Related Party Balance and Transactions

12 Months Ended

Jun. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY BALANCE AND TRANSACTIONS

Note 21. RELATED PARTY BALANCE AND TRANSACTIONS

Advance to suppliers-related party

The Company’s advances to suppliers – related party are as follows:

	June 30,		June 30,
	2022		2021
Bitcoin mining hardware and other equipment (1)	$	6,153,546	$	-
Total Advances to suppliers-related party	$	6,153,546	$	-

(1) On January 10, 2022, the Company’s joint venture, Thor Miner, entered into a Purchase Agreement with HighSharp. Pursuant to the Purchase Agreement, Thor agreed to purchase certain cryptocurrency mining equipment. In January and April 2022, Thor Miner made total prepayment of $35,406,649 for the order. The Company also entered into sales contract with SOS information Technology New York Inc (“SOSNY”) which specify the products to be delivered within 120 days from acceptance of contract and received a total deposit from SOSNY in the amount of $48,930,000.   The Company shipped cryptocurrency mining machines to SOSNY worth $1,325,520 for the year ended June 2022 and $6,153,546 from July to December 2022.   Due to production issues from HighSharp, Thor was not able to timely deliver the full quantity of cryptocurrency mining machines to SOSNY under the PSA according to contract and was sued by SOSNY for breach of contract on December 9, 2022.   The Company entered into settlement agreement SOSNY effective on December 28, 2022, under which the Company will repay $13.0 million to SOSNY and terminate the previous agreements and balance of the deposits. The Company also assigned to SOSNY the right for the deposit that Thor has paid to HighSharp.  

As of December 22, 2022, the balance of advance to HighSharp and deposit from SOSNY amounted to $27,927,583 and $40,560,569, respectively. Thor Minor paid $13.0 million on December 23, 2022   to SOSNY and wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp resulting in net bad debt expenses of $367,014.

Due from related party, net

As of June 30, 2022 and June 30, 2021, the outstanding amounts due from related parties consist of the following:

	June 30,			June 30,
	2022			2021
Tianjin Zhiyuan Investment Group Co., Ltd. (1)	$	-		$	384,331
Zhejiang Jinbang Fuel Energy Co., Ltd (2)		415,412			430,902
Shanghai Baoyin Industrial Co., Ltd (3)		1,306,004			-
LSM Trading Ltd (4)		570,000			-
Rich Trading Co. Ltd (5)		103,424			-
Cao Lei  (6)		54,860			-
Less: allowance for doubtful accounts		(2,449,700	)		(384,331	)
Total	$	-		$	430,902

(1) In June 2013, the Company signed a five-year global logistic service agreement with Tianjin Zhiyuan Investment Group Co., Ltd. (“Zhiyuan Investment Group”) and TEWOO Chemical& Light Industry Zhiyuan Trade Co., Ltd. (together with Zhiyuan Investment Group, “Zhiyuan”). Zhiyuan Investment Group is owned by Mr. Zhong Zhang, a former shareholder of the Company. In September 2013, the Company executed an inland transportation management service contract with the Zhiyuan Investment Group whereby it would provide certain advisory services and help control potential commodities loss during the transportation process. Starting in late 2020, Mr. Zhang started selling off his shares of the Company and does not own shares of the Company as of June 30, 2021 and no longer a related party. Management’s reassessed the collectability and decided to provide full allowance for doubtful accounts as of June 30, 2021. The Company wrote off the balance in the first quarter of fiscal year 2022.

(2) During third fiscal quarter of 2021, the Company advanced $477,278 to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai and Zhejiang Jinbang returned $39,356 for the year ended June 30, 2021. The advance is non-interest bearing and due on demand. There has been no change in the balance other than changes as a result of changes in exchange rates. The Company provided allowance of $415,412 for the year ended June 30, 2022.

(3) From July to December 2021, the Company advanced approximately $1.6 million to Shanghai Baoyin Industrial Co., Ltd. (‘Baoyin”) which is 30% owned by Wang Qinggang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd.  Baoyin repaid approximately $0.3 million in December 2022. The advance is non-interest bearing and due on demand. The Company provided allowance of $1,306,004 for the year ended June 30, 2022.

(4) The Company advanced $570,000 to LSM Trading Ltd, which is 40% owned by the Company for the year ended June 30, 2022. The advance is non-interest bearing and due on demand. The Company provided allowance of  $570,000 for the year ended June 30, 2022.

(5) On November 16, 2021, the Company entered into a project cooperation agreement with Rich Trading Co. Ltd USA (“Rich Trading”) for the trading of computer equipment. Rich Trading’s bank account was controlled by now-terminated members of the Company’s management and was, at the time, an undisclosed related party. According to the agreement, the Company was to invest $4.5 million in the trading business operates by Rich Trading and the Company would be entitled to 90% of profit generated by the trading business. The Company advanced $3,300,000 for this project. $3,200,000 has been returned to the Company. The Company provided allowance of $100,000 for the year ended June 30, 2022. As of June 30, 2022, the Company also paid for expenses of Rich Trading for $3,424 and provided full allowance for the advance.

(6) The amount represents advance for business expenses to Mr. Cao Lei, former Chairman of the Board. The Company provided allowance of $54,860 for the year ended June 30, 2022. Business expenses incurred by Cao Lei amounted to $66,842 and $120,934 for the years ended June 30, 2022 and 2021.

Loan receivable- related parties (restated)

As of June 30, 2022 and June 30, 2021, the outstanding loan receivable from related parties consists of the following:

	June 30,		June 30,
	2022		2021
Wang, Qinggang (1)	$	552,285	$	-

(1) On June 10, 2021, the Company entered into a loan agreement with Wang Qinggang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The loan is non-interest bearing for loan amount up to $630,805 (RMB 4 million). In February 2022, Wang Qinggang, borrowed and repaid $232,340 of the loan amount. In June 2022, additional $552,285 (RMB 3,700,000) was loaned to Wang Qinggang with due date of June 7, 2024. The full amount was returned in September and December 2022.

Other payable - related party

As of June 30, 2021, the Company had payable to former Chief Executive Officer of $11,303 and to the acting Chief Financial Officer of $2,516 which were included in other current liabilities. These payments were made on behalf of the Company for the daily business operational activities.

Revenue - related party

For the year ended June 30, 2022, revenue from related party Zhejiang Jinbang amounted to $222,963. There was no related party revenue for the year ended June 30, 2021.