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RELATED PARTY TRANSACTIONS
 9 Months Ended
Mar. 31, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 13 - RELATED PARTY TRANSACTIONS

 

Due from Related Parties, Net

 

The Company has made temporary advances to certain stockholders and senior management of the Company and to other entities that are either owned by family members of those stockholders or to other entities that the Company has investments in.

 

As of March 31, 2023 and June 30, 2022, the outstanding amounts due from related parties consisted of the following:

 

  

March 31,

2023

  

June 30,

2022

 
         
Zhao Min  $-   $1,410 
Shanghai Gaojing Private Fund Management (a.)   419,334    429,998 
Zhongjian Yijia Health Technology (Qingdao) Co., Ltd. (“Zhongjian Yijia”) (b.)   1,513,015    1,719,568 
Zhongjian (Qingdao) International Logistics Development Co., Ltd. (“Zhongjian International”) (c.)   4,724,916    4,644,011 
Subtotal   6,657,265    6,794,987 
Less: allowance for doubtful accounts   (728,010)   - 
Total due from related parties, net  $5,929,255   $6,794,987 

 

a. The Company owns 32% equity interest in this company. Those advances are due on demand and non-interest bearing (Note 10).
   
b.

On September 17, 2021, the Company entered into a loan agreement with Zhongjian Yijia to with an amount of US$1,642,355 (RMB 11.0 million) for its working capital for one year, with a maturity date of September 16, 2022. The loans bore a fixed annual interest rate of 6.0% per annum. The Company recorded interest receivable amounted to US$77,213 as of June 30, 2022. Upon maturity date, the Company signed a loan extension agreement with this related party to extend the loan repayment by installments, among which, US$217,445 (RMB 1.5 million) will be paid by September 30, 2022, US$724,816 (RMB 5.0 million) will be paid by December 31, 2022, and the remaining loan and unpaid interest will be paid by June 30, 2023. During the nine months ended March 31, 2023, the Company received payment of US$218,403 (RMB 1.5 million) from this related party. However, due to the impact from COVID-19, the Company did not receive the second installment repayment of US$728,010 (RMB 5.0 million) according to the loan agreements, hence, the Company recorded allowance according to the Company’s accounting policy based on its best estimates. As of March 31, 2023, the allowance for doubtful accounts was US$728,010, and the total outstanding balance including the principal and interest was amounted to US$1,513,015 as of March 31, 2023. Management will continue putting effort in collection of overdue loans to this related party.

 

Interest income was US$53,981 and US$55,062 for the nine months ended March 31, 2023 and 2022, respectively. Interest income was US$9,778 and US$55,062 for the three months ended March 31, 2023 and 2022, respectively.

   
c.

On October 28, 2021, the Company entered into a loan agreement with Zhongjian International to with an amount of US$4,334,401 (RMB 29.9 million) for its working capital for one year, with a maturity date of October 27, 2022. The loans bore a fixed annual interest rate of 6.0% per annum. Upon maturity date, the Company signed a loan extension agreement with this related party to extend the loan for another year with the new maturity date of October 27, 2023. The total outstanding balance including the principal and interest were amounted to US$4,724,916 and US$4,644,011 as of March 31, 2023 and June 30, 2022, respectively.

 

Interest income was US$194,224 and US$118,201 for the nine months ended March 31, 2023 and 2022, respectively. Interest income was US$64,628 and US$69,297 for the three months ended March 31, 2023 and 2022, respectively.

 

 

Due to Related Parties

 

As of March 31, 2023 and June 30, 2022, the Company had related party payables of US$2,622,798 and US$2,798,800, respectively, mainly due to the principal stockholders or certain relatives of the stockholders, and senior management of the Company who lend funds for the Company’s operations. The payables are unsecured, non-interest bearing, and due on demand.

 

  

March 31,

2023

  

June 30,

2022

 
         
Wu Yang  $-   $95,630 
Wang Sai   38,206    96,081 
Zhou Guocong   2,100    - 
Li Baolin   2,038    - 
Zhao Min (a.)   423,134    562,528 
Zhou Shunfang (b.)   1,988,282    2,044,561 
Liu Fengming   44,157    - 
Yan Lixia   1,790    - 
Zhang Yuying   72,646    - 
Huang Shanchun   50,445    - 
Total due to related parties  $2,622,798   $2,798,800 

 

a. During the year ended June 30, 2022, the Company entered into a series of loan agreements with Zhao Min to borrow an aggregated amount of US$365,797 (RMB 2.45 million) for the Company’s working capital needs for three months, with a maturity date range between July 2022 to September 2022. The loans bore a fixed annual interest rate of 5.0% per annum. Upon maturity date, the Company signed loan extension agreements with Zhao Min to extend the loan period for another nine months, with the same interest rate of 5.0% per annum. During the nine months ended March 31, 2023, the Company borrowed additional loan of US$29,120 (RMB 0.2 million), resulted a total outstanding balance including principal and the interest of US$395,894 as of March 31, 2023.
   
b. During the year ended June 30, 2022, the Company entered into a series of loan agreements with Zhou Shunfang to borrow an aggregated amount of US$1,269,092 (RMB 8.5 million) for the Company’s working capital needs for less than one year, with a maturity date range on March 31, 2022. The loans bore a fixed annual interest rate of 20.0% per annum. All loans were fully repaid by the Company upon their maturity.

 

Interest expenses on loans due to related parties were US$14,332 and US$ nil for the nine months ended March 31, 2023 and 2022, respectively. Interest expenses on loans due to related parties were US$5,012 and US$ nil for the three months ended March 31, 2023 and 2022, respectively.

 

Loan guarantee provided by related parties

 

The Company’s related parties provide guarantee for the Company’s short-term bank loans (see Note 14).