Document And Entity Information
Document And Entity Information - shares | 12 Months Ended | |
Jun. 30, 2020 | Nov. 12, 2020 | |
Document And Entity Information [Abstract] | ||
Document Type | 20-F | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Entity Registrant Name | WINS Finance Holdings Inc. | |
Document Period End Date | Jun. 30, 2020 | |
Entity Current Reporting Status | Yes | |
Entity Well-known Seasoned Issuer | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,837,642 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | FY | |
Entity Central Index Key | 0001640251 | |
Current Fiscal Year End Date | --06-30 | |
Entity Voluntary Filers | No | |
Trading Symbol | WINS | |
Title of 12(b) Security | Ordinary Shares, par value $.0001 per share | |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
ASSETS | ||
Cash | $ 38,820 | $ 70,312 |
Net investment in direct financing leases (Note 5) | 16,958,300 | 30,011,279 |
Operating lease, right-of-use asset (Note 6) | 63,356 | 163,041 |
Property and equipment, net (Note 7) | 26,592 | 48,131 |
Deferred tax assets, net (Note 16) | 24,474,583 | 20,836,408 |
Other assets (Note 8) | 2,054,907 | 2,106,321 |
Non-marketable investment (Note 3) | 2,828,963 | 2,912,040 |
Assets of disposal group classified as held for sale | 163,251,052 | 171,954,262 |
TOTAL ASSETS | 209,696,573 | 228,101,794 |
Liabilities | ||
Bank loans for capital lease business (Note 9) | 0 | 338,763 |
Other loans for capital lease business (Note 9) | 0 | 377,393 |
Interest payable | 8,320 | 21,494 |
Income tax payable (Note 16) | 1,423,022 | 1,202,674 |
Deposits from direct financing leases | 5,294,690 | 5,406,497 |
Operating lease liability-current | 47,904 | 57,990 |
Other liabilities (Note 10) | 3,157,021 | 2,552,085 |
Due to related party (Note 17) | 464,000 | 464,000 |
Operating lease liability-non-current (Note 6) | 7,103 | 194,089 |
Liabilities of disposal group classified as held for sale (Note 19) | 2,949,836 | 3,036,447 |
Total Liabilities | 13,351,896 | 13,651,432 |
Stockholders' Equity | ||
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 19,837,642 issued and outstanding at June 30, 2020 and 2019)(Note 12) | 1,984 | 1,984 |
Additional paid-in capital | 211,934,432 | 211,934,432 |
Statutory reserve (Note13) | 4,687,085 | 4,687,085 |
Retained earnings | 9,557,212 | 21,560,152 |
Accumulated other comprehensive losses | (29,836,036) | (23,733,291) |
Total Stockholders' Equity | 196,344,677 | 214,450,362 |
TOTAL LIABILITIES AND EQUITY | $ 209,696,573 | $ 228,101,794 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 26, 2015 |
CONSOLIDATED BALANCE SHEETS | |||
Common stock, par value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock shares issued | 19,837,642 | 19,837,642 | 21,526,747 |
Common stock, shares outstanding | 19,837,642 | 19,837,642 | 21,526,747 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Direct financing lease income | ||
Direct financing lease interest income | $ 4,934,157 | $ 7,595,992 |
Interest expense for direct financing lease | (11,967) | (411,066) |
Business collaboration fee and commission expenses for leasing projects | (37,572) | (68,342) |
Provision for lease payment receivable | (19,379,086) | (81,585,960) |
Net direct financing lease interest income after provision for receivables | (14,494,468) | (74,469,376) |
Net revenue | (14,494,468) | (74,469,376) |
Non-interest income | ||
Interest on investment securities-held to maturity | 0 | 105,878 |
Total non-interest income | 0 | 105,878 |
Non-interest expense | ||
Business taxes and surcharges | (7,652) | (15,827) |
Salaries and employee charges | (923,325) | (542,628) |
Rental expenses (Note 6) | (95,545) | (102,859) |
Other operating expenses | (481,311) | (2,062,802) |
Total non-interest expense | (1,507,833) | (2,724,116) |
Income before taxes | (16,002,301) | (77,087,614) |
Income taxes credit (Note 16) | 3,999,361 | 18,900,720 |
NET LOSSES | (12,002,940) | (58,186,894) |
Income from discontinued operation | 0 | 8,377,166 |
Total Net Losses | (12,002,940) | (49,809,728) |
Other comprehensive loss | ||
Foreign currency translation adjustment | (6,102,745) | (9,623,857) |
COMPREHENSIVE LOSS | $ (18,105,685) | $ (59,433,585) |
Weighted-average ordinary shares outstanding (Note 15) | ||
Basic | 19,837,642 | 19,837,642 |
Diluted | 19,837,642 | 19,837,642 |
Earnings per share (Note 15) | ||
Basic | $ (0.61) | $ (2.51) |
Diluted | (0.61) | (2.51) |
From continuing operation | (0.61) | (2.93) |
From discontinued operation | $ 0 | $ 0.42 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated other Comprehensive (Loss)/Income [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Total |
Beginning Balance at Jun. 30, 2018 | $ 1,984 | $ 211,934,432 | $ (14,109,434) | $ 4,687,085 | $ 71,369,880 | $ 273,883,947 |
Beginning Balance, shares at Jun. 30, 2018 | 19,837,642 | |||||
Net losses | $ 0 | 0 | 0 | 0 | (49,809,728) | (49,809,728) |
Foreign currency translation adjustment | 0 | 0 | (9,623,857) | 0 | 0 | (9,623,857) |
Ending Balance at Jun. 30, 2019 | $ 1,984 | 211,934,432 | (23,733,291) | 4,687,085 | 21,560,152 | 214,450,362 |
Ending Balance, Shares at Jun. 30, 2019 | 19,837,642 | |||||
Net losses | $ 0 | 0 | 0 | 0 | (12,002,940) | (12,002,940) |
Foreign currency translation adjustment | 0 | 0 | (6,102,745) | 0 | 0 | (6,102,745) |
Ending Balance at Jun. 30, 2020 | $ 1,984 | $ 211,934,432 | $ (29,836,036) | $ 4,687,085 | $ 9,557,212 | $ 196,344,677 |
Ending Balance, Shares at Jun. 30, 2020 | 19,837,642 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Continuing Operation | ||
Net losses | $ (12,002,940) | $ (58,186,894) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 21,118 | 41,000 |
Provisionfor lease payment receivables | 19,379,086 | 81,585,960 |
Deferred tax (benefit) | (4,255,391) | (20,055,500) |
Changes in assets and liabilities: | ||
Net investment in direct financing leases | (7,116,662) | (41,724,936) |
Interest receivable | 4,293,657 | |
Other assets | 180,508 | 473,025 |
Lease receivable in lease agency transaction | (92,689) | (1,930,374) |
Interest payable | (12,629) | (130,205) |
Income tax payable | 256,030 | 1,127,838 |
Deposits from direct financing leases | 42,663 | (4,397,481) |
Other liabilities | 489,490 | 1,190,464 |
Net Cash Provided by (Used in) Operating Activities from Discontinued Operation | (229,263) | |
Net Cash Provided by (Used in) Operating Activities | (3,111,416) | (37,942,709) |
Continuing Operation | ||
Proceeds from maturities of investments securities | 46,906,465 | |
Deposits paid to banks for financial leasing services | (2,916,996) | |
Withdrawal of pledged bank deposits | 4,397,481 | |
Purchase of property, plant and equipment | (843) | 0 |
Net Cash Provided by (Used in) Investing Activities from Discontinued Operation | (3,266,588) | |
Net Cash Provided by (Used in) Investing Activities | (843) | 45,120,362 |
Continuing Operation | ||
Repayment of loans | (699,469) | (17,200,372) |
Net Cash (Used in) Provided by Financing Activities | (699,469) | (17,200,372) |
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH FROM CONTINUING OPERATION | 3,780,236 | (6,536,360) |
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH FROM DISCONTINUED OPERATION | (221,827) | 5,907,827 |
NET (DECREASE) IN CASH FROM CONTINUING OPERATION | (31,492) | (13,063,228) |
NET (DECREASE) AND INCREASE IN CASH FROM DISCONTINUED OPERATION | (221,827) | 2,411,976 |
Cash and cash equivalents at beginning of year | 70,312 | 13,133,540 |
Cash and cash equivalents at beginning of year-disposal groups | 7,775,528 | 5,363,552 |
Cash and cash equivalents at end of year | 38,820 | 70,312 |
Cash and cash equivalents at end of year-disposal groups | 7,553,701 | 7,775,528 |
Continuing Operation | ||
Cash paid for income taxes | 26,942 | |
Cash paid for interest expense | 11,966 | 443,186 |
Discontinued Operation | ||
Cash paid for income taxes | 256,613 | |
Cash paid for interest expense | $ 0 | $ 0 |
ORGANIZATION, PRINCIPAL ACTIVIT
ORGANIZATION, PRINCIPAL ACTIVITIES,GOING CONCERN AND MANAGEMENT'S PLANS | 12 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION, PRINCIPAL ACTIVITIES, GOING CONCERN AND MANAGEMENT'S PLANS | |
ORGANIZATION, PRINCIPAL ACTIVITIES, GOING CONCERN AND MANAGEMENT'S PLANS | NOTE 1 - The accompanying consolidated financial statements include the financial statements of Wins Finance Holdings Inc. (“Wins Finance”) and its subsidiaries, Wins Holdings LLC (“WHL”), Wins Finance Group Limited (“WFG”), Full Shine Capital Resources Limited (“Full Shine”), Jinshang International Financial Leasing Co., Ltd. (“Jinshang Leasing”), Shanxi Jinchen Agriculture Co., Ltd. (“Jinchen Agriculture) and Shanxi Dongsheng Finance Guarantee Co., Ltd. (“Dongsheng Guarantee”). Wins Finance and its subsidiaries are collectively referred to as the "Company". Wins Finance was incorporated in the Cayman Islands as an exempt company on February 15, 2015 and was then a wholly owned subsidiary of Sino Mercury Acquisition Corp. WFG was incorporated under the laws of British Virgin Islands on July 27, 2014 and was initially owned 100% by Mr. Wang Hong. On October 23, 2014, WFG acquired a wholly-owned subsidiary, Full Shine, which is a shell company incorporated in the laws of the Hong Kong Special Administrative Region (the “HKSAR” or “Hong Kong”), for HK$1. On December 2, 2014, WFG, through Full Shine, acquired 100% of the equity capital of Jinshang Leasing, a PRC Company, by means of a share exchange (the “Jinshang Leasing Share Exchange”) pursuant to which WFG issued 30,000,000 ordinary shares to a personal holding Company owned by Mr. Wang Hong in exchange for Mr. Wang Hong’s transferring 100% of the equity capital of Jinshang Leasing to Full Shine. The share exchange among WFG, Full Shine and Mr. Wang Hong is considered in substance to be a capital transaction, rather than a business combination transaction, because prior to the share exchange WFG and Full Shine did not have any operations, had an immaterial amount of assets, and were controlled by the same owner as Jinshang Leasing. WFG’s financial statements as of and for the year ended June 30, 2015 consolidate WFG, Full Shine, Jinshang Leasing, and Jinshang Leasing’s direct and indirect wholly-owned PRC subsidiaries Jinchen Agriculture, Dongsheng Guarantee and Tianjin Jiaming. Following the completion of the capital transaction, WFG conducted business operations primarily through Jinshang Leasing and Dongsheng Guarantee. Jinshang Leasing was incorporated on May 18, 2009 in Beijing, the People’s Republic of China (the “PRC”) under the laws of PRC and engages primarily in providing financing lease services to small and medium-sized companies and related financing consulting services in the PRC. Tianjin Jiaming was incorporated on April 23, 2014 as a wholly-owned subsidiary of Jinshang Leasing. Tianjin Jiaming did not conduct any business activities from its inception through September 30, 2015, and it was dissolved on March 30, 2018. Dongsheng Guarantee was incorporated on February 22, 2006 in Jinzhong City, Shanxi Province, PRC under the laws of PRC and is mainly engaged in providing credit guarantees to small and medium-sized companies and related consulting finance services in the PRC. Jinchen Agriculture was incorporated on February 29, 2012 in Jinzhong City. Shanxi Province, PRC under the laws of PRC. Jinchen Agriculture did not conduct any business activities from its inception through September 30, 2015. On October 26, 2015, Wins Finance consummated the transactions contemplated by the Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of April 24, 2015 and amended on May 5, 2015, by and among Wins Finance, Sino Mercury Acquisition Corp. (“Sino”), WFG and the shareholders of WFG (the “WFG Shareholders”). Upon the closing of the transactions contemplated by the Merger Agreement (the “Closing”), (i) Sino merged with and into Wins Finance with Wins Finance surviving the merger (the “Merger”) and (ii) the WFG Shareholders exchanged 100% of the ordinary shares of WFG for cash and ordinary shares of Wins Finance (the “Share Exchange” together with the Merger, the “Transactions”). WFG is an integrated financing solution provider with operations located primarily in Jinzhong City, Shanxi Province and Beijing, China. WFG’s goal is to assist Chinese small & medium enterprises, including microenterprises, which have limited access to financing, in improving their overall fund-raising capability and enable them to obtain funding for business development. As a result of the Transactions, the former members of WFG own approximately 78.0% of the stock of Wins Finance and the former stockholders of Sino own the remaining 22.0%. The Transactions are accounted for as a “reverse merger” and recapitalization at the date of the consummation of the Transactions since the former members of WFG owned a majority of common stock of the Company and WFG’s operations will be the operations of Sino following the Transactions. Accordingly, WFG is deemed to be the accounting acquirer in the Transactions and, consequently, the Transactions are treated as a recapitalization of WFG. As a result, the assets and liabilities and the historical operations that will be reflected in the Sino’s financial statements after consummation of the Transactions will be those of WFG and will be recorded at the historical cost basis of WFG. Sino’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of WFG upon consummation of the Transactions. As such, WFG is the continuing entity for financial reporting purpose. SEC Manual requires that in a reverse acquisition of historical shareholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset in paid-in-capital. Therefore, the financial statements have been prepared as if WFG had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock. WHL was incorporated on November 10, 2015 in New York and was disposed on June 30, 2016 to Ms. Wenyu Li, an individual beneficially owning 8.1% of the Company’s ordinary Shares as of June 30, 2016, for a cash consideration of $270,000 (Note 8), which was the net asset value of WHL on the date of disposal. WHL did not conduct any business activities from its inception. On December 13, 2016, Appelo Ltd. and Wits Global Ltd., each an entity controlled by Mr. Wang Hong (collectively, the “Sellers”) entered into an agreement to transfer all of the ordinary shares of Wins Finance owned by them (an aggregate of 13,440,000 ordinary shares (approximately 67% of the Company’s outstanding ordinary shares)) to Freeman FinTech Corporation Limited (“Freeman”), a company listed on the Hong Kong Stock Exchange. In connection with the transaction, the Seller transferred certain rights in a registration rights agreement to Freeman. On August 2, 2017, Spectacular Bid Limited, a wholly owned subsidiary of Freeman, completed the acquisition of approximately 67% of the Company’s outstanding shares, and thereafter, Spectacular Bid Limited and Freeman become the Company’s immediate and ultimate holding company. On June 9, 2020, the Changzhi Public Security Bureau ( the “Bureau”) enforced a judgement against Jinchen Agriculture. Pursuant to the action, the Bureau froze the assets of Jincheng Agriculture and its subsidiaries. Up to the date of the report, the Company's management was unable to determine the cause of the freeze as the authorities have not provided such information, but it has advised that the Company no longer has control of the assets or operations of Jinchen Agriculture and its subsidiary Dongsheng Guarantee. Therefore, until the freeze is lifted, the Company will not be able to consolidate Shanxi Jinchen and its subsidiary Dongsheng Guarantee into its financial statements. The Company's other business are unaffected by the freeze and continue to operate normally. As at June 30 2020 and the date of approval of the consolidated financial statements, the Company had the following wholly-owned subsidiaries: Place and date of Name of entity establishment Registered capital Principal activities Wins Finance Group British Virgin Islands USD 30,000,100.00 A holding company 100% Limited(“WFG”) July 27, 2014 owned by Wins Finance Full Shine Capital Hong Kong A holding company 100% Resources Limited August 01, 2013 HKD 1.00 owned by WFG (“Full Shine”) Jinshang International PRC USD 180,000,000.00 A company providing Financial Leasing May 18, 2009 financial leasing services and Co.,Ltd (“Jingshang Leasing”) 100% owned by Full shine GOING CONCERN AND MANAGEMENT’S PLANS These consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations in the foreseeable future and that the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company has incurred losses for the years ended June 30, 2020 of approximately $12 million from continuing operation and net cash used in operating activities in 2020 of approximately $3.11 million from continuing operations. The Company has funded these losses primarily through cash generated from operations over the years. The Company expects revenue in the year ended June 30 2021 to decrease 25% as compared with the year ended June 30 2020 due to the adverse impact of the COVID-19 outbreak on the Company's financial leasing business. Although COVID-19 was contained in China in the second half of 2020, the lessee's ability to repay the rental expense was still affected and the Company had made a specific allowance for the lease payment in the amount of $101,862,247 as of June 30, 2020 based on the specific risk of collectability of the lessee was identified. As of June 30, 2020, the Company’s cash balances totaled $38,000. The Company has taken an intensive review of operations and expenditures, including selling, distribution and administration expenses, to identify and eliminate inefficiencies and redundancies in order to preserve cash while maintaining the business. Given the Company's existing cash balances and projected cash generated by, and used in, operating activities, the Company believes that it will have sufficient liquidity to fund its operating activities, and react as necessary to market changes, which may include working capital needs for at least twelve months from June 30, 2020. These consolidated financial statements do not reflect adjustments to the carrying value of assets and liabilities, reported expenses and statement of financial position classification that would be necessary if going concern assumption was not appropriate. These adjustments could be material. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation and principle of consolidation The consolidated financial statements of Wins Finance and its subsidiaries are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The consolidated financial statements include the financial statements of Wins Finance, its subsidiaries, including the wholly-foreign owned enterprises ("WFOEs") in the PRC. A subsidiary is an entity in which Wins Finance (i) directly or indirectly controls more than 50% of the voting power; or (ii) has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. All significant inter-Company transactions and balances have been eliminated upon consolidation. (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using information then currently available. Changes in facts and circumstances may cause Wins Finance to revise its estimates. Material estimates that are particularly susceptible to significant change in the near-term include the determination of the allowances for doubtful accounts receivable and for guarantee losses. Significant accounting estimates reflected in the financial statements include, but are not limited to: (i) the allowance for doubtful receivables; (ii) estimates of losses on unexpired contracts and financial guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) impairment of long-lived assets; (vi) valuation allowance for deferred tax assets; (vii) contingencies; and (viii) share-based compensation. (c) Operating segments ASC 280, Segment Reporting, requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the financing lease business and the guarantee business. The Company’s net revenues are all generated from customers in the PRC. Hence, The Company operates and manages its business within one reportable segment, which is to provide financial services in the PRC domestic market. For the year ended June 30, 2020, there were2 customers that accounted for 50% and 14% of the Jinshang Leasing’s revenue, respectively. For the year ended June 30, 2019, there were 3 customers that accounted for 43%, 12% and 11% of the Jinshang Leasing’s revenue, respectively. As of June 30, 2020, two customers accounted for 40% and 13%, respectively, of the minimum lease payments receivable of Jinshang Leasing. As of June 30, 2019, two customers accounted for 45% and 12%, respectively, of the minimum lease payments receivable of Jinshang Leasing. (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in banks and all highly liquid investments with original maturities of three months or less that are unrestricted as to withdrawal and use. (e) Restricted Cash Restricted cash represents cash pledged to banks. (f) Investments securities – held to maturity Investments in non-marketable asset management products issued by banks and financial institutions (the issuers) with original maturities of one year or three or five years are classified as investment securities – held to maturity ("HTM"). The Company’s asset management products are managed by banks and financial institutions and invested in fixed-income financial products that are permitted by the China Securities Regulatory Commission (“CSRC”), such as government bonds, corporate bonds and central bank notes. The investment portfolios of these products are not disclosed to the Company by the banks or financial institutions. HTM securities are those securities in which the Company has the ability and intent to hold the security until maturity. HTM securities are recorded at amortized cost. Premiums and discounts on HTM securities are amortized or accreted over the life of the related HTM security as an adjustment to yield using the effective-interest method. There were no such premiums or discounts on HTM securities for any of the reporting periods presented herein. A decline in the market value of any HTM securities below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. To determine whether an impairment is other-than-temporary, the Company considers all available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable forecasts when developing an estimate of cash flows expected to be collected. The Company regularly evaluates the potential for impairment of the HTM securities, in particular when conditions indicate a potential for impairment, but not less than annually. There was no impairment noted for any of the reporting periods presented herein. Interest income from HTM securities is recognized when the Company’s right to receive payment is established. Accrued but unpaid interest income is recorded as interest receivable in the accompanying consolidated balance sheets. (g) Net investment in direct financing leases Lease contracts that Jinshang Leasing enters with financing lease customers transfer substantially all the rewards and risks of ownership of the leased assets, other than legal title, to the customers. These financing lease contracts are accounted for as direct financing leases in accordance with ASC 840-10-25 and ASC 840-40-25. At the inception of a transaction, the cost of the leased property is capitalized at the present value of the minimum lease payment receivables and the unguaranteed residual value of the property at the end of the lease. The difference between the sum of (i) the minimum lease payment receivables and the unguaranteed residual value and (ii) the cost of the leased property is recognized as unearned income. Unearned income is recognized over the period of the lease using the effective interest rate method. Net investment in direct financing leases is recorded at net realizable value consisting of minimum lease payments to be received less allowance for uncollectible, as needed, and less the unearned income. The allowance for lease payment receivable losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on Jinshang Leasing’s loss history, known and inherent risks in the transactions, adverse situations that may affect the lessee’s ability to repay, the estimated value of any underlying asset, current economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revision as more information becomes available. While management uses the best information available upon which to base estimates, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used for the purposes of analysis. Jinshang Leasing provides “Specific Allowance” for the lease payment receivable of lease transactions if any specific collectability risk is identified, and a “General Allowance”, based on total minimum lease payment receivable balance of those transactions with no specific risk identified, to be used to cover unidentified probable loss. Jinshang Leasing performs periodic and systematic detailed reviews to identify credit risks and to assess the overall collectability, and may adjust its estimates on allowance when new circumstances arise. (h) Revenue recognition The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 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 were no material changes to the Company’s consolidated financial statements upon adoption of ASC 606. Direct financing lease interest income Direct financing lease interest income is recognized on an accrual basis using the effective interest method over the term of the lease by applying the rate that discounts the estimated future minimum lease payment receivables through the period of the lease to the amount of the net investment in the direct financing lease at inception. The accrual of financing lease interest income is discontinued when a customer becomes 90 days or more past due on its lease or interest payments to Jinshang Leasing, unless Jinshang Leasing believes the interest is otherwise recoverable. Leases may be placed on non-accrual earlier if Jinshang Leasing has significant doubt about the ability of the customer to meet its lease obligations, as evidenced by consistent delinquency, deterioration in the customer’s financial condition or other relevant factors. Payments received while the lease is on non-accrual are applied to reduce the amount of the recorded value. Jinshang Leasing resumes accruing the interest income when Jinshang Leasing determines that the interest has again become recoverable, as, for example, if the customer resumes payment of the previous interest, and shows material improvement in its operating performance, financial position, and similar indicators. Contract Balances For the year ended June 30, 2020 and 2019, the Company did not have any significant incremental costs of obtaining contracts with customers incurred and/or costs incurred in fulfilling contracts with customers within the scope of ASC Topic 606, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract. As of June 30, 2020and 2019, the Company does not have any contract assets (unbilled receivables) since revenue is recognized when the performance obligation is fulfilled and the payment from customers is not contingent on a future event. Advances received from customers related to unsatisfied performance obligations are recorded as contract liabilities (unearned income), which will be recognized as revenues upon the satisfaction of performance obligations through the transfer of related promised services to customers. Allocation to Remaining Performance Obligations The Company has elected to apply the practical expedient in paragraph ASC Topic 606-10-50-14 and did not disclose the information related to transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2020 and 2019, because either the performance obligation of the Company’s contracts with customers has an original expected duration of one year or less or the Company has a right to consideration from a borrower or a customer in an amount that corresponds directly with the value to the borrower or the customer of the Company’s performance completed to date, therefore the Company may recognize revenue in the amount to which the Company has a right to invoice or collect. (i) Property and equipment, net Plant and equipment are recorded at cost less accumulated depreciation and impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3%salvage value. The average estimated useful lives of property and equipment are discussed in Note 8. The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the corresponding accounts and includes any gain or loss in the statements of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and improvements of equipment are capitalized. (j) Impairment of long-lived assets The Company applies the provisions of ASC No. 360 Sub topic 10, “Impairment or Disposal of Long-Lived Assets” (ASC 360-10) issued by the Financial Accounting Standards Board (“FASB”). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company tests long-lived assets, including property and equipment and finite-lived intangible assets, for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount of the assets is greater than their fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows at the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There were no impairment losses on long-lived assets in the years ended June 30, 2020 and 2019. (k) Non-marketable equity investments On August 28, 2018, a subsidiary of the Company entered into an agreement to acquire a 30% equity interest in Hui Yue Finance Leasing (Ningbo) Co., Ltd. (“Hui Yue”). Hui Yue will be a joint venture between the Company, Mercury International Financial Leasing (Tianjin) Co., Ltd. (formerly translated as Chenxing International (Tianjin) Financial Leasing Co., Ltd) and Zhongtou Jinchuang (China) Financial Holding Group Co., Limited (formerly translated as Sino Investment Jinchuang Financial Holding Co., Ltd). The Company was originally required to pay RMB 300 million ($43.7 million) for its 30% interest in Hui Yue. On October 26, 2018, the parties to the agreement entered into an amendment providing that the Company would acquire only a 15% equity interest in Hui Yue (instead of the originally contemplated 30%) for RMB150 million($21.8 million). Pursuant to the agreement, the Company was required to pay the capital within thirty years, from the date of change of Hui Yue’s company registration. The first payment of RMB 20 million ($2.9 million) was made on October 30, 2018. Hui Yue will focus on the financial leasing of equipment relating to port logistics, construction machinery, energy conservation and medicine in Ningbo, China. The Company believes that participating in this investment has the opportunity to boost the Company’s growth in the leasing sector by leveraging the local financial, governmental and client resources of the Company. The Company elected to record its equity investments in this privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer, since the Company does not have significant influence over Hui Yue and its investment in Hui Yue is without readily determinable fair value. There was no observable price change for the year ended June 30, 2020. Equity investments in Hui Yue accounted for using the measurement alternative are subject to periodic impairment reviews. The Company's impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in non-interest income (expenses).Dividend income is recognized when the right to receive the payment is established. (l) Fair value measurements ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information for financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all non-financial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. Level 1 - inputs are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. As of June 30, 2020 and 2019, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank and other loans which were carried at cost or amortized cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities or the rate of interest of these instruments approximate the market rate of interest. (m) Foreign currency translation The Company’s functional and reporting currency is the United States Dollar (“US dollars” or “USD”). The functional currency of the Company’s subsidiaries in the PRC is the Chinese Yuan, or Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. For financial reporting purposes, the financial statements of the Company’s subsidiaries are prepared using RMB and translated into the Company’s functional currency at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate in effect at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and stockholders' equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. June 30, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0697 6.8680 For the years ended June 30 2020 2019 Items in the statements of income and comprehensive income, and statements of cash flows 7.0319 6.8221 (n) Interest expense Interest expense derived from the loans providing funds for financial leasing contracts is classified as cost of revenue in the consolidated statements of income. (o) Non-interest expenses Non-interest expenses primarily consist of salary and benefits for employees, travel cost, entertainment expense, depreciation of equipment, office rental expense, professional service fees, office supplies, and similar items. (p) Income taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” ASC 740 requires a Company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment of the changes. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. (q) Comprehensive income Comprehensive income includes net income and foreign currency translation adjustments. Comprehensive income is reported in the statements of operations and comprehensive income. Accumulated other comprehensive income, as presented on the balance sheets, represents cumulative foreign currency translation adjustments. (r) Operating leases The Company leases its office premises under lease agreements that qualify as operating leases. The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. The Company elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. (s) Share-based compensation The Company accounts for share-based compensation awards to employees in accordance with ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense net of estimated forfeitures over the requisite service period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. If an award is cancelled for no consideration and it is not accompanied by a concurrent grant of (or offer to grant) a replacement award, it is accounted for as a repurchase for no consideration. Any unrecognized compensation cost is recognized on the cancellation date. Cancellation of an award, accompanied by a concurrent grant of (or offer to grant) a replacement award, is accounted for as a modification of the cancelled award (ASC 718-20-35-8 through 35-9). (t) 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 other things, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 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 the loss can be reasonably estimated. (u) Earnings per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). (v) Disposal groups (or non-current assets) held-for-sale and discontinued operations Disposal groups (or non-current assets) are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. The disposal groups or the non- current assets (except for certain assets as explained below) are stated at the lower of carrying amount and fair value less costs to sell. Deferred tax assets, assets arising from employee benefits, financial assets (other than investments in subsidiaries and associates) and investment properties, which are classified as held for sale, would continue to be measured in accordance with the significant accounting policies set out elsewhere in Note 20. A discontinued operation is a component of the Company’s business, the operations and cash flows of which can be clearly distinguished from the rest of the group and which represent a separate major line of business or geographic area of operations, or is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale. When an operation is classified as discontinued, a single amount is presented in the income statement, which comprises the post-tax profit or loss of the discontinued operation and the post-tax gain or loss recognized on the measurement to fair value less costs to sell, or on the disposal, of the assets or disposal groups constituting the discontinued operation. (w) Impact of recently issued accounting pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance supersedes current guidance on revenue recognition in Topic 605, Revenue Recognition . In addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue recognition. On July 1, 2018, the Company adopted ASC 606, applying the modified retrospective method to contracts that were not completed as of July 1, 2018. The adoption did not have a material impact on retained earnings as of July 1, 2018. Results for reporting periods beginning on or after July 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. Additional disclosures have been made. Please see the Notes to Consolidated Financial Statements for details. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities . This new guidance amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance will require a modified retrospective application to all of the Company’s outstanding instruments beginning July 1, 2018, with a cumulative effect adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value will be applied prospectively. Please see the Notes to Consolidated Financial Statements for details. In November 2016, the FASB issued ASU No. 2016-18, Statements of Cash Flows (Topic 230): Restricted Cash. This guidance requires that a statement of cash flows explain the changes during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The standard should be applied to each period presented using a retrospective transition method. The adoption of this standard resulted in the Company’s restricted cash being included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. Other accounting standards adopted beginning July 1, 2018 do not have a significant impact on the Company’s consolidated financial statements. (x) Impact of recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) for re |
RISKS
RISKS | 12 Months Ended |
Jun. 30, 2020 | |
RISKS | |
RISKS | NOTE 3 - RISKS (a) Credit risk Credit risk is one of the most significant risks for the Company’s business. Credit risk exposure arises principally in investments in direct financing leases. The Company identifies credit risk collectively based on industry, geography and customer type. This information is monitored regularly by management. Further quantitative disclosures in respect of the Company’s exposure to credit risk arising from its investments in direct financing leases are set out in Note 6. The Company’s asset management products are managed by banks and financial institutions and invested in fixed-income financial products that are permitted by the China Securities Regulatory Commission (“SRC”), such as government bonds, corporate bonds and central bank notes. Management does not foresee any significant credit risks from these assets and does not expect that these banks or financial institutions may default and cause losses to the Company. PRC state-owned banks, such as Bank of China, are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management when any of those banks faces a material credit crisis. Meanwhile, China does not have an official deposit insurance program, nor does it have an agency similar to what was the Federal Deposit Insurance Corporation (FDIC) in the U.S. In the event of bankruptcy of one of the financial institutions in which the Company has deposits or investments, it may be unlikely to claim its deposits or investments back in full. As of June 30, 2020 and 2019, the Company held cash and restricted cash was $Nil, that was not insured by any governmental authority. To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with well-known financial institutions in the PRC. There has been no recent history of default in relation to these financial institutions. (b) Liquidity risk The Company is also exposed to liquidity risk, which is the risk that it will be unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. The Company is also exposed to liquidity risk on its short-term investments, including the risks that the banks and financial institutions that manage the Company’s short-term investments will be unable to redeem such short-term investments at a price equal to principal and accrued and unpaid interest or, in extreme circumstances, such as significant redemptions or a deterioration of liquidity in the financial markets, may be unable to redeem them at all. As a result, the Company may not have access to the capital related to such short-term investments when needed. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company may turn to other financial institutions, and historically has occasionally take loans from its shareholders to obtain short-term funding to meet liquidity shortages. (c) Foreign currency risk A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in the RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (the “PBOC”) or other authorized financial institutions at exchange rates quoted by the 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 the 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. (d) Business and economic risks The Company’s operations are carried out in the PRC through its direct and indirect WFOEs. 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. 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, and rates and methods of taxation, among other things. The Company expects revenue in the year ended June 30, 2021 to decrease 25% as compared with the year ended June 30,2020due to the adverse impact of the COVID-19outbreak on the Company's financial leasing business. Besides, because of the COVID-19 outbreak, the lessee’s ability to repay the rental expense was affected and the Company had made specific allowance for the lease payment amounting to USD 101,862,247 as of June 30, 2020 based on the specific risk of collectability of the lessee. |
INVESTMENTS SECURITIES - HELD T
INVESTMENTS SECURITIES - HELD TO MATURITY | 12 Months Ended |
Jun. 30, 2020 | |
INVESTMENTS SECURITIES - HELD TO MATURITY | |
INVESTMENTS SECURITIES - HELD TO MATURITY | NOTE 4 - INVESTMENTS SECURITIES – HELD TO MATURITY Investments securities – held to maturity as of June 30, 2020 and 2019mainly represented asset management products that Jinshang Leasing purchased from financial institutions. The term for the investments is one year or three or five years, and Jinshang Leasing has the ability and intents to hold the security until maturity. Interest from these investments varies from 5% to 5.5% annually, with deduction of a management fee, and was receivable quarterly, annually or upon maturity. Given that the amount of returns of the investments is determinable, the Company recorded these investments at amortized cost using the effective interest. The balances of investments securities as of June 30, 2020 and June 30, 2019 was nil. Interest income from these investments was $ Nil and $105,878 for the years ended June 30, 2020and 2019, respectively. Earned but uncollected interest was nil both of as of June 30, 2020 and 2019. |
NET INVESTMENT IN DIRECT FINANC
NET INVESTMENT IN DIRECT FINANCING LEASES | 12 Months Ended |
Jun. 30, 2020 | |
NET INVESTMENT IN DIRECT FINANCING LEASES | |
NET INVESTMENT IN DIRECT FINANCING LEASES | NOTE 5 - NET INVESTMENT IN DIRECT FINANCING LEASES Jinshang Leasing’s leasing operations consist principally of leasing high value equipment under direct financing leases expiring in 1‑5 years as of the balance sheets dates. The leases bear effective interest rate of 4.3% - 13.3% per annum. The following is a summary of the components of the Jinshang Leasing’s net investment in direct financing leases at June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Total minimum lease payments to be received $ 122,561,475 $ 121,043,154 Less: Amounts representing estimated executory costs — — Minimum lease payments receivable 122,561,475 121,043,154 Less: unearned income, representing interest (3,533,936) (5,806,618) Present value of minimum lease receivable 119,027,539 115,236,536 Less: Allowance for uncollectible receivables (102,069,239) (85,225,257) Net investment in direct financing leases $ 16,958,300 $ 30,011,279 Future minimum lease receipts under non-cancellable direct financing lease arrangements are as follows: June 30, 2020 June 30, 2019 Within 1 year $ 113,637,581 $ 98,532,910 2 years 7,340,325 14,124,241 3 years 1,583,569 7,022,776 4 years — 1,363,227 Total minimum finance lease receivables $ 122,561,475 $ 121,043,154 An account is considered delinquent if a substantial portion of a scheduled payment has not been received by the date the payment was contractually due. The accrual of direct financing lease interest income had been suspended on delinquent finance lease receivables with remaining contractual amounts due of $102,069,239 and $85,225,257 as of June 30, 2020 and 2019. As of June 30, 2020 and 2019, there were no recorded investment in direct financing leases past due 90 days or more and still accruing. The following is a credit quality analysis of finance lease receivables. In the event that an instalment repayment of a finance lease receivables is overdue for more than 30 days, the entire outstanding balance of the finance lease receivables is classified as overdue. If the instalment repayment is overdue within 30 days, only the balance of this instalment is classified as overdue. June 30, 2020 June 30, 2019 Overdue and credit-impaired $ $ – Overdue within 90 days (inclusive) — 632,212 – Overdue above 90 days 9,195,673 3,156,238 Not yet overdue but credit impaired 92,666,574 81,234,615 Overdue but not credit-impaired – Overdue within 30 days (inclusive) — — – Overdue 31 to 90 days (inclusive) — — – Overdue above 90 days — — Neither overdue nor impaired 17,165,292 30,213,471 Less: Allowances for impairment losses (102,069,239) (85,225,257) Net investment in direct financing leases, end of year $ 16,958,300 $ 30,011,279 The allowance for uncollectible minimum lease payments receivables in direct financing leases for the years ended June 30, 2020 and 2019 were as following: June 30, 2020 June 30, 2019 Allowance for uncollectible receivables at the beginning of year $ 85,225,257 $ 4,342,576 (Reversal of Provision)for lease payment receivables (10,626) (574,002) Provision for lease payment receivables 19,368,460 82,159,962 Effect of foreign currency translation (2,513,852) (703,279) Allowance for uncollectible receivables at the end of year $ 102,069,239 $ 85,225,257 June 30, 2020 June 30, 2019 Allowance for uncollectible receivables relating to: Individually evaluated for impairment $ 101,862,247 $ 85,023,066 Collectively evaluated for impairment 206,992 202,191 Ending balance $ 102,069,239 $ 85,225,257 Minimum lease payments receivable Individually evaluated for impairment $ 101,862,247 $ 85,572,930 Collectively evaluated for impairment 20,699,228 35,470,224 Ending balance $ 122,561,475 $ 121,043,154 The finance leases receivable has no pledged as collateral for the Company’s other loans as of June 30, 2020.The finance leases receivable with a gross amount of approximately $1,433,609 (RMB9,846,081) were pledged as collateral for the Company’s other loans (Note 10) as of June 30, 2019. The allowance for credit losses provides coverage for probable and estimable losses in the Company’s investment in direct financing leases. The allowance recorded is based on a quarterly review. The determination of the appropriate amount of any provision is highly dependent on management’s judgment at that time and takes into consideration all known relevant internal and external factors, including levels of nonperforming leases, customers’ financial condition, leased property values and collateral values as well as general economic conditions. When a direct financing lease receivable is determined uncollectible, for example, the customer declares bankruptcy, or the Company reaches agreement of debt restructuring with the customer, the direct financing lease would be written off from the investment in direct financing leases. Credit Quality of Investment in Direct Financing Lease: The Company performs a quarterly review on the credit quality of its investments in direct financing leases, by evaluating a variety of factors, including dependence on the counterparties, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, leased property values or collateral values, and other economic conditions such as economic trends in the area or country. In cases where heightened risk is detected as a result of factors indicating that a customer is having difficulty repaying the underlying financing, such as a default in making interest payments, material changes to the customer’s business, and deterioration of financial condition and cash flow support, the Company classifies the contracts as “abnormal contracts,” contracts without such heightened risk indicators are classified as “normal contracts”. For those contracts, the Company’s WFOE generally initiates negotiations with the customer about possible improvement or remediation measures, such as an improvement plan for cash flow management, third-party support, extension plans and similar measure, and implement close supervision of the remediation measures adopted. The risk classification of direct financing lease receivables is as follows: June 30, 2020 June 30, 2019 Normal $ 20,699,228 $ 36,020,088 Abnormal 101,862,247 85,023,066 Total $ 122,561,475 $ 121,043,154 |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2020 | |
LEASES | |
LEASES | NOTE 6 - LEASES June 30, 2020 June 30, 2019 Operating leases: Operating lease right of use assets 63,356 163,041 Current operating lease liabilities 47,904 57,990 Non-current operating lease liabilities 7,103 194,089 Total operating lease liabilities $ 55,007 $ 252,079 Maturities of lease liabilities were as follows: For the year ended June 30, Operating lease 2021 $ 61,304 Total $ 61,304 Less: amount representing interest $ 6,297 Present value of future minimum lease payments $ 55,007 Less: Current obligations $ 47,904 Long-term obligations $ 7,103 Operating lease expense for the years ended June 30, 2020 and 2019 was $ 95,545 and $ 102,859, respectively The remaining lease term is eight months as to the year ended June 30, 2020. Discount rate was 5.46%. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE 7 - PROPERTY AND EQUIPMENT, NET Property and equipment as of June 30, 2020 and 2019 consisted of the following: Useful life Salvage (years) value June 30, 2020 June 30, 2019 Leasehold improvement 20 % Vehicles 5 % 463,425 477,034 Office equipment 5 % 190,763 196,365 Electric equipment 5 % 23,841 23,678 Less: accumulated depreciation (651,437) (648,946) Property and equipment, net $ 26,592 $ 48,131 Depreciation expense totaled $2,491and $17,846 for the years ended June 30, 2020 and 2019, respectively. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Jun. 30, 2020 | |
OTHER ASSETS | |
OTHER ASSETS | NOTE 8 - OTHER ASSETS Other assets as of June 30, 2020 and 2019 consisted of: June 30, 2020 June 30, 2019 Deposit for direct financing lease $ — $ 182,782 Advance payment to third party companies 1,839 872 Other receivables 2,053,068 1,922,667 $ 2,054,907 $ 2,106,321 |
LOANS FOR CAPITAL LEASE BUSINES
LOANS FOR CAPITAL LEASE BUSINESS | 12 Months Ended |
Jun. 30, 2020 | |
LOANS FOR CAPITAL LEASE BUSINESS | |
LOANS FOR CAPITAL LEASE BUSINESS | NOTE 9 - LOANS FOR CAPITAL LEASE BUSINESS Bank loans Bank loans of $Nil and $338,763 as of June 30, 2020 and 2019, respectively, represented RMB denominated loans Jinshang Leasing obtained for Yancheng projects from CITIC Bank. The CITIC Bank loan for Yancheng project with a principal amount of RMB3.1 million ($0.5 million) was obtained in April 2015, bears interest at the fixed rate of 5.75% per annum, has a term from April 3, 2015 to February 12, 2020, pledged with time deposit certificate from Potevio New Energy Yancheng Co., Ltd (lessee of Yancheng project) of $498,898 (RMB3,426,450) as of June 30, 2019. Interest expense incurred on the bank loans for the years ended June 30, 2020 and 2019 were $10,369and $324,350, respectively. Other loans Other loans of $ Nil and $ 377,393 as of June 30, 2020 and 2019 represented RMB denominated loans Jinshang Leasing obtained in July 2016 and April 2017 for its various direct financing lease projects from Great Wall Guoxing Financial Leasing Co., Ltd. The loans bear interest at the fixed rate of 6% per annum and the term of the loans is thirty months and matures in 2019, and pledged against the Company’s receivables from its certain direct financing leases, with a gross carrying amount of$1,433,609 (RMB9,846,081)as of June 30, 2019,Jinshang Leasing paid deposits totaled $ 182,782(RMB1,255,355) (Note 9) to Great Wall Guoxing Financial Leasing Co., Ltd as of June 30, 2019, respectively, which are non-interest bearing and repayable upon maturity of the other loans. Interest expense incurred on the other loans for the years ended June 30, 2020and 2019 were $1,597 and $118,821, respectively. As of June 30, 2020, the borrowings was Nil. As of June 30, 2019, the borrowings will be due according to the following schedule: Bank loans Other loans (principal amounts) (principal amounts) Within 1 year $ 338,763 $ 377,393 Between 1 to 2 years — — Between 2 to 3 years — — Between 3 to 4 years — — Between 4 to 5 years — — Beyond 5 years — — $ 338,763 $ 377,393 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Jun. 30, 2020 | |
OTHER LIABILITIES | |
OTHER LIABILITIES | NOTE 10 - OTHER LIABILITIES Other liabilities as of June 30, 2020 and 2019 consisted of: June 30, 2020 June 30, 2019 Other tax payable $ 1,428,070 $ 1,223,716 Accrued payroll 54,010 41,215 Other payables 1,674,941 1,287,154 $ 3,157,021 $ 2,552,085 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2020 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | NOTE 11 - SHARE-BASED COMPENSATION 2015 Long-Term Incentive Equity Plan On October 20, 2015, the Company adopted the 2015 Long-Term Incentive Equity Plan, or the “Plan”, under which the Company may grant options to purchase ordinary shares of the Company to its employees, officers, directors and consultants. The total number of Ordinary Shares reserved and available for issuance under the Plan shall be a number of Ordinary Shares equal to ten percent (10%) of the total outstanding Ordinary Shares as of the closing date of that certain Agreement and Plan of Reorganization, dated as of April 10, 2015, by and among the Company, WFG and the shareholders of WFG (“Merger Agreement”), after taking into account the Ordinary Shares that may be issued pursuant to the Merger Agreement and the conversion of any shares held by the Company’s public shareholders as provided for in the Company’s Amended and Restated Certificate of Incorporation. The Plan shall be administered by the Board or a Committee. If administered by a Committee, such Committee shall be composed of at least two directors, all of whom are “outside directors” within the meaning of the regulations issued under Section 162(m) of the Code and “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Committee members shall serve for such term as the Board may in each case determine and shall be subject to removal at any time by the Board. The term of each Option shall be fixed by the Committee; provided, however, that an Incentive Option may be granted only within the ten-year period commencing from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive Option granted to an optionee who, at the time of grant, owns Ordinary Shares possessing more than 10% of the total combined voting power of all classes of voting shares of the Company (“10% Shareholder”). The exercise price per Ordinary Share purchasable under an Option shall be determined by the Committee at the time of grant and may not be less than 100% of the Fair Market Value on the date of grant (or, if greater, the par value of the Ordinary Shares); provided, however, that the exercise price of an Incentive Option granted to a 10% Shareholder will not be less than 110% of the Fair Market Value on the date of grant. The Plan was approved and unless terminated by the Board, it shall continue to remain effective until such time as no further awards may be granted and all awards granted under the Plan are no longer outstanding. Notwithstanding the foregoing, grants of Incentive Options may be made only during the ten-year period beginning on the Effective Date. The following table summarizes stock award activity and related information for all of Wins Finance’s Equity Plans for the years ended June 30, 2020 and 2019: Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Term In Years $ Outstanding, July 1, 2016 1,270,000 12 2.42 Granted — 12 3.00 Exercised — — — Forfeited (1,190,000) 12 — Canceled (80,000) 12 — Outstanding, June 30, 2017, 2018 and 2019 — — — Granted — — — Exercised — — — Forfeited — — — Canceled — — — Outstanding, June 30, 2020 — — — Exercisable, June 30, 2019and 2020 — — — Vested and expected to vest, June 30, 2019and 2020 — — — During the year ended June 30, 2017, 1,190,000 options were forfeited and 80,000 options were cancelled due to the termination of the holders’ employment prior to vesting. On February 14, 2017, Wins Finance terminated the remaining option agreements with the employees for no consideration. No options remained outstanding following the cancellation and as of June 30, 2019 and 2020. The Company measures compensation cost related to share options based on the grant-date fair value of the award using the Binomial Model. The weighted-average assumptions used in the Binomial Model calculation for option grants during the year ended June 30, 2016 were as follows: Expected volatility 51.5 % Risk-free interest rates 1.77 % Expected terms 5.0 years Dividend yields 0 % Sub-Optimal behavior multiple 2.80 Fair Value per share of options granted $ 5.27~$5.44 The expected volatility assumption is based on historical weekly volatility of peer companies’ share price. The Company utilized peer company data due to Wins Finance’s limited history of publicly traded shares. During the year ended 2016, the expected term assumption represents the remaining life of the option at the grant date. The risk-free interest rates used are based on the USD Treasury Activities (IYC25) Zero Coupon Yield. The estimated fair value of share-based compensation to employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. In connection with the grant of stock options to employees, the Company recorded share-based compensation charges of nil and nil , respectively, for the years ended June 30, 2020 and 2019, respectively. The negative amount in 2017 resulted from the reversal of share-based compensation expense for the Company’s options that were cancelled due to the termination of the holder’s employment prior to vesting. |
CAPITALIZATION
CAPITALIZATION | 12 Months Ended |
Jun. 30, 2020 | |
CAPITALIZATION | |
CAPITALIZATION | NOTE 12 - CAPITALIZATION Common Stock As of October 26, 2015, Wins Finance is authorized to issue up to 100,000,000 ordinary shares with a par value of $0.0001, 21,526,747 shares of Common Stock were issued and outstanding. 16,800,000 and 4,726,747 ordinary shares were held by WFG's shareholders and former stockholders of Sino, respectively. On June 28, 2016, the Company repurchased 5,100 of its ordinary shares from Bradley Reifler, a former director of the Company, for $60,180, and 1,480,000 shares from Bluesky LLC for $17,464,000. Of the amounts payable to Bluesky, $17 million was paid. Bluesky LLC is a limited liability Company owned and controlled by Bluesky Family Trust, a family trust benefitting the family of Jianming Hao, the Company’s former Chairman, Co-Chief Executive Officer and President. Balance of $464,000 remained unpaid as of June 30, 2020and June 30, 2019 On December 2, 2016, the Company repurchased 204,005 of its ordinary shares from Richard Xu, a former officer of the Company, for a consideration of $204. As of June 30, 2020 and 2019, there were 19,837,642 shares of common stock issued and outstanding. |
STATUTORY RESERVE
STATUTORY RESERVE | 12 Months Ended |
Jun. 30, 2020 | |
STATUTORY RESERVE | |
STATUTORY RESERVE | NOTE 13 - STATUTORY RESERVE In accordance with the PRC regulations on enterprises and the company’s articles of association, enterprises established in the PRC are required to provide statutory reserve before any dividend distribution, which is appropriated from net profit as reported in the enterprise’s PRC statutory accounts for the calendar year. Before making any dividend distribution, an enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. The statutory reserve can only be used for specific purposes and is not distributable as cash dividends. |
EMPLOYEE RETIREMENT BENEFITS
EMPLOYEE RETIREMENT BENEFITS | 12 Months Ended |
Jun. 30, 2020 | |
EMPLOYEE RETIREMENT BENEFITS | |
EMPLOYEE RETIREMENT BENEFITS | NOTE 14 - EMPLOYEE RETIREMENT BENEFITS The Company has made employee benefit contributions in accordance with Chinese relevant regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and birth insurance. The Company recorded the contribution in the salaries and employee charges when incurred. The contributions made by the Companies were $95,017 and $124,667 for the year ended June 30, 2020 and 2019, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 15 - EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2020 and 2019, respectively: June 30, 2020 June 30, 2019 Net income/(loss) attributable to the common shareholders $ (12,002,940) $ (49,809,728) Basic weighted-average common shares outstanding 19,837,642 19,837,642 Effect of dilutive securities — — Diluted weighted-average common shares outstanding 19,837,642 19,837,642 Earnings (loss) per share – Basic $ (0.61) $ (2.51) Earnings (loss) per share – Diluted $ (0.61) $ (2.51) Earnings (loss) per share – From continuing operations $ (0.61) $ (2.93) Earnings (loss) per share – From discontinued operations $ — $ 0.42 Basic earnings per share are computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed by adding other common stock equivalents, including non-vested common share in the weighted average number of common shares outstanding for a period, if dilutive. As of June 30, 2020 and 2019, there were no dilutive securities. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | NOTE 16 - INCOME TAXES Pursuant to the relevant rules and regulations of the Cayman Islands and the BVI, the Company and its subsidiary incorporated therein are not subject to any income tax pursuant to the rules and regulations of their respective countries of incorporation. No Hong Kong Profits Tax has been made for the years ended June 30, 2020and 2019 as Full Shine had no assessable profits arising in Hong Kong. The provision for PRC Enterprise Income Tax (“EIT) is calculated at 25% of the estimated assessable profits of the subsidiaries established in the PRC during the years ended June 30, 2020and 2019. Under the EIT Law, investment income from security funds is exempted from PRC EIT. The PRC income tax returns are generally not subject to examination by the tax authorities for tax years before calendar (tax) year 2013. With a few exceptions, the calendar (tax) years 2014-2018 remain open to examination by tax authorities in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits of the position, and measures the unrecognized benefits associated with the tax position. For the years ended June 30, 2020 and 2019, the Company had no unrecognized tax benefits. The Company does not anticipate any significant increase to its liabilities for unrecognized tax benefits within the next 12 months. The Company will classify interest and penalties, if any, related to income tax matters in income tax expense. The Company’s WFOEs are subject to income taxes in China and are subject to routine corporate income tax audits. Management believes that the WFOEs’ tax return positions are fully supported, but tax authorities may challenge certain positions, which may not be fully sustained. Determining the income tax expense for these potential assessments and recording the related effects requires management judgments and estimates. The amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in the Company’s income tax expense and, therefore, could have a material impact on the Company’s provision for income tax, net income and cash flows. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty and the timing of the resolution and/or closure of audits is not certain. If any issues addressed in tax audits of the Company’s WFOEs are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. Income tax payable represented enterprise income tax at a rate of 25% of taxable income the Company accrued but not paid. Income tax payable as of June 30, 2020 and 2019 comprises: June 30, 2020 June 30, 2019 Jinshang Leasing 1,423,022 1,202,674 Total $ 1,423,022 $ 1,202,674 For the years ended June 30, 2020 2019 Current income tax (expense) (256,030) (1,154,780) Deferred tax benefit 4,255,391 20,055,500 Total credit for income taxes 3,999,361 18,900,720 The reconciliation between the effective income tax rate and the PRC statutory income tax rate of 25% is as follows: June 30, 2020 June 30, 2019 PRC statutory tax 25 % 25.0 % Effect of non-deductible expenses (30.3) % (27.4) % Effect of non-taxable income 3.7 % 0.5 % Others (23.4) % (22.9) % Effective tax rate (25.0) % (24.8) % Deferred tax arose from the difference in tax and accounting base of the deductible lease payment receivable loss and difference in direct financing lease income recognition between PRC and U.S. GAAP. June 30, 2020 June 30, 2019 Deferred tax assets Provision for direct financing lease $ 25,517,310 $ 21,306,314 Direct financing lease income (1,042,727) (469,906) Specific allowance on guarantee — — Total deferred tax assets 24,474,583 20,836,408 Less: Valuation allowance — — Less: Net off with deferred tax liabilities for financial reporting purposes — — Nettotal deferred tax assets $ 24,474,583 $ 20,836,408 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ — $ — Commissions and fees on financial guarantee services — — Direct financing lease income — — Total deferred tax liabilities Less: Net off with deferred tax assets for financial reporting purposes — — Net total deferred tax liabilities $ — $ — For the purpose of presentation in the consolidated balance sheets, certain deferred tax assets and liabilities have been offset. As of June 30, 2020and 2019, the Company had net deferred tax assets of $24,299,486 and $20,836,408, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The management considered all available evidence, both positive and negative, in determining the realizability of deferred tax assets at June 30, 2020 and 2019. Management considered carry back availability, the scheduled reversals of deferred tax liabilities, projected future taxable income during the reversal periods, and tax planning strategies in making this assessment. Management also considered recent history of taxable income, trends in the Company’s earnings and tax rate, positive financial ratios, and the impact of the downturn in the current economic environment (including the impact of credit on allowance and provision for guarantee and direct financing lease losses; and the impact on funding levels) on the Company. Based upon its assessment, management believes that a valuation allowance was not necessary as of June 30, 2020 and 2019. As of June 30, 2020 and 2019, the Company intends to permanently reinvest the undistributed earnings of its operating subsidiaries to fund future operations. As such, no provision has been made for deferred tax assets related to the future repatriation of the cumulative undistributed earnings of the PRC subsidiaries of $51,295,890 and $39,293,597 as of June 30, 2020 and 2019, respectively. For the years ended June 30, 2020 and 2019, the Company has not been selected for examination by the applicable tax authority and no resolution of tax audits were expected to be material to the financial statements. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 12 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 17 - RELATED PARTY TRANSACTIONS AND BALANCES Related party balances Related party balances as of June 30, 2020 and 2019 (apart from those disclosed elsewhere in these financial statements) consisted of: June 30, 2020 June 30, 2019 Due to related party Bluesky LLC $ 464,000 $ 464,000 $ 464,000 $ 464,000 Bluesky LLC is a limited liability Company owned and controlled by Bluesky Family Trust, a family trust benefitting the family of Jianming Hao, the Company’s former Chairman, Co-Chief Executive Officer and President. The amount due to Bluesky LLC was interest free, unsecured and due on demand. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 - COMMITMENTS AND CONTINGENCIES Guarantee Commitments During the year ended June 30, 2018, Jinshang Leasing and a third party jointly entered into certain finance lease contracts with a customer with total contract amount of $70.1 million (RMB464 million). Jinshang Leasing provides financing to the customer of $6.2 million (RMB44 million) (included in Note 6 - net investment in direct financing leases) and the third party provides the remaining financing of $59.4 million (RMB420 million), for a period up to August 2020. Jinshang Leasing also acts as a guarantor and is obligated to pay the third party if the customer fails to pay the obligations when they become due. As of June 30, 2020, the maximum guarantee issued by Jinshang Leasing was $65.3 million(RMB462 million). Litigation The Company is involved in various legal actions arising in the ordinary course of its business. As of June 30, 2019, the Company was involved in 1 lawsuit in China, which the Company is a defendant in relation to its financing lease business (see below). The cases are in the process of being enforced. On October 31, 2014, King & Wood Mallesons filed a complaint in Xicheng District People's Court of Beijing on behalf of its client for breach of contract against Jinshang Leasing, our subsidiary. On February 3, 2015, the court agreed with Jinshang Leasing that it did not have jurisdiction over the proceeding, and the case was transferred to the court in Beijing, Haidian. There has been no activity in the case since it was transferred to the Beijing Haidian court. We believe that resolution of this matter will not result in any payment that, in the aggregate, would be material to our financial position or results of operations. As of June 30, 2018, the Company and certain of its executive officers have been named as defendants in one civil securities lawsuit filed in U.S. District Courts. On April 20, 2017, Michel Desta filed a securities class action complaint in the District Court for the Central District of California seeking monetary damages against us, Jianming Hao, Renhui Mu, Peiling (Amy) He, and Junfeng Zhao (entitled Desta v. Wins Finance Holdings, Inc., et al.; C.D. Cal. Case No. 2:17-cv-02983) (hereafter, the “California Action”). On June 26, 2017, the Court issued an Order appointing lead plaintiffs and lead counsel, and on August 25, 2017 lead plaintiffs filed an Amended Class Action Complaint. The Amended Complaint (which did not name Peiling (Amy) He as a defendant), alleges a claim against us for securities fraud purportedly arising from alleged misrepresentations concerning Wins’ principal executive offices (which alleged misrepresentations resulted in Wins being added to, and then removed from, the Russell 2000 index). On October 24, 2017, we moved to dismiss the Amended Complaint for failure to state a claim as against us. On March 1, 2018, the District Court for the Central District of California issued an Order denying the Company’s motion to dismiss. Thus, the civil action has proceeded to the fact gathering “discovery” stage in respect to the Company. As a result of a private mediation conducted in November 2018, the Company agreed in principle to settle the class action, on behalf of all remaining defendants. The full terms of that settlement remain confidential (but include certain contingencies concerning shareholder participation in the settlement and required court approvals). The court granted preliminary approval of the settlement by order entered on March 4, 2019. Given that the Company has not yet received the necessary approvals from Chinese regulators as to the transfer of the settlement funds from China to the United States, the Court entered an Order dated October 13, 2020 setting a final settlement approval hearing for March 24, 2021. On July 24, 2020, Samuel Kamau filed a shareholder class action complaint in the District Court for the Central District of California seeking unspecified monetary damages for alleged violations of the United States Securities Exchange Act of 1934 during the period from October 31, 2018 to July 6, 2020 against Wins Finance Holdings Inc., Renhui Mu, and Junfeng Zhao (entitled Kamau v. Wins Finance Holdings, Inc., et al.; C.D. Cal. Case No. 2:20-cv-06656). Plaintiff’s initial complaint alleges, among other things, that Defendants purportedly violated the securities laws by failing to disclose that the repayment of a RMB 580 million “loan” to Guohong Asset Management Co., Ltd. was “highly uncertain,” and that the resignation of the Company’s former independent auditor was “foreseeably likely” given the non-payment of the foregoing loan as well as alleged material weaknesses in the Company’s control over financial reporting. As of this date and to the best of our knowledge, neither the Company nor the individual Defendants have been served or have agreed to accept service of the summons and complaint. As of this date, Plaintiff has not filed an affidavit of service with the Court concerning service upon any Defendant. In accordance with procedural rules applicable to such securities class actions, motions for appointment as lead plaintiff(s) and lead counsel were filled on or before September 24, 2020, following the Court's resolution of which it is common for the newly-appointed lead plaintiff(s) to amend the complaint and allegations underlying the claims. |
DISPOSAL GROUPS HELD FOR SALE
DISPOSAL GROUPS HELD FOR SALE | 12 Months Ended |
Jun. 30, 2020 | |
DISPOSAL GROUPS HELD FOR SALE | |
DISPOSAL GROUPS HELD FOR SALE | NOTE 19 - DISPOSAL GROUPS HELD FOR SALE As at 30 June 2020 and 30 June 2019, the Company determined that it had lost control of the subsidiaries Jinchen Agriculture and Dongsheng Guarantee. The management of the Company has concluded that the Company has no option but to de-consolidate Jinchen Agriculture and Dongsheng Guarantee from its financial reporting as at June 30, 2020 and 2019. The effect of de-consolidation is that in future, the financial results of the subsidiaries are no longer reported in the Company’s Annual Report (i.e. the report will be at a company, not group level) and the investment in the subsidiaries is written down in the Company’s accounts as a disposal without consideration. In the event that the Company is able to re-establish control over the PRC subsidiaries and/or their assets, the Company will then re-consolidate and/or recognize this value. De-consolidation will allow the Company to prepare and issue financial reports that, to the extent possible given the circumstances, most closely and accurately reflect the true financial position of the Company. As shareholders will be aware, the Company has been unable to complete its financial reporting on a Group basis (including the PRC subsidiaries information). The Board did not, until now, believe that de-consolidation was warranted as they were waiting for further information and confirmations on the subsidiaries Jinchen Agriculture and Dongsheng Guarantee. This has led the Company to seek several extensions for submission of the reports and left the Company facing potential de-listing by Nasdaq. The Board now believes that the decision to de-consolidate as at June 30, 2020 and 2019 is justified. The de-consolidation is based on a combination of factors: 1. The Board and the management has incomplete record for the Company itself and no access to the original books and records of the subsidiaries of Jinchen Agriculture and Dongsheng Guarantee due to the freeze by the Bureau. 2. The Company, although owing 100% of the subsidiaries of Jinchen Agriculture and Dongsheng Guarantee, is only able to affect control over them via the cooperation of the managements of the subsidiaries or the Bureau. As the management of the subsidiaries was out of connection and the assets and documents were freeze by the Bureau, there are significant legal and financial obstacles to regaining the control of the subsidiaries. 3. The confirmation by way of site visit that the subsidiaries have ceased operations at the operating offices. 4. The Company’s appointed legal counsel was unable to determine the cause of the freeze as the authorities have not provided such information, but it has advised the Company that the Company no longer has control of the assets or operations of Jinchen Agriculture and Dongsheng Guarantee. Therefore, until the freeze is lifted and the Company has not been provided any guidance about when the freeze would be lifted, the Company will not be able to consolidate Jinchen Agriculture and Dongsheng Guarantee into its financial statements. 5. The Company intend to dispose the right to major shareholders for which the price will be determined later and subject to shareholder approval. Given the circumstances and based on the available information, the Board believes that the Company and its shareholders have been the victim of financial misreporting and the loss control of the subsidiaries of Jinchen Agriculture and Dongsheng Guarantee. The Board believes that de-consolidating the accounts as at 30 June 2020 and 2019 will be the fairest and most accurate way of reporting the Company’s financial position going forward and will allow the Company to pursue a restructuring and reorganization of its listing to safeguard its remaining value. Details of the disposal are as follows: Carrying amounts of assets of which control was lost: June 30, 2020 June 30, 2019 ASSETS Cash $ 3,755,831 $ 7,775,528 Restricted cash 15,568,983 16,026,192 Commission receivable 1,211,140 1,246,707 Compensation receivable 100,622 103,577 Advance payment 17,217 17,724 Interest receivable 15,940,393 16,408,380 Other receivable 198 — Available-for-sale financial assets 126,596,083 130,313,790 Property and equipment, net 60,585 62,364 TOTAL ASSETS $ 163,251,052 $ 171,954,262 LIABILITIES Allowance on guarantee $ 348,854 $ 359,098 Unearned Income-Guarantee commission 77,902 80,190 Income tax payable 2,243,618 2,309,505 Other liabilities 75,381 77,580 Deferred tax liabilities 204,081 210,074 TOTAL LIABILITIES $ 2,949,836 $ 3,036,447 Net assets de-recognised $ 160,301,216 $ 168,917,815 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2020 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 20 - SUBSEQUENT EVENTS Loss of control over subsidiaries On June 9, 2020, the Changzhi Public Security Bureau ( the “Bureau”) enforced a judgement against Jinchen Agriculture. Pursuant to the action, the Bureau froze the assets of Jincheng Agriculture and its subsidiaries. Up to the date of the report, the Company’s management was unable to determine the cause of the freeze as the authorities have not provided such information, but it has advised that the Company no longer has control of the assets or operations of Jinchen Agriculture and its subsidiary Dongsheng Guarantee. Therefore, until the freeze is lifted, the Company will not be able to consolidate Jinchen Agriculture and its subsidiary Dongsheng Guarantee into its financial statements. On November 2, 2020, the Company applied to Changzhi Public Security Bureau for assistance, hoping to take all appropriate and necessary actions as soon as possible, including but not limited to: 1. 2. The Company’s other business are unaffected by the freeze and continue to operate normally Legal issues On July 24, 2020, Samuel Kamau filed a shareholder class action complaint in the District Court for the Central District of California seeking unspecified monetary damages for alleged violations of the United States Securities Exchange Act of 1934 during the period from October 31, 2018 to July 6, 2020 against Wins Finance Holdings Inc., Renhui Mu, and Junfeng Zhao (entitled Kamau v. Wins Finance Holdings, Inc., et al.; C.D. Cal. Case No. 2:20-cv-06656). Plaintiffs initial complaint alleges, among other things, that Defendants purportedly violated the securities laws by failing to disclose that the repayment of a RMB 580 million "loan" to Guohong Asset Management Co., Ltd. was ''highly uncertain," and that the resignation of the Company’s former independent auditor was foreseeably likely given the non-payment of the foregoing loan as well as alleged material weaknesses in the Company's control over financial reporting. As of this date and to the best of our knowledge, neither the Company nor the individual Defendants have been served or have agreed to accept service of the summons and complaint. As of this date, Plaintiff has not filed an affidavit of service with the Court concerning service upon any Defendant. In accordance with procedural rules applicable to such securities class actions, the deadline for the submission of motions for appointment as lead plaintiff(s) and lead counsel are due on or before September 24, 2020, following the resolution of which it is common for the newly-appointed lead plaintiff(s) to amend the complaint and allegations underlying the claims. For this reason, we cannot provide a meaningful evaluation at this time of the likelihood of an unfavorable outcome. Similarly, because the action seeks unspecified damages, and because the shareholder class has not yet been certified by the Court, we cannot provide a meaningful evaluation of the amount or range of potential loss. Finally, given the preliminary status of this newly-filed action, we have not yet received instructions from the Company as to whether it will defend or seek to settle this matter. Influence of COVID-19 The Company expects revenue in the year ended June 30,2021 to decrease 25% as compared with the year ended June 30,2020 due to the adverse impact of the COVID-19 outbreak on the Company's financial leasing business. Despite COVID-19 was contained in China in the second half of 2020, the lessee’s ability to repay the rental expense was still affected and the Company had made specific allowance for lease payments amounting to USD 101,862,247 as at June 30 2020 based on the specific risk of collectability of the lessees identified. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation and principle of consolidation | (a) Basis of presentation and principle of consolidation The consolidated financial statements of Wins Finance and its subsidiaries are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The consolidated financial statements include the financial statements of Wins Finance, its subsidiaries, including the wholly-foreign owned enterprises ("WFOEs") in the PRC. A subsidiary is an entity in which Wins Finance (i) directly or indirectly controls more than 50% of the voting power; or (ii) has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. All significant inter-Company transactions and balances have been eliminated upon consolidation. |
Use of estimates | (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using information then currently available. Changes in facts and circumstances may cause Wins Finance to revise its estimates. Material estimates that are particularly susceptible to significant change in the near-term include the determination of the allowances for doubtful accounts receivable and for guarantee losses. Significant accounting estimates reflected in the financial statements include, but are not limited to: (i) the allowance for doubtful receivables; (ii) estimates of losses on unexpired contracts and financial guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) impairment of long-lived assets; (vi) valuation allowance for deferred tax assets; (vii) contingencies; and (viii) share-based compensation. |
Operating segments | (c) Operating segments ASC 280, Segment Reporting, requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the financing lease business and the guarantee business. The Company’s net revenues are all generated from customers in the PRC. Hence, The Company operates and manages its business within one reportable segment, which is to provide financial services in the PRC domestic market. For the year ended June 30, 2020, there were2 customers that accounted for 50% and 14% of the Jinshang Leasing’s revenue, respectively. For the year ended June 30, 2019, there were 3 customers that accounted for 43%, 12% and 11% of the Jinshang Leasing’s revenue, respectively. As of June 30, 2020, two customers accounted for 40% and 13%, respectively, of the minimum lease payments receivable of Jinshang Leasing. As of June 30, 2019, two customers accounted for 45% and 12%, respectively, of the minimum lease payments receivable of Jinshang Leasing. |
Cash and cash equivalents | (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in banks and all highly liquid investments with original maturities of three months or less that are unrestricted as to withdrawal and use. |
Restricted Cash | (e) Restricted Cash Restricted cash represents cash pledged to banks. |
Investments securities - held to maturity | (f) Investments securities – held to maturity Investments in non-marketable asset management products issued by banks and financial institutions (the issuers) with original maturities of one year or three or five years are classified as investment securities – held to maturity ("HTM"). The Company’s asset management products are managed by banks and financial institutions and invested in fixed-income financial products that are permitted by the China Securities Regulatory Commission (“CSRC”), such as government bonds, corporate bonds and central bank notes. The investment portfolios of these products are not disclosed to the Company by the banks or financial institutions. HTM securities are those securities in which the Company has the ability and intent to hold the security until maturity. HTM securities are recorded at amortized cost. Premiums and discounts on HTM securities are amortized or accreted over the life of the related HTM security as an adjustment to yield using the effective-interest method. There were no such premiums or discounts on HTM securities for any of the reporting periods presented herein. A decline in the market value of any HTM securities below cost that is deemed to be other-than-temporary results in an impairment to reduce the carrying amount to fair value. To determine whether an impairment is other-than-temporary, the Company considers all available information relevant to the collectability of the security, including past events, current conditions, and reasonable and supportable forecasts when developing an estimate of cash flows expected to be collected. The Company regularly evaluates the potential for impairment of the HTM securities, in particular when conditions indicate a potential for impairment, but not less than annually. There was no impairment noted for any of the reporting periods presented herein. Interest income from HTM securities is recognized when the Company’s right to receive payment is established. Accrued but unpaid interest income is recorded as interest receivable in the accompanying consolidated balance sheets. |
Net investment in direct financing leases | (g) Net investment in direct financing leases Lease contracts that Jinshang Leasing enters with financing lease customers transfer substantially all the rewards and risks of ownership of the leased assets, other than legal title, to the customers. These financing lease contracts are accounted for as direct financing leases in accordance with ASC 840-10-25 and ASC 840-40-25. At the inception of a transaction, the cost of the leased property is capitalized at the present value of the minimum lease payment receivables and the unguaranteed residual value of the property at the end of the lease. The difference between the sum of (i) the minimum lease payment receivables and the unguaranteed residual value and (ii) the cost of the leased property is recognized as unearned income. Unearned income is recognized over the period of the lease using the effective interest rate method. Net investment in direct financing leases is recorded at net realizable value consisting of minimum lease payments to be received less allowance for uncollectible, as needed, and less the unearned income. The allowance for lease payment receivable losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on Jinshang Leasing’s loss history, known and inherent risks in the transactions, adverse situations that may affect the lessee’s ability to repay, the estimated value of any underlying asset, current economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revision as more information becomes available. While management uses the best information available upon which to base estimates, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used for the purposes of analysis. Jinshang Leasing provides “Specific Allowance” for the lease payment receivable of lease transactions if any specific collectability risk is identified, and a “General Allowance”, based on total minimum lease payment receivable balance of those transactions with no specific risk identified, to be used to cover unidentified probable loss. Jinshang Leasing performs periodic and systematic detailed reviews to identify credit risks and to assess the overall collectability, and may adjust its estimates on allowance when new circumstances arise. |
Revenue recognition | (h) Revenue recognition The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) on January 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 were no material changes to the Company’s consolidated financial statements upon adoption of ASC 606. Direct financing lease interest income Direct financing lease interest income is recognized on an accrual basis using the effective interest method over the term of the lease by applying the rate that discounts the estimated future minimum lease payment receivables through the period of the lease to the amount of the net investment in the direct financing lease at inception. The accrual of financing lease interest income is discontinued when a customer becomes 90 days or more past due on its lease or interest payments to Jinshang Leasing, unless Jinshang Leasing believes the interest is otherwise recoverable. Leases may be placed on non-accrual earlier if Jinshang Leasing has significant doubt about the ability of the customer to meet its lease obligations, as evidenced by consistent delinquency, deterioration in the customer’s financial condition or other relevant factors. Payments received while the lease is on non-accrual are applied to reduce the amount of the recorded value. Jinshang Leasing resumes accruing the interest income when Jinshang Leasing determines that the interest has again become recoverable, as, for example, if the customer resumes payment of the previous interest, and shows material improvement in its operating performance, financial position, and similar indicators. Contract Balances For the year ended June 30, 2020 and 2019, the Company did not have any significant incremental costs of obtaining contracts with customers incurred and/or costs incurred in fulfilling contracts with customers within the scope of ASC Topic 606, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract. As of June 30, 2020and 2019, the Company does not have any contract assets (unbilled receivables) since revenue is recognized when the performance obligation is fulfilled and the payment from customers is not contingent on a future event. Advances received from customers related to unsatisfied performance obligations are recorded as contract liabilities (unearned income), which will be recognized as revenues upon the satisfaction of performance obligations through the transfer of related promised services to customers. Allocation to Remaining Performance Obligations The Company has elected to apply the practical expedient in paragraph ASC Topic 606-10-50-14 and did not disclose the information related to transaction price allocated to the performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2020 and 2019, because either the performance obligation of the Company’s contracts with customers has an original expected duration of one year or less or the Company has a right to consideration from a borrower or a customer in an amount that corresponds directly with the value to the borrower or the customer of the Company’s performance completed to date, therefore the Company may recognize revenue in the amount to which the Company has a right to invoice or collect. |
Property and equipment, net | (i) Property and equipment, net Plant and equipment are recorded at cost less accumulated depreciation and impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3%salvage value. The average estimated useful lives of property and equipment are discussed in Note 8. The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the corresponding accounts and includes any gain or loss in the statements of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and improvements of equipment are capitalized. |
Impairment of long-lived assets | (j) Impairment of long-lived assets The Company applies the provisions of ASC No. 360 Sub topic 10, “Impairment or Disposal of Long-Lived Assets” (ASC 360-10) issued by the Financial Accounting Standards Board (“FASB”). ASC 360-10 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the asset. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company tests long-lived assets, including property and equipment and finite-lived intangible assets, for impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that the net carrying amount of the assets is greater than their fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally measured by discounting expected future cash flows at the rate the Company utilizes to evaluate potential investments. The Company estimates fair value based on the information available in making whatever estimates, judgments and projections are considered necessary. There were no impairment losses on long-lived assets in the years ended June 30, 2020 and 2019. |
Non-marketable equity investments | (k) Non-marketable equity investments On August 28, 2018, a subsidiary of the Company entered into an agreement to acquire a 30% equity interest in Hui Yue Finance Leasing (Ningbo) Co., Ltd. (“Hui Yue”). Hui Yue will be a joint venture between the Company, Mercury International Financial Leasing (Tianjin) Co., Ltd. (formerly translated as Chenxing International (Tianjin) Financial Leasing Co., Ltd) and Zhongtou Jinchuang (China) Financial Holding Group Co., Limited (formerly translated as Sino Investment Jinchuang Financial Holding Co., Ltd). The Company was originally required to pay RMB 300 million ($43.7 million) for its 30% interest in Hui Yue. On October 26, 2018, the parties to the agreement entered into an amendment providing that the Company would acquire only a 15% equity interest in Hui Yue (instead of the originally contemplated 30%) for RMB150 million($21.8 million). Pursuant to the agreement, the Company was required to pay the capital within thirty years, from the date of change of Hui Yue’s company registration. The first payment of RMB 20 million ($2.9 million) was made on October 30, 2018. Hui Yue will focus on the financial leasing of equipment relating to port logistics, construction machinery, energy conservation and medicine in Ningbo, China. The Company believes that participating in this investment has the opportunity to boost the Company’s growth in the leasing sector by leveraging the local financial, governmental and client resources of the Company. The Company elected to record its equity investments in this privately held company using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer, since the Company does not have significant influence over Hui Yue and its investment in Hui Yue is without readily determinable fair value. There was no observable price change for the year ended June 30, 2020. Equity investments in Hui Yue accounted for using the measurement alternative are subject to periodic impairment reviews. The Company's impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities. All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in non-interest income (expenses).Dividend income is recognized when the right to receive the payment is established. |
Fair value measurements | (l) Fair value measurements ASC Topic 825, Financial Instruments (“Topic 825”) requires disclosure of fair value information for financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instruments. Topic 825 excludes certain financial instruments and all non-financial assets and liabilities from its disclosure requirements. Accordingly, the aggregate fair value amounts do not represent the underlying value of the Company. Level 1 - inputs are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - inputs are based upon quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. As of June 30, 2020 and 2019, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank and other loans which were carried at cost or amortized cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities or the rate of interest of these instruments approximate the market rate of interest. |
Foreign currency translation | (m) Foreign currency translation The Company’s functional and reporting currency is the United States Dollar (“US dollars” or “USD”). The functional currency of the Company’s subsidiaries in the PRC is the Chinese Yuan, or Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. For financial reporting purposes, the financial statements of the Company’s subsidiaries are prepared using RMB and translated into the Company’s functional currency at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate in effect at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and stockholders' equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. June 30, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0697 6.8680 For the years ended June 30 2020 2019 Items in the statements of income and comprehensive income, and statements of cash flows 7.0319 6.8221 |
Interest expense | (n) Interest expense Interest expense derived from the loans providing funds for financial leasing contracts is classified as cost of revenue in the consolidated statements of income. |
Non-interest expenses | (o) Non-interest expenses Non-interest expenses primarily consist of salary and benefits for employees, travel cost, entertainment expense, depreciation of equipment, office rental expense, professional service fees, office supplies, and similar items. |
Income taxes | (p) Income taxes The Company accounts for income taxes in accordance with FASB ASC Topic 740, “Income Taxes.” ASC 740 requires a Company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. 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. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment of the changes. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. |
Comprehensive income | (q) Comprehensive income Comprehensive income includes net income and foreign currency translation adjustments. Comprehensive income is reported in the statements of operations and comprehensive income. Accumulated other comprehensive income, as presented on the balance sheets, represents cumulative foreign currency translation adjustments. |
Operating leases | (r) Operating leases The Company leases its office premises under lease agreements that qualify as operating leases. The Company adopted ASU No. 2016-02 and related standards (collectively ASC 842, Leases), which replaced previous lease accounting guidance, on January 1, 2019 using the modified retrospective method of adoption. The Company elected the transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. |
Share-based compensation | (s) Share-based compensation The Company accounts for share-based compensation awards to employees in accordance with ASC Topic 718, “Compensation – Stock Compensation”, which requires that share-based payment transactions with employees be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense net of estimated forfeitures over the requisite service period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. If an award is cancelled for no consideration and it is not accompanied by a concurrent grant of (or offer to grant) a replacement award, it is accounted for as a repurchase for no consideration. Any unrecognized compensation cost is recognized on the cancellation date. Cancellation of an award, accompanied by a concurrent grant of (or offer to grant) a replacement award, is accounted for as a modification of the cancelled award (ASC 718-20-35-8 through 35-9). |
Commitments and contingencies | (t) 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 other things, government investigations and tax matters. In accordance with ASC No. 450 Sub topic 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 the loss can be reasonably estimated. |
Earnings per Share (EPS) | (u) Earnings per Share (EPS) Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similar to basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if all the potential common shares pertaining to warrants, stock options, and similar instruments had been issued and if the additional common shares were dilutive. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method for the outstanding unvested restricted stock, options and warrants, and the if-converted method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). |
Disposal groups (or non-current assets) held-for-sale and discontinued operations | (v) Disposal groups (or non-current assets) held-for-sale and discontinued operations Disposal groups (or non-current assets) are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. The disposal groups or the non- current assets (except for certain assets as explained below) are stated at the lower of carrying amount and fair value less costs to sell. Deferred tax assets, assets arising from employee benefits, financial assets (other than investments in subsidiaries and associates) and investment properties, which are classified as held for sale, would continue to be measured in accordance with the significant accounting policies set out elsewhere in Note 20. A discontinued operation is a component of the Company’s business, the operations and cash flows of which can be clearly distinguished from the rest of the group and which represent a separate major line of business or geographic area of operations, or is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or is a subsidiary acquired exclusively with a view to resale. When an operation is classified as discontinued, a single amount is presented in the income statement, which comprises the post-tax profit or loss of the discontinued operation and the post-tax gain or loss recognized on the measurement to fair value less costs to sell, or on the disposal, of the assets or disposal groups constituting the discontinued operation. |
Impact of recently issued accounting pronouncements and Impact of recently issued accounting pronouncements not yet adopted | (w) Impact of recently issued accounting pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). This guidance supersedes current guidance on revenue recognition in Topic 605, Revenue Recognition . In addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue recognition. On July 1, 2018, the Company adopted ASC 606, applying the modified retrospective method to contracts that were not completed as of July 1, 2018. The adoption did not have a material impact on retained earnings as of July 1, 2018. Results for reporting periods beginning on or after July 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 605. Additional disclosures have been made. Please see the Notes to Consolidated Financial Statements for details. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Recognition and Measurement of Financial Assets and Financial Liabilities . This new guidance amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The main provisions require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value through earnings, unless they qualify for a measurement alternative. The new guidance will require a modified retrospective application to all of the Company’s outstanding instruments beginning July 1, 2018, with a cumulative effect adjustment recorded to opening retained earnings as of the beginning of the first period in which the guidance becomes effective. However, changes to the accounting for equity securities without a readily determinable fair value will be applied prospectively. Please see the Notes to Consolidated Financial Statements for details. In November 2016, the FASB issued ASU No. 2016-18, Statements of Cash Flows (Topic 230): Restricted Cash. This guidance requires that a statement of cash flows explain the changes during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The standard is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The standard should be applied to each period presented using a retrospective transition method. The adoption of this standard resulted in the Company’s restricted cash being included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. Other accounting standards adopted beginning July 1, 2018 do not have a significant impact on the Company’s consolidated financial statements. (x) Impact of recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) for recognition of credit losses on financial instruments, which is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020, for calendar year entities), with early adoption permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. The Company does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which is part of the FASB disclosure framework project to improve the effectiveness of disclosures in the notes to the financial statements. The amendments in the new guidance remove, modify and add certain disclosure requirements related to fair value measurements covered in Topic 820, Fair Value Measurement. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for either the entire standard or only the requirements that modify or eliminate the disclosure requirements, with certain requirements applied prospectively, and all other requirements applied retrospectively to all periods presented. The Company is currently evaluating the impact of adopting this guidance. In October 2018, the FASB issued ASU No. 2018-17, Consolidation: Targeted Improvements to Related Party Guidance for Variable Interest Entities , which modifies the guidance related to indirect interests held through related parties under common control for determining whether fees paid to decision makers and service providers are variable interest. ASU 2018-17 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 and early adoption is permitted. The Company is currently evaluating the impact of adopting this guidance. In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, Income Taxes. This guidance removes certain Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
ORGANIZATION, PRINCIPAL ACTIV_2
ORGANIZATION, PRINCIPAL ACTIVITIES,GOING CONCERN AND MANAGEMENT'S PLANS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
ORGANIZATION, PRINCIPAL ACTIVITIES, GOING CONCERN AND MANAGEMENT'S PLANS | |
Schedule of wholly-owned subsidiaries of the company | As at June 30 2020 and the date of approval of the consolidated financial statements, the Company had the following wholly-owned subsidiaries: Place and date of Name of entity establishment Registered capital Principal activities Wins Finance Group British Virgin Islands USD 30,000,100.00 A holding company 100% Limited(“WFG”) July 27, 2014 owned by Wins Finance Full Shine Capital Hong Kong A holding company 100% Resources Limited August 01, 2013 HKD 1.00 owned by WFG (“Full Shine”) Jinshang International PRC USD 180,000,000.00 A company providing Financial Leasing May 18, 2009 financial leasing services and Co.,Ltd (“Jingshang Leasing”) 100% owned by Full shine |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Adjustments Resulting from the Foreign Currency Translations | Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. June 30, 2020 June 30, 2019 Balance sheet items, except for equity accounts 7.0697 6.8680 For the years ended June 30 2020 2019 Items in the statements of income and comprehensive income, and statements of cash flows 7.0319 6.8221 |
NET INVESTMENT IN DIRECT FINA_2
NET INVESTMENT IN DIRECT FINANCING LEASES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
NET INVESTMENT IN DIRECT FINANCING LEASES | |
Summary of the Components of the Jinshang Leasing's Net Investment in Direct Financing Leases | The following is a summary of the components of the Jinshang Leasing’s net investment in direct financing leases at June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Total minimum lease payments to be received $ 122,561,475 $ 121,043,154 Less: Amounts representing estimated executory costs — — Minimum lease payments receivable 122,561,475 121,043,154 Less: unearned income, representing interest (3,533,936) (5,806,618) Present value of minimum lease receivable 119,027,539 115,236,536 Less: Allowance for uncollectible receivables (102,069,239) (85,225,257) Net investment in direct financing leases $ 16,958,300 $ 30,011,279 |
Schedule of Future Minimum Lease Receipts | Future minimum lease receipts under non-cancellable direct financing lease arrangements are as follows: June 30, 2020 June 30, 2019 Within 1 year $ 113,637,581 $ 98,532,910 2 years 7,340,325 14,124,241 3 years 1,583,569 7,022,776 4 years — 1,363,227 Total minimum finance lease receivables $ 122,561,475 $ 121,043,154 |
Summary of credit quality analysis of finance lease receivables | June 30, 2020 June 30, 2019 Overdue and credit-impaired $ $ – Overdue within 90 days (inclusive) — 632,212 – Overdue above 90 days 9,195,673 3,156,238 Not yet overdue but credit impaired 92,666,574 81,234,615 Overdue but not credit-impaired – Overdue within 30 days (inclusive) — — – Overdue 31 to 90 days (inclusive) — — – Overdue above 90 days — — Neither overdue nor impaired 17,165,292 30,213,471 Less: Allowances for impairment losses (102,069,239) (85,225,257) Net investment in direct financing leases, end of year $ 16,958,300 $ 30,011,279 |
Schedule of allowance on financial guarantee | The allowance for uncollectible minimum lease payments receivables in direct financing leases for the years ended June 30, 2020 and 2019 were as following: June 30, 2020 June 30, 2019 Allowance for uncollectible receivables at the beginning of year $ 85,225,257 $ 4,342,576 (Reversal of Provision)for lease payment receivables (10,626) (574,002) Provision for lease payment receivables 19,368,460 82,159,962 Effect of foreign currency translation (2,513,852) (703,279) Allowance for uncollectible receivables at the end of year $ 102,069,239 $ 85,225,257 June 30, 2020 June 30, 2019 Allowance for uncollectible receivables relating to: Individually evaluated for impairment $ 101,862,247 $ 85,023,066 Collectively evaluated for impairment 206,992 202,191 Ending balance $ 102,069,239 $ 85,225,257 Minimum lease payments receivable Individually evaluated for impairment $ 101,862,247 $ 85,572,930 Collectively evaluated for impairment 20,699,228 35,470,224 Ending balance $ 122,561,475 $ 121,043,154 |
Summary of Risk Classification of Direct Financing Lease Receivables | The risk classification of direct financing lease receivables is as follows: June 30, 2020 June 30, 2019 Normal $ 20,699,228 $ 36,020,088 Abnormal 101,862,247 85,023,066 Total $ 122,561,475 $ 121,043,154 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
LEASES | |
Schedule of operating lease | June 30, 2020 June 30, 2019 Operating leases: Operating lease right of use assets 63,356 163,041 Current operating lease liabilities 47,904 57,990 Non-current operating lease liabilities 7,103 194,089 Total operating lease liabilities $ 55,007 $ 252,079 |
Schedule of maturity lease liability | For the year ended June 30, Operating lease 2021 $ 61,304 Total $ 61,304 Less: amount representing interest $ 6,297 Present value of future minimum lease payments $ 55,007 Less: Current obligations $ 47,904 Long-term obligations $ 7,103 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of Property and Equipment, Net | Property and equipment as of June 30, 2020 and 2019 consisted of the following: Useful life Salvage (years) value June 30, 2020 June 30, 2019 Leasehold improvement 20 % Vehicles 5 % 463,425 477,034 Office equipment 5 % 190,763 196,365 Electric equipment 5 % 23,841 23,678 Less: accumulated depreciation (651,437) (648,946) Property and equipment, net $ 26,592 $ 48,131 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
OTHER ASSETS | |
Schedule of Other Assets | Other assets as of June 30, 2020 and 2019 consisted of: June 30, 2020 June 30, 2019 Deposit for direct financing lease $ — $ 182,782 Advance payment to third party companies 1,839 872 Other receivables 2,053,068 1,922,667 $ 2,054,907 $ 2,106,321 |
LOANS FOR CAPITAL LEASE BUSIN_2
LOANS FOR CAPITAL LEASE BUSINESS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
LOANS FOR CAPITAL LEASE BUSINESS | |
Schedule of Maturities of Long-term Debt | As of June 30, 2019, the borrowings will be due according to the following schedule: Bank loans Other loans (principal amounts) (principal amounts) Within 1 year $ 338,763 $ 377,393 Between 1 to 2 years — — Between 2 to 3 years — — Between 3 to 4 years — — Between 4 to 5 years — — Beyond 5 years — — $ 338,763 $ 377,393 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
OTHER LIABILITIES | |
Schedule of Other Liabilities | Other liabilities as of June 30, 2020 and 2019 consisted of: June 30, 2020 June 30, 2019 Other tax payable $ 1,428,070 $ 1,223,716 Accrued payroll 54,010 41,215 Other payables 1,674,941 1,287,154 $ 3,157,021 $ 2,552,085 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
SHARE-BASED COMPENSATION | |
Schedule of Stock Award Activity | The following table summarizes stock award activity and related information for all of Wins Finance’s Equity Plans for the years ended June 30, 2020 and 2019: Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Term In Years $ Outstanding, July 1, 2016 1,270,000 12 2.42 Granted — 12 3.00 Exercised — — — Forfeited (1,190,000) 12 — Canceled (80,000) 12 — Outstanding, June 30, 2017, 2018 and 2019 — — — Granted — — — Exercised — — — Forfeited — — — Canceled — — — Outstanding, June 30, 2020 — — — Exercisable, June 30, 2019and 2020 — — — Vested and expected to vest, June 30, 2019and 2020 — — — |
Schedule of Weighted Average Assumptions Used to Value Options | The weighted-average assumptions used in the Binomial Model calculation for option grants during the year ended June 30, 2016 were as follows: Expected volatility 51.5 % Risk-free interest rates 1.77 % Expected terms 5.0 years Dividend yields 0 % Sub-Optimal behavior multiple 2.80 Fair Value per share of options granted $ 5.27~$5.44 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule of Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2020 and 2019, respectively: June 30, 2020 June 30, 2019 Net income/(loss) attributable to the common shareholders $ (12,002,940) $ (49,809,728) Basic weighted-average common shares outstanding 19,837,642 19,837,642 Effect of dilutive securities — — Diluted weighted-average common shares outstanding 19,837,642 19,837,642 Earnings (loss) per share – Basic $ (0.61) $ (2.51) Earnings (loss) per share – Diluted $ (0.61) $ (2.51) Earnings (loss) per share – From continuing operations $ (0.61) $ (2.93) Earnings (loss) per share – From discontinued operations $ — $ 0.42 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
INCOME TAXES | |
Schedule of Income Tax Payable | Income tax payable represented enterprise income tax at a rate of 25% of taxable income the Company accrued but not paid. Income tax payable as of June 30, 2020 and 2019 comprises: June 30, 2020 June 30, 2019 Jinshang Leasing 1,423,022 1,202,674 Total $ 1,423,022 $ 1,202,674 |
Schedule of Components of Income Tax Expense (Benefit) | For the years ended June 30, 2020 2019 Current income tax (expense) (256,030) (1,154,780) Deferred tax benefit 4,255,391 20,055,500 Total credit for income taxes 3,999,361 18,900,720 |
Schedule of Reconciliation Between the Effective Income Tax Rate and the PRC Statutory Income Tax Rate | The reconciliation between the effective income tax rate and the PRC statutory income tax rate of 25% is as follows: June 30, 2020 June 30, 2019 PRC statutory tax 25 % 25.0 % Effect of non-deductible expenses (30.3) % (27.4) % Effect of non-taxable income 3.7 % 0.5 % Others (23.4) % (22.9) % Effective tax rate (25.0) % (24.8) % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax arose from the difference in tax and accounting base of the deductible lease payment receivable loss and difference in direct financing lease income recognition between PRC and U.S. GAAP. June 30, 2020 June 30, 2019 Deferred tax assets Provision for direct financing lease $ 25,517,310 $ 21,306,314 Direct financing lease income (1,042,727) (469,906) Specific allowance on guarantee — — Total deferred tax assets 24,474,583 20,836,408 Less: Valuation allowance — — Less: Net off with deferred tax liabilities for financial reporting purposes — — Nettotal deferred tax assets $ 24,474,583 $ 20,836,408 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ — $ — Commissions and fees on financial guarantee services — — Direct financing lease income — — Total deferred tax liabilities Less: Net off with deferred tax assets for financial reporting purposes — — Net total deferred tax liabilities $ — $ — |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
RELATED PARTY TRANSACTIONS AND BALANCES | |
Schedule of Related Party Balances | Related party balances as of June 30, 2020 and 2019 (apart from those disclosed elsewhere in these financial statements) consisted of: June 30, 2020 June 30, 2019 Due to related party Bluesky LLC $ 464,000 $ 464,000 $ 464,000 $ 464,000 |
DISPOSAL GROUPS HELD FOR SALE (
DISPOSAL GROUPS HELD FOR SALE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
DISPOSAL GROUPS HELD FOR SALE | |
Summary of carrying amounts of assets and liabilities of which control was lost | June 30, 2020 June 30, 2019 ASSETS Cash $ 3,755,831 $ 7,775,528 Restricted cash 15,568,983 16,026,192 Commission receivable 1,211,140 1,246,707 Compensation receivable 100,622 103,577 Advance payment 17,217 17,724 Interest receivable 15,940,393 16,408,380 Other receivable 198 — Available-for-sale financial assets 126,596,083 130,313,790 Property and equipment, net 60,585 62,364 TOTAL ASSETS $ 163,251,052 $ 171,954,262 LIABILITIES Allowance on guarantee $ 348,854 $ 359,098 Unearned Income-Guarantee commission 77,902 80,190 Income tax payable 2,243,618 2,309,505 Other liabilities 75,381 77,580 Deferred tax liabilities 204,081 210,074 TOTAL LIABILITIES $ 2,949,836 $ 3,036,447 Net assets de-recognised $ 160,301,216 $ 168,917,815 |
ORGANIZATION, PRINCIPAL ACTIV_3
ORGANIZATION, PRINCIPAL ACTIVITIES, GOING CONCERN AND MANAGEMENT'S PLANS (Details) - USD ($) | Dec. 13, 2016 | Oct. 23, 2014 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 02, 2017 | Jun. 30, 2016 | Oct. 26, 2015 | Dec. 02, 2014 |
Common stock shares issued | 19,837,642 | 19,837,642 | 21,526,747 | ||||||
Cash consideration | $ 270,000 | ||||||||
Net losses | $ (12,002,940) | $ (49,809,728) | |||||||
Net cash in operating activities | (3,111,416) | (37,942,709) | |||||||
Cash | 38,820 | $ 70,312 | |||||||
Specific allowance for lease payment receivables for COVID-19 | 101,862,247 | ||||||||
Continuing Operation | |||||||||
Net losses | (12,002,940) | ||||||||
Net cash in operating activities | $ (3,111,416) | ||||||||
Jinshang Leasing [Member] | |||||||||
Percentage of acquired the equity capital | 100.00% | ||||||||
Common stock shares issued | 30,000,000 | ||||||||
Ms. Wenyu Li [Member] | |||||||||
Percentage of individual beneficially owning | 8.10% | ||||||||
Subsequent event | Forecast | |||||||||
Decrease in revenue (as a percent) | 25.00% | ||||||||
Freeman FinTech Corporation [Member] | |||||||||
Agreement to transfer ordinary shares | 13,440,000 | ||||||||
Percentage of owned subsidiary | 67.00% | ||||||||
Spectacular Bid Limited [Member] | |||||||||
Percentage of owned subsidiary | 67.00% | ||||||||
Full Shine [Member] | |||||||||
Business incorporation cost | $ 1 | ||||||||
Former [Member] | Holdco [Member] | |||||||||
Percentage of acquired the equity capital | 78.00% | ||||||||
Former [Member] | Sino [Member] | |||||||||
Percentage of acquired the equity capital | 22.00% |
ORGANIZATION, PRINCIPAL ACTIV_4
ORGANIZATION, PRINCIPAL ACTIVITIES, GOING CONCERN AND MANAGEMENT'S PLANS - Schedule of wholly-owned subsidiaries of the company (Details) | 12 Months Ended | |
Jun. 30, 2020HKD ($) | Jun. 30, 2020USD ($) | |
Wins Finance Group Limited("WFG") | ||
Schedule Of Wholly Owned Subsidiaries [Line Items] | ||
Registered capital | $ 30,000,100 | |
Ownership interest (as a percent) | 100.00% | 100.00% |
Full Shine Capital Resources Limited ("Full Shine") | ||
Schedule Of Wholly Owned Subsidiaries [Line Items] | ||
Registered capital | $ 1 | |
Ownership interest (as a percent) | 100.00% | 100.00% |
Jinshang International Financial Leasing Co.,Ltd("Jingshang Leasing") | ||
Schedule Of Wholly Owned Subsidiaries [Line Items] | ||
Registered capital | $ 180,000,000 | |
Ownership interest (as a percent) | 100.00% | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment, Salvage Value, Percentage | 3.00% | |
Customer One Concentration Risk [Member] | ||
Concentration Risk, Percentage | 50.00% | 43.00% |
Customer One Concentration Risk [Member] | Capital Lease Obligations [Member] | ||
Concentration Risk, Percentage | 40.00% | 45.00% |
Customer Two Concentration Risk [Member] | ||
Concentration Risk, Percentage | 14.00% | 12.00% |
Customer Two Concentration Risk [Member] | Capital Lease Obligations [Member] | ||
Concentration Risk, Percentage | 13.00% | 12.00% |
Customer Three Concentration Risk [Member] | ||
Concentration Risk, Percentage | 11.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Change in Contract with Customer, Liability [Abstract] | |
Revenue, Practical Expedient, Initial Application and Transition, Nondisclosure of Transaction Price Allocation to Remaining Performance Obligation [true false] | true |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Change in Contract with Customer, Liability [Abstract] | |
Expected duration for satisfaction of performance obligation | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-marketable equity investments (Details) - Hui Yue ¥ in Millions, $ in Millions | Oct. 30, 2018CNY (¥) | Oct. 30, 2018USD ($) | Oct. 26, 2018CNY (¥) | Oct. 26, 2018USD ($) | Aug. 28, 2018CNY (¥) | Aug. 28, 2018USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||
Equity interest agreed to acquire | 15.00% | 15.00% | 30.00% | 30.00% | ||
Agreed payment to acquire equity method investment | ¥ 150 | $ 21.8 | ¥ 300 | $ 43.7 | ||
Period within which entity was required to pay the capital | 30 years | 30 years | ||||
Payment made to acquire equity method investment | ¥ 20 | $ 2.9 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign currency translation (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Balance sheet items, except for equity accounts | 7.0697 | 6.8680 |
Items in the statements of income and comprehensive income, and statements of cash flows | 7.0319 | 6.8221 |
RISKS (Details)
RISKS (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Restricted cash and cash equivalents | $ 0 | $ 0 | |
Specific Allowance For Lease Payment Receivables For COVID-19 | $ 101,862,247 | ||
Subsequent event | Forecast | |||
Decrease in revenue (as a percent) | 25.00% |
INVESTMENTS SECURITIES - HELD_2
INVESTMENTS SECURITIES - HELD TO MATURITY (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Schedules Of Cost Method Investments [Line Items] | ||
Interest on investment securities | $ 0 | $ 105,878 |
Investment securities, balance | 0 | 0 |
Notes Receivable [Member] | ||
Schedules Of Cost Method Investments [Line Items] | ||
Interest receivable | $ 0 | $ 0 |
Maximum | ||
Schedules Of Cost Method Investments [Line Items] | ||
Interest rate for investments | 5.50% | |
Minimum | ||
Schedules Of Cost Method Investments [Line Items] | ||
Interest rate for investments | 5.00% |
NET INVESTMENT IN DIRECT FINA_3
NET INVESTMENT IN DIRECT FINANCING LEASES (Details) | 12 Months Ended | ||
Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Remaining direct financing leases contractual amounts | $ 102,069,239 | $ 85,225,257 | |
Debt Instrument, Collateral Amount | ¥ 9,846,081 | $ 1,433,609 | |
Maximum | |||
Lessee, Finance Lease, Term of Contract | 5 years | 5 years | |
Finance Lease Interest Expense Percentage | 13.30% | ||
Minimum | |||
Lessee, Finance Lease, Term of Contract | 1 year | 1 year | |
Finance Lease Interest Expense Percentage | 4.30% |
NET INVESTMENT IN DIRECT FINA_4
NET INVESTMENT IN DIRECT FINANCING LEASES - Summary of the Components of Net Investment in Direct Financing Leases (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
NET INVESTMENT IN DIRECT FINANCING LEASES | ||
Total minimum lease payments to be received | $ 122,561,475 | $ 121,043,154 |
Less: Amounts representing estimated executory costs | 0 | 0 |
Minimum lease payments receivable | 122,561,475 | 121,043,154 |
Less: unearned income, representing interest | (3,533,936) | (5,806,618) |
Present value of minimum lease receivable | 119,027,539 | 115,236,536 |
Less: Allowance for uncollectible receivables | (102,069,239) | (85,225,257) |
Net investment in direct financing leases | $ 16,958,300 | $ 30,011,279 |
NET INVESTMENT IN DIRECT FINA_5
NET INVESTMENT IN DIRECT FINANCING LEASES - Schedule of Future Minimum Lease Receipts (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
NET INVESTMENT IN DIRECT FINANCING LEASES | ||
Within 1 year | $ 113,637,581 | $ 98,532,910 |
2 years | 7,340,325 | 14,124,241 |
3 years | 1,583,569 | 7,022,776 |
4 years | 0 | 1,363,227 |
Total minimum finance lease receivables | $ 122,561,475 | $ 121,043,154 |
NET INVESTMENT IN DIRECT FINA_6
NET INVESTMENT IN DIRECT FINANCING LEASES - Schedule of credit quality analysis of finance leases (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Direct Financing Lease, Net Investment in Lease, Credit Quality Indicator [Line Items] | ||
Less: Allowance for uncollectible receivables | $ (102,069,239) | $ (85,225,257) |
Net investment in direct financing leases, end of year | 16,958,300 | 30,011,279 |
Overdue and credit-impaired | ||
Direct Financing Lease, Net Investment in Lease, Credit Quality Indicator [Line Items] | ||
Not yet overdue but credit impaired | 92,666,574 | 81,234,615 |
Overdue and credit-impaired | Overdue within 90 days (inclusive) | ||
Direct Financing Lease, Net Investment in Lease, Credit Quality Indicator [Line Items] | ||
Overdue and credit-impaired and not credit-impaired | 632,212 | |
Overdue and credit-impaired | Overdue above 90 days | ||
Direct Financing Lease, Net Investment in Lease, Credit Quality Indicator [Line Items] | ||
Overdue and credit-impaired and not credit-impaired | 9,195,673 | 3,156,238 |
Overdue but not credit-impaired | ||
Direct Financing Lease, Net Investment in Lease, Credit Quality Indicator [Line Items] | ||
Neither overdue nor impaired | $ 17,165,292 | $ 30,213,471 |
NET INVESTMENT IN DIRECT FINA_7
NET INVESTMENT IN DIRECT FINANCING LEASES - Schedule of Allowance for Uncollectible Lease Payments Receivables (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
NET INVESTMENT IN DIRECT FINANCING LEASES | ||||
Allowance for uncollectible receivables at the beginning of year | $ 85,225,257 | $ 4,342,576 | ||
(Reversal of Provision)for lease payment receivables | (10,626) | (574,002) | ||
Provision for lease payment receivables | 19,368,460 | 82,159,962 | ||
Effect of foreign currency translation | (2,513,852) | (703,279) | ||
Allowance for uncollectible receivables at the end of year | 102,069,239 | 85,225,257 | ||
Allowance for uncollectible receivables relating to: | ||||
Individually evaluated for impairment | $ 101,862,247 | $ 85,023,066 | ||
Collectively evaluated for impairment | 206,992 | 202,191 | ||
Ending balance | $ 102,069,239 | $ 85,225,257 | 102,069,239 | 85,225,257 |
Minimum lease payments receivable | ||||
Individually evaluated for impairment | 101,862,247 | 85,572,930 | ||
Collectively evaluated for impairment | 20,699,228 | 35,470,224 | ||
Ending balance | $ 122,561,475 | $ 121,043,154 |
NET INVESTMENT IN DIRECT FINA_8
NET INVESTMENT IN DIRECT FINANCING LEASES - Summary of Risk Classification of Direct Financing Lease Receivables (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Total | $ 122,561,475 | $ 121,043,154 |
Normal [Member] | ||
Total | 20,699,228 | 36,020,088 |
Abnormal [Member] | ||
Total | $ 101,862,247 | $ 85,023,066 |
LEASES (Details)
LEASES (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Operating leases: | ||
Operating lease right of use assets | $ 63,356 | $ 163,041 |
Current operating lease liabilities | 47,904 | 57,990 |
Non-current operating lease liabilities | 7,103 | 194,089 |
Total operating lease liabilities | $ 55,007 | $ 252,079 |
LEASES - Maturities of lease li
LEASES - Maturities of lease liabilities (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Maturities of lease liabilities | ||
2021 | $ 61,304 | |
Total | 61,304 | |
Less: amount representing interest | 6,297 | |
Total operating lease liabilities | 55,007 | $ 252,079 |
Current operating lease liabilities | 47,904 | 57,990 |
Long-term obligations | $ 7,103 | $ 194,089 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
LEASES | ||
Operating lease expense | $ 95,545 | $ 102,859 |
Remaining lease term | 8 months | |
Discount rate | 5.46% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Less: accumulated depreciation | $ (651,437) | $ (648,946) |
Property and equipment, net | $ 26,592 | 48,131 |
Salvage value | 3.00% | |
Depreciation expenses | $ 2,491 | 17,846 |
Leasehold improvements [Member] | ||
Salvage value | 3.00% | |
Useful life (years) | 20 years | |
Vehicles [Member] | ||
Property, Plant and Equipment, Gross | $ 463,425 | 477,034 |
Salvage value | 3.00% | |
Useful life (years) | 5 years | |
Office equipment [Member] | ||
Property, Plant and Equipment, Gross | $ 190,763 | 196,365 |
Salvage value | 3.00% | |
Useful life (years) | 5 years | |
Electric equipment [Member] | ||
Property, Plant and Equipment, Gross | $ 23,841 | $ 23,678 |
Salvage value | 3.00% | |
Useful life (years) | 5 years |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
OTHER ASSETS | ||
Deposit for direct financing lease | $ 0 | $ 182,782 |
Advance payment to third party companies | 1,839 | 872 |
Other receivables | 2,053,068 | 1,922,667 |
Other Assets | $ 2,054,907 | $ 2,106,321 |
LOANS FOR CAPITAL LEASE BUSIN_3
LOANS FOR CAPITAL LEASE BUSINESS (Details) | Apr. 03, 2015CNY (¥) | Apr. 03, 2015USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) |
Loans Payable to Bank | $ 0 | $ 338,763 | ||||||
Debt Instrument, Collateral Amount | ¥ 9,846,081 | 1,433,609 | ||||||
Other Loans Payable | 0 | 377,393 | ||||||
Deposit Assets | $ 0 | $ 182,782 | ||||||
Notes Payable, Other Payables [Member] | ||||||||
Interest Expense, Debt | $ 1,597 | $ 118,821 | ||||||
Notes Payable, Other Payables [Member] | Jinshang Leasing [Member] | ||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 6.00% | 6.00% | ||||||
Debt Instrument, Collateral Amount | ¥ 9,846,081 | $ 1,433,609 | ||||||
Other Loans Payable | 377,393 | |||||||
Deposit Assets | ¥ 1,255,355 | $ 182,782 | ||||||
Bank Loan [Member] | ||||||||
Interest Expense, Debt | $ 10,369 | $ 324,350 | ||||||
Yancheng Project Bank Loan [Member] | Jinshang Leasing [Member] | ||||||||
Proceeds from Bank Debt | ¥ 3,100,000 | $ 500,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 5.75% | 5.75% | ||||||
Mortgage Contract Loan [Member] | Jinshang Leasing [Member] | ||||||||
Debt Instrument, Collateral Amount | ¥ 3,426,450 | $ 498,898 | ||||||
Debt Instrument, Maturity Date, Description | February 12, 2020 |
LOANS FOR CAPITAL LEASE BUSIN_4
LOANS FOR CAPITAL LEASE BUSINESS - Additional Information (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Long-term Debt | $ 0 | |
Bank Loan [Member] | ||
Within 1 year | $ 338,763 | |
Between 1 to 2 years | 0 | |
Between 2 to 3 years | 0 | |
Between 3 to 4 years | 0 | |
Between 4 to 5 years | 0 | |
Beyond 5 years | 0 | |
Long-term Debt | 338,763 | |
Notes Payable, Other Payables [Member] | ||
Within 1 year | 377,393 | |
Between 1 to 2 years | 0 | |
Between 2 to 3 years | 0 | |
Between 3 to 4 years | 0 | |
Between 4 to 5 years | 0 | |
Beyond 5 years | 0 | |
Long-term Debt | $ 377,393 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
OTHER LIABILITIES | ||
Other tax payable | $ 1,428,070 | $ 1,223,716 |
Accrued payroll | 54,010 | 41,215 |
Other payables | 1,674,941 | 1,287,154 |
Other Liabilities | $ 3,157,021 | $ 2,552,085 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Stock Award Activity (Details) - $ / shares | 12 Months Ended | 36 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2019 | |
Number of Shares | ||||||
Outstanding, Beginning | shares | 0 | 0 | 0 | 1,270,000 | 1,270,000 | |
Granted | shares | 0 | 0 | 0 | 0 | ||
Exercised | shares | 0 | 0 | 0 | 0 | ||
Forfeited | shares | 0 | (1,190,000) | (1,190,000) | (1,190,000) | ||
Canceled | shares | 0 | (80,000) | (80,000) | (80,000) | ||
Outstanding, Ending | shares | 0 | 0 | 0 | 0 | 1,270,000 | 0 |
Exercisable | 0 | 0 | 0 | |||
Vested and expected to vest | 0 | 0 | 0 | |||
Weighted Average Exercise Price | ||||||
Outstanding, Beginning | $ / shares | $ 0 | $ 0 | $ 0 | $ 12 | $ 12 | |
Granted | $ / shares | 0 | 12 | ||||
Exercised | $ / shares | 0 | 0 | 0 | 0 | ||
Forfeited | $ / shares | 0 | 12 | 12 | 12 | ||
Canceled | $ / shares | 0 | 12 | 12 | 12 | ||
Outstanding, Ending | $ / shares | 0 | 0 | $ 0 | $ 0 | $ 12 | 0 |
Exercisable | 0 | 0 | 0 | |||
Vested and expected to vest | $ 0 | $ 0 | $ 0 | |||
Weighted Average Remaining Contractual Term In Years | ||||||
Outstanding | 2 years 5 months 1 day | |||||
Granted | 3 years | |||||
Vested and expected to vest | 0 years | 0 years |
SHARE-BASED COMPENSATION - Sc_2
SHARE-BASED COMPENSATION - Schedule of Weighted Average Assumptions Used to Value Options (Details) | 12 Months Ended |
Jun. 30, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 51.50% |
Risk-free interest rates | 1.77% |
Expected terms | 5 years |
Dividend yields | 0.00% |
Sub-Optimal behavior multiple | $ 2.80 |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair Value per share of options granted | 5.27 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair Value per share of options granted | $ 5.44 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - $ / shares | Oct. 20, 2015 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of shares reserved for further issuance | 10.00% | |||||
Grant period | 10 years | |||||
Exercise period | 10 years | |||||
Options granted | 0 | 0 | 0 | 0 | ||
Options granted, weighted average exercise price per share | $ 0 | $ 12 | ||||
Options forfeited | 0 | 1,190,000 | 1,190,000 | 1,190,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 0 | 80,000 | 80,000 | 80,000 | ||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value on date of grant | 100.00% | |||||
Shareholders Voting Power Exceeds Ten Percent [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise period | 5 years | |||||
Shareholders Voting Power Exceeds Ten Percent [Member] | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair market value on date of grant | 110.00% |
CAPITALIZATION (Details)
CAPITALIZATION (Details) - USD ($) | Dec. 02, 2016 | Jun. 28, 2016 | Jun. 30, 2020 | Jun. 30, 2019 | Oct. 26, 2015 |
Class of Stock [Line Items] | |||||
Due to related party | $ 464,000 | $ 464,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||
Common Stock, Shares, Issued | 19,837,642 | 19,837,642 | 21,526,747 | ||
Common Stock, Shares, Outstanding | 19,837,642 | 19,837,642 | 21,526,747 | ||
Richard Xu [Member] | |||||
Class of Stock [Line Items] | |||||
Ordinary shares repurchased, shares | 204,005 | ||||
Ordinary shares repurchased, amount | $ 204 | ||||
Brad Reifler [Member] | |||||
Class of Stock [Line Items] | |||||
Ordinary shares repurchased, shares | 5,100 | ||||
Ordinary shares repurchased, amount | $ 60,180 | ||||
Bluesky LLC [Member] | |||||
Class of Stock [Line Items] | |||||
Ordinary shares repurchased, shares | 1,480,000 | ||||
Ordinary shares repurchased, amount | $ 17,464,000 | ||||
Amount paid to related party for repurchase of ordinary shares | $ 17,000,000 | ||||
Due to related party | $ 464,000 | $ 464,000 | |||
WFG's shareholders [Member] | |||||
Class of Stock [Line Items] | |||||
Common Stock, Shares, Issued | 16,800,000 | ||||
Sino [Member] | Former Stockholders [Member] | |||||
Class of Stock [Line Items] | |||||
Common Stock, Shares, Issued | 4,726,747 |
STATUTORY RESERVE (Details)
STATUTORY RESERVE (Details) | 12 Months Ended |
Jun. 30, 2020 | |
STATUTORY RESERVE | |
Percentage allocation of annual after-tax profit to general reserve | 10.00% |
Limit of general reserve to distribute dividends | 50.00% |
EMPLOYEE RETIREMENT BENEFITS (D
EMPLOYEE RETIREMENT BENEFITS (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
EMPLOYEE RETIREMENT BENEFITS | ||
Employee benefit contributions | $ 95,017 | $ 124,667 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
EARNINGS PER SHARE | ||
Net income/(loss) attributable to the common shareholders | $ (12,002,940) | $ (49,809,728) |
Basic weighted-average common shares outstanding | 19,837,642 | 19,837,642 |
Effect of dilutive securities | 0 | 0 |
Diluted weighted-average common shares outstanding | 19,837,642 | 19,837,642 |
Earnings (loss) per share - Basic | $ (0.61) | $ (2.51) |
Earnings (loss) per share - Diluted | (0.61) | (2.51) |
Earnings (loss) per share - From continuing operations | (0.61) | (2.93) |
Earnings (loss) per share - From discontinued operations | $ 0 | $ 0.42 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
INCOME TAXES | ||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | $ 51,295,890 | $ 39,293,597 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% |
Deferred Tax Assets, Net | $ 24,299,486 | $ 20,836,408 |
INCOME TAXES - Schedule of Inco
INCOME TAXES - Schedule of Income Tax Payable (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income tax payable (Note 16) | $ 1,423,022 | $ 1,202,674 |
Jinshang Leasing [Member] | ||
Income tax payable (Note 16) | $ 1,423,022 | $ 1,202,674 |
INCOME TAXES - Schedule Of Comp
INCOME TAXES - Schedule Of Components Of Income Tax Expense Benefit (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
INCOME TAXES | ||
Current income tax (expense) | $ (256,030) | $ (1,154,780) |
Deferred tax benefit | 4,255,391 | 20,055,500 |
Total credit for income taxes | $ 3,999,361 | $ 18,900,720 |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation Between the Effective Income Tax Rate and the PRC Statutory Income Tax Rate (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
INCOME TAXES | ||
PRC statutory tax | 25.00% | 25.00% |
Effect of non-deductible expenses | (30.30%) | (27.40%) |
Effect of non-taxable income | 3.70% | 0.50% |
Others | (23.40%) | (22.90%) |
Effective tax rate | (25.00%) | (24.80%) |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred tax assets | ||
Provision for direct financing lease | $ 25,517,310 | $ 21,306,314 |
Direct financing lease income | (1,042,727) | (469,906) |
Specific allowance on guarantee | 0 | 0 |
Total deferred tax assets | 24,474,583 | 20,836,408 |
Less: Valuation allowance | 0 | |
Less: Net off with deferred tax liabilities for financial reporting purposes | 0 | |
Net total deferred tax assets | $ 24,474,583 | 20,836,408 |
Deferred tax liabilities | ||
Guarantee paid on behalf of guarantee service customers loss | 0 | |
Commissions and fees on financial guarantee services | 0 | |
Direct financing lease income | 0 | |
Total deferred tax liabilities | 0 | |
Less: Net off with deferred tax assets for financial reporting purposes | 0 | |
Net total deferred tax liabilities | $ 0 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES - Schedule of Related Party Balances (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||
Due to related party | $ 464,000 | $ 464,000 |
Bluesky LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 464,000 | $ 464,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) ¥ in Millions | 12 Months Ended | |||||
Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) | Jul. 06, 2020CNY (¥) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | |
Guarantor Obligations [Line Items] | ||||||
Loss Contingency, Damages Sought, Value | $ | $ 1 | |||||
Finance Lease, Principal Payments | ¥ 464 | $ 70,100,000 | ||||
Third Party [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Finance Lease, Principal Payments | 420 | 59,400,000 | ||||
Subsequent event | ||||||
Guarantor Obligations [Line Items] | ||||||
Repayment of loan being highly uncertain, loan amount | ¥ | ¥ 580 | |||||
Jinshang Leasing [Member] | ||||||
Guarantor Obligations [Line Items] | ||||||
Finance Lease, Principal Payments | ¥ 44 | $ 6,200,000 | ||||
Guarantor Obligations, Current Carrying Value | ¥ 462 | $ 65,300,000 |
DISPOSAL GROUPS HELD FOR SALE_2
DISPOSAL GROUPS HELD FOR SALE (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
ASSETS | |||
Cash | $ 7,553,701 | $ 7,775,528 | $ 5,363,552 |
TOTAL ASSETS | 163,251,052 | 171,954,262 | |
LIABILITIES | |||
TOTAL LIABILITIES | 2,949,836 | 3,036,447 | |
Disposal group, held for sale | Jinchen Agriculture and Dongsheng Guarantee | |||
ASSETS | |||
Cash | 3,755,831 | 7,775,528 | |
Restricted cash | 15,568,983 | 16,026,192 | |
Commission receivable | 1,211,140 | 1,246,707 | |
Compensation receivable | 100,622 | 103,577 | |
Advance payment | 17,217 | 17,724 | |
Interest receivable | 15,940,393 | 16,408,380 | |
Other receivable | 198 | ||
Available-for-sale financial assets | 126,596,083 | 130,313,790 | |
Property and equipment, net | 60,585 | 62,364 | |
TOTAL ASSETS | 163,251,052 | 171,954,262 | |
LIABILITIES | |||
Allowance on guarantee | 348,854 | 359,098 | |
Unearned Income-Guarantee commission | 77,902 | 80,190 | |
Income tax payable | 2,243,618 | 2,309,505 | |
Other liabilities | 75,381 | 77,580 | |
Deferred tax liabilities | 204,081 | 210,074 | |
TOTAL LIABILITIES | 2,949,836 | 3,036,447 | |
Net assets de-recognised | $ 160,301,216 | $ 168,917,815 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) ¥ in Millions | 12 Months Ended | |||
Jun. 30, 2021 | Jul. 06, 2020CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Debt Securities, Held-to-maturity | $ 0 | $ 0 | ||
Specific allowance for lease payment receivables for COVID-19 | $ 101,862,247 | |||
Subsequent event | ||||
Repayment of loan being highly uncertain, loan amount | ¥ | ¥ 580 | |||
Subsequent event | Forecast | ||||
Decrease in revenue (as a percent) | 25.00% |