Document and Entity Information
Document and Entity Information | 12 Months Ended |
Jun. 30, 2019shares | |
Entity Registrant Name | Dogness (International) Corp |
Entity Central Index Key | 0001707303 |
Document Type | 20-F |
Document Period End Date | Jun. 30, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --06-30 |
Entity a Well-known Seasoned Issuer | No |
Entity a Voluntary Filer | No |
Entity's Reporting Status Current | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2019 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Common Class A [Member] | |
Entity Common Stock, Shares Outstanding | 16,844,631 |
Common Class B [Member] | |
Entity Common Stock, Shares Outstanding | 9,069,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
CURRENT ASSETS | ||
Cash | $ 2,550,152 | $ 7,085,235 |
Short-term investments | 11,073,200 | 28,233,035 |
Accounts receivable, net | 5,164,380 | 5,641,501 |
Accounts receivable from third-party customers, net | 244,764 | |
Inventories, net | 5,362,731 | 4,153,583 |
Prepayments and other current assets | 1,527,397 | 1,231,298 |
Total current assets | 25,922,624 | 46,344,652 |
Property, plant and equipment, net | 35,516,368 | 20,950,685 |
Intangible assets, net | 2,226,798 | 2,390,571 |
Long-term prepayments for land lease | 4,107,550 | |
Long-term investments in equity investees | 995,131 | |
Deferred tax assets | 255,456 | 22,297 |
TOTAL ASSETS | 69,023,927 | 69,708,205 |
CURRENT LIABILITIES | ||
Short-term bank loans | 2,914,000 | 4,835,200 |
Accounts payable | 543,158 | 351,375 |
Advance from customers | 179,306 | 240,216 |
Taxes payable | 2,909,097 | 2,421,303 |
Accrued liabilities and other payable | 1,526,862 | 1,120,579 |
Total current liabilities | 8,072,423 | 8,968,673 |
Commitments | ||
EQUITY | ||
Additional paid-in capital | 52,827,145 | 52,144,891 |
Statutory reserve | 191,716 | 164,367 |
Retained earnings | 11,657,630 | 10,263,198 |
Accumulated other comprehensive loss | (3,894,300) | (1,884,751) |
Total stockholders' equity | 60,834,018 | 60,739,532 |
Noncontrolling interest | 117,486 | |
Total equity of Dogness (International) Corporation | 60,951,504 | 60,739,532 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 69,023,927 | 69,708,205 |
Common Class A [Member] | ||
EQUITY | ||
Common stock, $0.002 par value, 100,0000,000 shares authorized, 25,913,631 issued and outstanding | 33,689 | 33,689 |
Common Class B [Member] | ||
EQUITY | ||
Common stock, $0.002 par value, 100,0000,000 shares authorized, 25,913,631 issued and outstanding | $ 18,138 | $ 18,138 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Jun. 30, 2018 | Apr. 26, 2018 | Jul. 11, 2017 |
Statement of Financial Position [Abstract] | ||||
Common stock, par or stated value per share | $ 0.002 | $ 0.002 | $ 0.002 | $ 0.002 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 15,000,000 |
Common stock, shares issued | 25,913,631 | 25,913,631 | 15,000,000 | |
Common stock, shares outstanding | 25,913,631 | 25,913,631 | 15,000,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | |||
Revenues | $ 25,887,948 | $ 30,135,295 | $ 21,172,091 |
Revenues - related parties | 328,567 | ||
Total Revenues | 26,216,515 | 30,135,295 | 21,172,091 |
Cost of revenues | (16,786,510) | (18,000,708) | (12,837,219) |
Gross Profit | 9,430,005 | 12,134,587 | 8,334,872 |
Operating expenses: | |||
Selling expenses | 2,101,403 | 1,654,629 | 789,444 |
General and administrative expenses | 6,015,901 | 3,958,355 | 1,527,563 |
Research and development expenses | 673,131 | 580,379 | 208,447 |
Total operating expenses | 8,790,435 | 6,193,363 | 2,525,454 |
Income from operations | 639,570 | 5,941,224 | 5,809,418 |
Other income (expenses): | |||
Interest income (expense), net | 616,878 | (23,961) | (332,249) |
Foreign exchange transaction gain (loss) | 503,528 | (381,773) | 320,566 |
Other income (expenses), net | 23,498 | (6,410) | 91,226 |
Total other income (expense) | 1,143,904 | (412,144) | 79,543 |
Income before income taxes | 1,783,474 | 5,529,080 | 5,888,961 |
Provision for income taxes | 380,296 | 925,372 | 943,197 |
Net income | 1,403,178 | 4,603,708 | 4,945,764 |
Less: net loss attributable to noncontrolling interest | (18,603) | ||
Net income attributable to the Company | 1,421,781 | 4,603,708 | 4,945,764 |
Other comprehensive income(loss): | |||
Foreign currency translation gain (loss) | (2,010,170) | (1,762,729) | 142,519 |
Comprehensive income (loss) | (606,992) | 2,840,979 | 5,088,283 |
Less: comprehensive loss attributable to noncontrolling interest | (19,224) | ||
Comprehensive income (loss) attributable to the Company | $ (587,768) | $ 2,840,979 | $ 5,088,283 |
Earnings Per share | |||
Basic | $ 0.05 | $ 0.22 | $ 0.33 |
Diluted | $ 0.05 | $ 0.22 | $ 0.33 |
Weighted Average Shares Outstanding | |||
Basic | 25,913,631 | 20,800,670 | 15,000,000 |
Diluted | 25,941,606 | 20,809,950 | 15,000,000 |
Dividends declared per share | $ 0 | $ 0 | $ 0.18 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid in Capital [Member] | Statutory Reserves [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Non-controlling Interest [Member] | Total |
Balance at Jun. 30, 2016 | $ 30,000 | $ 1,625,306 | $ 21,817 | $ 3,671,085 | $ (264,541) | $ 5,083,667 | |
Balance, shares at Jun. 30, 2016 | 15,000,000 | ||||||
Net income (loss) for the year | 4,945,764 | 4,945,764 | |||||
Cash dividend paid | (2,725,883) | (2,725,883) | |||||
Dividend declared | (88,926) | (88,926) | |||||
Statutory reserve | 45,334 | (45,334) | |||||
Foreign currency translation loss | 142,519 | 142,519 | |||||
Proceeds from initial public offering | |||||||
Options granted for services | 0 | ||||||
Capital contribution made by noncontrolling shareholders | |||||||
Balance at Jun. 30, 2017 | $ 30,000 | 1,625,306 | 67,151 | 5,756,706 | (122,022) | 7,357,141 | |
Balance, shares at Jun. 30, 2017 | 15,000,000 | ||||||
Net income (loss) for the year | 4,603,708 | 4,603,708 | |||||
Cash dividend paid | |||||||
Statutory reserve | 97,216 | (97,216) | |||||
Foreign currency translation loss | (1,762,729) | (1,762,729) | |||||
Proceeds from initial public offering | $ 21,827 | 50,178,458 | 50,200,285 | ||||
Proceeds from initial public offering, shares | 10,913,631 | ||||||
Options granted for services | 341,127 | 341,127 | |||||
Capital contribution made by noncontrolling shareholders | |||||||
Balance at Jun. 30, 2018 | $ 51,827 | 52,144,891 | 164,367 | 10,263,198 | (1,884,751) | 60,739,532 | |
Balance, shares at Jun. 30, 2018 | 25,913,631 | ||||||
Net income (loss) for the year | 1,421,781 | (18,603) | 1,403,178 | ||||
Cash dividend paid | |||||||
Statutory reserve | 27,349 | (27,349) | |||||
Foreign currency translation loss | (2,009,549) | (621) | (2,010,170) | ||||
Proceeds from initial public offering | |||||||
Options granted for services | 682,254 | 682,254 | |||||
Capital contribution made by noncontrolling shareholders | 136,710 | 136,710 | |||||
Balance at Jun. 30, 2019 | $ 51,827 | $ 52,827,145 | $ 191,716 | $ 11,657,630 | $ (3,894,300) | $ 117,486 | $ 60,951,504 |
Balance, shares at Jun. 30, 2019 | 25,913,631 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 1,403,178 | $ 4,603,708 | $ 4,945,764 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 1,466,522 | 1,219,892 | 830,328 |
Loss on disposition of fixed assets | 5,053 | ||
Share-based compensation for services | 682,254 | 341,127 | 0 |
Change in inventory reserve | (4,863) | (14,106) | (400,957) |
Change in bad debt allowance | 90,077 | (5,356) | 43,987 |
Deferred tax expenses (benefit) | (209,015) | (12,747) | 53,398 |
Unrealized foreign exchange loss | (87,893) | (103,922) | (33,104) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 55,189 | (1,462,024) | (743,349) |
Inventories | (1,356,110) | (1,235,858) | (434,413) |
Prepayments and other current assets | (4,475,109) | (805,370) | (93,568) |
Accounts payables | 205,428 | (317,716) | 57,359 |
Advance from customers | (52,719) | (198,827) | 353,134 |
Taxes payable | 577,877 | 753,832 | 871,307 |
Accrued expenses and other liabilities | 436,233 | 751,752 | 53,052 |
Net cash (used in) provided by operating activities | (1,268,951) | 3,514,385 | 5,507,991 |
Cash flows from investing activities: | |||
Purchase of property, plant and equipment | (3,157,281) | (11,030,538) | (3,620,512) |
Capital expenditures on construction-in-progress | (13,572,260) | (2,413,172) | |
Purchase of intangible assets- Land use rights | (2,079,731) | ||
Long-term investments in equity investees | (1,143,707) | ||
Proceeds upon maturity (purchase) of short-term investments | 16,250,610 | (28,737,530) | |
Net cash used in investing activities | (1,622,638) | (44,260,971) | (3,620,512) |
Cash flows from financing activities: | |||
Cash dividend paid | (2,725,883) | ||
Net proceeds from initial public offering | 50,200,285 | ||
Capital contribution made by noncontrolling shareholders | 136,710 | ||
Proceeds from short-term bank loans | 2,932,000 | 4,921,600 | 5,842,759 |
Repayment of short-term bank loans | (4,691,200) | (6,121,240) | (5,872,120) |
Proceeds from (repayment of) related party loans | (25,629) | (1,387,864) | 745,579 |
Net cash (used in) provided by financing activities | (1,648,119) | 47,612,781 | (2,009,665) |
Effect of exchange rate changes on cash | 4,625 | (1,285,556) | 242,547 |
Net (decrease) increase in cash | (4,535,083) | 5,580,639 | 120,361 |
Cash, beginning of year | 7,085,235 | 1,504,596 | 1,384,235 |
Cash, end of year | 2,550,152 | 7,085,235 | 1,504,596 |
Supplemental disclosure information: | |||
Cash paid for income tax | 74,284 | 34,393 | |
Cash paid for interest | $ 209,849 | $ 313,301 | 357,326 |
Supplemental non-cash activity: | |||
Dividend declared and unpaid | $ 88,926 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Dogness (International) Corporation (“Dogness” or the “Company”), limited liability company established under the laws of the British Virgin Islands (“BVI”) on July 11, 2016 as a holding company. The Company, through its subsidiaries, is primarily engaged in the design, manufacturing and sales of various types of pet leashes, pet collars, pet harnesses and retractable leashes with products being sold all over the world mainly through distributions by large retailers. Mr. Silong Chen, the Chairman of the Board and Chief Executive Officer (“CEO”) Company controlling shareholder (the “ Controlling Shareholder”) the Company by virtue of his ownership of 9,069,000 Class B common shares, which carry three votes per share and, in the aggregate have more than half of the voting power of all common shares. Reorganization A Reorganization of the legal structure was completed January 2017. Reorganization involved incorporation Dogness, a BVI holding company; and Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”), a holding company established under the laws of the People’s Republic of China (“PRC”); and the transfer of Dogness (Hong Kong) Pet Products Co., Ltd. (“HK Dogness”), Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”), and Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”; collectively, the “Transferred Entities”) from the Controlling Shareholder to Dogness and Dongguan Dogness. Prior to the reorganization, the Transferred Entities’ equity interests were 100% controlled by the Controlling Shareholder. On November 2016, the Controlling Shareholder transferred his 100% ownership interest in Dongguan Dongguan Dogness, which owned HK Dogness considered foreign-owned (“WFOE”) PRC. On January 2017, Controlling Shareholder transferred his 100% equity interests HK Dogness HK Jiasheng to Dogness. After the reorganization, Dogness owns equity interests the entities mentioned above. Since the Company and its wholly-owned subsidiaries are effectively controlled by the same Controlling Shareholder before and after the reorganization, they are considered under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. On December 18, 2017, the Company completed its initial public offering (“IPO”) of 10,913,631 Class A common shares at a public offering price of $5.00 per share. The gross proceeds were approximately $54.6 million before deducting the placement agent’s commissions and other offering expenses, resulting in net proceeds of approximately $50.2 million. In connection with the offering, the Company’s Class A common shares began trading on the NASDAQ Global Market on December 20, 2017 under the symbol “DOGZ.” In January 2018, the Company formed a Delaware limited liability company, Dogness Group LLC (“Dogness Group”), with its operation focusing primarily on pet product sales in the U.S. In February 2018, Dogness Overseas Ltd (“Dogness Overseas”) was established in the British Virgin Islands as a holding company. Dogness Overseas owns all of the interests in Dogness Group. On March 16, 2018 (the “Acquisition Date”), the Company entered into a share purchase agreement to acquire 100% of the equity interests in Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) from its original shareholder, Long Kai (Shenzheng) Industrial Co., Ltd (“Longkai”), for a total cash consideration of approximately RMB 71.0 million ($10.7 million) (the “Acquisition”). After the acquisition, Mejia became the Company’s wholly-owned subsidiary. On July 6, 2018, Dogness Intelligence Technology Co., Ltd. (“Intelligence Guangzhou”) was incorporated under the laws of PRC in Guangzhou City of Guangdong Province in China with a total registered capital of RMB 80 million (approximately $11.8 million). One of the Company’s subsidiaries, Dongguan Jiasheng, owns 58% of Intelligence Guangzhou, with the remaining 42% ownership interest owned by two unrelated entities . Intelligence Guangzhou had immaterial operation since its inception and will be the research and manufacturing facility for the Company’s fast growing intelligent pet products. On February 5, 2019, in order to expand into the Japanese market and expedite the development of new smart pet products, Dogness Japan Co. Ltd. (“Dogness Japan”) was incorporated in Japan. The Company invested $250,000 for 51% ownership interest in Dogness Japan, with the remaining 49% owned by an unrelated individual. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of Dogness, HK Dogness, HK Jiasheng, Dongguan Dogness, Dongguan Jiasheng, Meijia, Dogness Overseas, Intelligence Guangzhou, Dogness Japan and Dogness Group. All inter-company balances and transactions have been eliminated upon consolidation. For the Company’s equity investment which the Company does not have control and is not the primary beneficiary, but has significant influence in the decision-making of the ordinary course of business, the equity method is applied. The Company’s consolidated financial statements reflect the operating results of the following entities: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Dogness (International) Corporation (“Dogness” or the “Company”) July 11, 2016 BVI Parent, 100 % Holding Company Dogness (Hong Kong) Pet Products Co., Ltd. (“HK Dogness”) March 10, 2009 Hong Kong 100 % Trading Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”) July 12, 2007 Hong Kong 100 % Trading Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”) October 26, 2016 Dongguan, China 100 % Holding Company Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”) May 15, 2009 Dongguan, China 100 % Development and manufacturing of pet leash products Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) July 09,2009 Zhangzhou, China 100 % manufacturing of pet leash products Dogness Overseas Ltd (“Dogness Overseas”) February 8, 2018 BVI 100 % Holding Company Dogness Group LLC (“Dogness Group”) January 23, 2018 Delaware, United States 100 % Pet products trading Dogness Intelligence Technology Co., Ltd. (“Intelligence Guangzhou”) July 6, 2018 Guangzhou, China 58 % Research and manufacturing of intelligent pet products Dogness Japan Co. Ltd. (“Dogness Japan”) February 5, 2019 Osaka, Japan 51 % Pet products trading Noncontrolling interests As of June 30, 2019, noncontrolling interests represent 42% and 49% noncontrolling shareholders’ interests in Intelligence Guangzhou and Dogness Japan, respectively. The noncontrolling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the operating results of the Company are presented on the face of the consolidated statements of income and comprehensive income (loss) as an allocation of the total income or loss for the year between noncontrolling interest holders and the shareholders of the Company. Use of Estimates In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. Cash The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. Short-term Investments The Company’s short-term investments consist of wealth management financial products purchased from PRC banks with maturities within one month to twelve months. The banks invest the Company’s fund in certain financial instruments including money market funds, bonds or mutual funds, with rates of return on these investments ranging from 1.75% to 4.60% per annum. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities. The interest earned is recognized in the consolidated statements of income and comprehensive income (loss) over the contractual term of these investments. The Company had short-term investments of $11,073,200 and $28,233,035 as of June 30, 2019 and 2018, respectively. The Company recorded interest income of $536,345, $517,359 and $Nil for the years ended June 30, 2019, 2018 and 2017, respectively. Accounts Receivable, net Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income (loss). Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Allowance for uncollectible balances amounted to $128,106 and $40,012 as of June 30, 2019 and 2018, respectively. Inventories, net Inventories are stated at net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. Prepayment Prepayment primarily consists of advances to suppliers for purchasing of raw materials that have not been received, and prepayment to a landlord for lease of a piece of land in order to build a warehouse in the near future. These advances are interest free, unsecured and short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. Property, plant and Equipment Property, plant and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows: Useful life Buildings 10-50 years Leasehold improvement Lesser of useful life and lease term Machinery equipment 5-10 years Transportation vehicles 5 years Office equipment and furniture 5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income (loss) in other income or expenses. Intangible Assets Intangible assets consist primarily of a customized software system purchased from a third-party vendor, used for accounting and production management and land use rights. Under PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership.” Intangible assets are stated at cost less accumulated amortization. Customized software system are amortized using the straight-line method over the estimated useful economic life of 10 years. Land use rights are amortization using the straight-line method over the estimated useful life of 50 years, which is determined in connection with the term of the land use rights. Long-term Investments in Equity Investees On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”). In accordance with ASC 321, equity securities which the Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either at fair value or using the measurement alternative. Under the measurement alternative, the equity investments are measured at cost, less any impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company. Nanjing Rootaya Intelligence Technology Co., Ltd. (“Nanjing Rootaya”) is an entity incorporated on March 25, 2015 in the PRC and is primarily engaged in development of smart pet products. In July 2018, the Company entered into an equity investment agreement with Nanjing Rootaya to invest RMB 1.25 million ($182,125) for 10% of the ownership interest in Nanjing Rootaya. Before the Company’s equity investment, Nanjing Rootaya was owned by three unrelated shareholders. Dogness Network Technology Co., Ltd (“Dogness Network”) is an entity incorporated on November 17, 2017 in the PRC and is engaged in the development and sales of intelligent smart pet products. In November 2018, the Company entered into an equity investment agreement with Dogness Network to invest RMB 8.0 million ($1,165,600) for 10% of the ownership interest in Dogness Network. Before the Company’s equity investment, Dogness Network was owned by an unrelated shareholder. As of June 30, 2019, the Company made capital contribution of RMB 3.08 million ($448,756). Linsun Smart Technology Co., Ltd (“Linsun”) is an entity incorporated on January 25, 2018 in the PRC and is engaged in development and sales of smart pet products. In November 2018, the Company entered into an equity investment agreement with Linsun to invest RMB 3.0 million ($437,100) for 13% of the ownership interest in Linsun. Before the Company’s equity investment, Linsun was owned by three unrelated shareholders. As of June 30, 2019, the Company made capital contribution of RMB 2.5 million ($364,250). The purpose of entering into these equity investment agreements with Nanjing Rootaya, Dogness Network and Linsun was to establish cooperative business with these investees to jointly develop and distribute the Company’s intelligent smart pet products. The Company accounts for the above mentioned investments using the measurement alternative in accordance with ASC 321. As of June 30, 2019, these investments amounted to $995,131 and are reported as long-term investments in equity investees on the consolidated balance sheets. The Company records the cost method investments at historical cost and subsequently records any dividends received from the net accumulated earnings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reductions in the cost of the investments. Investment in equity investees is evaluated for impairment when facts or circumstances indicate that the fair value of the investment is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There was no impairment for the Company’s equity investments for the year ended June 30, 2019. Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 - inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, short-term investments, accounts receivable, advances to suppliers, prepayments and other current assets, accounts payable, advance from customers, taxes payable, accrued liabilities and other payable and short-term bank loans approximate their fair values because of the short-term nature of these instruments. The Company’s long-term investments are accounted for using the measurement alternative in accordance with ASC 321, which also approximate their recorded values. Long-lived assets impairment The Company reviews long-lived assets, including definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition below are the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of June 30, 2019, 2018 and 2017. Revenue Recognition On July 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a new five five not Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occur with the transfer of title of the Company’s products to the customers. Net sale is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods to the wholesaler and retailers. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. Such incentives do not represent a standalone value and are accounted for as a reduction of revenue in accordance with ASC 606. Prior to the adoption of ASC 606, the Company’s policy was also to account sales incentives, if applicable, as a reduction of revenue in accordance with ASC 605-50. Therefore, there is no change as to how the Company accounts for sales incentives upon its adoption of ASC 606. For the years ended June 30, 2019, 2018 and 2017, the Company did not provide any sales incentives to its customers. Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales and the related costs incurred by the Company are included in cost of goods sold. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration. The Company’s revenue is primarily generated from the sales of pet products, including leashes, accessories, collars, harnesses and intelligent smart pet products, to wholesalers and retailers. Revenue is recognized when the merchandise is delivered, title is transferred and the Company’s performance obligations to fulfill the customer contracts have been satisfied. Revenue is reported net of all value added taxes (“VAT”). The Company does not routinely permit customers to return products and historically, customer returns have been immaterial. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of June 30, 2019 and 2018, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended June 30, 2019, 2018 and 2017 are disclosed in Note 15 of this consolidation financial statements. Research and development costs Research and development expenses include costs directly attributable to the conduct of research and development projects, including the cost of salaries and other employee benefits, testing expenses, consumable equipment and consulting fees. All costs associated with research and development are expensed as incurred. Income Taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. 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. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended June 30, 2019, 2018 and 2017. As of June 30, 2019, the tax years ended December 31, 2013 through December 31, 2018 for the Company’s PRC entities remain open for statutory examination by PRC tax authorities. Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or receivable net of payments in the accompanying consolidated financial statements. Further, when exporting goods, the exporter is entitled to some or all of the refund of the VAT paid or assess. Since a majority of the Company’s products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the Company completes all the required tax filing procedures. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Basic average shares outstanding and diluted average shares outstanding were the same for the years ended June 30, 2017. For the years ended June 30, 2019 and 2018, the effect of potential shares of common stock from the unexercised options was dilutive since the exercise prices for the options were lower than the average market price (See Note 13). Share-Based compensation The Company follows the provisions of ASC 718, “Compensation — Stock Compensation,” which establishes the accounting for employee stock-based awards. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company’s common stock. Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of the operations of HK Dogness , and are determined using RMB, the local currency, as the functional currency. Dogness Japan uses Japanese Yen as the functional currency, while The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive income. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: June 30, 2019 June 30, 2018 June 30, 2017 Year-end spot rate US$1=RMB 6.8657 US$1=JPY 107.5 US$1=RMB 6.6181 US$1=RMB 6.7780 Average rate US$1=RMB 6.8226 US$1=JPY 111.1 US$1=RMB 6.5020 US$1=RMB 6.8118 Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currency. Concentrations and Credit Risk A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. As of June 30, 2019, and 2018, $1,773,713 and $3,348,242 of the Company’s cash and cash equivalents was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. In addition, the Company’s short-term investments deposited with PRC banks are also not insured. As of June 30, 2019, two customers accounted for 25% and 18% of the Company’s total accounts receivable, respectively. As of June 30, 2018, two customers accounted for 16% and 11% of the Company’s total accounts receivable, respectively. As of June 30, 2017, two customers accounted for 30% and 13% of the Company’s total accounts receivable, respectively. For the years ended June 30, 2019, 2018 and 2017, export sales accounted for 42.5%, 50.2% and 67.7% of the Company’s total revenue, respectively. For the year ended June 30, 2019, three customers accounted for 28.1%, 13.5% and 5.6% of the Company’s total revenue, respectively. For the year ended June 30, 201 8, three customers accounted for 24.9%, 14.0% and 7.4% of the Company’s total revenue, respectively. For the year ended June 30, 2017, three customers accounted for 20%, 15% and 13% of the Company’s total revenue, respectively. For the year ended June 30, 2019, 2018 and 2017, no single supplier accounted for more than 10% of the Company’s total raw material purchases. Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation, such as reclassification of negative VAT tax payable as VAT tax recoverable, and segregation of capital expenditure on construction-in-progress out of capital expenditure on property, plant and equipment. These reclassifications had no effect on the reported revenues, net income and cash flows. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. The guidance will be effective in fiscal year 2020, with early adoption permitted, and must be applied using a modified retrospective approach. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the company’s financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 “Target Improvement” and ASU 2018-20 “Narrow-scope Improvements for Lessors.” As an emerging growth company, the Company will adopt this guidance effective July 1, 2019. The Company is evaluating the impact on its consolidated financial statements. In February 2018, the FASB has issued Accounting Standards Update (ASU) No. 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.” The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The |
Liquidity
Liquidity | 12 Months Ended |
Jun. 30, 2019 | |
Liquidity | |
Liquidity | NOTE 3 – LIQUIDITY For the year ended June 30, 2019, the Company’s revenue decreased by approximately $3.9 million or 13%, from approximately $30.1 million in fiscal year 2018 to approximately $26.2 million in fiscal year 2019. The decrease in the Company’s revenue was largely affected by reduced export sales to major customers located in the United States when uncertainties arose from the China-U.S trade dispute, including the increase in the US’ tariff on certain Chinese imports from 10% in September 2018 to 25% since May 2019. As a result, the Company’s total unit sales volume decreased by 24.1% when export sales to customers located in the United States decreased by approximately $4.6 million in fiscal 2019 as compared to fiscal 2018. In addition, the Company’s working capital decreased by approximately $19.5 million or 52% from approximately $37.4 million as of June 30, 2018 to approximately $17.9 million as of June 30, 2019, mainly because of large capital expenditures on the Company’s construction-in-progress projects on the construction of a new manufacturing plant under the Company’s subsidiary Meijia and a new warehouse under the Company’s subsidiary Dongguan Jiasheng (see Note 6 below). As of the date of this annual report, the Company had future minimum capital expenditure commitment on its construction-in-progress projects of approximately $7.3 million within the next twelve months. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. The Company currently plans to fund its operations mainly through cash flow from its operations, remaining cash from its 2017 IPO proceeds, renewal of bank borrowings and equity financing, if necessary, to ensure sufficient working capital. As of June 30, 2019, the Company had cash of approximately $2.6 million, the Company also had short-term investments of approximately $11.1 million because the Company invested remaining IPO proceeds to purchase interest-bearing wealth management financial products from the banks and such short-term investments have maturities ranging from one to three months. These short-term investments are highly liquid and can be used as working capital when needed. In addition, the Company also had outstanding accounts receivable of approximately $5.4 million, of which approximately $3.9 million or 76% has been subsequently collected back during July to September 2019, and become available for use as working capital. As of June 30, 2019, the Company had outstanding bank loans of approximately $2.9 million from a PRC bank, and an unused line of credit of RMB 16 million ($2.3 million) with another bank that is available for withdrawal on an as-needed basis. Management expects that it would be able to renew all of its existing bank loans upon their maturity based on past experience and the Company’s good credit history. Subsequently, on August 9, 2019, the Company entered into a loan agreement with Industrial and Commercial Bank of China (“ICBC”) to borrow RMB 12 million ($1.8 million) as working capital for one year. On September 5, 2019 and September 10, 2019, the Company further entered into two loan agreements with Bank of Communications to borrow approximately RMB 18 million ($2.6 million) as working capital for one year (see Note 16). Although the Company’s revenue decreased in fiscal year 2019 due to decreased export sales to the United States affected by increased tariffs and trade war between China and the United States, the Company has adjusted its sales strategy to increase its sales and marketing efforts to target China’s domestic market, European, Australia and other countries. In addition, Company’s US subsidiary has entered into agreements with several large retail chains in the United States, Canada and Australia for the distribution of the Company’s intelligent pet products. The Company expects the revenues to be generated from these markets will partially mitigate sales decreases in the United States. Management also sees strong opportunities in the newly developed intelligent pet products, which may further increase the Company’s revenue and net income to strengthen its cash position for the next 12 months. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date of this report. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Accounts Receivable, Net | NOTE 4 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: As of June 30, 2019 2018 Accounts receivable from third-party customers $ 5,292,486 $ 5,681,513 Less: allowance for doubtful accounts (128,106 ) (40,012 ) Total accounts receivable from third-party customers, net 5,164,380 5,641,501 Add: accounts receivable - related parties 244,764 - Total accounts receivable, net $ 5,409,144 $ 5,641,501 For the years ended June 30, 2019, 2018 and 2017, the Company recorded a bad debt provision of $90,077, a bad debt recovery of $5,356 and a bad debt provision of $43,987, respectively. Allowance for doubtful accounts amounted to $128,106 and $40,012 as of June 30, 2019 and 2018, respectively. Approximately RMB 27 million ($3.9 million) or 76% of the accounts receivable balance as of June 30, 2019 from third-party customers has been collected as of the date of this Report. In connection with the Company’s long-term investments in equity investees as disclosed in Note 2, the Company sold certain intelligence pet products to Linshui and Dogness Network. The outstanding accounts receivable from these related parties amounted to $244,764 as of June 30, 2019, which has been fully collected back as of the date of this Report (see Note 11). |
Inventory, Net
Inventory, Net | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 5 – INVENTORY, NET Inventories consisted of the following: As of June 30, 2019 2018 Raw materials $ 795,047 $ 825,675 Work in process 1,136,582 1,076,749 Finished goods 3,431,102 2,256,171 5,362,731 4,158,595 Less: inventory allowance - (5,012 ) Inventory, net $ 5,362,731 $ 4,153,583 Inventory includes raw materials, work in progress and finished goods. Finished goods include direct material costs, direct labor costs and manufacturing overhead. For the years ended June 30, 2019, 2018 and 2017, the Company recorded an inventory reserve recovery of $4,863, $14,106 and $400,957, respectively. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment stated at cost less accumulated depreciation consisted of the following: As of June 30, 2019 2018 Buildings $ 9,492,699 $ 9,794,094 Machinery and equipment 9,543,080 8,309,138 Office equipment and furniture 676,748 525,886 Automobiles 765,214 622,720 Leasehold improvements 5,126,219 3,985,511 Construction-in-progress (“CIP”) (1) 15,787,348 2,375,461 Total 41,391,308 25,612,810 Less: accumulated depreciation (5,874,940 ) (4,662,125 ) Property, plant and equipment, net $ 35,516,368 $ 20,950,685 Depreciation expense was $1,387,698, $1,179,814 and $809,313 for the years ended June 30, 2019, 2018 and 2017, respectively. In connection with the $2.9 million loan from Bank of Communications of China, Dongguan Branch, the Company pledged fixed assets of approximately $8,426,982 as the collateral to secure the loan (See Note 8). (1) The Company’s CIP primarily consisted of the following: On March 16, 2018, the Company acquired 100% of the equity interests in Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) from its original shareholder, for a total cash consideration of RMB 71.0 million ($10.7 million) (See Note 1). After the acquisition, the Company started building its own facilities and office spaces to expand the production capacity in order to fulfill increased customer orders. Total budgeted capital expenditure on decoration and purchase of equipment and machinery to bring Meijia manufacturing facility into use amounted to RMB 110 million ($16.0 million). As of June 30, 2019, the Company has already spent RMB 80.8 million ($11.8 million) and had future capital expenditure commitment of approximately RMB 29.2 million ($4.2 million) on Meijia plant facilities. Meijia plant has started the test operation in August 2019, and is expected to be ready for production before December 31, 2019 upon passing the final inspection conducted by local government. In addition, the Company’s subsidiary Dongguan Jiasheng is also working on a project to build a warehouse with original budgeted costs of RMB 85 million ($12.4 million). In order to conform to the local government’s building code, the construction plan has been recently modified and the budgeted cost has been reduced to RMB 75 million ($10.9 million). As of June 30, 2019, the Company has already spent RMB 23.2 million ($3.4 million) and had future capital expenditure commitment of approximately RMB 51.8 million ($7.5 million) on the warehouse construction. The warehouse construction is expected to be completed by the end of 2020. As of June 30, 2019, future minimum capital expenditures on the Company’s construction-in-progress projects are estimated as follows: Capital expenditure commitment Capital expenditure commitment Total 2020 $ 4,200,000 $ 6,000,000 $ 10,200,000 2021 - 1,500,000 1,500,000 Total $ 4,200,000 $ 7,500,000 $ 11,700,000 Subsequently, from July 2019 to September 2019, the Company spent additional RMB 30.6 million ($4.4 million) on the above mentioned construction projects (including RMB 21.4 million ($3.1 million) on equipment and machinery purchase for Meijia plant, and RMB 9.2 million ($1.3 million) on the warehouse construction). As a result, the Company’s future capital expenditure commitment on CIP has been lowered down from approximately $11.7 million as of June 30, 2019 to approximately $7.3 million as of the date of this Report. The Company plans to fund these CIP projects through working capital generated from operations, bank borrowings, the proceeds received from the IPO and other potential capital raising activities. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | NOTE 7 – INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following: As of June 30, 2019 2018 Software $ 199,984 $ 207,396 Land use right 2,212,619 2,294,624 Less: accumulated amortization (185,805 ) (111,449 ) Intangible assets, net $ 2,226,798 $ 2,390,571 Amortization expense was $78,824, $40,078 and $21,015 for the years ended June 30, 2019, 2018 and 2017, respectively. In connection with the $2.9 million loan from Bank of Communications of China, Dongguan Branch., the Company pledged intangible assets of $2,212,619 as the collateral to secure the loan (See Note 8) Estimated future amortization expense is as follows: Year ending June 30, Amortization expense 2020 $ 78,340 2021 78,340 2022 78,340 2023 72,881 Thereafter 1,918,897 Total $ 2,226,798 |
Short-Term Bank Loans
Short-Term Bank Loans | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short-Term Bank Loans | NOTE 8 – SHORT-TERM BANK LOANS Short-term loans consisted of the following: As of June 30, 2019 2018 Bank of Communications of China (“BCC”): Effective interest rate at 5.655%, due on July 31, 2018 (1) $ - $ 3,022,000 Effective interest rate at 5.873%, due on August 20, 2019 (2) 2,914,000 - Industrial and Commercial Bank of China (“ICBC”): Effective interest rate at 6.525%, due on January 10, 2019 (3) - 1,813,200 Total $ 2,914,000 $ 4,835,200 (1) In August 2016, Dongguan Jiasheng signed a loan agreement with Bank of Communication of China, Dongguan Branch to borrow RMB 26 million ($3.8 million) as working capital for one year with a due date on July 29, 2017. The loan was repaid in full upon maturity on August 8, 2017. In August 2017, the Company renewed the above loan for another year to July 31, 2018. The Company repaid the loan upon maturity on August 21, 2018. (2) On August 17, 2018, the Company entered into a line of credit agreement with Bank of Communication of China, Dongguan Branch to allow the Company to borrow RMB 30 million ($4.5 million) for one year with a maturity date on August 13, 2019. The Company had drawn down RMB 20 million ($3.0 million) of the loan to purchase raw materials on August 21, 2018. The loan bears a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 1.5625 basis points. The Company pledged the land use right of approximately $2.2 million and buildings of approximately $8.4 million acquired from Meijia as the collateral to secure this loan (see Note 6 and Note 7). In addition, Mr. Silong Chen, the CEO of the Company, provided personal guarantee for the loan. On August 20, 2019, the Company repaid the loan upon maturity and entered into two new loan agreements with BCC to borrow RMB 18 million ($2.6 million) as working capital for one year (See Note 16). (3) On January 22, 2016, Dongguan Jiasheng entered into a loan agreement with ICBC to borrow RMB 12 million ($1.8 million) as working capital for one year with the maturity date on January 20, 2017. The loan bears a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 50 basis points. The loan was renewed in January 2017 for another year, with the new maturity date of January 9, 2018. The loan was further renewed for another year upon maturity, with a new maturity date of January 10, 2019. On October 13, 2018, the Company repaid the loan in full before its maturity and has no plan to further renew the loan. In addition to the above loans borrowed from ICBC, the Company’s principal shareholder, Mr. Silong Chen, pledged his personal assets as the collateral to safeguard a maximum line of credit of $2.3 million that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. In addition, Mr. Silong Chen and his relatives jointly signed a maximum guarantee agreement with ICBC to provide an additional maximum RMB 16 million ($2.3 million) guarantee to any loan that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. The Company has not yet drawn upon this line of credit. Interest expenses for the above-mentioned loans amounted to $209,842, $546,681 and $333,170 for the years ended June 30, 2019, 2018 and 2017, respectively. |
Taxes
Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxes | NOTE 9 – TAXES (a) Corporate Income Taxes (“CIT”) Dogness is incorporated in the BVI as an offshore holding company and is not subject to tax on income or capital gain under the laws of BVI. Under Hong Kong tax laws, subsidiaries in Hong Kong are subject to statutory income tax rate at 16.5% if revenue is generated in Hong Kong and there are no withholding taxes in Hong Kong on remittance of dividends. Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. In October 2015, Dongguan Jiasheng, the Company’s main operating subsidiary in PRC, was approved as HNTEs and is entitled to a reduced income tax rate of 15% for three years. On November 28, 2018, Dongguan Jiasheng successfully renewed the High-technology certificate for another three years. The certificate is valid for another three years and is subject to further renewal. EIT is typically governed by the local tax authority in China. Each local tax authority at times may grant tax holidays to local enterprises as a way to encourage entrepreneurship and stimulate local economy. The corporate income taxes for the fiscal year 2019, 2018 and 2017 were reported at a reduced rate of 15% as a result of Dongguan Jiasheng being approved as HNTE. The impact of the tax holidays noted above decreased foreign taxes by $3,003, $545,805 and $552,132 for the years ended June 30, 2019, 2018 and 2017, respectively. The benefit of the tax holidays on net income per share (basic and diluted) was $0.00, $0.03 and $0.04 for the years ended June 30, 2019, 2018 and 2017, respectively. As of June 30, 2019, the tax years ended December 31, 2013 through December 31, 2018 for the Company’s PRC entities remain open for statutory examination by PRC tax authorities. The following table reconciles the statutory rate to the Company’s effective tax rate: For the years ended June 30, 2019 2018 2017 % % % Hong Kong Statutory income tax rate 16.5 16.5 16.5 Income not generated in Hong Kong (8.9 ) (15.3 ) (15.4 ) China statutory income tax rate 25.0 25.0 25.0 Effect of PRC preferential tax rate and tax holidays (10.0 ) (8.3 ) (9.3 ) Non-deductible permanent difference 0.7 (1.8 ) (1.6 ) Research and development tax credit (2.0 ) (0.9 ) (0.1 ) Effective tax rate 21.3 15.2 15.1 The provision for income tax consists of the following: For the years ended June 30, 2019 2018 2017 Current income tax provision $ 614,622 $ 938,119 $ 889,799 Deferred income tax provision (benefit) (234,326 ) (12,747 ) 53,398 Total income tax expense $ 380,296 $ 925,372 $ 943,197 The components of deferred tax assets and deferred tax liability as of June 30, 2019 and 2018 consist of the following: June 30, 2019 June 30, 2018 Deferred tax assets: Net operating losses $ 234,319 $ 24,717 Inventory and accounts receivable reserves 21,137 - $ 255,456 $ 24,717 Deferred tax liability Inventory and accounts receivable reserves - (2,420 ) Deferred tax assets (liability) - net $ 255,456 $ 22,297 (b) Taxes Payable The Company’s taxes payable consists of the following: June 30, 2019 June 30, 2018 Corporate income tax payable 2,907,079 2,416,098 Other tax payable 2,018 5,205 Total taxes payable $ 2,909,097 $ 2,421,303 As of June 30, 2019 and 2018, the Company had accrued tax liabilities of approximately $2.9 million and $2.4 million, respectively, mostly related to the unpaid income tax and business tax in China. According to PRC taxation regulation, if tax has not been fully paid, tax authorities may impose tax and late payment penalties within three years. In practice, since all of the taxes owed are local taxes, the local tax authority is typically more flexible and willing to provide incentives or settlements with local small and medium-size businesses to relieve their burden and to stimulate the local economy. Management has discussed with local tax authorities regarding the outstanding tax payable balance after the Company successfully completed its IPO and is in the process of negotiating a settlement plan agreement. There was no interest and penalty accrued as of June 30, 2019 becaue the Company has not received any penalty and interest charge notice from local tax authorities. The Company believes it is likely that the Company can reach an agreement with the local tax authority to fully settle its tax liabilities within fiscal 2020 but cannot guarantee such settlement will ultimately occur. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 – COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Company’s subsidiary Dongguan Jiasheng leases manufacturing facilities and administration office spaces under operating leases. These leases of the major manufacturing facilities and office space expire between April 30, 2027 and October 14, 2038. The Company’s subsidiary Dogness Group also leases warehouse which expires on June 20, 2024. Operating lease expense amounted to $640,626, $391,784 and $333,452 for the years ended June 30, 2019, 2018 and 2017, respectively. Future minimum lease payments under non-cancelable operating leases are as follows: Twelve months ending June 30, Lease payments 2020 $ 150,531 2021 75,849 2022 77,660 2023 79,795 2024 83,005 Thereafter 62,425 Total $ 529,265 Contingencies The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on the Company’s consolidated financial position or results of operations or liquidity. Capital Investment Obligation On July 6, 2018, a new entity called Dogness Intelligence Technology Co., Ltd. (“ Intelligence Guangzhou ”), was incorporated under the laws of the People’s Republic of China in Guangzhou City, Guangdong Province, China with a total registered capital of RMB 80 million ($11.8 million). The Company’s subsidiary, Dongguan Jiasheng, is requited to contribute RMB 46.4 million ($6.8 million) as paid-in capital in exchange for 58% ownership interest in Intelligence Guangzhou. As of the date of this report, Dongguang Jiasheng has not made the capital contribution. Pursuant to the article of incorporation, the Company is required to complete the capital contribution before May 22, 2038. In connection with the Company’s long-term investments in equity investees in Dogness Network and Linsun, as disclosed in Note 2 above, the Company is required to invest RMB 8.0 million ($1,165,600) in exchange for 10% ownership interest in Dogness Network, and is required to invest RMB 3.0 million ($437,100) in exchange for 13% ownership interest in Linsun. As of June 30, 2019, the Company already made the cash investment of RMB 3.08 million ($448,756) and RMB 2.5 million ($364,250) to Dogness Network and Linsun, respectively, and is obligated to contribute additional $798,694 in aggregate (including $725,844 to Dogness Network and $72,850 to Linsun) capital investment within the next twelve months from June 30, 2019. Capital Expenditure Commitment on the CIP In connection with the Company’s construction-in-progress projects on Meijia and Dongguan Jiasheng, future minimum capital expenditure commitment on these CIP projects is estimated to be $11.7 million as of June 30, 2019 and approximately $7.3 million as of the date of this Report (see Note 6) . |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11 – RELATED PARTY TRANSACTIONS As of June 30, 2019 and 2018, the balances due from related parties were as follows: As of June 30, Accounts receivable - related parties, net: 2019 2018 -Linsun Smart Technology Co., Ltd (“Linsun”) $ 92,563 $ - -Dogness Network Technology Co., Ltd (“Dogness Network”), 152,201 - $ 244,764 $ - During the year ended June 30, 2019, the Company sold intelligent pet products to related parties Linsun and Dogness Network. Sales of intelligent pet products to Linsun and Dogness Network amounted to $185,126 and During the year ended June 30, 2019, the Company also purchased certain pet product components and parts, such as smart drinking water machines and pet feeding devices, from related party Linsun. Total purchases from Linsun amounted to $850,589 in the fiscal year 2019. In addition, in connection with the Company’s bank borrowings, Mr. Silong Chen, the Chairman of the Board and CEO of the Company, pledged his personal assets as collateral and signed guarantee agreements to provide guarantee to the Company’s short-term bank loans (See Note 8). |
Equity
Equity | 12 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Equity | NOTE 12 – EQUITY Common Shares Dogness was established under the laws of BVI on July 11, 2016. The original authorized number of common shares was 15,000,000 shares with par value of $0.002 each. On April 26, 2017, Shareholders of the Company held a meeting (the “Meeting”) and approved the following resolutions: (i) increase the authorized number of common shares to 100,000,000 shares with par value of $0.002 each, of which 15,000,000 were issued and outstanding; and (ii) reclassify the currently issued and outstanding common shares into two classes, Class A common shares and Class B common shares, which have equal economic rights but unequal voting rights, pursuant to which Class A common shares receive one vote each and Class B common shares receive three votes each. The Meeting approved to reclassify all the shares beneficially owned by Mr. Silong Chen as Class B common shares and all other shares owned by the other shareholders as Class A common shares. As a result, Mr. Silong Chen owns 9,069,000 Class B common shares of par value of $0.002. The rest of shareholders as of the date of the meeting owned an aggregated of 5,931,000 Class A common shares of par value of $0.002 each. Initial Public Offering On December 18, 2017, the Company completed its initial public offering (“IPO”) of 10,913,631 Class A common shares at a public offering price of $5.00 per share. The gross proceeds were approximately $54.6 million before deducting placement agent’s commission and other offering expenses, resulting in net proceeds of approximately $50.2 million. In connection with the offering, the Company’s Class A common shares began trading on the NASDAQ Global Market on December 20, 2017 under the symbol “DOGZ.” As of June 30, 2019 and 2018, the Company had an aggregate of 25,913,631 common shares outstanding, consisting of 16,844,631 Class A and 9,069,000 Class B common shares. Cash Dividends In November 2016, the Company’s Board of Directors approved a resolution to pay a cash dividend of RMB 600,259 ($90,699) to its shareholder at the time of record, out of the retained earnings balance of Dongguan Jiasheng. This dividend was paid in January 2017. In December 2016, the Company’s Board of Directors approved another resolution and paid a cash dividend of RMB 17,000,000 (equivalent to $2,568,700) to its shareholder at the time of record, out of the retained earnings balance of HK Dogness. The Company did not declare a cash dividend during the years ended June 30, 2019 and 2018. Public Offering Warrants In connection with and upon closing of the IPO on December 18, 2017, the Company agreed to issue to the underwriters and to register herein warrants to purchase up to a total of up to 500,000 Class A common shares (equal to 5% of the aggregate number of Class A common shares sold in the IPO). The warrants carry a term of three years, and are exercisable at any time, and from time to time, in whole or in part, commencing 180 days from the closing of the IPO and are exercisable at a price equal to $6.25 per share. Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to its own stock. The warrants were recorded at their fair value on the date of grant as a component of shareholders’ equity. As of June 30, 2019, 500,000 underwriter warrants were issued and outstanding; and none of the warrants has been exercised. Statutory Reserve The Company’s subsidiaries located in mainland China are required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The Company allocated $27,349, $97,216 and $45,334 to statutory reserves during the years ended June 30, 2019, 2018 and 2017 in accordance with PRC GAAP, respectively. The restricted amounts as determined by the PRC statutory laws totaled $191,716, $164,367 and $67,151 as of June 30, 2019, 2018 and 2017, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 13 - EARNINGS PER SHARE For the years ended June 30, 2019 and 2018, the effect of potential shares of common stock from the unexercised options was dilutive since the exercise prices for the options were lower than the average market price. For the years ended June 30, 2019 and 2018, the effect of potential shares of common stock from the warrants was anti-dilutive since the exercise prices were higher than the average market price. As a result, a total of 27,975 and 9,280 unexercised options are dilutive, and were included in the computation of diluted earnings per share for the years ended June 30, 2019 and 2018, respectively. For the year ended June 30, 2017, basic average shares outstanding and diluted average shares outstanding were the same because there were no warrants or options outstanding. The following table presents a reconciliation of basic and diluted net income per share: For the years ended June 30, 2019 2018 2017 Net income attributable to the Company $ 1,421,781 $ 4,603,708 $ 4,945,764 Weighted average number of common shares outstanding - Basic 25,913,631 20,800,670 15,000,000 Dilutive securities -unexercised warrants and options 27,975 9,280 - Weighted average number of common shares outstanding – diluted 25,941,606 20,809,950 15,000,000 Earnings per share - Basic $ 0.05 $ 0.22 $ 0.33 Earnings per share – Diluted $ 0.05 $ 0.22 $ 0.33 |
Options
Options | 12 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Options | NOTE 14 – OPTIONS On November 10, 2017, the Company signed a consulting agreement to engage TJ Capital Management, L.P. (“TJ Capital”) to provide strategic consulting services to the Company in matters relating to investor relations, capital markets and shareholder value creation strategy. As the part of the agreement, TJ Capital was granted stock option to purchase 160,000 shares of the Company’s common stock. The options are exercisable at a purchase price of $1.50 per share with no restriction for sale, among which options 60,000 shares were to vest 7 months after the Company’s IPO date, 50,000 shares were to vest 10 months after the IPO date, and 50,000 shares were to vest 15 months after the IPO date. On May 23, 2019, the Company signed a service termination agreement with TJ Capital to terminate the consulting agreement previously entered on November 10, 2017. As a result, the options granted under the original service agreement were also cancelled. No stock-based compensation expenses were accrued up to the date of the termination of this agreement, because TJ Capital had not provided the services. On May 28, 2017, the Company signed an employment agreement with Dr. Yunhao Chen, the Chief Financial Officer of the Company. As the part of the compensation, the Company agreed to grant Ms. Chen options to purchase up to 120,000 Class A common shares, at an exercise price of $1.50 per share. The grant was effective at the IPO date and the options vest at a rate of 5,000 per month, beginning one month following completion of the IPO. The aggregate fair value of the options granted to Dr. Yunhao Chen, the CFO, was $440,840. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying stock of $5.0; risk free rate of 1.84%; expected term of 2 years; exercise price of the options of $1.50; volatility of 69.5%; and expected future dividends of $Nil. As of June 30, 2019, no options were exercised by the CFO and 90,000 options were vested. On May 28, 2017, the Company signed an employment agreement with Mr. Silong Chen, the Chief Executive Officer of the Company. As the part of the compensation, the Company agrees to grant Mr. Chen options to purchase up to 360,000 Class A common shares, at an exercise price of $1.50 per share. The grant was effective at the IPO date and the options vest at a rate of 10,000 per month, beginning one month following completion of the IPO. The aggregate fair value of the options granted to Mr. Silong Chen was $1,385,500. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying stock of $5.0; risk free rate of 1.94%; expected term of 3 years; exercise price of the options of $1.50; volatility of 74.7%; and expected future dividends of $Nil. As of June 30, 2019, no options were exercised by the CEO and 180,000 options were vested. The Company recorded $682,254 and $341,127 stock-based compensation expense for the years ended June 30, 2019 and 2018, respectively. No stock-based compensation expense was recorded for the years ended June 30, 2017. As of June 30, 2019, the Company had 270,000 outstanding vested stock options with a weighted average remaining term over 1.14 years and 210,000 unvested stock options with a weighted average remaining term over 1.33 years. Unamortized stock-based compensation expense was $802,959 as of June 30, 2019. The following table summarized the Company’s stock option activity: Number of Weighted Average Weighted Average Remaining Life in Years Outstanding, June 30, 2018 640,000 $ 1.50 1.81 Exercisable, June 30, 2018 90,000 $ 1.50 2.14 Granted - $ - - Cancelled 160,000 - - Exercised - - - Outstanding June 30, 2019 480,000 $ 1.50 1.22 Exercisable, June 30, 2019 270,000 $ 1.50 1.14 |
Segment Information and Revenue
Segment Information and Revenue Analysis | 12 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information and Revenue Analysis | NOTE 15 – SEGMENT INFORMATION AND REVENUE ANALYSIS An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment. The management of the Company concludes that it has only one reporting segment. The Company designs and manufactures fashionable and high-quality leashes, collars and harnesses to complement cats’ and dogs’ appearances. The Company’s products have similar economic characteristics with respect to raw materials, vendors, marketing and promotions, customers and methods of distribution. The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, rather than by product types or geographic area; hence the Company has only one reporting segment. Geographic information The summary of our total revenues by geographic market for the years ended June 30, 2019, 2018 and 2017 was as follows: For the year ended June 30, 2019 2018 2017 China $ 15,082,443 $ 14,865,940 $ 6,839,534 United States 5,522,008 10,168,945 9,082,419 Europe 2,510,190 1,994,085 2,618,851 Australia 216,993 223,463 149,635 Canada 950,353 128,320 481,142 Central and South America 231,426 106,098 411,281 Japan and other Asian countries and regions 1,703,102 2,637,444 1,589,229 Total $ 26,216,515 $ 30,135,295 $ 21,172,091 Revenue by product categories The summary of our total revenues by our product categories for the years ended June 30, 2019, 2018 and 2017 was as follows: For the years ended June 30, 2019 2018 2017 Pet leashes $ 6,266,952 $ 7,102,233 $ 5,290,918 Pet collars 6,188,672 10,684,908 7,529,420 Pet harnesses 3,587,128 4,980,771 1,508,426 Retractable dog leashes 1,771,805 2,650,932 1,691,066 Intelligent pet products 2,103,523 59,719 - Gift suspender 4,058,229 3,481,500 2,415,118 Other pet accessories 2,024,742 1,175,232 2,737,143 Climbing hooks 215,464 - - Total $ 26,216,515 $ 30,135,295 $ 21,172,091 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 16 – SUBSEQUENT EVENTS On July 4, 2019, the Company made additional capital contribution of RMB 3 .0 million ($0.4 million) to increase the paid-in capital of Meijia. On July 30, 2019, the Company renegotiated and signed a new Corporate and Executive Service Agreement with TJ Capital to provide strategic consulting services to the Company relating to services such as investor relations, capital markets and shareholder value creation strategy. The consulting service period is for two years, unless sooner terminated by either party or extended by the agreement of both parties. Pursuant to the agreement, as the compensation for the services, TJ Capital will be granted stock options to purchase 160,000 shares of the Company’s Class A common shares. The options are exercisable at a purchase price of $1.50 per share, and the options shall be deemed to be fully paid at a rate of 6,667 options per month, commencing on August 1, 2019. The aggregated fair value of the options granted to TJ Capital was $284,300. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying stock of $2.90; risk free rate of 1.85%; expected term of 2 years; exercise price of the options of $1.50; volatility of 77.0%; and expected future dividends of $Nil. On August 9, 2019, the Company entered into a loan agreement with ICBC to borrow RMB 12 million ($1.8 million) as working capital for one year. The loan bears a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 1.345 basis points. Mr. Silong Chen, the CEO of the Company, provided personal guarantee for the loan. On August 20, 2019, the Company repaid the bank loan of RMB 20 million ($3.0 million) borrowed from Bank of Communications upon maturity. On September 5 and September 10, 2019, the Company entered into a loan agreement with Bank of Communications to borrow RMB 18 million ($2.6 million) as working capital for one year. The loans bear a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 1.405 basis points. The Company pledged the land use right of approximately $2.2 million and buildings of approximately $8.4 million acquired from Meijia as collateral to secure this loan. Mr. Silong Chen, the CEO of the Company, provided personal guarantee for the loans. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of Dogness, HK Dogness, HK Jiasheng, Dongguan Dogness, Dongguan Jiasheng, Meijia, Dogness Overseas, Intelligence Guangzhou, Dogness Japan and Dogness Group. All inter-company balances and transactions have been eliminated upon consolidation. For the Company’s equity investment which the Company does not have control and is not the primary beneficiary, but has significant influence in the decision-making of the ordinary course of business, the equity method is applied. The Company’s consolidated financial statements reflect the operating results of the following entities: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Dogness (International) Corporation (“Dogness” or the “Company”) July 11, 2016 BVI Parent, 100 % Holding Company Dogness (Hong Kong) Pet Products Co., Ltd. (“HK Dogness”) March 10, 2009 Hong Kong 100 % Trading Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”) July 12, 2007 Hong Kong 100 % Trading Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”) October 26, 2016 Dongguan, China 100 % Holding Company Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”) May 15, 2009 Dongguan, China 100 % Development and manufacturing of pet leash products Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) July 09,2009 Zhangzhou, China 100 % manufacturing of pet leash products Dogness Overseas Ltd (“Dogness Overseas”) February 8, 2018 BVI 100 % Holding Company Dogness Group LLC (“Dogness Group”) January 23, 2018 Delaware, United States 100 % Pet products trading Dogness Intelligence Technology Co., Ltd. (“Intelligence Guangzhou”) July 6, 2018 Guangzhou, China 58 % Research and manufacturing of intelligent pet products Dogness Japan Co. Ltd. (“Dogness Japan”) February 5, 2019 Osaka, Japan 51 % Pet products trading |
Noncontrolling Interests | Noncontrolling interests As of June 30, 2019, noncontrolling interests represent 42% and 49% noncontrolling shareholders’ interests in Intelligence Guangzhou and Dogness Japan, respectively. The noncontrolling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the operating results of the Company are presented on the face of the consolidated statements of income and comprehensive income (loss) as an allocation of the total income or loss for the year between noncontrolling interest holders and the shareholders of the Company. |
Use of Estimates | Use of Estimates In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, revenue recognition and realization of deferred tax assets. Actual results could differ from those estimates. |
Cash | Cash The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. |
Short-term Investments | Short-term Investments The Company’s short-term investments consist of wealth management financial products purchased from PRC banks with maturities within one month to twelve months. The banks invest the Company’s fund in certain financial instruments including money market funds, bonds or mutual funds, with rates of return on these investments ranging from 1.75% to 4.60% per annum. The carrying values of the Company’s short-term investments approximate fair value because of their short-term maturities. The interest earned is recognized in the consolidated statements of income and comprehensive income (loss) over the contractual term of these investments. The Company had short-term investments of $11,073,200 and $28,233,035 as of June 30, 2019 and 2018, respectively. The Company recorded interest income of $536,345, $517,359 and $Nil for the years ended June 30, 2019, 2018 and 2017, respectively. |
Accounts Receivable, Net | Accounts Receivable, net Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income (loss). Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Allowance for uncollectible balances amounted to $128,106 and $40,012 as of June 30, 2019 and 2018, respectively. |
Inventories, Net | Inventories, net Inventories are stated at net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. |
Prepayment | Prepayment Prepayment primarily consists of advances to suppliers for purchasing of raw materials that have not been received, and prepayment to a landlord for lease of a piece of land in order to build a warehouse in the near future. These advances are interest free, unsecured and short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. |
Property, Plant and Equipment | Property, plant and Equipment Property, plant and equipment are stated at cost. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows: Useful life Buildings 10-50 years Leasehold improvement Lesser of useful life and lease term Machinery equipment 5-10 years Transportation vehicles 5 years Office equipment and furniture 5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income (loss) in other income or expenses. |
Intangible Assets | Intangible Assets Intangible assets consist primarily of a customized software system purchased from a third-party vendor, used for accounting and production management and land use rights. Under PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership.” Intangible assets are stated at cost less accumulated amortization. Customized software system are amortized using the straight-line method over the estimated useful economic life of 10 years. Land use rights are amortization using the straight-line method over the estimated useful life of 50 years, which is determined in connection with the term of the land use rights. |
Long-term Investments in Equity Investees | Long-term Investments in Equity Investees On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) 321 “Investments—Equity Securities” (“ASC 321”). In accordance with ASC 321, equity securities which the Company has no significant influence (generally less than a 20% ownership interest) with readily determinable fair values are accounted for at fair value based on quoted market prices. Equity securities without readily determinable fair values are accounted for either at fair value or using the measurement alternative. Under the measurement alternative, the equity investments are measured at cost, less any impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company. Nanjing Rootaya Intelligence Technology Co., Ltd. (“Nanjing Rootaya”) is an entity incorporated on March 25, 2015 in the PRC and is primarily engaged in development of smart pet products. In July 2018, the Company entered into an equity investment agreement with Nanjing Rootaya to invest RMB 1.25 million ($182,125) for 10% of the ownership interest in Nanjing Rootaya. Before the Company’s equity investment, Nanjing Rootaya was owned by three unrelated shareholders. Dogness Network Technology Co., Ltd (“Dogness Network”) is an entity incorporated on November 17, 2017 in the PRC and is engaged in the development and sales of intelligent smart pet products. In November 2018, the Company entered into an equity investment agreement with Dogness Network to invest RMB 8.0 million ($1,165,600) for 10% of the ownership interest in Dogness Network. Before the Company’s equity investment, Dogness Network was owned by an unrelated shareholder. As of June 30, 2019, the Company made capital contribution of RMB 3.08 million ($448,756). Linsun Smart Technology Co., Ltd (“Linsun”) is an entity incorporated on January 25, 2018 in the PRC and is engaged in development and sales of smart pet products. In November 2018, the Company entered into an equity investment agreement with Linsun to invest RMB 3.0 million ($437,100) for 13% of the ownership interest in Linsun. Before the Company’s equity investment, Linsun was owned by three unrelated shareholders. As of June 30, 2019, the Company made capital contribution of RMB 2.5 million ($364,250). The purpose of entering into these equity investment agreements with Nanjing Rootaya, Dogness Network and Linsun was to establish cooperative business with these investees to jointly develop and distribute the Company’s intelligent smart pet products. The Company accounts for the above mentioned investments using the measurement alternative in accordance with ASC 321. As of June 30, 2019, these investments amounted to $995,131 and are reported as long-term investments in equity investees on the consolidated balance sheets. The Company records the cost method investments at historical cost and subsequently records any dividends received from the net accumulated earnings of the investee as income. Dividends received in excess of earnings are considered a return of investment and are recorded as reductions in the cost of the investments. Investment in equity investees is evaluated for impairment when facts or circumstances indicate that the fair value of the investment is less than its carrying value. An impairment is recognized when a decline in fair value is determined to be other-than-temporary. The Company reviews several factors to determine whether a loss is other-than-temporary. These factors include, but are not limited to, the: (i) nature of the investment; (ii) cause and duration of the impairment; (iii) extent to which fair value is less than cost; (iv) financial condition and near term prospects of the investments; and (v) ability to hold the security for a period of time sufficient to allow for any anticipated recovery in fair value. There was no impairment for the Company’s equity investments for the year ended June 30, 2019. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 - inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, short-term investments, accounts receivable, advances to suppliers, prepayments and other current assets, accounts payable, advance from customers, taxes payable, accrued liabilities and other payable and short-term bank loans approximate their fair values because of the short-term nature of these instruments. The Company’s long-term investments are accounted for using the measurement alternative in accordance with ASC 321, which also approximate their recorded values. |
Long-lived Assets Impairment | Long-lived assets impairment The Company reviews long-lived assets, including definitive-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition below are the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were no impairments of these assets as of June 30, 2019, 2018 and 2017. |
Revenue Recognition | Revenue Recognition On July 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. ASC 606 requires the use of a new five five not Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occur with the transfer of title of the Company’s products to the customers. Net sale is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods to the wholesaler and retailers. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. Such incentives do not represent a standalone value and are accounted for as a reduction of revenue in accordance with ASC 606. Prior to the adoption of ASC 606, the Company’s policy was also to account sales incentives, if applicable, as a reduction of revenue in accordance with ASC 605-50. Therefore, there is no change as to how the Company accounts for sales incentives upon its adoption of ASC 606. For the years ended June 30, 2019, 2018 and 2017, the Company did not provide any sales incentives to its customers. Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales and the related costs incurred by the Company are included in cost of goods sold. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration. The Company’s revenue is primarily generated from the sales of pet products, including leashes, accessories, collars, harnesses and intelligent smart pet products, to wholesalers and retailers. Revenue is recognized when the merchandise is delivered, title is transferred and the Company’s performance obligations to fulfill the customer contracts have been satisfied. Revenue is reported net of all value added taxes (“VAT”). The Company does not routinely permit customers to return products and historically, customer returns have been immaterial. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of June 30, 2019 and 2018, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended June 30, 2019, 2018 and 2017 are disclosed in Note 15 of this consolidation financial statements |
Research and Development Costs | Research and development costs Research and development expenses include costs directly attributable to the conduct of research and development projects, including the cost of salaries and other employee benefits, testing expenses, consumable equipment and consulting fees. All costs associated with research and development are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. 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. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended June 30, 2019, 2018 and 2017. As of June 30, 2019, the tax years ended December 31, 2013 through December 31, 2018 for the Company’s PRC entities remain open for statutory examination by PRC tax authorities. |
Value Added Tax ("VAT") | Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or receivable net of payments in the accompanying consolidated financial statements. Further, when exporting goods, the exporter is entitled to some or all of the refund of the VAT paid or assess. Since a majority of the Company’s products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the Company completes all the required tax filing procedures. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Earnings Per Share | Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Basic average shares outstanding and diluted average shares outstanding were the same for the years ended June 30, 2017. For the years ended June 30, 2019 and 2018, the effect of potential shares of common stock from the unexercised options was dilutive since the exercise prices for the options were lower than the average market price (See Note 13). |
Share-based Compensation | Share-Based compensation The Company follows the provisions of ASC 718, “Compensation — Stock Compensation,” which establishes the accounting for employee stock-based awards. For employee stock-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. For the non-employee stock-based awards, the fair value of the awards to non-employees are measured every reporting period based on the value of the Company’s common stock. |
Foreign Currency Translation | Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of the operations of HK Dogness , and are determined using RMB, the local currency, as the functional currency. Dogness Japan uses Japanese Yen as the functional currency, while The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive income. The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: June 30, 2019 June 30, 2018 June 30, 2017 Year-end spot rate US$1=RMB 6.8657 US$1=JPY 107.5 US$1=RMB 6.6181 US$1=RMB 6.7780 Average rate US$1=RMB 6.8226 US$1=JPY 111.1 US$1=RMB 6.5020 US$1=RMB 6.8118 |
Comprehensive Income (loss) | Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currency. |
Concentrations and Credit Risk | Concentrations and Credit Risk A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. As of June 30, 2019, and 2018, $1,773,713 and $3,348,242 of the Company’s cash and cash equivalents was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. In addition, the Company’s short-term investments deposited with PRC banks are also not insured. As of June 30, 2019, two customers accounted for 25% and 18% of the Company’s total accounts receivable, respectively. As of June 30, 2018, two customers accounted for 16% and 11% of the Company’s total accounts receivable, respectively. As of June 30, 2017, two customers accounted for 30% and 13% of the Company’s total accounts receivable, respectively. For the years ended June 30, 2019, 2018 and 2017, export sales accounted for 42.5%, 50.2% and 67.7% of the Company’s total revenue, respectively. For the year ended June 30, 2019, three customers accounted for 28.1%, 13.5% and 5.6% of the Company’s total revenue, respectively. For the year ended June 30, 201 8, three customers accounted for 24.9%, 14.0% and 7.4% of the Company’s total revenue, respectively. For the year ended June 30, 2017, three customers accounted for 20%, 15% and 13% of the Company’s total revenue, respectively. For the year ended June 30, 2019, 2018 and 2017, no single supplier accounted for more than 10% of the Company’s total raw material purchases. |
Statement of Cash Flows | Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. |
Risks and Uncertainties | Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation, such as reclassification of negative VAT tax payable as VAT tax recoverable, and segregation of capital expenditure on construction-in-progress out of capital expenditure on property, plant and equipment. These reclassifications had no effect on the reported revenues, net income and cash flows. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. The guidance will be effective in fiscal year 2020, with early adoption permitted, and must be applied using a modified retrospective approach. In July 2018, the FASB issued updates to the lease standard making transition requirements less burdensome. The update provides an option to apply the transition provisions of the new standard at its adoption date instead of at the earliest comparative period presented in the company’s financial statements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. FASB further issued ASU 2018-11 “Target Improvement” and ASU 2018-20 “Narrow-scope Improvements for Lessors.” As an emerging growth company, the Company will adopt this guidance effective July 1, 2019. The Company is evaluating the impact on its consolidated financial statements. In February 2018, the FASB has issued Accounting Standards Update (ASU) No. 2018-02, “Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income.” The ASU amends ASC 220, Income Statement — Reporting Comprehensive Income, to “allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act.” In addition, under the ASU, an entity will be required to provide certain disclosures regarding stranded tax effects. The ASU is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In March 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company does not believe this guidance will have a material impact on its consolidated financial statements. On June 20, 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting, In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Targeted Transition Relief. In August 2018, the FASB Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company is currently evaluating the impact of adopting ASU No. 2018-13 on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Entities | The Company’s consolidated financial statements reflect the operating results of the following entities: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Dogness (International) Corporation (“Dogness” or the “Company”) July 11, 2016 BVI Parent, 100 % Holding Company Dogness (Hong Kong) Pet Products Co., Ltd. (“HK Dogness”) March 10, 2009 Hong Kong 100 % Trading Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”) July 12, 2007 Hong Kong 100 % Trading Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”) October 26, 2016 Dongguan, China 100 % Holding Company Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”) May 15, 2009 Dongguan, China 100 % Development and manufacturing of pet leash products Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) July 09,2009 Zhangzhou, China 100 % manufacturing of pet leash products Dogness Overseas Ltd (“Dogness Overseas”) February 8, 2018 BVI 100 % Holding Company Dogness Group LLC (“Dogness Group”) January 23, 2018 Delaware, United States 100 % Pet products trading Dogness Intelligence Technology Co., Ltd. (“Intelligence Guangzhou”) July 6, 2018 Guangzhou, China 58 % Research and manufacturing of intelligent pet products Dogness Japan Co. Ltd. (“Dogness Japan”) February 5, 2019 Osaka, Japan 51 % Pet products trading |
Schedule of Property and Equiipment Useful Life | The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows: Useful life Buildings 10-50 years Leasehold improvement Lesser of useful life and lease term Machinery equipment 5-10 years Transportation vehicles 5 years Office equipment and furniture 5 years |
Schedule of Currency Exchange Rates | The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report: June 30, 2019 June 30, 2018 June 30, 2017 Year-end spot rate US$1=RMB 6.8657 US$1=JPY 107.5 US$1=RMB 6.6181 US$1=RMB 6.7780 Average rate US$1=RMB 6.8226 US$1=JPY 111.1 US$1=RMB 6.5020 US$1=RMB 6.8118 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following: As of June 30, 2019 2018 Accounts receivable from third-party customers $ 5,292,486 $ 5,681,513 Less: allowance for doubtful accounts (128,106 ) (40,012 ) Total accounts receivable from third-party customers, net 5,164,380 5,641,501 Add: accounts receivable - related parties 244,764 - Total accounts receivable, net $ 5,409,144 $ 5,641,501 |
Inventory, Net (Tables)
Inventory, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following: As of June 30, 2019 2018 Raw materials $ 795,047 $ 825,675 Work in process 1,136,582 1,076,749 Finished goods 3,431,102 2,256,171 5,362,731 4,158,595 Less: inventory allowance - (5,012 ) Inventory, net $ 5,362,731 $ 4,153,583 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property, plant and equipment stated at cost less accumulated depreciation consisted of the following: As of June 30, 2019 2018 Buildings $ 9,492,699 $ 9,794,094 Machinery and equipment 9,543,080 8,309,138 Office equipment and furniture 676,748 525,886 Automobiles 765,214 622,720 Leasehold improvements 5,126,219 3,985,511 Construction-in-progress (“CIP”) (1) 15,787,348 2,375,461 Total 41,391,308 25,612,810 Less: accumulated depreciation (5,874,940 ) (4,662,125 ) Property, plant and equipment, net $ 35,516,368 $ 20,950,685 |
Schedule of Future Minimum Capital Expenditures | Capital expenditure commitment Capital expenditure commitment Total 2020 $ 4,200,000 $ 6,000,000 $ 10,200,000 2021 - 1,500,000 1,500,000 Total $ 4,200,000 $ 7,500,000 $ 11,700,000 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following: As of June 30, 2019 2018 Software $ 199,984 $ 207,396 Land use right 2,212,619 2,294,624 Less: accumulated amortization (185,805 ) (111,449 ) Intangible assets, net $ 2,226,798 $ 2,390,571 |
Schedule of Future Amortization Expense | Estimated future amortization expense is as follows: Year ending June 30, Amortization expense 2020 $ 78,340 2021 78,340 2022 78,340 2023 72,881 Thereafter 1,918,897 Total $ 2,226,798 |
Short-Term Bank Loans (Tables)
Short-Term Bank Loans (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Bank Loans | Short-term loans consisted of the following: As of June 30, 2019 2018 Bank of Communications of China (“BCC”): Effective interest rate at 5.655%, due on July 31, 2018 (1) $ - $ 3,022,000 Effective interest rate at 5.873%, due on August 20, 2019 (2) 2,914,000 - Industrial and Commercial Bank of China (“ICBC”): Effective interest rate at 6.525%, due on January 10, 2019 (3) - 1,813,200 Total $ 2,914,000 $ 4,835,200 (1) In August 2016, Dongguan Jiasheng signed a loan agreement with Bank of Communication of China, Dongguan Branch to borrow RMB 26 million ($3.8 million) as working capital for one year with a due date on July 29, 2017. The loan was repaid in full upon maturity on August 8, 2017. In August 2017, the Company renewed the above loan for another year to July 31, 2018. The Company repaid the loan upon maturity on August 21, 2018. (2) On August 17, 2018, the Company entered into a line of credit agreement with Bank of Communication of China, Dongguan Branch to allow the Company to borrow RMB 30 million ($4.5 million) for one year with a maturity date on August 13, 2019. The Company had drawn down RMB 20 million ($3.0 million) of the loan to purchase raw materials on August 21, 2018. The loan bears a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 1.5625 basis points. The Company pledged the land use right of approximately $2.2 million and buildings of approximately $8.4 million acquired from Meijia as the collateral to secure this loan (see Note 6 and Note 7). In addition, Mr. Silong Chen, the CEO of the Company, provided personal guarantee for the loan. On August 20, 2019, the Company repaid the loan upon maturity and entered into two new loan agreements with BCC to borrow RMB 18 million ($2.6 million) as working capital for one year (See Note 16). (3) On January 22, 2016, Dongguan Jiasheng entered into a loan agreement with ICBC to borrow RMB 12 million ($1.8 million) as working capital for one year with the maturity date on January 20, 2017. The loan bears a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus 50 basis points. The loan was renewed in January 2017 for another year, with the new maturity date of January 9, 2018. The loan was further renewed for another year upon maturity, with a new maturity date of January 10, 2019. On October 13, 2018, the Company repaid the loan in full before its maturity and has no plan to further renew the loan. In addition to the above loans borrowed from ICBC, the Company’s principal shareholder, Mr. Silong Chen, pledged his personal assets as the collateral to safeguard a maximum line of credit of $2.3 million that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. In addition, Mr. Silong Chen and his relatives jointly signed a maximum guarantee agreement with ICBC to provide an additional maximum RMB 16 million ($2.3 million) guarantee to any loan that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. The Company has not yet drawn upon this line of credit. Interest expenses for the above-mentioned loans amounted to $209,842, $546,681 and $333,170 for the years ended June 30, 2019, 2018 and 2017, respectively. |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The following table reconciles the statutory rate to the Company’s effective tax rate: For the years ended June 30, 2019 2018 2017 % % % Hong Kong Statutory income tax rate 16.5 16.5 16.5 Income not generated in Hong Kong (8.9 ) (15.3 ) (15.4 ) China statutory income tax rate 25.0 25.0 25.0 Effect of PRC preferential tax rate and tax holidays (10.0 ) (8.3 ) (9.3 ) Non-deductible permanent difference 0.7 (1.8 ) (1.6 ) Research and development tax credit (2.0 ) (0.9 ) (0.1 ) Effective tax rate 21.3 15.2 15.1 |
Schedule of Components of Income Tax Expense (Benefit) | The provision for income tax consists of the following: For the years ended June 30, 2019 2018 2017 Current income tax provision $ 614,622 $ 938,119 $ 889,799 Deferred income tax provision (benefit) (234,326 ) (12,747 ) 53,398 Total income tax expense $ 380,296 $ 925,372 $ 943,197 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and deferred tax liability as of June 30, 2019 and 2018 consist of the following: June 30, 2019 June 30, 2018 Deferred tax assets: Net operating losses $ 234,319 $ 24,717 Inventory and accounts receivable reserves 21,137 - $ 255,456 $ 24,717 Deferred tax liability Inventory and accounts receivable reserves - (2,420 ) Deferred tax assets (liability) - net $ 255,456 $ 22,297 |
Schedule of Taxes Payable | The Company’s taxes payable consists of the following: June 30, 2019 June 30, 2018 Corporate income tax payable 2,907,079 2,416,098 Other tax payable 2,018 5,205 Total taxes payable $ 2,909,097 $ 2,421,303 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future minimum lease payments under non-cancelable operating leases are as follows: Twelve months ending June 30, Lease payments 2020 $ 150,531 2021 75,849 2022 77,660 2023 79,795 2024 83,005 Thereafter 62,425 Total $ 529,265 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | As of June 30, 2019 and 2018, the balances due from related parties were as follows: As of June 30, Accounts receivable - related parties, net: 2019 2018 -Linsun Smart Technology Co., Ltd (“Linsun”) $ 92,563 $ - -Dogness Network Technology Co., Ltd (“Dogness Network”), 152,201 - $ 244,764 $ - |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents a reconciliation of basic and diluted net income per share: For the years ended June 30, 2019 2018 2017 Net income attributable to the Company $ 1,421,781 $ 4,603,708 $ 4,945,764 Weighted average number of common shares outstanding - Basic 25,913,631 20,800,670 15,000,000 Dilutive securities -unexercised warrants and options 27,975 9,280 - Weighted average number of common shares outstanding – diluted 25,941,606 20,809,950 15,000,000 Earnings per share - Basic $ 0.05 $ 0.22 $ 0.33 Earnings per share – Diluted $ 0.05 $ 0.22 $ 0.33 |
Options (Tables)
Options (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following table summarized the Company’s stock option activity: Number of Weighted Average Weighted Average Remaining Life in Years Outstanding, June 30, 2018 640,000 $ 1.50 1.81 Exercisable, June 30, 2018 90,000 $ 1.50 2.14 Granted - $ - - Cancelled 160,000 - - Exercised - - - Outstanding June 30, 2019 480,000 $ 1.50 1.22 Exercisable, June 30, 2019 270,000 $ 1.50 1.14 |
Segment Information and Reven_2
Segment Information and Revenue Analysis (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenues by Geographic Market | The summary of our total revenues by geographic market for the years ended June 30, 2019, 2018 and 2017 was as follows: For the year ended June 30, 2019 2018 2017 China $ 15,082,443 $ 14,865,940 $ 6,839,534 United States 5,522,008 10,168,945 9,082,419 Europe 2,510,190 1,994,085 2,618,851 Australia 216,993 223,463 149,635 Canada 950,353 128,320 481,142 Central and South America 231,426 106,098 411,281 Japan and other Asian countries and regions 1,703,102 2,637,444 1,589,229 Total $ 26,216,515 $ 30,135,295 $ 21,172,091 |
Schedule of Revenues by Product Categories | The summary of our total revenues by our product categories for the years ended June 30, 2019, 2018 and 2017 was as follows: For the years ended June 30, 2019 2018 2017 Pet leashes $ 6,266,952 $ 7,102,233 $ 5,290,918 Pet collars 6,188,672 10,684,908 7,529,420 Pet harnesses 3,587,128 4,980,771 1,508,426 Retractable dog leashes 1,771,805 2,650,932 1,691,066 Intelligent pet products 2,103,523 59,719 - Gift suspender 4,058,229 3,481,500 2,415,118 Other pet accessories 2,024,742 1,175,232 2,737,143 Climbing hooks 215,464 - - Total $ 26,216,515 $ 30,135,295 $ 21,172,091 |
Organization and Description _2
Organization and Description of Business (Details Narrative) | Mar. 16, 2018USD ($) | Mar. 16, 2018CNY (¥) | Dec. 18, 2017USD ($)$ / sharesshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2018USD ($)shares | Jun. 30, 2017USD ($) | Feb. 05, 2019USD ($) | Jul. 06, 2018USD ($) | Jul. 06, 2018CNY (¥) | Apr. 26, 2018shares | Jan. 09, 2017 |
Common stock, shares outstanding | shares | 25,913,631 | 25,913,631 | 15,000,000 | ||||||||
Ownership interest percentage | 100.00% | 100.00% | 100.00% | ||||||||
Proceeds from issuance or sale of equity | $ 50,200,285 | ||||||||||
Total cash consideration to acquire the equity interests | $ 10,700,000 | ||||||||||
RMB [Member] | |||||||||||
Total cash consideration to acquire the equity interests | $ 71,000,000 | ||||||||||
Long Kai (Shenzheng) Industrial Co Ltd [Member] | RMB [Member] | |||||||||||
Total cash consideration to acquire the equity interests | ¥ | ¥ 7,100,000 | ||||||||||
Dogness Intelligence Technology Co Ltd [Member] | |||||||||||
Registered capital | $ 11,800,000 | ||||||||||
Dogness Intelligence Technology Co Ltd [Member] | TwoUnrelated Entities [Member] | |||||||||||
Ownership interest percentage | 42.00% | 42.00% | |||||||||
Dogness Intelligence Technology Co Ltd [Member] | Dongguan Jiasheng [Member] | |||||||||||
Ownership interest percentage | 58.00% | 58.00% | |||||||||
Dogness Intelligence Technology Co Ltd [Member] | RMB [Member] | |||||||||||
Registered capital | ¥ | ¥ 80,000,000 | ||||||||||
Dogness Japan Co Ltd [Member] | |||||||||||
Ownership interest percentage | 51.00% | ||||||||||
Investments, amount | $ 250,000 | ||||||||||
Dogness Japan Co Ltd [Member] | Unrelated Individual [Member] | |||||||||||
Ownership interest percentage | 49.00% | ||||||||||
Zhangzhou Meijia Metal Product Co., Ltd [Member] | |||||||||||
Business combination of acquisition ratio | 100.00% | 100.00% | |||||||||
Common Class B [Member] | |||||||||||
Common stock, shares outstanding | shares | 9,069,000 | 9,069,000 | |||||||||
Common Class A [Member] | |||||||||||
Common stock, shares outstanding | shares | 16,844,631 | 16,844,631 | |||||||||
IPO [Member] | Common Class A [Member] | |||||||||||
Number of shares issued under public offering | shares | 10,913,631 | ||||||||||
Proceeds from issuance or sale of equity | $ 54,600,000 | ||||||||||
Shares Issued, price per share | $ / shares | $ 5 | ||||||||||
Proceeds from issuance of common stock | $ 50,200,000 | ||||||||||
Total cash consideration to acquire the equity interests | $ 10,700,000 | ||||||||||
Dogness [Member] | |||||||||||
Ownership interest percentage | 100.00% | ||||||||||
Ms. Yunhao Chen, the Chief Financial Officer of the Company [Member] | |||||||||||
Entity Incorporation, state country name | British Virgin Islands | ||||||||||
Entity Incorporation, date of incorporation | Jul. 11, 2016 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 1 Months Ended | 12 Months Ended | |||||||||
May 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Nov. 30, 2018USD ($) | Nov. 30, 2018CNY (¥) | Jul. 31, 2018USD ($) | Jul. 31, 2018CNY (¥) | Jul. 06, 2018 | Jul. 02, 2018 | |
Short-term investments | $ 11,073,200 | $ 28,233,035 | |||||||||
Interest income | 536,345 | 517,359 | |||||||||
Allowance for doubtful accounts receivable | 128,106 | 40,012 | |||||||||
Long-term investments | 995,131 | ||||||||||
Long-lived assets impairment | |||||||||||
Tax benfit percentage | 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. | ||||||||||
Penalties or interest of income taxes | |||||||||||
Value added taxes rate description | The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. | ||||||||||
Cash and cash equivalents | $ 1,773,713 | $ 3,348,242 | |||||||||
Accounts Receivable [Member] | |||||||||||
Concentration risk, percentage | 76.00% | ||||||||||
Customers One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 25.00% | 16.00% | 30.00% | ||||||||
Customers One [Member] | Sales Revenue [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 28.10% | 24.90% | 20.00% | ||||||||
Customers Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 18.00% | 11.00% | 13.00% | ||||||||
Customers Two [Member] | Sales Revenue [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 13.50% | 14.00% | 15.00% | ||||||||
Customers [Member] | Sales Revenue [Member] | |||||||||||
Concentration risk, percentage | 25.00% | 10.00% | |||||||||
Customers [Member] | Sales Revenue [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 42.50% | 50.20% | 67.70% | ||||||||
Customers Three [Member] | Sales Revenue [Member] | Customer Concentration Risk [Member] | |||||||||||
Concentration risk, percentage | 5.60% | 7.40% | 13.00% | ||||||||
Nanjing Rootaya Intelligence Technology Co Ltd [Member] | Equity Investment Agreement [Member] | |||||||||||
Ownership percentage | 10.00% | 10.00% | |||||||||
Long-term investments | $ 182,125 | ||||||||||
Nanjing Rootaya Intelligence Technology Co Ltd [Member] | Equity Investment Agreement [Member] | RMB [Member] | |||||||||||
Long-term investments | ¥ | ¥ 12,500,000 | ||||||||||
Dogness Network Technology Co Ltd [Member] | |||||||||||
Ownership percentage | 10.00% | ||||||||||
Dogness Network Technology Co Ltd [Member] | Equity Investment Agreement [Member] | |||||||||||
Ownership percentage | 10.00% | 10.00% | |||||||||
Long-term investments | $ 1,165,600 | ||||||||||
Capital contribution | $ 448,756 | ||||||||||
Dogness Network Technology Co Ltd [Member] | Equity Investment Agreement [Member] | RMB [Member] | |||||||||||
Long-term investments | ¥ | ¥ 8,000,000 | ||||||||||
Capital contribution | 3,080,000 | ||||||||||
Linsun Smart Technology Co Ltd [Member] | |||||||||||
Ownership percentage | 13.00% | ||||||||||
Linsun Smart Technology Co Ltd [Member] | Equity Investment Agreement [Member] | |||||||||||
Ownership percentage | 13.00% | 13.00% | |||||||||
Long-term investments | $ 437,100 | ||||||||||
Capital contribution | 364,250 | ||||||||||
Linsun Smart Technology Co Ltd [Member] | Equity Investment Agreement [Member] | RMB [Member] | |||||||||||
Long-term investments | ¥ | ¥ 3,000,000 | ||||||||||
Capital contribution | $ 2,500,000 | ||||||||||
Software [Member] | |||||||||||
Intangible asset, useful life | 10 years | ||||||||||
Land [Member] | |||||||||||
Intangible asset, useful life | 50 years | ||||||||||
Minimum [Member] | |||||||||||
Investments percentage | 1.75% | ||||||||||
Maximum [Member] | |||||||||||
Investments percentage | 4.60% | ||||||||||
Ownership percentage | 20.00% | ||||||||||
Dogness Intelligence Technology Co Ltd [Member] | |||||||||||
Noncontrolling interest rate | 42.00% | ||||||||||
Dogness Japan Co Ltd [Member] | |||||||||||
Noncontrolling interest rate | 49.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Entities (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Dogness (International) Corporation [Member] | |
Date of Incorporation | Jul. 11, 2016 |
Place of Incorporation | BVI |
% of Ownership | 100.00% |
Principal Activities | Holding Company |
Dogness (Hong Kong) Pet Products Co., Ltd [Member] | |
Date of Incorporation | Mar. 10, 2009 |
Place of Incorporation | Hong Kong |
% of Ownership | 100.00% |
Principal Activities | Trading |
Jiasheng Enterprise (Hong Kong) Co., Limited [Member] | |
Date of Incorporation | Jul. 12, 2007 |
Place of Incorporation | Hong Kong |
% of Ownership | 100.00% |
Principal Activities | Trading |
Dogness Intelligence Technology (Dongguan) Co., Ltd [Member] | |
Date of Incorporation | Oct. 26, 2016 |
Place of Incorporation | Dongguan, China |
% of Ownership | 100.00% |
Principal Activities | Holding Company |
Dongguan Jiasheng Enterprise Co., Ltd [Member] | |
Date of Incorporation | May 15, 2009 |
Place of Incorporation | Dongguan, China |
% of Ownership | 100.00% |
Principal Activities | Development and manufacturing of pet leash products |
Zhangzhou Meijia Metal Product Co., Ltd [Member] | |
Date of Incorporation | Jul. 9, 2009 |
Place of Incorporation | Zhangzhou, China |
% of Ownership | 100.00% |
Principal Activities | manufacturing of pet leash products |
Dogness Overseas Ltd [Member] | |
Date of Incorporation | Feb. 8, 2018 |
Place of Incorporation | BVI |
% of Ownership | 100.00% |
Principal Activities | Holding Company |
Dogness Group LLC [Member] | |
Date of Incorporation | Jan. 23, 2018 |
Place of Incorporation | Delaware, United States |
% of Ownership | 100.00% |
Principal Activities | Pet products trading |
Dogness Intelligence Technology Co Ltd [Member] | |
Date of Incorporation | Jul. 6, 2018 |
Place of Incorporation | Guangzhou, China |
% of Ownership | 58.00% |
Principal Activities | Research and manufacturing of intelligent pet products |
Dogness Japan Co Ltd [Member] | |
Date of Incorporation | Feb. 5, 2019 |
Place of Incorporation | Osaka, Japan |
% of Ownership | 51.00% |
Principal Activities | Pet products trading |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Property and Equiipment Useful Life (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Buildings [Member] | Minimum [Member] | |
Property, plant and equipment useful life | 10 years |
Buildings [Member] | Maximum [Member] | |
Property, plant and equipment useful life | 50 years |
Leasehold Improvements [Member] | |
Estimated useful lives | Lesser of useful life and lease term |
Machinery Equipment [Member] | Minimum [Member] | |
Property, plant and equipment useful life | 5 years |
Machinery Equipment [Member] | Maximum [Member] | |
Property, plant and equipment useful life | 10 years |
Transportation Vehicles [Member] | |
Property, plant and equipment useful life | 5 years |
Office Equipment and Furniture [Member] | |
Property, plant and equipment useful life | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Currency Exchange Rates (Details) | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Year-End Spot Rate : US$1 Exchange Rate=RMB [Member] | |||
Foreign currency exchange rate, translation | 6.8657 | 6.6181 | 6.7780 |
Year-End Spot Rate : US$1 Exchange Rate= JPY [Member] | |||
Foreign currency exchange rate, translation | 107.5 | ||
Average Rate US$1=RMB [Member] | |||
Foreign currency exchange rate, translation | 6.8226 | 6.5020 | 6.8118 |
Average Rate US$1=JPY [Member] | |||
Foreign currency exchange rate, translation | 111.1 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
May 30, 2019 | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Sep. 10, 2019USD ($) | Sep. 10, 2019CNY (¥) | Sep. 05, 2019USD ($) | Sep. 05, 2019CNY (¥) | Aug. 09, 2019USD ($) | Aug. 09, 2019CNY (¥) | |
Revenue decrease from prior year | $ 3,900,000 | |||||||||||
Percentage of revenue decreased | 0.13 | |||||||||||
Revenue | $ 26,216,515 | $ 30,135,295 | $ 21,172,091 | |||||||||
Working capital decrease from prior year | $ 19,500,000 | |||||||||||
Percentage of working capital | 0.52 | |||||||||||
Working capital | $ 37,400,000 | 17,900,000 | ||||||||||
Construction-in-progress projects | 7,300,000 | |||||||||||
Cash | 2,600,000 | |||||||||||
Short-term investments | 11,073,200 | 28,233,035 | ||||||||||
Outstanding accounts receivable | 5,400,000 | |||||||||||
Outstanding bank loans | 2,900,000 | |||||||||||
Short term debt | 2,914,000 | 4,835,200 | ||||||||||
RMB [Member] | ||||||||||||
Line of credit | 16,000,000 | |||||||||||
PRC Bank [Member] | ||||||||||||
Revenue | 15,082,443 | $ 14,865,940 | $ 6,839,534 | |||||||||
Unused lines of Credit [Member] | PRC Bank [Member] | ||||||||||||
Line of credit | 2,300,000 | |||||||||||
PRC Bank [Member] | ||||||||||||
Outstanding bank loans | $ 2,900,000 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Percentage of working capital | 0.76 | |||||||||||
Working capital | $ 3,900,000 | |||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | Industrial and Commercial Bank of China [Membeer] | ||||||||||||
Short term debt | $ 1,800,000 | |||||||||||
Subsequent Event [Member] | Two Loan Agreements [Member] | ||||||||||||
Short term debt | $ 2,600,000 | $ 2,600,000 | ||||||||||
Subsequent Event [Member] | RMB [Member] | Loan Agreement [Member] | Industrial and Commercial Bank of China [Membeer] | ||||||||||||
Short term debt | ¥ | ¥ 12,000,000 | |||||||||||
Subsequent Event [Member] | RMB [Member] | Two Loan Agreements [Member] | ||||||||||||
Short term debt | ¥ | ¥ 18,000,000 | ¥ 18,000,000 | ||||||||||
Sales Revenue [Member] | Customers [Member] | ||||||||||||
Revenue decrease from prior year | $ 4,600,000 | |||||||||||
Percentage of revenue decreased | 0.241 | |||||||||||
Concentration risk, percentage | 25.00% | 10.00% |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details Narrative) | 12 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2019CNY (¥) | |
Provision for bad debt | $ 90,077 | $ (5,356) | $ 43,987 | |
Allowance for doubtful accounts | 128,106 | 40,012 | ||
Accounts receivable related parties | 5,164,380 | $ 5,641,501 | ||
Linshui and Dogness Newwork [Member] | ||||
Accounts receivable related parties | 244,764 | |||
Third Party Customers [Member] | ||||
Accounts receivable related parties | $ 3,900,000 | |||
Third Party Customers [Member] | RMB [Member] | ||||
Accounts receivable related parties | ¥ | ¥ 27,000,000 | |||
Accounts Receivable [Member] | ||||
Concentration risk, percentage | 76.00% |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Receivables [Abstract] | ||
Accounts receivable from third-party customers | $ 5,292,486 | $ 5,681,513 |
Less: allowance for doubtful accounts | (128,106) | (40,012) |
Total accounts receivable from third-party customers, net | 5,164,380 | 5,641,501 |
Add: accounts receivable - related parties | 244,764 | |
Total accounts receivable, net | $ 5,164,380 | $ 5,641,501 |
Inventory, Net (Details Narrati
Inventory, Net (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |||
Inventory reserve | $ 4,863 | $ 14,106 | $ 400,957 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 795,047 | $ 825,675 |
Work in process | 1,136,582 | 1,076,749 |
Finished goods | 3,431,102 | 2,256,171 |
Inventory, gross | 5,362,731 | 4,158,595 |
Less: inventory allowance | (5,012) | |
Inventory, net | $ 5,362,731 | $ 4,153,583 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Depreciation | $ 1,387,698 | $ 1,179,814 | $ 809,313 | ||
Payment for capital expenditure | $ 7,300,000 | 13,572,260 | 2,413,172 | ||
Warehouse Construction [Member] | |||||
Payment for capital expenditure | 3,400,000 | ||||
RMB [Member] | |||||
Payment for capital expenditure | 80,800,000 | ||||
RMB [Member] | Warehouse Construction [Member] | |||||
Payment for capital expenditure | $ 23,200,000 | ||||
Subsequent Event [Member] | |||||
Property plant and equipment additional amount | $ 4,400,000 | ||||
Subsequent Event [Member] | Equipment and Machinery [Member] | |||||
Property plant and equipment additional amount | 3,100,000 | ||||
Subsequent Event [Member] | Warehouse Construction [Member] | |||||
Property plant and equipment additional amount | 1,300,000 | ||||
Subsequent Event [Member] | RMB [Member] | |||||
Property plant and equipment additional amount | 30,600,000 | ||||
Subsequent Event [Member] | RMB [Member] | Equipment and Machinery [Member] | |||||
Property plant and equipment additional amount | 21,400,000 | ||||
Subsequent Event [Member] | RMB [Member] | Warehouse Construction [Member] | |||||
Property plant and equipment additional amount | $ 9,200,000 | ||||
Property and Equipment [Member] | |||||
Collateralized Financings | 8,426,982 | ||||
Bank Of Communications [Member] | |||||
Collateralized Financings | $ 2,900,000 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Buildings | $ 9,492,699 | $ 9,794,094 | |
Machinery and equipment | 9,543,080 | 8,309,138 | |
Office equipment and furniture | 676,748 | 525,886 | |
Automobiles | 765,214 | 622,720 | |
Leasehold improvements | 5,126,219 | 3,985,511 | |
Construction in progress | [1] | 15,787,348 | 2,375,461 |
Total | 41,391,308 | 25,612,810 | |
Less: accumulated depreciation | (5,874,940) | (4,662,125) | |
Property, plant and equipment, net | $ 35,516,368 | $ 20,950,685 | |
[1] | The Company's CIP primarily consisted of the following: On March 16, 2018, the Company acquired 100% of the equity interests in Zhangzhou Meijia Metal Product Co., Ltd ("Meijia") from its original shareholder, for a total cash consideration of RMB 71.0 million ($10.7 million) (See Note 1). After the acquisition, the Company started building its own facilities and office spaces to expand the production capacity in order to fulfill increased customer orders. Total budgeted capital expenditure on decoration and purchase of equipment and machinery to bring Meijia manufacturing facility into use amounted to RMB 110 million ($16.0 million). As of June 30, 2019, the Company has already spent RMB 80.8 million ($11.8 million) and had future capital expenditure commitment of approximately RMB 29.2 million ($4.2 million) on Meijia plant facilities. Meijia plant has started the test operation in August 2019, and is expected to be ready for production before December 31, 2019 upon passing the final inspection conducted by local government. In addition, the Company's subsidiary Dongguan Jiasheng is also working on a project to build a warehouse with original budgeted costs of RMB 85 million ($12.4 million). In order to conform to the local government's building code, the construction plan has been recently modified and the budgeted cost has been reduced to RMB 75 million ($10.9 million). As of June 30, 2019, the Company has already spent RMB 23.2 million ($3.4 million) and had future capital expenditure commitment of approximately RMB 51.8 million ($7.5 million) on the warehouse construction. The warehouse construction is expected to be completed by the end of 2020. |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) (Parenthetical) | Mar. 16, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) |
Equity interest percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||
Cash consideration | $ 10,700,000 | |||||
Purchase of equipment and machinery | 16,000,000 | |||||
Payment for capital expenditure | $ 7,300,000 | $ 13,572,260 | $ 2,413,172 | |||
Warehouse Construction [Member] | ||||||
Payment for capital expenditure | 3,400,000 | |||||
Zhangzhou Meijia Metal Product Co., Ltd ('Meijia') [Member] | ||||||
Payment for capital expenditure | 4,200,000 | |||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Warehouse Construction [Member] | ||||||
Payment for capital expenditure | 7,500,000 | |||||
Estimated budgeted costs | 12,400,000 | |||||
Reduction of estimated budgeted costs | 10,900,000 | |||||
RMB [Member] | ||||||
Cash consideration | 71,000,000 | |||||
Purchase of equipment and machinery | $ 110,000,000 | |||||
Payment for capital expenditure | 80,800,000 | |||||
RMB [Member] | Warehouse Construction [Member] | ||||||
Payment for capital expenditure | 23,200,000 | |||||
RMB [Member] | Zhangzhou Meijia Metal Product Co., Ltd ('Meijia') [Member] | ||||||
Payment for capital expenditure | $ 29,200,000 | |||||
RMB [Member] | Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Warehouse Construction [Member] | ||||||
Payment for capital expenditure | ¥ | ¥ 51,800,000 | |||||
Estimated budgeted costs | ¥ | 85,000,000 | |||||
Reduction of estimated budgeted costs | ¥ | ¥ 75,000,000 |
Property, Plant and Equipment_6
Property, Plant and Equipment, Net - Schedule of Future Minimum Capital Expenditures (Details) | Jun. 30, 2019USD ($) |
2020 | $ 10,200,000 |
2021 | 1,500,000 |
Total | 11,700,000 |
Zhangzhou Meijia Metal Product Co., Ltd ('Meijia') [Member] | |
2020 | 4,200,000 |
2021 | |
Total | 4,200,000 |
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | |
2020 | 6,000,000 |
2021 | 1,500,000 |
Total | $ 7,500,000 |
Intangible Assets, Net - (Detai
Intangible Assets, Net - (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Amortization of intangible assets | $ 78,824 | $ 40,078 | $ 21,015 |
Loan from bank | 2,914,000 | $ 4,835,200 | |
Intangible Assets [Member] | |||
Loan from bank | 2,900,000 | ||
Collateral to secure loan | $ 2,212,619 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Software | $ 199,984 | $ 207,396 |
Land use right | 2,212,619 | 2,294,624 |
Less: accumulated amortization | (185,805) | (111,449) |
Intangible assets, net | $ 2,226,798 | $ 2,390,571 |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Estimated Future Amortization Expense for Intangible Assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 78,340 | |
2021 | 78,340 | |
2022 | 78,340 | |
2023 | 72,881 | |
Thereafter | 1,918,897 | |
Intangible assets, net | $ 2,226,798 | $ 2,390,571 |
Short-Term Bank Loans (Details
Short-Term Bank Loans (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |||
Interest expense related to short-term bank loans | $ 209,842 | $ 546,681 | $ 333,170 |
Short-Term Bank Loans - Schedul
Short-Term Bank Loans - Schedule of Short-term Bank Loans (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | |
Short-term Debt | $ 2,914,000 | $ 4,835,200 | |
Short-term Bank Loan 1 [Member] | |||
Short-term Debt | [1] | 3,022,000 | |
Short-term Bank Loan 2 [Member] | |||
Short-term Debt | [2] | 2,914,000 | |
Short-term Bank Loan 3 [Member] | |||
Short-term Debt | [3] | $ 1,813,200 | |
[1] | In August 2016, Dongguan Jiasheng signed a loan agreement with Bank of Communication of China, Dongguan Branch to borrow RMB 26 million ($3.8 million) as working capital for one year with a due date on July 29, 2017. The loan was repaid in full upon maturity on August 8, 2017. In August 2017, the Company renewed the above loan for another year to July 31, 2018. The Company repaid the loan upon maturity on August 21, 2018. | ||
[2] | On August 17, 2018, the Company entered into a line of credit agreement with Bank of Communication of China, Dongguan Branch to allow the Company to borrow RMB 30 million ($4.5 million) for one year with a maturity date on August 13, 2019. The Company had drawn down RMB 20 million ($3.0 million) of the loan to purchase raw materials on August 21, 2018. The loan bears a variable interest rate based on the prime interest rate set by the People's Bank of China at the time of borrowing, plus 1.5625 basis points. The Company pledged the land use right of approximately $2.2 million and buildings of approximately $8.4 million acquired from Meijia as the collateral to secure this loan (see Note 6 and Note 7). In addition, Mr. Silong Chen, the CEO of the Company, provided personal guarantee for the loan. On August 20, 2019, the Company repaid the loan upon maturity and entered into two new loan agreements with BCC to borrow RMB 18 million ($2.6 million) as working capital for one year (See Note 16). | ||
[3] | On January 22, 2016, Dongguan Jiasheng entered into a loan agreement with ICBC to borrow RMB 12 million ($1.8 million) as working capital for one year with the maturity date on January 20, 2017. The loan bears a variable interest rate based on the prime interest rate set by the People's Bank of China at the time of borrowing, plus 50 basis points. The loan was renewed in January 2017 for another year, with the new maturity date of January 9, 2018. The loan was further renewed for another year upon maturity, with a new maturity date of January 10, 2019. On October 13, 2018, the Company repaid the loan in full before its maturity and has no plan to further renew the loan. In addition to the above loans borrowed from ICBC, the Company's principal shareholder, Mr. Silong Chen, pledged his personal assets as the collateral to safeguard a maximum line of credit of $2.3 million that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. In addition, Mr. Silong Chen and his relatives jointly signed a maximum guarantee agreement with ICBC to provide an additional maximum RMB 16 million ($2.3 million) guarantee to any loan that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. The Company has not yet drawn upon this line of credit. |
Short-Term Bank Loans - Sched_2
Short-Term Bank Loans - Schedule of Short-term Bank Loans (Details) (Parenthetical) | Aug. 31, 2016USD ($) | Aug. 20, 2016USD ($) | Aug. 20, 2016CNY (¥) | Aug. 17, 2016USD ($) | Aug. 17, 2016CNY (¥) | Jan. 22, 2016USD ($) | Jan. 31, 2017 | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Aug. 31, 2016CNY (¥) | Aug. 17, 2016CNY (¥) | Jan. 22, 2016CNY (¥) |
Short term debt | $ 2,914,000 | $ 4,835,200 | |||||||||||
Proceeds from short term debt | $ 2,932,000 | $ 4,921,600 | $ 5,842,759 | ||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Loan Agreement [Member] | |||||||||||||
Debt Instrument, Maturity Date | Jul. 29, 2017 | ||||||||||||
Short term debt | $ 3,800,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Loan Agreement [Member] | RMB [Member] | |||||||||||||
Short term debt | ¥ | ¥ 26,000,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | |||||||||||||
Short term debt | $ 4,500,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | Building [Member] | |||||||||||||
Collateral debt | $ 8,400,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | RMB [Member] | |||||||||||||
Short term debt | ¥ | ¥ 30,000,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Mr, Silong Chen [Member] | |||||||||||||
Maximum line of credit | $ 2,300,000 | ||||||||||||
Line of credit facility period | In addition, Mr. Silong Chen and his relatives jointly signed a maximum guarantee agreement with ICBC to provide an additional maximum RMB 16 million (approximately $2.3 million) guarantee to any loan that Dongguan Jiasheng could borrow from ICBC during the period from February 12, 2015 to February 12, 2020. | ||||||||||||
Maximum guarantee amount | $ 2,300,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | RMB [Member] | Mr, Silong Chen [Member] | |||||||||||||
Maximum guarantee amount | ¥ | ¥ 16,000,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Loan Agreement [Member] | Industrial and Commercial Bank of China [Membeer] | |||||||||||||
Debt Instrument, Maturity Date | Jan. 20, 2017 | ||||||||||||
Short term debt | $ 12,000,000 | ||||||||||||
Loan renewed matuirty date | Jan. 9, 2018 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Loan Agreement [Member] | RMB [Member] | Industrial and Commercial Bank of China [Membeer] | |||||||||||||
Short term debt | ¥ | ¥ 1,800,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | |||||||||||||
Debt Instrument, Maturity Date | Aug. 13, 2019 | Aug. 13, 2019 | |||||||||||
Proceeds from short term debt | $ 2,600,000 | $ 3,000,000 | |||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | Land Use Right [Member] | |||||||||||||
Collateral debt | $ 2,200,000 | ||||||||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Line Of Credit Agreement [Member] | RMB [Member] | |||||||||||||
Proceeds from short term debt | ¥ | ¥ 18,000,000 | ¥ 20,000,000 | |||||||||||
Short-term Bank Loan 1 [Member] | |||||||||||||
Debt instrrument effective interest rate | 5.655% | ||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2018 | ||||||||||||
Short-term Bank Loan 2 [Member] | |||||||||||||
Debt instrrument effective interest rate | 5.873% | ||||||||||||
Debt Instrument, Maturity Date | Aug. 20, 2019 | ||||||||||||
Short-term Bank Loan 3 [Member] | |||||||||||||
Debt instrrument effective interest rate | 6.525% | ||||||||||||
Debt Instrument, Maturity Date | Jan. 10, 2019 |
Taxes (Details Narrative)
Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statutory income tax rate | 15.00% | 15.00% | 15.00% |
Description on tax rate | Under the Enterprise Income Tax ("EIT") Law of PRC, domestic enterprises and Foreign Investment Enterprises (the "FIE") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. In October 2015, Dongguan Jiasheng, the Company's main operating subsidiary in PRC, was approved as HNTEs and is entitled to a reduced income tax rate of 15% for three years. | ||
Decrease in foreign taxes | $ 3,003 | $ 545,805 | $ 552,132 |
Benefit of Tax Holiday on Net Income per Share (basic and diluted) | $ 0 | $ 0.03 | $ 0.04 |
Accrued tax liabilities | $ 2,909,097 | $ 2,421,303 | |
Hong Kong [Member] | |||
Statutory income tax rate | 16.50% | 16.50% | 16.50% |
Taxes - Schedule of Effective I
Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Statutory income tax rate | 15.00% | 15.00% | 15.00% |
Effect of PRC preferential tax rate and tax holidays | (10.00%) | (8.30%) | (9.30%) |
Non-deductible permanent difference | 0.70% | (1.80%) | (1.60%) |
Research and development tax credit | (2.00%) | (0.90%) | (0.10%) |
Effective tax rate | 21.30% | 15.20% | 15.10% |
Hong Kong [Member] | |||
Statutory income tax rate | 16.50% | 16.50% | 16.50% |
Income not generated in Hong Kong | (8.90%) | (15.30%) | (15.40%) |
China [Member] | |||
Statutory income tax rate | 25.00% | 25.00% | 25.00% |
Taxes - Schedule of Components
Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current income tax provision | $ 614,622 | $ 938,119 | $ 889,799 |
Deferred income tax provision (benefit) | (234,326) | (12,747) | 53,398 |
Total income tax expense | $ 380,296 | $ 925,372 | $ 943,197 |
Taxes - Schedule of Deferred Ta
Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $ 234,319 | $ 24,717 |
Inventory and accounts receivable reserves | 21,137 | |
Deferred Tax Assets, Gross | 255,456 | 24,717 |
Inventory and accounts receivable reserves | (2,420) | |
Deferred tax assets (liability) - Net | $ 255,456 | $ 22,297 |
Taxes - Schedule of Taxes Payab
Taxes - Schedule of Taxes Payable (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||
Corporate income tax payable | $ 2,907,079 | $ 2,416,098 |
Other tax payable | 2,018 | 5,205 |
Total taxes payable | $ 2,909,097 | $ 2,421,303 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | Jul. 06, 2018USD ($) | Jul. 06, 2018CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jul. 06, 2018CNY (¥) |
Lease expiration, description | These leases of the major manufacturing facilities and office space expire between April 30, 2027 and October 14, 2038. | These leases of the major manufacturing facilities and office space expire between April 30, 2027 and October 14, 2038. | ||||||
Lease expiration, date | Jun. 20, 2024 | Jun. 20, 2024 | ||||||
Operating lease expense | $ 640,626 | $ 391,784 | $ 333,452 | |||||
Payment to capital expenditure | $ 7,300,000 | 13,572,260 | $ 2,413,172 | |||||
RMB [Member] | ||||||||
Payment to capital expenditure | 80,800,000 | |||||||
Dogness Intelligence Technology Co Ltd [Member] | ||||||||
Capital | $ 11,800,000 | |||||||
Ownership percentage | 58.00% | 58.00% | ||||||
Dogness Intelligence Technology Co Ltd [Member] | RMB [Member] | ||||||||
Capital | ¥ | ¥ 80,000,000 | |||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | ||||||||
Capital | $ 6,800,000 | |||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | RMB [Member] | ||||||||
Capital | ¥ | ¥ 46,400,000 | |||||||
Dogness Network Technology Co Ltd [Member] | ||||||||
Capital | 725,844 | 725,844 | ||||||
Ownership percentage | 10.00% | 10.00% | ||||||
Capital contribution | $ 1,165,600 | 448,756 | ||||||
Dogness Network Technology Co Ltd [Member] | RMB [Member] | ||||||||
Capital contribution | ¥ | ¥ 8,000,000 | ¥ 3,080,000 | ||||||
Linsun Smart Technology Co Ltd [Member] | ||||||||
Capital | 72,850 | 72,850 | ||||||
Ownership percentage | 13.00% | 13.00% | ||||||
Capital contribution | $ 437,100 | 364,250 | ||||||
Linsun Smart Technology Co Ltd [Member] | RMB [Member] | ||||||||
Capital contribution | ¥ | ¥ 3,000,000 | ¥ 2,500,000 | ||||||
Dogness Network and Linsun [Member] | ||||||||
Capital | $ 798,694 | 798,694 | ||||||
Meijia and Dongguan Jiasheng [Member] | ||||||||
Payment to capital expenditure | 11,700,000 | |||||||
Meijia and Dongguan Jiasheng [Member] | Date of Report [Member] | ||||||||
Payment to capital expenditure | $ 7,300,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) | Jun. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 150,531 |
2021 | 75,849 |
2022 | 77,660 |
2023 | 79,795 |
2024 | 83,005 |
Thereafter | 62,425 |
Total | $ 529,265 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue related parties | $ 328,567 | ||
Accounts receivable - related parties, net | 244,764 | ||
Linsun Smart Technology Co Ltd [Member] | |||
Revenue related parties | 185,126 | ||
Payments to related parties | 850,589 | ||
Dogness Network Technology Co Ltd [Member] | |||
Revenue related parties | $ 143,441 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Accounts receivable - related parties, net | $ 244,764 | |
Linsun Smart Technology Co Ltd [Member] | ||
Accounts receivable - related parties, net | 92,563 | |
Dogness Network Technology Co Ltd [Member] | ||
Accounts receivable - related parties, net | $ 152,201 |
Equity (Details Narrative)
Equity (Details Narrative) | Dec. 18, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2016CNY (¥) | Nov. 30, 2016USD ($) | Nov. 30, 2016CNY (¥) | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Apr. 26, 2018$ / sharesshares | Jul. 11, 2017$ / sharesshares |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 15,000,000 | ||||||
Common stock par value | $ / shares | $ 0.002 | $ 0.002 | $ 0.002 | $ 0.002 | ||||||
Common stock, shares issued | 25,913,631 | 25,913,631 | 15,000,000 | |||||||
Common stock, shares outstanding | 25,913,631 | 25,913,631 | 15,000,000 | |||||||
Paid a cash dividend | $ | $ 2,725,883 | |||||||||
Warrants exercised | 0 | |||||||||
Statutory reserve, description | Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. | |||||||||
Allocatiion to statutory reserve | $ | $ 27,349 | 97,216 | 45,334 | |||||||
Restricted reserve | $ | $ 191,716 | $ 164,367 | $ 67,151 | |||||||
Public Offering Warrants [Member] | ||||||||||
Warrants term | 3 years | |||||||||
Warrants exercise price | $ / shares | $ 6.25 | |||||||||
Warrants issued | 500,000 | |||||||||
Warrants outstanding | 500,000 | |||||||||
Warrants exercised | ||||||||||
Class B Common Shares [Member] | ||||||||||
Common stock, shares outstanding | 9,069,000 | 9,069,000 | ||||||||
Common Class A [Member] | ||||||||||
Common stock, shares authorized | 5,931,000 | |||||||||
Common stock par value | $ / shares | $ 0.002 | |||||||||
Common stock, shares outstanding | 16,844,631 | 16,844,631 | ||||||||
Common Class A [Member] | Public Offering Warrants [Member] | ||||||||||
Warrants to purchase common stock | 500,000 | |||||||||
Percentage for common stock sold for offering | 5.00% | |||||||||
Common Class A [Member] | IPO [Member] | ||||||||||
Shares of initial public offering | 10,913,631 | |||||||||
Shares issued price per share | $ / shares | $ 5 | |||||||||
Gross from initial public offering | $ | $ 54,600,000 | |||||||||
Proceeds from initial public offering | $ | $ 50,200,000 | |||||||||
Mr, Silong Chen [Member] | Class B Common Shares [Member] | ||||||||||
Common stock, shares authorized | 9,069,000 | |||||||||
Common stock par value | $ / shares | $ 0.002 | |||||||||
Board of Directors [Member] | ||||||||||
Paid a cash dividend | $ | $ 2,568,700 | $ 90,699 | ||||||||
Board of Directors [Member] | RMB [Member] | ||||||||||
Paid a cash dividend | ¥ | ¥ 17,000,000 | ¥ 600,259 |
Earnings Per Share (Details Nar
Earnings Per Share (Details Narrative) - shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 27,975 | 9,280 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |||
Net income attributable to the Company | $ 1,421,781 | $ 4,603,708 | $ 4,945,764 |
Weighted average number of common shares outstanding - Basic | 25,913,631 | 20,800,670 | 15,000,000 |
Dilutive securities -unexercised warrants and options | 27,975 | 9,280 | |
Weighted average number of common shares outstanding - diluted | 25,941,606 | 20,809,950 | 15,000,000 |
Earnings per share - Basic | $ 0.05 | $ 0.22 | $ 0.33 |
Earnings per share - Diluted | $ 0.05 | $ 0.22 | $ 0.33 |
Options (Details Narrative)
Options (Details Narrative) - USD ($) | Nov. 10, 2017 | May 28, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Share-based payment award, options, exercisable | $ 1.50 | $ 1.50 | |||
Share-based compensation for services | $ 682,254 | $ 341,127 | $ 0 | ||
Outstanding vested stock options | 270,000 | ||||
Outstanding vested stock options, weighted average remaining term | 1 year 1 month 20 days | ||||
Unvested stock options | 210,000 | ||||
Unvested stock options, weighted average remaining term | 1 year 3 months 29 days | ||||
Unamortized stock-based compensation expense | $ 802,959 | ||||
TJ Capital Management, L.P [Member] | |||||
Share-based compensation options grants in period | 160,000 | ||||
Share-based payment award, options, exercisable | $ 1.50 | ||||
TJ Capital Management, L.P [Member] | IPO [Member] | |||||
Options vested | 60,000 | ||||
share-based payment award fair value assumptions expected term | 7 months | ||||
TJ Capital Management, L.P [Member] | IPO [Member] | |||||
Options vested | 50,000 | ||||
share-based payment award fair value assumptions expected term | 10 months | ||||
TJ Capital Management, L.P [Member] | IPO [Member] | |||||
Options vested | 50,000 | ||||
share-based payment award fair value assumptions expected term | 15 months | ||||
Dr. Yunhao Chen [Member] | |||||
Options vested | 90,000 | ||||
share-based payment award fair value assumptions expected term | 2 years | ||||
Aggregated fair value of options granted | $ 440,840 | ||||
Share-based payment award, fair value assumptions, method used | Black-Scholes pricing model | ||||
Share price | $ 5 | ||||
Share-based payment award, fair value assumptions, risk free interest rate | 1.84% | ||||
Share-based payment award, fair value assumptions, exercise price | $ 1.50 | ||||
Share-based payment award, fair value assumptions, expected volatility rate | 69.50% | ||||
Share-based payment award, fair value assumptions, expected dividend payments | $ 0 | ||||
Options exercised | 0 | ||||
Dr. Yunhao Chen [Member] | Common Class A [Member] | |||||
Share-based compensation options grants in period | 120,000 | ||||
Share-based payment award, options, exercisable | $ 1.50 | ||||
Dr. Yunhao Chen [Member] | IPO [Member] | |||||
Options vested | 5,000 | ||||
Mr, Silong Chen [Member] | |||||
Options vested | 180,000 | ||||
share-based payment award fair value assumptions expected term | 3 years | ||||
Aggregated fair value of options granted | $ 1,385,500 | ||||
Share-based payment award, fair value assumptions, method used | Black-Scholes pricing model | ||||
Share price | $ 5 | ||||
Share-based payment award, fair value assumptions, risk free interest rate | 1.94% | ||||
Share-based payment award, fair value assumptions, exercise price | $ 1.50 | ||||
Share-based payment award, fair value assumptions, expected volatility rate | 74.70% | ||||
Share-based payment award, fair value assumptions, expected dividend payments | $ 0 | ||||
Options exercised | 0 | ||||
Mr, Silong Chen [Member] | Common Class A [Member] | |||||
Share-based compensation options grants in period | 360,000 | ||||
Share-based payment award, options, exercisable | $ 1.50 | ||||
Mr, Silong Chen [Member] | IPO [Member] | |||||
Options vested | 10,000 |
Options - Schedule of Stock Opt
Options - Schedule of Stock Option Activity (Details) | 12 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Options Outstanding, Beginning Balance | shares | 640,000 |
Number of Option Outstanding Exercisable, Beginning Balance | shares | 90,000 |
Number of Options, Granted | shares | |
Number of Options, Cancelled | shares | 160,000 |
Number of Options, Excercised | shares | |
Number of Options Outstanding, Ending Balance | shares | 480,000 |
Number of Options Outstanding Exercisable, Ending Balance | shares | 270,000 |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 1.50 |
Weighted Average Exercise Price Exercisable, Beginning Balance | $ / shares | 1.50 |
Weighted Average Price, Granted | $ / shares | |
Weighted Average Exercise Price, Cancelled | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Ending Balance | $ / shares | 1.50 |
Weighted Average Exercise Price Exercisable, Ending Balance | $ / shares | $ 1.50 |
Weighted Average Remaining Life in Year, Beginning Balance | 1 year 9 months 22 days |
Weighted Average Remaining Life in Year, Beginning Balance | 2 years 1 month 20 days |
Weighted Average Remaining Contractual Term, Granted | 0 years |
Weighted Average Remaining Contractual Term, Cancelled | 0 years |
Weighted Average Remaining Contractual Term, Exercised | 0 years |
Weighted Average Remaining Life in Year, Ending Balance | 1 year 2 months 19 days |
Weighted Average Remaining Life in Year, Ending Balance | 1 year 1 month 20 days |
Segment Information and Reven_3
Segment Information and Revenue Analysis (Details Narrative) | 12 Months Ended |
Jun. 30, 2019Integer | |
Segment Reporting [Abstract] | |
Number of reporting segment | 1 |
Segment Information and Reven_4
Segment Information and Revenue Analysis - Schedule of Revenues by Geographic Market (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 26,216,515 | $ 30,135,295 | $ 21,172,091 |
China [Member] | |||
Revenues | 15,082,443 | 14,865,940 | 6,839,534 |
United States [Member] | |||
Revenues | 5,522,008 | 10,168,945 | 9,082,419 |
Europe [Member] | |||
Revenues | 2,510,190 | 1,994,085 | 2,618,851 |
Australia [Member] | |||
Revenues | 216,993 | 223,463 | 149,635 |
Canada [Member] | |||
Revenues | 950,353 | 128,320 | 481,142 |
Central and South America [Member] | |||
Revenues | 231,426 | 106,098 | 411,281 |
Japan and Other Asian countries and Regions [Member] | |||
Revenues | $ 1,703,102 | $ 2,637,444 | $ 1,589,229 |
Segment Information and Reven_5
Segment Information and Revenue Analysis - Schedule of Revenues by Product Categories (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues | $ 26,216,515 | $ 30,135,295 | $ 21,172,091 |
Pet leashes [Member] | |||
Revenues | 6,266,952 | 7,102,233 | 5,290,918 |
Pet Collars [Member] | |||
Revenues | 6,188,672 | 10,684,908 | 7,529,420 |
Pet Harnesses [Member] | |||
Revenues | 3,587,128 | 4,980,771 | 1,508,426 |
Retractable Dog Leashes [Member] | |||
Revenues | 1,771,805 | 2,650,932 | 1,691,066 |
Intelligent Pet Products [Member] | |||
Revenues | 2,103,523 | 59,719 | |
Gift Suspender [Member] | |||
Revenues | 4,058,229 | 3,481,500 | 2,415,118 |
Other Pet Accessories [Member] | |||
Revenues | 2,024,742 | 1,175,232 | 2,737,143 |
Climbing Hooks [Member] | |||
Revenues | $ 215,464 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Sep. 10, 2019USD ($) | Sep. 10, 2019CNY (¥) | Sep. 05, 2019USD ($) | Sep. 05, 2019CNY (¥) | Aug. 20, 2019USD ($) | Aug. 20, 2019CNY (¥) | Aug. 09, 2019USD ($) | Aug. 09, 2019CNY (¥) | Aug. 01, 2019shares | Nov. 10, 2017$ / sharesshares | Jul. 30, 2019$ / sharesshares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Jun. 30, 2017USD ($) | Jul. 04, 2019USD ($) | Jul. 04, 2019CNY (¥) |
Additional paid-in capital | $ 52,827,145 | $ 52,144,891 | ||||||||||||||
Share-based payment award, options, exercisable | $ / shares | $ 1.50 | $ 1.50 | ||||||||||||||
Proceeds from short-term bank loans | $ 2,932,000 | $ 4,921,600 | $ 5,842,759 | |||||||||||||
Repayment of short-term bank loans | $ 4,691,200 | $ 6,121,240 | $ 5,872,120 | |||||||||||||
TJ Capital Management, L.P [Member] | ||||||||||||||||
Share-based compensation options grants in period | shares | 160,000 | |||||||||||||||
Share-based payment award, options, exercisable | $ / shares | $ 1.50 | |||||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Repayment of short-term bank loans | $ 3,000,000 | |||||||||||||||
Subsequent Event [Member] | Land [Member] | ||||||||||||||||
Right use of assets | $ 2,200,000 | |||||||||||||||
Subsequent Event [Member] | Buildings [Member] | ||||||||||||||||
Right use of assets | 8,400,000 | |||||||||||||||
Subsequent Event [Member] | Loan Agreement [Member] | ||||||||||||||||
Proceeds from short-term bank loans | $ 2,600,000 | $ 2,600,000 | $ 1,800,000 | |||||||||||||
Subsequent Event [Member] | TJ Capital Management, L.P [Member] | ||||||||||||||||
Share-based payment award, options, exercisable | $ / shares | $ 1.50 | |||||||||||||||
Stock options deemed payment, shares | shares | 6,667 | |||||||||||||||
Share based compensation number of shares granted | shares | 284,300 | |||||||||||||||
Share price | $ / shares | $ 2.90 | |||||||||||||||
Share based payment award fair value assumptions risk free interest rate | 1.85% | |||||||||||||||
Share based payment award fair value assumptions expected term | 2 years | |||||||||||||||
Share based payment award fair value assumptions exercise price | $ / shares | $ 1.50 | |||||||||||||||
Share based payment award fair value assumptions expected volatility rate | 77.00% | |||||||||||||||
Share based payment award fair value assumptions expected dividends | 0.00% | |||||||||||||||
Subsequent Event [Member] | TJ Capital Management, L.P [Member] | Common Class A [Member] | ||||||||||||||||
Share-based compensation options grants in period | shares | 160,000 | |||||||||||||||
Subsequent Event [Member] | RMB [Member] | ||||||||||||||||
Repayment of short-term bank loans | ¥ | ¥ 20,000,000 | |||||||||||||||
Subsequent Event [Member] | RMB [Member] | Loan Agreement [Member] | ||||||||||||||||
Proceeds from short-term bank loans | ¥ | ¥ 18,000,000 | ¥ 18,000,000 | ¥ 12,000,000 | |||||||||||||
Subsequent Event [Member] | Meijia [Member] | ||||||||||||||||
Additional paid-in capital | $ 400,000 | |||||||||||||||
Subsequent Event [Member] | Meijia [Member] | RMB [Member] | ||||||||||||||||
Additional paid-in capital | ¥ | ¥ 3,000,000 |