Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Sep. 22, 2020 | Dec. 31, 2019 | |
Document Information Line Items | |||
Entity Registrant Name | China Health Industries Holdings, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Common Stock, Shares Outstanding | 65,539,737 | ||
Entity Public Float | $ 24,767,901 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001309057 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Jun. 30, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity File Number | 000-51060 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets | ||
Cash and cash equivalents | $ 36,072,474 | $ 35,507,535 |
Accounts receivable, net | 4,631,861 | 1,987,505 |
Inventory | 807,351 | 857,239 |
Other receivables, net | 32,255 | 28,435 |
Advances to suppliers | 205,650 | 8,619 |
Prepayments | 41,505 | 15,868 |
Total current assets | 41,791,096 | 38,405,201 |
Property, plants and equipment, net | 3,677,798 | 3,719,424 |
Intangible assets, net | 2,249,614 | 2,782,869 |
Construction in progress | 511,664 | 835,452 |
Deferred tax assets | 5,806 | 2,235 |
Prepayments – Non-Current | 9,709 | |
Total assets | 48,235,978 | 45,754,890 |
Current liabilities | ||
Accounts payable and accrued expenses | 406,228 | 497,084 |
Other payables | 63,271 | 74,121 |
Advances from customers | 137,543 | 153,613 |
Related party debts | 7,259,862 | 6,962,520 |
Wages payable | 275,982 | 265,686 |
Taxes payable | 425,106 | 619,403 |
Total current liabilities | 8,567,992 | 8,572,427 |
Equity | ||
Common stock, ($0.0001 par value per share, 300,000,000 shares authorized, 65,539,737 and 65,539,737 shares issued and outstanding as of June 30, 2020 and June 30, 2019, respectively) | 6,554 | 6,554 |
Additional paid-in capital | 521,987 | 521,987 |
Accumulated other comprehensive income | (1,658,741) | (593,654) |
Statutory reserves | 38,679 | 38,679 |
Retained earnings | 40,759,507 | 37,208,897 |
Total stockholders’ equity | 39,667,986 | 37,182,463 |
Total equity | 39,667,986 | 37,182,463 |
Total liabilities and equity | $ 48,235,978 | $ 45,754,890 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 65,539,737 | 65,539,737 |
Common stock, shares outstanding | 65,539,737 | 65,539,737 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||
REVENUE | $ 9,931,887 | $ 9,275,386 |
COST OF GOODS SOLD | 2,657,044 | 2,238,011 |
GROSS PROFIT | 7,274,843 | 7,037,375 |
OPERATING EXPENSES | ||
Selling, general and administrative expenses | 1,781,680 | 1,864,636 |
Depreciation and amortization expenses | 601,068 | 610,821 |
Total operating expenses | 2,382,748 | 2,475,457 |
INCOME FROM OPERATIONS | 4,892,095 | 4,561,918 |
OTHER INCOME/(EXPENSES) | ||
Interest income | 125,627 | 114,228 |
Interest expense | (1) | (6) |
Other income, net | 45 | 15,681 |
Bank charges | (796) | (1,119) |
Total other income, net | 124,875 | 128,784 |
INCOME | 5,016,970 | 4,690,702 |
Provision for income taxes | (1,466,360) | (1,383,663) |
NET INCOME | 3,550,610 | 3,307,039 |
Foreign currency translation adjustment | (1,065,087) | (1,368,956) |
COMPREHENSIVE INCOME | $ 2,485,523 | $ 1,938,083 |
Net income per share: | ||
Net income per share Basic & diluted (in Dollars per share) | $ 0.0542 | $ 0.0505 |
Weighted average shares outstanding: | ||
Basic & diluted (in Shares) | 65,539,737 | 65,539,737 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings | Statutory Reserve | Accumulated Other Comprehensive Income (loss) | Total Stockholders' Equity | Noncontrolling Interest | Total |
Balance at Jun. 30, 2018 | $ 6,554 | $ 521,987 | $ 33,901,858 | $ 38,679 | $ 775,302 | $ 35,244,380 | $ 35,244,380 | |
Balance (in Shares) at Jun. 30, 2018 | 65,539,737 | |||||||
Net income | 3,307,039 | 3,307,039 | 3,307,039 | |||||
Other comprehensive loss - Translation adjustment | (1,368,956) | (1,368,956) | (1,368,956) | |||||
Balance at Jun. 30, 2019 | $ 6,554 | 521,987 | 37,208,897 | 38,679 | (593,654) | 37,182,463 | 37,182,463 | |
Balance (in Shares) at Jun. 30, 2019 | 65,539,737 | |||||||
Net income | 3,550,610 | 3,550,610 | 3,550,610 | |||||
Other comprehensive loss - Translation adjustment | (1,065,087) | (1,065,087) | (1,065,087) | |||||
Balance at Jun. 30, 2020 | $ 6,554 | $ 521,987 | $ 40,759,507 | $ 38,679 | $ (1,658,741) | $ 39,667,986 | $ 39,667,986 | |
Balance (in Shares) at Jun. 30, 2020 | 65,539,737 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net income attributable to China Health Industries Holdings | $ 3,550,610 | $ 3,307,039 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expenses | 805,308 | 817,679 |
Provision for doubtful accounts | (1,706) | (136,860) |
Deferred taxes gain | (3,651) | (339) |
Changes in operating assets and liabilities: | ||
Inventory | 25,965 | (268,187) |
Accounts receivable | (2,711,485) | (606,897) |
Other receivables | (4,640) | 1,082 |
Advance to suppliers and prepaid expenses | (214,955) | 106,672 |
Accounts payables and accrued expenses | (77,357) | 111,997 |
Advance from customers and other payables | (20,654) | 4,817 |
Amounts due to related parties | 1,236,064 | 1,541,573 |
Wages payable | 17,835 | 39,711 |
Taxes payable | (196,356) | 197,098 |
Net cash provided by operating activities | 2,404,978 | 5,115,385 |
Cash Flows from Investing Activities | ||
Withdraw of short term investment | ||
Purchase of property, plant and equipment | (24,709) | (127,826) |
Expenditure in construction in progress | (133,091) | (25,750) |
Disposal of property, plant and equipment | 5,831 | 29,581 |
Proceeds from short term investment | ||
Proceeds from disposal of subsidiary | ||
Net cash (used in)/provided by investing activities | (151,969) | (123,995) |
Cash Flows from Financing Activities | ||
Proceed from related party debts | ||
Payment of short term loans | ||
Net cash (used in)/provided by financing activities | ||
Effect of exchange rates change on cash and cash equivalents | (1,688,070) | (2,098,765) |
Net increase/(decrease) in cash and cash equivalents | 564,939 | 2,892,625 |
Cash and cash equivalents, beginning of period | 35,507,535 | 32,614,910 |
Cash and cash equivalents, end of period | 36,072,474 | 35,507,535 |
Supplemental disclosure of cash flow information | ||
Interest paid | ||
Taxes paid | 1,624,158 | 829,157 |
Non-cash activities: | ||
Loan from related party for the construction of a facility | $ 727,787 | $ 587,323 |
Organization and Business Backg
Organization and Business Background | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND BUSINESS BACKGROUND | Note 1 - ORGANIZATION AND BUSINESS BACKGROUND China Health Industries Holdings, Inc. (“China Health US”) was incorporated in the State of Arizona on July 11, 1996 and was the successor of the business known as Arizona Mist, Inc. which began in 1989. On May 9, 2005, it entered into a stock purchase agreement and Share Exchange (effecting a reverse merger) with Edmonds 6, Inc. (“Edmonds 6”), a Delaware corporation, and changed its name to Universal Fog, Inc. Pursuant to this agreement, Universal Fog, Inc. (which has been in continuous operation since 1996) became a wholly-owned subsidiary of Edmonds 6. China Health Industries Holdings Limited (“China Health HK”) was incorporated on July 20, 2007 in Hong Kong under the Companies Ordinance as a limited liability company. China Health HK was formed for the purpose of seeking and consummating a merger or acquisition with a business entity organized as a private corporation, partnership, or sole proprietorship as defined by FASB ACS Topic 915 (“Development Stage Entities”). Harbin Humankind Biology Technology Co., Limited (“Humankind”) was incorporated in Harbin City, Heilongjiang Province, the People’s Republic of China (the “PRC”) on December 14, 2003, as a limited liability company under the Company Law of the PRC. Humankind is engaged in the manufacturing and sale of health products. On August 20, 2007, the sole shareholder of China Health HK entered into a share purchase agreement (the “Share Purchase Agreement”) with the owners of Humankind. Pursuant to the Share Purchase Agreement, China Health HK purchased 100% of the ownership in Humankind for a cash consideration of $60,408 (the “Share Purchase”). Subsequent to the completion of the Share Purchase, Humankind became a wholly-owned subsidiary of China Health HK. The Share Purchase was accounted for as a “reverse merger” since the owner of Humankind owned a majority of the outstanding shares of China Health HK’s common stock immediately following the execution of the Share Purchase Agreement, it was deemed to be the accounting acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations that have been reflected in the financial statements for periods prior to the Share Purchase are those of Humankind and have been recorded at the historical cost basis. After completion of the Share Purchase, China Health HK’s consolidated financial statements include the assets and liabilities of both China Health HK and Humankind, the historical operations of Humankind, and the operations of China Health HK and its subsidiaries from the closing date of the Share Purchase. On October 14, 2008, Humankind set up a 99% owned subsidiary, Harbin Huimeijia Medicine Company (“Huimeijia”), with its primary business being manufacturing and distributing medicine. Mr. Xin Sun, the Company’s majority owner, owns 1% of Huimeijia. Huimeijia is consolidated in the consolidated financial statements of China Health HK. On December 31, 2008, China Health HK entered into a reverse merger with Universal Fog, Inc., a U.S. publicly traded shell company (the “Transaction”). China Health HK is the acquirer in the Transaction, and the Transaction has been treated as a recapitalization of China Health US. After the Transaction and a 20:1 reverse stock split, Mr. Xin Sun owned 61,203,088 shares of common stock, representing 98.3% of the 62,234,737 total outstanding shares of common stock of China Health US. On April 7, 2009, Mr. Sun transferred 28,200,000 shares of common stock to 296 individuals, leaving him with 33,003,088 shares of common stock of China Health US, or approximately 53.03% of the total outstanding shares of common stock. Universal Fog, Inc. changed its name to China Health Industries Holdings, Inc. on February 19, 2009. On November 22, 2013, Humankind completed the acquisition of Heilongjiang Huimeijia Pharmaceutical Co., Ltd. (“HLJ Huimeijia”) for a total purchase price of $16,339,869 (RMB100,000,000). HLJ Huimeijia was founded on October 30, 2003, and is engaged in the manufacturing and distribution of tincture, ointments, rubber paste (including hormones), topical solution, suppositories, liniment (including traditional Chinese medicine extractions), enemas and oral liquids. HLJ Huimeijia’s predecessor is Heilongjiang Xue Du Pharmaceutical Co., Ltd., which has established its brand name in the market through its supply of high quality medical products. HLJ Huimeijia is categorized as a “high and new technology” enterprise by the Science Technology Department in Heilongjiang Province. HLJ Huimeijia has 21 products which have been approved by, and have received approval numbers issued by, National Medical Products Administration, or NPMA (formerly known as the China State Food and Drug Administration, or the CFDA). In addition, HLJ Huimeijia is the holder of one patent for utility models, five patents for external design and three trademarks in China, including the Chinese brand name of “Xue Du” which has an established reputation among customers in northeastern China. On December 24, 2014, Humankind entered into a stock transfer agreement (the “Original Agreement”) with Xiuzheng Pharmaceutical Group Co., Ltd. a company incorporated under the laws of the PRC and located in Jilin province (“Xiuzheng Pharmacy” or the “Buyer”), Mr. Xin Sun, the CEO of the Company, and Huimeijia, 99% owned by Humankind and 1% owned by Mr. Xin Sun. Pursuant to the Original Agreement, Humankind and Mr. Xin Sun (the “Equity Holders”), would sell their respective equity interests in Huimeijia to Xiuzheng Pharmacy. On February 9, 2015, the four parties entered into a supplementary agreement (the “Supplementary Agreement”) to modify the terms of the Original Agreement, pursuant to which the Equity Holders and Huimeijia (collectively the “Asset Transferors”) would sell only the 19 drug approval numbers (including the tablet, capsule, powder, mixture, oral liquid, syrup and oral solution under the 19 approval numbers; licenses including the original copies of Business License, Organization Code Certificate, Tax Registration Certificate, Drug Production Permit and GMP Certificate, and other documents and original copies related to the production and operation of the 19 drugs) (the “Assets”) to Xiuzheng Pharmacy. The Equity Holders would have retained their equity interests in Huimeijia, but would have pledged such equity interests to Xiuzheng Pharmacy until the Assets were transferred, at which time the cash consideration would have been paid by the Buyer. Total cash consideration would have been the same as under the Original Agreement, i.e., RMB 8,000,000 (approximately $1,306,186) to the Asset Transferors. In the event that the Assets had failed to be transferred to the Buyer due to the fault of the Asset Transferors, the paid consideration would have been returned to the Buyer with interest accrued. If the failure of the transfer of the Assets were a result of changes in government policy or force majeure, the paid cash consideration would have been returned to the Buyer but without any interest. On October 12, 2016, the four parties agreed to rescind the Supplementary Agreement and entered into a new supplementary agreement (the “New Supplementary Agreement”), pursuant to which the four parties agreed to execute the transfer of the equity interests based on the Original Agreement and the Equity Holders agreed to sell their respective equity interests in Huimeijia to Xiuzheng Pharmacy. The transfer of 100% of the equity interests of Huimeijia to the Buyer was for total cash consideration of RMB 8,000,000 (approximately $1,306,186) (the “Purchase Price”) to the Equity Holders. 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy complete three-batches production of all forms of the drugs included in the Assets. As of the date of this report, 80% of the Purchase Price has been paid, the Company has completed changes in its business registration, and Xiuzheng Pharmacy has obtained a business license issued by the local State Administration of Industry and Commerce in Harbin (“Harbin SAIC”) to Huimeijia, in which the ownership of Huimeijia has been recorded as held by Xiuzheng Pharmacy, with Harbin SAIC and the legal representative (a person that is authorized to take most of the corporate actions on behalf of a company under the corporate laws in China) of Huimeijia has been appointed by the Buyer. China Health US, China Health HK, Humankind and HLJ Huimeijia are collectively referred herein to as the “Company.” As of June 30, 2020, the Company’s corporate structure was as follows: |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | Note 2 - SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States (“US GAAP”) and have been consistently applied in the preparation of the consolidated financial statements. Principles of Consolidation The accompanying consolidated financial statements include China Health US and its four subsidiary companies, including China Health HK, Humankind and HLJ Huimeijia. All significant intercompany balances and transactions have been eliminated in consolidation and combination. On November 22, 2013, China Health US, through its wholly owned subsidiary Humankind, completed the acquisition of HLJ Huimeijia. HLJ Huimeijia and Humankind are under the common control of Mr. Xin Sun, the CEO of the Company before and after the date of transfer. Humankind’s accounting policy adopted the guidance in ASC 805-50-05-5 for the transfer of net assets between entities under common control to apply a method similar to the pooling-of-interests’ method. Under this method, the financial statements of Humankind shall report results of operations for the period in which the transfer occurs as though the transfer of net assets had occurred at the beginning of the period. Results of operations for that period will thus comprise both those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. Similarly, Humankind shall present the statements of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date. Financial statements and financial information of Humankind presented for prior years also shall be retrospectively adjusted to furnish comparative information. Segment Reporting FASB ASC Topic 280, “Segment Reporting,” established 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 details on the Company’s business segments. The Company has three reportable operating segments: Humankind, HLJ Huimeijia and Others. The segments are grouped based on the types of products provided. Fair Value of Financial Instruments The provisions of accounting guidance, FASB ASC Topic 820 that applies to the Company requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. Fair Value Measurements FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. Various inputs are considered when determining the fair value of the Company’s debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below. Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. Foreign Currency Translation and Transaction Humankind, Huimeijia and HLJ Huimeijia maintain their books and accounting records in PRC currency “Renminbi” (“RMB”), which has been determined as the functional currency. The functional currency of China Health HK is the Hong Kong Dollar (“HKD”). Transactions denominated in currencies other than the functional currencies are recorded at the exchange rates prevailing on the date of the transactions, as quoted by the Federal Reserve Board. Foreign currency exchange gains and losses resulting from these transactions are included in operations. Humankind, Huimeijia, HLJ Huimeijia and China Health Hong Kong’s financial statements are translated into the reporting currency, the United States Dollar (“USD”). Assets and liabilities of the above entities are translated at the prevailing exchange rate at each reporting period end date. Contributed capital accounts are translated using the historical rate of exchange when capital is injected. Income and expense accounts are translated at the average rate of exchange during the reporting period. Translation adjustments resulting from the translation of these financial statements are reflected as accumulated other comprehensive income in shareholders’ equity and non-controlling interests. For the purpose of presenting these financial statements, the Company’s assets and liabilities with functional currency of HKD are expressed in USD at the exchange rate on the balance sheet date, which was 7.7501 and7.8129 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.7942 and 7.8401 for the years ended June 30, 2020 and 2019, respectively. For Renminbi currency, the Company’s assets and liabilities are expressed in USD at the exchange rate on the balance sheet date, which was 7.0650 and 6.8668 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.0309 and 6.8234 for the years ended June 30, 2020 and 2019, respectively. Statement of Cash Flows In accordance with Statement FASB ASC Topic 230, “Statement of Cash Flows,” cash flow from the Company’s operations is calculated based upon the local currencies and translated to the reporting currency using an average foreign exchange rate for the reporting period. As a result, amounts related to assets and liabilities reported in the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Significant estimates and assumptions by management include, among others; useful lives of long-lived assets and intangible assets, valuation of inventory, accounts receivable and notes receivable, impairment analysis of long-lived assets, construction in progress, intangible assets and deferred taxes. While the Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less at the time of purchase. As of June 30, 2020, and 2019, the Company’s uninsured bank balance was mainly maintained at financial institutions located in the PRC and Hong Kong, totaled $36,072,474 and $35,507,535, respectively. The Company has no insured bank balance as of June 30, 2020 and 2019, respectively. Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment and bad debt history, the customer’s current credit worthiness, changes in customer payment patterns and the economic environment. From November 1, 2013, the Company changed its credit policy by offering ninety (90) day payment terms for sales agents, whereas the payment terms for sales agents before November 1, 2013 were thirty (30) day. As of June 30, 2020 and 2019, the balances of accounts receivable were $4,631,861 and $1,987,505, respectively. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company evaluated the nature of all accounts receivable then provided allowance for doubtful accounts. As of June 30, 2020, and 2019, the balances of allowance for doubtful accounts were $68,003 and $71,713 respectively. Advance to Suppliers The Company periodically makes advances to certain vendors for purchases of raw materials, or service providers for services relating to construction plans for our plant, equipment and production lines for the GMP upgrading, and records these payments as advance to suppliers. The increase in the amount of advance to suppliers is due to Humankind’s prepaid equipment, which has not been shipped yet. As a result, as of June 30, 2020, and 2019, advance to suppliers amounted to $205,650 and $8,619 , respectively. Inventory Inventory consists of raw materials, work in progress and finished goods of manufactured products. Inventory is stated at lower of cost or market and consists of materials, labor and overhead. HLJ Huimeijia uses the weighted average method for inventory valuation. The other entities of the Company use the first-in, first-out (“FIFO”) method for inventory valuation. Overhead costs included in finished goods include direct labor cost and other costs directly applicable to the manufacturing process. The Company evaluates inventory for excess, slow moving, and obsolete inventory as well as inventory the value of which is in excess of its net realizable value. This evaluation includes analysis of sales levels by product and projections of future demand. If future demand or market conditions are less favorable than the Company’s projections, a write-down of inventory may be required, and would be reflected in cost of goods sold in the period the revision is made. The inventory allowance with an amount of $nil and $nil were provided for the years ended June 30, 2020, and 2019, respectively. Impairment of Long-Lived Assets The Company’s long-lived assets and other assets are reviewed for impairment in accordance with the guidance of the FASB ASC Topic 360-10, “Property, Plant, and Equipment,” and FASB ASC Topic 205, “Presentation of Financial Statements.” The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of the asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on the Company’s reporting results and financial position. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of June 30, 2020, and 2019, the Company has not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Maintenance, repairs and minor renewals are expensed as incurred, major renewals and improvements that extend the lives or increase the capacity of plant assets are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the results of operations in the reporting period of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. The depreciable lives applied are: Building, Warehouse and Improvements 20 to 30 years Office Equipment 3 to 7 years Vehicles 5 to15 years Machinery and Equipment 7 to 15 years Intangible Assets The Company evaluates intangible assets in accordance with FASB ASC Topic 350, “Intangibles — Goodwill and Other.” Intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. If the assumptions and estimates used to allocate the purchase price are not correct, or if business conditions change, purchase price adjustments or future asset impairment charges could be required. The value of the Company’s intangible assets could be impacted by future adverse changes such as: (i) any future declines in the Company’s operating results, (ii) a decline in the valuation of technology, including the valuation of the Company’s common stock, (iii) a significant slowdown in the worldwide economy, or (iv) any failure to meet the performance projections included in the Company’s forecasts of future operating results. In accordance with FASB ASC Topic 350, the Company tests intangible assets for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist. Impairment evaluations involve management estimates of asset useful lives and future cash flows. Significant judgment by management is required in the forecasts of future operating results that are used in the evaluations. It is possible, however, that the plans and estimates used may be incorrect. If the Company’s actual results, or the plans and estimates used in future impairment analysis, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges in a future period. Based on such evaluations, there were no impairments recorded for intangible assets for the years ended June 30, 2020, and 2019, respectively. Construction in Progress Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. Costs classified as construction in progress include all costs of obtaining the asset and bringing it to the location in the condition necessary for its intended use. No depreciation is provided for construction in progress until such time as the assets are completed and are placed into service. The Company reviews the carrying value of construction in progress for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the assets. The factors considered by Management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, there were no impairments recorded for construction in progress, for the years ended June 30, 2020 and June 30, 2019, respectively. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. Revenue Recognition The Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is identified in any contract and transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers while performance obligation are completed. For most of the Company’s products net sales, control transfers when products are shipped and transaction price are determined. The majority of the Company’s revenue relates to the sale of inventory to customers, and revenue is recognized when control of the products or services is transferred to its customers that reflects the performance obligations are properly allocated with transaction price and satisfied in the contract. Given the nature of the Company’s business and the applicable rules guiding revenue recognition, the Company’s revenue recognition practices do not contain estimates that materially affect the results of operations. The Company records revenue at the discounted selling price and allows its customers to return products for exchange or credit subject to certain limitations. A provision for such returns is recorded based upon historical experience. There has been no provision recorded for returns based upon historical experience for the years ended June 30, 2020 and 2019, respectively. Cost of Goods Sold Cost of goods sold consists primarily of the costs of raw materials, freight charges, direct labor, depreciation of plants and machinery, warehousing and overhead costs associated with the manufacturing process and commission expenses. Income Taxes The Company adopts FASB ASC Topic 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefits or that future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. As a result of the implementation of FIN 48 (ASC 740-10), the Company undertook a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48 (ASC 740-10). The Company recognized no material adjustments to liabilities or stockholders’ equity as a result of the implementation. The adoption of FIN 48 did not have a material impact on the Company’s financial statements. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from the Company’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance. Enterprise Income Tax Under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC (the “EIT Law”), income tax is payable by enterprises at a rate of 25% of their taxable income. Value Added Tax The Provisional Regulations of the PRC Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (“VAT”) is imposed on goods sold in, or imported into, the PRC and on processing, repair and replacement services provided within the PRC. VAT payable in the PRC is charged on an aggregated basis at a rate of 13% or 16% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 16% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible VAT already paid by the taxpayer on purchases of goods and services in the same financial year. As of June 30, 2020 and June 30, 2019, VAT payables were $92,652 and $120,114, respectively. Sales-Related and Payroll Taxes Pursuant to the tax law and regulations of the PRC, the Company is obligated to pay 7% and 5% of the annual aggregate VAT paid by the Company as taxes for the purposes of maintaining and building cities and educational facilities, which fees are included as sales-related taxes. Sales-related taxes are recorded when sales revenue is recognized. Concentrations of Business and Credit Risks All of the Company’s manufacturing is located in the PRC. There can be no assurance that the Company will be able to successfully continue to manufacture its products and failure to do so would have a material adverse effect on the Company’s financial position, results of operations and cash flows. Moreover, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, prices of raw materials, competition, governmental and political conditions, and changes in regulations. Since the Company is dependent on trade in the PRC, the Company is subject to various additional political, economic and other uncertainties. Among other risks, the Company’s operations will be subject to the risks of restrictions on transfer of funds, domestic customs, changing taxation policies, foreign exchange restrictions, and political and governmental regulations. The Company operates in China, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between U.S. dollars and the Chinese currency RMB. The results of operations denominated in foreign currency are translated at the average rate of exchange during the reporting periods. Earnings Per Share Basic earnings per common share is computed by dividing net earnings applicable to common shareholders by the weighted-average number of common shares outstanding during the period. When applicable, diluted earnings per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. For the years ended June 30, 2020 and 2019, the Company had no potential dilutive common stock equivalents outstanding. Potential common shares issued are calculated using the treasury stock method, which recognizes the use of proceeds that could be obtained upon the exercise of options and warrants in computing diluted earnings per share. It assumes that any proceeds would be used to purchase common stock at the average market price of the common stock during the period. FASB ASC Topic 260, “Earnings Per Share,” requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The main objective of the standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In issuing this standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. The standard is applicable to loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, loan commitments and certain other off-balance sheet credit exposures, debt securities (including those held-to-maturity) and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The CECL model does not apply to available-for-sale debt securities. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the credit losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Accordingly, the new methodology will be utilized when assessing the Company’s financial instruments for impairment. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. ASU 2016-13 is effective for years beginning after December 15, 2019, including interim periods within those fiscal years under a modified retrospective approach. Early adoption is permitted for the periods beginning after December 15, 2018. The Company plans to adopt the guidance from July 1, 2020. The Company finalized its analysis and believes the adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements and its internal controls over financial reporting. 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), which modifies the disclosure requirements on fair value measurements, including removing the requirement to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 also added new disclosures including the requirement to disclose (a) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019 and early adoption is permitted. This standard will only impact the disclosures pertaining to fair value measurements. The Company plans to adopt the guidance from July 1, 2020. The Company finalized its analysis and believes the adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements and its internal controls over financial reporting. |
Assets sale
Assets sale | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS SALE | NOTE 3 - ASSETS SALE On December 24, 2014, Humankind entered into a stock transfer agreement (the “Agreement”) with Xiuzheng Pharmaceutical Group Co., Ltd a company incorporated under the laws of the People’s Republic of China and located in Jilin province (“Xiuzheng Pharmacy” or the “Buyer”), Mr. Xin Sun, the CEO of the Company, and Huimeijia, pursuant to which, Humankind and Mr. Xin Sun (the “Equity Holders”), shall sell their respective equity interests in Huimeijia to Xiuzheng Pharmacy. The transfer of the 100% equity interests of Huimeijia to the Buyer was for total cash consideration of RMB 8,000,000 (approximately $1,306,186) to the Equity Holders. On February 9, 2015, the four parties entered into a supplementary agreement (the “Supplementary Agreement”) to modify the terms of the Agreement, pursuant to which, the Equity Holders and Huimeijia (collectively the “Assets Transferors”) shall only sell the 19 drug approval numbers (including the tablet, capsule, powder, mixture, oral liquid, syrup and oral solution under the 19 approval numbers; licenses including the original copies of Business License, Organization Code Certificate, Tax Registration Certificate, Drug Production Permit and GMP Certificate, and other documents and original copies related to the production and operation of the 19 drugs) (the “Assets”) to Xiuzheng Pharmacy. The Equity Holders will retain the equity interests in Huimeijia, but will have the equity interests pledged to Xiuzheng Pharmacy until the Assets are transferred, at which time all the cash consideration shall be paid by the Buyer. The total cash consideration remains to be the same as under the Agreement, i.e., RMB 8,000,000 (approximately $1,306,186) to the Assets Transferors. In the event that the Assets are failed to be transferred to the Buyer due to the fault of the Assets Transferors, the paid consideration shall be returned to the Buyer with interests accrued. If the failure of the transfer of the Assets is a result of the government policy changes or force majeure, the paid cash consideration shall be returned to the Buyer but without any interests. As of June 30, 2016, the transfer of the Assets had not been completed because the assets transfer crossed different provinces which resulted in a complicated interaction among the local administrations of Heilongjiang Province, where Huimeijia is located and Jilin Province, where the transferee is located. The Company is striving to accelerate the process of the transfer. On October 12, 2016, the four parties agreed to rescind the Supplementary Agreement and entered into a new supplementary agreement (the “New Supplementary Agreement”), pursuant to which the four parties agreed to execute the transfer of the equity interests based on the Original Agreement and the Equity Holders agreed to sell their respective equity interests in Huimeijia to Xiuzheng Pharmacy. The transfer of 100% of the equity interests of Huimeijia to the Buyer was for total cash consideration of RMB 8,000,000 (approximately $1,306,186) (the “Purchase Price”) to the Equity Holders. 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy to complete three-batches production of all forms of the drugs included in the Assets. As of the date of this report, 80% of the Purchase Price has been paid, the Company has completed changes in its business registration, and Xiuzheng Pharmacy has obtained a business license issued by the local State Administration of Industry and Commerce in Harbin (“Harbin SAIC”) to Huimeijia, in which the ownership of Huimeijia has been recorded as held by Xiuzheng Pharmacy, with Harbin SAIC and the legal representative (a person that is authorized to take most of the corporate actions on behalf of a company under the corporate laws in China) of Huimeijia has been appointed by the Buyer. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Jun. 30, 2020 | |
Accounts Receivable Disclosure [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 4 - ACCOUNTS RECEIVABLE The Company’s accounts receivable amounted to $4,631,861 and $1,987,505 net of allowance for doubtful accounts amounting to $68,003 and $71,713 as of June 30, 2020 and 2019, respectively. |
Inventories
Inventories | 12 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5 - INVENTORIES Inventory consists of following: June 30, June 30, Raw Materials $ 278,189 $ 320,334 Supplies and Packing Materials 104,992 91,110 Work-in-Progress 78,132 85,191 Finished Goods 346,038 360,604 Total $ 807,351 $ 857,239 The inventory allowance with an amount of $nil and $nil were provided for the years ended June 30, 2020 and 2019, respectively. |
Construction in Progress
Construction in Progress | 12 Months Ended |
Jun. 30, 2020 | |
Construction In Progress Disclosure [Abstract] | |
CONSTRUCTION IN PROGRESS | NOTE 6 - CONSTRUCTION IN PROGRESS Construction in progress consisted of the following: June 30, June 30, Plant - HLJ Huimeijia $ 511,664 $ 806,612 Factory Maintenance - HMK - 28,840 Total $ 511,664 $ 835,452 On April 6, 2012, HLJ Huimeijia entered into an agreement with a contractor for construction of the HLJ Huimeijia plant. The estimated total cost of construction was approximately $1.86 million (RMB 12,800,000). As of June 30, 2020, 78% of construction has been completed, $1,404,376 (RMB 9,661,312) has been recorded as costs of construction in progress and construction in progress at an amount of $ 892,712 6,356,767 |
Property, Plants and Equipment
Property, Plants and Equipment | 12 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANTS AND EQUIPMENT | NOTE 7 - PROPERTY, PLANTS AND EQUIPMENT Property, plants and equipment consisted of the following June 30, June 30, Building, Warehouses and Improvements $ 3,741,542 $ 3,474,056 Machinery and Equipment 1,729,239 1,876,174 Office Equipment 74,291 76,435 Vehicles 206,497 212,456 Others 912,674 910,178 Less Accumulated Depreciation (2,986,445 ) (2,829,875 ) Total $ 3,677,798 $ 3,719,424 Depreciation expense was $347,923 and $346,377 for the years ended June 30, 2020 and 2019, respectively. Depreciation expense charged to operations was $143,555 and $139,519 for the years ended June 30, 2020 and 2019, respectively. Depreciation expense charged to cost of goods sold was $204,368 and $206,858 for the years ended June 30, 2020 and 2019, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 8 - INTANGIBLE ASSETS The following is a summary of intangible assets: June 30, June 30, Land Use Rights – Humankind $ 897,096 $ 922,990 Health Supplement Product Patents – Humankind 4,246,285 4,368,847 Pharmaceutical Patents - HLJ Huimeijia 370,017 380,697 Land Use Rights - HLJ Huimeijia 613,600 631,311 Less: Accumulated Amortization (3,877,384 ) (3,520,976 ) Intangible Assets, net, Held for Continuing Operations $ 2,249,614 $ 2,782,869 All land in the PRC belongs to the State. Enterprises and individuals can pay the State a fee to obtain the right to use a piece of land for commercial purposes or residential purposes for an initial period of 50 years or 70 years, respectively. The land use right can be sold, purchased, and exchanged in the market. The successor owner of the land use right will have the right to use the land for the time remaining on the initial period. The patent has amortized life of 10 years. Amortization expense charged to operations was $457,513 and $471,302 for the years ended June 30, 2020 and 2019, respectively. |
Related party debts
Related party debts | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY DEBTS | NOTE 9 - RELATED PARTY DEBTS Related party debts, which represent temporary short-term loans from Mr. Xin Sun and Mr. Kai Sun consisted of the following: June 30, June 30, Mr. Xin Sun $ 7,226,764 $ 6,928,467 Mr. Kai Sun 33,098 34,053 Related Party Debts, Held for Continuing Operations $ 7,259,862 $ 6,962,520 These loans are unsecured and non-interest bearing and have no fixed terms of repayment; therefore, they are deemed payable on demand. Mr. Kai Sun, a director of Humankind, is a PRC citizen and a family member of Mr. Xin Sun, the CEO of the Company. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES (a) Corporate income taxes China Health US was incorporated in the State of Arizona on July 11, 1996. After the Company had acquired the business of China Health HK through the acquisition of all the share capital of China Health HK under a share exchange agreement dated December 31, 2008, it became a holding company and do not conduct any substantial operations or business of its own in the State of Delaware and in the U.S. The Company also does not provide for U.S. taxes or foreign withholding taxes on undistributed earnings from its non-U.S. subsidiaries, either owned directly or indirectly, because it was elected to indefinitely reinvest such earnings outside the U.S to support non-U.S. liquidity needs to fund operations and growth of its foreign subsidiaries and acquisitions. United States China Health US had no taxable income for U.S. corporate income tax purposes for the years ended June 30, 2020 and 2019, respectively. As of June 30, 2020 and 2019, China Health US had $1,381,747 and $1,077,484 in net operating loss carry forwards available to offset future taxable income, respectively. The federal corporate net operating loss carryover is expired in 20 taxable years following the taxable year of the loss. If not utilized, the federal net operating loss for the fiscal years 2020 and 2019 in an amount of $304,263 and $290,122, respectively, will begin to expire in the years 2040 and 2039, respectively. Management believes that it is more likely than not that the benefits from these accumulated net operating losses will not be realized in the future due to the Company’s operating history and the continued losses of its U.S. operation. Accordingly, the Company has provided a full valuation allowance on the deferred tax assets under its U.S. entity. Hong Kong China Health Industries Holdings Limited (“China Health HK”) was incorporated in Hong Kong on July 20, 2007 and is subject to Hong Kong profits taxation on its business activities conducted in Hong Kong and income sourced in Hong Kong. As of June 30, 2020, and 2019, China Health Hong Kong had $10,099 and $9,702 in net operating loss carry forwards available to offset future taxable income, respectively. Net operating losses of Hong Kong can generally be carried forward indefinitely. The Company believes that it is more likely than not that these accumulated net operating losses will not be utilized in the future. Therefore, the Company had provided full valuation allowance for the deferred tax assets arising from the losses in Hong Kong during the years ended June 30, 2020, and 2019, amounting $397 and $598, respectively. Accordingly, there is no net deferred tax assets under this entity. People’s Republic of China Under the EIT Law, the standard EIT rate is 25%. The PRC subsidiaries of the Company are subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. The provision for income taxes consisted of the following for the years ended June 30, 2020 and 2019: As of June 30, 2020, and 2019, taxes payable consists of: June 30, June 30, Income tax payable $ 257,261 $ 422,519 Value-added tax payable 92,652 120,114 Other taxes payable 75,193 76,770 Total $ 425,106 $ 619,403 A reconciliation between the Company’s actual provision for income taxes and the provision at the statutory rate is as follows: June 30, June 30, Pre-tax book income $ 5,016,970 $ 4,690,702 Federal statutory rate 21 % 21 % Income tax computed at U.S. federal statutory rate 1,053,564 985,047 Non-deductible staff welfare - 37,955 Foreign rate differential 211,264 141,394 Change in valuation allowance 201,532 219,267 Total provision for income taxes $ 1,466,360 $ 1,383,663 The Company’s effective tax rate was 29.2% and 29.5% for the years ended June 30, 2020 and 2019, respectively. The provision for income taxes on income consists of the following for the years ended June 30, 2020 and 2019: Provision for income taxes consisted of: For the Years Ended June 30, 2020 2019 Current provision: Domestic $ - $ - Foreign 1,469,931 1,383,702 Total current provision 1,469,931 1,383,702 Deferred provision: Domestic - - Foreign (3,571 ) (39 ) Total deferred provision (3,571 ) (39 ) Total provision for income taxes $ 1,466,360 $ 1,383,663 Significant components of deferred tax assets were as follows: June 30, June 30, Deferred tax assets Net operating loss carry forward $ 1,075,533 $ 869,502 Allowance for doubtful accounts 17,001 17,928 Valuation allowance (1,086,728 ) (885,195 ) Deferred tax assets, net $ 5,806 $ 2,235 (b) Uncertain tax positions There were no unrecognized tax benefits as of June 30, 2020 and 2019, respectively. Management does not anticipate any potential future adjustments in the next twelve months which would result in a material change to its tax positions. There was no interests and penalties arising from its tax payments for the years ended June 30, 2020. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 11 - EARNINGS PER SHARE Basic earnings per common share is computed by dividing net earnings applicable to common shareholders by the weighted-average number of common shares outstanding during the period. When applicable, diluted earnings per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. Potential common shares issued are calculated using the treasury stock method, which recognizes the use of proceeds that could be obtained upon the exercise of options and warrants in computing diluted earnings per share. It assumes that any proceeds would be used to purchase common stock at the average market price of the common stock during the period. FASB ASC Topic 260, Earnings Per Share, requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. For the years ended June 30, 2020, and 2019, the Company does not have potential dilutive shares. The following table sets forth the computation of basic and diluted net income per share: For the Years Ended June 30, June 30, 2020 2019 Net income/(loss) $ 3,550,610 $ 3,307,039 Net income/(loss) per share: Net income (loss) per share Basic & diluted $ 0.0542 $ 0.0505 Weighted average shares outstanding: Basic & diluted 65,539,737 65,539,737 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 - COMMITMENTS AND CONTINGENCIES The Company’s assets are located in the PRC and revenues are derived from operations in the PRC. In terms of industry regulations and policies, the economy of the PRC has been transitioning from a planned economy to market oriented economy. Although in recent years the Chinese government has implemented measures emphasizing the utilization of market forces for economic reforms, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of productive assets in the PRC is still owned by the Chinese government. For example, all land is state owned and leased to business entities or individuals through the government’s granting of Land Use Rights. The granting process is typically based on government policies at the time of granting and can be lengthy and complex. This process may adversely affect the Company’s future manufacturing expansions. The Chinese government also exercises significant control over the PRC’s economic growth through the allocation of resources and providing preferential treatment to particular industries or companies. Uncertainties may arise with changing of governmental policies and measures. The Company faces a number of risks and challenges not typically associated with companies in North America and Western Europe, since its assets exist solely in the PRC, and its revenues are derived from its operations therein. The PRC is a developing country with an early stage market economic system, overshadowed by the state. Its political and economic systems are very different from the more developed countries and are in a state of change. The PRC also faces many social, economic and political challenges that may produce major shocks, instabilities and even crises, in both its domestic arena and in its relationships with other countries, including the United States. Such shocks, instabilities and crises may in turn significantly and negatively affect the Company’s performance. The Company had no rental commitment as of June 30, 2020. |
Major Suppliers and Customers
Major Suppliers and Customers | 12 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
MAJOR SUPPLIERS AND CUSTOMERS | NOTE 13 - MAJOR SUPPLIERS AND CUSTOMERS For the year ended June 30, 2020, the Company had three suppliers that in the aggregate accounted for approximately 75% of the Company’s purchases, with each supplier accounting for 28%, 27% and 21%, respectively. For the year ended June 30, 2019, the Company had three suppliers that in the aggregate accounted for approximately 75% of the Company’s purchases, with each supplier accounting for 48%, 16% and 11%, respectively. For the year ended June 30, 2020, the Company had six customers that in the aggregate accounted for 85% of the Company’s total sales, with each customer accounting for 21%, 17%, 15%, 12%, 11% and 9%, respectively. For the year ended June 30, 2019, the Company had six customers that in the aggregate accounted for 81% of the Company’s total sales, with each customer accounting for 20%, 16%, 15%, 11%, 11% and 8%, respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 14 - SEGMENT REPORTING The Company was organized into three main business segments based on the types of products being provided to customers: HLJ Huimeijia, Humankind and others. Each of the three operating segments referenced above has separate and distinct general ledgers. The chief operating decision maker (“CODM”) receives financial information, including revenue, gross margin, operating income, and net income produced from the various general ledger systems to make decisions about allocating resources and assessing performance; however, the principal measure of segment profitability or loss used by the CODM is net income or loss by segment. The following tables present summary information by segment for the years ended June 30, 2020 and 2019, respectively: For the Year Ended For the Year Ended HLJ Consolidated HLJ Consolidated Huimeijia Humankind Others operations Huimeijia Humankind Others operations Revenues $ 40,009 $ 9,891,878 $ - $ 9,931,887 $ 72,299 $ 9,203,087 $ - $ 9,275,386 Cost of revenues 46,897 2,610,147 - 2,657,044 119,772 2,118,239 - 2,238,011 Gross profit (loss) (6,888 ) 7,281,731 - 7,274,843 (47,473 ) 7,084,848 - 7,037,375 Interest income 24 125,598 5 125,627 39 114,189 - 114,228 Interest expense - - 1 1 6 6 Depreciation and amortization 82,871 518,197 - 601,068 77,413 533,408 - 610,821 Income tax - 1,466,360 - 1,466,360 1,383,663 - 1,383,663 Net income (loss) (568,279 ) 4,423,549 (304,660 ) 3,550,610 (618,168 ) 4,152,346 (227,139 ) 3,307,039 Total capital expenditures 132,811 24,990 - 157,801 114,769 38,807 - 153,576 Total assets $ 3,315,693 44,904,281 16,004 48,235,978 $ 3,527,147 $ 42,227,720 $ 23 $ 45,754,890 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 - SUBSEQUENT EVENTS The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and determined that there are no additional items to disclose except the above-mentioned matters. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation This summary of significant accounting policies of the Company is presented to assist in understanding the Company’s consolidated financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the United States (“US GAAP”) and have been consistently applied in the preparation of the consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include China Health US and its four subsidiary companies, including China Health HK, Humankind and HLJ Huimeijia. All significant intercompany balances and transactions have been eliminated in consolidation and combination. On November 22, 2013, China Health US, through its wholly owned subsidiary Humankind, completed the acquisition of HLJ Huimeijia. HLJ Huimeijia and Humankind are under the common control of Mr. Xin Sun, the CEO of the Company before and after the date of transfer. Humankind’s accounting policy adopted the guidance in ASC 805-50-05-5 for the transfer of net assets between entities under common control to apply a method similar to the pooling-of-interests’ method. Under this method, the financial statements of Humankind shall report results of operations for the period in which the transfer occurs as though the transfer of net assets had occurred at the beginning of the period. Results of operations for that period will thus comprise both those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period. Similarly, Humankind shall present the statements of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date. Financial statements and financial information of Humankind presented for prior years also shall be retrospectively adjusted to furnish comparative information. |
Segment Reporting | Segment Reporting FASB ASC Topic 280, “Segment Reporting,” established 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 details on the Company’s business segments. The Company has three reportable operating segments: Humankind, HLJ Huimeijia and Others. The segments are grouped based on the types of products provided. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The provisions of accounting guidance, FASB ASC Topic 820 that applies to the Company requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. |
Fair Value Measurements | Fair Value Measurements FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. Various inputs are considered when determining the fair value of the Company’s debt. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below. Level 1 – observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets. Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.). Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a nonrecurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. The Company had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. |
Foreign Currency Translation and Transaction | Foreign Currency Translation and Transaction Humankind, Huimeijia and HLJ Huimeijia maintain their books and accounting records in PRC currency “Renminbi” (“RMB”), which has been determined as the functional currency. The functional currency of China Health HK is the Hong Kong Dollar (“HKD”). Transactions denominated in currencies other than the functional currencies are recorded at the exchange rates prevailing on the date of the transactions, as quoted by the Federal Reserve Board. Foreign currency exchange gains and losses resulting from these transactions are included in operations. Humankind, Huimeijia, HLJ Huimeijia and China Health Hong Kong’s financial statements are translated into the reporting currency, the United States Dollar (“USD”). Assets and liabilities of the above entities are translated at the prevailing exchange rate at each reporting period end date. Contributed capital accounts are translated using the historical rate of exchange when capital is injected. Income and expense accounts are translated at the average rate of exchange during the reporting period. Translation adjustments resulting from the translation of these financial statements are reflected as accumulated other comprehensive income in shareholders’ equity and non-controlling interests. For the purpose of presenting these financial statements, the Company’s assets and liabilities with functional currency of HKD are expressed in USD at the exchange rate on the balance sheet date, which was 7.7501 and7.8129 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.7942 and 7.8401 for the years ended June 30, 2020 and 2019, respectively. For Renminbi currency, the Company’s assets and liabilities are expressed in USD at the exchange rate on the balance sheet date, which was 7.0650 and 6.8668 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.0309 and 6.8234 for the years ended June 30, 2020 and 2019, respectively. |
Statement of Cash Flows | Statement of Cash Flows In accordance with Statement FASB ASC Topic 230, “Statement of Cash Flows,” cash flow from the Company’s operations is calculated based upon the local currencies and translated to the reporting currency using an average foreign exchange rate for the reporting period. As a result, amounts related to assets and liabilities reported in the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. |
Use of Estimates and Assumptions | Use of Estimates and Assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Significant estimates and assumptions by management include, among others; useful lives of long-lived assets and intangible assets, valuation of inventory, accounts receivable and notes receivable, impairment analysis of long-lived assets, construction in progress, intangible assets and deferred taxes. While the Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less at the time of purchase. As of June 30, 2020, and 2019, the Company’s uninsured bank balance was mainly maintained at financial institutions located in the PRC and Hong Kong, totaled $36,072,474 and $35,507,535, respectively. The Company has no insured bank balance as of June 30, 2020 and 2019, respectively. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and determined based on management’s assessment of known requirements, aging of receivables, payment and bad debt history, the customer’s current credit worthiness, changes in customer payment patterns and the economic environment. From November 1, 2013, the Company changed its credit policy by offering ninety (90) day payment terms for sales agents, whereas the payment terms for sales agents before November 1, 2013 were thirty (30) day. As of June 30, 2020 and 2019, the balances of accounts receivable were $4,631,861 and $1,987,505, respectively. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company evaluated the nature of all accounts receivable then provided allowance for doubtful accounts. As of June 30, 2020, and 2019, the balances of allowance for doubtful accounts were $68,003 and $71,713 respectively. |
Advance to Suppliers | Advance to Suppliers The Company periodically makes advances to certain vendors for purchases of raw materials, or service providers for services relating to construction plans for our plant, equipment and production lines for the GMP upgrading, and records these payments as advance to suppliers. The increase in the amount of advance to suppliers is due to Humankind’s prepaid equipment, which has not been shipped yet. As a result, as of June 30, 2020, and 2019, advance to suppliers amounted to $205,650 and $8,619 , respectively. |
Inventory | Inventory Inventory consists of raw materials, work in progress and finished goods of manufactured products. Inventory is stated at lower of cost or market and consists of materials, labor and overhead. HLJ Huimeijia uses the weighted average method for inventory valuation. The other entities of the Company use the first-in, first-out (“FIFO”) method for inventory valuation. Overhead costs included in finished goods include direct labor cost and other costs directly applicable to the manufacturing process. The Company evaluates inventory for excess, slow moving, and obsolete inventory as well as inventory the value of which is in excess of its net realizable value. This evaluation includes analysis of sales levels by product and projections of future demand. If future demand or market conditions are less favorable than the Company’s projections, a write-down of inventory may be required, and would be reflected in cost of goods sold in the period the revision is made. The inventory allowance with an amount of $nil and $nil were provided for the years ended June 30, 2020, and 2019, respectively. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company’s long-lived assets and other assets are reviewed for impairment in accordance with the guidance of the FASB ASC Topic 360-10, “Property, Plant, and Equipment,” and FASB ASC Topic 205, “Presentation of Financial Statements.” The Company tests for impairment losses on long-lived assets used in operations whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying amount of the asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates on asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on the Company’s reporting results and financial position. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of June 30, 2020, and 2019, the Company has not experienced impairment losses on its long-lived assets. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Maintenance, repairs and minor renewals are expensed as incurred, major renewals and improvements that extend the lives or increase the capacity of plant assets are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the results of operations in the reporting period of disposition. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. The depreciable lives applied are: Building, Warehouse and Improvements 20 to 30 years Office Equipment 3 to 7 years Vehicles 5 to15 years Machinery and Equipment 7 to 15 years |
Intangible Assets | Intangible Assets The Company evaluates intangible assets in accordance with FASB ASC Topic 350, “Intangibles — Goodwill and Other.” Intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment tests. If the assumptions and estimates used to allocate the purchase price are not correct, or if business conditions change, purchase price adjustments or future asset impairment charges could be required. The value of the Company’s intangible assets could be impacted by future adverse changes such as: (i) any future declines in the Company’s operating results, (ii) a decline in the valuation of technology, including the valuation of the Company’s common stock, (iii) a significant slowdown in the worldwide economy, or (iv) any failure to meet the performance projections included in the Company’s forecasts of future operating results. In accordance with FASB ASC Topic 350, the Company tests intangible assets for impairment on an annual basis or more frequently if the Company believes indicators of impairment exist. Impairment evaluations involve management estimates of asset useful lives and future cash flows. Significant judgment by management is required in the forecasts of future operating results that are used in the evaluations. It is possible, however, that the plans and estimates used may be incorrect. If the Company’s actual results, or the plans and estimates used in future impairment analysis, are lower than the original estimates used to assess the recoverability of these assets, we could incur additional impairment charges in a future period. Based on such evaluations, there were no impairments recorded for intangible assets for the years ended June 30, 2020, and 2019, respectively. |
Construction in Progress | Construction in Progress Construction in progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. Costs classified as construction in progress include all costs of obtaining the asset and bringing it to the location in the condition necessary for its intended use. No depreciation is provided for construction in progress until such time as the assets are completed and are placed into service. The Company reviews the carrying value of construction in progress for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value of the assets, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of the assets. The factors considered by Management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, there were no impairments recorded for construction in progress, for the years ended June 30, 2020 and June 30, 2019, respectively. However, there can be no assurances that demand for the Company’s products or services will continue, which could result in an impairment of long-lived assets in the future. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is identified in any contract and transferred to its customers. Control is generally transferred when the Company has a present right to payment and title and the significant risks and rewards of ownership of products or services are transferred to its customers while performance obligation are completed. For most of the Company’s products net sales, control transfers when products are shipped and transaction price are determined. The majority of the Company’s revenue relates to the sale of inventory to customers, and revenue is recognized when control of the products or services is transferred to its customers that reflects the performance obligations are properly allocated with transaction price and satisfied in the contract. Given the nature of the Company’s business and the applicable rules guiding revenue recognition, the Company’s revenue recognition practices do not contain estimates that materially affect the results of operations. The Company records revenue at the discounted selling price and allows its customers to return products for exchange or credit subject to certain limitations. A provision for such returns is recorded based upon historical experience. There has been no provision recorded for returns based upon historical experience for the years ended June 30, 2020 and 2019, respectively. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of the costs of raw materials, freight charges, direct labor, depreciation of plants and machinery, warehousing and overhead costs associated with the manufacturing process and commission expenses. |
Income Taxes | Income Taxes The Company adopts FASB ASC Topic 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is established for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize the benefits or that future deductibility is uncertain. Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. As a result of the implementation of FIN 48 (ASC 740-10), the Company undertook a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by FIN 48 (ASC 740-10). The Company recognized no material adjustments to liabilities or stockholders’ equity as a result of the implementation. The adoption of FIN 48 did not have a material impact on the Company’s financial statements. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from the Company’s estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or deferred tax asset valuation allowance. |
Enterprise Income Tax | Enterprise Income Tax Under the Provisional Regulations of PRC Concerning Income Tax on Enterprises promulgated by the PRC (the “EIT Law”), income tax is payable by enterprises at a rate of 25% of their taxable income. |
Value Added Tax | Value Added Tax The Provisional Regulations of the PRC Concerning Value Added Tax promulgated by the State Council came into effect on January 1, 1994. Under these regulations and the Implementing Rules of the Provisional Regulations of the PRC Concerning Value Added Tax, value added tax (“VAT”) is imposed on goods sold in, or imported into, the PRC and on processing, repair and replacement services provided within the PRC. VAT payable in the PRC is charged on an aggregated basis at a rate of 13% or 16% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 16% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of VAT included in the price or charges, and less any deductible VAT already paid by the taxpayer on purchases of goods and services in the same financial year. As of June 30, 2020 and June 30, 2019, VAT payables were $92,652 and $120,114, respectively. |
Sales-Related and Payroll Taxes | Sales-Related and Payroll Taxes Pursuant to the tax law and regulations of the PRC, the Company is obligated to pay 7% and 5% of the annual aggregate VAT paid by the Company as taxes for the purposes of maintaining and building cities and educational facilities, which fees are included as sales-related taxes. Sales-related taxes are recorded when sales revenue is recognized. |
Concentrations of Business and Credit Risks | Concentrations of Business and Credit Risks All of the Company’s manufacturing is located in the PRC. There can be no assurance that the Company will be able to successfully continue to manufacture its products and failure to do so would have a material adverse effect on the Company’s financial position, results of operations and cash flows. Moreover, the success of the Company’s operations is subject to numerous contingencies, some of which are beyond management’s control. These contingencies include general economic conditions, prices of raw materials, competition, governmental and political conditions, and changes in regulations. Since the Company is dependent on trade in the PRC, the Company is subject to various additional political, economic and other uncertainties. Among other risks, the Company’s operations will be subject to the risks of restrictions on transfer of funds, domestic customs, changing taxation policies, foreign exchange restrictions, and political and governmental regulations. The Company operates in China, which may give rise to significant foreign currency risks from fluctuations and the degree of volatility of foreign exchange rates between U.S. dollars and the Chinese currency RMB. The results of operations denominated in foreign currency are translated at the average rate of exchange during the reporting periods. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net earnings applicable to common shareholders by the weighted-average number of common shares outstanding during the period. When applicable, diluted earnings per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, consisting of shares that might be issued upon exercise of common stock options and warrants. For the years ended June 30, 2020 and 2019, the Company had no potential dilutive common stock equivalents outstanding. Potential common shares issued are calculated using the treasury stock method, which recognizes the use of proceeds that could be obtained upon the exercise of options and warrants in computing diluted earnings per share. It assumes that any proceeds would be used to purchase common stock at the average market price of the common stock during the period. FASB ASC Topic 260, “Earnings Per Share,” requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) – Measurement of Credit Losses on Financial Instruments (ASU 2016-13). The main objective of the standard is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In issuing this standard, the FASB is responding to criticism that today’s guidance delays recognition of credit losses. The standard will replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, will apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. The standard is applicable to loans, accounts receivable, trade receivables, and other financial assets measured at amortized cost, loan commitments and certain other off-balance sheet credit exposures, debt securities (including those held-to-maturity) and other financial assets measured at fair value through other comprehensive income, and beneficial interests in securitized financial assets. The CECL model does not apply to available-for-sale debt securities. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the credit losses will be recognized as allowances rather than reductions in the amortized cost of the securities. Accordingly, the new methodology will be utilized when assessing the Company’s financial instruments for impairment. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses. ASU 2016-13 is effective for years beginning after December 15, 2019, including interim periods within those fiscal years under a modified retrospective approach. Early adoption is permitted for the periods beginning after December 15, 2018. The Company plans to adopt the guidance from July 1, 2020. The Company finalized its analysis and believes the adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements and its internal controls over financial reporting. 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), which modifies the disclosure requirements on fair value measurements, including removing the requirement to disclose (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (2) the policy for timing of transfers between levels and (3) the valuation processes for Level 3 fair value measurements. ASU 2018-13 also added new disclosures including the requirement to disclose (a) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2019 and early adoption is permitted. This standard will only impact the disclosures pertaining to fair value measurements. The Company plans to adopt the guidance from July 1, 2020. The Company finalized its analysis and believes the adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial statements and its internal controls over financial reporting. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of straight-line basis over the estimated useful life of assets | Building, Warehouse and Improvements 20 to 30 years Office Equipment 3 to 7 years Vehicles 5 to15 years Machinery and Equipment 7 to 15 years |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | June 30, June 30, Raw Materials $ 278,189 $ 320,334 Supplies and Packing Materials 104,992 91,110 Work-in-Progress 78,132 85,191 Finished Goods 346,038 360,604 Total $ 807,351 $ 857,239 |
Construction in Progress (Table
Construction in Progress (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Construction In Progress Disclosure [Abstract] | |
Schedule of construction in progress | June 30, June 30, Plant - HLJ Huimeijia $ 511,664 $ 806,612 Factory Maintenance - HMK - 28,840 Total $ 511,664 $ 835,452 |
Property, Plants and Equipment
Property, Plants and Equipment (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plants and equipment | June 30, June 30, Building, Warehouses and Improvements $ 3,741,542 $ 3,474,056 Machinery and Equipment 1,729,239 1,876,174 Office Equipment 74,291 76,435 Vehicles 206,497 212,456 Others 912,674 910,178 Less Accumulated Depreciation (2,986,445 ) (2,829,875 ) Total $ 3,677,798 $ 3,719,424 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | June 30, June 30, Land Use Rights – Humankind $ 897,096 $ 922,990 Health Supplement Product Patents – Humankind 4,246,285 4,368,847 Pharmaceutical Patents - HLJ Huimeijia 370,017 380,697 Land Use Rights - HLJ Huimeijia 613,600 631,311 Less: Accumulated Amortization (3,877,384 ) (3,520,976 ) Intangible Assets, net, Held for Continuing Operations $ 2,249,614 $ 2,782,869 |
Related party debts (Tables)
Related party debts (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of related party debts | June 30, June 30, Mr. Xin Sun $ 7,226,764 $ 6,928,467 Mr. Kai Sun 33,098 34,053 Related Party Debts, Held for Continuing Operations $ 7,259,862 $ 6,962,520 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of taxes payable | June 30, June 30, Income tax payable $ 257,261 $ 422,519 Value-added tax payable 92,652 120,114 Other taxes payable 75,193 76,770 Total $ 425,106 $ 619,403 |
Schedule of reconciliation between actual provision for income taxes and the provision at the statutory rate | June 30, June 30, Pre-tax book income $ 5,016,970 $ 4,690,702 Federal statutory rate 21 % 21 % Income tax computed at U.S. federal statutory rate 1,053,564 985,047 Non-deductible staff welfare - 37,955 Foreign rate differential 211,264 141,394 Change in valuation allowance 201,532 219,267 Total provision for income taxes $ 1,466,360 $ 1,383,663 |
Schedule of provision for income taxes | For the Years Ended June 30, 2020 2019 Current provision: Domestic $ - $ - Foreign 1,469,931 1,383,702 Total current provision 1,469,931 1,383,702 Deferred provision: Domestic - - Foreign (3,571 ) (39 ) Total deferred provision (3,571 ) (39 ) Total provision for income taxes $ 1,466,360 $ 1,383,663 |
Schedule of components of deferred tax assets | June 30, June 30, Deferred tax assets Net operating loss carry forward $ 1,075,533 $ 869,502 Allowance for doubtful accounts 17,001 17,928 Valuation allowance (1,086,728 ) (885,195 ) Deferred tax assets, net $ 5,806 $ 2,235 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net income per share | For the Years Ended June 30, June 30, 2020 2019 Net income/(loss) $ 3,550,610 $ 3,307,039 Net income/(loss) per share: Net income (loss) per share Basic & diluted $ 0.0542 $ 0.0505 Weighted average shares outstanding: Basic & diluted 65,539,737 65,539,737 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of information by segment | For the Year Ended For the Year Ended HLJ Consolidated HLJ Consolidated Huimeijia Humankind Others operations Huimeijia Humankind Others operations Revenues $ 40,009 $ 9,891,878 $ - $ 9,931,887 $ 72,299 $ 9,203,087 $ - $ 9,275,386 Cost of revenues 46,897 2,610,147 - 2,657,044 119,772 2,118,239 - 2,238,011 Gross profit (loss) (6,888 ) 7,281,731 - 7,274,843 (47,473 ) 7,084,848 - 7,037,375 Interest income 24 125,598 5 125,627 39 114,189 - 114,228 Interest expense - - 1 1 6 6 Depreciation and amortization 82,871 518,197 - 601,068 77,413 533,408 - 610,821 Income tax - 1,466,360 - 1,466,360 1,383,663 - 1,383,663 Net income (loss) (568,279 ) 4,423,549 (304,660 ) 3,550,610 (618,168 ) 4,152,346 (227,139 ) 3,307,039 Total capital expenditures 132,811 24,990 - 157,801 114,769 38,807 - 153,576 Total assets $ 3,315,693 44,904,281 16,004 48,235,978 $ 3,527,147 $ 42,227,720 $ 23 $ 45,754,890 |
Organization and Business Bac_2
Organization and Business Background (Details) | Oct. 12, 2016USD ($) | Oct. 12, 2016CNY (¥) | Feb. 09, 2015USD ($) | Feb. 09, 2015CNY (¥) | Feb. 09, 2015USD ($) | Feb. 09, 2015CNY (¥) | Nov. 22, 2013USD ($) | Nov. 22, 2013CNY (¥) | Dec. 31, 2008shares | Aug. 20, 2007USD ($) | Jun. 30, 2020shares | Jun. 30, 2019shares | Dec. 24, 2014 | Apr. 07, 2009shares | Oct. 14, 2008 |
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Common Stock, Shares, Outstanding (in Shares) | 65,539,737 | 65,539,737 | |||||||||||||
Total cash consideration | $ | $ 1,306,186 | ||||||||||||||
Mr. Xin Sun [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Ownership percent | 1.00% | ||||||||||||||
Majority ownership, percent | 1.00% | ||||||||||||||
Supplementary Agreement [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Total cash consideration | $ 1,306,186 | ¥ 8,000,000 | ¥ 8,000,000 | $ 1,306,186 | ¥ 8,000,000 | ||||||||||
Equity interests, percentage | 100.00% | 100.00% | |||||||||||||
Percentage of purchase price paid | 80.00% | 80.00% | |||||||||||||
New Supplementary Agreement [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Total cash consideration | $ 1,306,186 | ¥ 8,000,000 | |||||||||||||
Equity interests, percentage | 100.00% | 100.00% | |||||||||||||
Purchase price, description | 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy complete three-batches production of all forms of the drugs included in the Assets. | 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy complete three-batches production of all forms of the drugs included in the Assets. | |||||||||||||
Harbin Humankind Biology Technology Co., Limited [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Ownership percent | 100.00% | 99.00% | |||||||||||||
Total purchase price | $ | $ 60,408 | ||||||||||||||
Harbin Huimeijia Medicine Company [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Ownership percent | 99.00% | ||||||||||||||
China Health Industries Holdings Limited [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Transaction and subsequent reverse stock split | After the Transaction and a 20:1 reverse stock split, Mr. Xin Sun owned 61,203,088 shares of common stock, representing 98.3% of the 62,234,737 total outstanding shares of common stock of China Health US. | ||||||||||||||
China Health Industries Holdings Limited [Member] | Mr. Xin Sun [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Number of shares held (in Shares) | 61,203,088 | 33,003,088 | |||||||||||||
Percentage of shares held | 98.30% | 53.03% | |||||||||||||
Common Stock, Shares, Outstanding (in Shares) | 62,234,737 | ||||||||||||||
Number of shares transferred (in Shares) | 28,200,000 | ||||||||||||||
Number of individuals | 296 | ||||||||||||||
Heilongjiang Huimeijia Pharmaceutical Co., Ltd. [Member] | |||||||||||||||
Organization and Business Background (Details) [Line Items] | |||||||||||||||
Total purchase price | $ 16,339,869 | ¥ 100,000,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 12 Months Ended | |
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | |
Significant Accounting Policies (Details) [Line Items] | ||
Number of reportable segment | 3 | |
Uninsured bank balances | $ 36,072,474 | $ 35,507,535 |
Accounts receivable | 4,631,861 | 1,987,505 |
Allowance for doubtful accounts | 68,003 | 71,713 |
Advance to suppliers | 205,650 | 8,619 |
Inventory net of allowances | ||
Tax settlement percentage | 50.00% | |
Percentage of enterprises tax rate | 25.00% | |
Income tax services rate percentage | 16.00% | |
Transfers and Servicing of Financial Assets, Policy [Policy Text Block] | $92,652 | $120,114 |
Foreign currency translation, description | the Company’s assets and liabilities with functional currency of HKD are expressed in USD at the exchange rate on the balance sheet date, which was 7.7501 and7.8129 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.7942 and 7.8401 for the years ended June 30, 2020 and 2019, respectively. For Renminbi currency, the Company’s assets and liabilities are expressed in USD at the exchange rate on the balance sheet date, which was 7.0650 and 6.8668 as of June 30, 2020 and June 30, 2019, respectively; stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rates during the year, which was 7.0309 and 6.8234 for the years ended June 30, 2020 and 2019, respectively. | |
Minimum [Member] | ||
Significant Accounting Policies (Details) [Line Items] | ||
VAT payable, percentage | 13.00% | |
Taxes on maintaining and building | 5.00% | |
Maximum [Member] | ||
Significant Accounting Policies (Details) [Line Items] | ||
VAT payable, percentage | 16.00% | |
Taxes on maintaining and building | 7.00% |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets | 12 Months Ended |
Jun. 30, 2020 | |
Building, Warehouse and Improvements [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 20 years |
Building, Warehouse and Improvements [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 30 years |
Office Equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 7 years |
Vehicles [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 5 years |
Vehicles [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 15 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 7 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of straight-line basis over the estimated useful life of assets [Line Items] | |
Estimated useful life | 15 years |
Assets sale (Details)
Assets sale (Details) | Oct. 12, 2016USD ($) | Oct. 12, 2016CNY (¥) | Feb. 09, 2015CNY (¥) | Feb. 09, 2015 | Feb. 09, 2015USD ($) | Feb. 09, 2015CNY (¥) | Dec. 24, 2014USD ($) | Dec. 24, 2014CNY (¥) |
Stock Transfer Agreement [Member] | ||||||||
Assets sale (Details) [Line Items] | ||||||||
Equity interests, percentage | 100.00% | 100.00% | ||||||
Total cash consideration | $ 1,306,186 | ¥ 8,000,000 | ||||||
Supplementary Agreement [Member] | ||||||||
Assets sale (Details) [Line Items] | ||||||||
Equity interests, percentage | 100.00% | 100.00% | ||||||
Total cash consideration | $ 1,306,186 | ¥ 8,000,000 | ¥ 8,000,000 | $ 1,306,186 | ¥ 8,000,000 | |||
Agreement terms, description | the four parties entered into a supplementary agreement (the “Supplementary Agreement”) to modify the terms of the Agreement, pursuant to which, the Equity Holders and Huimeijia (collectively the “Assets Transferors”) shall only sell the 19 drug approval numbers (including the tablet, capsule, powder, mixture, oral liquid, syrup and oral solution under the 19 approval numbers; licenses including the original copies of Business License, Organization Code Certificate, Tax Registration Certificate, Drug Production Permit and GMP Certificate, and other documents and original copies related to the production and operation of the 19 drugs) (the “Assets”) to Xiuzheng Pharmacy. | |||||||
Purchase Price, description | the Equity Holders. 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy to complete three-batches production of all forms of the drugs included in the Assets. As of the date of this report, 80% of the Purchase Price has been paid, the Company has completed changes in its business registration, and Xiuzheng Pharmacy has obtained a business license issued by the local State Administration of Industry and Commerce in Harbin (“Harbin SAIC”) to Huimeijia, in which the ownership of Huimeijia has been recorded as held by Xiuzheng Pharmacy, with Harbin SAIC and the legal representative (a person that is authorized to take most of the corporate actions on behalf of a company under the corporate laws in China) of Huimeijia has been appointed by the Buyer. | the Equity Holders. 40% of the Purchase Price was due within 10 business days after the signing of the New Supplementary Agreement; 40% of the Purchase Price was due within 10 business days after the completion of the changes in business registration described in the Original Agreement and Xiuzheng Pharmacy obtaining documents evidencing its ownership on Huimeijia; 15% of the Purchase Price is due within 10 business days after the transfer of all of the Assets is approved by Heilongjiang FDA; and 5% of the Purchase Price is due within 10 business days after all of the Assets have been transferred to Xiuzheng Pharmacy or its designee and Humankind and Mr. Xin Sun have instructed Xiuzheng Pharmacy to complete three-batches production of all forms of the drugs included in the Assets. As of the date of this report, 80% of the Purchase Price has been paid, the Company has completed changes in its business registration, and Xiuzheng Pharmacy has obtained a business license issued by the local State Administration of Industry and Commerce in Harbin (“Harbin SAIC”) to Huimeijia, in which the ownership of Huimeijia has been recorded as held by Xiuzheng Pharmacy, with Harbin SAIC and the legal representative (a person that is authorized to take most of the corporate actions on behalf of a company under the corporate laws in China) of Huimeijia has been appointed by the Buyer. |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Accounts Receivable (Textual) | ||
Accounts receivable | $ 4,631,861 | $ 1,987,505 |
Net of allowances for doubtful accounts | $ 68,003 | $ 71,713 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Inventory (Textual) | ||
Inventory allowance |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventory - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Schedule of inventory [Abstract] | ||
Raw Materials | $ 278,189 | $ 320,334 |
Supplies and Packing Materials | 104,992 | 91,110 |
Work-in-Progress | 78,132 | 85,191 |
Finished Goods | 346,038 | 360,604 |
Total | $ 807,351 | $ 857,239 |
Construction in Progress (Detai
Construction in Progress (Details) | Jun. 30, 2020USD ($) | Jun. 30, 2020CNY (¥) | Apr. 06, 2012USD ($) | Apr. 06, 2012CNY (¥) |
Construction in Progress (Textual) | ||||
Estimated total cost of construction | $ 1,860,000 | ¥ 12,800,000 | ||
Construction in progress, percentage | 78.00% | 78.00% | ||
Cost of construction in progress | $ 1,404,376 | ¥ 9,661,312 | ||
Construction in progress | $ 892,712 | ¥ 6,356,767 |
Construction in Progress (Det_2
Construction in Progress (Details) - Schedule of construction in progress - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Construction in Progress (Details) - Schedule of construction in progress [Line Items] | ||
Total | $ 511,664 | $ 835,452 |
Plant - HLJ Huimeijia [Member] | ||
Construction in Progress (Details) - Schedule of construction in progress [Line Items] | ||
Total | 511,664 | 806,612 |
Factory maintenance - HMK [Member] | ||
Construction in Progress (Details) - Schedule of construction in progress [Line Items] | ||
Total | $ 28,840 |
Property, Plants and Equipmen_2
Property, Plants and Equipment (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plants and Equipment (Textual) | ||
Depreciation expense | $ 347,923 | $ 346,377 |
Depreciation expense charged to operations | 143,555 | 139,519 |
Depreciation expense charged to cost of goods sold | $ 204,368 | $ 206,858 |
Property, Plants and Equipmen_3
Property, Plants and Equipment (Details) - Schedule of property, plants and equipment - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Less Accumulated Depreciation | $ (2,986,445) | $ (2,829,875) |
Total | 3,677,798 | 3,719,424 |
Building, Warehouses and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plants and equipment, Gross | 3,741,542 | 3,474,056 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plants and equipment, Gross | 1,729,239 | 1,876,174 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plants and equipment, Gross | 74,291 | 76,435 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plants and equipment, Gross | 206,497 | 212,456 |
Others [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plants and equipment, Gross | $ 912,674 | $ 910,178 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible Assets (Details) [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | |
Amortization expense (in Dollars) | $ 457,513 | $ 471,302 |
Commercial Purpose [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Finite-lived intangible asset, useful life | 50 years | |
Residential Purpose [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Finite-lived intangible asset, useful life | 70 years |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: Accumulated Amortization | $ (3,877,384) | $ (3,520,976) |
Intangible Assets, net, Held for Continuing Operations | 2,249,614 | 2,782,869 |
Land Use Right [Member] | Humankind [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, gross | 897,096 | 922,990 |
Land Use Right [Member] | HLJ Huimeijia [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, gross | 613,600 | 631,311 |
Health Supplement Product Patents [Member] | Humankind [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, gross | 4,246,285 | 4,368,847 |
Pharmaceutical Patents [Member] | HLJ Huimeijia [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, gross | $ 370,017 | $ 380,697 |
Related party debts (Details) -
Related party debts (Details) - Schedule of related party debts - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||
Related Party Debts, Held for Continuing Operations | $ 7,259,862 | $ 6,962,520 |
Mr. Xin Sun [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Debts, Held for Continuing Operations | 7,226,764 | 6,928,467 |
Mr. Kai Sun [Member] | ||
Related Party Transaction [Line Items] | ||
Related Party Debts, Held for Continuing Operations | $ 33,098 | $ 34,053 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
United States [Member] | ||
Income Taxes (Details) [Line Items] | ||
Operating loss carry forwards | $ 1,381,747 | $ 1,077,484 |
Description of federal corporate net operating loss expired years | The federal corporate net operating loss carryover is expired in 20 taxable years following the taxable year of the loss. | |
Operating loss carryforwards, description | the federal net operating loss for the fiscal years 2020 and 2019 in an amount of $304,263 and $290,122, respectively, will begin to expire in the years 2040 and 2039, respectively | |
China Health HK [Member] | ||
Income Taxes (Details) [Line Items] | ||
Operating loss carry forwards | $ 10,099 | 9,702 |
Valuation allowance of deferred tax assets | $ 397 | $ 598 |
People's Republic of china [Member] | ||
Income Taxes (Details) [Line Items] | ||
Standard EIT rate under EIT law | 25.00% | |
Effective income tax rate | 29.20% | 29.50% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of taxes payable - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Income tax payable | $ 257,261 | $ 422,519 |
Value-added tax payable | 92,652 | 120,114 |
Other taxes payable | 75,193 | 76,770 |
Total | $ 425,106 | $ 619,403 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of reconciliation between actual provision for income taxes and the provision at the statutory rate - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Pre-tax book income | $ 5,016,970 | $ 4,690,702 |
Federal statutory rate | 21.00% | 21.00% |
Income tax computed at U.S. federal statutory rate | $ 1,053,564 | $ 985,047 |
Non-deductible staff welfare | 37,955 | |
Foreign rate differential | 211,264 | 141,394 |
Change in valuation allowance | 201,532 | 219,267 |
Total provision for income taxes | $ 1,466,360 | $ 1,383,663 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of provision for income taxes - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | ||
Foreign | 1,469,931 | 1,383,702 |
Total current provision | 1,469,931 | 1,383,702 |
Domestic | ||
Foreign | (3,571) | (39) |
Total deferred provision | (3,571) | (39) |
Total provision for income taxes | $ 1,466,360 | $ 1,383,663 |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of components of deferred tax assets - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred tax assets | ||
Net operating loss carry forward | $ 1,075,533 | $ 869,502 |
Allowance for doubtful accounts | 17,001 | 17,928 |
Valuation allowance | (1,086,728) | (885,195) |
Deferred tax assets, net | $ 5,806 | $ 2,235 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of basic and diluted net income per share - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of basic and diluted net income per share [Abstract] | ||
Net income/(loss) | $ 3,550,610 | $ 3,307,039 |
Net income/(loss) per share: | ||
Net income (loss) per share Basic & diluted | $ 0.0542 | $ 0.0505 |
Weighted average shares outstanding: | ||
Basic & diluted | 65,539,737 | 65,539,737 |
Major Suppliers and Customers (
Major Suppliers and Customers (Details) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Purchases [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Number of suppliers | 3 | 3 |
Concentration risk, percentage | 75.00% | 75.00% |
Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 85.00% | 81.00% |
Number of customers | 6 | 6 |
Supplier One [Member] | Purchases [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 28.00% | 48.00% |
Supplier Two [Member] | Purchases [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 27.00% | 16.00% |
Supplier Three [Member] | Purchases [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 21.00% | 11.00% |
Customer One [Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 21.00% | 20.00% |
Customer Two [Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 17.00% | 16.00% |
Customer Three [Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 15.00% | 15.00% |
Customer Four [Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 12.00% | 11.00% |
Customer Five [Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 11.00% | 11.00% |
Customer Six {Member] | Total sales [Member] | ||
Major Suppliers and Customers (Details) [Line Items] | ||
Concentration risk, percentage | 9.00% | 8.00% |
Segment Reporting (Details)
Segment Reporting (Details) | Jun. 30, 2020 |
Segment Reporting [Abstract] | |
Number of business segments | 3 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of information by segment - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Hlj Huimeijia [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 40,009 | $ 72,299 |
Cost of revenues | 46,897 | 119,772 |
Gross profit (loss) | (6,888) | (47,473) |
Interest income | 24 | 39 |
Interest expense | ||
Depreciation and amortization | 82,871 | 77,413 |
Income tax | ||
Net income (loss) | (568,279) | (618,168) |
Total capital expenditures | 132,811 | 114,769 |
Total assets | 3,315,693 | 3,527,147 |
Humankind [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 9,891,878 | 9,203,087 |
Cost of revenues | 2,610,147 | 2,118,239 |
Gross profit (loss) | 7,281,731 | 7,084,848 |
Interest income | 125,598 | 114,189 |
Interest expense | ||
Depreciation and amortization | 518,197 | 533,408 |
Income tax | 1,466,360 | 1,383,663 |
Net income (loss) | 4,423,549 | 4,152,346 |
Total capital expenditures | 24,990 | 38,807 |
Total assets | 44,904,281 | 42,227,720 |
Others [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Cost of revenues | ||
Gross profit (loss) | ||
Interest income | 5 | |
Interest expense | 1 | 6 |
Depreciation and amortization | ||
Income tax | ||
Net income (loss) | (304,660) | (227,139) |
Total capital expenditures | ||
Total assets | 16,004 | 23 |
Consolidated operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 9,931,887 | 9,275,386 |
Cost of revenues | 2,657,044 | 2,238,011 |
Gross profit (loss) | 7,274,843 | 7,037,375 |
Interest income | 125,627 | 114,228 |
Interest expense | 1 | 6 |
Depreciation and amortization | 601,068 | 610,821 |
Income tax | 1,466,360 | 1,383,663 |
Net income (loss) | 3,550,610 | 3,307,039 |
Total capital expenditures | 157,801 | 153,576 |
Total assets | $ 48,235,978 | $ 45,754,890 |