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Condensed financial information of the parent company
 12 Months Ended
Jun. 30, 2019
Condensed Financial Information Disclosure [Abstract]  
Condensed financial information of the parent company

Note 17 – Condensed financial information of the parent company

 

The Company performed a test on the restricted net assets of their consolidated subsidiaries 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 information for the parent company.

 

The subsidiaries 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 subsidiaries and VIE under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as "Loss in excess of investment in subsidiaries" and the loss of the subsidiaries is presented as "Equity loss of subsidiaries". 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

AS OF JUNE 30, 2019 AND 2018

(UNAUDITED)

 

   2019   2018 
         
ASSETS
CURRENT ASSETS:        
Cash  $60,122   $378,730 
Other receivables   2,300    2,300 
Prepaid expenses   25,000    40,458 
Total current assets   87,422    421,488 
           
OTHER ASSETS:          
Intercompany receivable   19,149,878    18,574,784 
Total other assets   19,149,878    18,574,784 
           
Total assets  $19,237,300   $18,996,272 
           
LIABILITIES AND SHAREHOLDERS' EQUITY
           
CURRENT LIABILITIES:          
Other payables  $177,092   $2,000 
Other payables - shareholders   848,089    - 
Accrued liabilities   26,200    - 
Total current liabilities   874,289    2,000 
           
OTHER LIABILITIES:          
Loss in excess of investment in subsidiaries   17,842,213    9,292,064 
 Total other liabilities   17,842,213    9,292,064 
           
Total liabilities   18,716,502    9,294,064 
           
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS' EQUITY:          
Preferred stock, $0.001 par value, 1,000,000 shares authorized, no share issued or outstanding   -    - 
Common stock, $0.001 par value, 74,000,000 shares authorized, 7,174,626 and 5,488,649 shares issued and outstanding as of June 30, 2019 and  2018, respectively   7,175    5,489 
Additional paid-in-capital   54,237,082    48,360,368 
Deferred stock compensation   (3,161,200)   (2,825,000)
Deficit   (64,031,446)   (49,642,916)
Statutory reserves   6,248,092    6,248,092 
Accumulated other comprehensive income   7,221,095    7,556,175 
Total shareholders' equity   520,798    9,702,208 
Total liabilities and shareholders' equity  $19,237,300   $18,996,272 

  

PARENT COMPANY STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEARS ENDED JUNE 30, 2019, 2018 AND 2017

(UNAUDITED)

 

   2019   2018   2017 
             
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES  $(1,756,972)  $(858,605)  $(600,000)
STOCK COMPENSATION EXPENSE   (4,592,200)   (1,388,501)   (289,000)
LOSS FROM OPERATIONS   (6,349,172)   (2,247,106)   (889,000)
                
OTHER INCOME (EXPENSE), NET               
Interest income   84    13    - 
Finance expense   (1,465)   (26)   - 
Equity loss of subsidiaries   (8,037,977)   (5,152,846)   (10,149,120)
TOTAL OTHER EXPENSE, NET   (8,039,358)   (5,152,859)   (10,149,120)
                
NET LOSS   (14,388,530)   (7,399,965)   (11,038,120)
                
OTHER COMPREHENSIVE INCOME (LOSS) -               
foreign currency translation income (loss)   (335,080)   347,097    (499,361)
                
COMPREHENSIVE LOSS  $(14,723,610)  $(7,052,868)  $(11,537,481)

 

PARENT COMPANY STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2019, 2018 AND 2017

(UNAUDITED)

 

   2019   2018   2017 
             
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net loss  $(14,388,530)  $(7,399,965)  $(11,038,120)
Adjustments to reconcile net loss to cash used in operating activities:               
Stock compensation expense   4,592,200    1,388,501    289,000 
Loss from subsidiaries   8,037,977    5,152,846    10,149,120 
Changes in operating assets and liabilities               
Other receivables   -    (2,300)   - 
Prepaid expenses   15,458    (40,458)   - 
Intercompany receivable   (575,094)   (42,350)   - 
Other payables   175,092    2,000    - 
Other payables - shareholders   540,000    720,000    600,000 
Accrued expenses   334,289    -    - 
Net cash used in operating activities   (1,268,608)   (221,726)   - 
                
CASH FLOWS FROM FINANCING ACTIVITIES:               
Proceeds from sale of ordinary shares   950,000    600,000    - 
Net cash provided by financing activities   950,000    600,000    - 
                
EFFECTS OF EXCHANGE RATE CHANGE IN CASH   -    -    - 
                
NET CHANGE IN CASH   (318,608)   378,274    - 
                
CASH, beginning of year   378,730    456    456 
                
CASH, end of year  $60,122   $378,730   $456 
                
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES:               
Common stocks issued to repay shareholders  $4,928,400   $3,859,443   $- 
Accrued liabilities reclassified to loans payable – employees upon tri-party agreements  $308,089   $-   $-