Cover
Cover | 6 Months Ended |
Dec. 31, 2023 | |
Cover [Abstract] | |
Document Type | 6-K/A |
Amendment Flag | true |
Amendment Description | This Amendment No. 1 to the Report on Form 6-K for the six months ended December 31, 2023, originally filed with the Securities and Exchange Commission on April 12, 2024 (the “Original 6-K”), is being filed solely for the purposes of furnishing (1) Interactive Data File disclosure as Exhibit 101 in accordance with Rule 405 of Regulation S-T, (2) correction in a table on page F-20, and (2) a copy of a press release as Exhibit 99.3 providing a business update and announcing its financial results for the six months ended December 31, 2023. Except the financial statements, those documents were not previously disclosed. |
Document Period End Date | Dec. 31, 2023 |
Document Fiscal Period Focus | Q2 |
Document Fiscal Year Focus | 2024 |
Current Fiscal Year End Date | --06-30 |
Entity File Number | 001-38304 |
Entity Registrant Name | DOGNESS (INTERNATIONAL) CORPORATION |
Entity Central Index Key | 0001707303 |
Entity Address, Address Line One | Tongsha Industrial Estate |
Entity Address, Address Line Two | East District |
Entity Address, City or Town | Dongguan |
City Area Code | +86 |
Local Phone Number | 769-8875-3300 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,479,010 | $ 4,483,308 |
Accounts receivable from third-party customers, net | 2,101,516 | 1,492,762 |
Accounts receivable from related parties | 1,118,431 | 1,272,384 |
Inventories, net | 3,087,595 | 2,679,275 |
Prepayments and other current assets | 4,925,636 | 3,748,955 |
Advances to supplier- related party | 115,863 | 239,729 |
Total current assets | 13,922,332 | 14,003,843 |
NON-CURRENT ASSETS | ||
Property, plant and equipment, net | 61,743,326 | 61,686,849 |
Operating lease right-of-use lease assets | 17,303,060 | 17,537,096 |
Intangible assets, net | 1,853,039 | 1,845,006 |
Long-term investments in equity investees | 1,548,800 | 1,516,900 |
Deferred tax assets | 1,586,428 | 1,281,634 |
Total non-current assets | 84,034,653 | 83,867,485 |
TOTAL ASSETS | 97,956,985 | 97,871,328 |
CURRENT LIABILITIES | ||
Short-term bank loans | 705,200 | 887,000 |
Current portion of long-term bank loans | 625,274 | 2,959,918 |
Advances from customers | 231,029 | 121,687 |
Taxes payable | 1,198,575 | 1,015,444 |
Accrued expenses and other current liabilities | 1,024,780 | 1,026,218 |
Operating lease liabilities, current | 2,364,014 | 2,326,162 |
Total current liabilities | 7,595,759 | 9,317,966 |
NON-CURRENT LIABILITIES | ||
Long term bank loans | 3,855,168 | 1,595,549 |
Operating lease liabilities, non-current | 11,038,675 | 10,612,508 |
Total non-current liabilities | 14,893,843 | 12,208,057 |
TOTAL LIABILITIES | 22,489,602 | 21,526,023 |
Commitments and Contingencies (Note 6) | ||
EQUITY | ||
Statutory reserve | 291,443 | 291,443 |
Retained earnings | (2,532,613) | 664,004 |
Accumulated other comprehensive loss | (8,679,275) | (10,345,832) |
Equity attributable to owners of the Company | 75,467,340 | 76,344,331 |
Non-controlling interest | 43 | 974 |
Total equity | 75,467,383 | 76,345,305 |
TOTAL LIABILITIES AND EQUITY | 97,956,985 | 97,871,328 |
Common Class A [Member] | ||
EQUITY | ||
Common stock value | 86,369,647 | 85,716,578 |
Common Class B [Member] | ||
EQUITY | ||
Common stock value | 18,138 | 18,138 |
Related Party [Member] | ||
CURRENT ASSETS | ||
Due from related parties | 94,281 | 87,430 |
CURRENT LIABILITIES | ||
Accounts payable | ||
Due to related parties | 99,281 | 85,843 |
Nonrelated Party [Member] | ||
CURRENT LIABILITIES | ||
Accounts payable | $ 1,347,606 | $ 895,694 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Common stock, shares outstanding | 10,626,566 | 10,621,762 |
Common Class A [Member] | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 1,557,566 | 1,552,762 |
Common stock, shares outstanding | 1,557,566 | 1,552,762 |
Common Class B [Member] | ||
Common stock, par value | $ 0 | $ 0 |
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares issued | 9,069,000 | 9,069,000 |
Common stock, shares outstanding | 9,069,000 | 9,069,000 |
Statements of Loss and Comprehe
Statements of Loss and Comprehensive Loss (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Total Revenues | $ 6,674,687 | $ 10,398,607 |
Total Cost of revenues | (5,363,758) | (7,683,914) |
Gross Profit | 1,310,929 | 2,714,693 |
Operating expenses: | ||
Selling expenses | 529,021 | 1,501,469 |
General and administrative expenses | 3,873,442 | 4,192,810 |
Research and development expenses | 485,849 | 554,393 |
Total operating expenses | 4,888,312 | 6,248,672 |
Loss from operations | (3,577,383) | (3,533,979) |
Other income (expense): | ||
Interest expense, net | (113,690) | (100,255) |
Foreign exchange transaction gain | 32,469 | 76,962 |
Other income, net | 80,891 | 64,719 |
Rental income from related parties, net | 148,406 | 165,656 |
Total other income, net | 148,076 | 207,082 |
Loss before income taxes | (3,429,307) | (3,326,897) |
Income taxes benefit | (231,756) | (315,036) |
Net loss | (3,197,551) | (3,011,861) |
Less: net loss attributable to non-controlling interest | (934) | (57,103) |
Net loss attributable to Dogness (International) Corporation | (3,196,617) | (2,954,758) |
Other comprehensive loss | ||
Foreign currency translation | 1,666,560 | (2,326,099) |
Comprehensive loss | (1,530,991) | (5,337,960) |
Less: comprehensive loss attributable to non-controlling interest | (931) | (66,346) |
Comprehensive loss attributable to Dogness (International) Corporation | $ (1,530,060) | $ (5,271,614) |
Loss Per share | ||
Basic | $ (0.30) | $ (0.28) |
Diluted | $ (0.30) | $ (0.28) |
Weighted Average Shares Outstanding | ||
Basic | 10,622,663 | 10,580,323 |
Diluted | 10,622,663 | 10,580,323 |
Third Party Customer [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Revenues | $ 6,573,379 | $ 9,388,291 |
Total Cost of revenues | (5,280,923) | (7,012,038) |
Related Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Total Revenues | 101,308 | 1,010,316 |
Total Cost of revenues | $ (82,835) | $ (671,876) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] Common Class A [Member] | Common Stock [Member] Common Class B [Member] | Statutory Reserves [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Balance at Jun. 30, 2022 | $ 84,157,276 | $ 18,138 | $ 291,443 | $ 7,864,267 | $ (4,152,577) | $ 297,429 | $ 88,475,976 |
Balance, shares at Jun. 30, 2022 | 1,510,262 | 9,069,000 | |||||
Net loss for the period | (2,954,758) | (57,103) | (3,011,861) | ||||
Issuance shares for services | $ 334,500 | 334,500 | |||||
Issuance shares for services, shares | 42,500 | ||||||
Foreign currency translation loss | (2,316,856) | (9,243) | (2,326,099) | ||||
Balance at Dec. 31, 2022 | $ 84,491,776 | $ 18,138 | 291,443 | 4,909,509 | (6,469,433) | 231,083 | 83,472,516 |
Balance, shares at Dec. 31, 2022 | 1,552,762 | 9,069,000 | |||||
Balance at Jun. 30, 2023 | $ 85,716,578 | $ 18,138 | 291,443 | 664,004 | (10,345,832) | 974 | 76,345,305 |
Balance, shares at Jun. 30, 2023 | 1,552,762 | 9,069,000 | |||||
Net loss for the period | (3,196,617) | (934) | (3,197,551) | ||||
Issuance shares for services | 242,500 | 242,500 | |||||
Foreign currency translation loss | 1,666,557 | 3 | 1,666,560 | ||||
Reverse split shares | $ (810) | (810) | |||||
Reverse split shares, shares | (196) | ||||||
Exercise of warrants | $ 15,101 | 15,101 | |||||
Exercise of warrants, shares | 5,000 | ||||||
Options granted for services | $ 156,970 | 156,970 | |||||
Warrants modification | 239,308 | 239,308 | |||||
Balance at Dec. 31, 2023 | $ 86,369,647 | $ 18,138 | $ 291,443 | $ (2,532,613) | $ (8,679,275) | $ 43 | $ 75,467,383 |
Balance, shares at Dec. 31, 2023 | 1,557,566 | 9,069,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (3,197,551) | $ (3,011,861) |
Adjustments to reconcile loss income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,414,937 | 1,553,520 |
Share-based compensation for services | 399,470 | 18,583 |
Gain from disposal of property, plant and equipment | (9,845) | |
Change in bad debt allowance | 111,105 | |
Deferred tax benefit | (275,121) | (336,131) |
Accrued interest income | (97,622) | |
Amortization of right-of-use lease assets | 591,705 | 408,602 |
Warrants modification | 239,308 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (682,445) | (37,436) |
Accounts receivable-related parties | 177,374 | (445,099) |
Inventories | (359,976) | (630,430) |
Prepayments and other current assets | (1,080,158) | (589,816) |
Advances to supplier-related party | 126,527 | (102,305) |
Accounts payables | 425,101 | 291,728 |
Accounts payables-related party | (370,662) | |
Accrued expenses and other current liabilities | 16,516 | (156,628) |
Advance from customers | 104,887 | 182,887 |
Operating lease liabilities | 188,379 | (1,320,452) |
Taxes payable | 159,612 | 220,999 |
Net cash used in operating activities | (1,650,175) | (4,422,123) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (294,828) | (1,084,008) |
Proceeds from disposition of property, plant and equipment | 56,000 | |
Proceeds upon maturity of short-term investments | (10,374,920) | |
Net cash used in investing activities | (238,828) | (11,458,928) |
Cash flows from financing activities: | ||
Net proceeds from exercise of warrants | 15,101 | |
Reverse split shares | (810) | |
Proceeds from short-term bank loans | 691,000 | 400,000 |
Repayment of short-term bank loans | (885,800) | (50,000) |
Proceeds from long-term bank loans | 2,625,800 | |
Repayment of long-term bank loans | (2,793,472) | (447,438) |
Proceeds from related-party loans | 6,498 | 585,157 |
Net cash (used in) provided by financing activities | (341,683) | 487,719 |
Effect of exchange rate changes on cash and restricted cash | 226,388 | (489,499) |
Net decrease in cash and cash equivalents | (2,004,298) | (15,882,831) |
Cash and cash equivalents, beginning of period | 4,483,308 | 16,605,872 |
Cash and cash equivalents, end of period | 2,479,010 | 723,041 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 154,884 | 208,134 |
Non-Cash Investing Activities | ||
Right-of-assets obtained in exchange for operating lease obligations | 14,939,726 | |
Reduction of construction-in-progress through accounts payable and other payable | (40,251) | |
Prepaid share-based compensation for services | $ (223,000) | $ 315,917 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 6 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Dogness (International) Corporation (“Dogness” or the “Company”), is a company limited by shares established under the laws of the British Virgin Islands (“BVI”) on July 11, 2016 as a holding company. The Company, through its subsidiaries, is primarily engaged in the design, manufacturing and sales of various types of pet leashes, pet collars, pet harnesses, intelligent pet products, and retractable leashes with products being sold all over the world mainly through distributions by large retailers. Mr. Silong Chen, the Chairman of the Board and Chief Executive Officer (“CEO”) of the Company is the controlling shareholder (the “Controlling Shareholder”) of the Company by virtue of his ownership of 9,069,000 Reorganization A Reorganization of the legal structure was completed on January 9, 2017. The Reorganization involved the incorporation of Dogness, a BVI holding company; and Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”), a holding company established under the laws of the People’s Republic of China (“PRC”); and the transfer of Dogness (Hong Kong) Pet’s Products Co., Limited (“HK Dogness”), Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”), and Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”; collectively, the “Transferred Entities”) from the Controlling Shareholder to Dogness and Dongguan Dogness. Prior to the reorganization, the Transferred Entities’ equity interests were 100% controlled by the Controlling Shareholder. On November 24, 2016, the Controlling Shareholder transferred his 100 100 100 100 Since the Company and its wholly-owned subsidiaries are effectively controlled by the same Controlling Shareholder before and after the reorganization, they are considered under common control. The above-mentioned transactions were accounted for as a recapitalization. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying unaudited consolidated financial statements. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended December 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this interim report should be read in conjunction with the financial statements and notes thereto included in the Company’s annual financial statements in form 20-F for the fiscal year ended June 30, 2023 as filed with the SEC on October 12, 2023. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s unaudited consolidated financial statements reflect the operating results of the following entities: SCHEDULE OF ENTITIES Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Dogness (International) Corporation (“Dogness” or the “Company”) July 11, 2016 BVI Parent, 100 % Holding Company Dogness (Hongkong) Pet’s Products Co., Limited (“HK Dogness”) March 10, 2009 Hong Kong 100 % Trading Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”) July 12, 2007 Hong Kong 100 % Trading Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”) October 26, 2016 Dongguan, China 100 % Holding Company Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”) May 15, 2009 Dongguan, China 100 % Development and manufacturing of pet leash products Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) July 9,2009 Zhangzhou, China 100 % Manufacturing of pet leash products Dogness Overseas Ltd (“Dogness Overseas”) February 8, 2018 BVI 100 % Holding Company Dogness Group LLC (“Dogness Group”) January 23, 2018 Delaware, United States 100 % Pet products trading Dogness Pet Culture (Dongguan) Co. Ltd. (“Dogness Culture”) December 14, 2018 Dongguan, China 51.2 % Developing and expanding pet food market Non-controlling interests As of December 31, 2023, non-controll ing interests represent 48.8 controlling shareholders’ interests in Dogness Culture. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the operating results of the Company are presented on the face of the unaudited consolidated statements of comprehensive income (loss) as an allocation of the total income or loss between non-controlling interest holders and the shareholders of the Company. Use of Estimates In preparing the unaudited consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant, right-of-use assets (including lease liabilities) and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and realization of deferred tax assets. Actual results could differ from those estimates. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. Accounts Receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. The Company adopted this guidance effective January 1, 2023. The Company establishes a provision for doubtful receivables based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable. Allowance for uncollectible balances amounted to $ 276,376 160,026 Inventories, net Inventories are stated at net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. Prepayments and other assets Prepayments and other assets primarily consist of advances to suppliers for purchasing of raw materials that have not been received, and prepayment to a landlord for lease of a piece of land in order to build a warehouse in the near future, prepaid service fee, security deposits. These advances are interest free, unsecured and short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 - inputs to the valuation methodology are unobservable. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments (continued) Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, short-term investments, accounts receivable, inventories, prepayments and other current assets, accounts payable, advance from customers, taxes payable, accrued expenses and other current liabilities, current portion of lease liabilities, and short-term bank loans approximate their fair values because of the short-term nature of these instruments. The Company’s long-term investments are accounted for using the measurement alternative in accordance with ASC 321, which also approximate their recorded values. Rental income Rental revenues are recognized as earned in accordance with the terms of the respective lease agreement on a straight-line basis. Promotional discounts are recognized as a reduction to rental income over the promotional period. Late charges, administrative fees and other fees are recognized as income when earned. Management reviews the tenant’s payment history and financial condition periodically in determining, in its judgment, whether any accrued rental income and unbilled rent receivable balances applicable to each specific property is collectable. Revenue Recognition On July 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (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 Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occur with the transfer of title of the Company’s products to the customers. Net sale is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods to the wholesaler and retailers. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. Such incentives do not represent a standalone value and are accounted for as a reduction of revenue in accordance with ASC 606. For the six months ended December 31, 2023 and 2022, the Company did not provide any sales incentives to its customers. Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales and the related costs incurred by the Company are included in cost of goods sold. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration. The Company’s revenue is primarily generated from the sales of pet products, including leashes, accessories, collars, harnesses and intelligent pet products, to wholesalers and retailers. Revenue is reported net of all value added taxes (“VAT”). The Company does not routinely permit customers to return products and historically, customer returns have been immaterial. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) The Company also generates revenue by providing ribbon dyeing service and pet grooming services to customers. The Company utilizes its manufacturing capability and color dyeing technology to provide dyeing solutions to customers and apply dyes or pigments on ribbons made of textile materials such as fibers, yarns and fabrics to achieve customer desired color fastness and quality. The Company recognizes revenue at the point when dyeing solutions and related services are rendered, products after dyeing are delivered and accepted by the customers. The revenue from pet grooming services is recognized when the services are rendered. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of December 31, 2023 and June 30, 2023, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product and service types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months ended December 31, 2023 and 2022 are disclosed in Note 11 of this unaudited consolidated financial statements. Research and development costs Research and development expenses include costs directly attributable to the conduct of research and development projects, including the cost of salaries and other employee benefits, testing expenses, consumable equipment and consulting fees. All costs associated with research and development are expensed as incurred. Income Taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. Deferred income taxes assets and liabilities are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. Since significant amount of the Company’s products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the Company completes all the required tax filing procedures. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. Loss per Share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Share-Based compensation The Company follows the provisions of ASC 718, “Compensation - Stock Compensation,” which establishes the accounting for employee share-based awards. For employee share-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of the operations of HK Dogness, HK Jiasheng, Dongguan Dogness, Dongguan Jiasheng, Meijia and Dogness Culture are determined using RMB, the local currency, as the functional currency. while Dogness Overseas and Dogness Group use U.S Dollar as their functional currency. 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 foreign currencies are translated using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of comprehensive income (loss). DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following table outlines the currency exchange rates that were used in creating the unaudited consolidated financial statements: SCHEDULE OF CURRENCY EXCHANGE RATES Six months ended December 31, 2023 Six months ended December 31, 2022 June 30, 2023 Period End spot rate US$1= 7.0999 US$1= 6.8972 US$1= 7.2513 Average rate US$1= 7.2347 US$1= 6.9789 US$1= 6.9536 Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currency. Related party transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are measured at the amounts agreed upon by the parties. Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company does not expect the adoption of ASU 2021-04 to have a material effect on the consolidated financial statements. In June 2022, the FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The update also requires certain additional disclosures for equity securities subject to contractual sale restrictions. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. As an emerging growth company, the standard is effective for the Company for the year ended December 31, 2025. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the consolidated financial statements DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 6 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 3 – ACCOUNTS RECEIVABLE, NET Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE As of December 31, 2023 As of June 30, 2023 Accounts receivable from third-party customers $ 2,377,892 $ 1,652,788 Less: allowance for credit losses (276,376 ) (160,026 ) Total accounts receivable from third-party customers, net 2,101,516 1,492,762 Add: accounts receivable - related parties 1,118,431 1,272,384 Total accounts receivable, net $ 3,219,947 $ 2,765,146 Allowance for credit losses amounted to $ 276,376 160,026 Approximately $ 1.7 12.2 72 The Company sold certain intelligent pet products to related parties Dogness Technology and Dogness Network. The outstanding accounts receivable from these related parties amounted to $ 1,118,431 14,823 Allowance for credit losses movement is as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS As of December 31, 2023 As of June 30, 2023 Beginning balance $ 160,026 $ 6,872 Provision 111,105 160,254 Foreign currency translation adjustments 5,245 (7,100 ) Ending balance $ 276,376 $ 160,026 |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 4 – INVENTORIES, NET Inventories consisted of the following: SCHEDULE OF INVENTORY As of As of December 31, 2023 June 30, 2023 Raw materials $ 70,125 $ 67,827 Work in process 412,871 265,386 Finished goods 2,989,213 2,727,827 Inventory, gross 3,472,209 3,061,040 Less: inventory allowance (384,614 ) (381,765 ) Inventory, net $ 3,087,595 $ 2,679,275 Inventory includes raw materials, work in progress and finished goods. Finished goods include direct material costs, direct labor costs and manufacturing overhead. Inventory allowance movement is as follows: SCHEDULE OF INVENTORY ALLOWANCE As of December 31, 2023 As of June 30, 2023 Beginning balance $ 381,765 $ 146,684 Provision - 246,281 Foreign currency translation adjustments 2,849 (11,200 ) Ending balance $ 384,614 $ 381,765 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
BANK LOANS
BANK LOANS | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
BANK LOANS | NOTE 5 – BANK LOANS SCHEDULE OF BANK LOANS As of As of December 31, 2023 June 30, 2023 Cathay Bank $ 1,200 $ 887,000 Dongguan Rural Commercial Bank 5,184,442 4,555,467 Total 5,185,642 5,442,467 Less: current portion of short-term loans (705,200 ) (887,000 ) Less: current portion of long-term loans (625,274 ) (2,959,918 ) Long-term loans $ 3,855,168 $ 1,595,549 (1) On February 6, 2020, one of the Company’s U.S. subsidiaries, Dogness Group, obtained a line of credit from Cathay Bank, pursuant to which Dogness Group has the availability to borrow a maximum $ 1.2 As of December 31, 2023, the outstanding balance was $ 1200 (2) On July 17, 2020, the Company entered into multiple loan agreements with Dongguan Rural Commercial Bank to borrow an aggregate of $ 7.0 50 The loans have tenure varying between three and eight years. The loans bear a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus difference basis points. 1.8 4.8 4.2 30 2.9 20 5,184,442 216,736 1,571,686 Interest expenses for the above-mentioned loans amounted to $ 154,884 208,134 As of December 31, 2023, the Company’s short-term and long-term loans totaled approximately $ 6.2 SCHEDULE OF BANK LOANS REPAYMENT Twelve months ending December 31, Repayment 2024 $ 1,330,474 2025 915,634 2026 2,277,208 2027 430,053 2028 232,273 Total $ 5,185,642 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 6 – COMMITMENTS AND CONTINGENCIES Contingencies The Company may be involved in various legal proceedings, claims and other disputes arising from the commercial operations, projects, employees and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on the Company’s consolidated financial position or results of operations or liquidity. Capital Investment Obligation Zhangzhou Meijia Metal Product Ltd. Meijia was incorporated under the laws of the People’s Republic of China with a total registered capital of RMB 60.0 8.4 44.6 6.3 As of the date of this report, pursuant to the articles of incorporation of Meijia, the Company is obligated to contribute the remaining RMB 15.4 2.2 Capital Expenditure Commitment Our capital expenditures are incurred primarily in connection with the Company build new manufacturing and operating facilities, which include warehouse, workshops, office building, security gate, employee apartment building, electrical transformer station and exhibition hall, etc. in prior years. The future minimum capital expenditure commitment on these projects was $ 246,177 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS The relationship of related parties is summarized as follow: SCHEDULE OF RELATIONSHIP OF RELATED PARTIES Name of Related Party Relationship to the Company Silong Chen Chief Executive Officer; Chairman of the Board of Directors Junqiang Chen Relative of Mr. Silong Chen Linsun Smart Technology Co., Ltd (“Linsun”) Equity investee -10% of the ownership Dogness Network Technology Co., Ltd (“Dogness Network”) Equity investee - 13% of the ownership Dogness Technology Co., Ltd (“Dogness Technology”) The legal representative is Junqiang Chen, the relative of Mr. Silong Chen (1) Due from related parties Due from related parties consist of mainly rent receivables from the following: SCHEDULE OF DUE FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Linsun $ 94,281 $ 87,430 Total $ 94,281 $ 87,430 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 7 – RELATED PARTY TRANSACTIONS (continued) (2) Due to related parties Due to related parties consist of the following: SCHEDULE OF DUE TO RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Mr. Silong Chen $ 93,649 $ 80,327 Dogness Technology 5,632 5,516 Total $ 99,281 $ 85,843 Mr. Silong Chen periodically provides working capital loans to support the Company’s operations when needed. Such advances are non-interest bearing and due on demand. (3) Loan guarantee provided by related parties In connection with the Company’s bank borrowings, Mr. Silong Chen pledged his personal assets as collateral and signed guarantee agreements to provide guarantee to the Company’s long-term bank loans. (See Note 5). (4) Sales to related parties Revenue from related parties consisted of the following: SCHEDULE OF REVENUE FROM RELATED PARTIES For the six months ended December 31, Name 2023 2022 Dogness Technology $ 48,555 $ 96,947 Dogness Network 52,753 913,369 Total $ 101,308 $ 1,010,316 Cost of revenue associated with the sales to these two related parties amounted to $ 82,835 671,876 (5) Accounts receivable from related parties Accounts receivable from related parties consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Dogness Network $ 976,837 $ 1,133,092 Dogness Technology 141,594 139,292 Total $ 1,118,431 $ 1,272,384 As of December 31, 2023, total accounts receivable from related parties amounted to $ 1,118,431 14,823 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 7 – RELATED PARTY TRANSACTIONS (continued) (6) Advance to supplier- related party Advance to supplier from related party consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIER FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Advance to supplier - related party: Linsun $ 115,863 $ 239,729 Total $ 115,863 $ 239,729 (7) Purchase from related parties During the six months ended December 31, 2023 and 2022, the Company purchased certain pet product components and parts, such as smart pet water and food feeding devices, from Linsun. Total purchases from Linsun amounted to $ 224,001 366,660 (8) Lease arrangement with related parties On January 2, 2020, Dongguan Jiasheng signed a lease agreement with Linsun, which enabled Linsun to lease part of Dongguan Jiasheng’s new production facilities of approximately 8,460 ten years 220,000 and is subject to 15 225,192 226,494 On August 1, 2020, Dongguan Jiasheng signed a lease agreement with Dogness Network, which enabled Dogness Network to lease part of Dongguan Jiasheng’s new production facilities of approximately 580 Annual lease payment from Dogness Network amounted to approximately $ 33000 15 nil 27,025 On August 1, 2020, Dongguan Jiasheng signed a lease agreement with Dogness Technology, which enabled Dogness Technology to lease part of Dongguan Jiasheng’s new production facilities of approximately 50 1,700 762 790 |
EQUITY
EQUITY | 6 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
EQUITY | NOTE 8 – EQUITY Common Shares Dogness was established under the laws of BVI on July 11, 2016. The original authorized number of common shares was 15,000,000 0.002 100,000,000 0.002 15,000,000 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 8 – EQUITY (continued) On October 22, 2022, Shareholders of the Company held a meeting and approved a change to the maximum number of shares that the Company is authorized to issue from 100,000,000 0.002 90,931,000 9,069,000 110,000,000 0.002 90,931,000 19,069,000 On November 6, 2023, the Company announced (i) a share consolidation of the Company’s issued and outstanding Class A common shares at the ratio of one-for-twenty and (ii) an amendment of the Company’s Memorandum and Articles of Association to change its authorized shares from 90,931,000 0.002 19,069,000 0.002 Equity Financing All historical share and per share amounts in these financial statements have been retroactively adjusted to reflect the reverse stock split. January 2021 equity financing On January 20, 2021, the Company closed a securities purchase agreement with certain institutional investors for the sale of 172,757 43.0 6.6 July 2021 equity financing On July 19, 2021, the Company closed a securities purchase agreement with certain institutional investors for the sale of 108,906 36.4 3.5 February 2022 equity financing On February 24, 2022, the Company closed a securities purchase agreement with certain institutional investors for the sale of 98,313 57.6 4.7 June 2022 equity financing On June 3, 2022, the Company closed a securities purchase agreement with certain institutional investors for the sale of 181,818 66.0 10.9 Common Shares Issued for Service On December 15, 2022, the Company signed a consulting agreement with Real Miracle Investments Limited (“Real Miracle’) to provide strategic business and marketing consulting services to the Company for nine months from December 15, 2022. As the consideration for the service, Real Miracle is entitled to receive 15,000 334,500 On January 26, 2023, the Board adopted resolutions to grant total 75,000 25,000 1,455,000 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 12 – EQUITY (continued) On January 26, 2023, the Board adopted resolutions to grant 7,500 2,500 145,500 As of December 31, 2023, the Company had an aggregate of 10,626,566 1,557,566 9,069,000 10,621,762 1,552,762 9,069,000 Warrants In connection of January 2021 equity financing, warrants carry a term of thirty (30) months after the issuance date to purchase an aggregate of 86,378 54.0 13,821 54.0 5.4 86,378 In connection of July 2021 equity financing, the Company also issued warrants to purchase 8,712 36.4 No In connection of June 2022 equity financing, the Company also issued warrants to purchase 109,091 84.0 June 3, 2024 84.0 3.02 239,308 5,000 76,819 Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to its own shares. The warrants were recorded at their fair value on the date of grant as a component of shareholders’ equity. As of December 31, 2023, 35,985 11.1 1.21 Statutory Reserve The Company’s subsidiaries located in mainland China are required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC regulations until the reserve is equal to 50% of the entity’s registered capital. No 291,443 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Dec. 31, 2023 | |
Loss Per share | |
LOSS PER SHARE | NOTE 9 – LOSS PER SHARE For the six months ended December 31, 2023 and 2022, potential shares of common stock from the unexercised options and unexercised options are excluded from diluted net loss per share as such amounts are anti-dilutive. The following table presents a reconciliation of basic and diluted net loss per share: SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED 2023 2022 For the six months ended December 31, 2023 2022 Loss attributable to the Company $ (3,196,617 ) $ (2,954,758 ) Weighted average number of common shares outstanding – Basic 10,622,663 10,580,323 Dilutive securities -unexercised warrants and options - - Weighted average number of common shares outstanding – diluted 10,622,663 10,580,323 Loss per share – Basic $ (0.30 ) $ (0.28 ) Loss per share – Diluted $ (0.30 ) $ (0.28 ) |
OPTIONS
OPTIONS | 6 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
OPTIONS | NOTE 10 – OPTIONS On January 26, 2023, the Board adopted resolutions to issue incentive stock options of total 75,000 20.0 The aggregate fair value of the options granted to Mr. Silong Chen was $ 941,813 Black-Scholes pricing model 19.4 4.17 5 1.00 128.8 Nil On January 26, 2023, the Board adopted resolutions to issue incentive stock options of total 7,500 20.0 The aggregate fair value of the options granted to Dr. Yunhao Chen was $ 94,181 Black-Scholes pricing model 19.4 4.17 10 20.0 128.8 Nil 2,500 The Company recorded $ 399,470 Nil The following table summarized the Company’s share option activity: SCHEDULE OF SHARE OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life in Years Outstanding June 30, 2022 11,000 $ 30.0 - Exercisable, June 30, 2022 11,000 $ 30.0 - Granted 82,500 $ 20.0 - Exercised - $ - - Outstanding June 30, 2023 93,500 $ 20.0 5.03 Exercisable, June 30, 2023 25,000 $ 20.0 5.03 Granted - Forfeited (18,500 ) $ - - Exercised - $ - - Outstanding December 31, 2023 86,000 $ 20.0 4.07 Exercisable, December 31, 2023 25,000 $ 20.0 4.07 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
SEGMENT
SEGMENT | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT | NOTE 11 – SEGMENT An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment. The management of the Company concludes that it has only one Revenue by products and services The summary of total revenues by product and service categories consisted of the following SCHEDULE OF REVENUES BY PRODUCT CATEGORIES For the six months ended December 31, 2023 2022 Product sales: Traditional pet products $ 3,601,676 $ 4,720,547 Intelligent pet products 2,234,220 4,909,115 Climbing hooks and others 761,742 722,312 Total revenue from product sales 6,597,638 10,351,974 Services: Dyeing services 77,049 - Other services - 46,633 Total revenue from services 77,049 46,633 Total revenue $ 6,674,687 $ 10,398,607 Revenue by geographic area Geographic information about the revenues, which are classified based on customers, is set out as follows: SCHEDULE OF REVENUES BY GEOGRAPHIC INFORMATION 2023 2022 For the six months ended December 31, 2023 2022 Geographic location Sales in China domestic markets $ 2,134,640 $ 3,549,045 Sales to international markets 4,540,047 6,849,562 Total $ 6,674,687 $ 10,398,607 Revenues $ 6,674,687 $ 10,398,607 DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 6 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND CREDIT RISK | NOTE 12 – CONCENTRATIONS AND CREDIT RISK A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to effect the remittance. As of December 31, 2023, and June 30, 2023, $ 18,520 271,636 500,000 As of December 31, 2023, three customers aggregately accounted for 61.0 27.9 23.0 10.1 54.6 38.7 15.9 As of December 31, 2023, one third party supplier accounted for 30.0 13.7 11.2 For the six months ended December 31, 2023 and 2022, export sales accounted for 68.0 65.9 19.9 16.3 6.1 5.0 15.3 9.9 8.8 For the six months ended December 31, 2023, one third party supplier accounted for 55.3 For the six months ended December 31, 2022, two third party suppliers accounted for 21.0 12.4 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through April 12, 2024, the date these consolidated financial statements were available for issuance. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Non-controlling interests | Non-controlling interests As of December 31, 2023, non-controll ing interests represent 48.8 controlling shareholders’ interests in Dogness Culture. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the operating results of the Company are presented on the face of the unaudited consolidated statements of comprehensive income (loss) as an allocation of the total income or loss between non-controlling interest holders and the shareholders of the Company. |
Use of Estimates | Use of Estimates In preparing the unaudited consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, inventories, advances to suppliers, useful lives of property, plant, right-of-use assets (including lease liabilities) and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and realization of deferred tax assets. Actual results could differ from those estimates. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which requires the Company to measure and recognize expected credit losses for financial assets held and not accounted for at fair value through net income. The Company adopted this guidance effective January 1, 2023. The Company establishes a provision for doubtful receivables based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for credit losses after management has determined that the likelihood of collection is not probable. Allowance for uncollectible balances amounted to $ 276,376 160,026 |
Inventories, net | Inventories, net Inventories are stated at net realizable value using the weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging and future demand of each type of inventories. |
Prepayments and other assets | Prepayments and other assets Prepayments and other assets primarily consist of advances to suppliers for purchasing of raw materials that have not been received, and prepayment to a landlord for lease of a piece of land in order to build a warehouse in the near future, prepaid service fee, security deposits. These advances are interest free, unsecured and short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 - inputs to the valuation methodology are unobservable. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Fair Value of Financial Instruments (continued) Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, short-term investments, accounts receivable, inventories, prepayments and other current assets, accounts payable, advance from customers, taxes payable, accrued expenses and other current liabilities, current portion of lease liabilities, and short-term bank loans approximate their fair values because of the short-term nature of these instruments. The Company’s long-term investments are accounted for using the measurement alternative in accordance with ASC 321, which also approximate their recorded values. |
Rental income | Rental income Rental revenues are recognized as earned in accordance with the terms of the respective lease agreement on a straight-line basis. Promotional discounts are recognized as a reduction to rental income over the promotional period. Late charges, administrative fees and other fees are recognized as income when earned. Management reviews the tenant’s payment history and financial condition periodically in determining, in its judgment, whether any accrued rental income and unbilled rent receivable balances applicable to each specific property is collectable. |
Revenue Recognition | Revenue Recognition On July 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers, using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. To determine revenue recognition for contracts with customers, the Company performs the following five steps: (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 Revenue is recognized when obligations under the terms of a contract with the Company’s customers are satisfied. Satisfaction of contract terms occur with the transfer of title of the Company’s products to the customers. Net sale is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods to the wholesaler and retailers. The amount of consideration the Company expects to receive consists of the sales price adjusted for any incentives if applicable. Such incentives do not represent a standalone value and are accounted for as a reduction of revenue in accordance with ASC 606. For the six months ended December 31, 2023 and 2022, the Company did not provide any sales incentives to its customers. Incidental promotional items that are immaterial in the context of the contract are recognized as expense. Fees charged to customers for shipping and handling are included in net sales and the related costs incurred by the Company are included in cost of goods sold. In applying judgment, the Company considered customer expectations of performance, materiality and the core principles of ASC Topic 606. The Company’s performance obligations are generally transferred to the customer at a point in time. The Company’s contracts with customers generally do not include any variable consideration. The Company’s revenue is primarily generated from the sales of pet products, including leashes, accessories, collars, harnesses and intelligent pet products, to wholesalers and retailers. Revenue is reported net of all value added taxes (“VAT”). The Company does not routinely permit customers to return products and historically, customer returns have been immaterial. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue Recognition (continued) The Company also generates revenue by providing ribbon dyeing service and pet grooming services to customers. The Company utilizes its manufacturing capability and color dyeing technology to provide dyeing solutions to customers and apply dyes or pigments on ribbons made of textile materials such as fibers, yarns and fabrics to achieve customer desired color fastness and quality. The Company recognizes revenue at the point when dyeing solutions and related services are rendered, products after dyeing are delivered and accepted by the customers. The revenue from pet grooming services is recognized when the services are rendered. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit quality. Contact assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing of when an order is placed and when shipment or delivery occurs. As of December 31, 2023 and June 30, 2023, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product and service types and geographic areas, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months ended December 31, 2023 and 2022 are disclosed in Note 11 of this unaudited consolidated financial statements. |
Research and development costs | Research and development costs Research and development expenses include costs directly attributable to the conduct of research and development projects, including the cost of salaries and other employee benefits, testing expenses, consumable equipment and consulting fees. All costs associated with research and development are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. Deferred income taxes assets and liabilities are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the unaudited consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Value added tax (“VAT”) | Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. Since significant amount of the Company’s products are exported to the U.S. and Europe, the Company is eligible for VAT refunds when the Company completes all the required tax filing procedures. All of the VAT returns of the Company have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Loss per Share | Loss per Share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Share-Based compensation | Share-Based compensation The Company follows the provisions of ASC 718, “Compensation - Stock Compensation,” which establishes the accounting for employee share-based awards. For employee share-based awards, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense with graded vesting on a straight-line basis over the requisite service period for the entire award. |
Foreign Currency Translation | Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of the operations of HK Dogness, HK Jiasheng, Dongguan Dogness, Dongguan Jiasheng, Meijia and Dogness Culture are determined using RMB, the local currency, as the functional currency. while Dogness Overseas and Dogness Group use U.S Dollar as their functional currency. 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 foreign currencies are translated using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net income (loss) for the year. The Company’s financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of comprehensive income (loss). DOGNESS (INTERNATIONAL) CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All amounts in USD) (Unaudited) NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following table outlines the currency exchange rates that were used in creating the unaudited consolidated financial statements: SCHEDULE OF CURRENCY EXCHANGE RATES Six months ended December 31, 2023 Six months ended December 31, 2022 June 30, 2023 Period End spot rate US$1= 7.0999 US$1= 6.8972 US$1= 7.2513 Average rate US$1= 7.2347 US$1= 6.9789 US$1= 6.9536 |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currency. |
Related party transactions | Related party transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions are measured at the amounts agreed upon by the parties. |
Statement of Cash Flows | Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows,” cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. In October 2021, the FASB issued ASU No. 2021-08, “‘Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). This ASU requires entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination. The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for revenue contracts with customers acquired in a business combination and revenue contracts with customers not acquired in a business combination. The amendments are effective for the Company beginning after December 15, 2023, and are applied prospectively to business combinations that occur after the effective date. The Company does not expect the adoption of ASU 2021-04 to have a material effect on the consolidated financial statements. In June 2022, the FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The update also requires certain additional disclosures for equity securities subject to contractual sale restrictions. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. As an emerging growth company, the standard is effective for the Company for the year ended December 31, 2025. The Company is in the process of evaluating the impact of the new guidance on its consolidated financial statements. Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the consolidated financial statements |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF ENTITIES | The Company’s unaudited consolidated financial statements reflect the operating results of the following entities: SCHEDULE OF ENTITIES Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal Activities Dogness (International) Corporation (“Dogness” or the “Company”) July 11, 2016 BVI Parent, 100 % Holding Company Dogness (Hongkong) Pet’s Products Co., Limited (“HK Dogness”) March 10, 2009 Hong Kong 100 % Trading Jiasheng Enterprise (Hong Kong) Co., Limited (“HK Jiasheng”) July 12, 2007 Hong Kong 100 % Trading Dogness Intelligence Technology (Dongguan) Co., Ltd. (“Dongguan Dogness”) October 26, 2016 Dongguan, China 100 % Holding Company Dongguan Jiasheng Enterprise Co., Ltd. (“Dongguan Jiasheng”) May 15, 2009 Dongguan, China 100 % Development and manufacturing of pet leash products Zhangzhou Meijia Metal Product Co., Ltd (“Meijia”) July 9,2009 Zhangzhou, China 100 % Manufacturing of pet leash products Dogness Overseas Ltd (“Dogness Overseas”) February 8, 2018 BVI 100 % Holding Company Dogness Group LLC (“Dogness Group”) January 23, 2018 Delaware, United States 100 % Pet products trading Dogness Pet Culture (Dongguan) Co. Ltd. (“Dogness Culture”) December 14, 2018 Dongguan, China 51.2 % Developing and expanding pet food market |
SCHEDULE OF CURRENCY EXCHANGE RATES | The following table outlines the currency exchange rates that were used in creating the unaudited consolidated financial statements: SCHEDULE OF CURRENCY EXCHANGE RATES Six months ended December 31, 2023 Six months ended December 31, 2022 June 30, 2023 Period End spot rate US$1= 7.0999 US$1= 6.8972 US$1= 7.2513 Average rate US$1= 7.2347 US$1= 6.9789 US$1= 6.9536 |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE As of December 31, 2023 As of June 30, 2023 Accounts receivable from third-party customers $ 2,377,892 $ 1,652,788 Less: allowance for credit losses (276,376 ) (160,026 ) Total accounts receivable from third-party customers, net 2,101,516 1,492,762 Add: accounts receivable - related parties 1,118,431 1,272,384 Total accounts receivable, net $ 3,219,947 $ 2,765,146 |
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS | Allowance for credit losses movement is as follows: SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS As of December 31, 2023 As of June 30, 2023 Beginning balance $ 160,026 $ 6,872 Provision 111,105 160,254 Foreign currency translation adjustments 5,245 (7,100 ) Ending balance $ 276,376 $ 160,026 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventories consisted of the following: SCHEDULE OF INVENTORY As of As of December 31, 2023 June 30, 2023 Raw materials $ 70,125 $ 67,827 Work in process 412,871 265,386 Finished goods 2,989,213 2,727,827 Inventory, gross 3,472,209 3,061,040 Less: inventory allowance (384,614 ) (381,765 ) Inventory, net $ 3,087,595 $ 2,679,275 |
SCHEDULE OF INVENTORY ALLOWANCE | Inventory allowance movement is as follows: SCHEDULE OF INVENTORY ALLOWANCE As of December 31, 2023 As of June 30, 2023 Beginning balance $ 381,765 $ 146,684 Provision - 246,281 Foreign currency translation adjustments 2,849 (11,200 ) Ending balance $ 384,614 $ 381,765 |
BANK LOANS (Tables)
BANK LOANS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF BANK LOANS | SCHEDULE OF BANK LOANS As of As of December 31, 2023 June 30, 2023 Cathay Bank $ 1,200 $ 887,000 Dongguan Rural Commercial Bank 5,184,442 4,555,467 Total 5,185,642 5,442,467 Less: current portion of short-term loans (705,200 ) (887,000 ) Less: current portion of long-term loans (625,274 ) (2,959,918 ) Long-term loans $ 3,855,168 $ 1,595,549 |
SCHEDULE OF BANK LOANS REPAYMENT | SCHEDULE OF BANK LOANS REPAYMENT Twelve months ending December 31, Repayment 2024 $ 1,330,474 2025 915,634 2026 2,277,208 2027 430,053 2028 232,273 Total $ 5,185,642 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF RELATIONSHIP OF RELATED PARTIES | The relationship of related parties is summarized as follow: SCHEDULE OF RELATIONSHIP OF RELATED PARTIES Name of Related Party Relationship to the Company Silong Chen Chief Executive Officer; Chairman of the Board of Directors Junqiang Chen Relative of Mr. Silong Chen Linsun Smart Technology Co., Ltd (“Linsun”) Equity investee -10% of the ownership Dogness Network Technology Co., Ltd (“Dogness Network”) Equity investee - 13% of the ownership Dogness Technology Co., Ltd (“Dogness Technology”) The legal representative is Junqiang Chen, the relative of Mr. Silong Chen |
SCHEDULE OF DUE FROM RELATED PARTIES | Due from related parties consist of mainly rent receivables from the following: SCHEDULE OF DUE FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Linsun $ 94,281 $ 87,430 Total $ 94,281 $ 87,430 |
SCHEDULE OF DUE TO RELATED PARTIES | Due to related parties consist of the following: SCHEDULE OF DUE TO RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Mr. Silong Chen $ 93,649 $ 80,327 Dogness Technology 5,632 5,516 Total $ 99,281 $ 85,843 |
SCHEDULE OF REVENUE FROM RELATED PARTIES | Revenue from related parties consisted of the following: SCHEDULE OF REVENUE FROM RELATED PARTIES For the six months ended December 31, Name 2023 2022 Dogness Technology $ 48,555 $ 96,947 Dogness Network 52,753 913,369 Total $ 101,308 $ 1,010,316 |
SCHEDULE OF ACCOUNTS RECEIVABLE FROM RELATED PARTIES | Accounts receivable from related parties consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Dogness Network $ 976,837 $ 1,133,092 Dogness Technology 141,594 139,292 Total $ 1,118,431 $ 1,272,384 |
SCHEDULE OF ADVANCE TO SUPPLIER FROM RELATED PARTIES | Advance to supplier from related party consisted of the following: SCHEDULE OF ADVANCE TO SUPPLIER FROM RELATED PARTIES As of As of December 31, 2023 June 30, 2023 Advance to supplier - related party: Linsun $ 115,863 $ 239,729 Total $ 115,863 $ 239,729 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Loss Per share | |
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED | The following table presents a reconciliation of basic and diluted net loss per share: SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED 2023 2022 For the six months ended December 31, 2023 2022 Loss attributable to the Company $ (3,196,617 ) $ (2,954,758 ) Weighted average number of common shares outstanding – Basic 10,622,663 10,580,323 Dilutive securities -unexercised warrants and options - - Weighted average number of common shares outstanding – diluted 10,622,663 10,580,323 Loss per share – Basic $ (0.30 ) $ (0.28 ) Loss per share – Diluted $ (0.30 ) $ (0.28 ) |
OPTIONS (Tables)
OPTIONS (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
SCHEDULE OF SHARE OPTION ACTIVITY | The following table summarized the Company’s share option activity: SCHEDULE OF SHARE OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life in Years Outstanding June 30, 2022 11,000 $ 30.0 - Exercisable, June 30, 2022 11,000 $ 30.0 - Granted 82,500 $ 20.0 - Exercised - $ - - Outstanding June 30, 2023 93,500 $ 20.0 5.03 Exercisable, June 30, 2023 25,000 $ 20.0 5.03 Granted - Forfeited (18,500 ) $ - - Exercised - $ - - Outstanding December 31, 2023 86,000 $ 20.0 4.07 Exercisable, December 31, 2023 25,000 $ 20.0 4.07 |
SEGMENT (Tables)
SEGMENT (Tables) | 6 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF REVENUES BY PRODUCT CATEGORIES | The summary of total revenues by product and service categories consisted of the following SCHEDULE OF REVENUES BY PRODUCT CATEGORIES For the six months ended December 31, 2023 2022 Product sales: Traditional pet products $ 3,601,676 $ 4,720,547 Intelligent pet products 2,234,220 4,909,115 Climbing hooks and others 761,742 722,312 Total revenue from product sales 6,597,638 10,351,974 Services: Dyeing services 77,049 - Other services - 46,633 Total revenue from services 77,049 46,633 Total revenue $ 6,674,687 $ 10,398,607 |
SCHEDULE OF REVENUES BY GEOGRAPHIC INFORMATION | Geographic information about the revenues, which are classified based on customers, is set out as follows: SCHEDULE OF REVENUES BY GEOGRAPHIC INFORMATION 2023 2022 For the six months ended December 31, 2023 2022 Geographic location Sales in China domestic markets $ 2,134,640 $ 3,549,045 Sales to international markets 4,540,047 6,849,562 Total $ 6,674,687 $ 10,398,607 Revenues $ 6,674,687 $ 10,398,607 |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) - shares | Dec. 31, 2023 | Jun. 30, 2023 | Apr. 26, 2017 | Jan. 09, 2017 | Nov. 24, 2016 |
Common stock, shares outstanding | 10,626,566 | 10,621,762 | 15,000,000 | ||
Dongguan Jiasheng [Member] | Dongguan Dogness [Member] | |||||
Ownership interest percentage | 100% | ||||
HK Dogness [Member] | |||||
Ownership interest percentage | 100% | ||||
Dogness [Member] | |||||
Ownership interest percentage | 100% | ||||
Dogness Intelligence Technology Co., Ltd. [Member] | |||||
Ownership interest percentage | 100% | ||||
Common Class B [Member] | |||||
Common stock, shares outstanding | 9,069,000 | 9,069,000 |
SCHEDULE OF ENTITIES (Details)
SCHEDULE OF ENTITIES (Details) | 6 Months Ended |
Dec. 31, 2023 | |
Dogness (International) Corporation [Member] | |
Date of Incorporation | Jul. 11, 2016 |
Place of Incorporation | BVI |
% of Ownership | 100% |
Principal Activities | Holding Company |
Dogness (Hongkong) Pet's Products Co., Limited [Member] | |
Date of Incorporation | Mar. 10, 2009 |
Place of Incorporation | Hong Kong |
% of Ownership | 100% |
Principal Activities | Trading |
Jiasheng Enterprise (Hong Kong) Co., Limited [Member] | |
Date of Incorporation | Jul. 12, 2007 |
Place of Incorporation | Hong Kong |
% of Ownership | 100% |
Principal Activities | Trading |
Dogness Intelligence Technology (Dongguan) Co., Ltd. [Member] | |
Date of Incorporation | Oct. 26, 2016 |
Place of Incorporation | Dongguan, China |
% of Ownership | 100% |
Principal Activities | Holding Company |
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | |
Date of Incorporation | May 15, 2009 |
Place of Incorporation | Dongguan, China |
% of Ownership | 100% |
Principal Activities | Development and manufacturing of pet leash products |
Zhangzhou Meijia Metal Product Co Ltd [Member] | |
Date of Incorporation | Jul. 09, 2009 |
Place of Incorporation | Zhangzhou, China |
% of Ownership | 100% |
Principal Activities | Manufacturing of pet leash products |
Dogness Overseas Ltd [Member] | |
Date of Incorporation | Feb. 08, 2018 |
Place of Incorporation | BVI |
% of Ownership | 100% |
Principal Activities | Holding Company |
Dogness Group LLC [Member] | |
Date of Incorporation | Jan. 23, 2018 |
Place of Incorporation | Delaware, United States |
% of Ownership | 100% |
Principal Activities | Pet products trading |
Dogness Pet Culture (Dongguan) Co., Ltd. [Member] | |
Date of Incorporation | Dec. 14, 2018 |
Place of Incorporation | Dongguan, China |
% of Ownership | 51.20% |
Principal Activities | Developing and expanding pet food market |
SCHEDULE OF CURRENCY EXCHANGE R
SCHEDULE OF CURRENCY EXCHANGE RATES (Details) | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Year-End Spot Rate : US$1 Exchange Rate=RMB [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Foreign currency exchange rate, translation | 7.0999 | 7.2513 | 6.8972 |
Average Rate US$1=RMB [Member] | |||
Trading Activity, Gains and Losses, Net [Line Items] | |||
Foreign currency exchange rate, translation | 7.2347 | 6.9536 | 6.9789 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 6 Months Ended | ||
Dec. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Allowances for accounts receivable | $ 276,376 | $ 160,026 | $ 6,872 |
Income tax examination likelihood of unfavorable settlement | 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. | ||
Value added taxes rate description | Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. | ||
Dogness Pet Culture (Dongguan) Co., Ltd. [Member] | |||
Non controlling interests | 48.80% |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Receivables [Abstract] | |||
Accounts receivable from third-party customers | $ 2,377,892 | $ 1,652,788 | |
Less: allowance for credit losses | (276,376) | (160,026) | $ (6,872) |
Total accounts receivable from third-party customers, net | 2,101,516 | 1,492,762 | |
Add: accounts receivable - related parties | 1,118,431 | 1,272,384 | |
Total accounts receivable, net | $ 3,219,947 | $ 2,765,146 |
SCHEDULE OF ALLOWANCE FOR DOUBT
SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Receivables [Abstract] | ||
Beginning balance | $ 160,026 | $ 6,872 |
Provision | 111,105 | 160,254 |
Foreign currency translation adjustments | 5,245 | (7,100) |
Ending balance | $ 276,376 | $ 160,026 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details Narrative) ¥ in Millions | 6 Months Ended | ||||
Dec. 31, 2023 USD ($) | Mar. 25, 2024 USD ($) | Dec. 31, 2023 CNY (¥) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Doubtful accounts | $ 276,376 | $ 160,026 | $ 6,872 | ||
Accounts receivable from related parties amounted | 3,219,947 | 2,765,146 | |||
Related Party [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable from related parties amounted | $ 1,118,431 | $ 1,272,384 | |||
Related Party [Member] | Subsequent Event [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable from related parties amounted | $ 14,823 | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Third Party Customers [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Concentration risk percentage | 72% | ||||
Third Party Customers [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable | $ 1,700,000 | ¥ 12.2 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 70,125 | $ 67,827 | |
Work in process | 412,871 | 265,386 | |
Finished goods | 2,989,213 | 2,727,827 | |
Inventory, gross | 3,472,209 | 3,061,040 | |
Less: inventory allowance | (384,614) | (381,765) | $ (146,684) |
Inventory, net | $ 3,087,595 | $ 2,679,275 |
SCHEDULE OF INVENTORY ALLOWANCE
SCHEDULE OF INVENTORY ALLOWANCE (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | ||
Beginning balance | $ 381,765 | $ 146,684 |
Provision | 246,281 | |
Foreign currency translation adjustments | 2,849 | (11,200) |
Ending balance | $ 384,614 | $ 381,765 |
SCHEDULE OF BANK LOANS (Details
SCHEDULE OF BANK LOANS (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Line of Credit Facility [Line Items] | ||
Total | $ 5,185,642 | $ 5,442,467 |
Short-term Debt | (705,200) | (887,000) |
Less: current portion of long-term loans | (625,274) | (2,959,918) |
Long-term loans | 3,855,168 | 1,595,549 |
Cathay Bank [Membeer] | ||
Line of Credit Facility [Line Items] | ||
Loans payable to bank | 1,200 | 887,000 |
Dongguan Rural Commercial Bank [Member] | ||
Line of Credit Facility [Line Items] | ||
Loans payable to bank | $ 5,184,442 | $ 4,555,467 |
SCHEDULE OF BANK LOANS REPAYMEN
SCHEDULE OF BANK LOANS REPAYMENT (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Debt Disclosure [Abstract] | ||
2024 | $ 1,330,474 | |
2025 | 915,634 | |
2026 | 2,277,208 | |
2027 | 430,053 | |
2028 | 232,273 | |
Total | $ 5,185,642 | $ 5,442,467 |
BANK LOANS (Details Narrative)
BANK LOANS (Details Narrative) | 6 Months Ended | |||||||
Jul. 17, 2020 USD ($) | Jul. 17, 2020 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jul. 17, 2020 CNY (¥) | Feb. 06, 2020 USD ($) | |
Line of Credit Facility [Line Items] | ||||||||
Operating lease right of use asset | $ 17,303,060 | $ 17,537,096 | ||||||
Repayments of debt | 216,736 | ¥ 1,571,686 | ||||||
Interest expense | 154,884 | $ 208,134 | ||||||
Loan payable | 6,200,000 | |||||||
Cathay Bank [Membeer] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Loans payable to bank | 1,200 | 887,000 | ||||||
Dongguan Rural Commercial Bank [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Proceeds from loans | $ 7,000,000 | ¥ 50,000,000 | ||||||
Debt instrument description | The loans have tenure varying between three and eight years. The loans bear a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus difference basis points. | The loans have tenure varying between three and eight years. The loans bear a variable interest rate based on the prime interest rate set by the People’s Bank of China at the time of borrowing, plus difference basis points. | ||||||
Loans payable to bank | 5,184,442 | $ 4,555,467 | ||||||
Dongguan Jiasheng Enterprise Co., Ltd. [Member] | Cathay Bank [Membeer] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum line of credit | $ 1,200,000 | |||||||
Outstanding balance | $ 1,200 | |||||||
Meijia [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Loans receivable collateral for secured borrowings | $ 4,200,000 | ¥ 30,000,000 | ||||||
Meijia [Member] | Mr Silong Chen [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Loans receivable collateral for secured borrowings | 2,900,000 | ¥ 20,000,000 | ||||||
Meijia [Member] | Land [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Operating lease right of use asset | 1,800,000 | |||||||
Meijia [Member] | Building [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Operating lease right of use asset | $ 4,800,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) ¥ in Millions | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 CNY (¥) |
Future minimum capital expenditure commitment | $ 246,177 | |||
Zhangzhou Meijia Metal Product Co., Ltd ('Meijia') [Member] | ||||
Capital | 8,400,000 | ¥ 60 | $ 6,300,000 | ¥ 44.6 |
Zhangzhou Meijia Metal Product Co., Ltd ('Meijia') [Member] | December 30, 2025 [Member] | ||||
Capital | $ 2,200,000 | ¥ 15.4 |
SCHEDULE OF RELATIONSHIP OF REL
SCHEDULE OF RELATIONSHIP OF RELATED PARTIES (Details) | 6 Months Ended |
Dec. 31, 2023 | |
Mr Silong Chen [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Chief Executive Officer; Chairman of the Board of Directors |
Junqiang Chen [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Relative of Mr. Silong Chen |
Linsun Smart Technology Co Ltd [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Equity investee -10% of the ownership |
Dogness Network Technology Co Ltd [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | Equity investee - 13% of the ownership |
Dogness Technology Co Ltd [Member] | |
Related Party Transaction [Line Items] | |
Relationship to the Company | The legal representative is Junqiang Chen, the relative of Mr. Silong Chen |
SCHEDULE OF DUE FROM RELATED PA
SCHEDULE OF DUE FROM RELATED PARTIES (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Linsun Smart Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 94,281 | $ 87,430 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 94,281 | $ 87,430 |
SCHEDULE OF DUE TO RELATED PART
SCHEDULE OF DUE TO RELATED PARTIES (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Mr Silong Chen [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 93,649 | $ 80,327 |
Dogness Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | 5,632 | 5,516 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related party | $ 99,281 | $ 85,843 |
SCHEDULE OF REVENUE FROM RELATE
SCHEDULE OF REVENUE FROM RELATED PARTIES (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Total | $ 101,308 | $ 1,010,316 |
Dogness Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Total | 48,555 | 96,947 |
Dogness Network Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Total | $ 52,753 | $ 913,369 |
SCHEDULE OF ACCOUNTS RECEIVAB_2
SCHEDULE OF ACCOUNTS RECEIVABLE FROM RELATED PARTIES (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | $ 3,219,947 | $ 2,765,146 |
Dogness Network Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | 976,837 | 1,133,092 |
Dogness Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | 141,594 | 139,292 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts receivable from related parties | $ 1,118,431 | $ 1,272,384 |
SCHEDULE OF ADVANCE TO SUPPLIER
SCHEDULE OF ADVANCE TO SUPPLIER FROM RELATED PARTIES (Details) - USD ($) | Dec. 31, 2023 | Jun. 30, 2023 |
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | $ 115,863 | $ 239,729 |
Linsun Smart Technology Co Ltd [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | $ 115,863 | $ 239,729 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 6 Months Ended | |||||
Mar. 25, 2024 USD ($) | Aug. 01, 2020 USD ($) ft² | Jan. 02, 2020 USD ($) ft² | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) | |
Related Party Transaction [Line Items] | ||||||
Cost of revenue to related parties | $ 82,835 | $ 671,876 | ||||
Accounts receivable related parties | 3,219,947 | $ 2,765,146 | ||||
Proceeds from receivables from related parties | 6,498 | 585,157 | ||||
Related Party [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable related parties | 1,118,431 | 1,272,384 | ||||
Related Party [Member] | Subsequent Event [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable related parties | $ 14,823 | |||||
Proceeds from receivables from related parties | $ 14,823 | |||||
Linsun Smart Technology Co Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party debt | 224,001 | 366,660 | ||||
Linsun Smart Technology Co Ltd [Member] | Lease Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Area of land | ft² | 8,460 | |||||
Lease term | 10 years | |||||
Annual lease receivable | $ 220,000 | |||||
Operating leases percentage | 15% | |||||
Rental income | 225,192 | 226,494 | ||||
Dogness Network Technology Co Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable related parties | 976,837 | 1,133,092 | ||||
Dogness Network Technology Co Ltd [Member] | Lease Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Area of land | ft² | 580 | |||||
Annual lease receivable | $ 33,000 | |||||
Operating leases percentage | 15% | |||||
Rental income | 27,025 | |||||
Lease description | Annual lease payment from Dogness Network amounted to approximately $33000 and is subject to 15% increase every three years. | |||||
Dogness Technology Co Ltd [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Accounts receivable related parties | 141,594 | $ 139,292 | ||||
Dogness Technology Co Ltd [Member] | Lease Agreement [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Area of land | ft² | 50 | |||||
Annual lease receivable | $ 1,700 | |||||
Rental income | $ 762 | $ 790 |
EQUITY (Details Narrative)
EQUITY (Details Narrative) - USD ($) | 6 Months Ended | 12 Months Ended | |||||||||||||||||
Apr. 12, 2024 | Nov. 07, 2023 | Jan. 26, 2023 | Dec. 15, 2022 | Jun. 30, 2022 | Jun. 03, 2022 | Feb. 24, 2022 | Jul. 19, 2021 | Jan. 31, 2021 | Jan. 20, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Nov. 06, 2023 | Oct. 22, 2022 | Jul. 31, 2021 | Apr. 26, 2017 | Jul. 11, 2016 | |
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 100,000,000 | 15,000,000 | |||||||||||||||||
Common stock, par value | $ 0.002 | $ 0.002 | |||||||||||||||||
Shares outstanding, shares | 10,626,566 | 10,621,762 | 15,000,000 | ||||||||||||||||
Number of shares issued, value | $ 242,500 | $ 334,500 | |||||||||||||||||
Proceeds from issuance of warrants | 15,101 | ||||||||||||||||||
Warrants modification expense | $ 239,308 | ||||||||||||||||||
Statutory reserve description | Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC regulations until the reserve is equal to 50% of the entity’s registered capital. | ||||||||||||||||||
Allocatiion to statutory reserve | $ 0 | $ 0 | |||||||||||||||||
Restricted reserve | $ 291,443 | $ 291,443 | |||||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Proceeds from issuance of warrants | $ 5,400,000 | ||||||||||||||||||
Warrants exercised | 5,000 | 0 | 86,378 | ||||||||||||||||
Warrant outstanding | 35,985 | ||||||||||||||||||
Warrant exercise price | $ 11.1 | ||||||||||||||||||
Warrants weighted average remaining term | 1 year 2 months 15 days | ||||||||||||||||||
Securities Purchase Agreement [Member] | Subsequent Event [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Warrants exercised | 76,819 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Investor [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued price per share | $ 84 | $ 54 | $ 84 | $ 36.4 | |||||||||||||||
Warrants issued | 109,091 | 86,378 | 109,091 | 8,712 | |||||||||||||||
Expiration date | Jun. 03, 2024 | ||||||||||||||||||
Warrants modification expense | $ 239,308 | ||||||||||||||||||
Securities Purchase Agreement [Member] | Placement Agent [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued price per share | $ 54 | ||||||||||||||||||
Warrants issued | 13,821 | ||||||||||||||||||
Common Class A [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 90,931,000 | ||||||||||||||||||
Common stock, par value | $ 0 | $ 0 | $ 0.002 | ||||||||||||||||
Shares outstanding, shares | 1,557,566 | 1,552,762 | |||||||||||||||||
Common Class A [Member] | Real Miracle Investments Limited [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 15,000 | ||||||||||||||||||
Number of shares issued, value | $ 334,500 | ||||||||||||||||||
Common Class A [Member] | Mr Silong Chen [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 75,000 | ||||||||||||||||||
Number of shares issued, value | $ 1,455,000 | ||||||||||||||||||
Common Class A [Member] | Mr Silong Chen [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 25,000 | ||||||||||||||||||
Common Class A [Member] | Dr. Yunhao Chen [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 7,500 | ||||||||||||||||||
Number of shares issued, value | $ 145,500 | ||||||||||||||||||
Common Class A [Member] | Dr. Yunhao Chen [Member] | Share-Based Payment Arrangement, Tranche One [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issued | 2,500 | ||||||||||||||||||
Common Class A [Member] | Securities Purchase Agreement [Member] | Investor [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Number of shares issuance of sales | 181,818 | 98,313 | 108,906 | 172,757 | |||||||||||||||
Shares issued price per share | $ 66 | $ 57.6 | $ 36.4 | $ 43 | |||||||||||||||
Proceeds from sale of common shares | $ 10,900,000 | $ 4,700,000 | $ 3,500,000 | $ 6,600,000 | |||||||||||||||
Common Class B [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 19,069,000 | ||||||||||||||||||
Common stock, par value | $ 0 | $ 0 | $ 0.002 | ||||||||||||||||
Shares outstanding, shares | 9,069,000 | 9,069,000 | |||||||||||||||||
Minimum [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 100,000,000 | ||||||||||||||||||
Common stock, par value | $ 0.002 | ||||||||||||||||||
Minimum [Member] | Securities Purchase Agreement [Member] | Investor [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued price per share | $ 3.02 | ||||||||||||||||||
Minimum [Member] | Common Class A [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 90,931,000 | ||||||||||||||||||
Minimum [Member] | Common Class B [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 9,069,000 | ||||||||||||||||||
Maximum [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 110,000,000 | ||||||||||||||||||
Common stock, par value | $ 0.002 | ||||||||||||||||||
Maximum [Member] | Securities Purchase Agreement [Member] | Investor [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Shares issued price per share | $ 84 | ||||||||||||||||||
Maximum [Member] | Common Class A [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 90,931,000 | ||||||||||||||||||
Maximum [Member] | Common Class B [Member] | |||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||
Common stock, shares authorized | 19,069,000 |
SCHEDULE OF EARNINGS PER SHARE,
SCHEDULE OF EARNINGS PER SHARE, BASIC AND DILUTED (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Per share | ||
Loss attributable to the Company | $ (3,196,617) | $ (2,954,758) |
Weighted average number of common shares outstanding – Basic | 10,622,663 | 10,580,323 |
Dilutive securities -unexercised warrants and options | ||
Weighted average number of common shares outstanding – diluted | 10,622,663 | 10,580,323 |
Loss per share – Basic | $ (0.30) | $ (0.28) |
Loss per share – Diluted | $ (0.30) | $ (0.28) |
SCHEDULE OF SHARE OPTION ACTIVI
SCHEDULE OF SHARE OPTION ACTIVITY (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Jun. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | ||
Number of Options Outstanding, Beginning Balance | 93,500 | 11,000 |
Weighted Average Exercise Price, Beginning Balance | $ 20 | $ 30 |
Number of Option Outstanding Exercisable, Beginning balance | 25,000 | 11,000 |
Weighted Average Exercise Price Exercisable, Beginning Balance | $ 20 | $ 30 |
Number of Options, Granted | 82,500 | |
Weighted Average Price, Granted | $ 20 | |
Number of Options, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Remaining Life in Years, Outstanding Term | 4 years 25 days | 5 years 10 days |
Weighted Average Remaining Life in Years, Exercisable Term | 4 years 25 days | 5 years 10 days |
Number of Options, Forfeited | (18,500) | |
Weighted Average Exercise Price, Forfeited | ||
Number of Options Outstanding, Ending Balance | 86,000 | 93,500 |
Weighted Average Exercise Price Outstanding, Ending Balance | $ 20 | $ 20 |
Number of Option Outstanding Exercisable, Ending balance | 25,000 | 25,000 |
Weighted Average Exercise Price Exercisable, Ending Balance | $ 20 | $ 20 |
OPTIONS (Details Narrative)
OPTIONS (Details Narrative) - USD ($) | 6 Months Ended | ||||
Jan. 26, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Stock options exercise purchase price | $ 20 | $ 20 | $ 30 | ||
Share-based compensation for services | $ 399,470 | ||||
Mr Silong Chen [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Aggregated fair value of options granted | $ 941,813 | ||||
Share-based payment award, fair value assumptions, method used | Black-Scholes pricing model | ||||
Share price | $ 19.4 | ||||
Share-based payment award, fair value assumptions, risk free interest rate | 4.17% | ||||
Share-based payment award, fair value assumptions, expected term | 5 years | ||||
Share-based payment award, fair value assumptions, exercise price | $ 1 | ||||
Share-based payment award, fair value assumptions, expected volatility rate | 128.80% | ||||
Share-based payment award, fair value assumptions, expected dividend payments | |||||
Mr Silong Chen [Member] | Common Class A [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Stock options grants to purchase | 75,000 | ||||
Stock options exercise purchase price | $ 20 | ||||
Dr. Yunhao Chen [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Aggregated fair value of options granted | $ 94,181 | ||||
Share-based payment award, fair value assumptions, method used | Black-Scholes pricing model | ||||
Share price | $ 19.4 | ||||
Share-based payment award, fair value assumptions, risk free interest rate | 4.17% | ||||
Share-based payment award, fair value assumptions, expected term | 10 years | ||||
Share-based payment award, fair value assumptions, exercise price | $ 20 | ||||
Share-based payment award, fair value assumptions, expected volatility rate | 128.80% | ||||
Share-based payment award, fair value assumptions, expected dividend payments | |||||
Number of options vested | 2,500 | ||||
Dr. Yunhao Chen [Member] | Common Class A [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Stock options grants to purchase | 7,500 | ||||
Stock options exercise purchase price | $ 20 |
SCHEDULE OF REVENUES BY PRODUCT
SCHEDULE OF REVENUES BY PRODUCT CATEGORIES (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from External Customer [Line Items] | ||
Revenues | $ 6,674,687 | $ 10,398,607 |
Traditional Pet Products [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 3,601,676 | 4,720,547 |
Intelligent Pet Products [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 2,234,220 | 4,909,115 |
Climbing Hooks and Others [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 761,742 | 722,312 |
Product [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 6,597,638 | 10,351,974 |
Dyeing Services [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 77,049 | |
Service, Other [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | 46,633 | |
Service [Member] | ||
Revenue from External Customer [Line Items] | ||
Revenues | $ 77,049 | $ 46,633 |
SCHEDULE OF REVENUES BY GEOGRAP
SCHEDULE OF REVENUES BY GEOGRAPHIC INFORMATION (Details) - USD ($) | 6 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 6,674,687 | $ 10,398,607 |
China Market [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,134,640 | 3,549,045 |
International Markets [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 4,540,047 | $ 6,849,562 |
SEGMENT (Details Narrative)
SEGMENT (Details Narrative) | 6 Months Ended |
Dec. 31, 2023 Integer | |
Segment Reporting [Abstract] | |
Number of reporting segment | 1 |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK (Details Narrative) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 | Jun. 30, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | |
Concentration Risk [Line Items] | ||||
Cash and cash equivalents | $ | $ 18,520 | $ 271,636 | ||
FDIC deposit insurance limit | ¥ | ¥ 500,000 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Dogness Network Technology Co Ltd [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 27.90% | 38.70% | ||
Customers Three [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 61% | |||
Customers Three [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 6.10% | 8.80% | ||
Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 23% | |||
Customer One [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 19.90% | 15.30% | ||
Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 10.10% | 54.60% | ||
Customer Two [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 16.30% | 9.90% | ||
Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 15.90% | |||
Supplier [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 30% | |||
Supplier [Member] | Assets, Total [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 55.30% | |||
Supplier One [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 13.70% | |||
Supplier One [Member] | Assets, Total [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 21% | |||
Supplier Two [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 11.20% | |||
Supplier Two [Member] | Assets, Total [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 12.40% | |||
Customers [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 68% | 65.90% | ||
Customers Four [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 5% |