Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2022 | May 16, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 000-54485 | |
Entity Registrant Name | IONIX TECHNOLOGY, INC. | |
Entity Central Index Key | 0001528308 | |
Entity Tax Identification Number | 45-0713638 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | Rm 608, Block B, Times Square No.50 People Road | |
Entity Address, Address Line Two | Zhongshan District | |
Entity Address, Address Line Three | Dalian City | |
Entity Address, City or Town | Liaoning Province | |
Entity Address, Country | CN | |
Entity Address, Postal Zip Code | 116001 | |
City Area Code | 86 | |
Local Phone Number | 411-88079120 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | IINX | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 176,989,156 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 1,141,244 | $ 731,819 |
Notes receivable | 196,091 | 76,743 |
Accounts receivable | 4,340,702 | 4,936,974 |
Inventory | 5,052,260 | 5,454,371 |
Advances to suppliers - non-related parties | 468,797 | 782,481 |
- related parties | 441,538 | 434,200 |
Prepaid expenses and other current assets | 688,462 | 478,830 |
Total Current Assets | 12,329,094 | 12,895,418 |
Property, plant and equipment, net | 6,528,852 | 6,792,315 |
Intangible assets, net | 1,510,225 | 1,508,583 |
Long-term prepaid expenses | 529,926 | 491,015 |
Deferred tax assets | 50,988 | 50,105 |
Total Assets | 20,949,085 | 21,737,436 |
Current Liabilities: | ||
Short-term bank loan | 1,575,250 | 904,832 |
Accounts payable | 2,448,506 | 4,942,881 |
Advance from customers | 446,855 | 334,101 |
Promissory notes payable, net of debt discount and loan cost | 999,477 | 533,316 |
Due to related parties | 2,650,812 | 3,053,818 |
Accrued expenses and other current liabilities | 230,375 | 117,450 |
Total Current Liabilities | 8,351,275 | 9,886,398 |
Total Liabilities | 8,351,275 | 9,886,398 |
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, 395,000,000 shares authorized, 176,989,156 and 164,041,058 shares issued and outstanding as of March 31, 2022 and June 30, 2021 respectively | 17,699 | 16,404 |
Additional paid in capital | 12,379,248 | 10,786,792 |
Retained earnings (accumulated deficit) | (1,220,150) | (144,409) |
Accumulated other comprehensive income (loss) | 978,552 | 749,790 |
Total Stockholders' Equity attributable to the Company | 12,155,849 | 11,409,077 |
Noncontrolling interest | 441,961 | 441,961 |
Total Stockholders’ Equity | 12,597,810 | 11,851,038 |
Total Liabilities and Stockholders’ Equity | $ 20,949,085 | $ 21,737,436 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Jun. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Outstanding | 5,000,000 | 5,000,000 |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 395,000,000 | 395,000,000 |
Common Stock, Shares, Issued | 176,989,156 | 164,041,058 |
Common Stock, Shares, Outstanding | 176,989,156 | 164,041,058 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||||
Revenues (See Note 2 and Note 10 for related party amounts) | $ 2,058,179 | $ 3,160,746 | $ 10,551,867 | $ 9,102,094 |
Cost of Revenues (See Note 10 for related party amounts) | 1,788,635 | 2,802,497 | 9,528,438 | 8,071,941 |
Gross profit | 269,544 | 358,249 | 1,023,429 | 1,030,153 |
Operating expenses | ||||
Selling, general and administrative expense | 457,213 | 327,372 | 1,253,659 | 985,273 |
Research and development expense | 121,396 | 147,871 | 519,015 | 425,111 |
Total operating expenses | 578,609 | 475,243 | 1,772,674 | 1,410,384 |
Income (loss) from operations | (309,065) | (116,994) | (749,245) | (380,231) |
Other income (expense): | ||||
Interest expense, net of interest income | (180,726) | (42,441) | (443,052) | (262,174) |
Subsidy income | 37,139 | 45,790 | 184,397 | 59,876 |
Change in fair value of derivative liability | (647,632) | |||
Gain (loss) on extinguishment of debt | 15,000 | 202,588 | ||
Total other income (expense) | (128,587) | 3,349 | (258,655) | (647,342) |
Income (loss) before income tax expense (benefit) | (437,652) | (113,645) | (1,007,900) | (1,027,573) |
Income tax expense (benefit) | 145 | 1,949 | 67,841 | (23,555) |
Net income (loss) | (437,797) | (115,594) | (1,075,741) | (1,004,018) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustment | 58,337 | (29,945) | 228,762 | 865,206 |
Comprehensive loss | (379,460) | (145,539) | (846,979) | (138,812) |
Less: Comprehensive income attributable to noncontrolling interest | 19,632 | 19,632 | ||
Comprehensive loss attributable to common stockholders of the Company | $ (379,460) | $ (165,171) | $ (846,979) | $ (158,444) |
Earnings (Loss) Per Share - Basic | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - Basic | 139,844,550 | 161,911,380 | 142,392,564 | 134,708,314 |
Earnings (Loss) Per Share - Diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - Diluted | 137,978,627 | 161,911,380 | 140,883,445 | 134,708,314 |
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] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Jun. 30, 2020 | $ 500 | $ 11,417 | $ 9,243,557 | $ 262,198 | $ (357,011) | $ 441,961 | $ 9,602,622 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2020 | 5,000,000 | 114,174,265 | |||||
Net loss | (532,306) | (532,306) | |||||
Foreign currency translation adjustment | 430,281 | 430,281 | |||||
Stock warrants issued with convertible notes | |||||||
Issuance of common stock for advisory services | |||||||
Issuance of common stock for conversion of convertible notes | $ 233 | 390,768 | 391,001 | ||||
Issuance of common stock for conversion of convertible notes (in shares) | 2,326,652 | ||||||
Ending balance, value at Sep. 30, 2020 | $ 500 | $ 11,650 | 9,634,325 | (270,108) | 73,270 | 441,961 | 9,891,598 |
Shares, Outstanding, Ending Balance at Sep. 30, 2020 | 5,000,000 | 116,500,917 | |||||
Beginning balance, value at Jun. 30, 2020 | $ 500 | $ 11,417 | 9,243,557 | 262,198 | (357,011) | 441,961 | 9,602,622 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2020 | 5,000,000 | 114,174,265 | |||||
Net loss | (1,004,018) | ||||||
Foreign currency translation adjustment | 865,206 | ||||||
Ending balance, value at Mar. 31, 2021 | $ 500 | $ 16,404 | 10,786,792 | (741,820) | 488,563 | 461,593 | 11,012,032 |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 177,172,058 | ||||||
Beginning balance, value at Sep. 30, 2020 | $ 500 | $ 11,650 | 9,634,325 | (270,108) | 73,270 | 441,961 | 9,891,598 |
Shares, Outstanding, Beginning Balance at Sep. 30, 2020 | 5,000,000 | 116,500,917 | |||||
Issuance of common stock for commitment shares for promissory note | $ 157 | 67,903 | 68,060 | ||||
Issuance of common stock for commitment shares for promissory note (in shares) | 1,567,164 | ||||||
Net loss | (356,118) | (356,118) | |||||
Foreign currency translation adjustment | 464,870 | 464,870 | |||||
Issuance of common stock for commitment shares for private placement | $ 2,887 | 430,113 | 433,000 | ||||
Issuance Of Common Stock For Private Placement In Shares | 28,869,999 | ||||||
Issuance of common stock for conversion of convertible notes (in shares) | 7,143,978 | ||||||
Issuance of common stock for conversion of convertible notes | $ 714 | 455,429 | 456,143 | ||||
Issuance of common stock for exercise of warrants | $ 150 | 66,878 | 67,028 | ||||
Issuance of common stock for exercise of warrants (in shares) | 1,500,000 | ||||||
Settlement of warrants in relation to extinguishment of debt | (59,163) | (59,163) | |||||
Ending balance, value at Dec. 31, 2020 | $ 500 | $ 15,558 | 10,595,485 | (626,226) | 538,140 | 441,961 | 10,965,418 |
Shares, Outstanding, Ending Balance at Dec. 31, 2020 | 5,000,000 | 155,582,058 | |||||
Issuance of common stock for commitment shares for promissory note | $ 146 | 87,007 | 87,153 | ||||
Issuance of common stock for commitment shares for promissory note (in shares) | 14,590,000 | ||||||
Net loss | (115,594) | (115,594) | |||||
Foreign currency translation adjustment | (49,577) | 19,632 | (29,945) | ||||
Issuance of common stock for commitment shares for private placement | $ 700 | 104,300 | 105,000 | ||||
Issuance Of Common Stock For Private Placement In Shares | 7,000,000 | ||||||
Ending balance, value at Mar. 31, 2021 | 500 | $ 16,404 | 10,786,792 | (741,820) | 488,563 | 461,593 | 11,012,032 |
Shares, Outstanding, Ending Balance at Mar. 31, 2021 | 177,172,058 | ||||||
Beginning balance, value at Jun. 30, 2021 | $ 500 | $ 16,404 | 10,786,792 | (144,409) | 749,790 | 441,961 | 11,851,038 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2021 | 5,000,000 | 164,041,058 | |||||
Issuance of common stock for commitment shares for promissory note | $ 134 | 50,867 | 51,001 | ||||
Issuance of common stock for commitment shares for promissory note (in shares) | 1,342,000 | ||||||
Net loss | (540,199) | (540,199) | |||||
Foreign currency translation adjustment | (49,923) | (49,923) | |||||
Ending balance, value at Sep. 30, 2021 | $ 500 | $ 16,538 | 10,837,659 | (684,608) | 699,867 | 441,961 | 11,311,917 |
Shares, Outstanding, Ending Balance at Sep. 30, 2021 | 5,000,000 | 165,383,058 | |||||
Beginning balance, value at Jun. 30, 2021 | $ 500 | $ 16,404 | 10,786,792 | (144,409) | 749,790 | 441,961 | 11,851,038 |
Shares, Outstanding, Beginning Balance at Jun. 30, 2021 | 5,000,000 | 164,041,058 | |||||
Net loss | (1,075,741) | ||||||
Foreign currency translation adjustment | 228,762 | ||||||
Ending balance, value at Mar. 31, 2022 | $ 500 | $ 17,699 | 12,379,248 | (1,220,150) | 978,552 | 441,961 | 12,597,810 |
Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 5,000,000 | 176,989,156 | |||||
Beginning balance, value at Sep. 30, 2021 | $ 500 | $ 16,538 | 10,837,659 | (684,608) | 699,867 | 441,961 | 11,311,917 |
Shares, Outstanding, Beginning Balance at Sep. 30, 2021 | 5,000,000 | 165,383,058 | |||||
Issuance of common stock for commitment shares for promissory note | $ 219 | 52,906 | 53,125 | ||||
Issuance of common stock for commitment shares for promissory note (in shares) | 2,187,500 | ||||||
Net loss | (97,745) | (97,745) | |||||
Foreign currency translation adjustment | 220,348 | 220,348 | |||||
Issuance of common stock for commitment shares for private placement | $ 658 | 394,142 | 394,800 | ||||
Issuance Of Common Stock For Private Placement In Shares | 6,580,000 | ||||||
Return of common stocks by the holder of promissory note | $ (112) | 112 | |||||
Return of common stocks by the holder of promissory note (in shares) | (1,119,402) | ||||||
Registered Capital Increase of Fangguan Electronics | 941,074 | 941,074 | |||||
Ending balance, value at Dec. 31, 2021 | $ 500 | $ 17,303 | 12,225,893 | (782,353) | 920,215 | 441,961 | 12,823,519 |
Shares, Outstanding, Ending Balance at Dec. 31, 2021 | 5,000,000 | 173,031,156 | |||||
Issuance of common stock for commitment shares for promissory note | $ 500 | 153,250 | 153,750 | ||||
Issuance of common stock for commitment shares for promissory note (in shares) | 5,000,000 | ||||||
Net loss | (437,797) | (437,797) | |||||
Foreign currency translation adjustment | 58,337 | 58,337 | |||||
Return of common stocks by the holder of promissory note | $ (104) | 104 | |||||
Return of common stocks by the holder of promissory note (in shares) | (1,042,000) | ||||||
Ending balance, value at Mar. 31, 2022 | $ 500 | $ 17,699 | $ 12,379,248 | $ (1,220,150) | $ 978,552 | $ 441,961 | $ 12,597,810 |
Shares, Outstanding, Ending Balance at Mar. 31, 2022 | 5,000,000 | 176,989,156 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (1,075,741) | $ (1,004,018) |
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 556,509 | 512,375 |
Deferred taxes | (25,908) | |
Change in fair value of derivative liability | 647,632 | |
Loss (gain) on extinguishment of debt | (202,588) | |
Non-cash interest | 376,952 | 177,205 |
Changes in operating assets and liabilities: | ||
Accounts receivable - non-related parties | 677,321 | 262,424 |
Inventory | 493,898 | (652,185) |
Advances to suppliers - non-related parties | 324,613 | (326,742) |
Advances to suppliers - related parties | (40,072) | |
Prepaid expenses and other current assets | (229,424) | (620,374) |
Accounts payable | (2,558,931) | (184,288) |
Advance from customers | 105,930 | 293,468 |
Accrued expenses and other current liabilities | 109,886 | (248,380) |
Net cash provided by (used in) operating activities | (1,218,987) | (1,411,451) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property, plant and equipment | (153,659) | (190,190) |
Acquisition of intangible assets | (2,334) | |
Net cash used in investing activities | (153,659) | (192,524) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Notes receivable | (116,963) | 34,852 |
Proceeds from bank loans | 1,568,455 | 1,405,792 |
Repayment of bank loans | (919,710) | (2,344,185) |
Proceeds from issuance of promissory notes | 1,071,250 | 687,500 |
Repayment of promissory notes | (909,998) | |
Repayment of convertible notes payable | (555,747) | |
Proceeds from issuance of common stock for private placement | 394,800 | 538,000 |
Proceeds from (repayment of) loans from related parties | (452,840) | 1,021,130 |
Proceeds from the Registered Capital Increase of Fangguan Electronics | 941,070 | |
Net cash provided by (used in) financing activities | 1,576,064 | 787,342 |
Effect of exchange rate changes on cash | 206,007 | 73,352 |
Net increase (decrease) in cash and cash equivalents | 409,425 | (743,281) |
Cash and cash equivalents, beginning of period | 731,819 | 1,285,373 |
Cash and cash equivalents, end of period | 1,141,244 | 542,092 |
Supplemental disclosure of cash flow information | ||
Cash paid for income tax | 85,274 | 10,751 |
Cash paid for interests | 100,273 | 66,820 |
Non-cash investing and financing activities | ||
Issuance of 9,470,630 shares of common stock for conversion of convertible notes | 847,144 | |
Issuance of 3,026,164 shares of common stock as commitment shares for promissory note | 155,213 | |
Issuance of 1,500,000 shares of common stock for exercise of warrants | $ 67,028 | |
Issuance of 8,529,500 shares of common stock as commitment shares for promissory note | 257,875 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) | 9 Months Ended |
Mar. 31, 2022shares | |
Statement of Cash Flows [Abstract] | |
Issuance of shares of common stock for conversion of convertible notes | 9,470,630 |
Issuance of shares of common stock as commitment shares for promissory note | 3,026,164 |
Issuance of shares of common stock for exercises of warrants | 1,500,000 |
Issuance of common stock as commitment shares for promissory note | 8,529,500 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Mar. 31, 2022 | |
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. The Company,together with its wholly owned subsidiaries and an entity controlled through VIE agreements in China ( collectively referred to as the " Group") are principally engaged in the business of the high-end intelligent electronic equipment, which includes the furnace used in firing for lithium battery , the lithium battery packs,the portable power banks for electronic devices, LCM and LCD screens ,and in the provision of IT and solution-oriented services in China. New subsidiaries On February 7, 2021, the Board of Directors of the Company approved and ratified the incorporation of Shijirun (Yixing) Technology Co., Ltd. (“Shijirun”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on February 7, 2021. Well Best International Investment Limited, a limited liability company formed under the laws of Hong Kong Special Administrative Region (“Well Best”), and a wholly owned subsidiary of the Company, is the sole shareholder of Shijirun. As a result, Shijirun is an indirect, wholly-owned subsidiary of the Company. Shijirun will head up the Company’s advance into the new energy industry focusing on developing and producing high-end intelligent new energy equipment from Yixing City, Jiangsu Province, China. On March 30, 2021, the Board of Directors of the Company approved and ratified the incorporation of Huixiang Energy Technology (Suzhou) Co., Ltd. (“Huixiang Energy”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on March 18, 2021. Well Best is the sole shareholder of Huixiang Energy. As a result, Huixiang Energy is an indirect, wholly-owned subsidiary of the Company. Huixiang Energy conducts research and development of next generation advanced battery technologies, manufacture and sales of relevant battery products, including the solid-state rechargeable lithium ion battery for next generation energy storage systems. Huixiang Energy also on the operation of battery packs, battery systems and electric vehicles sharing business with its own internet sharing platform relating to the electric vehicles (online EV hailing services) and its relevant batteries and battery systems. Huixiang Energy will operate in Suzhou City, Jiangsu Province, China. Authorized share increase On May 6, 2021, the Board of Directors of the Company and the holders of the majority of issued and outstanding voting securities of the Company approved an amendment (the “Amendment”) to the Articles of Incorporation of the Company to increase the authorized number of shares of common stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation of the Company. The approval was made in accordance with Sections 78.320 and 78.390 of the Nevada Revised Statues, which provide that a corporation’s articles may be amended by written consent of the stockholders of the Company representing at least a majority of the voting power of the Company. Acquisition On December 27, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jialin Liang and Xuemei Jiang, each of whom are shareholders of Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”or the "VIE"). Pursuant to the terms of the Purchase Agreement, the Shareholders of the VIE, who together own 95.14 15,000,000 30 4.4 million 9.7 million Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). 5.0 0.78 million 1.0 million million) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021. . the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55 2.5 0.4 million |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2022 | |
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 Group’s audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Basis of consolidation The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 94.55 100 The subsidiaries of ionix are as follows: Well Best International Investment Limited (the wholly-owned subsidiary) Welly Surplus International Limited (the wholly-owned subsidiary) Shijirun (Yixing) Technology Co., Ltd (the wholly-owned subsidiary) Huixiang Energy Technology (Suzhou) Co., Ltd (the wholly-owned subsidiary) Changchun Fangguan Photoelectric Display Technology Co. Ltd (the wholly-owned subsidiary) Dalian Shizhe New Energy Technology Co., Ltd (the wholly-owned subsidiary) Shenzhen Baileqi Electronic Technology Co., Ltd (the wholly-owned subsidiary) Lisite Science Technology (Shenzhen) Co., Ltd (the wholly-owned subsidiary) Changchun Fangguan Electronics Technology Co., Ltd ( the VIE) Noncontrolling Interests The Group follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to NCIs even when such allocation might result in a deficit balance. The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 3, therefore no income or loss is allocated to NCI. Use of Estimates The Group’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, the useful lives of property and equipment and intangible assets, the impairment of long-lived assets, 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. Cash and cash equivalents Cash consists of cash on hand and cash in bank. Cash equivalents represent investment securities that are short-term, have high credit quality and are highly liquid. Cash equivalents are carried at fair market value and consist primarily of money market funds. Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Group specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Group will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers. As of March 31,2022 and June 30, 2021, the Company has accounts receivable balance from non-related party of $ 4,340,702 4,936,974 155,691 152,995 Inventories Inventories consist of raw materials, working-in-process and finished goods. Inventories are valued at the lower of cost or net realizable value. The Group does determine cost on the basis of the weighted average method. The Group periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Group does believe that the assumptions the Group uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. Advances to suppliers Advances to suppliers represent prepayments for merchandise, which were purchased but had not been received. The balance of the advances to suppliers is reduced and reclassified to inventories when the raw materials are received and pass quality inspection. Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Repairs and maintenance costs are normally expensed as incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of comprehensive income (loss) in the reporting period of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: Buildings 10 20 Machinery and equipment 5 10 Office equipment 3 5 Automobiles 5 Intangible assets Land use right is recorded as cost less accumulated amortization. Land use rights represent the prepayments for the use of the parcels of land in the PRC where the Group’s production facilities are located, and are charged to expense over their respective lease periods of 50 Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows Land use right 50 Computer software 2 -5 Gains or losses arising from derecognition of the intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of comprehensive income (loss) when the asset is disposed. Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Group are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Revenue recognition The Group 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 Group 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 Group expects to receive in exchange for those goods or services. The Group 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 Group generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. The control of the products is transferred to the customer upon receipt of goods by the customer. For service revenue, the Group recognizes revenue when services are performed and accepted by customers. The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: For the nine months ended March 31, 2022 2021 Sales of LCM and LCD $10,547,390 $9,100,076 Sales of LCM and LCD - - Sales of Lithume battery-related 4,477 - Service contracts - 2,018 Total $10,551,867 $9,102,094 For the Three Months ended March 31, 2022 2021 Sales of LCM and LCD $2,058,179 $3,160,474 Sales of LCM and LCD - - Sales of Lithume battery-related - - Service contracts - 272 Total $2,058,179 $3,160,746 All the operating entities of the Group are domiciled in the PRC. All the Group’s revenues are derived in the PRC during the three and nine months ended March 31,2022 and 2021 Cost of revenues Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues. Related parties and transactions The Group identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, "Related Party Disclosures" and other relevant ASC standards. Parties, which can be a corporation or individual, are considered to be related if the Group has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence. Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it requires their disclosure nonetheless. Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. As of March 31,2022 and June 30, 2021, the Group did not have any significant unrecognized uncertain tax positions. Comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a corporation during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears. 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 Group 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 Group elected the package of practical expedients which permits us not to reassess under the new standard the Group's prior conclusions about lease identification, lease classification and initial direct costs. The new standard has no material effect on the consolidated financial statements of the Group as the Group does not have a lease with a term longer than 12 months as of June 30, 2021 (See Note 5). Earnings (losses) per share Basic earnings (losses) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) 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. During the nine months ended March 31,2022 and 2021,the Company had outstanding convertible notes and warrants which represent 68,750 1,096,705 During the three months ended March 31,2022 and 2021, the Company had outstanding convertible notes and warrants which represent 68,750 68,750 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. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss). 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 31,2022 June 30, 2021 Balance sheet items, except for equity accounts 6.3482 6.4601 Nine months ended March 31, 2022 2021 Items in statements of comprehensive income (loss) and cash flows 6.4042 6.8254 Fair Value of Financial Instruments The carrying value of the Group’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 Group 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 Group has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 13). Convertible Instruments The Group 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 Group 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 Group 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 Group 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 Group 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 the Company's own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Group 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 The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for Calendar years beginning after December 15, 2019 and for interim periods within those Calendar years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group is currently in the process of evaluating the impact of the adoption of this guidance on its consolidated financial statements. COVID-19 The Group’s operations are affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Group’s business has been negatively impacted by the COVID-19 coronavirus outbreak to certain extent. |
VARIABLE INTEREST ENTITY
VARIABLE INTEREST ENTITY | 9 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
VARIABLE INTEREST ENTITY | NOTE 3 - VARIABLE INTEREST ENTITY The VIE contractual arrangements On December 27, 2018, the Company entered into VIE agreements with two shareholders of Fangguan Electronics to control 95.14 the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics 15 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 Group’s consolidated financial statements. 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 has the power to direct the activities of Fangguan Electronics that most significantly impacts the Group's economic performance. Through business operation agreement with the Shareholders of Fangguan Electronics, 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 of Fangguan Electronics. Through the exclusive technical support service agreement with the shareholders of Fangguan Electronics, the Company together with the relevant subsidiaries, shall provide Fangguan Electronics with necessary technical support and assistance as the exclusive provider. And at the request of the Company, Fangguan Electronics 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 Fangguan Electronicsin any Calendar 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 Fangguan Electronics. 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 Fangguan Electronics. Except for technical support, the Company and its subsidiaries 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 Fangguan Electronics has changed, the Group shall disclose the primary factors that caused the change and the effect on the Group’s financial statements in the periods when the change occurs. There are no restrictions on the consolidated Fangguan Electronics’s assets and on the settlement of its liabilities and all carrying amounts of Fangguan Electronics’s assets and liabilities are consolidated with the the financial statements of the Company and its subsidiaries. In addition, the net income of Fangguan Electronics after it became the VIE of the Company is free of restrictions for payment of dividends to the shareholders of the Company. On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). Fangguan Electronics's new institutional shareholder , namely Changchun Lingguan Investment Partnership ("Lingguan"), whose ultimate beneficial owners and controlling shareholders are Jialin Liang and Xuemei Jiang as both of whom own 63% of the ownership rights of Lingguan ( while all of the other sharehders are employee of the VIE), made cash contribution of RMB 6.0 million (approximately $0.78 million) and RMB 1.0 million (approximately $0.16 million ) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021. the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55% of the ownership rights in Fangguan Electronics ( prior to the Registered Capital Increase, Jialin Liang ever transferred his ownship right at the amount of RMB 2.5 million (approximately $0.4 million)) of Fangguan Electronics to a third party individual ). Therefore all of the Board of Directors of the Company , Jialin Liang and Xuemei Jiang have concluded that all of the VIE Agreements remain valid. Assets of Fangguan Electronics that are collateralized or pledged are not restricted to settle Fangguan Electronics' own obligations. The creditors of Fangguan Electronics do not have recourse to the general credit of the Company and its subsidiaries. Risks associated with the VIE structure The Company believes that the contractual arrangements with the VIE and the Shareholders of VIE 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: · discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and its VIE; · limit the Group’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 Group’s use of the proceeds from public offering to finance the Group’s business and operations in China. The Group’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out 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 subsidiaries and its VIE. There has been no change in facts and circumstances to consolidate the 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 $ 1,133,938 $ 702,979 Notes receivable 196,091 76,743 Accounts receivable - non-related parties 2,984,905 3,638,354 Inventory 4,487,946 4,899,831 Advances to suppliers - non-related parties - 749,975 Prepaid expenses and other current assets 378,955 62,251 Total Current Assets 9,181,835 10,130,133 Property, plant and equipment, net 6,523,977 6,787,525 Intangible assets, net 1,510,225 1, 508,583 Deferred tax assets 50,988 50,105 Total Assets $ 17,267,025 $ 18,476,346 Short-term bank loan $ 1,575,250 $ 904,832 Accounts payable 1,404,463 3,960,792 Advance from customers 252,216 150,110 Due to related parties 1,918,358 2,349,518 Accrued expenses and other current liabilities 100,134 49,968 Total Current Liabilities 5,250,421 7,415,220 Total Liabilities $ 5,250,421 $ 7,415,220 Schedule of condensed income statement and cash flow statement of its VIE are as follows: For the nine months ended March 31 , 2022 2021 Revenue (*) $10,547,390 $8,941,662 Net (loss) income ( ) (107,417) Net cash provided by (432,992) (581,315) Net cash used in (153,659) (192,524) Net cash provided by 1,472,853 ( ) (*) Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens. During the three and nine months ended March 31,2022 and 2021, the VIE did not have any material related party transactions with other subsidiaries of the Company. Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE and can have assets transferred out of the VIE under its control. Therefore, the Company considers that there is no asset in any of the VIE that can be used only to settle obligations of the VIE, except for registered capital and PRC statutory reserves. As all VIE are incorporated as limited liability companies under the Company Law of the PRC, creditors of the VIE do not have recourse to the general credit of the Company or its subsidiaries for any of the liabilities of the VIE. Currently, there is no contractual arrangement which requires the Company or its subsidiaries to provide additional financial support to the VIE. |
INVENTORIES
INVENTORIES | 9 Months Ended |
Mar. 31, 2022 | |
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: Balance as of March 31,2022 Balance as of June 30, 2021 Raw materials $ 2,020,439 $ 1,314,020 Work-in-process 2,152,242 3,367,716 Finished goods 879,579 772,635 Total Inventories $ 5,052,260 $ 5,454,371 The Group recorded no inventory markdown for the nine months ended March 31,2022 and 2021. |
OPERATING LEASE
OPERATING LEASE | 9 Months Ended |
Mar. 31, 2022 | |
Operating Lease | |
OPERATING LEASE | NOTE 5- OPERATING LEASE For the nine months ended March 31,2022, the Group had one real estate operating leases for office and warehouse under the terms of one year. 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 10,000 one year until July 20, 2020. one more year until July 20, 2021 1,500 10,000 one more year until July 20, 2022 295 2,000 The Group 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. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 9 Months Ended |
Mar. 31, 2022 | |
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 31,2022 June 30, 2021 Buildings $ 5,162,763 $ 5,073,335 Machinery and equipment 3,419,353 3,216,474 Office equipment 83,372 75,374 Automobiles 177,365 173,090 Subtotal 8,842,853 8,538,273 Less: Accumulated depreciation (2,314,001 ) (1,745,958 ) Property, plant and equipment, net $ 6,528,852 $ 6,792,315 Depreciation expenses related to property, plant and equipment were $ 531,811 468,186 Depreciation expenses related to property, plant and equipment were $ 177,489 167,245 As of March 31,2022 and June 30, 2021, buildings were pledged as collateral for bank loans (See Note 8) . |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 7– INTANGIBLE ASSETS, NET Intangible assets consist of the following: March 31,2022 June 30, 2021 Land use right $ 1,608,625 $ 1,580,761 Computer software 30,432 29,905 Subtotal 1,639,057 1,610,666 Less: Accumulated amortization (128,832 ) (102,083 ) Intangible assets, net $ 1,510,225 $ 1,508,583 Amortization expenses related to intangible assets were $ 24,697 44,189 Amortization expenses related to intangible assets were $ 8,244 10,063 Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31,2022 and June 30, 2021, 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, 2022 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK LOAN | NOTE 8 – SHORT-TERM BANK LOAN The Company’s short-term bank loans consist of the following: March 31,2022 June 30, 2021 Loan payable to Industrial Bank, due October 2021 (2 ) $ - $ 348,324 Loan payable to Industrial Bank, due July 2022 (3 ) 566,317 - Loan payable to Industrial Bank, due July 2022 (4 ) 654,468 - Loan payable to Industrial Bank, due August 2021 (1 ) - 556,508 oan payable to Industrial Bank, due October 2022 (5 ) 354,465 - Total $ 1,575,250 $ 904,832 (1) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$556,508 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$ 464,389 3,000,000 March 9, 2021 3.80 464,389 3,000,000 553,987 3,595,096 (2) During April 2021, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$ 346,966 2,250,212 October 13, 2021 3.85 346,966 2,250,212 (3) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$ 566,317 3,595,096 July 27, 2022 3.85 (4) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$654,468(RMB4,154,692) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. (5) On October 21, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$ 354,465 2,250,212 3.85 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Mar. 31, 2022 | |
Stockholders’ Equity: | |
STOCKHOLDERS' EQUITY | NOTE 9 - STOCKHOLDERS' EQUITY Stock Issued as Commitment Shares for Promissory Note On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $ 500,000 July 6, 2022 5 6,562,500 437,500 12,500 58,333.33 300,000 1,042,000 51,000 On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $ 250,000 5 7,875,000 211,250 13,750 29,166.66 625,000 1,562,500 53,125 On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $ 250,000 5 7,875,000 211,250 13,750 29,166.66 625,000 1,562,500 55,000 On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $ 500,000 5 15,750,000 422,500 27,500 58,333.33 1,250,000 Commitment Shares returned to the Company On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on December 21, 2020, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14) On January 10, 2022, a total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on March 10, 2021, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14) Stock Issued for Private Placement On October 4, 2021, the Company issued a total of 29,106,000 3,492,720 0.12 On November 13, 2021, the Company and individual subscribers agreed to a voluntary unwinding of the forementioned transaction related to the subscription and purchase of an aggregate 29,106,000 shares. The Company entered into cancellation agreements with each individual pursuant to which all funds were returned to the investors and all shares were returned to our transfer agent for cancellation. Immediately prior to the decision, the Registration Statement related to the shares was voluntarily withdrawn by the Company. On December 15, 2021, the Company issued a total of 6,580 ,000 394,800 0.06 |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 9 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 10 - RELATED PARTY TRANSACTIONS AND BALANCES Purchase from related party During the three and nine months ended March 31,2022 and 2021, the Group did not purchase from any related party. Advances to suppliers - related parties Lisite Science made advances of $ 441,538 434,200 Sales to related party During the three and nine months ended March 31,2022 and 2021, the Group did not sell to any related party. Lease from related party Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $ 1,500 10,000 one year until July 20, 2020 1,500 10,000 one more year until July 20, 2022 295 2,000 Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $ 2,500 17,525 one more year until May 31, 2021 2,500 17,525 Due to related parties Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand. March 31,2022 June 30, 2021 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 294,163 352,236 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 53,375 45,276 Yunqiang Xie (13) 35,758 - Jialin Liang (6 )(11) 1,404,801 1,844,857 Xuemei Jiang (7 )(10) 563,939 554,171 Kou Yue (12) 20,000 - Shikui Zhang (8 ) 72,760 58,961 Biao Shang (5 ) 20,153 19,804 Changyong Yang (9 ) 40,055 32,705 $ 2,650,812 $ 3,053,818 (1) Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company. (2) Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company. (3) Xin Sui serves as director of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 0.7 (5) Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric. (6) Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company. (7) Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company. (8) Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019. (9) Changyong Yang is a stockholder of the Company,who owns approximately 1.3 (10) The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded. (11) At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $ 5.8 million 39,581,883 4.4 million 30,000,000 (12) Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her. (13) Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun. During the nine months ended March 31,2022, the refund to Mr. Jialin Liang by Fangguan Electronics was $ 440,056 3,000,000 During the nine months ended March 31,2022, setting off the further advance to the Company by Mr Liu, the net refund by the Company to Mr Liu was approximately $ 58,073 During the nine months ended March 31,2022, Baozhen Deng advanced approximately $ 8,099 13,799 7,350 35,758 20,000 During the nine months ended March 31, 2021, Yubao Liu advanced $295,928 During the nine months ended March 31, 2021, Baileqi Electronic refunded $ 3,836 23,937 23,000 9,000 On September 23, 2020, Jialin Liang entered into a short-term loan agreement with Bank of Communications to borrow an individual loan of approximately US$ 441,000 3 3.85 |
CONCENTRATION
CONCENTRATION | 9 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION | NOTE 11– CONCENTRATION Major customers Customers who accounted for 10% or more of the Group’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 31,2022 Revenue Percentage of Accounts Percentage of Customer A $ 2,407,785 23 % $ 167,005 4 % Customer B 1,153,277 11 % 68,320 2 % Total $ 3,561,062 34 % $ 235,325 6 % For the nine months ended As of March 31,2021 Revenue Percentage of Accounts Percentage of Customer A $ 1,666,368 18 % $ 229,336 7 % Customer B 1,352,195 15 % - - % Customer C 950,501 10 % 184,584 5 % Total $ 3,969,064 43 % $ 413,920 12 % For the three months ended As of March 31,2022 Revenue Percentage of Accounts Percentage of Customer A $ 804,981 39 % $ 167,005 4 % Total $ 804,981 39 % $ 167,005 4 % For the three months ended As of March 31,2021 Revenue Percentage of Accounts Percentage of Customer A $ 612,781 19 % $ 229,336 7 % Customer B 484,802 15 % - - % Customer C 441, 260 14 % 184,584 5 % Total $ 1,538,843 48 % $ 413,920 12 % All customers of the Group are located in the PRC. Major suppliers The suppliers who accounted for 10% or more of the Group’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 31,2022 Purchase Percentage of Accounts Percentage of Supplier A $ 1,881,357 23 % $ 89,333 4 % Total $ 1,881,357 23 % $ 89,333 4 % For the nine months ended As of March 31,2021 Total Purchase Percentage of Accounts Percentage of Supplier A $ 1,148,322 14 % $ 65,123 2 % Supplier B 796,553 10 % 364,146 14 % Total $ 1,944,875 24 % $ 429,269 16 % For the Three Months ended As of March 31,2022 Purchase Percentage of Accounts Percentage of Supplier A $ 257,421 15 % $ 89,333 4 % Supplier B 181,509 11 146,204 6 Total $ 438,930 26 % $ 235,537 10 % For the Three Months ended As of March 31,2021 Purchase Percentage of Accounts Percentage of Supplier A $ 404,404 13 % $ 65,123 2 % 371,731 12 % - - % Total $ 776,135 25 % $ 65,123 2 % All suppliers of the Group are located in the PRC. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 12- 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 Group 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 and subject to the corporate tax rate of 21% on its taxable income. For the nine months ended March 31,2022 and 2021, the Company did not generate income in United States of America and no provision for income tax was made. 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 31,2022. 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 The PRC The Company’s subsidiaries in China are subject to a unified income tax rate of 25 15 The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows: For the nine months ended March 31, 2022 2021 Tax (benefit) at U.S. statutory rate $ (211,659 ) $ (215,790 ) Tax rate difference between foreign operations and U.S. 556 26,511 Change in valuation allowance 64,836 155,922 Permanent difference 214,108 9,802 Effective tax (benefit) $ 67,841 $ (23,555 ) The provisions for income taxes (benefits) are summarized as follows: For the nine months ended March 31, 2022 2021 Current $ 67,841 $ 2,353 Deferred - (25,908 ) Total $ 67,841 $ (23,555 ) As of March 31,2022, the Group has approximately $ 4,147,768 2035 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 21 100 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 determined that the Company did not have tax liabilities resulting from GILTI For the nine months ended March 31,2022 and 2021 due to net operating loss carryforwards available in the U.S. Therefore, there was no accrual of GILTI liability as of March 31,2022 and June 30, 2021. The extent of the Group’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 Group 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, 2022 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 13 - CONVERTIBLE DEBT Convertible notes Convertible notes payable balance was zero as of March 31,2022 and June 30, 2021. There was none of the amortization of debt discount during the three and nine months ended March 31,2022. For the nine months ended March 31,2021, the Company recorded the amortization of debt discount of $ 138,399 For the three months ended March 31,2021, the Company recorded the amortization of debt discount of $ 24,185 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: Balance at July 1, 2020 $ 276,266 Converted (357,868 ) Debt settlement (566,030 ) Change in fair value recognized in operations 647,632 Balance at March 31,2021 $ - There was no any movement for the change of derivative liabilities during the three and nine months ended March 31,2022, and the balance of derivative liabilities was $0 at March 31,2022 The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions: Estimated dividends None Expected volatility 78.55 253.30 Risk free interest rate 0.61 0.93 Expected term 0 to 6 Warrants In connection with the issuance of the $ 165,000 68,750 On December 21, 2020, the Company issued a total of 1,500,000 67,028 In connection with the issuance of the $ 55,000 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 December 2020, the Company paid a total of $ 82,500 In connection with the issuance of the $ 165,000 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 November 2020, the Company paid a total of $ 175,000 In connection with the issuance of the $ 146,850 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 71.08 Risk free interest rate 1.73 1.92 Expected term 5 Since the warrants can be exercised at $ 2.4 2.8 147,492 The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows: Number of Weighted Remaining Outstanding at July 1, 2021 ( ) 68,750 $ 2.80 3.53 Granted - - - Exercised or settled - - - Cancelled or Expired - - - Outstanding at March 31,2022 ( ) 68,750 $ 2.80 2.78 Note1: The herein mentioned warrant of 68,750 shares are entitled by Labrys Fund, LP in connection with the issuance of the $146,850 convertible promissory note on January 10, 2020. Number of Weighted Average Remaining Outstanding at July 1, 2020 229,166 $ 2.68 4.20 4.53 Granted - - - Exercised or settled ( ) (160,416 ) 2.63 4.05 4.16 Cancelled or expired - - - Outstanding at March 31,2021 ( ) 68,750 $ 2.80 3.78 Note2: The herein mentioned exercised or expired warrant of 160,416 shares was composed of ( ) the warrant of 68,750 shares entitled by FirstFire Global Opportunities Fund, LLC in connection with the issuance of the $165,000 convertible promissory note on September 11, 2019 ( ) the warrant of 22,916 shares entitled by Crown Bridge Partners, LLC in connection with the issuance of the $55,000 convertible promissory note on November 12, 2019 ( ) the warrant of 68,750 shares entitled by Morningview Financial LL in connection with the issuance of the $165,000 convertible promissory note on November 20, 2019. |
PROMISSORY NOTE
PROMISSORY NOTE | 9 Months Ended |
Mar. 31, 2022 | |
Promissory Note | |
PROMISSORY NOTE | NOTE 14– PROMISSORY NOTE Schedule of promissory note as of March 31,2022 is as follows: Note Balance Debt Discount Carrying Value Labrys Fund, LP (1 ) $ - $ - $ - Labrys Fund, LP (2 ) - - - Firstfire Global Opportunities Fund, (3 ) 325,000 29,230 295,770 Talos Victory Fund, LLC (4 ) 250,000 68,819 181,181 Mast Hill Fund, L.P (5 ) 250,000 71,505 178,495 Blue Lake Partners, LLC (6 ) 500,000 155,969 344,031 Total $ 1,325,000 $ 325,523 $ 999,477 (1) On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 300,000 5 7,052,239 253,500 3,000 35,000 In connection with the issuance of promissory note, on December 31,2020, the Company issued 447,762 1,119,402 68,060 On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 9) (2) On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 500,000 5 6,562,500 434,000 50,000 2,500 13,500 at each month beginning on July 9, 2021 through March 10, 2022. In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 1,042,000 87,153 The payment as of $58,333.33 originally scheduled on December 10, 2021 was postponed to January 10,2022 on which date that the payment of the total of $233,333.35 was made by the Company to fully refund the remaining balance of this self-amortization promissory note. On January 10 ,2022, the total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date. (3) On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $ 500,000 5 6,562,500 437,500 50,000 12,500 58,333.33 In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 1,042,000 51,000 The two monthly payments as of $58,333.33 each originally scheduled on November 9, 2021 and December 9, 2021 respectly were postponed to January 7,2022 on which date that the payment at the total of $175,000 was made by the Company to settle the payments scheduled for the period from November 9,2021 to January 7,2022. (4) On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023. In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9) (5) On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023. In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the three and nine months ended March 31, 2022.(See note 9) (6) On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023. In connection with the issuance of promissory note, on February 17 , 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $98,750 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9) For the three and nine months ended March 31,2022, the Company recorded the amortization of debt discount of $ 122,642 and $311,535 for the self-amortization promissory notes issued, which was included in other income and expense in the consolidated statement of comprehensive income (loss). |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 15 – SEGMENT INFORMATION The Group’s business was classified by management into three reportable business segments (smart energy, photoelectric display and service contracts) before March 31,2021 and into four segments (smart energy, photoeletric display, service contract and lithium battery-related business )after March 31,2021 supported by the administrative function 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.The lithium battery -related business reportable segment derives revenue from trading lithium battery packs and furnace used in firing for lithium battery,etc. Unallocated items comprise of mainly corporate expenses and corporate assets. Although all of the Group’s revenue is generated from PRC, the Group 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 31,2022 and 2021 For the nine months ended March 31,2022 Lithume Smart Photoelectric Service Unallocated Total Revenues $ 4,477 $ - $ 10,547,390 $ - $ - $ 10,551,867 Cost of Revenues 4,626 - 9,523,812 - - 9,528,438 Gross profit (loss) ( ) - 1,023,578 - - 1,023,429 Operating expenses 46,889 6,262 1,384,217 12,691 322,615 1,772,674 Income (loss) from operations (47,038 ) (6,262 ) (360,639 ) (12,691 ) (322,615 ) (749,245 ) Net income (loss) $ (49,359 ) $ (6,360 ) $ (279,028 ) $ (12,579 ) $ (728,415 ) $ (1,075,741 ) For the nine months ended March 31,2021 Smart Photoelectric Service Unallocated Total Revenues $ - $ 9,100,076 $ 2,018 $ - $ 9,102,094 Cost of Revenues - 8,061,782 10,159 - 8,071,941 Gross profit - 1,038,294 (8,141 ) - 1,030,153 Operating expenses 8,374 1,202,101 23,641 176,268 1,410,384 Income (loss) from operations (8,374 ) (163,807 ) (31,782 ) (176,268 ) (380,231 ) Net income (loss) $ (8,213 ) $ (147,074 ) $ (31,781 ) $ (816,950 ) $ (1,004,018 ) For the three months ended March 31,2022 Lithume battery-related Smart Photoelectric Service Unallocated Total Revenues $ - $ - $ 2,058,179 $ - $ - $ 2,058,179 Cost of Revenues - - 1,788,635 - - 1,788,635 Gross profit (loss) - - 269,544 - - 269,544 Operating expenses 9,887 1,401 533,847 138 33,336 578,609 Income (loss) from operations (9,887 ) (1,401 ) ) (138 ) (33,336 ) Net income (loss) $ (10,263 ) $ (1,399 ) $ ) $ (26 ) $ (183,111 ) $ (437,797 ) For the three months ended March 31,2021 Smart Photoelectric Service Unallocated Total Revenues $ - $ 3,160,474 $ 272 $ - $ 3,160,746 Cost of Revenues - 2,802,520 (23 ) - 2,802,497 Gross profit (loss) - 357,954 295 - 358,249 Operating expenses 2,842 428,842 5,893 37,666 475,243 Income (loss) from operations (2,842 ) (70,888 ) (5,598 ) (37,666 ) (116,994 ) Net income (loss) $ (2,841 ) $ (26,820 ) $ (5,598 ) $ (80,335 ) $ (115,594 ) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16- COMMITMENTS AND CONTINGENCIES Lease commitment Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $ 295 The future minimum lease payments for non-cancelable operating leases held by the Group as of March 31,2022 was $ 295, |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The Group’s audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
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 94.55 100 The subsidiaries of ionix are as follows: Well Best International Investment Limited (the wholly-owned subsidiary) Welly Surplus International Limited (the wholly-owned subsidiary) Shijirun (Yixing) Technology Co., Ltd (the wholly-owned subsidiary) Huixiang Energy Technology (Suzhou) Co., Ltd (the wholly-owned subsidiary) Changchun Fangguan Photoelectric Display Technology Co. Ltd (the wholly-owned subsidiary) Dalian Shizhe New Energy Technology Co., Ltd (the wholly-owned subsidiary) Shenzhen Baileqi Electronic Technology Co., Ltd (the wholly-owned subsidiary) Lisite Science Technology (Shenzhen) Co., Ltd (the wholly-owned subsidiary) Changchun Fangguan Electronics Technology Co., Ltd ( the VIE) |
Noncontrolling Interests | Noncontrolling Interests The Group follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to NCIs even when such allocation might result in a deficit balance. The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 3, therefore no income or loss is allocated to NCI. |
Use of Estimates | Use of Estimates The Group’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, the useful lives of property and equipment and intangible assets, the impairment of long-lived assets, 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. |
Cash and cash equivalents | Cash and cash equivalents Cash consists of cash on hand and cash in bank. Cash equivalents represent investment securities that are short-term, have high credit quality and are highly liquid. Cash equivalents are carried at fair market value and consist primarily of money market funds. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Group specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Group will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers. As of March 31,2022 and June 30, 2021, the Company has accounts receivable balance from non-related party of $ 4,340,702 4,936,974 155,691 152,995 |
Inventories | Inventories Inventories consist of raw materials, working-in-process and finished goods. Inventories are valued at the lower of cost or net realizable value. The Group does determine cost on the basis of the weighted average method. The Group periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Group does believe that the assumptions the Group uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. |
Advances to suppliers | Advances to suppliers Advances to suppliers represent prepayments for merchandise, which were purchased but had not been received. The balance of the advances to suppliers is reduced and reclassified to inventories when the raw materials are received and pass quality inspection. |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Repairs and maintenance costs are normally expensed as incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of comprehensive income (loss) in the reporting period of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: Buildings 10 20 Machinery and equipment 5 10 Office equipment 3 5 Automobiles 5 |
Intangible assets | Intangible assets Land use right is recorded as cost less accumulated amortization. Land use rights represent the prepayments for the use of the parcels of land in the PRC where the Group’s production facilities are located, and are charged to expense over their respective lease periods of 50 Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows Land use right 50 Computer software 2 -5 Gains or losses arising from derecognition of the intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of comprehensive income (loss) when the asset is disposed. |
Impairment of long-lived assets | Impairment of long-lived assets In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Group are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. |
Revenue recognition | Revenue recognition The Group 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 Group 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 Group expects to receive in exchange for those goods or services. The Group 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 Group generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. The control of the products is transferred to the customer upon receipt of goods by the customer. For service revenue, the Group recognizes revenue when services are performed and accepted by customers. The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: For the nine months ended March 31, 2022 2021 Sales of LCM and LCD $10,547,390 $9,100,076 Sales of LCM and LCD - - Sales of Lithume battery-related 4,477 - Service contracts - 2,018 Total $10,551,867 $9,102,094 For the Three Months ended March 31, 2022 2021 Sales of LCM and LCD $2,058,179 $3,160,474 Sales of LCM and LCD - - Sales of Lithume battery-related - - Service contracts - 272 Total $2,058,179 $3,160,746 All the operating entities of the Group are domiciled in the PRC. All the Group’s revenues are derived in the PRC during the three and nine months ended March 31,2022 and 2021 |
Cost of revenues | Cost of revenues Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues. |
Related parties and transactions | Related parties and transactions The Group identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, "Related Party Disclosures" and other relevant ASC standards. Parties, which can be a corporation or individual, are considered to be related if the Group has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence. Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it requires their disclosure nonetheless. |
Income taxes | Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. As of March 31,2022 and June 30, 2021, the Group did not have any significant unrecognized uncertain tax positions. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) is defined as the change in equity of a corporation during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears. |
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 Group 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 Group elected the package of practical expedients which permits us not to reassess under the new standard the Group's prior conclusions about lease identification, lease classification and initial direct costs. The new standard has no material effect on the consolidated financial statements of the Group as the Group does not have a lease with a term longer than 12 months as of June 30, 2021 (See Note 5). |
Earnings (losses) per share | Earnings (losses) per share Basic earnings (losses) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) 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. During the nine months ended March 31,2022 and 2021,the Company had outstanding convertible notes and warrants which represent 68,750 1,096,705 During the three months ended March 31,2022 and 2021, the Company had outstanding convertible notes and warrants which represent 68,750 68,750 |
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. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss). 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 31,2022 June 30, 2021 Balance sheet items, except for equity accounts 6.3482 6.4601 Nine months ended March 31, 2022 2021 Items in statements of comprehensive income (loss) and cash flows 6.4042 6.8254 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of the Group’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 Group 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 Group has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 13). |
Convertible Instruments | Convertible Instruments The Group 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 Group 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 Group 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 Group 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 Group 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 the Company's own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Group 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 The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for Calendar years beginning after December 15, 2019 and for interim periods within those Calendar years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group is currently in the process of evaluating the impact of the adoption of this guidance on its consolidated financial statements. |
COVID-19 | COVID-19 The Group’s operations are affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Group’s business has been negatively impacted by the COVID-19 coronavirus outbreak to certain extent. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: | Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: Buildings 10 20 Machinery and equipment 5 10 Office equipment 3 5 Automobiles 5 |
The estimated useful lives of the intangible assets are as follows | Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows Land use right 50 Computer software 2 -5 |
The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: | The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: For the nine months ended March 31, 2022 2021 Sales of LCM and LCD $10,547,390 $9,100,076 Sales of LCM and LCD - - Sales of Lithume battery-related 4,477 - Service contracts - 2,018 Total $10,551,867 $9,102,094 For the Three Months ended March 31, 2022 2021 Sales of LCM and LCD $2,058,179 $3,160,474 Sales of LCM and LCD - - Sales of Lithume battery-related - - Service contracts - 272 Total $2,058,179 $3,160,746 |
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: | 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 31,2022 June 30, 2021 Balance sheet items, except for equity accounts 6.3482 6.4601 Nine months ended March 31, 2022 2021 Items in statements of comprehensive income (loss) and cash flows 6.4042 6.8254 |
VARIABLE INTEREST ENTITY (Table
VARIABLE INTEREST ENTITY (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
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: | The Group’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out 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 subsidiaries and its VIE. There has been no change in facts and circumstances to consolidate the 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 $ 1,133,938 $ 702,979 Notes receivable 196,091 76,743 Accounts receivable - non-related parties 2,984,905 3,638,354 Inventory 4,487,946 4,899,831 Advances to suppliers - non-related parties - 749,975 Prepaid expenses and other current assets 378,955 62,251 Total Current Assets 9,181,835 10,130,133 Property, plant and equipment, net 6,523,977 6,787,525 Intangible assets, net 1,510,225 1, 508,583 Deferred tax assets 50,988 50,105 Total Assets $ 17,267,025 $ 18,476,346 Short-term bank loan $ 1,575,250 $ 904,832 Accounts payable 1,404,463 3,960,792 Advance from customers 252,216 150,110 Due to related parties 1,918,358 2,349,518 Accrued expenses and other current liabilities 100,134 49,968 Total Current Liabilities 5,250,421 7,415,220 Total Liabilities $ 5,250,421 $ 7,415,220 |
Schedule of condensed income statement and cash flow statement of its VIE are as follows: | Schedule of condensed income statement and cash flow statement of its VIE are as follows: For the nine months ended March 31 , 2022 2021 Revenue (*) $10,547,390 $8,941,662 Net (loss) income ( ) (107,417) Net cash provided by (432,992) (581,315) Net cash used in (153,659) (192,524) Net cash provided by 1,472,853 ( ) (*) Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: | Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: Balance as of March 31,2022 Balance as of June 30, 2021 Raw materials $ 2,020,439 $ 1,314,020 Work-in-process 2,152,242 3,367,716 Finished goods 879,579 772,635 Total Inventories $ 5,052,260 $ 5,454,371 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
The components of property, plant and equipment were as follows: | The components of property, plant and equipment were as follows: March 31,2022 June 30, 2021 Buildings $ 5,162,763 $ 5,073,335 Machinery and equipment 3,419,353 3,216,474 Office equipment 83,372 75,374 Automobiles 177,365 173,090 Subtotal 8,842,853 8,538,273 Less: Accumulated depreciation (2,314,001 ) (1,745,958 ) Property, plant and equipment, net $ 6,528,852 $ 6,792,315 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets consist of the following: | Intangible assets consist of the following: March 31,2022 June 30, 2021 Land use right $ 1,608,625 $ 1,580,761 Computer software 30,432 29,905 Subtotal 1,639,057 1,610,666 Less: Accumulated amortization (128,832 ) (102,083 ) Intangible assets, net $ 1,510,225 $ 1,508,583 |
SHORT-TERM BANK LOAN (Tables)
SHORT-TERM BANK LOAN (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
The Company’s short-term bank loans consist of the following: | The Company’s short-term bank loans consist of the following: March 31,2022 June 30, 2021 Loan payable to Industrial Bank, due October 2021 (2 ) $ - $ 348,324 Loan payable to Industrial Bank, due July 2022 (3 ) 566,317 - Loan payable to Industrial Bank, due July 2022 (4 ) 654,468 - Loan payable to Industrial Bank, due August 2021 (1 ) - 556,508 oan payable to Industrial Bank, due October 2022 (5 ) 354,465 - Total $ 1,575,250 $ 904,832 (1) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$556,508 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$ 464,389 3,000,000 March 9, 2021 3.80 464,389 3,000,000 553,987 3,595,096 (2) During April 2021, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$ 346,966 2,250,212 October 13, 2021 3.85 346,966 2,250,212 (3) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$ 566,317 3,595,096 July 27, 2022 3.85 (4) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$654,468(RMB4,154,692) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. (5) On October 21, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$ 354,465 2,250,212 3.85 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand. | Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand. March 31,2022 June 30, 2021 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 294,163 352,236 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 53,375 45,276 Yunqiang Xie (13) 35,758 - Jialin Liang (6 )(11) 1,404,801 1,844,857 Xuemei Jiang (7 )(10) 563,939 554,171 Kou Yue (12) 20,000 - Shikui Zhang (8 ) 72,760 58,961 Biao Shang (5 ) 20,153 19,804 Changyong Yang (9 ) 40,055 32,705 $ 2,650,812 $ 3,053,818 (1) Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company. (2) Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company. (3) Xin Sui serves as director of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 0.7 (5) Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric. (6) Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company. (7) Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company. (8) Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019. (9) Changyong Yang is a stockholder of the Company,who owns approximately 1.3 (10) The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded. (11) At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $ 5.8 million 39,581,883 4.4 million 30,000,000 (12) Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her. (13) Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun. |
CONCENTRATION (Tables)
CONCENTRATION (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: | Customers who accounted for 10% or more of the Group’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 31,2022 Revenue Percentage of Accounts Percentage of Customer A $ 2,407,785 23 % $ 167,005 4 % Customer B 1,153,277 11 % 68,320 2 % Total $ 3,561,062 34 % $ 235,325 6 % For the nine months ended As of March 31,2021 Revenue Percentage of Accounts Percentage of Customer A $ 1,666,368 18 % $ 229,336 7 % Customer B 1,352,195 15 % - - % Customer C 950,501 10 % 184,584 5 % Total $ 3,969,064 43 % $ 413,920 12 % For the three months ended As of March 31,2022 Revenue Percentage of Accounts Percentage of Customer A $ 804,981 39 % $ 167,005 4 % Total $ 804,981 39 % $ 167,005 4 % For the three months ended As of March 31,2021 Revenue Percentage of Accounts Percentage of Customer A $ 612,781 19 % $ 229,336 7 % Customer B 484,802 15 % - - % Customer C 441, 260 14 % 184,584 5 % Total $ 1,538,843 48 % $ 413,920 12 % |
The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows: | The suppliers who accounted for 10% or more of the Group’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 31,2022 Purchase Percentage of Accounts Percentage of Supplier A $ 1,881,357 23 % $ 89,333 4 % Total $ 1,881,357 23 % $ 89,333 4 % For the nine months ended As of March 31,2021 Total Purchase Percentage of Accounts Percentage of Supplier A $ 1,148,322 14 % $ 65,123 2 % Supplier B 796,553 10 % 364,146 14 % Total $ 1,944,875 24 % $ 429,269 16 % For the Three Months ended As of March 31,2022 Purchase Percentage of Accounts Percentage of Supplier A $ 257,421 15 % $ 89,333 4 % Supplier B 181,509 11 146,204 6 Total $ 438,930 26 % $ 235,537 10 % For the Three Months ended As of March 31,2021 Purchase Percentage of Accounts Percentage of Supplier A $ 404,404 13 % $ 65,123 2 % 371,731 12 % - - % Total $ 776,135 25 % $ 65,123 2 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows: | The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows: For the nine months ended March 31, 2022 2021 Tax (benefit) at U.S. statutory rate $ (211,659 ) $ (215,790 ) Tax rate difference between foreign operations and U.S. 556 26,511 Change in valuation allowance 64,836 155,922 Permanent difference 214,108 9,802 Effective tax (benefit) $ 67,841 $ (23,555 ) |
The provisions for income taxes (benefits) are summarized as follows: | The provisions for income taxes (benefits) are summarized as follows: For the nine months ended March 31, 2022 2021 Current $ 67,841 $ 2,353 Deferred - (25,908 ) Total $ 67,841 $ (23,555 ) |
CONVERTIBLE DEBT (Tables)
CONVERTIBLE DEBT (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
The change of derivative liabilities is as follows: | The change of derivative liabilities is as follows: Balance at July 1, 2020 $ 276,266 Converted (357,868 ) Debt settlement (566,030 ) Change in fair value recognized in operations 647,632 Balance at March 31,2021 $ - |
The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions: | The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions: Estimated dividends None Expected volatility 78.55 253.30 Risk free interest rate 0.61 0.93 Expected term 0 to 6 |
The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions: | 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 71.08 Risk free interest rate 1.73 1.92 Expected term 5 |
The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows: | The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows: Number of Weighted Remaining Outstanding at July 1, 2021 ( ) 68,750 $ 2.80 3.53 Granted - - - Exercised or settled - - - Cancelled or Expired - - - Outstanding at March 31,2022 ( ) 68,750 $ 2.80 2.78 Note1: The herein mentioned warrant of 68,750 shares are entitled by Labrys Fund, LP in connection with the issuance of the $146,850 convertible promissory note on January 10, 2020. Number of Weighted Average Remaining Outstanding at July 1, 2020 229,166 $ 2.68 4.20 4.53 Granted - - - Exercised or settled ( ) (160,416 ) 2.63 4.05 4.16 Cancelled or expired - - - Outstanding at March 31,2021 ( ) 68,750 $ 2.80 3.78 |
PROMISSORY NOTE (Tables)
PROMISSORY NOTE (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Promissory Note | |
Schedule of promissory note as of March 31,2022 is as follows: | Schedule of promissory note as of March 31,2022 is as follows: Note Balance Debt Discount Carrying Value Labrys Fund, LP (1 ) $ - $ - $ - Labrys Fund, LP (2 ) - - - Firstfire Global Opportunities Fund, (3 ) 325,000 29,230 295,770 Talos Victory Fund, LLC (4 ) 250,000 68,819 181,181 Mast Hill Fund, L.P (5 ) 250,000 71,505 178,495 Blue Lake Partners, LLC (6 ) 500,000 155,969 344,031 Total $ 1,325,000 $ 325,523 $ 999,477 (1) On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 300,000 5 7,052,239 253,500 3,000 35,000 In connection with the issuance of promissory note, on December 31,2020, the Company issued 447,762 1,119,402 68,060 On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 9) (2) On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 500,000 5 6,562,500 434,000 50,000 2,500 13,500 at each month beginning on July 9, 2021 through March 10, 2022. In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 1,042,000 87,153 The payment as of $58,333.33 originally scheduled on December 10, 2021 was postponed to January 10,2022 on which date that the payment of the total of $233,333.35 was made by the Company to fully refund the remaining balance of this self-amortization promissory note. On January 10 ,2022, the total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date. (3) On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $ 500,000 5 6,562,500 437,500 50,000 12,500 58,333.33 In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 1,042,000 51,000 The two monthly payments as of $58,333.33 each originally scheduled on November 9, 2021 and December 9, 2021 respectly were postponed to January 7,2022 on which date that the payment at the total of $175,000 was made by the Company to settle the payments scheduled for the period from November 9,2021 to January 7,2022. (4) On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023. In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9) (5) On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023. In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the three and nine months ended March 31, 2022.(See note 9) (6) On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021 | The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021 For the nine months ended March 31,2022 Lithume Smart Photoelectric Service Unallocated Total Revenues $ 4,477 $ - $ 10,547,390 $ - $ - $ 10,551,867 Cost of Revenues 4,626 - 9,523,812 - - 9,528,438 Gross profit (loss) ( ) - 1,023,578 - - 1,023,429 Operating expenses 46,889 6,262 1,384,217 12,691 322,615 1,772,674 Income (loss) from operations (47,038 ) (6,262 ) (360,639 ) (12,691 ) (322,615 ) (749,245 ) Net income (loss) $ (49,359 ) $ (6,360 ) $ (279,028 ) $ (12,579 ) $ (728,415 ) $ (1,075,741 ) For the nine months ended March 31,2021 Smart Photoelectric Service Unallocated Total Revenues $ - $ 9,100,076 $ 2,018 $ - $ 9,102,094 Cost of Revenues - 8,061,782 10,159 - 8,071,941 Gross profit - 1,038,294 (8,141 ) - 1,030,153 Operating expenses 8,374 1,202,101 23,641 176,268 1,410,384 Income (loss) from operations (8,374 ) (163,807 ) (31,782 ) (176,268 ) (380,231 ) Net income (loss) $ (8,213 ) $ (147,074 ) $ (31,781 ) $ (816,950 ) $ (1,004,018 ) For the three months ended March 31,2022 Lithume battery-related Smart Photoelectric Service Unallocated Total Revenues $ - $ - $ 2,058,179 $ - $ - $ 2,058,179 Cost of Revenues - - 1,788,635 - - 1,788,635 Gross profit (loss) - - 269,544 - - 269,544 Operating expenses 9,887 1,401 533,847 138 33,336 578,609 Income (loss) from operations (9,887 ) (1,401 ) ) (138 ) (33,336 ) Net income (loss) $ (10,263 ) $ (1,399 ) $ ) $ (26 ) $ (183,111 ) $ (437,797 ) For the three months ended March 31,2021 Smart Photoelectric Service Unallocated Total Revenues $ - $ 3,160,474 $ 272 $ - $ 3,160,746 Cost of Revenues - 2,802,520 (23 ) - 2,802,497 Gross profit (loss) - 357,954 295 - 358,249 Operating expenses 2,842 428,842 5,893 37,666 475,243 Income (loss) from operations (2,842 ) (70,888 ) (5,598 ) (37,666 ) (116,994 ) Net income (loss) $ (2,841 ) $ (26,820 ) $ (5,598 ) $ (80,335 ) $ (115,594 ) |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) - USD ($) | Dec. 24, 2021 | May 06, 2021 | Dec. 27, 2018 | Mar. 31, 2022 |
VIE Agreements [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of voting interests acquired | 94.55% | |||
Shareholder loan | $ 400,000 | |||
Cash | $ 9,700,000 | |||
VIE Agreements [Member] | China, Yuan Renminbi | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Shareholder loan | 2,500,000 | |||
VIE Agreements [Member] | Fangguan Electronics 1 [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Percentage of voting interests acquired | 95.14% | 94.55% | ||
Number of shares issue | 15,000,000 | |||
Shareholder loan | $ 4,400,000 | |||
Description of ownership right acquire | Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics | |||
VIE Agreements [Member] | Fangguan Electronics 1 [Member] | China, Yuan Renminbi | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Shareholder loan | $ 30,000,000 | |||
VIE Agreements [Member] | Fangguan Electronics 2 [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Shareholder loan | $ 780,000 | |||
Description of voting securities | VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). | |||
VIE Agreements [Member] | Fangguan Electronics 2 [Member] | China, Yuan Renminbi | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Shareholder loan | $ 5,000,000 | |||
Cash | $ 1,000,000 | |||
Board of Directors Chairman [Member] | Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Description of majority voting | common stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation of the Company. The approval was made in accordance with Sections 78.320 and 78.390 of the Nevada Revised Statues, which provide that a corporation’s articles may be amended by written consent of the stockholders of the Company representing at least a majority of the voting power of the Company. |
Depreciation is calculated on a
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: (Details) | 9 Months Ended |
Mar. 31, 2022 | |
Building [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 10 years |
Building [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 20 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 10 years |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 5 years |
Automobiles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of tangible assets | 5 years |
The estimated useful lives of t
The estimated useful lives of the intangible assets are as follows (Details) | 9 Months Ended |
Mar. 31, 2022 | |
Use Rights [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of intangible assets | 50 years |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of intangible assets | 2 years |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life of intangible assets | 5 years |
The following tables disaggrega
The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Product Information [Line Items] | ||||
Total Revenues | $ 2,058,179 | $ 3,160,746 | $ 10,551,867 | $ 9,102,094 |
Non Related Parties [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 2,058,179 | 3,160,474 | 10,547,390 | 9,100,076 |
Related Parties [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 0 | 0 | 0 | 0 |
Lithume Battery Related [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | 0 | 0 | 4,477 | 0 |
Service [Member] | ||||
Product Information [Line Items] | ||||
Total Revenues | $ 0 | $ 272 | $ 0 | $ 2,018 |
The exchange rates used to tran
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: (Details) | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 |
Income And Cash Flow [Member] | |||
Exchange rate | 6.4042 | 6.8254 | |
Balance Sheet [Member] | |||
Exchange rate | 6.3482 | 6.4601 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 24, 2021 | Jun. 30, 2021 | Dec. 27, 2018 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Outstanding warrants | 68,750 | 68,750 | 68,750 | 1,096,705 | |||
Use Rights [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Estimated useful life of intangible assets | 50 years | ||||||
Non Related Party [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Account receivable | $ 4,340,702 | $ 4,340,702 | $ 4,936,974 | ||||
Net of allowance for doubtful accounts | $ 155,691 | $ 155,691 | $ 152,995 | ||||
VIE Agreements [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Percentage of voting interests acquired | 94.55% | ||||||
VIE Agreements [Member] | Fangguan Electronics 1 [Member] | |||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||
Percentage of voting interests acquired | 94.55% | 94.55% | 95.14% | ||||
Percentage of recieve net income or net loss | 100.00% | 100.00% |
The following financial stateme
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: (Details) - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 |
Cash and cash equivalents | $ 1,141,244 | $ 731,819 | $ 542,092 | $ 1,285,373 |
Notes receivable | 196,091 | 76,743 | ||
Inventory | 5,052,260 | 5,454,371 | ||
Advances to suppliers - non-related parties | 468,797 | 782,481 | ||
Prepaid expenses and other current assets | 688,462 | 478,830 | ||
Total Current Assets | 12,329,094 | 12,895,418 | ||
Property, plant and equipment, net | 6,528,852 | 6,792,315 | ||
Intangible assets, net | 1,510,225 | 1,508,583 | ||
Total Assets | 20,949,085 | 21,737,436 | ||
Short-term bank loan | 1,575,250 | 904,832 | ||
Accounts payable | 2,448,506 | 4,942,881 | $ 65,123 | |
Advance from customers | 446,855 | 334,101 | ||
Due to related parties | 2,650,812 | 3,053,818 | ||
Accrued expenses and other current liabilities | 230,375 | 117,450 | ||
Total Current Liabilities | 8,351,275 | 9,886,398 | ||
Total Liabilities | 8,351,275 | 9,886,398 | ||
Consolidated Entity, Excluding Consolidated VIE [Member] | ||||
Cash and cash equivalents | 1,133,938 | 702,979 | ||
Notes receivable | 196,091 | 76,743 | ||
Accounts receivable - non-related parties | 2,984,905 | 3,638,354 | ||
Inventory | 4,487,946 | 4,899,831 | ||
Advances to suppliers - non-related parties | 749,975 | |||
Prepaid expenses and other current assets | 378,955 | 62,251 | ||
Total Current Assets | 9,181,835 | 10,130,133 | ||
Property, plant and equipment, net | 6,523,977 | 6,787,525 | ||
Intangible assets, net | 1,510,225 | 1 | ||
Deferred tax assets | 50,988 | 50,105 | ||
Total Assets | 17,267,025 | 18,476,346 | ||
Short-term bank loan | 1,575,250 | 904,832 | ||
Accounts payable | 1,404,463 | 3,960,792 | ||
Advance from customers | 252,216 | 150,110 | ||
Due to related parties | 1,918,358 | 2,349,518 | ||
Accrued expenses and other current liabilities | 100,134 | 49,968 | ||
Total Current Liabilities | 5,250,421 | 7,415,220 | ||
Total Liabilities | $ 5,250,421 | $ 7,415,220 |
Schedule of condensed income st
Schedule of condensed income statement and cash flow statement of its VIE are as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 15 Months Ended | |||||||
Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2021 | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Revenue | $ 2,058,179 | $ 3,160,746 | $ 10,551,867 | $ 9,102,094 | ||||||
Net (loss) income | $ (437,797) | $ (97,745) | $ (540,199) | $ (115,594) | $ (356,118) | $ (532,306) | (1,075,741) | (1,004,018) | $ (115,594) | |
Net cash provided by (used in) operating activities | (1,218,987) | (1,411,451) | ||||||||
Net cash used in investing activities | (153,659) | (192,524) | ||||||||
Net cash provided by financing activities | 1,576,064 | 787,342 | ||||||||
Trading Revenue [Member] | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Revenue | [1] | 10,547,390 | 8,941,662 | |||||||
Trading Revenue [Member] | Consolidated Entity, Excluding Consolidated VIE [Member] | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Net (loss) income | 182,642 | (107,417) | ||||||||
Net cash provided by (used in) operating activities | (432,992) | (581,315) | ||||||||
Net cash used in investing activities | (153,659) | (192,524) | ||||||||
Net cash provided by financing activities | $ 1,472,853 | $ 224,301 | ||||||||
[1] | Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens. |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details Narrative) - VIE Agreements [Member] - shares shares in Millions | Dec. 27, 2018 | Dec. 24, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Percentage of voting interests acquired | 94.55% | |
Changchun Fangguan Electronics Technology CoLtd 1 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Percentage of voting interests acquired | 95.14% | |
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 Electronics | |
Number of shares issue | 15 |
Inventories are stated at the l
Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: (Details) - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,020,439 | $ 1,314,020 |
Work-in-process | 2,152,242 | 3,367,716 |
Finished goods | 879,579 | 772,635 |
Total Inventories | $ 5,052,260 | $ 5,454,371 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | Jul. 20, 2021 | Jul. 20, 2021 | Jul. 20, 2020 | Mar. 31, 2022 |
Office And Warehouse [Member] | Shenzhen Keenest Technology Co Ltd [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Lease renewal term | one more year until July 20, 2022 | one more year until July 20, 2021 | ||
Monthly rent | $ 1,500 | |||
Office And Warehouse [Member] | China, Yuan Renminbi | Shenzhen Keenest Technology Co Ltd [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Monthly rent | 10,000 | |||
Office And Warehouse One [Member] | Shenzhen Keenest Technology Co Ltd [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Monthly rent | 295 | |||
Office And Warehouse One [Member] | China, Yuan Renminbi | Shenzhen Keenest Technology Co Ltd [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Monthly rent | 2,000 | |||
Lisite Science [Member] | Office And Warehouse Spaces [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Annual rent | $ 295 | 1,500 | $ 1,500 | |
Lease renewal term | one year until July 20, 2020. | |||
Lisite Science [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Annual rent | $ 10,000 | $ 10,000 |
The components of property, pla
The components of property, plant and equipment were as follows: (Details) - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 8,842,853 | $ 8,538,273 |
Less: Accumulated depreciation | (2,314,001) | (1,745,958) |
Property, plant and equipment, net | 6,528,852 | 6,792,315 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 5,162,763 | 5,073,335 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 3,419,353 | 3,216,474 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | 83,372 | 75,374 |
Automobiles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 177,365 | $ 173,090 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 177,489 | $ 167,245 | $ 531,811 | $ 468,186 |
Intangible assets consist of th
Intangible assets consist of the following: (Details) - USD ($) | Mar. 31, 2022 | Jun. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 1,639,057 | $ 1,610,666 |
Less: Accumulated amortization | (128,832) | (102,083) |
Intangible assets, net | 1,510,225 | 1,508,583 |
Use Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | 1,608,625 | 1,580,761 |
Computer Software, Intangible Asset [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Subtotal | $ 30,432 | $ 29,905 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense related to intangible assets | $ 8,244 | $ 10,063 | $ 24,697 | $ 44,189 |
The Company_s short-term bank l
The Company’s short-term bank loans consist of the following: (Details) - USD ($) | Jul. 27, 2021 | Oct. 31, 2021 | Aug. 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2022 | Oct. 21, 2021 | Jul. 28, 2021 | Jun. 30, 2021 | Apr. 13, 2021 | Sep. 10, 2020 | Aug. 11, 2020 | |
Short-Term Debt [Line Items] | ||||||||||||||
Total | $ 1,575,250 | $ 904,832 | ||||||||||||
Fangguan Electronics [Member] | Short Term Loan Agreement [Member] | Industrial Bank [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Debt maturity date | Jul. 27, 2022 | |||||||||||||
Interest rate | 3.85% | 3.85% | ||||||||||||
Borrowed amount | $ 354,465 | $ 566,317 | ||||||||||||
Fangguan Electronics [Member] | China, Yuan Renminbi | Short Term Loan Agreement [Member] | Industrial Bank [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Borrowed amount | $ 2,250,212 | $ 3,595,096 | ||||||||||||
Notes Payable to Banks [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total | [1] | 0 | 348,324 | |||||||||||
Notes Payable To Banks One [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total | [2] | 566,317 | 0 | |||||||||||
Notes Payable To Banks Two [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total | [3] | 654,468 | ||||||||||||
Notes Payable To Banks Three [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total | [4] | 0 | 556,508 | |||||||||||
Notes Payable To Banks Four [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Total | [5] | $ 354,465 | $ 0 | |||||||||||
Commercial Loan [Member] | Fangguan Electronics [Member] | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Proceeds from issuance of commercial paper | $ 346,966 | $ 464,389 | ||||||||||||
Debt maturity date | Oct. 13, 2021 | Mar. 9, 2021 | ||||||||||||
Interest rate | 3.85% | 3.80% | 3.80% | |||||||||||
Repayments of bank debt | $ 346,966 | $ 553,987 | $ 464,389 | |||||||||||
Commercial Loan [Member] | Fangguan Electronics [Member] | China, Yuan Renminbi | ||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||
Proceeds from issuance of commercial paper | $ 2,250,212 | $ 3,000,000 | ||||||||||||
Repayments of bank debt | $ 2,250,212 | $ 3,595,096 | $ 3,000,000 | |||||||||||
[1] | Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company. | |||||||||||||
[2] | Xin Sui serves as director of Welly Surplus. | |||||||||||||
[3] | Baozhen Deng is a stockholder of the Company, who owns approximately 0.7 | |||||||||||||
[4] | Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company. | |||||||||||||
[5] | Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric. |
SHORT-TERM BANK LOAN (Details N
SHORT-TERM BANK LOAN (Details Narrative) - Fangguan Electronics [Member] - Commercial Loan [Member] - USD ($) | 1 Months Ended | |||||||
Oct. 31, 2021 | Aug. 31, 2021 | Apr. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Apr. 13, 2021 | Sep. 10, 2020 | Aug. 11, 2020 | |
Short-Term Debt [Line Items] | ||||||||
Proceeds from Issuance of Commercial Paper | $ 346,966 | $ 464,389 | ||||||
Debt Instrument, Maturity Date | Oct. 13, 2021 | Mar. 9, 2021 | ||||||
Interest rate | 3.85% | 3.80% | 3.80% | |||||
Repayments of Bank Debt | $ 346,966 | $ 553,987 | $ 464,389 | |||||
China, Yuan Renminbi | ||||||||
Short-Term Debt [Line Items] | ||||||||
Proceeds from Issuance of Commercial Paper | $ 2,250,212 | $ 3,000,000 | ||||||
Repayments of Bank Debt | $ 2,250,212 | $ 3,595,096 | $ 3,000,000 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Feb. 17, 2022 | Jan. 03, 2022 | Dec. 29, 2021 | Dec. 15, 2021 | Oct. 04, 2021 | Jul. 15, 2021 | Jul. 08, 2021 | Jul. 05, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | May 04, 2021 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Value, Issued for Services | $ 67,028 | ||||||||||
Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,500,000 | ||||||||||
Stock Issued During Period, Value, Issued for Services | $ 150 | ||||||||||
Nine Individual Subscribers [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 6,580 | ||||||||||
Stock Issued During Period, Value, Issued for Services | $ 394,800 | $ 3,492,720 | |||||||||
Nine Individual Subscribers [Member] | Subscription Agreements [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 29,106,000 | ||||||||||
Nine Individual Subscribers [Member] | Common Stock [Member] | Subscription Agreements [Member] | Private Placement [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Share Price | $ 0.06 | $ 0.12 | |||||||||
Promissory Note [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cash received | $ 211,250 | $ 437,500 | |||||||||
Other cost | $ 13,750 | $ 12,500 | |||||||||
Amortization Expense Payable | $ 58,333.33 | ||||||||||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Debt maturity date | Jul. 6, 2022 | ||||||||||
Number of shares reserve for issuance | 6,562,500 | ||||||||||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock First Commitment Shares [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 300,000 | ||||||||||
Debt Instrument, Unamortized Discount | $ 51,000 | ||||||||||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,562,500 | 1,562,500 | 1,042,000 | ||||||||
Promissory Note [Member] | Talos Victory Fund LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Borrowed amount | $ 500,000 | $ 250,000 | $ 250,000 | ||||||||
Interest rate | 5.00% | 5.00% | 5.00% | ||||||||
Number of shares reserve for issuance | 7,875,000 | ||||||||||
Amortization Expense Payable | 53,125 | ||||||||||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 625,000 | 625,000 | |||||||||
Promissory Note 1 [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cash received | $ 211,250 | ||||||||||
Other cost | $ 13,750 | ||||||||||
Amortization Expense Payable | 29,166.66 | ||||||||||
Promissory Note 1 [Member] | Talos Victory Fund LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Number of shares reserve for issuance | 7,875,000 | ||||||||||
Amortization Expense Payable | 55,000 | ||||||||||
Promissory Note 2 [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Cash received | $ 422,500 | ||||||||||
Other cost | $ 27,500 | ||||||||||
Amortization Expense Payable | 29,166.66 | ||||||||||
Promissory Note 2 [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock Issued During Period, Shares, Issued for Services | 1,250,000 | ||||||||||
Promissory Note 2 [Member] | Talos Victory Fund LLC [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Number of shares reserve for issuance | 15,750,000 | ||||||||||
Promissory Note 3 [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Amortization Expense Payable | $ 58,333.33 | ||||||||||
Promissory Note [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Borrowed amount | $ 500,000 | ||||||||||
Interest rate | 5.00% |
Due to related parties represen
Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand. (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 27, 2018 | |
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 2,650,812 | $ 3,053,818 | |||
Baozhen Deng [Member] | |||||
Related Party Transaction [Line Items] | |||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 0.70% | ||||
Changyong Yang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 1.30% | ||||
Jialin Liang [Member] | Fangguan Electronics [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to Related Parties | $ 4,400,000 | $ 5,800,000 | |||
Jialin Liang [Member] | Fangguan Electronics [Member] | China, Yuan Renminbi | |||||
Related Party Transaction [Line Items] | |||||
Due to Related Parties | $ 30,000,000 | $ 39,581,883 | |||
Ben Wong [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [1] | $ 143,792 | 143,792 | ||
Yubao Liu [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [2] | 294,163 | 352,236 | ||
Xin Sui [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [3] | 2,016 | 2,016 | ||
Baozhen Deng [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [4] | 53,375 | 45,276 | ||
Yunqiang Xie [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [5] | 35,758 | |||
Jialin Liang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [6],[7] | 1,404,801 | 1,844,857 | ||
Xuemei Jiang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [8],[9] | 563,939 | 554,171 | ||
Kou Yue [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [10] | 20,000 | |||
Shikui Zhang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [11] | 72,760 | 58,961 | ||
Biao Shang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [12] | 20,153 | 19,804 | ||
Changyong Yang [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | [13] | $ 40,055 | $ 32,705 | ||
[1] | Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company. | ||||
[2] | Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company. | ||||
[3] | Xin Sui serves as director of Welly Surplus. | ||||
[4] | Baozhen Deng is a stockholder of the Company, who owns approximately 0.7 | ||||
[5] | Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun. | ||||
[6] | At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $ 5.8 million 39,581,883 4.4 million 30,000,000 | ||||
[7] | Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company. | ||||
[8] | The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded. | ||||
[9] | Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company. | ||||
[10] | Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her. | ||||
[11] | Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019. | ||||
[12] | Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric. | ||||
[13] | Changyong Yang is a stockholder of the Company,who owns approximately 1.3 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | Jul. 20, 2021 | Jul. 20, 2020 | Jun. 05, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 23, 2020 |
Lisite Science [Member] | Office And Warehouse Spaces [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Annual rent | $ 295 | $ 1,500 | $ 1,500 | ||||
Lease renewal term | one more year until July 20, 2022 | one year until July 20, 2020 | |||||
Lisite Science [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi | |||||||
Related Party Transaction [Line Items] | |||||||
Annual rent | $ 10,000 | $ 10,000 | |||||
Baileqi Electronic [Member] | Office And Warehouse Spaces [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Lease renewal term | one more year until May 31, 2021 | ||||||
Baileqi Electronic [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi | |||||||
Related Party Transaction [Line Items] | |||||||
Monthly Operating Lease Cost | $ 17,525 | 17,525 | |||||
Linga [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Related Party Debt | 440,056 | ||||||
Linga [Member] | China, Yuan Renminbi | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Related Party Debt | 3,000,000 | ||||||
Liu [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Related Party Debt | 58,073 | ||||||
Baozhen Deng [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Related Party Debt | 8,099 | $ 3,836 | |||||
Shikui Zhang [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 13,799 | 23,000 | |||||
Changyong Yang [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 7,350 | 9,000 | |||||
Yunqiang Xie [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 35,758 | ||||||
Yue Kou [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 20,000 | ||||||
Yubao Liu [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 295,928 | ||||||
Shenzhen Baileq [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Repayments of Related Party Debt | $ 23,937 | ||||||
Jialin Liang [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loans Payable to Bank, Current | $ 441,000 | ||||||
Short-term Debt, Percentage Bearing Fixed Interest Rate | 3.85% | ||||||
Jialin Liang [Member] | China, Yuan Renminbi | |||||||
Related Party Transaction [Line Items] | |||||||
Loans Payable to Bank, Current | $ 3,000,000 | ||||||
Keenest [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from Related Party Debt | 441,538 | $ 434,200 | |||||
Baileqi Electronic [Member] | Office And Warehouse Space [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Monthly Operating Lease Cost | $ 2,500 | $ 2,500 |
Customers who accounted for 10%
Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Jun. 30, 2021 | |
Concentration Risk [Line Items] | ||||||
Revenue | $ 2,058,179 | $ 3,160,746 | $ 10,551,867 | $ 9,102,094 | ||
Accounts receivable | 4,340,702 | 4,340,702 | $ 4,936,974 | |||
Sales [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Revenue | $ 804,981 | $ 1,538,843 | $ 3,561,062 | $ 3,969,064 | ||
Percentage of total accounts receivable | 39.00% | 48.00% | 34.00% | 43.00% | ||
Sales [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Revenue | $ 804,981 | $ 612,781 | $ 2,407,785 | $ 1,666,368 | ||
Percentage of total accounts receivable | 39.00% | 19.00% | 23.00% | 18.00% | ||
Sales [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Revenue | $ 484,802 | $ 1,153,277 | $ 1,352,195 | |||
Percentage of total accounts receivable | 15.00% | 11.00% | 15.00% | |||
Sales [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Revenue | $ 441 | $ 950,501 | ||||
Percentage of total accounts receivable | 14.00% | 10.00% | ||||
Accounts Receivable [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Percentage of total accounts receivable | 4.00% | 12.00% | 6.00% | 12.00% | ||
Accounts receivable | $ 235,325 | $ 413,920 | $ 235,325 | $ 413,920 | $ 413,920 | |
Accounts Receivable [Member] | Customer A [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Percentage of total accounts receivable | 4.00% | 7.00% | 4.00% | 7.00% | ||
Accounts receivable | $ 167,005 | $ 229,336 | $ 167,005 | $ 229,336 | 229,336 | |
Accounts Receivable [Member] | Customer B [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Percentage of total accounts receivable | 2.00% | |||||
Accounts receivable | $ 68,320 | $ 0 | $ 68,320 | $ 0 | 0 | |
Accounts Receivable [Member] | Customer C [Member] | ||||||
Concentration Risk [Line Items] | ||||||
Percentage of total accounts receivable | 5.00% | 5.00% | ||||
Accounts receivable | $ 184,584 | $ 184,584 | $ 184,584 |
The suppliers who accounted for
The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Jun. 30, 2021 | |
Concentration Risk [Line Items] | |||||
Accounts payable | $ 2,448,506 | $ 65,123 | $ 2,448,506 | $ 65,123 | $ 4,942,881 |
Purchases [Member] | |||||
Concentration Risk [Line Items] | |||||
Purchase | $ 438,930 | $ 776,135 | $ 1,881,357 | $ 1,944,875 | |
Percentage of total accounts receivable | 26.00% | 25.00% | 23.00% | 24.00% | |
Percentage of total accounts receivable | 2.00% | 2.00% | |||
Purchases [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of total accounts receivable | 15.00% | 13.00% | 23.00% | 14.00% | |
Purchases [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of total accounts receivable | 11.00% | 10.00% | |||
Purchases [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Purchase | $ 257,421 | $ 404,404 | $ 1,881,357 | $ 1,148,322 | |
Purchases [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Purchase | $ 181,509 | 371,731 | 796,553 | ||
Accounts payable | 0 | $ 0 | |||
Accounts Payable [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of total accounts receivable | 10.00% | 4.00% | 16.00% | ||
Accounts payable | $ 89,333 | $ 429,269 | $ 89,333 | $ 429,269 | |
Accounts Payable [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of total accounts receivable | 4.00% | 4.00% | 2.00% | ||
Percentage of total accounts receivable | 2.00% | 2.00% | |||
Accounts Payable [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Percentage of total accounts receivable | 6.00% | 12.00% | 14.00% | ||
Accounts Payable [Member] | Supplier A [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts payable | $ 89,333 | $ 65,123 | $ 89,333 | $ 65,123 | |
Accounts Payable [Member] | Supplier B [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts payable | $ 146,204 | $ 364,146 | $ 146,204 | $ 364,146 |
The reconciliation of income ta
The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Tax (benefit) at U.S. statutory rate | $ (211,659) | $ (215,790) | ||
Tax rate difference between foreign operations and U.S. | 556 | 26,511 | ||
Change in valuation allowance | 64,836 | 155,922 | ||
Permanent difference | 214,108 | 9,802 | ||
Effective tax (benefit) | $ 145 | $ 1,949 | $ 67,841 | $ (23,555) |
The provisions for income taxes
The provisions for income taxes (benefits) are summarized as follows: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Current | $ 67,841 | $ 2,353 | ||
Deferred | 0 | (25,908) | ||
Total | $ 145 | $ 1,949 | $ 67,841 | $ (23,555) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | Dec. 22, 2017 | Mar. 31, 2022 |
Operating Loss Carryforwards [Line Items] | ||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 25.00% | |
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 calendar years from 2016 to 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 2022 to 2024 | |
Unified income tax rate | 15.00% | |
Operating Loss Carryforwards | $ 4,147,768 | |
Expiration year | 2035 | |
Previously corporate tax rate | 21.00% | 34.00% |
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 | |
Inland Revenue, Hong Kong [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent | 16.50% |
The change of derivative liabil
The change of derivative liabilities is as follows: (Details) | 9 Months Ended |
Mar. 31, 2021USD ($) | |
Debt Disclosure [Abstract] | |
Balance at July 1, 2020 | $ 276,266 |
Converted | (357,868) |
Debt settlement | (566,030) |
Change in fair value recognized in operations | 647,632 |
Balance at March 31,2021 |
The estimated fair value of the
The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions: (Details) | 9 Months Ended |
Mar. 31, 2021 | |
Measurement Input Expected Volatility [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Measurement Input | 78.55 |
Measurement Input Expected Volatility [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Measurement Input | 253.30 |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Measurement Input | 0.61 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Measurement Input | 0.93 |
Measurement Input, Maturity [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
DebtInstrument term | 6 months |
The estimated fair value of t_2
The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions: (Details) | Mar. 31, 2022 |
Measurement Input Expected Volatility [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 56.23 |
Measurement Input Expected Volatility [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 71.08 |
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 1.73 |
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Warrants and Rights Outstanding, Measurement Input | 1.92 |
Measurement Input, Maturity [Member] | |
Debt Instrument [Line Items] | |
Warrant maturity terms | 5 years |
The details of the outstanding
The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows: (Details) - $ / shares | 9 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding at beginning | 147,492 | |
Outstanding at ending | 4 years 18 days | |
Outstanding at ending | $ 2.4 | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding at ending | 4 years 1 month 28 days | |
Outstanding at ending | $ 2.8 | |
Warrant [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding at beginning | 68,750 | 229,166 |
Outstanding at beginning | $ 2.80 | $ 2.68 |
Outstanding at ending | 3 years 6 months 10 days | 3 years 9 months 10 days |
Granted | 0 | 0 |
Granted | $ 0 | $ 0 |
Exercised or settled | 0 | (160,416) |
Exercised or settled | (0.00%) | 2.63% |
Cancelled or expired | 0 | 0 |
Cancelled or expired | $ 0 | $ 0 |
Outstanding at ending | 68,750 | 68,750 |
Outstanding at ending | $ 2.80 | $ 2.80 |
Outstanding at ending | 2 years 9 months 10 days | |
Warrant [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding at ending | 4 years 2 months 12 days | |
Warrant [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Outstanding at ending | 4 years 6 months 10 days |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) - USD ($) | Dec. 21, 2020 | Sep. 11, 2020 | Jan. 09, 2020 | Nov. 12, 2019 | Sep. 11, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Sep. 11, 2021 | Mar. 31, 2022 | Jun. 30, 2020 | Jan. 10, 2020 | Nov. 20, 2019 |
Debt Instrument [Line Items] | ||||||||||||||
Issuance of common stock for exercise of warrants | $ 67,028 | |||||||||||||
Minimum [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 2.4 | |||||||||||||
Outstanding warrants | 147,492 | |||||||||||||
Maximum [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 2.8 | |||||||||||||
Firstfire Global Opportunities Fund L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Issuance of common stock for conversion of convertible notes (in shares) | 1,500,000 | 165,000 | ||||||||||||
Issuance of common stock for exercise of warrants | $ 67,028 | $ 68,750 | ||||||||||||
Securities Purchase Agreement [Member] | Convertible Debt [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Amortization of debt discount | $ 24,185 | $ 138,399 | ||||||||||||
Convertible Promissory Note 1 [Member] | Convertible Debt 8 [Member] | Firstfire Global Opportunities Fund L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Description of conversion feature | 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 | |||||||||||||
Convertible Promissory Note [Member] | Crown Bridge Partners L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
[custom:DebtInstrumentConvertibleTermsOfConversionFeature2] | the warrant of 22,916 shares entitled by Crown Bridge Partners, LLC in connection with the issuance of the $55,000 convertible promissory note on November 12, 2019 | |||||||||||||
Convertible Promissory Note [Member] | Morningview Financial L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
[custom:DebtInstrumentConvertibleTermsOfConversionFeature3] | the warrant of 68,750 shares entitled by Morningview Financial LL in connection with the issuance of the $165,000 convertible promissory note on November 20, 2019. | |||||||||||||
Convertible Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
[custom:DebtInstrumentConvertibleTermsOfConversionFeature1] | the warrant of 68,750 shares entitled by FirstFire Global Opportunities Fund, LLC in connection with the issuance of the $165,000 convertible promissory note on September 11, 2019 | |||||||||||||
Convertible Promissory Note [Member] | Convertible Debt 8 [Member] | Morningview Financial L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Description of conversion feature | 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 | |||||||||||||
Remaining principal balance amount | $ 165,000 | |||||||||||||
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | Crown Bridge Partners L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Description of conversion feature | 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 | |||||||||||||
Borrowed amount | $ 55,000 | |||||||||||||
Remaining principal balance amount | $ 82,500 | $ 82,500 | ||||||||||||
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | Morningview Financial L L C [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Remaining principal balance amount | $ 175,000 | |||||||||||||
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | L A B R Y S F U N D L P [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Description of conversion feature | 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. | |||||||||||||
Remaining principal balance amount | $ 146,850 |
Schedule of promissory note as
Schedule of promissory note as of March 31,2022 is as follows: (Details) - USD ($) | Mar. 10, 2022 | Dec. 29, 2021 | Jul. 15, 2021 | Jul. 05, 2021 | Jul. 05, 2021 | Mar. 10, 2021 | Mar. 19, 2021 | Dec. 21, 2020 | Mar. 19, 2021 | Mar. 31, 2022 | Feb. 17, 2022 | Jan. 03, 2022 | Dec. 31, 2020 | |
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Debt Instrument, Fee Amount | $ 500,000 | $ 300,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | ||||||||||||
Number of shares reserve for issuance | 6,562,500 | 7,052,239 | ||||||||||||
Proceeds from Notes Payable | $ 434,000 | $ 253,500 | ||||||||||||
Legal Fees | 3,000 | $ 2,500 | ||||||||||||
Promissory Note Amortization Schedule Payment Amount | $ 35,000 | |||||||||||||
Original Issue Discount | 50,000 | |||||||||||||
Other Costs | $ 13,500 | |||||||||||||
Description Of Amortization Schedule | at each month beginning on July 9, 2021 through March 10, 2022. | |||||||||||||
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Debt Instrument, Fee Amount | $ 500,000 | $ 500,000 | ||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.00% | 5.00% | ||||||||||||
Number of shares reserve for issuance | 6,562,500 | |||||||||||||
Proceeds from Notes Payable | $ 437,500 | |||||||||||||
Promissory Note Amortization Schedule Payment Amount | 58,333.33 | |||||||||||||
Original Issue Discount | 50,000 | |||||||||||||
Other Costs | $ 12,500 | |||||||||||||
L A B R Y S F U N D L P [Member] | Promissory Note [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Number of shares reserve for issuance | 6,562,500 | |||||||||||||
Talos Victory Fund LLC [Member] | Promissory Note [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | $ 250,000 | $ 500,000 | $ 250,000 | |||||||||||
Number of shares reserve for issuance | 7,875,000 | |||||||||||||
Promissory Note 1 [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | $ 1,325,000 | |||||||||||||
Debt discount | 325,523 | |||||||||||||
Carrying Value | 999,477 | |||||||||||||
Promissory Note 1 [Member] | L A B R Y S F U N D L P [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [1] | 0 | ||||||||||||
Debt discount | [1] | 0 | ||||||||||||
Carrying Value | [1] | 0 | ||||||||||||
Promissory Note 2 [Member] | L A B R Y S F U N D L P [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [2] | 0 | ||||||||||||
Debt discount | [2] | 0 | ||||||||||||
Carrying Value | [2] | 0 | ||||||||||||
Promissory Note 3 [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [3] | 325,000 | ||||||||||||
Debt discount | [3] | 29,230 | ||||||||||||
Carrying Value | [3] | 295,770 | ||||||||||||
Promissory Note 4 [Member] | Talos Victory Fund LLC [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [3] | 250,000 | ||||||||||||
Debt discount | [3] | 68,819 | ||||||||||||
Carrying Value | [3] | 181,181 | ||||||||||||
Promissory Note 4 [Member] | Mast Hill Fund L P [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [4] | 250,000 | ||||||||||||
Debt discount | [4] | 71,505 | ||||||||||||
Carrying Value | [4] | 178,495 | ||||||||||||
Promissory Note 4 [Member] | Blue Lake Partner L L C [Member] | ||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||||||||
Schedule of promissory note as of December 31, 2021 is as follows: | [5] | 500,000 | ||||||||||||
Debt discount | [5] | 155,969 | ||||||||||||
Carrying Value | [5] | $ 344,031 | ||||||||||||
[1] | On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 300,000 5 7,052,239 253,500 3,000 35,000 | |||||||||||||
[2] | On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $ 500,000 5 6,562,500 434,000 50,000 2,500 13,500 at each month beginning on July 9, 2021 through March 10, 2022. | |||||||||||||
[3] | On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $ 500,000 5 6,562,500 437,500 50,000 12,500 58,333.33 | |||||||||||||
[4] | On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023. | |||||||||||||
[5] | On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023. |
PROMISSORY NOTE (Details Narrat
PROMISSORY NOTE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 08, 2021 | Mar. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
Short-Term Debt [Line Items] | ||||
Value of shares issued | $ 456,143 | |||
Common Stock [Member] | ||||
Short-Term Debt [Line Items] | ||||
Value of shares issued | $ 714 | |||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock First Commitment Shares [Member] | ||||
Short-Term Debt [Line Items] | ||||
Number of shares issued | 417,000 | 447,762 | ||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member] | ||||
Short-Term Debt [Line Items] | ||||
Number of shares issued | 1,042,000 | 1,119,402 | ||
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock [Member] | ||||
Short-Term Debt [Line Items] | ||||
Value of shares issued | $ 87,153 | $ 68,060 | ||
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock First Commitment Shares [Member] | ||||
Short-Term Debt [Line Items] | ||||
Number of shares issued | 300,000 | |||
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock Second Commitment Shares [Member] | ||||
Short-Term Debt [Line Items] | ||||
Number of shares issued | 1,042,000 | |||
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock [Member] | ||||
Short-Term Debt [Line Items] | ||||
Value of shares issued | $ 51,000 |
The following tables provide th
The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021 (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 15 Months Ended | ||||||
Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||||||
Revenues | $ 2,058,179 | $ 3,160,746 | $ 10,551,867 | $ 9,102,094 | |||||
Cost of Revenues | 1,788,635 | 2,802,497 | 9,528,438 | 8,071,941 | |||||
Gross profit (loss) | 269,544 | 358,249 | 1,023,429 | 1,030,153 | |||||
Operating expenses | 578,609 | 475,243 | 1,772,674 | 1,410,384 | |||||
Income (loss) from operations | (309,065) | (116,994) | (749,245) | (380,231) | |||||
Net income (loss) | (437,797) | $ (97,745) | $ (540,199) | (115,594) | $ (356,118) | $ (532,306) | (1,075,741) | (1,004,018) | $ (115,594) |
Lithume Battery Related [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 0 | 4,477 | |||||||
Cost of Revenues | 0 | 4,626 | |||||||
Gross profit (loss) | 0 | 149 | |||||||
Operating expenses | 9,887 | 46,889 | |||||||
Income (loss) from operations | (9,887) | (47,038) | |||||||
Net income (loss) | (10,263) | (49,359) | |||||||
Smart Energy [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 0 | 0 | 0 | 0 | |||||
Cost of Revenues | 0 | 0 | 0 | 0 | |||||
Gross profit (loss) | 0 | 0 | 0 | 0 | |||||
Operating expenses | 1,401 | 2,842 | 6,262 | 8,374 | |||||
Income (loss) from operations | (1,401) | (2,842) | (6,262) | (8,374) | |||||
Net income (loss) | (1,399) | (6,360) | (8,213) | (2,841) | |||||
Photoelectric Display [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 2,058,179 | 3,160,474 | 10,547,390 | 9,100,076 | |||||
Cost of Revenues | 1,788,635 | 2,802,520 | 9,523,812 | 8,061,782 | |||||
Gross profit (loss) | 269,544 | 357,954 | 1,023,578 | 1,038,294 | |||||
Operating expenses | 533,847 | 428,842 | 1,384,217 | 1,202,101 | |||||
Income (loss) from operations | (264,303) | (70,888) | (360,639) | (163,807) | |||||
Net income (loss) | (242,998) | (279,028) | (147,074) | (26,820) | |||||
Service Contracts [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 0 | 272 | 0 | 2,018 | |||||
Cost of Revenues | 0 | (23) | 0 | 10,159 | |||||
Gross profit (loss) | 0 | 295 | 0 | (8,141) | |||||
Operating expenses | 138 | 5,893 | 12,691 | 23,641 | |||||
Income (loss) from operations | (138) | (5,598) | (12,691) | (31,782) | |||||
Net income (loss) | (26) | (12,579) | (31,781) | (5,598) | |||||
Unallocated Items [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Revenues | 0 | 0 | 0 | 0 | |||||
Cost of Revenues | 0 | 0 | 0 | 0 | |||||
Gross profit (loss) | 0 | 0 | 0 | 0 | |||||
Operating expenses | 33,336 | 37,666 | 322,615 | 176,268 | |||||
Income (loss) from operations | (33,336) | $ (37,666) | (322,615) | (176,268) | |||||
Net income (loss) | $ (183,111) | $ (728,415) | $ (816,950) | $ (80,335) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jul. 20, 2022 | Mar. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating Leases, Rent Expense, Net | $ 295 | |
Operating Leases, Future Minimum Payments Due | $ 295 |