6-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K/A

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of April 2021

Commission File Number: 001-35755

URBAN TEA, INC.

(Translation of registrant’s name into English)

Huakun Times Plaza, Room 1118, Floor 11

No. 200, Erduan, East Xiang Fu Road

Yuhua District, Changsha, China

Tel: +86 511-8673-3102

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒        Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

EXPLANATORY NOTE

This amendment to the Current Report on Form 6-K/A (“Form 6-K/A”) is being filed to amend the Current Report on Form 6-K initially filed by Urban Tea, Inc. (the “Company”) with the Securities and Exchange Commission on April 27, 2021 (the “Original Form 6-K”). The Company is filing this Form 6-K/A solely to include the XBRL of the six-month interim financial statements which were omitted from the Original Form 6-K. The Company hereby incorporates such financial statements into the Company’s registration statements referenced below. Except as set forth in the foregoing, the Original Form 6-K is unchanged.

This Form 6-K/A is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration Numbers 333-227299) and on Form F-3s, as amended (Registration Numbers 333-248615, 333-233479 and 333-227211), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

Financial Statements and Exhibits.

Exhibits.

Exhibit No.	Description
99.1	Unaudited Interim Consolidated Financial Statements as of December 31, 2020 and for the Six Months Ended December 31, 2020 and 2019
99.2	Operating and Financial Review and Prospects in Connection with the Unaudited Interim Consolidated Financial Statements for the Six Months Ended December 31, 2020 and 2019
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

1

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  April 28, 2021	Urban Tea, Inc.
	By:	/s/ Xianlong Wu
		Name:	Xianlong Wu
		Title:	Chief Executive Officer

2

EX-99.1

Exhibit 99.1

URBAN TEA, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. dollars, except for shares)

	December 31, 2020			June 30, 2020
	(unaudited)
ASSETS
Cash	$	13,333,034		$	5,311,693
Short-term investments		3,335,640			2,266,069
Trade receivables		470,894			183,566
Inventories		1,475,924			1,403,582
Prepayments		26,874			-
Loans due from third parties		2,785,636			2,222,191
Due from a related party		3,411			1,127
Other current assets		106,244			108,224
Total current assets		21,537,657			11,496,452
Investment in equity investees		1,289,077			187,755
Goodwill		8,610,173			8,073,011
Property and equipment, net		1,327,658			1,315,326
Deposits for plant, property and equipment		1,013,825			849,245
Intangible assets		66,522			66,442
Right of use assets		363,318			553,904
Other noncurrent assets		67,089			92,992
Total Assets	$	34,275,319		$	22,635,127
LIABILITIES AND EQUITY
Trade payable	$	80,740		$	64,300
Unearned income		101,240			127,279
Other current liabilities		167,379			68,579
Income tax payable		268,215			-
Lease liabilities, current		308,276			315,259
Warrants liabilities		304,734			1,150,416
Total current liabilities		1,230,584			1,725,833
Lease liabilities, noncurrent		124,673			310,098
Total Liabilities		1,355,257			2,035,931
Shareholders’ Equity
Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 79,491,998 and 45,188,648 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively		7,949			4,519
Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding		-			-
Additional paid-in capital		36,837,553			25,568,478
Statutory reserve		5,848			-
Accumulated deficit		(10,967,630	)		(10,280,741	)
Accumulated other comprehensive income (loss)		998,913			(352,649	)
Total Urban Tea, Inc.’s Shareholders’ Equity		26,882,633			14,939,607
Non-controlling interests		6,037,429			5,659,589
Total Liabilities and Equity	$	34,275,319		$	22,635,127

See notes to the unaudited condensed consolidated financial statements

1

URBAN TEA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)

(Expressed in U.S. dollars, except share and per share data)

	For the Six Months Ended December 31,
	2020			2019
Revenue	$	3,874,080		$	418,219
Cost of revenues		(2,328,001	)		(300,124	)
Gross profit		1,546,079			118,095
Operating expenses
General and administrative expenses		(2,205,377	)		(1,597,112	)
Total operating expenses		(2,205,377	)		(1,597,112	)
Other income, net
Interest income		138,306			49,395
Change in fair value of warrants		845,683			15,330
Share of equity investees		(201,815	)		-
Other (loss) income		(167,046	)		73,531
Total other income, net		615,128			138,256
Net loss before income taxes		(44,170	)		(1,340,761	)
Income tax expenses		(259,031	)		-
Net loss		(303,201	)		(1,340,761	)
Less: Net (income) loss attributable to non-controlling interests		(377,840	)		4,995
Net loss attributable to Urban Tea, Inc.’s Shareholders		(681,041	)		(1,335,766	)
Other comprehensive income
Foreign currency translation adjustment		1,351,562			81,152
Comprehensive income (loss)		670,521			(1,259,609	)
Less: Comprehensive loss attributable to non-controlling interests		(377,840	)		4,995
Comprehensive income (loss) attributable to Urban Tea, Inc.’s Shareholders	$	292,681		$	(1,254,614	)
Loss per share- basic and diluted	$	(0.09	)	$	(0.04	)
Weighted Average Shares Outstanding-Basic and Diluted		72,370,528			31,289,010

See notes to the unaudited condensed consolidated financial statements

2

URBAN TEA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Expressed in U.S. dollars, except share data)

	Attributable to Urban Tea, Inc.’s Shareholders’ Equity
	Share capital											Accumulated other
	Ordinary share		Amount		Additional paid-in capital		Statutory reserve		Accumulated deficit			comprehensive (loss) income			Non-controlling Interest			Total
Balance as of July 1, 2019		26,180,314	$	2,618	$	17,625,612	$	-	$	(8,174,141	)	$	(302,222	)	$	-		$	9,151,867
Issuance of ordinary shares in connection with acquisition of a subsidiary		10,000,000		1,000		3,399,000		-		-			-			5,675,416			9,075,416
Net loss for the period		-		-		-		-		(1,335,766	)		-			(4,995	)		(1,340,761	)
Foreign currency translation adjustment		-		-		-		-		-			81,152			-			81,152
Balance as of December 31, 2019		36,180,314	$	3,618	$	21,024,612	$	-	$	(9,509,907	)	$	(221,070	)	$	5,670,421		$	16,967,674
Balance as of July 1, 2020		45,188,648	$	4,519	$	25,568,478	$	-	$	(10,280,741	)	$	(352,649	)	$	5,659,589		$	20,599,196
Issuances of ordinary shares in connection with private placements		33,750,000		3,375		11,046,625		-		-			-			-			11,050,000
Issuances of ordinary shares for professional services		553,350		55		222,450		-		-			-			-			222,505
Net (loss) income for the period		-		-		-		-		(681,041	)		-			377,840			(303,201	)
Appropriation of net income		-		-		-		5,848		(5,848	)		-			-			-
Foreign currency translation adjustment		-		-		-		-		-			1,351,562			-			1,351,562
Balance as of December 31, 2020		79,491,998	$	7,949	$	36,837,553	$	5,848	$	(10,967,630	)	$	998,913		$	6,037,429		$	32,920,062

See notes to the unaudited condensed consolidated financial statements

3

URBAN TEA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. dollars, except share data)

	For the Six Months Ended December 31,
	2020			2019
Cash Flows from Operating Activities:
Net loss	$	(303,201	)	$	(1,340,761	)
Adjustments to reconcile net income to net cash used in operating activities:
Reversal of provision for doubtful accounts		-			(1,423	)
Depreciation of property and equipment		78,671			68,941
Amortization of intangible assets		9,935			6,625
Net loss from disposal of property and equipment		15,242			1,025
Amortization of right of use assets		227,566			152,788
Change in fair value of warrants		(845,683	)		(15,330	)
Share based compensation expenses		222,500			-
Share of equity investees		201,815			-
Changes in assets and liabilities:
Trade receivables		(262,396	)		7,766
Inventories		41,445			(33,261	)
Prepayments		(25,902	)		45,953
Due from a related party		(2,113	)		-
Other current assets		10,480			99,815
Other noncurrent assets		32,331			57,784
Trade payable		29,198			(50,325	)
Unearned income		(53,623	)		(44,613	)
Income tax payable		259,284			-
Other current liabilities		94,317			46,487
Lease liabilities		(240,271	)		(153,036	)
Net cash used in operating activities		(510,405	)		(1,151,565	)
Cash Flows from Investing Activities:
Purchases of property and equipment		(1,620	)		(220,849	)
Payment of deposits in property and equipment		(91,364	)		(247,897	)
Proceeds from disposal of property and equipment		-			740
Purchases of intangible assets		(4,751	)		-
Investment in short-term investments		(9,393,389	)		-
Collection of short-term investments		8,541,987			1,244,736
Collection of loans from a third party		(367,057	)		-
Investment in equity investees		(1,257,714	)		(105,000	)
Acquisition of a subsidiary, net of cash acquired		-			(2,369,768	)
Net cash used in investing activities		(2,573,908	)		(1,698,038	)
Cash Flows from Financing Activities:
Cash raised in private placement of ordinary shares		11,050,000			-
Net cash provided by financing activities		11,050,000			-
Effect of exchange rate changes on cash and cash equivalents		55,654			(17,962	)
Increase (Decrease) in cash and cash equivalents		8,021,341			(2,867,565	)
Cash and cash equivalents at beginning of period		5,311,693			4,668,745
Cash and cash equivalents at end of period	$	13,333,034		$	1,801,180
Supplemental disclosures of cash flow information:
Interest paid	$	-		$	-
Tax paid	$	-		$	-
Major non-cash transactions:
Issuance of ordinary shares for professional services	$	222,505		$	-
Issuance of ordinary shares for acquisition of a subsidiary	$	-		$	3,400,000
Right-of-use assets obtained in exchange for operating lease obligations	$	-		$	1,360,822
Loan due from a third party transferred from short-term investments	$	-		$	2,304,541

See notes to the unaudited condensed consolidated financial statements

4

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Urban Tea, Inc., Inc. (formerly known as Delta Technology Holdings Limited) (“MYT” or the “the Company”), is a holding company that was incorporated on November 28, 2011, under the laws of the British Virgin Islands. On February 14, 2019, the Company changed its name to Urban Tea, Inc., Inc.

The Company owns 100% equity interest in NTH Holdings Limited (“NTH BVI”), an entity incorporated on August 28, 2018 in accordance with the laws and regulations in British Virgin Islands (“BVI”). NTH BVI owns 100% equity interest in Tea Language Group Limited (“NTH HK”), an entity incorporated on September 11, 2018 in accordance with the laws and regulations in Hong Kong (“HK”). On October 19, 2018, the Company, through NTH HK, established Mingyuntang (Shanghai) Tea Co. Ltd.  (“Shanghai MYT”), as a Wholly Foreign-Owned Enterprise (“WFOE”) in the People’s Republic of China (“PRC”).

The Company previously was engaged in the manufacturing and sale of organic compounds. The Company discontinued the manufacturing and sale of organic compounds business in April 2019. Currently, the Company conducts its business through two variable interest entities (“VIEs”), Hunan Mingyuntang Brand Management Company (“Hunan MYT”) and Hunan 39 PU Tea Co., Ltd. (“39Pu”). Hunan Mingyuntang is primarily engaged in specialty tea product distribution and retail business by providing high-quality tea beverages through its tea shop chains and 39Pu is engaged in dark tea distribution in the People’s Republic of China (“PRC”).

On November 19, 2018, Shanghai MYT entered into a series of variable interest entity agreements (“Hunan MYT VIE Agreements”) with Hunan MYT and Peng Fang, the sole shareholder of Hunan MYT. The Hunan MYT VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Hunan MYT, including absolute control rights and the rights to the management, operations, assets, property and revenue of Hunan MYT. The purpose of the Hunan MYT VIE Agreements is solely to give Shanghai MYT the exclusive control over Hunan MYT’s management and operations.

On October 2, 2019, Shanghai MYT entered into a series of variable interest entity agreements (“39Pu VIE Agreements”) with 39Pu and three shareholders who collectively owned 51% equity interest in 39Pu. The 39Pu VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent in all material respects to those it would possess as the controlling equity holder of 39Pu, including absolute control rights and the rights to the management, operations, assets, property and revenue of 39Pu. The purpose of the 39Pu VIE Agreements is solely to give Shanghai MYT the exclusive control over 39Pu’s management and operations. In exchange for the controlling interest in 39Pu, the Company is obliged to pay a cash consideration of $2.4 million and a share consideration of 10,000,000 ordinary shares of the Company, no par value (“Ordinary Shares”). In addition, a contingent cash consideration of $0.6 million and share consideration of 4,000,000 Ordinary Shares will be delivered to the three shareholders according to the earn-out payment based on the financial performance of 39 Pu in its next fiscal year. On October 17 and 28, 2019, the Company paid share consideration of 10,000,000 Ordinary Shares and the cash consideration of $2.4 million, respectively.

5

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED)

The accompanying consolidated financial statements reflect the activities of Hunan Mingyuntang, 39Pu and each of the following holding entities:

Name	Background	Ownership
Delta Technology Holdings USA Inc. (“Urban Tea USA”)	●     A US company ●     Incorporated on May 22, 2018 ●     A holding company	100% owned by the Company
NTH BVI	●     A BVI company ●     Incorporated on August 28, 2018 ●     A holding company	100% owned by the Company
NTH HK	●     A Hong Kong company ●     Incorporated on September 11, 2018 ●     A holding company	100% owned by NTH BVI
Shanghai MYT	●     A PRC company and deemed a wholly foreign owned enterprise (“WOFE”) ●     Incorporated on October 19 ●     Registered capital of $1 million ●     A holding company	WOFE, 100% owned by NTH HK
Hunan MYT	●     A PRC limited liability company ●     Incorporated on October 17, 2018 ●     Registered capital of $4,330,590 (RMB 30 million) ●     Engaged in specialty tea product distribution and retail business by provision of high-quality tea beverages in its tea shop chain	100% VIE of Shanghai MYT
39Pu	●     A PRC limited liability company ●     Incorporated on April 14, 2011 ●     Registered capital of $3,522,424 (RMB 20.9 million) with registered capital fully paid-up ●    Engaged in dark tea distribution	51% VIE of Shanghai MYT

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and principle of consolidation

The unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

The unaudited interim financial information as of December 31, 2020 and for the six months ended December 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. As of December 31, 2019, the Company had two VIEs – Hunan MYT and 39Pu. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 20-F for the fiscal year ended June 30, 2020, which was filed with the SEC on October 30, 2020.

In the opinion of management, all adjustments (including normal recurring adjustments) necessary to present a fair statement of the Company’s unaudited financial position as of December 31, 2020, its unaudited results of operations for the six months ended December 31, 2020 and 2019, and its unaudited cash flows for the six months ended December 31, 2020 and 2019, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

(b) Consolidation of Variable Interest Entity

Material terms of the Hunan MYT VIE Agreements and 39Pu VIE Agreements are described below:

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreements, Shanghai MYT and 39Pu each provides Hunan MYT with technical support, consulting services and management services on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Hunan MYT and 39Pu each granted an irrevocable and exclusive option to Shanghai MYT to purchase from each of Hunan MYT and 39Pu, any or all of Hunan MYT’s and 39Pu assets at the lowest purchase price permitted under the PRC laws. Should Shanghai MYT exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to Hunan MYT and 39Pu by Shanghai MYT under the agreement, Shanghai MYT is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, plus amount of the services fees or ratio decided by the board of directors of Shanghai MYT based on the value of services rendered by Shanghai MYT and the actual income of Hunan MYT and 39Pu from time to time, which is substantially equal to all of the net income of Hunan MYT and 51% of net income of 39Pu, respectively.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by Shanghai MYT with 30-day prior written notice. Hunan MYT or 39Pu does not have the right to terminate the agreement unilaterally. Shanghai MYT may unilaterally extend the term of this agreement with prior written notice.

7

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Consolidation of Variable Interest Entity (continued)

Exclusive Option Agreement

Under the Exclusive Option Agreement between Peng Fang and Shanghai MYT, irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Hunan MYT. The option price is equal to the capital paid in by Peng Fang subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Under the Exclusive Option Agreement between three shareholders of 39Pu and Shanghai MYT, the three shareholders irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in 39Pu. The option price is equal to the capital paid in by the three shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

The agreement remains effective for a term of ten years and may be renewed at Shanghai MYT’s election.

Share Pledge Agreement

Under the Share Pledge Agreement, Peng Fang and the three shareholders of 39Pu each pledged all of their equity interests in Hunan MYT and 39Pu to Shanghai MYT to guarantee the performance of Hunan MYT’s and 39Pu’s obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in any event of default, as set forth in the Share Pledge Agreement, including that Hunan MYT or Peng Fang, 39Pu or the three shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, Shanghai MYT, as pledgee, will be entitled to certain rights, including, but not limited to, the right to dispose of the pledged equity interest in accordance with applicable PRC laws. Shanghai MYT shall have the right to collect any and all dividends declared or generated in connection with the equity interest during the term of pledge.

The Share Pledge Agreement shall be effective until all payments due under the Exclusive Business Cooperation Agreement have been paid by Hunan MYT and 39Pu, respectively. Shanghai MYT shall cancel or terminate the Share Pledge Agreement upon Hunan MYT’s and 39Pu’s full payment of fees payable under the Exclusive Business Cooperation Agreement.

Timely Reporting Agreement

To ensure Hunan MYT and 39Pu promptly provide all of the information that Shanghai MYT and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Shanghai MYT, and Hunan MYT and 39Pu, respectively. Under the Timely Reporting Agreement, Hunan MYT and 39Pu each agreed that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

Although it is not explicitly stipulated in the Timely Reporting Agreement, the parties agreed its term shall be the same as that of the Exclusive Business Cooperation Agreement.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Consolidation of Variable Interest Entity (continued)

Power of Attorney

Under the Power of Attorney, Peng Fang and the three shareholders of 39Pu each authorized Shanghai MYT to act on her behalf as her exclusive agent and attorney with respect to all rights as shareholder, including but not limited to: (a) attending shareholders’ meetings; (b) exercising all the shareholder’s rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association of Hunan MYT and 39Pu, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Hunan MYT and 39Pu.

Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement.

This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, so long as Peng Fang is a shareholder of Company.

The VIE Agreements became effective immediately upon their execution.

VIE is an entity that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Shanghai MYT is deemed to have a controlling financial interest and be the primary beneficiary of Hunan MYT and 39Pu, because it has both of the following characteristics:

1. power to direct activities of a VIE that most significantly impact the entity’s economic performance, and

2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.

Pursuant to the VIE Agreements, Hunan MYT and 39Pu pay service fees equal to 100% and 51% of its net income to Shanghai MYT, respectively. At the same time, Shanghai MYT is entitled to receive 100% and 51% of expected residual returns from Hunan MYT and 39Pu, respectively. The VIE Agreements are designed so that Hunan MYT and 39Pu operate for the benefit of the Company. Accordingly, the accounts of Hunan MYT are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company’s consolidated financial statements.

In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company’s ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE agreements, it may not be able to exert effective control over Hunan MYT or 39Pu and its ability to conduct its business may be materially and adversely affected.

9

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(b) Consolidation of Variable Interest Entity (continued)

All of the Company’s main current operations are conducted through Hunan MYT since November 2018, and through 39Pu since October 2019. Current regulations in China permit Hunan MYT and 39Pu to pay dividends to the Company only out of their accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Hunan MYT and 39Pu to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

The following financial statement balances and amounts only reflect the financial position and financial performances of Hunan MYT and 39Pu, which were included in the consolidated financial statements as of December 31 and June 30, 2020:

	December 31, 2020		June 30, 2020
	(unaudited)
Cash	$	1,142,514	$	362,384
Short-term investments		3,335,640		2,266,069
Inventories		1,475,924		1,403,582
Loans due from a third party		2,785,636		2,222,191
Other current assets		607,423		292,917
Investments in equity investees		1,096,370		-
Property and equipment, net		1,327,658		1,315,326
Deposits for plant, property and equipment		1,013,825		849,245
Right of use assets		363,318		553,904
Other noncurrent assets		133,611		159,434
Total Assets	$	13,281,919	$	9,425,052
				-
Due to MYT*	$	10,466,925	$	7,270,932
Other current liabilities		1,050,524		885,515
Total Liabilities	$	11,517,449	$	8,156,447

* Payable due to MYT is eliminated upon consolidation.

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Revenue	$	3,874,080	$	418,219
Net income (loss)	$	377,453	$	(847,182	)

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) Segment reporting

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different services.

For the six months ended December 31, 2020 and 2019, the Company has two operating business lines, including retail business by provision of high-quality tea beverages in its tea shop chain business conducted by Hunan MYT and dark tea distribution business by 39Pu. Based on management’s assessment, the Company has determined that the two operating business lines are two operating segments as defined by ASC 280.

(d) Trade receivables

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as at December 31, 2020 and June 30, 2020.

(e) Inventories

Inventories, consisting of products available for sale, are stated at the lower of cost and market. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of income and comprehensive income.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(f) Revenue recognition

The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606.

In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

During the six months ended December 31, 2020 and 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its tea shop chains by Hunan MYT, and from sales of dark team products by 39Pu.

Sales of tea products, beverages and light meals in retail shop chains by Hunan MYT

Customers place order and pay for tea products, beverage drinks and light meals in the Company’s tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases.

Sales of dark tea products by 39Pu - The Company identifies a single performance obligation from contracts. The Company recognizes revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices. The transaction fees are fixed. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of products to the Company.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Disaggregation of revenue - The Company disaggregates its revenue from contracts by segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the six months ended December 31, 2020 and 2019 is as follows:

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Sales by Hunan MYT	$	169,656	$	348,816
Sales by 39Pu		3,704,424		69,403
	$	3,874,080	$	418,219

(g) Investment in equity investees

The investments for which the Company has the ability to exercise significant influence are accounted for under the equity method. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities, the amortization of intangible assets recognized upon purchase price allocation and dividend distributions or subsequent investments. All unrecognized inter-company profits and losses have been eliminated under the equity method. When the estimated amount to be realized from the investments falls below its carrying value, an impairment charge is recognized in the consolidated statements of operations when the decline in value is considered other than temporary.

(h) Leases

The Company adopted ASU 2016-02, Leases (Topic 842), on July 1, 2019, using a modified retrospective approach reflecting the application of the standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements.

The Company leases its offices which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. No impairment for right-of-use lease assets as of December 31, 2020.

13

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(i) Recently announced accounting standards

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Company’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Its mandatory effective dates are as follows: 1. Public business entities that meet the definition of an SEC filer for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; 2. All other public business entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years; and 3. All other entities (private companies, not-for-profit organizations, and employee benefit plans) for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. On November 15, 2019, FASB issued ASU 2019-10 which provides a framework to stagger effective dates for future major accounting standards (including ASC 326 Financial instrument-credit losses) and amends the effective dates to give implementation relief to certain type of entities: 1. Public business entities that meet the definition of an SEC filer, excluding entities eligible to be Smaller Reporting Companies, or SRC, as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; and 2. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an “emerging growth company,” or EGC, the Company has elected to take advantage of the extended transition period provided in the Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards applicable to private companies. The Company will adopt ASU 2016-13 and its related amendments effective January 1, 2023, and the Company is in the process of evaluating the potential effect on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. RISKS

(a) Credit risk

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of December 31, 2020, approximately $12.2 million was deposited with a bank in the United States which was insured by the government up to $250,000. As of December 31, 2020, approximately $1.1 million was primarily deposited in financial institutions located in Mainland China, and each bank accounts is insured by the government authority with the maximum limit of RMB 500,000 (equivalent to approximately $70,770). To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality.

The Company’s operations are carried out in Mainland China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors.

(b) Liquidity risk

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

(c) Foreign currency risk

Substantially all of the Company’s operating activities and the Company’s major assets and liabilities are denominated in RMB, except for the cash deposit of approximately $12.2 million which was in U.S. dollars as of December 31, 2020, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significant affected.

(c) VIE risk

It is possible that the Hunan MYT VIE Agreements and 39Pu VIE Agreements would not be enforceable in China if PRC government authorities or courts were to find that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event that the Company were unable to enforce these contractual arrangements, the Company would not be able to exert effective control over the VIE. Consequently, the VIE’s results of operations, assets and liabilities would not be included in the Company’s consolidated financial statements. If such were the case, the Company’s cash flows, financial position, and operating performance would be materially adversely affected. The Company’s contractual arrangements among Shanghai MYT, Hunan MYT and the Hunan MYT Shareholders, and among Shanghai MYT, 39Pu and the three shareholders of 39Pu are approved and in place. Management believes that such contracts are enforceable, and considers the possibility remote that PRC regulatory authorities with jurisdiction over the Company’s operations and contractual relationships would find the contracts to be unenforceable.

The Company’s operations and businesses rely on the operations and businesses of Hunan MYT and 39Pu, the VIEs of the Company, each of which holds certain recognized revenue-producing assets including tea beverage related raw materials, lease arrangements, and dark tea products. The VIEs also have an assembled workforce, focused primarily on promotion and marketing, whose costs are expensed as incurred. The Company’s operations and businesses may be adversely impacted if the Company loses the ability to use and enjoy assets held by its VIEs.

(e) Other risk

The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, which could significantly disrupt the Company’s operations.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. ACQUISITION OF 39PU

On October 2, 2019, the Company completed the acquisition of 51% equity interest in 39Pu, which is engaged in the distribution of dark tea and based in Hunan Province, China. Under the terms of the purchase agreement, the consideration was comprised of cash consideration of $2.4 million and share consideration of 10,000,000 Ordinary Shares, at a per share price of $0.34. In addition, a contingent cash consideration of $0.6 million and a share consideration of $1.2 million will be delivered to the three shareholders according to the earn-out payment based on the financial performance of 39Pu in its next fiscal years. On October 17 and 28, 2019, the Company paid the share consideration of 10,000,000 Ordinary Shares and the cash consideration of $2.4 million, respectively. Upon the close of the acquisition and as of June 30, 2020, the Company did not pay the contingent consideration due to 39Pu’s financial performance for the three months ended December 31, 2019 not reaching the earn-out payment condition.   In addition, due to the effects of COVID-19, the financial performance of 39Pu for the year ended June 30, 2020 did not meet the earn-out payment condition.

The acquisition had been accounted for as a business combination and the results of operations of 39Pu have been included in the Company’s consolidated financial statements from the acquisition date. The Company made estimates and judgments in determining the fair value of acquired assets and liabilities, based on an independent preliminary valuation report and management’s experiences with similar assets and liabilities. The following table summarizes the estimated fair values for major classes of assets acquired and liabilities assumed at the date of acquisition, using the exchange rate of 7.1489 on that day.

	Fair value
Net tangible assets	$	3,509,468
Goodwill		7,863,081
Foreign exchange adjustments		102,867
Less: Noncontrolling interests		(5,675,416	)
Total purchase consideration	$	5,800,000

5. SHORT-TERM INVESTMENTS

As of December 31, 2020 and June 30, 2020, the balance of short-term investments was comprised of investments of various financial products from Chinese banks and financial institutions, with variable return rate and with maturities between three months and one year. The Company classified these financial assets as held-to-maturity financial assets and recorded the assets at amortized cost, which approximates fair value. As of December 31, 2020 and June 30, 2020, the Company did not provide OTTI on short-term investments.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. INVENTORIES

Inventories consisted of the following:

	December 31, 2020		June 30, 2020
	(unaudited)
Merchant products	$	1,000,837	$	968,642
Raw materials		40,796		18,542
Packaging and other supplies		391,000		376,394
Other products		43,291		40,004
		1,475,924		1,403,582
Less: inventory write-down		-		-
Total inventories	$	1,475,924	$	1,403,582

7. LOANS DUE FROM THIRD PARTIES

Loans due from third parties consisted of the following:

	December 31, 2020		June 30, 2020
	(unaudited)
Sichuan Senmiao Ronglian Technology Co, Ltd. (“Senmiao Ronglian”) (a)	$	1,560,258	$	2,222,191
Shenzhen Qianhai Leshi Health Management Co., Ltd. (“Shenzhen Qianhai) (b)		1,225,378		-
Total loans due from third parties	$	2,785,636	$	2,222,191

(a) The Company purchased short-term investments of $1,148,930 in April 2019, and acquired short-term investments of $1,177,653 from the acquisition of 39Pu, both of which were investments in Senmiao Ronglian which was a variable interest entity of Senmiao Technology Ltd, a US listed company which used to operate a peer-to-peer marketplace before October 2019. In October 2019, Senmiao Ronglian disposed of the peer-to-peer marketplace, and the Company’s short-term investments became a loan due from Sichuan Ronglian as of December 31, 2019.

According to the loan agreement between the Company and Sichuan Ronglian, the loans will be paid in 12 months before December 9, 2020, with a per annum interest rate of 7%. During the six months ended December 31, 2020 and 2019, Senmiao Ronglian repaid an aggregation of $814,003 and $nil to the Company with remaining balance to be repaid before December 31, 2021.

The Company asssessed the payment ability of Senmiao Ronglian and did not provide allowance against the balance.

(b) In December 2020, the Company entered into a loan agreement with Shenzhen Qianhai to provide a loan of $1,225,378 to the third party. The loan matured in June 2021 with an interest rate of 1.495% per annum. The loan was made for the purpose of making use of idle cash.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. INVESTMENT IN EQUITY INVESTEES

As of December 31, 2020 and June 30, 2020, the Company’s investment in equity investees were as following:

	December 31, 2020			June 30, 2020
	(unaudited)
Urban Tea Management Inc. (“Meno”)	$	310,000		$	210,000
Guokui Management Inc. (“Guokui”)		100,000			-
Chuangyeying Brand Management Co., Ltd. (“CYY”)		390,589			-
Store Master Food Trading Co., Ltd. (“Store Master”)		706,818			-
Less: Share of results of equity investees		(218,330	)		(22,245	)
	$	1,280,077		$	187,755

As of December 31, 2020, the Company made investments aggregating $310,000 in Meno, in which the Company and an unrelated third party invested capital of 70% and 30%, respectively, and was entitled to 51% and 49% profit earned from Meno, respectively. Meno did not commence operations until August 1, 2020. The investment was for the purpose of expansion its tea shop chain to overseas market.

On September 23, 2020, the Company entered into a share purchase agreement, pursuant to which the Company agreed to pay $400,000 in cash to acquire 80% of the equity interest in Guokui, in which the Company and other unrelated third party investor were entitled to 51% and 49% profit earned from Guokui, respectively. As of December 31, 2020, the Company made investments aggregating $100,000. The investment was for the purpose of expansion its tea shop chain to overseas market.

In October 2020, the Company, through its WFOE, acquired 51% equity interest in each of CYY and Store Master in cash consideration of $376,462 and $681,252, respectively. In addition, the existing shareholders of CYY and Store Master will be rewarded additional incentives if certain performance targets were met. The Company did not accrue contingent consideration for the acquisition as the Company did not expect such perform targets would be met.

Pursuant to the articles of association of these equity investees, the operating and financing activities shall be unanimously approved by the Company and other shareholders, thus the Company does not control the equity investee but exercised significant influence over the equity investee. In accordance with ASC 323 “Investments — Equity Method and Joint Ventures,”, the Company accounted for the investments using equity method.

For the six months ended December 31, 2020 and 2019, the equity investees incurred net loss aggregating $218,330 and $nil, respectively.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9. PROPERTY AND EQUIPMENT, NET

The property and equipment consisted of the following:

	December 31, 2020			June 30, 2020
	(unaudited)
Building	$	855,570		$	790,605
Office equipment		652,169			618,323
Electronic equipment		55,760			51,526
Vehicles		27,271			25,200
Leasehold improvements		621,105			573,937
Less: accumulated depreciation		(884,217	)		(744,265	)
	$	1,327,658		$	1,315,326

For the six months ended December 31, 2020 ad 2019, the depreciation expenses were $78,671 and $68,941, respectively.

For the six months ended December 31, 2020, the Company disposed of office equipment with original cost of $18,644 and accumulated depreciation of $2,830. The Company incurred a net loss of $15,242 from the disposal of office equipment.

For the six months ended December 31, 2019, the Company disposed of office equipment with original cost of $3,047 and accumulated depreciation of $1,282. The Company incurred a net loss of $1,025 from the disposal of office equipment.

10. EQUITY

Ordinary Shares

The Company is authorized to issue up to 100,000,000 Ordinary Shares.

As of June 30, 2020, the Company had 45,188,648 shares issued and outstanding.

On June 5, 2020, the Company issued 8,834 ordinary shares to one independent director, at a per share price at the market price of the issuance date.

On July 30, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 18,750,000 ordinary shares, no par value, at a price of $0.32 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 3, 2020.

On August 14, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 15,000,000 ordinary shares, no par value, at a price of $0.4 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 18, 2020.

As of December 31, 2020, the Company had 79,491,998 shares issued and outstanding.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

10. EQUITY (CONTINUED)

Warrants

A summary of warrants activity for the six months ended December 31, 2020 and 2019 was as follows:

	Number of shares		Weighted average life	Expiration dates
Balance of warrants outstanding as of July 1, 2019		2,396,747	4.68 years	*
Balance of warrants outstanding as of December 31, 2019		2,396,747	4.18 years	*
Balance of warrants outstanding as of July 1, 2020		2,396,747	3.67 years	*
Balance of warrants outstanding as of December 31, 2020		2,396,747	3.17 years	*

* Among the 2,396,747 shares of warrants, 359,727 shares will expire on November 20, 2022, 2,037,020 shares will be expire on May 23, 2024.

Private placement warrants

On November 21, 2017, the company issued 359,727 warrants to the shareholder in connection with a private placement offering of 1,798,635 Ordinary Shares. The warrant has an exercise price of $1.31 per share and is exercisable for five years from the date of issuance.

As at December 31, 2020 and June 30, 2020, there were 359,727 warrants outstanding. The fair value of the warrants is $27,699 and $142,092, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”. 

Registered direct offering warrants and placement agent warrants

On May 24, 2019, the Company issued warrants to investors in connection with a registered direct offering to purchase a total of 1,809,420 Ordinary Shares with a warrant term of five (5) years. On the same date, the Company issued warrants to the Placement Agent in connection with a registered direct offering to purchase a total of 227,600 Ordinary Shares with a warrant term of five (5) years. Both warrants have an exercise price of $1.86 per share.

The warrants have customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional ordinary shares, options, warrants or other securities that are convertible into ordinary shares at a price lower than $1.86 per share. As such, the warrants were classified as a liability, which requires the warrant to be re-measured to their fair value for each reporting period.

As of December 31, 2020 and June 30, 2020, the Company estimated fair value of the registered direct offering warrants at $246,081 and $895,663, respectively, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”. 

As of December 31, 2020 and June 30, 2020, the Company estimated fair value of the Placement Agent Warrants at $30,954 and $246,718, respectively, using the Black-Scholes valuation model. The assumptions used to estimate the fair value of the warrants were the same as those used for registered direct offering warrants.

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URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the six months ended December 31, 2020 and 2019, respectively:

	For the Six Months Ended December 31,
	2020			2019
	(unaudited)			(unaudited)
Net loss attributable to Urban Tea’s shareholders	$	(681,041	)	$	(1,335,766	)
Weighted Average Shares Outstanding-Basic and Diluted	$	72,370,528		$	31,289,010
Loss per share- basic and diluted	$	(0.09	)	$	(0.04	)

Basic income per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted income per share is the same as basic loss per share due to the lack of dilutive items in the Company for the six months ended December 31, 2020 and 2019. The number of warrants is excluded from the computation as the anti-dilutive effect.

12. INCOME TAXES

British Virgin Islands

Under the current tax laws of BVI, the Company’s subsidiary incorporated in the BVI is not subject to tax on income or capital gains.

The United States of America

Delta Technology Holdings USA Inc is incorporated in the State of Delaware in the U.S., and is subject to U.S. federal corporate income taxes.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law, which has made significant changes to the Internal Revenue Code. Those changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the deemed repatriation of cumulative foreign earnings as of December 31, 2017. Accordingly, the Company reevaluated its deferred tax assets on net operating loss carryforward in the U.S and concluded there was no effect on the Company’s income tax expenses as the Company has no deferred tax assets generated since inception. 

As of December 31, 2020 and June 30, 2020, the Company’s federal net operating loss carryforward for U.S. income taxes was $1,519,567 and $1,245,761, respectively. The federal net operating loss carryforward is available to reduce future years’ taxable income through year 2037 and net operating losses generated before 2018 will not expire. Management believes that the realization of the benefit from this loss appears uncertain due to the Company’s operating history.

Utilization of the Company’s U.S. net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382 and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization.

21

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12. INCOME TAXES (CONTINUED)

Hong Kong

NTH HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, NTH HK is exempted from income tax on its foreign-derived income and there are no withholding taxed in Hong Kong on remittance of dividends.

PRC

Effective January 1, 2008, the New Taxation Law of PRC stipulates that domestic enterprises and foreign invested enterprises (the “FIEs”) are subject to a uniform tax rate of 25%. Under the PRC tax law, companies are required to make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate for their installment tax payments. The overpayment, however, will not be refunded and can only be used to offset future tax liabilities.

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the six months ended December 31, 2020 and 2019, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets. As of December 31, 2020 and June 30, 2020, the Company had net operating loss carryforwards of $2,926,042 and $2,266,653, respectively, and maintains a full valuation allowance on its net deferred tax assets.

The Company incurred current income tax expenses of $259,031 arising from taxable profit generated by 39Pu. The Company did not have any current and deferred tax expenses for the six months ended December 31, 2019.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of December 31, 2020 and June 30, 2020, and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

22

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. RELATED PARTY TRANSACTIONS AND BALANCES

As of December 31, 2020 and June 30, 2020, the Company had a balance of $3,411 and $1,127 due from a related party which was indirectly controlled Mr. Guo’an Hu, one of the shareholders of 39Pu, generated from sales of dark tea products prior to acquisition of 39Pu by the Company.

During the six months ended December 31, 2020, the Company sold dark tea products of $25,932 to one related party. During the six months ended December 31, 2019, the Company did not incur significant related party transactions.

14. COMMITMENTS AND CONTINGENCIES  

1) Lease Commitments

As of December 31, 2020, the Company leases offices space under certain non-cancelable operating leases, with terms ranging between one and ten years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets.

	December 31, 2020		June 30, 2020
	(unaudited)
Rights of use lease assets	$	363,318	$	553,904
Operating lease liabilities, current		308,276		315,259
Operating lease liabilities, noncurrent		124,673		310,098
Total operating lease liabilities	$	432,949	$	625,357

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2020 and June 30, 2020:

	December 31, 2020			June 30, 2020
	(unaudited)
Remaining lease term and discount rate
Weighted average remaining lease term (years)		2.35			3.30
Weighted average discount rate		4.75	%		4.75	%

During the six months ended December 31, 2020 and 2019, the Company incurred total operating lease expenses of $100,892 and $202,970, respectively. 

23

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

14. COMMITMENTS AND CONTINGENCIES (CONTINUED)

2) Lease Commitments (continued)

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2020:

For the six months ended June 30, 2021	$	214,272
For the twelve months ended June 30, 2022		165,017
For the twelve months ended June 30, 2023		38,840
For the twelve months ended June 30, 2024 and thereafter		33,232
Total lease payments		451,361
Less: imputed interest		(18,412	)
Present value of lease liabilities	$	432,949

15. SEGMENT REPORTING

The Company presents segment information after elimination of inter-company transactions. In general, revenue, cost of revenue and operating expenses are directly attributable, or are allocated, to each segment. The Company allocates costs and expenses that are not directly attributable to a specific segment, such as those that support infrastructure across different segments, to different segments mainly on the basis of usage, revenue or headcount, depending on the nature of the relevant costs and expenses. The Company does not allocate assets to its segments as the CODM does not evaluate the performance of segments using asset information. As of December 31, 2020 and June 30, 2020, the Company had two segments, which is retail business by provision of high-quality tea beverages in its tea shop chain (“tea shop chain”) conducted by Hunan MYT and distribution of dark tea products conducted by 39Pu.

The following tables present the summary of each segment’s revenue, loss from operations, loss before income taxes and net loss which is considered as a segment operating performance measure, for the six months ended December 31, 2020 and 2019:

	For the Six Months Ended December 31, 2020
	Tea shop			Distribution of Dark tea
	chains			products		Unallocated			Total
Revenues	$	169,656		$	3,704,424	$	-		$	51,189
Income (Loss) from operations	$	(460,535	)	$	910,067	$	(1,108,830	)	$	(659,298	)
Net income (loss)	$	(393,649	)	$	771,102	$	(680,654	)	$	(303,201	)

	For the Six Months Ended December 31, 2019
	Tea shop			Distribution of Dark tea
	chains			products			Unallocated			Total
Revenues	$	348,816		$	69,403		$	-		$	418,219
Loss from operations	$	(884,478	)	$	(85,628	)	$	(508,911	)	$	(1,479,017	)
Net loss	$	(836,986	)	$	(10,194	)	$	(493,581	)	$	(1,340,761	)

24

URBAN TEA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

15. SEGMENT REPORTING (CONTINUED)

Details of the Company’s revenue by segment are set out in Note 2(f).

As of December 31, 2020, the Company’s total assets were $7,306,504 for its tea shop chains, $5,975,415 for its distribution of dark tea business, and $20,993,400 unallocated.

As substantially all of the Company’s long-lived assets are located in the PRC and substantially all of the Company’s revenue is derived from within the PRC, no geographical information is presented.

16. SUBSEQUENT EVENT

On March 26, 2021, the Company entered into certain securities purchase agreement (the “SPA”) with certain “non-U.S. Persons” (the “Purchasers”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company agreed to sell an aggregate of 3,797,488 units (the “Units”), each Unit consisting of one ordinary share of the Company, no par value (“Share”) and a warrant to purchase three Shares (“Warrant”) with an initial exercise price of $4.65 per Share, at a price of $3.72 per Unit, for an aggregate purchase price of approximately $14.1 million (the “Offering”). The net proceeds to the Company from such Offering will be approximately $14.1 million and shall be used by the Company for the planned blockchain and cryptocurrency mining operation and for working capital and general corporate purposes.

The Warrants are exercisable six (6) months from the date of issuance at an initial exercise price of $4.65 per Share, for cash (the “Warrant Shares”). The Warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five and a half (5.5) years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions. The Warrants contain a mandatory exercise right for the Company to force exercise of the Warrants if the Company’s Shares trades at or above $23.25 per Share, for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the Warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 300,000 Shares per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date.

On April 20, 2021, the transaction contemplated by the SPA consummated when all the closing conditions of the SPA have been satisfied and the Company issued 3,797,488 Units to the Purchasers pursuant to the SPA.

25

EX-99.2

Exhibit 99.2

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

A. Operating Results

As of December 31, 2020, we have two operating business lines, including the retail business of providing high-quality tea beverages in our tea shop chain business conducted by Hunan MYT and the dark tea distribution business by 39Pu.

Tea Shop Chain Business

Currently the Company has three tea shops based in Hunan Province, China, among which two are flagship stores and one is a general store. The Company sells tea products, beverages and light meals. The tea drinks we are currently offering are developed on various tea base, among which is our characteristic Anhua dark tea base. These tea-based beverages include fresh milk tea, fruit tea, milk cap tea, etc. The light meals offered include selections such as salads, sandwiches, pasta, steak, burritos and other healthy options. The pastries we are offering include fresh baked bread, fresh baked cakes, frosting cakes, etc.

Customers place orders and pay for tea products, beverages and light meals in the Company’s tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase.

We have also teamed up with China’s leading online food ordering and delivery platforms—meituan.com (“美团”) and ele.me (“饿了么”)—to allow consumers to order drinks, light meals, and pastries through the Internet from the closest stores. Consumers, however, can order only products that are suitable for delivery, such as bread with long expiration periods, light snacks, and certain tea beverages. Some tea beverages, such as milk foam cap tea, are not offered online due to its unsuitability for delivery. After a customer places an order with these online platforms, our products will be produced in the stores and delivered by professional deliverymen. The production and delivery process is typically completed in forty (40) minutes.

For the six months ended December 31, 2020 and 2019, the Company earned income from the tea shop chain business of $169,656 and $348,816, respectively.  

Branding and Marketing Strategy

Our products are currently offered under two brands, Buoyance Manor (“浮力庄园”) and Your Ladyship Tea (“小主的茶”). We plan to offer snacks and accessories, including peanut nougat gift boxes, cookies, coffee mugs, and tea cups under a new brand Meet Honey. We have entered into a series of trademark assignment and license agreements with the owners of these trademarks. For details, please refer to the section of Trademarks, Copyrights, Patents and Domain Names.

Each brand has its own market position. Buoyance Manor mainly focuses on selling coffee drinks and varieties of bread originating from Europe. Your Ladyship Tea mainly focuses on selling tea beverages and light meals. Meet Honey will mainly focus on selling snacks and accessories, including peanut nougat gift boxes, cookies, coffee mugs, and tea cups.

Competition

In almost all markets in which we operate, there are numerous competitors in the specialty tea beverage business. We believe that our customers choose among specialty tea beverage brands primarily on the basis of product quality, service and convenience, as well as price. We face competition from large fast-food restaurants and ready-to-drink tea beverage manufacturers. We also compete with restaurants and other specialty retailers for prime retail locations and qualified personnel to operate both new and existing stores.

As of now, our major competitors in Hunan province are: Maiji (“麦吉”), Luosennina (“罗森尼娜”), NAYUKI (“奈雪的茶”), and Chayanyuese (“茶颜悦色”).

Dark tea distribution business

In order to diversify the Company’s business and making synergies between tea shop chains and dark tea distribution, the Company’s indirectly wholly-owned subsidiary, Mingyuntang (Shanghai) Tea Co. Ltd. (“Shanghai MYT”), entered into a series of contractual agreements (the “39Pu VIE Agreements”) with Hunan 39 PU Tea Co., Ltd. (“39Pu”) and certain shareholders of 39Pu (“39Pu Shareholders”), who collectively hold 51% of 39Pu. The 39Pu VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent, in all material respects, to those it would possess as the 51% equity holder of 39Pu, including absolute control rights and the rights to the management, operations, assets, property and revenue of 39Pu. The purpose of the VIE Agreements is solely to give 39Pu the exclusive control over 39Pu’s management. Through 39Pu VIE structure, the Company is able to consolidate operations of 39Pu effective October 2, 2019, and now operates a separate dark tea distribution business.

39Pu, headquartered in Changsha Province, China, is a high-end tea enterprise integrating tea distribution, product research and development, and tea cultural heritage projects. The company aims to create a comprehensive tea brand, selling premium tea (primarily Anhua dark tea) and facilitating the dissemination of tea culture. Currently, the company operates retail tea stores in Guangdong, Liaoning, Inner Mongolia, and Hunan.

39Pu sells dark tea products in its retail tea stores. 39Pu recognizes revenues when products are delivered to customers on a gross basis, as the Company is acting as a principal in these transactions. For the six months ended December 31, 2020 and 2019, the Company earned income from the dark tea distribution of $3,704,424 and $69,403, respectively.  

2

Recent developments

1) 2020 Registered Direct Offerings

On July 30, 2020, the Company and the Purchasers entered into certain securities purchase agreement (the “July Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 15,000,000 Ordinary Shares, at a price of $0.40 per share in a registered direct offering, for gross proceeds of approximately $6 million (the “July Offering”). The July Offering closed on August 3, 2020.

On August 14, 2020, the Company and the Purchasers entered into certain securities purchase agreement (the “July Purchase Agreement”), pursuant to which the Company agreed to sell to such Purchasers an aggregate of 18,750,000 Ordinary Shares, at a price of $0.32 per share in a registered direct offering, for gross proceeds of approximately $6 million (the “July Offering”). The July Offering closed on August 18, 2020.

2) Grand Opening of First Overseas Tea House

On August 1, 2020, the Company, through its joint venture, opened the first oversea specialty coffee and tea house under a brand name of “MENO” in West Village near Washington Square Park in Manhattan, New York City.

3) Acquisition of equity interest in CYY and Store Master

In October 2020, the Company, through its WFOE, acquired 51% equity interest in each of Chuangyeying Brand Management Co., Ltd. (“CYY”) and Store Master Food Trading Co., Ltd. (“Store Master”) and the shareholders of CYY and Store Master. As of December 31, 2020, the Company made investments of $376,462 and $681,252, respectively, in CYY and Store Master.

CYY has franchise permit and owns multiple registered trademarks in China. It currently manages over 300 tea beverages franchisees. Store Master specializes in supply chain management, product research and development, and optimizing long-term and stable supply chains. Store Master also owns a scalable warehouse with an advanced logistics management system. CYY and Store Master are commonly owned by five individuals.

4) Acquisition of equity interest in Guokui

On September 23, 2020, the Company entered into a share purchase agreement (the “Agreement”), pursuant to which the Company agreed to pay $400,000 in cash to acquire 80% of the equity interest in Guokui. Guokui is incorporated under the laws of New York State and has been operating CROP CIRCLE, a casual street food restaurant in New York City, since August 2020. As of December 31, 2020, the Company has invested $100,000 in Guokui.

Key Factors that Affect Operating Results

We just launched the specialty tea product distribution and retail business in November 2018 and the dark tea distribution business in October 2019. We believe our future success depends on our ability to significantly increase revenues as well as maintain profitability from our operations. Our limited operating history makes it difficult to evaluate our business and future prospects. You should consider our future prospects in light of the risks and challenges encountered by a company with a limited operating history in an emerging and rapidly evolving industry. These risks and challenges include, among other things,

● Our ability to attract and engage customers

● Our ability to increase product offerings

● Expansion of our online distribution

● Effective selling prices of our products

● Efficient store operations

Our business requires a significant amount of capital in large part because we are prompted to continue to open stores and expand our business in joint venture stores and to additional markets where we currently do not have operations.

3

Results of Operations

Six Months Ended December 31, 2020 as Compared to Six Months Ended December 31, 2019

	For the Six Months Ended December 31,						Change
	2020			2019			Amount			%
Revenue	$	3,874,080		$	418,219		$	3,455,861			826	%
Cost of revenues		(2,328,001	)		(300,124	)		(2,027,877	)		676	%
Gross profit		1,546,079			118,095			1,427,984			1,209	%
Operating expenses
General and administrative expenses		(2,205,377	)		(1,597,112	)		(608,265	)		38	%
Total operating expenses		(2,205,377	)		(1,597,112	)		(608,265	)		38	%
Other income, net
Interest income		138,306			49,395			88,911			180	%
Change in fair value of warrants		845,683			15,330			830,353			5,417	%
Share of equity investees		(201,815	)		-			(201,815	)		>100	%
Other (loss) income		(167,046	)		73,531			(240,577	)		(327	)%
Total other income, net		615,128			138,256			476,872			345	%
Net loss before income taxes		(44,170	)		(1,340,761	)		1,296,591			(97	)%
Income tax expenses		(259,031	)		-			(259,031	)		>100	%
Net loss	$	(303,201	)	$	(1,340,761	)	$	1,037,560			(77	)%

4

Revenues

We generate revenue from the following two sources, including (1) sales of tea products, beverages and light meals in its tea shop chains by Hunan MYT, and (2) sales of dark team products by 39Pu. Revenue from sales of dark team products services are newly incorporated into our operations as a result of our recent entry into VIE contractual agreements with 39Pu. Total revenue increased by $3,455,861 or 826%, from $418,219 for the six months ended December 31, 2019 to $3,874,080 for the six months ended December 31, 2020.

(1) Revenue from sales of tea products, beverages and light meals in retail shop chains

The Company commenced its business of specialty tea product distribution and retail in November 2018. The Company sold tea beverage drinks, light meals and other tea products in the retail stores. Customers places orders in the store and revenue is recognized when drinks and meals are delivered to the customers. For the six months ended December 31, 2020 and 2019, the Company generated revenues of $169,656 and $348,816, respectively, from its retail stores, representing a decrease of $179,160 or 51%. The decrease was primarily attributable to close of general stores during the twelve months ended December 31, 2020 as affected by the COVID-19 outbreak. During the six months ended December 31, 2020 and 2019, the Company had three and eight retail stores under operations, respectively.

(2) Revenue from sales of dark tea products

The Company commenced its business of sales of dark tea business in October 2019, when the Company entered into VIE agreements with 39Pu and 39Pu’s shareholders. The Company recognizes revenues when dark teas are delivered to customers, on a gross basis as the Company is acting as a principal in these transactions.

During the six months ended December 31, 2020 and 2019, the Company generated revenues of $3,704,424 and $69,403 from sales of dark tea products. The increase was primarily attributable to both online and offline marketing campaign for the dark tea products and the Company witnessed a sharp increase in the sales.

Cost of revenues

The cost of revenues is comprised of material costs of tea beverage drinks, light meals, dark tea products and other products. For the six months ended December 31, 2020, the Company incurred cost of $2,328,001, consisting of cost of tea beverage drinks and light meals of $89,858 and cost of dark tea products of $2,238,143. For the six months ended December 31, 2019, the Company incurred cost of $300,124, consisting of cost of tea beverage drinks and light meals of $298,483 and cost of dark tea products of $1,641.

General and administrative expenses

General and administrative expenses increased from $1,597,112 for the six months ended December 31, 2019 to $2,205,377 for the six months ended December 31, 2020, representing an increase of $608,265, or 38%. General and administrative expenses was mainly comprised of employee salary and welfare expenses, retail store and office rental expenses, share-based compensation expenses, professional consulting service fees and travel expenses. The increase of general and administrative expenses was mainly attributable to an increase of $615,243 in professional expenses as the Company raised funds from two direct offerings during the six months ended December 31, 2020, and an increase of $131,706 in marketing and promotion expenses because we invested in marketing campaigns for promotion of our dark tea products, netting off against a decrease of $102,078 in retail store and office rental expenses as the Company had three retails stores under operations as of December 31, 2020 as compared with 8 retail stores as of December 31, 2019.

Change in fair value of warrants

Gain on change in fair value of warrants was $845,683 for the six months ended December 31, 2020, as compared with $15,330 for the six months ended December 31, 2019. This is recorded as a non-cash gain, which resulted from the change in fair value of warrants issued connection with registered direct offering closed on May 24, 2019.

5

Net loss

As a result of the foregoing, net loss for the six months ended December 31, 2020 was $303,201, representing a decrease of $1,037,560 from net loss of $1,340,761 for the six months ended December 31, 2019. 

Critical Accounting Policies and Estimates

We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet dates and revenues and expenses during the reporting periods. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. We believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements. You should read the following description of critical accounting policies, judgments and estimates in conjunction with our unaudited condensed consolidated financial statements and other disclosures included in this Form 6-K.

● Basis of presentation

The unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

● Principal of consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company, its wholly and majority owned subsidiaries, and consolidated VIEs for which the Company is the primary beneficiary.

All transactions and balances among the Company, its subsidiaries and consolidated VIEs have been eliminated upon consolidation.

● Revenue recognition

The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company’s unaudited condensed consolidated financial statements upon adoption of ASC 606.

6

In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

During the six months ended December 31, 2020 and 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its tea shop chains by Hunan MYT, and from sales of dark team products by 39Pu. 

Sales of tea products, beverages and light meals in retail shop chains by Hunan MYT

Customers place order and pay for tea products, beverage drinks and light meals in the Company’s tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases.

Sales of dark tea products by 39Pu

The Company identifies a single performance obligation from contracts. The Company recognizes revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices. The transaction fees are fixed. Payments received in advance from customers are recorded as “advance from customers” in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of products to the Company.

● Income taxes

The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is probable that taxable income to be utilized with prior net operating loss carried forward. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized tax benefit as of December 31, 2020. As of  December 31, 2020, income tax returns for the tax years ended December 31, 2015 to 2019 remain open for statutory examination by PRC tax authorities. 

7

B. Liquidity and Capital Resources

We have financed our operations primarily through shareholder contributions, cash flow from operations, private placements, and public offerings of securities. As of December 31, 2020 and June 30, 2020, we had cash of $13,333,034 and $5,311,693, respectively. In addition, as of December 31, 2020 and June 30, 2020, we had short-term investments of $3,335,640 and $2,266,069 with maturities within twelve months.

On July 30, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 18,750,000 ordinary shares, no par value, at a price of $0.32 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 3, 2020.

On August 14, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 15,000,000 ordinary shares, no par value, at a price of $0.4 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 18, 2020.

Statement of Cash Flows

	For the Six Months Ended December 31,
	2020			2019
Net cash used in operating activities	$	(510,405	)	$	(1,151,565	)
Net cash used in investing activities		(2,573,908	)		(1,698,038	)
Net cash provided by financing activities		11,050,000			-
Effect of exchange rate changes on cash and cash equivalents		55,654			(17,962	)
Increase (Decrease) in cash and cash equivalents		8,021,341			(2,867,565	)
Cash and cash equivalents at beginning of period		5,311,693			4,668,745
Cash and cash equivalents at end of period	$	13,333,034		$	1,801,180

Operating activities

For the six months ended December 31, 2020, net cash used in operating activities was $510,405, mainly derived from (i) net loss of $303,201 for the six months adjusted for noncash amortization of right of use assets of $227,566, decrease in fair value of warrants of $845,683, stock based compensation expenses of $222,500 to certain consultants, and share of loss of $201,815 from our equity investees including Meno, Guokui, CYY and Store Master, and (ii) net changes in our operating assets and liabilities, principally comprising of (a) an increase of $262,396 in accounts receivable because we generated increasing revenues in sales of dark tea products, and (b) an increase of $259,284 in income tax payable because we generated net profits from sales of dark tea products by 39Pu.

For the six months ended December 31, 2019, net cash used in operating activities was $1,151,565. This was mainly attributable to our net loss of $1,340,761, adjusted by an increase of $99,815 in other current assets and an increase of $57,784 in noncurrent assets, both are results of deferral of consulting services and lease arrangements acquired from Ladyship Tea.

Investing activities

For the six months ended December 31, 2020, net cash used in investing activities was $2,573,908. This was mainly attributable to investments in short-term investments of $9,393,389, investment of $1,257,714 in four equity investees, and loans of $1,181,060 made to a third party, netting off against proceeds of $8,541,987 from release of short-term investments, and collection of loans of $814,003 from a third party.

For the six months ended December 31, 2019, net cash used in investing activities was $1,698,038. This was mainly attributable to acquisition of a subsidiary, net of cash of $2,369,768, purchase of $220,849 for property and equipment, payment of $247,897 for deposits in property and equipment, investment of $105,000 in one equity investee, netting off against proceeds of $1,244,736 from release of short-term investments.

Financing activities

For the six months ended December 31, 2020, we raised net proceeds of $11,050,000 from two private placements.

For the six months ended December 31, 2019, we did not incur cash inflow or outflow from financing activities.

8

C. Research and development, patent and licenses, etc.

Not applicable.

D. Trend information

Other than as disclosed elsewhere in this annual report, the Company is not aware of any trends, uncertainties, demands, commitments or events for the six months ended December 31, 2020 that are reasonably likely to have a material effect on our total net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

E. Off-balance sheet arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

F. Tabular disclosure of contractual obligations

Commitments and Contingencies

From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity.

Contractual obligations

Future minimum lease payment under non-cancelable operating leases are as follows:

For the six months ended June 30, 2021	$	214,272
For the twelve months ended June 30, 2022		165,017
For the twelve months ended June 30, 2023		38,840
For the twelve months ended June 30, 2024 and thereafter		33,232
Present value of lease liabilities	$	451,361

(1) We lease offices which are classified as operating leases in accordance with ASC Topic 842. As of December 31, 2020, our future lease payments totaled $451,361.

G. Safe Harbor

See “Forward-Looking Statements.”

9

H. Holding Company Structure

The Company is a holding company with no material operations of its own. We conduct our operations through our PRC subsidiaries and consolidated VIE. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries and consolidated VIE. If our subsidiaries, our consolidated VIE or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

As an offshore holding company, we are permitted under PRC laws and regulations to provide funding from the proceeds of our offshore fund raising activities to our PRC subsidiaries only through loans or capital contributions, and to our consolidated affiliated entity only through loans, in each case subject to the satisfaction of the applicable government registration and approval requirements. As a result, there is uncertainty with respect to our ability to provide prompt financial support to our PRC subsidiaries and our VIE when needed. Notwithstanding the foregoing, our PRC subsidiaries may use their own retained earnings (rather than Renminbi converted from foreign currency denominated capital) to provide financial support to our consolidated affiliated entity either through entrustment loans from our PRC subsidiaries to our VIE or direct loans to such consolidated affiliated entity’s nominee shareholders, which would be contributed to the consolidated variable entity as capital injections. Such direct loans to the nominee shareholders would be eliminated in our unaudited condensed consolidated financial statements against the consolidated affiliated entity’s share capital.

I. Quantitative and Qualitative Disclosures about Market Risk

Foreign currency exchange rate risk

Substantially all of the Company’s operating activities and the Company’s major assets and liabilities are denominated in RMB, except for the cash deposit of approximately $12.2 million which was in U.S. dollars as of December 31, 2020, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significant affected.

Interest rate risk

We are exposed to interest rate risk on our interest-bearing assets and liabilities. As part of our asset and liability risk management, we review and take appropriate steps to manage our interest rate exposures on our interest-bearing assets and liabilities. We have not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure during the six months ended December 31, 2020.

Currency convertibility risk

We transact all of our business in Renminbi, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China, or the PBOC. However, the unification of the exchange rates does not imply that the Renminbi may be readily convertible into U.S. dollars or other foreign currencies. All foreign exchange transactions continue to take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts.

10

XML

Document and Entity Information	6 Months Ended
	Dec. 31, 2020
Document and Entity Information [Abstract]
Entity Registrant Name	Urban Tea, Inc.
Entity Central Index Key	0001543268
Amendment Flag	true
Amendment Description	This amendment to the Current Report on Form 6-K/A ("Form 6-K/A") is being filed to amend the Current Report on Form 6-K initially filed by Urban Tea, Inc. (the "Company") with the Securities and Exchange Commission on April 27, 2021 (the "Original Form 6-K"). The Company is filing this Form 6-K/A solely to include the XBRL of the six-month interim financial statements which were omitted from the Original Form 6-K. The Company hereby incorporates such financial statements into the Company's registration statements referenced below. Except as set forth in the foregoing, the Original Form 6-K is unchanged. This Form 6-K/A is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration Numbers 333-227299) and on Form F-3s, as amended (Registration Numbers 333-248615, 333-233479 and 333-227211), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Current Fiscal Year End Date	--06-30
Document Type	6-K/A
Document Fiscal Year Focus	2020
Document Period End Date	Dec. 31, 2020
Document Fiscal Period Focus	Q2
Entity File Number	001-35755

XML

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Dec. 31, 2020	Jun. 30, 2020
ASSETS
Cash	$ 13,333,034	$ 5,311,693
Short-term investments	3,335,640	2,266,069
Trade receivables	470,894	183,566
Inventories	1,475,924	1,403,582
Prepayments	26,874
Loans due from third parties	2,785,636	2,222,191
Due from a related party	3,411	1,127
Other current assets	106,244	108,224
Total current assets	21,537,657	11,496,452
Investment in equity investees	1,289,077	187,755
Goodwill	8,610,173	8,073,011
Property and equipment, net	1,327,658	1,315,326
Deposits for plant, property and equipment	1,013,825	849,245
Intangible assets	66,522	66,442
Right of use assets	363,318	553,904
Other noncurrent assets	67,089	92,992
Total Assets	34,275,319	22,635,127
LIABILITIES AND EQUITY
Trade payable	80,740	64,300
Unearned income	101,240	127,279
Other current liabilities	167,379	68,579
Income tax payable	268,215
Lease liabilities, current	308,276	315,259
Warrants liabilities	304,734	1,150,416
Total current liabilities	1,230,584	1,725,833
Lease liabilities, noncurrent	124,673	310,098
Total Liabilities	1,355,257	2,035,931
Shareholders' Equity
Ordinary shares, $0.0001 par value share, 150,000,000 shares authorized 79,491,998 and 45,188,648 shares issued and outstanding at December 31, 2020 and June 30, 2020, respectively	7,949	4,519
Preferred shares, par value $0.0001 per share, 5,000,000 shares authorized; none issued or outstanding
Additional paid-in capital	36,837,553	25,568,478
Statutory reserve	5,848
Accumulated deficit	(10,967,630)	(10,280,741)
Accumulated other comprehensive income (loss)	998,913	(352,649)
Total Urban Tea, Inc.'s Shareholders' Equity	26,882,633	14,939,607
Non-controlling interests	6,037,429	5,659,589
Total Liabilities and Equity	$ 34,275,319	$ 22,635,127

XML

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Jun. 30, 2020
Statement of Financial Position [Abstract]
Ordinary shares, par value	$ 0.0001	$ 0.0001
Ordinary shares, shares authorized	150,000,000	150,000,000
Ordinary shares, shares issued	79,491,998	45,188,648
Ordinary shares, shares outstanding	79,491,998	45,188,648
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding

XML

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenue	$ 3,874,080	$ 418,219
Cost of revenues	(2,328,001)	(300,124)
Gross profit	1,546,079	118,095
Operating expenses
General and administrative expenses	(2,205,377)	(1,597,112)
Total operating expenses	(2,205,377)	(1,597,112)
Other income, net
Interest income	138,306	49,395
Change in fair value of warrants	845,683	15,330
Share of equity investees	(201,815)
Other (loss) income	(167,046)	73,531
Total other income, net	615,128	138,256
Net loss before income taxes	(44,170)	(1,340,761)
Income tax expenses	(259,031)
Net loss	(303,201)	(1,340,761)
Less: Net (income) loss attributable to non-controlling interests	(377,840)	4,995
Net loss attributable to Urban Tea, Inc.'s Shareholders	(681,041)	(1,335,766)
Other comprehensive income
Foreign currency translation adjustment	1,351,562	81,152
Comprehensive income (loss)	670,521	(1,259,609)
Less: Comprehensive loss attributable to non-controlling interests	(377,840)	4,995
Comprehensive income (loss) attributable to Urban Tea, Inc.'s Shareholders	$ 292,681	$ (1,254,614)
Loss per share- basic and diluted	$ (0.09)	$ (0.04)
Weighted Average Shares Outstanding-Basic and Diluted	72,370,528	31,289,010

XML

Unaudited Condensed Consolidated Statements of Equity - USD ($)	Share capital	Additional paid-in capital	Statutory reserve	Accumulated deficit	Accumulated other comprehensive (loss) income	Non-controlling Interest	Total
Balance at Jun. 30, 2019	$ 2,618	$ 17,625,612		$ (8,174,141)	$ (302,222)		$ 9,151,867
Balance, Shares at Jun. 30, 2019	26,180,314
Issuance of ordinary shares in connection with acquisition of a subsidiary	$ 1,000	3,399,000				5,675,416	9,075,416
Issuance of ordinary shares in connection with acquisition of a subsidiary, Shares	10,000,000
Net (loss) income for the period				(1,335,766)		(4,995)	(1,340,761)
Foreign currency translation adjustment					81,152		81,152
Balance at Dec. 31, 2019	$ 3,618	21,024,612		(9,509,907)	(221,070)	5,670,421	16,967,674
Balance, Shares at Dec. 31, 2019	36,180,314
Balance at Jun. 30, 2020	$ 4,519	25,568,478		(10,280,741)	(352,649)	5,659,589	14,939,607
Balance, Shares at Jun. 30, 2020	45,188,648
Issuances of ordinary shares in connection with private placements	$ 3,375	11,046,625					11,050,000
Issuances of ordinary shares in connection with private , Shares	33,750,000
Issuances of ordinary shares for professional services	$ 55	222,450					222,505
Issuances of ordinary shares for professional services, Shares	553,350
Net (loss) income for the period				(681,041)		377,840	(303,201)
Appropriation of net income			5,848	(5,848)
Foreign currency translation adjustment					1,351,562		1,351,562
Balance at Dec. 31, 2020	$ 7,949	$ 36,837,553	$ 5,848	$ (10,967,630)	$ 998,913	$ 6,037,429	$ 26,882,633
Balance, Shares at Dec. 31, 2020	79,491,998

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Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash Flows from Operating Activities:
Net loss	$ (303,201)	$ (1,340,761)
Adjustments to reconcile net income to net cash used in operating activities:
Reversal of provision for doubtful accounts		(1,423)
Depreciation of property and equipment	78,671	68,941
Amortization of intangible assets	9,935	6,625
Net loss from disposal of property and equipment	15,242	1,025
Amortization of right of use assets	227,566	152,788
Change in fair value of warrants	(845,683)	(15,330)
Share based compensation expenses	222,500
Share of equity investees	201,815
Changes in assets and liabilities:
Trade receivables	(262,396)	7,766
Inventories	41,445	(33,261)
Prepayments	(25,902)	45,953
Due from a related party	(2,113)
Other current assets	10,480	99,815
Other noncurrent assets	32,331	57,784
Trade payable	29,198	(50,325)
Unearned income	(53,623)	(44,613)
Income tax payable	259,284
Other current liabilities	94,317	46,487
Lease liabilities	(240,271)	(153,036)
Net cash used in operating activities	(510,405)	(1,151,565)
Cash Flows from Investing Activities:
Purchases of property and equipment	(1,620)	(220,849)
Payment of deposits in property and equipment	(91,364)	(247,897)
Proceeds from disposal of property and equipment		740
Purchases of intangible assets	(4,751)
Investment in short-term investments	(9,393,389)
Collection of short-term investments	8,541,987	1,244,736
Collection of loans from a third party	(367,057)
Investment in equity investees	(1,257,714)	(105,000)
Acquisition of a subsidiary, net of cash acquired		(2,369,768)
Net cash used in investing activities	(2,573,908)	(1,698,038)
Cash Flows from Financing Activities:
Cash raised in private placement of ordinary shares	11,050,000
Net cash provided by financing activities	11,050,000
Effect of exchange rate changes on cash and cash equivalents	55,654	(17,962)
Increase (Decrease) in cash and cash equivalents	8,021,341	(2,867,565)
Cash and cash equivalents at beginning of period	5,311,693	4,668,745
Cash and cash equivalents at end of period	13,333,034	1,801,180
Supplemental disclosures of cash flow information:
Interest paid
Tax paid
Major non-cash transactions:
Issuance of ordinary shares for professional services	222,505
Issuance of ordinary shares for acquisition of a subsidiary		3,400,000
Right-of-use assets obtained in exchange for operating lease obligations		1,360,822
Loan due from a third party transferred from short-term investments		$ 2,304,541

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Organization and Principal Activities

6 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION AND PRINCIPAL ACTIVITIES

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

Urban Tea, Inc., Inc. (formerly known as Delta Technology Holdings Limited) ("MYT" or the "the Company"), is a holding company that was incorporated on November 28, 2011, under the laws of the British Virgin Islands. On February 14, 2019, the Company changed its name to Urban Tea, Inc., Inc.

The Company owns 100% equity interest in NTH Holdings Limited ("NTH BVI"), an entity incorporated on August 28, 2018 in accordance with the laws and regulations in British Virgin Islands ("BVI"). NTH BVI owns 100% equity interest in Tea Language Group Limited ("NTH HK"), an entity incorporated on September 11, 2018 in accordance with the laws and regulations in Hong Kong ("HK"). On October 19, 2018, the Company, through NTH HK, established Mingyuntang (Shanghai) Tea Co. Ltd.  ("Shanghai MYT"), as a Wholly Foreign-Owned Enterprise ("WFOE") in the People's Republic of China ("PRC").

The Company previously was engaged in the manufacturing and sale of organic compounds. The Company discontinued the manufacturing and sale of organic compounds business in April 2019. Currently, the Company conducts its business through two variable interest entities ("VIEs"), Hunan Mingyuntang Brand Management Company ("Hunan MYT") and Hunan 39 PU Tea Co., Ltd. ("39Pu"). Hunan Mingyuntang is primarily engaged in specialty tea product distribution and retail business by providing high-quality tea beverages through its tea shop chains and 39Pu is engaged in dark tea distribution in the People's Republic of China ("PRC").

On November 19, 2018, Shanghai MYT entered into a series of variable interest entity agreements ("Hunan MYT VIE Agreements") with Hunan MYT and Peng Fang, the sole shareholder of Hunan MYT. The Hunan MYT VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Hunan MYT, including absolute control rights and the rights to the management, operations, assets, property and revenue of Hunan MYT. The purpose of the Hunan MYT VIE Agreements is solely to give Shanghai MYT the exclusive control over Hunan MYT's management and operations.

On October 2, 2019, Shanghai MYT entered into a series of variable interest entity agreements ("39Pu VIE Agreements") with 39Pu and three shareholders who collectively owned 51% equity interest in 39Pu. The 39Pu VIE Agreements are designed to provide Shanghai MYT with the power, rights and obligations equivalent in all material respects to those it would possess as the controlling equity holder of 39Pu, including absolute control rights and the rights to the management, operations, assets, property and revenue of 39Pu. The purpose of the 39Pu VIE Agreements is solely to give Shanghai MYT the exclusive control over 39Pu's management and operations. In exchange for the controlling interest in 39Pu, the Company is obliged to pay a cash consideration of $2.4 million and a share consideration of 10,000,000 ordinary shares of the Company, no par value ("Ordinary Shares"). In addition, a contingent cash consideration of $0.6 million and share consideration of 4,000,000 Ordinary Shares will be delivered to the three shareholders according to the earn-out payment based on the financial performance of 39 Pu in its next fiscal year. On October 17 and 28, 2019, the Company paid share consideration of 10,000,000 Ordinary Shares and the cash consideration of $2.4 million, respectively.

The accompanying consolidated financial statements reflect the activities of Hunan Mingyuntang, 39Pu and each of the following holding entities:

Name	Background	Ownership
Delta Technology Holdings USA Inc. ("Urban Tea USA")	●     A US company ●     Incorporated on May 22, 2018 ●     A holding company	100% owned by the Company
NTH BVI	●     A BVI company ●     Incorporated on August 28, 2018 ●     A holding company	100% owned by the Company
NTH HK	●     A Hong Kong company ●     Incorporated on September 11, 2018 ●     A holding company	100% owned by NTH BVI
Shanghai MYT	●     A PRC company and deemed a wholly foreign owned enterprise ("WOFE") ●     Incorporated on October 19 ●     Registered capital of $1 million ●     A holding company	WOFE, 100% owned by NTH HK
Hunan MYT	●     A PRC limited liability company ●     Incorporated on October 17, 2018 ●     Registered capital of $4,330,590 (RMB 30 million) ●     Engaged in specialty tea product distribution and retail business by provision of high-quality tea beverages in its tea shop chain	100% VIE of Shanghai MYT
39Pu	●     A PRC limited liability company ●     Incorporated on April 14, 2011 ●     Registered capital of $3,522,424 (RMB 20.9 million) with registered capital fully paid-up ●    Engaged in dark tea distribution	51% VIE of Shanghai MYT

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Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation and principle of consolidation

The unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

The unaudited interim financial information as of December 31, 2020 and for the six months ended December 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. As of December 31, 2019, the Company had two VIEs – Hunan MYT and 39Pu. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 20-F for the fiscal year ended June 30, 2020, which was filed with the SEC on October 30, 2020.

In the opinion of management, all adjustments (including normal recurring adjustments) necessary to present a fair statement of the Company's unaudited financial position as of December 31, 2020, its unaudited results of operations for the six months ended December 31, 2020 and 2019, and its unaudited cash flows for the six months ended December 31, 2020 and 2019, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

(b) Consolidation of Variable Interest Entity

Material terms of the Hunan MYT VIE Agreements and 39Pu VIE Agreements are described below:

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreements, Shanghai MYT and 39Pu each provides Hunan MYT with technical support, consulting services and management services on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Hunan MYT and 39Pu each granted an irrevocable and exclusive option to Shanghai MYT to purchase from each of Hunan MYT and 39Pu, any or all of Hunan MYT's and 39Pu assets at the lowest purchase price permitted under the PRC laws. Should Shanghai MYT exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to Hunan MYT and 39Pu by Shanghai MYT under the agreement, Shanghai MYT is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, plus amount of the services fees or ratio decided by the board of directors of Shanghai MYT based on the value of services rendered by Shanghai MYT and the actual income of Hunan MYT and 39Pu from time to time, which is substantially equal to all of the net income of Hunan MYT and 51% of net income of 39Pu, respectively.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by Shanghai MYT with 30-day prior written notice. Hunan MYT or 39Pu does not have the right to terminate the agreement unilaterally. Shanghai MYT may unilaterally extend the term of this agreement with prior written notice.

Exclusive Option Agreement

Under the Exclusive Option Agreement between Peng Fang and Shanghai MYT, irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Hunan MYT. The option price is equal to the capital paid in by Peng Fang subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Under the Exclusive Option Agreement between three shareholders of 39Pu and Shanghai MYT, the three shareholders irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in 39Pu. The option price is equal to the capital paid in by the three shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

The agreement remains effective for a term of ten years and may be renewed at Shanghai MYT's election.

Share Pledge Agreement

Under the Share Pledge Agreement, Peng Fang and the three shareholders of 39Pu each pledged all of their equity interests in Hunan MYT and 39Pu to Shanghai MYT to guarantee the performance of Hunan MYT's and 39Pu's obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in any event of default, as set forth in the Share Pledge Agreement, including that Hunan MYT or Peng Fang, 39Pu or the three shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, Shanghai MYT, as pledgee, will be entitled to certain rights, including, but not limited to, the right to dispose of the pledged equity interest in accordance with applicable PRC laws. Shanghai MYT shall have the right to collect any and all dividends declared or generated in connection with the equity interest during the term of pledge.

The Share Pledge Agreement shall be effective until all payments due under the Exclusive Business Cooperation Agreement have been paid by Hunan MYT and 39Pu, respectively. Shanghai MYT shall cancel or terminate the Share Pledge Agreement upon Hunan MYT's and 39Pu's full payment of fees payable under the Exclusive Business Cooperation Agreement.

Timely Reporting Agreement

To ensure Hunan MYT and 39Pu promptly provide all of the information that Shanghai MYT and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Shanghai MYT, and Hunan MYT and 39Pu, respectively. Under the Timely Reporting Agreement, Hunan MYT and 39Pu each agreed that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

Although it is not explicitly stipulated in the Timely Reporting Agreement, the parties agreed its term shall be the same as that of the Exclusive Business Cooperation Agreement.

Power of Attorney

Under the Power of Attorney, Peng Fang and the three shareholders of 39Pu each authorized Shanghai MYT to act on her behalf as her exclusive agent and attorney with respect to all rights as shareholder, including but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association of Hunan MYT and 39Pu, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Hunan MYT and 39Pu.

Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement.

This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, so long as Peng Fang is a shareholder of Company.

The VIE Agreements became effective immediately upon their execution.

VIE is an entity that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Shanghai MYT is deemed to have a controlling financial interest and be the primary beneficiary of Hunan MYT and 39Pu, because it has both of the following characteristics:

1. power to direct activities of a VIE that most significantly impact the entity's economic performance, and

2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.

Pursuant to the VIE Agreements, Hunan MYT and 39Pu pay service fees equal to 100% and 51% of its net income to Shanghai MYT, respectively. At the same time, Shanghai MYT is entitled to receive 100% and 51% of expected residual returns from Hunan MYT and 39Pu, respectively. The VIE Agreements are designed so that Hunan MYT and 39Pu operate for the benefit of the Company. Accordingly, the accounts of Hunan MYT are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company's consolidated financial statements.

In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company's ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE agreements, it may not be able to exert effective control over Hunan MYT or 39Pu and its ability to conduct its business may be materially and adversely affected.

All of the Company's main current operations are conducted through Hunan MYT since November 2018, and through 39Pu since October 2019. Current regulations in China permit Hunan MYT and 39Pu to pay dividends to the Company only out of their accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Hunan MYT and 39Pu to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

The following financial statement balances and amounts only reflect the financial position and financial performances of Hunan MYT and 39Pu, which were included in the consolidated financial statements as of December 31 and June 30, 2020:

	December 31, 2020		June 30, 2020
	(unaudited)
Cash	$	1,142,514	$	362,384
Short-term investments		3,335,640		2,266,069
Inventories		1,475,924		1,403,582
Loans due from a third party		2,785,636		2,222,191
Other current assets		607,423		292,917
Investments in equity investees		1,096,370		-
Property and equipment, net		1,327,658		1,315,326
Deposits for plant, property and equipment		1,013,825		849,245
Right of use assets		363,318		553,904
Other noncurrent assets		133,611		159,434
Total Assets	$	13,281,919	$	9,425,052
				-
Due to MYT*	$	10,466,925	$	7,270,932
Other current liabilities		1,050,524		885,515
Total Liabilities	$	11,517,449	$	8,156,447

* Payable due to MYT is eliminated upon consolidation.

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Revenue	$	3,874,080	$	418,219
Net income (loss)	$	377,453	$	(847,182	)

(c) Segment reporting

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different services.

For the six months ended December 31, 2020 and 2019, the Company has two operating business lines, including retail business by provision of high-quality tea beverages in its tea shop chain business conducted by Hunan MYT and dark tea distribution business by 39Pu. Based on management's assessment, the Company has determined that the two operating business lines are two operating segments as defined by ASC 280.

(d) Trade receivables

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management's assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as at December 31, 2020 and June 30, 2020.

(e) Inventories

Inventories, consisting of products available for sale, are stated at the lower of cost and market. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of income and comprehensive income.

(f) Revenue recognition

The Company adopted ASC 606, Revenue from Contracts with Customers ("ASC 606") beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company's consolidated financial statements upon adoption of ASC 606.

In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

During the six months ended December 31, 2020 and 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its tea shop chains by Hunan MYT, and from sales of dark team products by 39Pu.

Sales of tea products, beverages and light meals in retail shop chains by Hunan MYT

Customers place order and pay for tea products, beverage drinks and light meals in the Company's tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases.

Sales of dark tea products by 39Pu - The Company identifies a single performance obligation from contracts. The Company recognizes revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices. The transaction fees are fixed. Payments received in advance from customers are recorded as "advance from customers" in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of products to the Company.

Disaggregation of revenue - The Company disaggregates its revenue from contracts by segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company's disaggregation of revenues for the six months ended December 31, 2020 and 2019 is as follows:

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Sales by Hunan MYT	$	169,656	$	348,816
Sales by 39Pu		3,704,424		69,403
	$	3,874,080	$	418,219

(g) Investment in equity investees

The investments for which the Company has the ability to exercise significant influence are accounted for under the equity method. Under the equity method, original investments are recorded at cost and adjusted by the Company's share of undistributed earnings or losses of these entities, the amortization of intangible assets recognized upon purchase price allocation and dividend distributions or subsequent investments. All unrecognized inter-company profits and losses have been eliminated under the equity method. When the estimated amount to be realized from the investments falls below its carrying value, an impairment charge is recognized in the consolidated statements of operations when the decline in value is considered other than temporary.

(h) Leases

The Company adopted ASU 2016-02, Leases (Topic 842), on July 1, 2019, using a modified retrospective approach reflecting the application of the standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements.

The Company leases its offices which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. No impairment for right-of-use lease assets as of December 31, 2020.

(i) Recently announced accounting standards

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Company's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Its mandatory effective dates are as follows: 1. Public business entities that meet the definition of an SEC filer for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; 2. All other public business entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years; and 3. All other entities (private companies, not-for-profit organizations, and employee benefit plans) for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. On November 15, 2019, FASB issued ASU 2019-10 which provides a framework to stagger effective dates for future major accounting standards (including ASC 326 Financial instrument-credit losses) and amends the effective dates to give implementation relief to certain type of entities: 1. Public business entities that meet the definition of an SEC filer, excluding entities eligible to be Smaller Reporting Companies, or SRC, as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; and 2. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an "emerging growth company," or EGC, the Company has elected to take advantage of the extended transition period provided in the Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards applicable to private companies. The Company will adopt ASU 2016-13 and its related amendments effective January 1, 2023, and the Company is in the process of evaluating the potential effect on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 

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Risks

6 Months Ended

Dec. 31, 2020

Risks and Uncertainties [Abstract]

RISKS

3. RISKS

(a) Credit risk

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of December 31, 2020, approximately $12.2 million was deposited with a bank in the United States which was insured by the government up to $250,000. As of December 31, 2020, approximately $1.1 million was primarily deposited in financial institutions located in Mainland China, and each bank accounts is insured by the government authority with the maximum limit of RMB 500,000 (equivalent to approximately $70,770). To limit exposure to credit risk relating to deposits, the Company primarily place cash deposits with large financial institutions in China which management believes are of high credit quality.

The Company's operations are carried out in Mainland China. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC's economy. In addition, the Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and the extraction of mining resources, among other factors.

(b) Liquidity risk

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

(c) Foreign currency risk

Substantially all of the Company's operating activities and the Company's major assets and liabilities are denominated in RMB, except for the cash deposit of approximately $12.2 million which was in U.S. dollars as of December 31, 2020, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("PBOC") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Where there is a significant change in value of RMB, the gains and losses resulting from translation of financial statements of a foreign subsidiary will be significant affected.

(c) VIE risk

It is possible that the Hunan MYT VIE Agreements and 39Pu VIE Agreements would not be enforceable in China if PRC government authorities or courts were to find that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event that the Company were unable to enforce these contractual arrangements, the Company would not be able to exert effective control over the VIE. Consequently, the VIE's results of operations, assets and liabilities would not be included in the Company's consolidated financial statements. If such were the case, the Company's cash flows, financial position, and operating performance would be materially adversely affected. The Company's contractual arrangements among Shanghai MYT, Hunan MYT and the Hunan MYT Shareholders, and among Shanghai MYT, 39Pu and the three shareholders of 39Pu are approved and in place. Management believes that such contracts are enforceable, and considers the possibility remote that PRC regulatory authorities with jurisdiction over the Company's operations and contractual relationships would find the contracts to be unenforceable.

The Company's operations and businesses rely on the operations and businesses of Hunan MYT and 39Pu, the VIEs of the Company, each of which holds certain recognized revenue-producing assets including tea beverage related raw materials, lease arrangements, and dark tea products. The VIEs also have an assembled workforce, focused primarily on promotion and marketing, whose costs are expensed as incurred. The Company's operations and businesses may be adversely impacted if the Company loses the ability to use and enjoy assets held by its VIEs.

(e) Other risk

The Company's business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, which could significantly disrupt the Company's operations.

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Acquisition of 39PU

6 Months Ended

Dec. 31, 2020

Asset Acquisition [Abstract]

ACQUISITION OF 39PU

4. ACQUISITION OF 39PU

On October 2, 2019, the Company completed the acquisition of 51% equity interest in 39Pu, which is engaged in the distribution of dark tea and based in Hunan Province, China. Under the terms of the purchase agreement, the consideration was comprised of cash consideration of $2.4 million and share consideration of 10,000,000 Ordinary Shares, at a per share price of $0.34. In addition, a contingent cash consideration of $0.6 million and a share consideration of $1.2 million will be delivered to the three shareholders according to the earn-out payment based on the financial performance of 39Pu in its next fiscal years. On October 17 and 28, 2019, the Company paid the share consideration of 10,000,000 Ordinary Shares and the cash consideration of $2.4 million, respectively. Upon the close of the acquisition and as of June 30, 2020, the Company did not pay the contingent consideration due to 39Pu's financial performance for the three months ended December 31, 2019 not reaching the earn-out payment condition.   In addition, due to the effects of COVID-19, the financial performance of 39Pu for the year ended June 30, 2020 did not meet the earn-out payment condition.

The acquisition had been accounted for as a business combination and the results of operations of 39Pu have been included in the Company's consolidated financial statements from the acquisition date. The Company made estimates and judgments in determining the fair value of acquired assets and liabilities, based on an independent preliminary valuation report and management's experiences with similar assets and liabilities. The following table summarizes the estimated fair values for major classes of assets acquired and liabilities assumed at the date of acquisition, using the exchange rate of 7.1489 on that day.

	Fair value
Net tangible assets	$	3,509,468
Goodwill		7,863,081
Foreign exchange adjustments		102,867
Less: Noncontrolling interests		(5,675,416	)
Total purchase consideration	$	5,800,000

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Short-Term Investments

6 Months Ended

Dec. 31, 2020

Short-term Investments [Abstract]

SHORT-TERM INVESTMENTS

5. SHORT-TERM INVESTMENTS

As of December 31, 2020 and June 30, 2020, the balance of short-term investments was comprised of investments of various financial products from Chinese banks and financial institutions, with variable return rate and with maturities between three months and one year. The Company classified these financial assets as held-to-maturity financial assets and recorded the assets at amortized cost, which approximates fair value. As of December 31, 2020 and June 30, 2020, the Company did not provide OTTI on short-term investments.

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Inventories

6 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

INVENTORIES

6. INVENTORIES

Inventories consisted of the following:

	December 31, 2020		June 30, 2020
	(unaudited)
Merchant products	$	1,000,837	$	968,642
Raw materials		40,796		18,542
Packaging and other supplies		391,000		376,394
Other products		43,291		40,004
		1,475,924		1,403,582
Less: inventory write-down		-		-
Total inventories	$	1,475,924	$	1,403,582

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Loans Due from Third Parties

6 Months Ended

Dec. 31, 2020

Loans Due from Third Parties [Abstract]

LOANS DUE FROM THIRD PARTIES

7. LOANS DUE FROM THIRD PARTIES

Loans due from third parties consisted of the following:

	December 31, 2020		June 30, 2020
	(unaudited)
Sichuan Senmiao Ronglian Technology Co, Ltd. ("Senmiao Ronglian") (a)	$	1,560,258	$	2,222,191
Shenzhen Qianhai Leshi Health Management Co., Ltd. ("Shenzhen Qianhai) (b)		1,225,378		-
Total loans due from third parties	$	2,785,636	$	2,222,191

(a) The Company purchased short-term investments of $1,148,930 in April 2019, and acquired short-term investments of $1,177,653 from the acquisition of 39Pu, both of which were investments in Senmiao Ronglian which was a variable interest entity of Senmiao Technology Ltd, a US listed company which used to operate a peer-to-peer marketplace before October 2019. In October 2019, Senmiao Ronglian disposed of the peer-to-peer marketplace, and the Company's short-term investments became a loan due from Sichuan Ronglian as of December 31, 2019.

According to the loan agreement between the Company and Sichuan Ronglian, the loans will be paid in 12 months before December 9, 2020, with a per annum interest rate of 7%. During the six months ended December 31, 2020 and 2019, Senmiao Ronglian repaid an aggregation of $814,003 and $nil to the Company with remaining balance to be repaid before December 31, 2021.

The Company asssessed the payment ability of Senmiao Ronglian and did not provide allowance against the balance.

(b) In December 2020, the Company entered into a loan agreement with Shenzhen Qianhai to provide a loan of $1,225,378 to the third party. The loan matured in June 2021 with an interest rate of 1.495% per annum. The loan was made for the purpose of making use of idle cash.

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Investment in Equity Investees

6 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN EQUITY INVESTEES

8. INVESTMENT IN EQUITY INVESTEES

As of December 31, 2020 and June 30, 2020, the Company’s investment in equity investees were as following:

	December 31, 2020			June 30, 2020
	(unaudited)
Urban Tea Management Inc. (“Meno”)	$	310,000		$	210,000
Guokui Management Inc. (“Guokui”)		100,000			-
Chuangyeying Brand Management Co., Ltd. (“CYY”)		390,589			-
Store Master Food Trading Co., Ltd. (“Store Master”)		706,818			-
Less: Share of results of equity investees		(218,330	)		(22,245	)
	$	1,280,077		$	187,755

As of December 31, 2020, the Company made investments aggregating $310,000 in Meno, in which the Company and an unrelated third party invested capital of 70% and 30%, respectively, and was entitled to 51% and 49% profit earned from Meno, respectively. Meno did not commence operations until August 1, 2020. The investment was for the purpose of expansion its tea shop chain to overseas market.

On September 23, 2020, the Company entered into a share purchase agreement, pursuant to which the Company agreed to pay $400,000 in cash to acquire 80% of the equity interest in Guokui, in which the Company and other unrelated third party investor were entitled to 51% and 49% profit earned from Guokui, respectively. As of December 31, 2020, the Company made investments aggregating $100,000. The investment was for the purpose of expansion its tea shop chain to overseas market.

In October 2020, the Company, through its WFOE, acquired 51% equity interest in each of CYY and Store Master in cash consideration of $376,462 and $681,252, respectively. In addition, the existing shareholders of CYY and Store Master will be rewarded additional incentives if certain performance targets were met. The Company did not accrue contingent consideration for the acquisition as the Company did not expect such perform targets would be met.

Pursuant to the articles of association of these equity investees, the operating and financing activities shall be unanimously approved by the Company and other shareholders, thus the Company does not control the equity investee but exercised significant influence over the equity investee. In accordance with ASC 323 “Investments — Equity Method and Joint Ventures,”, the Company accounted for the investments using equity method.

For the six months ended December 31, 2020 and 2019, the equity investees incurred net loss aggregating $218,330 and $nil, respectively.

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Property and Equipment, Net

6 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

9. PROPERTY AND EQUIPMENT, NET

The property and equipment consisted of the following:

	December 31, 2020			June 30, 2020
	(unaudited)
Building	$	855,570		$	790,605
Office equipment		652,169			618,323
Electronic equipment		55,760			51,526
Vehicles		27,271			25,200
Leasehold improvements		621,105			573,937
Less: accumulated depreciation		(884,217	)		(744,265	)
	$	1,327,658		$	1,315,326

For the six months ended December 31, 2020 ad 2019, the depreciation expenses were $78,671 and $68,941, respectively.

For the six months ended December 31, 2020, the Company disposed of office equipment with original cost of $18,644 and accumulated depreciation of $2,830. The Company incurred a net loss of $15,242 from the disposal of office equipment.

For the six months ended December 31, 2019, the Company disposed of office equipment with original cost of $3,047 and accumulated depreciation of $1,282. The Company incurred a net loss of $1,025 from the disposal of office equipment.

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Equity

6 Months Ended

Dec. 31, 2020

Equity [Abstract]

EQUITY

10. EQUITY

Ordinary Shares

The Company is authorized to issue up to 100,000,000 Ordinary Shares.

As of June 30, 2020, the Company had 45,188,648 shares issued and outstanding.

On June 5, 2020, the Company issued 8,834 ordinary shares to one independent director, at a per share price at the market price of the issuance date.

On July 30, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 18,750,000 ordinary shares, no par value, at a price of $0.32 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 3, 2020.

On August 14, 2020, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such investors an aggregate of 15,000,000 ordinary shares, no par value, at a price of $0.4 per share, for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.5 million. The offering closed on August 18, 2020.

As of December 31, 2020, the Company had 79,491,998 shares issued and outstanding.

Warrants

A summary of warrants activity for the six months ended December 31, 2020 and 2019 was as follows:

	Number of shares		Weighted average life	Expiration dates
Balance of warrants outstanding as of July 1, 2019		2,396,747	4.68 years	*
Balance of warrants outstanding as of December 31, 2019		2,396,747	4.18 years	*
Balance of warrants outstanding as of July 1, 2020		2,396,747	3.67 years	*
Balance of warrants outstanding as of December 31, 2020		2,396,747	3.17 years	*

* Among the 2,396,747 shares of warrants, 359,727 shares will expire on November 20, 2022, 2,037,020 shares will be expire on May 23, 2024.

Private placement warrants

On November 21, 2017, the company issued 359,727 warrants to the shareholder in connection with a private placement offering of 1,798,635 Ordinary Shares. The warrant has an exercise price of $1.31 per share and is exercisable for five years from the date of issuance.

As at December 31, 2020 and June 30, 2020, there were 359,727 warrants outstanding. The fair value of the warrants is $27,699 and $142,092, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”. 

Registered direct offering warrants and placement agent warrants

On May 24, 2019, the Company issued warrants to investors in connection with a registered direct offering to purchase a total of 1,809,420 Ordinary Shares with a warrant term of five (5) years. On the same date, the Company issued warrants to the Placement Agent in connection with a registered direct offering to purchase a total of 227,600 Ordinary Shares with a warrant term of five (5) years. Both warrants have an exercise price of $1.86 per share.

The warrants have customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional ordinary shares, options, warrants or other securities that are convertible into ordinary shares at a price lower than $1.86 per share. As such, the warrants were classified as a liability, which requires the warrant to be re-measured to their fair value for each reporting period.

As of December 31, 2020 and June 30, 2020, the Company estimated fair value of the registered direct offering warrants at $246,081 and $895,663, respectively, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”. 

As of December 31, 2020 and June 30, 2020, the Company estimated fair value of the Placement Agent Warrants at $30,954 and $246,718, respectively, using the Black-Scholes valuation model. The assumptions used to estimate the fair value of the warrants were the same as those used for registered direct offering warrants.

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Loss Per Share

6 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

LOSS PER SHARE

11. LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss per common share for the six months ended December 31, 2020 and 2019, respectively:

	For the Six Months Ended December 31,
	2020			2019
	(unaudited)			(unaudited)
Net loss attributable to Urban Tea's shareholders	$	(681,041	)	$	(1,335,766	)
Weighted Average Shares Outstanding-Basic and Diluted	$	72,370,528		$	31,289,010
Loss per share- basic and diluted	$	(0.09	)	$	(0.04	)

Basic income per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted income per share is the same as basic loss per share due to the lack of dilutive items in the Company for the six months ended December 31, 2020 and 2019. The number of warrants is excluded from the computation as the anti-dilutive effect.

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Income Taxes

6 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

12. INCOME TAXES

British Virgin Islands

Under the current tax laws of BVI, the Company’s subsidiary incorporated in the BVI is not subject to tax on income or capital gains.

The United States of America

Delta Technology Holdings USA Inc is incorporated in the State of Delaware in the U.S., and is subject to U.S. federal corporate income taxes.

On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law, which has made significant changes to the Internal Revenue Code. Those changes include, but are not limited to, a U.S. corporate tax rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the deemed repatriation of cumulative foreign earnings as of December 31, 2017. Accordingly, the Company reevaluated its deferred tax assets on net operating loss carryforward in the U.S and concluded there was no effect on the Company’s income tax expenses as the Company has no deferred tax assets generated since inception. 

As of December 31, 2020 and June 30, 2020, the Company’s federal net operating loss carryforward for U.S. income taxes was $1,519,567 and $1,245,761, respectively. The federal net operating loss carryforward is available to reduce future years’ taxable income through year 2037 and net operating losses generated before 2018 will not expire. Management believes that the realization of the benefit from this loss appears uncertain due to the Company’s operating history.

Utilization of the Company’s U.S. net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations set forth in Internal Revenue Code Section 382 and similar state provisions. Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization.

Hong Kong

NTH HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019. Before that, the applicable tax rate was 16.5% for corporations in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax laws, NTH HK is exempted from income tax on its foreign-derived income and there are no withholding taxed in Hong Kong on remittance of dividends.

PRC

Effective January 1, 2008, the New Taxation Law of PRC stipulates that domestic enterprises and foreign invested enterprises (the “FIEs”) are subject to a uniform tax rate of 25%. Under the PRC tax law, companies are required to make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate for their installment tax payments. The overpayment, however, will not be refunded and can only be used to offset future tax liabilities.

The Company evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. For the six months ended December 31, 2020 and 2019, the Company had no unrecognized tax benefits. Due to uncertainties surrounding future utilization, the Company estimates there will not be sufficient future income to realize the deferred tax assets. As of December 31, 2020 and June 30, 2020, the Company had net operating loss carryforwards of $2,926,042 and $2,266,653, respectively, and maintains a full valuation allowance on its net deferred tax assets.

The Company incurred current income tax expenses of $259,031 arising from taxable profit generated by 39Pu. The Company did not have any current and deferred tax expenses for the six months ended December 31, 2019.

The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. The Company is subject to income taxes in the PRC. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. There were no uncertain tax positions as of December 31, 2020 and June 30, 2020, and the Company does not believe that its unrecognized tax benefits will change over the next twelve months.

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Related Party Transactions and Balances

6 Months Ended

Dec. 31, 2020

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND BALANCES

13. RELATED PARTY TRANSACTIONS AND BALANCES

As of December 31, 2020 and June 30, 2020, the Company had a balance of $3,411 and $1,127 due from a related party which was indirectly controlled Mr. Guo'an Hu, one of the shareholders of 39Pu, generated from sales of dark tea products prior to acquisition of 39Pu by the Company.

During the six months ended December 31, 2020, the Company sold dark tea products of $25,932 to one related party. During the six months ended December 31, 2019, the Company did not incur significant related party transactions.

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

14. COMMITMENTS AND CONTINGENCIES  

1) Lease Commitments

As of December 31, 2020, the Company leases offices space under certain non-cancelable operating leases, with terms ranging between one and ten years. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company's leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of its incremental borrowing rate.

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The table below presents the operating lease related assets and liabilities recorded on the balance sheets.

	December 31, 2020		June 30, 2020
	(unaudited)
Rights of use lease assets	$	363,318	$	553,904
Operating lease liabilities, current		308,276		315,259
Operating lease liabilities, noncurrent		124,673		310,098
Total operating lease liabilities	$	432,949	$	625,357

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of December 31, 2020 and June 30, 2020:

	December 31, 2020			June 30, 2020
	(unaudited)
Remaining lease term and discount rate
Weighted average remaining lease term (years)		2.35			3.30
Weighted average discount rate		4.75	%		4.75	%

During the six months ended December 31, 2020 and 2019, the Company incurred total operating lease expenses of $100,892 and $202,970, respectively. 

The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2020:

For the six months ended June 30, 2021	$	214,272
For the twelve months ended June 30, 2022		165,017
For the twelve months ended June 30, 2023		38,840
For the twelve months ended June 30, 2024 and thereafter		33,232
Total lease payments		451,361
Less: imputed interest		(18,412	)
Present value of lease liabilities	$	432,949

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Segment Reporting

6 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting

15. SEGMENT REPORTING

The Company presents segment information after elimination of inter-company transactions. In general, revenue, cost of revenue and operating expenses are directly attributable, or are allocated, to each segment. The Company allocates costs and expenses that are not directly attributable to a specific segment, such as those that support infrastructure across different segments, to different segments mainly on the basis of usage, revenue or headcount, depending on the nature of the relevant costs and expenses. The Company does not allocate assets to its segments as the CODM does not evaluate the performance of segments using asset information. As of December 31, 2020 and June 30, 2020, the Company had two segments, which is retail business by provision of high-quality tea beverages in its tea shop chain ("tea shop chain") conducted by Hunan MYT and distribution of dark tea products conducted by 39Pu.

The following tables present the summary of each segment's revenue, loss from operations, loss before income taxes and net loss which is considered as a segment operating performance measure, for the six months ended December 31, 2020 and 2019:

	For the Six Months Ended December 31, 2020
	Tea shop			Distribution of Dark tea
	chains			products		Unallocated			Total
Revenues	$	169,656		$	3,704,424	$	-		$	51,189
Income (Loss) from operations	$	(460,535	)	$	910,067	$	(1,108,830	)	$	(659,298	)
Net income (loss)	$	(393,649	)	$	771,102	$	(680,654	)	$	(303,201	)

	For the Six Months Ended December 31, 2019
	Tea shop			Distribution of Dark tea
	chains			products			Unallocated			Total
Revenues	$	348,816		$	69,403		$	-		$	418,219
Loss from operations	$	(884,478	)	$	(85,628	)	$	(508,911	)	$	(1,479,017	)
Net loss	$	(836,986	)	$	(10,194	)	$	(493,581	)	$	(1,340,761	)

Details of the Company's revenue by segment are set out in Note 2(f).

As of December 31, 2020, the Company's total assets were $7,306,504 for its tea shop chains, $5,975,415 for its distribution of dark tea business, and $20,993,400 unallocated.

As substantially all of the Company's long-lived assets are located in the PRC and substantially all of the Company's revenue is derived from within the PRC, no geographical information is presented.

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Subsequent Event

6 Months Ended

Dec. 31, 2020

Subsequent Events [Abstract]

Subsequent Event

16. SUBSEQUENT EVENT

On March 26, 2021, the Company entered into certain securities purchase agreement (the "SPA") with certain "non-U.S. Persons" (the "Purchasers") as defined in Regulation S of the Securities Act of 1933, as amended (the "Securities Act") pursuant to which the Company agreed to sell an aggregate of 3,797,488 units (the "Units"), each Unit consisting of one ordinary share of the Company, no par value ("Share") and a warrant to purchase three Shares ("Warrant") with an initial exercise price of $4.65 per Share, at a price of $3.72 per Unit, for an aggregate purchase price of approximately $14.1 million (the "Offering"). The net proceeds to the Company from such Offering will be approximately $14.1 million and shall be used by the Company for the planned blockchain and cryptocurrency mining operation and for working capital and general corporate purposes.

The Warrants are exercisable six (6) months from the date of issuance at an initial exercise price of $4.65 per Share, for cash (the "Warrant Shares"). The Warrants may also be exercised cashlessly if at any time after the six-month anniversary of the issuance date, there is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares. The Warrants shall expire five and a half (5.5) years from its date of issuance. The Warrants are subject to customary anti-dilution provisions reflecting stock dividends and splits or other similar transactions. The Warrants contain a mandatory exercise right for the Company to force exercise of the Warrants if the Company's Shares trades at or above $23.25 per Share, for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the Warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 300,000 Shares per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date.

On April 20, 2021, the transaction contemplated by the SPA consummated when all the closing conditions of the SPA have been satisfied and the Company issued 3,797,488 Units to the Purchasers pursuant to the SPA.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of presentation and principle of consolidation

(a) Basis of presentation and principle of consolidation

The unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP").

The unaudited interim financial information as of December 31, 2020 and for the six months ended December 31, 2020 and 2019 have been prepared without audit, pursuant to the rules and regulations of the SEC and pursuant to Regulation S-X. Certain information and footnote disclosures, which are normally included in annual financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. As of December 31, 2019, the Company had two VIEs – Hunan MYT and 39Pu. The unaudited interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 20-F for the fiscal year ended June 30, 2020, which was filed with the SEC on October 30, 2020.

In the opinion of management, all adjustments (including normal recurring adjustments) necessary to present a fair statement of the Company's unaudited financial position as of December 31, 2020, its unaudited results of operations for the six months ended December 31, 2020 and 2019, and its unaudited cash flows for the six months ended December 31, 2020 and 2019, as applicable, have been made. The unaudited interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Consolidation of Variable Interest Entity

(b) Consolidation of Variable Interest Entity

Material terms of the Hunan MYT VIE Agreements and 39Pu VIE Agreements are described below:

Exclusive Business Cooperation Agreement

Pursuant to the Exclusive Business Cooperation Agreements, Shanghai MYT and 39Pu each provides Hunan MYT with technical support, consulting services and management services on an exclusive basis, utilizing its advantages in technology, human resources, and information. Additionally, Hunan MYT and 39Pu each granted an irrevocable and exclusive option to Shanghai MYT to purchase from each of Hunan MYT and 39Pu, any or all of Hunan MYT's and 39Pu assets at the lowest purchase price permitted under the PRC laws. Should Shanghai MYT exercise such option, the parties shall enter into a separate asset transfer or similar agreement. For services rendered to Hunan MYT and 39Pu by Shanghai MYT under the agreement, Shanghai MYT is entitled to collect a service fee calculated based on the time of services rendered multiplied by the corresponding rate, plus amount of the services fees or ratio decided by the board of directors of Shanghai MYT based on the value of services rendered by Shanghai MYT and the actual income of Hunan MYT and 39Pu from time to time, which is substantially equal to all of the net income of Hunan MYT and 51% of net income of 39Pu, respectively.

The Exclusive Business Cooperation Agreement shall remain in effect for ten years unless it is terminated by Shanghai MYT with 30-day prior written notice. Hunan MYT or 39Pu does not have the right to terminate the agreement unilaterally. Shanghai MYT may unilaterally extend the term of this agreement with prior written notice.

Exclusive Option Agreement

Under the Exclusive Option Agreement between Peng Fang and Shanghai MYT, irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in Hunan MYT. The option price is equal to the capital paid in by Peng Fang subject to any appraisal or restrictions required by applicable PRC laws and regulations.

Under the Exclusive Option Agreement between three shareholders of 39Pu and Shanghai MYT, the three shareholders irrevocably granted Shanghai MYT (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, once or at multiple times, at any time, part or all of their equity interests in 39Pu. The option price is equal to the capital paid in by the three shareholders subject to any appraisal or restrictions required by applicable PRC laws and regulations.

The agreement remains effective for a term of ten years and may be renewed at Shanghai MYT's election.

Share Pledge Agreement

Under the Share Pledge Agreement, Peng Fang and the three shareholders of 39Pu each pledged all of their equity interests in Hunan MYT and 39Pu to Shanghai MYT to guarantee the performance of Hunan MYT's and 39Pu's obligations under the Exclusive Business Cooperation Agreement. Under the terms of the agreement, in any event of default, as set forth in the Share Pledge Agreement, including that Hunan MYT or Peng Fang, 39Pu or the three shareholders breach their respective contractual obligations under the Exclusive Business Cooperation Agreement, Shanghai MYT, as pledgee, will be entitled to certain rights, including, but not limited to, the right to dispose of the pledged equity interest in accordance with applicable PRC laws. Shanghai MYT shall have the right to collect any and all dividends declared or generated in connection with the equity interest during the term of pledge.

The Share Pledge Agreement shall be effective until all payments due under the Exclusive Business Cooperation Agreement have been paid by Hunan MYT and 39Pu, respectively. Shanghai MYT shall cancel or terminate the Share Pledge Agreement upon Hunan MYT's and 39Pu's full payment of fees payable under the Exclusive Business Cooperation Agreement.

Timely Reporting Agreement

To ensure Hunan MYT and 39Pu promptly provide all of the information that Shanghai MYT and the Company need to file various reports with the SEC, a Timely Reporting Agreement was entered between Shanghai MYT, and Hunan MYT and 39Pu, respectively. Under the Timely Reporting Agreement, Hunan MYT and 39Pu each agreed that it is obligated to make its officers and directors available to the Company and promptly provide all information required by the Company so that the Company can file all necessary SEC and other regulatory reports as required.

Although it is not explicitly stipulated in the Timely Reporting Agreement, the parties agreed its term shall be the same as that of the Exclusive Business Cooperation Agreement.

Power of Attorney

Under the Power of Attorney, Peng Fang and the three shareholders of 39Pu each authorized Shanghai MYT to act on her behalf as her exclusive agent and attorney with respect to all rights as shareholder, including but not limited to: (a) attending shareholders' meetings; (b) exercising all the shareholder's rights, including voting, that shareholders are entitled to under the laws of China and the Articles of Association of Hunan MYT and 39Pu, including but not limited to the sale or transfer or pledge or disposition of shares in part or in whole; and (c) designating and appointing on behalf of shareholders the legal representative, the executive director, supervisor, the chief executive officer and other senior management members of Hunan MYT and 39Pu.

Although it is not explicitly stipulated in the Power of Attorney, the term of the Power of Attorney shall be the same as the term of that of the Exclusive Option Agreement.

This Power of Attorney is coupled with an interest and shall be irrevocable and continuously valid from the date of execution of this Power of Attorney, so long as Peng Fang is a shareholder of Company.

The VIE Agreements became effective immediately upon their execution.

VIE is an entity that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Shanghai MYT is deemed to have a controlling financial interest and be the primary beneficiary of Hunan MYT and 39Pu, because it has both of the following characteristics:

1. power to direct activities of a VIE that most significantly impact the entity's economic performance, and

2. obligation to absorb losses of the entity that could potentially be significant to the VIE or right to receive benefits from the entity that could potentially be significant to the VIE.

Pursuant to the VIE Agreements, Hunan MYT and 39Pu pay service fees equal to 100% and 51% of its net income to Shanghai MYT, respectively. At the same time, Shanghai MYT is entitled to receive 100% and 51% of expected residual returns from Hunan MYT and 39Pu, respectively. The VIE Agreements are designed so that Hunan MYT and 39Pu operate for the benefit of the Company. Accordingly, the accounts of Hunan MYT are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, their financial positions and results of operations are included in the Company's consolidated financial statements.

In addition, as all of these VIE agreements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC, they would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could further limit the Company's ability to enforce these VIE agreements. Furthermore, these contracts may not be enforceable in China if PRC government authorities or courts take a view that such contracts contravene PRC laws and regulations or are otherwise not enforceable for public policy reasons. In the event the Company is unable to enforce these VIE agreements, it may not be able to exert effective control over Hunan MYT or 39Pu and its ability to conduct its business may be materially and adversely affected.

All of the Company's main current operations are conducted through Hunan MYT since November 2018, and through 39Pu since October 2019. Current regulations in China permit Hunan MYT and 39Pu to pay dividends to the Company only out of their accumulated distributable profits, if any, determined in accordance with their articles of association and PRC accounting standards and regulations. The ability of Hunan MYT and 39Pu to make dividends and other payments to the Company may be restricted by factors including changes in applicable foreign exchange and other laws and regulations.

The following financial statement balances and amounts only reflect the financial position and financial performances of Hunan MYT and 39Pu, which were included in the consolidated financial statements as of December 31 and June 30, 2020:

	December 31, 2020		June 30, 2020
	(unaudited)
Cash	$	1,142,514	$	362,384
Short-term investments		3,335,640		2,266,069
Inventories		1,475,924		1,403,582
Loans due from a third party		2,785,636		2,222,191
Other current assets		607,423		292,917
Investments in equity investees		1,096,370		-
Property and equipment, net		1,327,658		1,315,326
Deposits for plant, property and equipment		1,013,825		849,245
Right of use assets		363,318		553,904
Other noncurrent assets		133,611		159,434
Total Assets	$	13,281,919	$	9,425,052
				-
Due to MYT*	$	10,466,925	$	7,270,932
Other current liabilities		1,050,524		885,515
Total Liabilities	$	11,517,449	$	8,156,447

* Payable due to MYT is eliminated upon consolidation.

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Revenue	$	3,874,080	$	418,219
Net income (loss)	$	377,453	$	(847,182	)

Segment reporting

(c) Segment reporting

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company's reportable segments. Management, including the chief operating decision maker, reviews operation results by the revenue of different services.

For the six months ended December 31, 2020 and 2019, the Company has two operating business lines, including retail business by provision of high-quality tea beverages in its tea shop chain business conducted by Hunan MYT and dark tea distribution business by 39Pu. Based on management's assessment, the Company has determined that the two operating business lines are two operating segments as defined by ASC 280.

Trade receivables

(d) Trade receivables

Trade receivables are recorded at the invoiced amount and do not bear interest. The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on management's assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.

The Company considered the amounts of receivables in dispute and believes an allowance for these receivables were not necessary as at December 31, 2020 and June 30, 2020.

Inventories

(e) Inventories

Inventories, consisting of products available for sale, are stated at the lower of cost and market. Cost of inventories is determined using the weighted average cost method. Adjustments are recorded to write down the cost of inventories to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of income and comprehensive income.

Revenue recognition

(f) Revenue recognition

The Company adopted ASC 606, Revenue from Contracts with Customers ("ASC 606") beginning on July 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company's consolidated financial statements upon adoption of ASC 606.

In according with ASC 606, revenues are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those services.

During the six months ended December 31, 2020 and 2019, the Company generated revenues primarily from sales of tea products, beverages and light meals in its tea shop chains by Hunan MYT, and from sales of dark team products by 39Pu.

Sales of tea products, beverages and light meals in retail shop chains by Hunan MYT

Customers place order and pay for tea products, beverage drinks and light meals in the Company's tea shop chains. Revenues are recognized at the point of delivery to customers. Customers that purchase prepaid cards are issued additional points for free at the time of purchase. Cash received from the sales of prepaid vouchers are recognized as unearned income. Consideration collected for prepaid cards is equally allocated to each point as an element, including the points issued for free, to determine the transaction price for each point. The allocated transaction price are recognized as revenues upon the redemption of the points for purchases.

Sales of dark tea products by 39Pu - The Company identifies a single performance obligation from contracts. The Company recognizes revenues on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified goods, subject to inventory risks and has the discretion in establishing prices. The transaction fees are fixed. Payments received in advance from customers are recorded as "advance from customers" in the consolidated balance sheets. Advance from customers is recognized as revenue when the Company delivers the courses to its customers. Such advance payment received are non-refundable. In cases where fees are collected after the sales, revenue and accounts receivable are recognized upon delivery of products to the Company.

Disaggregation of revenue - The Company disaggregates its revenue from contracts by segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company's disaggregation of revenues for the six months ended December 31, 2020 and 2019 is as follows:

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Sales by Hunan MYT	$	169,656	$	348,816
Sales by 39Pu		3,704,424		69,403
	$	3,874,080	$	418,219

Investment in equity investees

(g) Investment in equity investees

The investments for which the Company has the ability to exercise significant influence are accounted for under the equity method. Under the equity method, original investments are recorded at cost and adjusted by the Company's share of undistributed earnings or losses of these entities, the amortization of intangible assets recognized upon purchase price allocation and dividend distributions or subsequent investments. All unrecognized inter-company profits and losses have been eliminated under the equity method. When the estimated amount to be realized from the investments falls below its carrying value, an impairment charge is recognized in the consolidated statements of operations when the decline in value is considered other than temporary.

Leases

(h) Leases

The Company adopted ASU 2016-02, Leases (Topic 842), on July 1, 2019, using a modified retrospective approach reflecting the application of the standard to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements.

The Company leases its offices which are classified as operating leases in accordance with Topic 842. Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. No impairment for right-of-use lease assets as of December 31, 2020.

Recently announced accounting standards

(i) Recently announced accounting standards

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. This ASU requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of the Company's portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the financial statements. Its mandatory effective dates are as follows: 1. Public business entities that meet the definition of an SEC filer for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; 2. All other public business entities for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years; and 3. All other entities (private companies, not-for-profit organizations, and employee benefit plans) for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. On November 15, 2019, FASB issued ASU 2019-10 which provides a framework to stagger effective dates for future major accounting standards (including ASC 326 Financial instrument-credit losses) and amends the effective dates to give implementation relief to certain type of entities: 1. Public business entities that meet the definition of an SEC filer, excluding entities eligible to be Smaller Reporting Companies, or SRC, as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years; and 2. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As an "emerging growth company," or EGC, the Company has elected to take advantage of the extended transition period provided in the Securities Act Section 7(a)(2)(B) for complying with new or revised accounting standards applicable to private companies. The Company will adopt ASU 2016-13 and its related amendments effective January 1, 2023, and the Company is in the process of evaluating the potential effect on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 

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Organization and Principal Activities (Tables)

6 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of consolidated financial statements

Name	Background	Ownership
Delta Technology Holdings USA Inc. ("Urban Tea USA")	●     A US company ●     Incorporated on May 22, 2018 ●     A holding company	100% owned by the Company
NTH BVI	●     A BVI company ●     Incorporated on August 28, 2018 ●     A holding company	100% owned by the Company
NTH HK	●     A Hong Kong company ●     Incorporated on September 11, 2018 ●     A holding company	100% owned by NTH BVI
Shanghai MYT	●     A PRC company and deemed a wholly foreign owned enterprise ("WOFE") ●     Incorporated on October 19 ●     Registered capital of $1 million ●     A holding company	WOFE, 100% owned by NTH HK
Hunan MYT	●     A PRC limited liability company ●     Incorporated on October 17, 2018 ●     Registered capital of $4,330,590 (RMB 30 million) ●     Engaged in specialty tea product distribution and retail business by provision of high-quality tea beverages in its tea shop chain	100% VIE of Shanghai MYT
39Pu	●     A PRC limited liability company ●     Incorporated on April 14, 2011 ●     Registered capital of $3,522,424 (RMB 20.9 million) with registered capital fully paid-up ●    Engaged in dark tea distribution	51% VIE of Shanghai MYT

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of consolidation of variable interest entity

	December 31, 2020		June 30, 2020
	(unaudited)
Cash	$	1,142,514	$	362,384
Short-term investments		3,335,640		2,266,069
Inventories		1,475,924		1,403,582
Loans due from a third party		2,785,636		2,222,191
Other current assets		607,423		292,917
Investments in equity investees		1,096,370		-
Property and equipment, net		1,327,658		1,315,326
Deposits for plant, property and equipment		1,013,825		849,245
Right of use assets		363,318		553,904
Other noncurrent assets		133,611		159,434
Total Assets	$	13,281,919	$	9,425,052
				-
Due to MYT*	$	10,466,925	$	7,270,932
Other current liabilities		1,050,524		885,515
Total Liabilities	$	11,517,449	$	8,156,447

* Payable due to MYT is eliminated upon consolidation.

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Revenue	$	3,874,080	$	418,219
Net income (loss)	$	377,453	$	(847,182	)

Schedule of revenue recognition

	For the Six Months Ended December 31,
	2020		2019
	(unaudited)		(unaudited)
Sales by Hunan MYT	$	169,656	$	348,816
Sales by 39Pu		3,704,424		69,403
	$	3,874,080	$	418,219

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Acquisition of 39PU (Tables)

6 Months Ended

Dec. 31, 2020

Asset Acquisition [Abstract]

Schedule of fair value of assets acquired and liabilities

	Fair value
Net tangible assets	$	3,509,468
Goodwill		7,863,081
Foreign exchange adjustments		102,867
Less: Noncontrolling interests		(5,675,416	)
Total purchase consideration	$	5,800,000

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Inventories (Tables)

6 Months Ended

Dec. 31, 2020

Inventory Disclosure [Abstract]

Schedule of inventories

	December 31, 2020		June 30, 2020
	(unaudited)
Merchant products	$	1,000,837	$	968,642
Raw materials		40,796		18,542
Packaging and other supplies		391,000		376,394
Other products		43,291		40,004
		1,475,924		1,403,582
Less: inventory write-down		-		-
Total inventories	$	1,475,924	$	1,403,582

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Loans Due from Third Parties (Tables)

6 Months Ended

Dec. 31, 2020

Loans Due from Third Parties [Abstract]

Schedule of Loans due from third parties

	December 31, 2020		June 30, 2020
	(unaudited)
Sichuan Senmiao Ronglian Technology Co, Ltd. ("Senmiao Ronglian") (a)	$	1,560,258	$	2,222,191
Shenzhen Qianhai Leshi Health Management Co., Ltd. ("Shenzhen Qianhai) (b)		1,225,378		-
Total loans due from third parties	$	2,785,636	$	2,222,191

(a) The Company purchased short-term investments of $1,148,930 in April 2019, and acquired short-term investments of $1,177,653 from the acquisition of 39Pu, both of which were investments in Senmiao Ronglian which was a variable interest entity of Senmiao Technology Ltd, a US listed company which used to operate a peer-to-peer marketplace before October 2019. In October 2019, Senmiao Ronglian disposed of the peer-to-peer marketplace, and the Company's short-term investments became a loan due from Sichuan Ronglian as of December 31, 2019.

According to the loan agreement between the Company and Sichuan Ronglian, the loans will be paid in 12 months before December 9, 2020, with a per annum interest rate of 7%. During the six months ended December 31, 2020 and 2019, Senmiao Ronglian repaid an aggregation of $814,003 and $nil to the Company with remaining balance to be repaid before December 31, 2021.

The Company asssessed the payment ability of Senmiao Ronglian and did not provide allowance against the balance.

(b) In December 2020, the Company entered into a loan agreement with Shenzhen Qianhai to provide a loan of $1,225,378 to the third party. The loan matured in June 2021 with an interest rate of 1.495% per annum. The loan was made for the purpose of making use of idle cash.

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Investment in Equity Investees (Tables)

6 Months Ended

Dec. 31, 2020

Equity Method Investments and Joint Ventures [Abstract]

Schedule of investment in equity investees

	December 31, 2020			June 30, 2020
	(unaudited)
Urban Tea Management Inc. (“Meno”)	$	310,000		$	210,000
Guokui Management Inc. (“Guokui”)		100,000			-
Chuangyeying Brand Management Co., Ltd. (“CYY”)		390,589			-
Store Master Food Trading Co., Ltd. (“Store Master”)		706,818			-
Less: Share of results of equity investees		(218,330	)		(22,245	)
	$	1,280,077		$	187,755

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Property and Equipment, Net (Tables)

6 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	December 31, 2020			June 30, 2020
	(unaudited)
Building	$	855,570		$	790,605
Office equipment		652,169			618,323
Electronic equipment		55,760			51,526
Vehicles		27,271			25,200
Leasehold improvements		621,105			573,937
Less: accumulated depreciation		(884,217	)		(744,265	)
	$	1,327,658		$	1,315,326

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Equity (Tables)

6 Months Ended

Dec. 31, 2020

Equity [Abstract]

Schedule of warrants activity

	Number of shares		Weighted average life	Expiration dates
Balance of warrants outstanding as of July 1, 2019		2,396,747	4.68 years	*
Balance of warrants outstanding as of December 31, 2019		2,396,747	4.18 years	*
Balance of warrants outstanding as of July 1, 2020		2,396,747	3.67 years	*
Balance of warrants outstanding as of December 31, 2020		2,396,747	3.17 years	*

* Among the 2,396,747 shares of warrants, 359,727 shares will expire on November 20, 2022, 2,037,020 shares will be expire on May 23, 2024.

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Loss Per Share (Tables)

6 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted loss per common share

	For the Six Months Ended December 31,
	2020			2019
	(unaudited)			(unaudited)
Net loss attributable to Urban Tea's shareholders	$	(681,041	)	$	(1,335,766	)
Weighted Average Shares Outstanding-Basic and Diluted	$	72,370,528		$	31,289,010
Loss per share- basic and diluted	$	(0.09	)	$	(0.04	)

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Commitments and Contingencies (Tables)

6 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of operating lease related assets and liabilities

	December 31, 2020		June 30, 2020
	(unaudited)
Rights of use lease assets	$	363,318	$	553,904
Operating lease liabilities, current		308,276		315,259
Operating lease liabilities, noncurrent		124,673		310,098
Total operating lease liabilities	$	432,949	$	625,357

Schedule of weighted average remaining lease terms and discount rates

	December 31, 2020			June 30, 2020
	(unaudited)
Remaining lease term and discount rate
Weighted average remaining lease term (years)		2.35			3.30
Weighted average discount rate		4.75	%		4.75	%

Schedule of maturities of lease liabilities

For the six months ended June 30, 2021	$	214,272
For the twelve months ended June 30, 2022		165,017
For the twelve months ended June 30, 2023		38,840
For the twelve months ended June 30, 2024 and thereafter		33,232
Total lease payments		451,361
Less: imputed interest		(18,412	)
Present value of lease liabilities	$	432,949

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Segment Reporting (Tables)

6 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Schedule of segment operating performance measure

	For the Six Months Ended December 31, 2020
	Tea shop			Distribution of Dark tea
	chains			products		Unallocated			Total
Revenues	$	169,656		$	3,704,424	$	-		$	51,189
Income (Loss) from operations	$	(460,535	)	$	910,067	$	(1,108,830	)	$	(659,298	)
Net income (loss)	$	(393,649	)	$	771,102	$	(680,654	)	$	(303,201	)

	For the Six Months Ended December 31, 2019
	Tea shop			Distribution of Dark tea
	chains			products			Unallocated			Total
Revenues	$	348,816		$	69,403		$	-		$	418,219
Loss from operations	$	(884,478	)	$	(85,628	)	$	(508,911	)	$	(1,479,017	)
Net loss	$	(836,986	)	$	(10,194	)	$	(493,581	)	$	(1,340,761	)

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Organization and Principal Activities (Details)	6 Months Ended
	Dec. 31, 2020
Delta Technology Holdings USA Inc [Member]
Background, description	● A US company ● Incorporated on May 22, 2018 ● A holding company
Ownership, description	100% owned by the Company
NTH BVI [Member]
Background, description	● A BVI company ● Incorporated on August 28, 2018 ● A holding company
Ownership, description	100% owned by the Company
NTH HK [Member]
Background, description	● A Hong Kong company ● Incorporated on September 11, 2018 ● A holding company
Ownership, description	100% owned by NTH BVI
Shanghai MYT [Member]
Background, description	● A PRC company and deemed a wholly foreign owned enterprise (“WOFE”) ● Incorporated on October 19 ● Registered capital of $1 million ● A holding company
Ownership, description	WOFE, 100% owned by NTH HK
Hunan MYT [Member]
Background, description	● A PRC limited liability company ● Incorporated on October 17, 2018 ● Registered capital of $4,330,590 (RMB 30 million) ● Engaged in specialty tea product distribution and retail business by provision of high-quality tea beverages in its tea shop chain
Ownership, description	100% VIE of Shanghai MYT
39Pu [Member]
Background, description	● A PRC limited liability company ● Incorporated on April 14, 2011 ● Registered capital of $3,522,424 (RMB 20.9 million) with registered capital fully paid-up ● Engaged in dark tea distribution
Ownership, description	51% VIE of Shanghai MYT

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Organization and Principal Activities (Details Textual)		1 Months Ended		6 Months Ended
	Oct. 02, 2019 USD ($) shares	Oct. 28, 2019 USD ($) shares	Oct. 17, 2019 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 31, 2020 CNY (¥)	Oct. 31, 2020
Organization and Principal Activities (Textual)
Equity interest percentage						51.00%
Organization and principal activities, description				The Company owns 100% equity interest in NTH Holdings Limited ("NTH BVI"), an entity incorporated on August 28, 2018 in accordance with the laws and regulations in British Virgin Islands ("BVI"). NTH BVI owns 100% equity interest in Tea Language Group Limited ("NTH HK"), an entity incorporated on September 11, 2018 in accordance with the laws and regulations in Hong Kong ("HK"). On October 19, 2018, the Company, through NTH HK, established Mingyuntang (Shanghai) Tea Co. Ltd.  ("Shanghai MYT"), as a Wholly Foreign-Owned Enterprise ("WFOE") in the People's Republic of China ("PRC").
Delta Technology Holdings USA Inc. [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				100.00%	100.00%
NTH BVI [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				100.00%	100.00%
NTH HK [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				100.00%	100.00%
Shanghai MYT [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				100.00%	100.00%
Hunan MYT [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				100.00%	100.00%
Registered capital				$ 4,330,590
Hunan MYT [Member] | RMB [Member]
Organization and Principal Activities (Textual)
Registered capital | ¥					¥ 30,000,000
39Pu [Member]
Organization and Principal Activities (Textual)
Percentage of owned subsidiary				51.00%	51.00%
Registered capital				$ 3,522,424
39Pu [Member] | RMB [Member]
Organization and Principal Activities (Textual)
Registered capital | ¥					¥ 20,900,000
39Pu VIE Agreements [Member]
Organization and Principal Activities (Textual)
Cash paid for consideration	$ 2,400,000	$ 2,400,000	$ 2,400,000
Share value for consideration | shares	10,000,000	10,000,000	10,000,000
Additional cash consideration	$ 600,000
Additional share value amount | shares	4,000,000
Equity interest percentage	51.00%

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Summary of Significant Accounting Policies (Details) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Line Items]
Cash	$ 13,333,034	$ 1,801,180	$ 5,311,693	$ 4,668,745
Short-term investments	3,335,640		2,266,069
Inventories	1,475,924		1,403,582
Other current assets	106,244		108,224
Property and equipment, net	1,327,658		1,315,326	$ 1,315,326
Deposits for plant, property and equipment	1,013,825		849,245
Right of use assets	363,318		553,904
Other noncurrent assets	67,089		92,992
Total Assets	34,275,319		22,635,127
Other current liabilities	167,379		68,579
Total Liabilities	1,355,257		2,035,931
Revenue	3,874,080	418,219
Variable Interest Entity, Primary Beneficiary [Member]
Property, Plant and Equipment [Line Items]
Cash	1,142,514		362,384
Short-term investments	3,335,640		2,266,069
Inventories	1,475,924		1,403,582
Loans due from a third party	2,785,636		2,222,191
Other current assets	607,423		292,917
Investments in equity investees	1,096,370
Property and equipment, net	1,327,658		1,315,326
Deposits for plant, property and equipment	1,013,825		849,245
Right of use assets	363,318		553,904
Other noncurrent assets	133,611		159,434
Total Assets	13,281,919		9,425,052
Due to MYT	10,466,925		7,270,932
Other current liabilities	1,050,524		885,515
Total Liabilities	11,517,449		$ 8,156,447
Revenue	3,874,080	418,219
Net income (loss)	$ 377,453	$ (847,182)

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Summary of Significant Accounting Policies (Details 1) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Sales by Hunan MYT	$ 169,656	$ 348,816
Sales by 39Pu	3,704,424	69,403
Total	$ 3,874,080	$ 418,219

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Summary of Significant Accounting Policies (Details Textual)	6 Months Ended
	Dec. 31, 2020 Segments
Summary of Significant Accounting Policies (Textual)
Number of operating business lines	2
Variable interest entity agreements, description	Pursuant to the VIE Agreements, Hunan MYT and 39Pu pay service fees equal to 100% and 51% of its net income to Shanghai MYT, respectively. At the same time, Shanghai MYT is entitled to receive 100% and 51% of expected residual returns from Hunan MYT and 39Pu, respectively.
Exclusive option agreement term	10 years
Thirty Nine Pu [Member]
Summary of Significant Accounting Policies (Textual)
Percentage of owned subsidiary	51.00%

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Risks (Details) - Dec. 31, 2020	USD ($)	CNY (¥)
Risks (Textual)
Insured amount	$ 250,000
Mainland China [Member]
Risks (Textual)
Deposited with a bank	1,000,000
Insured amount	70,770
Mainland China [Member] | RMB [Member]
Risks (Textual)
Insured amount | ¥		¥ 500,000
Cash Deposit [Member]
Risks (Textual)
Deposited with a bank	12,200,000
Cash Deposit [Member] | Credit Risk [Member]
Risks (Textual)
Deposited with a bank	$ 12,200,000

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Disposal of Elite (Details)	Feb. 09, 2019 USD ($)
Disposal of Elite (Textual)
Cash purchase price	$ 1,750,000

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Acquisition of 39PU (Details) - Level 3 [Member]	Dec. 31, 2020 USD ($)
Net tangible assets	$ 3,509,468
Goodwill	7,863,081
Foreign exchange adjustments	102,867
Less: Noncontrolling interests	(5,675,416)
Total purchase consideration	$ 5,800,000

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Acquisition of 39PU (Details Textual) - USD ($)		1 Months Ended
	Oct. 02, 2019	Oct. 28, 2019	Oct. 17, 2019
Acquisition of 39PU (Textual)
Acquisition of equity interest	51.00%
Contingent consideration, description	Under the terms of the purchase agreement, the consideration was comprised of cash consideration of $2.4 million and share consideration of 10,000,000 Ordinary Shares, at a per share price of $0.34. In addition, a contingent cash consideration of $0.6 million and a share consideration of $1.2 million will be delivered to the three shareholders according to the earn-out payment based on the financial performance of 39Pu in its next fiscal years.
Cash consideration		$ 2,400,000	$ 2,400,000
Shares consideration		10,000,000	10,000,000
Exchange rate	$ 7.1489

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Inventories (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Inventory Disclosure [Abstract]
Merchant products	$ 1,000,837	$ 968,642
Raw materials	40,796	18,542
Packaging and other supplies	391,000	376,394
Other products	43,291	40,004
Inventory gross	1,475,924	1,403,582
Less: inventory write-down
Total inventories	$ 1,475,924	$ 1,403,582

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Loans Due from Third Parties (Details) - USD ($)		Dec. 31, 2020	Jun. 30, 2020
Total loans due from third parties		$ 2,785,636	$ 2,222,191
Sichuan Senmiao Ronglian Technology Co, Ltd. [Member]
Total loans due from third parties	[1]	1,560,258	2,222,191
Shenzhen Qianhai Leshi Health Management Co., Ltd. [Member]
Total loans due from third parties	[2]	$ 1,225,378

[1] The Company purchased short-term investments of $1,148,930 in April 2019, and acquired short-term investments of $1,177,653 from the acquisition of 39Pu, both of which were investments in Senmiao Ronglian which was a variable interest entity of Senmiao Technology Ltd, a US listed company which used to operate a peer-to-peer marketplace before October 2019. In October 2019, Senmiao Ronglian disposed of the peer-to-peer marketplace, and the Company's short-term investments became a loan due from Sichuan Ronglian as of December 31, 2019

[2] In December 2020, the Company entered into a loan agreement with Shenzhen Qianhai to provide a loan of $1,225,378 to the third party. The loan matured in June 2021 with an interest rate of 1.495% per annum. The loan was made for the purpose of making use of idle cash.

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Loans Due from Third Parties (Details Textual) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 09, 2020	Apr. 30, 2019
Loans Due from Third Parties (Textual)
Purchased short-term investments				$ 1,148,930
Acquired short-term investments				$ 1,177,653
Interest rate of per annum	1.495%		7.00%
Repaid of loan	$ 814,003	$ 814,003
Loan value	$ 1,225,378

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Investment in Equity Investees (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Equity Method Investments and Joint Ventures [Abstract]
Urban Tea Management Inc. (“Meno”)	$ 310,000	$ 210,000
Guokui Management Inc. (“Guokui”)	100,000
Chuangyeying Brand Management Co., Ltd. (“CYY”)	390,589
Store Master Food Trading Co., Ltd. (“Store Master”)	706,818
Less: Share of results of equity investees	(218,330)	(22,245)
Total	$ 1,280,077	$ 187,755

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Investment in Equity Investees (Details Textuals) - USD ($)	1 Months Ended	6 Months Ended
	Sep. 23, 2020	Dec. 31, 2020	Dec. 31, 2019	Oct. 31, 2020
Investment in an Equity Investee (Textual)
Equity interest percentage				51.00%
Net loss		$ 218,330
Investments		$ 310,000
Investment, descriprtion		The Company and an unrelated third party invested capital of 70% and 30%, respectively, and was entitled to 51% and 49% profit earned from Meno, respectively. Meno did not commence operations until August 1, 2020.
Share purchase agreement, description	the Company entered into a share purchase agreement, pursuant to which the Company agreed to pay $400,000 in cash to acquire 80% of the equity interest in Guokui, in which the Company and other unrelated third party investor were entitled to 51% and 49% profit earned from Guokui, respectively. As of December 31, 2020, the Company made investments aggregating $100,000. The investment was for the purpose of expansion its tea shop chain to overseas market.
Cash consideration				$ 376,462
Cash consideration respectively				$ 681,252

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Property and Equipment, Net (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020	Jun. 30, 2019
Property, Plant and Equipment [Line Items]
Less: accumulated depreciation	$ (884,217)		$ (744,265)
Property, plant and equipment, net	1,327,658	$ 1,315,326	1,315,326
Building [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	855,570		790,605
Office equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	652,169		618,323
Electronic equipment [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	55,760		51,526
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	27,271		25,200
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, net	$ 621,105		$ 573,937

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Property and Equipment, Net (Details Textual) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Property And Equipment, Net (Textual)
Depreciation expenses	$ 78,671	$ 68,941
Office equipment cost	18,644	3,047
Accumulated depreciation	2,830	1,282
Net loss disposal of office equipment	$ (15,242)	$ (1,025)

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Equity (Details) - shares	6 Months Ended
	Dec. 31, 2020		Dec. 31, 2019
Equity [Abstract]
Beginning balance of warrants outstanding, Number of shares	2,396,747		2,396,747
Ending balance of warrants outstanding, Number of shares	2,396,747		2,396,747
Beginning Balance of warrants outstanding, Weighted average life	3 years 8 months 2 days		4 years 8 months 5 days
Ending Balance of warrants outstanding, Weighted average life	3 years 2 months 1 day		4 years 2 months 5 days
Balance of warrants outstanding, Expiration dates	*	[1]	*

[1] Among the 2,396,747 shares of warrants, 359,727 shares will expire on November 20, 2022, 2,037,020 shares will be expire on May 23, 2024.

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Equity (Details Textual) - USD ($)		1 Months Ended			6 Months Ended		12 Months Ended
	Aug. 14, 2019	Jul. 30, 2019	May 24, 2019	Nov. 21, 2017	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020	Jun. 05, 2020	Jun. 30, 2019
Equity (Textual)
Common stock, shares authorized					150,000,000		150,000,000
Common stock, shares issued					79,491,998		45,188,648
Common stock, shares outstanding					79,491,998		45,188,648
Value of services total amount					$ 222,505
Warrants outstanding					2,396,747	2,396,747	2,396,747		2,396,747
Fair value of warrants					$ (845,683)	$ (15,330)
Placement Agent Warrants [Member]
Equity (Textual)
Warrants to purchase ordinary shares			227,600
Warrants issuance of period			5 years
Warrants exercise price per share			$ 1.86
Fair value of warrants					30,954		$ 246,718
Registered direct offering warrants [Member]
Equity (Textual)
Warrants to purchase ordinary shares			1,809,420
Warrants issuance of period			5 years
Warrants exercise price per share			$ 1.86
Fair value of warrants					$ 246,081		$ 895,663
Ordinary Shares [Member]
Equity (Textual)
Common stock, shares authorized					100,000,000
Common stock, shares issued								8,834
Private placement warrants [Member]
Equity (Textual)
Issuance of shares				1,798,635
Warrants issuance of period				5 years
Warrants exercise price per share				$ 1.31
Private warrants to shareholder				359,727
Warrants outstanding					359,727		359,727
Fair value of warrants					$ 27,699		$ 142,092
Warrant [Member]
Equity (Textual)
Warrants, description					Among the 2,396,747 shares of warrants, 359,727 shares will expire on November 20, 2022, 2,037,020 shares will be expire on May 23, 2024.
Securities purchase agreement [Member] | Common Stocks [Member]
Equity (Textual)
Sale of stock ordinary shares	15,000,000	18,750,000
Sale of stock par value per share	$ 0.4	$ 0.32
Gross proceeds of value	$ 6,000,000	$ 6,000,000
Net proceeds of value	$ 5,500,000	$ 5,500,000

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Loss Per Share (Details) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Earnings Per Share [Abstract]
Net loss attributable to Urban Tea's shareholders	$ (681,041)	$ (1,335,766)
Weighted Average Shares Outstanding-Basic and Diluted	72,370,528	31,289,010
Loss per share- basic and diluted	$ (0.09)	$ (0.04)

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Income Taxes (Details) - USD ($)	1 Months Ended	6 Months Ended
	Dec. 22, 2017	Dec. 31, 2020	Dec. 31, 2019	Jun. 30, 2020
Income Taxes (Textual)
Net operating loss carryforward		$ 1,519,567		$ 1,245,761
Net operating losses expire		The federal net operating loss carryforward is available to reduce future years’ taxable income through year 2037 and net operating losses generated before 2018 will not expire.
Income tax expenses		$ 259,031
PRC [Member]
Income Taxes (Textual)
Net operating loss carryforward		2,926,042		$ 2,266,653
Underpayment of taxes		$ 100,000
Tax rate description		Effective January 1, 2008, the New Taxation Law of PRC stipulates that domestic enterprises and foreign invested enterprises (the "FIEs") are subject to a uniform tax rate of 25%. Under the PRC tax law, companies are required to make quarterly estimate payments based on 25% tax rate; companies that received preferential tax rates are also required to use a 25% tax rate for their installment tax payments.
Hong Kong [Member]
Income Taxes (Textual)
Statutory financial statements adjusted tax rate, description		The applicable tax rate for the first HKD$2 million of assessable profits is 8.25% and assessable profits above HKD$2 million will continue to be subject to the rate of 16.5% for corporations in Hong Kong, effective from the year of assessment 2018/2019.
Applicable tax rate		16.50%
United States [Member] | Maximum [Member]
Income Taxes (Textual)
Corporate tax rate	35.00%
United States [Member] | Minimum [Member]
Income Taxes (Textual)
Corporate tax rate	21.00%

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Related Party Transactions and Balances (Details) - USD ($)	6 Months Ended
	Dec. 31, 2020	Jun. 30, 2020
Related Party Transactions and Balances (Textual)
Due from related party	$ 3,411	$ 1,127
Sale to related party	$ 25,932

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Commitments and Contingencies (Details) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Rights of use lease assets	$ 363,318	$ 553,904
Operating lease liabilities, current	308,276	315,259
Operating lease liabilities, noncurrent	124,673	310,098
Total operating lease liabilities	$ 432,949	$ 625,357

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Commitments and Contingencies (Details 1)	Dec. 31, 2020	Jun. 30, 2020
Remaining lease term and discount rate
Weighted average remaining lease term (years)	2 years 4 months 6 days	3 years 3 months 19 days
Weighted average discount rate	4.75%	4.75%

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Commitments and Contingencies (Details 2) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
For the six months ended June 30, 2021	$ 214,272
For the twelve months ended June 30, 2022	165,017
For the twelve months ended June 30, 2023	38,840
For the twelve months ended June 30, 2024 and thereafter	33,232
Total lease payments	451,361
Less: imputed interest	(18,412)
Present value of lease liabilities	$ 432,949	$ 625,357

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Commitments and Contingencies (Details Textual) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies (Textual)
Incurred total operating lease expenses	$ 100,892	$ 202,970

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Segment Reporting (Details) - USD ($)	6 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Revenues	$ 3,874,080	$ 418,219
Income (Loss) from operations	(659,298)	(1,479,017)
Net income (loss)	(303,201)	(1,340,761)
Tea Shop Chains [Member]
Revenues	169,656	348,816
Income (Loss) from operations	(460,535)	(884,478)
Net income (loss)	(393,649)	(836,986)
Distribution of Dark Tea Products [Member]
Revenues	3,704,424	69,403
Income (Loss) from operations	910,067	(85,628)
Net income (loss)	771,102	(10,194)
Unallocated [Member]
Revenues
Income (Loss) from operations	(1,108,830)	(508,911)
Net income (loss)	$ (680,654)	$ (493,581)

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Segment Reporting (Details Textual) - USD ($)	Dec. 31, 2020	Jun. 30, 2020
Segment Reporting (Textual)
Total assets	$ 34,275,319	$ 22,635,127
Tea Shop Chains [Member]
Segment Reporting (Textual)
Total assets	7,306,504
Distribution of Dark Tea Products [Member]
Segment Reporting (Textual)
Total assets	5,975,415
Unallocated [Member]
Segment Reporting (Textual)
Total assets	$ 20,993,400

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Subsequent Event (Details) - USD ($)	1 Months Ended		6 Months Ended
	Apr. 20, 2021	Mar. 26, 2021	Dec. 31, 2020	Dec. 31, 2019
Subsequent Event (Textual)
Net proceeds from offering shares			$ 11,050,000
Subsequent Event [Member] | Securities Purchase Agreement [Member]
Subsequent Event (Textual)
Sale of aggregate shares	3,797,488	3,797,488
Sale of stock, description		The Company agreed to sell an aggregate of 3,797,488 units (the "Units"), each Unit consisting of one ordinary share of the Company, no par value ("Share") and a warrant to purchase three Shares ("Warrant") with an initial exercise price of $4.65 per Share.
Exercise price		$ 4.65
Share price, per unit		$ 3.72
Aggregate purchase price		$ 14,100,000
Net proceeds from offering shares		$ 14,100,000
Warrants expire		5 years 6 months
Consecutive trading days equity volume, description		The Warrants contain a mandatory exercise right for the Company to force exercise of the Warrants if the Company's Shares trades at or above $23.25 per Share, for 20 consecutive trading days, provided, among other things, that the shares issuable upon exercise of the Warrants are registered or may be sold pursuant to Rule 144 and the daily trading volume exceeds 300,000 Shares per trading day on each trading day in a period of 20 consecutive trading days prior to the applicable date.