Document And Entity Information
Document And Entity Information - shares | 12 Months Ended | |
Jun. 30, 2018 | Oct. 31, 2018 | |
Document Information [Line Items] | ||
Document Type | 20-F | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
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 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
ASSETS | ||
Cash | $ 18,497,092 | $ 17,002,282 |
Restricted cash | 23,082,396 | 24,282,208 |
Short-term investments | 178,273,317 | 187,944,184 |
Guarantee paid on behalf of guarantee service customers, net | 107,473 | 1,560,615 |
Commission receivable | 496,097 | 0 |
Net investment in direct financing leases | 71,645,717 | 76,723,457 |
Interest receivable | 15,157,094 | 3,514,075 |
Property and equipment, net | 221,200 | 594,148 |
Deferred tax assets, net | 1,089,667 | 327,137 |
Other assets | 654,579 | 815,984 |
TOTAL ASSETS | 309,224,632 | 312,764,090 |
Liabilities | ||
Bank loans for capital lease business | 13,696,574 | 28,281,541 |
Other loans for capital lease business | 4,774,510 | 9,509,597 |
Interest payable | 123,396 | 222,510 |
Income tax payable | 2,435,118 | 2,772,631 |
Unearned income from financial guarantee services | 88,824 | 538,215 |
Allowance on guarantee | 2,637,236 | 673,147 |
Deposits from direct financing leases | 9,164,554 | 10,854,121 |
Other liabilities | 1,562,819 | 893,569 |
Due to related party (Notes 13 and 18) | 464,000 | 464,000 |
Deferred tax liabilities | 0 | 746,884 |
Total Liabilities | 34,947,031 | 54,956,215 |
Stockholders' Equity | ||
Common stock (par value $0.0001 per share, 100,000,000 shares authorized; 19,837,642 issued and outstanding at June 30, 2018 and 2017) | 1,984 | 1,984 |
Additional paid-in capital | 211,934,432 | 211,934,432 |
Statutory reserve | 4,730,036 | 3,530,458 |
Retained earnings | 71,727,920 | 62,427,622 |
Accumulated other comprehensive loss | (14,116,771) | (20,086,621) |
Total Stockholders' Equity | 274,277,601 | 257,807,875 |
TOTAL LIABILITIES AND EQUITY | $ 309,224,632 | $ 312,764,090 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2018 | Jun. 30, 2017 | 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 | 19,837,642 | 21,526,747 |
Common stock, shares outstanding | 19,837,642 | 19,837,642 | 21,526,747 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Guarantee service income | |||
Commissions and fees on financial guarantee services | $ 2,308,567 | $ 2,839,194 | $ 6,193,225 |
(Provision) reversal of provision for financial guarantee services | (1,982,073) | 3,208,827 | (2,907,999) |
Provision for guarantee paid on behalf of guarantee service customers | (2,896,532) | 0 | 0 |
Commission and fees on guarantee services, net | (2,570,038) | 6,048,021 | 3,285,226 |
Direct financing lease income | |||
Direct financing lease interest income | 5,697,491 | 6,047,172 | 3,164,317 |
Interest expense for direct financing lease | (1,512,619) | (2,094,587) | (524,409) |
Business collaboration fee and commission expenses for leasing projects | (99,320) | (603,873) | (222,206) |
Provision for lease payment receivable | (3,108,520) | (27,332) | (597,444) |
Net direct financing lease interest income after provision for receivables | 977,032 | 3,321,380 | 1,820,258 |
Financial advisory and lease agency income | 1,695,769 | 357,284 | 402,800 |
Net revenue | 102,763 | 9,726,685 | 5,508,284 |
Non-interest income | |||
Interest on short-term investments | 15,095,621 | 13,752,538 | 13,958,540 |
Total non-interest income | 15,095,621 | 13,752,538 | 13,958,540 |
Non-interest expense | |||
Business taxes and surcharge | (13,059) | (4,406) | (167,867) |
Salaries and employee charges | (704,007) | (879,595) | (1,524,720) |
Rental expenses | (230,889) | (247,684) | (271,357) |
Other operating expenses | (4,789,448) | (46,258) | (4,621,038) |
Total non-interest expense | (5,737,403) | (1,177,943) | (6,584,982) |
Income before taxes | 9,460,981 | 22,301,280 | 12,881,842 |
Income tax credit (expense) | 1,038,895 | (1,951,489) | (764,445) |
NET INCOME | 10,499,876 | 20,349,791 | 12,117,397 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment | 5,969,850 | (5,130,963) | (19,361,292) |
COMPREHENSIVE INCOME (LOSS) | $ 16,469,726 | $ 15,218,828 | $ (7,243,895) |
Weighted-average ordinary shares outstanding | |||
Basic | 19,837,642 | 19,926,510 | 20,012,356 |
Diluted | 19,837,642 | 20,082,089 | 20,012,356 |
Earnings per share | |||
Basic | $ 0.53 | $ 1.02 | $ 0.61 |
Diluted | $ 0.53 | $ 1.01 | $ 0.61 |
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, 2015 | $ 237,264,108 | $ 1,680 | $ 199,365,902 | $ 4,405,634 | $ 325 | $ 33,490,567 |
Beginning 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 | 12,117,397 | |
Foreign currency translation adjustment | (19,361,292) | 0 | 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 | |||||
Statutory reserve | 0 | $ 0 | 0 | 0 | 1,199,578 | (1,199,578) |
Net income | 10,499,876 | 0 | 0 | 0 | 0 | 10,499,876 |
Foreign currency translation adjustment | 5,969,850 | 0 | 0 | 5,969,850 | 0 | 0 |
Ending Balance at Jun. 30, 2018 | $ 274,277,601 | $ 1,984 | $ 211,934,432 | $ (14,116,771) | $ 4,730,036 | $ 71,727,920 |
Ending Balance, Shares at Jun. 30, 2018 | 19,837,642 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 10,499,876 | $ 20,349,791 | $ 12,117,397 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation | 395,814 | 320,842 | 411,635 |
Impairment loss on short-term investments | 1,272,723 | 0 | 0 |
Share-based compensation | 0 | (1,465,680) | 1,889,733 |
Interest expense for convertible debt | 0 | 0 | 113,644 |
Provision for lease payment receivables | 3,108,520 | 27,332 | 597,444 |
Deferred tax (benefit) expense | (1,546,049) | 370,019 | (622,928) |
Provision (reversal of provision) for guarantee | 1,982,073 | (3,208,827) | 2,907,999 |
Provision for guarantee paid on behalf of guarantee service customers | 2,896,532 | 0 | 0 |
Changes in assets and liabilities: | |||
Net investment in direct financing leases | 3,925,969 | (3,638,296) | (53,059,622) |
Commission receivable | (504,779) | 0 | 0 |
Guarantee paid on behalf of guarantee service customers | (1,379,966) | 1,313,577 | (2,432,997) |
Unearned income from financial guarantee services | (470,358) | 122,923 | (3,036,771) |
Interest receivable | (12,016,442) | (2,443,076) | (783,680) |
Other assets | 145,401 | (546,486) | (330,841) |
Interest payable | (106,266) | 17,979 | 168,109 |
Income tax payable | (410,921) | 314,334 | (324,831) |
Deposits from direct financing leases | (1,983,386) | 1,719,175 | 6,096,934 |
Other liabilities | 692,504 | (52,009) | 676,794 |
Net Cash Provided by (Used in) Operating Activities | 6,501,245 | 13,201,598 | (35,611,981) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of short-term investments | (50,728,580) | (73,395,616) | (23,873,645) |
Proceeds from maturities of short-term investments | 64,102,479 | 32,294,070 | 44,287,804 |
Deposits paid to banks for financial guarantee services | (18,874,650) | (19,753,815) | (24,152,739) |
Deposits released from banks for financial guarantee services | 20,686,625 | 22,815,354 | 26,642,584 |
Placement of pledged bank deposits | 0 | (4,403,737) | (4,661,874) |
Withdrawal of pledged bank deposits | 0 | 4,403,737 | 406,461 |
Purchase of property, plant and equipment | (1,875) | (79,955) | (418,999) |
Consideration received on disposal of WHL (Note 1) | 0 | 270,000 | 0 |
Net Cash Provided by (Used in) Investing Activities | 15,183,999 | (37,849,962) | 18,229,592 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Capital paid in by owners | 0 | 0 | 29,669,019 |
Proceeds from loans | 0 | 11,751,680 | 46,618,743 |
Repayment of loans | (20,578,208) | (16,311,241) | (2,476,782) |
Proceeds of convertible debt | 0 | 0 | 8,500,000 |
Repayment of convertible debt | 0 | 0 | (8,613,644) |
Repayment of share repurchase | 0 | 0 | (17,060,180) |
Net Cash (Used in) Provided by Financing Activities | (20,578,208) | (4,559,561) | 56,637,156 |
EFFECT OF FOREIGN CURRENCY TRANSLATION ON CASH | 387,774 | (953,758) | (1,973,893) |
NET INCREASE (DECREASE) IN CASH | 1,494,810 | (30,161,683) | 37,280,874 |
Cash and cash equivalents at beginning of year | 17,002,282 | 47,163,965 | 9,883,091 |
Cash and cash equivalents at end of year | 18,497,092 | 17,002,282 | 47,163,965 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income taxes | 918,075 | 1,267,135 | 1,535,840 |
Cash paid for interest expense | $ 1,512,619 | $ 2,076,609 | $ 356,295 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Jun. 30, 2018 | |
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% by Mr. Wang Hong. On October 23, 2014, WFG acquired a wholly-owned subsidiary, Full Shine, which is a shell company incorporated in the laws of the Hong Kong Special Administrative Region (the “HKSAR” or “Hong Kong”), for $1. On December 2, 2014, WFG, through Full Shine, acquired 100% of the equity capital of Jinshang Leasing, a PRC Company, by means of a share exchange (the “Jinshang Leasing Share Exchange”) pursuant to which WFG issued 30,000,000 ordinary shares to a personal holding Company owned by Mr. Wang Hong in exchange for Mr. Wang Hong’s transferring 100% of the equity capital of Jinshang Leasing to Full Shine. The share exchange among WFG, Full Shine and Mr. Wang Hong is considered in substance to be a capital transaction, rather than a business combination transaction, because prior to the share exchange WFG and Full Shine did not have any operations, had an immaterial amount of assets, and were controlled by the same owner as Jinshang Leasing. WFG’s financial statements as of and for the year ended June 30, 2015 consolidate WFG, Full Shine, Jinshang Leasing, and Jinshang Leasing’s direct and indirect wholly-owned PRC subsidiaries Jinchen Agriculture, Dongsheng Guarantee and Tianjin Jiaming. Following the completion of the capital transaction, WFG conducted business operations primarily through Jinshang Leasing and Dongsheng Guarantee. Jinshang Leasing was incorporated on May 18, 2009 in Beijing, the People’s Republic of China (the “PRC”) under the laws of PRC and engages primarily in providing financing lease services to small and medium-sized companies and related financing consulting services in the PRC. Tianjin Jiaming was incorporated on April 23, 2014 as a wholly-owned subsidiary of Jinshang Leasing. Tianjin Jiaming did not conduct any business activities from its inception through September 30, 2015, and it was dissolved on March 30, 2018. 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% of the ordinary shares of WFG for cash and ordinary shares of Wins Finance (the “Share Exchange” together with the Merger, the “Transactions”). WFG is an integrated financing solution provider with operations located primarily in Jinzhong City, Shanxi Province and Beijing, China. WFG’s goal is to assist Chinese small & medium enterprises, including microenterprises, which have limited access to financing, in improving their overall fund-raising capability and enable them to obtain funding for business development. As a result of the Transactions, the former members of WFG own approximately 78.0% of the stock of Wins Finance and the former stockholders of Sino own the remaining 22.0%. The Transactions are accounted for as a “reverse merger” and recapitalization at the date of the consummation of the Transactions since the former members of WFG owned a majority of common stock of the Company and WFG’s operations will be the operations of Sino following the Transactions. Accordingly, WFG is deemed to be the accounting acquirer in the Transactions and, consequently, the Transactions are treated as a recapitalization of WFG. As a result, the assets and liabilities and the historical operations that will be reflected in the Sino’s financial statements after consummation of the Transactions will be those of WFG and will be recorded at the historical cost basis of WFG. Sino’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of WFG upon consummation of the Transactions. As such, WFG is the continuing entity for financial reporting purpose. SEC Manual requires that in a reverse acquisition of historical shareholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset in paid-in-capital. Therefore, the financial statements have been prepared as if WFG had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock. WHL was incorporated on November 10, 2015 in New York and was disposed on June 30, 2016 to Ms. Wenyu Li, an individual beneficially owning 8.1% of the Company’s ordinary Shares as of June 30, 2016, for a cash consideration of $270,000, which was the net asset value of WHL on the date of disposal. WHL did not conduct any business activities from its inception. On December 13, 2016, Appelo Ltd. and Wits Global Ltd., each an entity controlled by Mr. Wang Hong (collectively, the “Sellers”) entered into an agreement to transfer all of the ordinary shares of Wins Finance owned by them (an aggregate of 13,440,000 ordinary shares (approximately 67% of the Company’s outstanding ordinary shares)) to Freeman FinTech Corporation Limited (“Freeman”), a company listed on the Hong Kong Stock Exchange. In connection with the transaction, the Seller transferred certain rights in a registration rights agreement to Freeman. On August 2, 2017, approximately 67% company. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
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. (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using information then currently available. Changes in facts and circumstances may cause Wins Finance to revise its estimates. Material estimates that are particularly susceptible to significant change in the near-term include the determination of the allowances for doubtful accounts receivable and for guarantee losses. Significant accounting estimates reflected in the financial statements include, but are not limited to: (i) the allowance for doubtful receivables; (ii) estimates of losses on unexpired contracts and financial guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) impairment of long-lived assets; (vi) valuation allowance for deferred tax assets; (vii) contingencies; and (viii) share-based compensation. (c) Operating segments ASC 280, Segment Reporting, requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the financing lease business and the guarantee business. The Company’s net revenues are all generated from customers in the PRC. Hence, The Company operates and manages its business within one reportable segment, which is to provide financial services in the PRC domestic market. For the year ended June 30, 2018, there were three customers that accounted for 24%, 16% and 10% of the Company’s revenue, respectively. For the year ended June 30, 2017, there were two customers that accounted for 19% and 13% of the Company’s revenue, respectively. For the year ended June 30, 2016, there were no customers that individually accounted for 10% or more of the Company’s revenue. As of June 30, 2018, two customers accounted for 19% and 14% of the aggregate balances of loans guaranteed by Dongsheng Guarantee. As of June 30, 2017, two customers accounted for 13% and 11% of the aggregate balances of loans guaranteed by Dongsheng Guarantee. As of June 30, 2018, four customers accounted for 18%, 17%, 13% and 12%, respectively, of the minimum lease payments receivable of Jinshang Leasing. As of June 30, 2017, two customers accounted for 25% and 20%, respectively, of the minimum lease payments receivable of Jinshang Leasing. (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in banks and all highly liquid investments with original maturities of three months or less that are unrestricted as to withdrawal and use. (e) Restricted cash Restricted cash represents cash pledged to banks 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 months from the time the loan and guarantee are initiated. (f) 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. (g) 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, 2018 and 2017, the net assets of Dongsheng Guarantee were $219 million and $205 million, respectively. 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. Financial instruments whose contract amounts represent credit risk are as follows: June 30, 2018 June 30, 2017 Maximum guarantee issued $ 47,929,839 $ 67,314,661 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. (h) Guarantee paid on behalf of guarantee service customers, net 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, 2018 and 2017, uncollected guarantees paid on behalf of guarantee service customers from guarantee service customers on whose behalf Dongsheng Guarantee had repaid the loans were $2,954,188 and $1,560,615, respectively. Management performs an evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. As of June 30, 2018 and 2017, the Company accrued allowance of $2,846,715 and nil on the guarantee paid on behalf of guarantee service customers. (i) 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. 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, 2018 2017 2016 Allowance on financial guarantee at the beginning of year $ 673,147 $ 3,079,684 $ 1,261,868 Reversal of general allowance (258,439 ) (126,211 ) (355,313 ) Specific allowance (reversal) 2,240,512 (3,082,616 ) 3,263,312 Write-down against allowance - - (932,375 ) Reversal - recoveries by cash - 880,747 - Effect of foreign currency translation (17,984 ) (78,457 ) (157,808 ) Allowance on financial guarantee at the end of year $ 2,637,236 $ 673,147 $ 3,079,684 (j) 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. (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% to 6% of the guaranteed amount for 12 months, which represents the estimated fair value of the non-contingent guarantee liability at the inception of the guarantee. 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. There was no such income during the years ended June 30, 2018, 2017 and 2016. 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, 2018, 2017 and 2016 on these financing agency transactions. (l) Property and equipment, net Plant and equipment are recorded at cost less accumulated depreciation and impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3% to 5% salvage value. The average estimated useful lives of property and equipment are discussed in Note 8. The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the corresponding accounts and includes any gain or loss in the statements of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and improvements of equipment are capitalized. (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, 2018, 2017 and 2016. (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, 2018 and 2017, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank and other loans which were carried at cost or amortized cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities or the rate of interest of these instruments approximate the market rate of interest. (o) Foreign currency translation The Company’s functional and reporting currency is the United States Dollar (“US dollars” or “USD”). The functional currency of the Company’s subsidiaries in the PRC is the Chinese Yuan, or Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. For financial reporting purposes, the financial statements of the Company’s subsidiaries are prepared using RMB and translated into the Company’s functional currency at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate in effect at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and stockholders' equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. June 30, 2018 June 30, 2017 Balance sheet items, except for equity accounts 6.6191 6.7774 For the years ended June 30, 2018 2017 2016 Items in the statements of income and comprehensive income, and statements of cash flows 6.5052 6.8124 6.4352 (p) Interest expense Interest expense derived from the loans providing funds for financial leasing contracts is classified as cost of revenue in the consolidated statements of income. (q) 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. (s) 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. (w) 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-convert |
RISKS
RISKS | 12 Months Ended |
Jun. 30, 2018 | |
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 (Notes 2(g) and 20) 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 7. 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, 2018 and 2017, the Company held cash and restricted cash of $41,579,488 and $41,284,490, respectively, that was not insured by any governmental authority. To limit exposure to credit risk relating to deposits, the Company primarily places cash deposits only with well-known financial institutions in the PRC. There has been no recent history of default in relation to these financial institutions. (b) Liquidity risk The Company is also exposed to liquidity risk, which is the risk that it will be unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. The Company is also exposed to liquidity risk on its short-term investments, including the risks that the banks and financial institutions that manage the Company’s short-term investments will be unable to redeem such short-term investments at a price equal to principal and accrued and unpaid interest or, in extreme circumstances, such as significant redemptions or a deterioration of liquidity in the financial markets, may be unable to redeem them at all. As a result, the Company may not have access to the capital related to such short-term investments when needed. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company may turn to other financial institutions, and historically has occasionally take loans from its shareholders to obtain short-term funding to meet liquidity shortages. (c) Foreign currency risk A majority of the Company’s operating activities and a significant portion of the Company’s assets and liabilities are denominated in the RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (the “PBOC”) or other authorized financial institutions at exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. (d) Business and economic risks The Company’s operations are carried out in the PRC through its direct and indirect WFOEs. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Jun. 30, 2018 | |
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 $18.6 million and $19.9 million, respectively, as of June 30, 2018 and 2017, respectively; and cash deposited with banks for Jinshang Leasing’s bank loans for the capital lease business, in the amount of to $4.5 million and $4.4 million (Note 10) as of June 30, 2018 and 2017, respectively. The banks providing loans to Dongsheng Guarantee’s guarantee service customers generally require Dongsheng Guarantee as the guarantor of the loans, to pledge a minimum cash deposit usually in the range of 10% to 20% of the guaranteed amount. The deposits are released after the guaranteed bank loans are paid off and Dongsheng Guarantee’s guarantee obligation expires which is usually within 12 months. |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Short-term Investments [Abstract] | |
SHORT-TERM INVESTMENTS | NOTE 5 - SHORT-TERM INVESTMENTS Short-term investments as of June 30, 2018 and 2017 mainly represented wealth management products that Dongsheng Guarantee, Jinshang Leasing and Wins Finance purchased from financial institutions. The term for the investments is one year or three or five years, and Dongsheng Guarantee and Jinshang Leasing were entitled to redeem or transfer the investments at any time during the term. Interest from these investments varies from 5% to 9% annually, with deduction of a management fee, and was receivable quarterly, annually or upon maturity. Given that the amount of returns of the investments is determinable and the investments are redeemable at any time during the term, the Company recorded the amount at amortized cost using the effective interest as receivable in this account. The following table sets forth the contractual maturity of the balances as of June 30, 2018 in future periods. Actual maturities may differ from contractual maturities because of the subsidiaries’ rights to redeem. Maturing within: Short- term investments Within 1 year $ 64,964,005 2 years 113,309,312 3 years - 4 years - 5 years - Thereafter - $ 178,273,317 Interest income from short-term investments was $15,095,621, $13,752,538 and $13,958,540 for the years ended June 30, 2018, 2017 and 2016, respectively. Earned but uncollected interest was $15,157,094 and $3,514,075 as of June 30, 2018 and 2017, respectively. Included in short-term investments as of June 30, 2018 and 2017 was an interest bearing promissory note with a principal amount of $1 million that the Company purchased from a third party in January 2016, plus accrued interest. The promissory note was originally bearing interest at 12% per annum and due in January 2017. During the years ended June 30, 2018, 2017 and 2016, an impairment loss of $1,272,723, nil and nil was made on the promissory note, plus accrued interest, and was charged as other operating expenses in the consolidated statements of income and comprehensive income. Subsequent to June 30, 2018 through the issuance of these consolidated financial statements, the Company had redeemed investments totaled $48,345,306 and collected accrued interests of $4,168,233. The Company also made new investments to these wealth management products totaled $5,287,768. |
GUARANTEE PAID ON BEHALF OF GUA
GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET | 12 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET | NOTE 6 - GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET Guarantee paid on behalf of guarantee service customers as following: June 30, 2018 June 30, 2017 Guarantee paid on behalf of guarantee service customers $ 2,954,188 $ 1,560,615 Less: Allowance for doubtful accounts (2,846,715 ) - $ 107,473 $ 1,560,615 An analysis of the allowance for doubtful accounts is as follows: June 30, 2018 June 30, 2017 June 30, 2016 Balance at beginning of year $ - $ - $ - Provision for the year 2,896,532 - - Foreign exchange adjustment (49,817 ) - - Balance at end of year $ 2,846,715 $ - $ - |
NET INVESTMENT IN DIRECT FINANC
NET INVESTMENT IN DIRECT FINANCING LEASES | 12 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
NET INVESTMENT IN DIRECT FINANCING LEASES | NOTE 7 - NET INVESTMENT IN DIRECT FINANCING LEASES Jinshang Leasing’s leasing operations consist principally of leasing high value equipment under direct financing leases expiring in 1-5 years as of the balance sheets dates. The leases bear effective interest rate of 4.3% - 13.3% per annum. The following is a summary of the components of the Jinshang Leasing’s net investment in direct financing leases at June 30, 2018 and 2017: 2018 2017 Total minimum lease payments to be received $ 83,536,203 $ 86,731,625 Less: Amounts representing estimated executory costs - - Minimum lease payments receivable 83,536,203 86,731,625 Less: unearned income, representing interest (7,947,361 ) (9,140,852 ) Present value of minimum lease receivable 75,588,842 77,590,773 Less: Allowance for uncollectible receivables (3,943,125 ) (867,316 ) Net investment in direct financing leases $ 71,645,717 $ 76,723,457 Future minimum lease receipts under non-cancellable direct financing lease arrangements are as follows: June 30, 2018 Within 1 year $ 37,545,218 2 years 25,560,390 3 years 17,974,396 4 years 2,456,199 5 years - Total minimum finance lease receivables $ 83,536,203 During the years ended June 30, 2018, 2017 and 2016, certain guarantee service customers have agreed to utilize deposits to the extent of $977,691 (RMB6,471,383), nil and nil to repay finance lease payments of the same amount, and the Company derecognized these deposits and finance lease payments as of June 30, 2018. As of June 30, 2018, there were $1,324,248 investments in direct financing leases past due 90 days or more, that caused the Company to evaluate individually for impairment. As of June 30, 2017, 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. The allowance for uncollectible minimum lease payments receivables in direct financing leases for the years ended June 30, 2018 and 2017 were as following: For the years ended June 30, 2018 2017 2016 Allowance for uncollectible receivables at the beginning of year $ 867,316 $ 858,362 $ 302,401 Provision for lease payment receivables - specific 3,194,090 - - (Reversal of provision) Provision - general (85,570 ) 27,332 597,444 Effect of foreign currency translation (32,711 ) (18,378 ) (41,483 ) Allowance for uncollectible receivables at the end of year $ 3,943,125 $ 867,316 $ 858,362 June 30, 2018 June 30, 2017 Allowance for uncollectible receivables relating to: Individually evaluated for impairment $ 3,139,155 $ - Collectively evaluated for impairment 803,970 867,316 Ending balance $ 3,943,125 $ 867,316 Minimum lease payments receivable Individually evaluated for impairment $ 3,139,155 $ - Collectively evaluated for impairment 80,397,048 86,731,625 Ending balance $ 83,536,203 $ 86,731,625 The finance leases receivable with a carrying amount of approximately $3,746,653 (RMB24,799,285) were pledged as collateral for the Company’s other loans (Note 10) as of June 30, 2018. The allowance for credit losses provides coverage for probable and estimable losses in the Company’s investment in direct financing leases. The allowance recorded is based on a quarterly review. The determination of the appropriate amount of any provision is highly dependent on management’s judgment at that time and takes into consideration all known relevant internal and external factors, including levels of nonperforming leases, customers’ financial condition, leased property values and collateral values as well as general economic conditions. When a direct financing lease receivable is determined uncollectible, for example, the customer declares bankruptcy, or the Company reaches agreement of debt restructuring with the customer, the direct financing lease would be written off from the investment in direct financing leases. Credit Quality of Investment in Direct Financing Lease: The Company performs a quarterly review on the credit quality of its investments in direct financing leases, by evaluating a variety of factors, including dependence on the counterparties, latest financial position and performance of the customers, actual defaults, estimated future defaults, historical loss experience, leased property values or collateral values, and other economic conditions such as economic trends in the area or country. In cases where heightened risk is detected as a result of factors indicating that a customer is having difficulty repaying the underlying financing, such as a default in making interest payments, material changes to the customer’s business, and deterioration of financial condition and cash flow support, the Company classifies the contracts as “abnormal contracts,” contracts without such heightened risk indicators are classified as “normal contracts”. For those contracts, the Company’s WFOE generally initiates negotiations with the customer about possible improvement or remediation measures, such as an improvement plan for cash flow management, third-party support, extension plans and similar measure, and implement close supervision of the remediation measures adopted. The risk classification of direct financing lease receivables is as follows: June 30, 2018 June 30, 2017 Normal $ 80,397,048 $ 86,731,625 Abnormal 3,139,155 - Total $ 83,536,203 $ 86,731,625 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 8 - PROPERTY AND EQUIPMENT, NET Property and equipment as of June 30, 2018 and 2017 consisted of the following: Useful life (years) Salvage value 2018 2017 Leasehold improvements 3-5 0- 3% $ 478,752 $ 467,564 Vehicles 4-5 3%-5% 1,138,974 1,112,359 Office equipment 3-5 3% 176,285 172,166 Electric equipment 3 3% 37,303 34,632 Less: accumulated depreciation (1,610,114 ) (1,192,573 ) Property and equipment, net $ 221,200 $ 594,148 Depreciation expense totaled $395,814, $320,842 and $411,635 for the years ended June 30, 2018, 2017 and 2016, respectively. |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Jun. 30, 2018 | |
Other Assets [Abstract] | |
OTHER ASSETS | NOTE 9 - OTHER ASSETS Other assets as of June 30, 2018 and 2017 consisted of: 2018 2017 Deposits for other loans (Note 10) $ 604,748 $ 590,616 Prepaid insurance - 166,250 Advance payment to third party companies 41,921 52,517 Other receivables 7,910 6,601 $ 654,579 $ 815,984 Advance payment to the third party companies as of June 30, 2018 and 2017 represented amounts prepaid by Jinshang Leasing and Dongsheng Guarantee for expense related car gasoline and office rentals. |
LOANS FOR CAPITAL LEASE BUSINES
LOANS FOR CAPITAL LEASE BUSINESS | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
BANK LOAN FOR CAPITAL LEASE BUSINESS | NOTE 10 - LOANS FOR CAPITAL LEASE BUSINESS Bank loans Bank loans of $13,696,574 and $28,281,541 as of June 30, 2018 and 2017, respectively, represented RMB denominated loans Jinshang Leasing obtained for Shuguang and Yancheng projects from Huaxia Bank and CITIC Bank. The Huaxia Bank loans for Shuguang project with a total principal of RMB300 million ($45.3 million) were obtained in December 2015, May 2016 and June 2016, bear interest at the fixed rate of 5.5% per annum, have a term of three years, pledged with the Company’s time deposit certificates of $4.5 million and $4.4 million (RMB30 million)(Note 4) as of June 30, 2018 and 2017, respectively, and guaranteed by Liaoning SG Automotive Group Co., Ltd (lessee of Shuguang project). The CITIC Bank loan for Yancheng project with a principal amount of RMB3.1 million ($0.5 million) was obtained in April 2015, bears interest at the fixed rate of 5.75% per annum, has a term from April 3, 2015 to February 12, 2020, pledged with time deposit certificate from Potevio New Energy Yancheng Co., Ltd (lessee of Yancheng project) of $517,665 and $505,570 (RMB 3,426,450 Interest expense incurred on the bank loans for the years ended June 30, 2018, 2017 and 2016 were $1,062,956 and $1,684,075 and $524,409, respectively. Other loans Other loans of $ 4,774,510 as of June 30, 2018 represented RMB denominated loans Jinshang Leasing obtained in July 2016 and April 2017 for its various direct financing lease projects from Great Wall Guoxing Financial Leasing Co., Ltd. The loans bear interest at the fixed rate of 6% per annum and the term of the loans is thirty months and matures in 2019, and pledged against the Company’s receivables from its certain direct financing leases, with a carrying amount of $ 3,746,653 (RMB24,799,285) as of June 30, 2018. Jinshang Leasing paid deposits totaled $ 604,748 (RMB4,002,855) (Note 9) to Great Wall Guoxing Financial Leasing Co., Ltd, which are non-interest bearing and repayable upon maturity of the other loans. Interest expense incurred on the other loans for the years ended June 30, 2018 and 2017 were $449,663 and $410,512, respectively. As of June 30, 2018, the borrowings will be due according to the following schedule: Bank loans (principal amounts) Other loans (principal amounts) Within 1 year $ 13,345,068 $ 4,382,920 Between 1 to 2 years 351,506 391,590 Between 2 to 3 years - - Between 3 to 4 years - - Between 4 to 5 years - - Beyond 5 years - - $ 13,696,574 $ 4,774,510 |
UNEARNED INCOME FROM FINANCIAL
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES | 12 Months Ended |
Jun. 30, 2018 | |
Deferred Revenue Disclosure [Abstract] | |
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES | NOTE 11 - UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES Unearned income from guarantee services were $88,824 and $538,215 as of June 30, 2018 and 2017, respectively. |
OTHER LIABILITIES
OTHER LIABILITIES | 12 Months Ended |
Jun. 30, 2018 | |
Other Liabilities [Abstract] | |
OTHER LIABILITIES | NOTE 12 - OTHER LIABILITIES Other liabilities as of June 30, 2018 and 2017 consisted of: 2018 2017 Other tax payable $ 1,034,048 $ 771,293 Accrued legal and professional fees 415,780 3,861 Deposits received from guarantee service customers 60,432 59,019 Accrued payroll 50,701 45,356 Other payables 1,858 14,040 $ 1,562,819 $ 893,569 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 13 - SHARE-BASED COMPENSATION 2015 Long-Term Incentive Equity Plan On October 20, 2015, the Company adopted the 2015 Long-Term Incentive Equity Plan, or the “Plan”, under which the Company may grant options to purchase ordinary shares of the Company to its employees, officers, directors and consultants. The total number of Ordinary Shares reserved and available for issuance under the Plan shall be a number of Ordinary Shares equal to ten percent (10%) of the total outstanding Ordinary Shares as of the closing date of that certain Agreement and Plan of Reorganization, dated as of April 10, 2015, by and among the Company, WFG and the shareholders of WFG (“Merger Agreement”), after taking into account the Ordinary Shares that may be issued pursuant to the Merger Agreement and the conversion of any shares held by the Company’s public shareholders as provided for in the Company’s Amended and Restated Certificate of Incorporation. The Plan shall be administered by the Board or a Committee. If administered by a Committee, such Committee shall be composed of at least two directors, all of whom are “outside directors” within the meaning of the regulations issued under Section 162(m) of the Code and “non-employee” directors within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended. Committee members shall serve for such term as the Board may in each case determine and shall be subject to removal at any time by the Board. The term of each Option shall be fixed by the Committee; provided, however, that an Incentive Option may be granted only within the ten-year period commencing from the Effective Date and may only be exercised within ten years of the date of grant (or five years in the case of an Incentive Option granted to an optionee who, at the time of grant, owns Ordinary Shares possessing more than 10% of the total combined voting power of all classes of voting shares of the Company (“10% Shareholder”). The exercise price per Ordinary Share purchasable under an Option shall be determined by the Committee at the time of grant and may not be less than 100% of the Fair Market Value on the date of grant (or, if greater, the par value of the Ordinary Shares); provided, however, that the exercise price of an Incentive Option granted to a 10% Shareholder will not be less than 110% of the Fair Market Value on the date of grant. The Plan was approved and unless terminated by the Board, it shall continue to remain effective until such time as no further awards may be granted and all awards granted under the Plan are no longer outstanding. Notwithstanding the foregoing, grants of Incentive Options may be made only during the ten-year period beginning on the Effective Date. The following table summarizes stock award activity and related information for all of Wins Finance’s Equity Plans for the years ended June 30, 2018, 2017 and 2016: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual 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 and 2018 - - - Exercisable, June 30, 2017 and 2018 - - - Vested and expected to vest, June 30, 2017 and 2018 - - - 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 shares of common stock to eight employees at a weighted average exercise price of $12 per share. The options will vest and become exercisable in three (3) equal annual installments on each of the first, second and third dates of the Grant Date and the options will expire on the fifth anniversary of the Grant Date. During the year ended June 30, 2017, 1,190,000 options were forfeited and 80,000 options were cancelled due to the termination of the holders’ employment prior to vesting. On February 14, 2017, Wins Finance terminated the remaining option agreements with the employees for no consideration. No options remained outstanding following the cancellation and as of June 30, 2017 and 2018. The Company measures compensation cost related to share options based on the grant-date fair value of the award using the Binomial Model. The weighted-average assumptions used in the Binomial Model calculation for option grants during the year ended June 30, 2016 were as follows: Expected volatility 51.5 % Risk-free interest rates 1.77 % Expected terms 5.0 years Dividend yields 0 % Sub-Optimal behavior multiple 2.80 Fair Value per share of options granted $ 5.27~$5.44 The expected volatility assumption is based on historical weekly volatility of peer companies’ share price. The Company utilized peer company data due to Wins Finance’s limited history of publicly traded shares. During the year ended 2016, the expected term assumption represents the remaining life of the option at the grant date. The risk-free interest rates used are based on the USD Treasury Activities (IYC25) Zero Coupon Yield. The estimated fair value of share-based compensation to employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. In connection with the grant of stock options to employees, the Company recorded share-based compensation charges of nil, $(1,465,680) and $1,889,733, respectively, for the years ended June 30, 2018, 2017 and 2016, respectively. The negative amount in 2017 resulted from the reversal of share-based compensation expense for the Company’s options that were cancelled due to the termination of the holder’s employment prior to vesting. |
CAPITALIZATION
CAPITALIZATION | 12 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
CAPITALIZATION | NOTE 14 - CAPITALIZATION Common Stock As of October 26, 2015, Wins Finance is authorized to issue up to 100,000,000 ordinary shares with a par value of $0.0001, 21,526,747 shares of Common Stock were issued and outstanding. 16,800,000 and 4,726,747 ordinary shares were held by WFG's shareholders and former stockholders of Sino, respectively. On June 28, 2016, the Company repurchased 5,100 of its ordinary shares from Bradley Reifler, a former director of the Company, for $60,180, and 1,480,000 shares from Bluesky LLC for $17,464,000. Of the amounts payable to Bluesky, $17 million was paid. Bluesky LLC is a limited liability Company owned and controlled by Bluesky Family Trust, a family trust benefitting the family of Jianming Hao, the Company’s former Chairman, Co-Chief Executive Officer and President. Balance of $464,000 remained unpaid as of June 30, 2018. On December 2, 2016, the Company repurchased 204,005 of its ordinary shares from Richard Xu, a former officer of the Company, for a consideration of $204. As of June 30, 2018 and 2017, there were 19,837,642 shares of common stock issued and outstanding. |
STATUTORY RESERVE
STATUTORY RESERVE | 12 Months Ended |
Jun. 30, 2018 | |
Statutory Reserve [Abstract] | |
STATUTORY RESERVE | NOTE 15 - STATUTORY RESERVE In accordance with the PRC regulations on enterprises and the company’s articles of association, enterprises established in the PRC are required to provide statutory reserve before any dividend distribution, which is appropriated from net profit as reported in the enterprise’s PRC statutory accounts for the calendar year. Before making any dividend distribution, an enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. The statutory reserve can only be used for specific purposes and is not distributable as cash dividends. |
EMPLOYEE RETIREMENT BENEFITS
EMPLOYEE RETIREMENT BENEFITS | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
EMPLOYEE RETIREMENT BENEFIT | NOTE 16 - EMPLOYEE RETIREMENT BENEFITS The Company has made employee benefit contributions in accordance with Chinese relevant regulations, including retirement insurance, unemployment insurance, medical insurance, housing fund, work injury insurance and birth insurance. The Company recorded the contribution in the salaries and employee charges when incurred. The contributions made by the Company were $118,259, $111,493 and $107,970 for the years ended June 30, 2018, 2017 and 2016, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 17 - EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share for the years ended June 30, 2018, 2017 and 2016, respectively: For the years ended June 30, 2018 2017 2016 Net income attributable to the common shareholders $ 10,499,876 $ 20,349,791 $ 12,117,397 Basic weighted-average common shares outstanding 19,837,642 19,926,510 20,012,356 Effect of dilutive securities - 155,579 - Diluted weighted-average common shares outstanding 19,837,642 20,082,089 20,012,356 Earnings per share – Basic $ 0.53 $ 1.02 $ 0.61 Earnings per share – Diluted $ 0.53 $ 1.01 $ 0.61 Basic earnings per share are computed by dividing the net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed by adding other common stock equivalents, including non-vested common share in the weighted average number of common shares outstanding for a period, if dilutive. As of June 30, 2018, there were no dilutive securities. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 18 - 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, 2018, 2017 and 2016 as Full Shine had no assessable profits arising in Hong Kong. The provision for PRC Enterprise Income Tax (“EIT) is calculated at 25% of the estimated assessable profits of the subsidiaries established in the PRC during the years ended June 30, 2018, 2017 and 2016. 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 2012. With a few exceptions, the calendar (tax) years 2013 - 2017 remain open to examination by tax authorities in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or its withholding agent. The statute of limitations extends to five years under special circumstances, which are not clearly defined. In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits of the position, and measures the unrecognized benefits associated with the tax position. For the years ended June 30, 2018, 2017 and 2016, the Company had no unrecognized tax benefits. The Company does not anticipate any significant increase to its liabilities for unrecognized tax benefits within the next 12 months. The Company will classify interest and penalties, if any, related to income tax matters in income tax expense. The Company’s WFOEs are subject to income taxes in China and are subject to routine corporate income tax audits. Management believes that the WFOEs’ tax return positions are fully supported, but tax authorities may challenge certain positions, which may not be fully sustained. Determining the income tax expense for these potential assessments and recording the related effects requires management judgments and estimates. The amounts ultimately paid upon resolution of audits could be materially different from the amounts previously included in the Company’s income tax expense and, therefore, could have a material impact on the Company’s provision for income tax, net income and cash flows. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty and the timing of the resolution and/or closure of audits is not certain. If any issues addressed in tax audits of the Company's WFOEs are resolved in a manner not consistent with management's expectations, the Company could be required to adjust its provision for income tax in the period such resolution occurs. Income tax payable represented enterprise income tax at a rate of 25% of taxable income the Company accrued but not paid. Income tax payable as of June 30, 2018 and 2017 comprises: 2018 2017 Dongsheng Guarantee $ 2,411,031 $ 2,517,538 Jinshang Leasing 24,087 255,093 $ 2,435,118 $ 2,772,631 For the years ended June 30, 2018 2017 2016 Current income tax expense $ 507,154 $ 1,581,470 $ 1,387,373 Deferred tax expense (benefit) (1,546,049 ) 370,019 (622,928 ) Total (benefit) provision for income taxes $ (1,038,895 ) $ 1,951,489 $ 764,445 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, 2018 2017 2016 PRC statutory tax 25 % 25 % 25 % Effect of non-deductible expenses 3.4 % 0.0 % 0.0 % Effect of non-taxable income (39.9 )% (15.4 )% (28.5 )% Others 0.5 % (0.8 )% 9.7 % Effective tax rate (11.0 )% 8.8 % 6.2 % 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, 2018 June 30, 2017 Deferred tax assets Provision for direct financing lease $ 985,781 $ 216,829 Direct financing lease income - 110,308 Specific allowance on guarantee 550,495 - Total deferred tax assets 1,536,276 327,137 Less: Valuation allowance - - Less: Net off with deferred tax liabilities for financial reporting purposes (446,609 ) - Net total deferred tax assets $ 1,089,667 $ 327,137 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ 26,868 $ 390,154 Commissions and fees on financial guarantee services 283,608 356,730 Direct financing lease income 136,133 - Total deferred tax liabilities 446,609 746,884 Less: Net off with deferred tax assets for financial reporting purposes (446,609 ) - Net total deferred tax liabilities $ - $ 746,884 For the purpose of presentation in the consolidated balance sheets, certain deferred tax assets and liabilities have been offset. As of June 30, 2018 and 2017, the Company had net deferred tax assets of $1,089,667 and $327,137, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The management considered all available evidence, both positive and negative, in determining the realizability of deferred tax assets at June 30, 2018 and 2017. Management considered carry back availability, the scheduled reversals of deferred tax liabilities, projected future taxable income during the reversal periods, and tax planning strategies in making this assessment. Management also considered recent history of taxable income, trends in the Company’s earnings and tax rate, positive financial ratios, and the impact of the downturn in the current economic environment (including the impact of credit on allowance and provision for guarantee and direct financing lease losses; and the impact on funding levels) on the Company. Based upon its assessment, management believes that a valuation allowance was not necessary as of June 30, 2018 and 2017. As of June 30, 2018 and 2017, 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 $76,411,203 and $65,800,730 as of June 30, 2018 and 2017, respectively. For the years ended June 30, 2018 and 2017, 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, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 19 - RELATED PARTY TRANSACTIONS AND BALANCES Related party balances Related party balances as of June 30, 2018 and 2017 (apart from those disclosed elsewhere in these financial statements) consisted of: 2018 2017 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 Related party transactions for the years ended June 30, 2018, 2017 and 2016 consisted of: For the years ended June 30, 2018 2017 2016 Share repurchase Bluesky LLC $ - $ - $ 17,464,000 Convertible debt Bluesky LLC $ - $ - $ 8,500,000 The amount due to Bluesky LLC was interest free, unsecured and due on demand. On December 28, 2015, the Company issued an $8,500,000 promissory note (the “Note”) to Bluesky LLC. The note was bearing interest at 4% per year and due for repayment on December 28, 2016. The note was repaid in advance on April 28, 2016. On June 30, 2016, the Company repurchased 1,480,000 ordinary shares from Bluesky LLC at a price of $11.8 per share. On June 28, 2016, the Company paid approximately $17,000,000 to Bluesky LLC. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 - COMMITMENTS AND CONTINGENCIES Commitments Lease Commitments The Company leased their offices under lease agreements. The following table sets forth the Company’s contractual obligations as of June 30, 2018 in future periods: For the years ending June 30, Rental payments 2019 154,649 2020 154,649 2021 111,455 2022 - Thereafter - $ 420,753 Guarantee Commitments i. 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. ii. During the year ended June 30, 2018, Jinshang Leasing and a third party jointly entered into certain finance lease contracts with a customer with total contract amount of $70.1 million (RMB464 million). Jinshang Leasing provides financing to the customer of $6.6 million (RMB44 million)(included in Note 7 - net investment in direct financing leases) and the third party provides the remaining financing of $63.5 million (RMB420 million), for a period up to August 2020. Jinshang Leasing also acts as a guarantor and is obligated to pay the third party if the customer fails to pay the obligations when they become due. As of June 30, 2018, the maximum guarantee issued by Jinshang Leasing was $69.8 million(RMB462 million). 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. Also, the Company’s PRC subsidiaries have historically failed to make social insurance and provident housing fund contributions in full for their employees. During the years ended June 30, 2018 and 2017, 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, 2018 and 2017, the Company’s PRC had not received any notice from any relevant government authorities regarding their prior non-compliance with these requirements. However, it is possible that relevant regulatory authorities will impose penalties and/or bring legal action against them 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, 2018, the Company was involved in 3 lawsuits in China, 2 of which 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. An aggregated claim of $639,104 has been adjudicated by the Court in favor of the Company and these cases are in the process of being enforced. 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 million (RMB14.8 million) and compensation of $0.2 million (RMB1.5 million). There has been no activity in this lawsuit since it was transferred to the Beijing Haidian court. In June 2015, the lessee filed a notice to Jinshang Leasing and the supplier to terminate the financing lease arrangement and the respective equipment sale and purchase agreement. Jinshang Leasing has not collected or made any payment or recognized any income on this financing lease arrangement. The directors of the Company have sought advice from PRC legal counsel in this respect and are of the view that the lawsuit against Jinshang Leasing is without merit and believe that resolution of this matter will not result in any payment that, in the aggregate, would be material to the financial position or results of operations of the Company. 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 On August 31, 2018, defendants Renhui Mu and Junfeng Zhao moved to dismiss Plaintiffs’ Amended Complaint in the California Action for failure to state a claim as against them. That motion is scheduled for hearing on November 5, 2018. Separately, on September 17, 2018, lead plaintiffs in the California Action filed a motion seeking class certification. The Company’s opposition to that motion is currently due on December 14, 2018. On October 9, 2018, the Court entered an Order in the California Action dismissing the action as against Jianming Hao, without prejudice, for lead plaintiffs’ failure to timely serve him with the Summons and Amended Complaint. 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. We believe that the claims from this proceeding are without merit and we are vigorously defending this proceeding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20 - SUBSEQUENT EVENTS On August 28, 2018, a subsidiary of the Company entered into an agreement to acquire a 30% equity RMB 300 million (or approximately $45.3 million) for its 30% interest in Hui Yue. Hui Yue will focus on the financial leasing of equipment relating to port logistics, construction machinery, energy conservation and medicine in Ningbo, China. On October 26, 2018, the parties to the agreement entered into an amendment providing that the Company would acquire only a 15% equity interest in Hui Yue (instead of the originally contemplated 30%) for RMB150 million. Pursuant to the agreement, the Company was required to pay the capital within thirty years, from the date of change of Hui Yue’s company registration. The first payment of RMB 20 3.0 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
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 | (b) Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates using information then currently available. Changes in facts and circumstances may cause Wins Finance to revise its estimates. Material estimates that are particularly susceptible to significant change in the near-term include the determination of the allowances for doubtful accounts receivable and for guarantee losses. Significant accounting estimates reflected in the financial statements include, but are not limited to: (i) the allowance for doubtful receivables; (ii) estimates of losses on unexpired contracts and financial guarantee service contracts; (iii) accrual of estimated liabilities; (iv) useful lives of long-lived assets; (v) impairment of long-lived assets; (vi) valuation allowance for deferred tax assets; (vii) contingencies; and (viii) share-based compensation. |
Operating segments | (c) Operating segments ASC 280, Segment Reporting, requires companies to report financial and descriptive information about their reportable operating segments, including segment profit or loss, certain specific revenue and expense items, and segment assets. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. The Company’s chief operating decision-maker (“CODM”) has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for both the financing lease business and the guarantee business. The Company’s net revenues are all generated from customers in the PRC. Hence, The Company operates and manages its business within one reportable segment, which is to provide financial services in the PRC domestic market. For the year ended June 30, 2018, there were three customers that accounted for 24%, 16% and 10% of the Company’s revenue, respectively. For the year ended June 30, 2017, there were two customers that accounted for 19% and 13% of the Company’s revenue, respectively. For the year ended June 30, 2016, there were no customers that individually accounted for 10% or more of the Company’s revenue. As of June 30, 2018, two customers accounted for 19% and 14% of the aggregate balances of loans guaranteed by Dongsheng Guarantee. As of June 30, 2017, two customers accounted for 13% and 11% of the aggregate balances of loans guaranteed by Dongsheng Guarantee. As of June 30, 2018, four customers accounted for 18%, 17%, 13% and 12%, respectively, of the minimum lease payments receivable of Jinshang Leasing. As of June 30, 2017, two customers accounted for 25% and 20%, respectively, of the minimum lease payments receivable of Jinshang Leasing. |
Cash and cash equivalents | (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in banks and all highly liquid investments with original maturities of three months or less that are unrestricted as to withdrawal and use. |
Restricted Cash | (e) Restricted cash Restricted cash represents cash pledged to banks 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 months from the time the loan and guarantee are initiated. |
Short-term investments | (f) 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 | (g) 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, 2018 and 2017, the net assets of Dongsheng Guarantee were $219 million and $205 million, respectively. 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. Financial instruments whose contract amounts represent credit risk are as follows: June 30, 2018 June 30, 2017 Maximum guarantee issued $ 47,929,839 $ 67,314,661 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, net | (h) Guarantee paid on behalf of guarantee service customers, net 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, 2018 and 2017, uncollected guarantees paid on behalf of guarantee service customers from guarantee service customers on whose behalf Dongsheng Guarantee had repaid the loans were $2,954,188 and $1,560,615, respectively. Management performs an evaluation of the adequacy of the allowance. The allowance is based on the Company’s past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. As of June 30, 2018 and 2017, the Company accrued allowance of $2,846,715 and nil on the guarantee paid on behalf of guarantee service customers. |
Provision for guarantee losses | (i) 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. 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, 2018 2017 2016 Allowance on financial guarantee at the beginning of year $ 673,147 $ 3,079,684 $ 1,261,868 Reversal of general allowance (258,439 ) (126,211 ) (355,313 ) Specific allowance (reversal) 2,240,512 (3,082,616 ) 3,263,312 Write-down against allowance - - (932,375 ) Reversal - recoveries by cash - 880,747 - Effect of foreign currency translation (17,984 ) (78,457 ) (157,808 ) Allowance on financial guarantee at the end of year $ 2,637,236 $ 673,147 $ 3,079,684 |
Net investment in direct financing leases | (j) Net investment in direct financing leases Lease contracts that Jinshang Leasing enters with financing lease customers transfer substantially all the rewards and risks of ownership of the leased assets, other than legal title, to the customers. These financing lease contracts are accounted for as direct financing leases in accordance with ASC 840-10-25 and ASC 840-40-25. At the inception of a transaction, the cost of the leased property is capitalized at the present value of the minimum lease payment receivables and the unguaranteed residual value of the property at the end of the lease. The difference between the sum of (i) the minimum lease payment receivables and the unguaranteed residual value and (ii) the cost of the leased property is recognized as unearned income. Unearned income is recognized over the period of the lease using the effective interest rate method. Net investment in direct financing leases is recorded at net realizable value consisting of minimum lease payments to be received less allowance for uncollectible, as needed, and less the unearned income. The allowance for lease payment receivable losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on Jinshang Leasing’s loss history, known and inherent risks in the transactions, adverse situations that may affect the lessee’s ability to repay, the estimated value of any underlying asset, current economic conditions and other relevant factors. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revision as more information becomes available. While management uses the best information available upon which to base estimates, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used for the purposes of analysis. Jinshang Leasing provides “Specific Allowance” for the lease payment receivable of lease transactions if any specific collectability risk is identified, and a “General Allowance”, based on total minimum lease payment receivable balance of those transactions with no specific risk identified, to be used to cover unidentified probable loss. Jinshang Leasing performs periodic and systematic detailed reviews to identify credit risks and to assess the overall collectability, and may adjust its estimates on allowance when new circumstances arise. |
Revenue recognition | (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% to 6% of the guaranteed amount for 12 months, which represents the estimated fair value of the non-contingent guarantee liability at the inception of the guarantee. 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. There was no such income during the years ended June 30, 2018, 2017 and 2016. 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, 2018, 2017 and 2016 on these financing agency transactions. |
Property and equipment | (l) Property and equipment, net Plant and equipment are recorded at cost less accumulated depreciation and impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, with 3% to 5% salvage value. The average estimated useful lives of property and equipment are discussed in Note 8. The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the corresponding accounts and includes any gain or loss in the statements of income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and improvements of equipment are capitalized. |
Impairment of long-lived assets | (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, 2018, 2017 and 2016. |
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, 2018 and 2017, financial instruments of the Company primarily consisted of cash, restricted cash, accounts receivables, other receivables, and bank and other loans which were carried at cost or amortized cost on the consolidated balance sheets, and carrying amounts approximated their fair values because of their generally short maturities or the rate of interest of these instruments approximate the market rate of interest. |
Foreign currency translation | (o) Foreign currency translation The Company’s functional and reporting currency is the United States Dollar (“US dollars” or “USD”). The functional currency of the Company’s subsidiaries in the PRC is the Chinese Yuan, or Renminbi (“RMB”). Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the statements of operations. For financial reporting purposes, the financial statements of the Company’s subsidiaries are prepared using RMB and translated into the Company’s functional currency at the exchange rates quoted by www.oanda.com. Assets and liabilities are translated using the exchange rate in effect at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and stockholders' equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income in stockholders’ equity. June 30, 2018 June 30, 2017 Balance sheet items, except for equity accounts 6.6191 6.7774 For the years ended June 30, 2018 2017 2016 Items in the statements of income and comprehensive income, and statements of cash flows 6.5052 6.8124 6.4352 |
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 consolidated statements of income. |
Non-interest expenses | (q) 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 | (s) 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) | (w) 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 Accounting Standards Update ("ASU") 2016-18, " Statement of Cash Flows (Topic 230): Restricted Cash ." ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending balances shown on the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted. ASU 2016-18 must be applied retrospectively to all periods presented. The Company adopted this ASU beginning July 1, 2018. As of June 30, 2018 and 2017, the balances of restricted cash were $23,082,396 and $24,282,208, respectively. In August 2016, the FASB issued ASU 2016-15, " Classification of Certain Cash Receipts and Cash Payments (Topic 230)" . ASU 2016-15 adds and clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows, reducing the existing diversity in practice that has resulted from the lack of consistent principles on this topic. ASU 2016-15 is effective for interim and fiscal years beginning after December 15, 2017, with early adoption is permitted. The Company adopted this ASU beginning July 1, 2018, and does not expect the standard to have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) for recognition of credit losses on financial instruments, which is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019 (i.e., January 1, 2020, for calendar year entities), with early adoption permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The guidance introduces a new credit reserving model known as the Current Expected Credit Loss (CECL) model, which is based on expected losses, and differs significantly from the incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will likely result in earlier recognition of credit reserves. The Company does not intend to adopt the new standard early and is currently evaluating the impact the new guidance will have on its financial position, results of operations and cash flows. In 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. For publicly-traded business entities, Topic 606 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company will adopt the new revenue standard beginning July 1, 2018, using the modified retrospective method. The Company anticipates that the application of the new standard in the future may result in more disclosures, but its application is not likely to have a material impact on the timing and amounts of revenue recognized in the respective reporting periods. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The most significant impact on our consolidated financial statements relates to the recognition and measurement of equity investments at fair value, with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidation of the investee). This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company will adopt ASU 2016-01 effective July 1, 2018, and expects this ASU will not have a material impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, lessees will be required recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. The new lease guidance simplified the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. Lessees will no longer be provided with a source of off-balance sheet financing. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The Company is evaluating this ASU and has not determined the effect of this standard on its ongoing financial reporting. In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting , which relates to the accounting for employee share-based payments. This standard addresses several aspects of the accounting for share-based payment award transactions, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows; (d) accounting for forfeitures of share-based payments. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company adopted this ASU beginning July 1, 2017 with no material impact on its consolidated financial statements. 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 ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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, 2018 June 30, 2017 Maximum guarantee issued $ 47,929,839 $ 67,314,661 |
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, 2018 2017 2016 Allowance on financial guarantee at the beginning of year $ 673,147 $ 3,079,684 $ 1,261,868 Reversal of general allowance (258,439 ) (126,211 ) (355,313 ) Specific allowance (reversal) 2,240,512 (3,082,616 ) 3,263,312 Write-down against allowance - - (932,375 ) Reversal - recoveries by cash - 880,747 - Effect of foreign currency translation (17,984 ) (78,457 ) (157,808 ) Allowance on financial guarantee at the end of year $ 2,637,236 $ 673,147 $ 3,079,684 |
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, 2018 June 30, 2017 Balance sheet items, except for equity accounts 6.6191 6.7774 For the years ended June 30, 2018 2017 2016 Items in the statements of income and comprehensive income, and statements of cash flows 6.5052 6.8124 6.4352 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Short-term Investments [Abstract] | |
Contractual maturity | contractual maturities because of the subsidiaries’ rights to redeem. Maturing within: Short- term investments Within 1 year $ 64,964,005 2 years 113,309,312 3 years - 4 years - 5 years - Thereafter - $ 178,273,317 |
GUARANTEE PAID ON BEHALF OF G_2
GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Guarantee service of customers | Guarantee paid on behalf of guarantee service customers as following: June 30, 2018 June 30, 2017 Guarantee paid on behalf of guarantee service customers $ 2,954,188 $ 1,560,615 Less: Allowance for doubtful accounts (2,846,715 ) - $ 107,473 $ 1,560,615 |
Allowance for doubtful accounts | An analysis of the allowance for doubtful accounts is as follows: June 30, 2018 June 30, 2017 June 30, 2016 Balance at beginning of year $ - $ - $ - Provision for the year 2,896,532 - - Foreign exchange adjustment (49,817 ) - - Balance at end of year $ 2,846,715 $ - $ - |
NET INVESTMENT IN DIRECT FINA_2
NET INVESTMENT IN DIRECT FINANCING LEASES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Summary of the Components of the Jinshang Leasing's Net Investment in Direct Financing Leases | The following is a summary of the components of the Jinshang Leasing’s net investment in direct financing leases at June 30, 2018 and 2017: 2018 2017 Total minimum lease payments to be received $ 83,536,203 $ 86,731,625 Less: Amounts representing estimated executory costs - - Minimum lease payments receivable 83,536,203 86,731,625 Less: unearned income, representing interest (7,947,361 ) (9,140,852 ) Present value of minimum lease receivable 75,588,842 77,590,773 Less: Allowance for uncollectible receivables (3,943,125 ) (867,316 ) Net investment in direct financing leases $ 71,645,717 $ 76,723,457 |
Schedule of Future Minimum Lease Receipts | Future minimum lease receipts under non-cancellable direct financing lease arrangements are as follows: June 30, 2018 Within 1 year $ 37,545,218 2 years 25,560,390 3 years 17,974,396 4 years 2,456,199 5 years - Total minimum finance lease receivables $ 83,536,203 |
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, 2018 and 2017 were as following: For the years ended June 30, 2018 2017 2016 Allowance for uncollectible receivables at the beginning of year $ 867,316 $ 858,362 $ 302,401 Provision for lease payment receivables - specific 3,194,090 - - (Reversal of provision) Provision - general (85,570 ) 27,332 597,444 Effect of foreign currency translation (32,711 ) (18,378 ) (41,483 ) Allowance for uncollectible receivables at the end of year $ 3,943,125 $ 867,316 $ 858,362 June 30, 2018 June 30, 2017 Allowance for uncollectible receivables relating to: Individually evaluated for impairment $ 3,139,155 $ - Collectively evaluated for impairment 803,970 867,316 Ending balance $ 3,943,125 $ 867,316 Minimum lease payments receivable Individually evaluated for impairment $ 3,139,155 $ - Collectively evaluated for impairment 80,397,048 86,731,625 Ending balance $ 83,536,203 $ 86,731,625 |
Summary of Risk Classification of Direct Financing Lease Receivables | The risk classification of direct financing lease receivables is as follows: June 30, 2018 June 30, 2017 Normal $ 80,397,048 $ 86,731,625 Abnormal 3,139,155 - Total $ 83,536,203 $ 86,731,625 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment as of June 30, 2018 and 2017 consisted of the following: Useful life (years) Salvage value 2018 2017 Leasehold improvements 3-5 0- 3% $ 478,752 $ 467,564 Vehicles 4-5 3%-5% 1,138,974 1,112,359 Office equipment 3-5 3% 176,285 172,166 Electric equipment 3 3% 37,303 34,632 Less: accumulated depreciation (1,610,114 ) (1,192,573 ) Property and equipment, net $ 221,200 $ 594,148 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Other Assets [Abstract] | |
Schedule of Other Assets | Other assets as of June 30, 2018 and 2017 consisted of: 2018 2017 Deposits for other loans (Note 10) $ 604,748 $ 590,616 Prepaid insurance - 166,250 Advance payment to third party companies 41,921 52,517 Other receivables 7,910 6,601 $ 654,579 $ 815,984 |
LOANS FOR CAPITAL LEASE BUSIN_2
LOANS FOR CAPITAL LEASE BUSINESS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | As of June 30, 2018, the borrowings will be due according to the following schedule: Bank loans (principal amounts) Other loans (principal amounts) Within 1 year $ 13,345,068 $ 4,382,920 Between 1 to 2 years 351,506 391,590 Between 2 to 3 years - - Between 3 to 4 years - - Between 4 to 5 years - - Beyond 5 years - - $ 13,696,574 $ 4,774,510 |
OTHER LIABILITIES (Tables)
OTHER LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Other Liabilities [Abstract] | |
Schedule of Other Liabilities | Other liabilities as of June 30, 2018 and 2017 consisted of: 2018 2017 Other tax payable $ 1,034,048 $ 771,293 Accrued legal and professional fees 415,780 3,861 Deposits received from guarantee service customers 60,432 59,019 Accrued payroll 50,701 45,356 Other payables 1,858 14,040 $ 1,562,819 $ 893,569 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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, 2018, 2017 and 2016: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual 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 and 2018 - - - Exercisable, June 30, 2017 and 2018 - - - Vested and expected to vest, June 30, 2017 and 2018 - - - |
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, 2018 | |
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, 2018, 2017 and 2016, respectively: For the years ended June 30, 2018 2017 2016 Net income attributable to the common shareholders $ 10,499,876 $ 20,349,791 $ 12,117,397 Basic weighted-average common shares outstanding 19,837,642 19,926,510 20,012,356 Effect of dilutive securities - 155,579 - Diluted weighted-average common shares outstanding 19,837,642 20,082,089 20,012,356 Earnings per share – Basic $ 0.53 $ 1.02 $ 0.61 Earnings per share – Diluted $ 0.53 $ 1.01 $ 0.61 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
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, 2018 and 2017 comprises: 2018 2017 Dongsheng Guarantee $ 2,411,031 $ 2,517,538 Jinshang Leasing 24,087 255,093 $ 2,435,118 $ 2,772,631 |
Schedule of Components of Income Tax Expense (Benefit) | For the years ended June 30, 2018 2017 2016 Current income tax expense $ 507,154 $ 1,581,470 $ 1,387,373 Deferred tax expense (benefit) (1,546,049 ) 370,019 (622,928 ) Total (benefit) provision for income taxes $ (1,038,895 ) $ 1,951,489 $ 764,445 |
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, 2018 2017 2016 PRC statutory tax 25 % 25 % 25 % Effect of non-deductible expenses 3.4 % 0.0 % 0.0 % Effect of non-taxable income (39.9 )% (15.4 )% (28.5 )% Others 0.5 % (0.8 )% 9.7 % Effective tax rate (11.0 )% 8.8 % 6.2 % |
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, 2018 June 30, 2017 Deferred tax assets Provision for direct financing lease $ 985,781 $ 216,829 Direct financing lease income - 110,308 Specific allowance on guarantee 550,495 - Total deferred tax assets 1,536,276 327,137 Less: Valuation allowance - - Less: Net off with deferred tax liabilities for financial reporting purposes (446,609 ) - Net total deferred tax assets $ 1,089,667 $ 327,137 Deferred tax liabilities Guarantee paid on behalf of guarantee service customers loss $ 26,868 $ 390,154 Commissions and fees on financial guarantee services 283,608 356,730 Direct financing lease income 136,133 - Total deferred tax liabilities 446,609 746,884 Less: Net off with deferred tax assets for financial reporting purposes (446,609 ) - Net total deferred tax liabilities $ - $ 746,884 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Balances | Related party balances as of June 30, 2018 and 2017 (apart from those disclosed elsewhere in these financial statements) consisted of: 2018 2017 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, 2018, 2017 and 2016 consisted of: For the years ended June 30, 2018 2017 2016 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, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contractual Obligations | The following table sets forth the Company’s contractual obligations as of June 30, 2018 in future periods: For the years ending June 30, Rental payments 2019 154,649 2020 154,649 2021 111,455 2022 - Thereafter - $ 420,753 |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) - USD ($) | Dec. 13, 2016 | Aug. 28, 2018 | Jun. 30, 2018 | Aug. 02, 2017 | Jun. 30, 2017 | Jun. 30, 2016 | Oct. 26, 2015 | Dec. 02, 2014 |
Business Acquisition, Percentage of Voting Interests Acquired | 30.00% | |||||||
Common Stock, Shares, Issued | 19,837,642 | 19,837,642 | 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% | |||||||
Common Stock, Shares, Issued | 30,000,000 | |||||||
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] | ||||||||
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 ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | |
Agreed guaranteed commission period | 12 months | |||
Commission Percentage Rate Minimum | 2.00% | |||
Commission Percentage Rate Maximum | 6.00% | |||
Restricted Cash and Cash Equivalents, Current | $ 23,082,396 | $ 24,282,208 | ||
Allowance for Doubtful Accounts Receivable | 2,846,715 | 0 | $ 0 | $ 0 |
Provision for Loan and Lease Losses | 3,108,520 | 27,332 | $ 597,444 | |
Payment Guarantee [Member] | ||||
Provision for Loan and Lease Losses | $ 2,954,188 | $ 1,560,615 | ||
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] | Capital Lease Obligations [Member] | ||||
Concentration Risk, Percentage | 18.00% | 25.00% | ||
Customer Concentration Risk [Member] | Minimum [Member] | ||||
Concentration Risk, Percentage | 10.00% | |||
Customer One Concentration Risk [Member] | ||||
Concentration Risk, Percentage | 24.00% | |||
Customer One Concentration Risk [Member] | Capital Lease Obligations [Member] | ||||
Concentration Risk, Percentage | 17.00% | 20.00% | ||
Customer One Concentration Risk [Member] | Guaranteed loans [Member] | ||||
Concentration Risk, Percentage | 19.00% | 13.00% | ||
Customer Two Concentration Risk [Member] | ||||
Concentration Risk, Percentage | 16.00% | 13.00% | ||
Customer Two Concentration Risk [Member] | Capital Lease Obligations [Member] | ||||
Concentration Risk, Percentage | 13.00% | |||
Customer Two Concentration Risk [Member] | Guaranteed loans [Member] | ||||
Concentration Risk, Percentage | 14.00% | 11.00% | ||
Customer Three Concentration Risk [Member] | ||||
Concentration Risk, Percentage | 10.00% | 19.00% | ||
Customer Three Concentration Risk [Member] | Capital Lease Obligations [Member] | ||||
Concentration Risk, Percentage | 12.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Financial Guarantee Service) (Details) - Dongsheng Guarantee [Member] - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Loss Contingencies [Line Items] | ||
Maximum guarantee issued | $ 47,929,839 | $ 67,314,661 |
Value of net assets held by Dongsheng Guarantee used to calculate maximum guarantee obligation to customers | $ 219,000,000 | $ 205,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of allowance on financial guarantee) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Allowance on financial guarantee at the beginning of year | $ 673,147 | $ 3,079,684 | $ 1,261,868 |
Reversal of general allowance | (258,439) | (126,211) | (355,313) |
Specific allowance (reversal) | 2,240,512 | (3,082,616) | 3,263,312 |
Write-down against allowance | 0 | 0 | (932,375) |
Reversal - recoveries by cash | 0 | 880,747 | 0 |
Effect of foreign currency translation | (17,984) | (78,457) | (157,808) |
Allowance on financial guarantee at the end of year | $ 2,637,236 | $ 673,147 | $ 3,079,684 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Foreign currency translation) (Details) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Balance sheet items, except for equity accounts | 6.6191 | 6.7774 | |
Items in the statements of income and comprehensive income, and statements of cash flows | 6.5052 | 6.8124 | 6.4352 |
RISKS (Details)
RISKS (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Restricted Cash and Cash Equivalents | $ 41,579,488 | $ 41,284,490 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Jun. 30, 2017 |
Dongsheng Guarantee [Member] | ||
Restricted Cash Pledged With Banks As Guarantor Deposits | $ 18.6 | $ 19.9 |
Jinshang Leasing [Member] | ||
Cash Reserve Deposit Required and Made | $ 4.5 | $ 4.4 |
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 ($) | Nov. 09, 2018 | Jan. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
Schedules Of Cost Method Investments [Line Items] | |||||
Investment Income, Interest | $ 15,095,621 | $ 13,752,538 | $ 13,958,540 | ||
Interest Receivable | 15,157,094 | 3,514,075 | |||
Asset Impairment Charges | 1,272,723 | 0 | 0 | ||
Proceeds from Maturities, Prepayments and Calls of Short-term Investments | 64,102,479 | 32,294,070 | 44,287,804 | ||
Scenario, Forecast [Member] | |||||
Schedules Of Cost Method Investments [Line Items] | |||||
Interest Receivable | $ 4,168,233 | ||||
Proceeds from Maturities, Prepayments and Calls of Short-term Investments | 48,345,306 | ||||
Investments | $ 5,287,768 | ||||
Notes Receivable [Member] | |||||
Schedules Of Cost Method Investments [Line Items] | |||||
Receivable with Imputed Interest, Effective Yield (Interest Rate) | 12.00% | ||||
Asset Impairment Charges | 1,272,723 | 0 | $ 0 | ||
Receivable with Imputed Interest, Face Amount | $ 1,000,000 | $ 1,000,000 | |||
Maximum [Member] | |||||
Schedules Of Cost Method Investments [Line Items] | |||||
Investments Interest Rate | 9.00% | ||||
Minimum [Member] | |||||
Schedules Of Cost Method Investments [Line Items] | |||||
Investments Interest Rate | 5.00% |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Within 1 year | $ 64,964,005 | |
2 years | 113,309,312 | |
3 years | 0 | |
4 years | 0 | |
5 years | 0 | |
Thereafter | 0 | |
Short-term investment | $ 178,273,317 | $ 187,944,184 |
GUARANTEE PAID ON BEHALF OF G_3
GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET (Guarantee service of customers) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 |
Guarantee paid on behalf of guarantee service customers | $ 2,954,188 | $ 1,560,615 | ||
Less: Allowance for doubtful accounts | (2,846,715) | 0 | $ 0 | $ 0 |
Guarantee paid on behalf of guarantee service customers, net | $ 107,473 | $ 1,560,615 |
GUARANTEE PAID ON BEHALF OF G_4
GUARANTEE PAID ON BEHALF OF GUARANTEE SERVICE CUSTOMERS, NET (Allowance for doubtful accounts) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Balance at beginning of year | $ 0 | $ 0 | $ 0 |
Provision for the year | 2,896,532 | 0 | 0 |
Foreign exchange adjustment | (49,817) | 0 | 0 |
Balance at end of year | $ 2,846,715 | $ 0 | $ 0 |
NET INVESTMENT IN DIRECT FINA_3
NET INVESTMENT IN DIRECT FINANCING LEASES (Narrative) (Details) | 12 Months Ended | |||
Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Financing Receivable, Recorded Investment, 90 Days Past Due and Still Accruing | $ 1,324,248 | |||
Debt Instrument, Collateral Amount | $ 3,746,653 | ¥ 24,799,285 | ||
Maximum [Member] | ||||
Lessee, Finance Lease, Term of Contract | 5 years | 5 years | ||
Finance Lease Interest Expense Percentage | 13.30% | |||
Minimum [Member] | ||||
Lessee, Finance Lease, Term of Contract | 1 year | 1 year | ||
Finance Lease Interest Expense Percentage | 4.30% | |||
Property Lease Guarantee [Member] | ||||
Deposits | $ 977,691 | ¥ 6,471,383 | $ 0 | $ 0 |
NET INVESTMENT IN DIRECT FINA_4
NET INVESTMENT IN DIRECT FINANCING LEASES (Summary of the Components of Net Investment in Direct Financing Leases) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Total minimum lease payments to be received | $ 83,536,203 | $ 86,731,625 |
Less: Amounts representing estimated executory costs | 0 | 0 |
Minimum lease payments receivable | 83,536,203 | 86,731,625 |
Less: unearned income, representing interest | (7,947,361) | (9,140,852) |
Present value of minimum lease receivable | 75,588,842 | 77,590,773 |
Less: Allowance for uncollectible receivables | (3,943,125) | (867,316) |
Net investment in direct financing leases | $ 71,645,717 | $ 76,723,457 |
NET INVESTMENT IN DIRECT FINA_5
NET INVESTMENT IN DIRECT FINANCING LEASES (Schedule of Future Minimum Lease Receipts) (Details) | Jun. 30, 2018USD ($) |
Within 1 year | $ 37,545,218 |
2 years | 25,560,390 |
3 years | 17,974,396 |
4 years | 2,456,199 |
5 years | 0 |
Total minimum lease receipts | $ 83,536,203 |
NET INVESTMENT IN DIRECT FINA_6
NET INVESTMENT IN DIRECT FINANCING LEASES (Schedule of Allowance for Uncollectible Lease Payments Receivables) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Allowance for uncollectible receivables at the beginning of year | $ 867,316 | $ 858,362 | $ 302,401 |
Provision for lease payment receivables - specific | 3,194,090 | 0 | 0 |
(Reversal of provision) Provision - general | (85,570) | 27,332 | 597,444 |
Effect of foreign currency translation | (32,711) | (18,378) | (41,483) |
Allowance for uncollectible receivables at the end of year | 3,943,125 | 867,316 | $ 858,362 |
Allowance for uncollectible receivables relating to: | |||
Individually evaluated for impairment | 3,139,155 | 0 | |
Collectively evaluated for impairment | 803,970 | 867,316 | |
Minimum lease payments receivable | |||
Individually evaluated for impairment | 3,139,155 | 0 | |
Collectively evaluated for impairment | 80,397,048 | 86,731,625 | |
Ending balance | $ 83,536,203 | $ 86,731,625 |
NET INVESTMENT IN DIRECT FINA_7
NET INVESTMENT IN DIRECT FINANCING LEASES (Summary of Risk Classification of Direct Financing Lease Receivables) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Total | $ 83,536,203 | $ 86,731,625 |
Normal [Member] | ||
Total | 80,397,048 | 86,731,625 |
Abnormal [Member] | ||
Total | $ 3,139,155 | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Less: accumulated depreciation | $ (1,610,114) | $ (1,192,573) | |
Property and equipment, net | 221,200 | 594,148 | |
Depreciation | 395,814 | 320,842 | $ 411,635 |
Leasehold improvements [Member] | |||
Property, Plant and Equipment, Gross | 478,752 | 467,564 | |
Vehicles [Member] | |||
Property, Plant and Equipment, Gross | 1,138,974 | 1,112,359 | |
Office equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 176,285 | 172,166 | |
Salvage value | 3.00% | ||
Electric equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 37,303 | $ 34,632 | |
Salvage value | 3.00% | ||
Useful life (years) | 3 years | ||
Maximum [Member] | |||
Salvage value | 5.00% | ||
Maximum [Member] | Leasehold improvements [Member] | |||
Salvage value | 3.00% | ||
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] | |||
Salvage value | 0.00% | ||
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, 2018 | Jun. 30, 2017 |
Deposits for other loans (Note 10) | $ 604,748 | $ 590,616 |
Prepaid insurance | 0 | 166,250 |
Advance payment to third party companies | 41,921 | 52,517 |
Other receivables | 7,910 | 6,601 |
Other Assets | $ 654,579 | $ 815,984 |
LOANS FOR CAPITAL LEASE BUSIN_3
LOANS FOR CAPITAL LEASE BUSINESS (Narrative) (Details) | Apr. 03, 2015USD ($) | Apr. 03, 2015CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2016CNY (¥) | Jun. 30, 2018CNY (¥) | Jun. 30, 2017CNY (¥) |
Loans Payable to Bank | $ 13,696,574 | $ 28,281,541 | ||||||
Debt Instrument, Collateral Amount | 3,746,653 | ¥ 24,799,285 | ||||||
Other Loans Payable | 4,774,510 | 9,509,597 | ||||||
Deposit Assets | 604,748 | 590,616 | ||||||
Notes Payable, Other Payables [Member] | ||||||||
Interest Expense, Debt | $ 449,663 | 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 | $ 3,746,653 | ¥ 24,799,285 | ||||||
Other Loans Payable | 4,774,510 | |||||||
Deposit Assets | 604,748 | ¥ 4,002,855 | ||||||
Bank Loan [Member] | ||||||||
Interest Expense, Debt | $ 1,062,956 | 1,684,075 | $ 524,409 | |||||
Shuguang Project Bank Loan [Member] | Jinshang Leasing [Member] | ||||||||
Proceeds from Bank Debt | $ 45,300,000 | ¥ 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 | $ 4,500,000 | 4,400,000 | ¥ 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 | $ 517,665 | $ 505,570 | ¥ 3,426,450 | |||||
Debt Instrument, Maturity Date, Description | February 12, 2020 |
LOANS FOR CAPITAL LEASE BUSIN_4
LOANS FOR CAPITAL LEASE BUSINESS (Details) | Jun. 30, 2018USD ($) |
Bank Loan [Member] | |
Within 1 year | $ 13,345,068 |
Between 1 to 2 years | 351,506 |
Between 2 to 3 years | 0 |
Between 3 to 4 years | 0 |
Between 4 to 5 years | 0 |
Beyond 5 years | 0 |
Long-term Debt | 13,696,574 |
Other loans [Member] | |
Within 1 year | 4,382,920 |
Between 1 to 2 years | 391,590 |
Between 2 to 3 years | 0 |
Between 3 to 4 years | 0 |
Between 4 to 5 years | 0 |
Beyond 5 years | 0 |
Long-term Debt | $ 4,774,510 |
UNEARNED INCOME FROM FINANCIA_2
UNEARNED INCOME FROM FINANCIAL GUARANTEE SERVICES (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred Revenue | $ 88,824 | $ 538,215 |
OTHER LIABILITIES (Details)
OTHER LIABILITIES (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Other tax payable | $ 1,034,048 | $ 771,293 |
Accrued legal and professional fees | 415,780 | 3,861 |
Deposits received from guarantee service customers | 60,432 | 59,019 |
Accrued payroll | 50,701 | 45,356 |
Other payables | 1,858 | 14,040 |
Other Liabilities | $ 1,562,819 | $ 893,569 |
SHARE-BASED COMPENSATION (Sched
SHARE-BASED COMPENSATION (Schedule of Stock Award Activity) (Details) - $ / shares | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2018 | |
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 | 0 | |
Exercisable | 0 | |||
Vested and expected to vest | 0 | |||
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 | $ 0 | |
Exercisable | $ 0 | |||
Vested and expected to vest | $ 0 | |||
Weighted Average Remaining Contractual Term In Years | ||||
Outstanding | 0 years | 2 years 5 months 1 day | 0 years | |
Granted | 3 years | |||
Vested and expected to vest | 0 years |
SHARE-BASED COMPENSATION (Sch_2
SHARE-BASED COMPENSATION (Schedule of Weighted Average Assumptions Used to Value Options) (Details) | 12 Months Ended |
Jun. 30, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 51.50% |
Risk-free interest rates | 1.77% |
Expected terms | 5 years |
Dividend yields | 0.00% |
Sub-Optimal behavior multiple | $ 2.80 |
Minimum [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, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
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 | |
Share-based Compensation | $ 0 | $ (1,465,680) | $ 1,889,733 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 80,000 | 0 | |
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 | Jun. 30, 2018 | 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 | 19,837,642 | 21,526,747 | |||
Common Stock, Shares, Outstanding | 19,837,642 | 19,837,642 | 21,526,747 | |||
Richard Xu [Member] | ||||||
Class of Stock [Line Items] | ||||||
Ordinary shares repurchased, shares | 204,005 | |||||
Ordinary shares repurchased, amount | $ 204 | |||||
Brad Reifler [Member] | ||||||
Class of Stock [Line Items] | ||||||
Ordinary shares repurchased, shares | 5,100 | |||||
Ordinary shares repurchased, amount | $ 60,180 | |||||
Bluesky LLC [Member] | ||||||
Class of Stock [Line Items] | ||||||
Ordinary shares repurchased, shares | 1,480,000 | 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, 2018 | |
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, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Retirement Benefits [Abstract] | |||
Employee benefit contributions | $ 118,259 | $ 111,493 | $ 107,970 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Net income attributable to the common shareholders | $ 10,499,876 | $ 20,349,791 | $ 12,117,397 |
Basic weighted-average common shares outstanding | 19,837,642 | 19,926,510 | 20,012,356 |
Effect of dilutive securities | 0 | 155,579 | 0 |
Diluted weighted-average common shares outstanding | 19,837,642 | 20,082,089 | 20,012,356 |
Earnings per share - Basic | $ 0.53 | $ 1.02 | $ 0.61 |
Earnings per share - Diluted | $ 0.53 | $ 1.01 | $ 0.61 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | $ 76,411,203 | $ 65,800,730 | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | 25.00% |
Deferred Tax Assets, Net | $ 1,089,667 | $ 327,137 |
INCOME TAXES (Schedule of Incom
INCOME TAXES (Schedule of Income Tax Payable) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Income tax payable | $ 2,435,118 | $ 2,772,631 |
Dongsheng Guarantee [Member] | ||
Income tax payable | 2,411,031 | 2,517,538 |
Jinshang Leasing [Member] | ||
Income tax payable | $ 24,087 | $ 255,093 |
INCOME TAXES (Schedule Of Compo
INCOME TAXES (Schedule Of Components Of Income Tax Expense Benefit) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Current income tax expense | $ 507,154 | $ 1,581,470 | $ 1,387,373 |
Deferred tax expense (benefit) | (1,546,049) | 370,019 | (622,928) |
Total (benefit) provision for income taxes | $ (1,038,895) | $ 1,951,489 | $ 764,445 |
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, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
PRC statutory tax | 25.00% | 25.00% | 25.00% |
Effect of non-deductible expenses | 3.40% | 0.00% | 0.00% |
Effect of non-taxable income | (39.90%) | (15.40%) | (28.50%) |
Others | 0.50% | (0.80%) | 9.70% |
Effective tax rate | (11.00%) | 8.80% | 6.20% |
INCOME TAXES (Schedule of Defer
INCOME TAXES (Schedule of Deferred Tax Assets and Liabilities) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Deferred tax assets | ||
Provision for direct financing lease | $ 985,781 | $ 216,829 |
Direct financing lease income | 0 | 110,308 |
Specific allowance on guarantee | 550,495 | 0 |
Total deferred tax assets | 1,536,276 | 327,137 |
Less: Valuation allowance | 0 | 0 |
Less: Net off with deferred tax liabilities for financial reporting purposes | (446,609) | 0 |
Net total deferred tax assets | 1,089,667 | 327,137 |
Deferred tax liabilities | ||
Guarantee paid on behalf of guarantee service customers loss | 26,868 | 390,154 |
Commissions and fees on financial guarantee services | 283,608 | 356,730 |
Direct financing lease income | 136,133 | 0 |
Total deferred tax liabilities | 446,609 | 746,884 |
Less: Net off with deferred tax assets for financial reporting purposes | (446,609) | 0 |
Net total deferred tax liabilities | $ 0 | $ 746,884 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Narrative) (Details) - Bluesky LLC [Member] - USD ($) | 1 Months Ended | 12 Months Ended | |
Jun. 28, 2016 | Jun. 30, 2016 | Dec. 28, 2015 | |
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% |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Schedule of Related Party Balances) (Details) - USD ($) | Jun. 30, 2018 | Jun. 30, 2017 |
Related Party Transaction [Line Items] | ||
Due to related party | $ 464,000 | $ 464,000 |
Bluesky LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 464,000 | $ 464,000 |
RELATED PARTY TRANSACTIONS AN_5
RELATED PARTY TRANSACTIONS AND BALANCES (Schedule of Related Party Transactions) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Convertible debt | $ 0 | $ 0 | $ 8,500,000 |
Bluesky LLC [Member] | |||
Related Party Transaction [Line Items] | |||
Share repurchase | 0 | 0 | 17,464,000 |
Convertible debt | $ 0 | $ 0 | $ 8,500,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2014USD ($) | Oct. 31, 2014CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018CNY (¥) | |
Guarantor Obligations [Line Items] | |||||
Loss Contingency, Damages Sought, Value | $ 2,200,000 | ¥ 14.8 | $ 639,104 | ||
Litigation Settlement, Expense | $ 200,000 | ¥ 1.5 | |||
Finance Lease, Principal Payments | 70,100,000 | ¥ 464 | |||
Third Party [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Finance Lease, Principal Payments | 63,500,000 | 420 | |||
Jinshang Leasings [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Finance Lease, Principal Payments | 6,600,000 | ¥ 44 | |||
Guarantor Obligations, Current Carrying Value | $ 69,800,000 | ¥ 462 | |||
Minimum [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Guarantee expiration term | 6 months | 6 months | |||
Maximum [Member] | |||||
Guarantor Obligations [Line Items] | |||||
Guarantee expiration term | 12 months | 12 months |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Schedule of Contractual Obligations) (Details) | Jun. 30, 2018USD ($) |
2,019 | $ 154,649 |
2,020 | 154,649 |
2,021 | 111,455 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 420,753 |
SUBSEQUENT EVENTS (Narrative) (
SUBSEQUENT EVENTS (Narrative) (Details) ¥ in Millions, $ in Millions | 1 Months Ended | ||||
Oct. 30, 2018USD ($) | Oct. 30, 2018CNY (¥) | Oct. 26, 2018USD ($) | Aug. 28, 2018USD ($) | Aug. 28, 2018CNY (¥) | |
Business Acquisition, Percentage of Voting Interests Acquired | 30.00% | 30.00% | |||
Scenario, Forecast [Member] | |||||
Payments to Acquire Businesses, Gross | $ 150 | ||||
Hui Yue Finance Leasing Ningbo Co Ltd [Member] | Scenario, Forecast [Member] | Restatement Adjustment [Member] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 15.00% | ||||
Payments to Acquire Businesses, Gross | $ 3 | ¥ 20 | |||
Hui Yue Finance Leasing Ningbo Co Ltd [Member] | Scenario, Forecast [Member] | Previously Reported [Member] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 30.00% | ||||
Subsequent Event [Member] | |||||
Payments to Acquire Businesses, Gross | $ 45.3 | ¥ 300 |