Document and Entity Information
Document and Entity Information | 12 Months Ended |
Jun. 30, 2019shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Urban Tea, Inc. |
Entity Central Index Key | 0001543268 |
Amendment Flag | false |
Current Fiscal Year End Date | --06-30 |
Document Type | 20-F |
Document Period End Date | Jun. 30, 2019 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2019 |
Entity Emerging Growth Company | false |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 26,180,314 |
Entity File Number | 001-35755 |
Entity Interactive Data Current | Yes |
Entity Incorporation State Country Code | D8 |
Document Transition Report | false |
Document Annual Report | true |
Document Shell Company Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
ASSETS | ||
Cash | $ 4,668,745 | $ 961,280 |
Short-term investments | 4,078,244 | |
Trade receivables | 128,847 | |
Inventories | 114,533 | |
Prepayments | 58,764 | |
Other current assets | 249,155 | |
Assets from discontinued operation | 66,213,669 | |
Total current assets | 9,298,288 | 67,174,949 |
Property and equipment, net | 604,095 | |
Deposits for plant, property and equipment | 665,380 | |
Intangible assets | 73,854 | |
Other noncurrent assets | 204,932 | |
Total Assets | 10,846,549 | 67,174,949 |
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
Trade payable | 91,202 | |
Unearned income | 40,849 | |
Other current liabilities | 129,983 | |
Warrants liabilities | 1,432,648 | 312,963 |
Liabilities directly associated with the assets from discontinued operation | 89,669,272 | |
Total Liabilities | 1,694,682 | 89,982,235 |
Shareholders' Equity (Deficit) | ||
Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 26,180,314 and 12,660,314 shares issued and outstanding at June 30, 2019 and 2018, respectively | 2,618 | 1,266 |
Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding | ||
Additional paid-in capital | 17,625,612 | 57,187,910 |
Accumulated deficit | (8,174,141) | (83,279,164) |
Accumulated other comprehensive (loss) income | (302,222) | 3,282,702 |
Total Shareholders' Equity (Deficit) | 9,151,867 | (22,807,286) |
Total Liabilities and Shareholders' Equity (Deficit) | $ 10,846,549 | $ 67,174,949 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 26,180,314 | 12,660,314 |
Common stock, shares outstanding | 26,180,314 | 12,660,314 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | |||
Revenue | $ 401,814 | ||
Cost of revenues | (236,661) | ||
Gross profit | 165,153 | ||
Operating expenses | |||
General and administrative expenses | (2,202,161) | (889,107) | (2,814,205) |
Total operating expenses | (2,202,161) | (889,107) | (2,814,205) |
Other income, net | |||
Interest expenses | 3,977 | 27 | |
Change in fair value of warrants | 1,088,443 | 205,785 | 531,099 |
Other income | 11,725 | 83,000 | |
Total other income, net | 1,104,145 | 205,812 | 614,099 |
Net (loss) income from continuing operations before income taxes | (932,863) | (683,295) | (2,200,106) |
Income tax expenses | |||
Net (loss) income from continuing operations | (932,863) | (683,295) | (2,200,106) |
Net income (loss) from discontinued operations | |||
Loss from discontinued operations | (9,357,421) | (82,206,040) | (26,227,138) |
Gain on disposal of discontinued operations | 37,845,726 | ||
Net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Net income (loss) | 27,555,442 | (82,889,335) | (28,427,244) |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | 502,076 | 7,422,092 | (1,881,886) |
Reclassified to net loss from discontinued operations | (804,298) | ||
Total other comprehensive income (loss) | (302,222) | 7,422,092 | (1,881,886) |
Comprehensive income (loss) | $ 27,253,220 | $ (75,467,243) | $ (30,309,130) |
Income (loss) per share- basic and diluted | $ 1.53 | $ (7.11) | $ (2.87) |
Net (loss) income per share from continuing operations - basic and diluted | (0.05) | (0.06) | 0.05 |
Net income (loss) per share from discontinued operations - basic and diluted | $ 1.58 | $ (7.05) | $ (2.92) |
Weighted Average Shares Outstanding-Basic and Diluted | 18,055,150 | 11,653,729 | 9,914,313 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders's Equity (Deficit) - USD ($) | Share capital | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive (loss) income | Total |
Balance at Jun. 30, 2016 | $ 962 | $ 52,721,219 | $ (6,962,585) | $ (2,257,504) | $ 43,502,092 |
Balance, Shares at Jun. 30, 2016 | 9,618,852 | ||||
Issuance of ordinary shares for professional services | $ 144 | 2,418,544 | 2,418,688 | ||
Issuance of ordinary shares for professional services, Shares | 1,442,827 | ||||
Net income/loss for the year | (28,427,244) | (28,427,244) | |||
Foreign currency translation adjustment | (1,881,886) | (1,881,886) | |||
Balance at Jun. 30, 2017 | $ 1,106 | 55,139,763 | (35,389,829) | (4,139,390) | 15,611,650 |
Balance, Shares at Jun. 30, 2017 | 11,061,679 | ||||
Issuance of ordinary shares for professional services | $ 80 | 871,920 | 872,000 | ||
Issuance of ordinary shares for professional services, Shares | 800,000 | ||||
Issuances of ordinary shares in connection with certain private placements | $ 180 | 1,176,127 | 1,176,307 | ||
Issuances of ordinary shares in connection with certain private placements, Shares | 1,798,635 | ||||
Cancellation for escrow shares | $ (100) | 100 | |||
Cancellation for escrow shares, Shares | (1,000,000) | ||||
Cancellation for dividend payable | 35,000,000 | 35,000,000 | |||
Net income/loss for the year | (82,889,335) | (82,889,335) | |||
Foreign currency translation adjustment | 7,422,092 | 7,422,092 | |||
Balance at Jun. 30, 2018 | $ 1,266 | 57,187,910 | (83,279,164) | 3,282,702 | (22,807,286) |
Balance, Shares at Jun. 30, 2018 | 12,660,314 | ||||
Issuance of ordinary shares for professional services | $ 15 | 122,985 | 123,000 | ||
Issuance of ordinary shares for professional services, Shares | 150,000 | ||||
Issuances of ordinary shares in connection with certain private placements | $ 1,052 | 5,498,948 | 5,500,000 | ||
Issuances of ordinary shares in connection with certain private placements, Shares | 10,525,000 | ||||
Issuance of ordinary shares in connection with registered direct offering, net of transaction cost | $ 285 | 2,365,350 | 2,365,635 | ||
Issuance of ordinary shares in connection with registered direct offering, net of transaction cost, Shares | 2,845,000 | ||||
Disposition of Elite and its subsidiary | (47,549,581) | 47,549,581 | (4,087,000) | (4,087,000) | |
Net income/loss for the year | 27,555,442 | 27,555,442 | |||
Foreign currency translation adjustment | 502,076 | 502,076 | |||
Balance at Jun. 30, 2019 | $ 2,618 | $ 17,625,612 | $ (8,174,141) | $ (302,222) | $ 9,151,867 |
Balance, Shares at Jun. 30, 2019 | 26,180,314 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 27,555,442 | $ (82,889,335) | $ (28,427,244) |
Less: net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Net loss from continuing operations | (932,863) | (683,295) | (2,200,106) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Change in fair value of warrants | (1,088,443) | (205,785) | (531,099) |
Issuance cost in connection with registered direct offerings | 455,531 | ||
Share based compensation expenses | 123,000 | 872,000 | 2,418,688 |
Depreciation of property and equipment | 25,012 | ||
Amortization of intangible assets | 4,297 | ||
Changes in assets and liabilities: | |||
Trade receivables | (129,666) | ||
Inventories | (74,139) | ||
Prepayments | (59,137) | ||
Other current assets | (240,722) | ||
Other noncurrent assets | (13,632) | ||
Trade payable | 91,783 | ||
Other current liabilities | 130,809 | (83,000) | |
Net cash used in operating activities from continuing operations | (1,708,170) | (17,080) | (395,517) |
Net cash provided by (used in) operating activities from discontinued operations | 651,061 | (3,161,220) | 343,545 |
Net cash used in operating activities | (1,057,109) | (3,178,300) | (51,972) |
Cash Flows from Investing Activities: | |||
Investment in asset acquisition | (586,313) | ||
Purchases of property and equipment | (959,994) | ||
Purchases of intangible assets | (78,621) | ||
Investment in short-term investments | (4,104,188) | ||
Proceeds from disposal of Elite and its subsidiaries | 1,750,000 | ||
Cash in connection with discontinued operations | 45,122 | (13,144) | 414,382 |
Net cash (used in) provided by investing activities from continuing operations | (3,933,994) | (13,144) | 414,382 |
Net cash (used in) provided by investing activities from discontinued operations | (503,850) | (1,121,306) | 38,926 |
Net cash (used in) provided by investing activities | (4,437,844) | (1,134,450) | 453,308 |
Cash Flows from Financing Activities: | |||
Cash raised in private placement of ordinary shares | 5,500,000 | 1,176,307 | |
Cash raised in registered direct offering, net of transaction costs | 4,118,233 | ||
Net cash provided by financing activities from continuing operations | 9,618,233 | 1,176,307 | |
Net cash used in financing activities from discontinued operations | (124,592) | (689,388) | (388,495) |
Net cash provided by (used in) financing activities | 9,493,641 | 486,919 | (388,495) |
Effect of exchange rate changes on cash and cash equivalents | (291,223) | 4,787,111 | (12,841) |
Increase in cash and cash equivalents | 3,707,465 | 961,280 | |
Cash and cash equivalents at beginning of year | 961,280 | ||
Cash and cash equivalents at end of year | 4,668,745 | 961,280 | |
Supplemental disclosures of cash flow information: | |||
Interest paid | |||
Tax paid | |||
Major non-cash transactions: | |||
Issuance of ordinary shares for professional services | $ 123,000 | $ 872,000 | $ 2,418,688 |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. Urban Tea, Inc., (formerly known as Delta Technology Holdings Limited) ("MYT" or the "the Company") is a holding company that was incorporated on November 28, 2011, under the laws of the British Virgin Islands. On February 8, 2019, the Company received the stamped Certificate of Change of Name from the British Virgin Islands Registrar of Corporate Affairs dated February 4, 2019 pursuant to which the Company's name has been changed to "Urban Tea, Inc." (the "Name Change"). In addition to the Name Change, the Company effectuated a change of its ticker symbol from "DELT" to "MYT," (the "Symbol Change") on February 14, 2019. As a result of the Name Change and the Symbol Change, the Company's CUSIP number changed to G9396G100. On May 22, 2018, Delta Technology Holdings Limited establish a U.S. subsidiary named as Delta Technology Holdings USA Inc. Delta Technology Holdings USA Inc issued 200 shares without par value to Delta Technology Holdings Limited. On August 28, 2018, the Company formed NTH Holdings Limited ("NTH BVI"), a wholly owned subsidiary, in British Virgin Island ("BVI"). NTH BVI is authorized to issue a maximum of 50,000 shares of one class, at par value of $1.00 per share. On September 11, 2018, NTH BVI formed a wholly owned subsidiary, Tea Language Group Limited ("NTH HK") in Hong Kong. On October 19, 2018, the Company, through NTH HK, established Mingyuntang (Shanghai) Tea Co. Ltd. ("Shanghai MYT"). On November 19, 2018, Shanghai MYT entered into a series of VIE agreements with Hunan Mingyuntang Brand Management Company ("Hunan MYT") and its shareholder Peng Fang. The VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Hunan MYT, including absolute control rights and the rights to the management, operations, assets, property and revenue of Hunan MYT. The purpose of the VIE Agreements is solely to give Shanghai MYT the exclusive control over Hunan MYT's management and operations. Hunan MYT commenced the operation in December 2018, which was engaged in specialty tea product distribution and retail business by provision of high-quality tea beverages in its tea shop chain. DISPOSAL OF ELITE On February 9, 2019, the Company, Elite Ride Limited ("Elite"), the Company's wholly owned subsidiary, and HG Capital Group Limited, a private limited company duly organized under the laws of Hong Kong (the "Purchaser") entered into certain Share Purchase Agreement (the "Purchase Agreement"). Pursuant to the Purchase Agreement, the Purchaser agreed to purchase Elite in exchange for a cash purchase price of $1,750,000 (the "Consideration"). Elite, via its 100% owned subsidiary Delta Advanced Materials Limited, a Hong Kong corporation ("Delta HK"), which, in turn, holds all the equity interests in all the operating subsidiaries in the PRC, including Jiangsu Yangtze Delta Fine Chemical Co., Ltd ("Jiangsu Delta"), and Binhai Deda Chemical Co., Ltd ("Binhai Deda") (collectively, the "PRC Subsidiaries"). On March 29, 2019, the shareholders of the Company approved and adopted the SPA and related transactions providing for the disposal by the Company of 100% of the outstanding capital stock of Elite. On April 13, 2019, the Company received the $1,750,000, the necessary registration with HG Capital Group Limited received the stock certificate representing all the issued and outstanding shares of Elite and other closing conditions for the disposal were completed, including receipt of the fairness opinion. Upon closing of the disposition of Elite, the Purchaser became the sole shareholder of Elite and as a result, assumed all assets and obligations of all the subsidiaries and VIE entities owned or controlled by Elite. VIE AGREEMENTS WITH HUNAN MYT Material terms of each of the VIE Agreements are described below: Exclusive Business Cooperation Agreement Pursuant to the Exclusive Business Cooperation Agreement between Shanghai MYT and Hunan MYT, Shanghai MYT provides Hunan MYT with technical support, consulting services and management services on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Hunan MYT granted an irrevocable and exclusive option to Shanghai MYT to purchase from Hunan MYT, any or all of Hunan MYT's assets at the lowest purchase price permitted under the PRC laws. Should Shanghai MYT exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to Hunan MYT by Shanghai MYT under this agreement, Shanghai MYT is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, plus amount of the services fees or ratio decided by the board of directors of Shanghai MYT based on the value of services rendered by Shanghai MYT and the actual income of Hunan MYT from time to time, which is substantially equal to all of the net income of Hunan MYT. The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by Shanghai MYT with 30-day prior written notice. Hunan MYT does not have the right to terminate the agreement unilaterally. Shanghai MYT may unilaterally extend the term of this agreement with prior written notice. Exclusive Option Agreement Under the Exclusive Option Agreement, Peng Fang irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Hunan MYT. The option price is equal to the capital paid in by Peng Fang subject to any appraisal or restrictions required by applicable PRC laws and regulations. The agreement remains effective for a term of ten years and may be renewed at Shanghai MYT's election. Share Pledge Agreement Under the Share Pledge Agreement among Shanghai MYT, Peng Fang and Hunan MYT, Peng Fang pledged all of his equity interests in Hunan MYT to Shanghai MYT to guarantee the performance of Hunan MYT's obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in any event of default, as set forth in the Share Pledge Agreement, including that Hunan MYT or Peng Fang breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, Shanghai MYT, as pledgee, will be entitled to certain rights, including, but not limited to, the right to dispose of the pledged equity interest in accordance with applicable PRC laws. Shanghai MYT shall have the right to collect any and all dividends declared or generated in connection with the equity interest during the term of pledge. The Share Pledge Agreement shall be effective until all payments due under the Exclusive Business Cooperation Agreement have been paid by Hunan MYT. Shanghai MYT shall cancel or terminate the Share Pledge Agreement upon Hunan MYT's full payment of fees payable under the Exclusive Business Cooperation Agreement. Timely Reporting Agreement To ensure Hunan MYT promptly provides all of the information that Shanghai MYT and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Shanghai MYT and the Company. Under the Timely Reporting Agreement, Hunan MYT agreed that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required. Although it is not explicitly stipulated in the Timely Reporting Agreement, the parties agreed its term shall be the same as that of the Exclusive Business Cooperation Agreement. Power of Attorney Under the Power of Attorney, Peng Fang authorized Shanghai MYT to act on her behalf as her exclusive agent and attorney with respect to all rights as shareholder, including but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association of Hunan MYT, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Hunan MYT. Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement. This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, so long as Peng Fang is a shareholder of Company. The VIE Agreements became effective immediately upon their execution. As a result of Purchase Agreements into which the Company and HG Capital Group Limited entered on February 9, 2019, the Company had Hunan MYT as its only one VIE as of June 30, 2019 VIE is an entity that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Shanghai MYT is deemed to have a controlling financial interest and be the primary beneficiary of Hunan MYT, because it has both of the following characteristics: 1. power to direct activities of a VIE that most significantly impact the entity's economic performance, and 2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE. Pursuant to the VIE Agreements, Hunan MYT pays service fees equal to all of its net income to Shanghai MYT. At the same time, Shanghai MYT is entitled to receive all of expected residual returns. The VIE Agreements are designed so that Hunan MYT operates for the benefit of the Company. Accordingly, the accounts of Hunan MYT are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company's unaudited condensed consolidated financial statements. In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company's ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE agreements, it may not be able to exert effective control over Hunan MYT and its ability to conduct its business may be materially and adversely affected. All of the Company's main current operations are conducted through Hunan MYT from June 30, 2019. Current regulations in China permit Hunan MYT to pay dividends to the Company only out of its accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Hunan MYT to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations. The following financial statement balances and amounts only reflect the financial position and financial performances of Hunan MYT, which were included in the consolidated financial statements as of June 30, 2019 and 2018: June 30, June 30, 2019 2018 Cash $ 307,320 $ - Short-term investments 4,078,244 - Other current assets 551,299 - Property and equipment, net 604,095 - Deposits for plant, property and equipment 665,380 - Other noncurrent assets 278,786 - Total Assets $ 6,485,124 $ - Due to MYT $ 6,943,194 $ - Other current liabilities 262,034 - Total Liabilities $ 7,205,228 $ - For the Years Ended 2019 2018 2017 Revenue $ 401,814 $ - $ - Net loss $ (724,687 ) $ - $ - |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation and principle of consolidation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. (b) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. (c) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the "CODM"), which is comprised of certain members of the Company's management team. Historically, the Company had one single operating and reportable segment, namely the manufacturing and sales of organic compounds segment. During the year ended June 30, 2019, the Company controlled Hunan MYT through a series VIE agreements and evaluated how the CODM manages the businesses of the Company to maximize efficiency in allocating resources and assessing performance. Consequently, the Company had two operating and reportable segments. However, due to changes in our organizational structure associated with the manufacturing and sales of organic compounds segment as a discontinued operation (Note 2(u)), management has determined that the Company now operates in one operating segment with one reporting segment. The accounting policies of our one reportable segment are the same as those described in this Note 2. (d) Foreign currency translation The Company's financial statements are presented in the U.S. dollar ($), which is the Company's reporting currency and functional currency. The Company's subsidiaries in the PRC use Renminbi ("RMB") as their functional currencies. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income. In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into U.S. dollar using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in shareholders' equity as part of accumulated other comprehensive income. (e) Fair value measurement The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 ā Quoted prices in active markets for identical assets or liabilities. Level 2 ā Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 ā Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. As of June 30, 2019, the carrying value of financial items of the Company including cash and cash equivalents, trade receivables, other receivables, trade payables and other payables approximate their fair values due to their short-term nature and are classified within Level 1 of the fair value hierarchy. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The inputs used to measure the estimated fair value of warrants are classified as Level 3 fair value measurement due to the significance of unobservable inputs using company-specific information. The valuation methodology used to estimate the fair value of warrant liabilities is discussed in Note 12. As of June 30, 2019, the Company's warrant liabilities was comprised of private placement warrants relating to a private placement closed on November 21, 2017 ("private placement warrants"), warrants related to a registered direct offering closed on May 24, 2019 ("registered direct offering warrants"), and the warrants issued to the agent for the registered direct offering ("placement agent warrants") (Note 12), at the fair value of $204,325, $1,091,080, and $137,243, respectively. (f) Cash and cash equivalents Cash and cash equivalents consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use the Company maintained accounts at banks. (g) Short-term investments Short-term investments consist primarily of investments in financial products with variable return rate and maturities between three months and one year. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. (h) Trade receivables Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management's assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as at June 30, 2019 and 2018. (i) Inventories Inventories are carried at the lower of cost and net realizable value, as determined using the weighted average cost method. Management compares the cost of inventories with the net realizable value and if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventories are reviewed for potential write-down for estimated obsolescence or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value based upon forecasts for future demand and market conditions. When inventories are written-down to the lower of cost or net realizable value, it is not marked up subsequently based on changes in underlying facts and circumstances. (j) Property and equipment Property, plant and equipment are recorded at cost. The cost of an item of property and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method with residual value rate of 5% over the estimated useful lives as follows: Electronic equipment 5 years Office equipment 5 ā 10 years Vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statements of operations. (k) Intangible assets Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method with residual value rate of 5% based on their estimated useful lives as follows: Trademark 10 years The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. (l) Impairment of long-lived assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment. The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management's estimates due to changes in business conditions, operating performance and economic conditions. The Company's evaluation resulted in no long-lived asset impairment charges during the years ended June 30, 2019, 2018 and 2017. (m) Revenue recognition The Company adopted ASC 606, Revenue from Contracts with Customers ("ASC 606") beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company's consolidated financial statements upon adoption of ASC 606. In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. During the year ended June 30, 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its eight tea shop chains. Sales of tea products, beverages and light meals Customers place order and pay for tea products, beverage drinks and light meals in the Company's tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases. (n) Advertising expenses Advertising expenses are expensed as incurred for promoting the brand names of the Company's tea shop chains. The advertising expenses were $16,725, $nil and $nil for the years ended June 30, 2019, 2018 and 2017, respectively. (o) Income taxes The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes. The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forward. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of June 30, 2019 and 2018. As of June 30, 2019, income tax returns for the tax year ended December 31, 2018 remain open for statutory examination by PRC tax authorities. (p) Income (loss) per share Basic income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is the same as basic income (loss) per share due to the lack of dilutive items in the Company for the years ended June 30, 2019, 2018 and 2017, respectively. The number of warrants is omitted excluded from the computation as the anti-dilutive effect. (q) Comprehensive income (loss) Comprehensive income (loss) includes net income (loss) and other comprehensive foreign currency adjustments income. Comprehensive income (loss) is reported in the consolidated statements of operations and comprehensive income (loss). Accumulated other comprehensive (loss) income, as presented on the consolidated balance sheets are the cumulative foreign currency translation adjustments. (r) Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Subtopic 20, "Loss Contingencies", the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. (s) Share-based payments Share-based awards granted to the Company's employees and non-employees are measured at fair value on grant date and measurement date, respectively, and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares. At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the equity value of the Company, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. (t) Leases The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company's operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised. (u) Discontinued operation In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45. The Company disposed of its manufacturing and sales of organic compounds segment in April 2019, which met all the conditions required in order to be classified as a discontinued operation (Note 1). Accordingly, the operating results of the manufacturing and sales of organic compounds segment are reported as a gain from discontinued operations in the accompanying consolidated financial statements for all periods presented. In addition, the assets and liabilities related to the manufacturing and sales of organic compounds segment are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets at June 30, 2018. For additional information, see Note 4, "Disposal of ELITE". (v) Asset acquisition The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to transfer costs of ownership of tea shops is charged to general and administrative expenses at the acquisition date. (w) Recently announced accounting standards In April 2019, the FASB issued ASU 2019-04 "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." Apart from the amendments to ASU 2016-13 as mentioned below, the ASU also included subsequent amendments to ASU 2016-01, which we adopted in January 1, 2018. The guidance in relation to the amendments to ASU 2016-01 is effective for us for the year ending December 31, 2020 and interim reporting periods during the year ending December 31, 2020. Early adoption is permitted. Management is evaluating the effect, if any, on the Company's consolidated financial statements. In December 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. The amendments clarify or simplify certain narrow aspects of ASC 842 for lessors. Specifically: 1) The amendments provide an accounting policy election whereby lessors may choose not to evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, lessors making the election will account for those costs as if they are lessee costs, i.e., through the balance sheet instead of the income statement. 2) Lessors will exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties. Conversely, lessors will include in variable payments, and therefore revenue, such costs that are paid by the lessor and reimbursed by the lessee, and 3) Regarding contracts with lease and nonlease components, lessors will allocate certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. The amount of variable payments allocated to the lease components will be recognized in profit or loss, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other GAAP. If an entity has not yet adopted the new leases standard, it must adopt ASU 2018-20 concurrently with the leases standard. If an entity has previously adopted the new leases standard, specific transition requirements apply. Management is evaluating the effect, if any, on the Company's consolidated financial statements. In October 2018, the FASB issued ASU2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. ASU 2018-17 expands the accounting alternative that allows private companies the election not to apply the variable interest entity guidance to qualifying common control leasing arrangements. ASU 2018-17 broadens the scope of the private company alternative to include all common control arrangements that meet specific criteria (not just leasing arrangements). ASU 2018-17 also eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider such indirect interests on a proportionate basis. The amendments are effective for public business entities for fiscal years ending after December 15, 2019. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting the updated provisions to its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance if effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions to its consolidated financial statements. |
Risks
Risks | 12 Months Ended |
Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
RISKS | 3. RISKS (a) Credit risk Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2019, approximately $4,373,730 was deposited with a bank in the United States which was insured by the government up to $250,000. As of June 30, 2019, approximately $307,320 was primarily deposited in financial institutions located in Mainland China, and each bank accounts is insured by the government authority with the maximum limit of RMB 500,000 (equivalent to approximately $72,800). To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality. The Company's operations are carried out in Mainland China. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC's economy. In addition, the Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors. (b) Liquidity risk The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage. (c) Foreign currency risk Substantially all of the Company's operating activities and the Company's major assets and liabilities are denominated in RMB, except for the cash deposit of approximately $4,373,730 which was in U.S. dollars as of June 30, 2019, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("PBOC") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significant affected. (d) VIE risk It is possible that the VIE Agreements among Shanghai MYT, Hunan MYT, and the Hunan MYT Shareholders would not be enforceable in China if PRC government authorities or courts were to find that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event that the Company were unable to enforce these contractual arrangements, the Company would not be able to exert effective control over the VIE. Consequently, the VIE's results of operations, assets and liabilities would not be included in the Company's consolidated financial statements. If such were the case, the Company's cash flows, financial position, and operating performance would be materially adversely affected. The Company's contractual arrangements with Shanghai MYT, Hunan MYT, and the Hunan MYT Shareholders are approved and in place. Management believes that such contracts are enforceable, and considers the possibility remote that PRC regulatory authorities with jurisdiction over the Company's operations and contractual relationships would find the contracts to be unenforceable. The Company's operations and businesses rely on the operations and businesses of Hunan MYT, the VIE of the Company, which holds certain recognized revenue-producing assets including the luxury used cars. The VIE also has an assembled workforce, focused primarily on promotion and marketing, whose costs are expensed as incurred. The Company's operations and businesses may be adversely impacted if the Company loses the ability to use and enjoy assets held by its VIE. |
Disposal of Elite
Disposal of Elite | 12 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSAL OF ELITE | 4. DISPOSAL OF ELITE On February 9, 2019, the Company, Elite and HG Capital Group Limited entered into certain Share Purchase Agreement (the "Purchase Agreement"). Pursuant to the Purchase Agreement, the Purchaser agreed to purchase Elite in exchange of cash purchase price of $1,750,000 (the "Consideration"). The transaction contemplated by the Purchase Agreement is hereby referred as the Disposal. On March 29, 2019, management was authorized to approve and commit to a plan to sell ELITE. On April 13, 2019, the parties completed all the share transfer registration procedure as required by the laws of British Virgin Islands and all the other closing conditions have been satisfied, as a result, the Disposal contemplated by the Purchase Agreement is completed. Upon completion of the Disposal, the Purchaser became the sole shareholder of Elite and as a result, assumed all assets and obligations of all the subsidiaries and VIE entities owned or controlled by Elite. Upon the closing of the transaction, the Company does not bear any contractual commitment or obligation to the microcredit business or the employees of Elite and its subsidiaries and VIEs, nor to the Purchaser. Therefore the major assets and liabilities relevant to the disposal are reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes, are reported as components of net (loss) income separate from the net loss of continuing operations in accordance with ASC 205-20-45. In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45. The following table summarizes the carrying amount of major assets and liabilities the Company transferred to the Purchaser as of June 30, 2019 and 2018. June 30, June 30, Assets from discontinued operation: Cash and cash equivalents $ - $ 57,428 Trade and other receivables - 14,007,127 Inventories - 5,067,731 Property, plant and equipment, net - 44,346,646 Other noncurrent assets - 2,734,737 $ - $ 66,213,669 Liabilities directly associated with the assets from discontinued operation: Trade and other payables - 21,468,563 Bank borrowings and other loans - 67,336,545 Other liabilities - 864,164 $ - $ 89,669,272 The following is a reconciliation of the amounts of major classes of income from operations classified as discontinued operations in the consolidated statements of operations and comprehensive income (loss) for the years ended June 30, 2019, 2018 and 2017, respectively: For the Years Ended 2019 2018 2017 Discontinued Operations: Revenue $ 20,115,554 $ 38,452,206 $ 56,292,093 Cost of revenues (19,692,138 ) (36,488,874 ) (52,367,418 ) Selling expenses (1,501,110 ) (2,383,372 ) (1,416,283 ) General and administrative expenses (1,417,608 ) (2,359,160 ) (2,481,313 ) Allowance for doubtful accounts and obsolescence stock (6,721,854 ) (77,808,582 ) (25,162,381 ) Other expenses, net (140,264 ) (1,618,258 ) (1,091,836 ) Income tax benefits - - - Net gain from discontinued operations 37,845,726 - - Net income (loss) from discontinued operations $ 28,488,305 $ (82,206,040 ) $ (26,227,138 ) |
Asset Acquisition
Asset Acquisition | 12 Months Ended |
Jun. 30, 2019 | |
Asset Acquisition [Abstract] | |
ASSET ACQUISITION | 5. ASSET ACQUISITION In November 2018 and January 2019, Hunan MYT entered into one Asset Purchase Agreement with Your Ladyship Tea Beverage Co., Ltd. ("Your Ladyship Tea") to acquire assets, including inventories, property and equipment, tea shop rental contracts, related to three tea shops, respectively. The total cash consideration was $586,313. As of June 30, 2019, the Company made all consideration to the Your Ladyship Tea. There were no material direct transaction costs related to the transaction. In allocating the purchase price, the Company recorded all assets acquired and liabilities assumed at fair value. As the acquisition did not meet the definition of a business combination under FASB ASC Topic 805, Business Combinations, the Company accounted for the transaction as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather any excess consideration transferred over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets. The Company determined the estimated fair values using Level 3 inputs after review and consideration of relevant information, including quoted market prices and estimates made by management. The inventory was valued using the comparative sales method and the property and equipment and rental contracts were valued using the cost approach. Based on the fair value analysis of the net assets acquired, the fair value of assets acquired are as follows: Fair value of assets acquired Inventories $ 47,340 Property and equipment, net 324,203 Teashop rental contracts 202,980 Transfer costs* 11,790 $ 586,313 * the transfer cost was charged to expenses at the acquisition date. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Jun. 30, 2019 | |
Short-term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | 6. SHORT-TERM INVESTMENTS As of June 30, 2019 and 2018, the balance of short-term investments was comprised of investments of various financial products from Chinese banks and financial institutions, with variable return rate and with maturities between three months and one year. The Company classified these financial assets as held-to-maturity financial assets and recorded the assets at amortized cost, which approximates fair value. As of June 30, 2019 and 2018, the Company did not provide OTTI on short-term investments. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 7. INVENTORIES Inventories consisted of the following: June 30, June 30, Raw materials $ 90,604 $ - Packaging and other supplies 11,320 - Other merchant products 12,609 - $ 114,533 $ - Less: provision - - $ 114,533 $ - |
Other Current Assets
Other Current Assets | 12 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | 8. OTHER CURRENT ASSETS Other current assets consisted of the following: June 30, June 30, Deferred consulting expenses $ 84,574 $ - Deposits 77,010 - Prepaid rental expenses 62,193 - Advance to staff 11,695 - Others 13,683 - $ 249,155 $ - |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 9. PROPERTY AND EQUIPMENT, NET The property and equipment consisted of the following: June 30, June 30, Office equipment $ 433,878 $ - Electronic equipment 13,167 - Vehicles 8,739 - Leasehold improvements 173,165 - Less: accumulated depreciation (24,854 ) - $ 604,095 $ - The Company depreciated property and equipment from the next month to when the assets was available for use. For the years ended June 30, 2019, 2018 and 2017, the depreciation expenses were $25,012, $nil, and $nil, respectively. |
Deposits for Property and Equip
Deposits for Property and Equipment | 12 Months Ended |
Jun. 30, 2019 | |
Deposits For Property And Equipment [Abstract] | |
DEPOSITS FOR PROPERTY AND EQUIPMENT | 10. DEPOSITS FOR PROPERTY AND EQUIPMENT Deposits for property and equipment consisted of the following: June 30, June 30, Deposits for leasehold improvements $ 624,112 $ - Deposits for office equipment 41,268 - $ 665,380 $ - The deposits for leasehold improvements mainly represented the deposits for lease improvements of the Company's research and development center which is expected to complete in December 2019. |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
OTHER CURRENT LIABILITIES | 11. OTHER CURRENT LIABILITIES Other current liabilities consisted of the following: June 30, June 30, Accrued payroll and welfare $ 51,092 $ - Accrued rental expenses 42,519 - Payable for leasehold improvements 24,593 - Other tax payable 5,737 - Others 6,042 - $ 129,983 $ - |
Equity
Equity | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
EQUITY | 12. EQUITY Common Stock The Company is authorized to issue up to 100,000,000 shares of Common Stock. As of December 31, 2018, there were 12,660,314 shares of common stock issued and outstanding. On July 3, 2018, the Company issued 100,000 incentive shares to Long Yi, the Chief Executive Officer, and 50,000 shares to Wenyuan Zhang, the Secretary of the Board, under the Company's 2018 Equity Incentive Plan. The fair value of the services provided by Long Yi and Wenyuan Zhang was in in the total amount of US$123,000, at a per share price at the market price of the issuance date. On September 18, 2018, the Company entered into certain securities purchase agreement with certain non-affiliate "non-U.S. Persons" as defined in Regulation S of the Securities Act of 1933, as amended (the "Securities Act") pursuant to which the Company agreed to offer and sell up to 2,500,000 of its ordinary shares, par value $0.0001 per share, at a per share purchase price of $0.55. The transaction closed on November 19, 2018, and the Company issued 2,500,000 of its ordinary shares for proceeds of $1,375,000. On December 31, 2018, entered into certain securities purchase agreement with certain non-affiliate "non-U.S. Persons" as defined in Regulation S of the Securities Act of 1933, as amended (the " ") pursuant to which the Company agreed to offer and sell up to 7,500,000 of its ordinary shares, par value $0.0001 per share, at a per share purchase price of $0.55. On February 8, 2019, the Company issued 525,000 of its ordinary shares to certain , for no consideration. On May 24, 2019, and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 2,845,000 ordinary shares and warrants to purchase up to 1,809,420 Ordinary Shares in a registered direct offering, for gross proceeds of approximately $4.6 million. The warrants will be exercisable immediately following the date of issuance for a period of five years at an initial exercise price of $1.86 per share. As of June 30, 2019 and 2018, the Company had 26,180,314 shares and 12,660,314 shares issued and outstanding, respectively. Warrants A summary of warrants activity for the years ended June 30, 2019, 2018 and 2017 was as follows: Number of Weighted Expiration Balance of warrants outstanding as of July 1, 2016 8,500,000 1.47 years December 18, 2017 Balance of warrants outstanding as of July 1, 2017 8,500,000 0.47 years December 18, 2017 Expiration of IPO warrants (8,500,000 ) Grants of private placement warrants 359,727 5 years November 20, 2022 Balance of warrants outstanding as of July 1, 2018 359,727 4.39 years Grants of registered direct offering warrants 1,809,420 5 years May 23, 2024 Grants of placement agent warrants 227,600 5 years May 23, 2024 Balance of warrants outstanding as of June 30, 2019 2,396,747 4.68 years IPO warrants On December 21, 2012, the company issued 4,000,000 public warrants to the shareholder in connection with the Public Offering. Each class A share will be entitled to one public warrant. Each public warrant entitles the holders to purchase from the Company one ordinary shares at an exercise price of $10.00 commencing on the later of (a) December 18, 2013 and (b) the consolidation of each series of the Company's ordinary shares into one class of ordinary shares and will expire on the earlier of December 18, 2017 and the date of the Company's dissolution and liquidation of the Trust Account, unless such public warrant are earlier redeemed. The public warrants may be redeemed by the Company at a price of $0.01 per public warrant in whole but not in part upon 30 days prior written notice after the public warrants become exercisable, only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a 30 trading days period ending on the third business day prior to the date on which notice of redemption is given. In the event that there is no effective registration statement or prospectus covering the ordinary shares issuable upon exercise of the public warrants, holders of the public warrants may elect to exercise them on a cashless basis by paying the exercise price by surrendering their public warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of shares underlying the redeemable warrants, multiplied by the difference between the exercise price of the public warrants and the "fair market value" by (y) the fair market value. The "fair market value" means the average reported last sale price of our ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the public warrants notice is sent to the warrant agent. The Company would receive additional proceeds to the extent the redeemable warrants are exercised on a cashless basis. In connection with the Private Placement, on December 21, 2012, the founders (CIS Acquisition Holding Co Ltd) and certain of their designees purchased 4,500,000 warrants (the "Placement Warrants") at a price of $0.75 per warrants for an aggregate purchase price of $3,375,000. The Placement warrants are identical to the public warrants, except that the Placement warrants are (i) subject to certain transfer restrictions described below, (ii) cannot be redeemed by the Company, and (iii) may be exercised during the applicable exercise period, on a for cash or cashless basis, at any time after the consolidation of each series of the Company's ordinary shares into one class of ordinary shares after consummation of an Acquisition Transaction or post-acquisition tender offer, as the case may be, even if there is not an effective registration statement relating to the shares underlying the Placement warrants, so long as such warrants are held by the founders or their designees, or their affiliates. Notwithstanding the foregoing, if the Placement warrants are held by the holders other than the founders or their permitted transferees, the Placement warrants will only be exercisable by the holders on the same basis as the public warrants included in the units being sold in the Public offering. As at December 18, 2017, all the Public warrants were expired. Private placement warrants On November 21, 2017, the company issued 359,727 warrants to the shareholder in connection with a private placement offering of 1,798,635 ordinary shares. The warrant has an exercise price of $1.31 per share and is exercisable for five years from the date of issuance. As at June 30, 2019 and 2018, there were 359,727 warrants outstanding. The fair value of the warrants is $204,325, and $312,962, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, "Fair Value Measurement". The key assumption used in estimates are as follows: June 30, 2019 Terms of warrants 3.39 years Exercise price 1.31 Risk free rate of interest 2.77 % Dividend yield 0.00 % Annualized volatility of underlying stock 187.99 % Registered direct offering warrants In connection with the direct offering closed on May 24, 2019, the Company issued warrants to investors to purchase a total of 1,809,420 ordinary shares with a warrant term of five (5) years. The warrants have an exercise price of US$1.86 per share. The warrants have customary anti-dilution protections including a "full ratchet" anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than $1.86 per share. The anti-dilution adjustment provision is not triggered by certain "exempt issuances" which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers. Based on an evaluation as discussed in FASB ASC 815-15, "Embedded Derivatives" and FASB ASC 815-40-15, "Contracts in Entity's Own Equity ā Scope and Scope Exceptions," the Company determined that the registered direct offering warrants were not considered indexed to its own stock because neither the occurrence of a sale of equity securities by the issuer at market nor the issuance of another equity contract with a lower strike price is an input to the fair value of a fixed-for-fixed option or forward on equity shares. As such, the registered direct offering warrants were classified as a liability. As of May 24, 2019 and June 30, 2019, the Company estimated fair value of the registered direct offering warrants at US$1,961,411 and $1,091,080, respectively, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, "Fair Value Measurement". On the May 24, 2019 and June 30, 2019, the Company estimated the fair value of Series A Warrants using the following assumption. On May 24, On June 30, Terms of warrants 5 years 4.9 years Exercise price 1.86 1.86 Risk free rate of interest 2.77 % 2.77 % Dividend yield 0.00 % 0.00 % Annualized volatility of underlying stock 189.72 % 187.99 % Placement Agent Warrants On April 3, 2019, the Company entered into a letter agreement with FT Global Capital, Inc., as exclusive placement agent (the "Placement Agent"), pursuant to which the Placement Agent has agreed to act as placement agent on a best efforts basis in connection with the above offering. In addition to the cash payments, the Company has also agreed to issue to the Placement Agent a warrant to purchase a number of ordinary shares equal to 8.0% of the aggregate number of ordinary shares sold in this offering, which warrant will have the same term as registered direct offering warrants, including exercise price, vesting period, antidilution terms and etc. As such, same as the classification of , the Placement Agent Warrants were classified as a liability, which r As of May 24, 2019 and June 30, 2019, the Company estimated fair value of the Placement Agent Warrants Allocation of Issuance Costs In connection with the Private Placement closed on May 24, 2019, the Company incurred direct and incremental issuance costs of US$490,667. These costs were allocated to common stock and registered direct offering warrants in proportion to the allocation of proceeds. The issuance costs allocated to common stock were accounted for as a reduction of proceeds of the common stocks, while the issuance costs allocated to warrants were accounted for as non-operating expenses. |
Income (Loss) Per Share
Income (Loss) Per Share | 12 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
INCOME (LOSS) PER SHARE | 13. INCOME (LOSS) PER SHARE The following table sets forth the computation of basic and diluted loss per common share for the years ended June 30, 2019, 2018, and 2017, respectively: For the Years Ended 2019 2018 2017 Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Net (loss) income from continuing operations (932,863 ) (683,295 ) (2,200,106 ) Net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Weighted Average Shares Outstanding-Basic and Diluted 18,055,150 11,653,729 9,914,313 Income (loss) per share- basic and diluted $ 1.53 $ (7.11 ) $ (2.87 ) Net (loss) income per share from continuing operations ā basic and diluted $ (0.05 ) $ (0.06 ) $ 0.05 Net income (loss) per share from discontinued operations ā basic and diluted $ 1.58 $ (7.05 ) $ (2.92 ) Basic income (loss) per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is the same as basic loss per share due to the lack of dilutive items in the Company for the years ended June 30, 2019, 2018 and 2017. The number of warrants is excluded from the computation as the anti-dilutive effect. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 14. INCOME TAXES British Virgin Islands Under the current tax laws of BVI, the Company's subsidiary incorporated in the BVI is not subject to tax on income or capital gains. The United States of America Delta Technology Holdings USA Inc is incorporated in the State of Delaware in the U.S., and is subject to U.S. federal corporate income taxes. On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was signed into law, which has made significant changes to the Internal Revenue Code. Those changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the deemed repatriation of cumulative foreign earnings as of December 31, 2017. Accordingly, the Company reevaluated its deferred tax assets on net operating loss carryforward in the U.S and concluded there was no effect on the Company's income tax expenses as the Company has no deferred tax assets generated since inception. For the years ended June 30, 2019 and 2018, the Company had loss before tax of $841,088 and $17,080 in the U.S., respectively. As of June 30, 2019 and 2018, the Company's federal net operating loss carryforward for U.S. income taxes was $841,088 and $17,080, respectively. The federal net operating loss carryforward is available to reduce future years' taxable income through year 2037 and net operating losses generated in 2018 will not expire. Management believes that the realization of the benefit from this loss appears uncertain due to the Company's operating history. Utilization of the Company's U.S. net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382 and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization. Hong Kong NTH HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, NTH HK is exempted from income tax on its foreign-derived income and there are no withholding taxed in Hong Kong on remittance of dividends. PRC Shanghai MYT and Hunan MYT are subject to PRC Enterprise Income Tax ("EIT") on the taxable income in accordance with the relevant PRC income tax laws. The EIT rate for companies operating in the PRC is 25%. Income taxes that are attributed to the continuing operations are consist of: For the Years Ended 2019 2018 2017 Current income tax expenses $ - $ - $ - Deferred income tax expenses - - - Income tax expenses $ - $ - $ - Below is a reconciliation of the statutory tax rate to the effective tax rate of continuing operations: For the Years Ended 2019 2018 2017 PRC statutory income tax rate 25 % 25 % 25 % Effect of different tax rates available to different jurisdictions 10.6 % (24.5 )% (25 )% Effect of non-deductible expenses (0.2 )% 0 % 0 % Effect of change in valuation allowance and others (35.4 )% (0.5 )% 0 % 0 % 0 % 0 % Deferred tax assets as of June 30, 2019 and 2018 consist of the following: June 30, June 30, Net operating loss carrying forward $ 329,416 $ 3,587 Less: valuation allowance (329,416 ) (3,587 ) $ - $ - As of June 30, 2019 and 2018, the Company had net operating loss carryforwards of $1,437,105 and $17,080, respectively. The net operating loss carryforwards begin to expire in the tax year ending December 31, 2022. The Company evaluates its valuation allowance requirements at the end of each reporting period by reviewing all available evidence, both positive and negative, and considering whether, based on the weight of that evidence, a valuation allowance is needed. When circumstances cause a change in management's judgement about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in net income (loss). The future realization of the tax benefit of an existing deductible temporary difference ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryforward period available under applicable tax law. The Company reviews deferred tax assets for a valuation allowance based upon whether it is more likely than not that the deferred tax asset will be fully realized. As of June 30, 2019 and 2018, full valuation allowance is provided against the deferred tax assets based upon management's assessment as to their realization. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2019 and 2018, the Company did not have any significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months. |
Related Party Transactions and
Related Party Transactions and Balances | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | 15. RELATED PARTY TRANSACTIONS AND BALANCES As of June 30, 2019 and 2018, the Company had no balances due from or due to related parties. During the years ended June 30, 2019, 2018 and 2017, the Company did not incur significant related party transactions. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES 1) Lease Commitments During the year ended June 30, 2019, we entered into 20 lease agreements with various lessors for the lease of office spaces, eight tea shops, warehouses and staff accommodations. Among the 20 lease agreements, we had 3 lease agreements matured or terminated during the period. As of June 30, 2019, we had 18 lease agreements with an aggregated monthly rental fee of $39,638 which expires during December 2019 through May 2024. The following table sets forth the Company's contractual obligations as of June 30, 2019 in future periods: Rental payments Year ending June 30, 2020 $ 438,639 Year ending June 30, 2021 410,607 Year ending June 30, 2022 365,949 Year ending June 30, 2023 240,598 Year ending June 30, 2024 and thereafter 101,157 Total $ 1,556,950 Rent expense for the years ended June 30, 2019, 2018, and 2017 was $198,918, $0 and $0, respectively. |
Parent-Only Financials
Parent-Only Financials | 12 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
PARENT-ONLY FINANCIALS | 17. PARENT-ONLY FINANCIALS URBAN TEA, INC. CONDENSED BALANCE SHEETS June 30, June 30, 2019 2018 ASSETS Cash $ - $ - Due from VIE 7,250,000 - ć ć Total current assets 7,250,000 - Investment in subsidiaries 3,334,515 - Total Assets $ 10,584,515 $ - LIABILITIES AND SHAREHOLDERS' EQUITY Other current liabilities $ 1,432,648 $ 312,692 Total Liabilities 1,432,648 312,692 Shareholders' Equity Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 26,180,314 and 12,660,314 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively $ 2,618 $ 1,266 Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding - - Additional paid-in capital 17,625,612 79,682,234 Accumulated deficit (8,174,141 ) (83,279,164 ) Accumulated other comprehensive (loss) income (302,222 ) 3,282,702 Total Shareholders' Deficit 9,151,867 (312,692 ) Total Liabilities and Shareholders' Deficit $ 10,584,515 $ - URBAN TEA, INC. CONDENSED STATEMENTS OF OPERATIONS For the Years Ended 2019 2018 2017 General and administrative expenses $ (578,531 ) $ (872,000 ) $ (2,731,205 ) Change in fair value of warrants 1,088,443 205,785 531,099 Net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Equity loss in subsidiaries (1,442,775 ) (17,080 ) - Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Other comprehensive income (loss) Foreign currency translation adjustment (302,222 ) 7,422,092 (1,881,886 ) Comprehensive loss $ 27,253,220 $ (75,467,243 ) $ (30,309,130 ) URBAN TEA, INC. CONDENSED STATEMENTS OF CASH FLOWS For the Years Ended 2019 2018 2017 Cash Flows from Operating Activities: Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Less: net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Net loss from continuing operations (932,863 ) (683,295 ) (2,200,106 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Change in fair value of warrants (1,088,443 ) (205,785 ) (531,099 ) Issuance cost in connection with registered direct offerings 455,531 - - Share based compensation expenses 123,000 872,000 2,418,688 Equity loss in subsidiaries (1,442,775 ) (17,080 ) - Net cash used in operating activities - - (312,517 ) Cash Flows from Investing Activities: Net cash provided by investing activities - - - Cash Flows from Financing Activities: Proceeds from private placements 5,500,000 1,176,307 - Cash raised in private placement of ordinary shares 4,118,223 - - Borrowings from a shareholder - - 312,517 Loan to a VIE and a subsidiary (9,118,223 ) (1,176,307 ) - Net cash provided by financing activities - - 312,517 Increase in cash and cash equivalents - - - Cash and cash equivalents at beginning of year - - - Cash and cash equivalents at end of year $ - $ - $ - |
Subsequent Event
Subsequent Event | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | 18. SUBSEQUENT EVENT 1 . Filing of Form F-3 On August 27, 2019, the Company filed a Form F-3 to the registration of the resale by the selling shareholders of 10,671,638 ordinary shares, no par value, of Urban Tea, Inc. On September 6, 2019, SEC issued notice of effectiveness on the Form F-3. 2. Entry into a Share Purchase Agreement On September 28, 2019, the Company entered into a Share Purchase Agreement (" ") with the , Hunan 39 PU Tea Co., Ltd. (" ") and certain shareholders of 39 Pu, who collectively hold 51% equity interest of 39 Pu (the " "). 39 Pu is a dark tea enterprise integrating tea distribution, product research and development, and tea cultural heritage projects based in Hunan, China. Pursuant to the SPA, the Company shall deliver to the 39 Pu Shareholders total consideration of US$7.2 million (" "), of which US$3.00 million shall be paid in cash (" ") and US$4.2 million shall be paid in ordinary shares, no par value (" "), of the Company, at a price of US$0.30 per share, for a total of 14,000,000 Ordinary Shares (" "), in exchange for 39 Pu and 39 Pu Shareholders to enter into VIE Agreements (the " ") with WFOE. The VIE Agreements are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the majority equity holder of 39 Pu, including absolute rights to control the management, operations, assets, property and revenue of 39 Pu. 39 Pu has the necessary license to carry out the tea business in China. At the closing of the SPA (the " "), the Company shall make the initial payment of US$2.4 million in immediately available cash and issue 10,000,000 Ordinary Shares. The remaining portion of the Cash Consideration of $0.6 million and Share Consideration of 4,000,000 Ordinary Shares will be delivered according to the earn-out payment based on the financial performance of 39 Pu in its next fiscal year. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and principle of consolidation | (a) Basis of presentation and principle of consolidation The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. |
Use of estimates | (b) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates. |
Segment reporting | (c) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (the "CODM"), which is comprised of certain members of the Company's management team. Historically, the Company had one single operating and reportable segment, namely the manufacturing and sales of organic compounds segment. During the year ended June 30, 2019, the Company controlled Hunan MYT through a series VIE agreements and evaluated how the CODM manages the businesses of the Company to maximize efficiency in allocating resources and assessing performance. Consequently, the Company had two operating and reportable segments. However, due to changes in our organizational structure associated with the manufacturing and sales of organic compounds segment as a discontinued operation (Note 2(u)), management has determined that the Company now operates in one operating segment with one reporting segment. The accounting policies of our one reportable segment are the same as those described in this Note 2. |
Foreign currency translation | (d) Foreign currency translation The Company's financial statements are presented in the U.S. dollar ($), which is the Company's reporting currency and functional currency. The Company's subsidiaries in the PRC use Renminbi ("RMB") as their functional currencies. Transactions in foreign currencies are initially recorded at the functional currency rate ruling at the date of transaction. Any differences between the initially recorded amount and the settlement amount are recorded as a gain or loss on foreign currency transaction in the consolidated statements of income. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency rate of exchange ruling at the balance sheet date. Any differences are taken to profit or loss as a gain or loss on foreign currency translation in the statements of income. In accordance with ASC 830, Foreign Currency Matters, the Company translated the assets and liabilities into U.S. dollar using the rate of exchange prevailing at the applicable balance sheet date and the statements of income and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in shareholders' equity as part of accumulated other comprehensive income. |
Fair value measurement | (e) Fair value measurement The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 ā Quoted prices in active markets for identical assets or liabilities. Level 2 ā Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 ā Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. As of June 30, 2019, the carrying value of financial items of the Company including cash and cash equivalents, trade receivables, other receivables, trade payables and other payables approximate their fair values due to their short-term nature and are classified within Level 1 of the fair value hierarchy. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The inputs used to measure the estimated fair value of warrants are classified as Level 3 fair value measurement due to the significance of unobservable inputs using company-specific information. The valuation methodology used to estimate the fair value of warrant liabilities is discussed in Note 12. As of June 30, 2019, the Company's warrant liabilities was comprised of private placement warrants relating to a private placement closed on November 21, 2017 ("private placement warrants"), warrants related to a registered direct offering closed on May 24, 2019 ("registered direct offering warrants"), and the warrants issued to the agent for the registered direct offering ("placement agent warrants") (Note 12), at the fair value of $204,325, $1,091,080, and $137,243, respectively. |
Cash and cash equivalents | (f) Cash and cash equivalents Cash and cash equivalents consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use the Company maintained accounts at banks. |
Short-term investments | (g) Short-term investments Short-term investments consist primarily of investments in financial products with variable return rate and maturities between three months and one year. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. |
Trade receivables | (h) Trade receivables Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management's assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as at June 30, 2019 and 2018. |
Inventories | (i) Inventories Inventories are carried at the lower of cost and net realizable value, as determined using the weighted average cost method. Management compares the cost of inventories with the net realizable value and if applicable, an allowance is made for writing down the inventory to its net realizable value, if lower than cost. On an ongoing basis, inventories are reviewed for potential write-down for estimated obsolescence or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value based upon forecasts for future demand and market conditions. When inventories are written-down to the lower of cost or net realizable value, it is not marked up subsequently based on changes in underlying facts and circumstances. |
Property and equipment | (j) Property and equipment Property, plant and equipment are recorded at cost. The cost of an item of property and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating the manner intended by management. Significant additions or improvements extending useful lives of assets are capitalized. Maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method with residual value rate of 5% over the estimated useful lives as follows: Electronic equipment 5 years Office equipment 5 ā 10 years Vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statements of operations. |
Intangible assets | (k) Intangible assets Purchased intangible assets are recognized and measured at fair value upon acquisition. Separately identifiable intangible assets that have determinable lives continue to be amortized over their estimated useful lives using the straight-line method with residual value rate of 5% based on their estimated useful lives as follows: Trademark 10 years The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. |
Impairment of long-lived assets | (l) Impairment of long-lived assets The Company reviews long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets are reviewed for recoverability at the lowest level in which there are identifiable cash flows, usually at the store level. The carrying amount of a long-lived asset is not considered recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use of the asset. If the asset is determined not to be recoverable, then it is considered to be impaired and the impairment to be recognized is the amount by which the carrying amount of the asset exceeds the fair value of the asset, determined using discounted cash flow valuation techniques, as defined in ASC 360, Property, Plant, and Equipment. The Company determined the sum of the undiscounted cash flows expected to result from the use of the asset by projecting future revenue and operating expense for each store under consideration for impairment. The estimates of future cash flows involve management judgment and are based upon assumptions about expected future operating performance. The actual cash flows could differ from management's estimates due to changes in business conditions, operating performance and economic conditions. The Company's evaluation resulted in no long-lived asset impairment charges during the years ended June 30, 2019, 2018 and 2017. |
Revenue recognition | (m) Revenue recognition The Company adopted ASC 606, Revenue from Contracts with Customers ("ASC 606") beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company's consolidated financial statements upon adoption of ASC 606. In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. During the year ended June 30, 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its eight tea shop chains. Sales of tea products, beverages and light meals Customers place order and pay for tea products, beverage drinks and light meals in the Company's tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases. |
Advertising expenses | (n) Advertising expenses Advertising expenses are expensed as incurred for promoting the brand names of the Company's tea shop chains. The advertising expenses were $16,725, $nil and $nil for the years ended June 30, 2019, 2018 and 2017, respectively. |
Income taxes | (o) Income taxes The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes. The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forward. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of June 30, 2019 and 2018. As of June 30, 2019, income tax returns for the tax year ended December 31, 2018 remain open for statutory examination by PRC tax authorities. |
Income (loss) per share | (p) Income (loss) per share Basic income (loss) per share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is the same as basic income (loss) per share due to the lack of dilutive items in the Company for the years ended June 30, 2019, 2018 and 2017, respectively. The number of warrants is omitted excluded from the computation as the anti-dilutive effect. |
Comprehensive income (loss) | (q) Comprehensive income (loss) Comprehensive income (loss) includes net income (loss) and other comprehensive foreign currency adjustments income. Comprehensive income (loss) is reported in the consolidated statements of operations and comprehensive income (loss). Accumulated other comprehensive (loss) income, as presented on the consolidated balance sheets are the cumulative foreign currency translation adjustments. |
Commitments and contingencies | (r) Commitments and contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations and tax matters. In accordance with ASC No. 450 Subtopic 20, "Loss Contingencies", the Company records accruals for such loss contingencies when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. |
Share-based payments | (s) Share-based payments Share-based awards granted to the Company's employees and non-employees are measured at fair value on grant date and measurement date, respectively, and share-based compensation expense is recognized (i) immediately at the grant date if no vesting conditions are required, or (ii) using the accelerated attribution method, net of estimated forfeitures, over the requisite service period. The fair value of restricted shares is determined with reference to the fair value of the underlying shares. At each date of measurement, the Company reviews internal and external sources of information to assist in the estimation of various attributes to determine the fair value of the share-based awards granted by the Company, including but not limited to the fair value of the equity value of the Company, expected life, expected volatility and expected forfeiture rates. The Company is required to consider many factors and make certain assumptions during this assessment. If any of the assumptions used to determine the fair value of the share-based awards changes significantly, share-based compensation expense may differ materially in the future from that recorded in the current reporting period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. |
Leases | (t) Leases The Company accounts for its leases under the provisions of ASC 840, Leases. Certain of the Company's operating leases provide for minimum annual payments that change over the life of the lease. The aggregate minimum annual payments are expensed on the straight-line basis over the minimum lease term. The Company recognizes a deferred rent liability for minimum step rents when the amount of rent expense exceeds the actual lease payments and it reduces the deferred rent liability when the actual lease payments exceeds the amount of straight-line rent expense. Rent holidays and tenant improvement allowances for store remodels are amortized on the straight-line basis over the initial term of the lease and any option period that is reasonably assured of being exercised. |
Discontinued operation | (u) Discontinued operation In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45. The Company disposed of its manufacturing and sales of organic compounds segment in April 2019, which met all the conditions required in order to be classified as a discontinued operation (Note 1). Accordingly, the operating results of the manufacturing and sales of organic compounds segment are reported as a gain from discontinued operations in the accompanying consolidated financial statements for all periods presented. In addition, the assets and liabilities related to the manufacturing and sales of organic compounds segment are reported as assets and liabilities of discontinued operations in the accompanying consolidated balance sheets at June 30, 2018. For additional information, see Note 4, "Disposal of ELITE". |
Asset acquisition | (v) Asset acquisition The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes transaction costs. Goodwill is not recognized in asset acquisitions. In an asset acquisition, the cost allocated to transfer costs of ownership of tea shops is charged to general and administrative expenses at the acquisition date. |
Recently announced accounting standards | (w) Recently announced accounting standards In April 2019, the FASB issued ASU 2019-04 "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments." Apart from the amendments to ASU 2016-13 as mentioned below, the ASU also included subsequent amendments to ASU 2016-01, which we adopted in January 1, 2018. The guidance in relation to the amendments to ASU 2016-01 is effective for us for the year ending December 31, 2020 and interim reporting periods during the year ending December 31, 2020. Early adoption is permitted. Management is evaluating the effect, if any, on the Company's consolidated financial statements. In December 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. The amendments clarify or simplify certain narrow aspects of ASC 842 for lessors. Specifically: 1) The amendments provide an accounting policy election whereby lessors may choose not to evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, lessors making the election will account for those costs as if they are lessee costs, i.e., through the balance sheet instead of the income statement. 2) Lessors will exclude from variable payments, and therefore revenue, lessor costs paid by lessees directly to third parties. Conversely, lessors will include in variable payments, and therefore revenue, such costs that are paid by the lessor and reimbursed by the lessee, and 3) Regarding contracts with lease and nonlease components, lessors will allocate certain variable payments to the lease and nonlease components when the changes in facts and circumstances on which the variable payment is based occur. The amount of variable payments allocated to the lease components will be recognized in profit or loss, while the amount of variable payments allocated to nonlease components will be recognized in accordance with other GAAP. If an entity has not yet adopted the new leases standard, it must adopt ASU 2018-20 concurrently with the leases standard. If an entity has previously adopted the new leases standard, specific transition requirements apply. Management is evaluating the effect, if any, on the Company's consolidated financial statements. In October 2018, the FASB issued ASU2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. ASU 2018-17 expands the accounting alternative that allows private companies the election not to apply the variable interest entity guidance to qualifying common control leasing arrangements. ASU 2018-17 broadens the scope of the private company alternative to include all common control arrangements that meet specific criteria (not just leasing arrangements). ASU 2018-17 also eliminates the requirement that entities consider indirect interests held through related parties under common control in their entirety when assessing whether a decision-making fee is a variable interest. Instead, the reporting entity will consider such indirect interests on a proportionate basis. The amendments are effective for public business entities for fiscal years ending after December 15, 2019. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting the updated provisions to its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance if effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions to its consolidated financial statements. |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of consolidated financial statements | June 30, June 30, 2019 2018 Cash $ 307,320 $ - Short-term investments 4,078,244 - Other current assets 551,299 - Property and equipment, net 604,095 - Deposits for plant, property and equipment 665,380 - Other noncurrent assets 278,786 - Total Assets $ 6,485,124 $ - Due to MYT $ 6,943,194 $ - Other current liabilities 262,034 - Total Liabilities $ 7,205,228 $ - For the Years Ended 2019 2018 2017 Revenue $ 401,814 $ - $ - Net loss $ (724,687 ) $ - $ - |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment estimated useful lives | Electronic equipment 5 years Office equipment 5 ā 10 years Vehicles 10 years Leasehold improvements Over the shorter of lease term or the estimated useful lives of the assets |
Schedule of intangible assets | Trademark 10 years |
Disposal of Elite (Tables)
Disposal of Elite (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of assets and liabilities and income from operations classified as discontinued operation | June 30, June 30, Assets from discontinued operation: Cash and cash equivalents $ - $ 57,428 Trade and other receivables - 14,007,127 Inventories - 5,067,731 Property, plant and equipment, net - 44,346,646 Other noncurrent assets - 2,734,737 $ - $ 66,213,669 Liabilities directly associated with the assets from discontinued operation: Trade and other payables - 21,468,563 Bank borrowings and other loans - 67,336,545 Other liabilities - 864,164 $ - $ 89,669,272 For the Years Ended 2019 2018 2017 Discontinued Operations: Revenue $ 20,115,554 $ 38,452,206 $ 56,292,093 Cost of revenues (19,692,138 ) (36,488,874 ) (52,367,418 ) Selling expenses (1,501,110 ) (2,383,372 ) (1,416,283 ) General and administrative expenses (1,417,608 ) (2,359,160 ) (2,481,313 ) Allowance for doubtful accounts and obsolescence stock (6,721,854 ) (77,808,582 ) (25,162,381 ) Other expenses, net (140,264 ) (1,618,258 ) (1,091,836 ) Income tax benefits - - - Net gain from discontinued operations 37,845,726 - - Net income (loss) from discontinued operations $ 28,488,305 $ (82,206,040 ) $ (26,227,138 ) |
Asset Acquisition (Tables)
Asset Acquisition (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Asset Acquisition [Abstract] | |
Schedule of fair value of assets acquired | Fair value of assets acquired Inventories $ 47,340 Property and equipment, net 324,203 Teashop rental contracts 202,980 Transfer costs* 11,790 $ 586,313 * the transfer cost was charged to expenses at the acquisition date. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | June 30, June 30, Raw materials $ 90,604 $ - Packaging and other supplies 11,320 - Other merchant products 12,609 - $ 114,533 $ - Less: provision - - $ 114,533 $ - |
Other Current Assets (Tables)
Other Current Assets (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other current assets | June 30, June 30, Deferred consulting expenses $ 84,574 $ - Deposits 77,010 - Prepaid rental expenses 62,193 - Advance to staff 11,695 - Others 13,683 - $ 249,155 $ - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | June 30, June 30, Office equipment $ 433,878 $ - Electronic equipment 13,167 - Vehicles 8,739 - Leasehold improvements 173,165 - Less: accumulated depreciation (24,854 ) - $ 604,095 $ - |
Deposits for Property and Equ_2
Deposits for Property and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Deposits for Property and Equipment [Abstract] | |
Schedule of deposits for property and equipment | June 30, June 30, Deposits for leasehold improvements $ 624,112 $ - Deposits for office equipment 41,268 - $ 665,380 $ - |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other current liabilities | June 30, June 30, Accrued payroll and welfare $ 51,092 $ - Accrued rental expenses 42,519 - Payable for leasehold improvements 24,593 - Other tax payable 5,737 - Others 6,042 - $ 129,983 $ - |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Schedule of warrants activity | Number of Weighted Expiration Balance of warrants outstanding as of July 1, 2016 8,500,000 1.47 years December 18, 2017 Balance of warrants outstanding as of July 1, 2017 8,500,000 0.47 years December 18, 2017 Expiration of IPO warrants (8,500,000 ) Grants of private placement warrants 359,727 5 years November 20, 2022 Balance of warrants outstanding as of July 1, 2018 359,727 4.39 years Grants of registered direct offering warrants 1,809,420 5 years May 23, 2024 Grants of placement agent warrants 227,600 5 years May 23, 2024 Balance of warrants outstanding as of June 30, 2019 2,396,747 4.68 years |
Schedule of key assumption used in estimates | June 30, 2019 Terms of warrants 3.39 years Exercise price 1.31 Risk free rate of interest 2.77 % Dividend yield 0.00 % Annualized volatility of underlying stock 187.99 % |
Series A Warrants [Member] | |
Schedule of key assumption used in estimates | On May 24, On June 30, Terms of warrants 5 years 4.9 years Exercise price 1.86 1.86 Risk free rate of interest 2.77 % 2.77 % Dividend yield 0.00 % 0.00 % Annualized volatility of underlying stock 189.72 % 187.99 % |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of computation of basic and diluted loss per common share | For the Years Ended 2019 2018 2017 Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Net (loss) income from continuing operations (932,863 ) (683,295 ) (2,200,106 ) Net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Weighted Average Shares Outstanding-Basic and Diluted 18,055,150 11,653,729 9,914,313 Income (loss) per share- basic and diluted $ 1.53 $ (7.11 ) $ (2.87 ) Net (loss) income per share from continuing operations ā basic and diluted $ (0.05 ) $ (0.06 ) $ 0.05 Net income (loss) per share from discontinued operations ā basic and diluted $ 1.58 $ (7.05 ) $ (2.92 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | For the Years Ended 2019 2018 2017 Current income tax expenses $ - $ - $ - Deferred income tax expenses - - - Income tax expenses $ - $ - $ - |
Schedule of reconciliation of the statutory tax rate to the effective tax rate | For the Years Ended 2019 2018 2017 PRC statutory income tax rate 25 % 25 % 25 % Effect of different tax rates available to different jurisdictions 10.6 % (24.5 )% (25 )% Effect of non-deductible expenses (0.2 )% 0 % 0 % Effect of change in valuation allowance and others (35.4 )% (0.5 )% 0 % 0 % 0 % 0 % |
Schedule of deferred tax assets | Deferred tax assets June 30, June 30, Net operating loss carrying forward $ 329,416 $ 3,587 Less: valuation allowance (329,416 ) (3,587 ) $ - $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligations future periods | Rental payments Year ending June 30, 2020 $ 438,639 Year ending June 30, 2021 410,607 Year ending June 30, 2022 365,949 Year ending June 30, 2023 240,598 Year ending June 30, 2024 and thereafter 101,157 Total $ 1,556,950 |
Parent-Only Financials (Tables)
Parent-Only Financials (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheets | June 30, June 30, 2019 2018 ASSETS Cash $ - $ - Due from VIE 7,250,000 - ć ć Total current assets 7,250,000 - Investment in subsidiaries 3,334,515 - Total Assets $ 10,584,515 $ - LIABILITIES AND SHAREHOLDERS' EQUITY Other current liabilities $ 1,432,648 $ 312,692 Total Liabilities 1,432,648 312,692 Shareholders' Equity Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 26,180,314 and 12,660,314 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively $ 2,618 $ 1,266 Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding - - Additional paid-in capital 17,625,612 79,682,234 Accumulated deficit (8,174,141 ) (83,279,164 ) Accumulated other comprehensive (loss) income (302,222 ) 3,282,702 Total Shareholders' Deficit 9,151,867 (312,692 ) Total Liabilities and Shareholders' Deficit $ 10,584,515 $ - |
Schedule of condensed statements of operations | For the Years Ended 2019 2018 2017 General and administrative expenses $ (578,531 ) $ (872,000 ) $ (2,731,205 ) Change in fair value of warrants 1,088,443 205,785 531,099 Net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Equity loss in subsidiaries (1,442,775 ) (17,080 ) - Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Other comprehensive income (loss) Foreign currency translation adjustment (302,222 ) 7,422,092 (1,881,886 ) Comprehensive loss $ 27,253,220 $ (75,467,243 ) $ (30,309,130 ) |
Schedule of condensed statements of cash flows | For the Years Ended 2019 2018 2017 Cash Flows from Operating Activities: Net income (loss) $ 27,555,442 $ (82,889,335 ) $ (28,427,244 ) Less: net income (loss) from discontinued operations 28,488,305 (82,206,040 ) (26,227,138 ) Net loss from continuing operations (932,863 ) (683,295 ) (2,200,106 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Change in fair value of warrants (1,088,443 ) (205,785 ) (531,099 ) Issuance cost in connection with registered direct offerings 455,531 - - Share based compensation expenses 123,000 872,000 2,418,688 Equity loss in subsidiaries (1,442,775 ) (17,080 ) - Net cash used in operating activities - - (312,517 ) Cash Flows from Investing Activities: Net cash provided by investing activities - - - Cash Flows from Financing Activities: Proceeds from private placements 5,500,000 1,176,307 - Cash raised in private placement of ordinary shares 4,118,223 - - Borrowings from a shareholder - - 312,517 Loan to a VIE and a subsidiary (9,118,223 ) (1,176,307 ) - Net cash provided by financing activities - - 312,517 Increase in cash and cash equivalents - - - Cash and cash equivalents at beginning of year - - - Cash and cash equivalents at end of year $ - $ - $ - |
Organization and Principal Ac_3
Organization and Principal Activities (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Statement of Financial Position | ||
Short-term investments | $ 4,078,244 | |
Other current assets | 249,155 | |
Property and equipment, net | 604,095 | |
Total Assets | 10,846,549 | 67,174,949 |
Other current liabilities | 129,983 | |
Total Liabilities | 1,694,682 | 89,982,235 |
VIE AGREEMENTS [Member] | ||
Statement of Financial Position | ||
Cash | 307,320 | |
Short-term investments | 4,078,244 | |
Other current assets | 551,299 | |
Property and equipment, net | 604,095 | |
Deposits for plant, property and equipment | 665,380 | |
Other noncurrent assets | 278,786 | |
Total Assets | 6,485,124 | |
Due to MYT | 6,943,194 | |
Other current liabilities | 262,034 | |
Total Liabilities | $ 7,205,228 |
Organization and Principal Ac_4
Organization and Principal Activities (Details 1) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | $ 401,814 | ||
Net loss | 27,555,442 | (82,889,335) | (28,427,244) |
VIE AGREEMENTS [Member] | |||
Revenue | 401,814 | ||
Net loss | $ (724,687) |
Organization and Principal Ac_5
Organization and Principal Activities (Details Textual) - USD ($) | Feb. 09, 2019 | Aug. 28, 2018 | May 22, 2018 | Apr. 13, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 29, 2019 |
Organization and Principal Activities (Textual) | ||||||||
Diposal purchase elite in exchange | $ 1,750,000 | |||||||
Purchase Agreement [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Diposal purchase elite in exchange | $ 1,750,000 | |||||||
British Virgin Islands Corporation [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Stock issued | 50,000 | |||||||
Private placement offering ordinary shares | $ 1 | |||||||
Delta Advanced Materials Limited [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Percentage of owned subsidiary | 100.00% | |||||||
Elite Ride Limited [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Percentage of owned subsidiary | 100.00% | |||||||
HG Capital Group Limited [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Diposal purchase elite in exchange | $ 1,750,000 | |||||||
Delta Technology Holdings Limited [Member] | ||||||||
Organization and Principal Activities (Textual) | ||||||||
Stock issued | 200 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Electronic equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment | Over the shorter of lease term or the estimated useful lives of the assets |
Minimum [Member] | Office equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Maximum [Member] | Office equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended |
Jun. 30, 2019 | |
Trademark [Member] | |
Property, Plant and Equipment [Line Items] | |
Intangible assets useful live | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 24, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||||
Fair value of warrants | $ (1,088,443) | $ (205,785) | $ (531,099) | |
Advertising expenses | $ 16,725 | |||
Use Rights [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Property and equipment residual value rate | 5.00% | |||
Intangible assets residual value rate | 5.00% | |||
Private placement warrants [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Fair value of warrants | $ 204,325 | $ 312,962 | ||
Registered direct offering warrants [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Fair value of warrants | 1,091,080 | |||
Placement agent warrants [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Fair value of warrants | $ 246,718 | $ 137,243 |
Risks (Details)
Risks (Details) - Jun. 30, 2019 | USD ($) | CNY (Ā„) |
Risks (Textual) | ||
Deposited with a bank | $ 4,373,730 | |
Insured amount | 250,000 | |
Cash deposit [Member] | ||
Risks (Textual) | ||
Deposited with a bank | 4,373,730 | |
Mainland China [Member] | ||
Risks (Textual) | ||
Deposited with a bank | 307,320 | |
Insured amount | $ 72,800 | |
Mainland China [Member] | RMB [Member] | ||
Risks (Textual) | ||
Insured amount | Ā„ | Ā„ 500,000 |
Disposal of Elite (Details)
Disposal of Elite (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Assets from discontinued operation: | ||
Cash and cash equivalents | $ 57,428 | |
Trade and other receivables | 14,007,127 | |
Inventories | 5,067,731 | |
Property, plant and equipment, net | 44,346,646 | |
Other noncurrent assets | 2,734,737 | |
Total Assets | 66,213,669 | |
Liabilities directly associated with the assets from discontinued operation: | ||
Trade and other payables | 21,468,563 | |
Bank borrowings and other loans | 67,336,545 | |
Other liabilities | 864,164 | |
Total Liabilites | $ 89,669,272 |
Disposal of Elite (Details 1)
Disposal of Elite (Details 1) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Discontinued Operations: | |||
Revenue | $ 20,115,554 | $ 38,452,206 | $ 56,292,093 |
Cost of revenues | (19,692,138) | (36,488,874) | (52,367,418) |
Selling expenses | (1,501,110) | (2,383,372) | (1,416,283) |
General and administrative expenses | (1,417,608) | (2,359,160) | (2,481,313) |
Allowance for doubtful accounts and obsolescence stock | (6,721,854) | (77,808,582) | (25,162,381) |
Other expenses, net | (140,264) | (1,618,258) | (1,091,836) |
Income tax benefits | |||
Net gain from discontinued operations | 37,845,726 | ||
Net income (loss) from discontinued operations | $ 28,488,305 | $ (82,206,040) | $ (26,227,138) |
Disposal of Elite (Details Text
Disposal of Elite (Details Textual) | Feb. 09, 2019USD ($) |
Disposal of Elite (Textual) | |
Cash purchase Price | $ 1,750,000 |
Asset Acquisition (Details)
Asset Acquisition (Details) - Level 3 [Member] | Jun. 30, 2019USD ($) | |
Inventories | $ 47,340 | |
Property and equipment, net | 324,203 | |
Teashop rental contracts | 202,980 | |
Transfer costs | 11,790 | [1] |
Fair value of assets acquired | $ 586,313 | |
[1] | the transfer cost was charged to expenses at the acquisition date. |
Asset Acquisition (Details Text
Asset Acquisition (Details Textual) | 12 Months Ended |
Jun. 30, 2019USD ($) | |
Asset Acquisition (Textual) | |
Total cash consideration | $ 586,313 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 90,604 | |
Packaging and other supplies | 11,320 | |
Other merchant products | 12,609 | |
Inventory Gross | 114,533 | |
Less: provision | ||
Total | $ 114,533 |
Other Current Assets (Details)
Other Current Assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Other Current Assets [Abstract] | ||
Deferred consulting expenses | $ 84,574 | |
Deposits | 77,010 | |
Prepaid rental expenses | 62,193 | |
Advance to staff | 11,695 | |
Others | 13,683 | |
Total other current assets | $ 249,155 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (24,854) | |
Property, plant and equipment, net | 604,095 | |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 433,878 | |
Electronic Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 13,167 | |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | 8,739 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 173,165 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Textual) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Property And Equipment, Net (Textual) | |||
Depreciation expenses | $ 25,012 |
Deposits for Property and Equ_3
Deposits for Property and Equipment (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Property, Plant and Equipment [Abstract] | ||
Deposits for leasehold improvements | $ 624,112 | |
Deposits for office equipment | 41,268 | |
Total deposits for property and equipment | $ 665,380 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Other Current Liabilities [Abstract] | ||
Accrued payroll and welfare | $ 51,092 | |
Accrued rental expenses | 42,519 | |
Payable for leasehold improvements | 24,593 | |
Other tax payable | 5,737 | |
Others | 6,042 | |
Total current liabilities | $ 129,983 |
Equity (Details)
Equity (Details) - Warrant [Member] - shares | 12 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Beginning balance of warrants outstanding, Number of shares | 359,727 | 8,500,000 | 8,500,000 | |
Expiration of IPO warrants, Number of shares | (8,500,000) | |||
Grants of private placement warrants, Number of shares | 359,727 | |||
Grants of registered direct offering warrants, Number of shares | 1,809,420 | |||
Grants of placement agent warrants, Number of shares | 227,600 | |||
Ending balance of warrants outstanding, Number of shares | 2,396,747 | 359,727 | 8,500,000 | 8,500,000 |
Balance of warrants outstanding, Weighted average life | 4 years 8 months 5 days | 4 years 4 months 20 days | 5 months 20 days | 1 year 5 months 20 days |
Grants of private placement warrants, Weighted average life | 5 years | |||
Grants of registered direct offering warrants, Weighted average life | 5 years | |||
Grants of placement agent warrants, Weighted average life | 5 years | |||
Balance of warrants outstanding, Expiration dates | Dec. 18, 2017 | Dec. 18, 2017 | ||
Grants of private placement warrants, Expiration dates | Nov. 20, 2022 | |||
Grants of registered direct offering warrants, Expiration dates | May 23, 2024 | |||
Grants of placement agent warrants, Expiration dates | May 23, 2024 |
Equity (Details 1)
Equity (Details 1) - $ / shares | 1 Months Ended | 12 Months Ended |
May 24, 2019 | Jun. 30, 2019 | |
Warrant [Member] | ||
Terms of warrants | 3 years 4 months 20 days | |
Exercise price | $ 1.31 | |
Risk free rate of interest | 2.77% | |
Dividend yield | 0.00% | |
Annualized volatility of underlying stock | 187.99% | |
Series A Warrants [Member] | ||
Terms of warrants | 5 years | 4 years 10 months 25 days |
Exercise price | $ 1.86 | $ 1.86 |
Risk free rate of interest | 2.77% | 2.77% |
Dividend yield | 0.00% | 0.00% |
Annualized volatility of underlying stock | 189.72% | 187.99% |
Equity (Details Textual)
Equity (Details Textual) - USD ($) | Feb. 08, 2019 | Jul. 03, 2018 | May 24, 2019 | Dec. 31, 2018 | Sep. 18, 2018 | Nov. 21, 2017 | Dec. 21, 2012 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
Equity (Textual) | |||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | |||||||||
Common stock, shares issued | 26,180,314 | 12,660,314 | |||||||||
Common stock, shares outstanding | 26,180,314 | 12,660,314 | |||||||||
Value of services total amount | $ 123,000 | $ 872,000 | $ 2,418,688 | ||||||||
Fair value of warrants | (1,088,443) | (205,785) | $ (531,099) | ||||||||
IPO warrants [Member] | |||||||||||
Equity (Textual) | |||||||||||
Warrants to purchase ordinary shares | 4,500,000 | ||||||||||
Warrants exercise price per share | $ 0.75 | ||||||||||
Public warrants to shareholder | 4,000,000 | ||||||||||
Public warrant, description | The public warrants may be redeemed by the Company at a price of $0.01 per public warrant in whole but not in part upon 30 days prior written notice after the public warrants become exercisable, only in the event that the last sale price of the ordinary shares is at least $15.00 per share for any 20 trading days within a 30 trading days period ending on the third business day prior to the date on which notice of redemption is given. | ||||||||||
Aggregate purchase price | $ 3,375,000 | ||||||||||
Private Placement [Member] | |||||||||||
Equity (Textual) | |||||||||||
Fair value of warrants | 204,325 | $ 312,962 | |||||||||
Placement Agent Warrants [Member] | |||||||||||
Equity (Textual) | |||||||||||
Fair value of warrants | $ 246,718 | 137,243 | |||||||||
Incremental issuance costs | $ 490,667 | ||||||||||
Registered direct offering warrants [Member] | |||||||||||
Equity (Textual) | |||||||||||
Warrants to purchase ordinary shares | 1,809,420 | ||||||||||
Warrants issuance of period | 5 years | ||||||||||
Warrants exercise price per share | $ 1.86 | ||||||||||
Fair value of warrants | $ 1,961,411 | $ 1,091,080 | |||||||||
Class A warrants [Member] | IPO warrants [Member] | |||||||||||
Equity (Textual) | |||||||||||
Public warrant, description | Each class A share will be entitled to one public warrant. Each public warrant entitles the holders to purchase from the Company one ordinary shares at an exercise price of $10.00 commencing on the later. | ||||||||||
Securities purchase agreement [Member] | |||||||||||
Equity (Textual) | |||||||||||
Issuance of shares | 525,000 | 7,500,000 | 2,500,000 | ||||||||
Sale of stock ordinary shares | 2,845,000 | 7,500,000 | 2,500,000 | ||||||||
Sale of stock par value per share | $ 0.0001 | $ 0.0001 | |||||||||
Purchase price per share | $ 0.55 | $ 0.55 | |||||||||
Proceeds of value | $ 4,600,000 | $ 4,125,000 | $ 1,375,000 | ||||||||
Warrants to purchase ordinary shares | 1,809,420 | ||||||||||
Warrants issuance of period | 5 years | ||||||||||
Warrants exercise price per share | $ 1.86 | ||||||||||
Long Yi [Member] | |||||||||||
Equity (Textual) | |||||||||||
Issuance of shares | 100,000 | ||||||||||
Value of services total amount | $ 123,000 | ||||||||||
Wenyuan Zhang [Member] | |||||||||||
Equity (Textual) | |||||||||||
Issuance of shares | 50,000 | ||||||||||
Value of services total amount | $ 123,000 | ||||||||||
Private placement warrants [Member] | |||||||||||
Equity (Textual) | |||||||||||
Issuance of shares | 1,798,635 | ||||||||||
Warrants issuance of period | 5 years | ||||||||||
Warrants exercise price per share | $ 1.31 | ||||||||||
Private warrants to shareholder | 359,727 | ||||||||||
Common Stock [Member] | |||||||||||
Equity (Textual) | |||||||||||
Common stock, shares authorized | 100,000,000 | ||||||||||
Common stock, shares issued | 12,660,314 | ||||||||||
Common stock, shares outstanding | 12,660,314 | ||||||||||
Warrant [Member] | |||||||||||
Equity (Textual) | |||||||||||
Warrants outstanding | 2,396,747 | 359,727 | 8,500,000 | 8,500,000 |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |||
Net income (loss) | $ 27,555,442 | $ (82,889,335) | $ (28,427,244) |
Net (loss) income from continuing operations | (932,863) | (683,295) | (2,200,106) |
Net income (loss) from discontinued operations | $ 28,488,305 | $ (82,206,040) | $ (26,227,138) |
Weighted Average Shares Outstanding-Basic and Diluted | 18,055,150 | 11,653,729 | 9,914,313 |
Income (loss) per share- basic and diluted | $ 1.53 | $ (7.11) | $ (2.87) |
Net (loss) income per share from continuing operations - basic and diluted | (0.05) | (0.06) | 0.05 |
Net income (loss) per share from discontinued operations - basic and diluted | $ 1.58 | $ (7.05) | $ (2.92) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current income tax expenses | |||
Deferred income tax expenses | |||
Income tax expenses |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
PRC statutory income tax rate | 25.00% | 25.00% | 25.00% |
Effect of different tax rates available to different jurisdictions | 10.60% | (24.50%) | (25.00%) |
Effect of non-deductible expenses | (0.20%) | 0.00% | 0.00% |
Effect of change in valuation allowance and others | (35.40%) | (0.50%) | 0.00% |
Total | 0.00% | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carrying forward | $ 329,416 | $ 3,587 |
Less: valuation allowance | (329,416) | (3,587) |
Deferred tax assets |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | |
Hong Kong [Member] | |||
Income Taxes (Textual) | |||
Statutory financial statements adjusted tax rate, description | The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. | ||
Applicable tax rate | 16.50% | ||
United States [Member] | |||
Income Taxes (Textual) | |||
Loss before tax | $ 841,088 | $ 17,080 | |
Net operating loss carryforward | $ 841,088 | 17,080 | |
Net operating loss carryforward expire date | Jun. 30, 2037 | ||
United States [Member] | Maximum [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 35.00% | ||
United States [Member] | Minimum [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 21.00% | ||
PRC [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 25.00% | ||
Net operating loss carryforward | $ 1,437,105 | $ 17,080 | |
Net operating loss carryforward expire date | Dec. 31, 2022 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Year ending June 30, 2020 | $ 438,639 |
Year ending June 30, 2021 | 410,607 |
Year ending June 30, 2022 | 365,949 |
Year ending June 30, 2023 | 240,598 |
Year ending June 30, 2024 and thereafter | 101,157 |
Total | $ 1,556,950 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Textual) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies (Textual) | |||
Lease agreements, desription | We entered into 20 lease agreements with various lessors for the lease of office spaces, eight tea shops, warehouses and staff accommodations. Among the 20 lease agreements, we had 3 lease agreements matured or terminated during the period. As of June 30, 2019, we had 18 lease agreements with an aggregated monthly rental fee of $39,638 which expires during December 2019 through May 2024. | ||
Rent expense | $ 198,918 | $ 0 | $ 0 |
Parent-Only Financials (Details
Parent-Only Financials (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
ASSETS | ||||
Total current assets | $ 9,298,288 | $ 67,174,949 | ||
Total Assets | 10,846,549 | 67,174,949 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Other current liabilities | 129,983 | |||
Total Liabilities | 1,694,682 | 89,982,235 | ||
Shareholders' Equity | ||||
Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 26,180,314 and 12,660,314 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively | 2,618 | 1,266 | ||
Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding | ||||
Accumulated deficit | (8,174,141) | (83,279,164) | ||
Accumulated other comprehensive (loss) income | (302,222) | 3,282,702 | ||
Total Shareholders' Deficit | 9,151,867 | (22,807,286) | $ 15,611,650 | $ 43,502,092 |
Total Liabilities and Shareholders' Deficit | 10,846,549 | 67,174,949 | ||
Parent [Member] | ||||
ASSETS | ||||
Cash | ||||
Due from VIE | 7,250,000 | |||
Total current assets | 7,250,000 | |||
Investment in subsidiaries | 3,334,515 | |||
Total Assets | 10,584,515 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Other current liabilities | 1,432,648 | 312,692 | ||
Total Liabilities | 1,432,648 | 312,692 | ||
Shareholders' Equity | ||||
Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 26,180,314 and 12,660,314 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively | 2,618 | 1,266 | ||
Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding | ||||
Additional paid-in capital | 17,625,612 | 79,682,234 | ||
Accumulated deficit | (8,174,141) | (83,279,164) | ||
Accumulated other comprehensive (loss) income | (302,222) | 3,282,702 | ||
Total Shareholders' Deficit | 9,151,867 | (312,692) | ||
Total Liabilities and Shareholders' Deficit | $ 10,584,515 |
Parent-Only Financials (Detai_2
Parent-Only Financials (Details 1) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
General and administrative expenses | $ 2,202,161 | $ 889,107 | $ 2,814,205 |
Change in fair value of warrants | (1,088,443) | (205,785) | (531,099) |
Net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Net income (loss) | 27,555,442 | (82,889,335) | (28,427,244) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | 502,076 | 7,422,092 | (1,881,886) |
Comprehensive loss | 27,253,220 | (75,467,243) | (30,309,130) |
Parent [Member] | |||
General and administrative expenses | (578,531) | (872,000) | (2,731,205) |
Change in fair value of warrants | 1,088,443 | 205,785 | 531,099 |
Net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Equity loss in subsidiaries | (1,442,775) | (17,080) | |
Net income (loss) | 27,555,442 | (82,889,335) | (28,427,244) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | (302,222) | 7,422,092 | (1,881,886) |
Comprehensive loss | $ 27,253,220 | $ (75,467,243) | $ (30,309,130) |
Parent-Only Financials (Detai_3
Parent-Only Financials (Details 2) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities: | |||
Net income (loss) | $ 27,555,442 | $ (82,889,335) | $ (28,427,244) |
Less: net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Net loss from continuing operations | (932,863) | (683,295) | (2,200,106) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Change in fair value of warrants | (1,088,443) | (205,785) | (531,099) |
Issuance cost in connection with registered direct offerings | 455,531 | ||
Share based compensation expenses | 123,000 | 872,000 | 2,418,688 |
Net cash used in operating activities | (1,057,109) | (3,178,300) | (51,972) |
Cash Flows from Investing Activities: | |||
Net cash provided by investing activities | (4,437,844) | (1,134,450) | 453,308 |
Cash Flows from Financing Activities: | |||
Net cash provided by financing activities | 9,493,641 | 486,919 | (388,495) |
Increase in cash and cash equivalents | 3,707,465 | 961,280 | |
Cash and cash equivalents at beginning of year | 961,280 | ||
Cash and cash equivalents at end of year | 4,668,745 | 961,280 | |
Parent [Member] | |||
Cash Flows from Operating Activities: | |||
Net income (loss) | 27,555,442 | (82,889,335) | (28,427,244) |
Less: net income (loss) from discontinued operations | 28,488,305 | (82,206,040) | (26,227,138) |
Net loss from continuing operations | (932,863) | (683,295) | (2,200,106) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Change in fair value of warrants | 1,088,443 | 205,785 | 531,099 |
Issuance cost in connection with registered direct offerings | 455,531 | ||
Share based compensation expenses | 123,000 | 872,000 | 2,418,688 |
Equity loss in subsidiaries | (1,442,775) | (17,080) | |
Net cash used in operating activities | (312,517) | ||
Cash Flows from Investing Activities: | |||
Net cash provided by investing activities | |||
Cash Flows from Financing Activities: | |||
Proceeds from private placements | 5,500,000 | 1,176,307 | |
Cash raised in private placement of ordinary shares | 4,118,223 | ||
Borrowings from a shareholder | 312,517 | ||
Loan to a VIE and a subsidiary | (9,118,223) | (1,176,307) | |
Net cash provided by financing activities | 312,517 | ||
Increase in cash and cash equivalents | |||
Cash and cash equivalents at beginning of year | |||
Cash and cash equivalents at end of year |
Parent-Only Financials (Detai_4
Parent-Only Financials (Details Textual) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 |
Parent-Only Financials (Textual) | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 26,180,314 | 12,660,314 |
Common stock, shares outstanding | 26,180,314 | 12,660,314 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] - shares | 1 Months Ended | |
Sep. 28, 2019 | Aug. 27, 2019 | |
Subsequent Event (Textual) | ||
Resale of shareholders | 10,671,638 | |
Share Purchase Agreement [Member] | ||
Subsequent Event (Textual) | ||
VIE agreements, description | Pursuant to the SPA, the Company shall deliver to the 39 Pu Shareholders total consideration of US$7.2 million ("Total Consideration"), of which US$3.00 million shall be paid in cash ("Cash Consideration") and US$4.2 million shall be paid in ordinary shares, no par value ("Ordinary Shares"), of the Company, at a price of US$0.30 per share, for a total of 14,000,000 Ordinary Shares ("Share Consideration"), in exchange for 39 Pu and 39 Pu Shareholders to enter into VIE Agreements (the "VIE Agreements") with WFOE. The VIE AgreementsĀ are designed to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the majority equity holder of 39 Pu, including absolute rights to control the management, operations, assets, property and revenue of 39 Pu. 39 Pu has the necessary license to carry out the tea business in China. | |
Share purchase agreement, description | At the closing of the SPA (the "Closing"), the Company shall make the initial payment of US$2.4 million in immediately available cash and issue 10,000,000 Ordinary Shares. The remaining portion of the Cash Consideration of $0.6 million and Share Consideration of 4,000,000 Ordinary Shares will be delivered according to the earn-out payment based on the financial performance of 39 Pu in its next fiscal year. | |
39 Pu [Member] | ||
Subsequent Event (Textual) | ||
Equity interest, percentage | 51.00% |