Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | IONIX TECHNOLOGY, INC. | |
Entity Central Index Key | 0001528308 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 000-54485 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | IINX | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Reporting Status Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 114,003,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 1,900,785 | $ 509,615 |
Notes receivable | 8,180 | 120,182 |
Accounts receivable - non-related parties | 4,429,747 | 3,639,030 |
Accounts receivable - related parties | 102,680 | 340,026 |
Inventory | 2,921,462 | 3,379,146 |
Advances to suppliers - non-related parties | 358,612 | 129,423 |
Advances to suppliers - related parties | 246,249 | 269,498 |
Prepaid expenses and other current assets | 226,847 | 269,495 |
Total Current Assets | 10,194,562 | 8,656,415 |
Property, plant and equipment, net | 7,139,961 | 7,508,637 |
Intangible assets, net | 1,432,017 | 1,496,399 |
Deferred tax assets | 15,445 | 54,361 |
Total Assets | 18,781,985 | 17,715,812 |
Current Liabilities: | ||
Short-term bank loan | 2,518,081 | 2,618,296 |
Accounts payable | 3,297,564 | 2,732,327 |
Advance from customers | 328,514 | 114,158 |
Convertible notes payable, net of debt discount and loan cost | 69,503 | |
Derivative liability | 154,239 | |
Due to related parties | 2,035,995 | 2,105,338 |
Accrued expenses and other current liabilities | 286,202 | 368,319 |
Total Current Liabilities | 8,690,098 | 7,938,438 |
Stockholders' Equity: | ||
Preferred stock, $.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding | 500 | 500 |
Common stock, $.0001 par value, 195,000,000 shares authorized, 114,003,000 shares issued and outstanding | 11,400 | 11,400 |
Additional paid in capital | 8,849,509 | 8,829,487 |
Retained earnings | 1,251,142 | 539,866 |
Accumulated other comprehensive loss | (462,625) | (45,840) |
Total Stockholders' Equity attributable to the Company | 9,649,926 | 9,335,413 |
Noncontrolling interest | 441,961 | 441,961 |
Total Stockholders' Equity | 10,091,887 | 9,777,374 |
Total Liabilities and Stockholders' Equity | $ 18,781,985 | $ 17,715,812 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued | 5,000,000 | 5,000,000 |
Preferred stock, outstanding | 5,000,000 | 5,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 195,000,000 | 195,000,000 |
Common stock, issued | 114,003,000 | 114,003,000 |
Common stock, outstanding | 114,003,000 | 114,003,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Revenues | $ 7,500,330 | $ 2,568,888 |
Cost of Revenues | 6,073,104 | 2,279,723 |
Gross profit | 1,427,226 | 289,165 |
Operating expenses | ||
Selling, general and administrative expense | 381,428 | 61,586 |
Research and development expense | 222,823 | |
Total operating expenses | 604,251 | 61,586 |
Income from operations | 822,975 | 227,579 |
Other income (expense): | ||
Interest expense, net of interest income | (56,863) | |
Subsidy income | 42,787 | |
Change in fair value of derivative liability | 15,889 | |
Total other income | 1,813 | |
Income before income tax provision | 824,788 | 227,579 |
Income tax provision | 113,512 | 50,426 |
Net income | 711,276 | 177,153 |
Other comprehensive income (loss) | ||
Foreign currency translation adjustment | (416,785) | (7,922) |
Comprehensive income | $ 294,491 | $ 169,231 |
Income Per Share - Basic and Diluted (in dollars per share) | $ 0.01 | $ 0 |
Weighted average number of common shares outstanding - Basic and Diluted (in shares) | 114,003,000 | 99,003,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Non-controlling interest [Member] | Total |
Balance at beginning at Jun. 30, 2018 | $ 500 | $ 9,900 | $ 237,246 | $ 142,819 | $ 7,950 | $ 398,415 | |
Balance at beginning (in shares) at Jun. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 177,153 | 177,153 | |||||
Foreign currency translation adjustment | (7,922) | (7,922) | |||||
Balance at end at Sep. 30, 2018 | $ 500 | $ 9,900 | 237,246 | 319,972 | 28 | 567,646 | |
Balance at end (in shares) at Sep. 30, 2018 | 5,000,000 | 99,003,000 | |||||
Balance at beginning at Jun. 30, 2019 | $ 500 | $ 11,400 | 8,829,487 | 539,866 | (45,840) | 441,961 | 9,777,374 |
Balance at beginning (in shares) at Jun. 30, 2019 | 5,000,000 | 114,003,000 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock warrants | 20,022 | 20,022 | |||||
Net income | 711,276 | 711,276 | |||||
Foreign currency translation adjustment | (416,785) | (416,785) | |||||
Balance at end at Sep. 30, 2019 | $ 500 | $ 11,400 | $ 8,849,509 | $ 1,251,142 | $ (462,625) | $ 441,961 | $ 10,091,887 |
Balance at end (in shares) at Sep. 30, 2019 | 5,000,000 | 114,003,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 711,276 | $ 177,153 |
Adjustments required to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 208,314 | |
Deferred taxes | 37,553 | (4,555) |
Change in fair value of derivative liability | (15,889) | |
Amortization of debt discount | 21,313 | |
Changes in operating assets and liabilities: | ||
Accounts receivable - non-related parties | (948,146) | 165,960 |
Accounts receivable - related parties | 228,709 | 118,902 |
Inventory | 334,753 | (284,534) |
Advances to suppliers - non-related parties | (238,711) | 878 |
Advances to suppliers - related parties | 13,186 | (64,737) |
Prepaid expenses and other current assets | 33,140 | (9,530) |
Accounts payable - non-related parties | 682,885 | (151,889) |
Accounts payable - related parties | 154,452 | |
Advance from customers | 222,994 | (24,927) |
Accrued expenses and other current liabilities | (73,748) | (19,564) |
Net cash provided by operating activities | 1,217,629 | 57,609 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property, plant and equipment | (118,198) | |
Net cash used in investing activities | (118,198) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Notes receivable | 109,498 | |
Proceeds from issuance of convertible notes payable | 238,340 | |
Proceeds from (repayment of) loans from related parties | (13,383) | 137,292 |
Net cash provided by financing activities | 334,455 | 137,292 |
Effect of exchange rate changes on cash | (42,716) | (1,780) |
Net increase in cash and cash equivalents | 1,391,170 | 193,121 |
Cash and cash equivalents, beginning of period | 509,615 | 111,462 |
Cash and cash equivalents, end of period | 1,900,785 | 304,583 |
Supplemental disclosure of cash flow information: | ||
Cash paid for income tax | 35,312 | 70,558 |
Cash paid for interests | $ 34,247 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1 - NATURE OF OPERATIONS Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. By and through its wholly owned subsidiaries and an entity controlled through VIE agreements in China, the Company sells the high-end intelligent electronic equipment, which includes the portable power banks for electronic devices, LCM and LCD screens in China. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2019 and the results of operations and cash flows for the periods ended September 30, 2019 and 2018. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2020 or for any subsequent periods. The balance sheet at June 30, 2019 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended June 30, 2019 as included in our Annual Report on Form 10-K as filed with the SEC on September 30, 2019. Basis of consolidation The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation. Certain amounts have been reclassified to conform to current year presentation. Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. Revenue recognition The Company adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings. The Company estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: identify the contract with a customer; identify the performance obligations in the contract; determine the transaction price; allocate the transaction price to performance obligations in the contract; and recognize revenue as the performance obligation is satisfied. Under these criteria, for revenues from sale of products, the Company generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. For service revenue, the Company recognizes revenue when services are performed and accepted by customers. The following table disaggregates our revenue by major source for the three months ended September 30, 2019 and 2018, respectively: For the three months ended September 30, 2019 2018 Sales of goods - Non-related parties $ 6,793,669 $ 2,475,050 Sales of goods - Related parties 313,957 93,838 Service contracts 392,704 - Total $ 7,500,330 $ 2,568,888 All of the operating entities of the Company are domiciled in the PRC. Accordingly, all of the Company’s revenues are derived in the PRC during the three months ended September 30, 2019 and 2018. As of September 30, 2019 and June 30, 2019, all of the non-current assets were located in the PRC. Lease In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on their balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on July 1, 2019 and used the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Company elected the package of practical expedients which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months. Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss). The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: September 30, 2019 June 30, 2019 Balance sheet items, except for equity accounts 7.1483 6.8747 Three months ended September 30, 2019 2018 Items in statements of comprehensive income (loss) and cash 7.0115 6.6523 Fair Value of Financial Instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, derivative liabilities, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company has the derivative liabilities measured at fair value on a recurring basis. Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). Recent accounting pronouncements From time to time, new accounting pronouncements are issues by the Financial Accounting Standards Board or other standard bodies that may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented. |
VARIABLE INTEREST ENTITY
VARIABLE INTEREST ENTITY | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
VARIABLE INTEREST ENTITY | NOTE 3 – VARIABLE INTEREST ENTITY On December 27, 2018, the Company entered into VIE agreements with two shareholders of Fangguan Electronics to control 95.14% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics. In exchange for VIE agreements and additional capital contribution, the Company issued 15 million shares of common stock to two shareholders of Fangguan Electronics. The transaction was accounted for as a business combination using the acquisition method of accounting. The assets, liabilities and the operations of Fangguan Electronics subsequent to the acquisition date were included in the Company’s consolidated financial statements. Following unaudited pro forma combined statement of operations are based upon the historical financial statements of Ionix and Fangguan Electronics for the three month ended September 30, 2018 and are presented as if the acquisition had occurred at the beginning of the period. For the Three Months ended Fangguan Ionix Pro Forma Pro Forma Revenues $ 2,677,512 $ 2,568,888 $ (942,260 ) $ 4,304,140 Cost of revenues 2,283,545 2,279,723 (763,406 ) 3,799,862 Gross profit 393,967 289,165 (178,854 ) 504,278 Operating expenses 421,341 61,586 - 482,927 Income (loss) from operations (27,374 ) 227,579 (178,854 ) 21,351 Other income 40,134 - - 40,134 Income tax provision 1,914 50,426 - 52,340 Net income $ 10,846 $ 177,153 $ (178,854 ) $ 9,145 Risks associated with the VIE structure The Company believes that the contractual arrangements with its VIE and respective shareholders are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: revoke the business and operating licenses of the Company’s PRC subsidiary and its VIE; discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and its VIE; limit the Company’s business expansion in China by way of entering into contractual arrangements; impose fines or other requirements with which the Company’s PRC subsidiary and its VIE may not be able to comply; require the Company or the Company’s PRC subsidiary and its VIE to restructure the relevant ownership structure or operations; or restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China. The Company’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over its VIE and its respective shareholders and it may lose the ability to receive economic benefits from its VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and its VIE. The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: Balance as of Balance as of Current assets $ 8,240,729 $ 6,971,434 Non-current assets 8,580,735 9,057,609 Total assets $ 16,821,464 $ 16,029,043 Current liability $ 7,591,238 $ 6,885,058 Non-current liability - - Total liabilities $ 7,591,238 $ 6,885,058 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: September 30, 2019 June 30, 2019 Raw materials $ 662,087 $ 471,189 Work-in-process 800,072 1,719,426 Finished goods 1,459,303 1,188,531 Total Inventories $ 2,921,462 $ 3,379,146 The Company recorded no inventory markdown for the three months ended September 30, 2019 and 2018. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 3 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET The components of property, plant and equipment were as follows: September 30, 2019 June 30, 2019 Buildings $ 4,557,396 $ 4,661,535 Machinery and equipment 2,956,645 3,036,339 Office equipment 62,889 60,052 Automobiles 97,896 101,793 Subtotal 7,674,826 7,859,719 Less: Accumulated depreciation (534,865 ) (351,082 ) Property, plant and equipment, net $ 7,139,961 $ 7,508,637 Depreciation expense related to property, plant and equipment was $201,068 for the three months ended September 30, 2019. As of September 30, 2019, buildings were pledged as collateral for bank loans (See Note 7) . |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6 – INTANGIBLE ASSETS, NET Intangible assets consist of the following: September 30, 2019 June 30, 2019 Land use right $ 1,428,573 $ 1,485,428 Computer software 24,798 25,785 Subtotal 1,453,371 1,511,213 Less: Accumulated amortization (21,354 ) (14,814 ) Intangible assets, net $ 1,432,017 $ 1,496,399 Amortization expense related to intangible assets was $7,246 for the three months ended September 30, 2019. Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of September 30, 2019, land use right was pledged as collateral for bank loans (See Note 7). |
SHORT-TERM BANK LOAN
SHORT-TERM BANK LOAN | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BANK LOAN | NOTE 7 – SHORT-TERM BANK LOAN On November 12, 2018, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.52 million (RMB 18 million) for a year with annual interest rate of 5.27%. The borrowing was collateralized by the Company’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. The Company is in the process of renewing the loan with bank. |
RELATED PARTY TRANSACTIONS AND
RELATED PARTY TRANSACTIONS AND BALANCES | 3 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS AND BALANCES | NOTE 8 - RELATED PARTY TRANSACTIONS AND BALANCES Purchase from related party During the three months ended September 30, 2019, the Company purchased $583,764 and $37,495 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.7% and 1.3% respectively of the Company’s outstanding common stock as of September 30, 2019. The amount of $583,764 and $37,495 were included in the cost of revenue. During the three months ended September 30, 2018, the Company purchased $676,379 and $450,505 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 2% and 1.5% respectively of the Company’s outstanding common stock as of September 30, 2018. The amount of $676,379 and $340,026 were included in the cost of revenue. During the three months ended September 30, 2018, the Company’s subsidiary, Fangguan Photoelectric, purchased $792,282 from Fangguan Electronics before Fangguan Electronics became a variable interest entity of the Company on December 27, 2018 (See Note 3). The president of Fangguan Electronics was the president and a member of the board of directors of Fangguan Photoelectric before he resigned and left Fangguan Photoelectric in October 2018. The amount of $763,406 was included in the cost of revenue for the three months ended September 30, 2018. Advances to suppliers - related parties Lisite Science made advances of $246,249 and $269,498 to Keenest for future purchases as of September 30, 2019 and June 30, 2019, respectively. Sales to related party and accounts receivable from related party During the three months ended September 30, 2019 and 2018, Baileqi Electronic sold materials of $313,957 and $93,838 respectively to Shenzhen Baileqi S&T. The trade-related balance receivable from Shenzhen Baileqi S&T was $102,680 and $340,026 as of September 30, 2019 and June 30, 2019, respectively. Lease from related party Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. Due to related parties Due to related parties represents certain advances to the Company or its subsidiaries by related parties. The amounts are non-interest bearing, unsecured and due on demand. September 30, 2019 June 30, 2019 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 482,791 498,769 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 3,750 3,900 Baozhu Deng (5 ) - 5,303 Jialin Liang (6 ) 892,783 928,314 Xuemei Jiang (7 ) 500,818 520,750 Liang Zhang (8 ) - 625 Zijian Yang (9 ) - 1,869 Shikui Zhang (10 ) 10,045 - $ 2,035,995 $ 2,105,338 (1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. (2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc. (3) Xin Sui is a member of the board of directors of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T. (5) Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. (6) Jialin Liang is the president, CEO, and director of Fangguan Electronics. (7) Xuemei Jiang is the vice president and director of Fangguan Electronics. (8) Liang Zhang is the legal representative of Shizhe New Energy until May 2019. (9) Zijian Yang is the supervisor of Shizhe New Energy. (10) Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. During the three months ended September 30, 2019, Yubao Liu was refunded of $15,978 by Well Best and Welly Surplus. Baileqi Electronic refunded $5,303 to Baozhu Deng. Shizhe New Energy refunded $625 and $1,869 to Liang Zhang and Zijian Yang respectively. Shikui Zhang advanced $10,045 to Shizhe New Energy. During the three months ended September 30, 2018, Yubao Liu advanced $126,381 to Well Best. Baileqi Electronic borrowed $2,990 from Baozhu Deng. In addition, Baozhen Deng refunded $7,903 to Baileqi Electronic. |
CONCENTRATION
CONCENTRATION | 3 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION | NOTE 9 – CONCENTRATION Major customers Customers who accounted for 10% or more of the Company’s revenues (goods sold and services) for the three months ended September 30, 2019 and 2018 respectively and its outstanding balance of accounts receivable as of September 30, 2019 and 2018 respectively are presented as follows: For the Three Months ended As of September 30, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 1,072,827 14 % $ - -% Customer B 860,874 11 % 866,724 19 % Customer C 993,547 13 % 1,043,352 23 % Total $ 2,927,248 38 % $ 1,910,076 42 % For the Three Months ended As of September 30, 2018 Revenue Percentage of Accounts Percentage of Customer A $ 738,893 29 % $ - -% Customer B 1,028,423 40 % 272,761 59 % Total $ 1,767,316 69 % $ 272,761 59 % Primarily all customers are located in the PRC. Major suppliers The suppliers who accounted for 10% or more of the Company’s total purchases (materials and services) for the three months ended September 30, 2019 and 2018 respectively and its outstanding balance of accounts payable as of September 30, 2019 and 2018 respectively are presented as follows: For the Three Months ended As of September 30, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 583,764 19 % $ - -% Supplier B 497,229 16 % 117,461 4 % Total $ 1,080,993 35 % $ 117,461 4 % For the Three Months ended As of September 30, 2018 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 676,379 26 % $ - -% Supplier B - related party 450,505 18 % 31,743 6 % Supplier C - related party 792,282 31 % 367,779 72 % Supplier D 536,708 21 % - -% Total $ 2,455,874 96 % $ 399,522 78 % All suppliers of the Company are located in the PRC. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 - INCOME TAXES The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate, as follows: United States of America The Company is registered in the State of Nevada and is subject to the tax laws of United States of America. The Company has shown losses since inception. As a result, it has incurred no income tax. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three year period after the returns are filed. In unusual circumstances, the period may be longer. Tax returns for the years ended June 30, 2011 and after were still open to audit as of September 30, 2019. The Company received a penalty assessment from the IRS in the amount of $10,000 for failure to provide information with respect to certain foreign owned US Corporations on Form 5472 - Information Return of a 25% Foreign Owned US Corporation for the tax period ended June 30, 2013. The Company disputed this claim and is working to reverse the penalty. The Company believes that the payment of this penalty is remote and did not accrue this liability as of September 30, 2019. Hong Kong The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the three months ended September 30, 2019 and 2018, there is no assessable income chargeable to profit tax in Hong Kong. The PRC The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three years from November 2016 to November 2019 and is taxed at a unified income tax rate of 15%. The reconciliation of income tax expense at the U.S. statutory rate of 21% in 2019 and 2018, to the Company's effective tax rate is as follows: For the Three Months ended September 30, 2019 2018 Tax at U.S. statutory rate $ 173,205 $ 47,792 Tax rate difference between foreign (77,502 ) (1,408 ) Change in valuation allowance 17,133 2,424 Permanent difference 676 1,618 Effective tax $ 113,512 $ 50,426 The provisions for income taxes are summarized as follows: For the Three Months ended September 30, 2019 2018 Current $ 75,959 $ 54,981 Deferred 37,553 (4,555 ) Total $ 113,512 $ 50,426 As of September 30, 2019, the Company has approximately $962,000 net operating loss carryforwards available in the U.S., Hong Kong and China to reduce future taxable income which will begin to expire from 2035. It is more likely than not that the deferred tax assets cannot be utilized in the future because there will not be significant future earnings from the entity which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets. The Company has not provided deferred taxes on unremitted earnings attributable to international companies that have been considered to be reinvested indefinitely. Because of the availability of U.S. foreign tax credits, it is not practicable to determine the income tax liability that would be payable if such earnings were not indefinitely reinvested. In accordance with ASC Topic 740, interest associated with unrecognized tax benefits is classified as income tax and penalties are classified in selling, general and administrative expenses in the statements of comprehensive income (loss). The extent of the Company’s operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state and international tax audits. The Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. |
CONVERTIBLE DEBT
CONVERTIBLE DEBT | 3 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBT | NOTE 11 - CONVERTIBLE DEBT On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. Upon its issuing, the Company determined the conversion feature of this convertible note represented an embedded derivative since the note was convertible into a variable number of shares upon conversion. Accordingly, this convertible note was not considered to be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. The Company valued the initial derivative liability for the convertible note issued on July 25, 2019 at $67,343. The Company used the Black-Scholes valuation model with the following assumptions: risk-free interest rate of 2.08% and 1.68% (10 years US treasury yield) and volatilities of 55.87% and 55.87% on July 25, 2019 and September 30, 2019 respectively. For the three months ended September 30, 2019, the Company recorded the amortization of debt discount of $13,822 for the convertible note issued on July 25, 2019. On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in this Agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. Upon its issuing, the Company determined the conversion feature of the convertible note represented an embedded derivative since the note was convertible into a variable number of shares upon conversion. Accordingly, the convertible note was not considered to be conventional debt under ASC 815 and the embedded conversion feature was bifurcated from the debt host and accounted for as a derivative liability. The Company valued the initial derivative liability for the convertible note issued on September 11, 2019 at $102,785. The Company used the Black-Scholes valuation model with the following assumptions: risk-free interest rate of 1.75% and 1.68% (10 years US treasury yield) and volatility of 59.15% and 55.87% on September 11, 2019 and September 30, 2019 respectively. For the three months ended September 30, 2019, the Company recorded the amortization of debt discount of $7,491 for the convertible note issued on September 11, 2019. Warrant In connection with the issuance of the $165,000 convertible promissory note, FirstFire Global Opportunities Fund, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the terms and conditions of this Warrant). Exercise price shall be $2.40 and the warrants can be exercised within 5 years before September 11, 2024. The Company used the Black-Scholes valuation model to calculate and determined that the fair value of the warrants was $22,787 using following assumptions: risk-free interest rate of 1.75% (10 years US treasury yield) and volatility of 59.15% on September 11, 2019. Since the warrants can be exercised at $2.4 and are not liabilities, the convertible notes of $165,000 were allocated based on the fair values of the convertible notes and warrants. Accordingly, $20,022 was allocated to warrants and recorded in additional paid in capital account. As of September 30, 2019, there were 68,750 warrants outstanding, of which none is fully or partially vested. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 - SUBSEQUENT EVENTS The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the financial statements. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of September 30, 2019 and the results of operations and cash flows for the periods ended September 30, 2019 and 2018. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three months ended September 30, 2019 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2020 or for any subsequent periods. The balance sheet at June 30, 2019 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended June 30, 2019 as included in our Annual Report on Form 10-K as filed with the SEC on September 30, 2019. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation. Certain amounts have been reclassified to conform to current year presentation. |
Use of Estimates | Use of Estimates The Company’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements. |
Revenue recognition | Revenue recognition The Company adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings. The Company estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement. Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. Under these criteria, for revenues from sale of products, the Company generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. For service revenue, the Company recognizes revenue when services are performed and accepted by customers. The following table disaggregates our revenue by major source for the three months ended September 30, 2019 and 2018, respectively: For the three months ended September 30, 2019 2018 Sales of goods - Non-related parties $ 6,793,669 $ 2,475,050 Sales of goods - Related parties 313,957 93,838 Service contracts 392,704 - Total $ 7,500,330 $ 2,568,888 All of the operating entities of the Company are domiciled in the PRC. Accordingly, all of the Company’s revenues are derived in the PRC during the three months ended September 30, 2019 and 2018. As of September 30, 2019 and June 30, 2019, all of the non-current assets were located in the PRC. |
Lease | Lease In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on their balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on July 1, 2019 and used the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Company elected the package of practical expedients which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months. |
Foreign currencies translation | Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss). The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity. The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: September 30, 2019 June 30, 2019 Balance sheet items, except for equity accounts 7.1483 6.8747 Three months ended September 30, 2019 2018 Items in statements of comprehensive income (loss) and cash 7.0115 6.6523 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, derivative liabilities, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets; Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The Company has the derivative liabilities measured at fair value on a recurring basis. |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities. |
Common Stock Purchase Warrants | Common Stock Purchase Warrants The Company classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Company classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). |
Recent accounting pronouncements | Recent accounting pronouncements From time to time, new accounting pronouncements are issues by the Financial Accounting Standards Board or other standard bodies that may have an impact on the Company’s accounting and reporting. The Company believes that any recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of disaggregates our revenue by major source | The following table disaggregates our revenue by major source for the three months ended September 30, 2019 and 2018, respectively: For the three months ended September 30, 2019 2018 Sales of goods - Non-related parties $ 6,793,669 $ 2,475,050 Sales of goods - Related parties 313,957 93,838 Service contracts 392,704 - Total $ 7,500,330 $ 2,568,888 |
Schedule of exchange rates | The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: September 30, 2019 June 30, 2019 Balance sheet items, except for equity accounts 7.1483 6.8747 Three months ended September 30, 2019 2018 Items in statements of comprehensive income (loss) and cash 7.0115 6.6523 |
VARIABLE INTEREST ENTITY (Table
VARIABLE INTEREST ENTITY (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of acquisition pro forma | Following unaudited pro forma combined statement of operations are based upon the historical financial statements of Ionix and Fangguan Electronics for the three month ended September 30, 2018 and are presented as if the acquisition had occurred at the beginning of the period. For the Three Months ended Fangguan Ionix Pro Forma Pro Forma Revenues $ 2,677,512 $ 2,568,888 $ (942,260 ) $ 4,304,140 Cost of revenues 2,283,545 2,279,723 (763,406 ) 3,799,862 Gross profit 393,967 289,165 (178,854 ) 504,278 Operating expenses 421,341 61,586 - 482,927 Income (loss) from operations (27,374 ) 227,579 (178,854 ) 21,351 Other income 40,134 - - 40,134 Income tax provision 1,914 50,426 - 52,340 Net income $ 10,846 $ 177,153 $ (178,854 ) $ 9,145 |
Schedule of consolidated financial statements | The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: Balance as of Balance as of Current assets $ 8,240,729 $ 6,971,434 Non-current assets 8,580,735 9,057,609 Total assets $ 16,821,464 $ 16,029,043 Current liability $ 7,591,238 $ 6,885,058 Non-current liability - - Total liabilities $ 7,591,238 $ 6,885,058 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: September 30, 2019 June 30, 2019 Raw materials $ 662,087 $ 471,189 Work-in-process 800,072 1,719,426 Finished goods 1,459,303 1,188,531 Total Inventories $ 2,921,462 $ 3,379,146 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment, net | The components of property, plant and equipment were as follows: September 30, 2019 June 30, 2019 Buildings $ 4,557,396 $ 4,661,535 Machinery and equipment 2,956,645 3,036,339 Office equipment 62,889 60,052 Automobiles 97,896 101,793 Subtotal 7,674,826 7,859,719 Less: Accumulated depreciation (534,865 ) (351,082 ) Property, plant and equipment, net $ 7,139,961 $ 7,508,637 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Intangible assets consist of the following: September 30, 2019 June 30, 2019 Land use right $ 1,428,573 $ 1,485,428 Computer software 24,798 25,785 Subtotal 1,453,371 1,511,213 Less: Accumulated amortization (21,354 ) (14,814 ) Intangible assets, net $ 1,432,017 $ 1,496,399 |
RELATED PARTY TRANSACTIONS AN_2
RELATED PARTY TRANSACTIONS AND BALANCES (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of due to related parties | Due to related parties represents certain advances to the Company or its subsidiaries by related parties. The amounts are non-interest bearing, unsecured and due on demand. September 30, 2019 June 30, 2019 Ben Wong (1 ) $ 143,792 $ 143,792 Yubao Liu (2 ) 482,791 498,769 Xin Sui (3 ) 2,016 2,016 Baozhen Deng (4 ) 3,750 3,900 Baozhu Deng (5 ) - 5,303 Jialin Liang (6 ) 892,783 928,314 Xuemei Jiang (7 ) 500,818 520,750 Liang Zhang (8 ) - 625 Zijian Yang (9 ) - 1,869 Shikui Zhang (10 ) 10,045 - $ 2,035,995 $ 2,105,338 (1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. (2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc. (3) Xin Sui is a member of the board of directors of Welly Surplus. (4) Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T. (5) Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. (6) Jialin Liang is the president, CEO, and director of Fangguan Electronics. (7) Xuemei Jiang is the vice president and director of Fangguan Electronics. (8) Liang Zhang is the legal representative of Shizhe New Energy until May 2019. (9) Zijian Yang is the supervisor of Shizhe New Energy. (10) Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. |
CONCENTRATION (Tables)
CONCENTRATION (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Schedule of concentration risk | Customers who accounted for 10% or more of the Company’s revenues (goods sold and services) for the three months ended September 30, 2019 and 2018 respectively and its outstanding balance of accounts receivable as of September 30, 2019 and 2018 respectively are presented as follows: For the Three Months ended As of September 30, 2019 Revenue Percentage of Accounts Percentage of Customer A $ 1,072,827 14 % $ - -% Customer B 860,874 11 % 866,724 19 % Customer C 993,547 13 % 1,043,352 23 % Total $ 2,927,248 38 % $ 1,910,076 42 % For the Three Months ended As of September 30, 2018 Revenue Percentage of Accounts Percentage of Customer A $ 738,893 29 % $ - -% Customer B 1,028,423 40 % 272,761 59 % Total $ 1,767,316 69 % $ 272,761 59 % |
Schedule of major suppliers | The suppliers who accounted for 10% or more of the Company’s total purchases (materials and services) for the three months ended September 30, 2019 and 2018 respectively and its outstanding balance of accounts payable as of September 30, 2019 and 2018 respectively are presented as follows: For the Three Months ended As of September 30, 2019 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 583,764 19 % $ - -% Supplier B 497,229 16 % 117,461 4 % Total $ 1,080,993 35 % $ 117,461 4 % For the Three Months ended As of September 30, 2018 Total Purchase Percentage of Accounts Percentage of Supplier A - related party $ 676,379 26 % $ - -% Supplier B - related party 450,505 18 % 31,743 6 % Supplier C - related party 792,282 31 % 367,779 72 % Supplier D 536,708 21 % - -% Total $ 2,455,874 96 % $ 399,522 78 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of income tax expense | The reconciliation of income tax expense at the U.S. statutory rate of 21% in 2019 and 2018, to the Company's effective tax rate is as follows: For the Three Months ended September 30, 2019 2018 Tax at U.S. statutory rate $ 173,205 $ 47,792 Tax rate difference between foreign (77,502 ) (1,408 ) Change in valuation allowance 17,133 2,424 Permanent difference 676 1,618 Effective tax $ 113,512 $ 50,426 |
Schedule of provisions for income taxes | The provisions for income taxes are summarized as follows: For the Three Months ended September 30, 2019 2018 Current $ 75,959 $ 54,981 Deferred 37,553 (4,555 ) Total $ 113,512 $ 50,426 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Total Revenues | $ 7,500,330 | $ 2,568,888 |
Non-Related Parties [Member] | ||
Total Revenues | 6,793,669 | 2,475,050 |
Related Parties [Member] | ||
Total Revenues | 313,957 | 93,838 |
Service Contracts [Member] | ||
Total Revenues | $ 392,704 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2018 |
Income and Cash Flow [Member] | |||
Exchange rate | 7.0115 | 6.6523 | |
Balance Sheet [Member] | |||
Exchange rate | 7.1483 | 6.8747 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | Dec. 27, 2018 | Sep. 30, 2019 |
Minimum [Member] | ||
Lease term | 12 months | |
Share Purchase Agreement [Member] | Fangguan Electronics Two Share Holders [Member] | ||
Percentage of voting interests acquired | 95.14% | |
Percentage of recieve net income or net loss | 100.00% |
VARIABLE INTEREST ENTITY (Detai
VARIABLE INTEREST ENTITY (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues | $ 7,500,330 | $ 2,568,888 |
Cost of revenues | 6,073,104 | 2,279,723 |
Gross profit | 1,427,226 | 289,165 |
Operating expenses | 604,251 | 61,586 |
Income (loss) from operations | 822,975 | 227,579 |
Other income | 1,813 | |
Income tax provision | 113,512 | 50,426 |
Net income | $ 711,276 | 177,153 |
Variable Interest Entities [Member] | ||
Revenues | 4,304,140 | |
Cost of revenues | 3,799,862 | |
Gross profit | 504,278 | |
Operating expenses | 482,927 | |
Income (loss) from operations | 21,351 | |
Other income | 40,134 | |
Income tax provision | 52,340 | |
Net income | 9,145 | |
Pro Forma [Member] | ||
Revenues | (942,260) | |
Cost of revenues | (763,406) | |
Gross profit | (178,854) | |
Operating expenses | ||
Income (loss) from operations | (178,854) | |
Other income | ||
Income tax provision | ||
Net income | (178,854) | |
Fangguan Electronics [Member] | ||
Revenues | 2,677,512 | |
Cost of revenues | 2,283,545 | |
Gross profit | 393,967 | |
Operating expenses | 421,341 | |
Income (loss) from operations | (27,374) | |
Other income | 40,134 | |
Income tax provision | 1,914 | |
Net income | $ 10,846 |
VARIABLE INTEREST ENTITY (Det_2
VARIABLE INTEREST ENTITY (Details 1) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Current assets | $ 10,194,562 | $ 8,656,415 |
Total assets | 18,781,985 | 17,715,812 |
Current liability | 8,690,098 | 7,938,438 |
Variable Interest Entities [Member] | ||
Current assets | 8,240,729 | 6,971,434 |
Non-current assets | 8,580,735 | 9,057,609 |
Total assets | 16,821,464 | 16,029,043 |
Current liability | 7,591,238 | 6,885,058 |
Non-current liability | ||
Total liabilities | $ 7,591,238 | $ 6,885,058 |
VARIABLE INTEREST ENTITY (Det_3
VARIABLE INTEREST ENTITY (Details Narrative) - Fangguan Electronics Two Share Holders [Member] - Share Purchase Agreement [Member] | Dec. 27, 2018shares |
Percentage of voting interests acquired | 95.14% |
Number of shares issue | 15,000,000 |
Description of ownership right acquire | The ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronis. |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 662,087 | $ 471,189 |
Work-in-process | 800,072 | 1,719,426 |
Finished goods | 1,459,303 | 1,188,531 |
Total Inventories | $ 2,921,462 | $ 3,379,146 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Subtotal | $ 7,674,826 | $ 7,859,719 |
Less: Accumulated depreciation | (534,865) | (351,082) |
Property, plant and equipment, net | 7,139,961 | 7,508,637 |
Building [Member] | ||
Subtotal | 4,557,396 | 4,661,535 |
Machinery and Equipment [Member] | ||
Subtotal | 2,956,645 | 3,036,339 |
Office Equipment [Member] | ||
Subtotal | 62,889 | 60,052 |
Automobiles [Member] | ||
Subtotal | $ 97,896 | $ 101,793 |
PROPERTY, PLANT AND EQUIPMENT_4
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Property Plant And Equipment Net | |
Depreciation expense | $ 201,068 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 |
Subtotal | $ 1,453,371 | $ 1,511,213 |
Less: Accumulated amortization | (21,354) | (14,814) |
Intangible assets, net | 1,432,017 | 1,496,399 |
Land Use Rights [Member] | ||
Subtotal | 1,428,573 | 1,485,428 |
Computer Software [Member] | ||
Subtotal | $ 24,798 | $ 25,785 |
INTANGIBLE ASSETS, NET (Detai_2
INTANGIBLE ASSETS, NET (Details Narrative) | 3 Months Ended |
Sep. 30, 2019USD ($) | |
Intangible Assets Net | |
Amortization expense | $ 7,246 |
SHORT-TERM BANK LOAN (Details N
SHORT-TERM BANK LOAN (Details Narrative) - Changchun Fangguan Electronic Science and Technology Co., Ltd [Member] - Short Term Loan Agreement [Member] - Industrial Bank [Member] | Nov. 12, 2018USD ($) |
Borrowed amount | $ 2,520,000 |
Interest rate | 5.27% |
Debt maturity date | Dec. 31, 2020 |
RMB | |
Borrowed amount | $ 18,000,000 |
RELATED PARTY TRANSACTIONS AN_3
RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($) | Sep. 30, 2019 | Jun. 30, 2019 | |||
Due to related parties | $ 2,035,995 | $ 2,105,338 | |||
Ben Wong [Member] | |||||
Due to related parties | [1] | 143,792 | 143,792 | ||
Yubao Liu [Member] | |||||
Due to related parties | [2] | 482,791 | 498,769 | ||
Xin Sui [Member] | |||||
Due to related parties | [3] | 2,016 | 2,016 | ||
Baozhen Deng [Member] | |||||
Due to related parties | [4] | 3,750 | 3,900 | ||
Baozhu Deng [Member] | |||||
Due to related parties | [5] | 5,303 | |||
Jialin Liang [Member] | |||||
Due to related parties | [6] | 892,783 | 928,314 | ||
Xuemei Jiang [Member] | |||||
Due to related parties | 500,818 | [6] | 520,750 | [7] | |
Liang Zhang [Member] | |||||
Due to related parties | [8] | 625 | |||
Zijian Yang [Member] | |||||
Due to related parties | [9] | 1,869 | |||
Shikui Zhang [Member] | |||||
Due to related parties | [10] | $ 10,045 | |||
[1] | Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc. | ||||
[2] | Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology. Inc. | ||||
[3] | Xin Sui is a member of the board of directors of Welly Surplus. | ||||
[4] | Baozhen Deng is a stockholder of the Company, who owns approximately 1.3% of the Company's outstanding common stock, and the owner of Shenzhen Baileqi S&T. | ||||
[5] | Baozhu Deng is a relative of Baozhen Deng, a stockholder of the Company. | ||||
[6] | Jialin Liang is the president, CEO, and director of Fangguan Electronics. | ||||
[7] | Xuemei Jiang is the vice president and director of Fangguan Electronics. | ||||
[8] | Liang Zhang is the legal representative of Shizhe New Energy until May 2019. | ||||
[9] | Zijian Yang is the supervisor of Shizhe New Energy. | ||||
[10] | Shikui Zhang serves as the legal representative and general manager of Shizhe New Energy since May 2019. |
RELATED PARTY TRANSACTIONS AN_4
RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($) | Jul. 20, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 |
Related Party Transaction [Line Items] | ||||
Revenue from related party | $ 7,500,330 | $ 2,568,888 | ||
Accounts receivable - related parties | 102,680 | $ 340,026 | ||
Keenest And Shenzhen Baileqi S&T [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | 583,764 | 676,379 | ||
Cost of revenue - purchases related party | $ 583,764 | $ 676,379 | ||
Keenest And Shenzhen Baileqi S&T [Member] | Ownership [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 1.70% | 2.00% | ||
KeenestAndShenzhenBaileqiSAndT1Member | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 37,495 | $ 450,505 | ||
Cost of revenue - purchases related party | $ 37,495 | $ 340,026 | ||
KeenestAndShenzhenBaileqiSAndT1Member | Ownership [Member] | ||||
Related Party Transaction [Line Items] | ||||
Ownership percentage | 1.30% | 1.50% | ||
Changchun Fangguan Electronics Technology Co., Ltd. [Member] | Changchun Fangguan Photoelectric Display Technology Co., Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 792,282 | |||
Cost of revenue - purchases related party | 763,406 | |||
Keenest [Member] | ||||
Related Party Transaction [Line Items] | ||||
Advances from related parties | $ 246,249 | 269,498 | ||
Shenzhen Baileqi S&T [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 313,957 | 93,838 | ||
Accounts receivable - related parties | $ 102,680 | $ 340,026 | ||
Lisite Science [Member] | Office and Warehouse Space [Member] | ||||
Related Party Transaction [Line Items] | ||||
Annual rent | $ 1,500 | |||
Lease renewal term | one year | |||
Lisite Science [Member] | Office and Warehouse Space [Member] | RMB | ||||
Related Party Transaction [Line Items] | ||||
Annual rent | $ 10,000 | |||
Baileqi Electronic [Member] | Baozhu Deng [Member] | ||||
Related Party Transaction [Line Items] | ||||
Payment to releted party | $ 5,303 | |||
Baileqi Electronic [Member] | Office and Warehouse Space [Member] | ||||
Related Party Transaction [Line Items] | ||||
Lease term | The lease period is from June 1, 2019 to May 31, 2020 | |||
Lease renewal term | from June 1, 2019 to May 31, 2020 | |||
Monthly rent | $ 2,500 | |||
Baileqi Electronic [Member] | Office and Warehouse Space [Member] | RMB | ||||
Related Party Transaction [Line Items] | ||||
Monthly rent | 17,525 | |||
Yubao Liu [Member] | Well Best [Member] | ||||
Related Party Transaction [Line Items] | ||||
Payment to releted party | 15,978 | |||
Yubao Liu [Member] | Well Best [Member] | ||||
Related Party Transaction [Line Items] | ||||
Advances from related parties | 126,381 | |||
Liang Zhang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Advances from related parties | 625 | |||
Zijian Yang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Advances from related parties | 1,869 | |||
Baozhu Deng [Member] | Baileqi Electronic [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party borrowed | 2,990 | |||
Payment to releted party | $ 7,903 |
CONCENTRATION (Details)
CONCENTRATION (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Revenues | $ 7,500,330 | $ 2,568,888 | |
Accounts payable | 3,297,564 | $ 2,732,327 | |
Revenue [Member] | |||
Revenues | $ 2,927,248 | $ 1,767,316 | |
Concentration risk percentage | 38.00% | 69.00% | |
Accounts Receivable [Member] | |||
Accounts receivables | $ 1,910,076 | $ 272,761 | |
Concentration risk percentage | 42.00% | 59.00% | |
Purchases [Member] | |||
Total Purchase | $ 1,080,993 | $ 2,455,874 | |
Concentration risk percentage | 35.00% | 96.00% | |
Purchases [Member] | Supplier A [Member] | |||
Total Purchase | $ 583,764 | $ 676,379 | |
Concentration risk percentage | 19.00% | 26.00% | |
Purchases [Member] | Supplier B [Member] | |||
Total Purchase | $ 497,229 | $ 450,505 | |
Concentration risk percentage | 16.00% | 18.00% | |
Purchases [Member] | Supplier C [Member] | |||
Total Purchase | $ 792,282 | ||
Concentration risk percentage | 31.00% | ||
Purchases [Member] | Supplier D [Member] | |||
Total Purchase | $ 536,708 | ||
Concentration risk percentage | 21.00% | ||
Accounts Payable [Member] | |||
Accounts payable | $ 117,461 | $ 399,522 | |
Concentration risk percentage | 4.00% | 78.00% | |
Accounts Payable [Member] | Supplier A [Member] | |||
Accounts payable | |||
Concentration risk percentage | |||
Accounts Payable [Member] | Supplier B [Member] | |||
Accounts payable | $ 117,461 | $ 31,743 | |
Concentration risk percentage | 4.00% | ||
Accounts Payable [Member] | Supplier C [Member] | |||
Accounts payable | $ 367,779 | ||
Concentration risk percentage | 72.00% | ||
Accounts Payable [Member] | Supplier D [Member] | |||
Accounts payable | |||
Concentration risk percentage | |||
Customer A [Member] | Revenue [Member] | |||
Revenues | $ 1,072,827 | $ 738,893 | |
Concentration risk percentage | 14.00% | 29.00% | |
Customer A [Member] | Accounts Receivable [Member] | |||
Accounts receivables | |||
Concentration risk percentage | 0.00% | ||
Customer B [Member] | Revenue [Member] | |||
Revenues | $ 860,874 | $ 1,028,423 | |
Concentration risk percentage | 11.00% | 40.00% | |
Customer B [Member] | Accounts Receivable [Member] | |||
Accounts receivables | $ 866,724 | $ 272,761 | |
Concentration risk percentage | 19.00% | 59.00% | |
Customer C [Member] | Revenue [Member] | |||
Revenues | $ 993,547 | ||
Concentration risk percentage | 13.00% | ||
Customer C [Member] | Accounts Receivable [Member] | |||
Accounts receivables | $ 1,043,352 | ||
Customer C [Member] | Accounts Receivable [Member] | |||
Concentration risk percentage | 23.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax at U.S. statutory rate | $ 173,205 | $ 47,792 |
Tax rate difference between foreign operations and U.S. | (77,502) | (1,408) |
Change in valuation allowance | 17,133 | 2,424 |
Permanent difference | 676 | 1,618 |
Effective tax | $ 113,512 | $ 50,426 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 75,959 | $ 54,981 |
Deferred | 37,553 | (4,555) |
Total | $ 113,512 | $ 50,426 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Penalty assessment | $ 10,000 | |
Operating loss carryforwards | $ 962,000 | |
Expiration year | 2035 | |
Inland Revenue, Hong Kong [Member] | ||
Foreign income tax rate | 16.50% | 16.50% |
UNITED STATES | ||
Foreign income tax rate | 25.00% | |
CHINA | ||
Foreign income tax rate | 25.00% | |
Unified income tax rate | 15.00% |
CONVERTIBLE DEBT (Details Narra
CONVERTIBLE DEBT (Details Narrative) | Sep. 18, 2019USD ($) | Sep. 11, 2019USD ($) | Aug. 01, 2019USD ($) | Jul. 25, 2019USD ($) | Sep. 30, 2019USD ($)$ / sharesshares |
Amortization of debt discount | $ 21,313 | ||||
Warrant [Member] | |||||
Exercise price | $ / shares | $ 2.4 | ||||
Warrant maturity terms | 10 years | ||||
Fair value of warrants | $ 22,787 | ||||
Warrant outstanding | shares | 68,750 | ||||
Additional Paid-in Capital [Member] | Warrant [Member] | |||||
Warrant outstanding | shares | 20,022 | ||||
Risk Free Interest Rate [Member] | Warrant [Member] | |||||
Warrant measurement input | 0.0175 | ||||
Volatility [Member] | Warrant [Member] | |||||
Warrant measurement input | 0.5915 | ||||
Convertible Note Due on July 25, 2019 [Member] | |||||
Derivative liability | $ 67,343 | ||||
Derivative maturity terms | 10 years | ||||
Amortization of debt discount | $ 13,822 | ||||
Convertible Note Due on July 25, 2019 [Member] | Risk Free Interest Rate [Member] | |||||
Derivative liability measurement | 0.0208 | 0.0168 | |||
Convertible Note Due on July 25, 2019 [Member] | Volatility [Member] | |||||
Derivative liability measurement | 0.5587 | 0.5587 | |||
Convertible Note Due on September 11, 2019 [Member] | |||||
Derivative liability | $ 102,785 | ||||
Derivative maturity terms | 10 years | ||||
Amortization of debt discount | $ 7,491 | ||||
Convertible Note Due on September 11, 2019 [Member] | Risk Free Interest Rate [Member] | |||||
Derivative liability measurement | 0.0175 | 0.0168 | |||
Convertible Note Due on September 11, 2019 [Member] | Volatility [Member] | |||||
Derivative liability measurement | 0.5915 | 0.5587 | |||
Firstfire Global Opportunities Fund LLC [Member] | Convertible Promissory Note [Member] | |||||
Principal amount | $ 165,000 | ||||
Firstfire Global Opportunities Fund LLC [Member] | Convertible Promissory Note [Member] | Warrant [Member] | |||||
Number of common stock issues (in shares) | shares | 68,750 | ||||
Exercise price | $ / shares | $ 2.40 | ||||
Warrant maturity terms | 5 years | ||||
Warrant maturity date | Sep. 11, 2024 | ||||
Share Purchase Agreement [Member] | Power Up Lending Group Ltd [Member] | Convertible Note Due on July 25, 2019 [Member] | |||||
Principal amount | $ 103,000 | ||||
Proceeds from issuance of debt | $ 94,840 | ||||
Interest rate | 6.00% | ||||
Maturity date | Jul. 25, 2020 | ||||
Description of conversion feature | The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. | ||||
Share Purchase Agreement [Member] | Firstfire Global Opportunities Fund LLC [Member] | Convertible Note Due on September 11, 2019 [Member] | |||||
Principal amount | $ 165,000 | ||||
Proceeds from issuance of debt | $ 143,500 | ||||
Interest rate | 5.00% | ||||
Description of conversion feature | Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. | ||||
Original issue discount | $ 15,000 |