Restatement for Correction of an Error

3 Months Ended

Sep. 30, 2021

Accounting Changes and Error Corrections [Abstract]

Restatement for Correction of an Error

Note 2 - Restatement for Correction of an Error

The Company had a net accounts receivable balance in the amount of $1,234,863 and $1,640,779 as of September 30, 2021 and June 30, 2021, respectively, with that customer. The management subsequently discovered that the customer is a related party within the definition ASC 850.

On October 25, 2020, the Company signed an agreement with the Company’s major customer. The Company agreed to loan the customer the $9,311,854 (RMB60,000,000) at an annual interest rate of 7.2%. The actual loan amount shall prevail within the total amount. The loan is guaranteed by a Company’s supplier and due on October 25, 2021. The Company has recorded an allowance for uncollectible amount of $2,108,959 as of June 30, 2021. The total loan receivable, net of allowance amounted $6,430,497 and $6,417,350 as of September 30, 2021 and June 30, 2021, respectively. The management subsequently discovered that the customer is a Related Party within the definition ASC 850.

In the Affected Reports, the Company corrected the disclosure by reporting the above as related party transactions and balances.

Consequently, Management has identified a material weakness in understanding and knowledge of US GAAP. 

Comparison of restated financial statements to financial statements as previously reported:

Unaudited Condensed Consolidated Balance Sheets	As of September 30, 2021
	As Previously Reported		Restatement Adjustment			As Restated
Current Assets:
Account receivable, net	$	2,675,547	$	(1,234,863	)	$	1,440,684
Account receivable - related party, net		-		1,234,863			1,234,863
Loan receivable, net		6,430,497		(6,430,497	)		-
Loan receivable - related party, net		-		6,430,497			6,430,497
Total Current Assets		9,149,072		-			9,149,072

Unaudited Condensed Consolidated Statements of Cash Flows	Three Months ended September 30, 2021
	As Previously Reported			Restatement Adjustment			As Restated
(Increase) in accounts receivable	$	(67,545	)	$	(772,809	)	$	(840,354	)
Decrease in accounts receivable - related party		-			772,809			772,809
Net Cash Used in Operating Activities		(115,760	)		-			(115,760	)
Net Cash Used in Investing Activities		-			-			-
Net Cash Provided by Financing Activities		-			-			-

Consolidated Balance Sheets	As of June 30, 2021
	As Previously Reported		Restatement Adjustment			As Restated
Current Assets:
Account receivable, net	$	2,602,392	$	(1,640,779	)	$	961,613
Account receivable - related party, net		-		1,640,779			1,640,779
Loan receivable, net		6,417,350		(6,417,350	)		-
Loan receivable - related party, net		-		6,417,350			6,417,350
Total Current Assets		9,163,675		-			9,163,675

Consolidated Statement of Operations	Year ended June 30, 2021
	As Previously Reported		Restatement Adjustment			As Restated
Revenue	$	9,489,187	$	(5,278,370	)	$	4,210,817
Revenue – Related Party		-		5,278,370			5,278,370
Total Revenue		9,489,187		-			9,489,187

Consolidated Statements of Cash Flows	Year ended June 30, 2021
	As Previously Reported			Restatement Adjustment			As Restated
(Increase) in account receivable	$	(4,177,743	)	$	3,158,126		$	(1,019,617	)
(Increase) in account receivable - related party		-			(3,158,126	)		(3,158,126	)
Net Cash Used in Operating Activities		(2,562,524	)		-			(2,562,524	)
Loan receivable		8,365,926			(8,365,926	)		-
Loan receivable - related party		-			8,365,926			8,365,926
Net Cash Used in Investing Activities		(8,443,822	)		-			(8,443,822	)
Net Cash Provided by Financing Activities		6,232,225			-			6,232,225

Unaudited Condensed Consolidated Balance Sheets	As of September 30, 2020
	As Previously Reported		Restatement Adjustment			As Restated
Current Assets:
Account receivable	$	1,439,494	$	(1,424,766	)	$	14,728
Account receivable - related party		-		1,424,766			1,424,766
Total Current Assets		12,966,548		-			12,966,548

Unaudited Condensed Consolidated Statement of Operations	Three Months ended September 30, 2020
	As Previously Reported		Restatement Adjustment			As Restated
Revenue	$	5,143,578	$	(3,616,204	)	$	1,527,374
Revenue – Related Party		-		3,616,204			3,616,204
Total Revenue		5,143,578		-			5,143,578

Unaudited Condensed Consolidated Statements of Cash Flows	Three Months ended September 30, 2020
	As Previously Reported			Restatement Adjustment			As Restated
Account receivable	$	(1,413,328	)	$	1,398,868		$	(14,460	)
Account receivable - related party		-			(1,398,868	)		(1,398,868	)
Net Cash Used in Operating Activities		(1,456,401	)		-			(1,456,401	)
Net Cash Used in Investing Activities		(74,593	)		-			(74,593	)
Net Cash Provided by Financing Activities		6,232,225			-			6,232,225

As a result of the restatement as of September 30, 2021 and June 30, 2021, there is no change in the total balances of assets, liabilities, net loss or loss per share