Document and Entity Information
Document and Entity Information | 12 Months Ended |
Jun. 30, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | China Xiangtai Food Co., Ltd. |
Entity Central Index Key | 0001735556 |
Trading Symbol | PLIN |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Current Fiscal Year End Date | --06-30 |
Entity Well Known Seasoned Issuer | No |
Entity Common Stock, Shares Outstanding | 21,964,027 |
Document Type | 20-F |
Document Period End Date | Jun. 30, 2019 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Document Annual Report | false |
Document Transition Report | false |
Document Shell Company Report | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 3,216,005 | $ 308,033 |
Restricted cash | 0 | 11,060 |
Accounts receivable, net | 39,522,737 | 24,364,119 |
Accounts receivable - related party | 0 | 56,955 |
Other receivables, net | 259,350 | 150,376 |
Other receivables - related parties | 0 | 373,065 |
Inventories | 112,641 | 2,728 |
Prepayments | 213,596 | 317,860 |
Security deposits | 2,374,586 | 1,502,819 |
Loan receivable, net | 0 | 1,957,720 |
Total current assets | 45,698,915 | 29,044,735 |
PLANT AND EQUIPMENT, net | 4,549,212 | 3,962,455 |
OTHER ASSETS | ||
Other receivables | 132,181 | 9,951 |
Intangible assets, net | 462,738 | 492,330 |
Prepaid expenses | 508,271 | 0 |
Deferred tax assets | 0 | 220,222 |
Total other assets | 1,103,190 | 722,503 |
Total assets | 51,351,317 | 33,729,693 |
CURRENT LIABILITIES | ||
Short-term loans - banks | 4,514,380 | 4,530,011 |
Loans from third parties | 3,075,249 | 4,907,512 |
Short-term loans - related parties | 329,120 | 0 |
Accounts payable | 8,872,009 | 2,941,104 |
Other payables and accrued liabilities | 991,912 | 262,987 |
Other payables - related parties | 1,334,534 | 549,858 |
Customer deposits | 706,972 | 654,117 |
Customer deposits - related party | 29,643 | 31,482 |
Taxes payable | 2,975,046 | 3,037,585 |
Total current liabilities | 22,828,865 | 16,914,656 |
OTHER LIABILITIES | ||
Long-term loan - bank | 866,231 | 981,502 |
Loan from a third party | 3,131,007 | 0 |
Total other liabilities | 3,997,238 | 981,502 |
Total liabilities | 26,826,103 | 17,896,158 |
COMMITMENTS AND CONTINGENCIES | ||
MEZZANINE EQUITY | ||
Redeemable ordinary shares, $0.01 par value, 0 and 725,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively | 0 | 1,800,000 |
SHAREHOLDERS' EQUITY | ||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 21,964,027 and 20,000,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively | 219,640 | 200,000 |
Additional paid-in capital | 11,031,937 | 4,655,943 |
Statutory reserves | 1,496,642 | 940,816 |
Retained earnings | 12,085,566 | 8,277,801 |
Accumulated other comprehensive loss | (308,571) | (41,025) |
Total shareholders' equity | 24,525,214 | 14,033,535 |
Total liabilities, mezzanine equity and shareholders' equity | $ 51,351,317 | $ 33,729,693 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2019 | May 10, 2019 | Jun. 30, 2018 |
CONSOLIDATED BALANCE SHEETS | |||
Redeemable ordinary shares, par value | $ 0.01 | $ 0.01 | |
Redeemable ordinary shares, shares issued | 0 | 725,000 | 725,000 |
Redeemable ordinary shares, shares outstanding | 0 | 725,000 | 725,000 |
Ordinary shares, par value | $ 0.01 | $ 0.01 | |
Ordinary shares, shares authorized | 50,000,000 | 50,000,000 | |
Ordinary shares, shares authorized, shares issued | 21,964,027 | 20,000,000 | |
Ordinary shares, shares authorized, shares outstanding | 21,964,027 | 20,000,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
REVENUES | |||
Total revenues | $ 102,545,152 | $ 101,104,224 | $ 63,276,479 |
COST OF REVENUES | |||
Total cost of revenues | 93,543,933 | 91,452,753 | 58,209,404 |
GROSS PROFIT | 9,001,219 | 9,651,471 | 5,067,075 |
OPERATING EXPENSES: | |||
Selling | 1,255,340 | 708,531 | 854,643 |
General and administrative | 1,467,373 | 981,347 | 515,596 |
Provision for doubtful accounts | 743,986 | 918,940 | 175,317 |
Total operating expenses | 3,466,699 | 2,608,818 | 1,545,556 |
INCOME FROM OPERATIONS | 5,534,520 | 7,042,653 | 3,521,519 |
OTHER INCOME (EXPENSE) | |||
Interest income | 2,196 | 388,781 | 741,218 |
Interest expense | (841,130) | (1,282,291) | (667,748) |
Other finance expenses | (138,926) | (141,284) | (266,155) |
Other income (expense), net | 20,580 | (18,596) | 1,777 |
Provision for doubtful accounts - loan receivable | 0 | (1,506,778) | 0 |
Total other expense, net | (957,280) | (2,560,168) | (190,908) |
INCOME BEFORE INCOME TAXES | 4,577,240 | 4,482,485 | 3,330,611 |
PROVISION FOR INCOME TAXES | 213,649 | 714,376 | 875,737 |
NET INCOME | 4,363,591 | 3,768,109 | 2,454,874 |
OTHER COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustment | (267,546) | 133,553 | (135,663) |
COMPREHENSIVE INCOME | $ 4,096,045 | $ 3,901,662 | $ 2,319,211 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | |||
Basic | 20,319,723 | 20,000,000 | 20,000,000 |
Diluted | 20,944,951 | 20,083,151 | 20,000,000 |
EARNINGS PER SHARE | |||
Basic | $ 0.21 | $ 0.19 | $ 0.12 |
Diluted | $ 0.21 | $ 0.19 | $ 0.12 |
Supermarket and grocery store | |||
REVENUES | |||
Total revenues | $ 7,322,243 | $ 3,750,904 | $ 4,451,149 |
COST OF REVENUES | |||
Total cost of revenues | 6,371,345 | 3,193,830 | 3,011,400 |
Farmers' market | |||
REVENUES | |||
Total revenues | 95,222,909 | 97,353,320 | 58,825,330 |
COST OF REVENUES | |||
Total cost of revenues | $ 87,172,588 | $ 88,258,923 | $ 55,198,004 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Private placementsOrdinary Shares | Private placementsAdditional paid-in capital | Private placementsStatutory reserves | Private placementsUnrestricted | Private placementsAccumulated other comprehensive loss | Private placements | Initial public offeringOrdinary Shares | Initial public offeringAdditional paid-in capital | Initial public offeringStatutory reserves | Initial public offeringUnrestricted | Initial public offeringAccumulated other comprehensive loss | Initial public offering | Ordinary Shares | Additional paid-in capital | Statutory reserves | Unrestricted | Accumulated other comprehensive loss | Total |
Balance at the beginning at Jun. 30, 2016 | $ 200,000 | $ 4,371,674 | $ 299,489 | $ 2,696,145 | $ (38,915) | $ 7,528,393 | ||||||||||||
Balance at the beginning (in shares) at Jun. 30, 2016 | 20,000,000 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Capital contribution | $ 0 | 284,269 | 0 | 0 | 0 | 284,269 | ||||||||||||
Net income | 0 | 0 | 0 | 2,454,874 | 0 | 2,454,874 | ||||||||||||
Statutory reserves | 0 | 0 | 262,721 | (262,721) | 0 | 0 | ||||||||||||
Foreign currency translation | 0 | 0 | 0 | 0 | (135,663) | (135,663) | ||||||||||||
Balance at the end at Jun. 30, 2017 | $ 200,000 | 4,655,943 | 562,210 | 4,888,298 | (174,578) | 10,131,873 | ||||||||||||
Balance at the end (in shares) at Jun. 30, 2017 | 20,000,000 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Net income | $ 0 | 0 | 0 | 3,768,109 | 0 | 3,768,109 | ||||||||||||
Statutory reserves | 0 | 0 | 378,606 | (378,606) | 0 | 0 | ||||||||||||
Foreign currency translation | 0 | 0 | 0 | 0 | 133,553 | 133,553 | ||||||||||||
Balance at the end at Jun. 30, 2018 | $ 200,000 | 4,655,943 | 940,816 | 8,277,801 | (41,025) | 14,033,535 | ||||||||||||
Balance at the end (in shares) at Jun. 30, 2018 | 20,000,000 | |||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||
Issuance of ordinary shares | $ 667 | $ 199,333 | $ 0 | $ 0 | $ 0 | $ 200,000 | $ 11,724 | $ 4,383,911 | $ 0 | $ 0 | $ 0 | $ 4,395,634 | ||||||
Issuance of ordinary shares (in shares) | 66,667 | 1,172,360 | ||||||||||||||||
Issuance of ordinary shares in connection with redemption rights | $ 7,250 | 1,792,750 | 0 | 0 | 0 | 1,800,000 | ||||||||||||
Issuance of ordinary shares in connection with redemption rights (in shares) | 725,000 | |||||||||||||||||
Net income | $ 0 | 0 | 0 | 4,363,591 | 0 | 4,363,591 | ||||||||||||
Statutory reserves | 0 | 0 | 555,826 | (555,826) | 0 | 0 | ||||||||||||
Foreign currency translation | 0 | 0 | 0 | 0 | (267,546) | (267,546) | ||||||||||||
Balance at the end at Jun. 30, 2019 | $ 219,640 | $ 11,031,937 | $ 1,496,642 | $ 12,085,566 | $ (308,571) | $ 24,525,214 | ||||||||||||
Balance at the end (in shares) at Jun. 30, 2019 | 21,964,027 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 4,363,591 | $ 3,768,109 | $ 2,454,874 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 689,534 | 542,189 | 531,625 |
Amortization of long-term prepaid expenses | 109,544 | 0 | 0 |
Provision for doubtful accounts | 743,986 | 2,425,718 | 175,317 |
Deferred tax expense (benefit) | 213,649 | (126,936) | (43,829) |
Change in operating assets and liabilities | |||
Accounts receivable | (16,864,582) | (12,021,191) | (8,778,203) |
Accounts receivable - related party | 0 | (40,780) | (16,432) |
Other receivables | (147,078) | (88,954) | 73,744 |
Inventories | 167,860 | 291,594 | 829,946 |
Prepayments | 93,508 | 209,777 | (471,910) |
Security deposits | (1,388,179) | 0 | 0 |
Loan receivables - interest | 727,338 | (384,788) | (735,200) |
Accounts payable | 5,526,477 | 68,175 | 2,413,550 |
Other payables and accrued liabilities | 382,309 | 245,373 | 20,028 |
Customer deposits | 74,675 | 554,889 | 76,673 |
Customer deposits - related party | (723) | 32,049 | 0 |
Taxes payable | 40,830 | 929,745 | 955,988 |
Net cash used in operating activities | (5,267,261) | (3,595,031) | (2,513,829) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of plant and equipment | (20,635) | (89,351) | (11,674) |
Repayments from loan to third party | 1,171,945 | 0 | 0 |
Cash received from acquisition of grocery stores | 42,234 | 0 | 0 |
Net cash provided by (used in) investing activities | 1,193,544 | (89,351) | (11,674) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Repayments from (loans to) other receivables - related parties, net | 272,710 | 2,736,001 | (1,557,884) |
Proceeds from (repayments of) other payables - related parties, net | 353,321 | 609,048 | (5,342) |
Proceeds from capital contribution | 0 | 0 | 286,361 |
Proceeds from issuance of ordinary shares through private placements | 200,000 | 0 | 0 |
Proceeds from issuance of ordinary shares through initial public offering, net | 4,395,634 | 0 | 0 |
Proceeds from issuance of ordinary shares with redemption rights | 0 | 1,800,000 | 0 |
Proceeds from short-term loans - banks | 4,901,661 | 6,148,734 | 9,427,898 |
Repayments of short-term loans - banks | (5,194,743) | (11,375,158) | (3,994,374) |
Proceeds from short-term loans - third parties | 1,218,401 | 11,134,708 | 3,068,377 |
Repayments of short-term loans - third parties | (322,285) | (6,138,861) | (4,316,619) |
Proceeds from short-term loans - related parties | 331,075 | 0 | 0 |
Proceeds from long-term loan | 923,830 | 0 | 0 |
Repayments of long-term loan | (1,004,659) | 0 | 0 |
Proceeds from notes payable | 0 | 0 | 1,475,863 |
Repayments of notes payable | 0 | (1,537,184) | (7,343) |
Changes in security deposits | 575,581 | 615,426 | (1,880,588) |
Net cash provided by financing activities | 6,650,526 | 3,992,714 | 2,496,349 |
EFFECT OF EXCHANGE RATE ON CASH | 320,103 | (10,769) | (1,164) |
CHANGES IN CASH | 2,896,912 | 297,563 | (30,318) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 319,093 | 21,530 | 51,848 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year | 3,216,005 | 319,093 | 21,530 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income tax | 0 | 0 | 0 |
Cash paid for interest | 823,551 | 1,389,533 | 667,748 |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | |||
Other receivable - related party offset with other payable - related party upon execution of the tri-party offset agreement | 439,479 | 50,627 | 0 |
Issuance of ordinary shares with redemption rights of mezzanine equity | $ 1,800,000 | $ 0 | $ 0 |
Nature of business and organiza
Nature of business and organization | 12 Months Ended |
Jun. 30, 2019 | |
Nature of business and organization | |
Nature of business and organization | Note 1 – Nature of business and organization China Xiangtai Food Co., Ltd. (“Xiangtai Cayman” or the “Company”) is a holding company incorporated on January 23, 2018, under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding share capital of WVM Inc. (“Xiangtai BVI”). Xiangtai BVI is also a holding company holding all of the outstanding equity of CVS Limited, (“Xiangtai HK”). Xiangtai HK is also a holding company holding all of the outstanding equity of Chongqing Jinghuangtai Business Management Consulting Co., Ltd. (“Xiangtai WFOE”). The Company, through its variable interest entity (“VIE”), Chongqin Penglin Food Co., Ltd. (“CQ Penglin”) and through its wholly-owned subsidiary, Guang’an Yongpeng Food Co., Ltd. (“GA Yongpeng”), engages in slaughtering, processing, packing and selling various processed meat products. On July 2, 2018, the Company acquired Chongqing Pengmei Supermarket Co. Ltd., (“CQ Pengmei”) that operated two grocery stores under common control of Ms. Zeshu Dai, its CEO, and her spouse in the city of Chongqing. The operations of these two grocery stores started in November 2017. One of the grocery stores temporarily stopped operation in August 2018 due to fire safety requirement not being met by the landlord and the Company filed a lawsuit against the landlord for the safety issues in connection with the store operating lease (see Note 14). The grocery store which can be reopened once the court issues a judgment and the fire safety requirements are met. The acquisition price was at the carrying value on CQ Pengmei books and records for a total of approximately $0.9 million (RMB 5,949,052). The Company’s headquarter is located in the city of Chongqing, a direct-controlled municipality of the People’s Republic of China (the “PRC” or “China”). All of the Company’s business activities are carried out by CQ Penglin, GA Yongpeng and CQ Pengmei. In May 2018, Xiangtai Cayman completed its reorganization of entities under the common control of one major shareholder, Zeshu Dai, who obtained 100% control of China Meitai Food Co., Ltd. (“China Meitai”), which has 64.17% ownership in Xiangtai Cayman, through an entrustment agreement with a third party prior to the reorganization, which the third party entrusted its voting power, personnel appointment power and other power-related to operating and managing of China Meitai, and therefore effectively the control of Xiangtai Cayman, to Ms. Dai to the extent permitted by the laws of the British Virgin Islands. Ms. Dai entered into a call option agreement with a third party who is currently the sole shareholder of China Meitai. Pursuant to the call option agreement, the third party granted Ms. Dai an option that upon the closing of the initial public offering of the Company, Ms. Dai can exercise control of 97.74% of the shares of China Meitai. After excising the option shares in China Meitai, Ms. Dai indirectly owns 62.73% shares of the Company through China Meitai concurrently with the completion of the reorganization in May 2019. Xiangtai Cayman, Xiangtai BVI and Xiangtai HK were established as the holding companies of Xiangtai WFOE. Xiangtai WFOE is the primary beneficiary of CQ Penglin and is the holding company of GA Yongpeng, and all of these entities included in Xiangtai Cayman are under common control of Ms. Dai and her immediate family members. As the 97.7% major shareholder in China Meitai, upon exercising the option shares, who collectively owns 100% of CQ Penglin and 100% of GA Yongpeng prior to the reorganization, causing the consolidation of CQ Penglin and GA Yongpeng which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of Xiangtai Cayman. On May 10, 2019, the Company closed its initial public offering of an aggregate of 1,172,360 ordinary shares, par value $0.01 per share, at a public offering price of $5.00 per share, for gross proceeds of $5,861,800 (the “Closing”). The Company received net proceeds (after deducting underwriting discounts and commissions and other offering fees and expenses) of approximately $4.4 million from the offering. The accompanying consolidated financial statements reflect the activities of Xiangtai Cayman and each of the following entities: Name Background Ownership Xiangtai BVI · A British Virgin Islands company 100% Xiangtai HK · A Hong Kong company 100% owned by Xiangtai BVI Xiangtai WFOE · A PRC limited liability company and deemed a wholly foreign-owned enterprise (“WFOE”) 100% owned by Xiangtai HK CQ Penglin · A PRC limited liability company VIE of Xiangtai WFOE · Slaughtering, processing, packing, and selling various processed meat products. GA Yongpeng · A PRC limited liability company 100% owned by Xiangtai WFOE · Slaughtering, processing, packing and selling various processed meat products. CQ Pengmei · A PRC limited liability company 100% owned by Xiangtai WFOE · Grocery stores selling daily necessities Contractual Arrangements CQ Penglin’s PRC business license includes business activities of marketing survey service in the livestock industry and it is being included as a social survey category, which is within the business category in which foreign investment is restricted pursuant to the current PRC regulations. As such, CQ Penglin is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements (collectively the “Contractual Arrangements”). The significant terms of the Contractual Agreements are as follows: Technical Consultation and Services Agreement Pursuant to the technical consultation and services agreement between Xiangtai WFOE and CQ Penglin, as amended, Xiangtai WFOE is engaged as the exclusive provider of management consulting services to CQ Penglin. For such services, CQ Penglin agrees to pay service fees determined based on all of their net income to Xiangtai WFOE or Xiangtai WFOE has the obligation to absorb all of the losses of CQ Penglin. The technical consultation and services agreement, as amended, remains in effect for 30 years until October 8, 2047. The agreement can be extended only if Xiangtai WFOE gives its written consent of extension of the agreement before the expiration of the agreement and CQ Penglin then may extend without reservation. Business Cooperation Agreement Pursuant to the business cooperation agreement between Xiangtai WFOE and CQ Penglin, as amended, Xiangtai WFOE has the exclusive right to provide CQ Penglin with technical support, business support and related consulting services, including but not limited to technical services, business consultations, equipment or property leasing, marketing consultancy, system integration, product research and development, and system maintenance. In exchange, Xiangtai WFOE is entitled to a service fee that equals all of the net income of CQ Penglin determined by U.S. GAAP. The service fees may be adjusted based on the services rendered by Xiangtai WFOE in that month and the operational needs of CQ Penglin. The business cooperation agreement, as amended, remains in effect unless Xiangtai WFOE commits gross negligence, or a fraudulent act, against CQ Penglin. Nevertheless, Xiangtai WFOE shall have the right to terminate this agreement upon giving 30 days’ prior written notice to CQ Penglin at any time. Equity Option Agreements Pursuant to the equity option agreements, as amended, among the shareholders who collectively owned all of CQ Penglin and Xiangtai WFOE, CQ Penglin These shareholders jointly and severally grant Xiangtai WFOE an option to purchase their equity interests in CQ Penglin. The purchase price shall be the lowest price then permitted under applicable PRC laws. If the purchase price is greater than the registered capital of CQ Penglin, these shareholders of CQ Penglin are required to immediately return any amount in excess of the registered capital to Xiangtai WFOE or its designee of Xiangtai WFOE. Xiangtai WOFE may exercise such option at any time until it has acquired all equity interests of CQ Penglin, and may transfer the option to any third party. The agreements will terminate at the date on which all of these shareholders’ equity interests of CQ Penglin has been transferred to Xiangtai WFOE or its designee. Equity Pledge Agreements Pursuant to the equity pledge agreements, as amended, among the shareholders who collectively owned all of CQ Penglin, pledge all of the equity interests in CQ Penglin to Xiangtai WFOE as collateral to secure the obligations of CQ Penglin under the exclusive consulting services and operating agreement. These shareholders may not transfer or assign transfer or assign the pledged equity interests, or incur or allow any encumbrance that would jeopardize Xiangtai WFOE’s interests, without Xiangtai WFOE’s prior approval. In the event of default, Xiangtai WFOE as the pledgee will be entitled to certain rights and entitlements, including the priority in receiving payments by the evaluation or proceeds from the auction or sale of whole or part of the pledged equity interests of CQ Penglin. The agreement will terminate at the date these shareholders have transferred all of their pledged equity interests pursuant to the equity option agreement. Voting Rights Proxy and Financial Supporting Agreements Pursuant to the voting rights proxy and financial supporting agreements, as amended, the shareholders of CQ Penglin give Xiangtai WFOE an irrevocable proxy to act on their behalf on all matters pertaining to CQ Penglin and to exercise all of their rights as shareholders of CQ Penglin, including the right to attend shareholders meeting, to exercise voting rights and to transfer all or a part of their equity interests in CQ Penglin. In consideration of such granted rights, Xiangtai WFOE agrees to provide the necessary financial support to CQ Penglin whether or not CQ Penglin incurs a loss, and agrees not to request repayment if CQ Penglin is unable to do so. The agreements shall remain in effect for 30 years until October 8, 2047. Based on the foregoing contractual arrangements, which grant Xiangtai WFOE effective control of CQ Penglin, obligate Xiangtai WFOE to absorb all of the risks of loss from their activities, and enable Xiangtai WFOE to receive all of their expected residual returns, the Company accounts for CQ Penglin as a VIE. The Company consolidates the accounts of CQ Penglin for the periods presented herein, in accordance with Regulation S-X‑3A‑02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810‑10, Consolidation. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Jun. 30, 2019 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, and its VIE. All intercompany transactions and balances are eliminated upon consolidation. Enterprise-wide disclosure The Company’s chief operating decision-makers (i.e. chief executive officer and her direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by business lines (supermarket and farmers’ market revenues) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within one reportable segment as the Company’s grocery store operations are currently immaterial to its consolidated operation in total assets, revenue and net income (loss). Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment, impairment of long-lived assets, and allowance for doubtful accounts. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(308,571) and $(41,025) as of June 30, 2019 and 2018, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2019 and 2018 were translated at 6.87 RMB and 6.62 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to the statement of income accounts for the years ended June 30, 2019, 2018 and 2017 were 6.83 RMB, 6.51 RMB and 6.81 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and time deposits placed with banks or other financial institutions and have original maturities of less than three months. Restricted cash Restricted cash representing cash deposits frozen by the People’s Court of Yunyang related to the guarantee contract CQ Mingwen, CQ Penglin, GA Yongpeng and Mr. Mingwen Wang entered into on May 16, 2016. The frozen cash deposits were unfrozen by the Court in July 2018 after Mr. Mingwen Wang waived the liabilities of CQ Mingwen, CQ Penglin and GA Yongpeng, personally became responsible for all three payments and paid the first payment to the lender (See Note 13 for details). Accounts receivable Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical experience, aging of the receivables, the economic environment, trends in the food industry and the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. The Company provides an allowance for doubtful accounts provision of 25% for accounts receivable balances that are past due more than 180 days but less than 270 days, an allowance for doubtful accounts provision of 50% of for accounts receivable past due from 270 days but less than one year, an allowance for doubtful accounts provision of 100% for accounts receivable past due beyond one year, plus additional amounts as necessary when the Company’s collection department determines the collection of the full amount is remote and the Company’s management approves 100% of the allowance for doubtful accounts. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management has continued to evaluate the reasonableness of its valuation allowance policy and will update it if necessary. Other receivables Other receivables primarily include advances to employees, amounts due from unrelated entities, VAT tax refunds, and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes the collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2019 and 2018, allowance for the doubtful accounts were $48,203 and $49,981, respectively. Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value. Prepayments Prepayments are cash deposited or advanced to services providers for future inventory purchases or future services. This amount is refundable and bears no interest. Security deposits Security deposits are cash deposited to service providers who assisted the Company as a third party guarantor in the Company’s bank loans and sales contracts. These amounts are non-interest bearing and refundable upon the repayments of the loans or notes payable or fulfillment of sales contracts. Plant and equipment, net Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 0% or 5% residual value. The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets, net Intangible assets are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land-use rights.” The Company has obtained rights to use various parcels of land for 50 years. The Company amortizes the cost of the land use rights over their useful life using the straight-line method. Impairment for long-lived assets Long-lived assets, including plant and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2019 and 2018, no impairment of long-lived assets was recognized. Fair value measurement The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: · Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Loans receivable and the related accrued interest in the consolidated balance sheets at carrying value, which approximates fair value as the negotiated interest rates were indicative of the loan recipient’s financial condition and the rates the recipient could have obtained from an advance of another loan provider. Long-term bank loan on the balance sheets is at carrying value, which approximates fair value as the bank was lending the money to the Company at the market rate. Revenue recognition Prior to June 30, 2018, revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. Revenues are recognized at the date of goods delivered and title passed to customers or agents, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. The Company’s revenues come from two channels: supermarkets and farmers’ markets. The products sold in supermarkets are processed meat products and they sold in the PRC are subject to a Chinese value-added tax (“VAT”). The products sold at farmers’ markets are fresh-killed hog and hog’s byproducts. These products sold in the PRC are not subject to a Chinese VAT. VAT taxes are presented as a reduction of revenue. On July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of June 30, 2018. The core principle underlying the revenue recognition ASU is that the Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or overtime, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and determined that there were no differences in the pattern of revenue recognition. The Company also evaluated its current costs and liabilities in relation to its revenue streams and determined no contract assets (or contract liabilities) are required to be capitalized or accrued upon adoption. Disaggregated revenue by the Company’s revenue streams, such as supermarket and grocery store revenue and famers’ market revenue are required to be disclosed upon adoption, which has been reflected in the accompanying consolidated statements of income and comprehensive income. Cost of revenues Cost of revenues comprised of the cost of raw materials and the cost of processing and overhead expenses on sold products. Shipping and handling Shipping and handling costs are expensed as incurred and included in selling expenses. Advertising costs Advertising costs amounted to $14,876, $4,320 and $10,452 for the years ended June 30, 2019, 2018 and 2017, respectively. Advertising costs are expensed as incurred and included in selling expenses. Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2017 to 2019 are subject to examination by any applicable tax authorities. Earnings per share (“EPS”) Basic earnings per share are computed by dividing income available to ordinary shareholders by the weighted average ordinary shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. Ordinary shares equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Dilution is computed by applying the treasury share method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during the period. A total of 725,000 issued and outstanding ordinary shares with redemption rights prior to the redemption right removal on May 10, 2019 are included in the diluted earnings per share calculation with a weighted average effect of 623,699 and 83,151 ordinary shares for the years ended June 30, 2019 and 2018, respectively as if the shares were issued without any redemption right. A total of 4,667 warrants with weighted average effect of 1,867 ordinary shares using treasury share method are included in the diluted EPS calculation for the year ended June 30, 2019. A total of 1,172,360 warrants issued on May 10, 2019 are excluded in the diluted EPS calculation for the year ended June 30, 2019 as the average market price is lower than or equal to the exercise price. Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $95,331, $54,804 and $51,801 for the years ended June 30, 2019, 2018 and 2017, respectively. Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842), to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016‑02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption assuming the Company will remain an emerging growth company at that date. Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017‑13, which to clarify effective dates that public business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting ASC Topic 842 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. ASU No. 2017‑13 also amended that all components of a leveraged lease be recalculated from the inception of the lease based on the revised after tax cash flows arising from the change in the tax law, including revised tax rates. The difference between the amounts originally recorded and the recalculated amounts must be included in the income of the year in which the tax law is enacted. The Company has not early adopted this update and it will become effective on July 1, 2019. The adoption of ASU 2016‑02 will recognize additional operating liabilities of approximately $1.3 million, with corresponding right of use (“ROU”) assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases with a term longer than 12 months. In November 2016, the FASB issued ASU No. 2016‑18, "Statement of Cash Flows: Restricted Cash". The amendments address diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendment is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. Management adopted this ASU early during the year ended June 30, 2018. For the year ended June 30, 2018, cash and cash equivalents were increased by the amount of the restricted cash on the Company’s statement of cash flows. In February 2018, the FASB issued ASU 2018‑02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU on July 1, 2020 would have a material effect on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018‑07 – Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which to include share-based payment transactions for acquiring goods and services from nonemployees, which nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The definition of the term grant date is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Management plans to adopt this ASU on July 1, 2020. Management does not believe the adoption of this ASU would have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018‑13”). ASU 2018‑13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018‑13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018‑13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company does not believe the adoption of this ASU will not have a material effect on the Company’s audited consolidated financial statements. In May 2019, the FASB issued ASU 2019‑05, which is an update to ASU Update No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016‑13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016‑13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326‑30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016‑13 while still providing financial statement users with decision-useful information. ASU 2019‑05 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company is currently evaluating the impact of ASU 2019‑05 will have on its consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation such as segregating the selling and general and administrative expenses for comparative purpose. These reclassifications have no effect on the reported revenues, net income (loss) or total assets. |
Variable interest entity ("VIE"
Variable interest entity ("VIE") | 12 Months Ended |
Jun. 30, 2019 | |
Variable interest entity (VIE) | |
Variable interest entity ("VIE") | Note 3 – Variable interest entity (“VIE”) A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Xiangtai WFOE is deemed to have a controlling financial interest and be the primary beneficiary of CQ Penglin because it has both of the following characteristics: (1) The power to direct activities at CQ Penglin that most significantly impact such entity’s economic performance, and (2) The obligation to absorb losses of, and the right to receive benefits from CQ Penglin that could potentially be significant to such entity. Pursuant to the Contractual Arrangements, CQ Penglin pays service fees equal to all of its net income to Xiangtai WFOE. At the same time, Xiangtai WFOE is obligated to absorb all of CQ Penglin’s losses. The Contractual Arrangements are designed so that CQ Penglin operates for the benefit of Xiangtai WFOE and ultimately, the Company. Accordingly, the accounts of CQ Penglin are consolidated in the accompanying financial statements. In addition, its financial positions and results of operations are included in the Company’s financial statements. The carrying amount of VIE’s consolidated assets and liabilities are as follows: June 30, 2019 June 30, 2018 Current assets $ 39,258,826 $ 27,501,962 Property and equipment, net 868,435 1,050,013 Other noncurrent assets 162,142 392,876 Total assets 40,289,403 28,944,851 Total liabilities (30,645,069) (18,922,393) Net assets $ 9,644,334 $ 10,022,458 June 30, 2019 June 30, 2018 Current liabilities: Short-term loans - banks $ 4,150,310 $ 4,530,011 Loans from third parties 2,303,420 4,756,512 Short-term loans - related parties 329,120 — Accounts payable 6,995,932 651,404 Other payables and accrued liabilities 238,882 206,850 Other payables – related parties 528,717 444,709 Intercompany payables 8,928,579 4,291,604 Customer deposits 367,149 150,578 Taxes payable 2,805,722 2,909,223 Total current liabilities 26,647,831 17,940,891 Other liabilities: Long-term loan – bank 866,231 981,502 Loan from a third party 3,131,007 — 3,997,238 981,502 Total liabilities $ 30,645,069 $ 18,922,393 The summarized operating results of the VIE’s are as follows: For the year ended For the year ended For the year ended June 30, 2019 June 30, 2018 June 30, 2017 Operating revenues $ 89,959,760 $ 94,596,470 $ 60,944,017 Gross profit $ 7,809,539 $ 9,011,763 $ 5,146,692 Income from operations $ 6,556,351 $ 9,454,230 $ 3,694,021 Net income $ 5,533,912 $ 3,786,061 $ 2,627,212 |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Jun. 30, 2019 | |
Accounts receivable, net | |
Accounts receivable, net | Note 4 – Accounts receivable, net Accounts receivable, net consist of the following: June 30, 2019 June 30, 2018 Accounts receivable $ 41,827,554 $ 25,987,083 Allowance for doubtful accounts (2,304,817) (1,622,964) Total accounts receivable, net $ 39,522,737 $ 24,364,119 Movements of allowance for doubtful accounts are as follows: June 30, 2019 June 30, 2018 Beginning balance $ 1,622,964 $ 703,604 Addition 743,986 918,940 Write off — — Exchange rate effect (62,133) 420 Ending balance $ 2,304,817 $ 1,622,964 |
Security deposits
Security deposits | 12 Months Ended |
Jun. 30, 2019 | |
Security deposits | |
Security deposits | Note 5 – Security deposits Security deposits include loan deposits for the loans from various banks or other financial institutions and sales performance deposit to guarantee its sales contracts. Security deposits consist of the following: June 30, 2019 June 30, 2018 Loan deposits $ 986,407 $ 1,502,819 Sales performance deposit (1) 1,388,179 — Total security deposits $ 2,374,586 $ 1,502,819 (1) In May 2019, the Company signed a sales contract with a customer for its fresh killed hogs due to shortage of hog supplies in 2019. The contract requires the customer to prepay approximately $1.4 million (RMB 9,551,078) to the Company as customer deposits, and it also requires the Company to provide a sales performance deposit of $1,388,179 to the customer for guaranteeing its hog supplies from May 2019 to August 2019, and was extended to December 2019. Once the sales performances have been completed, the customer will return the deposit back to the Company. |
Plant and equipment, net
Plant and equipment, net | 12 Months Ended |
Jun. 30, 2019 | |
Plant and equipment, net | |
Plant and equipment, net | Note 6 – Plant and equipment, net Plant and equipment consist of the following: June 30, 2019 June 30, 2018 Buildings $ 3,950,375 $ 3,620,194 Automobile 118,487 88,038 Electronic devices 3,808,900 3,711,772 Office equipment 34,105 35,363 Leasehold improvements 762,772 — Subtotal 8,674,639 7,455,367 Less: accumulated depreciation (4,125,427) (3,492,912) Total $ 4,549,212 $ 3,962,455 Depreciation expense for the years ended June 30, 2019, 2018 and 2017 amounted to $677,387, $529,442 and $519,448, respectively. As of June 30, 2019, property recorded at RMB 12,268,800 (approximately $1.8 million) was pledged as collateral to secure a loan that a related party borrowed from a bank (see Note 9). |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Jun. 30, 2019 | |
Intangible assets, net | |
Intangible assets, net | Note 7 – Intangible assets, net Intangible assets consist of the following: June 30, 2019 June 30, 2018 Land use rights $ 603,774 $ 626,048 Less: accumulated amortization (141,036) (133,718) Net intangible assets $ 462,738 $ 492,330 Amortization expense for the years ended June 30, 2019, 2018 and 2017 amounted to $12,147, $12,747 and $12,177, respectively. As of June 30, 2019, land use right recorded at RMB 10,198,100 (approximately $1.5 million) was pledged as collateral to secure a loan that a related party borrowed from a bank (see Note 9). The estimated amortization is as follows: Estimated Twelve months ending June 30, amortization expense 2020 $ 12,147 2021 12,147 2022 12,147 2023 12,147 2024 12,147 Thereafter 402,003 Total $ 462,738 |
Loan receivables
Loan receivables | 12 Months Ended |
Jun. 30, 2019 | |
Loan receivables | |
Loan receivables | Note 8 – Loan receivables On November 1, 2015, the Company and Hunan Huade Food Co., Ltd. (“Hunan Huade”), a third party, entered into loan contract due on June 30, 2018 for RMB 8 million (approximately $1.2 million) which was subsequently repaid. As of June 30, 2018 remaining interest receivable totaled $1,957,720. In fiscal 2019, the Company reassessed the collectability of this and determined the remaining interest and determined the collectability was remote, therefore, provided 100% allowance on such remaining balance as of June 30, 2019. The Company no longer recognizes accrued interest income. As of June 30, 2019 and 2018, the total loan receivable from Hunan Huade was $0 and $1,957,720 net of allowance balance of $0 and $1,480,136, respectively. During the years ended June 30, 2019, 2018 and 2017, the interest income from the loan was $0, $384,788 and $735,200, respectively. |
Related party transactions and
Related party transactions and balances | 12 Months Ended |
Jun. 30, 2019 | |
Related party transactions and balances | |
Related party transactions and balances | Note 9 – Related party transactions and balances Related party transactions a. Revenues – related parties: For the Year For the Year For the Year Ended June 30, Ended June 30, Ended June 30, Name of related party Relationship 2019 2018 2017 Chongqing Mingwen Food Co., Ltd. (“CQ Mingwen”) President is the daughter-in-law of the Company’s Chief Executive Officer (“CEO”) $ — $ 36,091 $ 66,525 Chongqing Pengmei Supermarket Co., Ltd (“CQ Pengmei”) Indirectly owned by CEO and CEO’s spouse — 334,147 — $ — $ 370,238 $ 66,525 Related party balances a. Accounts receivable – related party: Name of related party Relationship June 30, 2019 June 30, 2018 CQ Pengmei Significantly influenced by Penglin $ — $ 56,955 (1) (1) On July 2, 2018, the Company acquired CQ Pengmei and the balance was eliminated upon acquisition subsequent to July 2, 2018. b. Customer deposit – related party: Name of related party Relationship June 30, 2019 June 30, 2018 CQ Mingwen Significantly influenced by Penglin $ 29,643 $ 31,482 c. Other receivables – related parties: Other receivables - related parties are those nontrade receivables arising from transactions between the Company and certain related parties, such as loans to these related parties. These loans are unsecured, non-interest bearing and due on demand. Name of related party Relationship June 30, 2019 June 30, 2018 CQ Pengmei Significantly influenced by Penglin $ — $ 373,065 (2) (2) On July 2, 2018, the Company acquired CQ Pengmei and the balance was eliminated upon acquisition subsequent to July 2, 2018. d. Other payables – related parties: Other payables – related parties are those nontrade payables arising from transactions between the Company and certain related parties, such as advanced made by the related party on behalf of the Company. This advance is unsecured and non-interest bearing. Current payables are due on demand. Name of related party Name of related party June 30, 2019 June 30, 2018 Xia Wang Chief Financial Officer $ 83,619 $ 30,015 Zeshu Dai CEO 659,420 486,418 Penglin Wang Son of the CEO 162,047 33,425 Zili Zhang CEO of CQ Pengmei 429,448 — $ 1,334,534 $ 549,858 e. Short-term loans – related parties: Short-term loans – related parties are those short-term loans from advances made by certain related parties for the daily operations needs of the Company. These loans are unsecured and interest bearing. Weighted average Collateral/ Short term loans Relationship Maturities interest rate Guarantee June 30, 2019 June 30, 2018 Xia Wang Chief Financial Officer February 20, 2020 9.60 % None 104,852 — Penglin Wang Son of CEO December 27, 2019 9.60 % None 224,268 — Total $ 329,120 $ — Interest expense incurred on the above mentioned related party loans amounted to $11,403, $0 and $0 for the years ended June 30, 2019, 2018 and 2017, respectively. f. Guarantee provided to related party loan On December 26, 2017, CQ Mingwen (the “borrower”) entered into a loan agreement with SPD Rural Bank (the lender) to borrow RMB 9 million (approximately $1.4 million) as working capital for one year and was extend for another year to December 26, 2019. GA Yongpeng pledged a land-use right recorded at RMB 10,198,100 (approximately $1.5 million) and building property recorded at RMB 12,268,800 (approximately $1.8 million) as collateral (see Note 6, 7 and 14). g. Loans guarantees by related parties The Company has various short-term loans guaranteed by its related parties. See Note 10. |
Credit Facilities
Credit Facilities | 12 Months Ended |
Jun. 30, 2019 | |
Credit Facilities | |
Credit Facilities | Note 10 – Credit Facilities Short term loans – banks Outstanding balances on short-term bank loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Shanghai Pudong Development (“SPD”) Bank Chongqing Nanbing Road Branch April 22, 2020 6.09 % A security deposit of $109,221 and guaranteed by the CEO and certain members of the family and affiliate $ 1,456,187 $ 1,510,004 Chongqing Rural Commercial Bank December 6, 2019 6.74 % Guaranteed by the CEO and certain members of the family and affiliate 2,694,122 3,020,007 Chongqing Beibei Chouzhou Bank Co., Ltd. January 20, 2020 6.96 % Guaranteed by GA Yongpeng’s properties recorded at RMB 36,626,600 (approximately $5.3 million) and Zeshu Dai’s 6.25% of stock right of GA Yongpeng recorded at RMB 1,250,000 (approximately $0.2 million) 364,071 — Total $ 4,514,380 $ 4,530,011 Loans from third parties Outstanding balances of short term third-party loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Sichuan Toucu Financial Information Services Co., Ltd Various amounts due between November 2018 and December 2018 ($145,628 was repaid in August 2019, and the balance was extended to be due between November 2019 and December 2019) 9.0 % None $ 407,758 $ 302,001 Chongqing Puluosi Small Mortgage Co., Ltd. Various amounts due between November 2018 and January 2019 (Reached new repayment terms upon private settlement)* 12.0 % Guaranteed by the CEO and certain members of the family and affiliate 4,805,734 4,530,011 Chongqing Zhouyang Shipping Co., Ltd December 28, 2019 18.0 % None 72,814 75,500 Mei Yang October 10, 2019 (Renewed and to be due on October 10, 2020) 18.0 % None 43,688 — Ping Wang January 10, 2020 9.89 % None 48,057 — Yuzhu Hu November 30, 2019 14.4 % None 160,191 — Yixuan Liu September 11, 2019 (Renewed and to be due on March 11, 2020) 12.0 % None 87,377 — Shuming Yang September 20, 2019 (Renewed and to be due on March 20, 2020) 12.0 % None 174,754 — Qin Cao October 22, 2019 (Renewed and to be due on October 22, 2020) 24.0 % None 72,814 — Maohua Xia Various amounts due between August 2019 and September 2019 (Renewed and various amounts to be due between August 2020 and September 2020) 24.0 % None 223,848 — Bangwei Zhu May 2, 2020 12.0 % None 36,407 — Mei Zhang April 9, 2019 (Renewed and to be due on April 9, 2020) 24.0 % None 72,814 — Total loans from third parties $ 6,206,256 $ 4,907,512 Total non-current loans from a third party (3,131,007) — Total current loans from third parties $ 3,075,249 $ 4,907,512 * Short term loans – related parties See Note 9. Long-term loan - bank The outstanding balance of long term bank loan consisted of the following: Weighted average Lender Maturity interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Chongqing Dadukou Rongxing Village & Township Bank September 20, 2020 12.0 % Guaranteed by CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family $ 866,231 $ 981,502 Interest expense pertaining to the above loans for the years ended June 30, 2019, 2018 and 2017 amounted to $823,551 ($11,403 was for interest expense of loans – related parties), $1,243,708 and $632,160, respectively. |
Taxes
Taxes | 12 Months Ended |
Jun. 30, 2019 | |
Taxes | |
Taxes | Note 11 – Taxes Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Xiangtai BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under the current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong Xiangtai HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Xiangtai HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Income tax exemption status granted On August 20, 2018, the Lingshui County Tax Bureau enacted a tax exemption for Lingshui Guang’an Yongpeng Food Co., Ltd. (wholly owned subsidiary) which expires on December 31, 2020. In addition, the benefit can also be retroactively applied to prior periods from January 1, 2014 to June 30, 2017. The tax savings for the years ended June 30, 2019 and 2018 was $1,389,566 and $122,251, respectively, and no tax savings for the year ended June 30, 2017 as GA Yongpeng was operated at losses. The Company’s basic and diluted earnings per shares would have been lower by $0.07 and $0.01 per share for the years ended June 30, 2019 and 2018 without the preferential tax rate reduction, respectively. Significant components of the provision for income taxes are as follows: For the year For the year For the year ended ended ended June 30, 2019 June 30, 2018 June 30, 2017 Current $ — $ 841,312 $ 919,566 Deferred tax expense (benefit) 213,649 (126,936) (43,829) Total provision for income taxes $ 213,649 $ 714,376 $ 875,737 The following table reconciles China statutory rates to the Company’s effective tax rate: June 30, 2019 June 30, 2018 June 30, 2017 China income tax rate 25.0 % 25.0 % 25.0 % Change in valuation allowance 1.2 % 0.0 % 1.3 % Income tax exemption status granted (21.5) % (9.3) % 0.0 % Others* 0.0 % 0.2 % 0.0 % Effective tax rate 4.7 % 15.9 % 26.3 % * Deferred tax assets – China Deferred tax assets are comprised of allowance for doubtful accounts at June 30, 2018 totaling $220,222. NOL carried forward According to Chinese tax regulations, net operating losses can be carried forward to offset taxable income for the next five years. During the year ended June 30, 2017, GA Yongpeng incurred net operating losses (“NOL”) of approximately $172,000 and recognized approximately $43,000 deferred tax assets in relation to the net operating losses carryforward, which the Company has provided 100% allowance at June 30, 2017. On August 20, 2018, GA Yongpeng obtained the tax-free benefit and the Company utilized the tax planning strategy to allocate intercompany profit into GA Yongpeng. As a result, for the years ended June 30, 2019, 2018 and 2017, there was no tax effect in relation to the NOL that the Company has previously reserved. Bad debt allowance Bad debt allowance must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of June 30, 2019 and 2018, the Company did not have any significant unrecognized uncertain tax positions. Value-added tax All of the Company’s service revenues that are earned and received in the PRC are subject to a Chinese VAT at a rate of 6% of the gross proceed or at a rate approved by the Chinese local government. All of the Company’s products that are sold in the PRC are subject to a Chinese value-added tax at a rate of 0%, 11%, 13% or 17% of the gross sales price depending on how much processing was added by the Company to each kind of products or at a rate approved by the Chinese local government. This VAT may be offset by the VAT paid by the Company on raw materials and other materials included in the cost of producing the finished product. Taxes payable consisted of the following: June 30, 2019 June 30, 2018 Income taxes $ 2,805,722 $ 2,909,223 Other taxes 169,324 128,362 Totals $ 2,975,046 $ 3,037,585 |
Concentration of risk
Concentration of risk | 12 Months Ended |
Jun. 30, 2019 | |
Concentration of risk | |
Concentration of risk | Note 12 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash (including restricted cash). As of June 30, 2019 and 2018, $78,918 and $319,071 were deposited with financial institutions located in the PRC, respectively. These balances are not covered by insurance. While management believes that these financial institutions and third-party fund holders are of high credit quality, it also continually monitors their creditworthiness. The Company is also exposed to risk from its accounts receivable, other receivables – related parties, and loan receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. As of June 30, 2019, the Company had working capital of approximately $22.9 million. The Company had accounts receivable of approximately $39.0 million, most of them are short-term in nature and can be collected back within 3 months to be used to support its working capital requirements. The Company believes the components of its current working capital is sufficient to support its operations for the next twelve months from the date of this report. If the Company is unable to realize its current assets within the normal operating cycle of a twelve-month period, the Company may have to consider supplementing its available sources of funds through obtaining additional loans. Customer concentration risk For the years ended June 30, 2019 and 2018, no customer accounted for more than 10% of the Company’s total revenues. For the year ended June 30, 2017, one customer accounted for 79.1% of the Company’s total revenues. As of June 30, 2019 and 2018, no customer accounted for more than 10% of the total balance of accounts receivable. Vendor concentration risk For the year ended June 30, 2019, four vendors accounted for 29.8%, 17.6%, 16.8% and 16.5% of the Company’s total purchases. For the year ended June 30, 2018, four vendors accounted for 29.0%, 24.5%, 21.2% and 12.8% of the Company’s total purchases. For the year ended June 30, 2017, three vendors accounted for 51.3%, 22.2% and 13.3% of the Company’s total purchases. As of June 30, 2019, four vendors accounted for 25.3%, 23.0%, 16.0% and 12.3% of the total balance of accounts payable. As of June 30, 2018, two vendors accounted for 47.5% and 22.3% of the total balance of accounts payable. |
Equity
Equity | 12 Months Ended |
Jun. 30, 2019 | |
Equity | |
Equity | Note 13 – Equity Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Xiangtai WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. CQ Penglin, GA Yongpeng and CQ Pengmei may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. The remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange. As of June 30, 2019 and 2018, Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei collectively attributed $1,496,642 and $940,816 of retained earnings for their statutory reserves, respectively. As a result of the foregoing restrictions, Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei from transferring funds to the Company in the form of dividends, loans and advances. As of June 30, 2019 and 2018, amounts restricted are the net assets of Xiangtai WFOE, CQ Penglin, GA Yongpeng and CQ Pengmei, which amounted to $18,571,570 and $14,033,535, respectively. Mezzanine equity On March 31, 2018, the Company entered into a Securities Purchase Agreement with a limited liability partnership (the “Purchaser”), an unrelated third party, pursuant to which the Company sold to the Purchaser in a private placement 375,000 ordinary shares of the Company, par value $0.01 per share, at a purchase price of $2.00 per share for an aggregate offering price of $750,000. The Purchaser has a redemption right of the ordinary shares at the original purchase value. On June 27, 2018, the Company entered into a Securities Purchase Agreement with a limited liability partnership (the “Purchaser”), an unrelated third party, pursuant to which the Company sold to the Purchaser in a private placement 350,000 ordinary shares of the Company, par value $0.01 per share, at a purchase price of $3.00 per share for an aggregate offering price of $1,050,000. The Purchaser has a redemption right of the ordinary shares at the original purchase value. On May 10, 2019, the Company had completed the initial public offering and the redeemable shares have been converted into 725,000 ordinary shares. Capital contribution On May 26, 2017, the Company’s shareholders have contributed $284,269 into the Company as additional capital. Private placements On September 4, 2018, the Company sold securities pursuant to Regulation D offering for a total of 66,667 ordinary shares to Boustead and Company Limited (“Boustead”), at an offering price of $3.00 per share for an aggregated purchase price of $200,000. Boustead Securities LLC (“Boustead Securities”) acted as the placement agent, to whom the Company agreed to compensate Boustead Securities $10,000 in commission and warrants to purchase for a total of 4,667 ordinary shares at $3.00 per share for five years from the issuance date upon receipt of the subscription proceeds. The transaction was not registered under the Securities Act in reliance on an exemption from registration set forth in Regulation D promulgated hereunder as a transaction by the Company not involving any public offering. Initial public offering On May 10, 2019, the Company closed its initial public offering of an aggregate of 1,172,360 ordinary shares, par value $0.01 per share, at a public offering price of $5.00 per share, for gross proceeds of $5,861,800 (the “Closing”). The Company received net proceeds (after deducting underwriting discounts and commissions and other offering fees and expenses) of approximately $4.4 million from the offering. In connection with the initial public offering, the Company issued 82,065 warrants to purchase for a total of 82,065 ordinary shares at $5.00 per share. The warrants will be exercised at any time, and from time to time, in whole or in part, commencing from the closing of the initial public offering on May 10, 2019 and expiring five years from the offering. Warrants The summary of warrant activity is as follows: Weighted Average Average Remaining Warrants Exercisable Exercise Contractual Outstanding Shares Price Life June 30, 2018 — — $ — — Granted/Acquired 86,732 86,732 $ 4.89 5.00 Forfeited — — $ — — Exercised — — $ — — June 30, 2019 86,732 86,732 $ 4.89 4.89 |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jun. 30, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | Note 14 – Commitments and contingencies Lease commitments The Company has entered into five non-cancellable operating lease agreements for one processing plant, one office space, one employee housing and two market spaces for the grocery stores expiring through February 2028. The Company’s commitment for minimum lease payment under these operating leases for the next five years is as follow: Twelve months ending June 30, Minimum lease payment 2020 $ 234,291 2021 233,339 2022 239,767 2023 248,205 2024 256,677 Thereafter 519,321 Total minimum payments required (1) $ 1,731,600 (1) Current lease commitment table excludes an existing lease entered by CQ Pengmei in August 2017 due to fire safety requirement not being met by the landlord for which the Company has temporarily stopped operation in August 2018. Per the Company’s PRC counsel, it is more than probable that the Company does not require to fulfill the remaining term of such lease contract. Rent expense (including amounts in cost of goods sold) for the years ended June 30, 2019, 2018 and 2017 was $348,408, $58,541 and $88,368, respectively. In September 2019, the Company has entered into one non-cancellable operating lease agreement for one office space from September 2019 through September 2024, which lease commitments have been included in the above minimum lease payments table. Guarantees a) Related parties As of June 30, 2019, CQ Penglin, the Company’s CEO, her husband and her elder son, and an unrelated third party Chongqing Education Guaranty Co., Ltd. jointly guaranteed approximately $1.3 million (RMB 9,000,000) loan that a related-party borrowed from the bank (see Note 9): Name of the party being guaranteed Guaranteed amount Guarantee expiration date CQ Mingwen (borrower) $ 1,310,654 December 25, 2019 The Company did not, however, accrue any liability in connection with such a guarantee because the borrowers have been current in its repayment obligation and the Company has not experienced any losses from providing such guarantee. As of the date of this report, the Company has evaluated the guarantee and has concluded that the likelihood of having to make any payments under the guarantee agreement is remote. If CQ Mingwen is unable to repay the loan upon maturity, assets of GA Yongpeng may be liquated to pay back the loan. b) Unrelated party Prior to June 30, 2018, the Company guaranteed approximately $0.7 million (RMB 5,000,000) in bank loan of an unrelated third-party as follows: Name of party being guaranteed Guaranteed amount Hunan Huade Food Co. Ltd. (borrower) $ 728,141 On May 16, 2016, CQ Mingwen, CQ Penglin, GA Yongpeng and Mr. Mingwen Wang (together, the “Guarantors”) entered into a guarantee contract (the “Guarantee Contract”) with Yuanyang Minyu Micro-Loan Co. Ltd (the “Lender”), a PRC company, for a term from May 16, 2016 to May 15, 2018, to guarantee an unpaid principal of RMB 2,000,000 plus interest based on a Loan Contract between the Lender and Hunan Huade Food Co., Ltd. (the “Borrower”) dated May 26, 2014. Under the Loan Agreement, the Lender agreed to loan the Borrower RMB 5,000,000 (the “Loan”). The Borrower agreed to pay interest at a monthly rate of 1.8% to the Lender and to repay the principal on or before September 25, 2014 (the “Due Date”). An additional default amount would accrue at a monthly rate of 0.9% would apply to any amount that was not repaid on or before the Due Date. The Borrower failed to repay the principal and interest. The Lender filed a civil lawsuit against the Lender and the Guarantees. On April 27, 2018, Chongqing Second Intermediate People’s Court made a final civil judgment (the “Judgement”), concluding: (1) The Loan Contract and the Guarantee Contract are valid. The Borrower should repay the outstanding principal of RMB 1,096,181.02, plus interest at a monthly rate of 2.0% from November 17, 2016 to the date of full repayment and the accrued default amount (collectively, the “Debt”) within 10 days after the Judgment came into effect. If the Borrower failed to repay within 10 days, a monthly interest rate of 4% would apply form the 11th day from the Judgement came into effect to the payoff date to the Lender. (2) The Guarantors should undertake joint and several guarantee liability for the repayment of the Debt. (3) The Borrower and the Guarantors should also jointly pay the litigation cost of RMB 25,930. On July 4, 2018, the Lender and the Guarantors entered into an Agreement (the “Agreement”) under the mediation of the People’s Court of Yunyang, based on which the Guarantors should (i) pay RMB 500,000 (the “First Payment”) to the Lender before July 15, 2018, (ii) pay RMB 500,000 (the “Second Payment”) to the Lender before September 30, 2018, and (3) pay the rest principal, interest and default fine (the “Third Payment”) before November 30, 2018. The People’s Court of Yunyang agreed to release the Guarantors frozen bank accounts after the Guarantors pay off the First Payment. On July 12, 2018, Mr. Mingwen Wang agreed to waive the liabilities of CQ Mingwen, CQ Penglin, GA Yongpeng and personally become responsible for all three payments. In July 2018 and October 2018, Mr. Mingwen Wang made two payments of RMB 500,000 each to the Lender, respectively. In June 2019, Mr. Mingwen Wang paid the remaining principal, interest and default fine and the case has closed. Contingencies From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The majority of these claims and proceedings related to or arise from, lease disputes, commercial disputes, worker compensation complaints, default on guaranteeing third party lease obligations, and default on loans. The Company first determines whether a loss from a claim is probable, and if it is reasonable to estimate the potential loss, the loss will be accrued. The Company discloses a range of possible losses, if a loss from a claim is probable but the amount of loss cannot be reasonably estimated. As of June 30, 2019, the amounts of potential losses the Company accrued for are summarized as follows: Dispute matter Claim amount 1) Leases $ 21,974 2) Worker compensation 21,681 Total $ 43,655 As of June 30, 2019, the amounts of potential losses the Company did not accrue for are summarized as follows: Dispute matter Claim amount 1) Guarantees $ 262,413 2) Commercial 30,458 3) Leases 115,933 4) Worker compensation 7,269 Total $ 416,073 The Company received two complaints related to an approximately $1.5 million (RMB 10,000,000) loan that was due on November 13, 2018 and another approximately $2.9 million (RMB 20,000,000) loan due on January 2, 2019 (See Note 10 – Chongqing Puluosi Small Mortgage Co., Ltd.). The following amounts have been accrued in the accompanying consolidated financial statements for the year ended June 30, 2019: (a) interest of approximately $27,000 up to November 13, 2018, (b) interest at a default interest rate of 18% totaling approximately $34,000 up to November 13, 2018 and (c) estimated legal cost of approximately $18,000. The Company settled the renewal term of these loans with the lender in October 2019 (See Note 10 – Chongqing Puluosi Small Mortgage Co., Ltd.*) and the complaints were withdrawn by the lender. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Xiangtai WFOE and the VIE are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances. |
Condensed financial information
Condensed financial information of the parent company | 12 Months Ended |
Jun. 30, 2019 | |
Condensed financial information of the parent company | |
Condensed financial information of the parent company | Note 15 – Condensed financial information of the parent company The Company performed a test on the restricted net assets of the consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4‑08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for the parent company. The subsidiary did not pay any dividend to the Company for the periods presented. For the purpose of presenting parent-only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiary” and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of June 30, 2019 and 2018. PARENT COMPANY BALANCE SHEETS June 30, 2019 June 30, 2018 ASSETS CURRENT ASSETS Intercompany receivables $ 6,623,561 $ 1,800,000 OTHER ASSETS Investment in subsidiary 18,554,729 14,149,218 Total assets $ 25,178,290 $ 15,949,218 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Other payable – related parties $ 257,384 $ 74,131 Accrued expenses 167,765 41,552 Intercompany payables 227,927 — Total current liabilities 653,076 115,683 Total liabilities 653,076 115,683 COMMITMENTS AND CONTINGENCIES MEZZANINE EQUITY Ordinary shares, $0.01 par value, 0 and 725,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively — 1,800,000 SHAREHOLDERS' EQUITY Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 21,964,027 and 20,000,000 share issued and outstanding as of June 30, 2019 and 2018, respectively 219,640 200,000 Additional paid-in capital 11,031,937 4,655,943 Statutory reserves 1,496,642 940,816 Retained earnings 12,085,566 8,277,801 Accumulated other comprehensive loss (308,571) (41,025) Total shareholders' equity 24,525,214 14,033,535 Total liabilities and shareholders' equity $ 25,178,290 $ 15,949,218 PARENT COMPANY STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Years Ended June 30, 2019 2018 2017 OPERATING EXPENSES General and administrative $ (309,466) $ (115,683) $ — LOSS FROM OPERATIONS (309,466) (115,683) — EQUITY INCOME OF SUBSIDIARY 4,673,057 3,883,792 2,454,874 NET INCOME 4,363,591 3,768,109 2,454,874 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (267,546) 133,553 (135,663) COMPREHENSIVE INCOME $ 4,096,045 $ 3,901,662 $ 2,319,211 PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended June 30, 2019 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,363,591 $ 3,768,109 $ 2,454,874 Adjustments to reconcile net income to cash (used in) provided by operating activities: Equity income of subsidiary (4,673,057) (3,883,792) (2,454,874) Change in operating assets and liabilities Other payable – related parties 183,253 74,131 — Accrued expenses 126,213 41,552 — Net cash (used in) provided by operating activities — — — CHANGES IN CASH — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year $ — $ — $ — |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Jun. 30, 2019 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company, its subsidiaries, and its VIE. All intercompany transactions and balances are eliminated upon consolidation. |
Enterprise-wide disclosure | Enterprise-wide disclosure The Company’s chief operating decision-makers (i.e. chief executive officer and her direct reports) review financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by business lines (supermarket and farmers’ market revenues) for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results and plans for levels or components below the consolidated unit level. Based on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within one reportable segment as the Company’s grocery store operations are currently immaterial to its consolidated operation in total assets, revenue and net income (loss). |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of plant and equipment, impairment of long-lived assets, and allowance for doubtful accounts. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive loss amounted to $(308,571) and $(41,025) as of June 30, 2019 and 2018, respectively. The balance sheet amounts, with the exception of shareholders’ equity at June 30, 2019 and 2018 were translated at 6.87 RMB and 6.62 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to the statement of income accounts for the years ended June 30, 2019, 2018 and 2017 were 6.83 RMB, 6.51 RMB and 6.81 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and time deposits placed with banks or other financial institutions and have original maturities of less than three months. |
Restricted cash | Restricted cash Restricted cash representing cash deposits frozen by the People’s Court of Yunyang related to the guarantee contract CQ Mingwen, CQ Penglin, GA Yongpeng and Mr. Mingwen Wang entered into on May 16, 2016. The frozen cash deposits were unfrozen by the Court in July 2018 after Mr. Mingwen Wang waived the liabilities of CQ Mingwen, CQ Penglin and GA Yongpeng, personally became responsible for all three payments and paid the first payment to the lender (See Note 13 for details). |
Accounts receivable | Accounts receivable Accounts receivable include trade accounts due from customers. Accounts are considered overdue after 30 days. In establishing the required allowance for doubtful accounts, management considers historical experience, aging of the receivables, the economic environment, trends in the food industry and the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. The Company provides an allowance for doubtful accounts provision of 25% for accounts receivable balances that are past due more than 180 days but less than 270 days, an allowance for doubtful accounts provision of 50% of for accounts receivable past due from 270 days but less than one year, an allowance for doubtful accounts provision of 100% for accounts receivable past due beyond one year, plus additional amounts as necessary when the Company’s collection department determines the collection of the full amount is remote and the Company’s management approves 100% of the allowance for doubtful accounts. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The Company’s management has continued to evaluate the reasonableness of its valuation allowance policy and will update it if necessary. |
Other receivables | Other receivables Other receivables primarily include advances to employees, amounts due from unrelated entities, VAT tax refunds, and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes the collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of June 30, 2019 and 2018, allowance for the doubtful accounts were $48,203 and $49,981, respectively. |
Inventories | Inventories Inventories are comprised of finished goods and are stated at the lower of cost or net realizable value using the weighted average method. Management reviews inventories for obsolescence and cost in excess of net realizable value at least annually and records a reserve against the inventory when the carrying value exceeds net realizable value. |
Prepayments | Prepayments Prepayments are cash deposited or advanced to services providers for future inventory purchases or future services. This amount is refundable and bears no interest. |
Security deposits | Security deposits Security deposits are cash deposited to service providers who assisted the Company as a third party guarantor in the Company’s bank loans and sales contracts. These amounts are non-interest bearing and refundable upon the repayments of the loans or notes payable or fulfillment of sales contracts. |
Plant and equipment, net | Plant and equipment, net Plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 0% or 5% residual value. The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets, net | Intangible assets, net Intangible assets are stated at cost, less accumulated amortization. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. All land in the PRC is owned by the government; however, the government grants “land-use rights.” The Company has obtained rights to use various parcels of land for 50 years. The Company amortizes the cost of the land use rights over their useful life using the straight-line method. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including plant and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of June 30, 2019 and 2018, no impairment of long-lived assets was recognized. |
Fair value measurement | Fair value measurement The accounting standard regarding the fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: · Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Loans receivable and the related accrued interest in the consolidated balance sheets at carrying value, which approximates fair value as the negotiated interest rates were indicative of the loan recipient’s financial condition and the rates the recipient could have obtained from an advance of another loan provider. Long-term bank loan on the balance sheets is at carrying value, which approximates fair value as the bank was lending the money to the Company at the market rate. |
Revenue recognition | Revenue recognition Prior to June 30, 2018, revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. Revenues are recognized at the date of goods delivered and title passed to customers or agents, when a formal arrangement exists, the price is fixed or determinable, the Company has no other significant obligations and collectability is reasonably assured. The Company’s revenues come from two channels: supermarkets and farmers’ markets. The products sold in supermarkets are processed meat products and they sold in the PRC are subject to a Chinese value-added tax (“VAT”). The products sold at farmers’ markets are fresh-killed hog and hog’s byproducts. These products sold in the PRC are not subject to a Chinese VAT. VAT taxes are presented as a reduction of revenue. On July 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014‑09, Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of June 30, 2018. The core principle underlying the revenue recognition ASU is that the Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or overtime, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and determined that there were no differences in the pattern of revenue recognition. The Company also evaluated its current costs and liabilities in relation to its revenue streams and determined no contract assets (or contract liabilities) are required to be capitalized or accrued upon adoption. Disaggregated revenue by the Company’s revenue streams, such as supermarket and grocery store revenue and famers’ market revenue are required to be disclosed upon adoption, which has been reflected in the accompanying consolidated statements of income and comprehensive income. |
Cost of revenues | Cost of revenues Cost of revenues comprised of the cost of raw materials and the cost of processing and overhead expenses on sold products. |
Shipping and handling | Shipping and handling Shipping and handling costs are expensed as incurred and included in selling expenses. |
Advertising costs | Advertising costs Advertising costs amounted to $14,876, $4,320 and $10,452 for the years ended June 30, 2019, 2018 and 2017, respectively. Advertising costs are expensed as incurred and included in selling expenses. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2017 to 2019 are subject to examination by any applicable tax authorities. |
Earnings per share ("EPS") | Earnings per share (“EPS”) Basic earnings per share are computed by dividing income available to ordinary shareholders by the weighted average ordinary shares outstanding during the period. Diluted earnings per share take into account the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised and converted into ordinary shares. Ordinary shares equivalents having an anti-dilutive effect on earnings per share are excluded from the calculation of diluted earnings per share. Dilution is computed by applying the treasury share method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase ordinary shares at the average market price during the period. A total of 725,000 issued and outstanding ordinary shares with redemption rights prior to the redemption right removal on May 10, 2019 are included in the diluted earnings per share calculation with a weighted average effect of 623,699 and 83,151 ordinary shares for the years ended June 30, 2019 and 2018, respectively as if the shares were issued without any redemption right. A total of 4,667 warrants with weighted average effect of 1,867 ordinary shares using treasury share method are included in the diluted EPS calculation for the year ended June 30, 2019. A total of 1,172,360 warrants issued on May 10, 2019 are excluded in the diluted EPS calculation for the year ended June 30, 2019 as the average market price is lower than or equal to the exercise price. |
Employee benefit | Employee benefit The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $95,331, $54,804 and $51,801 for the years ended June 30, 2019, 2018 and 2017, respectively. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842), to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016‑02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption assuming the Company will remain an emerging growth company at that date. Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017‑13, which to clarify effective dates that public business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting ASC Topic 842 for annual reporting periods beginning after December 15, 2019, and interim reporting periods within annual reporting periods beginning after December 15, 2020. ASU No. 2017‑13 also amended that all components of a leveraged lease be recalculated from the inception of the lease based on the revised after tax cash flows arising from the change in the tax law, including revised tax rates. The difference between the amounts originally recorded and the recalculated amounts must be included in the income of the year in which the tax law is enacted. The Company has not early adopted this update and it will become effective on July 1, 2019. The adoption of ASU 2016‑02 will recognize additional operating liabilities of approximately $1.3 million, with corresponding right of use (“ROU”) assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases with a term longer than 12 months. In November 2016, the FASB issued ASU No. 2016‑18, "Statement of Cash Flows: Restricted Cash". The amendments address diversity in practice that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendment is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. Management adopted this ASU early during the year ended June 30, 2018. For the year ended June 30, 2018, cash and cash equivalents were increased by the amount of the restricted cash on the Company’s statement of cash flows. In February 2018, the FASB issued ASU 2018‑02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU on July 1, 2020 would have a material effect on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018‑07 – Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which to include share-based payment transactions for acquiring goods and services from nonemployees, which nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. The definition of the term grant date is amended to generally state the date at which a grantor and a grantee reach a mutual understanding of the key terms and conditions of a share-based payment award. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Management plans to adopt this ASU on July 1, 2020. Management does not believe the adoption of this ASU would have a material effect on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU 2018‑13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018‑13”). ASU 2018‑13 removes, modifies and adds certain disclosure requirements in Topic 820 “Fair Value Measurement”. ASU 2018‑13 eliminates certain disclosures related to transfers and the valuations process, modifies disclosures for investments that are valued based on net asset value, clarifies the measurement uncertainty disclosure, and requires additional disclosures for Level 3 fair value measurements. ASU 2018‑13 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company does not believe the adoption of this ASU will not have a material effect on the Company’s audited consolidated financial statements. In May 2019, the FASB issued ASU 2019‑05, which is an update to ASU Update No. 2016‑13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016‑13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016‑13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326‑30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016‑13 while still providing financial statement users with decision-useful information. ASU 2019‑05 is effective for the Company for annual and interim reporting periods beginning July 1, 2020. The Company is currently evaluating the impact of ASU 2019‑05 will have on its consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current year presentation such as segregating the selling and general and administrative expenses for comparative purpose. These reclassifications have no effect on the reported revenues, net income (loss) or total assets. |
Nature of business and organi_2
Nature of business and organization (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Nature of business and organization | |
Summary of subsidiaries, VIE's and subsidiaries of VIE's | The accompanying consolidated financial statements reflect the activities of Xiangtai Cayman and each of the following entities: Name Background Ownership Xiangtai BVI · A British Virgin Islands company 100% Xiangtai HK · A Hong Kong company 100% owned by Xiangtai BVI Xiangtai WFOE · A PRC limited liability company and deemed a wholly foreign-owned enterprise (“WFOE”) 100% owned by Xiangtai HK CQ Penglin · A PRC limited liability company VIE of Xiangtai WFOE · Slaughtering, processing, packing, and selling various processed meat products. GA Yongpeng · A PRC limited liability company 100% owned by Xiangtai WFOE · Slaughtering, processing, packing and selling various processed meat products. CQ Pengmei · A PRC limited liability company 100% owned by Xiangtai WFOE · Grocery stores selling daily necessities |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of significant accounting policies | |
Schedule of estimated useful lives of property, plant and equipment | The estimated useful lives are as follows: Useful Life Building 10‑20 years Electronic devices 5‑10 years Automobile 5‑10 years Office equipment 5 years Leasehold improvements Shorter of the lease term or useful life |
Variable interest entity ("VI_2
Variable interest entity ("VIE") (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Variable interest entity (VIE) | |
Schedule of VIE's consolidated assets and liabilities and operating results | The carrying amount of VIE’s consolidated assets and liabilities are as follows: June 30, 2019 June 30, 2018 Current assets $ 39,258,826 $ 27,501,962 Property and equipment, net 868,435 1,050,013 Other noncurrent assets 162,142 392,876 Total assets 40,289,403 28,944,851 Total liabilities (30,645,069) (18,922,393) Net assets $ 9,644,334 $ 10,022,458 June 30, 2019 June 30, 2018 Current liabilities: Short-term loans - banks $ 4,150,310 $ 4,530,011 Loans from third parties 2,303,420 4,756,512 Short-term loans - related parties 329,120 — Accounts payable 6,995,932 651,404 Other payables and accrued liabilities 238,882 206,850 Other payables – related parties 528,717 444,709 Intercompany payables 8,928,579 4,291,604 Customer deposits 367,149 150,578 Taxes payable 2,805,722 2,909,223 Total current liabilities 26,647,831 17,940,891 Other liabilities: Long-term loan – bank 866,231 981,502 Loan from a third party 3,131,007 — 3,997,238 981,502 Total liabilities $ 30,645,069 $ 18,922,393 The summarized operating results of the VIE’s are as follows: For the year ended For the year ended For the year ended June 30, 2019 June 30, 2018 June 30, 2017 Operating revenues $ 89,959,760 $ 94,596,470 $ 60,944,017 Gross profit $ 7,809,539 $ 9,011,763 $ 5,146,692 Income from operations $ 6,556,351 $ 9,454,230 $ 3,694,021 Net income $ 5,533,912 $ 3,786,061 $ 2,627,212 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Accounts receivable, net | |
Schedule of accounts receivable, net | Accounts receivable, net consist of the following: June 30, 2019 June 30, 2018 Accounts receivable $ 41,827,554 $ 25,987,083 Allowance for doubtful accounts (2,304,817) (1,622,964) Total accounts receivable, net $ 39,522,737 $ 24,364,119 |
Schedule of movement of allowance for doubtful accounts | Movements of allowance for doubtful accounts are as follows: June 30, 2019 June 30, 2018 Beginning balance $ 1,622,964 $ 703,604 Addition 743,986 918,940 Write off — — Exchange rate effect (62,133) 420 Ending balance $ 2,304,817 $ 1,622,964 |
Security deposits (Tables)
Security deposits (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Security deposits | |
Schedule of security deposits | Security deposits consist of the following: June 30, 2019 June 30, 2018 Loan deposits $ 986,407 $ 1,502,819 Sales performance deposit (1) 1,388,179 — Total security deposits $ 2,374,586 $ 1,502,819 In May 2019, the Company signed a sales contract with a customer for its fresh killed hogs due to shortage of hog supplies in 2019. The contract requires the customer to prepay approximately $1.4 million (RMB 9,551,078) to the Company as customer deposits, and it also requires the Company to provide a sales performance deposit of $1,388,179 to the customer for guaranteeing its hog supplies from May 2019 to August 2019, and was extended to December 2019. Once the sales performances have been completed, the customer will return the deposit back to the Company. |
Plant and equipment, net (Table
Plant and equipment, net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Plant and equipment, net | |
Schedule of plant and equipment | Plant and equipment consist of the following: June 30, 2019 June 30, 2018 Buildings $ 3,950,375 $ 3,620,194 Automobile 118,487 88,038 Electronic devices 3,808,900 3,711,772 Office equipment 34,105 35,363 Leasehold improvements 762,772 — Subtotal 8,674,639 7,455,367 Less: accumulated depreciation (4,125,427) (3,492,912) Total $ 4,549,212 $ 3,962,455 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Intangible assets, net | |
Schedule of intangible assets | Intangible assets consist of the following: June 30, 2019 June 30, 2018 Land use rights $ 603,774 $ 626,048 Less: accumulated amortization (141,036) (133,718) Net intangible assets $ 462,738 $ 492,330 |
Schedule of estimated amortization | The estimated amortization is as follows: Estimated Twelve months ending June 30, amortization expense 2020 $ 12,147 2021 12,147 2022 12,147 2023 12,147 2024 12,147 Thereafter 402,003 Total $ 462,738 |
Related party transactions an_2
Related party transactions and balances (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Related party transactions and balances | |
Summary of revenues from related parties | a. Revenues – related parties: For the Year For the Year For the Year Ended June 30, Ended June 30, Ended June 30, Name of related party Relationship 2019 2018 2017 Chongqing Mingwen Food Co., Ltd. (“CQ Mingwen”) President is the daughter-in-law of the Company’s Chief Executive Officer (“CEO”) $ — $ 36,091 $ 66,525 Chongqing Pengmei Supermarket Co., Ltd (“CQ Pengmei”) Indirectly owned by CEO and CEO’s spouse — 334,147 — $ — $ 370,238 $ 66,525 |
Summary of accounts receivables from related parties | a. Accounts receivable – related party: Name of related party Relationship June 30, 2019 June 30, 2018 CQ Pengmei Significantly influenced by Penglin $ — $ 56,955 (1) (1) On July 2, 2018, the Company acquired CQ Pengmei and the balance was eliminated upon acquisition subsequent to July 2, 2018. |
Summary of customer deposit from related parties | b. Customer deposit – related party: Name of related party Relationship June 30, 2019 June 30, 2018 CQ Mingwen Significantly influenced by Penglin $ 29,643 $ 31,482 |
Summary of other receivables from related parties | Name of related party Relationship June 30, 2019 June 30, 2018 CQ Pengmei Significantly influenced by Penglin $ — $ 373,065 (2) (2) On July 2, 2018, the Company acquired CQ Pengmei and the balance was eliminated upon acquisition subsequent to July 2, 2018. |
Summary of other payables to related parties | Name of related party Name of related party June 30, 2019 June 30, 2018 Xia Wang Chief Financial Officer $ 83,619 $ 30,015 Zeshu Dai CEO 659,420 486,418 Penglin Wang Son of the CEO 162,047 33,425 Zili Zhang CEO of CQ Pengmei 429,448 — $ 1,334,534 $ 549,858 |
Summary of short-term loans by related parties | Weighted average Collateral/ Short term loans Relationship Maturities interest rate Guarantee June 30, 2019 June 30, 2018 Xia Wang Chief Financial Officer February 20, 2020 9.60 % None 104,852 — Penglin Wang Son of CEO December 27, 2019 9.60 % None 224,268 — Total $ 329,120 $ — |
Credit Facilities (Tables)
Credit Facilities (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Credit Facilities | |
Summary of outstanding balances on short-term bank loans | Outstanding balances on short-term bank loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Shanghai Pudong Development (“SPD”) Bank Chongqing Nanbing Road Branch April 22, 2020 6.09 % A security deposit of $109,221 and guaranteed by the CEO and certain members of the family and affiliate $ 1,456,187 $ 1,510,004 Chongqing Rural Commercial Bank December 6, 2019 6.74 % Guaranteed by the CEO and certain members of the family and affiliate 2,694,122 3,020,007 Chongqing Beibei Chouzhou Bank Co., Ltd. January 20, 2020 6.96 % Guaranteed by GA Yongpeng’s properties recorded at RMB 36,626,600 (approximately $5.3 million) and Zeshu Dai’s 6.25% of stock right of GA Yongpeng recorded at RMB 1,250,000 (approximately $0.2 million) 364,071 — Total $ 4,514,380 $ 4,530,011 |
Summary of outstanding balances of short term third-party loans | Outstanding balances of short term third-party loans consisted of the following: Weighted average Lenders Maturities interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Sichuan Toucu Financial Information Services Co., Ltd Various amounts due between November 2018 and December 2018 ($145,628 was repaid in August 2019, and the balance was extended to be due between November 2019 and December 2019) 9.0 % None $ 407,758 $ 302,001 Chongqing Puluosi Small Mortgage Co., Ltd. Various amounts due between November 2018 and January 2019 (Reached new repayment terms upon private settlement)* 12.0 % Guaranteed by the CEO and certain members of the family and affiliate 4,805,734 4,530,011 Chongqing Zhouyang Shipping Co., Ltd December 28, 2019 18.0 % None 72,814 75,500 Mei Yang October 10, 2019 (Renewed and to be due on October 10, 2020) 18.0 % None 43,688 — Ping Wang January 10, 2020 9.89 % None 48,057 — Yuzhu Hu November 30, 2019 14.4 % None 160,191 — Yixuan Liu September 11, 2019 (Renewed and to be due on March 11, 2020) 12.0 % None 87,377 — Shuming Yang September 20, 2019 (Renewed and to be due on March 20, 2020) 12.0 % None 174,754 — Qin Cao October 22, 2019 (Renewed and to be due on October 22, 2020) 24.0 % None 72,814 — Maohua Xia Various amounts due between August 2019 and September 2019 (Renewed and various amounts to be due between August 2020 and September 2020) 24.0 % None 223,848 — Bangwei Zhu May 2, 2020 12.0 % None 36,407 — Mei Zhang April 9, 2019 (Renewed and to be due on April 9, 2020) 24.0 % None 72,814 — Total loans from third parties $ 6,206,256 $ 4,907,512 Total non-current loans from a third party (3,131,007) — Total current loans from third parties $ 3,075,249 $ 4,907,512 * |
Summary of outstanding balances of long term bank loan | The outstanding balance of long term bank loan consisted of the following: Weighted average Lender Maturity interest rate Collateral/Guarantee June 30, 2019 June 30, 2018 Chongqing Dadukou Rongxing Village & Township Bank September 20, 2020 12.0 % Guaranteed by CQ Penglin, CQ Pengmei, GA Yongpeng, CQ Mingwen, the CEO and certain members of the family $ 866,231 $ 981,502 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Taxes | |
Schedule of significant components of the provision for income taxes | Significant components of the provision for income taxes are as follows: For the year For the year For the year ended ended ended June 30, 2019 June 30, 2018 June 30, 2017 Current $ — $ 841,312 $ 919,566 Deferred tax expense (benefit) 213,649 (126,936) (43,829) Total provision for income taxes $ 213,649 $ 714,376 $ 875,737 |
Schedule of reconciliation of statutory tax rates to effective tax rate | The following table reconciles China statutory rates to the Company’s effective tax rate: June 30, 2019 June 30, 2018 June 30, 2017 China income tax rate 25.0 % 25.0 % 25.0 % Change in valuation allowance 1.2 % 0.0 % 1.3 % Income tax exemption status granted (21.5) % (9.3) % 0.0 % Others* 0.0 % 0.2 % 0.0 % Effective tax rate 4.7 % 15.9 % 26.3 % |
Schedule of taxes payable | Taxes payable consisted of the following: June 30, 2019 June 30, 2018 Income taxes $ 2,805,722 $ 2,909,223 Other taxes 169,324 128,362 Totals $ 2,975,046 $ 3,037,585 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Equity | |
Summary of warrant activity | The summary of warrant activity is as follows: Weighted Average Average Remaining Warrants Exercisable Exercise Contractual Outstanding Shares Price Life June 30, 2018 — — $ — — Granted/Acquired 86,732 86,732 $ 4.89 5.00 Forfeited — — $ — — Exercised — — $ — — June 30, 2019 86,732 86,732 $ 4.89 4.89 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Loss Contingencies [Line Items] | |
Schedule of minimum lease payment for operating lease | The Company’s commitment for minimum lease payment under these operating leases for the next five years is as follow: Twelve months ending June 30, Minimum lease payment 2020 $ 234,291 2021 233,339 2022 239,767 2023 248,205 2024 256,677 Thereafter 519,321 Total minimum payments required (1) $ 1,731,600 |
Schedule of Guarantees | Name of party being guaranteed Guaranteed amount Hunan Huade Food Co. Ltd. (borrower) $ 728,141 |
Schedule of accrued potential losses | As of June 30, 2019, the amounts of potential losses the Company accrued for are summarized as follows: Dispute matter Claim amount 1) Leases $ 21,974 2) Worker compensation 21,681 Total $ 43,655 |
Schedule of not accrued potential losses | As of June 30, 2019, the amounts of potential losses the Company did not accrue for are summarized as follows: Dispute matter Claim amount 1) Guarantees $ 262,413 2) Commercial 30,458 3) Leases 115,933 4) Worker compensation 7,269 Total $ 416,073 |
Chongqin Penglin Food Co., Ltd | |
Loss Contingencies [Line Items] | |
Schedule of Guarantees | Name of the party being guaranteed Guaranteed amount Guarantee expiration date CQ Mingwen (borrower) $ 1,310,654 December 25, 2019 |
Condensed financial informati_2
Condensed financial information of the parent company (Tables) | 12 Months Ended |
Jun. 30, 2019 | |
Condensed financial information of the parent company | |
Statement of balance sheets of parent company | June 30, 2019 June 30, 2018 ASSETS CURRENT ASSETS Intercompany receivables $ 6,623,561 $ 1,800,000 OTHER ASSETS Investment in subsidiary 18,554,729 14,149,218 Total assets $ 25,178,290 $ 15,949,218 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Other payable – related parties $ 257,384 $ 74,131 Accrued expenses 167,765 41,552 Intercompany payables 227,927 — Total current liabilities 653,076 115,683 Total liabilities 653,076 115,683 COMMITMENTS AND CONTINGENCIES MEZZANINE EQUITY Ordinary shares, $0.01 par value, 0 and 725,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively — 1,800,000 SHAREHOLDERS' EQUITY Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 21,964,027 and 20,000,000 share issued and outstanding as of June 30, 2019 and 2018, respectively 219,640 200,000 Additional paid-in capital 11,031,937 4,655,943 Statutory reserves 1,496,642 940,816 Retained earnings 12,085,566 8,277,801 Accumulated other comprehensive loss (308,571) (41,025) Total shareholders' equity 24,525,214 14,033,535 Total liabilities and shareholders' equity $ 25,178,290 $ 15,949,218 |
Statement of income and comprehensive income of parent company | For the Years Ended June 30, 2019 2018 2017 OPERATING EXPENSES General and administrative $ (309,466) $ (115,683) $ — LOSS FROM OPERATIONS (309,466) (115,683) — EQUITY INCOME OF SUBSIDIARY 4,673,057 3,883,792 2,454,874 NET INCOME 4,363,591 3,768,109 2,454,874 FOREIGN CURRENCY TRANSLATION ADJUSTMENT (267,546) 133,553 (135,663) COMPREHENSIVE INCOME $ 4,096,045 $ 3,901,662 $ 2,319,211 |
Statement of cash flows of parent company | For the Years Ended June 30, 2019 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,363,591 $ 3,768,109 $ 2,454,874 Adjustments to reconcile net income to cash (used in) provided by operating activities: Equity income of subsidiary (4,673,057) (3,883,792) (2,454,874) Change in operating assets and liabilities Other payable – related parties 183,253 74,131 — Accrued expenses 126,213 41,552 — Net cash (used in) provided by operating activities — — — CHANGES IN CASH — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year — — — CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year $ — $ — $ — |
Nature of business and organi_3
Nature of business and organization - Activities (Details) | Jun. 30, 2019 |
Xiangtai BVI | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai BVI | Xiangtai HK | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai HK | Xiangtai WFOE | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai WFOE | GA Yongpeng | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Xiangtai WFOE | CQ Pengmei | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% |
Nature of business and organi_4
Nature of business and organization - Additional information (Details) | May 10, 2019USD ($)$ / sharesshares | Jul. 02, 2018CNY (¥)store | Jul. 02, 2018USD ($)store | Jun. 30, 2019USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Jun. 30, 2017USD ($) | May 31, 2019 | May 31, 2018 |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | ||||||
Proceeds from Issuance Initial Public Offering | $ | $ 4,395,634 | $ 0 | $ 0 | |||||
Initial public offering | ||||||||
Sale of Stock, Number of Shares Issued in Transaction | shares | 1,172,360 | |||||||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | |||||||
Sale of Stock, Price Per Share | $ / shares | $ 5 | |||||||
Gross Proceeds from Issuance Initial Public Offering | $ | $ 5,861,800 | |||||||
Proceeds from Issuance Initial Public Offering | $ | $ 4,400,000 | |||||||
One Major Shareholder [Member] | China Meitai | ||||||||
Ownership interest | 97.74% | 100.00% | ||||||
China Meitai | Xiangtai Cayman | ||||||||
Ownership interest | 62.73% | 64.17% | ||||||
CQ Pengmei | ||||||||
Number of Grocery Stores Operated | store | 2 | 2 | ||||||
Business Combination, Consideration Transferred | ¥ 5,949,052 | $ 900,000 |
Summary of significant accoun_4
Summary of significant accounting policies - Enterprise-wide disclosure (Details) | 12 Months Ended |
Jun. 30, 2019segment | |
Summary of significant accounting policies | |
Number of reportable segments | 1 |
Summary of significant accoun_5
Summary of significant accounting policies - Foreign currency translation and transaction (Details) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017 |
Summary of significant accounting policies | |||
Translation adjustments included in accumulated other comprehensive loss | $ (308,571) | $ (41,025) | |
Historical rate | 6.87 | 6.62 | |
Average translation rate | 6.83 | 6.51 | 6.81 |
Summary of significant accoun_6
Summary of significant accounting policies - Accounts receivable and Other receivables (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Accounts receivable and Other receivables | ||
Allowance for the doubtful accounts | $ 48,203 | $ 49,981 |
Financing receivables 180 to 270 days past due | ||
Accounts receivable and Other receivables | ||
Allowance for doubtful accounts (in percent) | 25.00% | |
Financing receivables 271 days to one year past due | ||
Accounts receivable and Other receivables | ||
Allowance for doubtful accounts (in percent) | 50.00% | |
Financing receivables beyond one year past due | ||
Accounts receivable and Other receivables | ||
Allowance for doubtful accounts (in percent) | 100.00% |
Summary of significant accoun_7
Summary of significant accounting policies - Plant and equipment, net (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Salvage Value, Percentage | 0.00% |
Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Salvage Value, Percentage | 5.00% |
Buildings | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Buildings | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 20 years |
Electronic devices | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Electronic devices | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Automobile | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Automobile | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Summary of significant accoun_8
Summary of significant accounting policies - Intangible assets, net (Details) | 12 Months Ended |
Jun. 30, 2019 | |
Land use right | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 50 years |
Summary of significant accoun_9
Summary of significant accounting policies - Advertising costs (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of significant accounting policies | |||
Advertising costs | $ 14,876 | $ 4,320 | $ 10,452 |
Summary of significant accou_10
Summary of significant accounting policies - Earnings per share ("EPS") (Details) - shares | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | May 10, 2019 | |
Earnings per share ("EPS") | |||
Redeemable ordinary shares, shares issued | 0 | 725,000 | 725,000 |
Redeemable ordinary shares, shares outstanding | 0 | 725,000 | 725,000 |
Incremental common shares attributable to dilutive effect of ordinary shares with redemption rights | 623,699 | 83,151 | |
Number of warrants | 4,667 | ||
Incremental common shares attributable to call options and warrants | 1,867 | ||
Warrant | |||
Earnings per share ("EPS") | |||
Amount of Antidilutive securities excluded from computation of earnings per share | 1,172,360 |
Summary of significant accou_11
Summary of significant accounting policies - Employee benefit (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of significant accounting policies | |||
Total expense for the plans | $ 95,331 | $ 54,804 | $ 51,801 |
Summary of significant accou_12
Summary of significant accounting policies - Recently issued accounting pronouncements (Details) - ASU 2016-02 - Restatement adjustment $ in Millions | Jul. 01, 2019USD ($) |
Recently issued accounting pronouncements | |
Operating liabilities | $ 1.3 |
Operating right of use (ROU) assets | $ 1.3 |
Variable interest entity ("VI_3
Variable interest entity ("VIE") (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Variable interest entity ("VIE") | |||
Current assets | $ 45,698,915 | $ 29,044,735 | |
PropertyPlantAndEquipmentNet | 4,549,212 | 3,962,455 | |
Total assets | 51,351,317 | 33,729,693 | |
Total liabilities | (26,826,103) | (17,896,158) | |
Current liabilities: | |||
Short-term loans - banks | 4,514,380 | 4,530,011 | |
Loans from third parties | 3,075,249 | 4,907,512 | |
Short-term loans - related parties | 329,120 | 0 | |
Accounts payable | 8,872,009 | 2,941,104 | |
Other payables and accrued liabilities | 991,912 | 262,987 | |
Other payables - related parties | 1,334,534 | 549,858 | |
Customer deposits | 706,972 | 654,117 | |
Taxes payable | 2,975,046 | 3,037,585 | |
Total current liabilities | 22,828,865 | 16,914,656 | |
Other liabilities: | |||
Loan from a third party | 3,131,007 | 0 | |
Total other liabilities | 3,997,238 | 981,502 | |
Total liabilities | 26,826,103 | 17,896,158 | |
Summarized operating results of the VIE's | |||
Operating revenues | 102,545,152 | 101,104,224 | $ 63,276,479 |
Gross profit | 9,001,219 | 9,651,471 | 5,067,075 |
Income from operations | 5,534,520 | 7,042,653 | 3,521,519 |
Net income | 4,363,591 | 3,768,109 | 2,454,874 |
CQ Penglin | |||
Variable interest entity ("VIE") | |||
Current assets | 39,258,826 | 27,501,962 | |
PropertyPlantAndEquipmentNet | 868,435 | 1,050,013 | |
Other noncurrent assets | 162,142 | 392,876 | |
Total assets | 40,289,403 | 28,944,851 | |
Total liabilities | (30,645,069) | (18,922,393) | |
Net assets | 9,644,334 | 10,022,458 | |
Current liabilities: | |||
Short-term loans - banks | 4,150,310 | 4,530,011 | |
Loans from third parties | 2,303,420 | 4,756,512 | |
Short-term loans - related parties | 329,120 | 0 | |
Accounts payable | 6,995,932 | 651,404 | |
Other payables and accrued liabilities | 238,882 | 206,850 | |
Other payables - related parties | 528,717 | 444,709 | |
Intercompany payables | 8,928,579 | 4,291,604 | |
Customer deposits | 367,149 | 150,578 | |
Taxes payable | 2,805,722 | 2,909,223 | |
Total current liabilities | 26,647,831 | 17,940,891 | |
Other liabilities: | |||
Long-term loan - bank | 866,231 | 981,502 | |
Loan from a third party | 3,131,007 | 0 | |
Total other liabilities | 3,997,238 | 981,502 | |
Total liabilities | 30,645,069 | 18,922,393 | |
Summarized operating results of the VIE's | |||
Operating revenues | 89,959,760 | 94,596,470 | 60,944,017 |
Gross profit | 7,809,539 | 9,011,763 | 5,146,692 |
Income from operations | 6,556,351 | 9,454,230 | 3,694,021 |
Net income | $ 5,533,912 | $ 3,786,061 | $ 2,627,212 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Accounts receivable, net | |||
Accounts receivable | $ 41,827,554 | $ 25,987,083 | |
Allowance for doubtful accounts | (2,304,817) | (1,622,964) | $ (703,604) |
Total accounts receivable, net | $ 39,522,737 | $ 24,364,119 |
Accounts receivable, net - Move
Accounts receivable, net - Movement (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Movements of allowance for doubtful accounts | |||
Beginning balance | $ 1,622,964 | $ 703,604 | |
Addition | 743,986 | 918,940 | $ 175,317 |
Write off | 0 | 0 | |
Exchange rate effect | (62,133) | 420 | |
Ending balance | $ 2,304,817 | $ 1,622,964 | $ 703,604 |
Security deposits (Details)
Security deposits (Details) | Jun. 30, 2019USD ($) | May 31, 2019CNY (¥) | May 31, 2019USD ($) | Jun. 30, 2018USD ($) |
Security deposits | ||||
Loan deposits | $ 986,407 | $ 1,502,819 | ||
Sales performance deposit | 1,388,179 | 0 | ||
Total security deposits | $ 2,374,586 | $ 1,502,819 | ||
Customer deposits | ¥ 9,551,078 | $ 1,400,000 |
Plant and equipment, net - Plan
Plant and equipment, net - Plant and equipment (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Plant and equipment | ||
Net intangible assets | $ 8,674,639 | $ 7,455,367 |
Less: accumulated depreciation | (4,125,427) | (3,492,912) |
Total | 4,549,212 | 3,962,455 |
Buildings | ||
Plant and equipment | ||
Net intangible assets | 3,950,375 | 3,620,194 |
Automobile | ||
Plant and equipment | ||
Net intangible assets | 118,487 | 88,038 |
Electronic devices | ||
Plant and equipment | ||
Net intangible assets | 3,808,900 | 3,711,772 |
Office equipment | ||
Plant and equipment | ||
Net intangible assets | 34,105 | 35,363 |
Leasehold improvements | ||
Plant and equipment | ||
Net intangible assets | $ 762,772 | $ 0 |
Plant and equipment, net - Addi
Plant and equipment, net - Additional Information (Details) | 12 Months Ended | ||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | |
Plant and equipment | |||||
Depreciation | $ 677,387 | $ 529,442 | $ 519,448 | ||
Property, Plant and Equipment, Net | $ 3,962,455 | $ 4,549,212 | |||
Property pledged as collateral | Buildings | CQ Mingwen | |||||
Plant and equipment | |||||
Property, Plant and Equipment, Net | ¥ 12,268,800 | $ 1,800,000 |
Intangible assets, net - Intang
Intangible assets, net - Intangible assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Intangible assets, net | ||
Land use rights | $ 603,774 | $ 626,048 |
Less: accumulated amortization | (141,036) | (133,718) |
Total | $ 462,738 | $ 492,330 |
Intangible assets, net - Estima
Intangible assets, net - Estimated amortization (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Intangible assets, net | ||
2020 | $ 12,147 | |
2021 | 12,147 | |
2022 | 12,147 | |
2023 | 12,147 | |
2024 | 12,147 | |
Thereafter | 402,003 | |
Total | $ 462,738 | $ 492,330 |
Intangible assets, net - Additi
Intangible assets, net - Additional Information (Details) | 12 Months Ended | ||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | |
Intangible assets, net | |||||
Amortization expenses | $ 12,147 | $ 12,747 | $ 12,177 | ||
Net intangible assets | $ 492,330 | $ 462,738 | |||
Property pledged as collateral | Land use right | CQ Mingwen | |||||
Intangible assets, net | |||||
Net intangible assets | ¥ 10,198,100 | $ 1,500,000 |
Loan receivables (Details)
Loan receivables (Details) ¥ in Millions | 12 Months Ended | ||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Nov. 01, 2015CNY (¥) | Nov. 01, 2015USD ($) | |
Loan receivables | |||||
Loan amount | ¥ 8 | $ 1,200,000 | |||
Remaining interest receivable | $ 1,957,720 | ||||
Allowance for interest receivable (in Percent) | 100.00% | ||||
Loan gross | $ 0 | 1,957,720 | |||
Loan net | 0 | 1,480,136 | |||
Interest income | $ 0 | $ 384,788 | $ 735,200 |
Related party transactions an_3
Related party transactions and balances - Revenues (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction [Line Items] | |||
Revenues from related parties | $ 0 | $ 370,238 | $ 66,525 |
CQ Mingwen | |||
Related Party Transaction [Line Items] | |||
Revenues from related parties | 0 | 36,091 | 66,525 |
CQ Pengmei | |||
Related Party Transaction [Line Items] | |||
Revenues from related parties | $ 0 | $ 334,147 | $ 0 |
Related party transactions an_4
Related party transactions and balances - Accounts receivable (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Related Party Transaction [Line Items] | ||
Accounts receivables from related parties | $ 0 | $ 56,955 |
CQ Pengmei | ||
Related Party Transaction [Line Items] | ||
Accounts receivables from related parties | $ 0 | $ 56,955 |
Related party transactions an_5
Related party transactions and balances - Customer deposit (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Related Party Transaction [Line Items] | ||
Customer deposit from related parties | $ 29,643 | $ 31,482 |
CQ Mingwen | ||
Related Party Transaction [Line Items] | ||
Customer deposit from related parties | $ 29,643 | $ 31,482 |
Related party transactions an_6
Related party transactions and balances - Other receivables (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Related Party Transaction [Line Items] | ||
Other receivables from related parties | $ 0 | $ 373,065 |
CQ Pengmei | ||
Related Party Transaction [Line Items] | ||
Other receivables from related parties | $ 0 | $ 373,065 |
Related party transactions an_7
Related party transactions and balances - Other payables (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Related Party Transaction [Line Items] | ||
Other payables to related parties | $ 1,334,534 | $ 549,858 |
Xia Wang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 83,619 | 30,015 |
Zeshu Dai | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 659,420 | 486,418 |
Penglin Wang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | 162,047 | 33,425 |
Zili Zhang | ||
Related Party Transaction [Line Items] | ||
Other payables to related parties | $ 429,448 | $ 0 |
Related party transactions an_8
Related party transactions and balances - Short-term loans (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Related Party Transaction [Line Items] | |||
Short-term loans by related parties | $ 329,120 | $ 0 | |
Interest expense incurred on short-term loans by related parties | 11,403 | 0 | $ 0 |
Xia Wang | |||
Related Party Transaction [Line Items] | |||
Short-term loans by related parties | $ 104,852 | 0 | |
Debt, Weighted Average Interest Rate | 9.60% | ||
Penglin Wang | |||
Related Party Transaction [Line Items] | |||
Short-term loans by related parties | $ 224,268 | $ 0 | |
Debt, Weighted Average Interest Rate | 9.60% |
Related party transactions an_9
Related party transactions and balances - Additional Information (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 26, 2017CNY (¥) | Dec. 26, 2017USD ($) |
Related Party Transaction [Line Items] | |||||
Loan from bank | $ 4,514,380 | $ 4,530,011 | |||
Land-use right pledged as collateral | 462,738 | 492,330 | |||
Building property pledged as collateral | 4,549,212 | $ 3,962,455 | |||
CQ Mingwen | |||||
Related Party Transaction [Line Items] | |||||
Loan from bank | ¥ 9,000,000 | $ 1,400,000 | |||
GA Yongpeng | |||||
Related Party Transaction [Line Items] | |||||
Land-use right pledged as collateral | ¥ 10,198,100 | 1,500,000 | |||
Building property pledged as collateral | ¥ 12,268,800 | $ 1,800,000 |
Credit Facilities - Short term
Credit Facilities - Short term loans banks (Details) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) |
Line of Credit Facility [Line Items] | |||
Security deposit | $ 109,221 | ||
Total current loans from third parties | 3,075,249 | $ 4,907,512 | |
Short-term loans - banks | $ 4,514,380 | 4,530,011 | |
Zeshu Dai | |||
Line of Credit Facility [Line Items] | |||
Stock right (as a percent) | 6.25% | 6.25% | |
GA Yongpeng | |||
Line of Credit Facility [Line Items] | |||
Properties pledged as collateral | ¥ 36,626,600 | $ 5,300,000 | |
Stock Pledged AS Collateral | ¥ 1,250,000 | $ 200,000 | |
Shanghai Pudong Development ("SPD") Bank Chongqing Nanbing Road Branch | |||
Line of Credit Facility [Line Items] | |||
Weighted average interest rate | 6.09% | 6.09% | |
Short-term loans - banks | $ 1,456,187 | 1,510,004 | |
Chongqing Rural Commercial Bank | |||
Line of Credit Facility [Line Items] | |||
Weighted average interest rate | 6.74% | 6.74% | |
Short-term loans - banks | $ 2,694,122 | 3,020,007 | |
Chongqing Beibei Chouzhou Bank Co., Ltd. | |||
Line of Credit Facility [Line Items] | |||
Weighted average interest rate | 6.96% | 6.96% | |
Short-term loans - banks | $ 364,071 | $ 0 |
Credit Facilities - Loans from
Credit Facilities - Loans from third parties (Details) | 1 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019CNY (¥) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jan. 02, 2019CNY (¥) | Jan. 02, 2019USD ($) | Nov. 13, 2018CNY (¥) | Nov. 13, 2018USD ($) | |
Line of Credit Facility [Line Items] | |||||||||||
Total loans from third parties | $ 4,907,512 | $ 6,206,256 | |||||||||
Total non-current loans from a third parties | 0 | (3,131,007) | |||||||||
Total current loans from third parties | 4,907,512 | 3,075,249 | |||||||||
Repayments of short term third-party loans | ¥ 800,000 | $ 116,503 | $ 322,285 | 6,138,861 | $ 4,316,619 | ||||||
Short term debt due by the end of October 2019 | ¥ 700,000 | 101,940 | |||||||||
Short term debt due on December 1, 2019 | 5,000,000 | 728,141 | |||||||||
Short term debt due on March 31, 2020 | 5,000,000 | 728,141 | |||||||||
Short term debt due on August 30, 2020 | ¥ 21,500,000 | $ 3,131,007 | |||||||||
Sichuan Toucu Financial Information Services Co., Ltd | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 9.00% | 9.00% | |||||||||
Total loans from third parties | 302,001 | $ 407,758 | |||||||||
Chongqing Puluosi Small Mortgage Co., Ltd. | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 12.00% | 12.00% | |||||||||
Total loans from third parties | 4,530,011 | $ 4,805,734 | |||||||||
Chongqing Zhouyang Shipping Co., Ltd | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 18.00% | 18.00% | |||||||||
Total loans from third parties | 75,500 | $ 72,814 | |||||||||
Total current loans from third parties | ¥ 20,000,000 | $ 2,900,000 | ¥ 10,000,000 | $ 1,500,000 | |||||||
Mei Yang | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 18.00% | 18.00% | |||||||||
Total loans from third parties | 0 | $ 43,688 | |||||||||
Ping Wang | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 9.89% | 9.89% | |||||||||
Total loans from third parties | 0 | $ 48,057 | |||||||||
Yuzhu Hu | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 14.40% | 14.40% | |||||||||
Total loans from third parties | 0 | $ 160,191 | |||||||||
Yixuan Liu | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 12.00% | 12.00% | |||||||||
Total loans from third parties | 0 | $ 87,377 | |||||||||
Shuming Yang | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 12.00% | 12.00% | |||||||||
Total loans from third parties | 0 | $ 174,754 | |||||||||
Qin Cao | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 24.00% | 24.00% | |||||||||
Total loans from third parties | 0 | $ 72,814 | |||||||||
Maohua Xia | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 24.00% | 24.00% | |||||||||
Total loans from third parties | 0 | $ 223,848 | |||||||||
Bangwei Zhu | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 12.00% | 12.00% | |||||||||
Total loans from third parties | 0 | $ 36,407 | |||||||||
Mei Zhang | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Weighted average interest rate | 24.00% | 24.00% | |||||||||
Total loans from third parties | $ 0 | $ 72,814 |
Credit Facilities - Long-term l
Credit Facilities - Long-term loan bank (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Line of Credit Facility [Line Items] | |||
Interest expense | $ 841,130 | $ 1,282,291 | $ 667,748 |
Interest expense of loans - related parties | $ 11,403 | 0 | 0 |
Chongqing Dadukou Rongxing Village & Township Bank | |||
Line of Credit Facility [Line Items] | |||
Weighted average interest rate | 12.00% | ||
Long term bank loan | $ 866,231 | 981,502 | |
Interest expense | 823,551 | $ 1,243,708 | $ 632,160 |
Interest expense of loans - related parties | $ 11,403 |
Taxes (Details)
Taxes (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Taxes | |||
Current | $ 0 | $ 841,312 | $ 919,566 |
Deferred tax expense (benefit) | 213,649 | (126,936) | (43,829) |
Total provision for income taxes | $ 213,649 | $ 714,376 | $ 875,737 |
Taxes - Schedule of effective t
Taxes - Schedule of effective tax rate (Details) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Taxes | |||
China income tax rate | 25.00% | 25.00% | 25.00% |
Change in valuation allowance | 1.20% | 0.00% | 1.30% |
Income tax exemption status granted | (21.50%) | (9.30%) | 0.00% |
Others | 0.00% | 0.20% | 0.00% |
Effective tax rate | 4.70% | 15.90% | 26.30% |
Taxes - Taxes payable (Details)
Taxes - Taxes payable (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Taxes | ||
Income taxes | $ 2,805,722 | $ 2,909,223 |
Other taxes | 169,324 | 128,362 |
Totals | $ 2,975,046 | $ 3,037,585 |
Taxes - Additional Information
Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | 25.00% |
Income Tax Holiday, Aggregate Dollar Amount | $ 1,389,566 | $ 122,251 | $ 0 |
Income Tax Holiday, Income Tax Benefits Per Share | $ 0.07 | $ 0.01 | |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts | $ 220,222 | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 1.20% | 0.00% | 1.30% |
Service [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 6.00% | ||
Value Added Tax Rate , Product One [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 0.00% | ||
Value Added Tax Rate, Product Two [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 11.00% | ||
Value Added Tax Rate , Product Three [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 13.00% | ||
Value Added Tax Rate, Product Four [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Value Added Tax Rate | 17.00% | ||
Cayman Islands | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | ||
British Virgin Islands | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 0.00% | ||
Hong Kong | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | ||
PRC | |||
Operating Loss Carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | ||
Subsidiaries, Guang'an Yongpeng Food Co., Ltd [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | $ 172,000 | ||
Deferred Tax Assets, Operating Loss Carryforwards | $ 43,000 | ||
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent | 100.00% |
Concentration of risk (Details)
Concentration of risk (Details) | 12 Months Ended | ||
Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($)item | Jun. 30, 2017itemcustomer | |
Concentration Risk [Line Items] | |||
Working capital | $ 22,900,000 | ||
Accounts Receivable, after Allowance for Credit Loss, Current | 39,522,737 | $ 24,364,119 | |
PRC | |||
Concentration Risk [Line Items] | |||
Concentration Risk Deposits With Financial Institutions | $ 78,918 | $ 319,071 | |
Customer Concentration Risk [Member] | Revenue from Contract with Customer, Product and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Number of Major Customers | customer | 1 | ||
Customer Concentration Risk [Member] | Maximum | Revenue from Contract with Customer, Product and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Customer Concentration Risk [Member] | Major Customer One [Member] | Revenue from Contract with Customer, Product and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 79.10% | ||
Customer Concentration Risk [Member] | Major Customer One [Member] | Accounts Receivable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 10.00% | |
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Number of Major Suppliers | item | 4 | 4 | 3 |
Supplier Concentration Risk [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Number of Major Suppliers | item | 4 | 2 | |
Supplier Concentration Risk [Member] | Vendor One [Member] | Cost of Goods and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 29.80% | 29.00% | 51.30% |
Supplier Concentration Risk [Member] | Vendor One [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 25.30% | 47.50% | |
Supplier Concentration Risk [Member] | Vendor Two [Member] | Cost of Goods and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 17.60% | 24.50% | 22.20% |
Supplier Concentration Risk [Member] | Vendor Two [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 23.00% | 22.30% | |
Supplier Concentration Risk [Member] | Vendor Three [Member] | Cost of Goods and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.80% | 21.20% | 13.30% |
Supplier Concentration Risk [Member] | Vendor Three [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.00% | ||
Supplier Concentration Risk [Member] | Vendor Four [Member] | Cost of Goods and Service Benchmark [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 16.50% | 12.80% | |
Supplier Concentration Risk [Member] | Vendor Four [Member] | Accounts Payable [Member] | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12.30% |
Equity - Restricted net assets
Equity - Restricted net assets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 |
Equity | ||
Statutory reserves | $ 1,496,642 | $ 940,816 |
Restricted net assets | $ 18,571,570 | $ 14,033,535 |
Equity - Mezzanine equity (Deta
Equity - Mezzanine equity (Details) - USD ($) | May 10, 2019 | Jun. 27, 2018 | Mar. 31, 2018 | May 26, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Par value per share | $ 0.01 | $ 0.01 | |||||
Aggregate offering price | $ 200,000 | $ 0 | $ 0 | ||||
Number of shares into which redeemable shares have been converted | 725,000 | ||||||
Capital contribution | $ 284,269 | $ 284,269 | |||||
Private placements | The Purchaser, an unrelated third party | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued | 350,000 | 375,000 | |||||
Par value per share | $ 0.01 | $ 0.01 | |||||
Purchase price per share | $ 3 | $ 2 | |||||
Aggregate offering price | $ 1,050,000 | $ 750,000 |
Equity - Capital contribution p
Equity - Capital contribution private placements (Details) - USD ($) | Sep. 04, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||
Aggregate offering price | $ 200,000 | $ 0 | $ 0 | |
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 4.89 | $ 0 | ||
Term of warrant | 4 years 10 months 21 days | 0 years | ||
Private placements | Boustead | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued | 66,667 | |||
Purchase price per share | $ 3 | |||
Aggregate offering price | $ 200,000 | |||
Over-Allotment Option [Member] | Boustead Securities | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Commission to placement agent | $ 10,000 | |||
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 3 | |||
Term of warrant | 5 years |
Equity - Capital contribution I
Equity - Capital contribution Initial public offering (Details) - USD ($) | May 10, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||
Par value per share | $ 0.01 | $ 0.01 | ||
Net proceeds after deducting underwriting discounts and commissions and other offering fees and expenses | $ 4,395,634 | $ 0 | $ 0 | |
Warrants to purchase ordinary shares | 4,667 | |||
Exercise price | $ 4.89 | $ 0 | ||
Term of warrant | 4 years 10 months 21 days | 0 years | ||
Initial public offering | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares issued | 1,172,360 | |||
Par value per share | $ 0.01 | |||
Purchase price per share | $ 5 | |||
Aggregate offering price | $ 5,861,800 | |||
Net proceeds after deducting underwriting discounts and commissions and other offering fees and expenses | $ 4,400,000 | |||
Warrants to purchase ordinary shares | 82,065 | |||
Exercise price | $ 5 | |||
Term of warrant | 5 years |
Equity - Warrants (Details)
Equity - Warrants (Details) | 12 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Warrants Outstanding | |
Balance at the beginning | 0 |
Granted/Acquired | 86,732 |
Forfeited | 0 |
Exercised | 0 |
Balance at the end | 86,732 |
Exercisable Shares | |
Balance at the beginning | 0 |
Granted/Acquired | 86,732 |
Forfeited | 0 |
Exercised | 0 |
Balance at the end | 86,732 |
Weighted Average Exercise Price | |
Balance at the beginning (in dollars per share) | $ / shares | $ 0 |
Granted/Acquired (in dollars per share) | $ / shares | 4.89 |
Forfeited (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 0 |
Balance at the end (in dollars per share) | $ / shares | $ 4.89 |
Average Remaining Contractual Life | |
Balance at the beginning (in years) | 0 years |
Granted/Acquired (in years) | 5 years |
Forfeited (in years) | 0 years |
Exercised (in years) | 0 years |
Balance at the end (in years) | 4 years 10 months 21 days |
Commitments and contingencies -
Commitments and contingencies - Lease commitments (Details) | 12 Months Ended | ||
Jun. 30, 2019USD ($)agreement | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Commitments and contingencies | |||
Number of Operating Lease Agreements | agreement | 5 | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2020 | $ 234,291 | ||
2021 | 233,339 | ||
2022 | 239,767 | ||
2023 | 248,205 | ||
2024 | 256,677 | ||
Thereafter | 519,321 | ||
Total minimum payments required | 1,731,600 | ||
Rent expense | $ 348,408 | $ 58,541 | $ 88,368 |
Commitments and contingencies_2
Commitments and contingencies - Guarantees (Details) | Jul. 12, 2018payment | Jul. 04, 2018CNY (¥) | Apr. 27, 2018CNY (¥) | May 16, 2016CNY (¥) | Oct. 31, 2018CNY (¥) | Jul. 31, 2018CNY (¥) | Oct. 31, 2018payment | Jun. 30, 2019CNY (¥) | Jun. 30, 2019USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) |
Loss Contingencies [Line Items] | |||||||||||
Hunan Huade Food Co. Ltd. (borrower) | ¥ 5,000,000 | $ 728,141 | |||||||||
Yuanyang Minyu Micro-Loan Co. Ltd | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | ¥ 5,000,000 | ||||||||||
Debt Instrument, Monthly Interest Rate | 1.80% | ||||||||||
Debt Instrument, Monthly Interest Rate, Additional Default Amount | 0.90% | ||||||||||
Yuanyang Minyu Micro-Loan Co. Ltd | Guarantee Obligations | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Long-term Debt | ¥ 1,096,181.02 | ||||||||||
Debt Instrument, Monthly Interest Rate, For First 10 Days | 2.00% | ||||||||||
Debt Instrument, Monthly Interest Rate, For After 10 Days | 4.00% | ||||||||||
Litigation Settlement, Amount Awarded from Other Party | ¥ 25,930 | ||||||||||
First Payment To Be Paid By Guarantors under Litigation | ¥ 500,000 | ||||||||||
Second Payment To Be Paid By Guarantors under Litigation | ¥ 500,000 | ||||||||||
Number of Payments Responsible By Guarantors | payment | 3 | ||||||||||
Number of Payments Made By Guarantors | payment | 2 | ||||||||||
First Payment Paid By Guarantors under Litigation | ¥ 500,000 | ||||||||||
Second Payment Paid By Guarantors under Litigation | ¥ 500,000 | ||||||||||
Guarantors | Yuanyang Minyu Micro-Loan Co. Ltd | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Hunan Huade Food Co. Ltd. (borrower) | ¥ 2,000,000 | ||||||||||
Chongqin Penglin Food Co., Ltd | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
CQ Mingwen (borrower) | ¥ 9,000,000 | $ 1,310,654 |
Commitments and contingencies_3
Commitments and contingencies - Contingencies (Details) | 12 Months Ended | |||||
Jun. 30, 2019USD ($) | Jan. 02, 2019CNY (¥) | Jan. 02, 2019USD ($) | Nov. 13, 2018CNY (¥) | Nov. 13, 2018USD ($) | Jun. 30, 2018USD ($) | |
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | $ 43,655 | |||||
Loss Contingency, Non Accrual Amount | 416,073 | |||||
Short-term Non-bank Loans and Notes Payable | 3,075,249 | $ 4,907,512 | ||||
Chongqing Zhouyang Shipping Co., Ltd | ||||||
Loss Contingencies [Line Items] | ||||||
Short-term Non-bank Loans and Notes Payable | ¥ 20,000,000 | $ 2,900,000 | ¥ 10,000,000 | $ 1,500,000 | ||
Interest Expense, Debt | 27,000 | |||||
Interest Expense Debt, At Default Interest Rate 18 Percent | 34,000 | |||||
Legal Fees | 18,000 | |||||
Guarantee | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Non Accrual Amount | 262,413 | |||||
Commercial | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency, Non Accrual Amount | 30,458 | |||||
Leases | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | 21,974 | |||||
Loss Contingency, Non Accrual Amount | 115,933 | |||||
Worker Compensation | ||||||
Loss Contingencies [Line Items] | ||||||
Loss Contingency Accrual | 21,681 | |||||
Loss Contingency, Non Accrual Amount | $ 7,269 |
Condensed financial informati_3
Condensed financial information of the parent company - Balance sheets (Details) - USD ($) | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2016 |
Assets, Other Than Property And Equipment, Noncurrent [Abstract] | ||||
Total assets | $ 51,351,317 | $ 33,729,693 | ||
Current liabilities: | ||||
Other payables - related parties | 1,334,534 | 549,858 | ||
Total current liabilities | 22,828,865 | 16,914,656 | ||
Total liabilities | 26,826,103 | 17,896,158 | ||
COMMITMENTS AND CONTINGENCIES | ||||
MEZZANINE EQUITY | ||||
Ordinary shares, $0.01 par value, 0 and 725,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively | 0 | 1,800,000 | ||
SHAREHOLDERS' EQUITY | ||||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 21,964,027 and 20,000,000 share issued and outstanding as of June 30, 2019 and 2018, respectively | 219,640 | 200,000 | ||
Additional Paid in Capital | 11,031,937 | 4,655,943 | ||
Statutory reserves | 1,496,642 | 940,816 | ||
Retained earnings | 12,085,566 | 8,277,801 | ||
Accumulated other comprehensive loss | (308,571) | (41,025) | ||
Total shareholders' equity | 24,525,214 | 14,033,535 | $ 10,131,873 | $ 7,528,393 |
Total liabilities, mezzanine equity and shareholders' equity | 51,351,317 | 33,729,693 | ||
Reportable Legal Entities [Member] | Parent Company [Member] | ||||
CURRENT ASSETS | ||||
Intercompany Receivables | 6,623,561 | 1,800,000 | ||
Assets, Other Than Property And Equipment, Noncurrent [Abstract] | ||||
Investment in subsidiary | 18,554,729 | 14,149,218 | ||
Total assets | 25,178,290 | 15,949,218 | ||
Current liabilities: | ||||
Other payables - related parties | 257,384 | 74,131 | ||
Accrued expenses | 167,765 | 41,552 | ||
Intercompany Payables | 227,927 | 0 | ||
Total current liabilities | 653,076 | 115,683 | ||
Total liabilities | 653,076 | 115,683 | ||
COMMITMENTS AND CONTINGENCIES | 0 | 0 | ||
MEZZANINE EQUITY | ||||
Ordinary shares, $0.01 par value, 0 and 725,000 shares issued and outstanding as of June 30, 2019 and 2018, respectively | 0 | 1,800,000 | ||
SHAREHOLDERS' EQUITY | ||||
Ordinary shares, $0.01 par value, 50,000,000 shares authorized, 21,964,027 and 20,000,000 share issued and outstanding as of June 30, 2019 and 2018, respectively | 219,640 | 200,000 | ||
Additional Paid in Capital | 11,031,937 | 4,655,943 | ||
Statutory reserves | 1,496,642 | 940,816 | ||
Retained earnings | 12,085,566 | 8,277,801 | ||
Accumulated other comprehensive loss | (308,571) | (41,025) | ||
Total shareholders' equity | 24,525,214 | 14,033,535 | ||
Total liabilities, mezzanine equity and shareholders' equity | $ 25,178,290 | $ 15,949,218 |
Condensed financial informati_4
Condensed financial information of the parent company - Parenthetical (Details) - $ / shares | Jun. 30, 2019 | May 10, 2019 | Jun. 30, 2018 |
Condensed financial information of the parent company | |||
Temporary Equity, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Temporary Equity, Shares Issued | 0 | 725,000 | 725,000 |
Temporary Equity, Shares Outstanding | 0 | 725,000 | 725,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 | |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Common Stock, Shares, Issued | 21,964,027 | 20,000,000 | |
Common Stock, Shares, Outstanding | 21,964,027 | 20,000,000 |
Condensed financial informati_5
Condensed financial information of the parent company - Statement of income and comprehensive income (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating Expenses [Abstract] | |||
General and administrative | $ (1,467,373) | $ (981,347) | $ (515,596) |
LOSS FROM OPERATIONS | 5,534,520 | 7,042,653 | 3,521,519 |
NET INCOME | 4,363,591 | 3,768,109 | 2,454,874 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (267,546) | 133,553 | (135,663) |
COMPREHENSIVE INCOME | 4,096,045 | 3,901,662 | 2,319,211 |
Reportable Legal Entities [Member] | Parent Company [Member] | |||
Operating Expenses [Abstract] | |||
General and administrative | (309,466) | (115,683) | 0 |
LOSS FROM OPERATIONS | (309,466) | (115,683) | 0 |
EQUITY INCOME OF SUBSIDIARY | 4,673,057 | 3,883,792 | 2,454,874 |
NET INCOME | 4,363,591 | 3,768,109 | 2,454,874 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (267,546) | 133,553 | (135,663) |
COMPREHENSIVE INCOME | $ 4,096,045 | $ 3,901,662 | $ 2,319,211 |
Condensed financial informati_6
Condensed financial information of the parent company - Statement of cash flows (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 4,363,591 | $ 3,768,109 | $ 2,454,874 |
Change in operating assets and liabilities | |||
Net cash used in operating activities | (5,267,261) | (3,595,031) | (2,513,829) |
CHANGES IN CASH | 2,896,912 | 297,563 | (30,318) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 319,093 | 21,530 | 51,848 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year | 3,216,005 | 319,093 | 21,530 |
Reportable Legal Entities [Member] | Parent Company [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 4,363,591 | 3,768,109 | 2,454,874 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | |||
Equity income of subsidiary | (4,673,057) | (3,883,792) | (2,454,874) |
Change in operating assets and liabilities | |||
Other payable - related parties | 183,253 | 74,131 | 0 |
Accrued expenses | 126,213 | 41,552 | 0 |
Net cash used in operating activities | 0 | 0 | 0 |
CHANGES IN CASH | 0 | 0 | 0 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 0 | 0 | 0 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of year | $ 0 | $ 0 | $ 0 |