Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Oct. 31, 2018 | Dec. 11, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | XT Energy Group, Inc. | |
Entity Central Index Key | 1,472,468 | |
Trading Symbol | XTNY | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2018 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,019 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 591,042,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Current assets | ||
Cash | $ 25,882,003 | $ 14,245,783 |
Notes receivable | 491,700 | 1,303,443 |
Accounts receivable, net | 2,791,284 | 5,142,780 |
Inventories, net | 5,530,021 | 5,141,533 |
Advances to suppliers | 4,713,028 | 1,101,472 |
Costs and estimated earnings in excess of billings | 2,815,830 | 2,883,408 |
Prepaid expenses | 1,150,088 | 1,364,501 |
Other receivables | 79,328 | 77,228 |
Other receivables - related party | 14,335 | |
Loan receivables | 1,759,428 | |
Deposit for investment | 415,723 | 439,857 |
Total current assets | 43,883,340 | 33,459,433 |
Other assets | ||
Property, plant and equipment, net | 11,958,536 | 11,966,233 |
Intangible assets, net | 8,870,063 | 9,260,643 |
Prepaid expenses - non-current | 240,936 | 208,498 |
Deferred tax assets | 17,125 | |
Goodwill | 4,041,069 | 4,133,143 |
Total other assets | 25,127,729 | 25,568,517 |
Total assets | 69,011,069 | 59,027,950 |
Current liabilities | ||
Short-term loan - bank | 716,764 | 733,095 |
Current maturities of long-term loan | 2,551,678 | 3,069,113 |
Short-term loan - third party | 175,943 | |
Short-term loans - related parties | 2,924,396 | 20,145,446 |
Accounts payable | 3,542,566 | 5,349,445 |
Advance from customers | 25,221,474 | 8,326,929 |
Other payables and accrued liabilities | 2,259,597 | 2,424,228 |
Other payables - related parties and director | 4,997,573 | 4,230,118 |
Income taxes payable | 1,146,808 | 898,424 |
Current maturities of investment payable | 134,522 | 2,505,871 |
Current maturities of investment payable - related parties | 355,290 | 507,143 |
Total current liabilities | 43,850,668 | 48,365,755 |
Other liabilities | ||
Investment payable | 5,474,241 | 6,700,774 |
Investment payable - related parties | 498,872 | 504,359 |
Total other liabilities | 5,973,113 | 7,205,133 |
Total liabilities | 49,823,781 | 55,570,888 |
Commitments and contingencies | ||
Equity | ||
Preferred stock: $0.001 par value, 100,000,000 shares authorized, none issued and outstanding | ||
Common stock: $0.001 par value, 1,000,000,000 shares authorized, 591,042,000 shares issued and outstanding as of October 31 and July 31, 2018 | 591,042 | 591,042 |
Additional paid-in capital | 24,393,071 | 9,860,068 |
Subscription receivable | (310,000) | (310,000) |
Statutory reserves | 258,030 | 108,487 |
Accumulated deficit | (5,517,175) | (6,743,399) |
Accumulated other comprehensive loss | (1,290,762) | (932,061) |
Total XT Energy Group, Inc. common shareholders' equity | 18,124,206 | 2,574,137 |
Noncontrolling interest | 1,063,082 | 882,925 |
Total equity | 19,187,288 | 3,457,062 |
Total liabilities and equity | $ 69,011,069 | $ 59,027,950 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2018 | Jul. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 591,042,000 | 591,042,000 |
Common stock, shares outstanding | 591,042,000 | 591,042,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Revenue: | ||
Revenue-products | $ 19,599,106 | $ 305,640 |
Revenue-installation of power systems | 389,332 | 49,554 |
Total revenue | 19,988,438 | 355,194 |
Cost of sales-products | 15,435,353 | 279,645 |
Cost of sales-installation of power systems | 357,570 | 37,999 |
Total cost of sales | 15,792,923 | 317,644 |
Gross profit | 4,195,515 | 37,550 |
Operating expenses: | ||
Selling expenses | 113,062 | 15,970 |
General and administrative expenses | 1,705,709 | 870,182 |
Recovery of doubtful accounts | (164,887) | |
Total operating expenses | 1,653,884 | 886,152 |
Income (loss) from operations | 2,541,631 | (848,602) |
Other (expenses) income | ||
Other (expenses) income, net | 30,755 | (4,431) |
Interest income | 9,195 | 328 |
Interest expense | (477,228) | |
Total other expenses, net | (437,278) | (4,103) |
Income (loss) before income taxes | 2,104,353 | (852,705) |
Income tax expense | (526,144) | (2,835) |
Net income (loss) | 1,578,209 | (855,540) |
Less: Net income attributable to non-controlling interest | 202,442 | |
Net income (loss) attributable to XT Energy Group, Inc. | 1,375,767 | (855,540) |
Net income (loss) | 1,578,209 | (855,540) |
Foreign currency translation adjustment | (380,986) | 89,875 |
Total comprehensive income (loss) | 1,197,223 | (765,665) |
Less: Comprehensive income attributable to non-controlling interest | 180,157 | |
Comprehensive income (loss) attributable to XT Energy Group, Inc. | $ 1,017,066 | $ (765,665) |
Net income (loss) per common share - basic and diluted | ||
Weighted average number of common shares outstanding - basic and diluted | 591,042,000 | 591,042,000 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 1,578,209 | $ (855,540) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation expense | 216,106 | 82,133 |
Amortization expense | 186,902 | |
Deferred tax expense | (17,369) | |
Provision for (recovery of) allowance for doubtful accounts | (164,887) | 1,576 |
Amortization of debt discount | 123,819 | |
Rent contributed by shareholders | 1,500 | |
Changes in operating assets and liabilities | ||
Notes receivable | 793,842 | |
Accounts receivable | 2,433,645 | 689,234 |
Inventories | (510,184) | (86,650) |
Advances to suppliers | (3,687,827) | 216,339 |
Costs and estimated earnings in excess of billings | 3,391 | 147,155 |
Prepaid expenses | 149,023 | |
Other receivables | (3,875) | (5,032) |
Accounts payable | (1,711,721) | (824,213) |
Advance from customers | 17,323,053 | (318,408) |
Other payables and taxes payable | 153,686 | (50,168) |
Net cash provided by (used in) operating activities | 16,865,813 | (1,002,074) |
Cash flows from investing activities: | ||
Payment to former shareholders on businesses acquired | (3,701,600) | |
Purchases of property and equipment | (478,662) | |
Refund of deposit investment | 14,539 | |
Collection of loan receivable | 1,744,708 | |
Issuance of notes receivable | (150,766) | |
Net cash used in investing activities | (2,421,015) | (150,766) |
Cash flows from financing activities: | ||
Borrowings from related parties and directors | 779,761 | |
Capital contribution from shareholders | 14,533,003 | |
Payments of short-term loan - bank | (455,453) | |
Payments of third party loan | (174,471) | |
Proceeds from related party loans | 2,035,492 | 147,661 |
Payments of related party loans | (19,046,392) | |
Net cash provided by (used in) financing activities | (2,328,060) | 147,661 |
Effect of exchange rate change on cash | (480,518) | 96,904 |
Net change in cash | 11,636,220 | (908,275) |
Cash - beginning of period | 14,245,783 | 1,156,969 |
Cash - end of period | 25,882,003 | 248,694 |
Supplemental disclosure of cash flow information: | ||
Interest paid | 49,848 | |
Income tax paid | 271,296 | 8,808 |
Supplemental non-cash investing and financing information: | ||
Rent contributed by shareholders | 1,500 | |
Receipt of property, plant and equipment from deposit made in prior year | 1,839,603 | |
Transfers from advances to suppliers to inventories | $ 305,819 |
Nature of Business and Organiza
Nature of Business and Organization | 3 Months Ended |
Oct. 31, 2018 | |
Nature of Business and Organization [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization XT Energy Group, Inc., formerly known as Xiangtian (USA) Air Power Co. Ltd. (the “Company” or “XT Energy”) was incorporated in the State of Delaware on September 2, 2008 as Goa Sweet Tours Ltd. On April 17, 2012, the Company entered into certain share purchase agreements, by and among Luck Sky International Investment Holdings Limited (“Lucky Sky”), an entity owned and controlled by Zhou Deng Rong, the former Chief Executive Officer and director of the Company, and certain of the Company’s former stockholders who owned, in the aggregate, 7,200,000 shares of the Company’s common stock (90% of the then outstanding shares). On May 15, 2012, Luck Sky purchased all 7,200,000 shares for an aggregate of $235,000. Effective May 29, 2012, the Company’s name was changed to “Xiangtian (USA) Air Power Co., Ltd.”. On May 30, 2014, the Company purchased 100% of the issued and outstanding shares of Luck Sky (Hong Kong) Aerodynamic Electricity Limited (“Xiangtian HK”) from its sole shareholder, Zhou Jian, who is also the Chairman of the Company. As a result of the acquisition, Xiangtian HK became the Company’s wholly owned subsidiary and the wholly owned subsidiary of Xiangtian HK in the People’s Republic of China (“China,” or the “PRC”), Luck Sky Aerodynamic and Luck Sky (Shenzhen) Aerodynamic Electricity Limited (“Xiangtian Shenzhen”) became the Company’s indirect subsidiary through Xiangtian HK. Effective October 31, 2016, the Company was reincorporated in Nevada as a result of its merger with and into our wholly owned Nevada subsidiary. The Company is engaged in a variety of energy-related businesses through its subsidiaries and controlled entities in China. One of the businesses is in the field of Compressed Air Energy Storage in China and produces electricity generation systems that combine its compressed air storage technology with photovoltaic (“PV”) panels to achieve a continuous supply of power under weather conditions that are unfavorable to the generation of electricity from PV panels alone. The sales and installation of power generation systems and PV systems and the sales of PV Panels, air compression equipment and heat pump products have been carried through the Company’s variable interest entities (“VIE”), Sanhe Luck Sky Electrical Engineering Co., Ltd. (“Sanhe Xiangtian”) and Xianning Xiangtian Energy Holding Group Co. Ltd. (“Xianning Xiangtian”), formerly known as Xianning Sanhe Power Equipment Manufacturing Co. Ltd. In March 2018, Xianning Xiangtian formed Xiangtian Zhongdian (Hubei) New Energy Co. Ltd. (“Xiangtian Zhongdian”), a joint venture in China, in which Xianning Xiangtian holds a 70% ownership interest with the remaining 30% ownership held by Nanjing Zhongdian Photovoltaic Co. Ltd. Xiangtian Zhongdian is in the business of manufacturing and sales of PV panels. In April 2018, Xianning Xiangtian formed a wholly owned subsidiary, Jingshan Sanhe Xiangtian New Energy Technology Co. Ltd. (“Jingshan Sanhe”), which engaged in the business of researching, manufacturing and sales of high-grade synthetic fuel products. In June 2018, Xianning Xiangtian acquired Hubei Jinli Hydraulic Co., Ltd. (“Hubei Jinli”), which is engaged in the business of manufacturing and sales of hydraulic parts and electronic components, and acquired Tianjin Jiabaili Petroleum Products Co. Ltd. (“Tianjin Jiabaili”), which is engaged in the business of manufacturing and sales of petroleum products (See Note 3 – Business combinations). In August 2018, Xianning Xiangtian formed a wholly owned subsidiary, Xianning Xiangtian Trade Co. Ltd. (“Xiangtian Trade”), which is engaged in the business of trading chemical raw materials for the purpose of providing a stable supply for fuel product operation. Xiangtian Trade has no operations since it was incorporated. In September and October 2018, Mr. Jian Zhou, the Company’s chairman and a shareholder of Xianning Xiangtian provided Chinese Renminbi (“RMB”) 100,000,000 (approximately $14.5 million) as capital contribution to Xianning Xiangtian. On November 5, 2018, the Company changed its name to XT Energy Group, Inc. through a merger with and into a newly formed, wholly-owned subsidiary, which subsidiary was formed for purposes of the name change. Reorganization On September 30, 2018, Xiangtian Shenzhen terminated its variable interest entity agreements (the “VIE Agreements”) as part of its restructuring to facilitate the shift of business focus between entities controlled by the Company. After the restructuring, the Company’s headquarters is located in the city of Xianning, Hubei Province, and Sanhe Xiangtian, the Company’s previous headquarters, located in the city of Sanhe, Hebei Province, became the Company’s sales office. The VIE Agreements include the following: ● Framework Agreement on Business Cooperation, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Management, Consulting and Training and Technical Service Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Option Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and all the shareholders of Sanhe Xiangtian (“Shanhe Xiangtian Shareholders”); ● Equity Pledge Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and the Shanhe Xiangtian Shareholders; ● Know-How Sub-License Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; and ● Powers of Attorney of the Sanhe Xiangtian Shareholders dated July 25, 2014. In connection with the termination of the VIE Agreements, on September 30, 2018, Sanhe Xiangtian transferred its 100% equity interest of Xianning Xiangtian to the Sanhe Xiangtian Shareholders and the Sanhe Xiangtian Shareholders transferred their 100% equity interest of Sanhe Xiangtian to Xianning Xiangtian. As a result of the foregoing equity transfers, Sanhe Xiangtian became a wholly owned subsidiary of Xianning Xiangtian. On the same day, the Company, through Xiangtian Shenzhen and Xiangtian HK, entered into a new series of variable interest entity agreements (“New VIE Agreements”), pursuant to which Xianning Xiangtian became the Company’s new contractually controlled affiliate. The New VIE Agreements allow us to: ● exercise effective control over Xianning Xiangtian; ● receive substantially all of the economic benefits of Xianning Xiangtian; and ● have an exclusive option to purchase all or part of the equity interests in Xianning Xiangtian when and to the extent permitted by the laws of the PRC. Framework Agreement on Business Cooperation Pursuant to the Framework Agreement on Business Cooperation between Xiangtian Shenzhen and Xianning Xiangtian, the parties agreed to enter into a series of agreements, including Agreement of Exclusive Management, Consulting and Training and Technical Service, Know-How Sub-License Agreement, Equity Pledge Agreement, Exclusive Option Agreement and Power of Attorney. Specifically, Xiangtian Shenzhen will dispatch an operative team to Xianning Xiangtian to assist with Xianning Xiangtian with its planning and managing and regular business operations. The parties agree to share the cooperation profits as set forth in the New VIE Agreements. The term of cooperation is 10 years and may be unilaterally extended by Xiangtian Shenzhen. Agreement of Exclusive Management, Consulting and Training and Technical Service Pursuant to the Agreement of Exclusive Management, Consulting and Training and Technical Service between Xiangtian Shenzhen and Xianning Xiangtian, Xianning Xiangtian engaged Xiangtian Shenzhen to provide consulting, training, management services and technical support exclusively for a term of 10 years, which may be unilaterally extended by Xiangtian Shenzhen. Xianning Xiangtian agrees to pay Xiangtian Shenzhen a service fee equal to one hundred percent (100%) of Xianning Xiangtian’s net income determined pursuant to the generally accepted accounting principles, payable quarterly. Exclusive Option Agreement Pursuant to the Exclusive Option Agreement among Xiangtian Shenzhen, Xiangtian HK, Xianning Xiangtian and the shareholders holding an aggregate of 100% of Xianning Xiangtian’s equity interest (“Xianning Xiangtian Shareholders”), the Xianning Xiangtian Shareholders irrevocably granted Xiangtian Shenzhen and Xiangtian HK an exclusive option to purchase from them, at its discretion, to the extent permitted under the PRC law, all or part of their equity interest in Xianning Xiangtian, and the purchase price will be the lowest price permitted by applicable PRC laws. The timing, method and times of exercise of this option to purchase is within Xiangtian Shenzhen and Xiangtian HK’s sole discretion. In addition, each of the Xianning Xiangtian Shareholders agrees to waive their respective preemptive right when the other shareholder transfers the equity interest of Xianning Xiangtian to Xiangtian Shenzhen or its designated party. The Xianning Xiangtian Shareholders further agree, among other things, without prior written consent of Xiangtian Shenzhen and Xiangtian HK, not to transfer, sell or pledge their equity interest of Xianning Xiangtian. Without the prior written consent of Xiangtian Shenzhen and Xiangtian HK, Xianning Xiangtian may not amend its articles of association, change the amount and structure of its registered capital or sell any of its assets or beneficial interest. Equity Pledge Agreement Pursuant to the Equity Pledge Agreement among Xiangtian Shenzhen, Xianning Xiangtian and the Xianning Xiangtian Shareholders, the Xianning Xiangtian Shareholders pledged all of their respective equity interest in Xianning Xiangtian to Xiangtian Shenzhen to guarantee the performance of Xianning Xiangtian’s obligations under the New VIE Agreements, other than the Equity Pledge Agreement. Xiangtian Shenzhen will be deemed to have created the encumbrance of first order in priority on the pledged equity interest. In the event of any breach of the VIE Agreements, other than this Equity Pledge Agreement, or failure to satisfy the guaranteed obligations, Xiangtian Shenzhen will have the right to dispose of the pledged equity interest. The Xianning Xiangtian Shareholders may receive dividends or share profits only with prior consent from Xiangtian Shenzhen, and such dividends and profits will be deposited into a bank account designated by and under supervision of Xiangtian Shenzhen and to be used for repayment of any liability due to any breach of the VIE Agreements by Xianning Xiangtian or the Xianning Xiangtian Shareholders. The agreement will remain effective until the termination of the VIE Agreements, other than this Equity Pledge Agreement. Know-How Sub-License Agreement Pursuant to the Know-How Sub-License Agreement between Xiangtian Shenzhen and Xianning Xiangtian, Xiangtian Shenzhen agreed to grant an exclusive and non-transferable sublicense to use the patents, patent applications and all related trade secrets and technology and improvements on photovoltaic installation and the air energy storage power generation technology (“Technology”) but without sublease right in the territory of China, exclusive of the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region for the purpose of the agreement. Xianning Xiangtian agreed to pay Xiangtian Shenzhen a quarterly royalty fee equal to five percent (5%) of Xianning Xiangtian’s gross revenue of each quarter. The shareholders of Xianning Xiangtian pledged all of their equity interest of Xianning Xiangtian as collateral for the royalty fee payable under this agreement. The agreement will remain effective throughout the entire duration of Xianning Xiangtian operations, unless terminated by Xiangtian Shenzhen with a 30-day prior written notice. Power of Attorney Pursuant to the Powers of Attorney executed by the Xianning Xiangtian Shareholders, each of the shareholders irrevocably appointed Xiangtian Shenzhen as his attorney-in-fact to exercise any and all rights as a shareholder of Xianning Xiangtian, including, but not limited to, the right to attend shareholders’ meetings, to execute shareholders’ resolutions, to sell, assign, transfer or pledge any or all of his equity interest of Xianning Xiangtian, to vote as a shareholder for all matters, as well as full power to execute equity transfer agreement as referenced in the Exclusive Option Agreement and to perform under the Exclusive Option Agreement and Equity Pledge Agreement without limitation. Xiangtian Shenzhen is also authorized to transfer, allocate or use any cash dividends and non-cash income in accordance with the respective shareholder’s instructions and to exercise all the necessary rights associated with the equity interest at Xiangtian Shenzhen’s sole discretion and without the consent of the Xianning Xiangtian Shareholders. The Powers of Attorney will remain effective as long as the Xianning Xiangtian Shareholders remain the shareholders of Xianning Xiangtian. Spousal Consent Letters Pursuant to the Spousal Consent Letters, each of the spouses of the Xianning Xiang Shareholders unconditionally and irrevocably agreed to the execution of the Equity Pledge Agreement, Exclusive Option Agreement and Power of Attorney entered by her spouse and the disposal of equity interest of Xianning Xiangtian held by her spouse. Each of the spouses also agreed that she will not assert any rights over the equity interest in Xianning Xiangtian held by and registered in the name of her respective spouse. The Xianning Xiangtian Shareholders’ actions to perform, amend or termination the above-mentioned agreement do not need their spouses’ authorization or consent. In addition, in the event that any of the spouses obtains any equity interest in Xianning Xiangtian held by her respective spouse for any reason, such spouse agrees to enter into similar contractual arrangements. All of the Company’s operations are through its VIEs located in the PRC. The accompanying unaudited condensed consolidated financial statements reflect the activities of XT Energy and each of the following entities: Name Background Ownership Xiangtian HK ● A Hong Kong company 100% owned by XT Energy Xiangtian BVI ● A British Virgin Islands company 100% owned by XT Energy Xiangtian Shenzhen ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Xiangtian HK Sanhe Xiangtian ● A PRC limited liability company ● Incorporated on July 8, 2013 ● Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter Xianning Xiangtian ● A PRC limited liability company ● Incorporated on May 30, 2016 ● Manufacturing and sales of air compression equipment and heat pump products 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter Xiangtian Zhongdian ● A PRC limited liability company ● Incorporated on March 7, 2018 ● Manufacturing and sales of PV panels 70% owned by Xianning Xiangtian Jingshan Sanhe ● A PRC limited liability company ● Incorporated on April 17, 2018 ● Researching, manufacturing and sales of high-grade synthetic fuel products 100% owned by Xianning Xiangtian Hubei Jinli ● A PRC limited liability company ● Incorporated on December 27, 2004 and acquired on June 30, 2018 ● Manufacturing and sales of hydraulic parts and electronic components 100% owned by Xianning Xiangtian Tianjin Jiabaili ● A PRC limited liability company ● Incorporated on April 10, 2007 and acquired on June 30, 2018 ● Manufacturing and sales of petroleum products 100% owned by Xianning Xiangtian Xiangtian Trade ● A PRC limited liability company ● Incorporated on August 9, 2018 ● Trading chemicals raw materials for the purpose of providing a stable supply for synthetic fuel product operation of the Company 100% owned by Xianning Xiangtian |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Oct. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Liquidity In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing in the form of loans payable and loans from related parties have been utilized to finance the working capital requirements of the Company. As of October 31, 2018, the Company’s net working capital was approximately $33,000 and the Company had cash of approximately $25.9 million. Although the Company believes that it can realize its current assets in the normal course of business, the Company’s ability to repay its current obligations will depend on the future realization of its current assets and the future operating revenues generated from its operations. The Company expects to realize the balance of its current assets within the normal operating cycle of a twelve month period. If the Company is unable to realize its current assets within the normal operating cycle of a twelve month period, the Company may have to consider supplementing its available sources of funds through the following sources: ● the Company will continuously seek equity financing to support its working capital; ● other available sources of financing from PRC banks and other financial institutions; ● financial support and credit guarantee commitments from the Company’s related parties or to obtain due date extension of approximately $5.5 million current payable balance as of October 31, 2018 from its related parties. Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due one year from the date of this report. However, there is no assurance that management will be successful in their plans. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as changes in the demand for the Company’s products or installations, PRC government policy, economic conditions, and competitive pricing in the industries that the Company operated in. Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s unaudited condensed consolidated financial statements are expressed in U.S. dollars. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s financial position, its results of operations and its cash flows, as applicable, have been made. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s July 31, 2018 annual report on Form 10-K filed on October 30, 2018. Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs for which the Company or its subsidiary is the primary beneficiary and the VIEs’ subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the estimated cost used to calculate the percentage of completion recognized in the Company’s revenues, the useful lives of property, plant and equipment, impairment of long-lived assets, allowance for accounts receivable doubtful accounts, allowance for inventory obsolescence reserve, allowance for advance to suppliers doubtful accounts, allowance for deferred tax assets, fair value of the assets and the liabilities of the entity acquired through its business combination, valuation of warranty reserves, contingent consideration liabilities, and the accrual of potential liabilities. Actual results could differ from these estimates. Variable interest entities On September 30, 2018, Xiangtian Shenzhen terminated the VIE Agreements as part of its restructuring to facilitate the shift of business focus between entities controlled by the Company. After the restructuring, the Company’s headquarter is now located in the city of Xianning, Hubei Province, and Sanhe Xiangtian, the Company’s previous headquarters, located in the city of Sanhe, Hebei Province, has become the Company’s sales office. The VIE Agreements include the following: ● Framework Agreement on Business Cooperation, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Management, Consulting and Training and Technical Service Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Option Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and Shanhe Xiangtian Shareholders; ● Equity Pledge Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and the Shanhe Xiangtian Shareholders; ● Know-How Sub-License Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; and ● Powers of Attorney of the Sanhe Xiangtian Shareholders dated July 25, 2014. In connection with the termination of the VIE Agreements, on September 30, 2018, Sanhe Xiangtian transferred its 100% equity interest of Xianning Xiangtian to the Sanhe Xiangtian Shareholders and the Sanhe Xiangtian Shareholders transferred their 100% equity interest of Sanhe Xiangtian to Xianning Xiangtian. As a result of the foregoing equity transfers, Sanhe Xiangtian became a wholly owned subsidiary of Xianning Xiangtian. On the same day, the Company, through Xiangtian Shenzhen and Xiangtian HK, entered into the New VIE Agreements, pursuant to which Xianning Xiangtian became the Company’s new contractually controlled affiliate. The principal terms of the agreements entered into among Xianning Xiangtian and Xiangtian Shenzhen, the primary beneficiary, are described below: ● Framework Agreement on Business Cooperation ● Agreement of Exclusive Management, Consulting and Training and Technical Service ● Exclusive Option Agreement ● Equity Pledge Agreement ● Know-How Sub-License Agreement ● Power of Attorney ● Spousal Consent Letters The Framework Agreement and the Exclusive Management Agreement have initial terms of ten years but each contains a renewal provision that allows Xiangtian Shenzhen to extend the term of such agreements at its sole option by written notice with no limitation as to such extensions. The Know-How Sub-License Agreement is valid for the duration of Xianning Xiangtian’s operation. The other agreements are of unlimited duration. The Company’s total assets and liabilities presented in the accompanying unaudited condensed consolidated financial statements represent substantially all of total assets and liabilities of the VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities. The following financial statement amounts and balances of the VIE were included in the accompanying unaudited condensed consolidated financial statements as of October 31, 2018 and July 31, 2018 and for the three months ended October 31, 2018 and 2017, respectively: October 31, July 31, Current assets $ 43,646,134 $ 33,240,433 Non-current assets 25,127,729 25,568,517 Total assets $ 68,773,863 $ 58,808,950 Current liabilities $ 41,506,532 $ 46,576,026 Non-current liabilities 5,973,113 7,205,133 Total liabilities $ 47,479,645 $ 53,781,159 For the three months ended For the three months ended Revenues $ 19,988,438 $ 355,194 Gross Profit $ 4,195,515 $ 37,550 Income (loss) from operations $ 3,037,062 $ (687,677 ) Net income (loss) $ 1,869,784 $ (691,802 ) Business Combinations The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition. Cash Cash denominated in RMB with a US dollar equivalent of $25,844,616 and $14,207,358 at October 31, 2018 and July 31, 2018, respectively, were held in accounts at financial institutions located in the PRC‚ which is not freely convertible into foreign currencies. In addition, these balances are not covered by insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness The Company and its subsidiaries and VIE have not experienced any losses in such accounts and do not believe the cash is exposed to any significant risk. Notes Receivable Notes receivable represents commercial notes due from various customers where the customers’ banks have guaranteed the payments. The notes are noninterest bearing and normally paid within three to six months. The Company has the ability to submit requests for payments to the customer’s banks earlier than the scheduled payments date, but will incur an interest charge and a processing fee. Accounts Receivable, net Accounts receivables, net, are recognized and carried at original invoiced amount less an allowance for any uncollectible accounts. The Company uses the aging method to estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debts determined by management are based on historical experience as well as the current economic climate and are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. Inventories, net Inventories, net, consist of raw materials, work in progress and finished goods and are stated at the lower of cost or net realizable value using the weighted average method. When appropriate, allowances to inventories are recorded to write down the cost of inventories to their net realizable value. As of October 31, 2018 and July 31, 2018, there were no such allowances. Advances to Suppliers, net Advances to suppliers, net, are cash deposited or advanced to outside vendors or services providers for future inventory purchases or future services. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. Costs and Estimated Earnings in Excess of Billings Costs and estimated earnings in excess of billings represents revenues recognized in excess of amounts billed. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the unaudited condensed consolidated financial statements. Loans Receivables Loans receivables represents interest free advances to the former shareholder of Hubei Jinli by the Company prior to the acquisition of Hubei Jinli on June 30, 2018. These advances were unsecured and due on demand. Full outstanding balance of $1,759,428 of loan receivables as of July 31, 2018 were repaid in August 2018. Property, Plant and equipment, net Property, plant and equipment are stated at cost net of accumulated depreciation and impairment losses. Depreciation is provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets’ estimated residual value: Classification Estimated Useful Life Estimated Residual Value Plant and buildings 5-20 years 0-5% Machinery equipment 5-10 years 0-5% Computer and office equipment 3-10 years 0-5% Vehicles 5-10 years 0-5% Plant improvement 20 years 0-5% The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and other comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction of the Company’s production warehouses, cafeteria, and employee dormitory. No depreciation is provided for construction-in-progress until it is completed and placed into service. Intangible assets, net Intangible assets, net, are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets as follows: Classification Estimated Useful Life Land use rights 50 years Technology know-hows 10 years Patents, licenses and certifications 3-10 years All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained rights to use various parcels of land for 50 years through the acquisition of Hubei Jinli in June 2018. Technology know-hows, including LSC Hand-Held Diesel Pump, CB-39 Motor Oil Pump, 0-16 MPa series hydraulic cylinder, brake cylinder and hydraulic value, and certain special operating licenses were acquired through the acquisition of Hubei Jinli and Tianjin Jiabaili in June 2018 with estimated finite useful lives between 4.5 years to 10 years. Certain PV panel certifications were contributed by the Company’s noncontrolling interest shareholders as capital contribution in March 2018 with an estimated finite useful lives of 10 years. The Company also acquired a safety production license with a finite useful of 3 years in June 2018. Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive loss. Impairment losses on goodwill are not reversed. As of October 31 and July 31, 2018, no impairment of goodwill was recognized. Impairment for Long-Lived Assets Long-lived assets, including plant and equipment and intangible with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of October 31, 2018 and July 31, 2018, no impairment of long-lived assets was recognized. Subscription receivable Subscription receivable represents unpaid capital contribution from its shareholders. Fair Value Measurement The Company applies the provisions of Accounting Standards Codification (“ASC”) Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of October 31, 2018. The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of October 31, 2018: Financial liabilities Carrying Value Fair Value Measurements at October 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 324,121 $ - $ - $ 324,121 Financial liabilities Carrying Value Fair Value Measurements at July 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 331,505 $ - $ - $ 331,505 The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the three months ended October 31, 2018 and for the year ended July 31, 2018: October 31, July 31, Beginning balance $ 331,505 $ - Contingent liability obligated from business combinations - 341,411 Exchange rate effect (7,384 ) (9,906 ) Ending balance $ 324,121 $ 331,505 The Company believes the carrying amount reported in the consolidated balance sheet for cash, notes receivable, accounts receivable, inventories, advance to suppliers, costs and estimated earnings in excess of billings, prepaid expenses, other receivables, loan receivables, short-term loans, accounts payable, advances from customers, other payables and accrued liabilities, tax payables and short-term investment payable approximate fair value because of the short-term nature of such instruments. The carrying amount of long-term investment payable reported in the consolidated balance sheets at carrying value, which approximates fair value as the rate of amortization of investment payment discount used were similar to interest rate charged by the bank in the PRC. As of October 31 and July 31, 2018, long-term investment payable balance was $5,973,113, net of discount of $876,577 and $7,205,133, net of discount of $869,173, respectively. Revenue Recognition On August 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC Topic 606) using the modified retrospective method for contracts that were not completed as of July 31, 2018. This did not result in an adjustment to the retained earnings upon adoption of this new guidance as the Company’s revenue was recognized based on the amount of consideration expected to receive in exchange for satisfying the performance obligations. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized over time for the Company’s sale and installation of power generation systems and are recognized at a point in time for the Company’s sale of products. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition. Sale and installation of power generation systems Sales of power generation system in conjunction of system installation are generally recognized based on the Company’s efforts or inputs to the satisfaction of a performance obligation using an input measure method, which essentially the same as the percentage of completion method prior to August 1, 2018 for its installation project. Therefore, take into account the costs, estimated earnings and revenue to date on contracts not yet completed. Revenue recognized is that percentage of the total contract price that costs expended to date bear to anticipated final total costs, based on current estimates of costs to complete. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor and supplies. Adjustments to the original estimates of the total contract revenue, total contract costs, or the extent of progress toward completion are often required as work progresses. Such changes and refinements in estimation are reflected in reported results of operations as they occur; if material, the effects of changes in estimates are disclosed in the notes to the unaudited condensed consolidated financial statements. The key assumptions used in the estimate of costs to complete relate to the unit material cost, the quantity of materials to be used, the installation cost and those indirect costs related to contract performance. The estimate of unit material cost is reviewed and updated on a quarterly basis, based on the updated information available in the supply markets. The estimate of material quantity to be used for completion and the installation cost is also reviewed and updated on a quarterly basis, based on the updated information on the progress of project execution. If the supply market conditions or the progress of project execution were different, it is likely that materially different amounts of contract costs would be used in the percentage of completion method of accounting. Thus the uncertainty associated with those estimates may impact the Company’s unaudited condensed consolidated financial statements. Selling, general, and administrative costs are charged to expense as incurred. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the unaudited condensed consolidated financial statements. Claims for additional contract costs are recognized upon a signed change order from the customer. The installation revenues and sales of equipment and system component are combined and considered as one performance obligation. The promises to transfer the equipment and system component and installation are not separately identifiable, which is evidencing by the fact that the Company provides a significant services of integrating the goods and services into a power generation system for which the customer has contracted. The Company currently do not have any modification of contract and the contract currently does not have any variable consideration. Sales of products The Company continues to derive its revenues from sales contracts with its customers with revenues being recognized upon delivery of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. Such revenues are recognized at a point in time after all performance obligations are satisfied and based on when control of goods transfer to a customer, which is generally similar to when its delivery has occurred prior to August 1, 2018. The Company’s disaggregate sale of products streams for the three months ended October 31, 2018 and 2017 are summarized as follows: For the three months For the three months Revenues PV panels and others $ 9,101,844 $ 305,640 Air compression equipment and other components 1,001,211 - Heat pumps 4,243,564 - High-grade synthetic fuel 4,096,752 - Hydraulic parts and electronic components 1,155,735 - Total revenue $ 19,599,106 $ 305,640 Warranty The Company generally provides limited warranties for work performed under its contracts. The warranty periods typically extend for up to five years following substantial completion of the Company’s work on a project. At the time a sale is recognized, the Company records estimated future warranty costs under ASC 460. Such estimated costs for warranties are estimated at completion and these warrants are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate. There were no such reserves record for the three months ended October 31, 2018 and 2017. No right of return exists on sales of inventory. As of October 31 and July 31, 2018, accrued warranty expense amounted to $64,325 and $67,651, respectively, and classified in the caption “other payables and accrued liabilities” in the accompanying unaudited condensed consolidated balance sheets. Advertising costs Advertising costs are expensed as incurred and included in selling and general and administrative expenses. Advertising costs amounted to $31,972 and $0 for the three months ended October 31, 2018 and 2017, respectively. Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $42,722 and $26,327 for the three months ended October 31, 2018 and 2017, respectively. Value added taxes The Company is subject to value added tax (“VAT”). Revenue from sales of goods purchased from other entities is generally subject to VAT at the rate of 16% starting in May 2018 or at the rate of 17% in April 2018 and prior. The Company is entitled to a refund for VAT already paid on goods purchased. The VAT balance is recorded in other payables on the consolidated balance sheets. Revenues are presented net of applicable VAT. Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2015 to 2017 are subject to examination by any applicable tax authorities. Comprehensive Income (Loss) The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) ASC 220 “Reporting Comprehensive Income”. Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company had other comprehensive (loss) income of ($380,986) and 89,875 for the three months ended October 31, 2018 and |
Business Combinations
Business Combinations | 3 Months Ended |
Oct. 31, 2018 | |
Business Combinations [Abstract] | |
Business combinations | Note 3 – Business combinations Acquisition of Hubei Jinli On June 21, 2018, Xianning Xiangtian entered into a share purchase agreement (the “Jinli Agreement”) with Sheng Zhou and Heping Zhang, former shareholders of Hubei Jinli (collectively the “Jinli Sellers”). Neither Xianning Xiangtian nor its affiliates have any material relationship with the Jinli Sellers other than with respect to the Jinli Agreement. Pursuant to the Jinli Agreement, Xianning Xiangtian agreed to acquire 100% of the capital stock of Hubei Jinli collectively held by the Jinli Sellers (the “Jinli Acquisition”), for an aggregate consideration of RMB 150 million (approximately $23.18 million), consisting of the following: (a) RMB 40 million (approximately $6.18 million) in cash (the “Jinli Cash Portion”); and (b) shares of the Company’s common stock (the “Jinli Stock Portion”) which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian’s common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli’s existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). The existing bank loan did not count toward the purchase price as it is considered to be assumed debt as part of the Hubei Jinli’s net assets. Pursuant to the Jinli Agreement, the Jinli Cash Portion shall be paid within seven days of the Jinli Agreement, and the Jinli Acquisition shall be closed within one month after payment of the Jinli Cash Portion. On June 21, 2018, Xianning Xiangtian, entered into a supplemental agreement to the Stock Purchase Agreement (the “Supplement Agreement”) with the Jinli Sellers, pursuant to which the Jinli Sellers have the right to demand that Xianning Xiangtian pay RMB 80.07 million (approximately $12.37 million) plus interest to repurchase the Stock Portion if the Company does not list its common stock on the Nasdaq Stock Market by June 21, 2019. On June 30, 2018, the parties consummated the Jinli Acquisition. Pursuant to the Supplement Agreement, after the Jinli Acquisition, should Hubei Jinli’s annual net profit (the “Jinli Net Profit”) exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 10% of the Jinli Net Profit. On August 25, 2018, Xianning Xiangtian and the Jinli Sellers amended this annual net profit sharing clause to define the annual net profit sharing period to be one year from June 21, 2018 to June 20, 2019. On August 11, 2018, Xianning Xiangtian and the Jinli Sellers amended the payment term of the Jinli Stock Portion which shall have a value equal to RMB 80.07 million (approximately $12.37 million) to comprise three cash installments of 1) first installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2019, 2) second installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2020, and 3) third installment of RMB 30.07 million (approximately $4.75 million) payable by June 20, 2021. The Company’s acquisition of Hubei Jinli was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Hubei Jinli based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the consideration transferred to acquire Hubei Jinli at the date of acquisition: Cash $ 6,040,015 Present value of cash installments 10,996,129 Contingent purchase prices payment 137,561 Total consideration at fair value $ 17,173,705 The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Hubei Jinli based on a valuation performed by an independent valuation firm engaged by the Company: Fair Value Cash $ 33,402 Accounts receivable, net 2,561,863 Inventories, net 455,247 Advances to suppliers 143,129 Other receivables 8,622 Loan receivables 2,434,381 Plant and equipment 6,550,446 Intangible assets 7,899,887 Deferred tax assets 9,295 Goodwill 3,906,599 Total assets 24,002,871 Short-term loan - bank (2,114,005 ) Current maturities of long-term loan (3,160,828 ) Accounts payable (357,188 ) Advance from customers (4,099 ) Other payables and accrued liabilities (844,926 ) Other payables - related party (30,200 ) Income taxes payable (317,920 ) Total liabilities (6,829,166 ) Net assets acquired $ 17,173,705 The above fair value valuation is a preliminary assessment. The Company will continue to evaluate the fair value and to be finalized within one year from the acquisition date on June 30, 2018. Approximately $3.9 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of Xianning Xiangtian and Hubei Jinli. None of the goodwill is expected to be deductible for income tax purposes. There are no changes to the fair value measurement of contingent liability since acquisition as there is no material change to Hubei Jinli’s operations for the three months ended October 31, 2018. The following unaudited pro forma combined results of operations presents the Company’s financial results as if the acquisition of Hubei Jinli had been completed on August 1, 2017. The unaudited pro forma results do not reflect operating efficiencies or potential cost savings which may result from the consolidation of operations. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations that the Company would have recognized had we completed the transaction on August 1, 2017. Future results may vary significantly from the results in this pro forma information because of future events and transactions, as well as other factors. For the Three Months Ended October 31, Revenue $ 1,078,936 Cost of revenue 563,317 Gross profit 515,619 Total operating expenses 1,130,635 Loss from operations (615,016 ) Other expense, net (4,103 ) Loss before income taxes (619,119 ) Income tax expense (2,835 ) Net loss attributable to XT Energy Group, Inc. $ (621,954 ) Weighted average number of common shares outstanding - basic and diluted 591,042,000 Net loss per common share - basic and diluted $ (0.00 ) Acquisition of Tianjin Jiabaili On June 21, 2018, Xianning Xiangtian entered into a share purchase agreement (the “Jiabaili Agreement”) with Wenhe Han and Guifen Wang, former shareholders of Tianjin Jiabaili (collectively the “Jiabaili Sellers”). Neither Xianning Xiangtian nor its affiliates have any material relationship with the Jiabaili Sellers other than with respect to the Jiabaili Agreement. Pursuant to the Jiabaili Agreement, Xianning Xiangtian agreed to acquire 90% of the capital stock of Tianjin Jiabaili collectively held by the Jiabaili Sellers (the “Jiabaili Acquisition”), for an aggregate consideration of RMB 6,120,000 (approximately $0.9 million), consisting of the following: (a) RMB 3,672,000 (approximately $0.5 million) in cash (the “Jiabaili Cash Portion”); and (b) shares of the Company’s common stock (the “Jiabaili Stock Portion”) which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). On June 30, 2018, the parties consummated the Jiabaili Acquisition. On August 12, 2018, Xianning Xiangtian and the Jiabaili Sellers amended the ownership transfer from 90% to 100% and the full payment term of acquisition price of RMB 6,800,000 (approximately $1.0 million) amended to be all cash payment. In addition, Xianning Xiangtian will indefinitely provide 10% of profit sharing of Tianjin Jiabaili to the Jiabaili Sellers. The Company’s acquisition of Tianjin Jiabaili was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Tianjin Jiabaili based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB with the valuation methodologies using level 3 inputs, except for other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense. The following table summarizes the consideration transferred to acquire Tianjin Jiabaili at the date of acquisition: Cash $ 1,026,803 Contingent purchase prices payment 203,850 Total consideration at fair value $ 1,230,653 The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Tianjin Jiabaili based on a valuation performed by an independent valuation firm engaged by the Company: Fair Value Cash $ 2,731 Other current assets 2,065 Intangible assets 875,802 Goodwill 350,055 Total assets 1,230,653 Total liabilities - Net assets acquired $ 1,230,653 Approximately $0.4 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of Xianning Xiangtian and Tianjin Jiabaili. None of the goodwill is expected to be deductible for income tax purposes. For three months ended October 31, 2017, the impact of the acquisition of Tianjin Jiabaili to the consolidated statements of operations and other comprehensive loss was not material. Contingent liabilities Contingent liabilities represent estimated contingent profit sharing payments that the Company agreed to as a purchase price consideration in relation to the acquisition of Hubei Jinli and Tianjin Jiabaili to the former shareholders’ of Hubei Jinli and Tianjin Jiabaili. Profit sharing payments to former shareholders’ of Hubei Jinli If Jinli Net Profit exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 10% of the Jinli Net Profit and the annual net profit sharing period is one year from June 21, 2018 to June 20, 2019. As of October 31, 2018, estimated contingent liabilities payables to the former shareholders of Hubei Jinli was $130,594 and classified in the caption “other payables and accrued liabilities” in the accompanying unaudited condensed consolidated balance sheets. Profit sharing payments to former shareholders’ of Tianjin Jiabaili Xianning Xiangtian shall pay the former shareholders of Tianjin Jiabaili 10% of the Tianjin Jiabaili’s annual net profit indefinitely from the date of acquisition on June 30, 2018. As of October 31, 2018, estimated contingent liabilities payables to the former shareholders of Tianjin Jiabaili was $193,527 and classified in the caption “other payables and accrued liabilities” in the accompanying unaudited condensed consolidated balance sheets. Investment payable Investment payable consists of the following: Name of Payee Relationship Nature October 31, July 31, Sheng Zhou Former shareholder of Hubei Jinli Payment for acquisition of Hubei Jinli $ 5,474,241 $ 9,069,058 Guifen Wang Former shareholder of Hubei Jinli Payment for acquisition of Tianjin Jiabaili 134,522 137,587 Total 5,608,763 9,206,645 Short-term (134,522 ) (2,505,871 ) Long-term $ 5,474,241 $ 6,700,774 The maturities schedule is as follows as of October 31, 2018: Repayment date Amount Due on demand $ 134,522 June 2019 101,257 June 2020 2,179,328 June 2021 4,008,874 Debt discount (815,218 ) Total $ 5,608,763 Investment payable – related parties Investment payable – related parties consist of the following: Name of Related Party Relationship Nature October 31, July 31, Wenhe Han Vice general manager of Tianjin Jiabaili Payment for acquisition of Tianjin Jiabaili $ 112,044 $ 261,216 Heping Zhang General manager of Hubei Jinli Payment for acquisition of Hubei Jinli 742,118 750,286 Total 854,162 1,011,502 Short-term (355,290 ) (507,143 ) Long-term $ 498,872 $ 504,359 The maturities schedule is as follows as of October 31, 2018: Repayment date Amount Due on demand $ 112,044 June 2019 250,867 June 2020 250,867 June 2021 301,743 Debt discount (61,359 ) Total $ 854,162 Debt discount Debt discount, net of accumulated amortization, totaled $876,577 and $1,021,413 as of October 31, 2018 and July 31, 2018, respectively, are recognized as a reduction of investment payable. Amortization expense related to the Debt discount, included in interest expense, was $123,819 and $0 for the three months ended October 31, 2018 and 2017, respectively. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Oct. 31, 2018 | |
Accounts Receivable, Net [Abstract] | |
Accounts receivable, net | Note 4 – Accounts receivable, net Accounts receivable, net consist of the following: October 31, July 31, Accounts receivable $ 3,972,252 $ 6,516,935 Less: allowance for doubtful accounts (1,180,968 ) (1,374,155 ) Accounts receivable, net $ 2,791,284 $ 5,142,780 During the three months ended October 31, 2018, the Company recognized $164,887 of recovery of allowance for doubtful accounts with foreign currency translation effect of $28,300. During the three months ended October 31, 2017, the Company recorded a provision of $1,576 related to certain outstanding accounts receivables which the Company deemed were no longer collectible. |
Inventories, Net
Inventories, Net | 3 Months Ended |
Oct. 31, 2018 | |
Inventories, Net [Abstract] | |
Inventories, net | Note 5 – Inventories, net Inventories, net, consist of the following: October 31, July 31, Raw materials and parts $ 1,329,830 $ 1,725,258 Work in progress 125,046 124,507 Finished goods 4,075,145 3,291,768 Total 5,530,021 5,141,533 Less: allowance for inventory reserve - - Inventory, net $ 5,530,021 $ 5,141,533 |
Costs and Estimated Earnings in
Costs and Estimated Earnings in Excess of Billings | 3 Months Ended |
Oct. 31, 2018 | |
Costs and Estimated Earnings in Excess of Billings [Abstract] | |
Costs and estimated earnings in excess of billings | Note 6 – Costs and estimated earnings in excess of billings Costs in excess of billings relate to certain contracts and consist of the following: October 31, July 31, Costs and estimated earnings incurred on uncompleted contracts $ 5,300,349 $ 5,025,892 Billings to date (2,484,519 ) (2,142,484 ) Costs and estimated earnings in excess of billings $ 2,815,830 $ 2,883,408 |
Deposit for Investment
Deposit for Investment | 3 Months Ended |
Oct. 31, 2018 | |
Deposit for Investment [Abstract] | |
Deposit for investment | Note 7 – Deposit for investment On March 16, 2018, the Company entered into a letter of intent to establish a 60% majority-owned subsidiary for a proposed supermarket project. Pursuant to the letter of intent, the Company paid a deposit to an unrelated party that will be the 40% noncontrolling interest in the proposed project. The deposit was $439,857 (RMB 3,000,000) and is expected to be used as working capital once the subsidiary is formed. On July 20, 2018, the Company rescinded the letter of intent and the unrelated party is required to fund the deposit to the Company by October 20, 2018. The Company collected $14,539 (RMB 100,000) as of October 31, 2018. The Company has received additional approximately $0.1 million (RMB 710,000) in November 2018. In November 2018, the Company entered an extension agreement with the unrelated party to extend the remaining balance of approximately $0.3 million (RMB 2,190,000) to April 2019. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 3 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Property, plant and equipment, net | Note 8 – Property, plant and equipment, net Property, plant and equipment consist of the following: October 31, July 31, Plant and buildings $ 6,543,857 $ 6,662,554 Machinery equipment 6,720,310 6,711,556 Computer and office equipment 282,052 251,965 Vehicle 165,030 121,211 Plant improvement 713,509 729,766 Construction in progress 452,527 256,503 Subtotal 14,877,285 14,733,555 Less: accumulated depreciation (2,918,749 ) (2,767,322 ) Property, plant and equipment, net $ 11,958,536 $ 11,966,233 Depreciation expenses for the three months ended October 31, 2018 and 2017 was $216,106 and $82,133, respectively. For the three months ended October 31, 2018 and 2017, depreciation included in cost of sales was $116,889 and $3,131, respectively. For the three months ended October 31, 2018 and 2017, depreciation included in selling, general and administrative expenses was $99,217 and $79,002, respectively. Construction-in-progress consist of the following as of October 31, 2018: Construction-in-progress description Value Estimated completion date Estimated additional cost to complete Synthetic fuel raw materials production line $ 223,605 November 2018* $ - Factory plantation 114,682 December 2018 28,671 Fire safety equipment installation 103,117 March 2019 14,335 Other miscellaneous items 11,123 December 2018 - Total construction-in-progress $ 452,527 $ 43,006 * The construction-in-progress is completed and pending for final inspection. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Oct. 31, 2018 | |
Intangible Assets, Net [Abstract] | |
Intangible assets, net | Note 9 – Intangible assets, net Intangible assets consist of the following: October 31, July 31, Land use rights $ 4,479,773 $ 4,581,842 Technology know-hows 1,788,325 1,829,072 Patents, licenses and certifications 2,869,904 2,935,293 Less: accumulated amortization (267,939 ) (85,564 ) Intangible assets, net $ 8,870,063 $ 9,260,643 Amortization expenses for the three months ended October 31, 2018 and 2017 amounted to $186,902 and $0, respectively. Based on the finite-lived intangible assets as of October 31, 2018, the expected amortization expenses are estimated as follows: Twelve months ending October 31, Estimated 2019 $ 733,915 2020 733,915 2021 733,054 2022 732,194 2023 578,223 Thereafter 5,358,762 Total $ 8,870,063 |
Debt
Debt | 3 Months Ended |
Oct. 31, 2018 | |
Debt [Abstract] | |
Debt | Note 10 – Debt Short-term loan - bank Outstanding balances of short-term loan - bank consisted of the following: Bank Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Wuhan Rural Commercial Bank May 2019 7.00 % Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou $ 716,764 $ 733,095 Current maturities of long-term loan Outstanding balances of current maturities of long-term loan consisted of the following: Bank Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Xianning Rural Commercial Bank* April 2019 5.83 % Land use rights, plant and equipment, inventories $ 2,551,678 $ 3,069,113 * The current maturities of long-term loan were acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). Short-term loan – third party Outstanding balances of short-term loan – third party consisted of the following: Lender Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Xianning Zhongying New Energy Service Co. Ltd. Repaid in October 2018 4.75 % None $ - $ 175,943 Short-term loans – related parties Name of Related Party Relationship Maturities Interest rate Collateral/ Guarantee October 31, 2018 July 31, 2018 Zhou Deng Hua Chief Executive Officer of the Company April 2019 & July 2019 None None $ 1,433,527 $ 5,864,759 Jian Zhou Chairman of the Company May 2019 None None 401,388 703,771 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in October 2018 12.00 % None - 13,195,707 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager January 2019 4.75 % None 372,717 381,209 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager September 2019 6.00 % None 716,764 - Total $ 2,924,396 $ 20,145,446 Interest expense for the year ended October 31, 2018 amounted to $353,409, including $295,327 related parties interest expenses. There was no interest expense for the same period 2017. |
Related Party Balances and Tran
Related Party Balances and Transactions | 3 Months Ended |
Oct. 31, 2018 | |
Related Party Balances and Transactions [Abstract] | |
Related party balances and transactions | Note 11 – Related party balances and transactions Sales to related parties Sanhe Liguang Kelitai Equipment Ltd (“Sanhe Kelitai”) In August 2016, Sanhe Xiangtian began three construction projects for installation of PV panels with Sanhe Kelitai. Sanhe Kelitai is majority (95%) owned by Zhou Jian, the Company’s Chairman of the Board. During the three months ended October 31, 2017, revenue of $8,748 and costs of sales of $7,550 were recognized related to these projects. There was no revenue for the same period 2018. Leases with related parties Sanhe Xiangtian leases its principal office, factory and dormitory from LuckSky Group in Sanhe City, Hebei Province, PRC. LuckSky Group is owned by Zhou Deng Rong, the Company’s former Chief Executive Officer. The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. For the three months ended October 31, 2018 and 2017, rent expense for the lease with Lucksky was $30,054 and $31,212, respectively. At October 31, 2018 and July 31, 2018, the amount due under the leases was $533,389 and $515,234, respectively. During year ended July 31, 2018, Sanhe Xiangtian leased another office in Sanhe City from Sanhe Dong Yi Glass Machine Company Ltd (“Sanhe Dong Yi”). which is owned by Zhou Deng Rong with the lease term expiring on June 14, 2019 for a rent of approximately $7,000 (RMB 48,000) per year. For the three months ended October 31, 2018, rent expense for this lease with Sanhe Dong Yi was $1,745. Related party balances a. Short-term loans – related parties (See Note 10) b. Other receivable – related parties and directors: Name of Related Party Relationship Nature October 31, July 31, Tianyu Ma General Manager of Tianjin Jiabaili Employee advances $ 14,335 $ - c. Other payables – related parties and directors: Name of Related Party Relationship Nature October 31, 2018 July 31, 2018 Luck Sky International Investment Holdings Ltd. Owned by Zhou Deng Rong, former Chief Executive Officer and director Advances for payment of U.S. Professional Fee $ 318,776 $ - Lucksky Group Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable 533,389 515,234 Sanhe Dong Yi Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable - 21,113 Hubei Hengyi Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager Interest payable 496,422 211,441 Zhou Deng Rong Former Chief Executive Officer and director Advances for payment of U.S. Professional Fee 2,748,260 2,748,260 Zhou Deng Hua Chief Executive Officer Advances for operational purpose 283,122 289,572 Jian Zhou Chairman Advances for operational purpose 610,448 436,444 Zhimin Feng Legal representative of Jingshan Sanhe Advances for operational purpose 2,855 1,191 Wei Gu General manager of Xiangtian Zhongdian Advances for operational purpose 4,301 6,863 Total $ 4,997,573 $ 4,230,118 d. Investment payables – related parties (See Note 3) |
Significant Customer, Former Re
Significant Customer, Former Related Party | 3 Months Ended |
Oct. 31, 2018 | |
Significant Customer, Former Related Party [Abstract] | |
Significant customer, former related party | Note 12 – Significant customer, former related party Prior to April 10, 2014, Zhou Deng Rong, the Company’s former Chief Executive Officer and director, owned 70% equity interest, and Zhou Jian, the Company’s Chairman, owned the remaining 30% equity interest of Xianning Lucksky Aerodynamic Electricity (“Xianning Lucksky”). Through April 10, 2014, Xianning Lucksky’s primary asset was a land use right for approximately 70 acres of land located in Xianning, Hubei Province, PRC. On April 8, 2014, Zhou Deng Rong sold his 70% equity interest in Xianning Lucksky to an individual, and Zhou Jian sold his 30% equity interest in Xianning Lucksky to another individual. The two individuals are unrelated to Zhou Deng Rong or Jian Zhou, or any member of management of the Company, or any of its consolidated subsidiaries or VIE. As such, as of April 8, 2014, the Company, or any of its shareholders, had no relationship to Xianning Lucksky. As of October 31, 2018, the Company entered into a series of sales contracts with Xianning Lucksky and other contracts on two buildings owned by Xianning Lucksky. These contracts represented approximately $1,011,000 and $0 of the Company’s revenue during the three months ended October 31, 2018 and 2017, respectively. On July 27, 2016, Xianning Xiangtian entered into a rental agreement with Xianning Lucksky to lease 4,628 square meters space in a factory in Xianning, Hubei Province, PRC. The space is leased for a rent of $83,132 (RMB 555,360) per year. The lease expires on July 31, 2018, and the Company terminated the lease early in February 2018 when the Company through Xiangtian Zhongdian signed another lease agreement which expires on February 5, 2019 with a rent of approximately $25,000 (RMB 168,922) per year. During the three months ended October 31, 2018 and 2017, rent expense related to these leases was $6,250 and $20,783, respectively. On July 27, 2018, Xianning Xiangtian entered into a lease with Xianning Lucksky. The space in the factory in Xianning in Hubei province being leased is 3,128 square meters. The factory space is leased for a rent of approximately $17,000 (RMB 114,172) per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a prior one-month written notice. Rent expense for this lease amounted to $3,464 for the three months ended October 31, 2018. |
Employee Benefits Government Pl
Employee Benefits Government Plan | 3 Months Ended |
Oct. 31, 2018 | |
Employee Benefits Government Plan [Abstract] | |
Employee benefits government plan | Note 13 – Employee benefits government plan The Company participates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. PRC labor regulations require the Company to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate based on the basic monthly compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution. At October 31, 2018 and July 31, 2018, the outstanding amount due to the local labor bureau was $177,525 and $174,971, respectively, and is included in Other Payables and Accrued Liabilities on the accompanying balance sheets. |
Income Taxes
Income Taxes | 3 Months Ended |
Oct. 31, 2018 | |
Income Taxes [Abstract] | |
Income taxes | Note 14 – Income taxes Income tax United States On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Act”) was enacted. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. As the Company has a July 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of approximately 28.6% for the Company’s fiscal year ending July 31, 2018, and 21% for subsequent fiscal years. Accordingly, the Company has remeasured the Company’s deferred tax assets on net operating loss carryforwards (“NOLs”) in the U.S at the lower enacted cooperated tax rate of 21%. However, this remeasurement has no effect on the Company’s income tax expenses as the Company has provided a 100% valuation allowance on its deferred tax assets previously. Additionally, the Act imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries, and future foreign earnings are subject to U.S. taxation. The change in rate has caused us to remeasure all U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. However, this one-time transition tax has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings prior to December 31, 2017 which the Company has foreign cumulative losses at December 31, 2017. British Virgin Islands Xiangtian BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Xiangtian HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Xiangtian HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC The Company PRC subsidiaries and VIEs and their controlled entities are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC, Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Significant components of the income tax expense consisted of the following for the three months ended October 31, 2018 and 2017: 2018 2017 Current $ 543,513 $ 2,835 Deferred (17,369 ) - Provision for income tax $ 526,144 $ 2,835 Significant components of the Company’s deferred tax assets as of October 31 and July 31, 2018 are approximately as follows: October 31, July 31, Deferred tax assets: Net operating loss carry forwards $ 879,015 $ 911,400 Accounts receivable allowance 295,242 343,500 Accrued liabilities 71,307 50,600 Warranty and other 16,082 16,400 Deferred tax assets before valuation allowance 1,261,646 1,321,900 Less: valuation allowance (1,244,521 ) (1,321,900 ) Net deferred tax assets $ 17,125 $ - As of October 31, 2018, the Company had U.S. federal NOLs of approximately $3,650,600 that expire beginning in 2029 to 2038 with deferred tax assets of approximately $766,600. As of October 31, 2018, the Company had approximately $430,100 of NOLs related to its PRC subsidiaries and VIEs that expire in years 2019 through 2023 with deferred tax assets of approximately $107,500. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon future generation for taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance as of July 31, 2018. During the three months ended October 31, 2018, the Company’s PRC entities has started to generating income, as a result, additional temporary difference generated from these entities during the three months ended October 31, 2018 are recognized as deferred tax assets without fully reserved for allowance. The Company evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize, present, and disclose uncertain positions that the company has taken or expects to take in its tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. If applicable, interest costs related to the unrecognized tax benefits are required to be calculated and would be classified as “Other Income (Expense)” in the statement of operations. Penalties would be recognized as a component of “General and Administrative Expenses” in the statement of operations. The Company filed its July 31, 2016 and 2017 corporation income tax return in November 2018. No interest or penalty on unpaid tax in relation to the late filings was recorded during the three months ended October 31, 2018 and 2017, respectively. As of October 31 and July 31, 2018, other than discussed above, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in its unrecognized tax benefits in the next quarter. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | Note 15 – Commitments and contingencies Operating leases The total future minimum lease payments under the non-cancellable operating leases as of October 31, 2018 are payable as follows: Twelve months ending October 31, Minimum lease payment 2019 $ 1,176,723 2020 1,211,542 2021 1,262,342 2022 568,515 2023 316,071 Thereafter 60,448 Total minimum payments required $ 4,595,641 Rental expense of the Company for the three months ended October 31, 2018 and 2017 were $158,018 and $19,710, respectively. Purchase commitment The total future minimum purchase commitment under the non-cancellable purchase contracts as of October 31, 2018 are payable as follows: Twelve months ending October 31, Minimum purchase commitment 2019 $ 179,012 Thereafter - Total minimum payments required $ 179,012 Contingencies On September 23, 2013, the Company issued 60,000,000 shares of restricted common stock at $0.001 per share to Mr. Roy Thomas Phillips, who was then a consultant to the Company and later served as the acting Chief Financial Officer of the Company beginning July 29, 2014, and two other non-related parties obtained a total of 7,000,000 shares of restricted common stock. The shares were issued in contemplation of a secondary offering. The Company takes the position that these shares should be cancelled since no secondary offering was consummated. The Company is taking steps to have these shares canceled. The Company valued the 67,000,000 shares of common stock issued at $67,000 as there was no market for the Company’s common stock and it has limited or no trading; and there is thought to be minimal value in the Company at the time of issuance, therefore the par value is thought to match the assumed market price of the Company’s common stock which is at $0.001 per share. The Company might incur additional expenses to have these shares canceled. On July 24, 2015, 7,000,000 shares issued to two other non-related parties were cancelled. For the three months ended October 31, 2018 and 2017, the dilutive effect of not canceling the 60,000,000 shares is incorporated in the unaudited condensed consolidated financial statements as the Company recorded such shares as issued and outstanding. For the three months ended October 31, 2018 and 2017, not canceling the 60,000,000 shares has an anti-dilutive effect. If the shares are not voluntarily returned for cancellation, the Company will need to commence litigation in Nevada to obtain a judgment to cancel the shares for lack of consideration. At this time, the Company is unable to estimate the cost such litigation if it takes place. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the New VIE Agreements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Xiangtian Shenzhen and the VIE are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the New VIE Agreements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the New VIE Agreements is remote based on current facts and circumstances. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Oct. 31, 2018 | |
Stockholders' Equity [Abstract] | |
Stockholders' equity | Note 16 – Stockholders’ equity In June 2017, the Board of Directors of the Company adopted the 2017 Stock Incentive Plan (the “Plan”) under which 30 million shares of common stock are available for issuances. As of October 31, 2018, the Company had not granted any awards under the Plan. During the three months ended October 31, 2018, the Company’s Chairman and major shareholder contributed $14,533,003 of additional paid in capital in Xianning Xiangtian. |
Concentrations
Concentrations | 3 Months Ended |
Oct. 31, 2018 | |
Concentrations [Abstract] | |
Concentrations | Note 17 – Concentrations Customer concentration risk For the three months ended October 31, 2018, four customers accounted for 43.3%, 18.1%, 14.0% and 11.1% of the Company’s total revenues, respectively. For the three months ended October 31, 2017, one customer accounted for 95.0% of the Company’s total revenues. As of October 31, 2018, two customers accounted for 24.0% and 14.0% of the total balance of accounts receivable, respectively. As of July 31, 2018, three customers accounted for 32.0%, 15.0% and 12.3% of the total balance of accounts receivable, respectively. Vendor concentration risk For the three months ended October 31, 2018, two vendors accounted for 42.5% and 25.8% of the Company’s total purchases, respectively. For the three months ended October 31, 2017, four vendors accounted for 35.8%, 31.5%, 16.5% and 10.5% of the Company’s total purchases, respectively. As of October 31, 2018, four vendors accounted for 44.1%, 13.6%, 11.4% and 10.1% of the total balance of accounts payable, respectively. As of July 31, 2018, four vendors accounted for 29.8%, 15.7%, 14.0% and 11.7% of the total balance of accounts payable, respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 18 – Segment reporting Starting in April 2018, the Company begins to evaluate performance and to determine resource allocations based on a number of factors, the primary measure being income from operations of the Company’s six reportable divisions in the PRC: Sanhe Xiangtian, Xianning Xiangtian, Xiangtian Zhongdian, Jingshan Sanhe, Hubei Jinli, and Tianjin Jiabaili. Tianjin Jiabaili does not has any operations as of October 31, 2018. Prior period numbers are broken down for purposes of comparison. These reportable divisions are consistent with the way the Company manages its business, each division operates under separate management groups and produces discrete financial information. The accounting principles applied at the operating division level in determining income (loss) from operations is generally the same as those applied at the consolidated financial statement level. The following represents results of division operations for the three months ended October 31, 2018 and 2017: 2018 2017 Revenues: Sanhe Xiangtian $ 1,920,878 $ 354,890 Xianning Xiangtian 4,233,629 304 Jingshan Sanhe 3,576,328 - Xiangtian Zhongdian 9,101,868 - Hubei Jinli 1,155,735 - Consolidated revenues $ 19,988,438 $ 355,194 2018 2017 Gross profit: Sanhe Xiangtian $ 707,409 $ 37,364 Xianning Xiangtian 853,785 186 Jingshan Sanhe 1,187,491 - Xiangtian Zhongdian 908,334 - Hubei Jinli 538,496 - Consolidated gross profit $ 4,195,515 $ 37,550 2018 2017 Income (loss) from operations: Sanhe Xiangtian $ 669,762 $ (425,298 ) Xianning Xiangtian 622,068 (262,379 ) Jingshan Sanhe 1,012,957 - Xiangtian Zhongdian 801,752 - Hubei Jinli 107,436 - Tianjin Jiabaili (176,912 ) - All four holding entities (495,432 ) (160,925 ) Consolidated income (loss) from operations $ 2,541,631 $ (848,602 ) 2018 2017 Net income (loss) attributable to controlling interest: Sanhe Xiangtian $ 547,514 $ (429,455 ) Xianning Xiangtian 209,416 (262,347 ) Jingshan Sanhe 757,356 - Xiangtian Zhongdian 472,364 - Hubei Jinli 63,268 - Tianjin Jiabaili (180,132 ) - All four holding entities (494,019 ) (163,738 ) Consolidated net income (loss) attributable to controlling interest $ 1,375,767 $ (855,540 ) 2018 2017 Depreciation and amortization expenses: Sanhe Xiangtian $ 43,063 $ 64,860 Xianning Xiangtian 57 17,273 Jingshan Sanhe 8,705 - Xiangtian Zhongdian 74,890 - Hubei Jinli 221,785 - Tianjin Jiabaili 54,508 - Consolidated depreciation and amortization expenses $ 403,008 $ 82,133 2018 2017 Interest expense: Sanhe Xiangtian $ 6,041 $ 295 Xianning Xiangtian 413,105 32 Hubei Jinli 58,082 - Consolidated interest expense $ 477,228 $ 327 2018 2017 Capital expenditures: Sanhe Xiangtian $ 47,031 $ - Xianning Xiangtian 1,265 - Jingshan Sanhe 265,323 - Xiangtian Zhongdian 8,040 - Hubei Jinli 144,643 - Tianjin Jiabaili 12,360 - Consolidated capital expenditures $ 478,662 $ - Total assets of each division as of October 31, 2018 and July 31, 2018 consist of the following: October 31, July 31, Total assets: Sanhe Xiangtian $ 11,046,964 $ 11,355,619 Xianning Xiangtian 7,135,951 4,689,100 Jingshan Sanhe 13,196,263 3,513,449 Xiangtian Zhongdian 13,153,436 12,620,210 Hubei Jinli 19,820,836 22,489,702 Tianjin Jiabaili 4,420,414 4,111,706 All four holding entities 237,205 248,164 Consolidated assets $ 69,011,069 $ 59,027,950 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Oct. 31, 2018 | |
Subsequent Event [Abstract] | |
Subsequent event | Note 19 – Subsequent event On November 20, 2018, Xianning Xiangtian signed a letter of intent with Aksu Duolang Investment Limited Liability Company to purchase 70% ownership of Kuche Xincheng Chemical Co. Ltd. (Kuche Xincheng). Xianning Xiangtian has the full right of refusal of proceeding the acquisition after the completion of the due diligence process. As of the date of this report, the due diligence process of Kuche Xincheng has not begun. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Oct. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Liquidity | Liquidity In assessing the Company’s liquidity, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing in the form of loans payable and loans from related parties have been utilized to finance the working capital requirements of the Company. As of October 31, 2018, the Company’s net working capital was approximately $33,000 and the Company had cash of approximately $25.9 million. Although the Company believes that it can realize its current assets in the normal course of business, the Company’s ability to repay its current obligations will depend on the future realization of its current assets and the future operating revenues generated from its operations. The Company expects to realize the balance of its current assets within the normal operating cycle of a twelve month period. If the Company is unable to realize its current assets within the normal operating cycle of a twelve month period, the Company may have to consider supplementing its available sources of funds through the following sources: ● the Company will continuously seek equity financing to support its working capital; ● other available sources of financing from PRC banks and other financial institutions; ● financial support and credit guarantee commitments from the Company’s related parties or to obtain due date extension of approximately $5.5 million current payable balance as of October 31, 2018 from its related parties. Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due one year from the date of this report. However, there is no assurance that management will be successful in their plans. There are a number of factors that could potentially arise that could undermine the Company’s plans, such as changes in the demand for the Company’s products or installations, PRC government policy, economic conditions, and competitive pricing in the industries that the Company operated in. |
Basis of presentation | Basis of presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s unaudited condensed consolidated financial statements are expressed in U.S. dollars. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s financial position, its results of operations and its cash flows, as applicable, have been made. Interim results are not necessarily indicative of results to be expected for the full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s July 31, 2018 annual report on Form 10-K filed on October 30, 2018. |
Principles of consolidation | Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs for which the Company or its subsidiary is the primary beneficiary and the VIEs’ subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the estimated cost used to calculate the percentage of completion recognized in the Company’s revenues, the useful lives of property, plant and equipment, impairment of long-lived assets, allowance for accounts receivable doubtful accounts, allowance for inventory obsolescence reserve, allowance for advance to suppliers doubtful accounts, allowance for deferred tax assets, fair value of the assets and the liabilities of the entity acquired through its business combination, valuation of warranty reserves, contingent consideration liabilities, and the accrual of potential liabilities. Actual results could differ from these estimates. |
Variable interest entities | Variable interest entities On September 30, 2018, Xiangtian Shenzhen terminated the VIE Agreements as part of its restructuring to facilitate the shift of business focus between entities controlled by the Company. After the restructuring, the Company’s headquarter is now located in the city of Xianning, Hubei Province, and Sanhe Xiangtian, the Company’s previous headquarters, located in the city of Sanhe, Hebei Province, has become the Company’s sales office. The VIE Agreements include the following: ● Framework Agreement on Business Cooperation, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Management, Consulting and Training and Technical Service Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; ● Exclusive Option Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and Shanhe Xiangtian Shareholders; ● Equity Pledge Agreement, dated July 25, 2014, by and among Xiangtian Shenzhen, Sanhe Xiangtian and the Shanhe Xiangtian Shareholders; ● Know-How Sub-License Agreement, dated July 25, 2014, by and between Xiangtian Shenzhen and Sanhe Xiangtian; and ● Powers of Attorney of the Sanhe Xiangtian Shareholders dated July 25, 2014. In connection with the termination of the VIE Agreements, on September 30, 2018, Sanhe Xiangtian transferred its 100% equity interest of Xianning Xiangtian to the Sanhe Xiangtian Shareholders and the Sanhe Xiangtian Shareholders transferred their 100% equity interest of Sanhe Xiangtian to Xianning Xiangtian. As a result of the foregoing equity transfers, Sanhe Xiangtian became a wholly owned subsidiary of Xianning Xiangtian. On the same day, the Company, through Xiangtian Shenzhen and Xiangtian HK, entered into the New VIE Agreements, pursuant to which Xianning Xiangtian became the Company’s new contractually controlled affiliate. The principal terms of the agreements entered into among Xianning Xiangtian and Xiangtian Shenzhen, the primary beneficiary, are described below: ● Framework Agreement on Business Cooperation ● Agreement of Exclusive Management, Consulting and Training and Technical Service ● Exclusive Option Agreement ● Equity Pledge Agreement ● Know-How Sub-License Agreement ● Power of Attorney ● Spousal Consent Letters The Framework Agreement and the Exclusive Management Agreement have initial terms of ten years but each contains a renewal provision that allows Xiangtian Shenzhen to extend the term of such agreements at its sole option by written notice with no limitation as to such extensions. The Know-How Sub-License Agreement is valid for the duration of Xianning Xiangtian’s operation. The other agreements are of unlimited duration. The Company’s total assets and liabilities presented in the accompanying unaudited condensed consolidated financial statements represent substantially all of total assets and liabilities of the VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities. The following financial statement amounts and balances of the VIE were included in the accompanying unaudited condensed consolidated financial statements as of October 31, 2018 and July 31, 2018 and for the three months ended October 31, 2018 and 2017, respectively: October 31, July 31, Current assets $ 43,646,134 $ 33,240,433 Non-current assets 25,127,729 25,568,517 Total assets $ 68,773,863 $ 58,808,950 Current liabilities $ 41,506,532 $ 46,576,026 Non-current liabilities 5,973,113 7,205,133 Total liabilities $ 47,479,645 $ 53,781,159 For the three months ended For the three months ended Revenues $ 19,988,438 $ 355,194 Gross Profit $ 4,195,515 $ 37,550 Income (loss) from operations $ 3,037,062 $ (687,677 ) Net income (loss) $ 1,869,784 $ (691,802 ) |
Business Combinations | Business Combinations The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition. |
Cash | Cash Cash denominated in RMB with a US dollar equivalent of $25,844,616 and $14,207,358 at October 31, 2018 and July 31, 2018, respectively, were held in accounts at financial institutions located in the PRC‚ which is not freely convertible into foreign currencies. In addition, these balances are not covered by insurance. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness The Company and its subsidiaries and VIE have not experienced any losses in such accounts and do not believe the cash is exposed to any significant risk. |
Notes Receivable | Notes Receivable Notes receivable represents commercial notes due from various customers where the customers’ banks have guaranteed the payments. The notes are noninterest bearing and normally paid within three to six months. The Company has the ability to submit requests for payments to the customer’s banks earlier than the scheduled payments date, but will incur an interest charge and a processing fee. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivables, net, are recognized and carried at original invoiced amount less an allowance for any uncollectible accounts. The Company uses the aging method to estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debts determined by management are based on historical experience as well as the current economic climate and are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. |
Inventories, net | Inventories, net Inventories, net, consist of raw materials, work in progress and finished goods and are stated at the lower of cost or net realizable value using the weighted average method. When appropriate, allowances to inventories are recorded to write down the cost of inventories to their net realizable value. As of October 31, 2018 and July 31, 2018, there were no such allowances. |
Advances to Suppliers, net | Advances to Suppliers, net Advances to suppliers, net, are cash deposited or advanced to outside vendors or services providers for future inventory purchases or future services. This amount is refundable and bears no interest. For any advances to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. |
Costs and Estimated Earnings in Excess of Billings | Costs and Estimated Earnings in Excess of Billings Costs and estimated earnings in excess of billings represents revenues recognized in excess of amounts billed. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the unaudited condensed consolidated financial statements. |
Loans Receivables | Loans Receivables Loans receivables represents interest free advances to the former shareholder of Hubei Jinli by the Company prior to the acquisition of Hubei Jinli on June 30, 2018. These advances were unsecured and due on demand. Full outstanding balance of $1,759,428 of loan receivables as of July 31, 2018 were repaid in August 2018. |
Property, Plant and equipment, net | Property, Plant and equipment, net Property, plant and equipment are stated at cost net of accumulated depreciation and impairment losses. Depreciation is provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets’ estimated residual value: Classification Estimated Useful Life Estimated Residual Value Plant and buildings 5-20 years 0-5% Machinery equipment 5-10 years 0-5% Computer and office equipment 3-10 years 0-5% Vehicles 5-10 years 0-5% Plant improvement 20 years 0-5% The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and other comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction of the Company’s production warehouses, cafeteria, and employee dormitory. No depreciation is provided for construction-in-progress until it is completed and placed into service. |
Intangible assets, net | Intangible assets, net Intangible assets, net, are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets as follows: Classification Estimated Useful Life Land use rights 50 years Technology know-hows 10 years Patents, licenses and certifications 3-10 years All land in the PRC is owned by the government; however, the government grants “land use rights.” The Company has obtained rights to use various parcels of land for 50 years through the acquisition of Hubei Jinli in June 2018. Technology know-hows, including LSC Hand-Held Diesel Pump, CB-39 Motor Oil Pump, 0-16 MPa series hydraulic cylinder, brake cylinder and hydraulic value, and certain special operating licenses were acquired through the acquisition of Hubei Jinli and Tianjin Jiabaili in June 2018 with estimated finite useful lives between 4.5 years to 10 years. Certain PV panel certifications were contributed by the Company’s noncontrolling interest shareholders as capital contribution in March 2018 with an estimated finite useful lives of 10 years. The Company also acquired a safety production license with a finite useful of 3 years in June 2018. |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the consolidated statements of operations and comprehensive loss. Impairment losses on goodwill are not reversed. As of October 31 and July 31, 2018, no impairment of goodwill was recognized. |
Impairment for Long-Lived Assets | Impairment for Long-Lived Assets Long-lived assets, including plant and equipment and intangible with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of October 31, 2018 and July 31, 2018, no impairment of long-lived assets was recognized. |
Subscription receivable | Subscription receivable Subscription receivable represents unpaid capital contribution from its shareholders. |
Fair Value Measurement | Fair Value Measurement The Company applies the provisions of Accounting Standards Codification (“ASC”) Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of October 31, 2018. The following table sets forth by level within the fair value hierarchy, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of October 31, 2018: Financial liabilities Carrying Value Fair Value Measurements at October 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 324,121 $ - $ - $ 324,121 Financial liabilities Carrying Value Fair Value Measurements at July 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 331,505 $ - $ - $ 331,505 The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the three months ended October 31, 2018 and for the year ended July 31, 2018: October 31, July 31, Beginning balance $ 331,505 $ - Contingent liability obligated from business combinations - 341,411 Exchange rate effect (7,384 ) (9,906 ) Ending balance $ 324,121 $ 331,505 The Company believes the carrying amount reported in the consolidated balance sheet for cash, notes receivable, accounts receivable, inventories, advance to suppliers, costs and estimated earnings in excess of billings, prepaid expenses, other receivables, loan receivables, short-term loans, accounts payable, advances from customers, other payables and accrued liabilities, tax payables and short-term investment payable approximate fair value because of the short-term nature of such instruments. The carrying amount of long-term investment payable reported in the consolidated balance sheets at carrying value, which approximates fair value as the rate of amortization of investment payment discount used were similar to interest rate charged by the bank in the PRC. As of October 31 and July 31, 2018, long-term investment payable balance was $5,973,113, net of discount of $876,577 and $7,205,133, net of discount of $869,173, respectively. |
Revenue Recognition | Revenue Recognition On August 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC Topic 606) using the modified retrospective method for contracts that were not completed as of July 31, 2018. This did not result in an adjustment to the retained earnings upon adoption of this new guidance as the Company’s revenue was recognized based on the amount of consideration expected to receive in exchange for satisfying the performance obligations. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are recognized over time for the Company’s sale and installation of power generation systems and are recognized at a point in time for the Company’s sale of products. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition. Sale and installation of power generation systems Sales of power generation system in conjunction of system installation are generally recognized based on the Company’s efforts or inputs to the satisfaction of a performance obligation using an input measure method, which essentially the same as the percentage of completion method prior to August 1, 2018 for its installation project. Therefore, take into account the costs, estimated earnings and revenue to date on contracts not yet completed. Revenue recognized is that percentage of the total contract price that costs expended to date bear to anticipated final total costs, based on current estimates of costs to complete. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor and supplies. Adjustments to the original estimates of the total contract revenue, total contract costs, or the extent of progress toward completion are often required as work progresses. Such changes and refinements in estimation are reflected in reported results of operations as they occur; if material, the effects of changes in estimates are disclosed in the notes to the unaudited condensed consolidated financial statements. The key assumptions used in the estimate of costs to complete relate to the unit material cost, the quantity of materials to be used, the installation cost and those indirect costs related to contract performance. The estimate of unit material cost is reviewed and updated on a quarterly basis, based on the updated information available in the supply markets. The estimate of material quantity to be used for completion and the installation cost is also reviewed and updated on a quarterly basis, based on the updated information on the progress of project execution. If the supply market conditions or the progress of project execution were different, it is likely that materially different amounts of contract costs would be used in the percentage of completion method of accounting. Thus the uncertainty associated with those estimates may impact the Company’s unaudited condensed consolidated financial statements. Selling, general, and administrative costs are charged to expense as incurred. At the time a loss on a contract becomes known, the entire amount of the estimated ultimate loss is recognized in the unaudited condensed consolidated financial statements. Claims for additional contract costs are recognized upon a signed change order from the customer. The installation revenues and sales of equipment and system component are combined and considered as one performance obligation. The promises to transfer the equipment and system component and installation are not separately identifiable, which is evidencing by the fact that the Company provides a significant services of integrating the goods and services into a power generation system for which the customer has contracted. The Company currently do not have any modification of contract and the contract currently does not have any variable consideration. Sales of products The Company continues to derive its revenues from sales contracts with its customers with revenues being recognized upon delivery of products. Persuasive evidence of an arrangement is demonstrated via sales contract and invoice; and the sales price to the customer is fixed upon acceptance of the sales contract and there is no separate sales rebate, discount, or other incentive. Such revenues are recognized at a point in time after all performance obligations are satisfied and based on when control of goods transfer to a customer, which is generally similar to when its delivery has occurred prior to August 1, 2018. The Company’s disaggregate sale of products streams for the three months ended October 31, 2018 and 2017 are summarized as follows: For the three months For the three months Revenues PV panels and others $ 9,101,844 $ 305,640 Air compression equipment and other components 1,001,211 - Heat pumps 4,243,564 - High-grade synthetic fuel 4,096,752 - Hydraulic parts and electronic components 1,155,735 - Total revenue $ 19,599,106 $ 305,640 |
Warranty | Warranty The Company generally provides limited warranties for work performed under its contracts. The warranty periods typically extend for up to five years following substantial completion of the Company’s work on a project. At the time a sale is recognized, the Company records estimated future warranty costs under ASC 460. Such estimated costs for warranties are estimated at completion and these warrants are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty experience or Company’s best estimate. There were no such reserves record for the three months ended October 31, 2018 and 2017. No right of return exists on sales of inventory. As of October 31 and July 31, 2018, accrued warranty expense amounted to $64,325 and $67,651, respectively, and classified in the caption “other payables and accrued liabilities” in the accompanying unaudited condensed consolidated balance sheets. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred and included in selling and general and administrative expenses. Advertising costs amounted to $31,972 and $0 for the three months ended October 31, 2018 and 2017, respectively. |
Employee benefit | Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $42,722 and $26,327 for the three months ended October 31, 2018 and 2017, respectively. |
Value added taxes | Value added taxes The Company is subject to value added tax (“VAT”). Revenue from sales of goods purchased from other entities is generally subject to VAT at the rate of 16% starting in May 2018 or at the rate of 17% in April 2018 and prior. The Company is entitled to a refund for VAT already paid on goods purchased. The VAT balance is recorded in other payables on the consolidated balance sheets. Revenues are presented net of applicable VAT. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2015 to 2017 are subject to examination by any applicable tax authorities. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) ASC 220 “Reporting Comprehensive Income”. Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. The Company had other comprehensive (loss) income of ($380,986) and 89,875 for the three months ended October 31, 2018 and 2017, respectively, from foreign currency translation adjustments. |
Foreign Currency Translation | Foreign Currency Translation The reporting currency of the Company is the United States Dollars. The functional currency of the Company is the Chinese Renminbi (“RMB”) as substantially all of the Company’s PRC subsidiaries’ operations use this denomination. Foreign denominated monetary assets and liabilities are translated into their United States dollar equivalents using foreign exchange rates which prevailed at the balance sheet date. Non-monetary assets and liabilities are translated at the exchange rates prevailing at the transaction date. Revenues and expenses are translated at average rates of exchange during the year. Gains or losses resulting from foreign currency transactions are included in results of operations. For the purpose of presenting these financial statements of subsidiaries in PRC, the Company’s assets and liabilities are expressed in United States Dollars at the exchange rate on the balance sheet date, which is 6.9758 and 6.8204 as of October 31, 2018 and July 31, 2018, respectively; stockholders’ equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 6.8779 and 6.6227 for the three months ended October 31, 2018 and 2017, respectively. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) in the stockholders’ equity section of the unaudited condensed consolidated balance sheets. For the purpose of presenting these financial statements of the subsidiary in Hong Kong, the Company’s assets and liabilities are expressed in United States Dollars at the exchange rate on the balance sheet date, which is 7.8404 and 7.8490 as of October 31, 2018 and July 31, 2018, respectively; stockholders’ equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period, which is 7.8417, 7.8135 for the three months ended October 31, 2018 and 2017, respectively. The resulting translation adjustments are reported under accumulated other comprehensive loss in the stockholders’ equity section of the unaudited condensed consolidated balance sheets. |
Earnings (loss) per Share | Earnings (loss) per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share gives effect to all dilutive potential of shares of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Loss per share excludes all potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities for the three months ended October 31, 2018 and 2017. |
Statutory Reserves | Statutory Reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. For the three months ended October 31, 2018 and 2017, the Company has contributed $149,543 and $0, respectively, to the statutory reserves. |
Contingencies | Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have a material adverse impact on the Company’s unaudited condensed consolidated financial position, results of operations and cash flows. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update will require the recognition of a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, for all leases with terms longer than 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of comprehensive income and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted. Upon adoption, leases will be recognized and measured at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2016-02 on its unaudited condensed consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. Management does not believe the adoption of this ASU would have a material effect on the Company’s unaudited condensed consolidated financial statements. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation such as segregating the selling and general and administrative expenses for comparative purpose. These reclassifications have no effect on the reported revenues, net income (loss) or total assets. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Nature of Business and Organization [Abstract] | |
Schedule of consolidated financial statements | Name Background Ownership Xiangtian HK ● A Hong Kong company 100% owned by XT Energy Xiangtian BVI ● A British Virgin Islands company 100% owned by XT Energy Xiangtian Shenzhen ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) 100% owned by Xiangtian HK Sanhe Xiangtian ● A PRC limited liability company ● Incorporated on July 8, 2013 ● Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter Xianning Xiangtian ● A PRC limited liability company ● Incorporated on May 30, 2016 ● Manufacturing and sales of air compression equipment and heat pump products 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter Xiangtian Zhongdian ● A PRC limited liability company ● Incorporated on March 7, 2018 ● Manufacturing and sales of PV panels 70% owned by Xianning Xiangtian Jingshan Sanhe ● A PRC limited liability company ● Incorporated on April 17, 2018 ● Researching, manufacturing and sales of high-grade synthetic fuel products 100% owned by Xianning Xiangtian Hubei Jinli ● A PRC limited liability company ● Incorporated on December 27, 2004 and acquired on June 30, 2018 ● Manufacturing and sales of hydraulic parts and electronic components 100% owned by Xianning Xiangtian Tianjin Jiabaili ● A PRC limited liability company ● Incorporated on April 10, 2007 and acquired on June 30, 2018 ● Manufacturing and sales of petroleum products 100% owned by Xianning Xiangtian Xiangtian Trade ● A PRC limited liability company ● Incorporated on August 9, 2018 ● Trading chemicals raw materials for the purpose of providing a stable supply for synthetic fuel product operation of the Company 100% owned by Xianning Xiangtian |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of financial statement amounts and balances of the VIE were included in the accompanying unaudited condensed consolidated financial statements | October 31, July 31, Current assets $ 43,646,134 $ 33,240,433 Non-current assets 25,127,729 25,568,517 Total assets $ 68,773,863 $ 58,808,950 Current liabilities $ 41,506,532 $ 46,576,026 Non-current liabilities 5,973,113 7,205,133 Total liabilities $ 47,479,645 $ 53,781,159 For the three months ended For the three months ended Revenues $ 19,988,438 $ 355,194 Gross Profit $ 4,195,515 $ 37,550 Income (loss) from operations $ 3,037,062 $ (687,677 ) Net income (loss) $ 1,869,784 $ (691,802 ) |
Schedule of estimated useful lives of property, plant and equipment | Classification Estimated Useful Life Estimated Residual Value Plant and buildings 5-20 years 0-5% Machinery equipment 5-10 years 0-5% Computer and office equipment 3-10 years 0-5% Vehicles 5-10 years 0-5% Plant improvement 20 years 0-5% |
Schedule of estimated useful lives of intangible assets, net | Classification Estimated Useful Life Land use rights 50 years Technology know-hows 10 years Patents, licenses and certifications 3-10 years |
Schedule of fair value hierarchy on a recurring basis | Financial liabilities Carrying Value Fair Value Measurements at October 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 324,121 $ - $ - $ 324,121 Financial liabilities Carrying Value Fair Value Measurements at July 31, 2018 Level 1 Level 2 Level 3 Contingent payment consideration liabilities (see Note 3) $ 331,505 $ - $ - $ 331,505 |
Schedule of reconciliation of assets and liabilities measured at fair value on a recurring basis | October 31, July 31, Beginning balance $ 331,505 $ - Contingent liability obligated from business combinations - 341,411 Exchange rate effect (7,384 ) (9,906 ) Ending balance $ 324,121 $ 331,505 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Business Acquisition [Line Items] | |
Schedule of fair value of identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 33,402 Accounts receivable, net 2,561,863 Inventories, net 455,247 Advances to suppliers 143,129 Other receivables 8,622 Loan receivables 2,434,381 Plant and equipment 6,550,446 Intangible assets 7,899,887 Deferred tax assets 9,295 Goodwill 3,906,599 Total assets 24,002,871 Short-term loan - bank (2,114,005 ) Current maturities of long-term loan (3,160,828 ) Accounts payable (357,188 ) Advance from customers (4,099 ) Other payables and accrued liabilities (844,926 ) Other payables - related party (30,200 ) Income taxes payable (317,920 ) Total liabilities (6,829,166 ) Net assets acquired $ 17,173,705 |
Schedule of unaudited pro forma of operations and financial results as acquisition | For the Three Months Ended October 31, Revenue $ 1,078,936 Cost of revenue 563,317 Gross profit 515,619 Total operating expenses 1,130,635 Loss from operations (615,016 ) Other expense, net (4,103 ) Loss before income taxes (619,119 ) Income tax expense (2,835 ) Net loss attributable to XT Energy Group, Inc. $ (621,954 ) Weighted average number of common shares outstanding - basic and diluted 591,042,000 Net loss per common share - basic and diluted $ (0.00 ) |
Hubei Jinli [Member] | |
Business Acquisition [Line Items] | |
Schedule of consideration transferred to acquisition | Cash $ 6,040,015 Present value of cash installments 10,996,129 Contingent purchase prices payment 137,561 Total consideration at fair value $ 17,173,705 |
Tianjin Jiabaili [Member] | |
Business Acquisition [Line Items] | |
Schedule of consideration transferred to acquisition | Cash $ 1,026,803 Contingent purchase prices payment 203,850 Total consideration at fair value $ 1,230,653 |
Schedule of fair value of identifiable assets acquired and liabilities assumed at the acquisition date | Fair Value Cash $ 2,731 Other current assets 2,065 Intangible assets 875,802 Goodwill 350,055 Total assets 1,230,653 Total liabilities - Net assets acquired $ 1,230,653 |
Investment payable [Member] | |
Business Acquisition [Line Items] | |
Schedule of investment payable | Name of Payee Relationship Nature October 31, July 31, Sheng Zhou Former shareholder of Hubei Jinli Payment for acquisition of Hubei Jinli $ 5,474,241 $ 9,069,058 Guifen Wang Former shareholder of Hubei Jinli Payment for acquisition of Tianjin Jiabaili 134,522 137,587 Total 5,608,763 9,206,645 Short-term (134,522 ) (2,505,871 ) Long-term $ 5,474,241 $ 6,700,774 |
Schedule of maturities schedule | Repayment date Amount Due on demand $ 134,522 June 2019 101,257 June 2020 2,179,328 June 2021 4,008,874 Debt discount (815,218 ) Total $ 5,608,763 |
Investment payable - related parties [Member] | |
Business Acquisition [Line Items] | |
Schedule of investment payable | Name of Related Party Relationship Nature October 31, July 31, Wenhe Han Vice general manager of Tianjin Jiabaili Payment for acquisition of Tianjin Jiabaili $ 112,044 $ 261,216 Heping Zhang General manager of Hubei Jinli Payment for acquisition of Hubei Jinli 742,118 750,286 Total 854,162 1,011,502 Short-term (355,290 ) (507,143 ) Long-term $ 498,872 $ 504,359 |
Schedule of maturities schedule | Repayment date Amount Due on demand $ 112,044 June 2019 250,867 June 2020 250,867 June 2021 301,743 Debt discount (61,359 ) Total $ 854,162 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Accounts Receivable, Net [Abstract] | |
Schedule of accounts receivable | October 31, July 31, Accounts receivable $ 3,972,252 $ 6,516,935 Less: allowance for doubtful accounts (1,180,968 ) (1,374,155 ) Accounts receivable, net $ 2,791,284 $ 5,142,780 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Inventories, Net [Abstract] | |
Schedule of inventories, net | October 31, July 31, Raw materials and parts $ 1,329,830 $ 1,725,258 Work in progress 125,046 124,507 Finished goods 4,075,145 3,291,768 Total 5,530,021 5,141,533 Less: allowance for inventory reserve - - Inventory, net $ 5,530,021 $ 5,141,533 |
Costs and Estimated Earnings _2
Costs and Estimated Earnings in Excess of Billings (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Costs and Estimated Earnings in Excess of Billings [Abstract] | |
Schedule of costs in excess of billings | October 31, July 31, Costs and estimated earnings incurred on uncompleted contracts $ 5,300,349 $ 5,025,892 Billings to date (2,484,519 ) (2,142,484 ) Costs and estimated earnings in excess of billings $ 2,815,830 $ 2,883,408 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of property, plant and equipment | October 31, July 31, Plant and buildings $ 6,543,857 $ 6,662,554 Machinery equipment 6,720,310 6,711,556 Computer and office equipment 282,052 251,965 Vehicle 165,030 121,211 Plant improvement 713,509 729,766 Construction in progress 452,527 256,503 Subtotal 14,877,285 14,733,555 Less: accumulated depreciation (2,918,749 ) (2,767,322 ) Property, plant and equipment, net $ 11,958,536 $ 11,966,233 |
Schedule of construction-in-progress | Construction-in-progress description Value Estimated completion date Estimated additional cost to complete Synthetic fuel raw materials production line $ 223,605 November 2018* $ - Factory plantation 114,682 December 2018 28,671 Fire safety equipment installation 103,117 March 2019 14,335 Other miscellaneous items 11,123 December 2018 - Total construction-in-progress $ 452,527 $ 43,006 * The construction-in-progress is completed and pending for final inspection. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Intangible Assets, Net [Abstract] | |
Schedule of intangible assets | October 31, July 31, Land use rights $ 4,479,773 $ 4,581,842 Technology know-hows 1,788,325 1,829,072 Patents, licenses and certifications 2,869,904 2,935,293 Less: accumulated amortization (267,939 ) (85,564 ) Intangible assets, net $ 8,870,063 $ 9,260,643 |
Schedule of amortization expenses estimated | Twelve months ending October 31, Estimated 2019 $ 733,915 2020 733,915 2021 733,054 2022 732,194 2023 578,223 Thereafter 5,358,762 Total $ 8,870,063 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Short-term loan - bank [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Outstanding balances of short-term loan - bank consisted of the following: Bank Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Wuhan Rural Commercial Bank May 2019 7.00 % Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou $ 716,764 $ 733,095 |
Long-term loan [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Outstanding balances of current maturities of long-term loan consisted of the following: Bank Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Xianning Rural Commercial Bank* April 2019 5.83 % Land use rights, plant and equipment, inventories $ 2,551,678 $ 3,069,113 * The current maturities of long-term loan were acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). |
Short-term loan - third party [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Outstanding balances of short-term loan – third party consisted of the following: Lender Name Maturities Interest rate Collateral/ Guarantee October 31, July 31, Xianning Zhongying New Energy Service Co. Ltd. Repaid in October 2018 4.75 % None $ - $ 175,943 |
Short-term loans - related parties [Member] | |
Short-term Debt [Line Items] | |
Schedule of loan | Name of Related Party Relationship Maturities Interest rate Collateral/ Guarantee October 31, 2018 July 31, 2018 Zhou Deng Hua Chief Executive Officer of the Company April 2019 & July 2019 None None $ 1,433,527 $ 5,864,759 Jian Zhou Chairman of the Company May 2019 None None 401,388 703,771 Hubei Henghao Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager Repaid in October 2018 12.00 % None - 13,195,707 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager January 2019 4.75 % None 372,717 381,209 Hubei Henghao Real Estate Development Co., Ltd Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager September 2019 6.00 % None 716,764 - Total $ 2,924,396 $ 20,145,446 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Related Party Balances and Transactions [Abstract] | |
Schedule of related party other receivable | Name of Related Party Relationship Nature October 31, July 31, Tianyu Ma General Manager of Tianjin Jiabaili Employee advances $ 14,335 $ - |
Schedule of related parties other payables | Name of Related Party Relationship Nature October 31, 2018 July 31, 2018 Luck Sky International Investment Holdings Ltd. Owned by Zhou Deng Rong, former Chief Executive Officer and director Advances for payment of U.S. Professional Fee $ 318,776 $ - Lucksky Group Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable 533,389 515,234 Sanhe Dong Yi Owned by Zhou Deng Rong, former Chief Executive Officer and director Lease payable - 21,113 Hubei Hengyi Real Estate Development Co., Ltd. Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager Interest payable 496,422 211,441 Zhou Deng Rong Former Chief Executive Officer and director Advances for payment of U.S. Professional Fee 2,748,260 2,748,260 Zhou Deng Hua Chief Executive Officer Advances for operational purpose 283,122 289,572 Jian Zhou Chairman Advances for operational purpose 610,448 436,444 Zhimin Feng Legal representative of Jingshan Sanhe Advances for operational purpose 2,855 1,191 Wei Gu General manager of Xiangtian Zhongdian Advances for operational purpose 4,301 6,863 Total $ 4,997,573 $ 4,230,118 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Income Taxes [Abstract] | |
Schedule of components of the income tax expense | 2018 2017 Current $ 543,513 $ 2,835 Deferred (17,369 ) - Provision for income tax $ 526,144 $ 2,835 |
Schedule of deferred tax assets | October 31, July 31, Deferred tax assets: Net operating loss carry forwards $ 879,015 $ 911,400 Accounts receivable allowance 295,242 343,500 Accrued liabilities 71,307 50,600 Warranty and other 16,082 16,400 Deferred tax assets before valuation allowance 1,261,646 1,321,900 Less: valuation allowance (1,244,521 ) (1,321,900 ) Net deferred tax assets $ 17,125 $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of future minimum lease payments under the non-cancellable operating leases | Twelve months ending October 31, Minimum lease payment 2019 $ 1,176,723 2020 1,211,542 2021 1,262,342 2022 568,515 2023 316,071 Thereafter 60,448 Total minimum payments required $ 4,595,641 |
Schedule of future minimum purchase commitment under the non-cancellable purchase contracts | Twelve months ending October 31, Minimum purchase commitment 2019 $ 179,012 Thereafter - Total minimum payments required $ 179,012 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of represents results of division operations | 2018 2017 Revenues: Sanhe Xiangtian $ 1,920,878 $ 354,890 Xianning Xiangtian 4,233,629 304 Jingshan Sanhe 3,576,328 - Xiangtian Zhongdian 9,101,868 - Hubei Jinli 1,155,735 - Consolidated revenues $ 19,988,438 $ 355,194 2018 2017 Gross profit: Sanhe Xiangtian $ 707,409 $ 37,364 Xianning Xiangtian 853,785 186 Jingshan Sanhe 1,187,491 - Xiangtian Zhongdian 908,334 - Hubei Jinli 538,496 - Consolidated gross profit $ 4,195,515 $ 37,550 2018 2017 Income (loss) from operations: Sanhe Xiangtian $ 669,762 $ (425,298 ) Xianning Xiangtian 622,068 (262,379 ) Jingshan Sanhe 1,012,957 - Xiangtian Zhongdian 801,752 - Hubei Jinli 107,436 - Tianjin Jiabaili (176,912 ) - All four holding entities (495,432 ) (160,925 ) Consolidated income (loss) from operations $ 2,541,631 $ (848,602 ) 2018 2017 Net income (loss) attributable to controlling interest: Sanhe Xiangtian $ 547,514 $ (429,455 ) Xianning Xiangtian 209,416 (262,347 ) Jingshan Sanhe 757,356 - Xiangtian Zhongdian 472,364 - Hubei Jinli 63,268 - Tianjin Jiabaili (180,132 ) - All four holding entities (494,019 ) (163,738 ) Consolidated net income (loss) attributable to controlling interest $ 1,375,767 $ (855,540 ) 2018 2017 Depreciation and amortization expenses: Sanhe Xiangtian $ 43,063 $ 64,860 Xianning Xiangtian 57 17,273 Jingshan Sanhe 8,705 - Xiangtian Zhongdian 74,890 - Hubei Jinli 221,785 - Tianjin Jiabaili 54,508 - Consolidated depreciation and amortization expenses $ 403,008 $ 82,133 2018 2017 Interest expense: Sanhe Xiangtian $ 6,041 $ 295 Xianning Xiangtian 413,105 32 Hubei Jinli 58,082 - Consolidated interest expense $ 477,228 $ 327 2018 2017 Capital expenditures: Sanhe Xiangtian $ 47,031 $ - Xianning Xiangtian 1,265 - Jingshan Sanhe 265,323 - Xiangtian Zhongdian 8,040 - Hubei Jinli 144,643 - Tianjin Jiabaili 12,360 - Consolidated capital expenditures $ 478,662 $ - Total assets of each division as of October 31, 2018 and July 31, 2018 consist of the following: October 31, July 31, Total assets: Sanhe Xiangtian $ 11,046,964 $ 11,355,619 Xianning Xiangtian 7,135,951 4,689,100 Jingshan Sanhe 13,196,263 3,513,449 Xiangtian Zhongdian 13,153,436 12,620,210 Hubei Jinli 19,820,836 22,489,702 Tianjin Jiabaili 4,420,414 4,111,706 All four holding entities 237,205 248,164 Consolidated assets $ 69,011,069 $ 59,027,950 |
Nature of Business and Organi_3
Nature of Business and Organization (Details) | 3 Months Ended |
Oct. 31, 2018 | |
Xiangtian HK [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A Hong Kong company |
Ownership | 100% owned by XT Energy |
Xiangtian BVI [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A British Virgin Islands company |
Ownership | 100% owned by XT Energy |
Xiangtian Shenzhen [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company and deemed a wholly foreign owned enterprise ("WFOE") |
Ownership | 100% owned by Xiangtian HK |
Sanhe Xiangtian [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company Incorporated on July 8, 2013 Sales and installation of power generation systems and PV systems and sales of PV Panels, air compression equipment and heat pump products |
Ownership | VIE of Xiangtian Shenzhen prior to September 30, 2018 and became subsidiary of Xianning Xiangtian on September 30, 2018 and thereafter |
Xianning Xiangtian [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company, Incorporated on May 30, 2016, Manufacturing and sales of air compression equipment and heat pump products |
Ownership | 100% owned by Sanhe Xiangtian prior to September 30, 2018 and became VIE of Xiangtian Shenzhen on September 30, 2018 and thereafter |
Xiangtian Zhongdian [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company, Incorporated on March 7, 2018, Manufacturing and sales of PV panels |
Ownership | 70% owned by Xianning Xiangtian |
Jingshan Sanhe [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company Incorporated on April 17, 2018 Researching, manufacturing and sales of high-grade synthetic fuel products |
Ownership | 100% owned by Xianning Xiangtian |
Hubei Jinli [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company, Incorporated on December 27, 2004 and acquired on June 30, 2018, Manufacturing and sales of hydraulic parts and electronic components |
Ownership | 100% owned by Xianning Xiangtian |
Tianjin Jiabaili [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company, Incorporated on April 10, 2007 and acquired on June 30, 2018, Manufacturing and sales of petroleum products |
Ownership | 100% owned by Xianning Xiangtian |
Xiangtian Trade [Member] | |
Nature of Business and Organization [Line Items] | |
Background | A PRC limited liability company Incorporated on August 9, 2018 Trading chemicals raw materials for the purpose of providing a stable supply for synthetic fuel product operation of the Company |
Ownership | 100% owned by Xianning Xiangtian |
Nature of Business and Organi_4
Nature of Business and Organization (Details Textual) | May 15, 2012USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥) | Mar. 31, 2018 | Apr. 17, 2012shares | Oct. 31, 2018USD ($) | Oct. 31, 2018CNY (¥) |
Xiangtian Zhongdian New Energy Co Ltd [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Description of business transaction | Xianning Xiangtian holds a 70% ownership interest with the remaining 30% ownership held by Nanjing Zhongdian Photovoltaic Co. Ltd. Xiangtian Zhongdian is in the business of manufacturing and sales of PV panels. | ||||||
Xianning Xiangtian [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Capital contribution | $ 14,500,000 | ¥ 100,000,000 | $ 14,500,000 | ¥ 100,000,000 | |||
Share Purchase Agreements [Member] | Luck Sky International Investment Holdings Limited [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Aggregate value of common stock | $ | $ 235,000 | ||||||
Aggregate shares of common stock | shares | 7,200,000 | 7,200,000 | |||||
Percentage of outstanding shares | 90.00% | ||||||
Description of business transaction | Effective May 29, 2012, the Company's name was changed to "Xiangtian (USA) Air Power Co., Ltd.". | ||||||
VIE Agreements [Member] | Xianning Xiangtian [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Percentage of VIE agreements equity interest | 100.00% | 100.00% | |||||
VIE Agreements [Member] | Sanhe Xiangtian [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Percentage of VIE agreements equity interest | 100.00% | 100.00% | |||||
Framework Agreement on Business Cooperation [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Agreement term | 10 years | 10 years | |||||
Agreement of Exclusive Management, Consulting and Training and Technical Service [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Agreement term | 10 years | 10 years | |||||
Exclusive Option Agreement [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Owners, percentage | 100.00% | 100.00% | |||||
Know-How Sub-License Agreement [Member] | |||||||
Nature of Business and Organization [Line Items] | |||||||
Royalty fee | 5.00% | 5.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |||
Current assets | $ 43,646,134 | $ 33,240,433 | |
Non-current assets | 25,127,729 | 25,568,517 | |
Total assets | 68,773,863 | 58,808,950 | |
Current liabilities | 41,506,532 | 46,576,026 | |
Non-current liabilities | 5,973,113 | 7,205,133 | |
Total liabilities | 47,479,645 | $ 53,781,159 | |
Revenues | 19,988,438 | $ 355,194 | |
Gross Profit | 4,195,515 | 37,550 | |
Income (loss) from operations | 3,037,062 | (687,677) | |
Net income (loss) | $ 1,869,784 | $ (691,802) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) | 3 Months Ended |
Oct. 31, 2018 | |
Plant and buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Plant and buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 20 years |
Estimated Residual Value | 5.00% |
Machinery equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Machinery equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Computer and office equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Estimated Residual Value | 0.00% |
Computer and office equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Estimated Residual Value | 0.00% |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 10 years |
Estimated Residual Value | 5.00% |
Plant improvement [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 20 years |
Plant improvement [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Residual Value | 0.00% |
Plant improvement [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Residual Value | 5.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 2) | 3 Months Ended |
Oct. 31, 2018 | |
Land use rights [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 50 years |
Technology know-hows [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Patents, licenses and certifications [Member] | Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Patents, licenses and certifications [Member] | Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 3) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | $ 324,121 | $ 331,505 |
Level 1 [Member] | ||
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | ||
Level 2 [Member] | ||
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | ||
Level 3 [Member] | ||
Financial liabilities | ||
Contingent payment consideration liabilities (see Note 3) | $ 324,121 | $ 331,505 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details 4) - USD ($) | 3 Months Ended | 12 Months Ended |
Oct. 31, 2018 | Jul. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | ||
Beginning balance | $ 331,505 | |
Contingent liability obligated from business combinations | $ 341,411 | |
Exchange rate effect | (7,384) | (9,906) |
Ending balance | $ 324,121 | $ 331,505 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details Textual) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Oct. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Jul. 31, 2018USD ($) | |
Summary of Significant Accounting Policies (Textual) | ||||
Net working capital | $ 33,000 | |||
Cash | 25,900,000 | |||
Current payable balance, related parties | $ 5,500,000 | |||
Variable interest agreements, description | Sanhe Xiangtian transferred its 100% equity interest of Xianning Xiangtian to the Sanhe Xiangtian Shareholders and the Sanhe Xiangtian Shareholders transferred their 100% equity interest of Sanhe Xiangtian to Xianning Xiangtian. | |||
Loans receivables, description | Loans receivables represents interest free advances to the former shareholder of Hubei Jinli by the Company prior to the acquisition of Hubei Jinli on June 30, 2018. These advances were unsecured and due on demand. Full outstanding balance of $1,759,428 of loan receivables as of July 31, 2018 were repaid in August 2018. | |||
Land use rights, description | All land in the PRC is owned by the government; however, the government grants "land use rights." The Company has obtained rights to use various parcels of land for 50 years through the acquisition of Hubei Jinli in June 2018. | |||
Technology know-hows, description | Technology know-hows, including LSC Hand-Held Diesel Pump, CB-39 Motor Oil Pump, 0-16 MPa series hydraulic cylinder, brake cylinder and hydraulic value, and certain special operating licenses were acquired through the acquisition of Hubei Jinli and Tianjin Jiabaili in June 2018 with estimated finite useful lives between 4.5 years to 10 years. | |||
Noncontrolling interest, description | Certain PV panel certifications were contributed by the Company's noncontrolling interest shareholders as capital contribution in March 2018 with an estimated finite useful lives of 10 years. | |||
Acquired safety production license, description | With a finite useful of 3 years in June 2018. | |||
Long-term investment payable, balance | $ 5,973,113 | $ 7,205,133 | ||
Cash denominated in Renminbi (RMB) with US dollar | 25,844,616 | 14,207,358 | ||
Net of discount | 876,577 | 869,173 | ||
Statutory reserves | $ 149,543 | 0 | ||
Statutory surplus reserve fund percentage description | Subject to certain cumulative limits, the "statutory surplus reserve fund" requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the "reserve fund". For foreign invested enterprises, the annual appropriation for the "reserve fund" cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). | |||
Other comprehensive loss from foreign currency translation adjustments | $ (380,986) | $ 89,875 | ||
Value added taxes, description | The Company is subject to value added tax ("VAT"). Revenue from sales of goods purchased from other entities is generally subject to VAT at the rate of 16% starting in May 2018 or at the rate of 17% in April 2018 and prior. | |||
Income tax examination, description | The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. | |||
Royalty fees, percentage | 5.00% | |||
Accrued warranty expense | $ 64,325 | $ 67,651 | ||
Advertising costs | 31,972 | 0 | ||
Employee benefit expenses | $ 42,722 | $ 26,377 | ||
Subsidiaries in PRC [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Foreign currency exchange rate | 6.9758 | 6.8204 | ||
Weighted average exchange rate | 6.8779 | 6.6227 | ||
Subsidiary in Hong Kong [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Foreign currency exchange rate | 7.8404 | 7.8490 | ||
Weighted average exchange rate | 7.8417 | 7.8135 | ||
Xiangtian Shenzhen [Member] | ||||
Summary of Significant Accounting Policies (Textual) | ||||
Percentage of amount received in net income | 100.00% |
Business Combinations (Details)
Business Combinations (Details) | 12 Months Ended |
Jun. 21, 2018USD ($) | |
Hubei Jinli [Member] | |
Business Acquisition [Line Items] | |
Cash | $ 6,040,015 |
Present value of cash installments | 10,996,129 |
Contingent purchase prices payment | 137,561 |
Total consideration at fair value | 17,173,705 |
Tianjin Jiabaili [Member] | |
Business Acquisition [Line Items] | |
Cash | 1,026,803 |
Contingent purchase prices payment | 203,850 |
Total consideration at fair value | $ 1,230,653 |
Business Combinations (Details
Business Combinations (Details 1) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 | Jun. 21, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 4,041,069 | $ 4,133,143 | |
Hubei Jinli [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 33,402 | ||
Accounts receivable, net | 2,561,863 | ||
Inventories, net | 455,247 | ||
Advances to suppliers | 143,129 | ||
Other receivables | 8,622 | ||
Loan receivables | 2,434,381 | ||
Plant and equipment | 6,550,446 | ||
Intangible assets | 7,899,887 | ||
Deferred tax assets | 9,295 | ||
Goodwill | 3,906,599 | ||
Total assets | 24,002,871 | ||
Short-term loan - bank | (2,114,005) | ||
Current maturities of long-term loan | (3,160,828) | ||
Accounts payable | (357,188) | ||
Advance from customers | (4,099) | ||
Other payables and accrued liabilities | (844,926) | ||
Other payables - related party | (30,200) | ||
Income taxes payable | (317,920) | ||
Total liabilities | (6,829,166) | ||
Net assets acquired | 17,173,705 | ||
Tianjin Jiabaili [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 2,731 | ||
Other current assets | 2,065 | ||
Intangible assets | 875,802 | ||
Goodwill | 350,055 | ||
Total assets | 1,230,653 | ||
Total liabilities | |||
Net assets acquired | $ 1,230,653 |
Business Combinations (Detail_2
Business Combinations (Details 2) | 3 Months Ended |
Oct. 31, 2018USD ($)$ / shares | |
Business Combinations [Abstract] | |
Revenue | $ 1,078,936 |
Cost of revenue | 563,317 |
Gross profit | 515,619 |
Total operating expenses | 1,130,635 |
Income (loss) from operations | (615,016) |
Other (expense) income, net | (4,103) |
Income (loss) before income taxes | (619,119) |
Income tax expense | (2,835) |
Net loss attributable to XT Energy Group, Inc. | $ (621,954) |
Weighted average number of common shares outstanding - basic and diluted | $ / shares | $ 591,042,000 |
Net loss per common share - basic and diluted | $ / shares | $ 0 |
Business Combinations (Detail_3
Business Combinations (Details 3) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Jul. 31, 2018 | |
Investment payable [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 5,608,763 | $ 9,206,645 |
Short-term | (134,522) | (2,505,871) |
Long-term | 5,474,241 | 6,700,774 |
Investment payable - related parties [Member] | ||
Business Acquisition [Line Items] | ||
Total | 854,162 | 1,011,502 |
Short-term | (355,290) | (507,143) |
Long-term | $ 498,872 | 504,359 |
Sheng Zhou [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Sheng Zhou | |
Relationship | Former shareholder of Hubei Jinli | |
Nature | Payment for acquisition of Hubei Jinli | |
Total | $ 5,474,241 | 9,069,058 |
Guifen Wang [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Guifen Wang | |
Relationship | Former shareholder of Hubei Jinli | |
Nature | Payment for acquisition of Tianjin Jiabaili | |
Total | $ 134,522 | 137,587 |
Wenhe Han [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Wenhe Han | |
Relationship | Vice general manager of Tianjin Jiabaili | |
Nature | Payment for acquisition of Tianjin Jiabaili | |
Total | $ 112,044 | 261,216 |
Heping Zhang [Member] | ||
Business Acquisition [Line Items] | ||
Name of Payee | Heping Zhang | |
Relationship | General manager of Hubei Jinli | |
Nature | Payment for acquisition of Hubei Jinli | |
Total | $ 742,118 | $ 750,286 |
Business Combinations (Detail_4
Business Combinations (Details 4) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Investment payable [Member] | ||
Business Acquisition [Line Items] | ||
Due on demand | $ 134,522 | |
June 2,019 | 101,257 | |
June 2,020 | 2,179,328 | |
June 2,021 | 4,008,874 | |
Deferred financing fees | (815,218) | |
Total | 5,608,763 | $ 9,206,645 |
Investment payable - related parties [Member] | ||
Business Acquisition [Line Items] | ||
Due on demand | 112,044 | |
June 2,019 | 250,867 | |
June 2,020 | 250,867 | |
June 2,021 | 301,743 | |
Deferred financing fees | (61,359) | |
Total | $ 854,162 | $ 1,011,502 |
Business Combinations (Detail_5
Business Combinations (Details Textual) | Aug. 11, 2018 | Aug. 12, 2018 | Jun. 30, 2018 | Oct. 31, 2018USD ($) | Oct. 31, 2017USD ($) | Jun. 21, 2018USD ($) | Jun. 21, 2018CNY (¥) | Jul. 31, 2018USD ($) |
Business Combinations (Textual) | ||||||||
Payment term of the stock portion, description | Payment term of the Jinli Stock Portion which shall have a value equal to RMB 80.07 million (approximately $12.37 million) to comprise three cash installments of 1) first installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2019, 2) second installment of RMB 25 million (approximately $3.95 million) payable by June 20, 2020, and 3) third installment of RMB 30.07 million (approximately $4.75 million) payable by June 20, 2021. | |||||||
Goodwill arising from the acquisition | $ 400,000 | |||||||
Ownership and payment term, description | The ownership transfer from 90% to 100% and the full payment term of acquisition price of RMB 6,800,000 (approximately $1.0 million) amended to be all cash payment. In addition, Xianning Xiangtian will indefinitely provide 10% of profit sharing of Tianjin Jiabaili to the Jiabaili Sellers. | |||||||
Net profit, percentage | 10.00% | |||||||
Deferred financing fees, net of accumulated amortization | 876,577 | $ 1,021,413 | ||||||
Amortization expense related to the deferred financing fees | 123,819 | $ 0 | ||||||
Tianjin Jiabaili [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Other payables and accrued liabilities | $ 193,527 | |||||||
Hubei Jinli [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Description of annual net profit on acquisition | If Jinli Net Profit exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the former shareholders of Hubei Jinli 10% of the Jinli Net Profit and the annual net profit sharing period is one year from June 21, 2018 to June 20, 2019. As of October 31, 2018, estimated contingent liabilities payables to the former shareholders of Hubei Jinli was $130,594 and classified in the caption ''other payables and accrued liabilities'' in the accompanying unaudited condensed consolidated balance sheets. | |||||||
Goodwill arising from the acquisition | $ 3,900,000 | |||||||
Other payables and accrued liabilities | $ 130,594 | |||||||
Share purchase agreement [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Percentage of capital stock acquire | 100.00% | 100.00% | ||||||
Aggregate consideration | $ 23,180,000 | ¥ 150,000,000 | ||||||
Description of acquisition | (a) RMB 40 million (approximately $6.18 million) in cash (the "Jinli Cash Portion''); and (b) shares of the Company's common stock (the ''Jinli Stock Portion'') which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian's common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli's existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). | (a) RMB 40 million (approximately $6.18 million) in cash (the "Jinli Cash Portion''); and (b) shares of the Company's common stock (the ''Jinli Stock Portion'') which shall have a value equal to RMB 80.07 million (approximately $12.37 million). The price per share will be determined by the average daily closing price of Xiangtian's common stock for the period from January 1, 2018 to June 30, 2018; and (c) an assumption by Xianning Sanhe of Hubei Jinli's existing bank loan from Hubei Xianning Rural Commercial Bank in the principal amount of RMB 29.93 million (approximately $4.63 million). | ||||||
Share purchase agreement [Member] | Tianjin Jiabaili [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Percentage of capital stock acquire | 90.00% | 90.00% | ||||||
Aggregate consideration | $ 900,000 | ¥ 6,120,000 | ||||||
Description of acquisition | (a) RMB 3,672,000 (approximately $0.5 million) in cash (the ''Jiabaili Cash Portion''); and (b) shares of the Company's common stock (the ''Jiabaili Stock Portion'') which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). | (a) RMB 3,672,000 (approximately $0.5 million) in cash (the ''Jiabaili Cash Portion''); and (b) shares of the Company's common stock (the ''Jiabaili Stock Portion'') which shall have a value equal to RMB 2,448,000 (approximately $0.4 million). | ||||||
Stock Purchase Agreement [Member] | ||||||||
Business Combinations (Textual) | ||||||||
Repurchase the stock portion | $ 12,370,000 | ¥ 80,070,000 | ||||||
Description of annual net profit on acquisition | Pursuant to the Supplement Agreement, after the Jinli Acquisition, should Hubei Jinli's annual net profit (the ''Jinli Net Profit'') exceed RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 20% of the Jinli Net Profit and if the Jinli Net Profit reaches RMB 5 million (approximately $773,000), but less than RMB 10 million (approximately $1.55 million), Xianning Xiangtian shall pay the Jinli Sellers 10% of the Jinli Net Profit. |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Accounts Receivable, Net [Abstract] | ||
Accounts receivable | $ 3,972,252 | $ 6,516,935 |
Less: allowance for doubtful accounts | (1,180,968) | (1,374,155) |
Accounts receivable, net | $ 2,791,284 | $ 5,142,780 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details Textual) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Accounts Receivable, Net (Textual) | ||
Provision for (recovery of) allowance for doubtful accounts | $ (164,887) | $ 1,576 |
Foreign currency translation effect | $ 28,300 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Inventories, Net [Abstract] | ||
Raw materials and parts | $ 1,329,830 | $ 1,725,258 |
Work in progress | 125,046 | 124,507 |
Finished goods | 4,075,145 | 3,291,768 |
Total | 5,530,021 | 5,141,533 |
Less: allowance for inventory reserve | ||
Inventory, net | $ 5,530,021 | $ 5,141,533 |
Advances to Suppliers, Net (Det
Advances to Suppliers, Net (Details) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Advances to Suppliers, Net (Textual) | ||
Outstanding advances to suppliers | $ 4,713,028 | $ 1,101,472 |
Costs and Estimated Earnings _3
Costs and Estimated Earnings in Excess of Billings (Details) - Percentage of Completion Method [Member] - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Costs and Estimated Earnings in Excess of Billings [Line Items] | ||
Costs and estimated earnings incurred on uncompleted contracts | $ 5,300,349 | $ 5,025,892 |
Billings to date | (2,484,519) | (2,142,484) |
Costs and estimated earnings in excess of billings | $ 2,815,830 | $ 2,883,408 |
Deposit for Investment (Details
Deposit for Investment (Details) | Apr. 30, 2019USD ($) | Apr. 30, 2019CNY (¥) | Nov. 30, 2018USD ($) | Nov. 30, 2018CNY (¥) | Oct. 31, 2018USD ($) | Oct. 31, 2018CNY (¥) | Mar. 16, 2018USD ($) | Mar. 16, 2018CNY (¥) |
Deposit for Investment (Textual) | ||||||||
Majority-owned subsidiary, percentage | 60.00% | 60.00% | ||||||
Noncontrolling interest percentage | 40.00% | 40.00% | ||||||
Deposit | $ 14,539 | ¥ 100,000 | $ 439,857 | ¥ 3,000,000 | ||||
Scenario, Forecast [Member] | ||||||||
Deposit for Investment (Textual) | ||||||||
Deposit | $ 300,000 | ¥ 2,190,000 | ||||||
Subsequent Event [Member] | ||||||||
Deposit for Investment (Textual) | ||||||||
Deposit | $ 100,000 | ¥ 710,000 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Subtotal | $ 14,877,285 | $ 14,733,555 |
Less: accumulated depreciation | (2,918,749) | (2,767,322) |
Property, plant and equipment, net | 11,958,536 | 11,966,233 |
Plant and buildings [Member] | ||
Subtotal | 6,543,857 | 6,662,554 |
Machinery equipment [Member] | ||
Subtotal | 6,720,310 | 6,711,556 |
Computer and office equipment [Member] | ||
Subtotal | 282,052 | 251,965 |
Vehicle [Member] | ||
Subtotal | 165,030 | 121,211 |
Plant improvement [Member] | ||
Subtotal | 713,509 | 729,766 |
Construction in progress [Member] | ||
Subtotal | $ 452,527 | $ 256,503 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details 1) | 3 Months Ended | |
Oct. 31, 2018USD ($) | ||
Property, Plant and Equipment [Line Items] | ||
Value | $ 452,527 | |
Estimated additional cost to complete | $ 43,006 | |
Synthetic fuel raw materials production line [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction-in-progress description | Synthetic bio-fuel raw materials production line | |
Value | $ 223,605 | |
Estimated completion date | Nov. 30, 2018 | [1] |
Estimated additional cost to complete | ||
Factory plantation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction-in-progress description | Factory plantation | |
Value | $ 114,682 | |
Estimated completion date | Dec. 31, 2018 | |
Estimated additional cost to complete | $ 28,671 | |
Fire safety equipment installation [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction-in-progress description | Fire safety equipment installation | |
Value | $ 103,117 | |
Estimated completion date | Mar. 31, 2019 | |
Estimated additional cost to complete | $ 14,335 | |
Other miscellaneous items [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Construction-in-progress description | Other miscellaneous items | |
Value | $ 11,123 | |
Estimated completion date | Dec. 31, 2018 | |
Estimated additional cost to complete | ||
[1] | The construction-in-progress is completed and pending for final inspection. |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net (Details Textual) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Property, Plant and Equipment, Net (Textual) | ||
Depreciation expenses | $ 216,106 | $ 82,133 |
Depreciation included in cost of sales | 116,889 | 3,131 |
Selling, general and administrative expenses | $ 99,217 | $ 79,002 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (267,939) | $ (85,564) |
Intangible assets, gross | 8,870,063 | 9,260,643 |
Land use rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 4,479,773 | 4,581,842 |
Technology know-hows [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,788,325 | 1,829,072 |
Patents, licenses and certifications [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 2,869,904 | $ 2,935,293 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details 1) | Oct. 31, 2018USD ($) |
Summary of expected amortization expenses | |
2,019 | $ 733,915 |
2,020 | 733,915 |
2,021 | 733,054 |
2,022 | 732,194 |
2,023 | 578,223 |
Thereafter | 5,358,762 |
Total | $ 8,870,063 |
Intangible Assets, Net (Detai_3
Intangible Assets, Net (Details Textual) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Intangible Assets, Net (Textual) | ||
Amortization expenses | $ 186,902 |
Debt (Details)
Debt (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2018 | Jul. 31, 2018 | ||
Short-term Debt [Line Items] | |||
Short-term loan | $ 2,924,396 | $ 20,145,446 | |
Wuhan Rural Commercial Bank [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Wuhan Rural Commercial Bank | Wuhan Rural Commercial Bank | |
Maturities | May 2,019 | May 2,019 | |
Interest rate | 7.00% | 7.00% | |
Collateral/ Guarantee | Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou | Guarantee by Sheng Zhou and Heping Zheng, former shareholders of Hubei Jinli, and three other companies related to Sheng Zhou | |
Short-term loan | $ 716,764 | $ 733,095 | |
Xianning Rural Commercial Bank [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | [1] | Xianning Rural Commercial Bank | Xianning Rural Commercial Bank |
Maturities | April 2,019 | April 2,019 | |
Interest rate | 5.83% | 5.83% | |
Collateral/ Guarantee | Land use rights, plant and equipment, inventories | Land use rights, plant and equipment, inventories | |
Long-term loan | $ 2,551,678 | $ 3,069,113 | |
Xianning Zhongying New Energy Service Co. Ltd. [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Xianning Zhongying New Energy Service Co. Ltd. | Xianning Zhongying New Energy Service Co. Ltd. | |
Maturities | Repaid in October 2018 | Repaid in October 2018 | |
Interest rate | 4.75% | 4.75% | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 175,943 | ||
Zhou Deng Hua [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Zhou Deng Hua | Zhou Deng Hua | |
Relationship | Chief Executive Officer of the Company | Chief Executive Officer of the Company | |
Maturities | April 2019 & July 2019 | April 2019 & July 2019 | |
Interest rate | None | None | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 1,433,527 | $ 5,864,759 | |
Jian Zhou [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Jian Zhou | Jian Zhou | |
Relationship | Chairman of the Company | Chairman of the Company | |
Maturities | May 2,019 | May 2,019 | |
Interest rate | None | None | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 401,388 | $ 703,771 | |
Hubei Henghao Real Estate Development Co., Ltd. [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Hubei Henghao Real Estate Development Co., Ltd. | Hubei Henghao Real Estate Development Co., Ltd. | |
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | |
Maturities | Repaid in October 2018 | Repaid in October 2018 | |
Interest rate | 12.00% | 12.00% | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 13,195,707 | ||
Hubei Henghao Real Estate Development Co., Ltd [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Hubei Henghao Real Estate Development Co., Ltd | Hubei Henghao Real Estate Development Co., Ltd | |
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | |
Maturities | January 2,019 | January 2,019 | |
Interest rate | 4.75% | 4.75% | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 372,717 | $ 381,209 | |
Hubei Henghao Real Estate Development Co., Ltd [Member] | |||
Short-term Debt [Line Items] | |||
Bank Name/Lender Name/Name of Related Party | Hubei Henghao Real Estate Development Co., Ltd | Hubei Henghao Real Estate Development Co., Ltd | |
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | Bin Zhou, son of Zhou Deng Hua, is the executive director and general manager | |
Maturities | September 2,019 | September 2,019 | |
Interest rate | 6.00% | 6.00% | |
Collateral/ Guarantee | None | None | |
Short-term loan | $ 716,764 | ||
[1] | The current maturities of long-term loan were acquired through the acquisition of Hubei Jinli on June 30, 2018 (see Note 3). |
Debt (Details Textual)
Debt (Details Textual) | 3 Months Ended |
Oct. 31, 2018USD ($) | |
Debt (Textual) | |
Interest expense, debt | $ 353,409 |
Interest expense, related party | $ 295,327 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party balances | $ 4,997,573 | $ 4,230,118 |
Tianyu Ma [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | General Manager of Tianjin Jiabaili | |
Nature | Employee advances | |
Related party balances | $ 14,335 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details 1) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Jul. 31, 2018 | |
Related Party Transaction [Line Items] | ||
Related party balances | $ 4,997,573 | $ 4,230,118 |
Luck Sky International Investment Holdings Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director | |
Nature | Advances for payment of U.S. Professional Fee | |
Related party balances | $ 318,776 | |
Lucksky Group [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director | |
Nature | Lease payable | |
Related party balances | $ 533,389 | 515,234 |
Sanhe Dong Yi [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Owned by Zhou Deng Rong, former Chief Executive Officer and director | |
Nature | Lease payable | |
Related party balances | 21,113 | |
Hubei Hengyi Real Estate Development Co., Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Bin Zhou, son of Zhou Deng Hua, is the executive director and generate manager | |
Nature | Interest payable | |
Related party balances | $ 496,422 | 211,441 |
Zhou Deng Rong [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Former Chief Executive Officer and director | |
Nature | Advances for payment of U.S. Professional Fee | |
Related party balances | $ 2,748,260 | 2,748,260 |
Zhou Deng Hua [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Chief Executive Officer | |
Nature | Advances for operational purpose | |
Related party balances | $ 283,122 | 289,572 |
Jian Zhou [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Chairman | |
Nature | Advances for operational purpose | |
Related party balances | $ 610,448 | 436,444 |
Zhimin Feng [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | Legal representative of Jingshan Sanhe | |
Nature | Advances for operational purpose | |
Related party balances | $ 2,855 | 1,191 |
Wei Gu [Member] | ||
Related Party Transaction [Line Items] | ||
Relationship | General manager of Xiangtian Zhongdian | |
Nature | Advances for operational purpose | |
Related party balances | $ 4,301 | $ 6,863 |
Related Party Balances and Tr_5
Related Party Balances and Transactions (Details Textual) | 3 Months Ended |
Oct. 31, 2018USD ($) | |
Related Party Balances and Transactions (Textual) | |
Lease description | The space in the office, factory and dormitory being leased are 1296, 5160 and 1200 square meters, respectively. The office and factory space are leased for a rent of $105,053 (RMB 697,248) per year and the dormitory is leased for a rent of $19,527 (RMB 129,600) per year. The leases expire in April 30, 2024 and are subject to renewal with a prior two-month written notice. For the three months ended October 31, 2018 and 2017, rent expense for the lease with Lucksky was $30,054 and $31,212, respectively. At October 31, 2018 and July 31, 2018, the amount due under the leases was $533,389 and $515,234, respectively. |
Sanhe Liguang Kelitai Equipment Ltd [Member] | |
Related Party Balances and Transactions (Textual) | |
Owners, percentage | 95.00% |
Revenue | $ 8,748 |
Costs of sales | $ 7,550 |
Sanhe Dong Yi [Member] | |
Related Party Balances and Transactions (Textual) | |
Lease description | The lease term expiring on June 14, 2019 for a rent of approximately $7,000 (RMB 48,000) per year. |
Rent expense | $ 1,745 |
Significant Customer, Former _2
Significant Customer, Former Related Party (Details) | 1 Months Ended | 3 Months Ended | ||||||
Jul. 27, 2018USD ($)m² | Jul. 27, 2018CNY (¥)m² | Jul. 27, 2016m² | Oct. 31, 2018USD ($) | Oct. 31, 2018CNY (¥) | Oct. 31, 2017USD ($) | Apr. 10, 2014a | Apr. 08, 2014 | |
Xianning Xiangtian [Member] | ||||||||
Significant Customer, Former Related Party (Textual) | ||||||||
Payments for rent | $ 83,132 | ¥ 555,360 | ||||||
Rent expense related to the leases | $ 17,000 | ¥ 114,172 | 6,250 | $ 20,783 | ||||
Lease expiration, description | Per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a prior one-month written notice. | Per year from August 1, 2018 to July 31, 2020 and is subject to renewal with a prior one-month written notice. | The lease expires on July 31, 2018, and the Company terminated the lease early in February 2018 when the Company through Xiangtian Zhongdian signed another lease agreement which expires on February 5, 2019 with a rent of approximately $25,000 (RMB 168,922). | |||||
Factory leased space | m² | 3,128 | 3,128 | 4,628 | |||||
Xianning Xiangtian One [Member] | ||||||||
Significant Customer, Former Related Party (Textual) | ||||||||
Rent expense related to the leases | 3,464 | |||||||
Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||
Significant Customer, Former Related Party (Textual) | ||||||||
Revenues from a significant customer | $ 1,011,000 | $ 0 | ||||||
Zhou Deng Rong [Member] | Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||
Significant Customer, Former Related Party (Textual) | ||||||||
Owners, percentage | 70.00% | 70.00% | ||||||
Land use right for approximately acres | a | 70 | |||||||
Jian Zhou [Member] | Xianning Lucksky Aerodynamic Electricity [Member] | ||||||||
Significant Customer, Former Related Party (Textual) | ||||||||
Owners, percentage | 30.00% | 30.00% |
Employee Benefits Government _2
Employee Benefits Government Plan (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Oct. 31, 2018 | Jul. 31, 2018 | |
Employee Benefits Government Plan [Textual] | ||
Outstanding amount due to the local labor bureau | $ 177,525 | $ 174,971 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Income Taxes [Abstract] | ||
Current | $ 543,513 | $ 2,835 |
Deferred | (17,369) | |
Provision for income tax | $ 526,144 | $ 2,835 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Oct. 31, 2018 | Jul. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carry forwards | $ 879,015 | $ 911,400 |
Accounts receivable allowance | 295,242 | 343,500 |
Accrued liabilities | 71,307 | 50,600 |
Warranty and other | 16,082 | 16,400 |
Deferred tax assets before valuation allowance | 1,261,646 | 1,321,900 |
Less: valuation allowance | (1,244,521) | (1,321,900) |
Net deferred tax assets | $ 17,125 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Dec. 22, 2017 | Oct. 31, 2018 | Jul. 31, 2018 | |
Income Taxes (Textual) | |||
Corporate tax rate | 21.00% | ||
Statutory U.S. tax rate | 28.60% | ||
Operating loss carryforwards | $ 3,650,600 | ||
Minimum [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 21.00% | ||
Maximum [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 34.00% | ||
Deferred Tax Assets [Member] | |||
Income Taxes (Textual) | |||
Valuation allowance on deferred tax assets | 100.00% | ||
Net operating loss carryforwards, description | U.S. deferred income tax assets and liabilities for temporary differences and NOLs and recorded one time income tax payable to be paid in 8 years. | ||
Operating loss carryforwards | $ 766,600 | ||
Operating loss carryforwards, expiration description | Expire beginning in 2029 to 2038 | ||
Hong Kong [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 16.50% | ||
PRC subsidiaries [Member] | |||
Income Taxes (Textual) | |||
Corporate tax rate | 25.00% | ||
PRC subsidiaries [Member] | Deferred Tax Assets [Member] | |||
Income Taxes (Textual) | |||
Operating loss carryforwards | $ 430,100 | ||
VIEs [Member] | Deferred Tax Assets [Member] | |||
Income Taxes (Textual) | |||
Operating loss carryforwards | $ 107,500 | ||
Operating loss carryforwards, expiration description | Expire in years 2019 through 2023. | ||
Subsequent Fiscal Years [Member] | |||
Income Taxes (Textual) | |||
Statutory U.S. tax rate | 21.00% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) | Oct. 31, 2018USD ($) |
Twelve months ending October 31, | |
2,019 | $ 1,176,723 |
2,020 | 1,211,542 |
2,021 | 1,262,342 |
2,022 | 568,515 |
2,023 | 316,071 |
Thereafter | 60,448 |
Total minimum payments required | $ 4,595,641 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) | Oct. 31, 2018USD ($) |
Twelve months ending October 31, | |
2,019 | $ 179,012 |
Thereafter | |
Total minimum payments required | $ 179,012 |
Commitments and Contingencies_4
Commitments and Contingencies (Details Textual) | 1 Months Ended | 3 Months Ended | ||
Jul. 24, 2015shares | Sep. 23, 2013USD ($)non-relatedparties$ / sharesshares | Oct. 31, 2018USD ($)shares | Oct. 31, 2017USD ($)shares | |
Commitments and Contingencies (Textual) | ||||
Rental expense | $ | $ 158,018 | $ 19,710 | ||
Common stock per share | $ / shares | $ 0.001 | |||
Number of other non-related parties | non-relatedparties | 2 | |||
Common stock shares issued, value | $ | $ 67,000 | |||
Dilutive effect of not canceling shares | 67,000,000 | 60,000,000 | 60,000,000 | |
Anti-dilutive shares | 60,000,000 | 60,000,000 | ||
Mr. Roy Thomas Phillips [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Restricted common stock shares issued | 60,000,000 | |||
Common stock per share | $ / shares | $ 0.001 | |||
Other non-related parties [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Restricted common stock shares issued | 7,000,000 | |||
Shares issued to two other non-related parties cancelled | 7,000,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) shares in Millions | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Stockholders' Equity (Textual) | ||
Capital contribution from shareholder | $ 14,533,003 | |
Xianning Xiangtian [Member] | ||
Stockholders' Equity (Textual) | ||
Shares for issuances | 30 | |
Capital contribution from shareholder | $ 14,533,003 |
Concentrations (Details)
Concentrations (Details) | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2018 | |
Accounts Payable [Member] | Vendor One [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 44.10% | 29.80% | |
Accounts Payable [Member] | Vendor Two [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 13.60% | 15.70% | |
Accounts Payable [Member] | Vendor Three [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 11.40% | 14.00% | |
Accounts Payable [Member] | Vendor Four [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 10.10% | 11.70% | |
Total Purchases [Member] | Vendor One [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 42.50% | 35.80% | |
Total Purchases [Member] | Vendor Two [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 25.80% | 31.50% | |
Total Purchases [Member] | Vendor Three [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 16.50% | ||
Total Purchases [Member] | Vendor Four [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 10.50% | ||
Customer One [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 43.30% | 95.00% | |
Customer One [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 24.00% | 32.00% | |
Customer Two [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 18.10% | ||
Customer Two [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 14.00% | 15.00% | |
Customer Three [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 14.00% | ||
Customer Three [Member] | Accounts Receivable [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 12.30% | ||
Customer Four [Member] | Total Revenues [Member] | |||
Concentrations (Textual) | |||
Concentration risk, percentage | 11.10% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | |||
Oct. 31, 2018 | Jul. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | $ 19,988,438 | $ 2,100,000 | $ 355,194 | $ 1,500,000 |
Consolidated gross profit | 4,195,515 | 343,000 | 37,550 | $ 245,000 |
Consolidated income (loss) from operations | 2,541,631 | (848,602) | ||
Consolidated net income (loss) attributable to controlling interest | 1,375,767 | (855,540) | ||
Consolidated depreciation and amortization expenses | 403,008 | 82,133 | ||
Consolidated interest expense | 477,228 | |||
Consolidated capital expenditures | 478,662 | |||
Consolidated assets | 69,011,069 | 59,027,950 | ||
Sanhe Xiangtian [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | 1,920,878 | 354,890 | ||
Consolidated gross profit | 707,409 | 37,364 | ||
Consolidated income (loss) from operations | 669,762 | (425,298) | ||
Consolidated net income (loss) attributable to controlling interest | 547,514 | (429,455) | ||
Consolidated depreciation and amortization expenses | 43,063 | 64,860 | ||
Consolidated interest expense | 6,041 | 295 | ||
Consolidated capital expenditures | 47,031 | |||
Consolidated assets | 11,046,964 | 11,355,619 | ||
Xianning Xiangtian [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | 4,233,629 | 304 | ||
Consolidated gross profit | 853,785 | 186 | ||
Consolidated income (loss) from operations | 622,068 | (262,379) | ||
Consolidated net income (loss) attributable to controlling interest | 209,416 | (262,347) | ||
Consolidated depreciation and amortization expenses | 57 | 17,273 | ||
Consolidated interest expense | 413,105 | 32 | ||
Consolidated capital expenditures | 1,265 | |||
Consolidated assets | 7,135,951 | 4,689,100 | ||
Jingshan Sanhe [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | 3,576,328 | |||
Consolidated gross profit | 1,187,491 | |||
Consolidated income (loss) from operations | 1,012,957 | |||
Consolidated net income (loss) attributable to controlling interest | 757,356 | |||
Consolidated depreciation and amortization expenses | 8,705 | |||
Consolidated capital expenditures | 265,323 | |||
Consolidated assets | 13,196,263 | 3,513,449 | ||
Xiangtian Zhongdian [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | 9,101,868 | |||
Consolidated gross profit | 908,334 | |||
Consolidated income (loss) from operations | 801,752 | |||
Consolidated net income (loss) attributable to controlling interest | 472,364 | |||
Consolidated depreciation and amortization expenses | 74,890 | |||
Consolidated capital expenditures | 8,040 | |||
Consolidated assets | 13,153,436 | 12,620,210 | ||
Hubei Jinli [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated revenues | 1,155,735 | |||
Consolidated gross profit | 538,496 | |||
Consolidated income (loss) from operations | 107,436 | |||
Consolidated net income (loss) attributable to controlling interest | 63,268 | |||
Consolidated depreciation and amortization expenses | 221,785 | |||
Consolidated interest expense | 58,082 | |||
Consolidated capital expenditures | 144,643 | |||
Consolidated assets | 19,820,836 | 22,489,702 | ||
Tianjin Jiabaili [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated income (loss) from operations | (176,912) | |||
Consolidated net income (loss) attributable to controlling interest | (180,132) | |||
Consolidated depreciation and amortization expenses | 54,508 | |||
Consolidated capital expenditures | 12,360 | |||
Consolidated assets | 4,420,414 | 4,111,706 | ||
All four holding entities [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated income (loss) from operations | (495,432) | (160,925) | ||
Consolidated net income (loss) attributable to controlling interest | (494,019) | $ (163,738) | ||
Consolidated assets | $ 237,205 | $ 248,164 |
Subsequent Event (Details)
Subsequent Event (Details) | Nov. 20, 2018 |
Subsequent Event [Member] | Xianning Xiangtian [Member] | |
Subsequent Event (Textual) | |
Ownership, percentage | 70.00% |