10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x   Quarterly Report PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31,2022

or

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from                to               .

Commission File Number 000-

IONIX TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada	45-0713638
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Rm 608, Block B, Times Square No.50 People Road, Zhongshan District, Dalian City, Liaoning Province, China 116001

(Address of Principal Executive Offices) (Zip Code)

+86-411-88079120

(Registrant’s Telephone Number, Including Area Code)

Not applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o.

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer    x	Smaller reporting company  x
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x.

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of the principal U.S. market
Common Stock, par value $0.0001 per share	IINX	OTCQB marketplace of OTC Markets, Inc.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 23, 2022, there were 176,989,156 shares of common stock issued and outstanding, par value $0.0001 per share.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this Quarterly Report on Form 10-Q and other filings of the Registrant under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as information communicated orally or in writing between the dates of such filings, contains or may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements in this Quarterly Report on Form 10-Q, including without limitation, statements related to our plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are the availability of working capital to fund our operations, the competitive market in which we operate, the efficient and uninterrupted operation of our computer and communications systems, our ability to generate a profit and execute our business plan, the retention of key personnel, our ability to protect and defend our intellectual property, the effects of governmental regulation, and other risks identified in the Registrant’s filings with the Securities and Exchange Commission from time to time.

In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms or other comparable terminology. Although the Registrant believes that the expectations reflected in the forward-looking statements contained herein are reasonable, the Registrant cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither the Registrant, nor any other person, assumes responsibility for the accuracy and completeness of such statements. The Registrant is under no duty to update any of the forward-looking statements contained herein after the date of this Quarterly Report on Form 10-Q.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

IONIX TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

		March 31, 2022			June 30, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	1,141,244		$	731,819
Notes receivable		196,091			76,743
Accounts receivable		4,340,702			4,936,974
Inventory		5,052,260			5,454,371
Advances to suppliers - non-related parties		468,797			782,481
- related parties		441,538			434,200
Prepaid expenses and other current assets		688,462			478,830
Total Current Assets		12,329,094			12,895,418
Property, plant and equipment, net		6,528,852			6,792,315
Intangible assets, net		1,510,225			1,508,583
Long-term prepaid expenses		529,926			491,015
Deferred tax assets		50,988			50,105
Total Assets	$	20,949,085		$	21,737,436
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term bank loan	$	1,575,250		$	904,832
Accounts payable		2,448,506			4,942,881
Advance from customers		446,855			334,101
Promissory notes payable, net of debt discount and loan cost		999,477			533,316
Due to related parties		2,650,812			3,053,818
Accrued expenses and other current liabilities		230,375			117,450
Total Current Liabilities		8,351,275			9,886,398
Total Liabilities		8,351,275			9,886,398
COMMITMENT AND CONTINGENCIES
Stockholders’ Equity:
Preferred stock, $.0001 par value, 5,000,000 shares authorized,   5,000,000 shares issued and outstanding		500			500
Common stock, $.0001 par value,  395,000,000 shares authorized， 176,989,156 and 164,041,058 shares issued and outstanding as of March 31, 2022 and June 30, 2021 respectively		17,699			16,404
Additional paid in capital		12,379,248			10,786,792
Retained earnings (accumulated deficit)		(1,220,150	)		(144,409	)
Accumulated other comprehensive income (loss)		978,552			749,790
Total Stockholders' Equity attributable to the Company		12,155,849			11,409,077
Noncontrolling interest		441,961			441,961
Total Stockholders’ Equity		12,597,810			11,851,038
Total Liabilities and Stockholders’ Equity	$	20,949,085		$	21,737,436

The accompanying notes are an integral part of these consolidated financial statements.

F-1

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	March 31,						March 31,
	2022			2021			2022			2021
Revenues (See Note 2 and Note 10 for related party amounts)	$	2,058,179		$	3,160,746		$	10,551,867		$	9,102,094
Cost of Revenues (See Note 10 for related party amounts)		1,788,635			2,802,497			9,528,438			8,071,941
Gross profit		269,544			358,249			1,023,429			1,030,153
Operating expenses
Selling, general and administrative expense		457,213			327,372			1,253,659			985,273
Research and development expense		121,396			147,871			519,015			425,111
Total operating expenses		578,609			475,243			1,772,674			1,410,384
Income (loss) from operations		(309,065	)		(116,994	)		(749,245	)		(380,231	)
Other income (expense):
Interest expense, net of interest income		(180,726	)		(42,441	)		(443,052	)		(262,174	)
Subsidy income		37,139			45,790			184,397			59,876
Change in fair value of derivative liability		-			-			-			(647,632	)
Gain (loss) on extinguishment of debt		15,000			-			-			202,588
Total other income (expense)		(128,587	)		3,349			(258,655	)		(647,342	)
Income (loss) before income tax expense (benefit)		(437,652	)		(113,645	)		(1,007,900	)		(1,027,573	)
Income tax expense (benefit)		145			1,949			67,841			(23,555	)
Net income (loss)		(437,797	)		(115,594	)		(1,075,741	)		(1,004,018	)
Other comprehensive income (loss)
Foreign currency translation adjustment		58,337			(29,945	)		228,762			865,206
Comprehensive loss		(379,460	)		(145,539	)		(846,979	)		(138,812	)
Less: Comprehensive income attributable to noncontrolling interest		-			19,632			-			19,632
Comprehensive loss attributable to common stockholders of the Company	$	(379,460	)	$	(165,171	)	$	(846,979	)	$	(158,444	)
Earnings (Loss) Per Share - Basic	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding - Basic		139,844,550			161,911,380			142,392,564			134,708,314
Earnings (Loss) Per Share - Diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding - Diluted		137,978,627			161,911,380			140,883,445			134,708,314

The accompanying notes are an integral part of these consolidated financial statements. 

F-2

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Preferred Stock				Common Stock						Additional		Retained Earnigs			Accumulated Other
	Number of Shares		Amount		Number of Shares			Amount			Paid-in Capital		(Accumulated Deficit)			Comprehensive Income (loss)			Non-controlling interest		Total
Balance at June 30, 2021		5,000,000	$	500		164,041,058		$	16,404		$	10,786,792	$	(144,409	)	$	749,790		$	441,961	$	11,851,038
Issuance of common stock as commitment shares for promissory note		-		-		1,342,000			134			50,867		-			-			-		51,001
Net income ( loss)		-		-		-			-			-		(540,199	)		-			-		(540,199	)
Foreign currency translation adjustment		-		-		-			-			-		-			(49,923	)		-		(49,923	)
Balance at September 30, 2021		5,000,000		500		165,383,058			16,538			10,837,659		(684,608	)		699,867			441,961		11,311,917
Issuance of common stock as commitment shares for promissory note		-		-		2,187,500			219			52,906		-			-			-		53,125
Issuance of common stock  for private placement		-		-		6,580,000			658			394,142		-			-			-		394,800
Return of common stocks by the holder of promissory note		-		-		(1,119,402	)		(112	)		112		-			-			-		-
Net income ( loss)		-		-		-			-			-		(97,745	)		-			-		(97,745	)
Foreign currency translation adjustment		-		-		-			-			-		-			220,348			-		220,348
Registered Capital Increase of Fangguan  Electronics		-		-		-			-			941,074		-			-			-		941,074
Balance at December 31, 2021		5,000,000		500		173,031,156			17,303			12,225,893		(782,353	)		920,215			441,961		12,823,519
Issuance of common stock as commitment shares for promissory note		-		-		5,000,000			500			153,250		-			-			-		153,750
Return of common stocks by the holder of promissory note		-		-		(1,042,000	)		(104	)		104		-			-			-		-
Net loss		-		-		-			-			-		(437,797	)		-			-		(437,797	)
Foreign currency translation adjustment		-		-		-			-			-		-			58,337					58,337
Balance at March 31, 2022		5,000,000	$	500		176,989,156		$	17,699		$	12,379,248	$	(1,220,150	)	$	978,552		$	441,961	$	12,597,810

F-3

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)

(Unaudited)

	Preferred Stock				Common Stock				Additional						Accumulated Other
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital			Retained Earnings			Comprehensive Income (loss)			Non-controlling interest		Total
Balance at June 30, 2020		5,000,000	$	500		114,174,265	$	11,417	$	9,243,557		$	262,198		$	(357,011	)	$	441,961	$	9,602,622
Stock warrants issued with convertible notes		-		-		-		-		-			-			-			-		-
Issuance of common stock for advisory services		-		-		-		-		-			-			-			-		-
Issuance of common stock for conversion of convertible notes		-		-		2,326,652		233		390,768			-			-			-		391,001
Net income ( loss)		-		-		-		-		-			(532,306	)		-			-		(532,306	)
Foreign currency translation adjustment		-		-		-		-		-			-			430,281			-		430,281
Balance at September 30, 2020		5,000,000		500		116,500,917		11,650		9,634,325			(270,108	)		73,270			441,961		9,891,598
Issuance of common stock for conversion of convertible notes		-		-		7,143,978		714		455,429			-			-			-		456,143
Issuance of common stock for exercise of warrants		-		-		1,500,000		150		66,878			-			-			-		67,028
Issuance of common stock for commitment shares for promissory note		-		-		1,567,164		157		67,903			-			-			-		68,060
Issuance of common stock for commitment shares for private placement		-		-		28,869,999		2,887		430,113			-			-			-		433,000
Settlement of warrants in relation to extinguishment of debt		-		-		-		-		(59,163	)		-			-			-		(59,163	)
Net income ( loss)		-		-		-		-		-			(356,118	)		-			-		(356,118	)
Foreign currency translation adjustment		-		-		-		-		-			-			464,870			-		464,870
Balance at December 31, 2020		5,000,000		500		155,582,058		15,558		10,595,485			(626,226	)		538,140			441,961		10,965,418
Issuance of common stock for commitment shares for promissory note		-		-		14,590,000		146		87,007			-			-			-		87,153
Issuance of common stock for commitment shares for private placement		-		-		7,000,000		700		104,300			-			-			-		105,000
Net loss		-		-		-		-		-			(115,594	)		-			-		(115,594	)
Foreign currency translation adjustment		-		-		-		-		-			-			(49,577	)		19,632		(29,945	)
Balance at March 31, 2021		5,000,000		500		177,172,058		16,404		10,786,792			(741,820	)		488,563			461,593		11,012,032

The accompanying notes are an integral part of these consolidated financial statements.

F-4

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	March 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(1,075,741	)	$	(1,004,018	)
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		556,509			512,375
Deferred taxes		-			(25,908	)
Change in fair value of derivative liability		-			647,632
Loss (gain) on extinguishment of debt		-			(202,588	)
Non-cash interest		376,952			177,205
Changes in operating assets and liabilities:
Accounts receivable - non-related parties		677,321			262,424
Inventory		493,898			(652,185	)
Advances to suppliers - non-related parties		324,613			(326,742	)
Advances to suppliers - related parties		-			(40,072	)
Prepaid expenses and other current assets		(229,424	)		(620,374	)
Accounts payable		(2,558,931	)		(184,288	)
Advance from customers		105,930			293,468
Accrued expenses and other current liabilities		109,886			(248,380	)
Net cash provided by (used in) operating activities		(1,218,987	)		(1,411,451	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment		(153,659	)		(190,190	)
Acquisition of intangible assets		-			(2,334	)
Net cash used in investing activities		(153,659	)		(192,524	)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes receivable		(116,963	)		34,852
Proceeds from bank loans		1,568,455			1,405,792
Repayment of bank loans		(919,710	)		(2,344,185	)
Proceeds from issuance of promissory notes		1,071,250			687,500
Repayment of promissory notes		(909,998	)		-
Repayment of convertible notes payable		-			(555,747	)
Proceeds from issuance of common stock for private placement		394,800			538,000
Proceeds from (repayment of) loans from related parties		(452,840	)		1,021,130
Proceeds from the Registered Capital Increase of Fangguan  Electronics		941,070			-
Net cash provided by (used in) financing activities		1,576,064			787,342
Effect of exchange rate changes on cash		206,007			73,352
Net increase (decrease) in cash and cash equivalents		409,425			(743,281	)
Cash and cash equivalents, beginning of period		731,819			1,285,373
Cash and cash equivalents, end of period	$	1,141,244		$	542,092
Supplemental disclosure of cash flow information
Cash paid for income tax	$	85,274		$	10,751
Cash paid for interests	$	100,273		$	66,820
Non-cash investing and financing activities
Issuance of 9,470,630 shares of common stock for conversion of convertible notes	$	-		$	847,144
Issuance of 3,026,164 shares of common stock as commitment shares for promissory note	$	-		$	155,213
Issuance of 1,500,000 shares of common stock for exercise of warrants	$	-		$	67,028
Issuance of 8,529,500 shares of common stock as commitment shares for promissory note	$	257,875		$	-

The accompanying notes are an integral part of these consolidated financial statements.

F-5

IONIX TECHNOLOGY, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31,2022

(Unaudited)

NOTE 1 - NATURE OF OPERATIONS

Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. The Company,together with its wholly owned subsidiaries and an entity controlled through VIE agreements in China ( collectively referred to as the " Group") are principally engaged in the business of the high-end intelligent electronic equipment, which includes the furnace used in firing for lithium battery , the lithium battery packs,the portable power banks for electronic devices, LCM and LCD screens ,and in the provision of IT and solution-oriented services in China.

New subsidiaries

On February 7, 2021, the Board of Directors of the Company approved and ratified the incorporation of Shijirun (Yixing) Technology Co., Ltd. (“Shijirun”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on February 7, 2021. Well Best International Investment Limited, a limited liability company formed under the laws of Hong Kong Special Administrative Region (“Well Best”), and a wholly owned subsidiary of the Company, is the sole shareholder of Shijirun. As a result, Shijirun is an indirect, wholly-owned subsidiary of the Company. Shijirun will head up the Company’s advance into the new energy industry focusing on developing and producing high-end intelligent new energy equipment from Yixing City, Jiangsu Province, China.

On March 30, 2021, the Board of Directors of the Company approved and ratified the incorporation of Huixiang Energy Technology (Suzhou) Co., Ltd. (“Huixiang Energy”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on March 18, 2021. Well Best is the sole shareholder of Huixiang Energy. As a result, Huixiang Energy is an indirect, wholly-owned subsidiary of the Company. Huixiang Energy conducts research and development of next generation advanced battery technologies, manufacture and sales of relevant battery products, including the solid-state rechargeable lithium ion battery for next generation energy storage systems. Huixiang Energy also on the operation of battery packs, battery systems and electric vehicles sharing business with its own internet sharing platform relating to the electric vehicles (online EV hailing services) and its relevant batteries and battery systems. Huixiang Energy will operate in Suzhou City, Jiangsu Province, China.

Authorized share increase

On May 6, 2021, the Board of Directors of the Company and the holders of the majority of issued and outstanding voting securities of the Company approved an amendment (the “Amendment”) to the Articles of Incorporation of the Company to increase the authorized number of shares of common stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation of the Company. The approval was made in accordance with Sections 78.320 and 78.390 of the Nevada Revised Statues, which provide that a corporation’s articles may be amended by written consent of the stockholders of the Company representing at least a majority of the voting power of the Company. The Amendment was filed with the Nevada Secretary of State on June 7, 2021.

Acquisition

On December 27, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jialin Liang and Xuemei Jiang, each of whom are shareholders of Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”or the "VIE"). Pursuant to the terms of the Purchase Agreement, the Shareholders of the VIE, who together own 95.14% of the ownership rights in Fangguan Electronics, agreed to execute and deliver the Business Operation Agreement, the Equity Interest Pledge Agreement, the Equity Interest Purchase Agreement, the Exclusive Technical Support Service Agreement (the “Services Agreement”) and the Power of Attorney, all together dated December 27, 2018 are referred to the “VIE Agreements”, to the Company in exchange for the issuance of an aggregate of 15,000,000 shares of the Company’s common stock, par value $.0001 per share, thereby causing Fangguan Electronics to become the Company’s variable interest entity. Together with VIE agreements, the Shareholders of the VIE also agreed to convert shareholder ( of the VIE) loan of RMB 30 million (approximately $4.4 million) to capital of the VIE and make cash contribution of RMB 9.7 million (approximately $1.4 million) to capital of the VIE. The entirety of the transaction will hereafter be referred to as the “Transaction”. As a result of the Transaction, the Company is able to exert effective control over Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics. Fangguan Electronics manufactures and sells Liquid Crystal Module (" LCM") and LCD screens in China based in Changchun City, Jilin Province, People’s Republic of China. (See Note 3).

F-6

On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). Fangguan Electronics's new institutional shareholder , namely Changchun Lingguan Investment Partnership ("Lingguan"), whose ultimate beneficial owners and controlling shareholders are Jialin Liang and Xuemei Jiang as both of whom own 63% of the ownership rights of Lingguan ( while all of the other sharehders are employee of the VIE), made cash contribution of RMB 5.0 million (approximately $0.78 million) and RMB 1.0 million (approximately $0.16 million) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021. . Lingguan is limited partnership by structure and private equity fund by nature. And Lingguan was established for the sole purpose of the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the the executive partner of Lingguan to represent Lingguan and has been in charge with the daily operation of Lingguan.She is the internal decision-maker of Lingguan and has the right to decide all the investment and divestment of the relevant investment of Lingguan.

Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55% of the ownership rights in Fangguan Electronics ( prior to the Registered Capital Increase, Jialin Liang ever transferred his ownship right at the amount of RMB 2.5 million (approximately $0.4 million)) of Fangguan Electronics to a third party individual ). Therefore all of the Board of Directors of the Company , Jialin Liang and Xuemei Jiang have concluded that all of the VIE Agreements remain valid.

F-7

NOTE 2– BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Group’s audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 94.55% of the ownership rights in the VIE and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions (if any) have been eliminated upon consolidation.

The subsidiaries of ionix are as follows:

Well Best International Investment Limited (the wholly-owned subsidiary)

Welly Surplus International Limited (the wholly-owned subsidiary)

Shijirun (Yixing) Technology Co., Ltd (the wholly-owned subsidiary)

Huixiang Energy Technology (Suzhou) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Photoelectric Display Technology Co. Ltd (the wholly-owned subsidiary)

Dalian Shizhe New Energy Technology Co., Ltd (the wholly-owned subsidiary)

Shenzhen Baileqi Electronic Technology Co., Ltd (the wholly-owned subsidiary)

Lisite Science Technology (Shenzhen) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Electronics Technology Co., Ltd ( the VIE)

Noncontrolling Interests

The Group follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to NCIs even when such allocation might result in a deficit balance.

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 3, therefore no income or loss is allocated to NCI.

Use of Estimates

The Group’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, the useful lives of property and equipment and intangible assets, the impairment of long-lived assets, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements.

Cash and cash equivalents

Cash consists of cash on hand and cash in bank. Cash equivalents represent investment securities that are short-term, have high credit quality and are highly liquid. Cash equivalents are carried at fair market value and consist primarily of money market funds.

F-8

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Group specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Group will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers. As of March 31,2022 and June 30, 2021, the Company has accounts receivable balance from non-related party of $4,340,702 and $4,936,974, net of allowance for doubtful accounts of $155,691 and $152,995, respectively. No bad debt expense was recorded during the three and nine months ended March 31,2022 and 2021.

Inventories

Inventories consist of raw materials, working-in-process and finished goods. Inventories are valued at the lower of cost or net realizable value. The Group does determine cost on the basis of the weighted average method. The Group periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Group does believe that the assumptions the Group uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result.

Advances to suppliers

Advances to suppliers represent prepayments for merchandise, which were purchased but had not been received. The balance of the advances to suppliers is reduced and reclassified to inventories when the raw materials are received and pass quality inspection.

Property, plant and equipment

Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Repairs and maintenance costs are normally expensed as incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.

When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of comprehensive income (loss) in the reporting period of disposition.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows:

Buildings	10 – 20 years
Machinery and equipment	5 – 10 years
Office equipment	3 – 5 years
Automobiles	5 years

Intangible assets

Land use right is recorded as cost less accumulated amortization. Land use rights represent the prepayments for the use of the parcels of land in the PRC where the Group’s production facilities are located, and are charged to expense over their respective lease periods of 50 years. According to the laws of the PRC, the government owns all of the land in the PRC. Enterprises or individuals are authorized to use the land only through land use rights granted by the PRC government for a certain period (usually 50 years).

F-9

Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows:

Land use right	50 years
Computer software	2-5 years

Gains or losses arising from derecognition of the intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of comprehensive income (loss) when the asset is disposed.

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Group are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

Revenue recognition

The Group adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings.

The Group estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Group expects to receive in exchange for those goods or services. The Group applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

· allocate the transaction price to performance obligations in the contract; and

· recognize revenue as the performance obligation is satisfied.

Under these criteria, for revenues from sale of products, the Group generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. The control of the products is transferred to the customer upon receipt of goods by the customer. For service revenue, the Group recognizes revenue when services are performed and accepted by customers.

F-10

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively:

	For the  nine months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$10,547,390	$9,100,076
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	4,477	-
Service contracts	-	2,018
Total	$10,551,867	$9,102,094

	For the Three Months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$2,058,179	$3,160,474
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	-	-
Service contracts	-	272
Total	$2,058,179	$3,160,746

All the operating entities of the Group are domiciled in the PRC. All the Group’s revenues are derived in the PRC during the three and nine months ended March 31,2022 and 2021

F-11

Cost of revenues

Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues.

Related parties and transactions

The Group identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, "Related Party Disclosures" and other relevant ASC standards.

Parties, which can be a corporation or individual, are considered to be related if the Group has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence.

Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it requires their disclosure nonetheless.

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

As of March 31,2022 and June 30, 2021, the Group did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a corporation during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears.

Leases

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Group adopted the new standard on July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Group elected the package of practical expedients which permits us not to reassess under the new standard the Group's prior conclusions about lease identification, lease classification and initial direct costs. 

The new standard has no material effect on the consolidated financial statements of the Group as the Group does not have a lease with a term longer than 12 months as of June 30, 2021 (See Note 5).

F-12

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share or increase a net income per share.

 During the nine months ended March 31,2022 and 2021,the Company had outstanding convertible notes and warrants which represent 68,750 and  1,096,705 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31,2022 and 2021, the Company had outstanding convertible notes and warrants which represent 68,750 and 68,750 shares of commons stock. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss).

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:

	March 31,2022		June 30, 2021
Balance sheet items, except for equity accounts		6.3482		6.4601

	Nine months ended March 31,
	2022		2021
Items in statements of comprehensive income (loss) and cash flows		6.4042		6.8254

Fair Value of Financial Instruments

The carrying value of the Group’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

The Group also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

F-13

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The Group has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 13).

Convertible Instruments

The Group evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Group accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Group records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Group accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

Common Stock Purchase Warrants

The Group classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to the Company's own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Group classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Recent accounting pronouncements

The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for Calendar years beginning after December 15, 2019 and for interim periods within those Calendar years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group is currently in the process of evaluating the impact of the adoption of this guidance on its consolidated financial statements.

F-14

COVID-19

The Group’s operations are affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Group’s business has been negatively impacted by the COVID-19 coronavirus outbreak to certain extent.

NOTE 3 - VARIABLE INTEREST ENTITY

The VIE contractual arrangements

On December 27, 2018, the Company entered into VIE agreements with two shareholders of Fangguan Electronics to control 95.14% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics. In exchange for VIE agreements and additional capital contribution, the Company issued 15 million shares of common stock to two shareholders of Fangguan Electronics. (See Note 1).

The transaction was accounted for as a business combination using the acquisition method of accounting. The assets, liabilities and the operations of Fangguan Electronics subsequent to the acquisition date were included in the Group’s consolidated financial statements.

Through power of attorney, equity interest purchase agreement, and equity interest pledge agreement, 95.14% of the voting rights of Fangguan Electronics’ shareholders have been transferred to the Company so that the Company has effective control over Fangguan Electronics and has the power to direct the activities of Fangguan Electronics that most significantly impacts the Group's economic performance.

Through business operation agreement with the Shareholders of Fangguan Electronics, the Company shall direct the business operations of Fangguan Electronics, including, but not limited to, adopting corporate policy regarding daily operations, financial management, and employment, and appointment of directors and senior officers of Fangguan Electronics.

Through the exclusive technical support service agreement with the shareholders of Fangguan Electronics, the Company together with the relevant subsidiaries, shall provide Fangguan Electronics with necessary technical support and assistance as the exclusive provider. And at the request of the Company, Fangguan Electronics shall pay the performance fee, the depreciation and the service fee to the Company. The performance fee shall be equivalent to 5% of the total revenue of Fangguan Electronicsin any Calendar year. The depreciation amount on equipment shall be determined by accounting rules of China. The Company has the right to set and revise annually this service fee unilaterally with reference to the performance of Fangguan Electronics.

The service fee that the Company is entitled to earn shall be the total business incomes of the whole year minus performance fee and equipment depreciation. This agreement allows the Company to collect 100% of the net profits of Fangguan Electronics. Except for technical support, the Company and its subsidiaries did not provide, nor does it intend to provide, any financial or other support either explicitly or implicitly during the periods presented to its variable interest entity.

If facts and circumstances change such that the conclusion to consolidate the Fangguan Electronics has changed, the Group shall disclose the primary factors that caused the change and the effect on the Group’s financial statements in the periods when the change occurs.

There are no restrictions on the consolidated Fangguan Electronics’s assets and on the settlement of its liabilities and all carrying amounts of Fangguan Electronics’s assets and liabilities are consolidated with the the financial statements of the Company and its subsidiaries. In addition, the net income of Fangguan Electronics after it became the VIE of the Company is free of restrictions for payment of dividends to the shareholders of the Company.

F-15

On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). Fangguan Electronics's new institutional shareholder , namely Changchun Lingguan Investment Partnership ("Lingguan"), whose ultimate beneficial owners and controlling shareholders are Jialin Liang and Xuemei Jiang as both of whom own 63% of the ownership rights of Lingguan ( while all of the other sharehders are employee of the VIE), made cash contribution of RMB 6.0 million (approximately $0.78 million) and RMB 1.0 million (approximately $0.16 million ) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021.  Lingguan is limited partnership by structure and private equity fund by nature. And Lingguan was established for the sole purpose of the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the the executive partner of Lingguan to represent Lingguan and has been in charge with the daily operation of Lingguan.She is the internal decision-maker of Lingguan and has the right to decide all the investment and divestment of the relevant investment of Lingguan.

Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55% of the ownership rights in Fangguan Electronics ( prior to the Registered Capital Increase, Jialin Liang ever transferred his ownship right at the amount of RMB 2.5 million (approximately $0.4 million)) of Fangguan Electronics to a third party individual ). Therefore all of the Board of Directors of the Company , Jialin Liang and Xuemei Jiang have concluded that all of the VIE Agreements remain valid.

F-16

Assets of Fangguan Electronics that are collateralized or pledged are not restricted to settle Fangguan Electronics' own obligations. The creditors of Fangguan Electronics do not have recourse to the general credit of the Company and its subsidiaries.

Risks associated with the VIE structure

The Company believes that the contractual arrangements with the VIE and the Shareholders of VIE are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

· discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and its VIE;

· limit the Group’s business expansion in China by way of entering into contractual arrangements.

· impose fines or other requirements with which the Company’s PRC subsidiary and its VIE may not be able to comply.

· require the Company or the Company’s PRC subsidiary and its VIE to restructure the relevant ownership structure or operations; or

· restrict or prohibit the Group’s use of the proceeds from public offering to finance the Group’s business and operations in China.

The Group’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over its VIE and its respective shareholders and it may lose the ability to receive economic benefits from its VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and its VIE. There has been no change in facts and circumstances to consolidate the VIE. The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:

	Balance as of March 31,2022		Balance as of June 30, 2021
Cash and cash equivalents	$	1,133,938	$	702,979
Notes receivable		196,091		76,743
Accounts receivable - non-related parties		2,984,905		3,638,354
Inventory		4,487,946		4,899,831
Advances to suppliers - non-related parties		-		749,975
Prepaid expenses and other current assets		378,955		62,251
Total Current Assets		9,181,835		10,130,133
Property, plant and equipment, net		6,523,977		6,787,525
Intangible assets, net		1,510,225		1, 508,583
Deferred tax assets		50,988		50,105
Total Assets	$	17,267,025	$	18,476,346
Short-term bank loan	$	1,575,250	$	904,832
Accounts payable		1,404,463		3,960,792
Advance from customers		252,216		150,110
Due to related parties		1,918,358		2,349,518
Accrued expenses and other current liabilities		100,134		49,968
Total Current Liabilities		5,250,421		7,415,220
Total Liabilities	$	5,250,421	$	7,415,220

F-17

Schedule of condensed income statement and cash flow statement of its VIE are as follows:

	For the nine months ended March 31 ,
	2022	2021
Revenue (*)	$10,547,390	$8,941,662
Net (loss) income	（182,642）	(107,417)
Net cash provided by (used in) operating activities	(432,992)	(581,315)
Net cash used in investing activities	(153,659)	(192,524)
Net cash provided by financing activities	1,472,853	（224,301）

(*) Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens.

During the three and nine months ended March 31,2022 and 2021, the VIE did not have any material related party transactions with other subsidiaries of the Company.

Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE and can have assets transferred out of the VIE under its control. Therefore, the Company considers that there is no asset in any of the VIE that can be used only to settle obligations of the VIE, except for registered capital and PRC statutory reserves. As all VIE are incorporated as limited liability companies under the Company Law of the PRC, creditors of the VIE do not have recourse to the general credit of the Company or its subsidiaries for any of the liabilities of the VIE.

F-18

Currently, there is no contractual arrangement which requires the Company or its subsidiaries to provide additional financial support to the VIE.

 NOTE 4 - INVENTORIES

Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following:

	Balance as of March 31,2022		Balance as of June 30, 2021
Raw materials	$	2,020,439	$	1,314,020
Work-in-process		2,152,242		3,367,716
Finished goods		879,579		772,635
Total Inventories	$	5,052,260	$	5,454,371

The Group recorded no inventory markdown for the nine months ended March 31,2022 and 2021. 

NOTE 5- OPERATING LEASE

For the nine months ended March 31,2022, the Group had one real estate operating leases for office and warehouse under the terms of one year.

Lisite Science Technology (Shenzhen) Co., Ltd ("Lisite Science") leases office and warehouse space from Shenzhen Keenest Technology Co., Ltd. (“Keenest”), a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 10).On July 20, 2021, Lisite Science further extended the lease with Keenest for one more year until July 20, 2022 with annual rent of approximately $295 (RMB2,000).

The Group made an accounting policy election not to recognize lease assets and liabilities for the leases listed above as all lease terms are 12 months or shorter.

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

The components of property, plant and equipment were as follows:

	March 31,2022			June 30, 2021
Buildings	$	5,162,763		$	5,073,335
Machinery and equipment		3,419,353			3,216,474
Office equipment		83,372			75,374
Automobiles		177,365			173,090
Subtotal		8,842,853			8,538,273
Less: Accumulated depreciation		(2,314,001	)		(1,745,958	)
Property, plant and equipment, net	$	6,528,852		$	6,792,315

Depreciation expenses related to property, plant and equipment were $531,811 and $468,186 for the nine months ended March 31,2022 and 2021, respectively.

Depreciation expenses related to property, plant and equipment were $177,489 and $167,245 for the three months ended March 31,2022 and 2021, respectively.

As of March 31,2022 and June 30, 2021, buildings were pledged as collateral for bank loans (See Note 8).

F-19

NOTE 7– INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	March 31,2022			June 30, 2021
Land use right	$	1,608,625		$	1,580,761
Computer software		30,432			29,905
Subtotal		1,639,057			1,610,666
Less: Accumulated amortization		(128,832	)		(102,083	)
Intangible assets, net	$	1,510,225		$	1,508,583

Amortization expenses related to intangible assets were $24,697 and $44,189 for the nine months ended March 31,2022 and 2021, respectively.

Amortization expenses related to intangible assets were $8,244 and $10,063 for the three months ended March 31,2022 and 2021, respectively.

Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31,2022 and June 30, 2021, land use right was pledged as collateral for bank loans (See Note 8).

NOTE 8 – SHORT-TERM BANK LOAN

The Company’s short-term bank loans consist of the following:

			March 31,2022		June 30, 2021
Loan payable to Industrial Bank, due October 2021	(2	)	$	-	$	348,324
Loan payable to Industrial Bank, due July 2022	(3	)		566,317		-
Loan payable to Industrial Bank, due July 2022	(4	)		654,468		-
Loan payable to Industrial Bank, due August 2021	(1	)		-		556,508
oan payable to Industrial Bank, due October 2022	(5	)		354,465		-
Total			$	1,575,250	$	904,832

(1) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$556,508 (RMB3,595,096) and maturity date at August 6, 2021.

During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$464,389 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$464,389 (RMB3,000,000) in full upon maturity. In August 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$553,987 (RMB3,595,096) in full upon maturity.

(2) During April 2021, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$346,966 (RMB2,250,212) and maturity date at October 13, 2021. On April 13, 2021, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On October 13, 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$346,966 (RMB2,250,212) in full upon maturity.

(3) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$566,317 (RMB3,595,096) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.  

F-20

(4) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$654,468(RMB4,154,692) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

(5) On October 21, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$354,465(RMB2,250,212) for 9 months until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

F-21

NOTE 9 - STOCKHOLDERS' EQUITY

 Stock Issued as Commitment Shares for Promissory Note

On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $51,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31,2022.(See Note 14)

On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31, 2022.(See Note 14).

On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31, 2022.(See Note 14)

On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.In connection with the issuance of promissory note, on February 17 , 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”).(See Note 14)

F-22

Commitment Shares returned to the Company

On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on December 21, 2020, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14)

On January 10, 2022, a total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on March 10, 2021, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14)

Stock Issued for Private Placement

On October 4, 2021, the Company issued a total of 29,106,000 restricted shares of common stock to 12 individual subscribers for an aggregate purchase price of $3,492,720 at $0.12 per share, according to the conditions of the subscription agreements signed between the Company and subscribers.

On November 13, 2021, the Company and individual subscribers agreed to a voluntary unwinding of the forementioned transaction related to the subscription and purchase of an aggregate 29,106,000 shares. The Company entered into cancellation agreements with each individual pursuant to which all funds were returned to the investors and all shares were returned to our transfer agent for cancellation. Immediately prior to the decision, the Registration Statement related to the shares was voluntarily withdrawn by the Company.

On December 15, 2021, the Company issued a total of 6,580 ,000 restricted shares of common stock to a Chinese citizen subscriber for an aggregate purchase price of $394,800 at $0.06 per share, according to the conditions of the subscription agreement signed between the Company and subscriber.

F-23

NOTE 10 - RELATED PARTY TRANSACTIONS AND BALANCES

Purchase from related party

During the three and nine months ended March 31,2022 and 2021, the Group did not purchase from any related party.

Advances to suppliers - related parties

Lisite Science made advances of $441,538 and $434,200 to Keenest for future purchases as of March 31,2022 and June 30, 2021,respectively.

Sales to related party

During the three and nine months ended March 31,2022 and 2021, the Group did not sell to any related party.

F-24

Lease from related party

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 5). On July 20, 2021, Lisite Science further extended the lease with Keenest for one more year until July 20, 2022 with annual rent of approximately $295 (RMB2,000).

Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). This lease was not extended when it expired in May 2021.

Due to related parties

Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand.

			March 31,2022		June 30, 2021
Ben Wong	(1	)	$	143,792	$	143,792
Yubao Liu	(2	)		294,163		352,236
Xin Sui	(3	)		2,016		2,016
Baozhen Deng	(4	)		53,375		45,276
Yunqiang Xie		(13)		35,758		-
Jialin Liang	(6	)(11)		1,404,801		1,844,857
Xuemei Jiang	(7	)(10)		563,939		554,171
Kou Yue		(12)		20,000		-
Shikui Zhang	(8	)		72,760		58,961
Biao Shang	(5	)		20,153		19,804
Changyong Yang	(9	)		40,055		32,705
			$	2,650,812	$	3,053,818

(1) Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company.

(2) Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company.

(3) Xin Sui serves as director of Welly Surplus.

(4) Baozhen Deng is a stockholder of the Company, who owns approximately 0.7% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T.

(5) Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric.

(6) Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company.

(7) Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company.

(8) Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019.

(9) Changyong Yang is a stockholder of the Company,who owns approximately 1.3% of the Company’s outstanding common stock,and the owner of Keenest.

(10) The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded.

F-25

(11) At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $5.8 million (RMB39,581,883), among which approximately $4.4 million (RMB30,000,000) was used for debt for equity swap by Mr.Liang during the capital increase of Fangguan Electronics occurred in March 2019. Thereafter Mr.Liang continued making advances to Fangguan Electronics.

(12) Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her.

(13) Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun.

F-26

During the nine months ended March 31,2022, the refund to Mr. Jialin Liang by Fangguan Electronics was $440,056(RMB3,000,000)

During the nine months ended March 31,2022, setting off the further advance to the Company by Mr Liu, the net refund by the Company to Mr Liu was approximately $58,073 .

During the nine months ended March 31,2022, Baozhen Deng advanced approximately $8,099 to Baileqi Electronic. Shikui Zhang advanced approximately $13,799 to Shizhe New Energy. Changyong Yang, a stockholder of the Company, advanced approximately $7,350 to Lisite Science. Mr Yunqiang Xie advanced approximately $35,758 to Shijirun. Ms.Yue Kou advanced $20,000 to Well Best after netting off the refund paid to her.

 During the nine months ended March 31, 2021, Yubao Liu advanced $295,928 to Well Best after netting off the refund paid to him.

 During the nine months ended March 31, 2021, Baileqi Electronic refunded $3,836 to Baozhen Deng and Shenzhen Baileqi S&T advanced $23,937 to Baileqi Electronic. Shikui Zhang advanced approximately $23,000 to Shizhe New Energy. Changyong Yang, a stockholder of the Company, advanced approximately $9,000 to Lisite Science.

On September 23, 2020, Jialin Liang entered into a short-term loan agreement with Bank of Communications to borrow an individual loan of approximately US$441,000 (RMB 3 million) for one year with annual interest rate of 3.85%. The borrowing was guaranteed by Fangguan Electronics. Pursuant to the loan agreement, the proceed from the bank loan could only be used in the operation of Fangguan Electronics. On September 23, 2020, Jialin Liang advanced all of the proceeds from this bank loan to Fangguan Electronics

NOTE 11– CONCENTRATION

Major customers

Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: 

	For the nine months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,407,785		23	%	$	167,005		4	%
Customer B		1,153,277		11	%		68,320		2	%
Total	$	3,561,062		34	%	$	235,325		6	%

	For the nine months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts receivable
Customer A	$	1,666,368		18	%	$	229,336		7	%
Customer B		1,352,195		15	%		-		-	%
Customer C		950,501		10	%		184,584		5	%
Total	$	3,969,064		43	%	$	413,920		12	%

F-27

	For the three months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	804,981		39	%	$	167,005		4	%
Total	$	804,981		39	%	$	167,005		4	%

	For the three months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts  receivable
Customer A	$	612,781		19	%	$	229,336		7	%
Customer B		484,802		15	%		-		-	%
Customer C		441, 260		14	%		184,584		5	%
Total	$	1,538,843		48	%	$	413,920		12	%

All customers of the Group are located in the PRC.

F-28

Major suppliers

The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows:

	For the nine months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,881,357		23	%	$	89,333		4	%
Total	$	1,881,357		23	%	$	89,333		4	%

	For the nine months ended March 31,2021					As of March 31,2021
	Total Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,148,322		14	%	$	65,123		2	%
Supplier B		796,553		10	%		364,146		14	%
Total	$	1,944,875		24	%	$	429,269		16	%

	For the Three Months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	257,421		15	%	$	89,333		4	%
Supplier B		181,509		11			146,204		6
Total	$	438,930		26	%	$	235,537		10	%

	For the Three Months ended   March 31,2021					As of March 31,2021
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	404,404		13	%	$	65,123		2	%
		371,731		12	%		-		-	%
Total	$	776,135		25	%	$	65,123		2	%

All suppliers of the Group are located in the PRC.

F-29

NOTE 12- INCOME TAXES

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Group operates in United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate.

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of United States of America and subject to the corporate tax rate of 21% on its taxable income.

For the nine months ended March 31,2022 and 2021, the Company did not generate income in United States of America and no provision for income tax was made. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three-year period after the returns are filed.  In unusual circumstances, the period may be longer.  Tax returns for the years ended June 30, 2016 and after were still open to audit as of March 31,2022.

Hong Kong

The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the nine months ended March 31,2022 and 2021, there is no assessable income chargeable to profit tax in Hong Kong.

The PRC

The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2022 to 2024.

F-30

The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows:

	For the nine months ended March 31,
	2022			2021
Tax (benefit) at U.S. statutory rate	$	(211,659	)	$	(215,790	)
Tax rate difference between foreign operations and U.S.		556			26,511
Change in valuation allowance		64,836			155,922
Permanent difference		214,108			9,802
Effective tax (benefit)	$	67,841		$	(23,555	)

The provisions for income taxes (benefits) are summarized as follows:

	For the nine months ended March 31,
	2022		2021
Current	$	67,841	$	2,353
Deferred		-		(25,908	)
Total	$	67,841	$	(23,555	)

As of March 31,2022, the Group has approximately $4,147,768 net operating loss carryforwards available in the U.S and Hong Kong to reduce future taxable income which will begin to expire from 2035. It is more likely than not that the deferred tax assets resulted from net operating loss carryforward cannot be utilized in the future because there will not be significant future earnings from the entities which generated the net operating loss. Therefore, the Group recorded a full valuation allowance on its deferred tax assets resulted from net operating loss carryforward as of March 31,2022.

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. Accordingly, the Company has re-measured its deferred tax assets on net operating loss carry forwards in the U.S at the lower enacted cooperated tax rate of 21%. However, this re-measurement has no effect on the Company’s income tax expenses as the Company has provided a 100% valuation allowance on its deferred tax assets previously.

Additionally, the 2017 Tax Act implemented a modified territorial tax system and imposing a tax on previously untaxed accumulated earnings and profits (“E&P”) of foreign subsidiaries (the “Toll Charge”). The Toll Charge is based in part on the amount of E&P held in cash and other specific assets as of December 31, 2017. The Toll Charge can be paid over an eight-year period, starting in 2018, and will not accrue interest. The 2017 Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits.

The Company has determined that this one-time Toll Charge has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings at either of the two testing dates of November 2, 2017 and December 31, 2017.

For purposes of the inclusion of GILTI, the Company determined that the Company did not have tax liabilities resulting from GILTI For the nine months ended March 31,2022 and 2021 due to net operating loss carryforwards available in the U.S. Therefore, there was no accrual of GILTI liability as of March 31,2022 and June 30, 2021.

The extent of the Group’s operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state and international tax audits. The Group recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due.

F-31

NOTE 13 - CONVERTIBLE DEBT

Convertible notes

Convertible notes payable balance was zero as of March 31,2022 and June 30, 2021.

There was none of the amortization of debt discount during the three and nine months ended March 31,2022.

For the nine months ended March 31,2021, the Company recorded the amortization of debt discount of $138,399 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

For the three months ended March 31,2021, the Company recorded the amortization of debt discount of $24,185 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

Derivative liability

Upon issuing of the convertible notes, the Company determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and accounted for as a derivative liability, with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the note, if any, is recorded immediately to interest expense at inception.

The derivative liability in connection with the conversion feature of the convertible debt is the only financial liability measured at fair value on a recurring basis.

The change of derivative liabilities is as follows:

Balance at July 1, 2020	$	276,266
Converted		(357,868	)
Debt settlement		(566,030	)
Change in fair value recognized in operations		647,632
Balance at March 31,2021	$	-

There was no any movement for the change of derivative liabilities during the three and nine months ended March 31,2022, and the balance of derivative liabilities was $0 at March 31,2022

The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions:

Estimated dividends	None
Expected volatility	78.55% to 253.30%
Risk free interest rate	0.61% to 0.93%
Expected term	0 to 6 months

Warrants

In connection with the issuance of the $165,000 convertible promissory note on September 11, 2019, FirstFire Global Opportunities Fund, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.40, and the warrants can be exercised within 5 years which is before September 11, 2024.

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31,2021. After this exercise, FirstFire Global Opportunities Fund, LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $55,000 convertible promissory note on November 12, 2019, Crown Bridge Partners, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 22,916 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 12, 2024.

F-32

In December 2020, the Company paid a total of $82,500 to fully settle the convertible note dated November 12, 2019 with Crown Bridge Partners, LLC, including all accrued and unpaid interest and unexercised warrants. After this settlement, Crown Bridge Partners, LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $165,000 convertible promissory note on November 20, 2019, Morningview Financial LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 20, 2024.

In November 2020, the Company paid a total of $175,000 to fully settle the convertible note dated November 20, 2019 with Morningview Financial LLC, including all accrued and unpaid interest and unexercised warrants. After this settlement, Morningview Financial LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $146,850 convertible promissory note on January 10, 2020, Labrys Fund, LP is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before January 10, 2025.

The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions:

Estimated dividends	None
Expected volatility	56.23% to 71.08%
Risk free interest rate	1.73% to 1.92%
Expected term	5 years

Since the warrants can be exercised at $2.4 or $2.8 and are not liabilities, the face value of convertible notes was allocated between convertible note and warrant based on the fair values of the conversion feature and warrants. Accordingly, $147,492  was allocated to warrants and recorded in additional paid in capital account during the year ended June 30, 2020.

The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (years)
Outstanding at July 1, 2021 （Note1）		68,750	$	2.80		3.53
Granted		-		-		-
Exercised or settled		-		-		-
Cancelled or Expired		-		-		-
Outstanding at March 31,2022（Note1）		68,750	$	2.80		2.78

Note1: The herein mentioned warrant of 68,750 shares are entitled by Labrys Fund, LP  in connection with the issuance of the $146,850 convertible promissory note on January 10, 2020.

	Number of Shares			Weighted Average Exercise Price	Remaining Contractual Term (years)
Outstanding at July 1, 2020	229,166		$	2.68	4.20 to 4.53
Granted	-			-	-
Exercised or settled     （Note2）	(160,416	)		2.63	4.05 to 4.16
Cancelled or expired	-			-	-
Outstanding at March 31,2021 （Note 1）	68,750		$	2.80	3.78

Note2: The herein mentioned exercised or expired warrant of 160,416 shares was composed of （1）the warrant of 68,750 shares entitled by FirstFire Global Opportunities Fund, LLC in connection with the issuance of the $165,000 convertible promissory note on September 11, 2019,（2）the warrant of 22,916 shares entitled by Crown Bridge Partners, LLC in connection with the issuance of the $55,000 convertible promissory note on November 12, 2019（3）the warrant of 68,750 shares entitled by Morningview Financial LL in connection with the issuance of the $165,000 convertible promissory note on November 20, 2019.

F-33

NOTE 14– PROMISSORY NOTE

Schedule of promissory note as of March 31,2022 is as follows:

			Note Balance		Debt Discount		Carrying Value
Labrys Fund, LP	(1	)	$	-	$	-	$	-
Labrys Fund, LP	(2	)		-		-		-
Firstfire Global Opportunities Fund, LLC	(3	)		325,000		29,230		295,770
Talos Victory Fund, LLC	(4	)		250,000		68,819		181,181
Mast Hill Fund, L.P	(5	)		250,000		71,505		178,495
Blue Lake Partners, LLC	(6	)		500,000		155,969		344,031
Total			$	1,325,000	$	325,523	$	999,477

(1) On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 31,2021 and received $253,500 in cash after deducting an OID in the amount of $30,000, legal fees of $3,000 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $35,000 payment at each month end beginning on April 23, 2021 through December 21, 2021.

In connection with the issuance of promissory note, on December 31,2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par.

On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 9)

(2) On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 19, 2021 and received $434,000 in cash after deducting an OID in the amount of $50,000, legal fees of $2,500 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning on July 9, 2021 through March 10, 2022.

In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par. (See Note 9)

The payment as of $58,333.33 originally scheduled on December 10, 2021 was postponed to January 10,2022 on

which date that the payment of the total of $233,333.35 was made by the Company to fully refund the remaining balance of this self-amortization promissory note.

On January 10 ,2022, the total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.

F-34

(3) On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.

In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $51,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

The two monthly payments as of $58,333.33 each originally scheduled on November 9, 2021 and December 9, 2021 respectly were postponed to January 7,2022 on which date that the payment at the total of $175,000 was made by the Company to settle the payments scheduled for the period from November 9,2021 to January 7,2022.

(4) On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

(5) On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the three and nine months ended March 31, 2022.(See note 9)

(6) On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.

In connection with the issuance of promissory note, on February 17 , 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $98,750 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

For the three and nine months ended March 31,2022, the Company recorded the amortization of debt discount of $ 122,642 and $311,535 for the self-amortization promissory notes issued, which was included in other income and expense in the consolidated statement of comprehensive income (loss).

F-35

NOTE 15 – SEGMENT INFORMATION

The Group’s business was classified by management into three reportable business segments (smart energy, photoelectric display and service contracts) before March 31,2021 and into four segments (smart energy, photoeletric display, service contract and lithium battery-related business )after March 31,2021 supported by the administrative function which conducts activities that are non-segment specific. The smart energy reportable segment derives revenue from the sales of portable power banks that is intended to be utilized as a power source for electronic devices such as the iphone, ipad, mp3/mp4 players, PSP gaming systems, and cameras. The photoelectric display reportable segment derives revenue from the sales of LCM and LCD screens manufactured for small devices such as video capable baby monitors, electronic devices such as tablets and cell phones, and for use in televisions or computer monitors. The service contracts reportable segment derives revenue from providing IT and solution-oriented services.The lithium battery -related business reportable segment derives revenue from trading lithium battery packs and furnace used in firing for lithium battery,etc. Unallocated items comprise of mainly corporate expenses and corporate assets.

Although all of the Group’s revenue is generated from PRC, the Group is organizationally structured along business segments. The accounting policies of each operating segments are same and are described in Note 2, “Summary of Significant Accounting Policies”.

The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021.

	For the nine months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	4,477		$	-		$	10,547,390		$	-		$	-		$	10,551,867
Cost of Revenues		4,626			-			9,523,812			-			-			9,528,438
Gross profit (loss)		（149）			-			1,023,578			-			-			1,023,429
Operating expenses		46,889			6,262			1,384,217			12,691			322,615			1,772,674
Income (loss) from operations		(47,038	)		(6,262	)		(360,639	)		(12,691	)		(322,615	)		(749,245	)
Net income (loss)	$	(49,359	)	$	(6,360	)	$	(279,028	)	$	(12,579	)	$	(728,415	)	$	(1,075,741	)

	For the nine months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	9,100,076		$	2,018		$	-		$	9,102,094
Cost of Revenues		-			8,061,782			10,159			-			8,071,941
Gross profit		-			1,038,294			(8,141	)		-			1,030,153
Operating expenses		8,374			1,202,101			23,641			176,268			1,410,384
Income (loss) from operations		(8,374	)		(163,807	)		(31,782	)		(176,268	)		(380,231	)
Net income (loss)	$	(8,213	)	$	(147,074	)	$	(31,781	)	$	(816,950	)	$	(1,004,018	)

	For the three months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	-		$	2,058,179		$	-		$	-		$	2,058,179
Cost of Revenues		-			-			1,788,635			-			-			1,788,635
Gross profit (loss)		-			-			269,544			-			-			269,544
Operating expenses		9,887			1,401			533,847			138			33,336			578,609
Income (loss) from operations		(9,887	)		(1,401	)		(264,303	)		(138	)		(33,336	)		(309,065)
Net income (loss)	$	(10,263	)	$	(1,399	)	$	(242,998	)	$	(26	)	$	(183,111	)	$	(437,797	)

F-36

	For the three months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	3,160,474		$	272		$	-		$	3,160,746
Cost of Revenues		-			2,802,520			(23	)		-			2,802,497
Gross profit (loss)		-			357,954			295			-			358,249
Operating expenses		2,842			428,842			5,893			37,666			475,243
Income (loss) from operations		(2,842	)		(70,888	)		(5,598	)		(37,666	)		(116,994	)
Net income (loss)	$	(2,841	)	$	(26,820	)	$	(5,598	)	$	(80,335	)	$	(115,594	)

NOTE 16- COMMITMENTS AND CONTINGENCIES

Lease commitment

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $295 (RMB2,000) until July 20, 2022.

The future minimum lease payments for non-cancelable operating leases held by the Group as of March 31,2022 was $295, which will be paid during June 2022.

F-37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein. We caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or our behalf. We disclaim any obligation to update forward-looking statements.

“Ionix“, "the Company,” “we,”or “our”are to Ionix Technology, Inc.a company incorporated in Nevada with limited liability on March 11, 2011. 

And “the Group,”or “our Group,” are to the Company, and, where the context requires ,its consolidated subsidiaries, including its variable interest entities and their subsidiaries, from time to time;  

“variable interest entities,or"VIE" are to Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”),a company incorporated under the laws of the PRC on June 28,2006, which has been controlled through VIE agreements by the Company since December 27, 2018. Fangguan Electronics is our variable interest entity, the financial results of which are consolidated into our consolidated financial statements as if it is our subsidiary.

Ionix is the entity in which investors are purchasing their interest.

The investors and the potential investors are advised to exercise causation when trading in the shares of Ionix Technology, Inc. because of the following factors:

The Company is not a Chinese operating company but a Nevada holding company with operations conducted by the subsidiaries of the Company and through contractual arrangements with a variable interest entity (VIE) based in China. This structure involves unique risks to investors. Even for the Group the VIE structure is not used to replicate foreign investment in Chinese-based companies where Chinese law prohibits direct foreign investment in the operating companies, investors of the Company may still never directly hold equity interests in the VIE. Chinese regulatory authorities could disallow this structure, which would likely result in a material change in the Company's operations and/or value of the common stock of the Company, including that it could cause the value of such securities to significantly decline or become worthless.

See “Risks associated with the VIE structure” in the footnotes section entitled “NOTE 3 - VARIABLE INTEREST ENTITY of this 10Q for a discussion of certain risk factors that should be considered by the potential investors or the investors of the Company.

Legal And Operational Risks Associated with being Based In China

Risks Related to new laws,or regulations of PRC:

The constant developments in the political and economic policies of the PRC government which may materially and adversely affect the Group's business, financial condition and results of operations

All of the Group's operations are conducted in the PRC, and are governed by PRC laws, rules and regulations.

Our PRC subsidiaries are subject to laws, rules and regulations applicable to foreign investment in China.

Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to the Company and its shareholders.

The PRC legal system is based on written statutes .Its court decisions have limited precedential value. The PRC legal system is evolving rapidly, and the interpretations of many laws, regulations and rules may contain inconsistencies and enforcement of these laws, regulations and rules involves uncertainties.

From time to time, the Group may have to resort to administrative and court proceedings to enforce the legal rights of the Group. However, since PRC judicial and administrative authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to predict the outcome of a judicial or administrative proceeding than in more developed legal systems. Furthermore, the PRC legal system is based, in part, on government policies and internal rules, some of which are not published in a timely manner, or at all, but which may have retroactive effect. As a result, the Group may not always be aware of any potential violation of these policies and rules. Such unpredictability towards the Group's contractual, property (including intellectual property) and procedural rights could adversely affect the Group 's business and impede its ability to continue the operations. 

38

The relevant new laws,or regulations of PRC issued recently are listed as below:

a.The Opinions on Intensifying Crack Down on Illegal Securities Activities issued on July 6, 2021 called for:

• tightening oversight of data security, crossborder data flow and administration of classified information, as well as amendments to relevant regulation to specify responsibilities of overseas listed Chinese companies with respect to data security and information security;

• enhanced oversight of overseas listed companies as well as overseas equity fundraising and listing by Chinese companies; and

• extraterritorial application of China’s securities laws

These laws and regulations can be complex and stringent, and are subject to change and uncertain interpretation, which may affect the Group's business.

b. On December 19, 2020, Chinese government promulgated the Foreign Investment Security Review Measures, which took effect on January 18, 2021. Under the Foreign Investment Security Review Measures, investments in military, national defense related areas or in locations in proximity to military facilities, or investments that would result in acquiring the actual control of assets in certain key sectors, such as critical agricultural products, energy and resources, equipment manufacturing, infrastructure, transport, cultural products and services, IT, Internet products and services, financial services and technology sectors, are required to be approved by designated governmental authorities in advance. Although the term “investment through other means” is not clearly defined under the Foreign Investment Security Review Measures, we cannot rule out the possibility that control through contractual arrangement may be regarded as a form of actual control and therefore require approval from the competent governmental authority. If the VIE structure of the Group were to be deemed as a method of foreign investment under any future laws, regulations and rules, and because the VIE business operations in our Group were not to fall under the “negative list” for foreign investment, it would not materially adversely affect the Group's current corporate structure, business, financial condition and results of operations.

c. In April 2021, the PRC government released the second draft of the personal information protection law, or the Draft Personal Information Protection Law for public comment. The Draft Personal Information Protection Law provides for various requirements on personal information protection, including legal bases for data collection and processing, requirements on data localization and cross-border data transfer, and requirements for consent and requirements on processing sensitive personal information.

d. In January 2020, the PRC government published the draft amendments to the PRC Anti-monopoly Law, to propose to increase legal liability for certain violations by introducing higher penalties and criminal liabilities for monopolistic behaviors.

The Group (including the VIE whose business are not subject to foreign investment restrictions ) neither involved any IT, Internet products or services , nor had concerns on the monopolistic behaviors and the unauthorized use, loss or leak of user data.

Hence neither the amended PRC Anti-monopoly Law nor the Data Security Law have any impact on the Group’s ability to conduct its business, accept foreign investments, or list on an U.S. or other foreign exchange.

e.In light of recent events indicating greater oversight by the Cyberspace Administration of China over data security, particularly for companies seeking to list on a foreign exchange, based on the fact that the Group neither possesses any personal information of any users nor makes any procurement of network product, this oversight barely have any impacts on its business. The Group has been fully compliant with the regulations and policies that have been issued by the CAC to date.

Issues on foreign exchange:

Ionix is a holding company with no material operations of its own. The Group did conduct our operations primarily through our PRC subsidiaries and the VIE in China. As a result, the Company’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries. If our existing PRC subsidiaries or the VIE incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to the Company. In addition, these PRC subsidiaries are permitted to pay dividends to the Company only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, all the PRC subsidiaries and the VIE in China are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital. In addition, the PRC subsidiaries may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and the VIE may allocate a portion of its after-tax profits based on PRC accounting standards to a surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange of the PRC ("SAFE").Neither the PRC subsidiaries nor VIE have paid any dividends.

39

PRC regulations relating to investments in offshore companies by PRC residents may limit the Company's ability to inject capital in the PRC subsidiaries or limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits. These risks may have a material adverse effect on the Group's business, financial condition and results of operations.

The Group primarily generate the cash flow directly through the VIE and subsidiaries. The Group have not relied on VIE agreements to transfer cash flow from the VIE to the whole-owned subsidiaries. The Company funded the strategic acquisitions and investments primarily from cash generated from the Group's operations and through debt and equity financing.

We expect to fund additional investments through cash generated from our operations and through debt and equity financing when opportunities arise in the future.

Restrictions on currency exchange or outbound capital flows may limit the Group's ability to utilize the PRC revenue effectively.

All of the Group's revenue is denominated in Renminbi. The Renminbi is currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but requires approval from or registration with appropriate government authorities or designated banks under the “capital account,” which includes foreign direct investment and loans, including loans the Group may secure from the PRC subsidiaries or variable interest entities. Currently, the PRC subsidiaries, that are foreign invested enterprises, may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to the Company, without the approval of SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate the Group's ability to purchase foreign currencies in the future for current account transactions.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by investment in PRC entities by offshore holding companies, it is possible that the Company is not able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by the Company to the PRC subsidiary or with respect to future capital contributions by the Company to the PRC subsidiary. If we fail to complete such registrations or obtain such approvals, the Group's ability to use the proceeds received from the equity offering and notes offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect the Group's liquidity and ability to fund and expand business.

Governmental control of currency conversion may limit the Group's ability to utilize the revenues effectively and affect the value of the company shareholders' investment.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. The Group receive substantially all of our revenues in Renminbi.

Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval of SAFE by complying with certain procedural requirements. Specifically, under the existing exchange restrictions, without prior approval of SAFE, cash generated from the operations of PRC subsidiaries in China may be used to pay dividends to the company. However, approval from or registration with appropriate government authorities is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. As a result, the Company will need to obtain SAFE approval or registration to use cash generated from the operations of the PRC subsidiaries and VIEs to pay off their respective debt in a currency other than Renminbi owed to entities outside China, or to make other capital expenditure if any.

In light of the flood of capital outflows of China in 2016 due to the weakening RMB, the PRC payments outside China in a currency other than Renminbi, PRC government has imposed more restrictive foreign exchange policies and stepped up scrutiny of major outbound capital movement including overseas direct investment.

More restrictions and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital account.

The PRC government may at its discretion further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents the Group from obtaining sufficient foreign currencies to satisfy Group's foreign currency demands, the Company may not be able to pay dividends in foreign currencies to the shareholders of the Company.

40

Within the Group structure:

During the term of the equity pledge agreements, the Company has the right to receive all of the dividends and profits distributed from the VIE on the pledged equity interests. The pledge will remain binding until the VIE and the Shareholders of the VIE discharge all their obligations under the contractual arrangements. The Company believes that the each of the contractual arrangements (including the equity pledge agreement ) constitutes valid and legally binding obligations of each party to such contractual arrangements under PRC laws.

However, the interpretation and implementation of the laws and regulations in the PRC and their application on the legality, binding effect and enforceability of contracts are subject to the discretion of competent PRC authorities, and therefore there is no assurance that relevant PRC authorities will take the same position as the Company herein in respect of the legality, binding effect and enforceability of each of the contractual arrangements. Meanwhile, since the PRC legal system continues to evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to the Company to enforce the contractual arrangements should the VIE or the shareholders of the VIE fail to perform their obligations under those arrangements.

The Company currently intend to retain most, if not all, of the Group's available funds and any future earnings to fund the development and growth of the Group's business. As a result, the Company does not expect to pay any cash dividends in the foreseeable future.

Under the exclusive technology support services agreement between the Company and the VIE, the Company does have the exclusive right through the relevant subsidiaries to provide the VIE the consulting and services related to, among other things, research and development, system operation, advertising, internal training and technical support. These VIE shall pay the Company an annual service fee, which are subject to the adjustment by the Company at its sole discretion. This agreement will remain effective with no express expiration unless as earlier terminated in writing by the Company (or through the relevant subsidiary if applicable) and the VIE.

The Group primarily generate the cash flow directly through our VIE and subsidiaries, and does not rely on the VIE agreements to transfer cash flow from the VIE to the whole-owned subsidiaries or the Company. The Group funded our strategic acquisitions and investments primarily from cash generated from the operations and through debt and equity financing.

And the Group does expect to fund additional investments through cash generated from the operations and through debt and equity financing when opportunities arise in the future. And none of any transfers, dividends, or distributions have been made to date.

Results of Operation For the Three and Nine Months Ended March 31,2022 and 2021

The period of from the early 2020 to the present was challenging and disruptive for the world, with the COVID-19 pandemic adding to the headwind of an already challenging global economy. Almost no industry was unaffected by the pandemic. The unprecedentedly adverse global operating environment had a major impact on the Group's business.

Nevertheless, the Group survived and thrived against all odds.  

Based on the Group’s well-established reputation in the market, management of the Company believes that the demand for the Group products would increase during the economic rebounding and the overall financial and business positions of the Company would remain sound, and the Company is well positioned to take advantage of any upturn in the market.

Considering that such effects of COVID-19 is temporary and will not have major impact on the long-term performance , the Group believes that the increase in turnover of the VIE as caused by the gradual recovery of the economy of PRC , would maintain in the future. As such, the Group remains cautiously optimistic about its sustainable development.

Given the dynamic nature of the COVID-19 outbreak, it is not practicable to provide a reasonable estimate of its impacts on the Group’s financial position, cash flows and operating results at the present.

Revenues

During the three months ended March 31,2022 and 2021, total revenues were $2,058,179 and $3,160,746 respectively. The total revenues decreased by $1,102,567 or 35% from the three months ended March 31,2021 to the three months ended March 31,2022.

41

Among the significant decrease of $1,102,567 in total revenues for the three months ended March 31,2022, the decrease of $1,102,298 came from the increase in revenue of Fangguan Electronics which was acquired on December 27, 2018,and partially attributed to the decrease of $272 in service contract segments.

The decrease in total revenues during the three months ended March 31,2022 can be directly attributed to the fact that since February 2022 PRC government imposed a citywide lockdown in Changchun （where both Fangguan Electronics and Fangguan Photoelectric are located）in an effort to fight against the spread of the Omicron coronavirus variant. It caused the significant adverse effects on the business of the Group.

During the nine months ended March 31,2022 and 2021, total revenues were $10,551,867 and $9,102,094, respectively. The total revenues increased by $1,449,773 or 16% from the nine months ended March 31,2021 to the nine months ended March 31,2022.

Among the significant increase of $1,449,773 in total revenues for the nine months ended March 31,2022, the increase of $1,447,314 came from the increase in revenue of Fangguan Electronics which was acquired on December 27, 2018,and partially offset by the decrease of $2,018 in service contract segments.

In addition, the increases in total revenues for the nine months ended March 31,2022 were partially attributed to the increase in revenues of $4,477 sourced from lithium battery - related business which was the new business segment established by the Company in 2021.

The increase in total revenues during the nine months ended March 31,2022 was attributed to the fact that during the latter half of the calendar year of 2021 the impact of COVID-19 pandemic had alleviated, resulting in the rebound of the economy and the increased operating revenue of the Group.

Cost of Revenue

Cost of revenues included the cost of raw materials, labor, depreciation, overhead and finished products purchased.

During the three months ended March 31,2022 and 2021, the total cost of revenues was $1,788,635 and $2,802,497 respectively. The total cost of revenues decreased by $1,013,862 or 36% from the three months ended March 31,2021 to the three months ended March 31,2022.

Among the significant decrease of $1,013,862 in total cost of revenues for the three months ended March 31,2022, $1,103,885 decreases were due to the decrease of the cost of revenues from Fangguan Electronics which was acquired on December 27, 2018.

 The decrease in cost of revenues from the three months ended March 31,2021 to the three months ended March 31,2022

can be directly attributed to the decrease of revenues during the corresponding periods.

During the nine months ended March 31,2022 and 2021, the total cost of revenues was $9,528,438 and $8,071,941 , respectively. The total cost of revenues increased by $1,456,497 or 18% from the nine months ended March 31,2021 to the nine months ended March 31,2022.

Among the significant increase of $1,456,497 in total cost of revenues for the nine months ended March 31,2022, $1,462,030 increases were due to the increase of the cost of revenues from Fangguan Electronics which was acquired on December 27, 2018.

The decrease in cost of revenues from the nine months ended March 31,2021 to the nine months ended March 31,2022 can be directly attributed to the decrease of revenues during the corresponding periods.

Gross Profit

During the three months ended March 31,2022 and 2021, the gross profit was $269,544 and $358,249 , respectively.

42

The gross profit decreased by 25% from the three months ended March 31,2021 to the three months ended March 31,2022.

Our gross profit margin was at 13% during the three months ended March 31,2022 as compared to 11% for the three months ended March 31,2021.

During the nine months ended March 31,2022 and 2021, the gross profit was $1,023,429 and $1,030,153 , respectively.

The gross profit decreased by 1% from the nine months ended March 31,2021 to the nine months ended March 31,2022.

Our gross profit margin was at 10% during the nine months ended March 31,2022 as compared to 11% for the nine months ended March 31,2021.  

Selling, General and Administrative Expenses

Our selling, general and administrative expenses are mainly comprised of payroll expenses, transportation, office expense, professional fees, freight and shipping costs, rent, and other miscellaneous expenses.

During the three months ended March 31,2022 and 2021, selling, general and administrative expenses were $457,213 and $327,372 , respectively.

The increase in selling, general and administrative expenses can be attributed to the fact that the Group ,especially Fangguan Electronics ,devoted greater efforts on market development to secure more business opportunities in the severe competition during the three months ended March 31,2022.

43

During the nine months ended March 31,2022, and 2021, selling, general and administrative expenses were $1,253,659 and $985,273 , respectively.

The increase in selling, general and administrative expenses can be attributed to the fact that the Group ,especially Fangguan Electronics ,devoted greater efforts on market development to secure more business opportunities in the severe competition during the nine months ended March 31,2022. 

Research and Development Expenses

Our research and development expenses are mainly comprised of payroll expenses of research staff, costs of materials used for research and other miscellaneous expenses.

During the three months ended March 31,2022 and 2021, research and development expenses were $121,396 and $147,871, respectively. The decrease in research and development expenses can be attributed to the stricter cost control during the three months ended March 31,2022.

During the nine months ended March 31,2022 and 2021, research and development expenses were $519,015 and $425,111 respectively. All research and development expenses were incurred by Fangguan Electronics (a variable interest entity of the Company since December 27, 2018). The increase in research and development expenses can be attributed to the increase of materials expenditures used for research during the nine months ended March 31,2022.

Other Incomes (Expenses)

Other expenses consisted of interest expense, net of interest income. Other incomes consisted primarily of subsidy income and gain on extinguishment of debt, net of loss on extinguishment of debt.

During the three months ended March 31,2022 and 2021, other incomes (expenses) were $(128,587) and $3,349 respectively. The other income decreased by $131,936 or 3940% from the three months ended March 31,2021 to the three months ended March 31,2022.

During the nine months ended March 31,2022 and 2021, other incomes (expenses) were $ (258,655) and $(647,342) respectively. The other expense decreased by $388,687 or 60% from the nine months ended March 31,2021 to the nine months ended March 31,2022.

The subsidy income was government subsidies received by Fangguan Electronics and Baileqi Electronic during the three and nine months ended March 31,2022 and 2021.

The change in fair value of derivative liability can be attributed to the fact that there were convertible notes during the three and nine months ended March 31,2021 while there is no any convertible note during the three and nine months ended March 31,2022.

Net Income (Loss)

During the three months ended March 31,2022 and 2021, the net income (loss) of the Group was $(437,797) and $(115,594), respectively. The total net loss increased by $322,203 or 279% from the three months ended March 31,2021 to the three months ended March 31,2022.

During the nine months ended March 31,2022 and 2021, our net income (loss) was $(1,075,741) and $(1,004,018) , respectively. The total net loss was increased by $71,723 or 7% from the nine months ended March 31,2021 to the nine months ended March 31,2022.

The increases in net loss during the three and nine months ended March 31,2022 can be directly attributed to the fact that since February 2022 PRC government imposed a citywide lockdown in Changchun （where both Fangguan Electronics and Fangguan Photoelectric are located）in an effort to fight against the spread of the Omicron coronavirus variant. It caused the significant adverse effects on the business of the Group.

44

Liquidity and Capital Resources

Cash Flow from Operating Activities

During the nine months ended March 31,2022, net cash used in operating activities was $1,218,987 compared to the cash used in operating activities of $1,411,451 for the nine months ended March 31,2021. The change was mainly due to a decrease in both accounts receivable and advance to supplier-non- related parties ,partially offset by a decrease in account payable during the nine months ended March 31,2022 as compared to the nine months ended March 31,2021.

Cash Flow from Investing Activities

During the nine months ended March 31,2022, net cash used in investing activities was $153,659 compared to net cash used in investing activities of $192,524 during the nine months ended March 31,2021. The change was primarily due to the fact that there were fewer purchase of equipments during the nine months ended March 31,2022 as compared to the nine months ended March 31,2021.

Cash Flow from Financing Activities

During the nine months ended March 31,2022, cash provided by financing activities was $1,576,064 compared to net cash provided by financing activities of $787,342 during the nine months ended March 31,2021. The change was primarily due to the proceeds from issuance of promissory notes ,the proceeds from capital injection in regard with the Registered Capital Increase of Fangguan Electronics , and the proceeds from bank loans during the nine months ended March 31,2022.

As of March 31,2022, we have a working capital of $3,977,819.

Our total current liabilities as of March 31,2022 were $8,351,275 and mainly consisted of $1,575,250 for short-term bank loans, $2,448,506 in accounts payable, the amount due to related parties of $2,650,812, advance from customers of $446,855 and the self-amortized promissory notes of $999,477. The Company’s major shareholder is committed to providing for our minimum working capital needs for the next 12 months, and we do not expect the previous related party loan be payable for the next 12 months. However, we do not have a formal agreement that states any of these facts. The remaining balance of our current liabilities relates to audit and consulting fees and such payments are due on demand and we expect to settle such amounts on a timely basis based upon shareholder loans to be granted to us in the next 12 months.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. The Group had an accumulated deficit of $1,220,150 as of March 31,2022. The Group incurred loss from operation and did not generate sufficient cash flow from its operating activities for the nine months ended March 31,2022. These factors, among others, raise substantial doubt about the Group’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Group plans to rely on the proceeds from loans from both unrelated and related parties to provide the resources necessary to fund the development of the business plan and operations. The Group is also pursuing other revenue streams which could include strategic acquisitions or possible joint ventures of other business segments. However, no assurance can be given that the Group will be successful in raising additional capital.

Future Financings

The Group considers taking on any long-term or short-term debt from financial institutions in the immediate future. Besides for the bank funding, the Group are dependent upon the directors and the major shareholders of the Company to provide continued funding and capital resources. If continued funding and capital resources are unavailable at reasonable terms, the Group may not be able to implement our plan of operations. The financial statements do not include any adjustments related to the recoverability of assets and classification of liabilities that might be necessary should the Group be unable to continue in operation.

45

Off-Balance Sheet Arrangements

The Group does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Group’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

The critical accounting policies of the Group are disclosed Note 2 to the consolidated financial statements.

Recently Issued Accounting Pronouncements

There were no recent accounting pronouncements that have or will have a material effect on the Group’s financial position or results of operations.

Contractual Obligations

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31,2022.

As of March 31, 2022, management identified the following weaknesses, which were deemed to be material weaknesses in internal controls:

1. Due to the size of the Company and available resources, there are limited personnel to assist with the accounting and financial reporting function, which results in a lack of segregation of duties.

2. We did not implement appropriate information technology controls – As March 31, 2022, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company's data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.

The Company plans to address these weaknesses in 2022-2023 by adding additional personnel as resources permit and evaluating options for implementing information technology control.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting subsequent to the fiscal year ended June 30, 2021, which were identified in connection with our management’ evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Group is not required by current SEC rules to include, and does not include, an auditor's attestation report. The Group's registered public accounting firm has not attested to Management's reports on the Group's internal control over financial reporting.

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

Our management, including our Principal Executive Officer and Principal Financial Officer, does not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. 

46

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Group may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Group cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

The Group knows of no material, existing or pending legal proceedings against the Group, nor is the Group involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to the Group's interest. 

Item 1A. Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 

(a) Recent Sales of Unregistered Equity Securities 

The following sets forth information regarding all unregistered securities issued since July 1, 2020:

On July 9, 2020, the Company issued a total of 42,079 shares of common stock to Power Up Lending Group Ltd for the conversion of debt in the principal amount of $20,000 according to the conditions of the convertible note dated as July 25, 2019.

On July 13, 2020, the Company issued a total of 68,500 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $37,503.75 according to the conditions of the convertible note dated as January 10, 2020.

On August 19, 2020, the Company issued a total of 222,891 shares of common stock to Power Up Lending Group Ltd for the conversion of debt in $19,000 of the principal amount of the Note together with $4,916.22 of accrued and unpaid interest thereto, totaling $23,916.22 according to the conditions of the convertible note dated as July 25, 2019.

On August 20, 2020, the Company issued a total of 600,000 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $54,180 according to the conditions of the convertible note dated as January 10, 2020.

On September 1, 2020, the Company issued a total of 75,000 shares of common stock to Firstfire Global Opportunities Fund LLC for the conversion of debt in the principal amount of $10,200 according to the conditions of the convertible note dated as September 11, 2019.

On September 14, 2020, the Company issued a total of 350,000 shares of common stock to Firstfire Global Opportunities Fund LLC for the conversion of debt in the principal amount of $13,550 according to the conditions of the convertible note dated as September 11, 2019.

On September 24, 2020, the Company issued a total of 568,182 shares of common stock to Morningview Financial, LLC for the conversion of debt in the principal amount of $15,000 according to the conditions of the convertible note dated as November 20, 2019.

On September 24, 2020, the Company issued a total of 400,000 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $6,065.11 according to the conditions of the convertible note dated as January 10, 2020.

On October 12, 2020, the Company issued a total of 650,000 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $14,844.39 according to the conditions of the convertible note dated as January 10, 2020.

On October 16, 2020, the Company issued a total of 181,500 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $2,722.5 according to the conditions of the convertible note dated as January 10, 2020.

47

On October 16, 2020, the Company issued a total of 1,200,000 shares of common stock to Firstfire Global Opportunities Fund LLC for the conversion of debt in the principal amount of $14,100 according to the conditions of the convertible note dated as September 11, 2019.

On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019.

On October 19, 2020, the Company issued a total of 2,112,478 shares of common stock to Labrys Fund, LP for the conversion of debt in the principal amount of $31,674.16 according to the conditions of the convertible note dated as January 10, 2020.

On October 29, 2020, the Company issued a total of 2,500,000 shares of common stock to Firstfire Global Opportunities Fund LLC for the conversion of debt in the principal amount of $31,000 according to the conditions of the convertible note dated as September 11, 2019.

On December 5, 2020, the Company issued a total of 20,370,000 shares of common stock to five Chinese citizen subscribers for an aggregate purchase price of $305,500 at $0.015 per share, according to the conditions of the five subscription agreements dated as November 20, 2020 signed by the between the Company and the subscribers.

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the full exercise of the warrants, according to the conditions of the convertible note dated as September 11, 2019.

On December 29, 2020, the Company issued a total of 8,499,999 shares of common stock to four Chinese citizen subscribers for an aggregate purchase price of $127,500 at $0.015 per share, according to the conditions of the four subscription agreements dated as December 9, 2020 and December 28, 2020 signed by the between the Company and the subscribers.

On December 31,2020, the Company issued a total of 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) to Labrys Fund, LLP related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

On January 13, 2021, the Company issued a total of 7,000,000 shares of common stock to a Chinese citizen subscriber for an aggregate purchase price of $105,000 at $0.015 per share, according to the conditions of the subscription agreement dated as January 13, 2021 between the Company and the subscriber.

On March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) to Labrys Fund, LLP related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

On July 8, 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) to FirstFire Global Opportunities Fund, LLC related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

On October 4, 2021, the Company issued a total of 29,106,000 restricted shares of common stock to 12 individual subscribers for an aggregate purchase price of $3,492,720 at $0.12 per share, according to the conditions of the subscription agreements signed between the Company and subscribers.

On November 13, 2021, the Company and individual subscribers agreed to a voluntary unwinding of the forementioned transaction related to the subscription and purchase of an aggregate 29,106,000 shares. The Company entered into cancellation agreements with each individual pursuant to which all funds were returned to the investors and all shares were returned to our transfer agent for cancellation. Immediately prior to the decision, the Registration Statement related to the shares was voluntarily withdrawn by the Company.

On December 15, 2021, the Company issued a total of 6,580 ,000 restricted shares of common stock to a Chinese citizen subscriber for an aggregate purchase price of $394,800 at $0.06 per share, according to the conditions of the subscription agreement signed between the Company and subscriber.

48

On December 21 2021, a total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on December 21, 2020, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.

On December 30, 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) to Talos Victory Fund, LLC,related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

On January 3, 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) to Mast Hill Fund, L.P.,related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

On January 10, 2022, a total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on March 10, 2021, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.

On February 17, 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) to Blue Lake Partners, LLC related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date.

The sales of the above securities were exempt from registration under the Securities Act of 1933, as amended (Securities Act), in reliance upon Section 4(2) of the Securities Act, or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions.

Exemption From Registration. The shares of Common Stock referenced herein were issued in reliance upon one of the following exemptions:

(a)The shares of Common Stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(2) of the Securities Act of 1933, as amended, ("Securities Act"), based upon the following: (a) each of the persons to whom the shares of Common Stock were issued (each such person, an "Investor") confirmed to the Company that it or he is an "accredited investor," as defined in Rule 501 of Regulation D promulgated under the Securities Act and has such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities, (b) there was no public offering or general solicitation with respect to the offering of such shares, (c) each Investor was provided with certain disclosure materials and all other information requested with respect to the Company, (d) each Investor acknowledged that all securities being purchased were being purchased for investment intent and were "restricted securities" for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act and (e) a legend has been, or will be, placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

(b)The shares of common stock referenced herein were issued pursuant to and in accordance with Rule 506 of Regulation D and Section 4(2) of the Securities Act. We made this determination in part based on the representations of the Investor(s), which included, in pertinent part, that such Investor(s) was an “accredited investor” as defined in Rule 501(a) under the Securities Act, and upon such further representations from the Investor(s) that (a) the Investor is acquiring the securities for his, her or its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (b) the Investor agrees not to sell or otherwise transfer the purchased securities unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (c) the Investor either alone or together with its representatives has knowledge and experience in financial and business matters such that he, she or it is capable of evaluating the merits and risks of an investment in us, and (d) the Investor has no need for the liquidity in its investment in us and could afford the complete loss of such investment.  Our determination is made based further upon our action of (a) making written disclosure to each Investor prior to the closing of sale that the securities have not been registered under the Securities Act and therefore cannot be resold unless they are registered or unless an exemption from registration is available, (b) making written descriptions of the securities being offered, the use of the proceeds from the offering and any material changes in the Company’s affairs that are not disclosed in the documents furnished, and (c) placement of a legend on the certificate that evidences the securities stating that the securities have not been registered under the Securities Act and setting forth the restrictions on transferability and sale of the securities, and upon such inaction of  the Company of any general solicitation or advertising for securities herein issued in reliance upon Rule 506 of Regulation D and Section 4(2) of the Securities Act. 

49

(c) The shares of Common Stock referenced herein were issued pursuant to and in accordance with Rule 903 of Regulation S of the Act. We completed the offering of the shares pursuant to Rule 903 of Regulation S of the Act on the basis that the sale of the shares was completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the shares. Each investor represented to us that the investor was not a "U.S. person", as defined in Regulation S, and was not acquiring the shares for the account or benefit of a U.S. person. The agreement executed between us and each investor included statements that the securities had not been registered pursuant to the Act and that the securities may not be offered or sold in the United States unless the securities are registered under the Act or pursuant to an exemption from the Act. Each investor agreed by execution of the agreement for the shares: (i) to resell the securities purchased only in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an exemption from registration under the Act; (ii) that we are required to refuse to register any sale of the securities purchased unless the transfer is in accordance with the provisions of Regulation S, pursuant to registration under the Act or pursuant to an exemption from registration under the Act; and (iii) not to engage in hedging transactions with regards to the securities purchased unless in compliance with the Act. All certificates representing the shares were or upon issuance will be endorsed with a restrictive legend confirming that the securities had been issued pursuant to Regulation S of the Act and could not be resold without registration under the Act or an applicable exemption from the registration requirements of the Act. 

Item 3. Defaults Upon Senior Securities. 

None.

Item 4. Mine Safety Disclosures.

N/A.

Item 5. Other Information.

None.

50

Item 6. Exhibits.

Exhibit
Number	Description of Exhibit
3.01a	Articles of Incorporation, dated March 11, 2011	Filed with the SEC on October 13, 2017 as part of our Annual Report on Form 10-K
3.01b	Certificate of Amendment to Articles of Incorporation, dated August 7, 2014	Filed with the SEC on September 3, 2014 as part of our Current Report on Form 8-K
3.01c	Certificate of Amendment to Articles of Incorporation, dated December 3, 2015	Filed with the SEC on December 10, 2015 as part of our Current Report on Form 8-K
3.01d	Certificate of Amendment to Articles of Incorporation, dated June 7,2021	Filed with the SEC on June 11, 2021 as part of our Current Report on Form 8-K
3.02a	Bylaws	Filed with the SEC on August 23, 2011 as an exhibit to our Registration Statement on Form 10.
3.02b	Amended Bylaws, dated August 7, 2014	Filed with the SEC on September 3, 2014 as part of our Current Report on Form 8-K
10.01	Manufacturing Agreement, dated as of August 19, 2016, by and between Jiangxi Huanming Technology Limited Company and XinyuIonix Technology Company Limited.	Filed with the SEC on August 24, 2016 as part of our Current Report on Form 8-K
10.02	Share Transfer Agreement, dated as of August 19, 2016, by and between GuoEn Li and Well Best International Investment Limited	Filed with the SEC on August 24, 2016 as part of our Current Report on Form 8-K
10.03	Share Purchase Agreement dated December 27, 2018 by and between Ionix Technology, Inc., Changchun Fangguan Electronics Technology Co., Ltd. and the shareholders of Changchun Fangguan Electronics Technology Co., Ltd.	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.04	Business Operation Agreement dated December 27, 2018 by and between Changchun Fangguan Photoelectric Display Technology Co., Ltd., Changchun Fangguan Electronics Technology Co., Ltd., Jialin Liang and Xuemei Jiang.	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.05	Exclusive Technical Support Service Agreement dated December 27, 2018 by and between Changchun Fangguan Photoelectric Display Technology Co., Ltd. and Changchun Fangguan Electronics Technology Co., Ltd.	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.06	Equity Interest Purchase Agreement dated December 27, 2018 by and between Changchun Fangguan Photoelectric Display Technology Co., Ltd., Changchun Fangguan Electronics Technology Co., Ltd., Jialin Liang and Xuemei Jiang.	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.07	Equity Interest Pledge Agreement dated December 27, 2018 by and between Changchun Fangguan Photoelectric Display Technology Co., Jialin Liang and Xuemei Jiang	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K

51

10.08	Power of Attorney Agreement dated December 27, 2018 by  Xuemei Jiang	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.09	Power of Attorney Agreement dated December 27, 2018 by Jialin Liang	Filed with the SEC on December 27, 2018 as part of our Current Report on Form 8-K
10.10	Compilation of Labrys Securities Purchase Agreement, Self-Amortization Promissory Note and Other Agreements (Filed herewith)	File with SEC on January 5, 2021 as part of our Current Report on Form 8-K
21.1	List of Subsidiaries	Filed herewith.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
32.02	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.	Filed herewith.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	Filed herewith

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

52

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Ionix Technology, Inc.
Date: May 23, 2022	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief Executive Officer and Director
	(Principal Executive Officer)

Date: May 23, 2022	By:	/s/ Yue Kou
	Name:	Yue Kou
	Title:	Chief Financial Officer
	(Principal Financial and Principal Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Ionix Technology, Inc.
Date: May 23, 2022	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief Executive Officer, Director
	(Principal Executive Officer)

Date: May 23, 2022	By:	/s/ Yue Kou
	Name:	Yue Kou
	Title:	Chief Financial Officer (Principal
	Financial and Principal Accounting Officer)

53

Date: May 23, 2022	By:	/s/ Yang Yan
	Name:	Yang Yan
	Title:	President and Treasurer

Date: May 23, 2022	By:	/s/ Yubao Liu
	Name:	Yubao Liu
	Title:	Director

Date: May 23, 2022	By:	/s/ Jialin Liang
	Name:	Jialin Liang
	Title:	Director

Date: May 23, 2022	By:	/s/ Xuemei Jiang
	Name:	Xuemei Jiang
	Title:	Director

Date: May 23, 2022	By:	/s/ Yongping Wang
	Name:	Yongping Wang
	Title:	Independent Director

Date: May 23, 2022	By:	/s/ Yongsheng Fu
	Name:	Yongsheng Fu
	Title:	Independent Director

Date: May 23, 2022	By:	/s/ Zhenyu Wang
	Name:	Zhenyu Wang
	Title:	Independent Director

Date: May 23, 2022	By:	/s/ Xiaolin Wei
	Name:	Xiaolin Wei
	Title:	Independent Director

Date: May 23, 2022	By:	/s/ Liyan Wang
	Name:	LiyanWang
	Title:	Independent Director

54

EX-21.1

Exhibit 21.1

 

# since December 28,2021, the ratio of 95.14% has been changed into 94.55%
 

LIST OF SUBSIDIARIES OF IONIX TECHNOLOGY, INC.

(As of May 23, 2022)

1.Well Best International Investment Limited.

Subsidiary of: Ionix Technology, Inc. (Wholly Owned by Ionix)·Jurisdiction of Formation: Hong Kong Special Administrative Region, September 14, 2015.Names under which business is conducted: Well Best International Investment Limited

2.Lisite Science Technology (Shenzhen) Co., Ltd.

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best).Jurisdiction of Formation: PRC, June 20, 2016.Names under which business is conducted: Lisite Science Technology (Shenzhen) Co., Ltd

3.Shenzhen Baileqi Electronic Technology Co., Ltd.

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best)·Jurisdiction of Formation:  PRC, August 8, 2016.Names under which business is conducted: Shenzhen Baileqi Electronic Technology Co., Ltd.

4.Welly Surplus International Limited.

Subsidiary of: Welly Surplus International Limited (99.9% Owned by Ionix).Jurisdiction of Formation: Hong Kong,  January 18, 2016.Names under which business is conducted: Welly Suplus International Limited.

5.Changchun Fangguan Photoelectric Display Technology Co., Ltd.

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best)·Jurisdiction of Formation: PRC, February 1, 2018.Names under which business is conducted: Changchun Fangguan Photoelectric Display Technology Co., Ltd.

6.Dalian Shizhe New Energy Technology Co., Ltd.

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best)·Jurisdiction of Formation: PRC, June 28, 2018.Names under which business is conducted: Dalian Shizhe New Energy Technology Co., Ltd.

7.Shijirun (Yixing) Technology, Ltd.

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best)·Jurisdiction of Formation: PRC, February 7,2021.Names under which business is conducted: Shijirun (Yixing) Technology, Ltd.

8.Changchun Fangguan Electronics Technology Co., Ltd

On December 27, 2018, the Company ( through Changchun Fangguan Photoelectric Display Technology Co., Ltd.) entered into VIE agreements with two shareholders of Changchun Fangguan Electronics Technology Co., Ltd.to control 94.55% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Changchun Fangguan Electronics.

9.Huixiang Energy Technology (Suzhou) Co., Ltd

Subsidiary of: Well Best International Investment Limited (Wholly Owned by Well Best)·Jurisdiction of Formation: PRC, March 18,2021.Names under which business is conducted: Huixiang Energy Technology (Suzhou) Co., Ltd

EX-31.01

EXHIBIT 31.01

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Cheng Li, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the period ended March 31,2022;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.      As the Registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.      Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.      As the Registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

a.      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.      Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

	Ionix Technology, Inc.
Date: May 23, 2022	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief (Principal) Executive Officer

EX-31.02

EXHIBIT 31.02

CERTIFICATION OF

PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, Yue Kou, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the period ended March 31,2022;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4.      As the Registrant’s certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.      Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5.      As the Registrant’s certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

a.      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

b.      Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

	Ionix Technology, Inc.
Date: May 23, 2022	By:	/s/ Yue Kou
	Name:  Yue Kou Title:   Chief (Principal) Accounting and Financial Officer

EX-32.01

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Cheng Li, the Chief Executive Officer of Ionix Technology, Inc., certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of the Registrant for the period ended March 31,2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and  results of operations of the Registrant.

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

	Ionix Technology, Inc.
Date: May 23, 2022
	By:	/s/ Cheng Li
	Name:  Cheng Li Title:    Chief (Principal) Executive Officer

EX-32.02

EXHIBIT 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Yue Kou, the Chief Accounting and Financial Officer of Ionix Technology, Inc., certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of the Registrant for the period ended March 31,2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and  results of operations of the Registrant.

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 23, 2022	Ionix Technology, Inc.
	By:	/s/  Yue Kou
	Name:  Yue Kou Title:    Chief (Principal) Accounting and Financial Officer

XML

Cover - shares	9 Months Ended
	Mar. 31, 2022	May 16, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2022
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--06-30
Entity File Number	000-54485
Entity Registrant Name	IONIX TECHNOLOGY, INC.
Entity Central Index Key	0001528308
Entity Tax Identification Number	45-0713638
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Rm 608, Block B, Times Square No.50 People Road
Entity Address, Address Line Two	Zhongshan District
Entity Address, Address Line Three	Dalian City
Entity Address, City or Town	Liaoning Province
Entity Address, Country	CN
Entity Address, Postal Zip Code	116001
City Area Code	86
Local Phone Number	411-88079120
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	IINX
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		176,989,156

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2022	Jun. 30, 2021
Current Assets:
Cash and cash equivalents	$ 1,141,244	$ 731,819
Notes receivable	196,091	76,743
Accounts receivable	4,340,702	4,936,974
Inventory	5,052,260	5,454,371
Advances to suppliers - non-related parties	468,797	782,481
- related parties	441,538	434,200
Prepaid expenses and other current assets	688,462	478,830
Total Current Assets	12,329,094	12,895,418
Property, plant and equipment, net	6,528,852	6,792,315
Intangible assets, net	1,510,225	1,508,583
Long-term prepaid expenses	529,926	491,015
Deferred tax assets	50,988	50,105
Total Assets	20,949,085	21,737,436
Current Liabilities:
Short-term bank loan	1,575,250	904,832
Accounts payable	2,448,506	4,942,881
Advance from customers	446,855	334,101
Promissory notes payable, net of debt discount and loan cost	999,477	533,316
Due to related parties	2,650,812	3,053,818
Accrued expenses and other current liabilities	230,375	117,450
Total Current Liabilities	8,351,275	9,886,398
Total Liabilities	8,351,275	9,886,398
Stockholders’ Equity:
Preferred stock, $.0001 par value, 5,000,000 shares authorized,   5,000,000 shares issued and outstanding	500	500
Common stock, $.0001 par value,  395,000,000 shares authorized， 176,989,156 and 164,041,058 shares issued and outstanding as of March 31, 2022 and June 30, 2021 respectively	17,699	16,404
Additional paid in capital	12,379,248	10,786,792
Retained earnings (accumulated deficit)	(1,220,150)	(144,409)
Accumulated other comprehensive income (loss)	978,552	749,790
Total Stockholders' Equity attributable to the Company	12,155,849	11,409,077
Noncontrolling interest	441,961	441,961
Total Stockholders’ Equity	12,597,810	11,851,038
Total Liabilities and Stockholders’ Equity	$ 20,949,085	$ 21,737,436

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2022	Jun. 30, 2021
Statement of Financial Position [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	5,000,000	5,000,000
Preferred Stock, Shares Outstanding	5,000,000	5,000,000
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common stock, authorized	395,000,000	395,000,000
Common Stock, Shares, Issued	176,989,156	164,041,058
Common Stock, Shares, Outstanding	176,989,156	164,041,058

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenues (See Note 2 and Note 10 for related party amounts)	$ 2,058,179	$ 3,160,746	$ 10,551,867	$ 9,102,094
Cost of Revenues (See Note 10 for related party amounts)	1,788,635	2,802,497	9,528,438	8,071,941
Gross profit	269,544	358,249	1,023,429	1,030,153
Operating expenses
Selling, general and administrative expense	457,213	327,372	1,253,659	985,273
Research and development expense	121,396	147,871	519,015	425,111
Total operating expenses	578,609	475,243	1,772,674	1,410,384
Income (loss) from operations	(309,065)	(116,994)	(749,245)	(380,231)
Other income (expense):
Interest expense, net of interest income	(180,726)	(42,441)	(443,052)	(262,174)
Subsidy income	37,139	45,790	184,397	59,876
Change in fair value of derivative liability				(647,632)
Gain (loss) on extinguishment of debt	15,000			202,588
Total other income (expense)	(128,587)	3,349	(258,655)	(647,342)
Income (loss) before income tax expense (benefit)	(437,652)	(113,645)	(1,007,900)	(1,027,573)
Income tax expense (benefit)	145	1,949	67,841	(23,555)
Net income (loss)	(437,797)	(115,594)	(1,075,741)	(1,004,018)
Other comprehensive income (loss)
Foreign currency translation adjustment	58,337	(29,945)	228,762	865,206
Comprehensive loss	(379,460)	(145,539)	(846,979)	(138,812)
Less: Comprehensive income attributable to noncontrolling interest		19,632		19,632
Comprehensive loss attributable to common stockholders of the Company	$ (379,460)	$ (165,171)	$ (846,979)	$ (158,444)
Earnings (Loss) Per Share - Basic	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding - Basic	139,844,550	161,911,380	142,392,564	134,708,314
Earnings (Loss) Per Share - Diluted	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding - Diluted	137,978,627	161,911,380	140,883,445	134,708,314

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Jun. 30, 2020	$ 500	$ 11,417	$ 9,243,557	$ 262,198	$ (357,011)	$ 441,961	$ 9,602,622
Shares, Outstanding, Beginning Balance at Jun. 30, 2020	5,000,000	114,174,265
Net loss				(532,306)			(532,306)
Foreign currency translation adjustment					430,281		430,281
Stock warrants issued with convertible notes
Issuance of common stock for advisory services
Issuance of common stock for conversion of convertible notes		$ 233	390,768				391,001
Issuance of common stock for conversion of convertible notes (in shares)		2,326,652
Ending balance, value at Sep. 30, 2020	$ 500	$ 11,650	9,634,325	(270,108)	73,270	441,961	9,891,598
Shares, Outstanding, Ending Balance at Sep. 30, 2020	5,000,000	116,500,917
Beginning balance, value at Jun. 30, 2020	$ 500	$ 11,417	9,243,557	262,198	(357,011)	441,961	9,602,622
Shares, Outstanding, Beginning Balance at Jun. 30, 2020	5,000,000	114,174,265
Net loss							(1,004,018)
Foreign currency translation adjustment							865,206
Ending balance, value at Mar. 31, 2021	$ 500	$ 16,404	10,786,792	(741,820)	488,563	461,593	11,012,032
Shares, Outstanding, Ending Balance at Mar. 31, 2021		177,172,058
Beginning balance, value at Sep. 30, 2020	$ 500	$ 11,650	9,634,325	(270,108)	73,270	441,961	9,891,598
Shares, Outstanding, Beginning Balance at Sep. 30, 2020	5,000,000	116,500,917
Issuance of common stock for commitment shares for promissory note		$ 157	67,903				68,060
Issuance of common stock for commitment shares for promissory note (in shares)		1,567,164
Net loss				(356,118)			(356,118)
Foreign currency translation adjustment					464,870		464,870
Issuance of common stock for commitment shares for private placement		$ 2,887	430,113				433,000
Issuance Of Common Stock For Private Placement In Shares		28,869,999
Issuance of common stock for conversion of convertible notes (in shares)		7,143,978
Issuance of common stock for conversion of convertible notes		$ 714	455,429				456,143
Issuance of common stock for exercise of warrants		$ 150	66,878				67,028
Issuance of common stock for exercise of warrants (in shares)		1,500,000
Settlement of warrants in relation to extinguishment of debt			(59,163)				(59,163)
Ending balance, value at Dec. 31, 2020	$ 500	$ 15,558	10,595,485	(626,226)	538,140	441,961	10,965,418
Shares, Outstanding, Ending Balance at Dec. 31, 2020	5,000,000	155,582,058
Issuance of common stock for commitment shares for promissory note		$ 146	87,007				87,153
Issuance of common stock for commitment shares for promissory note (in shares)		14,590,000
Net loss				(115,594)			(115,594)
Foreign currency translation adjustment					(49,577)	19,632	(29,945)
Issuance of common stock for commitment shares for private placement		$ 700	104,300				105,000
Issuance Of Common Stock For Private Placement In Shares		7,000,000
Ending balance, value at Mar. 31, 2021	500	$ 16,404	10,786,792	(741,820)	488,563	461,593	11,012,032
Shares, Outstanding, Ending Balance at Mar. 31, 2021		177,172,058
Beginning balance, value at Jun. 30, 2021	$ 500	$ 16,404	10,786,792	(144,409)	749,790	441,961	11,851,038
Shares, Outstanding, Beginning Balance at Jun. 30, 2021	5,000,000	164,041,058
Issuance of common stock for commitment shares for promissory note		$ 134	50,867				51,001
Issuance of common stock for commitment shares for promissory note (in shares)		1,342,000
Net loss				(540,199)			(540,199)
Foreign currency translation adjustment					(49,923)		(49,923)
Ending balance, value at Sep. 30, 2021	$ 500	$ 16,538	10,837,659	(684,608)	699,867	441,961	11,311,917
Shares, Outstanding, Ending Balance at Sep. 30, 2021	5,000,000	165,383,058
Beginning balance, value at Jun. 30, 2021	$ 500	$ 16,404	10,786,792	(144,409)	749,790	441,961	11,851,038
Shares, Outstanding, Beginning Balance at Jun. 30, 2021	5,000,000	164,041,058
Net loss							(1,075,741)
Foreign currency translation adjustment							228,762
Ending balance, value at Mar. 31, 2022	$ 500	$ 17,699	12,379,248	(1,220,150)	978,552	441,961	12,597,810
Shares, Outstanding, Ending Balance at Mar. 31, 2022	5,000,000	176,989,156
Beginning balance, value at Sep. 30, 2021	$ 500	$ 16,538	10,837,659	(684,608)	699,867	441,961	11,311,917
Shares, Outstanding, Beginning Balance at Sep. 30, 2021	5,000,000	165,383,058
Issuance of common stock for commitment shares for promissory note		$ 219	52,906				53,125
Issuance of common stock for commitment shares for promissory note (in shares)		2,187,500
Net loss				(97,745)			(97,745)
Foreign currency translation adjustment					220,348		220,348
Issuance of common stock for commitment shares for private placement		$ 658	394,142				394,800
Issuance Of Common Stock For Private Placement In Shares		6,580,000
Return of common stocks by the holder of promissory note		$ (112)	112
Return of common stocks by the holder of promissory note (in shares)		(1,119,402)
Registered Capital Increase of Fangguan  Electronics			941,074				941,074
Ending balance, value at Dec. 31, 2021	$ 500	$ 17,303	12,225,893	(782,353)	920,215	441,961	12,823,519
Shares, Outstanding, Ending Balance at Dec. 31, 2021	5,000,000	173,031,156
Issuance of common stock for commitment shares for promissory note		$ 500	153,250				153,750
Issuance of common stock for commitment shares for promissory note (in shares)		5,000,000
Net loss				(437,797)			(437,797)
Foreign currency translation adjustment					58,337		58,337
Return of common stocks by the holder of promissory note		$ (104)	104
Return of common stocks by the holder of promissory note (in shares)		(1,042,000)
Ending balance, value at Mar. 31, 2022	$ 500	$ 17,699	$ 12,379,248	$ (1,220,150)	$ 978,552	$ 441,961	$ 12,597,810
Shares, Outstanding, Ending Balance at Mar. 31, 2022	5,000,000	176,989,156

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (1,075,741)	$ (1,004,018)
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	556,509	512,375
Deferred taxes		(25,908)
Change in fair value of derivative liability		647,632
Loss (gain) on extinguishment of debt		(202,588)
Non-cash interest	376,952	177,205
Changes in operating assets and liabilities:
Accounts receivable - non-related parties	677,321	262,424
Inventory	493,898	(652,185)
Advances to suppliers - non-related parties	324,613	(326,742)
Advances to suppliers - related parties		(40,072)
Prepaid expenses and other current assets	(229,424)	(620,374)
Accounts payable	(2,558,931)	(184,288)
Advance from customers	105,930	293,468
Accrued expenses and other current liabilities	109,886	(248,380)
Net cash provided by (used in) operating activities	(1,218,987)	(1,411,451)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment	(153,659)	(190,190)
Acquisition of intangible assets		(2,334)
Net cash used in investing activities	(153,659)	(192,524)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes receivable	(116,963)	34,852
Proceeds from bank loans	1,568,455	1,405,792
Repayment of bank loans	(919,710)	(2,344,185)
Proceeds from issuance of promissory notes	1,071,250	687,500
Repayment of promissory notes	(909,998)
Repayment of convertible notes payable		(555,747)
Proceeds from issuance of common stock for private placement	394,800	538,000
Proceeds from (repayment of) loans from related parties	(452,840)	1,021,130
Proceeds from the Registered Capital Increase of Fangguan  Electronics	941,070
Net cash provided by (used in) financing activities	1,576,064	787,342
Effect of exchange rate changes on cash	206,007	73,352
Net increase (decrease) in cash and cash equivalents	409,425	(743,281)
Cash and cash equivalents, beginning of period	731,819	1,285,373
Cash and cash equivalents, end of period	1,141,244	542,092
Supplemental disclosure of cash flow information
Cash paid for income tax	85,274	10,751
Cash paid for interests	100,273	66,820
Non-cash investing and financing activities
Issuance of 9,470,630 shares of common stock for conversion of convertible notes		847,144
Issuance of 3,026,164 shares of common stock as commitment shares for promissory note		155,213
Issuance of 1,500,000 shares of common stock for exercise of warrants		$ 67,028
Issuance of 8,529,500 shares of common stock as commitment shares for promissory note	257,875

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical)	9 Months Ended
	Mar. 31, 2022 shares
Statement of Cash Flows [Abstract]
Issuance of shares of common stock for conversion of convertible notes	9,470,630
Issuance of shares of common stock as commitment shares for promissory note	3,026,164
Issuance of shares of common stock for exercises of warrants	1,500,000
Issuance of common stock as commitment shares for promissory note	8,529,500

XML

NATURE OF OPERATIONS

9 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS

NOTE 1 - NATURE OF OPERATIONS

Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. The Company,together with its wholly owned subsidiaries and an entity controlled through VIE agreements in China ( collectively referred to as the " Group") are principally engaged in the business of the high-end intelligent electronic equipment, which includes the furnace used in firing for lithium battery , the lithium battery packs,the portable power banks for electronic devices, LCM and LCD screens ,and in the provision of IT and solution-oriented services in China.

New subsidiaries

On February 7, 2021, the Board of Directors of the Company approved and ratified the incorporation of Shijirun (Yixing) Technology Co., Ltd. (“Shijirun”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on February 7, 2021. Well Best International Investment Limited, a limited liability company formed under the laws of Hong Kong Special Administrative Region (“Well Best”), and a wholly owned subsidiary of the Company, is the sole shareholder of Shijirun. As a result, Shijirun is an indirect, wholly-owned subsidiary of the Company. Shijirun will head up the Company’s advance into the new energy industry focusing on developing and producing high-end intelligent new energy equipment from Yixing City, Jiangsu Province, China.

On March 30, 2021, the Board of Directors of the Company approved and ratified the incorporation of Huixiang Energy Technology (Suzhou) Co., Ltd. (“Huixiang Energy”), a limited liability company formed under the laws of the Peoples Republic of China (PRC) on March 18, 2021. Well Best is the sole shareholder of Huixiang Energy. As a result, Huixiang Energy is an indirect, wholly-owned subsidiary of the Company. Huixiang Energy conducts research and development of next generation advanced battery technologies, manufacture and sales of relevant battery products, including the solid-state rechargeable lithium ion battery for next generation energy storage systems. Huixiang Energy also on the operation of battery packs, battery systems and electric vehicles sharing business with its own internet sharing platform relating to the electric vehicles (online EV hailing services) and its relevant batteries and battery systems. Huixiang Energy will operate in Suzhou City, Jiangsu Province, China.

Authorized share increase

On May 6, 2021, the Board of Directors of the Company and the holders of the majority of issued and outstanding voting securities of the Company approved an amendment (the “Amendment”) to the Articles of Incorporation of the Company to increase the authorized number of shares of common stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation of the Company. The approval was made in accordance with Sections 78.320 and 78.390 of the Nevada Revised Statues, which provide that a corporation’s articles may be amended by written consent of the stockholders of the Company representing at least a majority of the voting power of the Company. The Amendment was filed with the Nevada Secretary of State on June 7, 2021.

Acquisition

On December 27, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jialin Liang and Xuemei Jiang, each of whom are shareholders of Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”or the "VIE"). Pursuant to the terms of the Purchase Agreement, the Shareholders of the VIE, who together own 95.14% of the ownership rights in Fangguan Electronics, agreed to execute and deliver the Business Operation Agreement, the Equity Interest Pledge Agreement, the Equity Interest Purchase Agreement, the Exclusive Technical Support Service Agreement (the “Services Agreement”) and the Power of Attorney, all together dated December 27, 2018 are referred to the “VIE Agreements”, to the Company in exchange for the issuance of an aggregate of 15,000,000 shares of the Company’s common stock, par value $.0001 per share, thereby causing Fangguan Electronics to become the Company’s variable interest entity. Together with VIE agreements, the Shareholders of the VIE also agreed to convert shareholder ( of the VIE) loan of RMB 30 million (approximately $4.4 million) to capital of the VIE and make cash contribution of RMB 9.7 million (approximately $1.4 million) to capital of the VIE. The entirety of the transaction will hereafter be referred to as the “Transaction”. As a result of the Transaction, the Company is able to exert effective control over Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics. Fangguan Electronics manufactures and sells Liquid Crystal Module (" LCM") and LCD screens in China based in Changchun City, Jilin Province, People’s Republic of China. (See Note 3).

On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). Fangguan Electronics's new institutional shareholder , namely Changchun Lingguan Investment Partnership ("Lingguan"), whose ultimate beneficial owners and controlling shareholders are Jialin Liang and Xuemei Jiang as both of whom own 63% of the ownership rights of Lingguan ( while all of the other sharehders are employee of the VIE), made cash contribution of RMB 5.0 million (approximately $0.78 million) and RMB 1.0 million (approximately $0.16 million) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021. . Lingguan is limited partnership by structure and private equity fund by nature. And Lingguan was established for the sole purpose of the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the the executive partner of Lingguan to represent Lingguan and has been in charge with the daily operation of Lingguan.She is the internal decision-maker of Lingguan and has the right to decide all the investment and divestment of the relevant investment of Lingguan.

Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55% of the ownership rights in Fangguan Electronics ( prior to the Registered Capital Increase, Jialin Liang ever transferred his ownship right at the amount of RMB 2.5 million (approximately $0.4 million)) of Fangguan Electronics to a third party individual ). Therefore all of the Board of Directors of the Company , Jialin Liang and Xuemei Jiang have concluded that all of the VIE Agreements remain valid.

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2– BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The Group’s audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 94.55% of the ownership rights in the VIE and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions (if any) have been eliminated upon consolidation.

The subsidiaries of ionix are as follows:

Well Best International Investment Limited (the wholly-owned subsidiary)

Welly Surplus International Limited (the wholly-owned subsidiary)

Shijirun (Yixing) Technology Co., Ltd (the wholly-owned subsidiary)

Huixiang Energy Technology (Suzhou) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Photoelectric Display Technology Co. Ltd (the wholly-owned subsidiary)

Dalian Shizhe New Energy Technology Co., Ltd (the wholly-owned subsidiary)

Shenzhen Baileqi Electronic Technology Co., Ltd (the wholly-owned subsidiary)

Lisite Science Technology (Shenzhen) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Electronics Technology Co., Ltd ( the VIE)

Noncontrolling Interests

The Group follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to NCIs even when such allocation might result in a deficit balance.

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 3, therefore no income or loss is allocated to NCI.

Use of Estimates

The Group’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, the useful lives of property and equipment and intangible assets, the impairment of long-lived assets, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements.

Cash and cash equivalents

Cash consists of cash on hand and cash in bank. Cash equivalents represent investment securities that are short-term, have high credit quality and are highly liquid. Cash equivalents are carried at fair market value and consist primarily of money market funds.

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Group specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Group will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers. As of March 31,2022 and June 30, 2021, the Company has accounts receivable balance from non-related party of $4,340,702 and $4,936,974, net of allowance for doubtful accounts of $155,691 and $152,995, respectively. No bad debt expense was recorded during the three and nine months ended March 31,2022 and 2021.

Inventories

Inventories consist of raw materials, working-in-process and finished goods. Inventories are valued at the lower of cost or net realizable value. The Group does determine cost on the basis of the weighted average method. The Group periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Group does believe that the assumptions the Group uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result.

Advances to suppliers

Advances to suppliers represent prepayments for merchandise, which were purchased but had not been received. The balance of the advances to suppliers is reduced and reclassified to inventories when the raw materials are received and pass quality inspection.

Property, plant and equipment

Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Repairs and maintenance costs are normally expensed as incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.

When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of comprehensive income (loss) in the reporting period of disposition.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows:

Buildings	10 – 20 years
Machinery and equipment	5 – 10 years
Office equipment	3 – 5 years
Automobiles	5 years

Intangible assets

Land use right is recorded as cost less accumulated amortization. Land use rights represent the prepayments for the use of the parcels of land in the PRC where the Group’s production facilities are located, and are charged to expense over their respective lease periods of 50 years. According to the laws of the PRC, the government owns all of the land in the PRC. Enterprises or individuals are authorized to use the land only through land use rights granted by the PRC government for a certain period (usually 50 years).

Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows:

Land use right	50 years
Computer software	2-5 years

Gains or losses arising from derecognition of the intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of comprehensive income (loss) when the asset is disposed.

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Group are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

Revenue recognition

The Group adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings.

The Group estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Group expects to receive in exchange for those goods or services. The Group applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

· allocate the transaction price to performance obligations in the contract; and

· recognize revenue as the performance obligation is satisfied.

Under these criteria, for revenues from sale of products, the Group generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. The control of the products is transferred to the customer upon receipt of goods by the customer. For service revenue, the Group recognizes revenue when services are performed and accepted by customers.

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively:

	For the  nine months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$10,547,390	$9,100,076
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	4,477	-
Service contracts	-	2,018
Total	$10,551,867	$9,102,094

	For the Three Months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$2,058,179	$3,160,474
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	-	-
Service contracts	-	272
Total	$2,058,179	$3,160,746

All the operating entities of the Group are domiciled in the PRC. All the Group’s revenues are derived in the PRC during the three and nine months ended March 31,2022 and 2021

Cost of revenues

Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues.

Related parties and transactions

The Group identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, "Related Party Disclosures" and other relevant ASC standards.

Parties, which can be a corporation or individual, are considered to be related if the Group has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence.

Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it requires their disclosure nonetheless.

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

As of March 31,2022 and June 30, 2021, the Group did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a corporation during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears.

Leases

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Group adopted the new standard on July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Group elected the package of practical expedients which permits us not to reassess under the new standard the Group's prior conclusions about lease identification, lease classification and initial direct costs. 

The new standard has no material effect on the consolidated financial statements of the Group as the Group does not have a lease with a term longer than 12 months as of June 30, 2021 (See Note 5).

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share or increase a net income per share.

 During the nine months ended March 31,2022 and 2021,the Company had outstanding convertible notes and warrants which represent 68,750 and  1,096,705 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31,2022 and 2021, the Company had outstanding convertible notes and warrants which represent 68,750 and 68,750 shares of commons stock. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss).

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:

	March 31,2022		June 30, 2021
Balance sheet items, except for equity accounts		6.3482		6.4601

	Nine months ended March 31,
	2022		2021
Items in statements of comprehensive income (loss) and cash flows		6.4042		6.8254

Fair Value of Financial Instruments

The carrying value of the Group’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

The Group also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The Group has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 13).

Convertible Instruments

The Group evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Group accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Group records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Group accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

Common Stock Purchase Warrants

The Group classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to the Company's own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Group classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Recent accounting pronouncements

The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for Calendar years beginning after December 15, 2019 and for interim periods within those Calendar years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group is currently in the process of evaluating the impact of the adoption of this guidance on its consolidated financial statements.

COVID-19

The Group’s operations are affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Group’s business has been negatively impacted by the COVID-19 coronavirus outbreak to certain extent.

XML

VARIABLE INTEREST ENTITY

9 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

VARIABLE INTEREST ENTITY

NOTE 3 - VARIABLE INTEREST ENTITY

The VIE contractual arrangements

On December 27, 2018, the Company entered into VIE agreements with two shareholders of Fangguan Electronics to control 95.14% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics. In exchange for VIE agreements and additional capital contribution, the Company issued 15 million shares of common stock to two shareholders of Fangguan Electronics. (See Note 1).

The transaction was accounted for as a business combination using the acquisition method of accounting. The assets, liabilities and the operations of Fangguan Electronics subsequent to the acquisition date were included in the Group’s consolidated financial statements.

Through power of attorney, equity interest purchase agreement, and equity interest pledge agreement, 95.14% of the voting rights of Fangguan Electronics’ shareholders have been transferred to the Company so that the Company has effective control over Fangguan Electronics and has the power to direct the activities of Fangguan Electronics that most significantly impacts the Group's economic performance.

Through business operation agreement with the Shareholders of Fangguan Electronics, the Company shall direct the business operations of Fangguan Electronics, including, but not limited to, adopting corporate policy regarding daily operations, financial management, and employment, and appointment of directors and senior officers of Fangguan Electronics.

Through the exclusive technical support service agreement with the shareholders of Fangguan Electronics, the Company together with the relevant subsidiaries, shall provide Fangguan Electronics with necessary technical support and assistance as the exclusive provider. And at the request of the Company, Fangguan Electronics shall pay the performance fee, the depreciation and the service fee to the Company. The performance fee shall be equivalent to 5% of the total revenue of Fangguan Electronicsin any Calendar year. The depreciation amount on equipment shall be determined by accounting rules of China. The Company has the right to set and revise annually this service fee unilaterally with reference to the performance of Fangguan Electronics.

The service fee that the Company is entitled to earn shall be the total business incomes of the whole year minus performance fee and equipment depreciation. This agreement allows the Company to collect 100% of the net profits of Fangguan Electronics. Except for technical support, the Company and its subsidiaries did not provide, nor does it intend to provide, any financial or other support either explicitly or implicitly during the periods presented to its variable interest entity.

If facts and circumstances change such that the conclusion to consolidate the Fangguan Electronics has changed, the Group shall disclose the primary factors that caused the change and the effect on the Group’s financial statements in the periods when the change occurs.

There are no restrictions on the consolidated Fangguan Electronics’s assets and on the settlement of its liabilities and all carrying amounts of Fangguan Electronics’s assets and liabilities are consolidated with the the financial statements of the Company and its subsidiaries. In addition, the net income of Fangguan Electronics after it became the VIE of the Company is free of restrictions for payment of dividends to the shareholders of the Company.

On December 24, 2021, the Board of Directors of Fangguan Electronics and the holders of the majority of issued and outstanding voting securities of Fangguan Electronics approved an amendment (the “Amendment”) to the Articles of Incorporation of Fangguan Electronics to increase the registered capital (the “Registered Capital Increase”)of the VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million). Fangguan Electronics's new institutional shareholder , namely Changchun Lingguan Investment Partnership ("Lingguan"), whose ultimate beneficial owners and controlling shareholders are Jialin Liang and Xuemei Jiang as both of whom own 63% of the ownership rights of Lingguan ( while all of the other sharehders are employee of the VIE), made cash contribution of RMB 6.0 million (approximately $0.78 million) and RMB 1.0 million (approximately $0.16 million ) to the registered capital and the additional paid in capital respectively of Fangguan Electronics on December 28,2021.  Lingguan is limited partnership by structure and private equity fund by nature. And Lingguan was established for the sole purpose of the Registered Capital Increase of Fangguan Electronics.Xuemei Jiang,has acted as the the executive partner of Lingguan to represent Lingguan and has been in charge with the daily operation of Lingguan.She is the internal decision-maker of Lingguan and has the right to decide all the investment and divestment of the relevant investment of Lingguan.

Accordingly,Jialin Liang, Xuemei Jiang and Lingguan are deemed to be parties acting in concert and collectively own 94.55% of the ownership rights in Fangguan Electronics ( prior to the Registered Capital Increase, Jialin Liang ever transferred his ownship right at the amount of RMB 2.5 million (approximately $0.4 million)) of Fangguan Electronics to a third party individual ). Therefore all of the Board of Directors of the Company , Jialin Liang and Xuemei Jiang have concluded that all of the VIE Agreements remain valid.

Assets of Fangguan Electronics that are collateralized or pledged are not restricted to settle Fangguan Electronics' own obligations. The creditors of Fangguan Electronics do not have recourse to the general credit of the Company and its subsidiaries.

Risks associated with the VIE structure

The Company believes that the contractual arrangements with the VIE and the Shareholders of VIE are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could:

· discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and its VIE;

· limit the Group’s business expansion in China by way of entering into contractual arrangements.

· impose fines or other requirements with which the Company’s PRC subsidiary and its VIE may not be able to comply.

· require the Company or the Company’s PRC subsidiary and its VIE to restructure the relevant ownership structure or operations; or

· restrict or prohibit the Group’s use of the proceeds from public offering to finance the Group’s business and operations in China.

The Group’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over its VIE and its respective shareholders and it may lose the ability to receive economic benefits from its VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and its VIE. There has been no change in facts and circumstances to consolidate the VIE. The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:

	Balance as of March 31,2022		Balance as of June 30, 2021
Cash and cash equivalents	$	1,133,938	$	702,979
Notes receivable		196,091		76,743
Accounts receivable - non-related parties		2,984,905		3,638,354
Inventory		4,487,946		4,899,831
Advances to suppliers - non-related parties		-		749,975
Prepaid expenses and other current assets		378,955		62,251
Total Current Assets		9,181,835		10,130,133
Property, plant and equipment, net		6,523,977		6,787,525
Intangible assets, net		1,510,225		1, 508,583
Deferred tax assets		50,988		50,105
Total Assets	$	17,267,025	$	18,476,346
Short-term bank loan	$	1,575,250	$	904,832
Accounts payable		1,404,463		3,960,792
Advance from customers		252,216		150,110
Due to related parties		1,918,358		2,349,518
Accrued expenses and other current liabilities		100,134		49,968
Total Current Liabilities		5,250,421		7,415,220
Total Liabilities	$	5,250,421	$	7,415,220

Schedule of condensed income statement and cash flow statement of its VIE are as follows:

	For the nine months ended March 31 ,
	2022	2021
Revenue (*)	$10,547,390	$8,941,662
Net (loss) income	（182,642）	(107,417)
Net cash provided by (used in) operating activities	(432,992)	(581,315)
Net cash used in investing activities	(153,659)	(192,524)
Net cash provided by financing activities	1,472,853	（224,301）

(*) Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens.

During the three and nine months ended March 31,2022 and 2021, the VIE did not have any material related party transactions with other subsidiaries of the Company.

Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE and can have assets transferred out of the VIE under its control. Therefore, the Company considers that there is no asset in any of the VIE that can be used only to settle obligations of the VIE, except for registered capital and PRC statutory reserves. As all VIE are incorporated as limited liability companies under the Company Law of the PRC, creditors of the VIE do not have recourse to the general credit of the Company or its subsidiaries for any of the liabilities of the VIE.

Currently, there is no contractual arrangement which requires the Company or its subsidiaries to provide additional financial support to the VIE.

XML

INVENTORIES

9 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

INVENTORIES

 NOTE 4 - INVENTORIES

Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following:

	Balance as of March 31,2022		Balance as of June 30, 2021
Raw materials	$	2,020,439	$	1,314,020
Work-in-process		2,152,242		3,367,716
Finished goods		879,579		772,635
Total Inventories	$	5,052,260	$	5,454,371

The Group recorded no inventory markdown for the nine months ended March 31,2022 and 2021. 

XML

OPERATING LEASE

9 Months Ended

Mar. 31, 2022

Operating Lease

OPERATING LEASE

NOTE 5- OPERATING LEASE

For the nine months ended March 31,2022, the Group had one real estate operating leases for office and warehouse under the terms of one year.

Lisite Science Technology (Shenzhen) Co., Ltd ("Lisite Science") leases office and warehouse space from Shenzhen Keenest Technology Co., Ltd. (“Keenest”), a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 10).On July 20, 2021, Lisite Science further extended the lease with Keenest for one more year until July 20, 2022 with annual rent of approximately $295 (RMB2,000).

The Group made an accounting policy election not to recognize lease assets and liabilities for the leases listed above as all lease terms are 12 months or shorter.

XML

PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET

The components of property, plant and equipment were as follows:

	March 31,2022			June 30, 2021
Buildings	$	5,162,763		$	5,073,335
Machinery and equipment		3,419,353			3,216,474
Office equipment		83,372			75,374
Automobiles		177,365			173,090
Subtotal		8,842,853			8,538,273
Less: Accumulated depreciation		(2,314,001	)		(1,745,958	)
Property, plant and equipment, net	$	6,528,852		$	6,792,315

Depreciation expenses related to property, plant and equipment were $531,811 and $468,186 for the nine months ended March 31,2022 and 2021, respectively.

Depreciation expenses related to property, plant and equipment were $177,489 and $167,245 for the three months ended March 31,2022 and 2021, respectively.

As of March 31,2022 and June 30, 2021, buildings were pledged as collateral for bank loans (See Note 8).

XML

INTANGIBLE ASSETS, NET

9 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

NOTE 7– INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	March 31,2022			June 30, 2021
Land use right	$	1,608,625		$	1,580,761
Computer software		30,432			29,905
Subtotal		1,639,057			1,610,666
Less: Accumulated amortization		(128,832	)		(102,083	)
Intangible assets, net	$	1,510,225		$	1,508,583

Amortization expenses related to intangible assets were $24,697 and $44,189 for the nine months ended March 31,2022 and 2021, respectively.

Amortization expenses related to intangible assets were $8,244 and $10,063 for the three months ended March 31,2022 and 2021, respectively.

Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31,2022 and June 30, 2021, land use right was pledged as collateral for bank loans (See Note 8).

XML

SHORT-TERM BANK LOAN

9 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

SHORT-TERM BANK LOAN

NOTE 8 – SHORT-TERM BANK LOAN

The Company’s short-term bank loans consist of the following:

			March 31,2022		June 30, 2021
Loan payable to Industrial Bank, due October 2021	(2	)	$	-	$	348,324
Loan payable to Industrial Bank, due July 2022	(3	)		566,317		-
Loan payable to Industrial Bank, due July 2022	(4	)		654,468		-
Loan payable to Industrial Bank, due August 2021	(1	)		-		556,508
oan payable to Industrial Bank, due October 2022	(5	)		354,465		-
Total			$	1,575,250	$	904,832

(1) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$556,508 (RMB3,595,096) and maturity date at August 6, 2021.

During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$464,389 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$464,389 (RMB3,000,000) in full upon maturity. In August 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$553,987 (RMB3,595,096) in full upon maturity.

(2) During April 2021, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$346,966 (RMB2,250,212) and maturity date at October 13, 2021. On April 13, 2021, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On October 13, 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$346,966 (RMB2,250,212) in full upon maturity.

(3) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$566,317 (RMB3,595,096) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.  

(4) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$654,468(RMB4,154,692) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

(5) On October 21, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$354,465(RMB2,250,212) for 9 months until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

XML

STOCKHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2022

Stockholders’ Equity:

STOCKHOLDERS' EQUITY

NOTE 9 - STOCKHOLDERS' EQUITY

 Stock Issued as Commitment Shares for Promissory Note

On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $51,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31,2022.(See Note 14)

On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31, 2022.(See Note 14).

On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the nine months ended March 31, 2022.(See Note 14)

On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.In connection with the issuance of promissory note, on February 17 , 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”).(See Note 14)

Commitment Shares returned to the Company

On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on December 21, 2020, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14)

On January 10, 2022, a total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the promissory note issued to Labrys Fund, L.P on March 10, 2021, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 14)

Stock Issued for Private Placement

On October 4, 2021, the Company issued a total of 29,106,000 restricted shares of common stock to 12 individual subscribers for an aggregate purchase price of $3,492,720 at $0.12 per share, according to the conditions of the subscription agreements signed between the Company and subscribers.

On November 13, 2021, the Company and individual subscribers agreed to a voluntary unwinding of the forementioned transaction related to the subscription and purchase of an aggregate 29,106,000 shares. The Company entered into cancellation agreements with each individual pursuant to which all funds were returned to the investors and all shares were returned to our transfer agent for cancellation. Immediately prior to the decision, the Registration Statement related to the shares was voluntarily withdrawn by the Company.

On December 15, 2021, the Company issued a total of 6,580 ,000 restricted shares of common stock to a Chinese citizen subscriber for an aggregate purchase price of $394,800 at $0.06 per share, according to the conditions of the subscription agreement signed between the Company and subscriber.

XML

RELATED PARTY TRANSACTIONS AND BALANCES

9 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND BALANCES

NOTE 10 - RELATED PARTY TRANSACTIONS AND BALANCES

Purchase from related party

During the three and nine months ended March 31,2022 and 2021, the Group did not purchase from any related party.

Advances to suppliers - related parties

Lisite Science made advances of $441,538 and $434,200 to Keenest for future purchases as of March 31,2022 and June 30, 2021,respectively.

Sales to related party

During the three and nine months ended March 31,2022 and 2021, the Group did not sell to any related party.

Lease from related party

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 5). On July 20, 2021, Lisite Science further extended the lease with Keenest for one more year until July 20, 2022 with annual rent of approximately $295 (RMB2,000).

Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). This lease was not extended when it expired in May 2021.

Due to related parties

Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand.

			March 31,2022		June 30, 2021
Ben Wong	(1	)	$	143,792	$	143,792
Yubao Liu	(2	)		294,163		352,236
Xin Sui	(3	)		2,016		2,016
Baozhen Deng	(4	)		53,375		45,276
Yunqiang Xie		(13)		35,758		-
Jialin Liang	(6	)(11)		1,404,801		1,844,857
Xuemei Jiang	(7	)(10)		563,939		554,171
Kou Yue		(12)		20,000		-
Shikui Zhang	(8	)		72,760		58,961
Biao Shang	(5	)		20,153		19,804
Changyong Yang	(9	)		40,055		32,705
			$	2,650,812	$	3,053,818

(1) Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company.

(2) Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company.

(3) Xin Sui serves as director of Welly Surplus.

(4) Baozhen Deng is a stockholder of the Company, who owns approximately 0.7% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T.

(5) Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric.

(6) Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company.

(7) Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company.

(8) Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019.

(9) Changyong Yang is a stockholder of the Company,who owns approximately 1.3% of the Company’s outstanding common stock,and the owner of Keenest.

(10) The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded.

(11) At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $5.8 million (RMB39,581,883), among which approximately $4.4 million (RMB30,000,000) was used for debt for equity swap by Mr.Liang during the capital increase of Fangguan Electronics occurred in March 2019. Thereafter Mr.Liang continued making advances to Fangguan Electronics.

(12) Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her.

(13) Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun.

During the nine months ended March 31,2022, the refund to Mr. Jialin Liang by Fangguan Electronics was $440,056(RMB3,000,000)

During the nine months ended March 31,2022, setting off the further advance to the Company by Mr Liu, the net refund by the Company to Mr Liu was approximately $58,073 .

During the nine months ended March 31,2022, Baozhen Deng advanced approximately $8,099 to Baileqi Electronic. Shikui Zhang advanced approximately $13,799 to Shizhe New Energy. Changyong Yang, a stockholder of the Company, advanced approximately $7,350 to Lisite Science. Mr Yunqiang Xie advanced approximately $35,758 to Shijirun. Ms.Yue Kou advanced $20,000 to Well Best after netting off the refund paid to her.

 During the nine months ended March 31, 2021, Yubao Liu advanced $295,928 to Well Best after netting off the refund paid to him.

 During the nine months ended March 31, 2021, Baileqi Electronic refunded $3,836 to Baozhen Deng and Shenzhen Baileqi S&T advanced $23,937 to Baileqi Electronic. Shikui Zhang advanced approximately $23,000 to Shizhe New Energy. Changyong Yang, a stockholder of the Company, advanced approximately $9,000 to Lisite Science.

On September 23, 2020, Jialin Liang entered into a short-term loan agreement with Bank of Communications to borrow an individual loan of approximately US$441,000 (RMB 3 million) for one year with annual interest rate of 3.85%. The borrowing was guaranteed by Fangguan Electronics. Pursuant to the loan agreement, the proceed from the bank loan could only be used in the operation of Fangguan Electronics. On September 23, 2020, Jialin Liang advanced all of the proceeds from this bank loan to Fangguan Electronics

XML

CONCENTRATION

9 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

CONCENTRATION

NOTE 11– CONCENTRATION

Major customers

Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: 

	For the nine months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,407,785		23	%	$	167,005		4	%
Customer B		1,153,277		11	%		68,320		2	%
Total	$	3,561,062		34	%	$	235,325		6	%

	For the nine months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts receivable
Customer A	$	1,666,368		18	%	$	229,336		7	%
Customer B		1,352,195		15	%		-		-	%
Customer C		950,501		10	%		184,584		5	%
Total	$	3,969,064		43	%	$	413,920		12	%

	For the three months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	804,981		39	%	$	167,005		4	%
Total	$	804,981		39	%	$	167,005		4	%

	For the three months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts  receivable
Customer A	$	612,781		19	%	$	229,336		7	%
Customer B		484,802		15	%		-		-	%
Customer C		441, 260		14	%		184,584		5	%
Total	$	1,538,843		48	%	$	413,920		12	%

All customers of the Group are located in the PRC.

Major suppliers

The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows:

	For the nine months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,881,357		23	%	$	89,333		4	%
Total	$	1,881,357		23	%	$	89,333		4	%

	For the nine months ended March 31,2021					As of March 31,2021
	Total Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,148,322		14	%	$	65,123		2	%
Supplier B		796,553		10	%		364,146		14	%
Total	$	1,944,875		24	%	$	429,269		16	%

	For the Three Months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	257,421		15	%	$	89,333		4	%
Supplier B		181,509		11			146,204		6
Total	$	438,930		26	%	$	235,537		10	%

	For the Three Months ended   March 31,2021					As of March 31,2021
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	404,404		13	%	$	65,123		2	%
		371,731		12	%		-		-	%
Total	$	776,135		25	%	$	65,123		2	%

All suppliers of the Group are located in the PRC.

XML

INCOME TAXES

9 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 12- INCOME TAXES

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Group operates in United States of America, Hong Kong and the PRC that are subject to taxes in the jurisdictions in which they operate.

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of United States of America and subject to the corporate tax rate of 21% on its taxable income.

For the nine months ended March 31,2022 and 2021, the Company did not generate income in United States of America and no provision for income tax was made. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three-year period after the returns are filed.  In unusual circumstances, the period may be longer.  Tax returns for the years ended June 30, 2016 and after were still open to audit as of March 31,2022.

Hong Kong

The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the nine months ended March 31,2022 and 2021, there is no assessable income chargeable to profit tax in Hong Kong.

The PRC

The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2022 to 2024.

The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows:

	For the nine months ended March 31,
	2022			2021
Tax (benefit) at U.S. statutory rate	$	(211,659	)	$	(215,790	)
Tax rate difference between foreign operations and U.S.		556			26,511
Change in valuation allowance		64,836			155,922
Permanent difference		214,108			9,802
Effective tax (benefit)	$	67,841		$	(23,555	)

The provisions for income taxes (benefits) are summarized as follows:

	For the nine months ended March 31,
	2022		2021
Current	$	67,841	$	2,353
Deferred		-		(25,908	)
Total	$	67,841	$	(23,555	)

As of March 31,2022, the Group has approximately $4,147,768 net operating loss carryforwards available in the U.S and Hong Kong to reduce future taxable income which will begin to expire from 2035. It is more likely than not that the deferred tax assets resulted from net operating loss carryforward cannot be utilized in the future because there will not be significant future earnings from the entities which generated the net operating loss. Therefore, the Group recorded a full valuation allowance on its deferred tax assets resulted from net operating loss carryforward as of March 31,2022.

On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. Accordingly, the Company has re-measured its deferred tax assets on net operating loss carry forwards in the U.S at the lower enacted cooperated tax rate of 21%. However, this re-measurement has no effect on the Company’s income tax expenses as the Company has provided a 100% valuation allowance on its deferred tax assets previously.

Additionally, the 2017 Tax Act implemented a modified territorial tax system and imposing a tax on previously untaxed accumulated earnings and profits (“E&P”) of foreign subsidiaries (the “Toll Charge”). The Toll Charge is based in part on the amount of E&P held in cash and other specific assets as of December 31, 2017. The Toll Charge can be paid over an eight-year period, starting in 2018, and will not accrue interest. The 2017 Tax Act also imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits.

The Company has determined that this one-time Toll Charge has no effect on the Company’s income tax expenses as the Company has no undistributed foreign earnings at either of the two testing dates of November 2, 2017 and December 31, 2017.

For purposes of the inclusion of GILTI, the Company determined that the Company did not have tax liabilities resulting from GILTI For the nine months ended March 31,2022 and 2021 due to net operating loss carryforwards available in the U.S. Therefore, there was no accrual of GILTI liability as of March 31,2022 and June 30, 2021.

The extent of the Group’s operations involves dealing with uncertainties and judgments in the application of complex tax regulations in a multitude of jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state and international tax audits. The Group recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due.

XML

CONVERTIBLE DEBT

9 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

CONVERTIBLE DEBT

NOTE 13 - CONVERTIBLE DEBT

Convertible notes

Convertible notes payable balance was zero as of March 31,2022 and June 30, 2021.

There was none of the amortization of debt discount during the three and nine months ended March 31,2022.

For the nine months ended March 31,2021, the Company recorded the amortization of debt discount of $138,399 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

For the three months ended March 31,2021, the Company recorded the amortization of debt discount of $24,185 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

Derivative liability

Upon issuing of the convertible notes, the Company determined that the conversion feature embedded in the notes referred to above that contain a potential variable conversion amount constitutes a derivative which has been bifurcated from the note and accounted for as a derivative liability, with a corresponding discount recorded to the associated debt. The excess of the derivative value over the face amount of the note, if any, is recorded immediately to interest expense at inception.

The derivative liability in connection with the conversion feature of the convertible debt is the only financial liability measured at fair value on a recurring basis.

The change of derivative liabilities is as follows:

Balance at July 1, 2020	$	276,266
Converted		(357,868	)
Debt settlement		(566,030	)
Change in fair value recognized in operations		647,632
Balance at March 31,2021	$	-

There was no any movement for the change of derivative liabilities during the three and nine months ended March 31,2022, and the balance of derivative liabilities was $0 at March 31,2022

The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions:

Estimated dividends	None
Expected volatility	78.55% to 253.30%
Risk free interest rate	0.61% to 0.93%
Expected term	0 to 6 months

Warrants

In connection with the issuance of the $165,000 convertible promissory note on September 11, 2019, FirstFire Global Opportunities Fund, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.40, and the warrants can be exercised within 5 years which is before September 11, 2024.

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31,2021. After this exercise, FirstFire Global Opportunities Fund, LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $55,000 convertible promissory note on November 12, 2019, Crown Bridge Partners, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 22,916 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 12, 2024.

In December 2020, the Company paid a total of $82,500 to fully settle the convertible note dated November 12, 2019 with Crown Bridge Partners, LLC, including all accrued and unpaid interest and unexercised warrants. After this settlement, Crown Bridge Partners, LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $165,000 convertible promissory note on November 20, 2019, Morningview Financial LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 20, 2024.

In November 2020, the Company paid a total of $175,000 to fully settle the convertible note dated November 20, 2019 with Morningview Financial LLC, including all accrued and unpaid interest and unexercised warrants. After this settlement, Morningview Financial LLC is not entitled to any warrant to purchase shares.

In connection with the issuance of the $146,850 convertible promissory note on January 10, 2020, Labrys Fund, LP is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before January 10, 2025.

The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions:

Estimated dividends	None
Expected volatility	56.23% to 71.08%
Risk free interest rate	1.73% to 1.92%
Expected term	5 years

Since the warrants can be exercised at $2.4 or $2.8 and are not liabilities, the face value of convertible notes was allocated between convertible note and warrant based on the fair values of the conversion feature and warrants. Accordingly, $147,492  was allocated to warrants and recorded in additional paid in capital account during the year ended June 30, 2020.

The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (years)
Outstanding at July 1, 2021 （Note1）		68,750	$	2.80		3.53
Granted		-		-		-
Exercised or settled		-		-		-
Cancelled or Expired		-		-		-
Outstanding at March 31,2022（Note1）		68,750	$	2.80		2.78

Note1: The herein mentioned warrant of 68,750 shares are entitled by Labrys Fund, LP  in connection with the issuance of the $146,850 convertible promissory note on January 10, 2020.

	Number of Shares			Weighted Average Exercise Price	Remaining Contractual Term (years)
Outstanding at July 1, 2020	229,166		$	2.68	4.20 to 4.53
Granted	-			-	-
Exercised or settled     （Note2）	(160,416	)		2.63	4.05 to 4.16
Cancelled or expired	-			-	-
Outstanding at March 31,2021 （Note 1）	68,750		$	2.80	3.78

Note2: The herein mentioned exercised or expired warrant of 160,416 shares was composed of （1）the warrant of 68,750 shares entitled by FirstFire Global Opportunities Fund, LLC in connection with the issuance of the $165,000 convertible promissory note on September 11, 2019,（2）the warrant of 22,916 shares entitled by Crown Bridge Partners, LLC in connection with the issuance of the $55,000 convertible promissory note on November 12, 2019（3）the warrant of 68,750 shares entitled by Morningview Financial LL in connection with the issuance of the $165,000 convertible promissory note on November 20, 2019.

XML

PROMISSORY NOTE

9 Months Ended

Mar. 31, 2022

Promissory Note

PROMISSORY NOTE

NOTE 14– PROMISSORY NOTE

Schedule of promissory note as of March 31,2022 is as follows:

			Note Balance		Debt Discount		Carrying Value
Labrys Fund, LP	(1	)	$	-	$	-	$	-
Labrys Fund, LP	(2	)		-		-		-
Firstfire Global Opportunities Fund, LLC	(3	)		325,000		29,230		295,770
Talos Victory Fund, LLC	(4	)		250,000		68,819		181,181
Mast Hill Fund, L.P	(5	)		250,000		71,505		178,495
Blue Lake Partners, LLC	(6	)		500,000		155,969		344,031
Total			$	1,325,000	$	325,523	$	999,477

(1) On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 31,2021 and received $253,500 in cash after deducting an OID in the amount of $30,000, legal fees of $3,000 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $35,000 payment at each month end beginning on April 23, 2021 through December 21, 2021.

In connection with the issuance of promissory note, on December 31,2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par.

On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 9)

(2) On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 19, 2021 and received $434,000 in cash after deducting an OID in the amount of $50,000, legal fees of $2,500 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning on July 9, 2021 through March 10, 2022.

In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par. (See Note 9)

The payment as of $58,333.33 originally scheduled on December 10, 2021 was postponed to January 10,2022 on

which date that the payment of the total of $233,333.35 was made by the Company to fully refund the remaining balance of this self-amortization promissory note.

On January 10 ,2022, the total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.

(3) On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.

In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $51,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

The two monthly payments as of $58,333.33 each originally scheduled on November 9, 2021 and December 9, 2021 respectly were postponed to January 7,2022 on which date that the payment at the total of $175,000 was made by the Company to settle the payments scheduled for the period from November 9,2021 to January 7,2022.

(4) On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

(5) On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the three and nine months ended March 31, 2022.(See note 9)

(6) On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.

In connection with the issuance of promissory note, on February 17 , 2022, the Company issued 1,250,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $98,750 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

For the three and nine months ended March 31,2022, the Company recorded the amortization of debt discount of $ 122,642 and $311,535 for the self-amortization promissory notes issued, which was included in other income and expense in the consolidated statement of comprehensive income (loss).

XML

SEGMENT INFORMATION

9 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 15 – SEGMENT INFORMATION

The Group’s business was classified by management into three reportable business segments (smart energy, photoelectric display and service contracts) before March 31,2021 and into four segments (smart energy, photoeletric display, service contract and lithium battery-related business )after March 31,2021 supported by the administrative function which conducts activities that are non-segment specific. The smart energy reportable segment derives revenue from the sales of portable power banks that is intended to be utilized as a power source for electronic devices such as the iphone, ipad, mp3/mp4 players, PSP gaming systems, and cameras. The photoelectric display reportable segment derives revenue from the sales of LCM and LCD screens manufactured for small devices such as video capable baby monitors, electronic devices such as tablets and cell phones, and for use in televisions or computer monitors. The service contracts reportable segment derives revenue from providing IT and solution-oriented services.The lithium battery -related business reportable segment derives revenue from trading lithium battery packs and furnace used in firing for lithium battery,etc. Unallocated items comprise of mainly corporate expenses and corporate assets.

Although all of the Group’s revenue is generated from PRC, the Group is organizationally structured along business segments. The accounting policies of each operating segments are same and are described in Note 2, “Summary of Significant Accounting Policies”.

The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021.

	For the nine months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	4,477		$	-		$	10,547,390		$	-		$	-		$	10,551,867
Cost of Revenues		4,626			-			9,523,812			-			-			9,528,438
Gross profit (loss)		（149）			-			1,023,578			-			-			1,023,429
Operating expenses		46,889			6,262			1,384,217			12,691			322,615			1,772,674
Income (loss) from operations		(47,038	)		(6,262	)		(360,639	)		(12,691	)		(322,615	)		(749,245	)
Net income (loss)	$	(49,359	)	$	(6,360	)	$	(279,028	)	$	(12,579	)	$	(728,415	)	$	(1,075,741	)

	For the nine months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	9,100,076		$	2,018		$	-		$	9,102,094
Cost of Revenues		-			8,061,782			10,159			-			8,071,941
Gross profit		-			1,038,294			(8,141	)		-			1,030,153
Operating expenses		8,374			1,202,101			23,641			176,268			1,410,384
Income (loss) from operations		(8,374	)		(163,807	)		(31,782	)		(176,268	)		(380,231	)
Net income (loss)	$	(8,213	)	$	(147,074	)	$	(31,781	)	$	(816,950	)	$	(1,004,018	)

	For the three months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	-		$	2,058,179		$	-		$	-		$	2,058,179
Cost of Revenues		-			-			1,788,635			-			-			1,788,635
Gross profit (loss)		-			-			269,544			-			-			269,544
Operating expenses		9,887			1,401			533,847			138			33,336			578,609
Income (loss) from operations		(9,887	)		(1,401	)		(264,303	)		(138	)		(33,336	)		(309,065)
Net income (loss)	$	(10,263	)	$	(1,399	)	$	(242,998	)	$	(26	)	$	(183,111	)	$	(437,797	)

	For the three months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	3,160,474		$	272		$	-		$	3,160,746
Cost of Revenues		-			2,802,520			(23	)		-			2,802,497
Gross profit (loss)		-			357,954			295			-			358,249
Operating expenses		2,842			428,842			5,893			37,666			475,243
Income (loss) from operations		(2,842	)		(70,888	)		(5,598	)		(37,666	)		(116,994	)
Net income (loss)	$	(2,841	)	$	(26,820	)	$	(5,598	)	$	(80,335	)	$	(115,594	)

XML

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Mar. 31, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 16- COMMITMENTS AND CONTINGENCIES

Lease commitment

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $295 (RMB2,000) until July 20, 2022.

The future minimum lease payments for non-cancelable operating leases held by the Group as of March 31,2022 was $295, which will be paid during June 2022.

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The Group’s audited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Basis of consolidation

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 94.55% of the ownership rights in the VIE and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions (if any) have been eliminated upon consolidation.

The subsidiaries of ionix are as follows:

Well Best International Investment Limited (the wholly-owned subsidiary)

Welly Surplus International Limited (the wholly-owned subsidiary)

Shijirun (Yixing) Technology Co., Ltd (the wholly-owned subsidiary)

Huixiang Energy Technology (Suzhou) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Photoelectric Display Technology Co. Ltd (the wholly-owned subsidiary)

Dalian Shizhe New Energy Technology Co., Ltd (the wholly-owned subsidiary)

Shenzhen Baileqi Electronic Technology Co., Ltd (the wholly-owned subsidiary)

Lisite Science Technology (Shenzhen) Co., Ltd (the wholly-owned subsidiary)

Changchun Fangguan Electronics Technology Co., Ltd ( the VIE)

Noncontrolling Interests

Noncontrolling Interests

The Group follows FASB ASC Topic 810, “Consolidation,” governing the accounting for and reporting of noncontrolling interests (“NCIs”) in partially owned consolidated subsidiaries and the loss of control of subsidiaries. Certain provisions of this standard indicate, among other things, that NCIs (previously referred to as minority interests) be treated as a separate component of equity, not as a liability, that increases and decreases in the parent’s ownership interest that leave control intact be treated as equity transactions rather than as step acquisitions or dilution gains or losses, and that losses of a partially-owned consolidated subsidiary be allocated to NCIs even when such allocation might result in a deficit balance.

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 3, therefore no income or loss is allocated to NCI.

Use of Estimates

Use of Estimates

The Group’s consolidated financial statements have been prepared in accordance with US GAAP and this requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting period. The significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts receivable and advance to suppliers, the valuation of inventory, provision for staff benefit, the useful lives of property and equipment and intangible assets, the impairment of long-lived assets, recognition and measurement of deferred income taxes and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results may ultimately differ from those estimates and such differences may be material to our consolidated financial statements.

Cash and cash equivalents

Cash and cash equivalents

Cash consists of cash on hand and cash in bank. Cash equivalents represent investment securities that are short-term, have high credit quality and are highly liquid. Cash equivalents are carried at fair market value and consist primarily of money market funds.

Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 90 to 180 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Group specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Group will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance-sheet credit exposure related to its customers. As of March 31,2022 and June 30, 2021, the Company has accounts receivable balance from non-related party of $4,340,702 and $4,936,974, net of allowance for doubtful accounts of $155,691 and $152,995, respectively. No bad debt expense was recorded during the three and nine months ended March 31,2022 and 2021.

Inventories

Inventories

Inventories consist of raw materials, working-in-process and finished goods. Inventories are valued at the lower of cost or net realizable value. The Group does determine cost on the basis of the weighted average method. The Group periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Group does believe that the assumptions the Group uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result.

Advances to suppliers

Advances to suppliers

Advances to suppliers represent prepayments for merchandise, which were purchased but had not been received. The balance of the advances to suppliers is reduced and reclassified to inventories when the raw materials are received and pass quality inspection.

Property, plant and equipment

Property, plant and equipment

Property, plant and equipment are recorded at cost less accumulated depreciation and any impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Repairs and maintenance costs are normally expensed as incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.

When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the statement of comprehensive income (loss) in the reporting period of disposition.

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows:

Buildings	10 – 20 years
Machinery and equipment	5 – 10 years
Office equipment	3 – 5 years
Automobiles	5 years

Intangible assets

Intangible assets

Land use right is recorded as cost less accumulated amortization. Land use rights represent the prepayments for the use of the parcels of land in the PRC where the Group’s production facilities are located, and are charged to expense over their respective lease periods of 50 years. According to the laws of the PRC, the government owns all of the land in the PRC. Enterprises or individuals are authorized to use the land only through land use rights granted by the PRC government for a certain period (usually 50 years).

Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows:

Land use right	50 years
Computer software	2-5 years

Gains or losses arising from derecognition of the intangible asset are measured at the difference between the net disposal proceeds and the carrying amount of the assets and are recognized in the statement of comprehensive income (loss) when the asset is disposed.

Impairment of long-lived assets

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Group are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

Revenue recognition

Revenue recognition

The Group adopted the new accounting standard, ASC 606, Revenue from Contracts with Customers, and all the related amendments (new revenue standard) to all contracts using the modified retrospective method beginning on July 1, 2018. The adoption did not result in an adjustment to the retained earnings as of June 30, 2018. The comparative information was not restated and continued to be reported under the accounting standards in effect for those periods. The adoption of the new revenue standard has no impact on either reported sales to customers or net earnings.

The Group estimates return based on historical results, taking into consideration the type of customers, the type of transactions and the specifics of each arrangement.

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Group expects to receive in exchange for those goods or services. The Group applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

· allocate the transaction price to performance obligations in the contract; and

· recognize revenue as the performance obligation is satisfied.

Under these criteria, for revenues from sale of products, the Group generally recognizes revenue when its products are delivered to customers in accordance with the written sales terms. The control of the products is transferred to the customer upon receipt of goods by the customer. For service revenue, the Group recognizes revenue when services are performed and accepted by customers.

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively:

	For the  nine months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$10,547,390	$9,100,076
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	4,477	-
Service contracts	-	2,018
Total	$10,551,867	$9,102,094

	For the Three Months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$2,058,179	$3,160,474
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	-	-
Service contracts	-	272
Total	$2,058,179	$3,160,746

All the operating entities of the Group are domiciled in the PRC. All the Group’s revenues are derived in the PRC during the three and nine months ended March 31,2022 and 2021

Cost of revenues

Cost of revenues

Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues.

Related parties and transactions

Related parties and transactions

The Group identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, "Related Party Disclosures" and other relevant ASC standards.

Parties, which can be a corporation or individual, are considered to be related if the Group has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Corporations are also considered to be related if they are subject to common control or common significant influence.

Transactions between related parties commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide accounting or measurement guidance for such transactions, it requires their disclosure nonetheless.

Income taxes

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and discloses in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

As of March 31,2022 and June 30, 2021, the Group did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

Comprehensive income (loss)

Comprehensive income (loss) is defined as the change in equity of a corporation during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized gains (losses) on marketable securities classified as available-for-sale (net of tax), foreign currency translation adjustments, and share of change in other comprehensive income of equity investments one quarter in arrears.

Leases

Leases

In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on balance sheet and disclose key information about the leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

The new standard is effective for us on July 1, 2019, with early adoption permitted. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Group adopted the new standard on July 1, 2019 and use the effective date as our date of initial application. Consequently, financial information is not provided for the dates and periods before July 1, 2019. The new standard provides a number of optional expedients in transition. The Group elected the package of practical expedients which permits us not to reassess under the new standard the Group's prior conclusions about lease identification, lease classification and initial direct costs. 

The new standard has no material effect on the consolidated financial statements of the Group as the Group does not have a lease with a term longer than 12 months as of June 30, 2021 (See Note 5).

Earnings (losses) per share

Earnings (losses) per share

Basic earnings (losses) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted earnings (losses) per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share or increase a net income per share.

 During the nine months ended March 31,2022 and 2021,the Company had outstanding convertible notes and warrants which represent 68,750 and  1,096,705 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31,2022 and 2021, the Company had outstanding convertible notes and warrants which represent 68,750 and 68,750 shares of commons stock. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

Foreign currencies translation

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in the People’s Republic of China (“PRC”) maintain their books and records in their local currency, the Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. Stockholders’ equity is translated at historical rates. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statements of stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of comprehensive income (loss).

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:

	March 31,2022		June 30, 2021
Balance sheet items, except for equity accounts		6.3482		6.4601

	Nine months ended March 31,
	2022		2021
Items in statements of comprehensive income (loss) and cash flows		6.4042		6.8254

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying value of the Group’s financial instruments: cash and cash equivalents, accounts receivable, inventory, prepayments and other receivables, accounts payable, income tax payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

The Group also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The Group has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 13).

Convertible Instruments

Convertible Instruments

The Group evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Group accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Group records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Group accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

Common Stock Purchase Warrants

Common Stock Purchase Warrants

The Group classifies as equity any contracts that require physical settlement or net-share settlement or provide a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement) provided that such contracts are indexed to the Company's own stock as defined in ASC 815-40 ("Contracts in Entity's Own Equity"). The Group classifies as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement).

Recent accounting pronouncements

Recent accounting pronouncements

The Group considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds and modifies certain disclosure requirements for fair value measurements. Under the guidance, public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for Calendar years beginning after December 15, 2019 and for interim periods within those Calendar years, but entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The Group is currently in the process of evaluating the impact of the adoption of this guidance on its consolidated financial statements.

COVID-19

COVID-19

The Group’s operations are affected by the recent and ongoing outbreak of the coronavirus disease 2019 (COVID-19) which in March 2020, was declared a pandemic by the World Health Organization. The COVID-19 outbreak is causing lockdowns, travel restrictions, and closures of businesses. The Group’s business has been negatively impacted by the COVID-19 coronavirus outbreak to certain extent.

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows:

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows:

Buildings	10 – 20 years
Machinery and equipment	5 – 10 years
Office equipment	3 – 5 years
Automobiles	5 years

The estimated useful lives of the intangible assets are as follows

Purchased intangible assets are recognized and measured at fair value upon acquisition. Intangible assets acquired separately and with finite useful lives are carried at costs less accumulated amortization and any accumulated impairment losses. Amortization for intangible assets with finite useful lives is provided on a straight-line basis over their estimated useful lives. Alternatively, intangible assets with indefinite useful lives are carried at cost less any subsequent accumulated impairment losses. The estimated useful lives of the intangible assets are as follows:

Land use right	50 years
Computer software	2-5 years

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively:

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively:

	For the  nine months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$10,547,390	$9,100,076
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	4,477	-
Service contracts	-	2,018
Total	$10,551,867	$9,102,094

	For the Three Months ended March 31,
	2022	2021
Sales of LCM and LCD screens - Non-related parties	$2,058,179	$3,160,474
Sales of LCM and LCD screens - Related parties	-	-
Sales of Lithume battery-related	-	-
Service contracts	-	272
Total	$2,058,179	$3,160,746

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows:

	March 31,2022		June 30, 2021
Balance sheet items, except for equity accounts		6.3482		6.4601

	Nine months ended March 31,
	2022		2021
Items in statements of comprehensive income (loss) and cash flows		6.4042		6.8254

XML

VARIABLE INTEREST ENTITY (Tables)

9 Months Ended

Mar. 31, 2022

Discontinued Operations and Disposal Groups [Abstract]

The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:

The Group’s ability to conduct its business through its VIE may be negatively affected if the PRC government were to carry out any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE in its consolidated financial statements as it may lose the ability to exert effective control over its VIE and its respective shareholders and it may lose the ability to receive economic benefits from its VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiaries and its VIE. There has been no change in facts and circumstances to consolidate the VIE. The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:

	Balance as of March 31,2022		Balance as of June 30, 2021
Cash and cash equivalents	$	1,133,938	$	702,979
Notes receivable		196,091		76,743
Accounts receivable - non-related parties		2,984,905		3,638,354
Inventory		4,487,946		4,899,831
Advances to suppliers - non-related parties		-		749,975
Prepaid expenses and other current assets		378,955		62,251
Total Current Assets		9,181,835		10,130,133
Property, plant and equipment, net		6,523,977		6,787,525
Intangible assets, net		1,510,225		1, 508,583
Deferred tax assets		50,988		50,105
Total Assets	$	17,267,025	$	18,476,346
Short-term bank loan	$	1,575,250	$	904,832
Accounts payable		1,404,463		3,960,792
Advance from customers		252,216		150,110
Due to related parties		1,918,358		2,349,518
Accrued expenses and other current liabilities		100,134		49,968
Total Current Liabilities		5,250,421		7,415,220
Total Liabilities	$	5,250,421	$	7,415,220

Schedule of condensed income statement and cash flow statement of its VIE are as follows:

Schedule of condensed income statement and cash flow statement of its VIE are as follows:

	For the nine months ended March 31 ,
	2022	2021
Revenue (*)	$10,547,390	$8,941,662
Net (loss) income	（182,642）	(107,417)
Net cash provided by (used in) operating activities	(432,992)	(581,315)
Net cash used in investing activities	(153,659)	(192,524)
Net cash provided by financing activities	1,472,853	（224,301）

(*) Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens.

XML

INVENTORIES (Tables)

9 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following:

Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following:

	Balance as of March 31,2022		Balance as of June 30, 2021
Raw materials	$	2,020,439	$	1,314,020
Work-in-process		2,152,242		3,367,716
Finished goods		879,579		772,635
Total Inventories	$	5,052,260	$	5,454,371

XML

PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

9 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

The components of property, plant and equipment were as follows:

The components of property, plant and equipment were as follows:

	March 31,2022			June 30, 2021
Buildings	$	5,162,763		$	5,073,335
Machinery and equipment		3,419,353			3,216,474
Office equipment		83,372			75,374
Automobiles		177,365			173,090
Subtotal		8,842,853			8,538,273
Less: Accumulated depreciation		(2,314,001	)		(1,745,958	)
Property, plant and equipment, net	$	6,528,852		$	6,792,315

XML

INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets consist of the following:

Intangible assets consist of the following:

	March 31,2022			June 30, 2021
Land use right	$	1,608,625		$	1,580,761
Computer software		30,432			29,905
Subtotal		1,639,057			1,610,666
Less: Accumulated amortization		(128,832	)		(102,083	)
Intangible assets, net	$	1,510,225		$	1,508,583

XML

SHORT-TERM BANK LOAN (Tables)

9 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

The Company’s short-term bank loans consist of the following:

The Company’s short-term bank loans consist of the following:

			March 31,2022		June 30, 2021
Loan payable to Industrial Bank, due October 2021	(2	)	$	-	$	348,324
Loan payable to Industrial Bank, due July 2022	(3	)		566,317		-
Loan payable to Industrial Bank, due July 2022	(4	)		654,468		-
Loan payable to Industrial Bank, due August 2021	(1	)		-		556,508
oan payable to Industrial Bank, due October 2022	(5	)		354,465		-
Total			$	1,575,250	$	904,832

(1) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$556,508 (RMB3,595,096) and maturity date at August 6, 2021.

During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$464,389 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$464,389 (RMB3,000,000) in full upon maturity. In August 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$553,987 (RMB3,595,096) in full upon maturity.

(2) During April 2021, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$346,966 (RMB2,250,212) and maturity date at October 13, 2021. On April 13, 2021, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On October 13, 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$346,966 (RMB2,250,212) in full upon maturity.

(3) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$566,317 (RMB3,595,096) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.  

(4) On July 28, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$654,468(RMB4,154,692) for a year until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

(5) On October 21, 2021, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$354,465(RMB2,250,212) for 9 months until July 27, 2022 with annual interest rate of 3.85%. The borrowing was collateralized by the Fangguan Electronics’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su.

XML

RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

9 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand.

Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand.

			March 31,2022		June 30, 2021
Ben Wong	(1	)	$	143,792	$	143,792
Yubao Liu	(2	)		294,163		352,236
Xin Sui	(3	)		2,016		2,016
Baozhen Deng	(4	)		53,375		45,276
Yunqiang Xie		(13)		35,758		-
Jialin Liang	(6	)(11)		1,404,801		1,844,857
Xuemei Jiang	(7	)(10)		563,939		554,171
Kou Yue		(12)		20,000		-
Shikui Zhang	(8	)		72,760		58,961
Biao Shang	(5	)		20,153		19,804
Changyong Yang	(9	)		40,055		32,705
			$	2,650,812	$	3,053,818

(1) Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company.

(2) Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company.

(3) Xin Sui serves as director of Welly Surplus.

(4) Baozhen Deng is a stockholder of the Company, who owns approximately 0.7% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T.

(5) Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric.

(6) Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company.

(7) Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company.

(8) Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019.

(9) Changyong Yang is a stockholder of the Company,who owns approximately 1.3% of the Company’s outstanding common stock,and the owner of Keenest.

(10) The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded.

(11) At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $5.8 million (RMB39,581,883), among which approximately $4.4 million (RMB30,000,000) was used for debt for equity swap by Mr.Liang during the capital increase of Fangguan Electronics occurred in March 2019. Thereafter Mr.Liang continued making advances to Fangguan Electronics.

(12) Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her.

(13) Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun.

XML

CONCENTRATION (Tables)

9 Months Ended

Mar. 31, 2022

Risks and Uncertainties [Abstract]

Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows:

Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: 

	For the nine months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,407,785		23	%	$	167,005		4	%
Customer B		1,153,277		11	%		68,320		2	%
Total	$	3,561,062		34	%	$	235,325		6	%

	For the nine months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts receivable
Customer A	$	1,666,368		18	%	$	229,336		7	%
Customer B		1,352,195		15	%		-		-	%
Customer C		950,501		10	%		184,584		5	%
Total	$	3,969,064		43	%	$	413,920		12	%

	For the three months ended   March 31,2022					As of March 31,2022
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	804,981		39	%	$	167,005		4	%
Total	$	804,981		39	%	$	167,005		4	%

	For the three months ended   March 31,2021					As of March 31,2021
	Revenue		Percentage of revenue			Accounts  receivable		Percentage of accounts  receivable
Customer A	$	612,781		19	%	$	229,336		7	%
Customer B		484,802		15	%		-		-	%
Customer C		441, 260		14	%		184,584		5	%
Total	$	1,538,843		48	%	$	413,920		12	%

The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows:

The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows:

	For the nine months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,881,357		23	%	$	89,333		4	%
Total	$	1,881,357		23	%	$	89,333		4	%

	For the nine months ended March 31,2021					As of March 31,2021
	Total Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	1,148,322		14	%	$	65,123		2	%
Supplier B		796,553		10	%		364,146		14	%
Total	$	1,944,875		24	%	$	429,269		16	%

	For the Three Months ended   March 31,2022					As of March 31,2022
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	257,421		15	%	$	89,333		4	%
Supplier B		181,509		11			146,204		6
Total	$	438,930		26	%	$	235,537		10	%

	For the Three Months ended   March 31,2021					As of March 31,2021
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	404,404		13	%	$	65,123		2	%
		371,731		12	%		-		-	%
Total	$	776,135		25	%	$	65,123		2	%

XML

INCOME TAXES (Tables)

9 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows:

The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows:

	For the nine months ended March 31,
	2022			2021
Tax (benefit) at U.S. statutory rate	$	(211,659	)	$	(215,790	)
Tax rate difference between foreign operations and U.S.		556			26,511
Change in valuation allowance		64,836			155,922
Permanent difference		214,108			9,802
Effective tax (benefit)	$	67,841		$	(23,555	)

The provisions for income taxes (benefits) are summarized as follows:

The provisions for income taxes (benefits) are summarized as follows:

	For the nine months ended March 31,
	2022		2021
Current	$	67,841	$	2,353
Deferred		-		(25,908	)
Total	$	67,841	$	(23,555	)

XML

CONVERTIBLE DEBT (Tables)

9 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

The change of derivative liabilities is as follows:

The change of derivative liabilities is as follows:

Balance at July 1, 2020	$	276,266
Converted		(357,868	)
Debt settlement		(566,030	)
Change in fair value recognized in operations		647,632
Balance at March 31,2021	$	-

The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions:

The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions:

Estimated dividends	None
Expected volatility	78.55% to 253.30%
Risk free interest rate	0.61% to 0.93%
Expected term	0 to 6 months

The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions:

The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions:

Estimated dividends	None
Expected volatility	56.23% to 71.08%
Risk free interest rate	1.73% to 1.92%
Expected term	5 years

The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows:

The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (years)
Outstanding at July 1, 2021 （Note1）		68,750	$	2.80		3.53
Granted		-		-		-
Exercised or settled		-		-		-
Cancelled or Expired		-		-		-
Outstanding at March 31,2022（Note1）		68,750	$	2.80		2.78

Note1: The herein mentioned warrant of 68,750 shares are entitled by Labrys Fund, LP  in connection with the issuance of the $146,850 convertible promissory note on January 10, 2020.

	Number of Shares			Weighted Average Exercise Price	Remaining Contractual Term (years)
Outstanding at July 1, 2020	229,166		$	2.68	4.20 to 4.53
Granted	-			-	-
Exercised or settled     （Note2）	(160,416	)		2.63	4.05 to 4.16
Cancelled or expired	-			-	-
Outstanding at March 31,2021 （Note 1）	68,750		$	2.80	3.78

XML

PROMISSORY NOTE (Tables)

9 Months Ended

Mar. 31, 2022

Promissory Note

Schedule of promissory note as of March 31,2022 is as follows:

Schedule of promissory note as of March 31,2022 is as follows:

			Note Balance		Debt Discount		Carrying Value
Labrys Fund, LP	(1	)	$	-	$	-	$	-
Labrys Fund, LP	(2	)		-		-		-
Firstfire Global Opportunities Fund, LLC	(3	)		325,000		29,230		295,770
Talos Victory Fund, LLC	(4	)		250,000		68,819		181,181
Mast Hill Fund, L.P	(5	)		250,000		71,505		178,495
Blue Lake Partners, LLC	(6	)		500,000		155,969		344,031
Total			$	1,325,000	$	325,523	$	999,477

(1) On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 31,2021 and received $253,500 in cash after deducting an OID in the amount of $30,000, legal fees of $3,000 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $35,000 payment at each month end beginning on April 23, 2021 through December 21, 2021.

In connection with the issuance of promissory note, on December 31,2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par.

On December 21 2021,the total of 1,119,402 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.(See Note 9)

(2) On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 19, 2021 and received $434,000 in cash after deducting an OID in the amount of $50,000, legal fees of $2,500 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning on July 9, 2021 through March 10, 2022.

In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par. (See Note 9)

The payment as of $58,333.33 originally scheduled on December 10, 2021 was postponed to January 10,2022 on

which date that the payment of the total of $233,333.35 was made by the Company to fully refund the remaining balance of this self-amortization promissory note.

On January 10 ,2022, the total of 1,042,000 shares of common stock which were previously recorded at par as the Second Commitment Shares related to the aforesaid promissory note, were returned to the Company’s treasury because this promissory note was already fully repaid and satisfied prior to the maturity date.

(3) On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.

In connection with the issuance of promissory note, on July 8 , 2021, the Company issued 300,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $51,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

The two monthly payments as of $58,333.33 each originally scheduled on November 9, 2021 and December 9, 2021 respectly were postponed to January 7,2022 on which date that the payment at the total of $175,000 was made by the Company to settle the payments scheduled for the period from November 9,2021 to January 7,2022.

(4) On December 29, 2021, the Company issued a self-amortization promissory note to Talos Victory Fund, LLC,in the aggregate principal amount of $250,000. The promissory note is due on or before December 29, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 6,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on December 30 , 2021, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $53,125 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par.(See note9)

(5) On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

In connection with the issuance of promissory note, on January 3 , 2022, the Company issued 625,000 shares of common stock (the “First Commitment Shares”) and 1,562,500 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company records the First Commitment Shares as debt discount valued at $55,000 based on the quoted market price at issue date and amortized over the term of the promissory note and the Second Commitment Shares at par for the three and nine months ended March 31, 2022.(See note 9)

(6) On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.

XML

SEGMENT INFORMATION (Tables)

9 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021

The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021.

	For the nine months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	4,477		$	-		$	10,547,390		$	-		$	-		$	10,551,867
Cost of Revenues		4,626			-			9,523,812			-			-			9,528,438
Gross profit (loss)		（149）			-			1,023,578			-			-			1,023,429
Operating expenses		46,889			6,262			1,384,217			12,691			322,615			1,772,674
Income (loss) from operations		(47,038	)		(6,262	)		(360,639	)		(12,691	)		(322,615	)		(749,245	)
Net income (loss)	$	(49,359	)	$	(6,360	)	$	(279,028	)	$	(12,579	)	$	(728,415	)	$	(1,075,741	)

	For the nine months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	9,100,076		$	2,018		$	-		$	9,102,094
Cost of Revenues		-			8,061,782			10,159			-			8,071,941
Gross profit		-			1,038,294			(8,141	)		-			1,030,153
Operating expenses		8,374			1,202,101			23,641			176,268			1,410,384
Income (loss) from operations		(8,374	)		(163,807	)		(31,782	)		(176,268	)		(380,231	)
Net income (loss)	$	(8,213	)	$	(147,074	)	$	(31,781	)	$	(816,950	)	$	(1,004,018	)

	For the three months ended March 31,2022
	Lithume battery-related			Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	-		$	2,058,179		$	-		$	-		$	2,058,179
Cost of Revenues		-			-			1,788,635			-			-			1,788,635
Gross profit (loss)		-			-			269,544			-			-			269,544
Operating expenses		9,887			1,401			533,847			138			33,336			578,609
Income (loss) from operations		(9,887	)		(1,401	)		(264,303	)		(138	)		(33,336	)		(309,065)
Net income (loss)	$	(10,263	)	$	(1,399	)	$	(242,998	)	$	(26	)	$	(183,111	)	$	(437,797	)

	For the three months ended March 31,2021
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	-		$	3,160,474		$	272		$	-		$	3,160,746
Cost of Revenues		-			2,802,520			(23	)		-			2,802,497
Gross profit (loss)		-			357,954			295			-			358,249
Operating expenses		2,842			428,842			5,893			37,666			475,243
Income (loss) from operations		(2,842	)		(70,888	)		(5,598	)		(37,666	)		(116,994	)
Net income (loss)	$	(2,841	)	$	(26,820	)	$	(5,598	)	$	(80,335	)	$	(115,594	)

XML

NATURE OF OPERATIONS (Details Narrative) - USD ($)	Dec. 24, 2021	May 06, 2021	Dec. 27, 2018	Mar. 31, 2022
VIE Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired	94.55%
Shareholder loan	$ 400,000
Cash			$ 9,700,000
VIE Agreements [Member] | China, Yuan Renminbi
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shareholder loan	2,500,000
VIE Agreements [Member] | Fangguan Electronics 1 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired			95.14%	94.55%
Number of shares issue			15,000,000
Shareholder loan			$ 4,400,000
Description of ownership right acquire			Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics
VIE Agreements [Member] | Fangguan Electronics 1 [Member] | China, Yuan Renminbi
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shareholder loan			$ 30,000,000
VIE Agreements [Member] | Fangguan Electronics 2 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shareholder loan	$ 780,000
Description of voting securities	VIE from RMB50 million (approximately $7.2 million) to RMB55 million(approximately $8.0 million).
VIE Agreements [Member] | Fangguan Electronics 2 [Member] | China, Yuan Renminbi
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Shareholder loan	$ 5,000,000.0
Cash	$ 1,000,000.0
Board of Directors Chairman [Member] | Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Description of majority voting		common stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation of the Company. The approval was made in accordance with Sections 78.320 and 78.390 of the Nevada Revised Statues, which provide that a corporation’s articles may be amended by written consent of the stockholders of the Company representing at least a majority of the voting power of the Company.

XML

Depreciation is calculated on a straight-line basis over the estimated useful life of the assets after taking into account their respective estimated residual value. The estimated useful life of the assets is as follows: (Details)	9 Months Ended
	Mar. 31, 2022
Building [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	10 years
Building [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	20 years
Machinery and Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	10 years
Office Equipment [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	3 years
Office Equipment [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	5 years
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of tangible assets	5 years

XML

The estimated useful lives of the intangible assets are as follows (Details)	9 Months Ended
	Mar. 31, 2022
Use Rights [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of intangible assets	50 years
Computer Software, Intangible Asset [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of intangible assets	2 years
Computer Software, Intangible Asset [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life of intangible assets	5 years

XML

The following tables disaggregate the Revenue of the Group by major source for the three and nine months ended March 31,2022 and 2021, respectively: (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Product Information [Line Items]
Total Revenues	$ 2,058,179	$ 3,160,746	$ 10,551,867	$ 9,102,094
Non Related Parties [Member]
Product Information [Line Items]
Total Revenues	2,058,179	3,160,474	10,547,390	9,100,076
Related Parties [Member]
Product Information [Line Items]
Total Revenues	(0)	(0)	(0)	(0)
Lithume Battery Related [Member]
Product Information [Line Items]
Total Revenues	(0)	(0)	4,477	(0)
Service [Member]
Product Information [Line Items]
Total Revenues	$ (0)	$ 272	$ (0)	$ 2,018

XML

The exchange rates used to translate amounts in RMB into U.S. Dollars for the purposes of preparing the consolidated financial statements are as follows: (Details)	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
Income And Cash Flow [Member]
Exchange rate	6.4042		6.8254
Balance Sheet [Member]
Exchange rate	6.3482	6.4601

XML

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 24, 2021	Jun. 30, 2021	Dec. 27, 2018
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Outstanding warrants	68,750	68,750	68,750	1,096,705
Use Rights [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Estimated useful life of intangible assets			50 years
Non Related Party [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Account receivable	$ 4,340,702		$ 4,340,702			$ 4,936,974
Net of allowance for doubtful accounts	$ 155,691		$ 155,691			$ 152,995
VIE Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired					94.55%
VIE Agreements [Member] | Fangguan Electronics 1 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired	94.55%		94.55%				95.14%
Percentage of recieve net income or net loss	100.00%		100.00%

XML

The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: (Details) - USD ($)	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2020
Cash and cash equivalents	$ 1,141,244	$ 731,819	$ 542,092	$ 1,285,373
Notes receivable	196,091	76,743
Inventory	5,052,260	5,454,371
Advances to suppliers - non-related parties	468,797	782,481
Prepaid expenses and other current assets	688,462	478,830
Total Current Assets	12,329,094	12,895,418
Property, plant and equipment, net	6,528,852	6,792,315
Intangible assets, net	1,510,225	1,508,583
Total Assets	20,949,085	21,737,436
Short-term bank loan	1,575,250	904,832
Accounts payable	2,448,506	4,942,881	$ 65,123
Advance from customers	446,855	334,101
Due to related parties	2,650,812	3,053,818
Accrued expenses and other current liabilities	230,375	117,450
Total Current Liabilities	8,351,275	9,886,398
Total Liabilities	8,351,275	9,886,398
Consolidated Entity, Excluding Consolidated VIE [Member]
Cash and cash equivalents	1,133,938	702,979
Notes receivable	196,091	76,743
Accounts receivable - non-related parties	2,984,905	3,638,354
Inventory	4,487,946	4,899,831
Advances to suppliers - non-related parties		749,975
Prepaid expenses and other current assets	378,955	62,251
Total Current Assets	9,181,835	10,130,133
Property, plant and equipment, net	6,523,977	6,787,525
Intangible assets, net	1,510,225	1
Deferred tax assets	50,988	50,105
Total Assets	17,267,025	18,476,346
Short-term bank loan	1,575,250	904,832
Accounts payable	1,404,463	3,960,792
Advance from customers	252,216	150,110
Due to related parties	1,918,358	2,349,518
Accrued expenses and other current liabilities	100,134	49,968
Total Current Liabilities	5,250,421	7,415,220
Total Liabilities	$ 5,250,421	$ 7,415,220

XML

Schedule of condensed income statement and cash flow statement of its VIE are as follows: (Details) - USD ($)		3 Months Ended						9 Months Ended		15 Months Ended
		Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2021
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue		$ 2,058,179			$ 3,160,746			$ 10,551,867	$ 9,102,094
Net (loss) income		$ (437,797)	$ (97,745)	$ (540,199)	$ (115,594)	$ (356,118)	$ (532,306)	(1,075,741)	(1,004,018)	$ (115,594)
Net cash provided by (used in) operating activities								(1,218,987)	(1,411,451)
Net cash used in investing activities								(153,659)	(192,524)
Net cash provided by financing activities								1,576,064	787,342
Trading Revenue [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	[1]							10,547,390	8,941,662
Trading Revenue [Member] | Consolidated Entity, Excluding Consolidated VIE [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net (loss) income								182,642	(107,417)
Net cash provided by (used in) operating activities								(432,992)	(581,315)
Net cash used in investing activities								(153,659)	(192,524)
Net cash provided by financing activities								$ 1,472,853	$ 224,301

[1] Revenue generated by the VIE are primarily from manufacturing and trading LCM and LCD screens.

XML

VARIABLE INTEREST ENTITY (Details Narrative) - VIE Agreements [Member] - shares shares in Millions	Dec. 27, 2018	Dec. 24, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired		94.55%
Changchun Fangguan Electronics Technology CoLtd 1 [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of voting interests acquired	95.14%
Description of ownership right acquire	the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronics
Number of shares issue	15

XML

Inventories are stated at the lower of cost (determined using the weighted average cost) or net realizable value. Inventories consist of the following: (Details) - USD ($)	Mar. 31, 2022	Jun. 30, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 2,020,439	$ 1,314,020
Work-in-process	2,152,242	3,367,716
Finished goods	879,579	772,635
Total Inventories	$ 5,052,260	$ 5,454,371

XML

OPERATING LEASE (Details Narrative) - USD ($)				9 Months Ended
	Jul. 20, 2021	Jul. 20, 2021	Jul. 20, 2020	Mar. 31, 2022
Office And Warehouse [Member] | Shenzhen Keenest Technology Co Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Lease renewal term	one more year until July 20, 2022		one more year until July 20, 2021
Monthly rent			$ 1,500
Office And Warehouse [Member] | China, Yuan Renminbi | Shenzhen Keenest Technology Co Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Monthly rent			10,000
Office And Warehouse One [Member] | Shenzhen Keenest Technology Co Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Monthly rent			295
Office And Warehouse One [Member] | China, Yuan Renminbi | Shenzhen Keenest Technology Co Ltd [Member]
Defined Benefit Plan Disclosure [Line Items]
Monthly rent			2,000
Lisite Science [Member] | Office And Warehouse Spaces [Member]
Defined Benefit Plan Disclosure [Line Items]
Annual rent		$ 295	1,500	$ 1,500
Lease renewal term				one year until July 20, 2020.
Lisite Science [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi
Defined Benefit Plan Disclosure [Line Items]
Annual rent			$ 10,000	$ 10,000

XML

The components of property, plant and equipment were as follows: (Details) - USD ($)	Mar. 31, 2022	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Subtotal	$ 8,842,853	$ 8,538,273
Less: Accumulated depreciation	(2,314,001)	(1,745,958)
Property, plant and equipment, net	6,528,852	6,792,315
Building [Member]
Property, Plant and Equipment [Line Items]
Subtotal	5,162,763	5,073,335
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	3,419,353	3,216,474
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Subtotal	83,372	75,374
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Subtotal	$ 177,365	$ 173,090

XML

PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 177,489	$ 167,245	$ 531,811	$ 468,186

XML

Intangible assets consist of the following: (Details) - USD ($)	Mar. 31, 2022	Jun. 30, 2021
Finite-Lived Intangible Assets [Line Items]
Subtotal	$ 1,639,057	$ 1,610,666
Less: Accumulated amortization	(128,832)	(102,083)
Intangible assets, net	1,510,225	1,508,583
Use Rights [Member]
Finite-Lived Intangible Assets [Line Items]
Subtotal	1,608,625	1,580,761
Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Subtotal	$ 30,432	$ 29,905

XML

INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense related to intangible assets	$ 8,244	$ 10,063	$ 24,697	$ 44,189

XML

The Company’s short-term bank loans consist of the following: (Details) - USD ($)			1 Months Ended
		Jul. 27, 2021	Oct. 31, 2021	Aug. 31, 2021	Apr. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Mar. 31, 2022	Oct. 21, 2021	Jul. 28, 2021	Jun. 30, 2021	Apr. 13, 2021	Sep. 10, 2020	Aug. 11, 2020
Short-Term Debt [Line Items]
Total								$ 1,575,250			$ 904,832
Fangguan Electronics [Member] | Short Term Loan Agreement [Member] | Industrial Bank [Member]
Short-Term Debt [Line Items]
Debt maturity date		Jul. 27, 2022
Interest rate									3.85%	3.85%
Borrowed amount									$ 354,465	$ 566,317
Fangguan Electronics [Member] | China, Yuan Renminbi | Short Term Loan Agreement [Member] | Industrial Bank [Member]
Short-Term Debt [Line Items]
Borrowed amount									$ 2,250,212	$ 3,595,096
Notes Payable to Banks [Member]
Short-Term Debt [Line Items]
Total	[1]							(0)			348,324
Notes Payable To Banks One [Member]
Short-Term Debt [Line Items]
Total	[2]							566,317			(0)
Notes Payable To Banks Two [Member]
Short-Term Debt [Line Items]
Total	[3]							654,468
Notes Payable To Banks Three [Member]
Short-Term Debt [Line Items]
Total	[4]							(0)			556,508
Notes Payable To Banks Four [Member]
Short-Term Debt [Line Items]
Total	[5]							$ 354,465			$ (0)
Commercial Loan [Member] | Fangguan Electronics [Member]
Short-Term Debt [Line Items]
Proceeds from issuance of commercial paper					$ 346,966		$ 464,389
Debt maturity date					Oct. 13, 2021		Mar. 09, 2021
Interest rate												3.85%	3.80%	3.80%
Repayments of bank debt			$ 346,966	$ 553,987		$ 464,389
Commercial Loan [Member] | Fangguan Electronics [Member] | China, Yuan Renminbi
Short-Term Debt [Line Items]
Proceeds from issuance of commercial paper					$ 2,250,212		$ 3,000,000
Repayments of bank debt			$ 2,250,212	$ 3,595,096		$ 3,000,000

[1] Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company.

[2] Xin Sui serves as director of Welly Surplus.

[3] Baozhen Deng is a stockholder of the Company, who owns approximately 0.7% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T.

[4] Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company.

[5] Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric.

XML

SHORT-TERM BANK LOAN (Details Narrative) - Fangguan Electronics [Member] - Commercial Loan [Member] - USD ($)	1 Months Ended
	Oct. 31, 2021	Aug. 31, 2021	Apr. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Apr. 13, 2021	Sep. 10, 2020	Aug. 11, 2020
Short-Term Debt [Line Items]
Proceeds from Issuance of Commercial Paper			$ 346,966		$ 464,389
Debt Instrument, Maturity Date			Oct. 13, 2021		Mar. 09, 2021
Interest rate						3.85%	3.80%	3.80%
Repayments of Bank Debt	$ 346,966	$ 553,987		$ 464,389
China, Yuan Renminbi
Short-Term Debt [Line Items]
Proceeds from Issuance of Commercial Paper			$ 2,250,212		$ 3,000,000
Repayments of Bank Debt	$ 2,250,212	$ 3,595,096		$ 3,000,000

XML

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)									3 Months Ended
	Feb. 17, 2022	Jan. 03, 2022	Dec. 29, 2021	Dec. 15, 2021	Oct. 04, 2021	Jul. 15, 2021	Jul. 08, 2021	Jul. 05, 2021	Dec. 31, 2020	Mar. 31, 2022	May 04, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Value, Issued for Services									$ 67,028
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services									1,500,000
Stock Issued During Period, Value, Issued for Services									$ 150
Nine Individual Subscribers [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services				6,580
Stock Issued During Period, Value, Issued for Services				$ 394,800	$ 3,492,720
Nine Individual Subscribers [Member] | Subscription Agreements [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services					29,106,000
Nine Individual Subscribers [Member] | Common Stock [Member] | Subscription Agreements [Member] | Private Placement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share Price				$ 0.06							$ 0.12
Promissory Note [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Cash received			$ 211,250			$ 437,500
Other cost			$ 13,750			$ 12,500
Amortization Expense Payable										$ 58,333.33
Promissory Note [Member] | L A B R Y S F U N D L P [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Debt maturity date								Jul. 06, 2022
Number of shares reserve for issuance								6,562,500
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock First Commitment Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services							300,000
Debt Instrument, Unamortized Discount							$ 51,000
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services		1,562,500	1,562,500				1,042,000
Promissory Note [Member] | Talos Victory Fund LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Borrowed amount	$ 500,000	$ 250,000	$ 250,000
Interest rate	5.00%	5.00%	5.00%
Number of shares reserve for issuance			7,875,000
Amortization Expense Payable										53,125
Stock Issued During Period, Shares, Conversion of Convertible Securities		625,000	625,000
Promissory Note 1 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Cash received		$ 211,250
Other cost		$ 13,750
Amortization Expense Payable										29,166.66
Promissory Note 1 [Member] | Talos Victory Fund LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares reserve for issuance		7,875,000
Amortization Expense Payable										55,000
Promissory Note 2 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Cash received		$ 422,500
Other cost		$ 27,500
Amortization Expense Payable										29,166.66
Promissory Note 2 [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock Issued During Period, Shares, Issued for Services		1,250,000
Promissory Note 2 [Member] | Talos Victory Fund LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares reserve for issuance		15,750,000
Promissory Note 3 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Amortization Expense Payable										$ 58,333.33
Promissory Note [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Borrowed amount								$ 500,000
Interest rate								5.00%

XML

Due to related parties represents the certain advances to the Group by related parties. The amounts are non-interest bearing, unsecured and due on demand. (Details) - USD ($)		Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2021	Dec. 27, 2018
Related Party Transaction [Line Items]
Due to related parties		$ 2,650,812		$ 3,053,818
Baozhen Deng [Member]
Related Party Transaction [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		0.70%
Changyong Yang [Member]
Related Party Transaction [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		1.30%
Jialin Liang [Member] | Fangguan Electronics [Member]
Related Party Transaction [Line Items]
Due to Related Parties			$ 4,400,000		$ 5,800,000
Jialin Liang [Member] | Fangguan Electronics [Member] | China, Yuan Renminbi
Related Party Transaction [Line Items]
Due to Related Parties			$ 30,000,000		$ 39,581,883
Ben Wong [Member]
Related Party Transaction [Line Items]
Due to related parties	[1]	$ 143,792		143,792
Yubao Liu [Member]
Related Party Transaction [Line Items]
Due to related parties	[2]	294,163		352,236
Xin Sui [Member]
Related Party Transaction [Line Items]
Due to related parties	[3]	2,016		2,016
Baozhen Deng [Member]
Related Party Transaction [Line Items]
Due to related parties	[4]	53,375		45,276
Yunqiang Xie [Member]
Related Party Transaction [Line Items]
Due to related parties	[5]	35,758
Jialin Liang [Member]
Related Party Transaction [Line Items]
Due to related parties	[6],[7]	1,404,801		1,844,857
Xuemei Jiang [Member]
Related Party Transaction [Line Items]
Due to related parties	[8],[9]	563,939		554,171
Kou Yue [Member]
Related Party Transaction [Line Items]
Due to related parties	[10]	20,000
Shikui Zhang [Member]
Related Party Transaction [Line Items]
Due to related parties	[11]	72,760		58,961
Biao Shang [Member]
Related Party Transaction [Line Items]
Due to related parties	[12]	20,153		19,804
Changyong Yang [Member]
Related Party Transaction [Line Items]
Due to related parties	[13]	$ 40,055		$ 32,705

[1] Ben Wong was the former controlling shareholder (before April 20, 2017) of Shinning Glory, which holds majority shares in the Company.

[2] Yubao Liu has been the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in the Company. He also serves as director of the Company.

[3] Xin Sui serves as director of Welly Surplus.

[4] Baozhen Deng is a stockholder of the Company, who owns approximately 0.7% of the Company’s outstanding common stock, and the owner of Shenzhen Baileqi S&T.

[5] Mr Yunqiang Xie is a stockholder of the Company and serves as director of Shijirun.

[6] At the acquisition date of Fangguan Electronics (December 27, 2018), the advances to Fangguan Electronics by Jialin Liang amounted to be approximately $5.8 million (RMB39,581,883), among which approximately $4.4 million (RMB30,000,000) was used for debt for equity swap by Mr.Liang during the capital increase of Fangguan Electronics occurred in March 2019. Thereafter Mr.Liang continued making advances to Fangguan Electronics.

[7] Jialin Liang is a stockholder of the Company, serves as the president, CEO, and director of Fangguan Electronics and director of the Company.

[8] The liability represents the advances to Fangguan Electronics by Xuemei Jiang at the acquisition date of Fangguan Electronics (December 27, 2018). Thereafter Ms.Jiang neither made any further advance nor was refunded.

[9] Xuemei Jiang is a stockholder of the Company and serves as director of both Fangguan Electronics and the Company.

[10] Ms. Yue Kou is the CFO of the Company. During the nine months ended March 31,2022, Ms.Kou advanced $20,000 to Well Best after netting off the refund paid to her.

[11] Shikui Zhang is a stockholder of the Company and serves as the general manager of Shizhe New Energy since May 2019.

[12] Biao Shang is a stockholder of the Company and serves as director of Fangguan Photoelectric.

[13] Changyong Yang is a stockholder of the Company,who owns approximately 1.3% of the Company’s outstanding common stock,and the owner of Keenest.

XML

RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative) - USD ($)				9 Months Ended		12 Months Ended
	Jul. 20, 2021	Jul. 20, 2020	Jun. 05, 2020	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021	Sep. 23, 2020
Lisite Science [Member] | Office And Warehouse Spaces [Member]
Related Party Transaction [Line Items]
Annual rent	$ 295	$ 1,500		$ 1,500
Lease renewal term	one more year until July 20, 2022			one year until July 20, 2020
Lisite Science [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi
Related Party Transaction [Line Items]
Annual rent		$ 10,000		$ 10,000
Baileqi Electronic [Member] | Office And Warehouse Spaces [Member]
Related Party Transaction [Line Items]
Lease renewal term			one more year until May 31, 2021
Baileqi Electronic [Member] | Office And Warehouse Spaces [Member] | China, Yuan Renminbi
Related Party Transaction [Line Items]
Monthly Operating Lease Cost			$ 17,525	17,525
Linga [Member]
Related Party Transaction [Line Items]
Repayments of Related Party Debt				440,056
Linga [Member] | China, Yuan Renminbi
Related Party Transaction [Line Items]
Repayments of Related Party Debt				3,000,000
Liu [Member]
Related Party Transaction [Line Items]
Repayments of Related Party Debt				58,073
Baozhen Deng [Member]
Related Party Transaction [Line Items]
Repayments of Related Party Debt				8,099	$ 3,836
Shikui Zhang [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt				13,799	23,000
Changyong Yang [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt				7,350	9,000
Yunqiang Xie [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt				35,758
Yue Kou [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt				20,000
Yubao Liu [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt					295,928
Shenzhen Baileq [Member]
Related Party Transaction [Line Items]
Repayments of Related Party Debt					$ 23,937
Jialin Liang [Member]
Related Party Transaction [Line Items]
Loans Payable to Bank, Current							$ 441,000
Short-term Debt, Percentage Bearing Fixed Interest Rate							3.85%
Jialin Liang [Member] | China, Yuan Renminbi
Related Party Transaction [Line Items]
Loans Payable to Bank, Current							$ 3,000,000
Keenest [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt				441,538		$ 434,200
Baileqi Electronic [Member] | Office And Warehouse Space [Member]
Related Party Transaction [Line Items]
Monthly Operating Lease Cost			$ 2,500	$ 2,500

XML

Customers who accounted for 10% or more of the Group’s revenues (goods sold and services) and its outstanding balance of accounts receivable are presented as follows: (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021	Jun. 30, 2021
Concentration Risk [Line Items]
Revenue	$ 2,058,179	$ 3,160,746	$ 10,551,867	$ 9,102,094
Accounts receivable	4,340,702		4,340,702			$ 4,936,974
Sales [Member]
Concentration Risk [Line Items]
Revenue	$ 804,981	$ 1,538,843	$ 3,561,062	$ 3,969,064
Percentage of total accounts receivable	39.00%	48.00%	34.00%	43.00%
Sales [Member] | Customer A [Member]
Concentration Risk [Line Items]
Revenue	$ 804,981	$ 612,781	$ 2,407,785	$ 1,666,368
Percentage of total accounts receivable	39.00%	19.00%	23.00%	18.00%
Sales [Member] | Customer B [Member]
Concentration Risk [Line Items]
Revenue		$ 484,802	$ 1,153,277	$ 1,352,195
Percentage of total accounts receivable		15.00%	11.00%	15.00%
Sales [Member] | Customer C [Member]
Concentration Risk [Line Items]
Revenue		$ 441		$ 950,501
Percentage of total accounts receivable		14.00%		10.00%
Accounts Receivable [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	4.00%	12.00%	6.00%	12.00%
Accounts receivable	$ 235,325	$ 413,920	$ 235,325	$ 413,920	$ 413,920
Accounts Receivable [Member] | Customer A [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	4.00%	7.00%	4.00%	7.00%
Accounts receivable	$ 167,005	$ 229,336	$ 167,005	$ 229,336	229,336
Accounts Receivable [Member] | Customer B [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable			2.00%
Accounts receivable	$ 68,320	$ (0)	$ 68,320	$ (0)	(0)
Accounts Receivable [Member] | Customer C [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable		5.00%		5.00%
Accounts receivable		$ 184,584		$ 184,584	$ 184,584

XML

The suppliers who accounted for 10% or more of the Group’s total purchases (materials and services) and its outstanding balance of accounts payable are presented as follows: (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021
Concentration Risk [Line Items]
Accounts payable	$ 2,448,506	$ 65,123	$ 2,448,506	$ 65,123	$ 4,942,881
Purchases [Member]
Concentration Risk [Line Items]
Purchase	$ 438,930	$ 776,135	$ 1,881,357	$ 1,944,875
Percentage of total accounts receivable	26.00%	25.00%	23.00%	24.00%
Percentage of total accounts receivable		2.00%		2.00%
Purchases [Member] | Supplier A [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	15.00%	13.00%	23.00%	14.00%
Purchases [Member] | Supplier B [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	11.00%			10.00%
Purchases [Member] | Supplier A [Member]
Concentration Risk [Line Items]
Purchase	$ 257,421	$ 404,404	$ 1,881,357	$ 1,148,322
Purchases [Member] | Supplier B [Member]
Concentration Risk [Line Items]
Purchase	$ 181,509	371,731		796,553
Accounts payable		(0)		$ (0)
Accounts Payable [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	10.00%		4.00%	16.00%
Accounts payable	$ 89,333	$ 429,269	$ 89,333	$ 429,269
Accounts Payable [Member] | Supplier A [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	4.00%		4.00%	2.00%
Percentage of total accounts receivable		2.00%		2.00%
Accounts Payable [Member] | Supplier B [Member]
Concentration Risk [Line Items]
Percentage of total accounts receivable	6.00%	12.00%		14.00%
Accounts Payable [Member] | Supplier A [Member]
Concentration Risk [Line Items]
Accounts payable	$ 89,333	$ 65,123	$ 89,333	$ 65,123
Accounts Payable [Member] | Supplier B [Member]
Concentration Risk [Line Items]
Accounts payable	$ 146,204	$ 364,146	$ 146,204	$ 364,146

XML

The reconciliation of income tax expense (benefit) at the U.S. statutory rate of 21% to the Group's effective tax rate is as follows: (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Tax (benefit) at U.S. statutory rate			$ (211,659)	$ (215,790)
Tax rate difference between foreign operations and U.S.			556	26,511
Change in valuation allowance			64,836	155,922
Permanent difference			214,108	9,802
Effective tax (benefit)	$ 145	$ 1,949	$ 67,841	$ (23,555)

XML

The provisions for income taxes (benefits) are summarized as follows: (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Current			$ 67,841	$ 2,353
Deferred			(0)	(25,908)
Total	$ 145	$ 1,949	$ 67,841	$ (23,555)

XML

INCOME TAXES (Details Narrative) - USD ($)		6 Months Ended
	Dec. 22, 2017	Mar. 31, 2022
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent		25.00%
Description of income tax rate on foreign subsidiary		The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2022 to 2024
Unified income tax rate		15.00%
Operating Loss Carryforwards		$ 4,147,768
Expiration year		2035
Previously corporate tax rate	21.00%	34.00%
Valuation allowancealuation allowance tax rate		100.00%
Description of territorial tax		earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits
Inland Revenue, Hong Kong [Member]
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent		16.50%

XML

The change of derivative liabilities is as follows: (Details)	9 Months Ended
	Mar. 31, 2021 USD ($)
Debt Disclosure [Abstract]
Balance at July 1, 2020	$ 276,266
Converted	(357,868)
Debt settlement	(566,030)
Change in fair value recognized in operations	647,632
Balance at March 31,2021

XML

The estimated fair value of the derivative instruments was valued using the Black-Scholes option pricing model during the nine months ended March 31,2021, using the following assumptions: (Details)	9 Months Ended
	Mar. 31, 2021
Measurement Input Expected Volatility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Measurement Input	78.55
Measurement Input Expected Volatility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Measurement Input	253.30
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt Instrument, Measurement Input	0.61
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt Instrument, Measurement Input	0.93
Measurement Input, Maturity [Member] | Maximum [Member]
Debt Instrument [Line Items]
DebtInstrument term	6 months

XML

The estimated fair value of the warrants was valued using the Black-Scholes option pricing model at grant date, using the following assumptions: (Details)	Mar. 31, 2022
Measurement Input Expected Volatility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Warrants and Rights Outstanding, Measurement Input	56.23
Measurement Input Expected Volatility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Warrants and Rights Outstanding, Measurement Input	71.08
Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Warrants and Rights Outstanding, Measurement Input	1.73
Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Warrants and Rights Outstanding, Measurement Input	1.92
Measurement Input, Maturity [Member]
Debt Instrument [Line Items]
Warrant maturity terms	5 years

XML

The details of the outstanding warrants for the nine months Ended March 31,2022 and 2021 are as follows: (Details) - $ / shares	9 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Minimum [Member]
Debt Instrument [Line Items]
Outstanding at beginning		147,492
Outstanding at ending	4 years 18 days
Outstanding at ending	$ 2.4
Maximum [Member]
Debt Instrument [Line Items]
Outstanding at ending	4 years 1 month 28 days
Outstanding at ending	$ 2.8
Warrant [Member]
Debt Instrument [Line Items]
Outstanding at beginning	68,750	229,166
Outstanding at beginning	$ 2.80	$ 2.68
Outstanding at ending	3 years 6 months 10 days	3 years 9 months 10 days
Granted	(0)	(0)
Granted	$ (0)	$ (0)
Exercised or settled	(0)	(160,416)
Exercised or settled	(0.00%)	2.63%
Cancelled or expired	(0)	(0)
Cancelled or expired	$ (0)	$ (0)
Outstanding at ending	68,750	68,750
Outstanding at ending	$ 2.80	$ 2.80
Outstanding at ending	2 years 9 months 10 days
Warrant [Member] | Minimum [Member]
Debt Instrument [Line Items]
Outstanding at ending		4 years 2 months 12 days
Warrant [Member] | Maximum [Member]
Debt Instrument [Line Items]
Outstanding at ending		4 years 6 months 10 days

XML

CONVERTIBLE DEBT (Details Narrative) - USD ($)						3 Months Ended		6 Months Ended	9 Months Ended	12 Months Ended
	Dec. 21, 2020	Sep. 11, 2020	Jan. 09, 2020	Nov. 12, 2019	Sep. 11, 2019	Mar. 31, 2021	Dec. 31, 2020	Dec. 31, 2020	Mar. 31, 2021	Sep. 11, 2021	Mar. 31, 2022	Jun. 30, 2020	Jan. 10, 2020	Nov. 20, 2019
Debt Instrument [Line Items]
Issuance of common stock for exercise of warrants							$ 67,028
Minimum [Member]
Debt Instrument [Line Items]
Class of warrant or right, exercise price of warrants or rights											$ 2.4
Outstanding warrants												147,492
Maximum [Member]
Debt Instrument [Line Items]
Class of warrant or right, exercise price of warrants or rights											$ 2.8
Firstfire Global Opportunities Fund L L C [Member]
Debt Instrument [Line Items]
Issuance of common stock for conversion of convertible notes (in shares)	1,500,000	165,000
Issuance of common stock for exercise of warrants									$ 67,028	$ 68,750
Securities Purchase Agreement [Member] | Convertible Debt [Member]
Debt Instrument [Line Items]
Amortization of debt discount						$ 24,185		$ 138,399
Convertible Promissory Note 1 [Member] | Convertible Debt 8 [Member] | Firstfire Global Opportunities Fund L L C [Member]
Debt Instrument [Line Items]
Description of conversion feature					In connection with the issuance of the $165,000 convertible promissory note on September 11, 2019, FirstFire Global Opportunities Fund, LLC is entitled, upon the terms and subject to the limitations on exercise and the conditions set forth in the agreement, at any time on or after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.40, and the warrants can be exercised within 5 years which is before September 11, 2024
Convertible Promissory Note [Member] | Crown Bridge Partners L L C [Member]
Debt Instrument [Line Items]
[custom:DebtInstrumentConvertibleTermsOfConversionFeature2]			the warrant of 22,916 shares entitled by Crown Bridge Partners, LLC in connection with the issuance of the $55,000 convertible promissory note on November 12, 2019
Convertible Promissory Note [Member] | Morningview Financial L L C [Member]
Debt Instrument [Line Items]
[custom:DebtInstrumentConvertibleTermsOfConversionFeature3]			the warrant of 68,750 shares entitled by Morningview Financial LL in connection with the issuance of the $165,000 convertible promissory note on November 20, 2019.
Convertible Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member]
Debt Instrument [Line Items]
[custom:DebtInstrumentConvertibleTermsOfConversionFeature1]			the warrant of 68,750 shares entitled by FirstFire Global Opportunities Fund, LLC in connection with the issuance of the $165,000 convertible promissory note on September 11, 2019
Convertible Promissory Note [Member] | Convertible Debt 8 [Member] | Morningview Financial L L C [Member]
Debt Instrument [Line Items]
Description of conversion feature				after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 20, 2024
Remaining principal balance amount														$ 165,000
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | Crown Bridge Partners L L C [Member]
Debt Instrument [Line Items]
Description of conversion feature				after the date of issuance hereof to purchase from the Company up to 22,916 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before November 12, 2024
Borrowed amount				$ 55,000
Remaining principal balance amount							$ 82,500	$ 82,500
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | Morningview Financial L L C [Member]
Debt Instrument [Line Items]
Remaining principal balance amount														$ 175,000
Convertible Promissory Note [Member] | Convertible Debt 9 [Member] | L A B R Y S F U N D L P [Member]
Debt Instrument [Line Items]
Description of conversion feature			after the date of issuance hereof to purchase from the Company up to 68,750 shares of common stock. Exercise price shall be $2.80, and the warrants can be exercised within 5 years which is before January 10, 2025.
Remaining principal balance amount													$ 146,850

XML

Schedule of promissory note as of March 31,2022 is as follows: (Details) - USD ($)								1 Months Ended		2 Months Ended
		Mar. 10, 2022	Dec. 29, 2021	Jul. 15, 2021	Jul. 05, 2021	Jul. 05, 2021	Mar. 10, 2021	Mar. 19, 2021	Dec. 21, 2020	Mar. 19, 2021	Mar. 31, 2022	Feb. 17, 2022	Jan. 03, 2022	Dec. 31, 2020
Promissory Note [Member] | L A B R Y S F U N D L P [Member]
Defined Benefit Plan Disclosure [Line Items]
Debt Instrument, Fee Amount							$ 500,000							$ 300,000
Debt Instrument, Interest Rate, Stated Percentage							5.00%				5.00%
Number of shares reserve for issuance							6,562,500		7,052,239
Proceeds from Notes Payable								$ 434,000	$ 253,500
Legal Fees									3,000	$ 2,500
Promissory Note Amortization Schedule Payment Amount									$ 35,000
Original Issue Discount										50,000
Other Costs										$ 13,500
Description Of Amortization Schedule		at each month beginning on July 9, 2021 through March 10, 2022.
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member]
Defined Benefit Plan Disclosure [Line Items]
Debt Instrument, Fee Amount					$ 500,000	$ 500,000
Debt Instrument, Interest Rate, Stated Percentage					5.00%	5.00%
Number of shares reserve for issuance					6,562,500
Proceeds from Notes Payable				$ 437,500
Promissory Note Amortization Schedule Payment Amount				58,333.33
Original Issue Discount				50,000
Other Costs				$ 12,500
L A B R Y S F U N D L P [Member] | Promissory Note [Member]
Defined Benefit Plan Disclosure [Line Items]
Number of shares reserve for issuance						6,562,500
Talos Victory Fund LLC [Member] | Promissory Note [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:			$ 250,000									$ 500,000	$ 250,000
Number of shares reserve for issuance			7,875,000
Promissory Note 1 [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:											$ 1,325,000
Debt discount											325,523
Carrying Value											999,477
Promissory Note 1 [Member] | L A B R Y S F U N D L P [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[1]										(0)
Debt discount	[1]										(0)
Carrying Value	[1]										(0)
Promissory Note 2 [Member] | L A B R Y S F U N D L P [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[2]										(0)
Debt discount	[2]										(0)
Carrying Value	[2]										(0)
Promissory Note 3 [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[3]										325,000
Debt discount	[3]										29,230
Carrying Value	[3]										295,770
Promissory Note 4 [Member] | Talos Victory Fund LLC [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[3]										250,000
Debt discount	[3]										68,819
Carrying Value	[3]										181,181
Promissory Note 4 [Member] | Mast Hill Fund L P [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[4]										250,000
Debt discount	[4]										71,505
Carrying Value	[4]										178,495
Promissory Note 4 [Member] | Blue Lake Partner L L C [Member]
Defined Benefit Plan Disclosure [Line Items]
Schedule of promissory note as of December 31, 2021 is as follows:	[5]										500,000
Debt discount	[5]										155,969
Carrying Value	[5]										$ 344,031

[1] On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 31,2021 and received $253,500 in cash after deducting an OID in the amount of $30,000, legal fees of $3,000 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $35,000 payment at each month end beginning on April 23, 2021 through December 21, 2021.

[2] On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on March 19, 2021 and received $434,000 in cash after deducting an OID in the amount of $50,000, legal fees of $2,500 and other costs of $13,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning on July 9, 2021 through March 10, 2022.

[3] On July 5, 2021, the Company issued a self-amortization promissory note to FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before July 6, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on July 15,2021 and received $437,500 in cash after deducting an OID in the amount of $50,000 and other costs of $12,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning November 9, 2021 through July 6, 2022.

[4] On January 3, 2022, the Company issued a self-amortization promissory note to Mast Hill Fund, L.P.,in the aggregate principal amount of $250,000. The promissory note is due on or before January 3, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,875,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on January 7,2022 and received $211,250 in cash after deducting an OID in the amount of $25,000 and other costs of $13,750. The self-amortization promissory note has an amortization schedule of $29,166.66 payment at each month beginning May 3, 2022 through January 3, 2023.

[5] On February 17, 2022, the Company issued a self-amortization promissory note to Blue Lake Partners, LLC in the aggregate principal amount of $500,000. The promissory note is due on or before February 17, 2023 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 15,750,000 shares of its common stock for issuance if any debt is converted. The Company executed and closed the transaction on February 17,2022 and received $422,500 in cash after deducting an OID in the amount of $50,000 and other costs of $27,500. The self-amortization promissory note has an amortization schedule of $58,333.33 payment at each month beginning June 17, 2022 through February 17, 2023.

XML

PROMISSORY NOTE (Details Narrative) - USD ($)	1 Months Ended			3 Months Ended
	Jul. 08, 2021	Mar. 10, 2021	Dec. 31, 2020	Dec. 31, 2020
Short-Term Debt [Line Items]
Value of shares issued				$ 456,143
Common Stock [Member]
Short-Term Debt [Line Items]
Value of shares issued				$ 714
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock First Commitment Shares [Member]
Short-Term Debt [Line Items]
Number of shares issued		417,000	447,762
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock Second Commitment Shares [Member]
Short-Term Debt [Line Items]
Number of shares issued		1,042,000	1,119,402
Promissory Note [Member] | L A B R Y S F U N D L P [Member] | Common Stock [Member]
Short-Term Debt [Line Items]
Value of shares issued		$ 87,153	$ 68,060
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock First Commitment Shares [Member]
Short-Term Debt [Line Items]
Number of shares issued	300,000
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock Second Commitment Shares [Member]
Short-Term Debt [Line Items]
Number of shares issued	1,042,000
Promissory Note [Member] | FIRSTFIREGLOBALOPPORTUNITIES [Member] | Common Stock [Member]
Short-Term Debt [Line Items]
Value of shares issued	$ 51,000

XML

The following tables provide the business segment information for the three and nine months ended March 31,2022 and 2021 (Details) - USD ($)	3 Months Ended						9 Months Ended		15 Months Ended
	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2021
Segment Reporting Information [Line Items]
Revenues	$ 2,058,179			$ 3,160,746			$ 10,551,867	$ 9,102,094
Cost of Revenues	1,788,635			2,802,497			9,528,438	8,071,941
Gross profit (loss)	269,544			358,249			1,023,429	1,030,153
Operating expenses	578,609			475,243			1,772,674	1,410,384
Income (loss) from operations	(309,065)			(116,994)			(749,245)	(380,231)
Net income (loss)	(437,797)	$ (97,745)	$ (540,199)	(115,594)	$ (356,118)	$ (532,306)	(1,075,741)	(1,004,018)	$ (115,594)
Lithume Battery Related [Member]
Segment Reporting Information [Line Items]
Revenues	(0)						4,477
Cost of Revenues	(0)						4,626
Gross profit (loss)	(0)						149
Operating expenses	9,887						46,889
Income (loss) from operations	(9,887)						(47,038)
Net income (loss)	(10,263)						(49,359)
Smart Energy [Member]
Segment Reporting Information [Line Items]
Revenues	(0)			(0)			(0)	(0)
Cost of Revenues	(0)			(0)			(0)	(0)
Gross profit (loss)	(0)			(0)			(0)	(0)
Operating expenses	1,401			2,842			6,262	8,374
Income (loss) from operations	(1,401)			(2,842)			(6,262)	(8,374)
Net income (loss)	(1,399)						(6,360)	(8,213)	(2,841)
Photoelectric Display [Member]
Segment Reporting Information [Line Items]
Revenues	2,058,179			3,160,474			10,547,390	9,100,076
Cost of Revenues	1,788,635			2,802,520			9,523,812	8,061,782
Gross profit (loss)	269,544			357,954			1,023,578	1,038,294
Operating expenses	533,847			428,842			1,384,217	1,202,101
Income (loss) from operations	(264,303)			(70,888)			(360,639)	(163,807)
Net income (loss)	(242,998)						(279,028)	(147,074)	(26,820)
Service Contracts [Member]
Segment Reporting Information [Line Items]
Revenues	(0)			272			(0)	2,018
Cost of Revenues	(0)			(23)			(0)	10,159
Gross profit (loss)	(0)			295			(0)	(8,141)
Operating expenses	138			5,893			12,691	23,641
Income (loss) from operations	(138)			(5,598)			(12,691)	(31,782)
Net income (loss)	(26)						(12,579)	(31,781)	(5,598)
Unallocated Items [Member]
Segment Reporting Information [Line Items]
Revenues	(0)			(0)			(0)	(0)
Cost of Revenues	(0)			(0)			(0)	(0)
Gross profit (loss)	(0)			(0)			(0)	(0)
Operating expenses	33,336			37,666			322,615	176,268
Income (loss) from operations	(33,336)			$ (37,666)			(322,615)	(176,268)
Net income (loss)	$ (183,111)						$ (728,415)	$ (816,950)	$ (80,335)

XML

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	Jul. 20, 2022	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, Rent Expense, Net	$ 295
Operating Leases, Future Minimum Payments Due		$ 295