Document And Entity Information
Document And Entity Information | 12 Months Ended |
Jun. 30, 2017shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2017 |
Document Fiscal Year Focus | 2,017 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | Wins Finance Holdings Inc. |
Entity Central Index Key | 1,640,251 |
Current Fiscal Year End Date | --06-30 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 19,837,642 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
ASSETS | ||
Cash | $ 17,002,282 | $ 47,163,965 |
Restricted cash | 24,282,208 | 27,962,846 |
Short-term investments | 187,944,184 | 149,841,838 |
Guarantee paid on behalf of guarantee service customers | 1,560,615 | 2,039,684 |
Net investment in direct financing leases | 76,723,457 | 74,705,647 |
Interest receivable | 3,514,075 | 1,021,306 |
Property and equipment, net | 594,148 | 854,719 |
Deferred tax assets, net | 327,137 | 428,524 |
Other assets | 815,984 | 608,751 |
TOTAL ASSETS | 312,764,090 | 304,627,280 |
Liabilities | ||
Bank loans for capital lease business | 28,281,541 | 43,308,617 |
Other loans for capital lease business | 9,509,597 | 0 |
Interest payable | 222,510 | 208,947 |
Income tax payable | 2,772,631 | 2,510,847 |
Unearned income from financial guarantee services | 538,215 | 423,801 |
Allowance on guarantee | 673,147 | 3,079,684 |
Deposits from direct financing leases | 10,854,121 | 9,134,946 |
Other liabilities | 893,569 | 964,109 |
Due to related party (Notes 13 and 18) | 464,000 | 464,000 |
Deferred tax liabilities | 746,884 | 477,398 |
Total Liabilities | 54,956,215 | 60,572,349 |
Stockholders' Equity | ||
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 19,837,642 and 20,041,647 shares issued and outstanding at June 30, 2017 and 2016, respectively) | 1,984 | 2,004 |
Additional paid-in capital | 211,934,432 | 213,400,296 |
Statutory reserve | 3,530,458 | 2,364,245 |
Retained earnings | 62,427,622 | 43,244,044 |
Accumulated other comprehensive loss | (20,086,621) | (14,955,658) |
Total Stockholders’ Equity | 257,807,875 | 244,054,931 |
TOTAL LIABILITIES AND EQUITY | $ 312,764,090 | $ 304,627,280 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2017 | Jun. 30, 2016 | Oct. 26, 2015 |
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 | 20,041,647 | 21,526,747 |
Common stock, shares outstanding | 19,837,642 | 20,041,647 | 21,526,747 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Guarantee service income | |||
Commissions and fees on financial guarantee services | $ 2,839,194 | $ 6,193,225 | $ 7,860,629 |
Reversal of provision (provision) on financial guarantee services | 3,208,827 | (2,907,999) | 576,456 |
Commission and fees on guarantee services, net | 6,048,021 | 3,285,226 | 8,437,085 |
Direct financing lease income | |||
Direct financing lease interest income | 6,047,172 | 3,164,317 | 3,547,273 |
Interest expense for direct financing lease | (2,094,587) | (524,409) | (188,173) |
Business collaboration fee and commission expenses for leasing projects | (603,873) | (222,206) | (265,829) |
Provision for lease payment receivable | (27,332) | (597,444) | (70,467) |
Net direct financing lease interest income after provision for receivables | 3,321,380 | 1,820,258 | 3,022,804 |
Financial advisory and lease agency income | 357,284 | 402,800 | 3,386,586 |
Net revenue | 9,726,685 | 5,508,284 | 14,846,475 |
Non-interest income | |||
Interest on short-term investments | 13,752,538 | 13,958,540 | 16,657,246 |
Total non-interest income | 13,752,538 | 13,958,540 | 16,657,246 |
Non-interest expense | |||
Business taxes and surcharge | (4,406) | (167,867) | (200,223) |
Salaries and employees surcharge | (879,595) | (1,524,720) | (424,872) |
Rental expenses | (247,684) | (271,357) | (190,239) |
Other operating expenses | (46,258) | (4,621,038) | (1,468,741) |
Total non-interest expense | (1,177,943) | (6,584,982) | (2,284,075) |
Income before taxes | 22,301,280 | 12,881,842 | 29,219,646 |
Income tax expense | (1,951,489) | (764,445) | (3,146,993) |
NET INCOME | 20,349,791 | 12,117,397 | 26,072,653 |
Other comprehensive (loss) income | |||
Foreign currency translation adjustment | (5,130,963) | (19,361,292) | 1,757,840 |
COMPREHENSIVE INCOME (LOSS) | $ 15,218,828 | $ (7,243,895) | $ 27,830,493 |
Weighted-average ordinary shares outstanding | |||
Basic | 19,926,510 | 20,012,356 | 16,800,000 |
Diluted | 20,082,089 | 20,012,356 | 16,800,000 |
Earnings per share | |||
Basic | $ 1.02 | $ 0.61 | $ 1.55 |
Diluted | $ 1.01 | $ 0.61 | $ 1.55 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated other Comprehensive (Loss)/Income [Member] | Statutory Reserve [Member] | Retained Earnings [Member] |
Beginning Balance at Jun. 30, 2014 | $ 209,433,615 | $ 1,680 | $ 199,365,902 | $ 2,647,794 | $ 325 | $ 7,417,914 |
Beginning Balance, shares at Jun. 30, 2014 | 16,800,000 | |||||
Net income | 26,072,653 | $ 0 | 0 | 0 | 0 | 26,072,653 |
Foreign currency translation adjustment | 1,757,840 | 0 | 0 | 1,757,840 | 0 | 0 |
Ending Balance at Jun. 30, 2015 | 237,264,108 | $ 1,680 | 199,365,902 | 4,405,634 | 325 | 33,490,567 |
Ending Balance, Shares at Jun. 30, 2015 | 16,800,000 | |||||
Shares issued in reverse acquisition | 29,669,165 | $ 473 | 29,668,692 | 0 | 0 | 0 |
Shares issued in reverse acquisition, shares | 4,726,747 | |||||
Share repurchase | (17,524,180) | $ (149) | (17,524,031) | 0 | 0 | 0 |
Share repurchase, shares | (1,485,100) | |||||
Share based compensation | 1,889,733 | $ 0 | 1,889,733 | 0 | 0 | 0 |
Statutory reserve | 0 | 0 | 0 | 0 | 2,363,920 | (2,363,920) |
Net income | 12,117,397 | 0 | 0 | 0 | 0 | 12,117,397 |
Foreign currency translation adjustment | (19,361,292) | 0 | (19,361,292) | 0 | 0 | |
Ending Balance at Jun. 30, 2016 | 244,054,931 | $ 2,004 | 213,400,296 | (14,955,658) | 2,364,245 | 43,244,044 |
Ending Balance, Shares at Jun. 30, 2016 | 20,041,647 | |||||
Share repurchase | (204) | $ (20) | (184) | |||
Share repurchase, shares | (204,005) | |||||
Share based compensation | (1,465,680) | $ 0 | (1,465,680) | 0 | 0 | 0 |
Statutory reserve | 0 | 0 | 0 | 0 | 1,166,213 | (1,166,213) |
Net income | 20,349,791 | 0 | 0 | 0 | 20,349,791 | |
Foreign currency translation adjustment | (5,130,963) | 0 | 0 | (5,130,963) | 0 | 0 |
Ending Balance at Jun. 30, 2017 | $ 257,807,875 | $ 1,984 | $ 211,934,432 | $ (20,086,621) | $ 3,530,458 | $ 62,427,622 |
Ending Balance, Shares at Jun. 30, 2017 | 19,837,642 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 20,349,791 | $ 12,117,397 | $ 26,072,653 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation | 320,842 | 411,635 | 257,464 |
Share-based compensation | (1,465,680) | 1,889,733 | 0 |
Interest expense for convertible debt | 0 | 113,644 | 0 |
Loss on sale of property, plant and equipment | 0 | 0 | 4,706 |
Provision for lease payment receivables | 27,332 | 597,444 | 70,467 |
Deferred tax expense (benefit) | 370,019 | (622,928) | (515,495) |
(Reversal of provision) provision for guarantee | (3,208,827) | 2,907,999 | (576,456) |
Changes in assets and liabilities: | |||
Net investment in direct financing leases | (3,638,296) | (53,059,622) | (2,594,907) |
Commission receivable | 0 | 0 | 5,538,846 |
Guarantee paid on behalf of guarantee service customers | 1,313,577 | (2,432,997) | (109,809) |
Unearned income from financial guarantee services | 122,923 | (3,036,771) | (3,946,241) |
Interest receivable | (2,443,076) | (783,680) | 1,247,794 |
Other assets | (546,486) | (330,841) | 2,657,313 |
Lease receivables in lease agency transactions | 0 | 0 | 475,764 |
Lease payables in lease agency transactions | 0 | 0 | (466,938) |
Interest payable | 17,979 | 168,109 | 49,492 |
Income tax payable | 314,334 | (324,831) | 2,613,867 |
Deposits from direct financing leases | 1,719,175 | 6,096,934 | 441,082 |
Other liabilities | (52,009) | 676,794 | (38,993) |
Net Cash Provided by (Used in) Operating Activities | 13,201,598 | (35,611,981) | 31,180,609 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of short-term investments | (73,395,616) | (23,873,645) | (183,299,389) |
Proceeds from maturities of short-term investments | 32,294,070 | 44,287,804 | 143,380,854 |
Deposits paid to banks for financial guarantee services | (19,753,815) | (24,152,739) | (27,934,799) |
Deposits released from banks for financial guarantee services | 22,815,354 | 26,642,584 | 15,859,253 |
Placement of pledged bank deposits | (4,403,737) | (4,661,874) | (426,175) |
Withdrawal of pledged bank deposits | 4,403,737 | 406,461 | 412,583 |
Purchase of property, plant and equipment | (79,955) | (418,999) | (251,832) |
Consideration received on disposal of WHL (Note 1) | 270,000 | 0 | 0 |
Loan repaid by owners | 0 | 0 | 47,619,902 |
Loan lent to owners | 0 | 0 | (21,568,398) |
Net Cash (Used in) Provided by Investing Activities | (37,849,962) | 18,229,592 | (26,208,001) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Capital paid in by owners | 0 | 29,669,019 | 0 |
Proceeds from loans | 11,751,680 | 46,618,743 | 509,432 |
Repayment of loans | (16,311,241) | (2,476,782) | (611,535) |
Proceeds of convertible debt | 0 | 8,500,000 | 0 |
Repayment of convertible debt | 0 | (8,613,644) | 0 |
Repayment of share repurchase | 0 | (17,060,180) | 0 |
Proceeds from short term loans | 0 | 0 | 25,580,448 |
Repayment of short term loans | 0 | 0 | (25,580,448) |
Loan repaid to owners | 0 | 0 | (420,316) |
Loan borrowed from owners | 0 | 0 | 40,733 |
Net Cash (Used in) Provided by Financing Activities | (4,559,561) | 56,637,156 | (481,686) |
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH | (953,758) | (1,973,893) | 62,715 |
NET (DECREASE) INCREASE IN CASH | (30,161,683) | 37,280,874 | 4,553,637 |
Cash and cash equivalent at beginning of year | 47,163,965 | 9,883,091 | 5,329,454 |
Cash and cash equivalent at end of year | 17,002,282 | 47,163,965 | 9,883,091 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 1,267,135 | 1,535,840 | 1,049,197 |
Cash paid for interest expense | $ 2,076,609 | $ 356,295 | $ 138,686 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES 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”), Tianjin Jinshang Jiaming Financial Leasing Co. Ltd. (“Tianjin Jiaming”), 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 On December 2, 2014, WFG, through Full Shine, acquired 100 30,000,000 100 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. 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. 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. 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 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 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 67 On August 2, 2017, Spectacular Bid Limited, a wholly owned subsidiary of Freeman, completed the acquisition of approximately 67 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
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. 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, 2017, there were two customers that accounted for 19 13 10 18 14 11 10 As of June 30, 2017, two customers accounted for 13.2 11 (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 Restricted cash represents cash pledged to banks by Wins Finance’s subsidiary Dongsheng Guarantee, as guarantor for guarantee business customers. The banks providing loans to the Company’s guarantee service customers generally require Dongsheng Guarantee, as the guarantor of the loans, to pledge a cash deposit of a minimum of 10% to 20% of the guaranteed amount to an escrow account that is restricted from use. The deposit is released after the guaranteed bank loan is paid off and Dongsheng Guarantee’s guarantee obligations expire, which is usually within 12 Short-term investments Investments in non-marketable asset management products issued by banks and financial institutions (the issuers) with original maturities of one year to five years that could be redeemed or are transferrable at any time are classified as short-term investments under the cost method. 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. The investment portfolios of these products are not disclosed to the Company by the banks or financial institutions. If the banks and financial institutions are required to redeem these investments, they will redeem them at a price equal to the outstanding principal plus accrued and unpaid interest. The Company carries these cost method investments at cost and only adjusts for other-than-temporary impairments and distributions of earnings. Management regularly evaluates the impairment of theses cost method investments at the individual security level. If the fair value of an investment is less than its amortized cost basis at the balance sheet date of the report period for which impairment is being assessed, management will determine whether the decline in fair value is temporary or permanent. If the decline in fair value is other than temporary, the cost basis of the individual security is written down to fair value as the new cost basis, and the amount of the write-down is included in current earnings. There is no impairment noted for either of the reporting periods presented herein. Interest income from short-term investments 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. Financial guarantee service contracts The Company’s financial guarantee service contracts protect lenders by providing Dongsheng Guarantee’s agreement to pay an obligor’s obligations to a holder of the debt if the obligor fails to pay the obligations when they become due. Dongsheng Guarantee makes payment if the obligor fails in making payment when due. If the debtor defaults, the creditor would perform a direct claim on the guarantor. The financial guarantee service contract is classified as direct guarantee of indebtedness The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represents Dongsheng Guarantee’s maximum exposure to credit loss. Under PRC regulations, the maximum amount Dongsheng Guarantee may provide to its financial guarantee customers is 10 times its net assets. As of June 30, 2017 and 2016, the net assets of Dongsheng Guarantee were $ 205 195 Dongsheng Guarantee is a party to off-balance-sheet financial instruments in the normal course of business to meet the financing needs of its customers. June 30, 2017 June 30, 2016 Maximum guarantee issued $ 67,314,661 $ 86,289,058 Where Dongsheng Guarantee issues a guarantee, the fair value of the guarantee contract issued is initially recognized as unearned income from financial guarantee services within liabilities. The fair value of guarantees issued at the time of issuance is determined by reference to commissions charged in an arm’s length transaction for similar services, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. The fair value of the guarantee initially recognized as unearned income is amortized in profit or loss over the term of the guarantee as commissions and fees on financial guarantee services. In addition, provisions are recognized in accordance with Note 2(i) if and when (i) it becomes probable that the holder of the guarantee will call upon Dongsheng Guarantee under the guarantee, and (ii) the amount of that claim on Dongsheng Guarantee is expected to exceed the amount currently carried in unearned income in respect of that guarantee i.e. the amount initially recognized, less accumulated amortization. Guarantee paid on behalf of guarantee service customers As guarantor of guarantee service customers’ loans from banks and financial institutions, Dongsheng Guarantee is obligated to repay to the banks or financial institutions for the unpaid principal and accrued interest of the loans when customers default on their loans. Repayments on behalf of guarantee service customers are recorded as guarantees paid on behalf of guarantee service customers in the Company’s consolidated balance sheets. As of June 30, 2017 and 2016, uncollected guarantees paid on behalf of guarantee service customers from guarantee service customers on whose behalf Dongsheng Guarantee had repaid the loans were $ 1,560,615 2,039,684 Provision for guarantee losses A provision for possible losses to be absorbed by Dongsheng Guarantee for financial guarantees it provides is recorded as an accrued liability when the guarantees are made and recorded as “Allowance on financial guarantee services” in the consolidated balance sheets. This accrued liability represents probable losses and is increased or decreased by accruing a “Provision/(reversal of provision) on financial guarantee services” against commission and fee income from guarantee services throughout the terms of the guarantees as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee losses considers the guarantee contract amounts and a variety of factors, which include, depending on the counterparty, the latest financial position and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collateral or guarantees the customers or third parties offered, and other economic conditions, such as economic trends in the area and the country. The estimates are based upon information available at the time the estimates are made. It is possible that prior experience and default history of the borrowers are not indicative of future losses on guarantees made. Any increase or decrease in the provision would affect the Company’s consolidated income statements in future years. Dongsheng Guarantee provides “Specific Allowance” for the financial guarantee services if any specific collectability risk is identified, and a “General Allowance”, based on total guarantee contract amount of those transactions with no specific risk identified, to be used to cover unidentified probable loss. For the years ended June 30, 2017 2016 2015 Allowance on financial guarantee at the beginning of period $ 3,079,684 $ 1,261,868 $ 1,826,768 Provision (reversal) of general allowance (126,211) (355,313) (576,456) Specific allowance (reversal) (3,082,616) 3,263,312 - Direct write-downs against the allowance - Direct write-down for guarantees paid on behalf - (932,375) - - Reversal - recoveries by cash 880,747 - - Effect of foreign currency translation (78,457) (157,808) 11,556 Allowance on financial guarantee at the end of year $ 673,147 $ 3,079,684 $ 1,261,868 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. The General Allowance Jinshang Leasing provided as of June 30, 2017 and 2016 were $ 867,316 858,362 27,332 597,444 70,467 1,011,999 (k) Revenue recognition Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following: Commission income and evaluation income on guarantee service Commission income on guarantee services is recognized when guarantee contracts have been made whereby the related guarantee obligations have been accepted, the economic benefits associated with the guarantee contracts will probably be realized, and the amount of revenue associated with the guarantee contracts can be measured reliably. Commission income is determined based on the total fees provided for in the guarantee contracts, is recorded in full at inception as unearned income and is recognized as commission income in the income statement over the period of the guarantee using the straight-line method. The agreed commission is generally 2 6 Dongsheng Guarantee charges its financial guarantee customers a one-time fee for evaluations. Dongsheng Guarantee performs as to the likelihood that customers are qualified to apply for loans from banks and other financial institutions. Evaluation income is recognized upon the completion of the evaluation. 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. Financial advisory and agency income Jinshang Leasing and Dongsheng Guarantee provide financing solutions to customers and receive advisory fees as compensation. The advisory fees are recognized as income during the service period as the related service obligations are completed. As a licensed finance lease Company, Jinshang Leasing acts as agent in finance lease transactions between other finance lessors and lessees, or between banks and lessees. Jinshang Leasing neither receives the benefit of receiving the lease payments nor assumes the repayment obligations in these transactions. The lease agency income and advisory fees received in these transactions are recognized as income on a net basis during the service period as the related service obligations are completed. Jinshang Leasing acts as a financing agency between other financial leasing companies that need capital and financial institutions that are willing to provide capital. Other financial leasing companies factor to Jinshang Leasing their right to collect capital lease receivables in order to obtain capital from Jinshang Leasing, and Jinshang Leasing factors to other financial institutions its right to collect debts from these financial leasing companies in order to finance entirely the capital that Jinshang Leasing provides to other financial leasing companies. All of these factoring transactions are structured with recourse rights to the assignor of the receivable. Specifically, the financial institutions bear the credit risk should the financial leasing companies fail to repay capital lease receivables. Financial agency income that Jinshang Leasing earns from factoring transactions is accrued monthly as net interest income and payments that Jinshang Leasing makes on factoring loans from financial institutions are accrued monthly as interest cost, in each case in accordance with the terms of the factoring loan contracts. Jinshang Leasing recorded net interest income of nil in each of the years ended June 30, 2017, 2016, and 2015 on these financing agency transactions. (l) Property and equipment Plant and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3 5 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. (m) 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, 2017, 2016 and 2015. (n) 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, 2017 and 2016, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank loans, loans receivable and loans payable which were carried at 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 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. June 30, 2017 June 30, 2016 Balance sheet items, except for equity accounts 6.7774 6.6312 For the years ended June 30, 2017 2016 2015 Items in the statements of income and comprehensive income, and statements of cash flows 6.8124 6.4352 6.1375 (p) Interest expense Interest expense derived from the loans providing funds for financial leasing contracts is classified as cost of revenue in the statements of income. 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. (r) 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. Under the Corporate Income Tax Law of the PRC and related regulations (collectively, (the “CIT Law”), small business credit guarantee institutions are allowed to deduct from taxable income an allowance for guarantee losses as follows: (i) Guarantee Compensation Reserve - up to 1% of the balance of liabilities guaranteed by the Company as of the end of each year; the Guarantee Compensation Reserve of the end of the previous year is required to be added to the current year’s taxable income. (ii) Unexpired Liability Reserve - up to 50% of the current year’s guarantee income; the Unexpired Liability Reserve as of the end previous year is required to be added to the current year’s taxable income. (iii) Actual guarantee compensation losses incurred by small business credit guarantee institutions are required to be first applied as a write-off of the Guarantee Compensation Reserve, and any amount in excess of the Guarantee Compensation Reserve deductible from the current year’s taxable income. 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. (t) Operating leases The Company leases its office premises under lease agreements that qualify as operating leases. The Company records the rental under the lease agreements as operating expenses on a straight-line basis over the lease periods. (u) 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). (v) 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) 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). (x) Recently issued accounting pronouncements In November 2016, the Financial Accounting Standards Board (the "FASB") issued 2016-18, " Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, " Classification of Certain Cash Receipts and Cash Payments (Topic 230)" In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) with In May 2014, the FASB issued ASU 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. In August 2015, the FASB issued ASU No.2015-14 to defer the effective date of ASU No. 2014-09 for all entities by one year. For public business entities that follow U.S. GAAP, the deferral results in the new revenue standard are being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for interim and annual periods beginning after December 15, 2016. The Company will apply the new revenue standard beginning July 1, 2018, and will not early adopt. The Company has not yet selected a transition method. The Company is in the process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition, and its contracts with customers to determine the effect the guidance will have on its financial statements and what chang |
RISKS
RISKS | 12 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
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 financial guarantees that are off-balance sheet financial instruments, and in investments in direct financing leases. The total maximum financial guarantees issued (Note 2(g)) represent the maximum potential loss that would be recognized if counterparties failed completely to perform as contracted. Credit risk is controlled by the application of credit approvals, limits on the amounts guaranteed and monitoring procedures. The Company manages credit risk through its risk control system based upon a “business circle” of core Small and Medium Enterprises (“SMEs”), which commences with the establishment of overall risk management strategies, pre-transaction due diligence and assessment, in-transaction risk evaluation, product design, determination of risk-adjusted pricing, design of counter-guarantee requirements and ongoing post-transaction monitoring. To minimize credit risk, the Company requires collateral in the form of rights to cash, securities or property and equipment. Typically, the Company also requires its guarantee clients to provide one or more personal guarantors, referred to as “counter-guarantors,” so that such personal guarantors are jointly and severally liable for the repayment of the financing guaranteed with the borrower. 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, 2017 and 2016, the Company held cash and restricted cash of $ 41,284,490 75,126,811 (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. |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Jun. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
RESTRICTED CASH | NOTE 4 - RESTRICTED CASH Restricted cash represents cash pledged to banks as guarantor deposits by Dongsheng Guarantee to its guarantee service customers, in the amounts to $ 19.9 23.4 4.4 4.5 10 20 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Jun. 30, 2017 | |
Short-term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | NOTE 5 - SHORT-TERM INVESTMENTS Short-term investments as of June 30, 2017 represented transactional mutual debt fund products that Dongsheng Guarantee and Jinshang Leasing purchased from financial institutions. Short-term investments as of June 30, 2016 represented transactional mutual debt fund products that Dongsheng Guarantee, Jinshang Leasing and Tianjin Jiaming purchased from financial institutions. The term for the investments is one year or three or five years, and Dongsheng Guarantee, Jinshang Leasing and Tianjin Jiaming were entitled to redeem or transfer the investments at any time during the term. Interest from the investments varies from 5 13 The balances at June 30, 2017 and 2016, by contractual maturity, were due in one year or three or five years. Actual maturities may differ from contractual maturities because of the subsidiaries’ rights to redeem. The following table sets forth the Maturing within: Short- term investments Within 1 year $ 30,067,091 2 years 47,215,579 3 years 110,661,514 4 years - 5 years - Thereafter - $ 187,944,184 Interest income from short-term investments was $ 13,752,538 13,958,540 16,657,246 3,514,075 1,021,306 |
NET INVESTMENT IN DIRECT FINANC
NET INVESTMENT IN DIRECT FINANCING LEASES | 12 Months Ended |
Jun. 30, 2017 | |
Receivables [Abstract] | |
NET INVESTMENT IN DIRECT FINANCING LEASES | NOTE 6 - 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 5% - 10% per annum. June 30, 2017 Within 1 year $ 43,202,345 2 years 27,817,612 3 years 8,349,451 4 years 5,803,700 5 years 1,558,517 Total minimum lease receipts 86,731,625 Less: amount representing interest (9,140,852) Present value of minimum lease receivable $ 77,590,773 2017 2016 Total minimum lease payments to be received $ 86,731,625 $ 85,836,232 Less: Amounts representing estimated executory costs - - Minimum lease payments receivable 86,731,625 85,836,232 Less: Allowance for uncollectible receivables (867,316) (858,362) Net minimum lease payment receivable 85,864,309 84,977,870 Estimated residual value of leased property - Less: unearned income (9,140,852) (10,272,223) Net investment in direct financing leases $ 76,723,457 $ 74,705,647 As of June 30, 2017 and 2016, there were no recorded investment in direct financing leases on nonaccrual status, and no recorded investment in direct financing leases past due 90 days or more and still accruing. For the years ended June 30, 2017 2016 2015 Allowance for uncollectible receivables at the beginning of year $ 858,362 $ 302,401 $ 1,238,685 Provision for lease payment receivables 27,332 597,444 70,467 Direct write-downs charged against the allowance - - (1,011,999) Allowance to charge off direct financing lease interest income - - - Recoveries of amounts previously charged off - - - Effect of foreign currency translation (18,378) (41,483) 5,248 Allowance for uncollectible receivables at the end of year $ 867,316 $ 858,362 $ 302,401 Individually evaluated for impairment $ - $ - $ - Collectively evaluated for impairment 867,316 858,362 302,401 Allowance for uncollectible receivables at the end of year $ 867,316 $ 858,362 $ 302,401 Minimum lease payments receivable Individually evaluated for impairment $ - $ - $ - Collectively evaluated for impairment 86,731,625 85,836,232 30,240,137 Ending balance $ 86,731,625 $ 85,836,232 $ 30,240,137 As of June 30, 2017 and 2016, there was no impaired minimum lease payments receivable that caused the Company to evaluate individually for impairment. 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. June 30, 2017 June 30, 2016 Normal $ 86,731,625 $ 85,836,232 Abnormal - - Total $ 86,731,625 $ 85,836,232 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 7 - PROPERTY AND EQUIPMENT, NET Useful life Salvage (years) value 2017 2016 Leasehold improvements 3-5 3% $ 467,564 $ 393,985 Vehicles 4-5 3%-5% 1,112,359 1,151,482 Office equipment 3-5 3% 172,166 173,984 Electric equipment 3 3% 34,632 24,528 Less: accumulated depreciation (1,192,573) (889,260) Property and equipment, net $ 594,148 $ 854,719 Depreciation expense totaled $ 320,842 411,635 257,464 |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
OTHER ASSETS | NOTE 8 - OTHER ASSETS 2017 2016 Deposits for other loans (Note 9) $ 590,616 $ - Prepaid insurance 166,250 175,000 Advanced payment to third party companies 52,517 78,523 Receivable for disposal of WHL (Note 1) - 270,000 Other receivables 6,601 85,228 $ 815,984 $ 608,751 Advanced payment to the third party companies as of June 30, 2017 and 2016 represented an amount Jinshang Leasing and Dongsheng Guarantee prepaid for expense related car gasoline and office rentals. |
LOANS FOR CAPITAL LEASE BUSINES
LOANS FOR CAPITAL LEASE BUSINESS | 12 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
BANK LOAN FOR CAPITAL LEASE BUSINESS | NOTE 9 - LOANS FOR CAPITAL LEASE BUSINESS Bank loans Bank loans of $ 28,281,541 43,308,617 300 44.3 5.5 4.4 4.5 30 The CITIC Bank loan for Yancheng project with a principal amount of RMB 3.1 0.5 5.75 February 12, 2020 505,570 532,456 3,426,450 Interest expense incurred on the loans for the years ended June 30, 2017, 2016 and 2015 were $ 1,684,075 524,409 188,173 Other loans Other loans of $ 9,509,597 6 8,358,752 56,650,807 590,616 4,002,855 Interest expense incurred on the other loans for the year ended June 30, 2017 was $ 410,512 Bank loans Other loans (principal amounts) (principal amounts) Within 1 year $ 14,905,027 $ 4,846,657 Between 1 to 2 years 13,033,222 4,280,501 Between 2 to 3 years 343,292 382,439 Between 3 to 4 years - - Between 4 to 5 years - - Beyond 5 years - - $ 28,281,541 $ 9,509,597 |
UNEARNED INCOME FROM FINANCIAL
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES | 12 Months Ended |
Jun. 30, 2017 | |
Deferred Revenue Disclosure [Abstract] | |
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES | NOTE 10 - UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES Unearned income from guarantee services were $ 538,215 423,801 |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Jun. 30, 2017 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | NOTE 11 - OTHER LIABILITIES 2017 2016 Other tax payable $ 771,293 $ 510,147 Payable to an equipment provider for initial investment in direct financing lease - 407,679 Accrued payroll 45,356 42,898 Other payables 76,920 3,385 $ 893,569 $ 964,109 Payable to an equipment provider for initial investment in direct financing lease as of June 30, 2017 and 2016 represented the portion of unpaid initial investment by the lessor to the equipment provider in the direct financing lease transaction for which Jinshang Leasing acted as lease agent. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE- BASED COMPENSATION | NOTE 12 - 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. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Term In Years $ Outstanding, July 1, 2015 - - - Granted 1,450,000 12 3.00 Exercised - - - Forfeited (180,000) - - Canceled - - - Outstanding, July 1, 2016 1,270,000 12 2.42 Granted - Exercised - Forfeited (1,190,000) 12 Canceled (80,000) 12 Outstanding, June 30, 2017 - - - Exercisable, June 30, 2017 - - - Vested and expected to vest, June 30, 2017 - - Exercisable, June 30, 2016 - - - Vested and expected to vest, June 30, 2016 1,000,000 12 2.42 The aggregate intrinsic value of options vested and expected to vest as of 2016 were both zero, respectively. Intrinsic value is calculated as the amount by which the current market value of a share of common stock exceeds the exercise price multiplied by the number of option shares. During the year ended June 30, 2016, the Company granted options to purchase 1,450,000 12 During the year ended June 30, 2017, 1,190,000 The Company measures compensation cost related to share options based on the grant-date fair value of the award using the Binomial Model. 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 $ (1,465,680) 1,889,733 |
CAPITALIZATION
CAPITALIZATION | 12 Months Ended |
Jun. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
CAPITALIZATION | NOTE 13 - CAPITALIZATION Common Stock As of October 26, 2015, Wins Finance is authorized to issue up to 100,000,000 0.0001 21,526,747 16,800,000 4,726,747 On June 28, 2016, the Company repurchased 5,100 60,180 1,480,000 17,464,000 17 464,000 On December 2, 2016, the Company repurchased 204,005 204 As of June 30, 2017 and 2016, there were 19,837,642 20,041,647 |
STATUTORY RESERVE
STATUTORY RESERVE | 12 Months Ended |
Jun. 30, 2017 | |
Statutory Reserve [Abstract] | |
STATUTORY RESERVE | NOTE 14 - 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 50 |
EMPLOYEE RETIREMENT BENEFITS
EMPLOYEE RETIREMENT BENEFITS | 12 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT BENEFIT | NOTE 15 - 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 salary and employee charges when incurred. The contributions made by the Company were $ 111,493 107,970 52,374 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 16 - EARNINGS PER SHARE For the years ended June 30, 2017 2016 2015 Net income attributable to the common shareholders $ 20,349,791 $ 12,117,397 $ 26,072,653 Basic weighted-average common shares outstanding 19,926,510 20,012,356 16,800,000 Effect of dilutive securities 155,579 - - Diluted weighted-average common shares outstanding 20,082,089 20,012,356 16,800,000 Earnings per share Basic $ 1.02 $ 0.61 $ 1.55 Earnings per share Diluted $ 1.01 $ 0.61 $ 1.55 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17 - 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, 2017, 2016 and 2015 as Full Shine had no assessable profits arising in Hong Kong. The provision for PRC Enterprise Income Tax (“EIT) is calculated at 25 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 2011. With a few exceptions, the calendar (tax) years 2012 2016 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, 2017, 2016 and 2015, 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. 2017 2016 Dongsheng Guarantee $ 2,517,538 $ 2,083,683 Jinshang Leasing 255,093 427,164 $ 2,772,631 $ 2,510,847 For the years ended June 30, 2017 2016 2015 Current income tax expense $ 1,581,470 $ 1,387,373 $ 3,662,488 Deferred tax expense (benefit) 370,019 (622,928) (515,495) Total provision for income taxes $ 1,951,489 $ 764,445 $ 3,146,993 For the years ended June 30, 2017 2016 2015 PRC statutory tax 25 % 25.0 % 25.0 % Effect of non-deductible expenses 0.0 % 0.0 % 0.0 % Effect of non-taxable income (15.4) % (28.5) % (14.3) % Others (0.8) % 9.7 % 0.0 % Effective tax rate 8.8 % 6.2 % 10.7 % June 30, 2017 June 30, 2016 Deferred tax assets Provision for direct financing lease $ 216,829 $ 208,215 Direct financing lease income 110,308 220,309 Allowance on guarantee - 780,402 Total deferred tax assets 327,137 1,208,926 Less: Valuation allowance - - Less: Net off with deferred tax liabilities for financial reporting purposes - (780,402) Net total deferred tax assets $ 327,137 $ 428,524 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ 390,154 $ 509,921 Commissions and fees on financial guarantee services 356,730 747,879 Total deferred tax liabilities 746,884 1,257,800 Less: Net off with deferred tax assets for financial reporting purposes - (780,402) Net total deferred tax liabilities $ 746,884 $ 477,398 For the purpose of presentation in the consolidated balance sheets, certain deferred tax assets and liabilities have been offset. As of June 30, 2017 and 2016, the Company had net deferred tax assets of $ 327,137 428,524 As of June 30, 2017 and 2016, 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 $ 69,333,827 49,730,140 For the years ended June 30, 2017 and 2016, 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, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 18 - RELATED PARTY TRANSACTIONS AND BALANCES Related party balances Related party balances as of June 30, 2017 and 2016 (apart from those disclosed elsewhere in these financial statements) consisted of: 2017 2016 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. Related party transactions For the years ended June 30, 2017 2016 2015 Amount lent to owners Dongsheng International Investment Group Co., Ltd $ - $ - $ 13,148,677 Dongsheng International Investment Ltd (HK) - - 8,419,721 $ - $ - $ 21,568,398 Amount repaid from owners Dongsheng International Investment Group Co., Ltd $ - $ - $ 30,474,032 Dongsheng International Investment Ltd (HK) - - 10,628,558 Wang Hong (Note 1) - - 6,517,312 $ - $ - $ 47,619,902 Amount repaid to owners Wang Hong (Note 1) $ - $ - $ 244,399 Tian Wenjun - - 175,917 $ - $ - $ 420,316 Amount borrowed from owners - Wang Hong (Note 1) $ - $ - $ 16,293 Tian Wenjun - - 24,440 $ - $ - $ 40,733 Share repurchase Bluesky LLC $ - $ 17,464,000 $ - Convertible debt Bluesky LLC $ - $ 8,500,000 $ - The loans from owners and to owners were all interest free and due on demand. On December 28, 2015, the Company issued an $ 8,500,000 4 December 28, 2016 12.00 1 On June 30, 2016, the Company repurchased 1,480,000 11.8 17,000,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 19 - COMMITMENTS AND CONTINGENCIES Commitments Lease Commitments The Company leased their principal offices under lease agreements. For the years ending June 30, Rental payments 2018 $ 186,721 2019 2020 - 2021 - 2022 - Thereafter - $ 186,721 Guarantee Commitments Guarantees terminate upon payment or cancellation of the guaranteed obligation. Dongsheng Guarantee’s obligations to make payments under guarantees will be triggered upon failure of the parties for which the guarantees are provided to fulfill their guaranteed obligations. The terms from inception to termination of the guarantees provided generally range from 6 to 12 months. Contingencies In the past, Dongsheng Guarantee failed to comply with PRC regulations that provide that the aggregate balance of liabilities guaranteed by a financing guarantee Company for any single guaranteed party may not exceed 10% of the net assets of the guarantee Company and also failed to make required social insurance and provident housing fund contributions for some of its employees. During the years ended June 30, 2017 and 2016, Dongsheng Guarantee did not provide guarantees for loans in excess of 10% of its net assets to any single customer and made all required social insurance, but it failed to comply with certain housing fund requirements under PRC regulations. As of June 30, 2017 and 2016, Dongsheng Guarantee had not received any notice from any relevant government authorities regarding its prior non-compliance with these requirements. However, it is possible that relevant regulatory authorities will impose penalties and/or bring legal action against Dongsheng Guarantee retrospectively. Any such penalties or legal action could have an adverse effect on the Company’s business, and management is unable to make any estimate of the amounts of any such possible penalties. Litigations The Company is involved in various legal actions arising in the ordinary course of its business. As of June 30, 2017, the Company was involved in 3 lawsuits in China, of which 2 of the legal actions were initiated by the Company as plaintiff in relation to the guarantee business, and in the other of which the Company is a defendant in relation to its financing lease business (see below). The Company initiated legal proceedings to collect delinquent balances, interest and penalties from guarantees. 2 of these cases with an aggregated claim of $ 624,169 In October 2014, an equipment supplier filed a lawsuit in China naming Jinshang Leasing and the respective lessee of a financing lease arrangement as defendants demanding repayment of the equipment cost of $ 2.2 14.8 0.2 1.5 The Company and certain of its executive officers have been named as defendants in two civil securities lawsuits recently filed in two U.S. District Courts (the “Lawsuits”) in April 2017. Both Lawsuits are putative class action lawsuits where plaintiffs’ counsels are seeking to represent the entire class of shareholders who bought the Company’s securities between 29 October 2015 and 29 March 2017. Both Lawsuits assert the same statutory violations under the U.S. Securities Exchange Act, alleging, in sum and substance, that the defendants made false and misleading statements, or failed to disclose material facts, in the Company’s prospectuses, press releases, and filings with the U.S. Securities and Exchange Commission (the “SEC”) in connection with its growth, business prospects and the adequacy of its internal controls. The Lawsuits further alleged that the Company’s stock price fell when the alleged misstatements or omissions became known to investors. The plaintiffs are seeking unspecified monetary damages, including interest, costs and attorneys’ fees and other relief as the court deems just. On June 19, 2017, the plaintiff in one of the class actions filed a notice of voluntary discontinuance. 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 alleges a claim against the Company for securities fraud purportedly arising from alleged misrepresentations concerning its principal executive offices (which alleged misrepresentations resulted in the Company being added to, and then removed from, the Russell 2000 index). On October 24, 2017, the Company moved to dismiss the Amended Complaint for failure to state a claim against it. That motion remains pending. The Amended Complaint does not specifically allege the damages purportedly suffered by the class, and the Company is not yet able to provide a reliable estimate of any such damage claim. The directors of the Company believe that the claims from this proceeding are without merit and they are vigorously defending this proceeding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 - SUBSEQUENT EVENTS 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 (Note 1). On October 19, 2017, the Company received a letter from the Staff of the Listing Qualifications Department (the “Listing Qualifications Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Listing Qualifications Staff has withdrawn its August 4, 2017 delisting determination letter. Accordingly, the Company’s securities remain listed on Nasdaq. Notwithstanding the withdrawal of the August 4, 2017 delisting determination letter, the Company has been further advised by Nasdaq that the Company’s securities will remain halted pending the receipt and review by Nasdaq of additional information from the Company. |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
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 | 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, 2017, there were two customers that accounted for 19 13 10 18 14 11 10 As of June 30, 2017, two customers accounted for 13.2 11 |
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 | Restricted Cash Restricted cash represents cash pledged to banks by Wins Finance’s subsidiary Dongsheng Guarantee, as guarantor for guarantee business customers. The banks providing loans to the Company’s guarantee service customers generally require Dongsheng Guarantee, as the guarantor of the loans, to pledge a cash deposit of a minimum of 10% to 20% of the guaranteed amount to an escrow account that is restricted from use. The deposit is released after the guaranteed bank loan is paid off and Dongsheng Guarantee’s guarantee obligations expire, which is usually within 12 |
Short-term investments | Short-term investments Investments in non-marketable asset management products issued by banks and financial institutions (the issuers) with original maturities of one year to five years that could be redeemed or are transferrable at any time are classified as short-term investments under the cost method. 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. The investment portfolios of these products are not disclosed to the Company by the banks or financial institutions. If the banks and financial institutions are required to redeem these investments, they will redeem them at a price equal to the outstanding principal plus accrued and unpaid interest. The Company carries these cost method investments at cost and only adjusts for other-than-temporary impairments and distributions of earnings. Management regularly evaluates the impairment of theses cost method investments at the individual security level. If the fair value of an investment is less than its amortized cost basis at the balance sheet date of the report period for which impairment is being assessed, management will determine whether the decline in fair value is temporary or permanent. If the decline in fair value is other than temporary, the cost basis of the individual security is written down to fair value as the new cost basis, and the amount of the write-down is included in current earnings. There is no impairment noted for either of the reporting periods presented herein. Interest income from short-term investments 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. |
Financial guarantee service contracts | Financial guarantee service contracts The Company’s financial guarantee service contracts protect lenders by providing Dongsheng Guarantee’s agreement to pay an obligor’s obligations to a holder of the debt if the obligor fails to pay the obligations when they become due. Dongsheng Guarantee makes payment if the obligor fails in making payment when due. If the debtor defaults, the creditor would perform a direct claim on the guarantor. The financial guarantee service contract is classified as direct guarantee of indebtedness The contract amounts reflect the extent of involvement the Company has in the guarantee transaction and also represents Dongsheng Guarantee’s maximum exposure to credit loss. Under PRC regulations, the maximum amount Dongsheng Guarantee may provide to its financial guarantee customers is 10 times its net assets. As of June 30, 2017 and 2016, the net assets of Dongsheng Guarantee were $ 205 195 Dongsheng Guarantee is a party to off-balance-sheet financial instruments in the normal course of business to meet the financing needs of its customers. June 30, 2017 June 30, 2016 Maximum guarantee issued $ 67,314,661 $ 86,289,058 Where Dongsheng Guarantee issues a guarantee, the fair value of the guarantee contract issued is initially recognized as unearned income from financial guarantee services within liabilities. The fair value of guarantees issued at the time of issuance is determined by reference to commissions charged in an arm’s length transaction for similar services, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. The fair value of the guarantee initially recognized as unearned income is amortized in profit or loss over the term of the guarantee as commissions and fees on financial guarantee services. In addition, provisions are recognized in accordance with Note 2(i) if and when (i) it becomes probable that the holder of the guarantee will call upon Dongsheng Guarantee under the guarantee, and (ii) the amount of that claim on Dongsheng Guarantee is expected to exceed the amount currently carried in unearned income in respect of that guarantee i.e. the amount initially recognized, less accumulated amortization. |
Guarantee paid on behalf of guarantee service customers | Guarantee paid on behalf of guarantee service customers As guarantor of guarantee service customers’ loans from banks and financial institutions, Dongsheng Guarantee is obligated to repay to the banks or financial institutions for the unpaid principal and accrued interest of the loans when customers default on their loans. Repayments on behalf of guarantee service customers are recorded as guarantees paid on behalf of guarantee service customers in the Company’s consolidated balance sheets. As of June 30, 2017 and 2016, uncollected guarantees paid on behalf of guarantee service customers from guarantee service customers on whose behalf Dongsheng Guarantee had repaid the loans were $ 1,560,615 2,039,684 |
Provision for guarantee losses | Provision for guarantee losses A provision for possible losses to be absorbed by Dongsheng Guarantee for financial guarantees it provides is recorded as an accrued liability when the guarantees are made and recorded as “Allowance on financial guarantee services” in the consolidated balance sheets. This accrued liability represents probable losses and is increased or decreased by accruing a “Provision/(reversal of provision) on financial guarantee services” against commission and fee income from guarantee services throughout the terms of the guarantees as necessary when additional relevant information becomes available. The methodology used to estimate the liability for possible guarantee losses considers the guarantee contract amounts and a variety of factors, which include, depending on the counterparty, the latest financial position and performance of the borrowers, actual defaults, estimated future defaults, historical loss experience, estimated value of collateral or guarantees the customers or third parties offered, and other economic conditions, such as economic trends in the area and the country. The estimates are based upon information available at the time the estimates are made. It is possible that prior experience and default history of the borrowers are not indicative of future losses on guarantees made. Any increase or decrease in the provision would affect the Company’s consolidated income statements in future years. Dongsheng Guarantee provides “Specific Allowance” for the financial guarantee services if any specific collectability risk is identified, and a “General Allowance”, based on total guarantee contract amount of those transactions with no specific risk identified, to be used to cover unidentified probable loss. For the years ended June 30, 2017 2016 2015 Allowance on financial guarantee at the beginning of period $ 3,079,684 $ 1,261,868 $ 1,826,768 Provision (reversal) of general allowance (126,211) (355,313) (576,456) Specific allowance (reversal) (3,082,616) 3,263,312 - Direct write-downs against the allowance - Direct write-down for guarantees paid on behalf - (932,375) - - Reversal - recoveries by cash 880,747 - - Effect of foreign currency translation (78,457) (157,808) 11,556 Allowance on financial guarantee at the end of year $ 673,147 $ 3,079,684 $ 1,261,868 |
Net investment in direct financing leases | 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. The General Allowance Jinshang Leasing provided as of June 30, 2017 and 2016 were $ 867,316 858,362 27,332 597,444 70,467 1,011,999 |
Revenue recognition | (k) Revenue recognition Revenue is recognized when there are probable economic benefits to the Company and when the revenue can be measured reliably, on the following: Commission income and evaluation income on guarantee service Commission income on guarantee services is recognized when guarantee contracts have been made whereby the related guarantee obligations have been accepted, the economic benefits associated with the guarantee contracts will probably be realized, and the amount of revenue associated with the guarantee contracts can be measured reliably. Commission income is determined based on the total fees provided for in the guarantee contracts, is recorded in full at inception as unearned income and is recognized as commission income in the income statement over the period of the guarantee using the straight-line method. The agreed commission is generally 2 6 Dongsheng Guarantee charges its financial guarantee customers a one-time fee for evaluations. Dongsheng Guarantee performs as to the likelihood that customers are qualified to apply for loans from banks and other financial institutions. Evaluation income is recognized upon the completion of the evaluation. 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. Financial advisory and agency income Jinshang Leasing and Dongsheng Guarantee provide financing solutions to customers and receive advisory fees as compensation. The advisory fees are recognized as income during the service period as the related service obligations are completed. As a licensed finance lease Company, Jinshang Leasing acts as agent in finance lease transactions between other finance lessors and lessees, or between banks and lessees. Jinshang Leasing neither receives the benefit of receiving the lease payments nor assumes the repayment obligations in these transactions. The lease agency income and advisory fees received in these transactions are recognized as income on a net basis during the service period as the related service obligations are completed. Jinshang Leasing acts as a financing agency between other financial leasing companies that need capital and financial institutions that are willing to provide capital. Other financial leasing companies factor to Jinshang Leasing their right to collect capital lease receivables in order to obtain capital from Jinshang Leasing, and Jinshang Leasing factors to other financial institutions its right to collect debts from these financial leasing companies in order to finance entirely the capital that Jinshang Leasing provides to other financial leasing companies. All of these factoring transactions are structured with recourse rights to the assignor of the receivable. Specifically, the financial institutions bear the credit risk should the financial leasing companies fail to repay capital lease receivables. Financial agency income that Jinshang Leasing earns from factoring transactions is accrued monthly as net interest income and payments that Jinshang Leasing makes on factoring loans from financial institutions are accrued monthly as interest cost, in each case in accordance with the terms of the factoring loan contracts. Jinshang Leasing recorded net interest income of nil in each of the years ended June 30, 2017, 2016, and 2015 on these financing agency transactions. |
Property and equipment | (l) Property and equipment Plant and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3 5 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 | (m) 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, 2017, 2016 and 2015. |
Fair value measurements | (n) 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, 2017 and 2016, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank loans, loans receivable and loans payable which were carried at 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 | 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. June 30, 2017 June 30, 2016 Balance sheet items, except for equity accounts 6.7774 6.6312 For the years ended June 30, 2017 2016 2015 Items in the statements of income and comprehensive income, and statements of cash flows 6.8124 6.4352 6.1375 |
Interest expense | (p) Interest expense Interest expense derived from the loans providing funds for financial leasing contracts is classified as cost of revenue in the statements of income. |
Non-interest expenses | 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 | (r) 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. Under the Corporate Income Tax Law of the PRC and related regulations (collectively, (the “CIT Law”), small business credit guarantee institutions are allowed to deduct from taxable income an allowance for guarantee losses as follows: (i) Guarantee Compensation Reserve - up to 1% of the balance of liabilities guaranteed by the Company as of the end of each year; the Guarantee Compensation Reserve of the end of the previous year is required to be added to the current year’s taxable income. (ii) Unexpired Liability Reserve - up to 50% of the current year’s guarantee income; the Unexpired Liability Reserve as of the end previous year is required to be added to the current year’s taxable income. (iii) Actual guarantee compensation losses incurred by small business credit guarantee institutions are required to be first applied as a write-off of the Guarantee Compensation Reserve, and any amount in excess of the Guarantee Compensation Reserve deductible from the current year’s taxable income. |
Comprehensive income | 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 | (t) Operating leases The Company leases its office premises under lease agreements that qualify as operating leases. The Company records the rental under the lease agreements as operating expenses on a straight-line basis over the lease periods. |
Share-based compensation | (u) 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 | (v) 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) | 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). |
Recently issued accounting pronouncements | (x) Recently issued accounting pronouncements In November 2016, the Financial Accounting Standards Board (the "FASB") issued 2016-18, " Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 2016-15, " Classification of Certain Cash Receipts and Cash Payments (Topic 230)" In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) with In May 2014, the FASB issued ASU 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. In August 2015, the FASB issued ASU No.2015-14 to defer the effective date of ASU No. 2014-09 for all entities by one year. For public business entities that follow U.S. GAAP, the deferral results in the new revenue standard are being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for interim and annual periods beginning after December 15, 2016. The Company will apply the new revenue standard beginning July 1, 2018, and will not early adopt. The Company has not yet selected a transition method. The Company is in the process of evaluating the new standard against its existing accounting policies, including the timing of revenue recognition, and its contracts with customers to determine the effect the guidance will have on its financial statements and what changes to systems and controls may be warranted. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation: Improvements to Employee Share-Based Payment Accounting There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, “Principal versus Agent Considerations (Reporting Revenue Gross Versus Net),” was issued in March, 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, “Identifying Performance Obligations and Licensing,” issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. ASU 2016-12, “Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients” provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. Finally, ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” was issued in December 2016, and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU 2014-09, the Company will also consider the impact on its financial statements related to the updated guidance provided by these four new ASUs. There were various other accounting standards and updates recently issued, none of which are expected to have a material impact on the Company's financial position, operations, or cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Financial Instruments Whose Contract Amounts Represent Credit Risk | Financial instruments whose contract amounts represent credit risk are as follows: June 30, 2017 June 30, 2016 Maximum guarantee issued $ 67,314,661 $ 86,289,058 |
Schedule of allowance on financial guarantee | Dongsheng Guarantee 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. For the years ended June 30, 2017 2016 2015 Allowance on financial guarantee at the beginning of period $ 3,079,684 $ 1,261,868 $ 1,826,768 Provision (reversal) of general allowance (126,211) (355,313) (576,456) Specific allowance (reversal) (3,082,616) 3,263,312 - Direct write-downs against the allowance - Direct write-down for guarantees paid on behalf - (932,375) - - Reversal - recoveries by cash 880,747 - - Effect of foreign currency translation (78,457) (157,808) 11,556 Allowance on financial guarantee at the end of year $ 673,147 $ 3,079,684 $ 1,261,868 |
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, 2017 June 30, 2016 Balance sheet items, except for equity accounts 6.7774 6.6312 For the years ended June 30, 2017 2016 2015 Items in the statements of income and comprehensive income, and statements of cash flows 6.8124 6.4352 6.1375 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Short-term Investments [Abstract] | |
Schedule of Cost Method Investments [Table Text Block] | contractual maturity of the balances as of June 30, 2017 in future periods: Maturing within: Short- term investments Within 1 year $ 30,067,091 2 years 47,215,579 3 years 110,661,514 4 years - 5 years - Thereafter - $ 187,944,184 |
NET INVESTMENT IN DIRECT FINA30
NET INVESTMENT IN DIRECT FINANCING LEASES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Schedule of Future Minimum Lease Receipts | Future minimum lease receipts under non-cancellable direct financing lease arrangements are as follows: June 30, 2017 Within 1 year $ 43,202,345 2 years 27,817,612 3 years 8,349,451 4 years 5,803,700 5 years 1,558,517 Total minimum lease receipts 86,731,625 Less: amount representing interest (9,140,852) Present value of minimum lease receivable $ 77,590,773 |
Summary of the Components of the Jinshang Leasing's Net Investment in Direct Financing Leases | Following is a summary of the components of the Jinshang Leasing’s net investment in direct financing leases at June 30, 2017 and 2016: 2017 2016 Total minimum lease payments to be received $ 86,731,625 $ 85,836,232 Less: Amounts representing estimated executory costs - - Minimum lease payments receivable 86,731,625 85,836,232 Less: Allowance for uncollectible receivables (867,316) (858,362) Net minimum lease payment receivable 85,864,309 84,977,870 Estimated residual value of leased property - Less: unearned income (9,140,852) (10,272,223) Net investment in direct financing leases $ 76,723,457 $ 74,705,647 |
Schedule of Allowance for Uncollectible and Minimum Lease Payments Receivables | The allowance for uncollectible minimum lease payments receivables in direct financing leases for the years ended June 30, 2017, 2016 and 2015 were as following: For the years ended June 30, 2017 2016 2015 Allowance for uncollectible receivables at the beginning of year $ 858,362 $ 302,401 $ 1,238,685 Provision for lease payment receivables 27,332 597,444 70,467 Direct write-downs charged against the allowance - - (1,011,999) Allowance to charge off direct financing lease interest income - - - Recoveries of amounts previously charged off - - - Effect of foreign currency translation (18,378) (41,483) 5,248 Allowance for uncollectible receivables at the end of year $ 867,316 $ 858,362 $ 302,401 Individually evaluated for impairment $ - $ - $ - Collectively evaluated for impairment 867,316 858,362 302,401 Allowance for uncollectible receivables at the end of year $ 867,316 $ 858,362 $ 302,401 Minimum lease payments receivable Individually evaluated for impairment $ - $ - $ - Collectively evaluated for impairment 86,731,625 85,836,232 30,240,137 Ending balance $ 86,731,625 $ 85,836,232 $ 30,240,137 |
Summary of Risk Classification of Direct Financing Lease Receivables | The risk classification of direct financing lease receivables is as follows: June 30, 2017 June 30, 2016 Normal $ 86,731,625 $ 85,836,232 Abnormal - - Total $ 86,731,625 $ 85,836,232 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment as of June 30, 2017 and 2016 consisted of the following: Useful life Salvage (years) value 2017 2016 Leasehold improvements 3-5 3% $ 467,564 $ 393,985 Vehicles 4-5 3%-5% 1,112,359 1,151,482 Office equipment 3-5 3% 172,166 173,984 Electric equipment 3 3% 34,632 24,528 Less: accumulated depreciation (1,192,573) (889,260) Property and equipment, net $ 594,148 $ 854,719 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets as of June 30, 2017 and 2016 consisted of: 2017 2016 Deposits for other loans (Note 9) $ 590,616 $ - Prepaid insurance 166,250 175,000 Advanced payment to third party companies 52,517 78,523 Receivable for disposal of WHL (Note 1) - 270,000 Other receivables 6,601 85,228 $ 815,984 $ 608,751 |
LOANS FOR CAPITAL LEASE BUSIN33
LOANS FOR CAPITAL LEASE BUSINESS (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of June 30, 2017, the borrowings will be due according to the following schedule: Bank loans Other loans (principal amounts) (principal amounts) Within 1 year $ 14,905,027 $ 4,846,657 Between 1 to 2 years 13,033,222 4,280,501 Between 2 to 3 years 343,292 382,439 Between 3 to 4 years - - Between 4 to 5 years - - Beyond 5 years - - $ 28,281,541 $ 9,509,597 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other liabilities as of June 30, 2017 and 2016 consisted of: 2017 2016 Other tax payable $ 771,293 $ 510,147 Payable to an equipment provider for initial investment in direct financing lease - 407,679 Accrued payroll 45,356 42,898 Other payables 76,920 3,385 $ 893,569 $ 964,109 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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, 2017 and 2016: Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Term In Years $ Outstanding, July 1, 2015 - - - Granted 1,450,000 12 3.00 Exercised - - - Forfeited (180,000) - - Canceled - - - Outstanding, July 1, 2016 1,270,000 12 2.42 Granted - Exercised - Forfeited (1,190,000) 12 Canceled (80,000) 12 Outstanding, June 30, 2017 - - - Exercisable, June 30, 2017 - - - Vested and expected to vest, June 30, 2017 - - Exercisable, June 30, 2016 - - - Vested and expected to vest, June 30, 2016 1,000,000 12 2.42 |
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, 2017 | |
Earnings Per Share [Abstract] | |
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, 2016 and 2015, respectively: For the years ended June 30, 2017 2016 2015 Net income attributable to the common shareholders $ 20,349,791 $ 12,117,397 $ 26,072,653 Basic weighted-average common shares outstanding 19,926,510 20,012,356 16,800,000 Effect of dilutive securities 155,579 - - Diluted weighted-average common shares outstanding 20,082,089 20,012,356 16,800,000 Earnings per share Basic $ 1.02 $ 0.61 $ 1.55 Earnings per share Diluted $ 1.01 $ 0.61 $ 1.55 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
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, 2017 and 2016 comprises: 2017 2016 Dongsheng Guarantee $ 2,517,538 $ 2,083,683 Jinshang Leasing 255,093 427,164 $ 2,772,631 $ 2,510,847 |
Schedule of Components of Income Tax Expense (Benefit) | For the years ended June 30, 2017 2016 2015 Current income tax expense $ 1,581,470 $ 1,387,373 $ 3,662,488 Deferred tax expense (benefit) 370,019 (622,928) (515,495) Total provision for income taxes $ 1,951,489 $ 764,445 $ 3,146,993 |
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: For the years ended June 30, 2017 2016 2015 PRC statutory tax 25 % 25.0 % 25.0 % Effect of non-deductible expenses 0.0 % 0.0 % 0.0 % Effect of non-taxable income (15.4) % (28.5) % (14.3) % Others (0.8) % 9.7 % 0.0 % Effective tax rate 8.8 % 6.2 % 10.7 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax arose from the difference in tax and accounting base of the deductible allowance for guarantee loss and lease payment receivable loss and difference in direct financing lease income recognition between PRC and U.S. GAAP. June 30, 2017 June 30, 2016 Deferred tax assets Provision for direct financing lease $ 216,829 $ 208,215 Direct financing lease income 110,308 220,309 Allowance on guarantee - 780,402 Total deferred tax assets 327,137 1,208,926 Less: Valuation allowance - - Less: Net off with deferred tax liabilities for financial reporting purposes - (780,402) Net total deferred tax assets $ 327,137 $ 428,524 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ 390,154 $ 509,921 Commissions and fees on financial guarantee services 356,730 747,879 Total deferred tax liabilities 746,884 1,257,800 Less: Net off with deferred tax assets for financial reporting purposes - (780,402) Net total deferred tax liabilities $ 746,884 $ 477,398 For the purpose of presentation in the consolidated balance sheets, certain deferred tax assets and liabilities have been offset. |
RELATED PARTY TRANSACTIONS AN38
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Balances | Related party balances as of June 30, 2017 and 2016 (apart from those disclosed elsewhere in these financial statements) consisted of: 2017 2016 Due to related party Bluesky LLC $ 464,000 $ 464,000 $ 464,000 $ 464,000 |
Schedule of Related Party Transactions | Related party transactions for the years ended June 30, 2017, 2016 and 2015 consisted of: For the years ended June 30, 2017 2016 2015 Amount lent to owners Dongsheng International Investment Group Co., Ltd $ - $ - $ 13,148,677 Dongsheng International Investment Ltd (HK) - - 8,419,721 $ - $ - $ 21,568,398 Amount repaid from owners Dongsheng International Investment Group Co., Ltd $ - $ - $ 30,474,032 Dongsheng International Investment Ltd (HK) - - 10,628,558 Wang Hong (Note 1) - - 6,517,312 $ - $ - $ 47,619,902 Amount repaid to owners Wang Hong (Note 1) $ - $ - $ 244,399 Tian Wenjun - - 175,917 $ - $ - $ 420,316 Amount borrowed from owners - Wang Hong (Note 1) $ - $ - $ 16,293 Tian Wenjun - - 24,440 $ - $ - $ 40,733 Share repurchase Bluesky LLC $ - $ 17,464,000 $ - Convertible debt Bluesky LLC $ - $ 8,500,000 $ - |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations | The following table sets forth the Company’s contractual obligations as of June 30, 2017 in future periods: For the years ending June 30, Rental payments 2018 $ 186,721 2019 2020 - 2021 - 2022 - Thereafter - $ 186,721 |
ORGANIZATION AND PRINCIPAL AC40
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) | Dec. 13, 2016 | Aug. 02, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Oct. 26, 2015 | Dec. 22, 2014 | Dec. 02, 2014 |
Common Stock, Shares, Issued | 19,837,642 | 20,041,647 | 21,526,747 | ||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 8.10% | ||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 270,000 | ||||||
Jinshang Leasing [Member] | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | 100.00% | |||||
Common Stock, Shares, Issued | 30,000,000 | ||||||
Jinchen Agriculture [Member] | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||||||
Subsequent Event [Member] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 67.00% | ||||||
Freeman FinTech Corporation [Member] | |||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 13,440,000 | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 67.00% | ||||||
Spectacular Bid Limited [Member] | Subsequent Event [Member] | |||||||
Business Acquisition, Percentage of Voting Interests Acquired | 67.00% | ||||||
Former [Member] | Holdco [Member] | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 78.00% | ||||||
Former [Member] | Sino [Member] | |||||||
Noncontrolling Interest, Ownership Percentage by Parent | 22.00% |
SUMMARY OF SIGNIFICANT ACCOUN41
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Investment Income, Interest | $ 13,752,538 | $ 13,958,540 | $ 16,657,246 |
Allowance for uncollectibles | 867,316 | 858,362 | |
Provision for General Allowance | 27,332 | 597,444 | 70,467 |
Direct write-downs against the allowance | 0 | 0 | $ 1,011,999 |
Guarantee Paid On Behalf Of Guarantee Service Customers | $ 1,560,615 | $ 2,039,684 | |
Agreed guaranteed commission period | 12 months | ||
Commission Percentage Rate Minimum | 2.00% | ||
Commission Percentage Rate Maximum | 6.00% | ||
Minimum [Member] | |||
Property, Plant and Equipment, Salvage Value, Percentage | 3.00% | ||
Maximum [Member] | |||
Property, Plant and Equipment, Salvage Value, Percentage | 5.00% | ||
Customer Concentration Risk [Member] | Minimum [Member] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Customer One Concentration Risk [Member] | |||
Concentration Risk, Percentage | 19.00% | 18.00% | |
Customer One Concentration Risk [Member] | Guaranteed loans [Member] | |||
Concentration Risk, Percentage | 13.20% | ||
Customer Two Concentration Risk [Member] | |||
Concentration Risk, Percentage | 13.00% | 14.00% | |
Customer Two Concentration Risk [Member] | Guaranteed loans [Member] | |||
Concentration Risk, Percentage | 11.00% | ||
Customer Three Concentration Risk [Member] | |||
Concentration Risk, Percentage | 11.00% |
SUMMARY OF SIGNIFICANT ACCOUN42
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Financial Guarantee Service) (Details) - Dongsheng Guarantee [Member] - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Loss Contingencies [Line Items] | ||
Maximum guarantee issued | $ 67,314,661 | $ 86,289,058 |
Value of net assets held by Dongsheng Guarantee used to calculate maximum guarantee obligation to customers | $ 205,000,000 | $ 195,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of allowance on financial guarantee) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Allowance on financial guarantee at the beginning of period | $ 3,079,684 | $ 1,261,868 | $ 1,826,768 |
Provision (reversal) of general allowance | (126,211) | (355,313) | (576,456) |
Specific allowance (reversal) | (3,082,616) | 3,263,312 | 0 |
Direct write-downs against the allowance | |||
Direct write-down for guarantees paid on behalf | 0 | (932,375) | 0 |
Reversal - recoveries by cash | 880,747 | 0 | 0 |
Effect of foreign currency translation | (78,457) | (157,808) | 11,556 |
Allowance on financial guarantee at the end of year | $ 673,147 | $ 3,079,684 | $ 1,261,868 |
SUMMARY OF SIGNIFICANT ACCOUN44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Foreign currency translation) (Details) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Balance sheet items, except for equity accounts | 6.7774 | 6.6312 | |
Items in the statements of income and comprehensive income, and statements of cash flows | 6.8124 | 6.4352 | 6.1375 |
RISKS (Details)
RISKS (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Restricted Cash and Cash Equivalents | $ 41,284,490 | $ 75,126,811 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Jun. 30, 2016 |
Dongsheng Guarantee [Member] | ||
Restricted Cash Pledged With Banks As Guarantor Deposits | $ 19.9 | $ 23.4 |
Jinshang Leasing [Member] | ||
Cash Reserve Deposit Required and Made | $ 4.4 | $ 4.5 |
Maximum [Member] | ||
Pledged Cash Deposit Range | 20.00% | |
Minimum [Member] | ||
Pledged Cash Deposit Range | 10.00% |
SHORT-TERM INVESTMENTS (Narrati
SHORT-TERM INVESTMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Schedule of Cost-method Investments [Line Items] | |||
Investment Income, Interest | $ 13,752,538 | $ 13,958,540 | $ 16,657,246 |
Interest Receivable | $ 3,514,075 | $ 1,021,306 | |
Maximum [Member] | |||
Schedule of Cost-method Investments [Line Items] | |||
Investments Interest Rate | 13.00% | ||
Minimum [Member] | |||
Schedule of Cost-method Investments [Line Items] | |||
Investments Interest Rate | 5.00% |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Within 1 year | $ 30,067,091 | |
2 years | 47,215,579 | |
3 years | 110,661,514 | |
4 years | 0 | |
5 years | 0 | |
Thereafter | 0 | |
Short-term investment | $ 187,944,184 | $ 149,841,838 |
NET INVESTMENT IN DIRECT FINA49
NET INVESTMENT IN DIRECT FINANCING LEASES (Schedule of Future Minimum Lease Receipts) (Details) | Jun. 30, 2017USD ($) |
Within 1 year | $ 43,202,345 |
2 years | 27,817,612 |
3 years | 8,349,451 |
4 years | 5,803,700 |
5 years | 1,558,517 |
Total minimum lease receipts | 86,731,625 |
Less: amount representing interest | (9,140,852) |
Present value of minimum lease receivable | $ 77,590,773 |
NET INVESTMENT IN DIRECT FINA50
NET INVESTMENT IN DIRECT FINANCING LEASES (Summary of the Components of Net Investment in Direct Financing Leases) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Total minimum lease payments to be received | $ 86,731,625 | $ 85,836,232 |
Less: Amounts representing estimated executory costs | 0 | 0 |
Minimum lease payments receivable | 86,731,625 | 85,836,232 |
Less: Allowance for uncollectible receivables | (867,316) | (858,362) |
Net minimum lease payment receivable | 85,864,309 | 84,977,870 |
Estimated residual value of leased property | 0 | |
Less: unearned income | (9,140,852) | (10,272,223) |
Net investment in direct financing leases | $ 76,723,457 | $ 74,705,647 |
NET INVESTMENT IN DIRECT FINA51
NET INVESTMENT IN DIRECT FINANCING LEASES (Schedule of Allowance for Uncollectible Lease Payments Receivables) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Allowance for uncollectible receivables at the beginning of year | $ 858,362 | $ 302,401 | $ 1,238,685 |
Provision for lease payment receivables | 27,332 | 597,444 | 70,467 |
Direct write-downs charged against the allowance | 0 | 0 | (1,011,999) |
Allowance To Charge Off Direct Financing Lease Interest Income | 0 | 0 | 0 |
Recoveries of amounts previously charged off | 0 | 0 | 0 |
Effect of foreign currency translation | (18,378) | (41,483) | 5,248 |
Allowance for uncollectible receivables at the end of year | 867,316 | 858,362 | 302,401 |
Individually evaluated for impairment | 0 | 0 | 0 |
Collectively evaluated for impairment | 867,316 | 858,362 | 302,401 |
Minimum lease payments receivable | |||
Individually evaluated for impairment | 0 | 0 | 0 |
Collectively evaluated for impairment | 86,731,625 | 85,836,232 | 30,240,137 |
Ending balance | $ 86,731,625 | $ 85,836,232 | $ 30,240,137 |
NET INVESTMENT IN DIRECT FINA52
NET INVESTMENT IN DIRECT FINANCING LEASES (Summary of Risk Classification of Direct Financing Lease Receivables) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Total | $ 86,731,625 | $ 85,836,232 | $ 30,240,137 |
Abnormal [Member] | |||
Total | 0 | 0 | |
Normal [Member] | |||
Total | $ 86,731,625 | $ 85,836,232 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Less: accumulated depreciation | $ (1,192,573) | $ (889,260) | |
Property and equipment, net | 594,148 | 854,719 | |
Depreciation | 320,842 | 411,635 | $ 257,464 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment, Gross | $ 467,564 | 393,985 | |
Salvage value | 3.00% | ||
Vehicles [Member] | |||
Property, Plant and Equipment, Gross | $ 1,112,359 | 1,151,482 | |
Office equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 172,166 | 173,984 | |
Salvage value | 3.00% | ||
Electric equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 34,632 | $ 24,528 | |
Salvage value | 3.00% | ||
Useful life (years) | 3 years | ||
Maximum [Member] | |||
Salvage value | 5.00% | ||
Maximum [Member] | Leasehold improvements [Member] | |||
Useful life (years) | 5 years | ||
Maximum [Member] | Vehicles [Member] | |||
Salvage value | 5.00% | ||
Useful life (years) | 5 years | ||
Maximum [Member] | Office equipment [Member] | |||
Useful life (years) | 5 years | ||
Minimum [Member] | |||
Salvage value | 3.00% | ||
Minimum [Member] | Leasehold improvements [Member] | |||
Useful life (years) | 3 years | ||
Minimum [Member] | Vehicles [Member] | |||
Salvage value | 3.00% | ||
Useful life (years) | 4 years | ||
Minimum [Member] | Office equipment [Member] | |||
Useful life (years) | 3 years |
OTHER ASSETS (Details)
OTHER ASSETS (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Deposits for other loans (Note 9) | $ 590,616 | $ 0 |
Prepaid insurance | 166,250 | 175,000 |
Advanced payment to third party companies | 52,517 | 78,523 |
Receivable for disposal of WHL (Note 1) | 0 | 270,000 |
Other receivables | 6,601 | 85,228 |
Other Assets | $ 815,984 | $ 608,751 |
LOANS FOR CAPITAL LEASE BUSIN55
LOANS FOR CAPITAL LEASE BUSINESS (Details) | Jun. 30, 2017USD ($) |
Bank Loan [Member] | |
Within 1 year | $ 14,905,027 |
Between 1 to 2 years | 13,033,222 |
Between 2 to 3 years | 343,292 |
Between 3 to 4 years | |
Between 4 to 5 years | |
Beyond 5 years | |
Long-term Debt | 28,281,541 |
Notes Payable, Other Payables [Member] | |
Within 1 year | 4,846,657 |
Between 1 to 2 years | 4,280,501 |
Between 2 to 3 years | 382,439 |
Between 3 to 4 years | |
Between 4 to 5 years | |
Beyond 5 years | |
Long-term Debt | $ 9,509,597 |
LOANS FOR CAPITAL LEASE BUSIN56
LOANS FOR CAPITAL LEASE BUSINESS (Narrative) (Details) | Apr. 03, 2015USD ($) | Apr. 03, 2015CNY (¥) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016CNY (¥) | Jun. 30, 2015USD ($) | Jun. 30, 2017CNY (¥) | Jun. 30, 2016CNY (¥) |
Loans Payable to Bank | $ 28,281,541 | $ 43,308,617 | ||||||
Other Loans Payable | 9,509,597 | 0 | ||||||
Deposit Assets | 590,616 | 0 | ||||||
Notes Payable, Other Payables [Member] | ||||||||
Interest Expense, Debt | $ 410,512 | |||||||
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 | $ 8,358,752 | ¥ 56,650,807 | ||||||
Other Loans Payable | 9,509,597 | |||||||
Deposit Assets | 590,616 | ¥ 4,002,855 | ||||||
Bank Loan [Member] | ||||||||
Interest Expense, Debt | 1,684,075 | 524,409 | $ 188,173 | |||||
Bank Loan [Member] | Jinshang Leasing [Member] | ||||||||
Loans Payable to Bank | $ 28,281,541 | 43,308,617 | ||||||
Shuguang Project Bank Loan [Member] | Jinshang Leasing [Member] | ||||||||
Proceeds from Bank Debt | 44,300,000 | ¥ 300,000,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 5.50% | 5.50% | ||||||
Debt Instrument, Term | 3 years | |||||||
Debt Instrument, Collateral Amount | $ 4,400,000 | 4,500,000 | ¥ 30,000,000 | |||||
Yancheng Project Bank Loan [Member] | Jinshang Leasing [Member] | ||||||||
Proceeds from Bank Debt | $ 500,000 | ¥ 3,100,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 5.75% | 5.75% | ||||||
Mortgage Contract Loan [Member] | Jinshang Leasing [Member] | ||||||||
Debt Instrument, Collateral Amount | $ 505,570 | $ 532,456 | ¥ 3,426,450 | |||||
Debt Instrument, Maturity Date, Description | February 12, 2020 |
UNEARNED INCOME FROM FINANCIA57
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred Revenue | $ 538,215 | $ 423,801 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Other tax payable | $ 771,293 | $ 510,147 |
Payable to an equipment provider for initial investment in direct financing lease | 0 | 407,679 |
Accrued payroll | 45,356 | 42,898 |
Other payables | 76,920 | 3,385 |
Other Liabilities | $ 893,569 | $ 964,109 |
SHARE-BASED COMPENSATION (Sched
SHARE-BASED COMPENSATION (Schedule of Stock Award Activity) (Details) - 2015 Long-Term Incentive Equity Plan [Member] - $ / shares | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Number of Shares | ||
Outstanding, Beginning | shares | 1,270,000 | 0 |
Granted | shares | 0 | 1,450,000 |
Exercised | shares | 0 | 0 |
Forfeited | shares | (1,190,000) | (180,000) |
Canceled | shares | (80,000) | 0 |
Outstanding, Ending | shares | 0 | 1,270,000 |
Exercisable | 0 | 0 |
Vested and expected to vest | 0 | 1,000,000 |
Weighted Average Exercise Price | ||
Outstanding, Beginning | $ / shares | $ 12 | $ 0 |
Granted | $ / shares | 12 | |
Exercised | $ / shares | 0 | |
Forfeited | $ / shares | 12 | 0 |
Canceled | $ / shares | 12 | 0 |
Outstanding, Ending | $ / shares | 0 | 12 |
Exercisable | 0 | 0 |
Vested and expected to vest | $ 0 | $ 12 |
Weighted Average Remaining Contractual Term In Years | ||
Granted | 3 years | |
Outstanding | 2 years 5 months 1 day | |
Vested and expected to vest | 2 years 5 months 1 day |
SHARE-BASED COMPENSATION (Sch60
SHARE-BASED COMPENSATION (Schedule of Weighted Average Assumptions Used to Value Options) (Details) - Two Thousand Long Term Incentive Equity Plan [Member] | 12 Months Ended |
Jun. 30, 2017$ / 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 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair Value per share of options granted | 5.27 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair Value per share of options granted | $ 5.44 |
SHARE-BASED COMPENSATION (Narra
SHARE-BASED COMPENSATION (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based Compensation | $ (1,465,680) | $ 1,889,733 | $ 0 |
Long-Term Incentive Equity Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 0 | 1,450,000 | |
Options granted, weighted average exercise price per share | $ 12 | ||
Options forfeited | 1,190,000 | 180,000 | |
Eight employees [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options granted | 1,450,000 | ||
Options granted, weighted average exercise price per share | $ 12 |
CAPITALIZATION (Details)
CAPITALIZATION (Details) - USD ($) | Dec. 02, 2016 | Jun. 28, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Oct. 26, 2015 |
Class of Stock [Line Items] | |||||
Ordinary shares repurchased, amount | $ 204 | $ 17,524,180 | |||
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 | 20,041,647 | 21,526,747 | ||
Common Stock, Shares, Outstanding | 19,837,642 | 20,041,647 | 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 | 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 (Narrative) (
STATUTORY RESERVE (Narrative) (Details) | 12 Months Ended |
Jun. 30, 2017 | |
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, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Retirement Benefits [Abstract] | |||
Employee benefit contributions | $ 111,493 | $ 107,970 | $ 52,374 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net income attributable to the common shareholders | $ 20,349,791 | $ 12,117,397 | $ 26,072,653 |
Basic weighted-average common shares outstanding | 19,926,510 | 20,012,356 | 16,800,000 |
Effect of dilutive securities | 155,579 | 0 | 0 |
Diluted weighted-average common shares outstanding | 20,082,089 | 20,012,356 | 16,800,000 |
Earnings per share - Basic | $ 1.02 | $ 0.61 | $ 1.55 |
Earnings per share - Diluted | $ 1.01 | $ 0.61 | $ 1.55 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | $ 69,333,827 | $ 49,730,140 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | 25.00% |
Deferred Tax Assets, Net | $ 327,137 | $ 428,524 | |
Minimum [Member] | |||
Income Tax Examination, Year under Examination | 2,012 | ||
Maximum [Member] | |||
Income Tax Examination, Year under Examination | 2,016 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Payable) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Income tax payable | $ 2,772,631 | $ 2,510,847 |
Dongsheng Guarantee [Member] | ||
Income tax payable | 2,517,538 | 2,083,683 |
Jinshang Leasing [Member] | ||
Income tax payable | $ 255,093 | $ 427,164 |
INCOME TAXES (Schedule Of Compo
INCOME TAXES (Schedule Of Components Of Income Tax Expense Benefit) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Current income tax expense | $ 1,581,470 | $ 1,387,373 | $ 3,662,488 |
Deferred tax expense (benefit) | 370,019 | (622,928) | (515,495) |
Total provision for income taxes | $ 1,951,489 | $ 764,445 | $ 3,146,993 |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation Between the Effective Income Tax Rate and the PRC Statutory Income Tax Rate) (Details) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
PRC statutory tax | 25.00% | 25.00% | 25.00% |
Effect of non-deductible expenses | 0.00% | 0.00% | 0.00% |
Effect of non-taxable income | (15.40%) | (28.50%) | (14.30%) |
Others | (0.80%) | 9.70% | 0.00% |
Effective tax rate | 8.80% | 6.20% | 10.70% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Deferred tax assets | ||
Provision for direct financing lease | $ 216,829 | $ 208,215 |
Direct financing lease income | 110,308 | 220,309 |
Allowance on guarantee | 0 | 780,402 |
Total deferred tax assets | 327,137 | 1,208,926 |
Less: Valuation allowance | 0 | 0 |
Less: Net off with deferred tax liabilities for financial reporting purposes | 0 | (780,402) |
Net total deferred tax assets | 327,137 | 428,524 |
Deferred tax liabilities | ||
Guarantee paid on behalf of guarantee service customers loss | 390,154 | 509,921 |
Commissions and fees on financial guarantee services | 356,730 | 747,879 |
Total deferred tax liabilities | 746,884 | 1,257,800 |
Less: Net off with deferred tax assets for financial reporting purposes | 0 | (780,402) |
Net total deferred tax liabilities | $ 746,884 | $ 477,398 |
RELATED PARTY TRANSACTIONS AN71
RELATED PARTY TRANSACTIONS AND BALANCES (Narrative) (Details) - Bluesky LLC [Member] - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 28, 2016 | Dec. 28, 2015 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Ordinary shares repurchased | 1,480,000 | 1,480,000 | |
Ordinary shares repurchased, price per share | $ 11.8 | ||
Amount paid to related party for repurchase of ordinary shares | $ 17,000,000 | ||
Convertible Notes Payable [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument face amount | $ 8,500,000 | ||
Interest rate | 4.00% | ||
Maturity date | Dec. 28, 2016 | ||
Conversion price per share | $ 12 | ||
Commission percentage to placement agent | 1.00% |
RELATED PARTY TRANSACTIONS AN72
RELATED PARTY TRANSACTIONS AND BALANCES (Schedule of Related Party Balances) (Details) - USD ($) | Jun. 30, 2017 | Jun. 30, 2016 |
Related Party Transaction [Line Items] | ||
Due to related party (Notes 13 and 18) | $ 464,000 | $ 464,000 |
Bluesky LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party (Notes 13 and 18) | $ 464,000 | $ 464,000 |
RELATED PARTY TRANSACTIONS AN73
RELATED PARTY TRANSACTIONS AND BALANCES (Schedule of Related Party Transactions) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Related Party Transaction [Line Items] | |||
Amount lent to owners | $ 21,568,398 | ||
Amount repaid from owners | 47,619,902 | ||
Amount repaid to owners | 420,316 | ||
Amount borrowed from owners | 40,733 | ||
Proceeds of convertible debt | 0 | 8,500,000 | 0 |
Dongsheng International Investment Group Co Ltd [Member] | |||
Related Party Transaction [Line Items] | |||
Amount lent to owners | 13,148,677 | ||
Amount repaid from owners | 30,474,032 | ||
Dongsheng International Investment Ltd (HK) [Member] | |||
Related Party Transaction [Line Items] | |||
Amount lent to owners | 8,419,721 | ||
Amount repaid from owners | 10,628,558 | ||
Wang Hong [Member] | |||
Related Party Transaction [Line Items] | |||
Amount repaid from owners | 6,517,312 | ||
Amount repaid to owners | 244,399 | ||
Amount borrowed from owners | 16,293 | ||
Tian Wenjun [Member] | |||
Related Party Transaction [Line Items] | |||
Amount repaid to owners | 175,917 | ||
Amount borrowed from owners | 24,440 | ||
Bluesky LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Share repurchase | 17,464,000 | ||
Proceeds of convertible debt | $ 8,500,000 |
COMMITMENTS AND CONTINGENCIES74
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2014USD ($) | Oct. 31, 2014CNY (¥) | Jun. 30, 2017USD ($) | |
Guarantor Obligations [Line Items] | |||
Loss Contingency, Damages Sought, Value | $ 2,200,000 | ¥ 14.8 | $ 624,169 |
Litigation Settlement, Expense | $ 200,000 | ¥ 1.5 | |
Minimum [Member] | |||
Guarantor Obligations [Line Items] | |||
Guarantee expiration term | 6 months | ||
Maximum [Member] | |||
Guarantor Obligations [Line Items] | |||
Guarantee expiration term | 12 months |
COMMITMENTS AND CONTINGENCIES75
COMMITMENTS AND CONTINGENCIES (Schedule of Contractual Obligations) (Details) | Jun. 30, 2017USD ($) |
2,018 | $ 186,721 |
2,019 | |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 186,721 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) | Aug. 02, 2017 |
Subsequent Event [Member] | |
Business Acquisition, Percentage of Voting Interests Acquired | 67.00% |