Document and Entity Information
Document and Entity Information | 12 Months Ended |
Jun. 30, 2020shares | |
Document and Entity Information | |
Entity Registrant Name | China Xiangtai Food Co., Ltd. |
Entity Central Index Key | 0001735556 |
Trading Symbol | PLIN |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Current Fiscal Year End Date | --06-30 |
Entity Well Known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Interactive Data Current | Yes |
Entity Common Stock, Shares Outstanding | 23,971,084 |
Document Type | 20-F |
Document Period End Date | Jun. 30, 2020 |
Amendment Flag | false |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Document Annual Report | false |
Document Transition Report | false |
Document Shell Company Report | true |
Title of 12(g) Security | Ordinary shares, par value $0.01 per share |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,533,237 | $ 3,196,990 |
Accounts receivable, net | 40,572,757 | 39,522,737 |
Other receivables, net | 148,894 | 238,383 |
Prepayments, net | 7,720,452 | 213,596 |
Security deposits, net | 237,409 | 2,352,742 |
Current assets of discontinued operations | 63,185 | 174,467 |
Total current assets | 50,275,934 | 45,698,915 |
OTHER ASSETS | ||
Plant and equipment, net | 3,455,993 | 3,335,229 |
Intangible assets, net | 437,989 | 462,738 |
Goodwill | 5,185,866 | 0 |
Right of use assets | 2,725,747 | 0 |
Deferred tax assets | 648,768 | 0 |
Other receivables | 39,685 | 9,597 |
Other assets of discontinued operations | 579,452 | 1,844,838 |
Total other assets | 13,073,500 | 5,652,402 |
Total assets | 63,349,434 | 51,351,317 |
CURRENT LIABILITIES | ||
Short-term loans - banks | 4,359,210 | 4,150,309 |
Loans from third parties | 5,013,117 | 2,449,048 |
Total current loans from related parties | 0 | 329,120 |
Current maturities of long-term loan - bank | 777,558 | 0 |
Convertible debenture, net | 4,768,312 | 0 |
Accounts payable | 7,510,432 | 8,654,056 |
Customer deposits | 1,266,073 | 704,354 |
Customer deposits - related party | 27,395 | 29,643 |
Other payables and accrued liabilities | 1,942,014 | 420,359 |
Other payables - related parties | 2,234,980 | 1,245,864 |
Operating lease liabilities | 49,171 | 0 |
Taxes payable | 3,342,127 | 2,974,059 |
Current liabilities of discontinued operations | 1,445,201 | 1,872,053 |
Total current liabilities | 32,735,590 | 22,828,865 |
OTHER LIABILITIES | ||
Long-term loan - bank | 0 | 866,231 |
Loans from third parties | 2,074,871 | 3,131,007 |
Long-term loans - related parties | 713,325 | 0 |
Operating lease liabilities - noncurrent | 581,083 | 0 |
Other liabilities of discontinued operations | 417,729 | 0 |
Total other liabilities | 3,787,008 | 3,997,238 |
Total liabilities | 36,522,598 | 26,826,103 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 23,971,084 and 21,964,027 shares issued and outstanding as of June 30, 2020 and 2019, respectively | 239,711 | 219,640 |
Additional paid-in capital | 15,765,411 | 11,031,937 |
Deferred share compensation | (47,708) | 0 |
Statutory reserves | 1,670,367 | 1,496,642 |
Retained earnings | 7,034,899 | 12,085,566 |
Accumulated other comprehensive loss | (856,218) | (308,571) |
Total China Xiangtai Food Co., Ltd. shareholders' equity | 23,806,462 | 24,525,214 |
NONCONTROLLING INTERESTS | 3,020,374 | 0 |
Total equity | 26,826,836 | 24,525,214 |
Total liabilities and shareholders' equity | $ 63,349,434 | $ 51,351,317 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, par value | $ 0.01 | $ 0.01 |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 |
Ordinary shares, shares authorized, shares issued | 23,971,084 | 21,964,027 |
Ordinary shares, shares authorized, shares outstanding | 23,971,084 | 21,964,027 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
REVENUES | |||
Total revenues | $ 110,551,502 | $ 99,079,267 | $ 101,104,224 |
COST OF REVENUES | |||
Total cost of revenues | 103,373,524 | 90,429,027 | 91,452,753 |
GROSS PROFIT | 7,177,978 | 8,650,240 | 9,651,471 |
OPERATING EXPENSES: | |||
Selling | 794,193 | 550,574 | 708,531 |
General and administrative | 4,167,587 | 1,277,820 | 981,347 |
Provision for doubtful accounts | 770,192 | 743,986 | 918,940 |
Stock compensation expense | 930,223 | ||
Total operating expenses | 6,662,195 | 2,572,380 | 2,608,818 |
INCOME FROM OPERATIONS | 515,783 | 6,077,860 | 7,042,653 |
OTHER INCOME (EXPENSE) | |||
Interest income | 3,048 | 2,163 | 388,781 |
Interest expense | (1,673,563) | (730,780) | (1,282,291) |
Other finance expenses | (417,549) | (118,394) | (141,284) |
Other (expense) income, net | (89,405) | 9,012 | (18,596) |
Provision for doubtful accounts - security deposit | (718,437) | ||
Provision for doubtful accounts - loan receivable | 0 | 0 | (1,506,778) |
Total other income, net | (2,895,906) | (837,999) | (2,560,168) |
(LOSS) INCOME BEFORE INCOME TAXES | (2,380,123) | 5,239,861 | 4,482,485 |
PROVISION FOR INCOME TAXES | 223,173 | 213,649 | 714,376 |
Net (loss) income from continuing operations | (2,603,296) | 5,026,212 | 3,768,109 |
NET LOSS FROM DISCONTINUED OPERATIONS | (1,796,237) | (662,621) | 0 |
NET (LOSS) INCOME | (4,399,533) | 4,363,591 | 3,768,109 |
Less: Net income attributable to non-controlling interest from continuing operations | 477,409 | ||
NET (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | (4,876,942) | 4,363,591 | 3,768,109 |
Net income (loss) | (4,399,533) | 4,363,591 | 3,768,109 |
OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustment | (559,320) | (267,546) | 133,553 |
Foreign currency translation adjustment | (559,320) | (267,546) | 133,553 |
TOTAL COMPREHENSIVE (LOSS) INCOME | (4,958,853) | 4,096,045 | 3,901,662 |
Less: Comprehensive income attributable to non-controlling interests from continuing operations | 465,736 | ||
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | $ (5,424,589) | $ 4,096,045 | $ 3,901,662 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | |||
Basic | 22,417,524 | 20,319,723 | 20,000,000 |
Diluted | 22,417,524 | 20,944,951 | 20,083,151 |
(LOSS) EARNINGS PER SHARE - BASIC | |||
Continuing operations | $ (0.14) | $ 0.24 | $ 0.19 |
Discontinued operations | (0.08) | (0.03) | |
(LOSS) EARNINGS PER SHARE - DILUTED | |||
Continuing operations | (0.14) | 0.24 | $ 0.19 |
Discontinued operations | $ (0.08) | $ (0.03) | |
Supermarket and grocery store | |||
REVENUES | |||
Total revenues | $ 5,827,319 | $ 3,856,358 | $ 3,750,904 |
COST OF REVENUES | |||
Total cost of revenues | 4,961,552 | 3,256,439 | 3,193,830 |
Farmers' market | |||
REVENUES | |||
Total revenues | 80,473,936 | 95,222,909 | 97,353,320 |
COST OF REVENUES | |||
Total cost of revenues | 76,192,444 | $ 87,172,588 | $ 88,258,923 |
Feed raw material | |||
REVENUES | |||
Total revenues | 24,250,247 | ||
COST OF REVENUES | |||
Total cost of revenues | $ 22,219,528 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Private placementsOrdinary Shares | Private placementsAdditional paid-in capital | Private placementsStatutory reserves | Private placementsUnrestricted | Private placementsAccumulated other comprehensive loss | Private placements | Initial public offeringOrdinary Shares | Initial public offeringAdditional paid-in capital | Initial public offeringStatutory reserves | Initial public offeringUnrestricted | Initial public offeringAccumulated other comprehensive loss | Initial public offering | Ordinary Shares | Deferred share compensation | Additional paid-in capital | Statutory reserves | Unrestricted | Accumulated other comprehensive loss | Noncontrolling Interests | Total |
Balance at the beginning at Jun. 30, 2017 | $ 200,000 | $ 4,655,943 | $ 562,210 | $ 4,888,298 | $ (174,578) | $ 10,131,873 | ||||||||||||||
Balance at the beginning (in shares) at Jun. 30, 2017 | 20,000,000 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Statutory reserves | $ 0 | 0 | 378,606 | (378,606) | 0 | 0 | ||||||||||||||
Net (loss) income | 0 | 0 | 0 | 3,768,109 | 0 | 3,768,109 | ||||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 133,553 | 133,553 | ||||||||||||||
Balance at the end at Jun. 30, 2018 | $ 200,000 | 4,655,943 | 940,816 | 8,277,801 | (41,025) | 14,033,535 | ||||||||||||||
Balance at the end (in shares) at Jun. 30, 2018 | 20,000,000 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Statutory reserves | $ 0 | 0 | 555,826 | (555,826) | 0 | 0 | ||||||||||||||
Issuance of ordinary shares | $ 667 | $ 199,333 | $ 0 | $ 0 | $ 0 | $ 200,000 | $ 11,723 | $ 4,383,911 | $ 0 | $ 0 | $ 0 | $ 4,395,634 | ||||||||
Issuance of ordinary shares (in shares) | 66,667 | 1,172,360 | ||||||||||||||||||
Issuance of ordinary shares in connection with redemption rights | $ 7,250 | 1,792,750 | 0 | 0 | 0 | 1,800,000 | ||||||||||||||
Issuance of ordinary shares in connection with redemption rights (in shares) | 725,000 | |||||||||||||||||||
Net (loss) income | $ 0 | 0 | 0 | 4,363,591 | 0 | 4,363,591 | ||||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (267,546) | (267,546) | ||||||||||||||
Balance at the end at Jun. 30, 2019 | $ 219,640 | 11,031,937 | 1,496,642 | 12,085,566 | (308,571) | 24,525,214 | ||||||||||||||
Balance at the end (in shares) at Jun. 30, 2019 | 21,964,027 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Statutory reserves | $ 0 | 0 | 173,725 | (173,725) | 0 | 0 | ||||||||||||||
Issuance of ordinary shares for services | $ 1,800 | $ (114,500) | 762,700 | 0 | 0 | 0 | 650,000 | |||||||||||||
Issuance of ordinary shares for services (in shares) | 180,000 | |||||||||||||||||||
Amortization of deferred share compensation | $ 0 | 66,792 | 0 | 0 | 0 | 0 | 66,792 | |||||||||||||
Options issued to directors | 0 | 213,431 | 0 | 0 | 0 | 213,431 | ||||||||||||||
Issuance of ordinary shares for acquisition | $ 10,000 | 2,648,909 | 0 | 0 | 0 | 2,658,909 | ||||||||||||||
Issuance of ordinary shares for acquisition (in shares) | 1,000,000 | |||||||||||||||||||
Fair value of noncontrolling interest acquired | $ 0 | 0 | 0 | 0 | 0 | $ 2,554,638 | 2,554,638 | |||||||||||||
Fair value of beneficial conversion feature of convertible debenture | 0 | 259,540 | 0 | 0 | 0 | 259,540 | ||||||||||||||
Conversion convertible debenture into ordinary shares | $ 8,271 | 848,894 | 0 | 0 | 0 | 857,165 | ||||||||||||||
Conversion convertible debenture into ordinary shares (in shares) | 827,057 | |||||||||||||||||||
Net (loss) income | $ 0 | 0 | 0 | (4,876,942) | 0 | 477,409 | (4,399,533) | |||||||||||||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | (547,647) | (11,673) | (559,320) | |||||||||||||
Balance at the end at Jun. 30, 2020 | $ 239,711 | $ (47,708) | $ 15,765,411 | $ 1,670,367 | $ 7,034,899 | $ (856,218) | $ 3,020,374 | $ 26,826,836 | ||||||||||||
Balance at the end (in shares) at Jun. 30, 2020 | 23,971,084 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (4,399,533) | $ 4,363,591 | $ 3,768,109 |
Net loss from discontinued operations | 1,796,237 | 662,621 | 0 |
Net (loss) income from continuing operations | (2,603,296) | 5,026,212 | 3,768,109 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 508,354 | 521,925 | 542,189 |
Provision for doubtful accounts | 1,488,629 | 743,986 | 2,425,718 |
Stock compensation expense | 930,223 | 0 | 0 |
Late payment penalty expense | 500,000 | 0 | 0 |
Amortization of operating lease right-of-use assets | 73,346 | 0 | 0 |
Amortization of convertible debenture issuance cost and discount | 357,853 | 0 | 0 |
Deferred tax (benefit) expense | (166,673) | 213,649 | (126,936) |
Change in operating assets and liabilities | |||
Accounts receivable | 2,615,184 | (16,864,582) | (12,021,191) |
Accounts receivable - related party | 0 | 0 | (40,780) |
Other receivables | 52,333 | (157,440) | (88,954) |
Inventories | 318,478 | 2,647 | 291,594 |
Prepayments | (5,556,930) | 93,508 | 209,777 |
Security deposits | 1,388,179 | (1,476,090) | 0 |
Loan receivables - interest | 0 | 727,338 | (384,788) |
Accounts payable | (4,206,084) | 5,852,139 | 68,175 |
Customer deposits | (3,329,873) | 73,946 | 554,889 |
Customer deposits - related party | (1,421) | (723) | 32,049 |
Other payables and accrued liabilities | 1,564,210 | 165,216 | 245,373 |
Operating lease liabilities | (45,716) | 0 | 0 |
Taxes payable | 452,831 | 35,087 | 929,745 |
Net cash used in operating activities from continuing operations | (5,660,373) | (5,043,182) | (3,595,031) |
Net cash used in operating activities from discontinued operations | (251,646) | (224,079) | 0 |
Net cash used in operating activities | (5,912,019) | (5,267,261) | (3,595,031) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of plant and equipment | (700,399) | (20,635) | (89,351) |
Repayments from loan to third party | 0 | 1,171,945 | 0 |
Cash received from acquisition of JMC | 859,461 | 0 | 0 |
Net cash provided by (used in) investing activities from continuing operations | 159,062 | 1,151,310 | (89,351) |
Net cash provided by investing activities from discontinued operations | 0 | 42,234 | 0 |
Net cash provided by (used in) investing activities | 159,062 | 1,193,544 | (89,351) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repayments from other receivables - related parties, net | 0 | 741 | 2,736,001 |
(Repayments of) proceeds from other payables - related parties, net | (2,028,451) | 701,245 | 609,048 |
Proceeds from issuance of ordinary shares through private placements | 0 | 200,000 | 0 |
Proceeds from issuance of ordinary shares through initial public offering, net | 0 | 4,395,634 | 0 |
Proceeds from issuance of ordinary shares with redemption rights | 0 | 0 | 1,800,000 |
Proceeds from short-term loans - banks | 469,288 | 4,535,428 | 6,148,734 |
Repayments of short-term loans - banks | (1,137,574) | (4,755,264) | (11,375,158) |
Proceeds from short-term loans - third parties | 770,906 | 1,174,453 | 11,134,708 |
Repayments of short-term loans - third parties | (1,638,334) | (322,285) | (6,138,861) |
Proceeds from short-term loans - related parties | 0 | 331,075 | 0 |
Proceeds from long-term loan - banks | 0 | 923,830 | 0 |
Repayments of long-term loan - banks | (64,619) | (1,004,659) | 0 |
Proceeds from long-term loans - third parties | 2,040,691 | 0 | 0 |
Repayment of long -term loans - Third Parties | (2,844) | 0 | 0 |
Proceeds from long-term loans - related parties | 472,132 | 0 | 0 |
Repayments of long-term loans - related parties | (76,793) | 0 | 0 |
Repayment of note payable | 0 | 0 | (1,537,184) |
Proceeds from convertiable debentures, net of issuance costs | 5,480,000 | 0 | 0 |
Changes in security deposits | (15,069) | 648,828 | 615,426 |
Net cash provided by financing activities from continuing operations | 4,269,333 | 6,829,026 | 3,992,714 |
Net cash used in financing activities from discontinued operations | (192,325) | (178,500) | 0 |
Net cash provided by financing activities | 4,077,008 | 6,650,526 | 3,992,714 |
EFFECT OF EXCHANGE RATE ON CASH | (4,296) | 320,103 | (10,769) |
CHANGES IN CASH | (1,680,245) | 2,896,912 | 297,563 |
CASH AND CASH EQUIVALENTS, beginning of year | 3,216,005 | 319,093 | 21,530 |
CASH AND CASH EQUIVALENTS, end of year | 1,535,760 | 3,216,005 | 319,093 |
LESS: CASH AND CASH EQUIVALENTS FROM DISCONTINUED OPERATIONS | 2,523 | 19,015 | 0 |
CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS | 1,533,237 | 3,196,990 | 319,093 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income tax | 0 | 0 | 0 |
Cash paid for interest | 488,360 | 823,551 | 1,389,533 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |||
Other receivable - related party offset with other payable - related party upon execution of the tri-party offset agreement | 1,195,585 | 439,479 | 50,627 |
Issuance of ordinary shares with redemption rights of mezzanine equity | 0 | 1,800,000 | 0 |
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 3,240,920 | 0 | 0 |
Issuance of ordinary shares for acquisition | 2,658,909 | 0 | 0 |
Conversion of convertible debenture into ordinary shares | $ 857,165 | $ 0 | $ 0 |
Nature of business and organiza
Nature of business and organization | 12 Months Ended |
Jun. 30, 2020 | |
Nature of business and organization | |
Nature of business and organization | Note 1 – Nature of business and organization China Xiangtai Food Co., Ltd. (“Xiangtai Cayman” or the “Company”) is a holding company incorporated on January 23, 2018, under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding share capital of WVM Inc. (“Xiangtai BVI”). Xiangtai BVI is also a holding company holding all of the outstanding equity of CVS Limited, (“Xiangtai HK”). Xiangtai HK is also a holding company holding all of the outstanding equity of Chongqing Jinghuangtai Business Management Consulting Co., Ltd. (“Xiangtai WFOE”). The Company, through its variable interest entity (“VIE”), Chongqin Penglin Food Co., Ltd. (“CQ Penglin”) and through its wholly-owned subsidiary, Guang’an Yongpeng Food Co., Ltd. (“GA Yongpeng”), engages in slaughtering, processing, packing and selling various processed meat products. On July 2, 2018, the Company acquired Chongqing Pengmei Supermarket Co. Ltd., (“CQ Pengmei”) that operated two grocery stores under common control of Ms. Zeshu Dai, its CEO, and her spouse in the city of Chongqing. The operations of these two grocery stores started in November 2017. The acquisition price was at the carrying value on CQ Pengmei books and records for a total of approximately $0.9 million (RMB 5,949,052). In February 2020, the Company discontinued its grocery stores business as the Company has been operating at losses in this business. As a result, the results of operations for the Company's grocery stores business are reported as discontinued operations under the guidance of Accounting Standards Codification 205. On April 3, 2020, the Company entered into a Share Purchase Agreement ("SPA") with Xiangtai WFOE, Chongqing Ji Mao Cang Feed Co., Ltd. ("JMC"), which engages in raw feed material and formula solution wholesales business, and the shareholders of JMC ("JMC Shareholders"). Pursuant to the SPA, the Company shall issue to the shareholder who owns 51% of JMC's equity interest 2,000,000 duly authorized, fully paid and nonassessable ordinary shares of the Company, valued at a price of $1.77 per share, the closing price of the Company's ordinary share on April 3, 2020, for an aggregate discounted purchase price of $2,658,909 with probability of contingent considerations, subject to the milestones as specified in the SPA, in exchange for JMC Shareholders' agreement to cause JMC to enter into certain VIE agreements with Xiangtai WFOE, through which WFOE shall have the right to control, manage and operate JMC in return for a service fee equal to 51% of JMC's after-tax net income. (See Note 4). The Company’s headquarter is located in the city of Chongqing, a direct-controlled municipality of the People’s Republic of China (the “PRC” or “China”). All of the Company’s business activities are carried out by CQ Penglin, GA Yongpeng, CQ Pengmei and JMC. In May 2018, Xiangtai Cayman completed its reorganization of entities under the common control of one major shareholder, Zeshu Dai, who obtained 100% control of China Meitai Food Co., Ltd. (“China Meitai”), which has 64.17% ownership in Xiangtai Cayman, through an entrustment agreement with a third party prior to the reorganization, which the third party entrusted its voting power, personnel appointment power and other power-related to operating and managing of China Meitai, and therefore effectively the control of Xiangtai Cayman, to Ms. Dai to the extent permitted by the laws of the British Virgin Islands. Ms. Dai entered into a call option agreement with a third party who is currently the sole shareholder of China Meitai. Pursuant to the call option agreement, the third party granted Ms. Dai an option that upon the closing of the initial public offering of the Company, Ms. Dai can exercise control of 97.74% of the shares of China Meitai. After excising the option shares in China Meitai, Ms. Dai indirectly owns 62.73% shares of the Company through China Meitai concurrently with the completion of the reorganization in May 2019. Xiangtai Cayman, Xiangtai BVI and Xiangtai HK were established as the holding companies of Xiangtai WFOE. Xiangtai WFOE is the primary beneficiary of CQ Penglin and is the holding company of GA Yongpeng, and all of these entities included in Xiangtai Cayman are under common control of Ms. Dai and her immediate family members. As the 97.7% major shareholder in China Meitai, upon exercising the option shares, who collectively owns 100% of CQ Penglin and 100% of GA Yongpeng prior to the reorganization, causing the consolidation of CQ Penglin and GA Yongpeng which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of Xiangtai Cayman. On May 10, 2019, the Company closed its initial public offering of an aggregate of 1,172,360 ordinary shares, par value $0.01 per share, at a public offering price of $5.00 per share, for gross proceeds of $5,861,800 (the “Closing”). The Company received net proceeds (after deducting underwriting discounts and commissions and other offering fees and expenses) of approximately $4.4 million from the offering. The accompanying consolidated financial statements reflect the activities of Xiangtai Cayman and each of the following entities: Name Background Ownership Xiangtai BVI · A British Virgin Islands company 100% Xiangtai HK · A Hong Kong company 100% owned by Xiangtai BVI Xiangtai WFOE · A PRC limited liability company and deemed a wholly foreign-owned enterprise (“WFOE”) 100% owned by Xiangtai HK CQ Penglin · A PRC limited liability company VIE of Xiangtai WFOE · Slaughtering, processing, packing, and selling various processed meat products. GA Yongpeng · A PRC limited liability company 100% owned by Xiangtai WFOE · Slaughtering, processing, packing and selling various processed meat products. CQ Pengmei · A PRC limited liability company 100% owned by Xiangtai WFOE · Grocery stores selling daily necessities JMC · A PRC limited liability company 51 % VIE of Xiangtai WFOE · Feed raw materials and formula solutions wholesales. Contractual Arrangements CQ Penglin CQ Penglin’s PRC business license includes business activities of marketing survey service in the livestock industry and it is being included as a social survey category, which is within the business category in which foreign investment is restricted pursuant to the current PRC regulations. As such, CQ Penglin is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements (collectively the “Contractual Arrangements”). The significant terms of the Contractual Agreements are as follows: Technical Consultation and Services Agreement Pursuant to the technical consultation and services agreement between Xiangtai WFOE and CQ Penglin, as amended, Xiangtai WFOE is engaged as the exclusive provider of management consulting services to CQ Penglin. For such services, CQ Penglin agrees to pay service fees determined based on all of their net income to Xiangtai WFOE or Xiangtai WFOE has the obligation to absorb all of the losses of CQ Penglin. The technical consultation and services agreement, as amended, remains in effect for 30 years until October 8, 2047. The agreement can be extended only if Xiangtai WFOE gives its written consent of extension of the agreement before the expiration of the agreement and CQ Penglin then may extend without reservation. Business Cooperation Agreement Pursuant to the business cooperation agreement between Xiangtai WFOE and CQ Penglin, as amended, Xiangtai WFOE has the exclusive right to provide CQ Penglin with technical support, business support and related consulting services, including but not limited to technical services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. In exchange, Xiangtai WFOE is entitled to a service fee that equals all of the net income of CQ Penglin determined by U.S. GAAP. The service fees may be adjusted based on the services rendered by Xiangtai WFOE in that month and the operational needs of CQ Penglin. The business cooperation agreement, as amended, remains in effect unless Xiangtai WFOE commits gross negligence, or a fraudulent act, against CQ Penglin. Nevertheless, Xiangtai WFOE shall have the right to terminate this agreement upon giving 30 days’ prior written notice to CQ Penglin at any time. Equity Option Agreements Pursuant to the equity option agreements, as amended, among the shareholders who collectively owned all of CQ Penglin and Xiangtai WFOE, and CQ Penglin. These shareholders jointly and severally grant Xiangtai WFOE an option to purchase their equity interests in CQ Penglin. The purchase price shall be the lowest price then permitted under applicable PRC laws. If the purchase price is greater than the registered capital of CQ Penglin, these shareholders of CQ Penglin are required to immediately return any amount in excess of the registered capital to Xiangtai WFOE or its designee of Xiangtai WFOE. Xiangtai WOFE may exercise such option at any time until it has acquired all equity interests of CQ Penglin, and may transfer the option to any third party. The agreements will terminate at the date on which all of these shareholders’ equity interests of CQ Penglin has been transferred to Xiangtai WFOE or its designee. Equity Pledge Agreements Pursuant to the equity pledge agreements, as amended, among the shareholders who collectively owned all of CQ Penglin, pledge all of the equity interests in CQ Penglin to Xiangtai WFOE as collateral to secure the obligations of CQ Penglin under the exclusive consulting services and operating agreement. These shareholders may not transfer or assign transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Xiangtai WFOE’s interests, without Xiangtai WFOE’s prior approval. In the event of default, Xiangtai WFOE as the pledgee will be entitled to certain rights and entitlements, including the priority in receiving payments by the evaluation or proceeds from the auction or sale of whole or part of the pledged equity interests of CQ Penglin. The agreement will terminate at the date these shareholders have transferred all of their pledged equity interests pursuant to the equity option agreement. Voting Rights Proxy and Financial Supporting Agreements Pursuant to the voting rights proxy and financial supporting agreements, as amended, the shareholders of CQ Penglin give Xiangtai WFOE an irrevocable proxy to act on their behalf on all matters pertaining to CQ Penglin and to exercise all of their rights as shareholders of CQ Penglin, including the right to attend shareholders meeting, to exercise voting rights and to transfer all or a part of their equity interests in CQ Penglin. In consideration of such granted rights, Xiangtai WFOE agrees to provide the necessary financial support to CQ Penglin whether or not CQ Penglin incurs a loss, and agrees not to request repayment if CQ Penglin is unable to do so. The agreements shall remain in effect for 30 years until October 8, 2047. Based on the foregoing contractual arrangements, which grant Xiangtai WFOE effective control of CQ Penglin, obligate Xiangtai WFOE to absorb all of the risks of loss from their activities, and enable Xiangtai WFOE to receive all of their expected residual returns, the Company accounts for CQ Penglin as a VIE. The Company consolidates the accounts of CQ Penglin for the periods presented herein, in accordance with Regulation S-X‑3A‑02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810‑10, Consolidation. JMC JMC is a private enterprise specializing in feed raw material sales and feed formula solutions. JMC has entered strategic alliances with large grain and oil companies and has obtained general distributorship in Chongqing, Sichuan and other places in the PRC. To provide distribution service, JMC needs to conduct market research and to collect and analyze the relating market data, which is regarded as marketing service, which is within the business category in which foreign investment is restricted pursuant to the current PRC regulations. As such, JMC is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements (collectively the “Contractual Arrangements”). The significant terms of the Contractual Agreements are as follows: Technical Consultation and Services Agreement Pursuant to the technical consultation and services agreement, as amended, between Xiangtai WFOE and JMC, Xiangtai WFOE is engaged as the exclusive provider of management consulting services to JMC. For such services, JMC agrees to pay service fees determined based on 51% of their net income to Xiangtai WFOE or Xiangtai WFOE has the obligation to absorb 51% of the losses of JMC. The technical consultation and services agreement, as amended, remains in effect for 20 years until April 2, 2040. The agreement can be extended only if Xiangtai WFOE gives its written consent of extension of the agreement before the expiration of the agreement and JMC then may extend without reservation. Equity Option Agreement Pursuant to the equity option agreement, a shareholder who owned 51% of JMC, Xiangtai WFOE, and JMC. This shareholder severally grant Xiangtai WFOE an option to purchase her 51% equity interests in JMC. The purchase price shall be the lowest price then permitted under applicable PRC laws. If the purchase price is greater than the registered capital of JMC, this shareholder of JMC is required to immediately return any amount in excess of the registered capital to Xiangtai WFOE or its designee of Xiangtai WFOE. Xiangtai WOFE may exercise such option at any time until it has acquired the 51% equity interests of JMC, and may transfer the option to any third party. The agreements will terminate at the date on which all of this shareholder’s 51% equity interests of JMC has been transferred to Xiangtai WFOE or its designee. Equity Pledge Agreement Pursuant to the equity pledge agreement, a shareholder who owned 51% of JMC pledges all of her 51% equity interests in JMC to Xiangtai WFOE as collateral to secure the obligations of JMC under the exclusive consulting services and operating agreement. This shareholder may not transfer or assign transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Xiangtai WFOE’s interests, without Xiangtai WFOE’s prior approval. In the event of default, Xiangtai WFOE as the pledgee will be entitled to certain rights and entitlements, including the priority in receiving payments by the evaluation or proceeds from the auction or sale of whole or part of the pledged equity interests of JMC. The agreement will terminate at the date these shareholders have transferred all of their pledged equity interests pursuant to the equity option agreement. Voting Rights Proxy and Financial Supporting Agreement Pursuant to the voting rights proxy and financial supporting agreement, a 51% shareholder of JMC give Xiangtai WFOE an irrevocable proxy to act on their behalf on all matters pertaining to JMC and to exercise all of their rights as the 51% shareholder of JMC, including the right to attend shareholders meeting, to exercise voting rights and to transfer all 51% or a part of her equity interests in JMC. In consideration of such granted rights, Xiangtai WFOE agrees to provide the necessary 51% financial support to JMC whether or not JMC incurs a loss, and agrees not to request repayment if JMC is unable to do so. The agreements shall remain in effect for 20 years until April 2, 2040. Based on the foregoing contractual arrangements, which grant Xiangtai WFOE effective 51% control of JMC, obligate Xiangtai WFOE to absorb 51% of the risks of loss from their activities, and enable Xiangtai WFOE to receive 51% of their expected residual returns, the Company accounts for JMC as a VIE. The Company consolidates the accounts of JMC beginning on April 3, 2020, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jun. 30, 2020 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, and its VIE. All intercompany transactions and balances are eliminated upon consolidation. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment, impairment of long-lived assets, and allowance for doubtful accounts. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(856,218) and $(308,571) as of June 30, 2020 and 2019, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2019 and 2018 were translated at 7.07 RMB and 6.87 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to the statement of income accounts for the years ended June 30, 2020, 2019 and 2018 were 7.03 RMB, 6.83 RMB and 6.51 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. Business combinations The purchase of price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company's operating results from the date of acquisition. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and time deposits placed with banks or other financial institutions and have original maturities of less than three months. Accounts receivable Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical experience, aging of the receivables, the economic environment, trends in the food industry and the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. The Company provides an allowance for doubtful accounts provision of 25% for accounts receivable balances that are past due more than 180 days but less than 270 days, an allowance for doubtful accounts provision of 50% of for accounts receivable past due from 270 days but less than one year, an allowance for doubtful accounts provision of 100% for accounts receivable past due beyond one year, plus additional amounts as necessary when the Company’s collection department determines the collection of the full amount is remote and the Company’s management approves 100% of the allowance for doubtful accounts. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management has continued to evaluate the reasonableness of its valuation allowance policy and will update it if necessary. Other receivables Other receivables primarily include advances to employees, amounts due from unrelated entities, VAT tax refunds, and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes the collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2020 and 2019, allowance for the doubtful accounts were $50,363 and $48,203 for continuing operations, respectively. As of June 30, 2020 and 2019, no allowance for the doubtful accounts was recognized for discontinued operations, respectively. Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value. Prepayments Prepayments are cash deposited or advanced to services providers for future inventory purchases or future services. This amount is refundable and bears no interest. Security deposits Security deposits include loan deposits to service providers who assisted the Company as a third party guarantor in the Company’s bank loans and sales performance deposits to guarantee the Company’s sales contracts. These amounts are non-interest bearing and refundable upon the repayments of the loans or notes payable or fulfillment of sales contracts. Security deposits considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2020 and 2019, allowance for the doubtful accounts were $715,024 and $0 for continuing operations, respectively. As of June 30, 2020 and 2019, no allowance for the doubtful accounts was recognized for discontinued operations, respectively. Plant and equipment, net Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 0% or 5% residual value. The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction projects. No depreciation is provided for construction-in-progress until it is completed and placed into service. Intangible assets, net Intangible assets are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land-use rights.” The Company has obtained rights to use various parcels of land for 50 years. The Company amortizes the cost of the land use rights over their useful life using the straight-line method. Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive income (loss). Impairment losses on goodwill are not reversed. The Company reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred. The Company has the opinion to access qualitative factors to determine whether it is necessary to perform the two-step in accordance with ASC 350-20. If the Company believes, as a result of the qualitative carrying amount, the two-step quantities impairment test described below is required. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit's goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business acquisition with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive income (loss). Impairment losses on goodwill are not reversed. For the years ended June 30, 2020, 2019 and 2018, no impairment was recorded for goodwill. Impairment for long-lived assets Long-lived assets, including plant and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2020 and 2019, no impairment of long-lived assets was recognized for continuing operations. As of June 30, 2020 and 2019, $724,987 and $0 impairment of long-lived assets was recognized for discontinued operations, respectively. Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. The embedded conversion features of convertible debentures not separately accounted for as a derivative and contained considered to be derivative instruments provide for a rate of conversion that is below market value. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”) required to separate the instruments into debt and equity. A BCF is a non-detachable conversion feature that is "in the money" at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is "in the money" if the effective conversion price is lower than the commitment date fair value of the share into which it is convertible. The relative fair values of the BCF were recorded as discounts from the face amount of the respective debt instrument. The Company amortized the discount using the straight-line method which approximates the effective interest method through maturity of such instruments. Fair value measurement The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: · 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, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Long-term bank loan on the balance sheets is at carrying value, which approximates fair value as the bank was lending the money to the Company at the market rate. Related parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. Revenue recognition Prior to June 30, 2018, revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. Revenues are recognized at the date of goods delivered and title passed to customers or agents, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. The Company’s revenues come from three channels: supermarkets, farmers’ markets and feed raw materials. The products sold in supermarkets together with feed raw materials are processed products are subject to a Chinese value-added tax (“VAT”) when sold in the PRC. The products sold at farmers’ markets are fresh-killed hog and hog’s byproducts. These products sold in the PRC are not subject to a Chinese VAT. VAT taxes are presented as a reduction of revenue. On July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of June 30, 2018. The core principle underlying the revenue recognition ASU is that the Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or overtime, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and determined that there were no differences in the pattern of revenue recognition. Disaggregated revenue by the Company’s revenue streams, such as supermarket and grocery store revenue, famers’ market revenue and feed raw material revenue are required to be disclosed upon adoption, which has been reflected in the accompanying consolidated statements of income and comprehensive income. Gross versus Net Revenue Reporting The Company also engages in trading of chilled fresh pork. The determination of whether revenues should be reported on a gross or net basis is based on its assessment of whether it is the principal or an agent in the transaction in accordance with ASC 606-10-55 and depends on whether the promise to the customer is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company controls the products prior to transferring it. When the Company controls the product, the promise is to provide and deliver the products and revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is presented net. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in 606-10-55-39. The Company considers this guidance in conjunction with the terms in the Company’s arrangements with both suppliers and customers. In general, the Company does not control the products as it has no obligation to (i) fulfill the resale products delivery, and (ii) bear any inventory risk. In addition, when establishing the selling prices for delivery of the resale products, the Company has such discretion of establishing price to ensure it would generate profit for the services of the products delivery arrangements. The Company believes that all these factors indicate that the Company is acting as an agent in this transaction. As a result, revenue from the trading of chilled fresh pork is presented on a net basis. Cost of revenues Cost of revenues comprised of the cost of raw materials and the cost of processing and overhead expenses on sold products. Shipping and handling Shipping and handling costs are expensed as incurred and included in selling expenses. Advertising costs Advertising costs from continuing operations amounted to $16,913, $2,583, and $4,320 for the years ended June 30, 2020, 2019 and 2018, respectively. Advertising costs from discontinued operations amounted to $0, $12,293, and $0 for the years ended June 30, 2020, 2019 and 2018, respectively. Advertising costs are expensed as incurred and included in selling expenses. Leases Effective July 1, 2019, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On July 1, 2019, the Company recognized approximately $1.3 million right of use (“ROU”) assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 6.09% based on the duration of lease terms. Operating lease ROU assets and lease liabilities are recognized at the adoption date of July 1, 2019 or the commencement date, whichever is earlier, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. Stock-based compensation The Company records stock compensation expense for employees at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company’s expected volatility assumption is based on the historical volatility of the Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination rate. The risk-free interest rate for the expected term of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the Company’s current and expected dividend policy. The Company records stock compensation expense for non-employees at fair value on the grant date and recognizes the expense over the service provider’s requisite service period. Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2017 to 2019 are subject to examination by any applicable tax authorities. Earnings per share (“EPS”) Basic earnings per share are computed by dividing income available to ordinary shareholders by the weighted average ordinary shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. Ordinary shares equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Dilution is computed by applying the treasury share method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during the period. A total of 725,000 issued and outstanding ordinary shares with redemption rights prior to the redemption right removal on May 10, 2019 are included in the diluted earnings per share calculation with a weighted average effect of 623,699 and 83,151 ordinary shares for the years ended June 30, 2019 and 2018, respectively as if the shares were issued without any redemption right. A total of 4,667 warrants with weighted average effect of 1,867 ordinary shares using treasury share method are included in the diluted EPS calculation for the year ended June 30, 2019. A total of 67,500 vested stock options issued on August 1, 2019, a total of $1.2 million principal value of convertible debts with floor conversion price of $1.0 issued on November 22, 2019, a total of $1.8 million principal value of convertible debts issued on December 30, 2019 with floor conversion price of $1.0, a total of $1.0 million principal value of convertible debts issued on March 9, 2020 with floor conversion price of $3.0, a total of $0.7 million principal value of convertible debts issued on March 9, 2020 with floor conversion price of $3.0, and a total of 1,000,000 contingent shares to be issued to JMC Shareholders are excluded in the diluted EPS calculation for the year ended June 30, 2020 due to its anti-diluted effect. Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans from continuing operations were $54,882, $73,201 and $54,804 for the years ended June 30, 2020, 2019 and 2018, respectively. Total expenses for the plans from discontinued operations were $7,758, $22,130 and $0 for the years ended June 30, 2020, 2019 and 2018, respectively. Recently issued accounting pronouncements In August 2018, the FASB issued ASU 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018‑13”). ASU 2018‑13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018‑13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018‑13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The adoption of this ASU on July 1, 2020 did not have a material effect on the Company’s consolidated financial statements. In May 2019, the FASB issued ASU 2019‑05, which is an update to ASU Update No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016‑13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016‑13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326‑30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for c |
Variable interest entity ("VIE"
Variable interest entity ("VIE") | 12 Months Ended |
Jun. 30, 2020 | |
Variable interest entity (VIE) | |
Variable interest entity ("VIE") | Note 3 – Variable interest entity (“VIE”) A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Xiangtai WFOE is deemed to have a controlling financial interest and be the primary beneficiary of CQ Penglin and JMC because it has both of the following characteristics: (1) The power to direct activities at CQ Penglin and JMC that most significantly impact such entity’s economic performance, and (2) The obligation to absorb losses of, and the right to receive benefits from CQ Penglin and JMC that could potentially be significant to such entity. Pursuant to the Contractual Arrangements, CQ Penglin pays service fees equal to all of its net income to Xiangtai WFOE and JMC pays service fees equal to 51% of its net income to Xiangtai WFOE. At the same time, Xiangtai WFOE is obligated to absorb all of CQ Penglin’s losses and to absorb 51% of JMC's losses. The Contractual Arrangements are designed so that CQ Penglin and JMC operate for the benefit of Xiangtai WFOE and ultimately, the Company. Accordingly, the accounts of CQ Penglin and JMC are consolidated in the accompanying consolidated financial statements. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements. The carrying amount of VIE’s consolidated assets and liabilities are as follows: June 30, 2020 June 30, 2019 Current assets $ 48,347,542 $ 39,258,826 Property and equipment, net 1,403,707 868,435 Other noncurrent assets 3,558,210 162,142 Total assets 53,309,459 40,289,403 Total liabilities (42,919,217) (30,645,069) Net assets $ 10,390,242 $ 9,644,334 June 30, 2020 June 30, 2019 Current liabilities: Short-term loans - banks $ 4,359,210 $ 4,150,310 Loans from third parties 4,449,563 2,303,420 Short-term loans - related parties — 329,120 Current maturities of long-term loan - bank 777,558 — Accounts payable 6,606,723 6,995,932 Other payables and accrued liabilities 1,526,051 238,882 Other payables - related parties 7,161,232 528,717 Intercompany payables 10,334,680 8,928,579 Customer deposits 1,159,902 367,149 Operating lease liabilities 49,171 — Taxes payable 3,125,847 2,805,722 Total current liabilities 39,549,937 26,647,831 Other liabilities: Long-term loan - bank — 866,231 Loan from a third party 2,074,871 3,131,007 Long-term loans - related parties 713,325 — Operating lease liabilities - noncurrent 581,084 — 3,369,280 3,997,238 Total liabilities $ 42,919,217 $ 30,645,069 The summarized operating results of the VIE’s are as follows: For the year ended For the year ended For the year ended June 30, 2020 June 30, 2019 June 30, 2018 Operating revenues $ 105,100,563 $ 89,959,760 $ 94,596,470 Gross profit $ 6,218,590 $ 7,809,539 $ 9,011,763 Income from operations $ 2,867,697 $ 6,556,351 $ 9,454,230 Net income $ 974,302 $ 5,533,912 $ 3,786,061 |
Business Combinations
Business Combinations | 12 Months Ended |
Jun. 30, 2020 | |
Business Combinations | |
Business Combinations | Note 4 – Business Combinations Acquisition of JMC On April 3, 2020, the Company entered into a Share Purchase Agreement (“SPA”) with WFOE, Chongqing Ji Mao Cang Feed Co., Ltd. (“JMC”) and the shareholders of JMC (“JMC Shareholders”). Pursuant to the SPA, the Company shall issue to the shareholder who owns 51% of JMC’s equity interest 2,000,000 duly authorized, fully paid and nonassessable ordinary shares of the Company, valued at a price of $1.77 per share, the closing price of the Company’s ordinary share on April 3, 2020, for an aggregate discounted purchase price of $2,658,909 with probability of contingent considerations, subject to the milestones as specified in the SPA, in exchange for JMC Shareholders’ agreement to cause JMC to enter into certain VIE agreements with WFOE, through which WFOE shall have the right to control, manage and operate JMC in return for a service fee equal to 51% of JMC’s after-tax net income. The Company’s acquisition of JMC was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of JMC based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The consideration was valued at $2,658,909, based upon the issuance of 1,000,000 shares determined using the closing price of $1.77 per share on April 3, 2020 and the present value of issuance of 1,000,000 shares payable at the end of year two and year three determined using the closing price of $1.77 per share on April 3, 2020 and discount rate of 4.75%. The considerations also include 70% probability of contingent considerations of 600,000 shares payment at the end of year two and 30% probability of contingent considerations of 400,000 shares payment at the end of year three. According to the milestones, 1,000,000 shares were issued to JMC shareholders before April 11, 2020; however, the audited total sales or net profit of JMC in fiscal year 2020 shall respectively exceed $70,000,000 (approximately RMB 500,000,000) or $1,500,000 (approximately RMB 10,000,000) in accordance with U.S. GAAP. According to the milestones, 600,000 shares shall be issued to JMC shareholders before August 7, 2021 and the audited total sales or net profit of JMC in fiscal year June 30, 2021 shall respectively increase by 10% compared with that of fiscal year 2020; 400,000 shares shall be issued to JMC shareholders before August 7, 2022 and the audited total sales or net profit of JMC in fiscal year June 30, 2022 shall respectively increase by 10% compared with that of fiscal year June 30, 2021. If the milestones cannot be met, the Company will not issue the corresponding shares to JMC shareholders. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date, which represents the net purchase price allocation on the date of the acquisition of JMC based on valuation performed by an independent valuation firm engaged by the Company and translated the fair value from RMB to USD using the exchange rate on April 3, 2020 at the rate of USD 1.00 to RMB 7.09. Fair value Cash and cash equivalents $ 852,145 Other current assets 9,924,263 Plant and equipment 11,648 Goodwill 5,166,271 Other noncurrent assets 481,062 Total assets Total liabilities (11,221,842) Net assets of JMC 5,213,547 Less: fair value of non-controlling interest (2,554,638) Total consideration paid $ 2,658,909 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations | |
Discontinued Operations | Note 5 – Discontinued Operations In February 2020, the Company discontinued its grocery stores business as the Company has been operating at losses in this business. As a result, the results of operations for the Company’s grocery stores business are reported as discontinued operations under the guidance of Accounting Standards Codification 205. Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations in the consolidated balance sheets as of June 30, 2020 and 2019 is as follow: Carrying amounts of major classes of assets included as part of discontinued operations of CQ Pengmei: June 30, 2020 June 30, 2019 CURRENT ASSETS: Cash and cash equivalents $ 2,523 $ 19,015 Other receivables, net 57,395 20,967 Inventories — 112,641 Security deposits 3,267 21,844 Total current assets of discontinued operations 63,185 174,467 OTHER ASSETS: Other receivables 48,371 122,584 Prepaid expenses — 508,271 Plant and equipment, net 25,752 1,213,983 Operating lease right-of-use assets 505,329 — Total other assets of discontinued operations 579,452 1,844,838 Total assets of discontinued operations $ 642,637 $ 2,019,305 Carrying amounts of major classes of liabilities included as part of discontinued operations of CQ Pengmei: CURRENT LIABILITIES: Short-term loan – banks $ 336,845 $ 364,071 Loans from third parties 474,135 626,201 Accounts payable 64,725 217,953 Customer deposits 6,519 2,618 Other payables and accrued liabilities 416,227 571,553 Other payables – related parties 29,846 88,670 Operating lease liabilities 116,904 — Taxes payable — 987 Total current liabilities of discontinued operations 1,445,201 1,872,053 OTHER LIABILITIES: Operating lease liabilities - noncurrent 417,729 — Total liabilities of discontinued operations $ 1,862,930 $ 1,872,053 Reconciliation of the amounts of major classes of income and losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the years ended June 30, 2020, 2019 and 2018. For the Year Ended For the Year Ended For the Year Ended June 30, June 30, June 30, 2020 2019 2018 Supermarket and grocery store $ 1,574,965 $ 3,465,885 $ — Cost of revenue 1,435,597 3,114,906 — Gross profit 139,368 350,979 — OPERATING EXPENSES: Selling 438,458 704,766 — General and administrative 162,976 189,553 — Provision for right-of-use assets 250,181 — — Loss on disposal of long-lived assets 276,648 — — Impairment of long-lived assets 724,987 — — Total operating expenses 1,853,250 894,319 — Loss from operations (1,713,882) (543,340) — OTHER INCOME (EXPENSES) Interest income 14 33 — Interest expense (114,853) (110,350) — Other finance expense (3,156) (20,532) — Other income, net 35,640 11,568 — Total other expense, net (82,355) (119,281) — Loss before income taxes (1,796,237) (662,621) — Income tax expense — — — Net loss from discontinued operations $ (1,796,237) $ (662,621) $ — |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Jun. 30, 2020 | |
Accounts receivable, net | |
Accounts receivable, net | Note 6 – Accounts receivable, net Accounts receivable, net consist of the following: June 30, 2020 June 30, 2019 Accounts receivable $ 44,505,100 $ 41,827,554 Allowance for doubtful accounts (3,932,343) (2,304,817) Total accounts receivable, net $ 40,572,757 $ 39,522,737 Movements of allowance for doubtful accounts are as follows: June 30, 2020 June 30, 2019 Beginning balance $ 2,304,817 $ 1,622,964 Balance inherited from JMC 930,657 — Addition 769,764 743,986 Write off — — Exchange rate effect (72,895) (62,133) Ending balance $ 3,932,343 $ 2,304,817 |
Security deposits, net
Security deposits, net | 12 Months Ended |
Jun. 30, 2020 | |
Security deposits | |
Security deposits | Note 7 – Security deposits, net Security deposits include loan deposits for the loans from various banks or other financial institutions and sales performance deposit to guarantee its sales contracts. Security deposits consist of the following: June 30, 2020 June 30, 2019 Loan deposits $ 955,700 $ 986,407 Sales performance deposit — 1,388,179 (1) Allowance for security deposits (715,024) — Total security deposits, net $ 240,676 $ 2,374,586 Less: security deposits - discontinued operations (3,267) (21,844) Security deposits, net - continuing operations $ 237,409 $ 2,352,742 (1) In May 2019, the Company signed a sales contract with a customer for its fresh killed hogs in 2019. The contract requires the customer to prepay approximately $1.4 million (RMB 9,551,078) to the Company as customer deposits, and it also requires the Company to provide a sales performance deposit of $1,388,179 to the customer for guaranteeing its hog supplies from May 2019 to August 2019, and was extended to December 2019. The sales performances have been completed by June 30, 2020, the customer returned the deposit back to the Company. |
Plant and equipment, net
Plant and equipment, net | 12 Months Ended |
Jun. 30, 2020 | |
Plant and equipment, net | |
Plant and equipment, net | Note 8 – Plant and equipment, net Plant and equipment consist of the following: June 30, 2020 June 30, 2019 Buildings $ 3,393,212 $ 3,950,375 Automobile 165,628 118,487 Electronic devices 3,691,929 3,808,900 Office equipment 42,595 34,105 Leasehold improvements — 762,772 Construction-in-progress 495,634 — Subtotal 7,788,998 8,674,639 Less: accumulated depreciation (4,307,253) (4,125,427) Total $ 3,481,745 $ 4,549,212 Less: plant and equipment, net - discontinued operations (25,752) (1,213,983) Plant and equipment, net - continuing operations $ 3,455,993 $ 3,335,229 Depreciation expense from continuing operations for the years ended June 30, 2020, 2019 and 2018 amounted to $496,562, $509,778 and $529,442, respectively. Depreciation expense from discontinued operations for the years ended June 30, 2020, 2019 and 2018 amounted to $125,257, $167,609 and $0, respectively. Loss on disposal and impairment of long-lived assets from discontinued operations for the year ended June 30, 2020 was $276,648 and $724,987, respectively. As of June 30, 2020, property recorded at RMB 12,268,800 (approximately $1.7 million) was pledged as collateral to secure a loan that a related party borrowed from a bank, and property recorded at RMB 36,626,600 (approximately $5.2 million) was pledged as collateral to secure a short-term bank loan (see Note 10). Construction-in-progress consist of the following as of June 30, 2020: Estimated Additional Estimated Cost to Construction-in-progress description Value Completion date Complete Pig farm $ 495,634 December 2020 $ 183,993 |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Jun. 30, 2020 | |
Intangible assets, net | |
Intangible assets, net | Note 9 – Intangible assets, net Intangible assets consist of the following: June 30, 2020 June 30, 2019 Land use rights $ 586,795 $ 603,774 Less: accumulated amortization (148,806) (141,036) Net intangible assets $ 437,989 $ 462,738 Amortization expense for the years ended June 30, 2020, 2019 and 2018 amounted to $11,792, $12,147 and $12,747, respectively. As of June 30, 2020, land use right recorded at RMB 10,198,100 (approximately $1.4 million) was pledged as collateral to secure a loan that a related party borrowed from a bank (see Note 10). The estimated amortization is as follows: Estimated Twelve months ending June 30, amortization expense 2021 $ 11,792 2022 11,792 2023 11,792 2024 11,792 2025 11,792 Thereafter 379,029 Total $ 437,989 |
Related party transactions and
Related party transactions and balances | 12 Months Ended |
Jun. 30, 2020 | |
Related party transactions and balances | |
Related party transactions and balances | Note 10 – Related party transactions and balances Related party balances a. Customer deposit – related party: Name of related party Relationship June 30, 2020 June 30, 2019 CQ Mingwen Significantly influenced by Penglin $ 27,395 $ 29,643 b. Other payables – related parties: Other payables – related parties are those nontrade payables arising from transactions between the Company and certain related parties, such as advances made by the related party on behalf of the Company, and related accrued interest payable on the advances. These advances are unsecured and non-interest bearing, except payables to Jiaping Zhou and Jun Zhou with an annual interest rate of 4.35%. Current payables are due on demand. Name of related party Name of related party June 30, 2020 June 30, 2019 Xia Wang Chief Financial Officer $ 153,659 $ 83,619 Zeshu Dai CEO — 659,420 Penglin Wang Son of the CEO 248 162,047 Zili Zhang CEO of CQ Pengmei 12 429,448 Jiaping Zhou Shareholder of JMC 231,268 — Jun Zhou Shareholder of JMC 1,879,639 — Total 2,264,826 1,334,534 Total other payables - related parties - discontinued operations (29,846) (88,670) Total other payables - related parties - continuing operations $ 2,234,980 $ 1,245,864 c. Short term and long-term loans – related parties: Long-term loans – related parties are those long-term loans from advances made by certain related parties for the daily operations needs of the Company. These loans are unsecured and interest bearing. Weighted average Collateral/ Short term loans Relationship Maturities interest rate Guarantee June 30, 2020 June 30, 2019 Xia Wang CFO February 20,2020 (Extended to January 15, 2022) 9.60 % None $ 101,904 $ 104,852 Penglin Wang Son of CEO December 27, 2019 (Extended to December 11, 2024) 9.60 % None 229,283 224,268 Yong Wang Son of CEO July 17, 2022 7.13 % None 268,912 — Zeshu Dai CEO March 8, 2022 7.13 % None 113,226 — Total 713,325 329,120 Total current loans from related parties — (329,120) Total non-current loans from related parties $ 713,325 $ — Interest expense incurred on the above mentioned related party loans amounted to $51,770, $11,403 and $0 for the years ended June 30, 2020, 2019 and 2018, respectively. d. Guarantee provided to related party loan On December 26, 2017, CQ Mingwen (the “borrower”) entered into a loan agreement with SPD Rural Bank (the lender) to borrow RMB 9 million (approximately $1.3 million) as working capital for one year and was extend two times to December 26, 2020. GA Yongpeng pledged a land-use right recorded at RMB 10,198,100 (approximately $1.4 million) and building property recorded at RMB 12,268,800 (approximately $1.7 million) as collateral (see Note 8 and 9 and 16). e. Loans guarantees by related parties The Company has various short-term loans guaranteed by its related parties. See Note 11. |
Credit Facilities
Credit Facilities | 12 Months Ended |
Jun. 30, 2020 | |
Credit Facilities | |
Credit Facilities | Note 11 – Credit Facilities Short term loans – banks Outstanding balances on short-term bank loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Shanghai Pudong Development ("SPD") Bank Chongqing Nanbing Road Branch April 22, 2020 (Fully repaid by October 2020) 6.09 % A security deposit of $109,221 and guaranteed by the CEO and certain members of the family and affiliate $ 1,273,794 $ 1,456,187 Chongqing Rural Commercial Bank November 25, 2020 6.74 % Guaranteed by the CEO and certain members of the family and affiliate 1,839,928 2,694,122 Chongqing Beibei Chouzhou Bank Co., Ltd. (Chouzhou Bank) March 20, 2020 – in default* 6.96 % Guaranteed by GA Yongpeng's properties recorded at RMB 36,626,600 (approximately $5.2 million) and Zeshu Dai's 6.25% of stock right of GA Yongpeng recorded at RMB 1,250,000 (approximately $0.2 million) 336,845 364,071 The Agriculture Bank of China Chongqing Yubei Branch June 27, 2021 3.85 % Guaranteed by the properties of JMC's CEO and CFO recorded at RMB 5,517,400 (approximately $0.8 million) 467,058 — China Zheshang Bank Chongqing Branch May 5, 2021 5.35 % Guaranteed by the properties of JMC's CEO and CFO recorded at RMB 12,090,000 (approximately $1.7 million) 778,430 — Total $ 4,696,055 $ 4,514,380 Less: short term loans - banks - discontinued operations (336,845) (364,071) Short term loans - banks - continuing operations $ 4,359,210 $ 4,150,309 · On September 25, 2020, the Chongqing Beibei District People’s Court issued a civil mediation letter, according to which CQ Pengmei shall repay Chouzhou Bank the principal and the interest. Approximately $16,000 (RMB 110,000) of principal and approximately $13,000 (RMB 93,466) of the interest will be due before October 21, 2020, all the remaining balance should be repaid for at least approximately $14,000 (RMB 100,000) on the 21th of each month since November 2020, and the repayment shall be completed no later than May 21, 2022. Since November 2020 to May 2022, the interest rate rises by 50%, which should be paid before 21th of each month. Wang Penglin, Wang Mingwen, Dai Zeshu, Chongqing Education Financing Guarantee Co., Ltd. and CQ Penglin shall bear joint and several liability for the above repayment. As of the date of this report, CQ Pengmei has paid off approximately $16,000 (RMB 114,939) to Chouzhou Bank as part of the repayment. Loans from third parties Outstanding balances of short term third-party loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Sichuan Toucu Financial Information Services Co., Ltd September 3, 2020 (Fully repaid in September 2020) 9.0 % None $ 63,554 $ 407,758 Chongqing Puluosi Small Mortgage Co., Ltd. Various amounts due between November 2018 and January 2019 – in default* 12.0 % Guaranteed by the CEO and certain members of the family and affiliate 4,183,248 4,805,734 Gang Hu September 4, 2022 7.13 % None 120,303 — Chongqing Reassurance Co., Ltd. Due upon request 17.4 % None 273,294 — Chongqing Zhouyang Shipping Co., Ltd December 28, 2019 18.0 % None — 72,814 Mei Yang October 10, 2020 (Fully repaid by the date of this report) 24.0 % None 7,077 43,688 Ping Wang September 17, 2021 10.8 % None 43,875 48,057 Yuzhu Hu November 30, 2020 14.4 % None — 160,191 Yixuan Liu September 11, 2020 (Renewed and to be due on September 11, 2022) 12.0 % None 84,920 87,377 Shuming Yang September 20, 2020 (Renewed and to be due on September 20, 2022) 12.0 % None 169,839 174,754 Chunlan Zhuo March 22, 2021 18.0 % None 63,911 — Qin Cao October 22, 2020 (Fully repaid in October 2020) 24.0 % None 30,005 72,814 Maohua Xia Various amounts due between August 2020 and September 2020 (Fully repaid by the date of this report) 24.0 % None 33,561 223,848 Chongqing Shouqing Trading Co., Ltd. September 7, 2021 12.0 % None 382,139 — Shengli Huang April 23, 2022 24.0 % None 99,073 — Xiaofen Ai June 17, 2021 24.0 % None 28,307 — Chongqing Haobangshou Ecommerce Co., Ltd. March 24, 2023 6.0 % None 1,415,328 — Bangwei Zhu May 2, 2020 12.0 % None — 36,407 Mei Zhang July 20, 2020 (Fully repaid by the date of this report) 24.0 % None 49,536 72,814 Feng Zhou February 28, 2022 12.0 % None 14,153 — Xiaolin Cao November 30, 2020 — % None 500,000 — Total loans from third parties $ 7,562,123 $ 6,206,256 Total non-current loans from third parties (2,074,871) (3,131,007) Total current loans from third parties $ 5,487,252 $ 3,075,249 Less: current loans from third parties - discontinued operations (474,135) (626,201) Current loans from third parties - continuing operations $ 5,013,117 $ 2,449,048 * Long term and short-term loans – related parties See Note 10. Long-term loan - bank The outstanding balance of long term bank loan consisted of the following: Weighted average Lender Maturity interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Chongqing Dadukou Rongxing Village & Township Bank September 20, 2020 (Subsequently in default*) 12.0 % Guaranteed by CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family $ 777,558 $ 866,231 *On August 12, 2020, Chongqing Dadukou Rongxing Village & Township Bank (“Dadukou Rongxing”) sued CQ Penglin to repay the loan of Dadukou Rongxing approximately $0.9 million (RMB 6,629,447), which consists of principal of approximately $0.8 million (RMB 5,493,839) and approximately $0.1 million (RMB 1,135,608), in the Chongqing Dadukou District People’s Court. CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family guaranteed the loan shall bear joint and several lability for the repayment. As of the date of this report, the Chongqing Dadukou District People’s Court has not held a trial. Interest expense for continuing operations pertaining to the above loans for the years ended June 30, 2020, 2019 and 2018 amounted to $1,661,788 ($51,770 was for interest expense of loans – related parties), $713,201 ($11,403 was for interest expense of loans – related parties) and $1,243,708, respectively. Interest expense for discontinued operations pertaining to the above loans for the years ended June 30, 2020, 2019 and 2018 amounted to $114,853, $110,350 and $0, respectively. |
Taxes
Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Taxes | |
Taxes | Note 12 – Taxes Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Xiangtai BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under the current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Xiangtai HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Xiangtai HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Income tax exemption status granted On August 20, 2018, the Lingshui County Tax Bureau enacted a tax exemption for Lingshui Guang’an Yongpeng Food Co., Ltd. (wholly owned subsidiary) which expires on December 31, 2020. In addition, the benefit can also be retroactively applied to prior periods from January 1, 2014 to June 30, 2017. The tax savings for the years ended June 30, 2020, 2019 and 2018 was $334,794, $1,389,566 and $122,251, respectively. The Company’s basic and diluted earnings per shares would have been lower by $0.01, $0.07 and $0.01 per share for the years ended June 30, 2020, 2019 and 2018 without the preferential tax rate reduction, respectively. Significant components of the provision for income taxes are as follows: For the year For the year For the year ended ended ended June 30, 2020 June 30, 2019 June 30, 2018 Current $ 389,846 $ — $ 841,312 Deferred tax expense (benefit) (166,673) 213,649 (126,936) Total provision for income taxes $ 223,173 $ 213,649 $ 714,376 The following table reconciles China statutory rates to the Company’s effective tax rate: June 30, 2020 June 30, 2019 June 30, 2018 China income tax rate 25.0 % 25.0 % 25.0 % Change in valuation allowance 0.0 % 1.0 % 0.0 % Income tax exemption status granted (10.2) % (21.9) % (9.3) % Others* (24.2) % — % 0.2 % Effective tax rate (9.4) % 4.1 % 15.9 % * Deferred tax assets – China Deferred tax assets are comprised of allowance for doubtful accounts at June 30, 2020 totaling $648,768. NOL carried forward According to Chinese tax regulations, net operating losses can be carried forward to offset taxable income for the next five years. On August 20, 2018, GA Yongpeng obtained the tax-free benefit and the Company utilized the tax planning strategy to allocate intercompany profit into GA Yongpeng. As a result, for the years ended June 30, 2020, 2019 and 2018, there was no tax effect in relation to the NOL that the Company has previously reserved. Bad debt allowance Bad debt allowance must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2020 and 2019, the Company did not have any significant unrecognized uncertain tax positions. Value-added tax All of the Company’s service revenues that are earned and received in the PRC are subject to a Chinese VAT at a rate of 6% of the gross proceed or at a rate approved by the Chinese local government. All of the Company’s products that are sold in the PRC are subject to a Chinese value-added tax at a rate of 0%, 11%, 13% or 17% of the gross sales price depending on how much processing was added by the Company to each kind of products or at a rate approved by the Chinese local government. This VAT may be offset by the VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. Taxes payable consisted of the following: June 30, 2020 June 30, 2019 Income taxes $ 3,114,811 $ 2,805,722 Other taxes 227,316 169,324 Total $ 3,342,127 $ 2,975,046 Less: taxes payable - discontinued operations — (987) Taxes payable - continuing operations $ 3,342,127 $ 2,974,059 |
Concentration of risk
Concentration of risk | 12 Months Ended |
Jun. 30, 2020 | |
Concentration of risk | |
Concentration of risk | Note 13 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. In China, the insurance coverage of each bank is RMB 500,000 (approximately$71,000). As of June 30, 2020 and 2019, cash balance of $1,366,796 and $78,918, respectively, were deposited with financial institutions located in China, of which $968,840 and $0, respectively, were subject to credit risk. The Hong Kong Deposit Protection Board pays compensation up to a limit of HKD 500,000 (approximately $64,000) if the bank with which an individual/a company hold its eligible deposit fails. As of June 30, 2020 and 2019, cash balance of $5,254 and $2,683,514, respectively, were maintained at financial institutions in Hong Kong, and $0 and $2,619,520 were subject to credit risk. In the US, the insurance coverage of each bank is $250,000. As of June 30, 2020 and 2019, cash balance of $163,640 and $0, respectively, were deposited with financial institutions located in US and was not subject to credit risk. While management believes that these financial institutions and third-party fund holders are of high credit quality, it also continually monitors their creditworthiness. The Company is also exposed to risk from its accounts receivable, other receivables and prepayments. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. As of June 30, 2020, the Company had working capital of approximately $17.5 million. The Company had accounts receivable of approximately $40.6 million, most of them are short-term in nature and can be collected back within the Company's operating cycle to be used to support its working capital requirements. The Company believes the components of its current working capital is sufficient to support its operations for the next twelve months from the date of this report. If the Company is unable to realize its current assets within the normal operating cycle of a twelve-month period, the Company may have to consider supplementing its available sources of funds through obtaining additional loans. Customer concentration risk For the years ended June 30, 2020, 2019 and 2018, no customer accounted for more than 10% of the Company’s total revenues. As of June 30, 2020 and 2019, no customer accounted for more than 10% of the total balance of accounts receivable. Vendor concentration risk For the year ended June 30, 2020, five vendors accounted for 19.6%, 17.4%, 16.4%, 15.8% and 14.0% of the Company's total purchases. For the year ended June 30, 2019, four vendors accounted for 29.8%, 17.6%, 16.8% and 16.5% of the Company’s total purchases. For the year ended June 30, 2018, four vendors accounted for 29.0%, 24.5%, 21.2% and 12.8% of the Company’s total purchases. As of June 30, 2020, four vendors accounted for 30.2%, 20.2%, 13.6% and 10.5% of the total balance of accounts payable.As of June 30, 2019, four vendors accounted for 25.3%, 23.0%, 16.0% and 12.3% of the total balance of accounts payable. |
Convertible Debentures
Convertible Debentures | 12 Months Ended |
Jun. 30, 2020 | |
Convertible Debentures | |
Convertible Debentures | Note 14 – Convertible Debentures Convertible Debenture issued on November 22, 2019, December 30, 2019 and March 9, 2020 On November 22, 2019, the Company entered into a securities purchase agreement with an accredited investor to place convertible debentures (“Debenture”) with a maturity date of twelve months after the issuance thereof in the aggregate principal amount of $5,000,000. The first convertible debenture was issued on November 22, 2019 in the amount of $2,000,000; the second convertible debenture was issued on December 30, 2019 in the amount of $2,000,000; and the third convertible debenture was issued on March 9, 2020 in the amount of $1,000,000. The Debentures bear interest at the rate of 5% per annum. The Debenture holder may convert a Debenture in its sole discretion at any time on or prior to maturity at the lower of $5.06 or 93% of the average of the four lowest daily VWAPs during the 10 consecutive trading days immediately preceding the conversion date, provided that as long as we are not in default under the Debenture, the conversion price may never be less than $3.00. Any time after the issuance of a Debenture that the daily VWAP is less than $3.00 for a period of 10 consecutive trading days (each such occurrence, a “Triggering Event”) and only for so long as such conditions exist after a Triggering Event, the Company shall make monthly payments beginning on the 30 th day after the date of the Triggering Event. Each monthly payment shall be in an amount equal to the sum of (i) the principal amount outstanding as of the date of the Triggering Event divided by the number of such monthly payments until maturity, (ii) a redemption premium of 10% during the six month after the issuance of a Debenture of 20% thereafter in respect of such principal amount and (iii) accrued and unpaid interest hereunder as of each payment date. The Company may, no more than twice, obtain a thirty-day deferral of a monthly payment due as a result of a Triggering Event through the payment of a deferral fee in the amount equal to 10% of the total amount of such monthly payment. Each deferral payment may be paid by the issuance of such number of shares as is equal to (i) if such shares issued will be immediately freely tradable shares in the hands of the holder, 100% of the average of the daily VWAPs during the 10 consecutive trading days immediately preceding the due date in respect of such deferred monthly payment, and (ii) if such shares issued will be restricted securities, 93% of the average of the 4 lowest daily VWAPS during the 10 consecutive Trading Days immediately preceding the due date. On June 19, 2020, the Company entered in an amendment agreement with the Debenture holder to amend the “Floor Price” of the convertible debenture issued on November 22, 2019 to $1.00 per share and the “Floor Price” of the convertible debenture issued on December 30, 2019 to $1.00 per share for the first $200,000 of principal and accrued interest to be converted. The “Floor Price” for the remaining principal and accrued interest on that debenture shall remained unchanged at $3.00 per share. On September 15, 2020, the Company entered in an amendment agreement with the Debenture holder to amend the “Floor Price” of the Second Convertible Debenture to $1.00 per share for the first $1,400,000 of principal and accrued interest to be converted. The “Floor Price” for the remaining principal and accrued interest on the Second Convertible Debenture and the Third Convertible Debenture shall remain unchanged at $3.00 per share. On November 13, 2020, the Company entered in an amendment agreement with the Debenture Holder to amend the “Floor Price” of the remaining $600,000 of principal and accrued interest to be converted in the Second Convertible Debenture to $1.00 per share and to amend the “Floor Price” of the Third Convertible Debenture to $1.00 per share for the first $200,000 of principal plus accrued interest to be converted. The “Floor Price” for the remaining principal and accrued interest on the Third Convertible Debenture shall remain unchanged at $3.00 per share. The Company determined that conversion option embedded in the Debenture is considered indexed to the Company’s own stock and did not required to be separately accounted for as a derivative under the guidance in ASC 815. However, the Debenture are convertible into shares of the common stock, at conversion price equal to 93% of the average of four lowest trading price during the 10 trading day period prior to the date of any notice of conversion, which is lower than the price of the Company’s common stock on the date of issue for the first two batches of the principal amount of $4,000,000 of the Debenture on November 22, 2019 and December 30, 2019. Therefore, the conversion feature embedded in the convertible note meet the definition of beneficial conversion feature (“BCF”). The Company evaluated the intrinsic value of the BCF at the issue date to be at $259,540. The relative fair values of the BCF were recorded into additional paid in capital as well as were recognized as a discount to the Debenture. The discount to the Debenture is being amortized to interest expense over the life of the Debenture using effective interest method. The price of the Company’s common stock on the date of issue on March 9, 2020 was $2.33 for the remaining principal amount of $1,000,000 of the Debenture, which is lower than the conversion floor price of $3.00 and it does not contain a BCF on the issuance date. As a result, the $1,000,000 conversion option embedded in the Debenture are entirety accounted for a liability with the Debenture. Convertible Debenture issued on June 19, 2020, July 17, 2020, August 14, 2020, and November 13, 2020 On June 19, 2020, the Company entered into another securities purchase agreement with the same accredited investor to place convertible debentures with a maturity date of twelve months after the issuance thereof in the aggregate principal amount of $2,000,000. The first Debenture in the amount of $700,000 was issued on June 19, 2020; the second Debenture in the amount of $700,000 was issued on July 17, 2020; the third Debenture in an amount of $300,000 was issued on August 14, 2020; and the fourth closing of the Debenture in an amount of $300,000 was issued on November 13, 2020. The Debentures bear interest at the rate of 5% per annum. The Debenture holder may convert a Debenture in its sole discretion at any time on or prior to maturity at the lower of $3.00 or 93% of the average of the four lowest daily VWAPs during the 10 consecutive trading days immediately preceding the conversion date, provided that as long as we are not in default under the Debenture, the conversion price may never be less than $2.50. The Company may not convert any portion of a Debenture if such conversion would result in the Debenture holder beneficially owning more than 4.99% of our then issued and common stock, provided that such limitation may be waived by the Debenture holder with 65 days’ notice. Any time after 180 days from the date of issuance that the daily VWAP is less than $2.50 for a period of 10 consecutive trading days (each such occurrence, a “Triggering Event”) and only for so long as such conditions exist after a Triggering Event, we shall make monthly payments beginning on the 30 th day after the date of the Triggering Event. Each monthly payment shall be in an amount equal to the sum of (i) the principal amount outstanding as of the date of the Triggering Event divided by the number of such monthly payments until maturity, (ii) a redemption premium of 10% during the six month after the signing of the Agreement or 20% thereafter in respect of such principal amount and (iii) accrued and unpaid interest hereunder as of each payment date. The Company may, no more than twice, obtain a thirty-day deferral of a monthly payment due as a result of a Triggering Event through the payment of a deferral fee in the amount equal to 10% of the total amount of such monthly payment. Each deferral payment may be paid either (i) in cash or (ii) if the conversion price on the date of the payment is above $2.50 and such shares issued will be immediately freely tradable shares in the hands of the Debenture holder, by the issuance of such number of shares as is equal to the applicable deferral payment divided by a price per share equal to the conversion price. The price of the Company’s common stock on the date of issue on June 19, 2020 was $1.70 for the principal amount of $700,000 of the first Debenture, which is lower than the conversion floor price of $2.50 and it does not contain a BCF on the issuance date. As a result, the $700,000 conversion option embedded in the Debenture are entirety accounted for a liability with the Debenture. June 30, 2020 June 30, 2019 Principal balance $ 4,900,000 $ — Less: Debentures discount and debts insurance cost (131,688) — Total $ 4,768,312 $ — The Company incurred issuance cost of $230,000 and had a BCF value of $259,540 in connection with the issuance of the Debentures. The Company recognized the issuance cost and the BCF value as a discount to the Debentures at the inception date. For the year ended June 30, 2020, amortization of the issuance cost and Debentures discount of $153,274 and $204,579, respectively. These issuance costs and Debenture discount are being amortized and recorded to interest expense in the accompanying consolidated statements of income and comprehensive income (loss) over the life of the Debentures using effective interest method. |
Equity
Equity | 12 Months Ended |
Jun. 30, 2020 | |
Equity | |
Equity | Note 15 – Equity Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Xiangtai WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. CQ Penglin, GA Yongpeng, CQ Pengmei and JMC may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. The remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange. As of June 30, 2020 and 2019, Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC collectively attributed $1,670,367 and $1,496,642 of retained earnings for their statutory reserves, respectively. As a result of the foregoing restrictions, Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC from transferring funds to the Company in the form of dividends, loans and advances. As of June 30, 2020 and 2019, amounts restricted are the net assets of Xiangtai WFOE, CQ Penglin, GA Yongpeng, CQ Pengmei and JMC, which amounted to $17,978,793, and $18,571,570, respectively. Mezzanine equity On March 31, 2018, the Company entered into a Securities Purchase Agreement with a limited liability partnership (the “Purchaser”), an unrelated third party, pursuant to which the Company sold to the Purchaser in a private placement 375,000 ordinary shares of the Company, par value $0.01 per share, at a purchase price of $2.00 per share for an aggregate offering price of $750,000. The Purchaser has a redemption right of the ordinary shares at the original purchase value. On June 27, 2018, the Company entered into a Securities Purchase Agreement with a limited liability partnership (the “Purchaser”), an unrelated third party, pursuant to which the Company sold to the Purchaser in a private placement 350,000 ordinary shares of the Company, par value $0.01 per share, at a purchase price of $3.00 per share for an aggregate offering price of $1,050,000. The Purchaser has a redemption right of the ordinary shares at the original purchase value. On May 10, 2019, the Company had completed the initial public offering and the redeemable shares have been converted into 725,000 ordinary shares Private placements On September 4, 2018, the Company sold securities pursuant to Regulation D offering for a total of 66,667 ordinary shares to Boustead and Company Limited (“Boustead”), at an offering price of $3.00 per share for an aggregated purchase price of $200,000. Boustead Securities LLC (“Boustead Securities”) acted as the placement agent, to whom the Company agreed to compensate Boustead Securities $10,000 in commission and warrants to purchase for a total of 4,667 ordinary shares at $3.00 per share for five years from the issuance date upon receipt of the subscription proceeds. The transaction was not registered under the Securities Act in reliance on an exemption from registration set forth in Regulation D promulgated hereunder as a transaction by the Company not involving any public offering. Initial public offering On May 10, 2019, the Company closed its initial public offering of an aggregate of 1,172,360 ordinary shares, par value $0.01 per share, at a public offering price of $5.00 per share, for gross proceeds of $5,861,800 (the “Closing”). The Company received net proceeds (after deducting underwriting discounts and commissions and other offering fees and expenses) of approximately $4.4 million from the offering. In connection with the initial public offering, the Company issued 82,065 warrants to purchase for a total of 82,065 ordinary shares at $5.00 per share. The warrants will be exercised at any time, and from time to time, in whole or in part, commencing from the closing of the initial public offering on May 10, 2019 and expiring five years from the offering. Conversion of debenture For the year ended June 30, 2020, the Debenture holder converted principal and interest value of $800,000 and $57,165, respectively, into a total of 827,057 of the Company’s ordinary shares at weighted average conversion price of $1.04. Stock options In August 2019, the Company issued a total of 95,000 options to two directors of the Company and vested in four equal installment on a quarterly basis with an exercise price of $5.00 for three years from date of issuance after the Company’s listing on the Nasdaq Stock Market on August 15, 2019. The Company used the Black Scholes model to value the options at the time they were issued, based on the stated exercise prices of $5.0, market price of $4.6, volatility of 118%, risk-free rate of 1.44% and dividend yield of 0%. Because the Company does not have a history of employee stock options, the estimated life is based on one half of the sum of the vesting period and the contractual life of the option. This is the same as assuming that the options are exercised at the mid-point between the vesting date and expiration date. The Company’s ordinary share did not have a history of trading history to determine its own volatility. As a result, the Company used the volatility of a comparable company with similar size and similar industry as the assumption of its estimated volatility. Total fair value of these options were estimated to be $243,922 and the compensation expenses are to be recognized on a straight-line basis over the total service period of one year. Total compensation expenses for the year ended June 30, 2020 was $213,431. The summary of stock option activity is as follows: Weighted Average Average Remaining Aggregate Options Exercisable Exercise Contractual Intrinsic Outstanding Option Price Life Value June 30, 2019 — — $ — — — Granted/Acquired 95,000 71,250 $ 5.00 3.00 — Forfeited — — $ — — — Exercised — — $ — — — June 30, 2020 95,000 71,250 $ 5.00 2.12 — Warrants The summary of warrant activity is as follows: Weighted Average Average Remaining Warrants Exercisable Exercise Contractual Outstanding Shares Price Life June 30, 2018 — — $ — — Granted/Acquired 86,732 86,732 $ 4.89 5.00 Forfeited — — $ — — Exercised — — $ — — June 30, 2019 86,732 86,732 $ 4.89 4.89 Granted/Acquired — — $ — — Forfeited — — $ — — Exercised — — $ — — June 30, 2020 86,732 86,732 $ 4.89 3.88 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and contingencies | |
Commitments and contingencies | Note 16 – Commitments and contingencies Lease commitments The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s real estate leases are classified as operating leases. The Company has entered into seven non-cancellable operating lease agreements for two office spaces, one dormitory, one storage and three market spaces for the grocery stores expiring through February 2030. Upon adoption of FASB ASU 2016-02, the Company recognized approximately $1.3 million right of use (“ROU”) assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using incremental borrowing rate of 6.09% based on duration of lease terms. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration. Operating lease expenses are allocated between the cost of revenue and selling, general, and administrative expenses. Rent expense (including amounts in cost of goods sold) for continuing operations for the years ended June 30, 2020, 2019 and 2018 was $112,963, $30,198 and $58,541, respectively. Rent expense (including amounts in cost of goods sold) for discontinued operations for the years ended June 30, 2020, 2019 and 2018 was $108,881, $318,210 and $0, respectively. The five-year maturity of the Company’s lease obligations is presented below: Twelve Months Ending June 30, Operating Lease Amount 2021 $ 216,033 2022 231,738 2023 240,099 2024 247,634 2025 148,825 Thereafter 328,749 Total lease payments 1,413,078 Less: Interest (248,191) Present value of lease liabilities $ 1,164,887 Less: present value of lease liabilities - discontinued operations (534,633) Present value of lease liabilities - continuing operations 630,254 (1) Current lease commitment table excludes an existing lease entered by CQ Pengmei in August 2017 due to fire safety requirement not being met by the landlord for which the Company has temporarily stopped operation in August 2018. Per the Company’s PRC counsel, it is more than probable that the Company does not require to fulfill the remaining term of such lease contract. The Company also leased a pig farm from an unrelated third party and subleased the pig farm to an unrelated third party for the same amount of approximately $17,000 (RMB 120,000) annually from May 8, 2020 to May 7, 2025. The Company did not recognized these transactions as there are no income statements effect with the offset of the lease expenses and sublease income and the result of the recognition of ROU and lease liabilities are immaterial to the Company's financial statements. Guarantees a) Related party As of June 30, 2020, CQ Penglin, the Company’s CEO, her husband and her elder son, and an unrelated third party Chongqing Education Guaranty Co., Ltd. jointly guaranteed approximately $1.3 million (RMB 9,000,000) loan that a related-party borrowed from the bank (see Note 10): Name of the party being guaranteed Guaranteed amount Guarantee expiration date CQ Mingwen (borrower) $ 1,273,795 December 25, 2020 The Company did not, however, accrue any liability in connection with such a guarantee because the borrowers have been current in its repayment obligation and the Company has not experienced any losses from providing such guarantee. As of the date of this report, the Company has evaluated the guarantee and has concluded that the likelihood of having to make any payments under the guarantee agreement is remote. If CQ Mingwen is unable to repay the loan upon maturity, assets of GA Yongpeng may be liquidated to pay back the loan. b) CQ Mingwen, a related party, and three other unrelated third parties As of June 30, 2020, GA Yongpeng guaranteed approximately aggregated of unpaid loan balance of $0.1 million (RMB 809,220) that that four entities, 1) CQ Mingwen, a related party, 2) Chongqing Gangxinyi Trading Co., Ltd., 3) Chongqing Liangxun Trading Co., Ltd., and 4) Chongqing Fu Yong Sheng Food Supermarket Co., Ltd., borrowed from Sichuan Toucu Financial Information Services Co., Ltd. These loan balances are GA Yongpeng’s property and CQ Pengmei’s 100% equity interest. As of the date of this report, these loans balance were repaid by the guarantees in full. Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from, lease disputes, commercial disputes, default on guaranteeing third party lease obligations, and default on loans. The Company first determines whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss, the loss will be accrued. The Company discloses a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated. As of June 30, 2020, the amount of potential losses the Company accrued for are summarized as follows: Dispute matter Claim amount Leases $ 45,867 As of June 30, 2020, the amount of potential losses the Company did not accrue for are summarized as follows: Dispute matter Claim amount Guarantees $ 248,302 The Company received three complaints related to an approximately $4.6 million (RMB 33,000,000) loan currently in default (See Note 11 – Chongqing Puluosi Small Mortgage Co., Ltd.). Yong Li filed a lawsuit against Chongqing Fu Yong Sheng Food Supermarket Co., Ltd. (“FYS Supermarket”) and GA Yongpeng in connection with FYS Supermarket’s breach of a supermarket equipment purchase agreement signed on May 7, 2018 by failing to pay off the remaining balance of approximately $0.2 million (RMB 1.7 million). On June 11, 2020, Chongqing Nan’an District People’s Court made a judgement that FYS Supermarket should pay Yong the full remaining balance and the monthly interest rate at 1.5% for the transfer fee and the losses and Yong’s attorney fee approximately $3,000 (RMB 20,000). GA Yongpeng shall bear joint and several liability for the above repayment. FYS Supermarket and GA Yongpeng are also required to pay property guarantee fee approximately $700 (RMB 5,000) and court fee approximately $3,000 (RMB 21,045). As of the date of this report, the Company has evaluated the financial condition of FYS Supermarket and has concluded that the likelihood of having to make any payments is remote. Therefore, the Company did not accrue any contingent liability as of June 30, 2020. On October 20, 2020, Chongqing Haobangshou Ecommerce Co., Ltd. (“Haobangshou”) filed a lawsuit against Chongqing Penglin in connection with the $1,415,328 (RMB 10,000,000) loan due on March 24, 2023 and a total of $445,828 (RMB 3,150,000) outstanding payments for goods purchased in July 2020. Haobangshou stated that Haobangshou and CQ Penglin made a verbal deal in July 2020 that CQ Penglin will return the whole balance of $1,861,156 (RMB 13,150,000) within three months but CQ Penglin did not make repayments according to the deal. Therefore, Haobangshou asked CQ Penglin to pay off the full balance of $1,861,156 (RMB 13,150,000) and the interest of the whole balance at the annual interest rate of 12% from August 1, 2020 to the repayment date. Currently, the case is still under review and the Company is expected to receive the verdict on December 10, 2020. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Xiangtai WFOE and the VIE are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances. |
Segments
Segments | 12 Months Ended |
Jun. 30, 2020 | |
Segments | |
Segments | Note 17 – Segments ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. Effective on April 3, 2020, after the acquisition of JMC, the Company has determined that it has three operating segments for purposes of allocating resources and evaluating financial performance, which consists of: (1) fresh meat business, (2) feed raw materials business, and (3) grocery stores (discontinued). Prior period numbers are broken down for comparative purpose. The following tables present summary information by segment for the years ended June 30, 2020, 2019 and 2018: Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2020 meat materials operations) operations) Revenues $ 86,301,255 $ 24,250,247 $ 110,551,502 $ 1,574,965 Cost of revenues 81,153,996 22,219,528 103,373,524 1,435,597 Gross profit 5,147,259 2,030,719 7,177,978 139,368 Depreciation and amortization 506,775 1,579 508,354 125,257 Total capital expenditures $ 700,399 $ — $ 700,399 $ — Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2019 meat materials operations) operations) Revenues $ 99,079,267 $ — $ 99,079,267 $ 3,465,885 Cost of revenues 90,429,027 — 90,429,027 3,114,906 Gross profit 8,650,240 — 8,650,240 350,979 Depreciation and amortization 521,925 — 521,925 167,609 Total capital expenditures $ 20,635 $ — $ 20,635 $ — Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2018 meat materials operations) operations) Revenues $ 101,104,224 $ — $ 101,104,224 $ — Cost of revenues 91,452,753 — 91,452,753 — Gross profit 9,651,471 — 9,651,471 — Depreciation and amortization 542,189 — 542,189 — Total capital expenditures $ 89,351 $ — $ 89,351 $ — Total assets as of: June 30, June 30, 2020 2019 Fresh meat business $ 50,044,169 $ 45,260,319 Feed raw materials business 12,446,388 — Grocery stores - discontinued 642,637 2,019,305 Holding companies 216,240 4,071,693 Total Assets $ 63,349,434 $ 51,351,317 |
Condensed financial information
Condensed financial information of the parent company | 12 Months Ended |
Jun. 30, 2020 | |
Condensed financial information of the parent company | |
Condensed financial information of the parent company | Note 18 – Condensed financial information of the parent company The Company performed a test on the restricted net assets of the consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4‑08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for the parent company. The subsidiary did not pay any dividend to the Company for the periods presented. For the purpose of presenting parent-only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiary” and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of June 30, 2020 and 2019. PARENT COMPANY BALANCE SHEETS June 30, 2020 June 30, 2019 ASSETS CURRENT ASSETS Cash and cash equivalents $ 163,640 $ — Prepayments 18,406 — Other receivables 28,940 — Intercompany receivables 9,963,384 6,623,561 Total current assets 10,174,370 6,623,561 OTHER ASSETS Investment in subsidiary 19,713,942 18,554,729 Total assets $ 29,888,312 $ 25,178,290 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Loan from third party $ 500,000 $ — Other payable - related parties 423,416 257,384 Convertible debenture, net 4,768,312 — Accrued expenses 390,122 167,765 Intercompany payables — 227,927 Total current liabilities 6,081,850 653,076 Total liabilities 6,081,850 653,076 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 23,971,084 and 21,964,027 share issued and outstanding as of June 30, 2020 and 2019, respectively 239,711 219,640 Additional paid-in capital 15,765,411 11,031,937 Deferred share compensation (47,708) — Statutory reserves 1,670,367 1,496,642 Retained earnings 7,034,899 12,085,566 Accumulated other comprehensive loss (856,218) (308,571) Total shareholders' equity 23,806,462 24,525,214 Total liabilities and shareholders' equity $ 29,888,312 $ 25,178,290 PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Years Ended June 30, 2020 2019 2018 OPERATING EXPENSES General and administrative $ (2,512,271) $ (309,466) $ (115,683) Stock compensation expense (930,223) — — Total operating expenses (3,442,494) (309,466) (115,683) LOSS FROM OPERATIONS (3,442,494) (309,466) (115,683) OTHER INCOME (EXPENSE) Interest expense (123,212) — — Other finance expenses (359,187) — — Equity (loss) income of subsidiaries (952,049) 4,673,057 3,883,792 Total other (expenses) income, net (1,434,448) 4,673,057 3,883,792 NET (LOSS) INCOME (4,876,942) 4,363,591 3,768,109 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (547,647) (267,546) 133,553 COMPREHENSIVE (LOSS) INCOME $ (5,424,589) $ 4,096,045 $ 3,901,662 PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended June 30, 2020 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (4,876,942) $ 4,363,591 $ 3,768,109 Adjustments to reconcile net income to cash (used in) provided by operating activities: Equity loss (income) of subsidiary 952,049 (4,673,057) (3,883,792) Stock compensation expense 930,223 — — Late payment penalty expense 500,000 — — Amortization of convertible debenture issuance cost and discount 357,853 — — Change in operating assets and liabilities Other receivables (28,940) — — Prepayments (18,406) — — Accrued expenses 269,521 126,213 41,552 Intercompany (3,567,750) — — Net cash used in operating activities (5,482,392) (183,253) (74,131) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from other payables - related parties, net 166,032 183,253 74,131 Proceeds from convertible debentures, net of issuance costs 5,480,000 — — Net cash provided by financing activities 5,646,032 183,253 74,131 CHANGES IN CASH AND CASH EQUIVALENTS 163,640 — — CASH AND CASH EQUIVALENTS, beginning of year — — — CASH AND CASH EQUIVALENTS, end of year $ 163,640 $ — $ — NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES Issuance of ordinary shares with redemption rights of mezzanine equity $ — $ 1,800,000 $ — Issuance of ordinary shares for acquisition $ 2,658,909 $ — $ — Conversion of convertible debenture into ordinary shares $ 857,165 $ — $ — |
Subsequent events
Subsequent events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent events | |
Subsequent events | Note 19 – Subsequent events Private Placement On July 27, 2020, the Company entered into certain securities purchase agreement (the “SPA”) with certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended pursuant to which the Company agreed to sell 2,339,000 ordinary shares at a per share purchase price of $1.50. The gross proceeds to the Company from this offering will be approximately $3.5 million. The Company plans to use the proceeds for working capital. The SPAs contain customary representations, warranties and covenants. The offering is closed on August 20, 2020. Conversion of Convertible Debenture Subsequent to June 30, 2020, the Debenture holder converted principal and interest value of $2,600,000 and $84,630, respectively, into a total of 2,478,780 of the Company’s ordinary shares at weighted average conversion price of $1.08. Conversion and Amendment of Convertible Debenture As previously disclosed in Note 13, the Company entered into a securities purchase agreement with an accredited investor (the “Debenture Holder”) to place three convertible debentures with a maturity date of twelve months after the issuance thereof in the aggregate principal amount of $5,000,000. During the period from May 21, 2020 to August 13, 2020, the Company issued a total of 1,847,167 ordinary shares to the holder of the First Convertible Debenture upon the conversion of a total of $2,062,191 in principal due and accrued and unpaid interest under the Convertible Debenture. As a result, the First Convertible Debenture has retired. On September 15, 2020, the Company entered in an amendment agreement with the Debenture holder to amend the “Floor Price” of the Second Convertible Debenture to $1.00 per share for the first $1,400,000 of principal and accrued interest to be converted. The “Floor Price” for the remaining principal and accrued interest on the Second Convertible Debenture and the Third Convertible Debenture shall remain unchanged at $3.00 per share. On November 13, 2020, the Company entered in an amendment agreement with the Debenture Holder to amend the “Floor Price” of the remaining $600,000 of principal and accrued interest to be converted in the Second Convertible Debenture to $1.00 per share and to amend the “Floor Price” of the Third Convertible Debenture to $1.00 per share for the first $200,000 of principal plus accrued interest to be converted. The “Floor Price” for the remaining principal and accrued interest on the Third Convertible Debenture shall remain unchanged at $3.00 per share. Closing of Convertible Debenture On June 19, 2020, the Company entered into another securities purchase agreement with the same accredited investor to place convertible debentures with a maturity date of twelve months after the issuance thereof in the aggregate principal amount of $2,000,000. The first Debenture in the amount of $700,000 was issued on June 19, 2020; the second Debenture in the amount of $700,000 was issued on July 17, 2020; the third Debenture in an amount of $300,000 was issued on August 14, 2020; and the fourth closing of the Debenture in an amount of $300,000 was issued on November 13, 2020. The Debentures bear interest at the rate of 5% per annum. Acquisition of China Silanchi Holding Limited (“Silanchi”) On September 3, 2020, the Company entered into a share purchase agreement with Silanchi, a British Virgin Islands company, and China Gelingge Holding Limitied and China Yaxinge Holding Limited, the shareholders of Silanchi, who collectively hold 100% equity interest of Silanchi and to deliver a total consideration of US$100 in exchange for acquiring 98% equity interest of Silanchi. Silanchi was established on December 12, 2019. As of the date of this report, Silanchi did not have any operations. Issuance of ordinary shares for compensation On July 1, 2020, the Company entered into a three-year employment agreement (the “Employment Agreement”) with Ms. Xia Wang, the CFO of the Company, pursuant to which the Company agreed to issue 200,000 ordinary shares of the Company per annum as Ms. Wang’s compensation during her employment with the Company. The compensation arrangement was subsequently approved by the Compensation Committee of the Company. On September 24, 2020, pursuant to the Employment Agreement, the Company issued the 200,000 ordinary shares to Ms. Wang for her services as CFO for the fiscal year ended June 30, 2021. The shares were valued at $1.35 per share using the closing price on July 1, 2020 with total consideration of $270,000. Failure to Satisfy a Continued Listing Standard On October 21, 2020, the Company received a letter from The NASDAQ Stock Exchange regarding the Company’s failure to comply with NASDAQ Continued Listing Rule (“Rule”) 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share. A failure to comply with Rule 5550(a)(2) exists when listed securities fail to maintain a closing bid price of at least $1.00 per share for 30 consecutive business days. Based on the closing bid price for the last 30 consecutive business days (including, in particular, the period September 2, 2020 through October 20, 2020), the Company failed to meet the aforesaid requirement. Under Rule 5810(c)(3)(A), the Company will be provided a compliance period of 180 calendar days, until April 19, 2021, to regain compliance. If at any time during this 180 day period the closing bid price of the Company’s securities is at least $1.00 for a minimum of ten consecutive business days, the Company’s compliance will be regained. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, and its VIE. All intercompany transactions and balances are eliminated upon consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment, impairment of long-lived assets, and allowance for doubtful accounts. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(856,218) and $(308,571) as of June 30, 2020 and 2019, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2019 and 2018 were translated at 7.07 RMB and 6.87 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to the statement of income accounts for the years ended June 30, 2020, 2019 and 2018 were 7.03 RMB, 6.83 RMB and 6.51 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. |
Business combinations | Business combinations The purchase of price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company's operating results from the date of acquisition. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and time deposits placed with banks or other financial institutions and have original maturities of less than three months. |
Accounts receivable | Accounts receivable Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical experience, aging of the receivables, the economic environment, trends in the food industry and the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. The Company provides an allowance for doubtful accounts provision of 25% for accounts receivable balances that are past due more than 180 days but less than 270 days, an allowance for doubtful accounts provision of 50% of for accounts receivable past due from 270 days but less than one year, an allowance for doubtful accounts provision of 100% for accounts receivable past due beyond one year, plus additional amounts as necessary when the Company’s collection department determines the collection of the full amount is remote and the Company’s management approves 100% of the allowance for doubtful accounts. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management has continued to evaluate the reasonableness of its valuation allowance policy and will update it if necessary. |
Other receivables | Other receivables Other receivables primarily include advances to employees, amounts due from unrelated entities, VAT tax refunds, and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes the collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2020 and 2019, allowance for the doubtful accounts were $50,363 and $48,203 for continuing operations, respectively. As of June 30, 2020 and 2019, no allowance for the doubtful accounts was recognized for discontinued operations, respectively. |
Inventories | Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value. |
Prepayments | Prepayments Prepayments are cash deposited or advanced to services providers for future inventory purchases or future services. This amount is refundable and bears no interest. |
Security deposits | Security deposits Security deposits include loan deposits to service providers who assisted the Company as a third party guarantor in the Company’s bank loans and sales performance deposits to guarantee the Company’s sales contracts. These amounts are non-interest bearing and refundable upon the repayments of the loans or notes payable or fulfillment of sales contracts. Security deposits considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2020 and 2019, allowance for the doubtful accounts were $715,024 and $0 for continuing operations, respectively. As of June 30, 2020 and 2019, no allowance for the doubtful accounts was recognized for discontinued operations, respectively. |
Plant and equipment, net | Plant and equipment, net Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 0% or 5% residual value. The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction projects. No depreciation is provided for construction-in-progress until it is completed and placed into service. |
Intangible assets, net | Intangible assets, net Intangible assets are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land-use rights.” The Company has obtained rights to use various parcels of land for 50 years. The Company amortizes the cost of the land use rights over their useful life using the straight-line method. |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive income (loss). Impairment losses on goodwill are not reversed. The Company reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred. The Company has the opinion to access qualitative factors to determine whether it is necessary to perform the two-step in accordance with ASC 350-20. If the Company believes, as a result of the qualitative carrying amount, the two-step quantities impairment test described below is required. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit's goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business acquisition with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive income (loss). Impairment losses on goodwill are not reversed. For the years ended June 30, 2020, 2019 and 2018, no impairment was recorded for goodwill. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including plant and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2020 and 2019, no impairment of long-lived assets was recognized for continuing operations. As of June 30, 2020 and 2019, $724,987 and $0 impairment of long-lived assets was recognized for discontinued operations, respectively. |
Financial Instruments | Financial Instruments The Company analyzes all financial instruments with features of both liabilities and equity under FASB Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity” and FASB ASC Topic 815 “Derivatives and Hedging”. The embedded conversion features of convertible debentures not separately accounted for as a derivative and contained considered to be derivative instruments provide for a rate of conversion that is below market value. Such feature is normally characterized as a “beneficial conversion feature” (“BCF”) required to separate the instruments into debt and equity. A BCF is a non-detachable conversion feature that is "in the money" at the commitment date, which requires recognition of interest expense for underlying debt instruments and a deemed dividend for underlying equity instruments. A conversion option is "in the money" if the effective conversion price is lower than the commitment date fair value of the share into which it is convertible. The relative fair values of the BCF were recorded as discounts from the face amount of the respective debt instrument. The Company amortized the discount using the straight-line method which approximates the effective interest method through maturity of such instruments. |
Fair value measurement | Fair value measurement The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: · 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, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Long-term bank loan on the balance sheets is at carrying value, which approximates fair value as the bank was lending the money to the Company at the market rate. |
Related party | Related parties A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
Revenue recognition | Revenue recognition Prior to June 30, 2018, revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. Revenues are recognized at the date of goods delivered and title passed to customers or agents, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. The Company’s revenues come from three channels: supermarkets, farmers’ markets and feed raw materials. The products sold in supermarkets together with feed raw materials are processed products are subject to a Chinese value-added tax (“VAT”) when sold in the PRC. The products sold at farmers’ markets are fresh-killed hog and hog’s byproducts. These products sold in the PRC are not subject to a Chinese VAT. VAT taxes are presented as a reduction of revenue. On July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of June 30, 2018. The core principle underlying the revenue recognition ASU is that the Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or overtime, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and determined that there were no differences in the pattern of revenue recognition. Disaggregated revenue by the Company’s revenue streams, such as supermarket and grocery store revenue, famers’ market revenue and feed raw material revenue are required to be disclosed upon adoption, which has been reflected in the accompanying consolidated statements of income and comprehensive income. Gross versus Net Revenue Reporting The Company also engages in trading of chilled fresh pork. The determination of whether revenues should be reported on a gross or net basis is based on its assessment of whether it is the principal or an agent in the transaction in accordance with ASC 606-10-55 and depends on whether the promise to the customer is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company controls the products prior to transferring it. When the Company controls the product, the promise is to provide and deliver the products and revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is presented net. To distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance of control in ASC 606-10-55-37A and the indicators in 606-10-55-39. The Company considers this guidance in conjunction with the terms in the Company’s arrangements with both suppliers and customers. In general, the Company does not control the products as it has no obligation to (i) fulfill the resale products delivery, and (ii) bear any inventory risk. In addition, when establishing the selling prices for delivery of the resale products, the Company has such discretion of establishing price to ensure it would generate profit for the services of the products delivery arrangements. The Company believes that all these factors indicate that the Company is acting as an agent in this transaction. As a result, revenue from the trading of chilled fresh pork is presented on a net basis. |
Cost of revenues | Cost of revenues Cost of revenues comprised of the cost of raw materials and the cost of processing and overhead expenses on sold products. |
Shipping and handling | Shipping and handling Shipping and handling costs are expensed as incurred and included in selling expenses. |
Advertising costs | Advertising costs Advertising costs from continuing operations amounted to $16,913, $2,583, and $4,320 for the years ended June 30, 2020, 2019 and 2018, respectively. Advertising costs from discontinued operations amounted to $0, $12,293, and $0 for the years ended June 30, 2020, 2019 and 2018, respectively. Advertising costs are expensed as incurred and included in selling expenses. |
Leases | Leases Effective July 1, 2019, the Company adopted FASB ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require us to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On July 1, 2019, the Company recognized approximately $1.3 million right of use (“ROU”) assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental borrowing rate of 6.09% based on the duration of lease terms. Operating lease ROU assets and lease liabilities are recognized at the adoption date of July 1, 2019 or the commencement date, whichever is earlier, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. |
Stock-based compensation | Stock-based compensation The Company records stock compensation expense for employees at fair value on the grant date and recognizes the expense over the employee’s requisite service period. The Company’s expected volatility assumption is based on the historical volatility of the Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination rate. The risk-free interest rate for the expected term of an option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based on the Company’s current and expected dividend policy. The Company records stock compensation expense for non-employees at fair value on the grant date and recognizes the expense over the service provider’s requisite service period. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2017 to 2019 are subject to examination by any applicable tax authorities. |
Earnings per share ("EPS") | Earnings per share (“EPS”) Basic earnings per share are computed by dividing income available to ordinary shareholders by the weighted average ordinary shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. Ordinary shares equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Dilution is computed by applying the treasury share method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during the period. A total of 725,000 issued and outstanding ordinary shares with redemption rights prior to the redemption right removal on May 10, 2019 are included in the diluted earnings per share calculation with a weighted average effect of 623,699 and 83,151 ordinary shares for the years ended June 30, 2019 and 2018, respectively as if the shares were issued without any redemption right. A total of 4,667 warrants with weighted average effect of 1,867 ordinary shares using treasury share method are included in the diluted EPS calculation for the year ended June 30, 2019. A total of 67,500 vested stock options issued on August 1, 2019, a total of $1.2 million principal value of convertible debts with floor conversion price of $1.0 issued on November 22, 2019, a total of $1.8 million principal value of convertible debts issued on December 30, 2019 with floor conversion price of $1.0, a total of $1.0 million principal value of convertible debts issued on March 9, 2020 with floor conversion price of $3.0, a total of $0.7 million principal value of convertible debts issued on March 9, 2020 with floor conversion price of $3.0, and a total of 1,000,000 contingent shares to be issued to JMC Shareholders are excluded in the diluted EPS calculation for the year ended June 30, 2020 due to its anti-diluted effect. |
Employee benefit | Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans from continuing operations were $54,882, $73,201 and $54,804 for the years ended June 30, 2020, 2019 and 2018, respectively. Total expenses for the plans from discontinued operations were $7,758, $22,130 and $0 for the years ended June 30, 2020, 2019 and 2018, respectively. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In August 2018, the FASB issued ASU 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018‑13”). ASU 2018‑13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018‑13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018‑13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The adoption of this ASU on July 1, 2020 did not have a material effect on the Company’s consolidated financial statements. In May 2019, the FASB issued ASU 2019‑05, which is an update to ASU Update No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016‑13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016‑13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326‑30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016‑13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company has not early adopted this update and it will become effective on July 1, 2023 assuming the Company will remain an emerging growth company, which qualified as smaller reporting company, at that date. The Company is currently evaluating the impact of ASU 2019‑05 will have on its consolidated financial statements. In January 2020, the FASB issued ASU 2020-01 to clarify the interaction of the accounting for equity securities under ASC 321 and investments accounted for under the equity method of accounting in ASC 323 and the accounting for certain forward contracts and purchased options accounted for under ASC 815. With respect to the interactions between ASC 321 and ASC 323, the amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting when applying the measurement alternative in ASC 321, immediately before applying or upon discontinuing the equity method of accounting. With respect to forward contracts or purchased options to purchase securities, the amendments clarify that when applying the guidance in ASC 815-10-15-141(a), an entity should not consider whether upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in ASC 323 or the fair value option in accordance with ASC 825. The ASU is effective for interim and annual reporting periods beginning after December 15, 2020. Early adoption is permitted, including adoption in any interim period. The Company does not expect the adoption of this standard will have a material impact on its consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current year of segregating the selling and general and administrative expenses for comparative purpose. These reclassifications have no effect on the reported revenues, net income (loss) or total assets. Certain prior year amounts have been reclassified to conform to the current year of discontinued operations presentation. These reclassifications have no effect on the accompanying statements of operations and cash flows. |
Nature of business and organi_2
Nature of business and organization (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Nature of business and organization | |
Summary of subsidiaries, VIE's and subsidiaries of VIE's | The accompanying consolidated financial statements reflect the activities of Xiangtai Cayman and each of the following entities: Name Background Ownership Xiangtai BVI · A British Virgin Islands company 100% Xiangtai HK · A Hong Kong company 100% owned by Xiangtai BVI Xiangtai WFOE · A PRC limited liability company and deemed a wholly foreign-owned enterprise (“WFOE”) 100% owned by Xiangtai HK CQ Penglin · A PRC limited liability company VIE of Xiangtai WFOE · Slaughtering, processing, packing, and selling various processed meat products. GA Yongpeng · A PRC limited liability company 100% owned by Xiangtai WFOE · Slaughtering, processing, packing and selling various processed meat products. CQ Pengmei · A PRC limited liability company 100% owned by Xiangtai WFOE · Grocery stores selling daily necessities JMC · A PRC limited liability company 51 % VIE of Xiangtai WFOE · Feed raw materials and formula solutions wholesales. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of property, plant and equipment | The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life |
Variable interest entity ("VI_2
Variable interest entity ("VIE") (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Variable interest entity (VIE) | |
Schedule of VIE's consolidated assets and liabilities and operating results | The carrying amount of VIE’s consolidated assets and liabilities are as follows: June 30, 2020 June 30, 2019 Current assets $ 48,347,542 $ 39,258,826 Property and equipment, net 1,403,707 868,435 Other noncurrent assets 3,558,210 162,142 Total assets 53,309,459 40,289,403 Total liabilities (42,919,217) (30,645,069) Net assets $ 10,390,242 $ 9,644,334 June 30, 2020 June 30, 2019 Current liabilities: Short-term loans - banks $ 4,359,210 $ 4,150,310 Loans from third parties 4,449,563 2,303,420 Short-term loans - related parties — 329,120 Current maturities of long-term loan - bank 777,558 — Accounts payable 6,606,723 6,995,932 Other payables and accrued liabilities 1,526,051 238,882 Other payables - related parties 7,161,232 528,717 Intercompany payables 10,334,680 8,928,579 Customer deposits 1,159,902 367,149 Operating lease liabilities 49,171 — Taxes payable 3,125,847 2,805,722 Total current liabilities 39,549,937 26,647,831 Other liabilities: Long-term loan - bank — 866,231 Loan from a third party 2,074,871 3,131,007 Long-term loans - related parties 713,325 — Operating lease liabilities - noncurrent 581,084 — 3,369,280 3,997,238 Total liabilities $ 42,919,217 $ 30,645,069 The summarized operating results of the VIE’s are as follows: For the year ended For the year ended For the year ended June 30, 2020 June 30, 2019 June 30, 2018 Operating revenues $ 105,100,563 $ 89,959,760 $ 94,596,470 Gross profit $ 6,218,590 $ 7,809,539 $ 9,011,763 Income from operations $ 2,867,697 $ 6,556,351 $ 9,454,230 Net income $ 974,302 $ 5,533,912 $ 3,786,061 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Business Combinations | |
Summary of fair value of the identifiable assets acquired and liabilities assumed on the acquisition date | The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date, which represents the net purchase price allocation on the date of the acquisition of JMC based on valuation performed by an independent valuation firm engaged by the Company and translated the fair value from RMB to USD using the exchange rate on April 3, 2020 at the rate of USD 1.00 to RMB 7.09. Fair value Cash and cash equivalents $ 852,145 Other current assets 9,924,263 Plant and equipment 11,648 Goodwill 5,166,271 Other noncurrent assets 481,062 Total assets Total liabilities (11,221,842) Net assets of JMC 5,213,547 Less: fair value of non-controlling interest (2,554,638) Total consideration paid $ 2,658,909 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations | |
Summary of carrying amounts of major classes of assets and liabilities included as part of discontinued operations of CQ Pengmei and reconciliation of the amounts of major classes of income and losses from discontinued operations in the consolidated statements of operations and comprehensive loss | Reconciliation of the carrying amounts of major classes of assets and liabilities from discontinued operations in the consolidated balance sheets as of June 30, 2020 and 2019 is as follow: Carrying amounts of major classes of assets included as part of discontinued operations of CQ Pengmei: June 30, 2020 June 30, 2019 CURRENT ASSETS: Cash and cash equivalents $ 2,523 $ 19,015 Other receivables, net 57,395 20,967 Inventories — 112,641 Security deposits 3,267 21,844 Total current assets of discontinued operations 63,185 174,467 OTHER ASSETS: Other receivables 48,371 122,584 Prepaid expenses — 508,271 Plant and equipment, net 25,752 1,213,983 Operating lease right-of-use assets 505,329 — Total other assets of discontinued operations 579,452 1,844,838 Total assets of discontinued operations $ 642,637 $ 2,019,305 Carrying amounts of major classes of liabilities included as part of discontinued operations of CQ Pengmei: CURRENT LIABILITIES: Short-term loan – banks $ 336,845 $ 364,071 Loans from third parties 474,135 626,201 Accounts payable 64,725 217,953 Customer deposits 6,519 2,618 Other payables and accrued liabilities 416,227 571,553 Other payables – related parties 29,846 88,670 Operating lease liabilities 116,904 — Taxes payable — 987 Total current liabilities of discontinued operations 1,445,201 1,872,053 OTHER LIABILITIES: Operating lease liabilities - noncurrent 417,729 — Total liabilities of discontinued operations $ 1,862,930 $ 1,872,053 Reconciliation of the amounts of major classes of income and losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the years ended June 30, 2020, 2019 and 2018. For the Year Ended For the Year Ended For the Year Ended June 30, June 30, June 30, 2020 2019 2018 Supermarket and grocery store $ 1,574,965 $ 3,465,885 $ — Cost of revenue 1,435,597 3,114,906 — Gross profit 139,368 350,979 — OPERATING EXPENSES: Selling 438,458 704,766 — General and administrative 162,976 189,553 — Provision for right-of-use assets 250,181 — — Loss on disposal of long-lived assets 276,648 — — Impairment of long-lived assets 724,987 — — Total operating expenses 1,853,250 894,319 — Loss from operations (1,713,882) (543,340) — OTHER INCOME (EXPENSES) Interest income 14 33 — Interest expense (114,853) (110,350) — Other finance expense (3,156) (20,532) — Other income, net 35,640 11,568 — Total other expense, net (82,355) (119,281) — Loss before income taxes (1,796,237) (662,621) — Income tax expense — — — Net loss from discontinued operations $ (1,796,237) $ (662,621) $ — |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounts receivable, net | |
Schedule of accounts receivable, net | Accounts receivable, net consist of the following: June 30, 2020 June 30, 2019 Accounts receivable $ 44,505,100 $ 41,827,554 Allowance for doubtful accounts (3,932,343) (2,304,817) Total accounts receivable, net $ 40,572,757 $ 39,522,737 |
Schedule of movement of allowance for doubtful accounts | Movements of allowance for doubtful accounts are as follows: June 30, 2020 June 30, 2019 Beginning balance $ 2,304,817 $ 1,622,964 Balance inherited from JMC 930,657 — Addition 769,764 743,986 Write off — — Exchange rate effect (72,895) (62,133) Ending balance $ 3,932,343 $ 2,304,817 |
Security deposits (Tables)
Security deposits (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Security deposits | |
Schedule of security deposits | Security deposits consist of the following: June 30, 2020 June 30, 2019 Loan deposits $ 955,700 $ 986,407 Sales performance deposit — 1,388,179 (1) Allowance for security deposits (715,024) — Total security deposits, net $ 240,676 $ 2,374,586 Less: security deposits - discontinued operations (3,267) (21,844) Security deposits, net - continuing operations $ 237,409 $ 2,352,742 In May 2019, the Company signed a sales contract with a customer for its fresh killed hogs in 2019. The contract requires the customer to prepay approximately $1.4 million (RMB 9,551,078) to the Company as customer deposits, and it also requires the Company to provide a sales performance deposit of $1,388,179 to the customer for guaranteeing its hog supplies from May 2019 to August 2019, and was extended to December 2019. The sales performances have been completed by June 30, 2020, the customer returned the deposit back to the Company. |
Plant and equipment, net (Table
Plant and equipment, net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Plant and equipment, net | |
Schedule of plant and equipment | Plant and equipment consist of the following: June 30, 2020 June 30, 2019 Buildings $ 3,393,212 $ 3,950,375 Automobile 165,628 118,487 Electronic devices 3,691,929 3,808,900 Office equipment 42,595 34,105 Leasehold improvements — 762,772 Construction-in-progress 495,634 — Subtotal 7,788,998 8,674,639 Less: accumulated depreciation (4,307,253) (4,125,427) Total $ 3,481,745 $ 4,549,212 Less: plant and equipment, net - discontinued operations (25,752) (1,213,983) Plant and equipment, net - continuing operations $ 3,455,993 $ 3,335,229 |
Schedule of components of construction-in-progress | Construction-in-progress consist of the following as of June 30, 2020: Estimated Additional Estimated Cost to Construction-in-progress description Value Completion date Complete Pig farm $ 495,634 December 2020 $ 183,993 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Intangible assets, net | |
Schedule of intangible assets | Intangible assets consist of the following: June 30, 2020 June 30, 2019 Land use rights $ 586,795 $ 603,774 Less: accumulated amortization (148,806) (141,036) Net intangible assets $ 437,989 $ 462,738 |
Schedule of estimated amortization | The estimated amortization is as follows: Estimated Twelve months ending June 30, amortization expense 2021 $ 11,792 2022 11,792 2023 11,792 2024 11,792 2025 11,792 Thereafter 379,029 Total $ 437,989 |
Related party transactions an_2
Related party transactions and balances (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Related party transactions and balances | |
Summary of customer deposit from related parties | Name of related party Relationship June 30, 2020 June 30, 2019 CQ Mingwen Significantly influenced by Penglin $ 27,395 $ 29,643 |
Summary of other payables to related parties | Name of related party Name of related party June 30, 2020 June 30, 2019 Xia Wang Chief Financial Officer $ 153,659 $ 83,619 Zeshu Dai CEO — 659,420 Penglin Wang Son of the CEO 248 162,047 Zili Zhang CEO of CQ Pengmei 12 429,448 Jiaping Zhou Shareholder of JMC 231,268 — Jun Zhou Shareholder of JMC 1,879,639 — Total 2,264,826 1,334,534 Total other payables - related parties - discontinued operations (29,846) (88,670) Total other payables - related parties - continuing operations $ 2,234,980 $ 1,245,864 |
Summary of short-term loans by related parties | Weighted average Collateral/ Short term loans Relationship Maturities interest rate Guarantee June 30, 2020 June 30, 2019 Xia Wang CFO February 20,2020 (Extended to January 15, 2022) 9.60 % None $ 101,904 $ 104,852 Penglin Wang Son of CEO December 27, 2019 (Extended to December 11, 2024) 9.60 % None 229,283 224,268 Yong Wang Son of CEO July 17, 2022 7.13 % None 268,912 — Zeshu Dai CEO March 8, 2022 7.13 % None 113,226 — Total 713,325 329,120 Total current loans from related parties — (329,120) Total non-current loans from related parties $ 713,325 $ — |
Credit Facilities (Tables)
Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Credit Facilities | |
Summary of outstanding balances on short-term bank loans | Outstanding balances on short-term bank loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Shanghai Pudong Development ("SPD") Bank Chongqing Nanbing Road Branch April 22, 2020 (Fully repaid by October 2020) 6.09 % A security deposit of $109,221 and guaranteed by the CEO and certain members of the family and affiliate $ 1,273,794 $ 1,456,187 Chongqing Rural Commercial Bank November 25, 2020 6.74 % Guaranteed by the CEO and certain members of the family and affiliate 1,839,928 2,694,122 Chongqing Beibei Chouzhou Bank Co., Ltd. (Chouzhou Bank) March 20, 2020 – in default* 6.96 % Guaranteed by GA Yongpeng's properties recorded at RMB 36,626,600 (approximately $5.2 million) and Zeshu Dai's 6.25% of stock right of GA Yongpeng recorded at RMB 1,250,000 (approximately $0.2 million) 336,845 364,071 The Agriculture Bank of China Chongqing Yubei Branch June 27, 2021 3.85 % Guaranteed by the properties of JMC's CEO and CFO recorded at RMB 5,517,400 (approximately $0.8 million) 467,058 — China Zheshang Bank Chongqing Branch May 5, 2021 5.35 % Guaranteed by the properties of JMC's CEO and CFO recorded at RMB 12,090,000 (approximately $1.7 million) 778,430 — Total $ 4,696,055 $ 4,514,380 Less: short term loans - banks - discontinued operations (336,845) (364,071) Short term loans - banks - continuing operations $ 4,359,210 $ 4,150,309 · On September 25, 2020, the Chongqing Beibei District People’s Court issued a civil mediation letter, according to which CQ Pengmei shall repay Chouzhou Bank the principal and the interest. Approximately $16,000 (RMB 110,000) of principal and approximately $13,000 (RMB 93,466) of the interest will be due before October 21, 2020, all the remaining balance should be repaid for at least approximately $14,000 (RMB 100,000) on the 21th of each month since November 2020, and the repayment shall be completed no later than May 21, 2022. Since November 2020 to May 2022, the interest rate rises by 50%, which should be paid before 21th of each month. Wang Penglin, Wang Mingwen, Dai Zeshu, Chongqing Education Financing Guarantee Co., Ltd. and CQ Penglin shall bear joint and several liability for the above repayment. As of the date of this report, CQ Pengmei has paid off approximately $16,000 (RMB 114,939) to Chouzhou Bank as part of the repayment. |
Summary of outstanding balances of short term third-party loans | Outstanding balances of short term third-party loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Sichuan Toucu Financial Information Services Co., Ltd September 3, 2020 (Fully repaid in September 2020) 9.0 % None $ 63,554 $ 407,758 Chongqing Puluosi Small Mortgage Co., Ltd. Various amounts due between November 2018 and January 2019 – in default* 12.0 % Guaranteed by the CEO and certain members of the family and affiliate 4,183,248 4,805,734 Gang Hu September 4, 2022 7.13 % None 120,303 — Chongqing Reassurance Co., Ltd. Due upon request 17.4 % None 273,294 — Chongqing Zhouyang Shipping Co., Ltd December 28, 2019 18.0 % None — 72,814 Mei Yang October 10, 2020 (Fully repaid by the date of this report) 24.0 % None 7,077 43,688 Ping Wang September 17, 2021 10.8 % None 43,875 48,057 Yuzhu Hu November 30, 2020 14.4 % None — 160,191 Yixuan Liu September 11, 2020 (Renewed and to be due on September 11, 2022) 12.0 % None 84,920 87,377 Shuming Yang September 20, 2020 (Renewed and to be due on September 20, 2022) 12.0 % None 169,839 174,754 Chunlan Zhuo March 22, 2021 18.0 % None 63,911 — Qin Cao October 22, 2020 (Fully repaid in October 2020) 24.0 % None 30,005 72,814 Maohua Xia Various amounts due between August 2020 and September 2020 (Fully repaid by the date of this report) 24.0 % None 33,561 223,848 Chongqing Shouqing Trading Co., Ltd. September 7, 2021 12.0 % None 382,139 — Shengli Huang April 23, 2022 24.0 % None 99,073 — Xiaofen Ai June 17, 2021 24.0 % None 28,307 — Chongqing Haobangshou Ecommerce Co., Ltd. March 24, 2023 6.0 % None 1,415,328 — Bangwei Zhu May 2, 2020 12.0 % None — 36,407 Mei Zhang July 20, 2020 (Fully repaid by the date of this report) 24.0 % None 49,536 72,814 Feng Zhou February 28, 2022 12.0 % None 14,153 — Xiaolin Cao November 30, 2020 — % None 500,000 — Total loans from third parties $ 7,562,123 $ 6,206,256 Total non-current loans from third parties (2,074,871) (3,131,007) Total current loans from third parties $ 5,487,252 $ 3,075,249 Less: current loans from third parties - discontinued operations (474,135) (626,201) Current loans from third parties - continuing operations $ 5,013,117 $ 2,449,048 * |
Summary of outstanding balances of long term bank loan | The outstanding balance of long term bank loan consisted of the following: Weighted average Lender Maturity interest rate Collateral/Guarantee June 30, 2020 June 30, 2019 Chongqing Dadukou Rongxing Village & Township Bank September 20, 2020 (Subsequently in default*) 12.0 % Guaranteed by CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family $ 777,558 $ 866,231 *On August 12, 2020, Chongqing Dadukou Rongxing Village & Township Bank (“Dadukou Rongxing”) sued CQ Penglin to repay the loan of Dadukou Rongxing approximately $0.9 million (RMB 6,629,447), which consists of principal of approximately $0.8 million (RMB 5,493,839) and approximately $0.1 million (RMB 1,135,608), in the Chongqing Dadukou District People’s Court. CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family guaranteed the loan shall bear joint and several lability for the repayment. As of the date of this report, the Chongqing Dadukou District People’s Court has not held a trial. |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Taxes | |
Schedule of significant components of the provision for income taxes | Significant components of the provision for income taxes are as follows: For the year For the year For the year ended ended ended June 30, 2020 June 30, 2019 June 30, 2018 Current $ 389,846 $ — $ 841,312 Deferred tax expense (benefit) (166,673) 213,649 (126,936) Total provision for income taxes $ 223,173 $ 213,649 $ 714,376 |
Schedule of reconciliation of statutory tax rates to effective tax rate | The following table reconciles China statutory rates to the Company’s effective tax rate: June 30, 2020 June 30, 2019 June 30, 2018 China income tax rate 25.0 % 25.0 % 25.0 % Change in valuation allowance 0.0 % 1.0 % 0.0 % Income tax exemption status granted (10.2) % (21.9) % (9.3) % Others* (24.2) % — % 0.2 % Effective tax rate (9.4) % 4.1 % 15.9 % * |
Schedule of taxes payable | Taxes payable consisted of the following: June 30, 2020 June 30, 2019 Income taxes $ 3,114,811 $ 2,805,722 Other taxes 227,316 169,324 Total $ 3,342,127 $ 2,975,046 Less: taxes payable - discontinued operations — (987) Taxes payable - continuing operations $ 3,342,127 $ 2,974,059 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Convertible Debentures | |
Schedule of components of convertible debentures | June 30, 2020 June 30, 2019 Principal balance $ 4,900,000 $ — Less: Debentures discount and debts insurance cost (131,688) — Total $ 4,768,312 $ — |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Equity | |
Summary of stock option activity | The summary of stock option activity is as follows: Weighted Average Average Remaining Aggregate Options Exercisable Exercise Contractual Intrinsic Outstanding Option Price Life Value June 30, 2019 — — $ — — — Granted/Acquired 95,000 71,250 $ 5.00 3.00 — Forfeited — — $ — — — Exercised — — $ — — — June 30, 2020 95,000 71,250 $ 5.00 2.12 — |
Summary of warrant activity | The summary of warrant activity is as follows: Weighted Average Average Remaining Warrants Exercisable Exercise Contractual Outstanding Shares Price Life June 30, 2018 — — $ — — Granted/Acquired 86,732 86,732 $ 4.89 5.00 Forfeited — — $ — — Exercised — — $ — — June 30, 2019 86,732 86,732 $ 4.89 4.89 Granted/Acquired — — $ — — Forfeited — — $ — — Exercised — — $ — — June 30, 2020 86,732 86,732 $ 4.89 3.88 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Loss Contingencies [Line Items] | |
Schedule of lease obligations | The five-year maturity of the Company’s lease obligations is presented below: Twelve Months Ending June 30, Operating Lease Amount 2021 $ 216,033 2022 231,738 2023 240,099 2024 247,634 2025 148,825 Thereafter 328,749 Total lease payments 1,413,078 Less: Interest (248,191) Present value of lease liabilities $ 1,164,887 Less: present value of lease liabilities - discontinued operations (534,633) Present value of lease liabilities - continuing operations 630,254 |
Schedule of accrued potential losses | As of June 30, 2020, the amount of potential losses the Company accrued for are summarized as follows: Dispute matter Claim amount Leases $ 45,867 |
Schedule of not accrued potential losses | As of June 30, 2020, the amount of potential losses the Company did not accrue for are summarized as follows: Dispute matter Claim amount Guarantees $ 248,302 |
Chongqin Penglin Food Co., Ltd | |
Loss Contingencies [Line Items] | |
Schedule of Guarantees | Name of the party being guaranteed Guaranteed amount Guarantee expiration date CQ Mingwen (borrower) $ 1,273,795 December 25, 2020 |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Segments | |
Summary of information by segment | The following tables present summary information by segment for the years ended June 30, 2020, 2019 and 2018: Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2020 meat materials operations) operations) Revenues $ 86,301,255 $ 24,250,247 $ 110,551,502 $ 1,574,965 Cost of revenues 81,153,996 22,219,528 103,373,524 1,435,597 Gross profit 5,147,259 2,030,719 7,177,978 139,368 Depreciation and amortization 506,775 1,579 508,354 125,257 Total capital expenditures $ 700,399 $ — $ 700,399 $ — Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2019 meat materials operations) operations) Revenues $ 99,079,267 $ — $ 99,079,267 $ 3,465,885 Cost of revenues 90,429,027 — 90,429,027 3,114,906 Gross profit 8,650,240 — 8,650,240 350,979 Depreciation and amortization 521,925 — 521,925 167,609 Total capital expenditures $ 20,635 $ — $ 20,635 $ — Grocery Total stores Fresh Feed raw (continuing (discontinued For the year ended June 30, 2018 meat materials operations) operations) Revenues $ 101,104,224 $ — $ 101,104,224 $ — Cost of revenues 91,452,753 — 91,452,753 — Gross profit 9,651,471 — 9,651,471 — Depreciation and amortization 542,189 — 542,189 — Total capital expenditures $ 89,351 $ — $ 89,351 $ — Total assets as of: June 30, June 30, 2020 2019 Fresh meat business $ 50,044,169 $ 45,260,319 Feed raw materials business 12,446,388 — Grocery stores - discontinued 642,637 2,019,305 Holding companies 216,240 4,071,693 Total Assets $ 63,349,434 $ 51,351,317 |
Condensed financial informati_2
Condensed financial information of the parent company (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Condensed financial information of the parent company | |
Statement of balance sheets of parent company | June 30, 2020 June 30, 2019 ASSETS CURRENT ASSETS Cash and cash equivalents $ 163,640 $ — Prepayments 18,406 — Other receivables 28,940 — Intercompany receivables 9,963,384 6,623,561 Total current assets 10,174,370 6,623,561 OTHER ASSETS Investment in subsidiary 19,713,942 18,554,729 Total assets $ 29,888,312 $ 25,178,290 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Loan from third party $ 500,000 $ — Other payable - related parties 423,416 257,384 Convertible debenture, net 4,768,312 — Accrued expenses 390,122 167,765 Intercompany payables — 227,927 Total current liabilities 6,081,850 653,076 Total liabilities 6,081,850 653,076 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 23,971,084 and 21,964,027 share issued and outstanding as of June 30, 2020 and 2019, respectively 239,711 219,640 Additional paid-in capital 15,765,411 11,031,937 Deferred share compensation (47,708) — Statutory reserves 1,670,367 1,496,642 Retained earnings 7,034,899 12,085,566 Accumulated other comprehensive loss (856,218) (308,571) Total shareholders' equity 23,806,462 24,525,214 Total liabilities and shareholders' equity $ 29,888,312 $ 25,178,290 |
Statement of income and comprehensive income of parent company | For the Years Ended June 30, 2020 2019 2018 OPERATING EXPENSES General and administrative $ (2,512,271) $ (309,466) $ (115,683) Stock compensation expense (930,223) — — Total operating expenses (3,442,494) (309,466) (115,683) LOSS FROM OPERATIONS (3,442,494) (309,466) (115,683) OTHER INCOME (EXPENSE) Interest expense (123,212) — — Other finance expenses (359,187) — — Equity (loss) income of subsidiaries (952,049) 4,673,057 3,883,792 Total other (expenses) income, net (1,434,448) 4,673,057 3,883,792 NET (LOSS) INCOME (4,876,942) 4,363,591 3,768,109 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (547,647) (267,546) 133,553 COMPREHENSIVE (LOSS) INCOME $ (5,424,589) $ 4,096,045 $ 3,901,662 |
Statement of cash flows of parent company | For the Years Ended June 30, 2020 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (4,876,942) $ 4,363,591 $ 3,768,109 Adjustments to reconcile net income to cash (used in) provided by operating activities: Equity loss (income) of subsidiary 952,049 (4,673,057) (3,883,792) Stock compensation expense 930,223 — — Late payment penalty expense 500,000 — — Amortization of convertible debenture issuance cost and discount 357,853 — — Change in operating assets and liabilities Other receivables (28,940) — — Prepayments (18,406) — — Accrued expenses 269,521 126,213 41,552 Intercompany (3,567,750) — — Net cash used in operating activities (5,482,392) (183,253) (74,131) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from other payables - related parties, net 166,032 183,253 74,131 Proceeds from convertible debentures, net of issuance costs 5,480,000 — — Net cash provided by financing activities 5,646,032 183,253 74,131 CHANGES IN CASH AND CASH EQUIVALENTS 163,640 — — CASH AND CASH EQUIVALENTS, beginning of year — — — CASH AND CASH EQUIVALENTS, end of year $ 163,640 $ — $ — NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES Issuance of ordinary shares with redemption rights of mezzanine equity $ — $ 1,800,000 $ — Issuance of ordinary shares for acquisition $ 2,658,909 $ — $ — Conversion of convertible debenture into ordinary shares $ 857,165 $ — $ — |
Nature of business and organi_3
Nature of business and organization - Activities (Details) | Jun. 30, 2020 |
Xiangtai BVI | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
JMC | |
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% |
Xiangtai BVI | Xiangtai BVI | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai BVI | Xiangtai HK | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai HK | Xiangtai WFOE | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai WFOE | GA Yongpeng | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai WFOE | CQ Pengmei | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Nature of business and organi_4
Nature of business and organization - Additional information (Details) | Apr. 11, 2020shares | Apr. 03, 2020USD ($)$ / sharesshares | May 10, 2019USD ($)$ / sharesshares | Jul. 02, 2018CNY (¥)store | Jul. 02, 2018USD ($)store | Jun. 30, 2020USD ($)agreement$ / shares | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($) | May 31, 2019 | May 31, 2018 |
Issuance of ordinary shares for acquisition | $ 2,658,909 | $ 0 | $ 0 | |||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Proceeds from Issuance Initial Public Offering | $ 0 | $ 4,395,634 | $ 0 | |||||||
Number of contractual agreements | agreement | 5 | |||||||||
Initial public offering | ||||||||||
Sale of Stock, Number of Shares Issued in Transaction | shares | 1,172,360 | |||||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | |||||||||
Sale of Stock, Price Per Share | $ / shares | $ 5 | |||||||||
Gross Proceeds from Issuance Initial Public Offering | $ 5,861,800 | |||||||||
Proceeds from Issuance Initial Public Offering | $ 4,400,000 | |||||||||
JMC | ||||||||||
Percentage of after-tax net income payable to the company as service fee (as a percent) | 51.00% | |||||||||
Percentage of losses obligated by the company to absorb (as a percent) | 51.00% | |||||||||
Ownership interest prior to acquisition pledged by the existing shareholder (as a percent) | 51.00% | |||||||||
Expected residual returns (as a percent) | 51.00% | |||||||||
JMC | Technical consultation and services agreement | ||||||||||
Agreement term | 20 years | |||||||||
JMC | Voting Rights Proxy and Financial Supporting Agreement | ||||||||||
Agreement term | 20 years | |||||||||
One Major Shareholder [Member] | China Meitai | ||||||||||
Ownership interest | 97.74% | 100.00% | ||||||||
China Meitai | Xiangtai Cayman | ||||||||||
Ownership interest | 62.73% | 64.17% | ||||||||
JMC | ||||||||||
Issuance of ordinary shares for acquisition | $ 2,658,909 | |||||||||
Ownership interest to be acquired (as a percent) | 51.00% | |||||||||
Number of shares to be issued (in shares) | shares | 1,000,000 | 2,000,000 | ||||||||
Price at which the shares are to be issued (in dollars per share) | $ / shares | $ 1.77 | |||||||||
Percentage of after-tax net income payable to the company as service fee (as a percent) | 51.00% | |||||||||
CQ Pengmei | ||||||||||
Number of Grocery Stores Operated | store | 2 | 2 | ||||||||
Issuance of ordinary shares for acquisition | ¥ 5,949,052 | $ 900,000 |
Summary of significant accoun_4
Summary of significant accounting policies - Foreign currency translation and transaction (Details) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018 |
Summary of significant accounting policies | |||
Translation adjustments included in accumulated other comprehensive loss | $ (856,218) | $ (308,571) | |
Historical rate | 7.07 | 6.87 | |
Average translation rate | 7.03 | 6.83 | 6.51 |
Summary of significant accoun_5
Summary of significant accounting policies - Accounts receivable and Other receivables (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Financing receivables 180 to 270 days past due | |
Accounts receivable and Other receivables | |
Allowance for doubtful accounts (in percent) | 25.00% |
Financing receivables 271 days to one year past due | |
Accounts receivable and Other receivables | |
Allowance for doubtful accounts (in percent) | 50.00% |
Financing receivables beyond one year past due | |
Accounts receivable and Other receivables | |
Allowance for doubtful accounts (in percent) | 100.00% |
Summary of significant accoun_6
Summary of significant accounting policies - Plant and equipment, net (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Salvage Value, Percentage | 0.00% |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Salvage Value, Percentage | 5.00% |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Electronic devices | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Electronic devices | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Automobile | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Automobile | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of significant accoun_7
Summary of significant accounting policies - Intangible assets, net (Details) | 12 Months Ended |
Jun. 30, 2020 | |
Land use right | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 50 years |
Summary of significant accoun_8
Summary of significant accounting policies - Earnings per share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 01, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 09, 2020 | Dec. 30, 2019 | Nov. 22, 2019 | May 10, 2019 |
Earnings per share ("EPS") | ||||||||
Redeemable ordinary shares, shares issued | 725,000 | |||||||
Redeemable ordinary shares, shares outstanding | 725,000 | |||||||
Incremental common shares attributable to dilutive effect of ordinary shares with redemption rights | 623,699 | 83,151 | ||||||
Number of warrants | 4,667 | |||||||
Incremental common shares attributable to call options and warrants | 1,867 | |||||||
Floor conversion price of convertible debts issued, that are anti-dilutive (in dollars per share) | $ 1.04 | |||||||
Vested stock options | ||||||||
Earnings per share ("EPS") | ||||||||
Antidilutive securities (in shares) | 67,500 | |||||||
Convertible debt issued on November 22, 2019 | ||||||||
Earnings per share ("EPS") | ||||||||
Principal value of convertible debts issued, that are anti-dilutive | $ 1.2 | |||||||
Floor conversion price of convertible debts issued, that are anti-dilutive (in dollars per share) | $ 1 | |||||||
Convertible debt issued on December 30, 2019 | ||||||||
Earnings per share ("EPS") | ||||||||
Principal value of convertible debts issued, that are anti-dilutive | $ 1.8 | |||||||
Floor conversion price of convertible debts issued, that are anti-dilutive (in dollars per share) | $ 1 | |||||||
Convertible debt issued on March 9, 2020, one | ||||||||
Earnings per share ("EPS") | ||||||||
Principal value of convertible debts issued, that are anti-dilutive | $ 1 | |||||||
Floor conversion price of convertible debts issued, that are anti-dilutive (in dollars per share) | $ 3 | |||||||
Convertible debt issued on March 9, 2020, two | ||||||||
Earnings per share ("EPS") | ||||||||
Principal value of convertible debts issued, that are anti-dilutive | $ 0.7 | |||||||
Floor conversion price of convertible debts issued, that are anti-dilutive (in dollars per share) | $ 3 | |||||||
Contingent shares to be issued pursuant to business combination | ||||||||
Earnings per share ("EPS") | ||||||||
Antidilutive securities (in shares) | 1,000,000 |
Summary of significant accoun_9
Summary of significant accounting policies - Leases (Details) - USD ($) | Jun. 30, 2020 | Jul. 01, 2019 | Jun. 30, 2019 |
Recently issued accounting pronouncements | |||
Right of use assets | $ 2,725,747 | $ 0 | |
Present value of lease liabilities | 1,164,887 | ||
Adjustment | ASU 2016-02 | |||
Recently issued accounting pronouncements | |||
Right of use assets | 1,300,000 | $ 1,300,000 | |
Present value of lease liabilities | $ 1,300,000 | $ 1,300,000 | |
Incremental borrowing rate (as a percent) | 6.09% |
Summary of significant accou_10
Summary of significant accounting policies - Employee benefit (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Continuing operations | |||
Significant Accounting Policies [Line Items] | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 54,882 | $ 73,201 | $ 54,804 |
Discontinued operations | |||
Significant Accounting Policies [Line Items] | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 7,758 | $ 22,130 | $ 0 |
Summary of significant accou_11
Summary of significant accounting policies - Additional information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Significant Accounting Policies [Line Items] | |||
Allowance for doubtful accounts, security deposit | $ 718,437 | ||
Continuing operations | |||
Significant Accounting Policies [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss | 50,363 | $ 48,203 | |
Allowance for doubtful accounts, security deposit | 715,024 | 0 | |
Impairment of long lived assets | 0 | 0 | |
Advertising Expense | 16,913 | 2,583 | $ 4,320 |
Discontinued operations | |||
Significant Accounting Policies [Line Items] | |||
Accounts Receivable, Allowance for Credit Loss | 0 | 0 | |
Allowance for doubtful accounts, security deposit | 0 | 0 | |
Impairment of long lived assets | 724,987 | 0 | |
Advertising Expense | $ 0 | $ 12,293 | $ 0 |
Variable interest entity ("VI_3
Variable interest entity ("VIE") (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Variable interest entity ("VIE") | |||
Current assets | $ 50,275,934 | $ 45,698,915 | |
Property and equipment, net | 3,455,993 | 3,335,229 | |
Total assets | 63,349,434 | 51,351,317 | |
Total liabilities | (36,522,598) | (26,826,103) | |
Current liabilities: | |||
Short-term loans - banks | 4,359,210 | 4,150,309 | |
Loans from third parties | 5,013,117 | 2,449,048 | |
Total current loans from related parties | 0 | 329,120 | |
Current maturities of long-term loan - bank | 777,558 | 0 | |
Accounts payable | 7,510,432 | 8,654,056 | |
Other payables and accrued liabilities | 1,942,014 | 420,359 | |
Other payables - related parties | 2,234,980 | 1,245,864 | |
Customer deposits | 1,266,073 | 704,354 | |
Operating lease liabilities | 49,171 | 0 | |
Taxes payable | 3,342,127 | 2,974,059 | |
Total current liabilities | 32,735,590 | 22,828,865 | |
Other liabilities: | |||
Loan from a third party | 2,074,871 | 3,131,007 | |
Operating lease liabilities - noncurrent | 581,083 | 0 | |
Total other liabilities | 3,787,008 | 3,997,238 | |
Total liabilities | 36,522,598 | 26,826,103 | |
Summarized operating results of the VIE's | |||
Operating revenues | 110,551,502 | 99,079,267 | $ 101,104,224 |
Gross profit | 7,177,978 | 8,650,240 | 9,651,471 |
Income from operations | 515,783 | 6,077,860 | 7,042,653 |
Net income | (4,876,942) | 4,363,591 | 3,768,109 |
VIEs | |||
Variable interest entity ("VIE") | |||
Total liabilities | (42,919,217) | (30,645,069) | |
Current liabilities: | |||
Short-term loans - banks | 4,359,210 | 4,150,310 | |
Loans from third parties | 4,449,563 | 2,303,420 | |
Total current loans from related parties | 329,120 | ||
Current maturities of long-term loan - bank | 777,558 | 0 | |
Accounts payable | 6,606,723 | 6,995,932 | |
Other payables and accrued liabilities | 1,526,051 | 238,882 | |
Other payables - related parties | 7,161,232 | 528,717 | |
Intercompany payables | 10,334,680 | 8,928,579 | |
Customer deposits | 1,159,902 | 367,149 | |
Operating lease liabilities | 49,171 | 0 | |
Taxes payable | 3,125,847 | 2,805,722 | |
Total current liabilities | 39,549,937 | 26,647,831 | |
Other liabilities: | |||
Long-term loan - bank | 866,231 | ||
Loan from a third party | 2,074,871 | 3,131,007 | |
Long-term loans - related parties | 713,325 | 0 | |
Operating lease liabilities - noncurrent | 581,084 | 0 | |
Total other liabilities | 3,369,280 | 3,997,238 | |
Total liabilities | 42,919,217 | 30,645,069 | |
Summarized operating results of the VIE's | |||
Operating revenues | 105,100,563 | 89,959,760 | 94,596,470 |
Gross profit | 6,218,590 | 7,809,539 | 9,011,763 |
Income from operations | 2,867,697 | 6,556,351 | 9,454,230 |
Net income | 974,302 | 5,533,912 | $ 3,786,061 |
CQ Penglin | |||
Variable interest entity ("VIE") | |||
Current assets | 48,347,542 | 39,258,826 | |
Property and equipment, net | 1,403,707 | 868,435 | |
Other noncurrent assets | 3,558,210 | 162,142 | |
Total assets | 53,309,459 | 40,289,403 | |
Total liabilities | (42,919,217) | (30,645,069) | |
Net assets | 10,390,242 | 9,644,334 | |
Other liabilities: | |||
Total liabilities | $ 42,919,217 | $ 30,645,069 | |
JMC | |||
Summarized operating results of the VIE's | |||
Percentage of after-tax net income payable to the company as service fee (as a percent) | 51.00% | ||
Percentage of losses obligated by the company to absorb (as a percent) | 51.00% |
Business Combinations (Details)
Business Combinations (Details) | Aug. 07, 2022shares | Aug. 07, 2021shares | Apr. 11, 2020shares | Apr. 03, 2020USD ($)$ / sharesshares | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2021 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||
Issuance of ordinary shares for acquisition | $ | $ 2,658,909 | $ 0 | $ 0 | |||||||
JMC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Ownership interest to be acquired (as a percent) | 51.00% | |||||||||
Number of shares to be issued (in shares) | 1,000,000 | 2,000,000 | ||||||||
Price at which the shares are to be issued (in dollars per share) | $ / shares | $ 1.77 | |||||||||
Issuance of ordinary shares for acquisition | $ | $ 2,658,909 | |||||||||
Percentage of after-tax net income payable to the company as service fee (as a percent) | 51.00% | |||||||||
Issuance of shares using the closing price | 1,000,000 | |||||||||
Issuance of shares using the closing price and discount rate | 1,000,000 | |||||||||
Discount rate (as a percent) | 4.75% | |||||||||
Minimum | JMC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Ownership interest to be acquired (as a percent) | 30.00% | |||||||||
Number of shares to be issued (in shares) | 400,000 | |||||||||
Maximum | JMC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Ownership interest to be acquired (as a percent) | 70.00% | |||||||||
Number of shares to be issued (in shares) | 600,000 | |||||||||
Audited total sales | ¥ 500,000,000 | $ 70,000,000 | ||||||||
Net profit of JMC | ¥ 10,000,000 | $ 1,500,000 | ||||||||
Forecast | JMC | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Number of shares to be issued (in shares) | 400,000 | 600,000 | ||||||||
Percentage of increase in sales and profit | 10.00% | 10.00% |
Business Combinations - Fair va
Business Combinations - Fair value of the identifiable assets acquired and liabilities assumed on the acquisition date (Details) | Apr. 03, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Business Acquisition [Line Items] | ||||
Exchange rate used (RMB/USD) | 7.03 | 6.83 | 6.51 | |
Goodwill | $ 5,185,866 | $ 0 | ||
Total consideration paid | $ 2,658,909 | $ 0 | $ 0 | |
JMC | ||||
Business Acquisition [Line Items] | ||||
Exchange rate used (RMB/USD) | 0.14104 | |||
Cash and cash equivalents | $ 852,145 | |||
Other current assets | 9,924,263 | |||
Plant and equipment | 11,648 | |||
Goodwill | 5,166,271 | |||
Other noncurrent assets | 481,062 | |||
Total assets | 16,435,389 | |||
Total liabilities | (11,221,842) | |||
Net assets of JMC | 5,213,547 | |||
Less: fair value of non-controlling interest | (2,554,638) | |||
Total consideration paid | $ 2,658,909 |
Discontinued Operations - Major
Discontinued Operations - Major class of assets and liabilities (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 2,523 | $ 19,015 | $ 0 |
Disposal Group, Including Discontinued Operation, Assets, Current, Total | 63,185 | 174,467 | |
OTHER ASSETS: | |||
Disposal Group, Including Discontinued Operation, Assets, Noncurrent, Total | 579,452 | 1,844,838 | |
CURRENT LIABILITIES: | |||
Disposal Group, Including Discontinued Operation, Liabilities, Current, Total | 1,445,201 | 1,872,053 | |
Discontinued operations | CQ Pengmei | |||
CURRENT ASSETS: | |||
Cash and cash equivalents | 2,523 | 19,015 | |
Other receivables, net | 57,395 | 20,967 | |
Inventories | 112,641 | ||
Security deposits | 3,267 | 21,844 | |
Disposal Group, Including Discontinued Operation, Assets, Current, Total | 63,185 | 174,467 | |
OTHER ASSETS: | |||
Other receivables | 48,371 | 122,584 | |
Prepaid expenses | 508,271 | ||
Plant and equipment, net | 25,752 | 1,213,983 | |
Operating lease right-of-use assets | 505,329 | ||
Disposal Group, Including Discontinued Operation, Assets, Noncurrent, Total | 579,452 | 1,844,838 | |
Total assets of discontinued operations | 642,637 | 2,019,305 | |
CURRENT LIABILITIES: | |||
Short-term loan - banks | 336,845 | 364,071 | |
Loans from third parties | 474,135 | 626,201 | |
Accounts payable | 64,725 | 217,953 | |
Customer deposits | 6,519 | 2,618 | |
Other payables and accrued liabilities | 416,227 | 571,553 | |
Other payables - related parties | 29,846 | 88,670 | |
Operating lease liabilities | 116,904 | ||
Taxes payable | 987 | ||
Disposal Group, Including Discontinued Operation, Liabilities, Current, Total | 1,445,201 | 1,872,053 | |
OTHER LIABILITIES: | |||
Operating lease liabilities - noncurrent | 417,729 | ||
Total liabilities of discontinued operations | $ 1,862,930 | $ 1,872,053 |
Discontinued Operations - Recon
Discontinued Operations - Reconciliation of major classes of income and losses (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
OTHER INCOME (EXPENSES) | |||
NET LOSS FROM DISCONTINUED OPERATIONS | $ (1,796,237) | $ (662,621) | $ 0 |
Discontinued operations | CQ Pengmei | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Supermarket and grocery store | 1,574,965 | 3,465,885 | |
Cost of revenue | 1,435,597 | 3,114,906 | |
Gross profit | 139,368 | 350,979 | |
OPERATING EXPENSES: | |||
Selling | 438,458 | 704,766 | |
General and administrative | 162,976 | 189,553 | |
Provision for right-of-use assets | 250,181 | ||
Loss on disposal of long-lived assets | 276,648 | ||
Impairment of long-lived assets | 724,987 | ||
Total operating expenses | 1,853,250 | 894,319 | |
Loss from operations | (1,713,882) | (543,340) | |
OTHER INCOME (EXPENSES) | |||
Interest income | 14 | 33 | |
Interest expense | (114,853) | (110,350) | |
Other finance expense | (3,156) | (20,532) | |
Other income, net | 35,640 | 11,568 | |
Total other expense, net | (82,355) | (119,281) | |
Loss before income taxes | (1,796,237) | (662,621) | |
NET LOSS FROM DISCONTINUED OPERATIONS | $ (1,796,237) | $ (662,621) |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Accounts receivable, net | |||
Accounts receivable | $ 44,505,100 | $ 41,827,554 | |
Allowance for doubtful accounts | (3,932,343) | (2,304,817) | $ (1,622,964) |
Total accounts receivable, net | $ 40,572,757 | $ 39,522,737 |
Accounts receivable, net - Move
Accounts receivable, net - Movement (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Movements of allowance for doubtful accounts | ||
Beginning balance | $ 2,304,817 | $ 1,622,964 |
Balance inherited from JMC | 930,657 | |
Addition | 769,764 | 743,986 |
Write off | 0 | 0 |
Exchange rate effect | (72,895) | (62,133) |
Ending balance | $ 3,932,343 | $ 2,304,817 |
Security deposits, net (Details
Security deposits, net (Details) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | May 31, 2019CNY (¥) | May 31, 2019USD ($) |
Deposit Assets [Line Items] | ||||
Loan deposits | $ 955,700 | $ 986,407 | ||
Sales performance deposit | 1,388,179 | |||
Allowance for security deposits | (715,024) | |||
Total security deposits | 240,676 | 2,374,586 | ||
Security deposits, net | 237,409 | 2,352,742 | ||
Customer deposits | ¥ 9,551,078 | $ 1,400,000 | ||
Continuing operations | ||||
Deposit Assets [Line Items] | ||||
Security deposits, net | 237,409 | 2,352,742 | ||
Discontinued operations | ||||
Deposit Assets [Line Items] | ||||
Security deposits, net | $ 3,267 | $ 21,844 |
Plant and equipment, net - Plan
Plant and equipment, net - Plant and equipment (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Plant and equipment | ||
Plant and equipment, gross | $ 7,788,998 | $ 8,674,639 |
Less: accumulated depreciation | (4,307,253) | (4,125,427) |
Total | 3,455,993 | 3,335,229 |
Buildings | ||
Plant and equipment | ||
Plant and equipment, gross | 3,393,212 | 3,950,375 |
Automobile | ||
Plant and equipment | ||
Plant and equipment, gross | 165,628 | 118,487 |
Electronic devices | ||
Plant and equipment | ||
Plant and equipment, gross | 3,691,929 | 3,808,900 |
Office equipment | ||
Plant and equipment | ||
Plant and equipment, gross | 42,595 | 34,105 |
Leasehold improvements | ||
Plant and equipment | ||
Plant and equipment, gross | 762,772 | |
Construction-in-progress | ||
Plant and equipment | ||
Plant and equipment, gross | 495,634 | 0 |
Continuing operations | ||
Plant and equipment | ||
Total | 3,455,993 | 3,335,229 |
Discontinued operations | ||
Plant and equipment | ||
Total | 25,752 | 1,213,983 |
Continued And Discontinued Operations [Member] | ||
Plant and equipment | ||
Total | $ 3,481,745 | $ 4,549,212 |
Plant and equipment, net - Addi
Plant and equipment, net - Additional Information (Details) | 12 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | |
Plant and equipment | |||||
Property, Plant and Equipment, Net | $ 3,335,229 | $ 3,455,993 | |||
Properties pledged as collateral | ¥ 36,626,600 | 5,200,000 | |||
Property pledged as collateral | Buildings | CQ Mingwen | |||||
Plant and equipment | |||||
Property, Plant and Equipment, Net | ¥ 12,268,800 | 1,700,000 | |||
Continuing operations | |||||
Plant and equipment | |||||
Depreciation | $ 496,562 | 509,778 | $ 529,442 | ||
Property, Plant and Equipment, Net | 3,335,229 | 3,455,993 | |||
Discontinued operations | |||||
Plant and equipment | |||||
Depreciation | 125,257 | 167,609 | $ 0 | ||
Loss on disposal of long-lived assets | 276,648 | ||||
Impairment of long-lived assets | $ 724,987 | ||||
Property, Plant and Equipment, Net | $ 1,213,983 | $ 25,752 |
Plant and equipment, net - Comp
Plant and equipment, net - Components of construction-in-progress (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Plant and equipment | ||
Pig farm, value | $ 7,788,998 | $ 8,674,639 |
Construction-in-progress | ||
Plant and equipment | ||
Pig farm, value | 495,634 | $ 0 |
Pig farm, estimated additional cost to complete | $ 183,993 |
Intangible assets, net - Intang
Intangible assets, net - Intangible assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Intangible assets, net | ||
Land use rights | $ 586,795 | $ 603,774 |
Less: accumulated amortization | (148,806) | (141,036) |
Total | $ 437,989 | $ 462,738 |
Intangible assets, net - Estima
Intangible assets, net - Estimated amortization (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Intangible assets, net | ||
2021 | $ 11,792 | |
2022 | 11,792 | |
2023 | 11,792 | |
2024 | 11,792 | |
2025 | 11,792 | |
Thereafter | 379,029 | |
Total | $ 437,989 | $ 462,738 |
Intangible assets, net - Additi
Intangible assets, net - Additional Information (Details) | 12 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | |
Intangible assets, net | |||||
Amortization expenses | $ 11,792 | $ 12,147 | $ 12,747 | ||
Net intangible assets | $ 462,738 | $ 437,989 | |||
Property pledged as collateral | Land use right | CQ Mingwen | |||||
Intangible assets, net | |||||
Net intangible assets | ¥ 10,198,100 | $ 1,400,000 |
Related party transactions an_3
Related party transactions and balances - Customer deposit (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||
Customer deposit from related parties | $ 27,395 | $ 29,643 |
CQ Mingwen | ||
Related Party Transaction [Line Items] | ||
Customer deposit from related parties | $ 27,395 | $ 29,643 |
Related party transactions an_4
Related party transactions and balances - Other payables (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||
Other payables to related parties | $ 2,264,826 | $ 1,334,534 |
Discontinued operations | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 29,846 | 88,670 |
Continuing operations | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 2,234,980 | 1,245,864 |
Xia Wang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 153,659 | 83,619 |
Zeshu Dai | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 0 | 659,420 |
Penglin Wang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 248 | 162,047 |
Zili Zhang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 12 | 429,448 |
Zhou Jiaping | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 231,268 | 0 |
Zhou Jun | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | $ 1,879,639 | $ 0 |
Related party transactions an_5
Related party transactions and balances - Short term and long-term loans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transaction [Line Items] | |||
Total loans from related parties | $ 713,325 | $ 329,120 | |
Total current loans from related parties | 0 | 329,120 | |
Total non-current loans from related parties | 713,325 | 0 | |
Interest expense incurred on short-term loans by related parties | $ 51,770 | 11,403 | $ 0 |
Xia Wang | |||
Related Party Transaction [Line Items] | |||
Debt, Weighted Average Interest Rate | 9.60% | ||
Total loans from related parties | $ 101,904 | 104,852 | |
Penglin Wang | |||
Related Party Transaction [Line Items] | |||
Debt, Weighted Average Interest Rate | 9.60% | ||
Total loans from related parties | $ 229,283 | 224,268 | |
Yong Wang | |||
Related Party Transaction [Line Items] | |||
Debt, Weighted Average Interest Rate | 7.13% | ||
Total loans from related parties | $ 268,912 | 0 | |
Zeshu Dai | |||
Related Party Transaction [Line Items] | |||
Debt, Weighted Average Interest Rate | 7.13% | ||
Total loans from related parties | $ 113,226 | $ 0 |
Related party transactions an_6
Related party transactions and balances - Additional Information (Details) | 12 Months Ended | ||||
Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 26, 2017CNY (¥) | Dec. 26, 2017USD ($) | |
Related Party Transaction [Line Items] | |||||
Loan from bank | $ 4,359,210 | $ 4,150,309 | |||
Land-use right pledged as collateral | 437,989 | 462,738 | |||
Building property pledged as collateral | 3,455,993 | $ 3,335,229 | |||
Annual interest rate (in percentage) | 4.35 | ||||
CQ Mingwen | |||||
Related Party Transaction [Line Items] | |||||
Loan from bank | ¥ 9,000,000 | $ 1,300,000 | |||
GA Yongpeng | |||||
Related Party Transaction [Line Items] | |||||
Land-use right pledged as collateral | ¥ 10,198,100 | 1,400,000 | |||
Building property pledged as collateral | ¥ 12,268,800 | $ 1,700,000 |
Credit Facilities - Short term
Credit Facilities - Short term loans banks (Details) | Sep. 25, 2020CNY (¥) | Sep. 25, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) |
Line of Credit Facility [Line Items] | |||||||
Security deposit | $ 109,221 | ||||||
Properties pledged as collateral | ¥ 36,626,600 | 5,200,000 | |||||
Total | $ (4,514,380) | (4,696,055) | |||||
Short-term loans - banks | 4,150,309 | $ 4,359,210 | |||||
Repayment of debt | $ 1,137,574 | 4,755,264 | $ 11,375,158 | ||||
Zeshu Dai | |||||||
Line of Credit Facility [Line Items] | |||||||
Stock right (as a percent) | 6.25% | 6.25% | |||||
GA Yongpeng | |||||||
Line of Credit Facility [Line Items] | |||||||
Properties pledged as collateral | ¥ 36,626,600 | $ 5,200,000 | |||||
Stock Pledged AS Collateral | 1,250,000 | 200,000 | |||||
JMC | |||||||
Line of Credit Facility [Line Items] | |||||||
Properties pledged as collateral | ¥ 5,517,400 | 800,000 | |||||
Continuing operations | |||||||
Line of Credit Facility [Line Items] | |||||||
Short-term loans - banks | 4,150,309 | 4,359,210 | |||||
Discontinued operations | |||||||
Line of Credit Facility [Line Items] | |||||||
Total | (364,071) | $ (336,845) | |||||
Shanghai Pudong Development ("SPD") Bank Chongqing Nanbing Road Branch | |||||||
Line of Credit Facility [Line Items] | |||||||
Weighted average interest rate | 6.09% | 6.09% | |||||
Total | (1,456,187) | $ (1,273,794) | |||||
Chongqing Rural Commercial Bank | |||||||
Line of Credit Facility [Line Items] | |||||||
Weighted average interest rate | 6.74% | 6.74% | |||||
Total | (2,694,122) | $ (1,839,928) | |||||
Chongqing Beibei Chouzhou Bank Co., Ltd. | |||||||
Line of Credit Facility [Line Items] | |||||||
Weighted average interest rate | 6.96% | 6.96% | |||||
Total | (364,071) | $ (336,845) | |||||
Principal amount due before October 21, 2020 | ¥ 110,000 | $ 16,000 | |||||
Interest amount due before October 21, 2020 | 93,466 | 13,000 | |||||
Remaining balance that is to be repaid at 21th of each month since November 2020 | ¥ 100,000 | $ 14,000 | |||||
Increase in interest rate (as a percent) | 50.00% | 50.00% | |||||
Repayment of debt | ¥ 114,939 | $ 16,000 | |||||
The Agriculture Bank of China Chongqing Yubei Branch | |||||||
Line of Credit Facility [Line Items] | |||||||
Weighted average interest rate | 3.85% | 3.85% | |||||
Total | 0 | $ (467,058) | |||||
China Zheshang Bank Chongqing Branch | |||||||
Line of Credit Facility [Line Items] | |||||||
Weighted average interest rate | 5.35% | 5.35% | |||||
Total | $ 0 | $ (778,430) | |||||
China Zheshang Bank Chongqing Branch | JMC | |||||||
Line of Credit Facility [Line Items] | |||||||
Properties pledged as collateral | ¥ 12,090,000 | $ 1,700,000 |
Credit Facilities - Loans from
Credit Facilities - Loans from third parties (Details) | 12 Months Ended | |||||||||
Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Oct. 27, 2020CNY (¥) | Oct. 27, 2020USD ($) | Oct. 20, 2020CNY (¥) | Oct. 20, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Nov. 13, 2018CNY (¥) | Nov. 13, 2018USD ($) | |
Line of Credit Facility [Line Items] | ||||||||||
Properties pledged as collateral | ¥ 36,626,600 | $ 5,200,000 | ||||||||
Total loans from third parties | 7,562,123 | $ 6,206,256 | ||||||||
Total non-current loans from a third parties | (2,074,871) | (3,131,007) | ||||||||
Total current loans from third parties | 5,487,252 | 3,075,249 | ||||||||
Short-term loans - third parties | 5,013,117 | 2,449,048 | ||||||||
Subsequent events | CQ Penglin | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total balance of bank accounts frozen | ¥ 181,573 | $ 26,000 | ||||||||
Continuing operations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Short-term loans - third parties | 5,013,117 | 2,449,048 | ||||||||
Discontinued operations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Short-term loans - third parties | $ 474,135 | 626,201 | ||||||||
Sichuan Toucu Financial Information Services Co., Ltd | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 9.00% | 9.00% | ||||||||
Total loans from third parties | $ 63,554 | 407,758 | ||||||||
Chongqing Puluosi Small Mortgage Co., Ltd. | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 4,183,248 | 4,805,734 | ||||||||
Number of complaints received | 3 | |||||||||
Default interest rate (as a percent) | 18.00% | 18.00% | ||||||||
Default interest amount | $ 781,000 | |||||||||
Estimated legal cost | 129,000 | |||||||||
Repayment of debt | ¥ 3,411,544 | $ 500,000 | ||||||||
Chongqing Puluosi Small Mortgage Co., Ltd. | Loan due on November 13, 2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total loans from third parties | 10,000,000 | $ 1,400,000 | ||||||||
Chongqing Puluosi Small Mortgage Co., Ltd. | Loan due on December 21, 2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total loans from third parties | 3,000,000 | 400,000 | ||||||||
Chongqing Puluosi Small Mortgage Co., Ltd. | Loan due on January 2, 2019 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total loans from third parties | ¥ 20,000,000 | $ 2,800,000 | ||||||||
Chongqing Zhouyang Shipping Co., Ltd | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 18.00% | 18.00% | ||||||||
Total loans from third parties | $ 0 | 72,814 | ||||||||
Short-term loans - third parties | ¥ 33,000,000 | $ 4,600,000 | ||||||||
Mei Yang | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 7,077 | 43,688 | ||||||||
Ping Wang | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 10.80% | 10.80% | ||||||||
Total loans from third parties | $ 43,875 | 48,057 | ||||||||
Yuzhu Hu | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 14.40% | 14.40% | ||||||||
Total loans from third parties | $ 0 | 160,191 | ||||||||
Yixuan Liu | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 84,920 | 87,377 | ||||||||
Shuming Yang | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 169,839 | 174,754 | ||||||||
Qin Cao | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 30,005 | 72,814 | ||||||||
Maohua Xia | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 33,561 | 223,848 | ||||||||
Bangwei Zhu | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 0 | 36,407 | ||||||||
Mei Zhang | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 49,536 | 72,814 | ||||||||
Gang Hu | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 7.13% | 7.13% | ||||||||
Total loans from third parties | $ 120,303 | 0 | ||||||||
Chongqing Reassurance Co., Ltd. | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 17.40% | 17.40% | ||||||||
Total loans from third parties | $ 273,294 | 0 | ||||||||
Chunlan Zhuo | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 18.00% | 18.00% | ||||||||
Total loans from third parties | $ 63,911 | 0 | ||||||||
Chongqing Shouqing Trading Co., Ltd. | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 382,139 | 0 | ||||||||
Shengli Huang | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 99,073 | 0 | ||||||||
Xiaofen Ai | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 24.00% | 24.00% | ||||||||
Total loans from third parties | $ 28,307 | 0 | ||||||||
Chongqing Haobangshou Ecommerce Co., Ltd. | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 6.00% | 6.00% | ||||||||
Total loans from third parties | $ 1,415,328 | 0 | ||||||||
Chongqing Haobangshou Ecommerce Co., Ltd. | Subsequent events | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | ¥ 10,000,000 | $ 1,415,328 | ||||||||
Feng Zhou | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Weighted average interest rate | 12.00% | 12.00% | ||||||||
Total loans from third parties | $ 14,153 | 0 | ||||||||
Xiaolin Cao | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Total loans from third parties | $ 500,000 | $ 0 |
Credit Facilities - Long-term l
Credit Facilities - Long-term loan bank And Additional Information (Details) (Imported) | 12 Months Ended | ||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Aug. 12, 2020CNY (¥) | Aug. 12, 2020USD ($) | |
Line of Credit Facility [Line Items] | |||||
Interest expense | $ 1,673,563 | $ 730,780 | $ 1,282,291 | ||
Interest expense of loans - related parties | 51,770 | 11,403 | 0 | ||
Continuing operations | |||||
Line of Credit Facility [Line Items] | |||||
Interest expense | 1,661,788 | 713,201 | 1,243,708 | ||
Interest expense of loans - related parties | 51,770 | 11,403 | |||
Discontinued operations | |||||
Line of Credit Facility [Line Items] | |||||
Interest expense | $ 114,853 | 110,350 | $ 0 | ||
Chongqing Dadukou Rongxing Village & Township Bank | |||||
Line of Credit Facility [Line Items] | |||||
Weighted average interest rate | 12.00% | ||||
Long term bank loan | $ 777,558 | $ 866,231 | |||
Chongqing Dadukou Rongxing Village & Township Bank | Subsequent events | |||||
Line of Credit Facility [Line Items] | |||||
Aggregate amount to be repaid due to suit | ¥ 6,629,447 | $ 900,000 | |||
Principal portion of amount to be repaid due to suit | 5,493,839 | 800,000 | |||
Interest portion of amount to be repaid due to suit | ¥ 1,135,608 | $ 100,000 |
Taxes (Details)
Taxes (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Taxes | |||
Current | $ 389,846 | $ 841,312 | |
Deferred tax expense (benefit) | (166,673) | $ 213,649 | (126,936) |
Total provision for income taxes | $ 223,173 | $ 213,649 | $ 714,376 |
Taxes - Schedule of effective t
Taxes - Schedule of effective tax rate (Details) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Taxes | |||
China income tax rate | 25.00% | 25.00% | 25.00% |
Change in valuation allowance | 0.00% | 1.00% | 0.00% |
Income tax exemption status granted | (10.20%) | (21.90%) | (9.30%) |
Others | (24.20%) | 0.00% | 0.20% |
Effective tax rate | (9.40%) | 4.10% | 15.90% |
Taxes - Taxes payable (Details)
Taxes - Taxes payable (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income taxes | $ 3,114,811 | $ 2,805,722 |
Other taxes | 227,316 | 169,324 |
Total | 3,342,127 | 2,975,046 |
Taxes payable | 3,342,127 | 2,974,059 |
Discontinued operations | ||
Taxes payable | 0 | 987 |
Continuing operations | ||
Taxes payable | $ 3,342,127 | $ 2,974,059 |
Taxes - Additional Information
Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | 25.00% |
Income Tax Holiday, Aggregate Dollar Amount | $ 334,794 | $ 1,389,566 | $ 122,251 |
Income Tax Holiday, Income Tax Benefits Per Share | $ 0.01 | $ 0.07 | $ 0.01 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | $ 648,768 | ||
Service [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 6.00% | ||
Value Added Tax Rate , Product One [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 0.00% | ||
Value Added Tax Rate, Product Two [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 11.00% | ||
Value Added Tax Rate , Product Three [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 13.00% | ||
Value Added Tax Rate, Product Four [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 17.00% | ||
Cayman Islands | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | ||
British Virgin Islands | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | ||
Hong Kong | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | ||
PRC | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% |
Concentration of risk (Details)
Concentration of risk (Details) | 12 Months Ended | |||
Jun. 30, 2020CNY (¥)item | Jun. 30, 2019USD ($)item | Jun. 30, 2018item | Jun. 30, 2020USD ($) | |
Concentration Risk [Line Items] | ||||
Working capital | $ 17,500,000 | |||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 39,522,737 | 40,572,757 | ||
China | ||||
Concentration Risk [Line Items] | ||||
Insurance coverage for each bank in China | ¥ 500,000 | 71,000 | ||
Cash balance deposited with financial institutions | 78,918 | 1,366,796 | ||
Cash balance deposited with financial institutions, that are subject to credit risk | 0 | 968,840 | ||
Hong Kong | ||||
Concentration Risk [Line Items] | ||||
Cash balance deposited with financial institutions | 2,683,514 | 5,254 | ||
Cash balance deposited with financial institutions, that are subject to credit risk | 2,619,520 | 0 | ||
US | ||||
Concentration Risk [Line Items] | ||||
Insurance coverage for each bank in China | 250,000 | |||
Cash balance deposited with financial institutions | $ 0 | $ 163,640 | ||
Customer Concentration Risk [Member] | Maximum | Revenue from Contract with Customer, Product and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | 10.00% | |
Customer Concentration Risk [Member] | Major Customer One [Member] | Accounts Receivable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Major Suppliers | item | 5 | 4 | 4 | |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Major Suppliers | item | 4 | 4 | ||
Supplier Concentration Risk [Member] | Vendor One [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 19.60% | 29.80% | 29.00% | |
Supplier Concentration Risk [Member] | Vendor One [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 30.20% | 25.30% | ||
Supplier Concentration Risk [Member] | Vendor Two [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 17.40% | 17.60% | 24.50% | |
Supplier Concentration Risk [Member] | Vendor Two [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 20.20% | 23.00% | ||
Supplier Concentration Risk [Member] | Vendor Three [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 16.40% | 16.80% | 21.20% | |
Supplier Concentration Risk [Member] | Vendor Three [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 13.60% | 16.00% | ||
Supplier Concentration Risk [Member] | Vendor Four [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 15.80% | 16.50% | 12.80% | |
Supplier Concentration Risk [Member] | Vendor Four [Member] | Accounts Payable [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 10.50% | 12.30% | ||
Supplier Concentration Risk [Member] | Vendor Five [Member] | Cost of Goods and Service Benchmark [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration Risk, Percentage | 14.00% |
Convertible Debentures (Details
Convertible Debentures (Details) | Jun. 19, 2020USD ($)item$ / shares | Nov. 22, 2019USD ($)item$ / shares | Jun. 30, 2020USD ($)$ / shares | Nov. 13, 2020USD ($)$ / shares | Sep. 15, 2020USD ($)$ / shares | Aug. 14, 2020USD ($) | Jul. 17, 2020USD ($) | Mar. 09, 2020USD ($)$ / shares | Dec. 30, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 1.04 | ||||||||
Common stock, share price (in dollars per share) | $ 4.6 | ||||||||
Issuance cost incurred | $ | $ 230,000 | ||||||||
Amortization of debt issuance cost | $ | 153,274 | ||||||||
Amortization of debentures discount | $ | $ 204,579 | ||||||||
Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturity term | 12 months | 12 months | |||||||
Aggregate principal amount | $ | $ 5,000,000 | $ 5,000,000 | |||||||
Interest rate (as a percent) | 5.00% | ||||||||
Conversion price (in dollars per share) | $ 1 | ||||||||
Percentage of the average of the four lowest daily VWAPs considered for determination of minimum conversion price (as a percent) | 93.00% | ||||||||
Number of lowest daily VWAPs considered for determination of minimum conversion price | item | 10 | ||||||||
Threshold consecutive trading days for triggering event | item | 10 | ||||||||
Stock price trigger (in dollars per share) | $ 3 | ||||||||
Redemption premium (as a percent) | 10.00% | ||||||||
Redemption premium payment period | 6 months | ||||||||
Redemption premium on principal (as a percent) | 20.00% | ||||||||
Deferral period for monthly payment | 30 days | ||||||||
Deferral fee (as a percent) | 10.00% | ||||||||
Percentage of the average of the daily VWAP considered for determination of deferral fee | 93.00% | 100.00% | |||||||
Threshold number of consecutive trading days over which the daily VWAPs considered for determination of deferral fee | item | 10 | ||||||||
Percentage of the average of the four lowest daily VWAPs considered for determination of deferral fee (as a percent) | 93.00% | ||||||||
Number of lowest daily VWAPs considered for determination of deferral fee | item | 4 | ||||||||
Threshold number of consecutive trading days over which the lowest daily VWAPs considered for determination of deferral fee | item | 10 | ||||||||
Principal amount of debt whose floor price is amended | $ | $ 600,000 | ||||||||
Beneficial conversion feature | $ | $ 259,540 | ||||||||
Principal amount of debt whose share price is lower than conversion floor price | $ | $ 1,000,000 | ||||||||
Convertible Debentures issued on November 22, 2019 & December 30, 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 4,000,000 | ||||||||
Conversion floor price (in dollars per share) | $ 3 | ||||||||
Principal amount of debt whose floor price is amended | $ | $ 200,000 | ||||||||
Convertible Debentures issued on November 22, 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 2,000,000 | ||||||||
Conversion floor price (in dollars per share) | $ 1 | ||||||||
Convertible Debentures issued on December 30, 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 2,000,000 | ||||||||
Conversion floor price (in dollars per share) | $ 1 | ||||||||
Convertible Debentures issued on March 9, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 1,000,000 | ||||||||
Conversion floor price (in dollars per share) | $ 3 | ||||||||
Common stock, share price (in dollars per share) | $ 2.33 | ||||||||
Convertible Debenture issued on June 19, 2020, July 17, 2020, August 14, 2020, and November 13, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maturity term | 12 months | ||||||||
Aggregate principal amount | $ | $ 2,000,000 | ||||||||
Interest rate (as a percent) | 5.00% | ||||||||
Conversion price (in dollars per share) | $ 2.50 | ||||||||
Percentage of the average of the four lowest daily VWAPs considered for determination of minimum conversion price (as a percent) | 93.00% | ||||||||
Number of lowest daily VWAPs considered for determination of minimum conversion price | item | 4 | ||||||||
Conversion floor price (in dollars per share) | $ 2.50 | ||||||||
Threshold consecutive trading days for triggering event | item | 10 | ||||||||
Stock price trigger (in dollars per share) | $ 2.50 | ||||||||
Threshold number of consecutive trading days over which the lowest daily VWAPs considered for determination of minimum conversion price | item | 10 | ||||||||
Redemption premium (as a percent) | 10.00% | ||||||||
Redemption premium payment period | 6 months | ||||||||
Redemption premium on principal (as a percent) | 20.00% | ||||||||
Deferral period for monthly payment | 30 days | ||||||||
Deferral fee (as a percent) | 10.00% | ||||||||
Beneficial ownership (as a percent) | 4.99% | ||||||||
Period for providing written notice for not to convert debentures | 65 days | ||||||||
Period after the date of issuance for triggering event | 180 | ||||||||
Convertible Debentures issued on June 19, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 700,000 | ||||||||
Conversion floor price (in dollars per share) | $ 2.50 | ||||||||
Common stock, share price (in dollars per share) | $ 1.70 | ||||||||
Principal amount of debt whose share price is lower than conversion floor price | $ | $ 700,000 | ||||||||
Convertible Debentures issued on July 17, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 700,000 | ||||||||
Convertible Debentures issued on August 14, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 300,000 | ||||||||
Convertible Debentures yet to be issued | |||||||||
Debt Instrument [Line Items] | |||||||||
Aggregate principal amount | $ | $ 300,000 | ||||||||
Subsequent events | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 3 | ||||||||
Conversion floor price (in dollars per share) | $ 3 | $ 1 | |||||||
Principal amount of debt whose floor price is amended | $ | $ 200,000 | $ 1,400,000 | |||||||
Subsequent events | Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion floor price (in dollars per share) | $ 3 | ||||||||
Principal amount of debt whose floor price is amended | $ | $ 200,000 | ||||||||
Subsequent events | Convertible Debentures issued on November 22, 2019 | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion floor price (in dollars per share) | $ 1 | ||||||||
Principal amount of debt whose floor price is amended | $ | $ 1,400,000 | ||||||||
Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 3 | ||||||||
Minimum | Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 5.06 | ||||||||
Minimum | Convertible Debenture issued on June 19, 2020, July 17, 2020, August 14, 2020, and November 13, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 3 | ||||||||
Minimum | Subsequent events | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion floor price (in dollars per share) | $ 1 | ||||||||
Minimum | Subsequent events | Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Conversion floor price (in dollars per share) | $ 1 |
Convertible Debentures - Compon
Convertible Debentures - Components (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Convertible Debentures | ||
Principal balance | $ 4,900,000 | |
Less: Debentures discount and debts insurance cost | (131,688) | |
Total | $ 4,768,312 | $ 0 |
Equity - Restricted net assets
Equity - Restricted net assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Equity | ||
Statutory reserves | $ 1,670,367 | $ 1,496,642 |
Restricted net assets | $ 17,978,793 | $ 18,571,570 |
Equity - Mezzanine equity (Deta
Equity - Mezzanine equity (Details) - USD ($) | May 10, 2019 | Jun. 27, 2018 | Mar. 31, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Par value per share | $ 0.01 | $ 0.01 | ||||
Common stock, share price (in dollars per share) | $ 4.6 | |||||
Aggregate offering price | $ 0 | $ 200,000 | $ 0 | |||
Number of shares into which redeemable shares have been converted | 725,000 | |||||
Private placements | The Purchaser, an unrelated third party | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued | 350,000 | 375,000 | ||||
Par value per share | $ 0.01 | $ 0.01 | ||||
Common stock, share price (in dollars per share) | $ 3 | $ 2 | ||||
Aggregate offering price | $ 1,050,000 | $ 750,000 |
Equity - Capital contribution p
Equity - Capital contribution private placements (Details) - USD ($) | Sep. 04, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, share price (in dollars per share) | $ 4.6 | |||
Aggregate offering price | $ 0 | $ 200,000 | $ 0 | |
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 4.89 | $ 4.89 | $ 0 | |
Balance at the beginning (in years) | 3 years 10 months 17 days | 5 years 10 months 21 days | 0 years | |
Private placements | Boustead | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued | 66,667 | |||
Common stock, share price (in dollars per share) | $ 3 | |||
Aggregate offering price | $ 200,000 | |||
Over-Allotment Option [Member] | Boustead Securities | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Commission to placement agent | $ 10,000 | |||
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 3 | |||
Balance at the beginning (in years) | 5 years |
Equity - Capital contribution I
Equity - Capital contribution Initial public offering (Details) - USD ($) | May 10, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsidiary, Sale of Stock [Line Items] | ||||
Par value per share | $ 0.01 | $ 0.01 | ||
Common stock, share price (in dollars per share) | $ 4.6 | |||
Net proceeds after deducting underwriting discounts and commissions and other offering fees and expenses | $ 0 | $ 4,395,634 | $ 0 | |
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 4.89 | $ 4.89 | $ 0 | |
Balance at the beginning (in years) | 3 years 10 months 17 days | 5 years 10 months 21 days | 0 years | |
Initial public offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued | 1,172,360 | |||
Par value per share | $ 0.01 | |||
Common stock, share price (in dollars per share) | $ 5 | |||
Aggregate offering price | $ 5,861,800 | |||
Net proceeds after deducting underwriting discounts and commissions and other offering fees and expenses | $ 4,400,000 | |||
Warrants to purchase ordinary shares | 82,065 | |||
Exercise price | $ 5 | |||
Balance at the beginning (in years) | 5 years |
Equity - Warrants (Details)
Equity - Warrants (Details) - $ / shares | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Warrants Outstanding | ||||
Balance at the beginning | 86,732 | 0 | ||
Granted/Acquired | 0 | 86,732 | ||
Forfeited | 0 | 0 | ||
Exercised | 0 | 0 | ||
Balance at the end | 86,732 | 86,732 | ||
Exercisable Shares | ||||
Balance at the beginning | 86,732 | 0 | ||
Granted/Acquired | 0 | 86,732 | ||
Forfeited | 0 | 0 | ||
Exercised | 0 | 0 | ||
Balance at the end | 86,732 | 86,732 | ||
Weighted Average Exercise Price | ||||
Balance at the beginning (in dollars per share) | $ 4.89 | $ 0 | ||
Granted/Acquired (in dollars per share) | $ 0 | $ 4.89 | ||
Forfeited (in dollars per share) | 0 | 0 | ||
Exercised (in dollars per share) | $ 0 | $ 0 | ||
Balance at the end (in dollars per share) | $ 4.89 | $ 4.89 | ||
Average Remaining Contractual Life | ||||
Balance at the beginning (in years) | 5 years 10 months 21 days | 0 years | ||
Granted/Acquired (in years) | 0 years | 5 years | ||
Forfeited (in years) | 0 years | 0 years | ||
Exercised (in years) | 0 years | 0 years | ||
Balance at the end (in years) | 5 years 10 months 21 days | 0 years | 3 years 10 months 17 days | 5 years 10 months 21 days |
Equity - Capital contribution C
Equity - Capital contribution Conversion of debenture (Details) | 12 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Equity | |
Principal amount of debentures converted | $ 800,000 |
Interest amount of debentures converted | $ 57,165 |
Number of shares issued upon conversion | shares | 827,057 |
Conversion price (in dollars per share) | $ / shares | $ 1.04 |
Equity - Capital contribution S
Equity - Capital contribution Stock options (Details) | 1 Months Ended | 12 Months Ended |
Aug. 31, 2019shares | Jun. 30, 2020USD ($)$ / sharesshares | |
Equity | ||
Number of options issued | shares | 95,000 | 95,000 |
Number of directors to whom options were granted | 2 | |
Number of equal installments in which the options will vest | 4 | |
Exercise price (in dollars per share) | $ / shares | $ 5 | |
Term of the options | 3 years | |
Market price (in dollars per share) | $ / shares | $ 4.6 | |
Volatility (as a percent) | 118.00% | |
Risk-free interest rate (as a percent) | 1.44% | |
Dividend yield (as a percent) | 0.00% | |
Estimated fair value of options | $ 243,922 | |
Total service period | 1 year | |
Total compensation expenses | $ 213,431 |
Equity - Stock options activity
Equity - Stock options activity (Details) - $ / shares | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Options outstanding | |||
Granted/Acquired | 95,000 | 95,000 | |
Ending balance | 95,000 | ||
Exercisable Option | |||
Granted/Acquired | 71,250 | ||
Ending balance | 71,250 | ||
Weighted Average Exercise Price | |||
Granted/Acquired | $ 5 | ||
Ending balance | $ 5 | ||
Average Remaining Contractual Life | |||
Average remaining contractual term | 2 years 1 month 13 days | 0 years | |
Granted/Acquired | 3 years | ||
Forfeited | 0 years | ||
Exercised | 0 years |
Commitments and contingencies -
Commitments and contingencies - Lease commitments (Details) | 12 Months Ended | ||||
Jun. 30, 2020CNY (¥)agreement | Jun. 30, 2020USD ($)agreement | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jul. 01, 2019USD ($) | |
Loss Contingencies [Line Items] | |||||
Number of Operating Lease Agreements | agreement | 7 | 7 | |||
Right of use ("ROU") assets | $ 2,725,747 | $ 0 | |||
Present value of lease liabilities | $ 1,164,887 | ||||
Incremental borrowing rate | 6.09% | ||||
Least cost | ¥ 120,000 | $ 17,000 | |||
Sublease income | ¥ 120,000 | 17,000 | |||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
2021 | 216,033 | ||||
2022 | 231,738 | ||||
2023 | 240,099 | ||||
2024 | 247,634 | ||||
2025 | 148,825 | ||||
Thereafter | 328,749 | ||||
Total lease payments | 1,413,078 | ||||
Less: Interest | (248,191) | ||||
Present value of lease liabilities | 1,164,887 | ||||
Continuing operations | |||||
Loss Contingencies [Line Items] | |||||
Present value of lease liabilities | 630,254 | ||||
Rent expense | 112,963 | 30,198 | $ 58,541 | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
Present value of lease liabilities | 630,254 | ||||
Discontinued operations | |||||
Loss Contingencies [Line Items] | |||||
Present value of lease liabilities | 534,633 | ||||
Rent expense | 108,881 | $ 318,210 | $ 0 | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
Present value of lease liabilities | 534,633 | ||||
Adjustment | ASU 2016-02 | |||||
Loss Contingencies [Line Items] | |||||
Right of use ("ROU") assets | 1,300,000 | $ 1,300,000 | |||
Present value of lease liabilities | 1,300,000 | 1,300,000 | |||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||||
Present value of lease liabilities | $ 1,300,000 | $ 1,300,000 |
Commitments and contingencies_2
Commitments and contingencies - Guarantees (Details) | 12 Months Ended | |
Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | |
Chongqin Penglin Food Co., Ltd | ||
Loss Contingencies [Line Items] | ||
CQ Mingwen (borrower) | ¥ 9,000,000 | $ 1,273,795 |
GA Yongpeng | ||
Loss Contingencies [Line Items] | ||
CQ Mingwen (borrower) | ¥ 809,220 | $ 100,000 |
Equity interest | 100.00% | 100.00% |
Commitments and contingencies_3
Commitments and contingencies - Contingencies (Details) | Jun. 11, 2020CNY (¥) | Jun. 11, 2020USD ($) | May 07, 2018CNY (¥) | May 07, 2018USD ($) | Jun. 30, 2020CNY (¥) | Jun. 30, 2020USD ($) | Oct. 20, 2020CNY (¥) | Oct. 20, 2020USD ($) | Jun. 30, 2019USD ($) | Nov. 13, 2018CNY (¥) | Nov. 13, 2018USD ($) |
Loss Contingencies [Line Items] | |||||||||||
Short-term Non-bank Loans and Notes Payable | $ 5,013,117 | $ 2,449,048 | |||||||||
Amount of loan due | 7,562,123 | 6,206,256 | |||||||||
Chongqing Zhouyang Shipping Co., Ltd | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Short-term Non-bank Loans and Notes Payable | ¥ 33,000,000 | $ 4,600,000 | |||||||||
Amount of loan due | $ 0 | 72,814 | |||||||||
Annual interest rate | 18.00% | ||||||||||
Chongqing Haobangshou Ecommerce Co., Ltd. | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount of loan due | $ 1,415,328 | $ 0 | |||||||||
Annual interest rate | 6.00% | ||||||||||
Chongqing Haobangshou Ecommerce Co., Ltd. | Subsequent events | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Amount of loan due | ¥ 10,000,000 | $ 1,415,328 | |||||||||
Outstanding payments for goods purchased | 3,150,000 | 445,828 | |||||||||
Total balance to be repaid | ¥ 13,150,000 | $ 1,861,156 | |||||||||
Annual interest rate | 12.00% | 12.00% | |||||||||
Guarantees | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency, Non Accrual Amount | $ 248,302 | ||||||||||
Leases | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss Contingency Accrual | 45,867 | ||||||||||
Breach of a supermarket equipment purchase agreement | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Remaining balance | ¥ 1,700,000 | $ 200,000 | |||||||||
Loss contingency, damages awarded | ¥ 20,000 | $ 3,000 | |||||||||
Interest rate | 1.50% | 1.50% | |||||||||
Attorney fee | ¥ 20,000 | $ 3,000 | |||||||||
Property guarantee fee | ¥ 5,000 | 700 | |||||||||
Court fee | ¥ 21,045 | $ 3,000 |
Segments (Details)
Segments (Details) | Apr. 03, 2020segment | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Revenues | $ 110,551,502 | $ 99,079,267 | $ 101,104,224 | |
Cost of revenues | 103,373,524 | 90,429,027 | 91,452,753 | |
Gross profit | 7,177,978 | 8,650,240 | 9,651,471 | |
Fresh meat | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 86,301,255 | 99,079,267 | 101,104,224 | |
Cost of revenues | 81,153,996 | 90,429,027 | 91,452,753 | |
Gross profit | 5,147,259 | 8,650,240 | 9,651,471 | |
Depreciation and amortization | 506,775 | 521,925 | 542,189 | |
Total capital expenditures | 700,399 | 20,635 | 89,351 | |
Feed raw materials | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 24,250,247 | 0 | 0 | |
Cost of revenues | 22,219,528 | 0 | 0 | |
Gross profit | 2,030,719 | 0 | 0 | |
Depreciation and amortization | 1,579 | 0 | 0 | |
Total capital expenditures | 0 | 0 | 0 | |
Continuing operations | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 110,551,502 | 99,079,267 | 101,104,224 | |
Cost of revenues | 103,373,524 | 90,429,027 | 91,452,753 | |
Gross profit | 7,177,978 | 8,650,240 | 9,651,471 | |
Depreciation and amortization | 508,354 | 521,925 | 542,189 | |
Total capital expenditures | 700,399 | 20,635 | $ 89,351 | |
Discontinued operations | Grocery stores | Grocery stores | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,574,965 | 3,465,885 | ||
Cost of revenues | 1,435,597 | 3,114,906 | ||
Gross profit | 139,368 | 350,979 | ||
Depreciation and amortization | 125,257 | 167,609 | ||
Total capital expenditures | $ 0 | $ 0 |
Segments - Assets (Details)
Segments - Assets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 63,349,434 | $ 51,351,317 |
Holding companies | ||
Segment Reporting Information [Line Items] | ||
Total assets | 216,240 | 4,071,693 |
Fresh meat | ||
Segment Reporting Information [Line Items] | ||
Total assets | 50,044,169 | 45,260,319 |
Feed raw materials | ||
Segment Reporting Information [Line Items] | ||
Total assets | 12,446,388 | 0 |
Grocery stores | Grocery stores | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 642,637 | $ 2,019,305 |
Condensed financial informati_3
Condensed financial information of the parent company - Balance sheets (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
CURRENT ASSETS | ||||
Cash and cash equivalents | $ 1,533,237 | $ 3,196,990 | $ 319,093 | |
Prepayments | 7,720,452 | 213,596 | ||
Other receivables | 148,894 | 238,383 | ||
Total current assets | 50,275,934 | 45,698,915 | ||
OTHER ASSETS | ||||
Total assets | 63,349,434 | 51,351,317 | ||
CURRENT LIABILITIES | ||||
Loans from third parties | 5,013,117 | 2,449,048 | ||
Other payables - related parties | 2,234,980 | 1,245,864 | ||
Convertible debenture, net | 4,768,312 | 0 | ||
Total current liabilities | 32,735,590 | 22,828,865 | ||
Total liabilities | 36,522,598 | 26,826,103 | ||
COMMITMENTS AND CONTINGENCIES | ||||
SHAREHOLDERS' EQUITY | ||||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 23,971,084 and 21,964,027 share issued and outstanding as of June 30, 2020 and 2019, respectively | 239,711 | 219,640 | ||
Additional Paid in Capital | 15,765,411 | 11,031,937 | ||
Deferred share compensation | (47,708) | 0 | ||
Statutory reserves | 1,670,367 | 1,496,642 | ||
Retained earnings | 7,034,899 | 12,085,566 | ||
Accumulated other comprehensive loss | (856,218) | (308,571) | ||
Total China Xiangtai Food Co., Ltd. shareholders' equity | 23,806,462 | 24,525,214 | ||
NONCONTROLLING INTERESTS | 3,020,374 | 0 | ||
Total equity | 26,826,836 | 24,525,214 | $ 14,033,535 | $ 10,131,873 |
Total liabilities and shareholders' equity | 63,349,434 | 51,351,317 | ||
Reportable Legal Entities [Member] | Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Cash and cash equivalents | 163,640 | 0 | ||
Prepayments | 18,406 | 0 | ||
Other receivables | 28,940 | 0 | ||
Intercompany Receivables | 9,963,384 | 6,623,561 | ||
Total current assets | 10,174,370 | 6,623,561 | ||
OTHER ASSETS | ||||
Investment in subsidiary | 19,713,942 | 18,554,729 | ||
Total assets | 29,888,312 | 25,178,290 | ||
CURRENT LIABILITIES | ||||
Loans from third parties | 500,000 | 0 | ||
Other payables - related parties | 423,416 | 257,384 | ||
Convertible debenture, net | 4,768,312 | 0 | ||
Accrued expenses | 390,122 | 167,765 | ||
Intercompany Payables | 0 | 227,927 | ||
Total current liabilities | 6,081,850 | 653,076 | ||
Total liabilities | 6,081,850 | 653,076 | ||
COMMITMENTS AND CONTINGENCIES | 0 | 0 | ||
SHAREHOLDERS' EQUITY | ||||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 23,971,084 and 21,964,027 share issued and outstanding as of June 30, 2020 and 2019, respectively | 239,711 | 219,640 | ||
Additional Paid in Capital | 15,765,411 | 11,031,937 | ||
Deferred share compensation | (47,708) | 0 | ||
Statutory reserves | 1,670,367 | 1,496,642 | ||
Retained earnings | 7,034,899 | 12,085,566 | ||
Accumulated other comprehensive loss | (856,218) | (308,571) | ||
Total China Xiangtai Food Co., Ltd. shareholders' equity | 23,806,462 | 24,525,214 | ||
Total liabilities and shareholders' equity | $ 29,888,312 | $ 25,178,290 |
Condensed financial informati_4
Condensed financial information of the parent company - Parenthetical (Details) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Condensed financial information of the parent company | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 23,971,084 | 21,964,027 |
Common Stock, Shares, Outstanding | 23,971,084 | 21,964,027 |
Condensed financial informati_5
Condensed financial information of the parent company - Statement of income and comprehensive income (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING EXPENSES: | |||
General and administrative | $ (4,167,587) | $ (1,277,820) | $ (981,347) |
Stock compensation expense | (930,223) | ||
Total operating expenses | 6,662,195 | 2,572,380 | 2,608,818 |
LOSS FROM OPERATIONS | 515,783 | 6,077,860 | 7,042,653 |
OTHER INCOME (EXPENSE) | |||
Interest expense | (1,673,563) | (730,780) | (1,282,291) |
Other finance expenses | (417,549) | (118,394) | (141,284) |
Total other income, net | (2,895,906) | (837,999) | (2,560,168) |
NET (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | (4,876,942) | 4,363,591 | 3,768,109 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (559,320) | (267,546) | 133,553 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | (5,424,589) | 4,096,045 | 3,901,662 |
Reportable Legal Entities [Member] | Parent Company [Member] | |||
OPERATING EXPENSES: | |||
General and administrative | (2,512,271) | (309,466) | (115,683) |
Stock compensation expense | (930,223) | 0 | 0 |
Total operating expenses | 3,442,494 | 309,466 | 115,683 |
LOSS FROM OPERATIONS | (3,442,494) | (309,466) | (115,683) |
OTHER INCOME (EXPENSE) | |||
Interest expense | (123,212) | 0 | 0 |
Other finance expenses | (359,187) | 0 | 0 |
Equity (loss) income of subsidiaries | (952,049) | 4,673,057 | 3,883,792 |
Total other income, net | (1,434,448) | 4,673,057 | 3,883,792 |
NET (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | (4,876,942) | 4,363,591 | 3,768,109 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (547,647) | (267,546) | 133,553 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CHINA XIANGTAI FOOD CO., LTD. | $ (5,424,589) | $ 4,096,045 | $ 3,901,662 |
Condensed financial informati_6
Condensed financial information of the parent company - Statement of cash flows (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (4,399,533) | $ 4,363,591 | $ 3,768,109 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Stock compensation expense | 930,223 | 0 | 0 |
Late payment penalty expense | 500,000 | 0 | 0 |
Amortization of convertible debenture issuance cost and discount | 357,853 | 0 | 0 |
Change in operating assets and liabilities | |||
Prepayments | (5,556,930) | 93,508 | 209,777 |
Net cash used in operating activities | (5,912,019) | (5,267,261) | (3,595,031) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from other payables - related parties, net | (2,028,451) | 701,245 | 609,048 |
Proceeds from short-term loan - third party | 0 | 331,075 | 0 |
Proceeds from convertible debentures, net of issuance costs | 5,480,000 | 0 | 0 |
Net cash provided by financing activities | 4,077,008 | 6,650,526 | 3,992,714 |
CHANGES IN CASH | (1,680,245) | 2,896,912 | 297,563 |
CASH AND CASH EQUIVALENTS, beginning of year | 3,216,005 | 319,093 | 21,530 |
CASH AND CASH EQUIVALENTS, end of year | 1,535,760 | 3,216,005 | 319,093 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |||
Issuance of ordinary shares with redemption rights of mezzanine equity | 0 | 1,800,000 | 0 |
Issuance of ordinary shares for acquisition | 2,658,909 | 0 | 0 |
Conversion of convertible debenture into ordinary shares | 857,165 | 0 | 0 |
Reportable Legal Entities [Member] | Parent Company [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | (4,876,942) | 4,363,591 | 3,768,109 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Equity income of subsidiary | 952,049 | (4,673,057) | (3,883,792) |
Stock compensation expense | 930,223 | 0 | 0 |
Late payment penalty expense | 500,000 | 0 | 0 |
Amortization of convertible debenture issuance cost and discount | 357,853 | 0 | 0 |
Change in operating assets and liabilities | |||
Other receivables | (28,940) | 0 | 0 |
Prepayments | (18,406) | 0 | 0 |
Accrued expenses | 269,521 | 126,213 | 41,552 |
Intercompany | (3,567,750) | 0 | 0 |
Net cash used in operating activities | (5,482,392) | (183,253) | (74,131) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from other payables - related parties, net | 166,032 | 183,253 | 74,131 |
Proceeds from convertible debentures, net of issuance costs | 5,480,000 | 0 | 0 |
Net cash provided by financing activities | 5,646,032 | 183,253 | 74,131 |
CHANGES IN CASH | 163,640 | 0 | 0 |
CASH AND CASH EQUIVALENTS, beginning of year | 0 | 0 | 0 |
CASH AND CASH EQUIVALENTS, end of year | 163,640 | 0 | 0 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |||
Issuance of ordinary shares with redemption rights of mezzanine equity | 0 | 1,800,000 | 0 |
Issuance of ordinary shares for acquisition | 2,658,909 | 0 | 0 |
Conversion of convertible debenture into ordinary shares | $ 857,165 | $ 0 | $ 0 |
Subsequent events (Details)
Subsequent events (Details) - Subsequent events - Private placements $ / shares in Units, $ in Millions | Jul. 27, 2020USD ($)$ / sharesshares |
Subsequent events | |
Number of shares issued | shares | 2,339,000 |
Share purchase price | $ / shares | $ 1.50 |
Gross proceeds from this offering | $ | $ 3.5 |
Subsequent events - Convertible
Subsequent events - Convertible debenture (Details) - USD ($) | Jul. 01, 2020 | Jun. 30, 2020 | Sep. 15, 2020 |
Subsequent Event [Line Items] | |||
Principal amount of debentures converted | $ 800,000 | ||
Interest amount of debentures converted | $ 57,165 | ||
Number of shares issued upon conversion | 827,057 | ||
Conversion price (in dollars per share) | $ 1.04 | ||
Subsequent events | |||
Subsequent Event [Line Items] | |||
Conversion price (in dollars per share) | $ 3 | ||
Subsequent events | Convertible debenture | |||
Subsequent Event [Line Items] | |||
Principal amount of debentures converted | $ 2,600,000 | ||
Interest amount of debentures converted | $ 84,630 | ||
Number of shares issued upon conversion | 2,478,780 | ||
Conversion price (in dollars per share) | $ 1.08 |
Subsequent events - Conversion
Subsequent events - Conversion and Amendment of Convertible Debenture (Details) | Nov. 22, 2019USD ($) | Aug. 13, 2020USD ($)shares | Jun. 30, 2020USD ($)itemshares | Nov. 13, 2020USD ($)$ / shares | Sep. 15, 2020USD ($)$ / shares | Aug. 14, 2020USD ($) | Jul. 17, 2020USD ($) | Jun. 19, 2020USD ($)$ / shares |
Subsequent events | ||||||||
Shares issued upon conversion of debenture | shares | 827,057 | |||||||
Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | ||||||||
Subsequent events | ||||||||
Number of convertible debentures | item | 3 | |||||||
Maturity term | 12 months | 12 months | ||||||
Aggregate principal amount | $ 5,000,000 | $ 5,000,000 | ||||||
Interest rate (as a percent) | 5.00% | |||||||
Principal amount of debt whose floor price is amended | $ 600,000 | |||||||
Convertible Debentures issued on November 22, 2019 | ||||||||
Subsequent events | ||||||||
Aggregate principal amount | $ 2,000,000 | |||||||
Conversion floor price (in dollars per share) | $ / shares | $ 1 | |||||||
Closing of Convertible Debenture | ||||||||
Subsequent events | ||||||||
Aggregate principal amount | $ 300,000 | $ 300,000 | $ 700,000 | $ 700,000 | ||||
Interest rate (as a percent) | 5.00% | |||||||
Principal amount of debt whose floor price is amended | $ 2,000,000 | |||||||
Subsequent events | ||||||||
Subsequent events | ||||||||
Conversion floor price (in dollars per share) | $ / shares | $ 3 | $ 1 | ||||||
Principal amount of debt whose floor price is amended | $ 200,000 | $ 1,400,000 | ||||||
Subsequent events | Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | ||||||||
Subsequent events | ||||||||
Conversion floor price (in dollars per share) | $ / shares | $ 3 | |||||||
Principal amount of debt whose floor price is amended | $ 200,000 | |||||||
Subsequent events | Convertible Debentures issued on November 22, 2019 | ||||||||
Subsequent events | ||||||||
Conversion of principal due and accrued and unpaid interest of convertible debenture | $ 2,062,191 | |||||||
Shares issued upon conversion of debenture | shares | 1,847,167 | |||||||
Conversion floor price (in dollars per share) | $ / shares | $ 1 | |||||||
Principal amount of debt whose floor price is amended | $ 1,400,000 | |||||||
Subsequent events | Convertible Debentures two and three | ||||||||
Subsequent events | ||||||||
Conversion floor price (in dollars per share) | $ / shares | $ 3 | |||||||
Minimum | Subsequent events | ||||||||
Subsequent events | ||||||||
Conversion floor price (in dollars per share) | $ / shares | $ 1 | |||||||
Minimum | Subsequent events | Convertible Debentures issued on November 22, 2019, December 30, 2019 & March 9, 2020 | ||||||||
Subsequent events | ||||||||
Conversion floor price (in dollars per share) | $ / shares | $ 1 |
Subsequent events - Silanchi (D
Subsequent events - Silanchi (Details) - USD ($) | Sep. 03, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Subsequent events | ||||
Consideration transferred | $ 2,658,909 | $ 0 | $ 0 | |
Subsequent events | Silanchi | ||||
Subsequent events | ||||
Consideration transferred | $ 100 | |||
Ownership interest to be acquired (as a percent) | 98.00% | |||
Subsequent events | Silanchi | Shareholders of Silanchi | ||||
Subsequent events | ||||
Ownership interest held | 100.00% |
Subsequent events - Issuance of
Subsequent events - Issuance of ordinary shares for compensation (Details) - USD ($) | Sep. 24, 2020 | Jul. 01, 2020 | Jun. 30, 2020 |
Subsequent Event [Line Items] | |||
Market price (in dollars per share) | $ 4.6 | ||
Subsequent events | Ms. Wang | |||
Subsequent Event [Line Items] | |||
Term of employment agreement | 3 years | ||
Shares issued for compensation | 200,000 | 200,000 | |
Market price (in dollars per share) | $ 1.35 | ||
Consideration for issuance of shares | $ 270,000 |