Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2020 | May 15, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | IONIX TECHNOLOGY, INC. | |
Entity Central Index Key | 0001528308 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Interactive Data Current | Yes | |
Entity Reporting Status Current | Yes | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | IINX | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity File Number | 000-54485 | |
Entity Incorporation, State or Country Code | NV | |
Entity Common Stock, Shares Outstanding | 114,193,057 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Current Assets: | ||
Cash and cash equivalents (Note 3 at VIE) | $ 1,834,763 | $ 509,615 |
Notes receivable (Note 3 at VIE) | 23,721 | 120,182 |
Accounts receivable - non-related parties (Note 3 at VIE) | 3,494,207 | 3,639,030 |
Accounts receivable - related parties | 420,906 | 340,026 |
Inventory (Note 3 at VIE) | 3,045,127 | 3,379,146 |
Advances to suppliers - non-related parties (Note 3 at VIE) | 354,820 | 129,423 |
Advances to suppliers - related parties | 264,797 | 269,498 |
Prepaid expenses and other current assets (Note 3 at VIE) | 593,122 | 269,495 |
Total Current Assets (Note 3 at VIE) | 10,031,463 | 8,656,415 |
Property, plant and equipment, net (Note 3 at VIE) | 6,812,910 | 7,508,637 |
Right-of-use assets - operating leases | 20,825 | |
Intangible assets, net (Note 3 at VIE) | 1,430,449 | 1,496,399 |
Deferred tax assets (Note 3 at VIE) | 51,460 | 54,361 |
Total Assets (Note 3 at VIE) | 18,347,107 | 17,715,812 |
Current Liabilities: | ||
Short-term bank loan (Note 3 at VIE) | 2,540,543 | 2,618,296 |
Accounts payable (Note 3 at VIE) | 2,569,420 | 2,732,327 |
Advance from customers (Note 3 at VIE) | 59,165 | 114,158 |
Convertible notes payable, net of debt discount and loan cost | 347,427 | |
Derivative liability | 446,852 | |
Due to related parties (Note 3 at VIE) | 2,032,723 | 2,105,338 |
Operating lease liabilities - current portion | 7,646 | |
Accrued expenses and other current liabilities (Note 3 at VIE) | 199,015 | 368,319 |
Total Current Liabilities (Note 3 at VIE) | 8,202,791 | 7,938,438 |
Operating lease liabilities | 12,462 | |
Total Liabilities (Note 3 at VIE) | 8,215,253 | 7,938,438 |
COMMITMENT AND CONTINGENCIES | ||
Stockholders' Equity: | ||
Preferred stock, $.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding | 500 | 500 |
Common stock, $.0001 par value, 195,000,000 shares authorized, 114,193,057 and 114,003,000 shares issued and outstanding as of March 31, 2020 and June 30, 2019, respectively | 11,419 | 11,400 |
Additional paid in capital | 9,299,825 | 8,829,487 |
Retained earnings | 750,578 | 539,866 |
Accumulated other comprehensive loss | (372,429) | (45,840) |
Total Stockholders' Equity attributable to the Company | 9,689,893 | 9,335,413 |
Noncontrolling interest | 441,961 | 441,961 |
Total Stockholders' Equity | 10,131,854 | 9,777,374 |
Total Liabilities and Stockholders' Equity | $ 18,347,107 | $ 17,715,812 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 5,000,000 | 5,000,000 |
Preferred stock, outstanding | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 195,000,000 | 195,000,000 |
Common stock, issued | 114,193,057 | 114,003,000 |
Common stock, outstanding | 114,193,057 | 114,003,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenues (See Note 2 and Note 9 for related party amounts) | $ 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 |
Cost of Revenues (See Note 9 for related party amounts) | 2,506,518 | 2,271,380 | 14,850,194 | 6,618,015 |
Gross profit | 245,652 | 623,422 | 2,735,274 | 1,223,422 |
Operating expenses | ||||
Selling, general and administrative expense | 499,616 | 392,367 | 1,378,241 | 686,132 |
Research and development expense | 139,029 | 158,562 | 645,880 | 158,562 |
Total operating expenses | 638,645 | 550,929 | 2,024,121 | 844,694 |
Income (loss) from operations | (392,993) | 72,493 | 711,153 | 378,728 |
Other income (expense): | ||||
Interest expense, net of interest income | (213,267) | (34,412) | (470,500) | (34,412) |
Subsidy income | 50,018 | |||
Change in fair value of derivative liability | (44,850) | 86,602 | ||
Loss on extinguishment of debt | (15,074) | (15,074) | ||
Total other expense | (273,191) | (34,412) | (348,954) | (34,412) |
Income (loss) before income tax provision | (666,184) | 38,081 | 362,199 | 344,316 |
Income tax provision (benefit) | (29,962) | 17,017 | 151,487 | 139,245 |
Net income (loss) | (636,222) | 21,064 | 210,712 | 205,071 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | (165,507) | 56,484 | (326,589) | 28,523 |
Comprehensive income (loss) | $ (801,729) | $ 77,548 | $ (115,877) | $ 233,594 |
Earnings (Loss) Per Share - Basic (in dollars per share) | $ (0.01) | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding - Basic (in shares) | 114,104,735 | 114,003,000 | 114,036,665 | 104,148,985 |
Earnings (Loss) Per Share - Diluted (in dollars per share) | $ (0.01) | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding - Diluted (in shares) | 113,913,240 | 114,003,000 | 114,036,665 | 104,148,985 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Non-controlling Interest [Member] | Total |
Balance at beginning at Jun. 30, 2018 | $ 500 | $ 9,900 | $ 237,246 | $ 142,819 | $ 7,950 | $ 398,415 | |
Balance at beginning (in shares) at Jun. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 177,153 | 177,153 | |||||
Foreign currency translation adjustment | (7,922) | (7,922) | |||||
Balance at end at Sep. 30, 2018 | $ 500 | $ 9,900 | 237,246 | 319,972 | 28 | 567,646 | |
Balance at end (in shares) at Sep. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Balance at beginning at Jun. 30, 2018 | $ 500 | $ 9,900 | 237,246 | 142,819 | 7,950 | 398,415 | |
Balance at beginning (in shares) at Jun. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 205,071 | ||||||
Foreign currency translation adjustment | 28,523 | ||||||
Balance at end at Mar. 31, 2019 | $ 500 | $ 11,400 | 8,829,487 | 347,890 | 36,473 | 441,961 | 9,667,711 |
Balance at end (in shares) at Mar. 31, 2019 | 5,000,000 | 114,003,000 | |||||
Balance at beginning at Sep. 30, 2018 | $ 500 | $ 9,900 | 237,246 | 319,972 | 28 | 567,646 | |
Balance at beginning (in shares) at Sep. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for advisory services | $ 1,500 | 8,650,396 | 441,961 | 9,093,857 | |||
Issuance of common stock for advisory services (in shares) | 15,000,000 | ||||||
Net income (loss) | 6,854 | 6,854 | |||||
Foreign currency translation adjustment | (20,039) | (20,039) | |||||
Balance at end at Dec. 31, 2018 | $ 500 | $ 11,400 | 8,887,642 | 326,826 | (20,011) | 441,961 | 9,648,318 |
Balance at end (in shares) at Dec. 31, 2018 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Return of capital | (58,155) | (58,155) | |||||
Net income (loss) | 21,064 | 21,064 | |||||
Foreign currency translation adjustment | 56,484 | 56,484 | |||||
Balance at end at Mar. 31, 2019 | $ 500 | $ 11,400 | 8,829,487 | 347,890 | 36,473 | 441,961 | 9,667,711 |
Balance at end (in shares) at Mar. 31, 2019 | 5,000,000 | 114,003,000 | |||||
Balance at beginning at Jun. 30, 2019 | $ 500 | $ 11,400 | 8,829,487 | 539,866 | (45,840) | 441,961 | 9,777,374 |
Balance at beginning (in shares) at Jun. 30, 2019 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock warrants issued with convertible notes | 20,022 | 20,022 | |||||
Net income (loss) | 711,276 | 711,276 | |||||
Foreign currency translation adjustment | (416,785) | (416,785) | |||||
Balance at end at Sep. 30, 2019 | $ 500 | $ 11,400 | 8,849,509 | 1,251,142 | (462,625) | 441,961 | 10,091,887 |
Balance at end (in shares) at Sep. 30, 2019 | 5,000,000 | 114,003,000 | |||||
Balance at beginning at Jun. 30, 2019 | $ 500 | $ 11,400 | 8,829,487 | 539,866 | (45,840) | 441,961 | 9,777,374 |
Balance at beginning (in shares) at Jun. 30, 2019 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income (loss) | 210,712 | ||||||
Foreign currency translation adjustment | (326,589) | ||||||
Balance at end at Mar. 31, 2020 | $ 500 | $ 11,419 | 9,299,825 | 750,578 | (372,429) | 441,961 | 10,131,854 |
Balance at end (in shares) at Mar. 31, 2020 | 5,000,000 | 114,193,057 | |||||
Balance at beginning at Sep. 30, 2019 | $ 500 | $ 11,400 | 8,849,509 | 1,251,142 | (462,625) | 441,961 | 10,091,887 |
Balance at beginning (in shares) at Sep. 30, 2019 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock warrants issued with convertible notes | 84,613 | 84,613 | |||||
Net income (loss) | 135,658 | 135,658 | |||||
Foreign currency translation adjustment | 255,703 | 255,703 | |||||
Balance at end at Dec. 31, 2019 | $ 500 | $ 11,400 | 8,934,122 | 1,386,800 | (206,922) | 441,961 | 10,567,861 |
Balance at end (in shares) at Dec. 31, 2019 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for advisory services | $ 15 | 262,485 | 262,500 | ||||
Issuance of common stock for advisory services (in shares) | 150,000 | ||||||
Issuance of common stock for conversion of convertible notes | $ 4 | 60,361 | 60,365 | ||||
Issuance of common stock for conversion of convertible notes (in shares) | 40,057 | ||||||
Stock warrants issued with convertible notes | 42,857 | 42,857 | |||||
Net income (loss) | (636,222) | (636,222) | |||||
Foreign currency translation adjustment | (165,507) | (165,507) | |||||
Balance at end at Mar. 31, 2020 | $ 500 | $ 11,419 | $ 9,299,825 | $ 750,578 | $ (372,429) | $ 441,961 | $ 10,131,854 |
Balance at end (in shares) at Mar. 31, 2020 | 5,000,000 | 114,193,057 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - Variable Interest Entity [Member] | 3 Months Ended |
Dec. 31, 2018shares | |
Variable Interest Entity [Line Items] | |
Issuance of shares of common stock | 15,000,000 |
Ownership rights | 95.14% |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 210,712 | $ 205,071 |
Adjustments required to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 580,625 | 184,172 |
Deferred taxes | 1,306 | (15,732) |
Stock compensation for advisory services | 79,891 | |
Change in fair value of derivative liability | (86,602) | |
Loss on extinguishment of debt | 15,074 | |
Non-cash interest | 351,474 | |
Gain on disposal of property and equipment | (7,018) | |
Changes in operating assets and liabilities: | ||
Accounts receivable - non-related parties | 37,312 | 593,935 |
Accounts receivable - related parties | (92,348) | (22,607) |
Inventory | 237,193 | (774,776) |
Advances to suppliers - non-related parties | (232,695) | 13,826 |
Advances to suppliers - related parties | (3,352) | (114,802) |
Prepaid expenses and other current assets | (150,496) | (75,559) |
Accounts payable - non-related parties | (83,000) | (645,258) |
Accounts payable - related parties | (198,782) | |
Advance from customers | (52,380) | (61,014) |
Accrued expenses and other current liabilities | (164,326) | 10,938 |
Net cash provided by (used in) operating activities | 641,370 | (900,588) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property, plant and equipment | (193,610) | (38,375) |
Proceeds received from sale of equipment | 121,715 | |
Cash received from acquisition | 687,591 | |
Net cash provided by (used in) investing activities | (71,895) | 649,216 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Notes receivable | 94,292 | 54,451 |
Proceeds from issuance of convertible notes payable | 722,190 | |
Return of capital to non-controlling interests | (58,155) | |
Proceeds from (repayment of) loans from related parties | (28,979) | 591,766 |
Net cash provided by financing activities | 787,503 | 588,062 |
Effect of exchange rate changes on cash | (31,830) | 46,668 |
Net increase in cash and cash equivalents | 1,325,148 | 383,358 |
Cash and cash equivalents, beginning of period | 509,615 | 111,462 |
Cash and cash equivalents, end of period | 1,834,763 | 494,820 |
Supplemental disclosure of cash flow information | ||
Cash paid for income tax | 154,538 | 144,124 |
Cash paid for interests | $ 102,457 | $ 35,250 |
Non-cash investing and financing activities | ||
Issuance of 15,000,000 shares of common stock in exchange for 95.14% ownership rights of a variable interest entity | 8,651,896 | |
Issuance of common stock for advisory services | $ 262,500 | |
Issuance of 40,057 shares of common stock for conversion of convertible notes | $ 60,365 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 9 Months Ended |
Mar. 31, 2019shares | |
Variable Interest Entity [Member] | |
Variable Interest Entity [Line Items] | |
Issuance of common stock for conversion of convertible notes | 40,057 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 - NATURE OF OPERATIONS Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. By and through its wholly owned subsidiaries and an entity controlled through VIE agreements in China, the Company sells the high-end intelligent electronic equipment, which includes the portable power banks for electronic devices, LCM and LCD screens and provides IT and solution-oriented services in China. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2020 and the results of operations and cash flows for the periods ended March 31, 2020 and 2019. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2020 or for any subsequent periods. The balance sheet at June 30, 2019 has been derived from the audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2019 as included in our Annual Report on Form 10-K as filed with the SEC on September 30, 2019. Basis of consolidation The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation. Certain amounts have been reclassified to conform with current year presentation. Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. Revenue recognition The Company adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings. The Company estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. Under these criteria, for revenues from sale of products, the Company generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. For service revenue, the Company recognizes revenue when services are performed and accepted by customers. The following table disaggregates our revenue by major source for the three and nine months ended March 31, 2020 and 2019, respectively: For the Nine Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 14,518,376 $ 5,634,086 Sales of LCM and LCD screens - Related parties 718,194 115,897 Sales of portable power banks 1,719,127 1,831,387 Service contracts 629,771 260,067 Total $ 17,585,468 $ 7,841,437 For the Three Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 2,487,465 $ 2,760,934 Sales of LCM and LCD screens - Related parties 73,802 - Sales of portable power banks 181,033 - Service contracts 9,870 133,868 Total $ 2,752,170 $ 2,894,802 All the operating entities of the Company are domiciled in the PRC. All the Company’s revenues are derived in the PRC during the three and nine months ended March 31, 2020 and 2019. Leases In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Company elected the package of practical expedients which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard has a material effect on our financial statements. The most significant effects are related to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating leases. The Company has entered into an office lease arrangement in China with a lease term longer than 12 months under which we are the lessee. (See Note 5) Earnings Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share or increase a net income per share. The reconciliation of our basic to diluted weighted average common shares follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Basic weighted average common shares 114,104,735 114,003,000 114,036,665 104,148,985 Effect of potentially dilutive securities - Warrants (191,495 ) - - - - Convertible notes - - - - Diluted weighted average common shares 113,913,240 114,003,000 114,036,665 104,148,985 During the nine months ended March 31, 2020, the Company had outstanding convertible notes and warrants which represent 899,753 shares of commons stock. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive. During the three months ended March 31, 2020, the Company had outstanding convertible notes and warrants which represent 842,313 shares of commons stock, among which 613,147 shares of common stock for convertible notes were excluded from the computation of diluted earnings per share since their effect would have been antidilutive. Foreign currencies translation The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: March 31, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0851 6.8747 Nine Months Ended March 31, 2020 2019 Items in statements of comprehensive income (loss) and cash flows 6.9799 6.6639 Fair Value of Financial Instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 12). Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Recent accounting pronouncements From time to time, new accounting pronouncements are issues by the Financial Accounting Standards Board or other standard bodies that may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented. Risk factor Due to the outbreak of the Coronavirus Disease 2019 (COVID-19) in the PRC, the Company’s operational and financial performance has been affected by the epidemic during the three months period ended March 31, 2020. The Company has been keeping continuous attention on the situation of the COVID-19, assessing and reacting actively to its impacts on the financial position and operating results of the Company as below: • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, our financial condition and results of operations were adversely affected. Since the restarting of our operation near the end of this March, our financial performances have been recovering continuously. • As the outbreak in China has been subsiding recently and the Chinese government responded with the package of support including tax-cut and financial assistance, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future operating results or near-and-long-term financial condition. Up to the date of this report, the assessment is still in progress. • Since we restored our operation near the end of this March after signs that COVID-19 was under control, we assessed that 1) COVID-19-related impacts on our cost of capital or access to capital and funding sources and our sources or uses of cash have been insignificant; 2) There is no material uncertainty about our ongoing ability to meet the covenants of our credit agreements; 3) No any material liquidity deficiency has been identified and we do not expect to disclose or incur any material COVID-19-related contingencies;4) COVID-19-related impacts on the assets on our balance sheet or our ability to timely account for those assets have been insignificant; and 5) The possibilities for COVID-19 to trigger any material impairments, increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on our financial statements are low. Looking forward, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on issues mentioned above. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, COVID-19-related circumstances such as remote work arrangements adversely affected our ability to maintain operations. Since the lifting of the national shutdown order near the end of this March, our operations including financial reporting systems, internal control over financial reporting and disclosure controls and procedures have already resumed. Currently we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future business continuity plans or whether material resource constraints in implementing these plans. Up to the date of this report, the assessment is still in progress. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, the demands for our products or services were severely affected. Since the restarting of our operation near the end of this March, the demands have been rebounding continuously. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, our supply chain or the methods used to distribute our products or services were severely affected. Since the lift of the national shutdown order near the end of this March, we expect all of our supply chains or the methods would return to normal gradually. |
VARIABLE INTEREST ENTITY
VARIABLE INTEREST ENTITY | 9 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
VARIABLE INTEREST ENTITY | NOTE 3 – VARIABLE INTEREST ENTITY On December 27, 2018, the Company entered into VIE agreements with two shareholders of Changchun Fangguan Electronics Technology Co., Ltd. (PRC) (“Fangguan Electronics”) to control 95.14% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics. In exchange for VIE agreements and additional capital contribution, the Company issued 15 million shares of common stock to two shareholders of Fangguan Electronics. The transaction was accounted for as a business combination using the acquisition method of accounting. The assets, liabilities and the operations of Fangguan Electronics subsequent to the acquisition date were included in the Company’s consolidated financial statements. Following unaudited pro forma combined statement of operations are based upon the historical financial statements of the Company and Fangguan Electronics for the nine months ended March 31, 2019 and are presented as if the acquisition had occurred at the beginning of the period. For the Nine Months Ended March 31, 2019 Fangguan Ionix Pro Forma Pro Forma Revenues $ 7,722,432 $ 7,841,437 $ (1,606,120 ) $ 13,957,749 Cost of revenues 6,602,451 6,618,015 (1,173,150 ) 12,047,316 Gross profit 1,119,981 1,223,422 (432,970 ) 1,910,433 Operating expenses 926,013 844,694 - 1,770,707 Income (loss) from operations 193,968 378,728 (432,970 ) 139,726 Other income (expense) 5,155 (34,412 ) - (29,257 ) Income tax provision 29,972 139,245 - 169,217 Net income (loss) $ 169,151 $ 205,071 $ (432,970 ) $ (58,748 ) Through power of attorney, equity interest purchase agreement, and equity interest pledge agreement, 95.14% of the voting rights of Fangguan Electronics’ shareholders have been transferred to the Company so that the Company has effective control over Fangguan Electronics and have the power to direct the activities of Fangguan Electronics that most significantly impact its economic performance. Through business operation agreement with the shareholders of VIE, the Company shall direct the business operations of Fangguan Electronics, including, but not limited to, adopting corporate policy regarding daily operations, financial management, and employment, and appointment of directors and senior officers. Through the exclusive technical support service agreement with the shareholders of VIE, the Company shall provide VIE with necessary technical support and assistance as the exclusive provider. And at the request of the Company, VIE shall pay the performance fee, the depreciation and the service fee to the Company. The performance fee shall be equivalent to 5% of the total revenue of VIE in any fiscal year. The depreciation amount on equipment shall be determined by accounting rules of China. The Company has the right to set and revise annually this service fee unilaterally with reference to the performance of VIE. The service fee that the Company is entitled to earn shall be the total business incomes of the whole year minus performance fee and equipment depreciation. This agreement allows the Company to collect 100% of the net profits of the VIE. Except for technical support, the Company did not provide, nor does it intend to provide, any financial or other support either explicitly or implicitly during the periods presented to its variable interest entity. If facts and circumstances change such that the conclusion to consolidate the VIE has changed, the Company shall disclose the primary factors that caused the change and the effect on the Company’s financial statements in the periods when the change occurs. There are no restrictions on the consolidated VIE’s assets and on the settlement of its liabilities and all carrying amounts of VIE’s assets and liabilities are consolidated with the Company’s financial statements. In addition, the net income of Fangguan Electronics after Fangguan Electronics became the VIE of the Company is free of restrictions for payment of dividends to the shareholders of the Company. Risks associated with the VIE structure The Company believes that the contractual arrangements with its VIE and respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: • revoke the business and operating licenses of the Company’s PRC subsidiary and its VIE; • discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and its VIE; • limit the Company’s business expansion in China by way of entering into contractual arrangements; • impose fines or other requirements with which the Company’s PRC subsidiary and its VIE may not be able to comply; • require the Company or the Company’s PRC subsidiary and its VIE to restructure the relevant ownership structure or operations; or • restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China. The Company’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over its VIE and its respective shareholders and it may lose the ability to receive economic benefits from its VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and its VIE. The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: Balance as of Balance as of Cash and cash equivalents $ 1,665,104 $ 361,849 Notes receivable 23,721 120,182 Accounts receivable - non-related parties 3,226,121 3,402,986 Inventory 2,432,916 2,916,515 Advances to suppliers - non-related parties 346,160 106,146 Prepaid expenses and other current assets 49,655 63,756 Total Current Assets 7,743,677 6,971,434 Property, plant and equipment, net 6,807,436 7,506,849 Intangible assets, net 1,430,449 1,496,399 Deferred tax assets 45,854 54,361 Total Assets $ 16,027,416 $ 16,029,043 Short-term bank loan $ 2,540,543 $ 2,618,296 Accounts payable 2,528,657 2,637,039 Advance from customers 31,346 32,372 Due to related parties 1,406,033 1,449,064 Accrued expenses and other current liabilities 89,803 148,287 Total Current Liabilities 6,596,382 6,885,058 Total Liabilities $ 6,596,382 $ 6,885,058 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: March 31, 2020 June 30, 2019 Raw materials $ 626,393 $ 471,189 Work-in-process 436,945 1,719,426 Finished goods 1,981,789 1,188,531 Total Inventories $ 3,045,127 $ 3,379,146 The Company recorded no inventory markdown for the three and nine months ended March 31, 2020 and 2019. |
OPERATING LEASE
OPERATING LEASE | 9 Months Ended |
Mar. 31, 2020 | |
Operating Lease, Lease Income [Abstract] | |
OPERATING LEASE | NOTE 5 - OPERATING LEASE For the nine months ended March 31, 2020, the Company had three real estate operating leases for office, warehouses, manufacturing facilities and two boat operating leases under the terms from four months to three years. Lisite Science Technology (Shenzhen) Co., Ltd ("Lisite Science") leases office and warehouse space from Shenzhen Keenest Technology Co., Ltd. (“Keenest”), a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. (See Note 9) Shenzhen Baileqi Electronic Technology Co., Ltd. ("Baileqi Electronic") leases office and warehouse space from Shenzhen Baileqi Science and Technology Co., Ltd. (“Shenzhen Baileqi S&T”), a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. (See Note 9) Dalian Shizhe New Energy Technology Co., Ltd. (“Shizhe New Energy”) leases a boat from a non-related party with monthly rent of approximately $7,200 (RMB50,000) for one year from March 1, 2019 to February 28, 2020. On July 1, 2019, Shizhe New Energy leased another boat from the same non-related party with monthly rent of approximately $7,200 (RMB50,000) for four months from July 10, 2019 to November 10, 2019. The Company made an accounting policy election not to recognize lease assets and liabilities for the leases listed above as all lease terms are 12 months or shorter. On November 1, 2019, the Company leased an office space located in Dalian, China as its principal executive office under non-cancelable operating lease agreement for three years, which expires through October 31, 2022. The monthly rent is approximately $715 (RMB5,000). The Company adopted the new standard to recognize lease asset and liability for this lease after examining the criteria established. For the nine months ended March 31, 2020, the Company made $99,604 of fixed cash payments related to operating leases. Non-cash activities involving ROU assets obtained in exchange for lease liabilities were $19,711 for the nine months ended March 31, 2020, including the impact of adopting the new leases standard. As of March 31, 2020, the Company recognized operating lease liabilities of $20,108, among which $7,646 is classified as current portion and $12,462 is classified as non-current portion, and Right-of-use assets of $20,825 based on the present value of the remaining minimum rental payments under the current leasing standards for existing operating leases. March 31, 2020 June 30, 2019 Operating lease Right-of-use assets $ 20,825 $ - Operating lease liabilities Current portion of long-term debt $ 7,646 $ - Long-term debt 12,462 - Total operating lease liabilities $ 20,108 $ - |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 9 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET The components of property, plant and equipment were as follows: March 31, 2020 June 30, 2019 Buildings $ 4,598,048 $ 4,661,535 Machinery and equipment 2,934,748 3,036,339 Office equipment 64,853 60,052 Automobiles 98,769 101,793 Subtotal 7,696,418 7,859,719 Less: Accumulated depreciation (883,508 ) (351,082 ) Property, plant and equipment, net $ 6,812,910 $ 7,508,637 Depreciation expense related to property, plant and equipment was $558,789 and $176,458 for the nine months ended March 31, 2020 and 2019, respectively. Depreciation expense related to property, plant and equipment was $174,381 and $176,458 for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, buildings were pledged as collateral for bank loans (See Note 8) . |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 7 – INTANGIBLE ASSETS, NET Intangible assets consist of the following: March 31, 2020 June 30, 2019 Land use right $ 1,441,316 $ 1,485,428 Computer software 25,019 25,785 Subtotal 1,466,335 1,511,213 Less: Accumulated amortization (35,886 ) (14,814 ) Intangible assets, net $ 1,430,449 $ 1,496,399 Amortization expense related to intangible assets was $21,836 and $7,714 for the nine months ended March 31, 2020 and 2019, respectively. Amortization expense related to intangible assets was $7,164 and $7,714 for the three months ended March 31, 2020 and 2019, respectively. Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31, 2020, land use right was pledged as collateral for bank loans (See Note 8). |
SHORT-TERM BANK LOAN
SHORT-TERM BANK LOAN | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK LOAN | NOTE 8 – SHORT-TERM BANK LOAN On November 12, 2018, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.5 million (RMB 18 million) for a year with annual interest rate of 5.22%. The borrowing was collateralized by the Company’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. The loan was renewed for one year from November 19, 2019 to November 18, 2020. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 9 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 9 - RELATED PARTY TRANSACTIONS AND BALANCES Purchase from related party During the nine months ended March 31, 2020, the Company purchased $1,642,532 and $37,495 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.7% and 1.3% respectively of the Company’s outstanding common stock as of March 31, 2020. The amounts of $1,642,532 and $37,495 were included in the cost of revenue for the nine months ended March 31, 2020. During the nine months ended March 31, 2019, the Company’s subsidiaries, Lisite Science and Baileqi Electronic, purchased $1,610,058 and $629,438 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.7% and 1.3% respectively of the Company’s outstanding common stock as of March 31, 2019. The amounts of $1,610,058 and $565,165 were included in the cost of revenue for the nine months ended March 31, 2019. During the three months ended March 31, 2020, the Company purchased $177,995 and $0 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.7% and 1.3% respectively of the Company’s outstanding common stock as of March 31, 2020. The amounts of $177,995 and $0 were included in the cost of revenue for the three months ended March 31, 2020. During the three months ended March 31, 2019, Lisite Science and Baileqi Electronic purchased $0 and $112,176 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.7% and 1.3% respectively of the Company’s outstanding common stock as of March 31, 2019. The amounts of $0 and $111,116 were included in the cost of revenue for the three months ended March 31, 2019. During the three and nine months ended March 31, 2019, the Company’s subsidiary, Changchun Fangguan Photoelectric Display Technology Co. Ltd ("Fangguan Photoelectric"), purchased $0 and $1,498,744 from Fangguan Electronics before Fangguan Electronics became a variable interest entity of the Company on December 27, 2018 (See Note 3). The president of Fangguan Electronics was the president and a member of the board of directors of Fangguan Photoelectric before he resigned and left Fangguan Photoelectric in October 2018. The amounts of $0 and $1,130,052 were included in the cost of revenue for the three and nine months ended March 31, 2019. Advances to suppliers - related parties Lisite Science made advances of $264,797 and $269,498 to Keenest for future purchases as of March 31, 2020 and June 30, 2019, respectively. Sales to related party and accounts receivable from related party During the nine months ended March 31, 2020 and 2019, Baileqi Electronic sold materials of $718,194 and $93,838 respectively to Shenzhen Baileqi S&T. During the three months ended March 31, 2020 and 2019, Baileqi Electronic sold materials of $73,802 and $0 respectively to Shenzhen Baileqi S&T. The trade-related balance receivable from Shenzhen Baileqi S&T was $420,906 and $340,026 as of March 31, 2020 and June 30, 2019, respectively. During the three and nine months ended March 31, 2019, Fangguan Photoelectric sold products of $0 and $22,059 to Fangguan Electronics before Fangguan Electronics became a variable interest entity of the Company on December 27, 2018 (See Note 3). Lease from related party Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. Due to related parties Due to related parties represents certain advances to the Company or its subsidiaries by related parties. The amounts are non-interest bearing, unsecured and due on demand. March 31, 2020 June 30, 2019 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 452,544 498,769 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 6,606 3,900 Baozhu Deng (5 ) - 5,303 Jialin Liang (6 ) 900,747 928,314 Xuemei Jiang (7 ) 505,286 520,750 Liang Zhang (8 ) - 625 Zijian Yang (9 ) - 1,869 Shikui Zhang (10 ) 21,732 - $ 2,032,723 $ 2,105,338 (1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. (2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc. (3) Xin Sui is a member of the board of directors of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T. (5) Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. (6) Jialin Liang is the president, CEO, and director of Fangguan Electronics. (7) Xuemei Jiang is the vice president and director of Fangguan Electronics. (8) Liang Zhang is the legal representative of Shizhe New Energy until May 2019. (9) Zijian Yang is the supervisor of Shizhe New Energy. (10) Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. During the nine months ended March 31, 2020, Yubao Liu was refunded $46,225 by Welly Surplus and Well Best after netting off his advances to Well Best. Baileqi Electronic refunded $5,303 to Baozhu Deng and Baozhen Deng advanced $2,706 to Baileqi Electronic. Shizhe New Energy refunded $625 and $1,869 to Liang Zhang and Zijian Yang respectively. Shikui Zhang advanced $21,732 to Shizhe New Energy. During the nine months ended March 31, 2019, Yubao Liu advanced $327,286 to Well Best. Baileqi Electronic borrowed $4,470 from Baozhu Deng. In addition, Baozhen Deng refunded $7,680 to Baileqi Electronic. Liang Zhang and Zijian Yang advanced $7,370 and $4,856 to Shizhe New Energy, respectively. Jialin Liang advanced $270,112 (RMB 1.8 million) to Fangguan Electronics. |
CONCENTRATION
CONCENTRATION | 9 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION | NOTE 10 – CONCENTRATION Major customers Customers who accounted for 10% or more of the Company’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: For the Nine Months Ended As of March 31, 2020 Revenue Percentage of Accounts Percentage of Customer A $ 2,047,553 12 % $ 24,960 1 % Customer B 2,009,817 11 % 376,704 10 % Total $ 4,057,370 23 % $ 401,664 11 % For the Nine Months Ended As of March 31, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 1,497,073 19 % $ - -% Customer B 2,603,631 33 % 205,266 7 % Total $ 4,100,704 52 % $ 205,266 7 % For the Three Months Ended As of March 31, 2020 Revenue Percentage of Accounts Percentage of Customer A $ 315,541 11 % $ 24,960 1 % Customer B 748,422 27 % 376,704 10 % Total $ 1,063,963 38 % $ 401,664 11 % For the Three Months Ended As of March 31, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 654,209 23 % $ 205,266 7 % Customer B 320,756 11 % 149,798 5 % Total $ 974,965 34 % $ 355,064 12 % Primarily all customers are located in the PRC. Major suppliers The suppliers who accounted for 10% or more of the Company’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows: For the Nine Months Ended As of March 31, 2020 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 1,642,532 12 % $ - - % Supplier B 2,582,034 19 % - - % Total $ 4,224,566 31 % $ - - % For the Nine Months Ended As of March 31, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 1,610,058 23 % $ - - % Supplier B - related party 1,498,744 21 % - - % Supplier C 1,165,459 16 % 79,965 2 % Total $ 4,274,261 60 % $ 79,965 2 % For the Three Months Ended As of March 31, 2020 Total Purchase Percentage of Accounts Percentage of Supplier A $ 413,924 18 % $ - - % Total $ 413,924 18 % $ - - % For the Three Months Ended March 31, 2019 As of March 31, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A $ 366,985 15 % $ 79,965 2 % Supplier B 231,080 9 % 347,047 10 % Total $ 598,065 24 % $ 427,012 12 % All suppliers of the Company are located in the PRC. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11 - INCOME TAXES The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate. United States of America The Company is registered in the State of Nevada and is subject to the tax laws of United States of America. For the three and nine months ended March 31, 2020 and 2019, there is no assessable income chargeable to profit tax in United States of America. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three-year period after the returns are filed. In unusual circumstances, the period may be longer. Tax returns for the years ended June 30, 2016 and after were still open to audit as of March 31, 2020. Hong Kong The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the three and nine months ended March 31, 2020 and 2019, there is no assessable income chargeable to profit tax in Hong Kong. The PRC The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three years from November 2016 to November 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2019 to 2021. The reconciliation of income tax expense at the U.S. statutory rate of 21% to the Company's effective tax rate is as follows: For the Nine Months Ended March 31, 2020 2019 Tax at U.S. statutory rate $ 76,062 $ 72,306 Tax rate difference between foreign operations and U.S. (88,730 ) 21,437 Change in valuation allowance 168,429 36,163 Permanent difference (4,274 ) 9,339 Effective tax $ 151,487 $ 139,245 The provisions for income taxes are summarized as follows: For the Nine Months Ended March 31, 2020 2019 Current $ 150,181 $ 154,977 Deferred 1,306 (15,732 ) Total $ 151,487 $ 139,245 As of March 31, 2020, the Company has approximately $1,959,000 net operating loss carryforwards available in the U.S., Hong Kong and China to reduce future taxable income which will begin to expire from 2035. Except for the net operating loss carryforwards of $209,542 from Fangguan Electronics and Shizhe New Energy incurred in the three months ended March 31, 2020, it is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entities which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets except for the deferred tax assets of Fangguan Electronics and Shizhe New Energy of $51,460 as of March 31, 2020. In accordance with the current tax laws in the U.S., the Company is subject to a corporate tax rate of 21% on its taxable income. No provision for taxes is made for U.S. income tax for the nine months ended March 31, 2020 and 2019 as it has no taxable income in the U.S. On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. Accordingly, the Company has re-measured its deferred tax assets on net operating loss carry forwards in the U.S at the lower enacted cooperated tax rate of 21%. However, this re-measurement 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 2017 Tax Act implemented a modified territorial tax system and imposing a tax on previously untaxed accumulated earnings and profits (“E&P”) of foreign subsidiaries (the “Toll Charge”). The Toll Charge is based in part on the amount of E&P held in cash and other specific assets as of December 31, 2017. The Toll Charge can be paid over an eight-year period, starting in 2018, and will not accrue interest. The 2017 Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company has determined that this one-time Toll Charge has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings at either of the two testing dates of November 2, 2017 and December 31, 2017. For purposes of the inclusion of GILTI, the Company has determined that the Company has no taxable off-shore earnings as of March 31, 2020 and 2019, respectively. Therefore, this is no accrual of US income tax for GILTI as of March 31, 2020. The extent of the Company’s operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 12 - CONVERTIBLE DEBT Convertible notes As of March 31, 2020, convertible notes payable consists of: Note Balance Debt discount Carrying Value Power Up Lending Group Ltd (1 ) $ 69,000 $ (16,031 ) $ 52,969 Firstfire Global Opportunities Fund LLC (2 ) 165,000 (73,934 ) 91,066 Power Up Lending Group Ltd (3 ) 53,000 (24,036 ) 28,964 Crown Bridge Partners (4 ) 55,000 (27,056 ) 27,944 Morningview Financial LLC (5 ) 165,000 (105,441 ) 59,559 BHP Capital NY (6 ) 102,900 (61,069 ) 41,831 Labrys Fund, LP (7 ) 146,850 (101,756 ) 45,094 Total $ 756,750 $ (409,323 ) $ 347,427 (1) On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. During the three months ended March 31, 2020, Power Up Lending Group Ltd elected to convert $34,000 of the principal amount of the convertible notes into 40,057 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $15,074. (See Note 13) (2) On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (3) On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. (4) On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (5) On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (6) On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. (7) On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. For the three and nine months ended March 31, 2020, the Company recorded the amortization of debt discount of $170,138 and $351,474 for the convertible notes issued, which were included in other income and expenses in the consolidated statement of comprehensive income (loss). Derivative liability Upon issuing of the convertible notes, the Company determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and accounted for as a derivative liability, with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the note, if any, is recorded immediately to interest expense at inception. The derivative liability in connection with the conversion feature of the convertible debt is the only financial liability measured at fair value on a recurring basis. The change of derivative liabilities is as follows: Issued during the nine months ended March 31, 2020 $ 555,696 Converted (22,242 ) Change in fair value recognized in operations (86,602 ) Balance at March 31, 2020 $ 446,852 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model at issuance date and March 31, 2020, using the following assumptions: Estimated dividends None Expected volatility 55.87% to 75.76% Risk free interest rate 0.70% to 2.08% Expected term 3.8 to 12 months Warrants In connection with the issuance of the $165,000 convertible promissory note on September 11, 2019, FirstFire Global Opportunities Fund, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.40, and the warrants can be exercised within 5 years which is before September 11, 2024. In connection with the issuance of the $55,000 convertible promissory note on November 12, 2019, Crown Bridge Partners, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 22,916 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 12, 2024. In connection with the issuance of the $165,000 convertible promissory note on November 20, 2019, Morningview Financial LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 20, 2024. In connection with the issuance of the $146,850 convertible promissory note on January 10, 2020, Labrys Fund, LP is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before January 10, 2025. The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions: Estimated dividends None Expected volatility 56.23% to 71.08% Risk free interest rate 1.73% to 1.92% Expected term 5 years Since the warrants can be exercised at $2.4 or $2.8 and are not liabilities, the face value of convertible notes was allocated between convertible note and warrant based on the fair values of the conversion debt and warrants. Accordingly, $147,492 was allocated to warrants and recorded in additional paid in capital account during the nine months ended March 31, 2020. The details of the outstanding warrants are as follows: Number of shares Weighted Average Exercise Price Remaining Contractual Term Outstanding at July 1, 2019 - $ - - Granted 229,166 2.68 5 Exercised - - - Cancelled or expired - - - Outstanding at March 31, 2020 229,166 $ 2.68 4.45 to 4.78 |
STOCKHOLDER'S EQUITY
STOCKHOLDER'S EQUITY | 9 Months Ended |
Mar. 31, 2020 | |
Stockholders' Equity: | |
STOCKHOLDER'S EQUITY | NOTE 13 – STOCKHOLDER’S EQUITY Stock Issued for Services The Company engaged Maxim Group LLC as its financial advisor to assist the Company in articulating its growth strategy to the investment community and up-list its securities to a National Securities Exchange. On February 10, 2020, the Company issued 150,000 shares of common stock valued at $262,500 to Maxim Group LLC as a part of its compensation. The share-based compensation is amortized over service period from December 16, 2019 to November 30, 2020 and the amortization expense was $79,891 for the three and nine months ended March 31, 2020. Stock Issued for Conversion of Convertible Debt On January 31, 2020, the Company issued a total of 12,775 shares of common stock to Power Up Lending Group Ltd for the conversion of debt in the principal amount of $12,000 according to the conditions of the convertible note dated as July 25, 2019. The conversion resulted in a loss on extinguishment of debt of $7,813. On February 18, 2020, the Company issued a total of 11,834 shares of common stock to Power Up Lending Group Ltd for the conversion of debt in the principal amount of $10,000 according to the conditions of the convertible note dated as July 25, 2019. The conversion resulted in a loss on extinguishment of debt of $2,901. On February 28, 2020, the Company issued a total of 15,448 shares of common stock to Power Up Lending Group Ltd for the conversion of debt in the principal amount of $12,000 according to the conditions of the convertible note dated as July 25, 2019. The conversion resulted in a loss on extinguishment of debt of $4,360. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 14 – SEGMENT INFORMATION The Company’s business is classified by management into three reportable business segments (smart energy, photoelectric display and service contracts) supported by a corporate group which conducts activities that are non-segment specific. The smart energy reportable segment derives revenue from the sales of portable power banks that is intended to be utilized as a power source for electronic devices such as the iphone, ipad, mp3/mp4 players, PSP gaming systems, and cameras. The photoelectric display reportable segment derives revenue from the sales of LCM and LCD screens manufactured for small devices such as video capable baby monitors, electronic devices such as tablets and cell phones, and for use in televisions or computer monitors. The service contracts reportable segment derives revenue from providing IT and solution-oriented services. Unallocated items comprise mainly corporate expenses and corporate assets. Although all of the Company’s revenue is generated from Mainland China, the Company is organizationally structured along business segments. The accounting policies of each operating segments are same and are described in Note 2, “Summary of Significant Accounting Policies.” The following tables provide the business segment information for the three and nine months ended March 31, 2020 and 2019. For the Nine Months Ended March 31, 2020 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 1,719,127 $ 15,236,570 $ 629,771 $ - $ 17,585,468 Cost of Revenues 1,642,532 12,786,020 421,642 - 14,850,194 Gross profit 76,595 2,450,550 208,129 - 2,735,274 Operating expenses 10,094 1,491,200 25,326 497,501 2,024,121 Income (loss) from operations 66,501 959,350 182,803 (497,501 ) 711,153 Net income (loss) $ 59,915 $ 779,838 $ 165,603 $ (794,644 ) $ 210,712 For the Nine Months Ended March 31, 2019 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 1,831,387 $ 5,749,983 $ 260,067 $ - $ 7,841,437 Cost of Revenues 1,630,188 4,789,880 197,947 - 6,618,015 Gross profit 201,199 960,103 62,120 - 1,223,422 Operating expenses 11,728 574,524 39,270 219,172 844,694 Income (loss) from operations 189,471 385,579 22,850 (219,172 ) 378,728 Net income (loss) $ 141,214 $ 261,823 $ 21,204 $ (219,170 ) $ 205,071 For the Three Months Ended March 31, 2020 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 181,033 $ 2,561,267 $ 9,870 $ - $ 2,752,170 Cost of Revenues 177,995 2,256,426 72,097 - 2,506,518 Gross profit (loss) 3,038 304,841 (62,227 ) - 245,652 Operating expenses 3,960 377,641 8,109 248,935 638,645 Loss from operations (922 ) (72,800 ) (70,336 ) (248,935 ) (392,993 ) Net income (loss) $ 347 $ (83,297 ) $ (64,462 ) $ (488,810 ) $ (636,222 ) For the Three Months Ended March 31, 2019 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ - $ 2,760,934 $ 133,868 $ - $ 2,894,802 Cost of Revenues - 2,184,085 87,295 - 2,271,380 Gross profit - 576,849 46,573 - 623,422 Total operating expenses 2,882 486,969 26,403 34,675 550,929 Income (loss) from operations (2,882 ) 89,880 20,170 (34,675 ) 72,493 Net income (loss) $ (2,866 ) $ 39,811 $ 18,792 $ (34,673 ) $ 21,064 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 - SUBSEQUENT EVENTS The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2020 and the results of operations and cash flows for the periods ended March 31, 2020 and 2019. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2020 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2020 or for any subsequent periods. The balance sheet at June 30, 2019 has been derived from the audited consolidated financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2019 as included in our Annual Report on Form 10-K as filed with the SEC on September 30, 2019. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation. Certain amounts have been reclassified to conform with current year presentation. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. |
Revenue recognition | Revenue recognition The Company adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings. The Company estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. Under these criteria, for revenues from sale of products, the Company generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. For service revenue, the Company recognizes revenue when services are performed and accepted by customers. The following table disaggregates our revenue by major source for the three and nine months ended March 31, 2020 and 2019, respectively: For the Nine Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 14,518,376 $ 5,634,086 Sales of LCM and LCD screens - Related parties 718,194 115,897 Sales of portable power banks 1,719,127 1,831,387 Service contracts 629,771 260,067 Total $ 17,585,468 $ 7,841,437 For the Three Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 2,487,465 $ 2,760,934 Sales of LCM and LCD screens - Related parties 73,802 - Sales of portable power banks 181,033 - Service contracts 9,870 133,868 Total $ 2,752,170 $ 2,894,802 All the operating entities of the Company are domiciled in the PRC. All the Company’s revenues are derived in the PRC during the three and nine months ended March 31, 2020 and 2019. |
Leases | Leases In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Company elected the package of practical expedients which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard has a material effect on our financial statements. The most significant effects are related to the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating leases. The Company has entered into an office lease arrangement in China with a lease term longer than 12 months under which we are the lessee. (See Note 5) |
Earnings Per Share | Earnings Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share or increase a net income per share. The reconciliation of our basic to diluted weighted average common shares follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Basic weighted average common shares 114,104,735 114,003,000 114,036,665 104,148,985 Effect of potentially dilutive securities - Warrants (191,495 ) - - - - Convertible notes - - - - Diluted weighted average common shares 113,913,240 114,003,000 114,036,665 104,148,985 During the nine months ended March 31, 2020, the Company had outstanding convertible notes and warrants which represent 899,753 shares of commons stock. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive. During the three months ended March 31, 2020, the Company had outstanding convertible notes and warrants which represent 842,313 shares of commons stock, among which 613,147 shares of common stock for convertible notes were excluded from the computation of diluted earnings per share since their effect would have been antidilutive. |
Foreign currencies translation | Foreign currencies translation The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: March 31, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0851 6.8747 Nine Months Ended March 31, 2020 2019 Items in statements of comprehensive income (loss) and cash flows 6.9799 6.6639 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 12). |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). |
Recent accounting pronouncements | Recent accounting pronouncements From time to time, new accounting pronouncements are issues by the Financial Accounting Standards Board or other standard bodies that may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented. |
Risk factor | Risk factor Due to the outbreak of the Coronavirus Disease 2019 (COVID-19) in the PRC, the Company’s operational and financial performance has been affected by the epidemic during the three months period ended March 31, 2020. The Company has been keeping continuous attention on the situation of the COVID-19, assessing and reacting actively to its impacts on the financial position and operating results of the Company as below: • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, our financial condition and results of operations were adversely affected. Since the restarting of our operation near the end of this March, our financial performances have been recovering continuously. • As the outbreak in China has been subsiding recently and the Chinese government responded with the package of support including tax-cut and financial assistance, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future operating results or near-and-long-term financial condition. Up to the date of this report, the assessment is still in progress. • Since we restored our operation near the end of this March after signs that COVID-19 was under control, we assessed that 1) COVID-19-related impacts on our cost of capital or access to capital and funding sources and our sources or uses of cash have been insignificant; 2) There is no material uncertainty about our ongoing ability to meet the covenants of our credit agreements; 3) No any material liquidity deficiency has been identified and we do not expect to disclose or incur any material COVID-19-related contingencies;4) COVID-19-related impacts on the assets on our balance sheet or our ability to timely account for those assets have been insignificant; and 5) The possibilities for COVID-19 to trigger any material impairments, increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on our financial statements are low. Looking forward, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on issues mentioned above. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, COVID-19-related circumstances such as remote work arrangements adversely affected our ability to maintain operations. Since the lifting of the national shutdown order near the end of this March, our operations including financial reporting systems, internal control over financial reporting and disclosure controls and procedures have already resumed. Currently we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future business continuity plans or whether material resource constraints in implementing these plans. Up to the date of this report, the assessment is still in progress. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, the demands for our products or services were severely affected. Since the restarting of our operation near the end of this March, the demands have been rebounding continuously. • During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from this early February to mid-March, our supply chain or the methods used to distribute our products or services were severely affected. Since the lift of the national shutdown order near the end of this March, we expect all of our supply chains or the methods would return to normal gradually. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of disaggregates our revenue by major source | The following table disaggregates our revenue by major source for the three and nine months ended March 31, 2020 and 2019, respectively: For the Nine Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 14,518,376 $ 5,634,086 Sales of LCM and LCD screens - Related parties 718,194 115,897 Sales of portable power banks 1,719,127 1,831,387 Service contracts 629,771 260,067 Total $ 17,585,468 $ 7,841,437 For the Three Months Ended March 31, 2020 2019 Sales of LCM and LCD screens - Non-related parties $ 2,487,465 $ 2,760,934 Sales of LCM and LCD screens - Related parties 73,802 - Sales of portable power banks 181,033 - Service contracts 9,870 133,868 Total $ 2,752,170 $ 2,894,802 |
Schedule of basic to diluted weighted average | The reconciliation of our basic to diluted weighted average common shares follows: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Basic weighted average common shares 114,104,735 114,003,000 114,036,665 104,148,985 Effect of potentially dilutive securities - Warrants (191,495 ) - - - - Convertible notes - - - - Diluted weighted average common shares 113,913,240 114,003,000 114,036,665 104,148,985 |
Schedule of exchange rates | The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: March 31, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0851 6.8747 Nine Months Ended March 31, 2020 2019 Items in statements of comprehensive income (loss) and cash flows 6.9799 6.6639 |
VARIABLE INTEREST ENTITY (Table
VARIABLE INTEREST ENTITY (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of acquisition pro forma | Following unaudited pro forma combined statement of operations are based upon the historical financial statements of the Company and Fangguan Electronics for the nine months ended March 31, 2019 and are presented as if the acquisition had occurred at the beginning of the period. For the Nine Months Ended March 31, 2019 Fangguan Ionix Pro Forma Pro Forma Revenues $ 7,722,432 $ 7,841,437 $ (1,606,120 ) $ 13,957,749 Cost of revenues 6,602,451 6,618,015 (1,173,150 ) 12,047,316 Gross profit 1,119,981 1,223,422 (432,970 ) 1,910,433 Operating expenses 926,013 844,694 - 1,770,707 Income (loss) from operations 193,968 378,728 (432,970 ) 139,726 Other income (expense) 5,155 (34,412 ) - (29,257 ) Income tax provision 29,972 139,245 - 169,217 Net income (loss) $ 169,151 $ 205,071 $ (432,970 ) $ (58,748 ) |
Schedule of consolidated financial statements | The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: Balance as of Balance as of Cash and cash equivalents $ 1,665,104 $ 361,849 Notes receivable 23,721 120,182 Accounts receivable - non-related parties 3,226,121 3,402,986 Inventory 2,432,916 2,916,515 Advances to suppliers - non-related parties 346,160 106,146 Prepaid expenses and other current assets 49,655 63,756 Total Current Assets 7,743,677 6,971,434 Property, plant and equipment, net 6,807,436 7,506,849 Intangible assets, net 1,430,449 1,496,399 Deferred tax assets 45,854 54,361 Total Assets $ 16,027,416 $ 16,029,043 Short-term bank loan $ 2,540,543 $ 2,618,296 Accounts payable 2,528,657 2,637,039 Advance from customers 31,346 32,372 Due to related parties 1,406,033 1,449,064 Accrued expenses and other current liabilities 89,803 148,287 Total Current Liabilities 6,596,382 6,885,058 Total Liabilities $ 6,596,382 $ 6,885,058 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: March 31, 2020 June 30, 2019 Raw materials $ 626,393 $ 471,189 Work-in-process 436,945 1,719,426 Finished goods 1,981,789 1,188,531 Total Inventories $ 3,045,127 $ 3,379,146 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Operating Lease, Lease Income [Abstract] | |
Schdeule of minimum rental payments under the current leasing standards | As of March 31, 2020, the Company recognized operating lease liabilities of $20,108, among which $7,646 is classified as current portion and $12,462 is classified as non-current portion, and Right-of-use assets of $20,825 based on the present value of the remaining minimum rental payments under the current leasing standards for existing operating leases. March 31, 2020 June 30, 2019 Operating lease Right-of-use assets $ 20,825 $ - Operating lease liabilities Current portion of long-term debt $ 7,646 $ - Long-term debt 12,462 - Total operating lease liabilities $ 20,108 $ - |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | The components of property, plant and equipment were as follows: March 31, 2020 June 30, 2019 Buildings $ 4,598,048 $ 4,661,535 Machinery and equipment 2,934,748 3,036,339 Office equipment 64,853 60,052 Automobiles 98,769 101,793 Subtotal 7,696,418 7,859,719 Less: Accumulated depreciation (883,508 ) (351,082 ) Property, plant and equipment, net $ 6,812,910 $ 7,508,637 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Intangible assets consist of the following: March 31, 2020 June 30, 2019 Land use right $ 1,441,316 $ 1,485,428 Computer software 25,019 25,785 Subtotal 1,466,335 1,511,213 Less: Accumulated amortization (35,886 ) (14,814 ) Intangible assets, net $ 1,430,449 $ 1,496,399 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of unsecured and due to related parties | The amounts are non-interest bearing, unsecured and due on demand. March 31, 2020 June 30, 2019 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 452,544 498,769 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 6,606 3,900 Baozhu Deng (5 ) - 5,303 Jialin Liang (6 ) 900,747 928,314 Xuemei Jiang (7 ) 505,286 520,750 Liang Zhang (8 ) - 625 Zijian Yang (9 ) - 1,869 Shikui Zhang (10 ) 21,732 - $ 2,032,723 $ 2,105,338 (1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. (2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc. (3) Xin Sui is a member of the board of directors of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T. (5) Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. (6) Jialin Liang is the president, CEO, and director of Fangguan Electronics. (7) Xuemei Jiang is the vice president and director of Fangguan Electronics. (8) Liang Zhang is the legal representative of Shizhe New Energy until May 2019. (9) Zijian Yang is the supervisor of Shizhe New Energy. (10) Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. |
CONCENTRATION (Tables)
CONCENTRATION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Schedule of concentration risk | Customers who accounted for 10% or more of the Company’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: For the Nine Months Ended As of March 31, 2020 Revenue Percentage of Accounts Percentage of Customer A $ 2,047,553 12 % $ 24,960 1 % Customer B 2,009,817 11 % 376,704 10 % Total $ 4,057,370 23 % $ 401,664 11 % For the Nine Months Ended As of March 31, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 1,497,073 19 % $ - -% Customer B 2,603,631 33 % 205,266 7 % Total $ 4,100,704 52 % $ 205,266 7 % For the Three Months Ended As of March 31, 2020 Revenue Percentage of Accounts Percentage of Customer A $ 315,541 11 % $ 24,960 1 % Customer B 748,422 27 % 376,704 10 % Total $ 1,063,963 38 % $ 401,664 11 % For the Three Months Ended As of March 31, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 654,209 23 % $ 205,266 7 % Customer B 320,756 11 % 149,798 5 % Total $ 974,965 34 % $ 355,064 12 % |
Schedule of major suppliers | The suppliers who accounted for 10% or more of the Company’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows: For the Nine Months Ended As of March 31, 2020 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 1,642,532 12 % $ - - % Supplier B 2,582,034 19 % - - % Total $ 4,224,566 31 % $ - - % For the Nine Months Ended As of March 31, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 1,610,058 23 % $ - - % Supplier B - related party 1,498,744 21 % - - % Supplier C 1,165,459 16 % 79,965 2 % Total $ 4,274,261 60 % $ 79,965 2 % For the Three Months Ended As of March 31, 2020 Total Purchase Percentage of Accounts Percentage of Supplier A $ 413,924 18 % $ - - % Total $ 413,924 18 % $ - - % For the Three Months Ended March 31, 2019 As of March 31, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A $ 366,985 15 % $ 79,965 2 % Supplier B 231,080 9 % 347,047 10 % Total $ 598,065 24 % $ 427,012 12 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax expense | The reconciliation of income tax expense at the U.S. statutory rate of 21% to the Company's effective tax rate is as follows: For the Nine Months Ended March 31, 2020 2019 Tax at U.S. statutory rate $ 76,062 $ 72,306 Tax rate difference between foreign operations and U.S. (88,730 ) 21,437 Change in valuation allowance 168,429 36,163 Permanent difference (4,274 ) 9,339 Effective tax $ 151,487 $ 139,245 |
Schedule of provisions for income taxes | The provisions for income taxes are summarized as follows: For the Nine Months Ended March 31, 2020 2019 Current $ 150,181 $ 154,977 Deferred 1,306 (15,732 ) Total $ 151,487 $ 139,245 |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of convertible notes payable | As of March 31, 2020, convertible notes payable consists of: Note Balance Debt discount Carrying Value Power Up Lending Group Ltd (1 ) $ 69,000 $ (16,031 ) $ 52,969 Firstfire Global Opportunities Fund LLC (2 ) 165,000 (73,934 ) 91,066 Power Up Lending Group Ltd (3 ) 53,000 (24,036 ) 28,964 Crown Bridge Partners (4 ) 55,000 (27,056 ) 27,944 Morningview Financial LLC (5 ) 165,000 (105,441 ) 59,559 BHP Capital NY (6 ) 102,900 (61,069 ) 41,831 Labrys Fund, LP (7 ) 146,850 (101,756 ) 45,094 Total $ 756,750 $ (409,323 ) $ 347,427 (1) On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. During the three months ended March 31, 2020, Power Up Lending Group Ltd elected to convert $34,000 of the principal amount of the convertible notes into 40,057 shares of the Company?s common stock. The conversion resulted in a loss on extinguishment of debt of $15,074. (See Note 13) (2) On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (3) On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. (4) On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (5) On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. (6) On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. (7) On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. |
Schedule of change of derivative liabilities | The change of derivative liabilities is as follows: Issued during the nine months ended March 31, 2020 $ 555,696 Converted (22,242 ) Change in fair value recognized in operations (86,602 ) Balance at March 31, 2020 $ 446,852 |
Schedule for estimated fair value of the derivative instruments using the Black-Scholes option pricing model | The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model at issuance date and March 31, 2020, using the following assumptions: Estimated dividends None Expected volatility 55.87% to 75.76% Risk free interest rate 0.70% to 2.08% Expected term 3.8 to 12 months |
Schedule for estimated fair value of the warrants using the Black-Scholes option pricing model | The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions: Estimated dividends None Expected volatility 56.23% to 71.08% Risk free interest rate 1.73% to 1.92% Expected term 5 years |
Schedule of outstanding warrants | The details of the outstanding warrants are as follows: Number of shares Weighted Average Exercise Price Remaining Contractual Term Outstanding at July 1, 2019 - $ - - Granted 229,166 2.68 5 Exercised - - - Cancelled or expired - - - Outstanding at March 31, 2020 229,166 $ 2.68 4.45 to 4.78 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schdeule of business segment information | The following tables provide the business segment information for the three and nine months ended March 31, 2020 and 2019. For the Nine Months Ended March 31, 2020 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 1,719,127 $ 15,236,570 $ 629,771 $ - $ 17,585,468 Cost of Revenues 1,642,532 12,786,020 421,642 - 14,850,194 Gross profit 76,595 2,450,550 208,129 - 2,735,274 Operating expenses 10,094 1,491,200 25,326 497,501 2,024,121 Income (loss) from operations 66,501 959,350 182,803 (497,501 ) 711,153 Net income (loss) $ 59,915 $ 779,838 $ 165,603 $ (794,644 ) $ 210,712 For the Nine Months Ended March 31, 2019 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 1,831,387 $ 5,749,983 $ 260,067 $ - $ 7,841,437 Cost of Revenues 1,630,188 4,789,880 197,947 - 6,618,015 Gross profit 201,199 960,103 62,120 - 1,223,422 Operating expenses 11,728 574,524 39,270 219,172 844,694 Income (loss) from operations 189,471 385,579 22,850 (219,172 ) 378,728 Net income (loss) $ 141,214 $ 261,823 $ 21,204 $ (219,170 ) $ 205,071 For the Three Months Ended March 31, 2020 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ 181,033 $ 2,561,267 $ 9,870 $ - $ 2,752,170 Cost of Revenues 177,995 2,256,426 72,097 - 2,506,518 Gross profit (loss) 3,038 304,841 (62,227 ) - 245,652 Operating expenses 3,960 377,641 8,109 248,935 638,645 Loss from operations (922 ) (72,800 ) (70,336 ) (248,935 ) (392,993 ) Net income (loss) $ 347 $ (83,297 ) $ (64,462 ) $ (488,810 ) $ (636,222 ) For the Three Months Ended March 31, 2019 Smart Photoelectric display Service contracts Unallocated items Total Revenues $ - $ 2,760,934 $ 133,868 $ - $ 2,894,802 Cost of Revenues - 2,184,085 87,295 - 2,271,380 Gross profit - 576,849 46,573 - 623,422 Total operating expenses 2,882 486,969 26,403 34,675 550,929 Income (loss) from operations (2,882 ) 89,880 20,170 (34,675 ) 72,493 Net income (loss) $ (2,866 ) $ 39,811 $ 18,792 $ (34,673 ) $ 21,064 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Total Revenues | $ 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 |
Non-Related Parties [Member] | ||||
Total Revenues | 2,487,465 | 2,760,934 | 14,518,376 | 5,634,086 |
Related Parties [Member] | ||||
Total Revenues | 73,802 | 718,194 | 115,897 | |
Portable Power Banks [Member] | ||||
Total Revenues | 181,033 | 1,719,127 | 1,831,387 | |
Service Contracts [Member] | ||||
Total Revenues | $ 9,870 | $ 133,868 | $ 629,771 | $ 260,067 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||||
Weighted average number of common shares outstanding - Basic (in shares) | 114,104,735 | 114,003,000 | 114,036,665 | 104,148,985 |
Effect of potentially dilutive securities | ||||
Warrants | (191,495) | |||
Convertible notes | ||||
Diluted weighted average common shares | 113,913,240 | 114,003,000 | 114,036,665 | 104,148,985 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 |
Income and Cash Flow [Member] | |||
Exchange rate | 6.9799 | 6.6639 | |
Balance Sheet [Member] | |||
Exchange rate | 7.0851 | 6.8747 |
BASIS OF PRESENTATION AND SUM_7
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | Dec. 27, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Feb. 29, 2016 |
Lease term | 12 months | |||||||||
Common Stock [Member] | ||||||||||
Outstanding, shares | 114,193,057 | 114,003,000 | 114,003,000 | 114,003,000 | 114,003,000 | 114,003,000 | 99,003,000 | 99,003,000 | ||
Convertible notes | $ 613,147 | |||||||||
Minimum [Member] | ||||||||||
Lease term | 12 months | |||||||||
Share Purchase Agreement [Member] | Fangguan Electronics Two Share Holders [Member] | ||||||||||
Percentage of voting interests acquired | 95.14% | |||||||||
Percentage of recieve net income or net loss | 100.00% |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 | ||||
Cost of revenues | 2,506,518 | 2,271,380 | 14,850,194 | 6,618,015 | ||||
Gross profit | 245,652 | 623,422 | 2,735,274 | 1,223,422 | ||||
Operating expenses | 638,645 | 550,929 | 2,024,121 | 844,694 | ||||
Income (loss) from operations | (392,993) | 72,493 | 711,153 | 378,728 | ||||
Other income (expense) | (273,191) | (34,412) | (348,954) | (34,412) | ||||
Income tax provision | (29,962) | 17,017 | 151,487 | 139,245 | ||||
Net income (loss) | $ (636,222) | $ 135,658 | $ 711,276 | 21,064 | $ 6,854 | $ 177,153 | $ 210,712 | 205,071 |
Variable Interest Entities [Member] | ||||||||
Revenues | 13,957,749 | |||||||
Cost of revenues | 12,047,316 | |||||||
Gross profit | 1,910,433 | |||||||
Operating expenses | 1,770,707 | |||||||
Income (loss) from operations | 139,726 | |||||||
Other income (expense) | (29,257) | |||||||
Income tax provision | 169,217 | |||||||
Net income (loss) | (58,748) | |||||||
Pro Forma [Member] | ||||||||
Revenues | (1,606,120) | |||||||
Cost of revenues | (1,173,150) | |||||||
Gross profit | (432,970) | |||||||
Operating expenses | ||||||||
Income (loss) from operations | (432,970) | |||||||
Other income (expense) | ||||||||
Income tax provision | ||||||||
Net income (loss) | (432,970) | |||||||
Fangguan Electronics [Member] | ||||||||
Revenues | 7,722,432 | |||||||
Cost of revenues | 6,602,451 | |||||||
Gross profit | 1,119,981 | |||||||
Operating expenses | 926,013 | |||||||
Income (loss) from operations | 193,968 | |||||||
Other income (expense) | 5,155 | |||||||
Income tax provision | 29,972 | |||||||
Net income (loss) | 169,151 | |||||||
Fangguan Electronics [Member] | Variable Interest Entities [Member] | ||||||||
Revenues | $ 0 | $ 22,059 |
VARIABLE INTEREST ENTITY (Det_2
VARIABLE INTEREST ENTITY (Details 1) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 |
Cash and cash equivalents | $ 1,834,763 | $ 509,615 | $ 494,820 | $ 111,462 |
Notes receivable | 23,721 | 120,182 | ||
Accounts receivable - non-related parties | 3,494,207 | 3,639,030 | ||
Inventory | 3,045,127 | 3,379,146 | ||
Advances to suppliers - non-related parties | 354,820 | 129,423 | ||
Prepaid expenses and other current assets | 593,122 | 269,495 | ||
Total Current Assets (Note 3 at VIE) | 10,031,463 | 8,656,415 | ||
Property, plant and equipment, net | 6,812,910 | 7,508,637 | ||
Intangible assets, net | 1,430,449 | 1,496,399 | ||
Deferred tax assets | 51,460 | 54,361 | ||
Total Assets | 18,347,107 | 17,715,812 | ||
Short-term bank loan | 2,540,543 | 2,618,296 | ||
Accounts payable | 2,569,420 | 2,732,327 | ||
Advance from customers | 59,165 | 114,158 | ||
Due to related parties | 2,032,723 | 2,105,338 | ||
Accrued expenses and other current liabilities | 199,015 | 368,319 | ||
Total Current Liabilities | 8,202,791 | 7,938,438 | ||
Total Liabilities | 8,215,253 | 7,938,438 | ||
Variable Interest Entities [Member] | ||||
Cash and cash equivalents | 1,665,104 | 361,849 | ||
Notes receivable | 23,721 | 120,182 | ||
Accounts receivable - non-related parties | 3,226,121 | 3,402,986 | ||
Inventory | 2,432,916 | 2,916,515 | ||
Advances to suppliers - non-related parties | 346,160 | 106,146 | ||
Prepaid expenses and other current assets | 49,655 | 63,756 | ||
Total Current Assets (Note 3 at VIE) | 7,743,677 | 6,971,434 | ||
Property, plant and equipment, net | 6,807,436 | 7,506,849 | ||
Intangible assets, net | 1,430,449 | 1,496,399 | ||
Deferred tax assets | 45,854 | 54,361 | ||
Total Assets | 16,027,416 | 16,029,043 | ||
Short-term bank loan | 2,540,543 | 2,618,296 | ||
Accounts payable | 2,528,657 | 2,637,039 | ||
Advance from customers | 31,346 | 32,372 | ||
Due to related parties | 1,406,033 | 1,449,064 | ||
Accrued expenses and other current liabilities | 89,803 | 148,287 | ||
Total Current Liabilities | 6,596,382 | 6,885,058 | ||
Total Liabilities | $ 6,596,382 | $ 6,885,058 |
VARIABLE INTEREST ENTITY (Det_3
VARIABLE INTEREST ENTITY (Details Narrative) - Share Purchase Agreement [Member] - Changchun Fangguan Electronics Technology Co Ltd Two Share Holders [Member] | Dec. 27, 2018shares |
Percentage of voting interests acquired | 95.14% |
Number of shares issue | 15,000,000 |
Description of ownership right acquire | The ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronis. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 626,393 | $ 471,189 |
Work-in-process | 436,945 | 1,719,426 |
Finished goods | 1,981,789 | 1,188,531 |
Total Inventories | $ 3,045,127 | $ 3,379,146 |
OPERATING LEASE (Details)
OPERATING LEASE (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Leases [Abstract] | ||
Operating lease Right-of-use assets | $ 20,825 | |
Operating lease liabilities | ||
Current portion of long-term debt | 7,646 | |
Long-term debt | 12,462 | |
Total operating lease liabilities | $ 20,108 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | Nov. 01, 2019 | Jul. 02, 2019 | Mar. 31, 2020 | Jun. 30, 2019 |
Lease term | 12 months | |||
Cash payments related to operating leases | $ 99,604 | |||
Lease liabilities | 19,711 | |||
ROU for lease liabilities | 20,825 | |||
Operating lease liabilities | 20,108 | |||
Operating lease liability current | 7,646 | |||
Operating lease liability non current | 12,462 | |||
Office [Member] | Non Cancelable Operating Lease Agreement [Member] | China [Member] | ||||
Monthly rent | $ 715 | |||
Lease term | 5 years | |||
Expires date | Oct. 31, 2022 | |||
Office [Member] | RMB [Member] | Non Cancelable Operating Lease Agreement [Member] | China [Member] | ||||
Monthly rent | $ 5,000 | |||
Shenzhen Keenest Technology Co. Ltd. [Member] | Office And Warehouse [Member] | ||||
Monthly rent | $ 1,500 | |||
Lease term | 1 year | |||
Shenzhen Keenest Technology Co. Ltd. [Member] | Office And Warehouse [Member] | RMB [Member] | ||||
Monthly rent | $ 10,000 | |||
Shenzhen Baileqi Science And Technology Co Ltd [Member] | Office And Warehouse [Member] | ||||
Monthly rent | $ 2,500 | |||
Lease term | 1 year | |||
Shenzhen Baileqi Science And Technology Co Ltd [Member] | Office And Warehouse [Member] | RMB [Member] | ||||
Monthly rent | $ 17,525 | |||
Dalian Shizhe New Energy Technology Co Ltd [Member] | Boat [Member] | ||||
Monthly rent | $ 7,200 | $ 7,200 | ||
Lease term | 4 months | 1 year | ||
Dalian Shizhe New Energy Technology Co Ltd [Member] | Boat [Member] | RMB [Member] | ||||
Monthly rent | $ 50,000 | $ 50,000 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Subtotal | $ 7,696,418 | $ 7,859,719 |
Less: Accumulated depreciation | (883,508) | (351,082) |
Property, plant and equipment, net | 6,812,910 | 7,508,637 |
Building [Member] | ||
Subtotal | 4,598,048 | 4,661,535 |
Machinery and Equipment [Member] | ||
Subtotal | 2,934,748 | 3,036,339 |
Office Equipment [Member] | ||
Subtotal | 64,853 | 60,052 |
Automobiles [Member] | ||
Subtotal | $ 98,769 | $ 101,793 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 174,381 | $ 176,458 | $ 558,789 | $ 176,458 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 |
Subtotal | $ 1,466,335 | $ 1,511,213 |
Less: Accumulated amortization | (35,886) | (14,814) |
Intangible assets, net | 1,430,449 | 1,496,399 |
Land Use Rights [Member] | ||
Subtotal | 1,441,316 | 1,485,428 |
Computer Software [Member] | ||
Subtotal | $ 25,019 | $ 25,785 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 7,164 | $ 7,714 | $ 21,836 | $ 7,714 |
SHORT-TERM BANK LOAN (Details N
SHORT-TERM BANK LOAN (Details Narrative) - Changchun Fangguan Electronic Science and Technology Co., Ltd [Member] - Short Term Loan Agreement [Member] - Industrial Bank [Member] | Nov. 12, 2018USD ($) |
Borrowed amount | $ 2,500,000 |
Interest rate | 5.22% |
Debt maturity date | Dec. 31, 2020 |
Loan renewe | 1 year |
RMB | |
Borrowed amount | $ 18,000,000 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 | |||
Due to related parties | $ 2,032,723 | $ 2,105,338 | |||
Ben Wong [Member] | |||||
Due to related parties | [1] | 143,792 | 143,792 | ||
Yubao Liu [Member] | |||||
Due to related parties | [2] | 452,544 | 498,769 | ||
Xin Sui [Member] | |||||
Due to related parties | [3] | 2,016 | 2,016 | ||
Baozhen Deng [Member] | |||||
Due to related parties | [4] | 6,606 | 3,900 | ||
Baozhu Deng [Member] | |||||
Due to related parties | [5] | 5,303 | |||
Jialin Liang [Member] | |||||
Due to related parties | [6] | 900,747 | 928,314 | ||
Xuemei Jiang [Member] | |||||
Due to related parties | [7] | 505,286 | 520,750 | ||
Liang Zhang [Member] | |||||
Due to related parties | [8] | 625 | |||
Zijian Yang [Member] | |||||
Due to related parties | [9] | 1,869 | |||
Shikui Zhang [Member] | |||||
Due to related parties | $ 21,732 | [10] | [8] | ||
[1] | Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. | ||||
[2] | Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology. Inc. | ||||
[3] | Xin Sui is a member of the board of directors of Welly Surplus. | ||||
[4] | Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company's outstanding common stock, and the owner of Shenzhen Baileqi S&T. | ||||
[5] | Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. | ||||
[6] | Jialin Liang is the president, CEO, and director of Fangguan Electronics. | ||||
[7] | Xuemei Jiang is the vice president and director of Fangguan Electronics. | ||||
[8] | Liang Zhang is the legal representative of Shizhe New Energy until May 2019. | ||||
[9] | Zijian Yang is the supervisor of Shizhe New Energy. | ||||
[10] | Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | Jul. 20, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 177,995 | |||||
Cost of revenue - purchases related party | 177,995 | |||||
Revenue from related party | 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 | ||
Accounts receivable - related parties | $ 420,906 | $ 420,906 | $ 340,026 | |||
Fangguan Electronics [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related party | 7,722,432 | |||||
Variable Interest Entities [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related party | 13,957,749 | |||||
Variable Interest Entities [Member] | Fangguan Electronics [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related party | $ 0 | $ 22,059 | ||||
Ownership [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 1.70% | 1.70% | 1.70% | 1.70% | ||
Keenest And Shenzhen Baileqi S&T [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 0 | $ 1,642,532 | $ 1,610,058 | |||
Cost of revenue - purchases related party | $ 0 | $ 1,642,532 | $ 1,610,058 | |||
Keenest And Shenzhen Baileqi S&T [Member] | Ownership [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 1.70% | 1.70% | 1.70% | 1.70% | ||
Keenest And Shenzhen Baileqi S And T [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 112,176 | $ 37,495 | ||||
Cost of revenue - purchases related party | $ 111,116 | $ 37,495 | ||||
Keenest And Shenzhen Baileqi S And T [Member] | Ownership [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 1.30% | 1.30% | 1.30% | 1.30% | ||
Keenest And Shenzhen Baileqi S And T [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 629,438 | |||||
Cost of revenue - purchases related party | $ 565,165 | |||||
Keenest And Shenzhen Baileqi S And T [Member] | Ownership [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 1.30% | 1.30% | 1.30% | 1.30% | ||
Lisite Science and Baileqi Electronic [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 0 | |||||
Cost of revenue - purchases related party | $ 0 | |||||
Lisite Science and Baileqi Electronic [Member] | Ownership [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 2.00% | 2.00% | ||||
Changchun Fangguan Electronics Technology Co., Ltd. [Member] | Changchun Fangguan Photoelectric Display Technology Co., Ltd. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases from related party | $ 0 | $ 1,498,744 | ||||
Cost of revenue - purchases related party | 0 | 1,130,052 | ||||
Keenest [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | $ 264,797 | 269,498 | ||||
Shenzhen Baileqi S&T [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related party | $ 73,802 | $ 0 | 718,194 | $ 93,838 | ||
Accounts receivable - related parties | $ 420,906 | 420,906 | $ 340,026 | |||
Lisite Science [Member] | Office and Warehouse Space [Member] | Subsequent Event [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Annual rent | $ 1,500 | |||||
Lease renewal term | One year | |||||
Lisite Science [Member] | Office and Warehouse Space [Member] | RMB | Subsequent Event [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Annual rent | $ 10,000 | |||||
Baileqi Electronic [Member] | Baozhu Deng [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 2,706 | |||||
Payment to releted party | $ 5,303 | |||||
Baileqi Electronic [Member] | Office and Warehouse Space [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Lease term | The lease period is from June 1, 2019 to May 31, 2020 | |||||
Monthly rent | $ 2,500 | |||||
Baileqi Electronic [Member] | Office and Warehouse Space [Member] | RMB | ||||||
Related Party Transaction [Line Items] | ||||||
Monthly rent | $ 17,525 | |||||
Baozhen Deng [Member] | Ownership [Member] | Shenzhen Baileqi Science And Technology Co Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 1.30% | 1.30% | ||||
Yubao Liu [Member] | Well Best [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payment to releted party | $ 46,225 | |||||
Yubao Liu [Member] | Well Best [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 327,286 | |||||
Liang Zhang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 625 | |||||
Zijian Yang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 1,869 | |||||
Shikui Zhang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 21,732 | |||||
Baozhu Deng [Member] | Baileqi Electronic [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party borrowed | 4,470 | |||||
Payment to releted party | 7,680 | |||||
Shizhe New Energy [Member] | Liang Zhang [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 7,370 | |||||
Shizhe New Energy [Member] | Zijian Yang [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advances from related parties | 4,856 | |||||
Jialin Liang [Member] | Fangguan Electronics [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Annual rent | 270,112 | |||||
Jialin Liang [Member] | Fangguan Electronics [Member] | RMB | ||||||
Related Party Transaction [Line Items] | ||||||
Annual rent | $ 1,800,000 |
CONCENTRATION (Details)
CONCENTRATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 |
Concentration risk percentage | 10.00% | |||
Revenue [Member] | ||||
Revenues | $ 1,063,963 | $ 974,965 | $ 4,057,370 | $ 4,100,704 |
Concentration risk percentage | 38.00% | 34.00% | 23.00% | 52.00% |
Revenue [Member] | Customer A [Member] | ||||
Revenues | $ 315,541 | $ 654,209 | $ 2,047,553 | $ 1,497,073 |
Concentration risk percentage | 11.00% | 23.00% | 12.00% | 19.00% |
Revenue [Member] | Customer B [Member] | ||||
Revenues | $ 748,422 | $ 320,756 | $ 2,009,817 | $ 2,603,631 |
Concentration risk percentage | 27.00% | 11.00% | 11.00% | 33.00% |
Accounts Receivable [Member] | ||||
Revenues | $ 401,664 | $ 355,064 | $ 401,664 | $ 205,266 |
Concentration risk percentage | 11.00% | 12.00% | 11.00% | 7.00% |
Accounts Receivable [Member] | Customer A [Member] | ||||
Revenues | $ 24,960 | $ 205,266 | $ 24,960 | |
Concentration risk percentage | 1.00% | 7.00% | 1.00% | |
Accounts Receivable [Member] | Customer B [Member] | ||||
Revenues | $ 376,704 | $ 149,798 | $ 376,704 | $ 205,266 |
Concentration risk percentage | 10.00% | 5.00% | 10.00% | 7.00% |
Purchases [Member] | ||||
Revenues | $ 413,924 | $ 598,065 | $ 4,224,566 | $ 4,274,261 |
Concentration risk percentage | 18.00% | 24.00% | 31.00% | 60.00% |
Purchases [Member] | Supplier A [Member] | ||||
Revenues | $ 413,924 | $ 366,985 | $ 1,642,532 | $ 1,610,058 |
Concentration risk percentage | 18.00% | 15.00% | 12.00% | 23.00% |
Purchases [Member] | Supplier B [Member] | ||||
Revenues | $ 231,080 | $ 2,582,034 | $ 1,498,744 | |
Concentration risk percentage | 9.00% | 19.00% | 21.00% | |
Purchases [Member] | Supplier C [Member] | ||||
Revenues | $ 1,165,459 | |||
Concentration risk percentage | 16.00% | |||
Accounts Payable [Member] | ||||
Revenues | $ 427,012 | $ 79,965 | ||
Concentration risk percentage | 12.00% | 2.00% | ||
Accounts Payable [Member] | Supplier A [Member] | ||||
Revenues | $ 79,965 | |||
Concentration risk percentage | 2.00% | |||
Accounts Payable [Member] | Supplier B [Member] | ||||
Revenues | $ 347,047 | |||
Concentration risk percentage | 10.00% | |||
Accounts Payable [Member] | Supplier C [Member] | ||||
Revenues | $ 79,965 | |||
Concentration risk percentage | 2.00% |
CONCENTRATION (Details Narrativ
CONCENTRATION (Details Narrative) | 9 Months Ended |
Mar. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration risk percentage | 10.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Tax at U.S. statutory rate | $ 76,062 | $ 72,306 | ||
Tax rate difference between foreign operations and U.S. | (88,730) | 21,437 | ||
Change in valuation allowance | 168,429 | 36,163 | ||
Permanent difference | (4,274) | 9,339 | ||
Effective tax | $ (29,962) | $ 17,017 | $ 151,487 | $ 139,245 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 150,181 | $ 154,977 | ||
Deferred | 1,306 | (15,732) | ||
Total | $ (29,962) | $ 17,017 | $ 151,487 | $ 139,245 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Mar. 22, 2017 | Mar. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2019 |
Previously corporate tax rate | 34.00% | |||
Corporate tax rate | 21.00% | |||
Valuation allowancealuation allowance tax rate | 100.00% | |||
Description of territorial tax | Earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. | |||
Operating loss carryforwards | $ 1,959,000 | |||
Expiration year | 2035 | |||
Description of income tax rate on foreign subsidiary | The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three years from November 2016 to November 2019 and is taxed at a unified income tax rate of 15%. | |||
Deferred tax assets | $ 51,460 | $ 54,361 | ||
Fangguan Electronics [Member] | ||||
Operating loss carryforwards | 209,542 | |||
Deferred tax assets | $ 51,460 | |||
CHINA | ||||
Foreign income tax rate | 25.00% | |||
Unified income tax rate | 15.00% | |||
Renewed unified income tax rate | 15.00% | |||
Inland Revenue, Hong Kong [Member] | ||||
Foreign income tax rate | 16.50% | 16.50% |
CONVERTIBLE DEBT (Details)
CONVERTIBLE DEBT (Details) - USD ($) | Mar. 31, 2020 | Jan. 10, 2020 | ||
Carrying Value | $ 347,427 | |||
Power Up Lending Group Ltd [Member] | ||||
Note Balance | 34,000 | |||
Convertible Debt [Member] | ||||
Note Balance | 756,750 | |||
Debt discount | (409,323) | |||
Carrying Value | 347,427 | |||
Convertible Debt [Member] | Power Up Lending Group Ltd [Member] | ||||
Note Balance | [1] | 69,000 | ||
Debt discount | [1] | (16,031) | ||
Carrying Value | [1] | 52,969 | ||
Convertible Debt [Member] | Firstfire Global Opportunities Fund LLC [Member] | ||||
Note Balance | [2] | 165,000 | ||
Debt discount | [2] | (73,934) | ||
Carrying Value | [2] | 91,066 | ||
Convertible Debt [Member] | Power Up Lending Group Ltd [Member] | ||||
Note Balance | [3] | 53,000 | ||
Debt discount | [3] | (24,036) | ||
Carrying Value | [3] | 28,964 | ||
Convertible Debt [Member] | Crown Bridge Partners [Member] | ||||
Note Balance | [4] | 55,000 | ||
Debt discount | [4] | (27,056) | ||
Carrying Value | [4] | 27,944 | ||
Convertible Debt [Member] | Morningview Financial LLC [Member] | ||||
Note Balance | [5] | 165,000 | ||
Debt discount | [5] | (105,441) | ||
Carrying Value | [5] | 59,559 | ||
Convertible Debt [Member] | BHP Capital NY [Member] | ||||
Note Balance | [6] | 102,900 | ||
Debt discount | [6] | (61,069) | ||
Carrying Value | [6] | 41,831 | ||
Convertible Debt [Member] | LABRYS FUND, LP [Member] | ||||
Note Balance | 146,850 | [7] | $ 146,850 | |
Debt discount | [7] | (101,756) | ||
Carrying Value | [7] | $ 45,094 | ||
[1] | On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Companys common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. During the three months ended March 31, 2020, Power Up Lending Group Ltd elected to convert $34,000 of the principal amount of the convertible notes into 40,057 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $15,074. (See Note 13) | |||
[2] | On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the ''OID''), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||
[3] | On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date | |||
[4] | On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company's common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||
[5] | On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||
[6] | On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company's common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | |||
[7] | On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. |
CONVERTIBLE DEBT (Details 1)
CONVERTIBLE DEBT (Details 1) | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Debt Disclosure [Abstract] | |
Issued during the nine months ended March 31, 2020 | $ 555,696 |
Converted | (22,242) |
Change in fair value recognized in operations | (86,602) |
Balance at March 31, 2020 | $ 446,852 |
CONVERTIBLE DEBT (Details 2)
CONVERTIBLE DEBT (Details 2) | 9 Months Ended |
Mar. 31, 2020 | |
Estimated dividends | |
Minimum [Member] | |
Expected volatility | 55.87% |
Risk free interest rate | 0.70% |
Expected term | 1 year |
Maximum [Member] | |
Expected volatility | 75.76% |
Risk free interest rate | 2.08% |
Expected term | 3 years 9 months 18 days |
CONVERTIBLE DEBT (Details 3)
CONVERTIBLE DEBT (Details 3) | 9 Months Ended |
Mar. 31, 2020 | |
Estimated dividends | |
Minimum [Member] | |
Expected volatility | 55.87% |
Risk free interest rate | 0.70% |
Expected term | 1 year |
Maximum [Member] | |
Expected volatility | 75.76% |
Risk free interest rate | 2.08% |
Expected term | 3 years 9 months 18 days |
Warrant [Member] | |
Estimated dividends | |
Expected term | 5 years |
Warrant [Member] | Minimum [Member] | |
Expected volatility | 56.23% |
Risk free interest rate | 1.73% |
Warrant [Member] | Maximum [Member] | |
Expected volatility | 71.08% |
Risk free interest rate | 1.92% |
CONVERTIBLE DEBT (Details 4)
CONVERTIBLE DEBT (Details 4) - Warrant [Member] | 9 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of shares | |
Outstanding at beginning | shares | |
Granted | shares | 229,166 |
Exercised | shares | |
Cancelled or expired | shares | |
Outstanding at ending | shares | 229,166 |
Weighted Average Exercise Price | |
Outstanding at beginning | |
Granted | 2.68 |
Exercised | |
Cancelled or expired | |
Outstanding at ending | $ 2.68 |
Remaining Contractual Term (years) | |
Granted | 5 years |
Minimum [Member] | |
Weighted Average Exercise Price | |
Outstanding at ending | $ 2.4 |
Remaining Contractual Term (years) | |
Outstanding at ending | 4 years 5 months 12 days |
Maximum [Member] | |
Weighted Average Exercise Price | |
Outstanding at ending | $ 2.8 |
Remaining Contractual Term (years) | |
Outstanding at ending | 4 years 9 months 11 days |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | Feb. 28, 2020 | Feb. 18, 2020 | Jan. 31, 2020 | Jan. 13, 2020 | Jan. 10, 2020 | Jan. 10, 2020 | Dec. 13, 2019 | Dec. 03, 2019 | Nov. 22, 2019 | Nov. 20, 2019 | Nov. 15, 2019 | Nov. 12, 2019 | Nov. 12, 2019 | Nov. 04, 2019 | Sep. 18, 2019 | Sep. 11, 2019 | Aug. 01, 2019 | Jul. 25, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |||
Loss on extinguishment of debt | $ (15,074) | $ (15,074) | ||||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||
Exercise price | $ 2.68 | $ 2.68 | ||||||||||||||||||||||||
Warrant outstanding | 229,166 | 229,166 | ||||||||||||||||||||||||
Warrant [Member] | Minimum [Member] | ||||||||||||||||||||||||||
Exercise price | $ 2.4 | $ 2.4 | ||||||||||||||||||||||||
Warrant [Member] | Maximum [Member] | ||||||||||||||||||||||||||
Exercise price | $ 2.8 | $ 2.8 | ||||||||||||||||||||||||
Additional Paid-in Capital [Member] | Warrant [Member] | ||||||||||||||||||||||||||
Warrant outstanding | 147,492 | 147,492 | ||||||||||||||||||||||||
Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | $ 756,750 | $ 756,750 | ||||||||||||||||||||||||
Amortization of debt discount | 170,138 | 351,474 | ||||||||||||||||||||||||
Power Up Lending Group Ltd [Member] | ||||||||||||||||||||||||||
Principal amount | 34,000 | 34,000 | ||||||||||||||||||||||||
Loss on extinguishment of debt | $ 15,074 | |||||||||||||||||||||||||
Number of common stock issues (in shares) | 40,057 | |||||||||||||||||||||||||
Power Up Lending Group Ltd [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [1] | $ 69,000 | 69,000 | |||||||||||||||||||||||
Loss on extinguishment of debt | $ 4,360 | $ 2,901 | $ 7,813 | |||||||||||||||||||||||
Crown Bridge Partners [Member] | Convertible Promissory Note [Member] | Warrant [Member] | ||||||||||||||||||||||||||
Principal amount | $ 55,000 | $ 55,000 | ||||||||||||||||||||||||
Number of common stock issues (in shares) | 22,916 | |||||||||||||||||||||||||
Exercise price | $ 2.80 | $ 2.80 | ||||||||||||||||||||||||
Warrant maturity terms | 5 years | 5 years | ||||||||||||||||||||||||
Warrant maturity date | Nov. 12, 2024 | Nov. 12, 2024 | ||||||||||||||||||||||||
Crown Bridge Partners [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [2] | $ 55,000 | $ 55,000 | |||||||||||||||||||||||
Firstfire Global Opportunities Fund LLC [Member] | Convertible Promissory Note [Member] | ||||||||||||||||||||||||||
Principal amount | $ 165,000 | $ 165,000 | ||||||||||||||||||||||||
Firstfire Global Opportunities Fund LLC [Member] | Convertible Promissory Note [Member] | Warrant [Member] | ||||||||||||||||||||||||||
Number of common stock issues (in shares) | 68,750 | |||||||||||||||||||||||||
Exercise price | $ 2.40 | $ 2.40 | ||||||||||||||||||||||||
Warrant maturity terms | 5 years | 5 years | ||||||||||||||||||||||||
Warrant maturity date | Sep. 11, 2024 | Sep. 11, 2024 | ||||||||||||||||||||||||
Firstfire Global Opportunities Fund LLC [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [3] | $ 165,000 | $ 165,000 | |||||||||||||||||||||||
Power Up Lending Group Ltd [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [4] | 53,000 | 53,000 | |||||||||||||||||||||||
Morningview Financial LLC [Member] | Convertible Promissory Note [Member] | Warrant [Member] | ||||||||||||||||||||||||||
Principal amount | $ 165,000 | $ 165,000 | ||||||||||||||||||||||||
Number of common stock issues (in shares) | 68,750 | |||||||||||||||||||||||||
Exercise price | $ 2.80 | $ 2.80 | ||||||||||||||||||||||||
Warrant maturity terms | 5 years | 5 years | ||||||||||||||||||||||||
Warrant maturity date | Nov. 20, 2024 | Nov. 20, 2024 | ||||||||||||||||||||||||
Morningview Financial LLC [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [5] | $ 165,000 | $ 165,000 | |||||||||||||||||||||||
BHP Capital NY [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | [6] | 102,900 | 102,900 | |||||||||||||||||||||||
LABRYS FUND, LP [Member] | Convertible Debt [Member] | ||||||||||||||||||||||||||
Principal amount | $ 146,850 | $ 146,850 | $ 146,850 | [7] | $ 146,850 | [7] | ||||||||||||||||||||
Number of common stock issues (in shares) | 68,750 | |||||||||||||||||||||||||
Exercise price | $ 2.80 | $ 2.80 | ||||||||||||||||||||||||
Warrant maturity terms | 5 years | 5 years | ||||||||||||||||||||||||
Warrant maturity date | Jan. 10, 2025 | Jan. 10, 2025 | ||||||||||||||||||||||||
Share Purchase Agreement [Member] | Power Up Lending Group Ltd [Member] | Convertible Note Due on July 25, 2019 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 103,000 | |||||||||||||||||||||||||
Proceeds from issuance of debt | $ 94,840 | |||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||
Maturity date | Jul. 25, 2020 | |||||||||||||||||||||||||
Description of conversion feature | The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | Crown Bridge Partners [Member] | ||||||||||||||||||||||||||
Principal amount | $ 165,000 | $ 165,000 | ||||||||||||||||||||||||
Proceeds from issuance of debt | 156,750 | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | Crown Bridge Partners [Member] | Convertible Note Due on November 12, 2020 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 55,000 | $ 55,000 | ||||||||||||||||||||||||
Proceeds from issuance of debt | $ 50,750 | |||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | ||||||||||||||||||||||||
Maturity date | Nov. 12, 2020 | |||||||||||||||||||||||||
Description of conversion feature | The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
Original issue discount | $ 2,750 | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | Firstfire Global Opportunities Fund LLC [Member] | Convertible Note [Member] | ||||||||||||||||||||||||||
Principal amount | $ 165,000 | |||||||||||||||||||||||||
Proceeds from issuance of debt | $ 143,500 | |||||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||||||
Description of conversion feature | Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
Original issue discount | $ 15,000 | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | Power Up Lending Group Ltd [Member] | Convertible Note Due on November 4, 2020 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 53,000 | |||||||||||||||||||||||||
Proceeds from issuance of debt | $ 47,350 | |||||||||||||||||||||||||
Interest rate | 6.00% | |||||||||||||||||||||||||
Maturity date | Nov. 4, 2020 | |||||||||||||||||||||||||
Description of conversion feature | The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | Morningview Financial LLC [Member] | Convertible Note Due on November 20, 2020 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 165,000 | |||||||||||||||||||||||||
Proceeds from issuance of debt | $ 153,250 | |||||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||||||
Maturity date | Nov. 20, 2020 | |||||||||||||||||||||||||
Description of conversion feature | Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
Original issue discount | $ 8,250 | |||||||||||||||||||||||||
Share Purchase Agreement [Member] | BHP Capital NY [Member] | Convertible Note Due on December 3, 2020 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 102,900 | |||||||||||||||||||||||||
Proceeds from issuance of debt | $ 95,500 | |||||||||||||||||||||||||
Interest rate | 5.00% | |||||||||||||||||||||||||
Maturity date | Dec. 3, 2020 | |||||||||||||||||||||||||
Description of conversion feature | The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | |||||||||||||||||||||||||
Original issue discount | $ 4,900 | |||||||||||||||||||||||||
Convertible Promissory Note [Member] | LABRYS FUND, LP [Member] | Convertible Note Due on January 10, 2021 [Member] | ||||||||||||||||||||||||||
Principal amount | $ 146,850 | $ 146,850 | ||||||||||||||||||||||||
Proceeds from issuance of debt | $ 137,000 | |||||||||||||||||||||||||
Interest rate | 5.00% | 5.00% | ||||||||||||||||||||||||
Maturity date | Jan. 10, 2021 | |||||||||||||||||||||||||
Description of conversion feature | The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
Original issue discount | $ 7,350 | |||||||||||||||||||||||||
[1] | On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Companys common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. During the three months ended March 31, 2020, Power Up Lending Group Ltd elected to convert $34,000 of the principal amount of the convertible notes into 40,057 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $15,074. (See Note 13) | |||||||||||||||||||||||||
[2] | On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company's common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
[3] | On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the ''OID''), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
[4] | On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date | |||||||||||||||||||||||||
[5] | On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | |||||||||||||||||||||||||
[6] | On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company's common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | |||||||||||||||||||||||||
[7] | On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. |
STOCKHOLDER'S EQUITY (Details N
STOCKHOLDER'S EQUITY (Details Narrative) - USD ($) | Feb. 28, 2020 | Feb. 18, 2020 | Feb. 10, 2020 | Jan. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 |
Amortization expense | $ 7,164 | $ 7,714 | $ 21,836 | $ 7,714 | ||||
Loss on extinguishment of debt | (15,074) | (15,074) | ||||||
Power Up Lending Group Ltd [Member] | ||||||||
Loss on extinguishment of debt | 15,074 | |||||||
Power Up Lending Group Ltd [Member] | Convertible Debt [Member] | ||||||||
Stock issued for conversion of convertible debt | 15,448 | 11,834 | 12,775 | |||||
Value for stock issued for conversion of convertible debt | $ 12,000 | $ 10,000 | $ 12,000 | |||||
Loss on extinguishment of debt | $ 4,360 | $ 2,901 | $ 7,813 | |||||
Maxim Group LLC [Member] | ||||||||
Number of shares issued for services | 150,000 | |||||||
Value of shares issued for services | $ 262,500 | |||||||
Amortization expense | $ 79,891 | $ 79,891 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | $ 2,752,170 | $ 2,894,802 | $ 17,585,468 | $ 7,841,437 | ||||
Cost of Revenues | 2,506,518 | 2,271,380 | 14,850,194 | 6,618,015 | ||||
Gross profit | 245,652 | 623,422 | 2,735,274 | 1,223,422 | ||||
Operating expenses | 638,645 | 550,929 | 2,024,121 | 844,694 | ||||
Income (loss) from operations | (392,993) | 72,493 | 711,153 | 378,728 | ||||
Net income (loss) | (636,222) | $ 135,658 | $ 711,276 | 21,064 | $ 6,854 | $ 177,153 | 210,712 | 205,071 |
Smart Energy [Member] | ||||||||
Revenues | 181,033 | 1,719,127 | 1,831,387 | |||||
Cost of Revenues | 177,995 | 1,642,532 | 1,630,188 | |||||
Gross profit | 3,038 | 76,595 | 201,199 | |||||
Operating expenses | 3,960 | 2,882 | 10,094 | 11,728 | ||||
Income (loss) from operations | (922) | (2,882) | 66,501 | 189,471 | ||||
Net income (loss) | 347 | (2,866) | 59,915 | 141,214 | ||||
Photoelectric Display [Member] | ||||||||
Revenues | 2,561,267 | 2,760,934 | 15,236,570 | 5,749,983 | ||||
Cost of Revenues | 2,256,426 | 2,184,085 | 12,786,020 | 4,789,880 | ||||
Gross profit | 304,841 | 576,849 | 2,450,550 | 960,103 | ||||
Operating expenses | 377,641 | 486,969 | 1,491,200 | 574,524 | ||||
Income (loss) from operations | (72,800) | 89,880 | 959,350 | 385,579 | ||||
Net income (loss) | (83,297) | 39,811 | 779,838 | 261,823 | ||||
Service Contracts [Member] | ||||||||
Revenues | 9,870 | 133,868 | 629,771 | 260,067 | ||||
Cost of Revenues | 72,097 | 87,295 | 421,642 | 197,947 | ||||
Gross profit | (62,227) | 46,573 | 208,129 | 62,120 | ||||
Operating expenses | 8,109 | 26,403 | 25,326 | 39,270 | ||||
Income (loss) from operations | (70,336) | 20,170 | 182,803 | 22,850 | ||||
Net income (loss) | (64,462) | 18,792 | 165,603 | 21,204 | ||||
Unallocated Items [Member] | ||||||||
Revenues | ||||||||
Cost of Revenues | ||||||||
Gross profit | ||||||||
Operating expenses | 248,935 | 34,675 | 497,501 | 219,172 | ||||
Income (loss) from operations | (248,935) | (34,675) | (497,501) | (219,172) | ||||
Net income (loss) | $ (488,810) | $ (34,673) | $ (794,644) | $ (219,170) |
SEGMENT INFORMATION (Details Na
SEGMENT INFORMATION (Details Narrative) | 9 Months Ended |
Mar. 31, 2020Number | |
Segment Reporting [Abstract] | |
Number of reporting business segment | 3 |