacturing and sales of compound wine products and Herbal Wine Co. is engaged in the business of manufacturing and sales of herbal wine products. Pursuant to the Agreement, Xianning Xiangtian paid a total cash consideration of RMB67.5 million (approximately $9.7 million) ("Total Consideration") to be contributed into Wine Co. as registered capital. RMB60 million (approximately $8.7 million) of the Total Consideration was deposited into an escrow account held by Xianning Wenquan Branch of Agricultural Bank of China as escrow agent on December 14, 2018. As of December 21, 2018, the Rongentang Shareholders completed the equity interest transfer registration with relevant PRC government authorities and the fund in the escrow was released. In addition, Rongentang Shareholders completed the title transfer procedures with the PRC government authorities for all the real property and land use rights possessed by Rongentang to Wine Co. ("Title Transfer") from the owner of such real property and land use rights, Xianning Rongentang Wine Co., Ltd. ("Xianning Rongentang"), an entity controlled by the Rongentang Shareholders, in February 2019. Rongentang also obtained a three-year royalty-free license from Xianning Rongentang, the owner of the trademark "Rongentang," to use such trademark, in January 2019. The Company paid the remaining RMB7.5 million (approximately $1.1 million) of the Total Consideration to Wine Co. as registered capital in March 2019. Rongentang Shareholders were responsible for taxes and undisclosed liabilities of Rongentang prior to the closing, including but not limited to, the guarantee liability of Wine Co. under certain loan agreement, pursuant to which a security interest in the real property possessed by Rongentang was granted to secure the repayment of a loan of a party related to Rongentang Shareholders of up to RMB10 million (approximately $1.5 million) to a PRC commercial bank. RMB10 million (approximately $1.5 million) of the funds received by the Rongentang Shareholders in connection with the Transaction was used to pay off this loan on January 18, 2019. Upon closing of the Transaction, Rongentang became majority owned subsidiaries of Xianning Xiangtian and the Company is now engaged in the production and sales of compound wine and herbal wine products through Rongentang. The Company's acquisition of Wine Co. and Herbal Wine Co. was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Wine Co. and Herbal Wine Co. based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date, which represents the net purchase price allocation on the date of the acquisition of Wine Co. and Herbal Wine Co. based on a valuation performed by an independent valuation firm engaged by the Company: Fair Value Cash $ 6,890 Accounts receivable, net 23,612 Inventories, net 1,035,186 Advances to suppliers 25,719 Other receivables 244,279 Plant and equipment, net 4,351,805 Intangible assets, net 2,999,442 Goodwill 1,976,878 Total assets 10,663,811 Advance from customers 13,904 Other payables and accrued liabilities 6,128,289 Other payables – related parties and director 3,653,843 Taxes payable 5,582 Total liabilities 9,801,618 Net assets acquired prior to capital contribution $ 862,193 Total consideration for capital injection 9,699,669 Additional capital contribution by noncontrolling shareholder 215,548 Net assets acquired after capital contribution 10,777,410 Percentage of interest acquired 90.0 % Total net assets acquired $ 9,699,669 The above fair value valuation is a preliminary assessment. The Company will continue to evaluate the fair value and to be finalized within one year from acquisition date on December 21, 2018. Approximately $1.9 million of goodwill arising from the acquisition consists largely of synergies expected from the sales distribution networks of the Company to boost its wine and herbal wine sales. None of the goodwill is expected to be deductible for income tax purposes. For the years ended July 31, 2019, 2018 and 2017, the impact of the acquisition of Wine Co. and Herbal Wine Co. to the pro forma consolidated statements of operations and comprehensive loss was not material. On May 24, 2019, the Board discussed a plan to pursue the potential sale of all its ownership interest in Herbal Wine Co. and Wine Co. in order to shift its business focus on its energy related business. Therefore, the result of operations was presented as discontinued operations as of and for the year ended July 31, 2019 consolidated financial statements. See Note 4 – Discontinued operations. Profit sharing payments Profit sharing payments represent estimated contingent profit sharing payments that the Company agreed to as a purchase price consideration in relation to the acquisition of Hubei Jinli and Tianjin Jiabaili to the former shareholders' of Hubei Jinli and Tianjin Jiabaili. Profit sharing payments to former shareholders of Hubei Jinli If Jinli Net Profit exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 10% of the Jinli Net Profit and the annual net profit sharing period is one year from June 21, 2018 to June 20, 2019. The change in fair value measurement of contingent liability loss amounted to $441,199 with foreign translation rate effect of $4,447 for the year ended July 31, 2019 as the operations result of Hubei Jinli has changed. As of July 31, 2019 and 2018, profit sharing payments to the former shareholders of Hubei Jinli were $570,322 and $133,570, respectively and classified in the caption "other payables and accrued liabilities" in the accompanying consolidated balance sheets. Profit sharing payments to former shareholders of Tianjin Jiabaili Xianning Xiangtian shall pay the former shareholders of Tianjin Jiabaili 10% of the Tianjin Jiabaili's annual net profit indefinitely from the date of acquisition on June 30, 2018. The change in fair value measurement of contingent liability gain amounted to $197,541 with foreign translation rate effect of $393 for the year ended July 31, 2019 as Tianjin Jiabaili operations will no longer to continue. As of July 31, 2019 and 2018, profit sharing payments to the former shareholders of Tianjin Jiabaili were $0 and $197,935, respectively, and classified in the caption "other payables and accrued liabilities" in the accompanying consolidated balance sheets. Investment payable Investment payable consists of the following: Name of Payee Relationship Nature July 31, July 31, Sheng Zhou Former shareholder of Hubei Jinli Payment for acquisition of Hubei Jinli $ - $ 9,069,058 Guifen Wang Former shareholder of Hubei Jinli Payment for acquisition of Tianjin Jiabaili 136,314 137,587 Total 136,314 9,206,645 Short-term (136,314 ) (2,505,871 ) Long-term $ - $ 6,700,774 The maturities schedule is as follows as of July 31, 2019: Repayment date Amount Due on demand (see Note 17 – Commitments and Contingencies) $ 136,314 Total $ 136,314 Investment payable – related parties Investment payable – related parties consist of the following: Name of Related Party Relationship Nature July 31, July 31, Wenhe Han (see Note 17 – Commitments and Contingencies) Vice general manager of Tianjin Jiabaili Payment for acquisition of Tianjin Jiabaili $ 113,537 $ 261,216 Heping Zhang General manager of Hubei Jinli Payment for acquisition of Hubei Jinli 370,875 750,286 Total 484,412 1,011,502 Short-term (204,648 ) (507,143 ) Long-term $ 279,764 $ 504,359 The maturities schedule is as follows as of July 31, 2019: Repayment date Amount Due on demand $ 113,537 June 2020 101,683 June 2021 305,763 Debt discount (36,571 ) Total $ 484,412 Debt discount Debt discount, net of accumulated amortization, totaled $36,571 and $1,021,413 as of July 31, 2019 and 2018, respectively, are recognized as a reduction of investment payable. Amortization expense related to the debt discount, included in interest expense, was $493,102, $43,328 and $0 for the years ended July 31, 2019, 2018 and 2017, respectively. The Company repaid the payment for acquisition of Hubei Jinli prior to the original due date, as a result, the Company recognized a one-time finance expenses of $489,439 at the time for which the discount portion of the original due date payment were prepaid for the year ended July 31, 2019 and is included in the caption "other (expense) income, net" on the accompanying consolidated statements of operations and comprehensive loss. |
Discontinued operations
Discontinued operations | 12 Months Ended |
Jul. 31, 2019 | |
Discontinued Operations | |
Discontinued operations | Note 4 – Discontinued operations On May 24, 2019, the Company’s Board, discussed a plan to pursue the potential sale of all its ownership interest in Herbal Wine Co. and Wine Co. in order to shift the business focus on its energy related business. The decision and action taken by the Company of disposing Herbal Wine Co. and Wine Co. represent a major shift that will have a major effect on the Company’s operations and financial results, which trigger discontinued operations accounting in accordance with ASC 205-20-45. The fair value of discontinued operations, determined as of July 31, 2019, includes estimated consideration expected to be received, less costs to sell. After consideration of the determination of fair value of the discontinued operations, no impairment were indicated as of July 31, 2019. Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations in the consolidated balance sheets, including Herbal Wine Co. and Wine Co. as of July 31, 2019. Carrying amounts of major classes of assets included as part of discontinued operations: July 31, 2019 CURRENT ASSETS: Cash $ 1,929,899 Accounts receivable, net 471,889 Inventories, net 1,785,176 Advances to suppliers 181,101 Other current assets 73,707 Total current assets of discontinued operations 4,441,772 OTHER ASSETS: Property, plant and equipment, net 4,588,449 Intangible assets, net 2,950,343 Goodwill 1,998,387 Total other assets of discontinued operations 9,537,179 Total assets of the disposal group classified as discontinued operations $ 13,978,951 Carrying amounts of major classes of liabilities included as part of discontinued operations: CURRENT LIABILITIES: Accounts payable $ 25,266 Advance from customers 1,124,608 Other payables and accrued liabilities 42,778 Income taxes payable 306,360 Total current liabilities of discontinued operations 1,499,012 Total liabilities of the disposal group classified as discontinued operations $ 1,499,012 Reconciliation of the amounts of major classes of income and losses from discontinued operations in the consolidated statements of operations and comprehensive loss, including Herbal Wine Co. and Wine Co. for the year ended July 31, 2019. For the Year Ended 2019 Revenue: Significant customer, former related party $ 246,939 Other customers 1,860,654 Total revenue 2,107,593 Cost of revenue 271,919 Gross profit 1,835,674 OPERATING EXPENSES: Selling expenses 24,644 General and administrative expenses 416,228 Total operating expenses 440,872 Income from operations 1,394,802 OTHER INCOME (EXPENSE) Other expense, net (37,256 ) Interest income 2,211 Total other expenses, net (35,045 ) Income before income taxes 1,359,757 Income tax expenses (308,605 ) Net income from discontinued operations 1,051,152 Less: Net income attributable to non-controlling interest from discontinued operations 105,115 Net income from discontinued operations attributable to XT Energy Group, Inc. $ 946,037 |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Jul. 31, 2019 | |
Receivables [Abstract] | |
Accounts receivable, net | Note 5 – Accounts receivable, net Accounts receivable, net, consist of the following: July 31, July 31, Accounts receivable $ 6,096,212 $ 6,516,935 Less: allowance for doubtful accounts (1,695,469 ) (1,374,155 ) Accounts receivable, net 4,400,743 5,142,780 Less: accounts receivable – discontinued operations (471,889 ) - Accounts receivable, net – continuing operations $ 3,928,854 $ 5,142,780 During the year ended July 31, 2019, the Company recorded a provision of $422,684 of allowance for doubtful accounts and wrote off $118,684 accounts receivable. Addition of $32,478 was attributable to the acquisition of Wine Co. and Herbal Wine Co. Foreign currency translation effect amounted to $15,164. Balance of allowance for doubtful accounts from discontinued operations amounted to $32,242. During the year ended July 31, 2018, the Company recognized $119,003 of recovery of allowance for doubtful accounts with foreign currency translation effect of $20,862. During the year ended July 31, 2017, the Company recorded a provision of $1,395,152 of allowance for doubtful account. There are no write-off and allowance for doubtful accounts from discontinued operations during the years ended July 31, 2018 and 2017. |
Inventories, Net
Inventories, Net | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Note 6 – Inventories, net Inventories, net, consist of the following: July 31, July 31, Raw materials and parts $ 1,607,472 $ 1,725,258 Work in progress 258,634 124,507 Semi-finished goods 392,772 - Finished goods 6,420,298 3,291,768 Total 8,679,176 5,141,533 Less: allowance for inventory reserve (54,421 ) - Inventories, net 8,624,755 5,141,533 Less: inventories – discontinued operations (1,785,176 ) - Inventories, net – continuing operations $ 6,839,579 $ 5,141,533 For the year ended July 31, 2019, 2018 and 2017, an impairment of $263,720, $0, and $337,000, respectively, were recorded for inventories and reflected as cost of sales on the accompanying statement of operations. For the years ended July 31, 2019, 2018 and 2017, the Company wrote off inventories of $208,900, $341,609, and $0, respectively, from allowance for inventory reserve. |
Contract assets
Contract assets | 12 Months Ended |
Jul. 31, 2019 | |
Costs and Estimated Earnings in Excess of Billings [Abstract] | |
Contract assets | Note 7 – Contract assets Contract assets consist of the following: July 31, July 31, Revenue recognized to date $ - $ 5,025,892 Billings to date - (2,142,484 ) Contract assets $ - $ 2,883,408 |
Deposit for Investment, Net
Deposit for Investment, Net | 12 Months Ended |
Jul. 31, 2019 | |
Deposit for Investment [Abstract] | |
Deposit for investment, Net | Note 8 – Deposit for investment, net On March 16, 2018, the Company entered into a letter of intent to establish a 60% majority-owned subsidiary for a proposed supermarket project. Pursuant to the letter of intent, the Company paid a deposit to an unrelated party that will be the 40% noncontrolling interest in the proposed project. The deposit was $439,857 (RMB 3,000,000) and is expected to be used as working capital once the subsidiary is formed. On July 20, 2018, the Company rescinded the letter of intent and the unrelated party is required to fund the deposit to the Company by October 20, 2018. The Company collected $14,539 (RMB 100,000) as of October 31, 2018. The Company has received additional approximately $0.1 million (RMB 710,000) in November 2018. In May 2019, the Company entered an extension agreement with the unrelated party to extend the deadline for refunding the remaining balance of approximately $0.3 million (RMB 2,190,000) by July 2019. For the year ended July 31, 2019, an impairment of $320,457 (RMB 2,190,000) was recorded for deposit for investment after collection effort was made and the Company is unable to collect the remaining due. For the years ended July 31, 2018 and 2017, there was no such impairment. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment, net | Note 9 – Property, plant and equipment, net Property, plant and equipment consist of the following: July 31, July 31, Plant and buildings $ 11,773,196 $ 6,662,554 Machinery equipment 9,040,901 6,711,556 Computer and office equipment 668,741 251,965 Vehicles 468,486 121,211 Plant improvement 1,146,692 729,766 Construction in progress 1,650,429 256,503 Subtotal 24,748,445 14,733,555 Less: accumulated depreciation (5,098,140 ) (2,767,322 ) Property, plant and equipment, net 19,650,305 11,966,233 Less: property, plant and equipment – discontinued operations (4,588,449 ) - Property, plant and equipment, net – continuing operations $ 15,061,856 $ 11,966,233 Depreciation expenses from continuing operations for the years ended July 31, 2019, 2018 and 2017 were $999,036, $439,314 and $281,722, respectively. For the years ended July 31, 2019, 2018, and 2017, depreciation from continuing operations included in cost of sales was $590,391, $88,685, and $22,490 respectively. For the years ended July 31, 2019, 2018, and 2017, depreciation from continuing operations included in selling, general and administrative expenses was $408,645, $350,629 and $259,232, respectively. Depreciation expenses from discontinued operations for the year ended July 31, 2019 was $169,738. For the year ended July 31, 2019, depreciation from operations discontinued operations included in cost of sales and selling, general and administrative expenses was $144,009 and $25,729, respectively. Construction-in-progress consist of the following as of July 31, 2019: Construction-in-progress description Value Estimated Estimated Additional Cost to Complete Synthetic fuel raw materials production line $ 860,040 Completed in August 2019 $ 11,621 Factory plantation 280,026 Completed in August 2019 14,526 Fire safety equipment installation 152,306 November 2019 261,472 Piping 241,161 Completed in August 2019 58,105 Plant improvement 116,896 Completed and Inspected in August 2019 - Total construction-in-progress 1,650,429 345,724 Less: construction-in-progress – discontinued operations (116,896 ) - Total construction-in-progress – continuing operations $ 1,533,533 $ 345,724 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 10 – Intangible assets, net Intangible assets, net, consist of the following: July 31, July 31, Land use rights $ 7,227,670 $ 4,581,842 Technology know-hows 1,812,147 1,829,072 Patents, licenses and certifications 2,408,430 2,935,293 Software 7,451 - Less: accumulated amortization (715,376 ) (85,564 ) Intangible assets, net 10,740,322 9,260,643 Less: intangible assets – discontinued operations (2,950,343 ) - Intangible assets, net – continuing operations $ 7,789,979 $ 9,260,643 Amortization expenses from continuing operations for the years ended July 31, 2019, 2018 and 2017 amounted to $752,826, $88,534 and $0, respectively. Amortization expenses from discontinued operations for the year ended July 31, 2019 amounted to $86,716. Based on the finite-lived intangible assets as of July 31, 2019, the expected amortization expenses from continuing operations are estimated as follows: Twelve Months Ending July 31, Estimated 2020 $ 687,773 2021 686,408 2022 684,522 2023 683,077 2024 683,077 Thereafter 7,315,465 Total 10,740,322 Less: intangible assets – discontinued operations (2,950,343 ) Total intangible assets, net – continuing operations $ 7,789,979 |
Goodwill
Goodwill | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 11 – Goodwill The changes in the carrying amount of goodwill by reportable segment are as follows : Hubei Jinli Tianjin Jiabaili Wine Co. Total Balance as of July 31, 2017 $ - $ - $ - $ - Goodwill acquired through acquisition 3,906,599 350,055 - 4,256,654 Foreign currency translation adjustment (113,354 ) (10,157 ) - (123,511 ) Balance as of July 31, 2018 3,793,245 339,898 - 4,133,143 Goodwill acquired through acquisitions - - 1,976,878 1,976,878 Goodwill impairment - (339,221 ) - (339,221 ) Foreign currency translation adjustment (35,100 ) (677 ) 21,509 (14,268 ) Balance as of July 31, 2019 3,758,145 - 1,998,387 5,756,532 Less: goodwill – discontinued operations - - (1,998,387 ) (1,998,387 ) Goodwill – continuing operations $ 3,758,145 $ - $ - $ 3,758,145 |
Debt
Debt | 12 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 12 – Debt Short-term loan - bank Outstanding balance of short-term loan - bank consisted of the following: Bank Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Wuhan Rural Commercial Bank Repaid in May 2019 7.00 % Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou $ - $ 733,095 Current maturities of long-term loan Outstanding balance of current maturities of long-term loan consisted of the following: Bank Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Xianning Rural Commercial Bank* Repaid in April 2019 5.83 % Land use rights, plant and equipment, inventories $ - $ 3,069,113 * The current maturities of long-term loan was acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). Short-term loan – third party Outstanding balance of short-term loan – third party consisted of the following: Lender Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Xianning Zhongying New Energy Service Co. Ltd. Repaid in October 2018 4.75 % None $ - $ 175,943 Short-term loans – related parties Name of Related Party Relationship Maturities Interest rate Collateral/ Guarantee July 31, 2019 July 31, 2018 Zhou Deng Hua Chief Executive Officer of the Company Repaid in April 2019 & July 2019 None None $ - $ 5,864,759 Jian Zhou Chairman of the Company Repaid in May 2019 None None - 703,771 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in October 2018 12.00 % None - 13,195,707 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in January 2019 4.75 % None - 381,209 Total $ - $ 20,145,446 Interest expense for the year ended July 31, 2019 amounted to $462,331, including $296,093 related parties interest expenses. Interest expense for the year ended July 31, 2018 amounted to $256,467, including $221,819 related parties interest expenses. Interest expense for the year ended July 31, 2017 amounted to $0. |
Related Party Balances and Tran
Related Party Balances and Transactions | 12 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related party balances and transactions | Note 13 – Related party balances and transactions Sales to related parties Sanhe Liguang Kelitai Equipment Ltd ("Sanhe Kelitai") In August 2016, Sanhe Xiangtian began three construction projects for installation of PV panels with Sanhe Kelitai. Sanhe Kelitai is majority (95%) owned by Zhou Jian, the Company's Chairman of the Board. The Company had two construction projects for installation of PV panels with Sanhe Kelitai as well as sold various PV panels products to this related party. For the years ended July 31, 2019, 2018 and 2017, revenue of $0, $128,878 and $170,588, respectively, and costs of sales of $0, $112,890 and $147,466, respectively, were recognized related to these projects. Jian Zhou For the year ended July 31, 2018, the Company had one construction project for installation of PV panels with Jian Zhou's property. Revenue of $29,013 and costs of sales of $25,823 were recognized related to this project. For the year ended July 31, 2019, the Company sold Heat Pump products, PV Panels products and other parts to Jian Zhou. Revenue of $4,856 and costs of sales of $4,040 were recognized related to this project. Leases with related parties Sanhe Xiangtian leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province, PRC. LuckSky Group is owned by Zhou Deng Rong, the Company's former Chief Executive Officer, and Zhou Jian, the Company's Chairman. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire on July 31, 2024 and are subject to renewal with a two-month advance written notice. This lease is terminated in April 2019. For the years ended July 31, 2019, 2018 and 2017, rent expense for the lease with Lucksky Group was $90,743, $127,182 and $125,930, respectively. During year ended July 31, 2018, Sanhe Xiangtian leased another office in Sanhe City from Sanhe Dong Yi Glass Machine Company Ltd ("Sanhe Dong Yi") which is owned by Zhou Deng Rong with the lease term expired on June 14, 2019 for a rent of approximately $7,000 (RMB 48,000) per year. Sanhe Xiangtian renewed such lease under the same terms from June 15, 2019 to June 14, 2020. For the years ended July 31, 2019, 2018 and 2017, rent expense for this lease with Sanhe Dong Yi was $7,024, $22,149 and $0, respectively. Related party balances a. Short-term loans – related parties (See Note 12) b. Other receivables – related parties: Name of Related Party Relationship Nature July 31, July 31, Lei Su Legal representative of Tianjin Jiabaili Employee advances $ 2,905 $ - Deng Hua Zhou Chief Executive Officer Employee advances 3,632 - Total $ 6,537 $ - c. Accounts payable – related parties: Name of Related Party Relationship Nature July 31, July 31, Xianning Baizhuang Tea Industry Co., Ltd. Bin Zhou is the CEO of the company Purchase of materials $ 9,554 $ - Total $ 9,554 $ - d. Other payables – related parties: Name of Related Party Relationship Nature July 31, July 31, Luck Sky International Investment Holdings Ltd. Owned by Zhou Deng Rong, former Chief Executive Officer and director Payment for U.S. professional fee $ 593,941 $ - Lucksky Group Owned by Zhou Deng Rong, former Chief Executive Officer and director, and Zhou Jian, Chairman Lease payable 600,549 515,234 Sanhe Dong Yi Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable 872 21,113 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager Interest payable 488,455 211,441 Zhou Deng Rong Former Chief Executive Officer and director Payment for U.S. professional fee 2,748,259 2,748,260 Zhou Deng Hua Chief Executive Officer Advances for operational purpose - 289,572 Jian Zhou Chairman Advances for operational purpose 1,900,164 436,444 Zhimin Feng Legal representative of Jingshan Sanhe Advances for operational purpose 3,222 1,191 Wei Gu General manager of Xiangtian Zhongdian Advances for operational purpose - 6,863 Heping Zhang General Manager of Hubei Jinli Payment for acquisition of Hubei Jinli 39,923 - Total $ 6,375,385 $ 4,230,118 e. Investment payables – related parties (See Note 3) |
Significant Customer, Former Re
Significant Customer, Former Related Party | 12 Months Ended |
Jul. 31, 2019 | |
Significant Customer, Former Related Party [Abstract] | |
Significant customer, former related party | Note 14 – Significant customer, former related party Prior to April 10, 2014, Zhou Deng Rong, the Company's former Chief Executive Officer and director, owned 70% equity interest, and Zhou Jian, the Company's Chairman, owned the remaining 30% equity interest of Xianning Lucksky Aerodynamic Electricity ("Xianning Lucksky"). Through April 10, 2014, Xianning Lucksky's primary asset was a land use right for approximately 70 acres of land located in Xianning, Hubei Province, PRC. On April 8, 2014, Zhou Deng Rong sold his 70% equity interest in Xianning Lucksky to an individual, and Zhou Jian sold his 30% equity interest in Xianning Lucksky to another individual. The two individuals are unrelated to Zhou Deng Rong or Jian Zhou, or any member of management of the Company, or any of its consolidated subsidiaries or VIE. As such, as of April 8, 2014, the Company, or any of its shareholders, had no relationship to Xianning Lucksky. During the years ended July 31, 2019, 2018 and 2017, the Company entered into a series of sales contracts with Xianning Lucksky. These contracts represented approximately $1,680,000, $1,156,000 and $6,800,000 of the Company's revenue from continuing operations during the years ended July 31, 2019, 2018 and 2017, respectively. These contracts represented approximately $247,000 of the Company's revenue from discontinued operations during the years ended July 31, 2019. There are no revenue generated with Xianning Lucksky from discontinued operations during the years ended July 31, 2018 and 2017. On July 27, 2016, Xianning Xiangtian entered into a rental agreement with Xianning Lucksky to lease 4,628 square meters' space in a factory in Xianning, Hubei Province, PRC. The space is leased for a rent of $83,132 (RMB 555,360) per year. The lease would expire on July 31, 2018 but the Company terminated the lease early in February 2018 when the Company through Xiangtian Zhongdian signed another lease agreement which expired on February 5, 2019 with a rent of approximately $25,000 (RMB 168,922) per year. Xiangtian Zhongdian renewed such lease under the same terms from February 6, 2019 to February 5, 2021. During the years ended July 31, 2019, 2018 and 2017, rent expense related to these leases was $25,000, $51,243 and $81,480, respectively. On February 1, 2018, Xianning Xiangtian entered into a lease with Xianning Lucksky for a space of 4,628 square meters in the factory in Xianning, Hubei province. The factory space is leased for a rent of approximately $25,000 (RMB 168,922) per year from February 1, 2018 to July 31, 2020 and is subject to renewal with a one-month advance written notice. Rent expense for this lease amounted to $25,000 and $0 for the years ended July 31, 2019 and 2018, respectively. On July 27, 2018, Xianning Xiangtian entered into a lease with Xianning Lucksky for a space of 3,128 square meters in the factory in Xianning, Hubei province. The factory space is leased for a rent of approximately $17,000 (RMB 114,172) per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a one-month advance written notice. Rent expense for this lease amounted to $17,000 and $0 for the years ended July 31, 2019 and 2018, respectively. |
Employee Benefits Government Pl
Employee Benefits Government Plan | 12 Months Ended |
Jul. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee benefits government plan | Note 15 – Employee benefits government plan The Company participates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. PRC labor regulations require the Company to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate based on the basic monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution. As of July 31, 2019 and 2018, the outstanding amount due to the local labor bureau was $199,500 and $174,971, respectively, and is included in Other Payables and Accrued Liabilities on the accompanying consolidated balance sheets. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 16 – Income taxes Income tax United States On December 22, 2017, the "Tax Cuts and Jobs Act" (the "Act") was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. As the Company has a July 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of 21% and approximately 28.6% for the Company's fiscal year ending July 31, 2019 and 2018, respectively. Accordingly, the Company has remeasured the Company's deferred tax assets on net operating loss carryforwards ("NOLs") in the U.S at the lower enacted cooperated tax rate of 21%. However, this remeasurement has no effect on the Company's income tax expenses as the Company has provided a 100% valuation allowance on its deferred tax assets previously. Additionally, the Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused the Company to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company's income tax expenses as the Company has no undistributed foreign earnings prior to December 31, 2018 which the Company has foreign cumulative losses at December 31, 2018. British Virgin Islands Xiangtian BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Xiangtian HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Xiangtian HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC The Company PRC subsidiaries and VIEs and their controlled entities are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC, Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Significant components of the income tax expense consisted of the following for the years ended July 31, 2019 and 2018: 2019 2018 2017 Current $ 2,272,843 $ 170,678 $ 263,025 Deferred - 9,469 (104,784 ) Provision for income tax 2,272,843 180,147 158,241 Less: provision for income tax – discontinued operations (308,605 ) - - Provision for income tax – continuing operations $ 1,964,238 $ 180,147 $ 158,241 Reconciliation of effective income tax rate from continuing operations is as follows for the years ended July 31: 2019 2018 2017 Statutory U.S. tax rate (21.0 )% (28.6 )% (34.0 )% Effect of PRC statutory tax rate (4.0 )% 3.6 % 9.0 % Less: valuation allowance (713.8 )% 35.3 % 27.5 % Deferred tax expense 0.0 % (0.8 )% 2.4 % Permanent difference* (389.4 )% 6.6 % (1.3 )% Tax expense (1128.2 )% 16.1 % 3.6 % * Permanent difference mainly attributable to the expenses incurred in the U.S. and Hong Kong not being able to deducted in the Company's PRC tax return and certain meal and entertainment expenses and related parties interest expenses which in partially non-deductible under PRC income tax law. For the year ended July 31, 2019, 277.5%, 0.1% and 111.8% represents U.S., Hong Kong and PRC, respectively, expenses incurred not being able to be deducted in the Company's PRC tax return. Reconciliation of effective income tax rate from discontinued operations is as follows for the years ended July 31: 2019 2018 2017 Statutory U.S. tax rate 21.0 % - % - % Effect of PRC statutory tax rate 4.0 % - % - % Less: valuation allowance 0.6 % - % - % Permanent difference (2.9 )% - % - % Tax expense 22.7 % - % - % Significant components of the continuing operations of the Company's deferred tax assets as of July 31, 2019 and 2018 are approximately as follows: 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 1,967,400 $ 911,400 Accounts receivable allowance 415,800 343,500 Inventory allowance 13,600 - Deposit for investment allowance 79,500 - Accrued liabilities 72,000 50,600 Warranty and other 16,300 16,400 Deferred tax assets before valuation allowance 2,564,600 1,321,900 Less: valuation allowance (2,564,600 ) (1,321,900 ) Net deferred tax assets $ - $ - As of July 31, 2019, the Company had U.S. federal NOLs of approximately $5,094,000 that expire beginning in 2029 to 2038 with deferred tax assets of approximately $1,070,000. As of July 31, 2019, the Company had approximately $30,000 of NOLs related to its Hong Kong holding companies that can be carryforward indefinitely with deferred tax assets of approximately $5,000. As of July 31, 2019, the Company had approximately $3,571,000 of NOLs related to its PRC subsidiaries and VIEs that expire in years 2019 through 2023 with deferred tax assets of approximately $893,000. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance as of July 31, 2019. Significant components of the discontinued operations of the Company's deferred tax assets as of July 31, 2019 and 2018 are approximately as follows: 2019 2018 Deferred tax assets: Accounts receivable allowance $ 8,100 $ - Less: valuation allowance (8,100 ) - Net deferred tax assets $ - $ - The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as "unrecognized benefits." A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise's potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as "Other Income (Expense)" in the statement of operations. Penalties would be recognized as a component of "General and Administrative Expenses" in the statement of operations. The Company filed its July 31, 2016 and 2017 corporation income tax return in November 2018. For the year ended, July 31, 2018, $2,783 of estimated interest costs and $80,000 of estimated penalty were recorded in relation to the Company's late filing of July 31, 2016 and 2017 corporation income tax return. The Company stayed current with its July 31, 2018 tax return filing. No interest or penalty on unpaid tax was recorded during the year ended July 31, 2019. As of July 31, 2019 and 2018, other than discussed above, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next quarter. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 17 – Commitments and contingencies Operating leases The total future minimum lease payments under the non-cancellable operating leases as of July 31, 2019 are payable as follows: Twelve months ending July 31, Minimum Lease Payment 2020 $ 531,058 2021 1,069,633 2022 601,241 2023 333,716 2024 436 Thereafter 872 Total minimum payments required $ 2,536,956 Rental expense of the Company from continuing operations for the years ended July 31, 2019, 2018 and 2017 were $1,102,164, $304,663, and $212,610, respectively. Rental expense of the Company from discontinued operations for the years ended July 31, 2019, 2018 and 2017 were $0. Purchase commitment The total future minimum purchase commitment under the non-cancelable purchase contracts as of July 31, 2019 are payable as follows: Twelve months ending July 31, Amount 2020 $ 43,837 Thereafter - Total minimum payments required 43,837 Less: purchase commitments – discontinued operations (43,837 ) Total purchase commitments – continuing operations $ - Contingencies Cancellation of restricted common stock On September 23, 2013, the Company issued 60,000,000 shares of restricted common stock at $0.001 per share to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting Chief Financial Officer of the Company beginning July 29, 2014, and two other non-related parties obtained a total of 7,000,000 shares of restricted common stock. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for the Company's common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time of issuance, therefore the par value is thought to match the assumed market price of the Company's common stock which is at $0.001 per share. The Company might incur additional expenses to have these shares canceled. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were cancelled. On January 29, 2019, the Company commenced an action against Global Select Advisors Ltd. ("Global Select") in the First Judicial District Court of Nevada (the "Court") to cancel 60 million shares of common stock of the Company that, without proper authorization, were issued to Roy Thomas Phillips, a former consultant and acting Chief Financial Officer of the Company, and subsequently transferred to Global Select. On February 25, 2019, the Clerk of the Court entered a default against Global Select as a result of Global Select's failure to respond to the Company's complaint. The Company filed a motion for default judgment pursuant to which the Company sought an order authorizing the Company to cancel the 60 million shares. The Company's motion for default judgement was granted and the shares were cancelled in April 2019. Contract dispute – Sanhe Xiangtian vs. Shandong Taidai Sanhe Xiangtian is involved in a litigation with Shandong Taidai Photovoltaic Technology Co., Ltd. ("Shandong Taidai") for contractual dispute. Sanhe Xiangtian filed a complaint on January 24, 2018 with the Sanhe People's Court and claimed for damages of RMB 1,000,000 (approximately $149,245) caused by Shandong Taidai as it provided the unqualified construction project. On June 5, 2019, the court ruled Shandong Taidai to pay for the damages of Sanhe Xiangtian in the amount RMB 15,826,000 (approximately $2.3 million) and other associated fees of RMB 23,000 (approximately $3,000). As of the date of this report, the Company has not received any appealing notice from Shandong Taidai. The Company does not believe the litigation will have significant impact on its consolidated financial statements as the Company will record the gain contingency upon receiving the settlement charges. Shandong Taidai filed a lawsuit against Sanhe Xiangtian with Dongying City Intermediate People's Court of Shandong Province on November 29, 2018 regarding the same project and claimed unpaid work of RMB 4,089,150 (approximately $610,284) and liquidated damages of RMB 2,025,139 (approximately $302,242). As of December 19, 2018, Sanhe Xiangtian has submitted an application objecting to the jurisdiction of Dongying City Intermediate People's Court of but the application was rejected. On January 23, 2019, Sanhe Xiangtian appealed the ruling in the jurisdiction of Dongying City Intermediate People's Court. Currently, the case is under review by the Dongying City Intermediate People's Court. The Company does not believe the litigation will have a material impact on its current operations and financial statements as the accounts payable amount has been properly accrued. Acquisition payment dispute – Sanhe Xiangtian vs. Wehhan Han and Guifen Wang On March 19, 2019, Wenhe Han and Guifen Wang, former shareholders of Tianjin Jiabaili (collectively known as the "Plaintiffs"), filed a lawsuit against Xianning Xiangtian in People's Court of Jizhou District, Tianjin City for a dispute over the equity transfer of Tianjin Jiabaili between Plaintiffs and Xianning Xiangtian. The Plaintiffs claimed a damage amounting to RMB 2,000,000 (approximately $0.3 million) for breach of contract and demanded immediate payment on the unpaid equity transfer balance of RMB 1,720,000 (approximately $0.3 million). A hearing was held on April 23, 2019 and the court approved the request of the Plaintiffs to freeze Xianning Xiangtian's assets worth of RMB 3,720,000 (approximately $0.6 million) before a judgement is rendered. As of the date of this report, the freeze order has not been enforced and the Company has not received the list of assets subject to this order. Management currently cannot estimate the outcome of the litigation. On April 15, 2019, Xianning Xiangtian filed a lawsuit against Wenhan Han and Guifen Wang, former shareholders of Tianjin Jiabaili, for the same dispute over the equity transfer of Tianjin Jiabaili in the People's Court of Jizhou District, Tianjin City. Xianning Xiangtian claimed a damage amounting to RMB 2,000,000 (approximately $0.3 million) and demanded immediate refund of RMB 5,080,000 (approximately $0.8 million) plus a 6% annual interest starting from April 15, 2019 due to misrepresentation of the production facility of Tianjin Jiabaili from the former shareholders of Tianjin Jiabiali. A hearing is scheduled on June 11, 2019 and the court approved the request of the Company to freeze Wenhan Han and Guifen Wang's personal assets worth of RMB 7,080,000 (approximately $1.0 million). Currently, the case is under review by the Dongying City Intermediate People's Court. Management currently cannot estimate the outcome of the litigation. Other legal matters From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from, being guarantor of a third party and employment contract dispute. The Company accrues costs related to these matters when they become probable and as a result the amount of loss can be reasonably estimated. In determining whether a loss from a claim is probable, and if it is possible to estimate the potential litigation losses. In those situations, the Company discloses an estimate of the probable losses or a range of possible losses, if such estimates can be made. As of July 31, 2019, the type of complaints and disputes and their potential claims that the Company does not accrue costs for potential litigation losses as the probability of repaying these claims are remote. These potential are summarized as follows: Labor dispute – Qiao Lijuan vs. Tianjin JiaBaiLi Regarding the labor dispute lawsuit between Qiao Lijuan and Tianjin JiaBaiLi Petroleum Products Co., Ltd. (Hereinafter referred to as "JiaBaiLi"), on July 23, 2019, Qiao Lijuan sued JiaBaiLi (Defendant A) and the 1st Sales Company of JiaBaiLi (Defendant B) before Jizhou Court claiming Defendant B to pay RMB 7,000 (approximately $1,000) for salary, Defendant A to bear the joint and several liability and both Defendant A and B to bear the litigation fees. Currently, such case is in the process of court hearing and deliberation. The Company does not believe the litigation will have a material impact on its current operations and financial statements. Negotiable instruments dispute – Kelin Environmental Protection Equipment, Inc. Regarding the negotiable instruments dispute of Kelin Environmental Protection Equipment, Inc. (Hereinafter referred to as "Kelin"), as Kelin had not paid the draft due and expired, it was pursued by the holders. Xiangtian Zhongdian, as the one of the endorsers, are involved in 14 lawsuits currently and the amount is RMB 4.1 million (approximately $0.6 million). Xiangtian Zhongdian may be jointly and severally liable in the above cases, but it may recourse to the former endorsers after compensation. Dispute matter Claim amount 1) Negotiable instruments $ 551,997 2) Labor 1,017 Total $ 553,014 Shimen Government Inquiry On June 10, 2019, Xianning Xiangtian received an inquiry from Shimen County Market Supervision Bureau (the "Bureau") with respect to a formal investigation it initiated against Xianning Xiangtian on May 10, 2019. The Bureau stated it is investigating that Xianning Xiangtian was selling its shares to the public in anticipation of a Nasdaq listing in the near future as part of a multi-level marketing scheme. On June 14, 2019, Xianning Xiangtian issued a Letter of Statement in response to the inquiry and stated Xianning Xiangtian never issued any shares to the unspecified public since its incorporation and that all of the Company's shares are registered with VStock Transfer Agent. Following Xianning Xiangtian's delivery of its Letter of Statement, it has not received any further inquiries from the Bureau. The Company believes that these allegations are false and without merit, and intends to vigorously defend against it. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the New VIE Agreements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Xiangtian Shenzhen and the VIE are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the New VIE Agreements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company's current corporate structure or the New VIE Agreements is remote based on current facts and circumstances. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Stockholders' equity | Note 18 – Stockholders’ equity In June 2017, the Board of Directors of the Company adopted the 2017 Stock Incentive Plan (the “Plan”) under which 30 million shares of common stock are available for issuances. As of July 31, 2019, the Company did not grant any awards under the Plan. During the year ended July 31, 2019, Mr. Jian Zhou, the Company’s Chairman and principal stockholder as well as a shareholder of Xianning Xiangtian, and Zhou Deng Rong, the Company’s former Chief Executive Officer and director, contributed $30,820,127 of additional paid in capital in Xianning Xiangtian. As discussed in Note 17, the Company cancelled 60 million shares in April 2019. |
Concentrations
Concentrations | 12 Months Ended |
Jul. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 19 – Concentrations Customer concentration risk For the year ended July 31, 2019, two customers accounted for 34.7% and 23.6% of the Company's total revenues. For the year ended July 31, 2018, three customers accounted for 23.3%, 19.1% and 15.0% of the Company's total revenues. For the year ended July 31, 2017, two customers accounted for 71.4% and 11.8% of the Company's total revenues. As of July 31, 2019, four customers accounted for 20.8%, 17.7%, 17.3% and 12.9% of the total balance of accounts receivable, respectively. As of July 31, 2018, three customers accounted for 32.0%, 15.0% and 12.3% of the total balance of accounts receivable, respectively. Vendor concentration risk For the year ended July 31, 2019, two vendors accounted for 35.0% and 20.5% of the Company's total purchases. For the year ended July 31, 2018, four vendors accounted for 19.0%, 18.3%, 15.4% and 10.9% of the Company's total purchases. For the year ended July 31, 2017, four vendors accounted for 13.6%, 11.6%, 11.2% and 10.9% of the Company's total purchases. As of July 31, 2019, three vendors accounted for 49.8%, 13.7% and 11.4% of the total balance of accounts payable, respectively. As of July 31, 2018, four vendors accounted for 29.8%, 15.7%, 14.0% and 11.7% of the total balance of accounts payable, respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 20 – Segment reporting Starting in April 2018, the Company began to evaluate performance and to determine resource allocations based on a number of factors, the primary measurement being income from operations of the Company’s nine reportable divisions in the PRC: Sanhe Xiangtian, Xianning Xiangtian, Xiangtian Zhongdian, Jingshan Sanhe, Hubei Jinli, Tianjin Jiabaili, Xiangtian Trade, Wine Co., and Herbal Wine Co. Tianjin Jiabaili did not have any operations as of July 31, 2019. Prior period numbers are broken down for purposes of comparison. These reportable divisions are consistent with the way the Company manages its business and each division operates under separate management groups and produces discrete financial information. The accounting principles applied at the operating division level in determining income (loss) from operations is generally the same as those applied at the consolidated financial statement level. The following represents results of division operations for the years ended July 31, 2019, 2018 and 2017: 2019 2018 2017 Revenues: Sanhe Xiangtian $ 3,034,530 $ 9,488,621 $ 9,472,865 Xianning Xiangtian 8,684,086 946,780 48,506 Jingshan Sanhe 11,979,135 909,713 - Xiangtian Zhongdian 23,080,822 3,682,011 - Hubei Jinli 6,310,495 242,663 - Xiangtian Trade 37,845 - - Wine Co. 1,820,844 - - Herbal Wine Co. 286,749 - - Consolidated revenues 55,234,506 15,269,788 9,521,371 Less: revenues – discontinued operations (2,107,593 ) - - Revenues – continuing operations $ 53,126,913 $ 15,269,788 $ 9,521,371 2019 2018 2017 Gross profit: Sanhe Xiangtian $ 1,058,894 $ 1,678,488 $ 910,106 Xianning Xiangtian 1,455,529 250,714 68,058 Jingshan Sanhe 4,250,457 225,038 - Xiangtian Zhongdian 2,158,825 445,710 - Hubei Jinli 3,948,573 38,374 - Xiangtian Trade 37,845 - - Wine Co. 1,589,576 - - Herbal Wine Co. 246,098 - - Consolidated gross profit 14,745,797 2,638,324 978,164 Less: gross profit – discontinued operations (1,835,674 ) - - Gross profit – continuing operations $ 12,910,123 $ 2,638,324 $ 978,164 2019 2018 2017 Income (loss) from operations: Sanhe Xiangtian $ (219,521 ) $ 385,643 $ (3,653,553 ) Xianning Xiangtian (342,335 ) (394,376 ) (436,327 ) Jingshan Sanhe 1,722,380 34,279 - Xiangtian Zhongdian 1,104,729 267,118 - Hubei Jinli 2,453,399 (125,633 ) - Tianjin Jiabaili (1,440,112 ) (23,784 ) - Xiangtian Trade 17,772 - - Wine Co. 1,255,129 - - Herbal Wine Co. 139,673 - - All four holding entities (1,959,108 ) (992,678 ) (325,589 ) Consolidated income (loss) from operations 2,732,006 (849,431 ) (4,415,469 ) Less: income from operations – discontinued operations (1,394,802 ) - - Income (loss) from operations – continuing operations $ 1,337,204 $ (849,431 ) $ (4,415,469 ) 2019 2018 2017 Net income (loss) attributable to controlling interest: Sanhe Xiangtian $ (298,763 ) $ 274,981 $ (3,688,902 ) Xianning Xiangtian (1,579,641 ) (650,479 ) (436,007 ) Jingshan Sanhe 904,315 25,006 - Xiangtian Zhongdian 562,792 156,059 - Hubei Jinli 1,773,869 (161,799 ) - Tianjin Jiabaili (1,455,079 ) (23,817 ) - Xiangtian Trade 13,685 - - Wine Co. 816,129 - - Herbal Wine Co. 129,908 - - All four holding entities (1,952,508 ) (986,256 ) (439,250 ) Consolidated net income (loss) attributable to controlling interest (1,085,293 ) (1,366,305 ) (4,564,159 ) Less: net income attributable to controlling interest - discontinued operations (946,037 ) - - Net loss attributable to controlling interest - continuing operations $ (2,031,330 ) $ (1,366,305 ) $ (4,564,159 ) 2019 2018 2017 Depreciation and amortization expenses: Sanhe Xiangtian $ 166,547 $ 260,404 $ 261,585 Xianning Xiangtian 787 69,932 20,137 Jingshan Sanhe 98,103 1,345 - Xiangtian Zhongdian 287,918 100,468 - Hubei Jinli 977,661 79,178 - Tianjin Jiabaili 220,297 16,521 - Xiangtian Trade 549 Wine Co. 215,738 - - Herbal Wine Co. 40,716 - - Consolidated depreciation and amortization expenses 2,008,316 527,848 281,722 Less: depreciation and amortization expenses - discontinued operations (256,454 ) - - Depreciation and amortization expenses - continuing operations $ 1,751,862 $ 527,848 $ 281,722 2019 2018 2017 Interest expense: Sanhe Xiangtian $ 5,869 $ 12,827 $ - Xianning Xiangtian 783,327 256,048 - Hubei Jinli 166,237 30,920 - Consolidated interest expense $ 955,433 $ 299,795 $ - 2019 2018 2017 Capital expenditures: Sanhe Xiangtian $ 106,823 $ 97,534 $ 1,940,552 Xianning Xiangtian 5,890 2,987 48,643 Jingshan Sanhe 3,371,741 450,249 - Xiangtian Zhongdian 8,267 36,076 - Hubei Jinli 497,402 1,154 - Tianjin Jiabaili 135,333 - - Xiangtian Trade 511 - - Wine Co. 366,886 - - All four holding entities 18,500 - - Consolidated capital expenditures 4,511,353 588,000 1,989,195 Less: capital expenditures - discontinued operations (366,886 ) - - Capital expenditures - continuing operations $ 4,144,467 $ 588,000 $ 1,989,195 Total assets of each division as of July 31, 2019 and 2018 consisted of the following: July 31, July 31, Total assets: Sanhe Xiangtian $ 4,889,875 $ 11,355,619 Xianning Xiangtian 7,969,624 4,689,100 Jingshan Sanhe 6,969,849 3,513,449 Xiangtian Zhongdian 7,731,512 12,620,210 Hubei Jinli 21,635,194 22,489,702 Tianjin Jiabaili 302,518 4,111,706 Xiangtian Trade 483,168 - Wine Co. 11,005,886 - Herbal Wine Co. 2,973,064 - All four holding entities 416,098 248,164 Consolidated assets 64,376,788 59,027,950 Less: assets - discontinued operations (13,978,950 ) - Total assets - continuing operations $ 50,397,838 $ 59,027,950 |
Quarterly Unaudited Results
Quarterly Unaudited Results | 12 Months Ended |
Jul. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly unaudited results | Note 21 – Quarterly unaudited results The results of operations by quarter for the years ended July 31, 2019, 2018 and 2017 are as follows: 2019 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 19,988 $ 21,411 $ 6,790 $ 4,938 Gross profit $ 4,196 $ 5,376 $ 2,364 $ 974 Net income (loss) from continuing operations $ 1,376 $ 1,373 $ (593 ) $ (4,188 ) Net income from discontinued operations $ - $ 244 $ 685 $ 17 Earnings (loss) per common shares – basic and diluted from continuing operations $ 0.00 $ 0.00 $ (0.00 ) $ (0.01 ) Earnings (loss) per common shares – basic and diluted from discontinued operations $ - $ 0.00 $ 0.00 $ (0.00 ) 2018 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 355 $ 232 $ 424 $ 14,259 * Gross profit $ 38 $ 57 $ 115 $ 2,428 * Net income (loss) $ (856 ) $ (669 ) $ (682 ) $ 841 Net income (loss) per share, basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ 0.00 * During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the contract assets (See Note 7) as of July 31, 2017 and determined no allowance on contract assets were deemed necessary as the Company's products can easily be dismantled and resold above its contract assets if the Company were unable to pass the second inspections. 2017 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 87 $ 966 $ 3,277 $ 5,191 Gross profit $ 15 $ 132 $ 512 $ 319 Net loss $ (651 ) $ (321 ) $ (109 ) $ (3,483 ) Net loss per share, basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) |
Summary of Significant Accoun_2
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. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of consolidated financial statements | Name Background Ownership Xiangtian HK ● A Hong Kong company 100% owned by XT Energy Xiangtian BVI ● A British Virgin Islands company 100% owned by XT Energy Xiangtian Shenzhen ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Xiangtian HK Sanhe Xiangtian ● A PRC limited liability company ● Incorporated on July 8, 2013 ● Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter Xianning Xiangtian ● A PRC limited liability company ● Incorporated on May 30, 2016 ● Manufacturing and sales of air compression equipment and heat pump products 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter Xiangtian Zhongdian ● A PRC limited liability company ● Incorporated on March 7, 2018 ● Manufacturing and sales of PV panels 70% owned by Xianning Xiangtian Jingshan Sanhe ● A PRC limited liability company ● Incorporated on April 17, 2018 ● Researching, manufacturing and sales of high-grade synthetic fuel products 100% owned by Xianning Xiangtian Hubei Jinli ● A PRC limited liability company ● Incorporated on December 27, 2004 and acquired on June 30, 2018 ● Manufacturing and sales of hydraulic parts and electronic components 100% owned by Xianning Xiangtian Tianjin Jiabaili ● A PRC limited liability company ● Incorporated on April 10, 2007 and acquired on June 30, 2018 ● Manufacturing and sales of petroleum products 100% owned by Xianning Xiangtian Xiangtian Trade ● A PRC limited liability company ● Incorporated on August 9, 2018 ● Expected to engage in trading chemical raw materials to support fuel production 100% owned by Xianning Xiangtian Wine Co.* ● A PRC limited liability company ● Incorporated on August 9, 2011 and acquired on December 14, 2018 ● Manufacturing and sales of wine products 90% owned by Xianning Xiangtian Herbal Wine Co.* ● A PRC limited liability company ● Incorporated on August 9, 2018 and acquired on December 14, 2018 ● Manufacturing and sales of herbal wine products 90% owned by Xianning Xiangtian *See Note 4 – Discontinued operations for details. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of financial statement amounts and balances of the VIE were included in the accompanying unaudited condensed consolidated financial statements | 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 ) |
Schedule of estimated useful lives of property, plant and equipment | 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% |
Schedule of estimated useful lives of intangible assets, net | Classification Estimated Useful Life Land use rights 50 years Technology know-hows 10 years Patents, licenses and certifications 3-10 years Software 3 years |
Schedule of fair value hierarchy on a recurring basis | 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 |
Schedule of reconciliation of assets and liabilities measured at fair value on a recurring basis | 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 |
Schedule of disaggregate sale of products streams | 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 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Business Acquisition [Line Items] | |
Schedule of unaudited pro forma of operations and financial results as acquisition | For the Years Ended July 31, July 31, (Unaudited) (Unaudited) Revenue $ 19,049,576 $ 11,649,664 Cost of revenue 14,409,989 9,496,952 Gross profit 4,639,587 2,152,712 Total operating expenses 4,359,578 6,235,229 Income (loss) from operations 280,009 (4,082,517 ) Other income (expenses), net (530,989 ) (13,796 ) Loss before income taxes (250,980 ) (4,096,313 ) Income tax expense (337,243 ) (242,822 ) Net loss attributable to XT Energy Group, Inc. (588,223 ) (4,339,135 ) Less: Net income attributable to non-controlling interest 66,883 - Net loss attributable to XT Energy Group, Inc. $ (655,106 ) $ (4,339,135 ) Weighted average number of common shares outstanding - basic and diluted 591,042,000 591,042,000 Net loss per common share - basic and diluted $ (0.00 ) $ (0.01 ) |
Tianjin Jiabaili [Member] | |
Business Acquisition [Line Items] | |
Schedule of consideration transferred to acquisition | Cash $ 1,026,803 Contingent purchase prices payment 203,850 Total consideration at fair value $ 1,230,653 |
Schedule of fair value of identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 2,731 Other current assets 2,065 Intangible assets, net 875,802 Goodwill 350,055 Total assets 1,230,653 Total liabilities - Net assets acquired $ 1,230,653 |
Investment Payable [Member] | |
Business Acquisition [Line Items] | |
Schedule of investment payable | Name of Payee Relationship Nature July 31, July 31, Sheng Zhou Former shareholder of Hubei Jinli Payment for acquisition of Hubei Jinli $ - $ 9,069,058 Guifen Wang Former shareholder of Hubei Jinli Payment for acquisition of Tianjin Jiabaili 136,314 137,587 Total 136,314 9,206,645 Short-term (136,314 ) (2,505,871 ) Long-term $ - $ 6,700,774 |
Schedule of maturities schedule | Repayment date Amount Due on demand (see Note 17 – Commitments and Contingencies) $ 136,314 Total $ 136,314 |
Investment Payable Related Parties [Member] | |
Business Acquisition [Line Items] | |
Schedule of investment payable | Name of Related Party Relationship Nature July 31, July 31, Wenhe Han (see Note 17 – Commitments and Contingencies) Vice general manager of Tianjin Jiabaili Payment for acquisition of Tianjin Jiabaili $ 113,537 $ 261,216 Heping Zhang General manager of Hubei Jinli Payment for acquisition of Hubei Jinli 370,875 750,286 Total 484,412 1,011,502 Short-term (204,648 ) (507,143 ) Long-term $ 279,764 $ 504,359 |
Schedule of maturities schedule | Repayment date Amount Due on demand $ 113,537 June 2020 101,683 June 2021 305,763 Debt discount (36,571 ) Total $ 484,412 |
Hubei Jinli [Member] | |
Business Acquisition [Line Items] | |
Schedule of consideration transferred to acquisition | Cash $ 6,040,015 Present value of cash installments 10,996,129 Contingent purchase prices payment 137,561 Total consideration at fair value $ 17,173,705 |
Schedule of fair value of identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 33,402 Accounts receivable, net 2,561,863 Inventories, net 455,247 Advances to suppliers 143,129 Other receivables 8,622 Loan receivables 2,434,381 Plant and equipment, net 6,550,446 Intangible assets, net 7,899,887 Deferred tax assets 9,295 Goodwill 3,906,599 Total assets 24,002,871 Short-term loan - bank (2,114,005 ) Current maturities of long-term loan (3,160,828 ) Accounts payable (357,188 ) Advance from customers (4,099 ) Other payables and accrued liabilities (844,926 ) Other payables - related party (30,200 ) Income taxes payable (317,920 ) Total liabilities (6,829,166 ) Net assets acquired $ 17,173,705 |
Wine Co. and Herbal Wine Co [Member] | |
Business Acquisition [Line Items] | |
Schedule of fair value of identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 6,890 Accounts receivable, net 23,612 Inventories, net 1,035,186 Advances to suppliers 25,719 Other receivables 244,279 Plant and equipment, net 4,351,805 Intangible assets, net 2,999,442 Goodwill 1,976,878 Total assets 10,663,811 Advance from customers 13,904 Other payables and accrued liabilities 6,128,289 Other payables – related parties and director 3,653,843 Taxes payable 5,582 Total liabilities 9,801,618 Net assets acquired prior to capital contribution $ 862,193 Total consideration for capital injection 9,699,669 Additional capital contribution by noncontrolling shareholder 215,548 Net assets acquired after capital contribution 10,777,410 Percentage of interest acquired 90.0 % Total net assets acquired $ 9,699,669 |
Discontinued operations (Tables
Discontinued operations (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Discontinued Operations Tables Abstract | |
Schedule of assets and liabilities from discontinued operations | July 31, 2019 CURRENT ASSETS: Cash $ 1,929,899 Accounts receivable, net 471,889 Inventories, net 1,785,176 Advances to suppliers 181,101 Other current assets 73,707 Total current assets of discontinued operations 4,441,772 OTHER ASSETS: Property, plant and equipment, net 4,588,449 Intangible assets, net 2,950,343 Goodwill 1,998,387 Total other assets of discontinued operations 9,537,179 Total assets of the disposal group classified as discontinued operations $ 13,978,951 Carrying amounts of major classes of liabilities included as part of discontinued operations: CURRENT LIABILITIES: Accounts payable $ 25,266 Advance from customers 1,124,608 Other payables and accrued liabilities 42,778 Income taxes payable 306,360 Total current liabilities of discontinued operations 1,499,012 Total liabilities of the disposal group classified as discontinued operations $ 1,499,012 |
Schedule of income and loses from discontinued operations | For the Year Ended 2019 Revenue: Significant customer, former related party $ 246,939 Other customers 1,860,654 Total revenue 2,107,593 Cost of revenue 271,919 Gross profit 1,835,674 OPERATING EXPENSES: Selling expenses 24,644 General and administrative expenses 416,228 Total operating expenses 440,872 Income from operations 1,394,802 OTHER INCOME (EXPENSE) Other expense, net (37,256 ) Interest income 2,211 Total other expenses, net (35,045 ) Income before income taxes 1,359,757 Income tax expenses (308,605 ) Net income from discontinued operations 1,051,152 Less: Net income attributable to non-controlling interest from discontinued operations 105,115 Net income from discontinued operations attributable to XT Energy Group, Inc. $ 946,037 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Receivables [Abstract] | |
Schedule of accounts receivable | July 31, July 31, Accounts receivable $ 6,096,212 $ 6,516,935 Less: allowance for doubtful accounts (1,695,469 ) (1,374,155 ) Accounts receivable, net 4,400,743 5,142,780 Less: accounts receivable – discontinued operations (471,889 ) - Accounts receivable, net – continuing operations $ 3,928,854 $ 5,142,780 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories, net | July 31, July 31, Raw materials and parts $ 1,607,472 $ 1,725,258 Work in progress 258,634 124,507 Semi-finished goods 392,772 - Finished goods 6,420,298 3,291,768 Total 8,679,176 5,141,533 Less: allowance for inventory reserve (54,421 ) - Inventories, net 8,624,755 5,141,533 Less: inventories – discontinued operations (1,785,176 ) - Inventories, net – continuing operations $ 6,839,579 $ 5,141,533 |
Contract assets (Tables)
Contract assets (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Costs and Estimated Earnings in Excess of Billings [Abstract] | |
Schedule of Contract assets | July 31, July 31, Revenue recognized to date $ - $ 5,025,892 Billings to date - (2,142,484 ) Contract assets $ - $ 2,883,408 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | July 31, July 31, Plant and buildings $ 11,773,196 $ 6,662,554 Machinery equipment 9,040,901 6,711,556 Computer and office equipment 668,741 251,965 Vehicles 468,486 121,211 Plant improvement 1,146,692 729,766 Construction in progress 1,650,429 256,503 Subtotal 24,748,445 14,733,555 Less: accumulated depreciation (5,098,140 ) (2,767,322 ) Property, plant and equipment, net 19,650,305 11,966,233 Less: property, plant and equipment – discontinued operations (4,588,449 ) - Property, plant and equipment, net – continuing operations $ 15,061,856 $ 11,966,233 |
Schedule of construction-in-progress | Construction-in-progress description Value Estimated Estimated Additional Cost to Complete Synthetic fuel raw materials production line $ 860,040 Completed in August 2019 $ 11,621 Factory plantation 280,026 Completed in August 2019 14,526 Fire safety equipment installation 152,306 November 2019 261,472 Piping 241,161 Completed in August 2019 58,105 Plant improvement 116,896 Completed and Inspected in August 2019 - Total construction-in-progress 1,650,429 345,724 Less: construction-in-progress – discontinued operations (116,896 ) - Total construction-in-progress – continuing operations $ 1,533,533 $ 345,724 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | July 31, July 31, Land use rights $ 7,227,670 $ 4,581,842 Technology know-hows 1,812,147 1,829,072 Patents, licenses and certifications 2,408,430 2,935,293 Software 7,451 - Less: accumulated amortization (715,376 ) (85,564 ) Intangible assets, net 10,740,322 9,260,643 Less: intangible assets – discontinued operations (2,950,343 ) - Intangible assets, net – continuing operations $ 7,789,979 $ 9,260,643 |
Schedule of amortization expenses estimated | Twelve Months Ending July 31, Estimated 2020 $ 687,773 2021 686,408 2022 684,522 2023 683,077 2024 683,077 Thereafter 7,315,465 Total 10,740,322 Less: intangible assets – discontinued operations (2,950,343 ) Total intangible assets, net – continuing operations $ 7,789,979 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill | Hubei Jinli Tianjin Jiabaili Wine Co. Total Balance as of July 31, 2017 $ - $ - $ - $ - Goodwill acquired through acquisition 3,906,599 350,055 - 4,256,654 Foreign currency translation adjustment (113,354 ) (10,157 ) - (123,511 ) Balance as of July 31, 2018 3,793,245 339,898 - 4,133,143 Goodwill acquired through acquisitions - - 1,976,878 1,976,878 Goodwill impairment - (339,221 ) - (339,221 ) Foreign currency translation adjustment (35,100 ) (677 ) 21,509 (14,268 ) Balance as of July 31, 2019 3,758,145 - 1,998,387 5,756,532 Less: goodwill – discontinued operations - - (1,998,387 ) (1,998,387 ) Goodwill – continuing operations $ 3,758,145 $ - $ - $ 3,758,145 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Short-term loan - bank [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Bank Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Wuhan Rural Commercial Bank Repaid in May 2019 7.00 % Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou $ - $ 733,095 |
Long-term loan [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Bank Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Xianning Rural Commercial Bank* Repaid in April 2019 5.83 % Land use rights, plant and equipment, inventories $ - $ 3,069,113 * The current maturities of long-term loan was acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). |
Short-term loan - third party [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Lender Name Maturities Interest rate Collateral/Guarantee July 31, July 31, Xianning Zhongying New Energy Service Co. Ltd. Repaid in October 2018 4.75 % None $ - $ 175,943 |
Short-term loans - related parties [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Name of Related Party Relationship Maturities Interest rate Collateral/ Guarantee July 31, 2019 July 31, 2018 Zhou Deng Hua Chief Executive Officer of the Company Repaid in April 2019 & July 2019 None None $ - $ 5,864,759 Jian Zhou Chairman of the Company Repaid in May 2019 None None - 703,771 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in October 2018 12.00 % None - 13,195,707 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in January 2019 4.75 % None - 381,209 Total $ - $ 20,145,446 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party other receivable | Name of Related Party Relationship Nature July 31, July 31, Lei Su Legal representative of Tianjin Jiabaili Employee advances $ 2,905 $ - Deng Hua Zhou Chief Executive Officer Employee advances 3,632 - Total $ 6,537 $ - |
Schedule of related party accounts payable | Name of Related Party Relationship Nature July 31, July 31, Xianning Baizhuang Tea Industry Co., Ltd. Bin Zhou is the CEO of the company Purchase of materials $ 9,554 $ - Total $ 9,554 $ - |
Schedule of related parties other payables | Name of Related Party Relationship Nature July 31, July 31, Luck Sky International Investment Holdings Ltd. Owned by Zhou Deng Rong, former Chief Executive Officer and director Payment for U.S. professional fee $ 593,941 $ - Lucksky Group Owned by Zhou Deng Rong, former Chief Executive Officer and director, and Zhou Jian, Chairman Lease payable 600,549 515,234 Sanhe Dong Yi Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable 872 21,113 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager Interest payable 488,455 211,441 Zhou Deng Rong Former Chief Executive Officer and director Payment for U.S. professional fee 2,748,259 2,748,260 Zhou Deng Hua Chief Executive Officer Advances for operational purpose - 289,572 Jian Zhou Chairman Advances for operational purpose 1,900,164 436,444 Zhimin Feng Legal representative of Jingshan Sanhe Advances for operational purpose 3,222 1,191 Wei Gu General manager of Xiangtian Zhongdian Advances for operational purpose - 6,863 Heping Zhang General Manager of Hubei Jinli Payment for acquisition of Hubei Jinli 39,923 - Total $ 6,375,385 $ 4,230,118 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the income tax expense | 2019 2018 2017 Current $ 2,272,843 $ 170,678 $ 263,025 Deferred - 9,469 (104,784 ) Provision for income tax 2,272,843 180,147 158,241 Less: provision for income tax – discontinued operations (308,605 ) - - Provision for income tax – continuing operations $ 1,964,238 $ 180,147 $ 158,241 |
Schedule of reconciliation of effective income tax rate | Reconciliation of effective income tax rate from continuing operations is as follows for the years ended July 31: 2019 2018 2017 Statutory U.S. tax rate (21.0 )% (28.6 )% (34.0 )% Effect of PRC statutory tax rate (4.0 )% 3.6 % 9.0 % Less: valuation allowance (713.8 )% 35.3 % 27.5 % Deferred tax expense 0.0 % (0.8 )% 2.4 % Permanent difference* (389.4 )% 6.6 % (1.3 )% Tax expense (1128.2 )% 16.1 % 3.6 % * Permanent difference mainly attributable to the expenses incurred in the U.S. and Hong Kong not being able to deducted in the Company’s PRC tax return and certain meal and entertainment expenses and related parties interest expenses which in partially non-deductible under PRC income tax law. Reconciliation of effective income tax rate from discontinued operations is as follows for the years ended July 31: 2019 2018 2017 Statutory U.S. tax rate 21.0 % - % - % Effect of PRC statutory tax rate 4.0 % - % - % Less: valuation allowance 0.6 % - % - % Permanent difference (2.9 )% - % - % Tax expense 22.7 % - % - % |
Schedule of deferred tax assets | 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 1,967,400 $ 911,400 Accounts receivable allowance 415,800 343,500 Inventory allowance 13,600 - Deposit for investment allowance 79,500 - Accrued liabilities 72,000 50,600 Warranty and other 16,300 16,400 Deferred tax assets before valuation allowance 2,564,600 1,321,900 Less: valuation allowance (2,564,600 ) (1,321,900 ) Net deferred tax assets $ - $ - 2019 2018 Deferred tax assets: Accounts receivable allowance $ 8,100 $ - Less: valuation allowance (8,100 ) - Net deferred tax assets $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under the non-cancellable operating leases | Twelve months ending July 31, Minimum Lease Payment 2020 $ 531,058 2021 1,069,633 2022 601,241 2023 333,716 2024 436 Thereafter 872 Total minimum payments required $ 2,536,956 |
Schedule of future minimum purchase commitment under the non-cancellable purchase contracts | Twelve months ending July 31, Amount 2020 $ 43,837 Thereafter - Total minimum payments required 43,837 Less: purchase commitments – discontinued operations (43,837 ) Total purchase commitments – continuing operations $ - |
Schedule of accrue costs for potential litigation losses | Dispute matter Claim amount 1) Negotiable instruments $ 551,997 2) Labor 1,017 Total $ 553,014 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of represents results of division operations | 2019 2018 2017 Revenues: Sanhe Xiangtian $ 3,034,530 $ 9,488,621 $ 9,472,865 Xianning Xiangtian 8,684,086 946,780 48,506 Jingshan Sanhe 11,979,135 909,713 - Xiangtian Zhongdian 23,080,822 3,682,011 - Hubei Jinli 6,310,495 242,663 - Xiangtian Trade 37,845 - - Wine Co. 1,820,844 - - Herbal Wine Co. 286,749 - - Consolidated revenues 55,234,506 15,269,788 9,521,371 Less: revenues – discontinued operations (2,107,593 ) - - Revenues – continuing operations $ 53,126,913 $ 15,269,788 $ 9,521,371 2019 2018 2017 Gross profit: Sanhe Xiangtian $ 1,058,894 $ 1,678,488 $ 910,106 Xianning Xiangtian 1,455,529 250,714 68,058 Jingshan Sanhe 4,250,457 225,038 - Xiangtian Zhongdian 2,158,825 445,710 - Hubei Jinli 3,948,573 38,374 - Xiangtian Trade 37,845 - - Wine Co. 1,589,576 - - Herbal Wine Co. 246,098 - - Consolidated gross profit 14,745,797 2,638,324 978,164 Less: gross profit – discontinued operations (1,835,674 ) - - Gross profit – continuing operations $ 12,910,123 $ 2,638,324 $ 978,164 2019 2018 2017 Income (loss) from operations: Sanhe Xiangtian $ (219,521 ) $ 385,643 $ (3,653,553 ) Xianning Xiangtian (342,335 ) (394,376 ) (436,327 ) Jingshan Sanhe 1,722,380 34,279 - Xiangtian Zhongdian 1,104,729 267,118 - Hubei Jinli 2,453,399 (125,633 ) - Tianjin Jiabaili (1,440,112 ) (23,784 ) - Xiangtian Trade 17,772 - - Wine Co. 1,255,129 - - Herbal Wine Co. 139,673 - - All four holding entities (1,959,108 ) (992,678 ) (325,589 ) Consolidated income (loss) from operations 2,732,006 (849,431 ) (4,415,469 ) Less: income from operations – discontinued operations (1,394,802 ) - - Income (loss) from operations – continuing operations $ 1,337,204 $ (849,431 ) $ (4,415,469 ) 2019 2018 2017 Net income (loss) attributable to controlling interest: Sanhe Xiangtian $ (298,763 ) $ 274,981 $ (3,688,902 ) Xianning Xiangtian (1,579,641 ) (650,479 ) (436,007 ) Jingshan Sanhe 904,315 25,006 - Xiangtian Zhongdian 562,792 156,059 - Hubei Jinli 1,773,869 (161,799 ) - Tianjin Jiabaili (1,455,079 ) (23,817 ) - Xiangtian Trade 13,685 - - Wine Co. 816,129 - - Herbal Wine Co. 129,908 - - All four holding entities (1,952,508 ) (986,256 ) (439,250 ) Consolidated net income (loss) attributable to controlling interest (1,085,293 ) (1,366,305 ) (4,564,159 ) Less: net income attributable to controlling interest - discontinued operations (946,037 ) - - Net loss attributable to controlling interest - continuing operations $ (2,031,330 ) $ (1,366,305 ) $ (4,564,159 ) 2019 2018 2017 Depreciation and amortization expenses: Sanhe Xiangtian $ 166,547 $ 260,404 $ 261,585 Xianning Xiangtian 787 69,932 20,137 Jingshan Sanhe 98,103 1,345 - Xiangtian Zhongdian 287,918 100,468 - Hubei Jinli 977,661 79,178 - Tianjin Jiabaili 220,297 16,521 - Xiangtian Trade 549 Wine Co. 215,738 - - Herbal Wine Co. 40,716 - - Consolidated depreciation and amortization expenses 2,008,316 527,848 281,722 Less: depreciation and amortization expenses - discontinued operations (256,454 ) - - Depreciation and amortization expenses - continuing operations $ 1,751,862 $ 527,848 $ 281,722 2019 2018 2017 Interest expense: Sanhe Xiangtian $ 5,869 $ 12,827 $ - Xianning Xiangtian 783,327 256,048 - Hubei Jinli 166,237 30,920 - Consolidated interest expense $ 955,433 $ 299,795 $ - 2019 2018 2017 Capital expenditures: Sanhe Xiangtian $ 106,823 $ 97,534 $ 1,940,552 Xianning Xiangtian 5,890 2,987 48,643 Jingshan Sanhe 3,371,741 450,249 - Xiangtian Zhongdian 8,267 36,076 - Hubei Jinli 497,402 1,154 - Tianjin Jiabaili 135,333 - - Xiangtian Trade 511 - - Wine Co. 366,886 - - All four holding entities 18,500 - - Consolidated capital expenditures 4,511,353 588,000 1,989,195 Less: capital expenditures - discontinued operations (366,886 ) - - Capital expenditures - continuing operations $ 4,144,467 $ 588,000 $ 1,989,195 July 31, July 31, Total assets: Sanhe Xiangtian $ 4,889,875 $ 11,355,619 Xianning Xiangtian 7,969,624 4,689,100 Jingshan Sanhe 6,969,849 3,513,449 Xiangtian Zhongdian 7,731,512 12,620,210 Hubei Jinli 21,635,194 22,489,702 Tianjin Jiabaili 302,518 4,111,706 Xiangtian Trade 483,168 - Wine Co. 11,005,886 - Herbal Wine Co. 2,973,064 - All four holding entities 416,098 248,164 Consolidated assets 64,376,788 59,027,950 Less: assets - discontinued operations (13,978,950 ) - Total assets - continuing operations $ 50,397,838 $ 59,027,950 |
Quarterly Unaudited Results (Ta
Quarterly Unaudited Results (Tables) | 12 Months Ended |
Jul. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of results of operations by quarter | 2019 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 19,988 $ 21,411 $ 6,790 $ 4,938 Gross profit $ 4,196 $ 5,376 $ 2,364 $ 974 Net income (loss) from continuing operations $ 1,376 $ 1,373 $ (593 ) $ (4,188 ) Net income from discontinued operations $ - $ 244 $ 685 $ 17 Earnings (loss) per common shares – basic and diluted from continuing operations $ 0.00 $ 0.00 $ (0.00 ) $ (0.01 ) Earnings (loss) per common shares – basic and diluted from discontinued operations $ - $ 0.00 $ 0.00 $ (0.00 ) 2018 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 355 $ 232 $ 424 $ 14,259 * Gross profit $ 38 $ 57 $ 115 $ 2,428 * Net income (loss) $ (856 ) $ (669 ) $ (682 ) $ 841 Net income (loss) per share, basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ 0.00 * During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the contract assets (See Note 7) as of July 31, 2017 and determined no allowance on contract assets were deemed necessary as the Company's products can easily be dismantled and resold above its contract assets if the Company were unable to pass the second inspections. 2017 (in thousands, except per share information) Q1 Q2 Q3 Q4 Net revenue $ 87 $ 966 $ 3,277 $ 5,191 Gross profit $ 15 $ 132 $ 512 $ 319 Net loss $ (651 ) $ (321 ) $ (109 ) $ (3,483 ) Net loss per share, basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 ) |
Nature of Business and Organi_3
Nature of Business and Organization (Details) | 12 Months Ended | |
Jul. 31, 2019 | ||
Xiangtian HK [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A Hong Kong company | |
Ownership | 100% owned by XT Energy | |
Xiangtian BVI [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A British Virgin Islands company | |
Ownership | 100% owned by XT Energy | |
Xiangtian Shenzhen [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") | |
Ownership | 100% owned by Xiangtian HK | |
Sanhe Xiangtian [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company Incorporated on July 8, 2013 Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products | |
Ownership | VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter | |
Xianning Xiangtian [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on May 30, 2016, Manufacturing and sales of air compression equipment and heat pump products | |
Ownership | 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter | |
Xiangtian Zhongdian [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on March 7, 2018, Manufacturing and sales of PV panels | |
Ownership | 70% owned by Xianning Xiangtian | |
Jingshan Sanhe [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company Incorporated on April 17, 2018 Researching, manufacturing and sales of high-grade synthetic fuel products | |
Ownership | 100% owned by Xianning Xiangtian | |
Hubei Jinli [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on December 27, 2004 and acquired on June 30, 2018, Manufacturing and sales of hydraulic parts and electronic components | |
Ownership | 100% owned by Xianning Xiangtian | |
Tianjin Jiabaili [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on April 10, 2007 and acquired on June 30, 2018, Manufacturing and sales of petroleum products | |
Ownership | 100% owned by Xianning Xiangtian | |
Xiangtian Trade [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on August 9, 2018, Expected to engage in trading chemical raw materials to support fuel production | |
Ownership | 100% owned by Xianning Xiangtian | |
Wine Co. [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on August 9, 2011 and acquired on December 14, 2018, Manufacturing and sales of wine products | [1] |
Ownership | 90% owned by Xianning Xiangtian | [1] |
Herbal Wine Co. [Member] | ||
Nature of Business and Organization [Line Items] | ||
Background | A PRC limited liability company, Incorporated on August 9, 2018 and acquired on December 14, 2018, Manufacturing and sales of herbal wine products | [1] |
Ownership | 90% owned by Xianning Xiangtian | [1] |
[1] | Discontinued operations for details. |
Nature of Business and Organi_4
Nature of Business and Organization (Details Textual) | May 15, 2012USD ($)shares | Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | Jan. 31, 2019USD ($) | Jan. 31, 2019CNY (¥) | Oct. 31, 2018USD ($) | Oct. 31, 2018CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥) | Mar. 31, 2018 | Apr. 17, 2012shares | Jul. 31, 2019 | Dec. 31, 2018 | May 30, 2014 |
Nature of Business and Organization [Line Items] | ||||||||||||||
Percentage of acquired equity interest | 100.00% | 90.00% | ||||||||||||
Percentage of service fee | 100.00% | |||||||||||||
Xianning Xiangtian [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Capital contribution | $ 30,800,000 | $ 30,800,000 | $ 30,800,000 | $ 30,800,000 | ||||||||||
Xianning Xiangtian [Member] | CNY [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Capital contribution | ¥ | ¥ 209,260,000 | ¥ 209,260,000 | ¥ 209,260,000 | ¥ 209,260,000 | ||||||||||
Xiangtian Zhongdian (Hubei) New Energy Co. Ltd. [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Description of business transaction | Xianning Xiangtian holds a 70% ownership interest with the remaining 30% ownership held by Nanjing Zhongdian Photovoltaic Co. Ltd. Xiangtian Zhongdian is in the business of manufacturing and sales of PV panels. | |||||||||||||
Xiangtian HK [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Owners, percentage | 100.00% | |||||||||||||
Share Purchase Agreements [Member] | Luck Sky International Investment Holdings Limited [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Aggregate value of common stock | $ 235,000 | |||||||||||||
Aggregate shares of common stock | shares | 7,200,000 | 7,200,000 | ||||||||||||
Percentage of outstanding shares | 90.00% | |||||||||||||
Description of business transaction | Effective May 29, 2012, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.” | |||||||||||||
VIE Agreements [Member] | Sanhe Xiangtian [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Percentage of VIE agreements equity interest | 100.00% | 100.00% | ||||||||||||
VIE Agreements [Member] | Xianning Xiangtian [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Percentage of VIE agreements equity interest | 100.00% | 100.00% | ||||||||||||
Agreement of Exclusive Management, Consulting and Training and Technical Service [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Agreement term | 10 years | |||||||||||||
Framework Agreement on Business Cooperation [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Agreement term | 10 years | |||||||||||||
Know-How Sub-License Agreement [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Royalty fee | 5.00% | |||||||||||||
Exclusive Option Agreement [Member] | ||||||||||||||
Nature of Business and Organization [Line Items] | ||||||||||||||
Owners, percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Accounting Policies [Abstract] | |||
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 | |
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) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Jul. 31, 2019 | |
Plant and buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Plant and buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 20 years |
Estimated Residual Value | 5.00% |
Machinery equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Machinery equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Computer and office equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Estimated Residual Value | 0.00% |
Computer and office equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Plant improvement and fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Plant improvement and fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 20 years |
Estimated Residual Value | 5.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Jul. 31, 2019 | |
Land use rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 50 years |
Technology know-hows [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Patents, licenses and certifications [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Patents, licenses and certifications [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Financial Assets | ||
Short-term investment | $ 435,787 | |
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | $ 331,505 | |
Level 1 [Member] | ||
Financial Assets | ||
Short-term investment | 435,787 | |
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | ||
Level 2 [Member] | ||
Financial Assets | ||
Short-term investment | ||
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | ||
Level 3 [Member] | ||
Financial Assets | ||
Short-term investment | ||
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | $ 331,505 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Accounting Policies [Abstract] | |||
Beginning balance | $ 331,505 | ||
Contingent liability obligated from business combinations | 347,777 | ||
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 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details 5) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | [1] | Apr. 30, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Total revenue - sales of products | $ 4,938 | $ 6,790 | $ 21,411 | $ 19,988 | $ 14,259 | $ 423,644 | $ 424 | $ 232 | $ 355 | $ 5,191 | $ 3,277 | $ 966 | $ 87 | $ 53,126,913 | $ 15,269,788 | $ 9,521,371 | |
Less: revenues - sales of products from discontinued operations | (2,107,593) | ||||||||||||||||
Revenues - sales of products from continuing operations | 52,735,076 | 9,813,325 | 9,813,325 | ||||||||||||||
PV panels and others [Member] | |||||||||||||||||
Total revenue - sales of products | 23,321,989 | 5,583,858 | 2,221,428 | ||||||||||||||
Air compression equipment and other components [Member] | |||||||||||||||||
Total revenue - sales of products | 1,373,196 | 1,101,744 | |||||||||||||||
Heat pumps [Member] | |||||||||||||||||
Total revenue - sales of products | 8,771,452 | 1,533,845 | |||||||||||||||
High-grade synthetic fuel [Member] | |||||||||||||||||
Total revenue - sales of products | 12,957,944 | 1,351,215 | |||||||||||||||
Hydraulic parts and electronic components [Member] | |||||||||||||||||
Total revenue - sales of products | 6,310,495 | 242,663 | |||||||||||||||
Wine and herbal wine [Member] | |||||||||||||||||
Total revenue - sales of products | $ 2,107,593 | ||||||||||||||||
[1] | During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the deferred cost (See Note 7) as of July 31, 2017 and determined no allowance on deferred cost were deemed necessary as the Company's products can easily be dismantled and resold above its deferred cost if the Company were unable to pass the second inspections. |
Summary of Significant Accou_10
Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||
Working deficit | $ 1,900,000 | |||
Cash | $ 3,500,000 | |||
Variable interest agreements, description | 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. | |||
Loans receivables, description | 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. | |||
Land use rights, description | 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. | |||
Technology know-hows, description | 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. | |||
Noncontrolling interest, description | 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. | |||
Acquired safety production license, description | With a finite useful life of 3 years in June 2018 and January 2019, respectively. | |||
Long-term investment payable, balance | $ 279,764 | $ 7,205,133 | ||
Cash denominated in Renminbi (RMB) with US dollar | 3,250,535 | 14,207,358 | ||
Net of discount | 25,999 | 869,173 | ||
Statutory reserves | $ 572,642 | 108,487 | ||
Statutory surplus reserve fund percentage description | 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. | |||
Other comprehensive loss from foreign currency translation adjustments | $ (492,428) | (114,539) | $ (180,921) | |
Value added taxes, description | 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%. | |||
Income tax examination, description | The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. | |||
Royalty fees, percentage | 5.00% | |||
Accrued warranty expense | $ 65,182 | 65,791 | ||
Advertising costs | 63,595 | 12,892 | 1,896 | |
Employee benefit expenses | $ 248,904 | 151,167 | 131,923 | |
Cash balance, Description | 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). | |||
Goodwill impairment | $ (339,221) | 0 | 0 | |
Intangible assets impairment | 644,382 | 0 | 0 | |
Installation of power generation systems | 391,837 | 5,456,463 | 7,299,943 | |
Research and development expenses | $ 323,216 | $ 3,677 | ||
Subsidiaries in PRC [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Foreign currency exchange rate | 6.8841 | 6.8204 | ||
Weighted average exchange rate | 6.8340 | 6.5013 | 6.8160 | |
Subsidiary in Hong Kong [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Foreign currency exchange rate | 7.8275 | 7.8490 | ||
Weighted average exchange rate | 7.8369 | 7.8280 | 7.7696 | |
Xiangtian Shenzhen [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Percentage of amount received in net income | 100.00% | |||
Initial terms for provision renewal | 10 years |
Business Combinations (Details)
Business Combinations (Details) - Hubei Jinli [Member] | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Business Acquisition [Line Items] | |
Cash | $ 6,040,015 |
Present value of cash installments | 10,996,129 |
Contingent purchase prices payment | 137,561 |
Total consideration at fair value | $ 17,173,705 |
Business Combinations (Details
Business Combinations (Details 1) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,758,145 | $ 4,133,143 | |
Hubei Jinli [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 33,402 | ||
Accounts receivable, net | 2,561,863 | ||
Inventories, net | 455,247 | ||
Advances to suppliers | 143,129 | ||
Other receivables | 8,622 | ||
Loan receivables | 2,434,381 | ||
Plant and equipment, net | 6,550,446 | ||
Intangible assets, net | 7,899,887 | ||
Deferred tax assets | 9,295 | ||
Goodwill | 3,906,599 | ||
Total assets | 24,002,871 | ||
Short-term loan - bank | (2,114,005) | ||
Current maturities of long-term loan | (3,160,828) | ||
Accounts payable | (357,188) | ||
Advance from customers | (4,099) | ||
Other payables and accrued liabilities | (844,926) | ||
Other payables - related party | (30,200) | ||
Income taxes payable | (317,920) | ||
Total liabilities | (6,829,166) | ||
Net assets acquired | $ 17,173,705 |
Business Combinations (Detail_2
Business Combinations (Details 2) - USD ($) | 12 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenue | $ 19,049,576 | $ 11,649,664 |
Cost of revenue | 14,409,989 | 9,496,952 |
Gross profit | 4,639,587 | 2,152,712 |
Total operating expenses | 4,359,578 | 6,235,229 |
Income (loss) from operations | 280,009 | (4,082,517) |
Other income (expenses), net | (530,989) | (13,796) |
Loss before income taxes | (250,980) | (4,096,313) |
Income tax expense | (337,243) | (242,822) |
Net loss attributable to XT Energy Group, Inc. | (588,223) | (4,339,135) |
Less: Net income attributable to non-controlling interest | 66,883 | |
Net loss attributable to XT Energy Group, Inc. | $ (655,106) | $ (4,339,135) |
Net loss per common share - basic and diluted | $ 0 | $ (0.01) |
Business combinations (Detail_3
Business combinations (Details 3) - Tianjin Jiabaili [Member] | Jul. 31, 2019USD ($) |
Cash | $ 1,026,803 |
Contingent purchase prices payment | 203,850 |
Total consideration at fair value | $ 1,230,653 |
Business combinations (Detail_4
Business combinations (Details 4) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Goodwill | $ 3,758,145 | $ 4,133,143 | |
Tianjin Jiabaili [Member] | |||
Cash | 1,026,803 | ||
Total assets | 1,230,653 | ||
Tianjin Jiabaili [Member] | Independent Firm [Member] | |||
Cash | 2,731 | ||
Other current assets | 2,065 | ||
Intangible assets, net | 875,802 | ||
Goodwill | 350,055 | ||
Total assets | 1,230,653 | ||
Total liabilities | |||
Net assets acquired | $ 1,230,653 |
Business combinations (Detail_5
Business combinations (Details 5) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
Goodwill | $ 3,758,145 | $ 4,133,143 | |
Wine Co. and Herbal Wine Co [Member] | |||
Cash | 6,890 | ||
Accounts receivable, net | 23,612 | ||
Inventories, net | 1,035,186 | ||
Advances to suppliers | 25,719 | ||
Other receivables | 244,279 | ||
Plant and equipment, net | 4,351,805 | ||
Intangible assets, net | 2,999,442 | ||
Goodwill | 1,976,878 | ||
Total assets | 10,663,811 | ||
Advance from customers | 13,904 | ||
Other payables and accrued liabilities | 6,128,289 | ||
Other payables - related parties and director | 3,653,843 | ||
Taxes payable | 5,582 | ||
Total liabilities | 9,801,618 | ||
Net assets acquired prior to capital contribution | 862,193 | ||
Total consideration for capital injection | 9,699,669 | ||
Additional capital contribution by noncontrolling shareholder | 215,548 | ||
Net assets acquired after capital contribution | $ 10,777,410 | ||
Percentage of interest acquired | 90.00% | ||
Total net assets acquired | $ 9,699,669 |
Business Combinations (Detail_6
Business Combinations (Details 6) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Investment payable [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 136,314 | $ 9,206,645 |
Short-term | (136,314) | (2,505,871) |
Long-term | 6,700,774 | |
Investment payable - related parties [Member] | ||
Business Acquisition [Line Items] | ||
Total | 484,412 | 1,011,502 |
Short-term | (204,648) | (507,143) |
Long-term | $ 279,764 | 504,359 |
Sheng Zhou [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Sheng Zhou | |
Relationship | Former shareholder of Hubei Jinli | |
Nature | Payment for acquisition of Hubei Jinli | |
Total | 9,069,058 | |
Guifen Wang [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Guifen Wang | |
Relationship | Former shareholder of Hubei Jinli | |
Nature | Payment for acquisition of Tianjin Jiabaili | |
Total | $ 136,314 | 137,587 |
Wenhe Han [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Wenhe Han | |
Relationship | Vice general manager of Tianjin Jiabaili | |
Nature | Payment for acquisition of Tianjin Jiabaili | |
Total | $ 113,537 | 261,216 |
Heping Zhang [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Heping Zhang | |
Relationship | General manager of Hubei Jinli | |
Nature | Payment for acquisition of Hubei Jinli | |
Total | $ 370,875 | $ 750,286 |
Business Combinations (Detail_7
Business Combinations (Details 7) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Investment payable - related parties [Member] | ||
Business Acquisition [Line Items] | ||
Due on demand | $ 113,537 | |
June 2020 | 101,683 | |
June 2021 | 305,763 | |
Debt discount | (36,571) | |
Total | 484,412 | $ 1,011,502 |
Investment payable [Member] | ||
Business Acquisition [Line Items] | ||
Due on demand | 136,314 | |
Total | $ 136,314 | $ 9,206,645 |
Business Combinations (Detail_8
Business Combinations (Details Textual) | Dec. 14, 2018 | Aug. 11, 2018 | Mar. 31, 2019USD ($) | Mar. 31, 2019CNY (¥) | Jan. 18, 2019 | Dec. 21, 2018USD ($) | Aug. 12, 2018 | Jun. 30, 2018 | Jun. 21, 2018USD ($) | Jun. 21, 2018CNY (¥) | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2018 |
Business Combinations (Textual) | ||||||||||||||
Percentage of capital stock acquire | 100.00% | 90.00% | ||||||||||||
Payment term of the stock portion, description | Payment term of the Jinli Stock Portion which shall have a value equal to RMB 80.07 million (approximately $12.37 million) to comprise three cash installments of 1) first installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2019, 2) second installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2020, and 3) third installment of RMB 30.07 million (approximately $4.75 million) payable by June 20, 2021. | |||||||||||||
Goodwill arising from the acquisition | $ 1,900,000 | $ 3,900,000 | ||||||||||||
Ownership and payment term, description | The ownership transfer from 90% to 100% and the full payment term of acquisition price of RMB 6,800,000 (approximately $1.0 million) amended to be all cash payment. In addition, Xianning Xiangtian will indefinitely provide 10% of profit sharing of Tianjin Jiabaili to the Jiabaili Sellers. | |||||||||||||
Net profit, percentage | 10.00% | |||||||||||||
Deferred financing fees, net of accumulated amortization | 36,571 | $ 1,021,413 | ||||||||||||
Change in fair value measurement of contingent liability | 243,658 | |||||||||||||
Shareholders consideration, description | Pursuant to which a security interest in the real property possessed by Rongentang was granted to secure the repayment of a loan of a party related to Rongentang Shareholders of up to RMB10 million (approximately $1.5 million) to a PRC commercial bank. RMB10 million (approximately $1.5 million) of the funds received by the Rongentang Shareholders in connection with the Transaction was used to pay off this loan on January 18, 2019. | |||||||||||||
One-time finance expenses | $ 489,439 | |||||||||||||
Rongentang [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Aggregate consideration | $ 11,000,000 | |||||||||||||
Ownership and payment term, description | Pursuant to the Agreement, Xianning Xiangtian paid a total cash consideration of RMB67.5 million (approximately $9.7 million) ("Total Consideration") to the Rongentang Shareholders, the full amount of which would be contributed into Wine Co. as registered capital. RMB60 million (approximately $8.7 million) of the Total Consideration was deposited into an escrow account held by Xianning Wenquan Branch of Agricultural Bank of China as escrow agent on December 14, 2018. | |||||||||||||
Hubei Jinli [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Description of annual net profit on acquisition | If Jinli Net Profit exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 10% of the Jinli Net Profit and the annual net profit sharing period is one year from June 21, 2018 to June 20, 2019. | |||||||||||||
Payment term of the stock portion, description | The change in fair value measurement of contingent liability loss amounted to $441,199 with foreign translation rate effect of $4,447 for the year ended July 31, 2019 as the operations result of Hubei Jinli has changed. As of July 31, 2019 and 2018, profit sharing payments to the former shareholders of Hubei Jinli were $570,322 and $133,570, respectively and classified in the caption "other payables and accrued liabilities" in the accompanying consolidated balance sheets. | |||||||||||||
Change in fair value measurement of contingent liability | $ 441,199 | |||||||||||||
Contingent liability | $ 570,322 | |||||||||||||
Tianjin Jiabaili [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Payment term of the stock portion, description | The former shareholders of Tianjin Jiabaili 10% of the Tianjin Jiabaili's annual net profit indefinitely from the date of acquisition on June 30, 2018. The change in fair value measurement of contingent liability gain amounted to $197,541 with foreign translation rate effect of $393 for the year ended July 31, 2019 as Tianjin Jiabaili operations will no longer to continue. As of July 31, 2019 and 2018, profit sharing payments to the former shareholders of Tianjin Jiabaili were $0 and $197,935, respectively, and classified in the caption "other payables and accrued liabilities" in the accompanying consolidated balance sheets. | |||||||||||||
Minimum [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Amortization expense related to the debt discount | $ 43,328 | |||||||||||||
Maximum [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Amortization expense related to the debt discount | $ 493,102 | |||||||||||||
CNY [Member] | Rongentang [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Aggregate consideration | ¥ | ¥ 7,500,000 | |||||||||||||
Share purchase agreement [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Aggregate consideration | $ 23,180,000 | |||||||||||||
Description of acquisition | (a) RMB 40 million (approximately $6.18 million) in cash (the "Jinli Cash Portion"); and (b) shares of the Company's common stock (the "Jinli Stock Portion") which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian's common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli's existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). | (a) RMB 40 million (approximately $6.18 million) in cash (the "Jinli Cash Portion"); and (b) shares of the Company's common stock (the "Jinli Stock Portion") which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian's common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli's existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). | ||||||||||||
Share purchase agreement [Member] | Tianjin Jiabaili [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Percentage of capital stock acquire | 90.00% | 90.00% | ||||||||||||
Description of acquisition | Aggregate consideration of RMB 6,120,000 (approximately $0.9 million), consisting of the following: (a) RMB 3,672,000 (approximately $0.5 million) in cash (the "Jiabaili Cash Portion"); and (b) shares of the Company's common stock (the "Jiabaili Stock Portion") which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). | Aggregate consideration of RMB 6,120,000 (approximately $0.9 million), consisting of the following: (a) RMB 3,672,000 (approximately $0.5 million) in cash (the "Jiabaili Cash Portion"); and (b) shares of the Company's common stock (the "Jiabaili Stock Portion") which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). | ||||||||||||
Share purchase agreement [Member] | CNY [Member] | Tianjin Jiabaili [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Aggregate consideration | ¥ | ¥ 40,000,000 | |||||||||||||
Share purchase agreement [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Repurchase the stock portion | $ 12,370,000 | |||||||||||||
Description of annual net profit on acquisition | Pursuant to the Supplement Agreement, after the Jinli Acquisition, should Hubei Jinli's annual net profit (the "Jinli Net Profit") exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 10% of the Jinli Net Profit. | |||||||||||||
Share purchase agreement [Member] | CNY [Member] | ||||||||||||||
Business Combinations (Textual) | ||||||||||||||
Repurchase the stock portion | ¥ | ¥ 80,070,000 |
Discontinued operations (Detail
Discontinued operations (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 |
CURRENT ASSETS: | |||
Cash | $ 3,250,535 | $ 14,207,358 | |
Accounts receivable, net | 3,928,854 | 5,142,780 | |
Inventories, net | 6,839,579 | 5,141,533 | |
Advances to suppliers | 4,723,258 | 1,101,472 | |
Total current assets of discontinued operations | 4,441,772 | ||
OTHER ASSETS: | |||
Property, plant and equipment, net | 15,061,856 | 11,966,233 | |
Intangible assets, net | 7,789,979 | 9,260,643 | |
Goodwill | 3,758,145 | 4,133,143 | |
CURRENT LIABILITIES: | |||
Accounts payable | 3,164,927 | 5,349,445 | |
Advance from customers | 15,599,402 | 8,326,929 | |
Income taxes payable | 858,662 | 898,424 | |
Total current liabilities of discontinued operations | 1,499,012 | ||
Total liabilities of the disposal group classified as discontinued operations | 1,499,012 | ||
Parent [Member] | |||
CURRENT ASSETS: | |||
Cash | 1,929,899 | ||
Accounts receivable, net | 471,889 | ||
Inventories, net | 1,785,176 | ||
Advances to suppliers | 181,101 | ||
Other current assets | 73,707 | ||
Total current assets of discontinued operations | 4,441,772 | ||
OTHER ASSETS: | |||
Property, plant and equipment, net | 4,588,449 | ||
Intangible assets, net | 2,950,343 | ||
Goodwill | 1,998,387 | ||
Total other assets of discontinued operations | 9,537,179 | ||
Total assets of the disposal group classified as discontinued operations | 13,978,951 | ||
CURRENT LIABILITIES: | |||
Accounts payable | 25,266 | ||
Advance from customers | 1,124,608 | ||
Other payables and accrued liabilities | 42,778 | ||
Income taxes payable | 306,360 | ||
Total current liabilities of discontinued operations | 1,499,012 | ||
Total liabilities of the disposal group classified as discontinued operations | $ 1,499,012 |
Discontinued operations (Deta_2
Discontinued operations (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | [1] | Apr. 30, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Revenue: | |||||||||||||||||
Significant customer, former related party | $ 1,679,679 | $ 1,155,524 | $ 6,798,985 | ||||||||||||||
Total revenue | $ 4,938 | $ 6,790 | $ 21,411 | $ 19,988 | $ 14,259 | $ 423,644 | $ 424 | $ 232 | $ 355 | $ 5,191 | $ 3,277 | $ 966 | $ 87 | 53,126,913 | 15,269,788 | 9,521,371 | |
Cost of revenue | 40,216,790 | 12,631,464 | 8,543,207 | ||||||||||||||
Gross profit | 974 | 2,364 | 5,376 | 4,196 | $ 2,428 | $ 115 | $ 57 | $ 38 | $ 319 | $ 512 | $ 132 | $ 15 | 12,910,123 | 2,638,324 | 978,164 | ||
Operating expenses: | |||||||||||||||||
Selling expenses | 1,671,658 | 301,648 | 33,436 | ||||||||||||||
General and administrative expenses | 7,607,643 | 3,301,433 | 2,560,480 | ||||||||||||||
Total operating expenses | 11,572,919 | 3,487,755 | 5,393,633 | ||||||||||||||
Income from operations | 1,337,204 | (849,431) | (4,415,469) | ||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||
Other expenses, net | (244,578) | 22,114 | 8,222 | ||||||||||||||
Interest income | 36,912 | 7,837 | 1,329 | ||||||||||||||
Total other (expenses) income, net | (1,163,099) | (269,844) | 9,551 | ||||||||||||||
Income before income taxes | 174,105 | (1,119,275) | (4,405,918) | ||||||||||||||
Income tax expense | (1,964,238) | (180,147) | (158,241) | ||||||||||||||
Less: Net income attributable to non-controlling interest from discontinued operations | $ 17 | $ 685 | $ 244 | 105,115 | |||||||||||||
Net income from discontinued operations attributable to XT Energy Group, Inc. | 1,051,152 | ||||||||||||||||
Parent [Member] | |||||||||||||||||
Revenue: | |||||||||||||||||
Significant customer, former related party | 246,939 | ||||||||||||||||
Other customers | 1,860,654 | ||||||||||||||||
Total revenue | 2,107,593 | ||||||||||||||||
Cost of revenue | 271,919 | ||||||||||||||||
Gross profit | 1,835,674 | ||||||||||||||||
Operating expenses: | |||||||||||||||||
Selling expenses | 24,644 | ||||||||||||||||
General and administrative expenses | 416,228 | ||||||||||||||||
Total operating expenses | 440,872 | ||||||||||||||||
Income from operations | 1,394,802 | ||||||||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||||
Other expenses, net | (37,256) | ||||||||||||||||
Interest income | 2,211 | ||||||||||||||||
Total other (expenses) income, net | (35,045) | ||||||||||||||||
Income before income taxes | 1,359,757 | ||||||||||||||||
Income tax expense | (308,605) | ||||||||||||||||
Net income from discontinued operations | 1,051,152 | ||||||||||||||||
Less: Net income attributable to non-controlling interest from discontinued operations | 105,115 | ||||||||||||||||
Net income from discontinued operations attributable to XT Energy Group, Inc. | $ 946,037 | ||||||||||||||||
[1] | During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the deferred cost (See Note 7) as of July 31, 2017 and determined no allowance on deferred cost were deemed necessary as the Company's products can easily be dismantled and resold above its deferred cost if the Company were unable to pass the second inspections. |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Receivables [Abstract] | ||
Accounts receivable | $ 6,096,212 | $ 6,516,935 |
Less: allowance for doubtful accounts | (1,695,469) | (1,374,155) |
Accounts receivable, net | 3,928,854 | 5,142,780 |
Less: accounts receivable - discontinued operations | (471,889) | |
Accounts receivable, net - continuing operations | $ 3,928,854 | $ 5,142,780 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Accounts Receivable, Net (Textual) | |||
Provision for (recovery of) allowance for doubtful accounts | $ 422,684 | $ (119,003) | $ 1,395,152 |
Wrote off accounts receivable | 118,684 | ||
Foreign currency translation effect | 15,164 | 20,862 | |
Allowance for doubtful accounts from discontinued operations | 32,242 | ||
Wine Co. and Herbal Wine Co [Member] | |||
Accounts Receivable, Net (Textual) | |||
Provision for (recovery of) allowance for doubtful accounts | 32,242 | $ 119,003 | |
Attributable to acquisition value | $ 32,478 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials and parts | $ 1,607,472 | $ 1,725,258 |
Work in progress | 258,634 | 124,507 |
Semi-finished goods | 392,772 | |
Finished goods | 6,420,298 | 3,291,768 |
Total | 8,679,176 | 5,141,533 |
Less: allowance for inventory reserve | (54,421) | |
Inventories, net | 6,839,579 | 5,141,533 |
Less: inventories - discontinued operations | (1,785,176) | |
Inventories, net - continuing operations | $ 6,839,579 | $ 5,141,533 |
Inventories, Net (Details Textu
Inventories, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Inventories, Net (Textual) | |||
Impairment | $ 263,720 | $ 0 | $ 337,000 |
Wrote off inventories | $ 208,900 | $ 341,609 | $ 0 |
Contract assets (Details)
Contract assets (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Costs and Estimated Earnings in Excess of Billings [Abstract] | ||
Revenue recognized to date | $ 5,025,892 | |
Billings to date | (2,142,484) | |
Contract assets | $ 2,883,408 |
Deposit for Investment, Net (De
Deposit for Investment, Net (Details) | 1 Months Ended | ||||||||
Jul. 31, 2019USD ($) | Jul. 31, 2019CNY (¥) | Jul. 31, 2019CNY (¥) | Nov. 30, 2018USD ($) | Nov. 30, 2018CNY (¥) | Oct. 31, 2018USD ($) | Oct. 31, 2018CNY (¥) | Mar. 16, 2018USD ($) | Mar. 16, 2018CNY (¥) | |
Deposit for Investment (Textual) | |||||||||
Deposit | $ | $ 300,000 | $ 100,000 | $ 14,539 | $ 439,857 | |||||
Impairment deposit for investment | $ | $ 320,457 | ||||||||
Majority-owned subsidiary [Member] | |||||||||
Deposit for Investment (Textual) | |||||||||
Majority-owned subsidiary, percentage | 60.00% | 60.00% | |||||||
Unrelated party [Member] | |||||||||
Deposit for Investment (Textual) | |||||||||
Noncontrolling interest percentage | 40.00% | 40.00% | |||||||
CNY [Member] | |||||||||
Deposit for Investment (Textual) | |||||||||
Deposit | ¥ | ¥ 2,190,000 | ¥ 710,000 | ¥ 100,000 | ¥ 3,000,000 | |||||
Impairment deposit for investment | ¥ | ¥ 2,190,000 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Subtotal | $ 24,748,445 | $ 14,733,555 |
Less: accumulated depreciation | (5,098,140) | (2,767,322) |
Property, plant and equipment, net | 15,061,856 | 11,966,233 |
Less: property, plant and equipment - discontinued operations | (4,588,449) | |
Property, plant and equipment, net - continuing operations | 15,061,856 | 11,966,233 |
Plant and buildings [Member] | ||
Subtotal | 11,773,196 | 6,662,554 |
Machinery equipment [Member] | ||
Subtotal | 9,040,901 | 6,711,556 |
Computer and office equipment [Member] | ||
Subtotal | 668,741 | 251,965 |
Vehicle [Member] | ||
Subtotal | 468,486 | 121,211 |
Plant improvement [Member] | ||
Subtotal | 1,146,692 | 729,766 |
Construction in progress [Member] | ||
Subtotal | $ 1,650,429 | $ 256,503 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details 1) | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Property, Plant and Equipment [Line Items] | |
Value | $ 1,650,429 |
Estimated Additional Cost to Complete | 345,724 |
Continuing operations [Member] | |
Property, Plant and Equipment [Line Items] | |
Value | 1,533,533 |
Estimated Additional Cost to Complete | 345,724 |
Discontinued operations [Member] | |
Property, Plant and Equipment [Line Items] | |
Value | (116,896) |
Estimated Additional Cost to Complete | |
Synthetic fuel raw materials production line [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction-in-progress description | Synthetic fuel raw materials production line |
Value | $ 860,040 |
Estimated Completion date | Aug. 31, 2019 |
Estimated Additional Cost to Complete | $ 11,621 |
Factory plantation [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction-in-progress description | Factory plantation |
Value | $ 280,026 |
Estimated Completion date | Aug. 31, 2019 |
Estimated Additional Cost to Complete | $ 14,526 |
Fire safety equipment installation [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction-in-progress description | Fire safety equipment installation |
Value | $ 152,306 |
Estimated Completion date | Nov. 30, 2019 |
Estimated Additional Cost to Complete | $ 261,472 |
Piping [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction-in-progress description | Piping |
Value | $ 241,161 |
Estimated Completion date | Aug. 31, 2019 |
Estimated Additional Cost to Complete | $ 58,105 |
Plant Improvement [Member] | |
Property, Plant and Equipment [Line Items] | |
Construction-in-progress description | Plant improvement |
Value | $ 116,896 |
Estimated Completion date | Aug. 31, 2019 |
Estimated Additional Cost to Complete |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Property, Plant and Equipment, Net (Textual) | |||
Depreciation expenses | $ 999,036 | $ 439,314 | $ 281,722 |
Property, Plant and Equipment [Member] | Continuing operations [Member] | |||
Property, Plant and Equipment, Net (Textual) | |||
Depreciation expenses | 999,036 | 439,314 | 281,722 |
Depreciation included in cost of sales | 590,391 | 88,685 | 22,490 |
Selling, general and administrative expenses | 408,645 | $ 350,629 | $ 259,232 |
Property, Plant and Equipment [Member] | Discontinued operations [Member] | |||
Property, Plant and Equipment, Net (Textual) | |||
Depreciation expenses | 169,738 | ||
Depreciation included in cost of sales | 144,009 | ||
Selling, general and administrative expenses | $ 25,729 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (715,467) | $ (85,564) |
Less: intangible assets - discontinued operations | (2,950,343) | |
Intangible assets, net - continuing operations | 7,789,979 | 9,260,643 |
Land use rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 7,227,670 | 4,581,842 |
Technology know-hows [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 1,812,147 | 1,829,072 |
Patents, licenses and certifications [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | 2,408,430 | 2,935,293 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, net | $ 7,451 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details 1) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Summary of expected amortization expenses | ||
2020 | $ 687,773 | |
2021 | 686,408 | |
2022 | 684,522 | |
2023 | 683,077 | |
2024 | 683,077 | |
Thereafter | 10,740,322 | |
Less: intangible assets - discontinued operations | (2,950,343) | |
Total intangible assets, net - continuing operations | $ 7,789,979 | $ 9,260,643 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Intangible Assets, Net (Textual) | |||
Amortization expenses | $ 752,826 | $ 88,534 | |
Continuing Operations [Member] | |||
Intangible Assets, Net (Textual) | |||
Amortization expenses | 752,826 | $ 88,534 | $ 0 |
Discontinued operations [Member] | |||
Intangible Assets, Net (Textual) | |||
Amortization expenses | $ 86,716 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Begining Balance | $ 4,133,143 | ||
Goodwill acquired through acquisition | 1,976,878 | 4,256,654 | |
Goodwill impairment | (339,221) | 0 | $ 0 |
Foreign currency translation adjustment | (14,268) | (123,511) | |
Ending Balance | 3,758,145 | 4,133,143 | |
Less: goodwill - discontinued operations | (1,998,387) | ||
Goodwill - continuing operations | 3,758,145 | ||
Wine Co. and Herbal Wine Co [Member] | |||
Begining Balance | |||
Goodwill acquired through acquisition | 1,976,878 | ||
Goodwill impairment | |||
Foreign currency translation adjustment | 21,509 | ||
Ending Balance | 1,998,387 | ||
Less: goodwill - discontinued operations | (1,998,387) | ||
Goodwill - continuing operations | |||
Hubei Jinli [Member] | |||
Begining Balance | 3,793,245 | ||
Goodwill acquired through acquisition | 3,906,599 | ||
Goodwill impairment | |||
Foreign currency translation adjustment | (35,100) | (113,354) | |
Ending Balance | 3,793,245 | ||
Less: goodwill - discontinued operations | |||
Goodwill - continuing operations | 3,758,145 | ||
Tianjin Jiabaili [Member] | |||
Begining Balance | 339,898 | ||
Goodwill acquired through acquisition | 350,055 | ||
Goodwill impairment | (339,221) | ||
Foreign currency translation adjustment | (677) | (10,157) | |
Ending Balance | $ 339,898 | ||
Less: goodwill - discontinued operations | |||
Goodwill - continuing operations |
Debt (Details)
Debt (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | ||
Short-term Debt [Line Items] | |||
Short-term loan | $ 20,145,446 | ||
Wuhan Rural Commercial Bank [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Wuhan Rural Commercial Bank | Wuhan Rural Commercial Bank | |
Maturities | Repaid in May 2019 | Repaid in May 2019 | |
Interest rate | 7.00% | 7.00% | |
Collateral/Guarantee | Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou | Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou | |
Short-term loan | $ 733,095 | ||
Xianning Rural Commercial Bank [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | [1] | Xianning Rural Commercial Bank | Xianning Rural Commercial Bank |
Maturities | Repaid in April 2019 | Repaid in April 2019 | |
Interest rate | 5.83% | 5.83% | |
Collateral/Guarantee | Land use rights, plant and equipment, inventories | Land use rights, plant and equipment, inventories | |
Long-term loan | $ 3,069,113 | ||
Xianning Zhongying New Energy Service Co. Ltd. [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Xianning Zhongying New Energy Service Co. Ltd. | Xianning Zhongying New Energy Service Co. Ltd. | |
Maturities | Repaid in October 2018 | Repaid in October 2018 | |
Interest rate | 4.75% | 4.75% | |
Collateral/Guarantee | None | None | |
Short-term loan | $ 175,943 | ||
Zhou Deng Hua [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Zhou Deng Hua | Zhou Deng Hua | |
Relationship | Chief Executive Officer of the Company | Chief Executive Officer of the Company | |
Maturities | Repaid in April 2019 & July 2019 | Repaid in April 2019 & July 2019 | |
Interest rate | None | None | |
Collateral/Guarantee | None | None | |
Short-term loan | $ 5,864,759 | ||
Jian Zhou [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Jian Zhou | Jian Zhou | |
Relationship | Chairman of the Company | Chairman of the Company | |
Maturities | Repaid in May 2019 | Repaid in May 2019 | |
Interest rate | None | None | |
Collateral/Guarantee | None | None | |
Short-term loan | $ 703,771 | ||
Hubei Henghao Real Estate Development Co., Ltd [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Hubei Henghao Real Estate Development Co., Ltd. | Hubei Henghao Real Estate Development Co., Ltd. | |
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | |
Maturities | Repaid in October 2018 | Repaid in October 2018 | |
Interest rate | 12.00% | 12.00% | |
Collateral/Guarantee | None | None | |
Short-term loan | $ 13,195,707 | ||
Hubei Henghao Real Estate Development Co., Ltd [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Hubei Henghao Real Estate Development Co., Ltd | Hubei Henghao Real Estate Development Co., Ltd | |
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | |
Maturities | Repaid in January 2019 | Repaid in January 2019 | |
Interest rate | 4.75% | 4.75% | |
Collateral/Guarantee | None | None | |
Short-term loan | $ 381,209 | ||
[1] | The current maturities of long-term loan was acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). |
Debt (Details Textual)
Debt (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Debt (Textual) | |||
Interest expense, debt | $ 462,331 | $ 256,467 | $ 0 |
Interest expense, related party | $ 296,093 | $ 221,819 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party balances | $ 6,375,385 | $ 4,230,118 |
Accounts Receivable [Member] | ||
Related Party Transaction [Line Items] | ||
Related party balances | $ 6,537 | |
Lei Su [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Legal representative of Tianjin Jiabaili | |
Nature | Employee advances | |
Related party balances | $ 2,905 | |
Deng Hua Zhou [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Chief Executive Officer | |
Nature | Employee advances | |
Related party balances | $ 3,632 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details 1) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party balances | $ 9,554 | |
Accounts Payable [Member] | ||
Related Party Transaction [Line Items] | ||
Related party balances | $ 9,554 | |
Xianning Baizhuang Tea Industry Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Bin Zhou is the CEO of the company | |
Nature | Purchase of materials | |
Related party balances | $ 9,554 |
Related Party Balances and Tr_5
Related Party Balances and Transactions (Details 2) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party balances | $ 6,375,385 | $ 4,230,118 |
Luck Sky International Investment Holdings Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director | |
Nature | Payment for U.S. professional fee | |
Related party balances | $ 593,941 | |
Lucksky Group [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director, and Zhou Jian, Chairman | |
Nature | Lease payable | |
Related party balances | $ 600,549 | 515,234 |
Sanhe Dong Yi [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director | |
Nature | Lease payable | |
Related party balances | $ 872 | 21,113 |
Hubei Henghao Real Estate Development Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager | |
Nature | Interest payable | |
Related party balances | $ 488,455 | 211,441 |
Zhou Deng Rong [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Former Chief Executive Officer and director | |
Nature | Payment for U.S. professional fee | |
Related party balances | $ 2,748,259 | 2,748,260 |
Zhou Deng Hua [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Chief Executive Officer | |
Nature | Advances for operational purpose | |
Related party balances | 289,572 | |
Jian Zhou [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Chairman | |
Nature | Advances for operational purpose | |
Related party balances | $ 1,900,164 | 436,444 |
Zhimin Feng [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Legal representative of Jingshan Sanhe | |
Nature | Advances for operational purpose | |
Related party balances | $ 3,222 | 1,191 |
Wei Gu [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | General manager of Xiangtian Zhongdian | |
Nature | Advances for operational purpose | |
Related party balances | 6,863 | |
Heping Zhang [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | General Manager of Hubei Jinli | |
Nature | Payment for acquisition of Hubei Jinli | |
Related party balances | $ 39,923 |
Related Party Balances and Tr_6
Related Party Balances and Transactions (Details Textual) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Related Party Balances and Transactions (Textual) | |||
Lease description | The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire on July 31, 2024 and are subject to renewal with a two-month advance written notice. This lease is terminated in April 2019. For the years ended July 31, 2019, 2018 and 2017, rent expense for the lease with Lucksky Group was $90,743, $127,182 and $125,930, respectively. | ||
Sanhe Dong Yi [Member] | |||
Related Party Balances and Transactions (Textual) | |||
Owners, percentage | 95.00% | ||
Lease description | The lease term expired on June 14, 2019 for a rent of approximately $7,000 (RMB 48,000) per year. | ||
Rent expense | $ 7,024 | $ 22,149 | $ 0 |
Sanhe Liguang Kelitai Equipment Ltd [Member] | |||
Related Party Balances and Transactions (Textual) | |||
Revenue | 0 | 128,878 | 170,588 |
Costs of sales | 0 | 112,890 | $ 147,466 |
Jian Zhou [Member] | |||
Related Party Balances and Transactions (Textual) | |||
Revenue | 4,856 | 29,013 | |
Costs of sales | $ 4,040 | $ 25,823 |
Significant Customer, Former _2
Significant Customer, Former Related Party (Details) | Feb. 02, 2018CNY (¥)a | Jul. 27, 2018USD ($)a | Jul. 27, 2018CNY (¥)a | Jul. 27, 2016a | Jul. 31, 2019USD ($) | Jul. 31, 2019CNY (¥) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Apr. 10, 2014a | Apr. 08, 2014 |
Xianning Xiangtian [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Payments for rent | $ 83,132 | |||||||||
Rent expense related to the leases | $ 17,000 | $ 25,000 | 0 | |||||||
Lease expiration, description | per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a one-month advance written notice. | per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a one-month advance written notice. | The lease early in February 2018 when the Company through Xiangtian Zhongdian signed another lease agreement which expired on February 5, 2019 with a rent of approximately $25,000 (RMB 168,922) | |||||||
Factory leased space | a | 4,628 | 3,128 | 3,128 | 4,628 | ||||||
Xianning Xiangtian [Member] | CNY [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Payments for rent | ¥ | ¥ 168,922 | ¥ 555,360 | ||||||||
Rent expense related to the leases | ¥ | ¥ 114,172 | |||||||||
Xianning Xiangtian One [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Rent expense related to the leases | 25,000 | 81,480 | $ 51,243 | |||||||
Xianning Xiangtian One [Member] | Lease amounted [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Rent expense related to the leases | 17,000 | 0 | ||||||||
Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Revenues from a significant customer | 1,680,000 | $ 1,156,000 | $ 6,800,000 | |||||||
Revenue from discontinued operations | $ 247,000 | |||||||||
Zhou Deng Rong [Member] | Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Owners, percentage | 70.00% | 70.00% | ||||||||
Land use right for approximately acres | a | 70 | |||||||||
Jian Zhou [Member] | Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||||
Significant Customer, Former Related Party (Textual) | ||||||||||
Owners, percentage | 30.00% | 30.00% |
Employee Benefits Government _2
Employee Benefits Government Plan (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2019 | Jul. 31, 2018 | |
Employee Benefits Government Plan [Textual] | ||
Outstanding amount due to the local labor bureau | $ 199,500 | $ 174,971 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 2,272,843 | $ 170,678 | $ 263,025 |
Deferred | 9,469 | (104,784) | |
Provision for income tax | 2,272,843 | 180,147 | 158,241 |
Less: provision for income tax - discontinued operations | (308,605) | ||
Provision for income tax - continuing operations | $ 1,964,238 | $ 180,147 | $ 158,241 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | ||||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | ||
Statutory U.S. tax rate | (21.00%) | (28.60%) | (34.00%) | (34.00%) | |
Less: valuation allowance | (35.30%) | (27.50%) | (52.00%) | ||
Continuing Operations [Member] | |||||
Statutory U.S. tax rate | (21.00%) | (28.60%) | (34.00%) | ||
Effect of PRC statutory tax rate | (4.00%) | 3.60% | 9.00% | ||
Less: valuation allowance | (713.80%) | 35.30% | 27.50% | ||
Deferred tax expense | 0.00% | (0.80%) | 2.40% | ||
Permanent difference | [1] | (389.40%) | 6.60% | (1.30%) | |
Tax expense | (1128.20%) | 16.10% | 3.60% | ||
Discontinued operations [Member] | |||||
Statutory U.S. tax rate | 21.00% | (0.00%) | (0.00%) | ||
Effect of PRC statutory tax rate | 4.00% | 0.00% | 0.00% | ||
Less: valuation allowance | 0.60% | 0.00% | 0.00% | ||
Permanent difference | (2.90%) | 0.00% | 0.00% | ||
Tax expense | 22.70% | 0.00% | 0.00% | ||
[1] | Permanent difference mainly attributable to the expenses incurred in the U.S. and Hong Kong not being able to deducted in the Company's PRC tax return and certain meal and entertainment expenses and related parties interest expenses which in partially non-deductible under PRC income tax law. |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Jul. 31, 2019 | Jul. 31, 2018 |
Continuing Operations [Member] | ||
Deferred tax assets: | ||
Net operating loss carry forwards | $ 1,967,400 | $ 911,400 |
Accounts receivable allowance | 415,800 | 343,500 |
Inventory allowance | 13,600 | |
Deposit for investment allowance | 79,500 | |
Accrued liabilities | 72,000 | 50,600 |
Warranty and other | 16,300 | 16,400 |
Deferred tax assets before valuation allowance | 2,564,600 | 1,321,900 |
Less: valuation allowance | (2,564,600) | (1,321,900) |
Net deferred tax assets | ||
Discontinued operations [Member] | ||
Deferred tax assets: | ||
Accounts receivable allowance | 8,100 | |
Less: valuation allowance | (8,100) | |
Net deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Dec. 22, 2017 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Taxes (Textual) | |||||
Corporate tax rate | 21.00% | ||||
Statutory U.S. tax rate | 21.00% | 28.60% | 34.00% | 34.00% | |
Valuation allowance on deferred tax assets | (35.30%) | (27.50%) | (52.00%) | ||
Operating loss carryforwards | $ 5,094,000 | ||||
Unrecognized tax benefits, estimated interest costs | $ 2,783 | ||||
Unrecognized tax benefits, penalty expense | $ 80,000 | $ 80,000 | |||
Subsequent Fiscal Years [Member] | |||||
Income Taxes (Textual) | |||||
Statutory U.S. tax rate | 21.00% | ||||
Deferred Tax Assets [Member] | |||||
Income Taxes (Textual) | |||||
Valuation allowance on deferred tax assets | 100.00% | ||||
Net operating loss carryforwards, description | U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. | ||||
Operating loss carryforwards | $ 1,070,000 | ||||
Operating loss carryforwards, expiration description | Expire beginning in 2029 to 2038. | ||||
Hong Kong [Member] | |||||
Income Taxes (Textual) | |||||
Corporate tax rate | 16.50% | ||||
Net operating loss carryforwards, description | As of July 31, 2019, the Company had approximately $30,000 of NOLs related to its Hong Kong holding companies that can be carryforward indefinitely with deferred tax assets of approximately $5,000. | ||||
Expenses incurred but not deducted | 0.10% | ||||
Hong Kong [Member] | Deferred Tax Assets [Member] | |||||
Income Taxes (Textual) | |||||
Operating loss carryforwards | $ 30,000 | ||||
PRC [Member] | |||||
Income Taxes (Textual) | |||||
Corporate tax rate | 25.00% | ||||
Net operating loss carryforwards, description | As of July 31, 2019, the Company had approximately $3,571,000 of NOLs related to its PRC subsidiaries and VIEs that expire in years 2019 through 2023 with deferred tax assets of approximately $893,000. | ||||
Expenses incurred but not deducted | 111.80% | ||||
PRC [Member] | Deferred Tax Assets [Member] | |||||
Income Taxes (Textual) | |||||
Operating loss carryforwards | $ 893,000 | ||||
VIEs [Member] | Deferred Tax Assets [Member] | |||||
Income Taxes (Textual) | |||||
Net operating loss carryforwards, description | The Company had U.S. federal NOLs of approximately $5,094,000 that expire beginning in 2029 to 2038 with deferred tax assets of approximately $1,070,000. | ||||
Operating loss carryforwards, expiration description | Expire in years 2019 through 2023. | ||||
US [Member] | |||||
Income Taxes (Textual) | |||||
Expenses incurred but not deducted | 27750.00% | ||||
Maximum [Member] | |||||
Income Taxes (Textual) | |||||
Corporate tax rate | 34.00% | ||||
Minimum [Member] | |||||
Income Taxes (Textual) | |||||
Corporate tax rate | 21.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jul. 31, 2019USD ($) |
Twelve months ending July 31, | |
2020 | $ 531,058 |
2021 | 1,069,633 |
2022 | 601,241 |
2023 | 333,716 |
2024 | 436 |
Thereafter | 872 |
Total minimum payments required | $ 2,536,956 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) | Jul. 31, 2019USD ($) |
Twelve months ending July 31, | |
2020 | $ 43,837 |
Thereafter | |
Total minimum payments required | 43,837 |
Less: purchase commitments – discontinued operations | (43,837) |
Total purchase commitments – continuing operations |
Commitments and Contingencies_4
Commitments and Contingencies (Details 2) | Jul. 31, 2019USD ($) |
Total | $ 553,014 |
Negotiable instruments [Member] | |
Total | 551,997 |
Labor [Member] | |
Total | $ 1,017 |
Commitments and Contingencies_5
Commitments and Contingencies (Details Textual) | Jun. 11, 2019USD ($) | Jun. 11, 2019CNY (¥) | Jan. 24, 2018CNY (¥) | Jul. 23, 2019USD ($) | Jun. 05, 2019USD ($) | Jun. 05, 2019CNY (¥) | Apr. 15, 2019USD ($) | Apr. 15, 2019CNY (¥) | Mar. 19, 2019USD ($) | Mar. 19, 2019CNY (¥) | Nov. 29, 2018USD ($) | Nov. 29, 2018CNY (¥) | Jan. 24, 2018USD ($) | Jul. 24, 2015$ / sharesshares | Sep. 23, 2013USD ($)non-relatedparties$ / sharesshares | Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Jul. 23, 2019CNY (¥) | Apr. 30, 2019shares | Jan. 29, 2019shares |
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Rental expense | $ 1,102,164 | $ 304,663 | $ 212,610 | ||||||||||||||||||
Number of other non-related parties | non-relatedparties | 2 | ||||||||||||||||||||
Common stock shares issued, value | $ 67,000 | ||||||||||||||||||||
Dilutive effect of not canceling shares | shares | 67,000,000 | ||||||||||||||||||||
Claim for damages | $ 300,000 | ||||||||||||||||||||
Payment of unpaid equity transfer | 300,000 | ||||||||||||||||||||
Liquidated damages | $ 600,000 | ||||||||||||||||||||
Common stock cancelled | shares | 60,000,000 | ||||||||||||||||||||
Labor dispute, Description | Regarding the labor dispute lawsuit between Qiao Lijuan and Tianjin JiaBaiLi Petroleum Products Co., Ltd. (Hereinafter referred to as "JiaBaiLi"), on July 23, 2019, Qiao Lijuan sued JiaBaiLi (Defendant A) and the 1st Sales Company of JiaBaiLi (Defendant B) before Jizhou Court claiming Defendant B to pay RMB 7,000 (approximately $1,000) for salary, Defendant A to bear the joint and several liability and both Defendant A and B to bear the litigation fees. | ||||||||||||||||||||
Global Select [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Common stock cancelled | shares | 60,000,000 | ||||||||||||||||||||
Xiangtian Zhongdian [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Instruments compensation | $ 4,100,000 | ||||||||||||||||||||
CNY [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Claim for damages | ¥ | ¥ 2,000,000 | ||||||||||||||||||||
Payment of unpaid equity transfer | ¥ | 1,720,000 | ||||||||||||||||||||
Liquidated damages | ¥ | ¥ 3,720,000 | ||||||||||||||||||||
CNY [Member] | Xiangtian Zhongdian [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Instruments compensation | ¥ | ¥ 600,000 | ||||||||||||||||||||
Sanhe Xiangtian [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Claim for damages | $ 2,300,000 | $ 610,284 | $ 149,245 | ||||||||||||||||||
Liquidated damages | $ 302,242 | ||||||||||||||||||||
Associated fees | $ 3,000 | ||||||||||||||||||||
Sanhe Xiangtian [Member] | CNY [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Claim for damages | ¥ | ¥ 1,000,000 | ¥ 15,826,000 | ¥ 4,089,150 | ||||||||||||||||||
Liquidated damages | ¥ | ¥ 2,025,139 | ||||||||||||||||||||
Associated fees | ¥ | ¥ 23,000 | ||||||||||||||||||||
Xianning Xiangtian [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Claim for damages | $ 300,000 | ||||||||||||||||||||
Payment of unpaid equity transfer | $ 800,000 | ||||||||||||||||||||
Xianning Xiangtian [Member] | CNY [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Claim for damages | ¥ | ¥ 2,000,000 | ||||||||||||||||||||
Payment of unpaid equity transfer | ¥ | ¥ 5,080,000 | ||||||||||||||||||||
Wenhan Han and Guifen Wang's [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Personal assets | $ 1,000,000 | ||||||||||||||||||||
Wenhan Han and Guifen Wang's [Member] | CNY [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Personal assets | ¥ | ¥ 7,080,000 | ||||||||||||||||||||
Mr. Roy Thomas Phillips [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Restricted common stock shares issued | shares | 60,000,000 | ||||||||||||||||||||
Common stock per share | $ / shares | $ 0.001 | ||||||||||||||||||||
Other non-related parties [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Restricted common stock shares issued | shares | 7,000,000 | ||||||||||||||||||||
Common stock per share | $ / shares | $ 0.001 | ||||||||||||||||||||
Shares issued to two other non-related parties cancelled | shares | 7,000,000 | ||||||||||||||||||||
Discontinued operations [Member] | |||||||||||||||||||||
Commitments and Contingencies (Textual) | |||||||||||||||||||||
Rental expense | $ 0 | $ 0 | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Apr. 30, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | Apr. 30, 2019 | |
Stockholders' Equity (Textual) | ||||||
Capital contribution from stockholder | $ 30,820,127 | |||||
Common stock cancelled | 60,000,000 | |||||
Board of Directors [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Shares for issuances | 30,000,000 | |||||
Xianning Xiangtian [Member] | ||||||
Stockholders' Equity (Textual) | ||||||
Capital contribution from stockholder | $ 30,820,127 |
Concentrations (Details)
Concentrations (Details) | 12 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | |
Total Purchases [Member] | Vendor One [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 35.00% | 19.00% | 13.60% |
Total Purchases [Member] | Vendor Two [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 20.50% | 18.30% | 11.60% |
Total Purchases [Member] | Vendor Three [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 15.40% | 11.20% | |
Total Purchases [Member] | Vendor Four [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 10.90% | 10.90% | |
Accounts Payable [Member] | Vendor One [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 49.80% | 29.80% | |
Accounts Payable [Member] | Vendor Two [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 13.70% | 15.70% | |
Accounts Payable [Member] | Vendor Three [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 11.40% | 14.00% | |
Accounts Payable [Member] | Vendor Four [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 11.70% | ||
Customer One [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 34.70% | 23.30% | 71.40% |
Customer One [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 20.80% | 32.00% | |
Customer Two [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 23.60% | 19.10% | 11.80% |
Customer Two [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 17.70% | 15.00% | |
Customer Three [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 15.00% | ||
Customer Three [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 17.30% | 12.30% | |
Customer Four [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 12.90% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | ||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | $ 4,938 | $ 6,790 | $ 21,411 | $ 19,988 | $ 14,259 | [1] | $ 423,644 | $ 424 | $ 232 | $ 355 | $ 5,191 | $ 3,277 | $ 966 | $ 87 | $ 53,126,913 | $ 15,269,788 | $ 9,521,371 |
Gross profit - continuing operations | 974 | $ 2,364 | $ 5,376 | $ 4,196 | 2,428 | [1] | 115 | 57 | 38 | 319 | 512 | 132 | 15 | 12,910,123 | 2,638,324 | 978,164 | |
Income (loss) from operations - continuing operations | 1,337,204 | (849,431) | (4,415,469) | ||||||||||||||
Net loss attributable to controlling interest - continuing operations | 841 | $ (682) | $ (669) | $ (856) | $ (3,483) | $ (109) | $ (321) | $ (651) | (1,085,293) | (1,366,305) | (4,564,159) | ||||||
Depreciation and amortization expenses - continuing operations | 1,751,862 | 527,848 | 281,722 | ||||||||||||||
Consolidated interest expense | 955,433 | 299,795 | |||||||||||||||
Capital expenditures - continuing operations | 4,144,467 | 582,463 | 1,989,195 | ||||||||||||||
Total assets - continuing operations | 64,376,788 | 59,027,950 | 64,376,788 | 59,027,950 | |||||||||||||
Discontinued operations [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | (2,107,593) | ||||||||||||||||
Gross profit - continuing operations | (1,835,674) | ||||||||||||||||
Income (loss) from operations - continuing operations | (1,394,802) | ||||||||||||||||
Net loss attributable to controlling interest - continuing operations | (946,037) | ||||||||||||||||
Depreciation and amortization expenses - continuing operations | (256,454) | ||||||||||||||||
Capital expenditures - continuing operations | (366,886) | ||||||||||||||||
Total assets - continuing operations | (13,978,950) | (13,978,950) | |||||||||||||||
Consolidated [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 55,234,506 | 15,269,788 | 9,521,371 | ||||||||||||||
Gross profit - continuing operations | 14,745,797 | 2,638,324 | 978,164 | ||||||||||||||
Income (loss) from operations - continuing operations | 2,732,006 | (849,431) | (4,415,469) | ||||||||||||||
Net loss attributable to controlling interest - continuing operations | (1,085,293) | (1,366,305) | (4,564,159) | ||||||||||||||
Depreciation and amortization expenses - continuing operations | 2,008,316 | 527,848 | 281,722 | ||||||||||||||
Capital expenditures - continuing operations | 4,511,353 | 588,000 | 1,989,195 | ||||||||||||||
Total assets - continuing operations | 64,376,788 | 59,027,950 | 64,376,788 | 59,027,950 | |||||||||||||
Sanhe Xiangtian [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 3,034,530 | 9,488,621 | 9,472,865 | ||||||||||||||
Gross profit - continuing operations | 1,058,894 | 1,678,488 | 910,106 | ||||||||||||||
Income (loss) from operations - continuing operations | (219,521) | 385,643 | (3,653,553) | ||||||||||||||
Net loss attributable to controlling interest - continuing operations | (298,763) | 274,981 | (3,688,902) | ||||||||||||||
Depreciation and amortization expenses - continuing operations | 166,547 | 260,404 | 261,585 | ||||||||||||||
Consolidated interest expense | 5,869 | 12,827 | |||||||||||||||
Capital expenditures - continuing operations | 106,823 | 97,534 | 1,940,552 | ||||||||||||||
Total assets - continuing operations | 4,889,875 | 11,355,619 | 4,889,875 | 11,355,619 | |||||||||||||
Xianning Xiangtian [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 8,684,086 | 946,780 | 48,506 | ||||||||||||||
Gross profit - continuing operations | 1,455,529 | 250,714 | 68,058 | ||||||||||||||
Income (loss) from operations - continuing operations | (342,335) | (394,376) | (436,327) | ||||||||||||||
Net loss attributable to controlling interest - continuing operations | (1,579,641) | (650,479) | (436,007) | ||||||||||||||
Depreciation and amortization expenses - continuing operations | 787 | 69,932 | 20,137 | ||||||||||||||
Consolidated interest expense | 783,327 | 256,048 | |||||||||||||||
Capital expenditures - continuing operations | 5,890 | 2,987 | 48,643 | ||||||||||||||
Total assets - continuing operations | 7,969,624 | 4,689,100 | 7,969,624 | 4,689,100 | |||||||||||||
Jingshan Sanhe [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 11,979,135 | 909,713 | |||||||||||||||
Gross profit - continuing operations | 4,250,457 | 225,038 | |||||||||||||||
Income (loss) from operations - continuing operations | 1,722,380 | 34,279 | |||||||||||||||
Net loss attributable to controlling interest - continuing operations | 904,315 | 25,006 | |||||||||||||||
Depreciation and amortization expenses - continuing operations | 98,103 | 1,345 | |||||||||||||||
Capital expenditures - continuing operations | 3,371,741 | 450,249 | |||||||||||||||
Total assets - continuing operations | 6,969,849 | 3,513,449 | 6,969,849 | 3,513,449 | |||||||||||||
Xiangtian Zhongdian [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 23,080,822 | 3,682,011 | |||||||||||||||
Gross profit - continuing operations | 2,158,825 | 445,710 | |||||||||||||||
Income (loss) from operations - continuing operations | 1,104,729 | 267,118 | |||||||||||||||
Net loss attributable to controlling interest - continuing operations | 562,792 | 156,059 | |||||||||||||||
Depreciation and amortization expenses - continuing operations | 287,918 | 100,468 | |||||||||||||||
Capital expenditures - continuing operations | 8,267 | 36,076 | |||||||||||||||
Total assets - continuing operations | 7,731,512 | 12,620,210 | 7,731,512 | 12,620,210 | |||||||||||||
Hubei Jinli [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 6,310,495 | 242,663 | |||||||||||||||
Gross profit - continuing operations | 3,948,573 | 38,374 | |||||||||||||||
Income (loss) from operations - continuing operations | 2,453,399 | (125,633) | |||||||||||||||
Net loss attributable to controlling interest - continuing operations | 1,773,869 | (161,799) | |||||||||||||||
Depreciation and amortization expenses - continuing operations | 977,661 | 79,178 | |||||||||||||||
Consolidated interest expense | 166,237 | 30,920 | |||||||||||||||
Capital expenditures - continuing operations | 497,402 | 1,154 | |||||||||||||||
Total assets - continuing operations | 21,635,194 | 22,489,702 | 21,635,194 | 22,489,702 | |||||||||||||
Tianjin Jiabaili [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Income (loss) from operations - continuing operations | (1,440,112) | (23,784) | |||||||||||||||
Net loss attributable to controlling interest - continuing operations | (1,455,079) | (23,817) | |||||||||||||||
Depreciation and amortization expenses - continuing operations | 220,297 | 16,521 | |||||||||||||||
Capital expenditures - continuing operations | 135,333 | ||||||||||||||||
Total assets - continuing operations | 302,518 | 4,111,706 | 302,518 | 4,111,706 | |||||||||||||
Xiangtian Trade [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 37,845 | ||||||||||||||||
Gross profit - continuing operations | 37,845 | ||||||||||||||||
Income (loss) from operations - continuing operations | 17,772 | ||||||||||||||||
Net loss attributable to controlling interest - continuing operations | 13,685 | ||||||||||||||||
Depreciation and amortization expenses - continuing operations | 549 | ||||||||||||||||
Capital expenditures - continuing operations | 511 | ||||||||||||||||
Total assets - continuing operations | 483,168 | 483,168 | |||||||||||||||
Wine Co [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 1,820,844 | ||||||||||||||||
Gross profit - continuing operations | 1,589,576 | ||||||||||||||||
Income (loss) from operations - continuing operations | 1,255,129 | ||||||||||||||||
Net loss attributable to controlling interest - continuing operations | 816,129 | ||||||||||||||||
Depreciation and amortization expenses - continuing operations | 215,738 | ||||||||||||||||
Capital expenditures - continuing operations | 366,886 | ||||||||||||||||
Total assets - continuing operations | 11,005,886 | 11,005,886 | |||||||||||||||
Herbal Wine Co [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Revenues - continuing operations | 286,749 | ||||||||||||||||
Gross profit - continuing operations | 246,098 | ||||||||||||||||
Income (loss) from operations - continuing operations | 139,673 | ||||||||||||||||
Net loss attributable to controlling interest - continuing operations | 129,908 | ||||||||||||||||
Depreciation and amortization expenses - continuing operations | 40,716 | ||||||||||||||||
Total assets - continuing operations | 2,973,064 | 2,973,064 | |||||||||||||||
All four holding entities [Member] | |||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||
Income (loss) from operations - continuing operations | (1,959,108) | (992,678) | (325,589) | ||||||||||||||
Net loss attributable to controlling interest - continuing operations | (1,952,508) | (986,256) | (439,250) | ||||||||||||||
Capital expenditures - continuing operations | 18,500 | ||||||||||||||||
Total assets - continuing operations | $ 416,098 | $ 248,164 | $ 416,098 | $ 248,164 | |||||||||||||
[1] | During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the deferred cost (See Note 7) as of July 31, 2017 and determined no allowance on deferred cost were deemed necessary as the Company's products can easily be dismantled and resold above its deferred cost if the Company were unable to pass the second inspections. |
Quarterly Unaudited Results (De
Quarterly Unaudited Results (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | ||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Net revenue | $ 4,938 | $ 6,790 | $ 21,411 | $ 19,988 | $ 14,259 | [1] | $ 423,644 | $ 424 | $ 232 | $ 355 | $ 5,191 | $ 3,277 | $ 966 | $ 87 | $ 53,126,913 | $ 15,269,788 | $ 9,521,371 |
Gross profit | 974 | 2,364 | 5,376 | 4,196 | 2,428 | [1] | 115 | 57 | 38 | 319 | 512 | 132 | 15 | 12,910,123 | 2,638,324 | 978,164 | |
Net income (loss) | $ 841 | $ (682) | $ (669) | $ (856) | $ (3,483) | $ (109) | $ (321) | $ (651) | (1,085,293) | (1,366,305) | (4,564,159) | ||||||
Net income (loss) from continuing operations | (4,188) | (593) | 1,373 | 1,376 | |||||||||||||
Net income from discontinued operations | $ 17 | $ 685 | $ 244 | $ 105,115 | |||||||||||||
Net income (loss) per share, basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 | $ (0.01) | $ 0 | $ 0 | $ 0 | |||||||||
Earnings (loss) per common shares - basic and diluted from continuing operations | $ (0.01) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ (0.01) | ||||||||||
Earnings (loss) per common shares - basic and diluted from discontinued operations | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||
[1] | During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the deferred cost (See Note 7) as of July 31, 2017 and determined no allowance on deferred cost were deemed necessary as the Company's products can easily be dismantled and resold above its deferred cost if the Company were unable to pass the second inspections. |
Quarterly Unaudited Results (_2
Quarterly Unaudited Results (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||||
Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2016 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2017 | ||
Quarterly Unaudited Results (Textual) | |||||||||||||||||
Sales of products | $ 4,938 | $ 6,790 | $ 21,411 | $ 19,988 | $ 14,259 | [1] | $ 423,644 | $ 424 | $ 232 | $ 355 | $ 5,191 | $ 3,277 | $ 966 | $ 87 | $ 53,126,913 | $ 15,269,788 | $ 9,521,371 |
Gross profit | $ 974 | $ 2,364 | $ 5,376 | $ 4,196 | 2,428 | [1] | $ 115 | $ 57 | $ 38 | 319 | $ 512 | $ 132 | $ 15 | $ 12,910,123 | $ 2,638,324 | $ 978,164 | |
Financial Service, Other [Member] | |||||||||||||||||
Quarterly Unaudited Results (Textual) | |||||||||||||||||
Sales of products | 2,100,000 | 1,500,000 | |||||||||||||||
Gross profit | $ 343,000 | $ 245,000 | |||||||||||||||
[1] | During the quarter ended July 31, 2018, the Company recognized sales and installation of power generation systems of approximately $2.1 million with gross profit of approximately $343,000 and sales of products of approximately $1.5 million with gross profit of approximately $245,000, which the completion of installation and delivery of products were occurred during the quarter ended July 31, 2017. These revenues were contributed from the same customer and being deferred and recognized during the quarter ended July 31, 2018 mainly due the collectability were assured after additional inspections of the Company's projects and products with payment approval in September 2018 before the issuance of the Company's year ended July 31, 2018 financial statements. The Company also performed impairment testing on the deferred cost (See Note 7) as of July 31, 2017 and determined no allowance on deferred cost were deemed necessary as the Company's products can easily be dismantled and resold above its deferred cost if the Company were unable to pass the second inspections. |