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RELATED PARTY TRANSACTIONS
 3 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 12 - 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 September 30, 2024 and June 30, 2024, the outstanding amounts due from related parties consisted of the following:

 

   September 30, 2024   June 30, 2024 
         
Chongqing Yufan Trading Co., Ltd (“Chongqing Yufan”)  $280,668   $318,041 
Chongqing Dream Trading Co., Ltd   42,766    41,280 
Wintus China Limited   412,379    412,379 
Fujian Xinglinchun Health Industry Co., Ltd   25,303    24,424 
Subtotal   761,116    796,124 
Less: allowance for credit losses   (412,379)   (412,379)
Total due from related parties, net  $348,737   $383,745 

 

Due to Related Parties

 

As of September 30, 2024 and June 30, 2024, the Company had related party payables of US$2,315,223 and US$2,875,384, respectively, in relation to the operations of Biowin and Wintus. These related party obligations are primarily owed to the principal stockholders or certain relatives of the stockholders, and senior management of the Company, who provide funds for the Company’s operations. The payables are unsecured, non-interest bearing, and due on demand.

 

As of September 30, 2024 and June 30, 2024, the outstanding amounts due to related parties consisted of the following:

 

   September 30, 2024   June 30, 2024 
         
Wang Sai  $-   $58,846 
Huang Shanchun   -    444,595 
Liu Fengming   41,292    19,908 
Zhan Jiarui   19,271    111,528 
Liu Xiqiao   23,123    27,319 
Lyu Jiajia (a)   -    478,547 
Zhao Pengfei   7,128    6,880 
Wang Xiaohui   360,598    342,562 
Chi Keung Yan   630,535    614,427 
Fuzhou Medashan Biotechnology Co., Ltd.   6,539    13,297 
Chongqing Fuling District Renyi Zhilu Silk Industry Co., Ltd   890,703    412,479 
Chongqing Huajian Housing Development Co., Ltd (“Chongqing Huajian”)   336,034    344,996 
Total due to related parties  $2,315,223   $2,875,384 

 

a. On September 27, 2023, the Company entered into a loan agreement with Lyu Jiajia to borrow US$800,000 as working capital for one year, with a maturity date of September 29, 2024. The loan has a fixed interest rate of 15.0% per annum. The Company repaid totaling $0.4 million during the year ended June 30, 2024. As of June 30, 2024, the total outstanding balance, including principal and the interest, amounted to US$478,547. During the three months ended September 30, 2024, all of the amounts, including principal and interest due to Lyu Jiajia, were offset with the consideration for shares purchased from the Company.

 

 

Interest expenses on loans due to related parties were US$14,450 and nil from continued operations for the three months ended September 30, 2024 and 2023, respectively.

 

Interest expenses on loans due to related parties were nil and US$1,526 from discontinued operations for the three months ended September 30, 2024 and 2023, respectively.

 

Sales to a Related Party

 

The Company made sales of US$391,808 and US$130,801 to its related party, Chongqing Fuling District Renyi Zhilu Silk Industry Co., Ltd, for the three months ended September 30, 2024 and 2023, respectively.

 

Loan guarantee provided by related parties

 

The Company’s related parties provide a guarantee for the Company’s bank loans (see Note 13).

 

Loan guarantee provided to a related party

 

As of September 30, 2024 and June 30, 2024, Chongqing Wintus (New Star) Enterprises Group (“Chongqing Wintus”) provided a guarantee that amounted to US$712,771 and US$687,999 for a bank loan borrowed by Chongqing Yufan, a related party of the Company until December 28, 2025.

 

Lease from a related party

 

The Company entered into a two-year lease agreement for the lease of office space from a related party company, of which the CEO is the Company’s shareholder.

 

As of September 30, 2024, the operating lease right-of-use assets and corresponding operating lease liabilities of leases from the related party were US$63,062 and US$169,977, respectively.

 

As of June 30, 2024, the operating lease right-of-use assets and corresponding operating lease liabilities of leases from the related party were US$80,746 and US$163,306, respectively.

 

During the three months ended September 30, 2024 and 2023, the Company incurred operating lease expenses in leases from the related party of US$20,946 and US$20,728, respectively.