Variable interest entity ("VIE") (Tables)

12 Months Ended

Jun. 30, 2020

Schedule of VIE's consolidated assets and liabilities and operating results

The carrying amount of VIE’s consolidated assets and liabilities are as follows:


	June 30, 2020		June 30, 2019

Current assets	$	48,347,542	$	39,258,826
Property and equipment, net		1,403,707		868,435
Other noncurrent assets		3,558,210		162,142
Total assets		53,309,459		40,289,403
Total liabilities		(42,919,217)		(30,645,069)
Net assets	$	10,390,242	$	9,644,334


	June 30, 2020		June 30, 2019

Current liabilities:
Short-term loans - banks	$	4,359,210	$	4,150,310
Loans from third parties		4,449,563		2,303,420
Short-term loans - related parties		—		329,120
Current maturities of long-term loan - bank		777,558		—
Accounts payable		6,606,723		6,995,932
Other payables and accrued liabilities		1,526,051		238,882
Other payables - related parties		7,161,232		528,717
Intercompany payables		10,334,680		8,928,579
Customer deposits		1,159,902		367,149
Operating lease liabilities		49,171		—
Taxes payable		3,125,847		2,805,722
Total current liabilities		39,549,937		26,647,831

Other liabilities:
Long-term loan - bank		—		866,231
Loan from a third party		2,074,871		3,131,007
Long-term loans - related parties		713,325		—
Operating lease liabilities - noncurrent		581,084		—
		3,369,280		3,997,238

Total liabilities	$	42,919,217	$	30,645,069

The summarized operating results of the VIE’s are as follows:


	For the year ended		For the year ended		For the year ended
	June 30, 2020		June 30, 2019		June 30, 2018

Operating revenues	$	105,100,563	$	89,959,760	$	94,596,470
Gross profit	$	6,218,590	$	7,809,539	$	9,011,763
Income from operations	$	2,867,697	$	6,556,351	$	9,454,230
Net income	$	974,302	$	5,533,912	$	3,786,061

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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