Related Party Balance and Transactions

3 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY BALANCE AND TRANSACTIONS

Note 19. RELATED PARTY BALANCE AND TRANSACTIONS

Advance to suppliers-related party

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

	September 30,		June 30,
	2022		2022
Bitcoin mining hardware and other equipment (1)	$	1,978,368	$	6,153,546
Total Advances to suppliers-related party	$	1,978,368	$	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 Miner agreed to purchase certain cryptocurrency mining equipment. In January and April 2022, Thor Miner made total prepayment of $35,406,649 for the order. $4,175,178 was shipped in September 2022 and prepayment as of September 30, 2022 amounted to $1,978,368.   The Company shipped products of $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 Miner 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.   On December 23, 2022, the Company entered into a settlement agreement with SOSNY effective on December 28, 2022, under which the Company would 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 Miner has paid to HighSharp.   As of December 22, 2022, the balance of the advance to HighSharp and the deposit from SOSNY amounted to $27,927,583 and $40,560,569, respectively. Thor Miner paid $13.0 million on December 23, 2022 to SOSNY, which was received by SOSNY on December 28, 2022. Thor Miner wrote off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp resulted in net bad debt expenses of $367,014.

Due from related party, net

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

	September 30,			June 30,
	2022			2022
Zhejiang Jinbang Fuel Energy Co., Ltd (1)		391,100			415,412
Shanghai Baoyin Industrial Co., Ltd (2)		1,229,570			1,306,004
LSM Trading Ltd (3)		570,000			570,000
Rich Trading Co. Ltd (4)		103,424			103,424
Cao Lei  (5)		54,026			54,860
Less: allowance for credit losses		(2,348,120	)		(2,449,700	)
Total	$	-		$	-

(1) As of September 30,2022 and June 30, 2022, the Company advanced approximately $0.4 million to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing and due on demand.. In December 2022, the Company further advanced approximately $0.4 million to Zhejiang Jinbang. The Company provided full credit losses for the balance of the receivable as of September 30, 2022 and June 30, 2022.

(2) As of September 30,2022, the Company advanced approximately $1.2 million to Shanghai Baoyin Industrial Co., Ltd. which is 30% owned by Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable.

(3) 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 full credit losses for the balance of the receivable.

(4) 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 operated by Rich Trading and the Company would be entitled to 90% of profits generated by the trading business. The Company advanced $3,303,424 for this project. $3,200,000 has been returned to the Company. The Company provided allowance of $103,424 for the year ended June 30, 2022.

(5) The amount represents advance for business expenses to Mr. Cao Lei, former Chairman of the Board. The Company provided full credit losses for the balance of the receivable.

Loan receivable- related parties

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

	September 30,		June 30,
	2022		2022
Wang, Qinggang (1)	$	449,697	$	552,285

(1) On June 10, 2021, the Company entered into a loan agreement with Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The loan is non-interest bearing for loan amounts 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 $522,285 (RMB 3,700,000) was loaned to Wang Qinggang. $70,265 (RMB 0.5 million) was returned in September 2022 and approximately $0.4 million(RMB 3.2 million) in December 2022.