SEC Form 10-K/A filed by China Green Agriculture Inc. (Amendment)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No.1)
For
the fiscal year ended
or
For the transition period from _________ to _____________
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging growth company |
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The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter: $
The number of outstanding
shares of the registrant’s common stock on December 15, 2023, was
DOCUMENTS INCORPORATED BY REFERENCE
None.
Explanatory Note
This Amendment No. 1 to the Annual Report on Form 10-K/A is filed as an amendment to the Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed with the Securities and Exchange Commission (the “SEC”) by China Green Agriculture, Inc. (the "Company") on November 3, 2023 (the “Form 10K”). The purpose for the Amendment No. 1 is to include the reissued audit opinion on 2022 Financial Statements by the Company’s predecessor accounting firm, SS Accounting & Auditing, Inc. (the “SS Accounting”) which had not been included with the Form 10K filed on November 3, 2023. SS Accounting has reissued its previously issued audit report on December 15, 2023 with an unqualified opinion on the Company’s balance sheet statement as of June 30, 2022 and the related statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the fiscal year ended June 30, 2022, and the related notes and schedules (collectively referred to as the “2022 financial statements”). In predecessor accounting firm’s opinion, the 2022 financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and the results of its operations and its cash flows for the year ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America, and the previous report on those statements is still appropriate.
In this Amendment No. 1, the following changes were included:
| ● | We included SS Accounting’s reissued audit report dated November 10, 2022. |
This Form 10-K/A does not reflect events that may have occurred subsequent to the original filing date of November 3, 2023 and does not modify or update in any other way disclosures made in the Form 10-K. Accordingly, this Form 10-K/A should be read in conjunction with the Form 10-K and other filings made with the Commission subsequent to the filing of the Form 10-K, including any amendments to those filings.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Form 10-K/A contains the complete text of Item 15, the financial statements, and the currently dated certifications of our Chief Executive Officers and Chief Financial Officer. Capitalized terms not otherwise defined have the meanings ascribed to them in the Form 10-K. Among other things, forward-looking statements made in the Original Form 10-K have not been revised to reflect events, results, or developments that have occurred or facts that have become known to us after the date of the Original Form 10-K (other than as discussed above), and such forward-looking statements should be read in their historical context.
TABLE OF CONTENTS
| Page | ||
| PART IV | ||
| Item 15. | Exhibits and Financial Statement Schedules | 1 |
| Signatures | 2 | |
i
PART IV
Item 15. Exhibits, Financial Statement Schedules
| (a) | The following documents are filed as part of this report: |
| (1) | Financial Statements |
The following financial statements of China Green Agriculture, Inc. and Report of Independent Registered Public Accounting Firm are presented in the “F” pages of this Report:
| (2) | Financial Schedules |
None.
Financial statement schedules have been omitted because they are either not applicable or the required information is included in the financial statements or notes hereto.
| (3) | Exhibits |
The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.
| (b) | Exhibits |
See the Exhibit Index following the signature page of this report, which Index is incorporated herein by reference.
1
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| China Green Agriculture, Inc. | ||
| Date: December 15, 2023 | By: | /s/ Zhuoyu Li |
| Zhuoyu Li, CEO | ||
| Date: December 15, 2023 | By: | /s/ Zhibiao Pan |
| Zhibiao Pan, Co-CEO |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| December 15, 2023 | /s/ Zhuoyu Li |
| Zhuoyu Li, Chairman of the Board of Directors and CEO (principal executive officer) | |
| December 15, 2023 | /s/ Yongcheng Yang |
| Yongcheng Yang, Chief Financial Officer | |
| (principal financial officer and principal accounting officer) | |
| December 15, 2023 | /s/ Shiyu Zhang |
| Shiyu Zhang, Director | |
| December 15, 2023 | /s/ Jian Huang |
| Jian Huang, Director | |
| December 15, 2023 | /s/ Xiaolai Li |
| Xiaolai Li, Director | |
| December 15, 2023 | /s/ Lianfu Liu |
| Lianfu Liu, Director | |
| December 15, 2023 | /s/ Daqing Zhu |
| Daqing Zhu, Director | |
| December 15, 2023 | /s/ Jinjun Lu |
| Jinjun Lu, Director |
2
China Green Agriculture, Inc.
Exhibit Index to Annual Report on Form 10-K
For the Year Ended June 30, 2023
3
| * | Filed herewith |
| + | In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed. |
4
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of China Green Agriculture, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of China Green Agriculture Inc., and subsidiaries (the Company) as of June 30, 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended June 30, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2023, and the results of its operations and its cash flows for the year ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern. As described in Note 3 to the financial statements, The Company has incurred operating losses and has negative operating cash flows in the fiscal year 2023. These factors, among others, raise a substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters:
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements, and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-1
Intangible Assets Impairment Assessment
Critical Audit Matter Description
The Company has intangible assets with amount of $13,563,635 as of June 30, 2023. These intangible assets include Land Use Rights and Trademarks. The Company performed the impairment assessment of these Intangible assets subject to amortization on its elected assessment date of June 30, 2023, by assessing the recoverability and whether the asset’s carrying amount exceeds its fair value. The determination of the fair value requires management to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions primarily include, but are not limited to, market multiples, the discount rate, operating income before depreciation and amortization, cashflows and capital expenditures forecasts for next five years.
We identified the impairment testing of these intangible assets subject to amortization as a critical audit matter because of significant estimates and assumptions made by the management for the assessment.
How the Critical Audit Matter was Addressed in the Audit
| ● | We tested if the management meet the timing requirement of the impairment test |
| ● | We collected both external and internal source of information to evaluate if there is any significant negative change |
| ● | We tested management’s process for developing the fair value of the intangible assets subject to amortization. |
| ● | We evaluated management’s ability to accurately forecast future revenues by comparing actual results to management’s forecast. |
| ● | We evaluated the reasonableness of the qualitative adjustments for factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, and other relevant factors. |
| ● | We tested the mathematical accuracy of the model used by management. |
| ● | We evaluated the reasonableness and consistency of the selected valuation methodology and assumptions utilized by the Company. |
| ● | We tested the completeness and accuracy of underlying data used in the fair value estimate. |
| ● | We evaluated the significant assumptions provided by management including discount rate by considering (i) current and past performance of the entity; (ii) their consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. |
/s/
We have served as the Company’s auditor since 2023
November 2, 2023
PCAOB
Firm ID:
F-2
SS Accounting & Auditing, Inc.
8705 Havenwood Trail
Plano, TX 75024
Phone: + (817) 437-9479
E-Mail: [email protected]
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PRIOR AUDITOR’S RE-ISSUED OPINION
To the Board of Directors and Stockholders of China Green Agriculture, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of China Green Agriculture, Inc. (the Company) as of June 30, 2022 and the related statements of operations, comprehensive loss, stockholders’ equity, and cash flows for the year ended June 30, 2022, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and the results of its operations and its cash flows for the year ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.
Emphasis of a Matter
The Company’s financial statements have been presented with its former 4 VIEs Lishijie, Fengnong, Jinyangguang and Wangtian as a discontinued operation.
Going Concern
The Company’s financial statements are prepared using the generally accepted accounting principles applicable to a going concern. The Company has incurred operating losses and has negative operating cash flows in the fiscal year 2022. These factors, among others, raise a substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plan regarding these matters is also described. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
F-3
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Land Use Rights and Trademarks Subject to Amortization - Impairment Assessment
Critical Audit Matter Description
The Company has intangible assets subject to amortization including Land Use Rights and Trademarks. As of June 30, 2022, the carrying value of Land Use Rights and Trademarks is $14,935,488. The Company performed the impairment assessment of these Intangible assets subject to amortization on its elected assessment date of June 30, 2022, by assessing the recoverability and whether the asset’s carrying amount exceeds its fair value. The determination of the fair value requires management to make significant estimates and assumptions that affect the reporting unit’s expected future cash flows. These estimates and assumptions primarily include, but are not limited to, market multiples, the discount rate, operating income before depreciation and amortization, cashflows and capital expenditures forecasts.
We identified the impairment testing of these intangible assets subject to amortization as a critical audit matter because of significant estimates and assumptions made by the management for the assessment.
How the Critical Audit Matter was Addressed in the Audit
| ● | We tested management’s process for developing the fair value of the intangible assets subject to amortization. |
| ● | We evaluated management’s ability to accurately forecast future revenues by comparing actual results to management’s forecast. |
| ● | We evaluated the reasonableness of the qualitative adjustments for factors such as Company-specific risks, changes in current economic conditions that may not be captured in the quantitatively derived results, and other relevant factors. |
| ● | We tested the mathematical accuracy of the model used by management. |
| ● | We evaluated the reasonableness and consistency of the selected valuation methodology and assumptions utilized by the Company. |
| ● | We tested the completeness and accuracy of underlying data used in the fair value estimate. |
| ● | We evaluated the significant assumptions provided by management including discount rate by considering (i) current and past performance of the entity; (ii) their consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. |
/s/ SS Accounting & Auditing, Inc.
FIRM ID: 6717
We have served as the Company’s auditor since 2020
Plano, Texas
November 10, 2022
F-4
CHINA GREEN AGRICULTURE, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of June 30, 2023, and 2022
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Digital assets | ||||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Amount due from related parties | ||||||||
| Advances to suppliers, net | ||||||||
| Total Current Assets | ||||||||
| Plant, property and equipment, net | ||||||||
| Other assets | ||||||||
| Other non-current assets | ||||||||
| Intangible assets, net | ||||||||
| Deferred Tax Asset | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Customer deposits | ||||||||
| Accrued expenses and other payables | ||||||||
| Amount due to related parties | ||||||||
| Taxes payable | ||||||||
| Short term loans | ||||||||
| Interest payable | ||||||||
| Total Current Liabilities | ||||||||
| Long-term Liabilities | ||||||||
| Long-term loans | ||||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred Stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Retained earnings | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
FOR THE YEARS ENDED JUNE 30, 2023 AND 2022
| 2023 | 2022 | |||||||
| Sales | ||||||||
| Jinong | $ | $ | ||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Net sales | ||||||||
| Cost of goods sold | ||||||||
| Jinong | ||||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling expenses | ||||||||
| General and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense) | ||||||||
| Other income (expense) | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense) | ||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ( | ) | ( | ) | ||||
| Net loss from continuing operations | ( | ) | ( | ) | ||||
| Net loss from discontinued operations, net of taxes | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive loss | ||||||||
| Foreign currency translation gain loss | ( | ) | ( | ) | ||||
| Comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Basic weighted average shares outstanding | ||||||||
| Basic net loss per share – from continuing operations | ( | ) | ( | ) | ||||
| Basic net loss earnings per share – from discontinued operations | ( | ) | ||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | ||
| Diluted weighted average shares outstanding | ||||||||
| Diluted net loss per share– from continuing operations | ( | ) | ( | ) | ||||
| Diluted net loss earnings per share – from discontinued operations | ( | ) | ||||||
| Diluted net loss per share | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED JUNE 30, 2023 AND 2022
| Additional | Accumulated Other | Total | ||||||||||||||||||||||||||
| Number Of | Common | Paid In | Statutory | Retained | Comprehensive | Stockholders’ | ||||||||||||||||||||||
| Shares | Stock | Capital | Reserve | Earnings | Loss | Equity | ||||||||||||||||||||||
| BALANCE, June 30, 2022 | $ | $ | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of stock | ||||||||||||||||||||||||||||
| Issuance of stock for convertible notes | ||||||||||||||||||||||||||||
| Issuance of stock for consulting services | ||||||||||||||||||||||||||||
| Transfer to statutory reserve | ( | ) | ||||||||||||||||||||||||||
| Other comprehensive (Loss) | ( | ) | ( | ) | ||||||||||||||||||||||||
| BALANCE, June 30, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
| Additional | Accumulated Other | Total | ||||||||||||||||||||||||||
| Number Of | Common | Paid In | Statutory | Retained | Comprehensive | Stockholders’ | ||||||||||||||||||||||
| Shares | Stock | Capital | Reserve | Earnings | Loss | Equity | ||||||||||||||||||||||
| BALANCE, JUNE 30, 2021 | $ | $ | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||
| Issuance of stock | ||||||||||||||||||||||||||||
| Issuance of stock for convertible notes | ||||||||||||||||||||||||||||
| Issuance of stock for consulting services | ||||||||||||||||||||||||||||
| Transfer to statutory reserve | ( | ) | ||||||||||||||||||||||||||
| Other comprehensive (loss) | ( | ) | ( | ) | ||||||||||||||||||||||||
| BALANCE, June 30, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-7
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED June 30, 2023 and 2022
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Provision for losses on accounts receivable | ||||||||
| Gain (Loss) on disposal of property, plant and equipment | ||||||||
| Inventories impairment | ||||||||
| Gain (Loss) on sales of discontinued operations | ( | ) | ||||||
| Changes in operating assets | ||||||||
| Digital Assets | ( | ) | ||||||
| Accounts receivable | ||||||||
| Amount due from related parties | ( | ) | ||||||
| Other current assets | ) | |||||||
| Inventories | ( | ) | ( | ) | ||||
| Advances to suppliers | ||||||||
| Other assets | ||||||||
| Deferred tax assets | ( | ) | ||||||
| Changes in operating liabilities | ||||||||
| Accounts payable | ( | ) | ||||||
| Customer deposits | ( | ) | ||||||
| Amount due to related parties | ( | ) | ||||||
| Tax payables | ( | ) | ( | ) | ||||
| Accrued expenses and other payables | ||||||||
| Interest payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of plant, property, and equipment | ( | ) | ( | ) | ||||
| Change in construction in process | ||||||||
| Sales of discontinued operations | ||||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from the sale of common stock | ||||||||
| Proceeds from loans | ||||||||
| Repayment of loans | ( | ) | ( | ) | ||||
| Other payables-investors | ||||||||
| Advance from related party | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate change on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning balance | ||||||||
| Cash and cash equivalents, ending balance | $ | $ | ||||||
| Supplement disclosure of cash flow information | ||||||||
| Interest expense paid | $ | $ | ||||||
| Income taxes paid | ||||||||
| SUPPLEMENT NON-CASH ACTIVITIES | ||||||||
| Common stock issued to repay accrued expense | $ | $ | ||||||
| Nonmonetary sales and purchases | ||||||||
The consolidated statements of cash flows are presented with the combined cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category.
The accompanying notes are an integral part of these consolidated financial statements.
F-8
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
China Green Agriculture, Inc. (the “Company”, “Parent Company” or “Green Nevada”), through its subsidiaries, is engaged in the research, development, production, distribution and sale of humic acid-based compound fertilizer, compound fertilizer, blended fertilizer, organic compound fertilizer, slow-release fertilizers, highly concentrated water-soluble fertilizers and mixed organic-inorganic compound fertilizer and the development, production, and distribution of agricultural products.
Unless the context indicates otherwise, as used in this Report, the following are the references herein of all the subsidiaries of the Company (i) Green Agriculture Holding Corporation (“Green New Jersey”), a wholly-owned subsidiary of Green Nevada, incorporated in the State of New Jersey; (ii) Shaanxi TechTeam Jinong Humic Acid Product Co., Ltd. (“Jinong”), a wholly-owned subsidiary of Green New Jersey organized under the laws of the PRC; (iii) Xi’an Hu County Yuxing Agriculture Technology Development Co., Ltd. (“Yuxing”), a Variable Interest Entity (“VIE”) in the in the PRC controlled by Jinong through a series of contractual agreements; (iv) Beijing Gufeng Chemical Products Co., Ltd., a wholly-owned subsidiary of Jinong in the PRC (“Gufeng”), (v) Beijing Tianjuyuan Fertilizer Co., Ltd., Gufeng’s wholly-owned subsidiary in the PRC (“Tianjuyuan”), and (vi)Antaeus Tech, Inc. (“Antaeus”), a wholly-owned subsidiary of Green Nevada incorporated in the State of Delaware.
On June 30, 2016 the Company, through its wholly-owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following six companies that are organized under the laws of the PRC and would be deemed VIEs: Shaanxi Lishijie Agrochemical Co., Ltd. (“Lishijie”), Songyuan Jinyangguang Sannong Service Co., Ltd. (“Jinyangguang”), Shenqiu County Zhenbai Agriculture Co., Ltd. (“Zhenbai”), Weinan City Linwei District Wangtian Agricultural Materials Co., Ltd. (“Wangtian”), Aksu Xindeguo Agricultural Materials Co., Ltd. (“Xindeguo”), and Xinjiang Xinyulei Eco-agriculture Science and Technology co., Ltd. (“Xinyulei”). On January 1, 2017, the Company, through its wholly owned subsidiary Jinong, entered into strategic acquisition agreements and a series of contractual agreements with the shareholders of the following two companies that are organized under the laws of the PRC and would be deemed VIEs, Sunwu County Xiangrong Agricultural Materials Co., Ltd. (“Xiangrong”), and Anhui Fengnong Seed Co., Ltd. (“Fengnong”).
On November 30, 2017, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Zhenbai.
On June 2, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Xindeguo, Xinyulei and Xiangrong.
On December 1, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Lishijie.
On December 31, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Fengnong.
On March 31, 2022, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Jinyangguang and Wangtian.
On March 13, 2023, the Company established Antaeus Tech Inc. (“Antaeus”) in the State of Delaware. In April 2023, Antaeus started to purchase digital assets mining machines and to mine bitcoin in West Texas.
Yuxing may also collectively be referred to as the “the VIE Company”.
F-9
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
The Company’s current corporate structure as of is set forth in the diagram below:
F-10
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principle of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Green New Jersey, Jinong, Gufeng, Tianjuyuan, Yuxing and Antaeus. All significant inter-company accounts and transactions have been eliminated in consolidation.
For purposes of comparability, certain prior period amounts have been reclassified to conform to the current year presentation in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company’s consolidated financial statements have been presented with its former VIEs, Lishijie, Jinyangguang, Wangtian and Fengnong as a discontinued operation.
Effective June 16, 2013, Yuxing was converted from being a wholly owned foreign enterprise 100% owned by Jinong to a domestic enterprise 100% owned one natural person, who is not affiliated to the Company (“Yuxing’s Owner”). Effective the same day, Yuxing’s Owner entered into a series of contractual agreements with Jinong pursuant to which Yuxing became the VIE of Jinong.
VIE assessment
A VIE is an entity (1) that has total equity at risk that is not sufficient to finance its activities without additional subordinated financial support from other entities, (2) where the group of equity holders does not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance, or the obligation to absorb the entity’s expected losses or the right to receive the entity’s expected residual returns, or both, or (3) where the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. In order to determine if an entity is considered a VIE, the Company first performs a qualitative analysis, which requires certain subjective decisions regarding its assessments, including, but not limited to, the design of the entity, the variability that the entity was designed to create and pass along to its interest holders, the rights of the parties, and the purpose of the arrangement. If the Company cannot conclude after a qualitative analysis whether an entity is a VIE, it performs a quantitative analysis. The qualitative analysis considered the design of the entity, the risks that cause variability, the purpose for which the entity was created, and the variability that the entity was designed to pass along to its variable interest holders. When the primary beneficiary could not be identified through a qualitative analysis, we used internal cash flow models to compute and allocate expected losses or expected residual returns to each variable interest holder based upon the relative contractual rights and preferences of each interest holder in the VIE’s capital structure.
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CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Use of estimates
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the amount of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. However, actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the COVID-19.
Leases
The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease right-of-use assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. As the implicit rate is typically not readily determinable in the Company’s lease agreements, the Company uses its incremental borrowing rate as of the lease commencement date to determine the present value of the lease payments. The incremental borrowing rate is based on the Company’s specific rate of interest to borrow on a collateralized basis, over a similar term and in a similar economic environment as the lease. Lease expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recognized on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Additionally, the Company accounts for lease and non-lease components as a single lease component for its identified asset classes. As of June 30, 2023, the Company does not have any material leases for the implementation of ASC 842.
Cash and cash equivalents and concentration of cash
For statement of cash flows purposes, the Company
considers all cash on hand and in banks, certificates of deposit with state owned banks in the PRC and banks in the United States, and
other highly liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. The Company
maintains large sums of cash in three major banks in China. The aggregate cash in such accounts and on hand as of June 30, 2023 and 2022
was $
F-12
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Digital Assets
Digital assets are included in current assets in the condensed consolidated balance sheets. Digital assets are accounted for as indefinite-lived intangible assets, and are initially measured in accordance with FASB Accounting Standards Codification (“ASC”) Topic 350 – Intangibles-Goodwill and Other. The Company measures gains or losses on the disposition of digital assets in accordance with the first-in-first-out (“FIFO”) method of accounting.
Digital assets are not amortized, but are assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived intangible asset is impaired. Whenever the exchange-traded price of digital assets declines below its carrying value, the Company has determined that an impairment exists and records an impairment equal to the amount by which the carrying value exceeds the fair value.
Accounts receivable
Management regularly reviews the composition of
accounts receivable and analyzes customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate
the collectability of accounts receivable at each year-end. Accounts considered uncollectible are provisioned for written off based upon
management’s assessment. As of June 30, 2023, and 2022, the Company had accounts receivable of $
Inventories
Inventory is valued at the lower of cost (determined on a weighted average basis) or market. Inventories consist of raw materials, work in process, finished goods and packaging materials. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. As of June 30, 2023, and 2022 the Company had no reserve for obsolete goods.
Property, plant and equipment
Property, plant and equipment are recorded at cost. Gains or losses on disposals are reflected as gain or loss in the year of disposal. The cost of improvements that extend the life of plant, property, and equipment are capitalized. These capitalized costs may include structural improvements, equipment, and fixtures. All ordinary repair and maintenance costs are expensed as incurred.
| Estimated Useful Life | ||
| Building | ||
| Agricultural assets | ||
| Machinery and equipment | ||
| Vehicles | ||
| Mining machines |
Construction in Progress
Construction in progress represents the costs incurred relating to the construction of buildings or new additions to the Company’s plant facilities. Costs classified to construction in progress include all costs of obtaining the asset and bringing it to the location and condition necessary for its intended use. No depreciation is provided for construction in progress until the assets are completed and are placed into service. Interest incurred during construction is capitalized into construction in progress.
Long-Lived Assets
The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of June 30, 2023, and 2022 the Company determined that there were no impairments of its long-lived assets.
F-13
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Intangible Assets
The Company records intangible assets acquired individually or as part of a group at fair value. Intangible assets with definitive lives are amortized over the useful life of the intangible asset, which is the period over which the asset is expected to contribute directly or indirectly to the entity’s future cash flows. The Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company has not recorded impairment of intangible assets as of June 30, 2023 and 2022, respectively.
Goodwill
We test goodwill for impairment annually, or when events and circumstances change that would indicate the carrying amount may not be recoverable. ASC 350, “Intangibles – Goodwill and Other,” permits the assessment of qualitative factors to determine whether events and circumstances lead to the conclusion that it is necessary to perform the two-step quantitative goodwill impairment test required under ASC 350. ASC 350 also allows the option to skip the qualitative assessment and proceed directly to a quantitative assessment.
Under the first step, the fair value of the reporting
unit is compared with its carrying value including goodwill. If the fair value of the reporting unit exceeds its carrying value, step
two does not need to be performed. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill
impairment exists for the reporting unit and the enterprise must perform step two of the impairment test. Under step two, an impairment
loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.
The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner comparable to a purchase
price allocation. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. As of June 30,
2023, and 2022, the Company performed the required impairment review which resulted in impairment adjustment with amount of
Fair Value Measurement and Disclosures
Our accounting for Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels:
| Level one | — | Quoted market prices in active markets for identical assets or liabilities; | |
| Level two | — | Inputs other than level one inputs that are either directly or indirectly observable; and | |
| Level three | — | Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. |
F-14
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter.
The carrying values of cash and cash equivalents, trade and other receivables, trade and other payables approximate their fair values due to the short maturities of these instruments.
Revenue recognition
The Company adopted Accounting Standards Codification (“ASC”) 606. ASC 606, Revenue from Contracts with Customers, 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 services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those services recognized as performance obligations are satisfied.
The Company has assessed the impact of the guidance by performing the following five steps analysis:
| Step 1: | Identify the contract | |
| Step 2: | Identify the performance obligations | |
| Step 3: | Determine the transaction price | |
| Step 4: | Allocate the transaction price | |
| Step 5: | Recognize revenue |
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 Topic 606 and therefore there were no material changes to the Company’s consolidated financial statements upon adoption of ASC 606.
Sales revenue is recognized on the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist, and collectability is reasonably assured.
The Company’s revenue consists of invoiced value of goods, net of a value-added tax (VAT). No product return or sales discount allowance are made as products delivered and accepted by customers are not returnable and sales discounts are not granted after products are delivered.
Customer deposits
Payments received before all the relevant criteria
for revenue recognition are satisfied are recorded as customer deposits. When all revenue recognition criteria are met, the customer deposits
are recognized as revenue. As of June 30, 2023, and 2022, the Company had customer deposits of $
Stock-Based Compensation
The costs of all employee stock option, as well as other equity-based compensation arrangements, are reflected in the consolidated financial statements based on the estimated fair value of the awards on the grant date. That cost is recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). Stock compensation for stock granted to non-employees is determined as the fair value of the consideration received or the fair value of equity instruments issued, whichever is more reliably measured.
F-15
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Income taxes
We account for uncertain tax positions in accordance with Accounting Standards Codification, or ASC, 740, “Income Taxes.” The application of income tax law is inherently complex. Laws and regulations in this area are voluminous and are often ambiguous. As such, we are required to make many subjective assumptions and judgments regarding our income tax exposures. Interpretations of, and guidance surrounding, income tax laws and regulations change over time. Changes in our subjective assumptions and judgments can materially affect amounts recognized in the consolidated balance sheets and statements of income. See Note 12, “Taxes Payable,” of the Notes to Consolidated Financial Statements for additional detail on our uncertain tax positions and further information regarding ASC 740.
Foreign currency translation
The reporting currency of the Company is the US dollar. The functional currency of the Company and Green New Jersey is the US dollar. The functional currency of the Chinese subsidiaries is the Chinese Yuan or Renminbi (“RMB”). For the subsidiaries whose functional currencies are other than the US dollar, all asset and liability accounts were translated at the exchange rate on the balance sheet date; stockholders’ equity is translated at the historical rates and items in the income statement and cash flow statements are translated at the average rate in each applicable period. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of shareholders’ equity. The resulting translation gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency is included in the results of operations as incurred.
Segment reporting
The Company utilizes the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other way management disaggregates a company.
As of June 30, 2023, the Company, through its subsidiaries is engaged into four main business segments based on location and product: Jinong (fertilizer production), Gufeng (fertilizer production), Yuxing (agricultural products production), and Antaeus (bitcoin). As of June 30, 2023, the Company maintained four main business segments.
Fair values of financial instruments
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. The categorization of financial assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, other receivables, advances to suppliers, accounts payable, other payables, tax payable, and related party advances and borrowings.
As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented on the balance sheets. This is attributed to the short maturities of the instruments and that interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective balance sheet dates.
Statement of cash flows
The Company’s cash flows from operations are calculated based on the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheets.
F-16
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Earnings per share
Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding stock options and stock awards.
| Years Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Loss from continuing operations for Basic Earnings Per Share | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operations for Basic Earnings Per Share | ( | ) | ||||||
| Loss for Basic Earnings Per Share | ( | ) | ( | ) | ||||
| Basic Weighted Average Number of Shares | ||||||||
| Loss from continuing operations Per Share – Basic | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operations Per Share – Basic | $ | $ | ( | ) | ||||
| Net loss Per Share – Basic | $ | ( | ) | $ | ( | ) | ||
| Loss from continuing operations for Diluted Earnings Per Share | $ | ( | ) | $ | ( | ) | ||
| Loss from discontinued operations for Diluted Earnings Per Share | $ | $ | ( | ) | ||||
| Loss for Diluted Earnings Per Share | $ | ( | ) | $ | ( | ) | ||
| Diluted Weighted Average Number of Shares | ||||||||
| Loss from continuing operations Per Share – Diluted | $ | ( | ) | ( | ) | |||
| Loss from discontinued operations Per Share – Diluted | $ | $ | ( | ) | ||||
| Net loss Per Share – Diluted | $ | ( | ) | $ | ( | ) | ||
Reclassification
Certain reclassifications have been made to the prior year consolidated financial statements to conform to the 2023 consolidated financial statement presentation. Such reclassifications did not affect total revenues, operating income or net income or cash flows as previously reported.
Recent accounting pronouncements
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and simplifies the diluted earnings per share calculation in certain areas. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2023, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements.
NOTE 3 – GOING CERCERN
The Company’s financial statements are prepared assuming that the Company will continue as a going concern. The Company has incurred operating losses and had negative operating cash flows in the fiscal year 2023 and may continue to incur operating losses and generate negative cash flows as the Company implements its future business plan. If the situation exists, there could be substantial doubt about the Company’s ability to continue as going concern.
To meet its working capital needs through the next twelve months and to fund the growth of the Company, the Company may consider plans to raise additional funds through the issuance of equity or borrow loan from local bank. The ability of the Company to continue as a going concern is dependent upon its ability to successfully execute its new business strategy and eventually attain profitable operations.
The accompanying financial statements do not include any adjustments to reflect the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as going concern.
F-17
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 4 – INVENTORIES
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Raw materials | $ | $ | ||||||
| Supplies and packing materials | $ | $ | ||||||
| Work in progress | $ | $ | ||||||
| Finished goods | $ | $ | ||||||
| Total | $ | $ | ||||||
During the year ended June 30, 2023, the Company
sold compound fertilizers (finished goods) to certain parties at market price and purchased equivalent amount of simple fertilizers (raw
material) from the same parties also at market price. The simple fertilizers purchased, along with other materials were used in the Company’s
production facility to manufacture compound fertilizers. While nonmonetary, the sales and purchase transactions were consummated independently
under separate agreements at different times and measured at the prevailing market value. The total amount of nonmonetary sales and purchases
amounted to $
NOTE 5 – PROPERTY, PLANT AND EQUIPMENT
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Building and improvements | $ | $ | ||||||
| Auto | ||||||||
| Machinery and equipment | ||||||||
| Total property, plant and equipment | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
For the fiscal year ended June 30, 2023, total
depreciation expense for the continuing entities was $
F-18
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 6 – INTANGIBLE ASSETS AND DIGITAL ASSETS
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Land use rights, net | $ | $ | ||||||
| Technology patent, net | ||||||||
| Customer relationships, net | ||||||||
| Non-compete agreement | ||||||||
| Trademarks | ||||||||
| Total | $ | $ | ||||||
LAND USE RIGHT
On August 13, 2003,
On August 16, 2001, Jinong received a land use
right as a contribution from a shareholder, which was granted by the People’s Government and Land& Resources Bureau of Yangling
District, Shaanxi Province. The fair value of the related intangible asset at the time of the contribution was determined to be RMB
| June 30, 2022 | Foreign Currency Adjustment | Amortization/ Subtraction | June 30, 2023 | |||||||||||||
| Land use rights | $ | ( | ) | |||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||||||
| Total land use rights, net | $ | ( | ) | |||||||||||||
TECHNOLOGY PATENT
On August 16, 2001, Jinong was issued a technology
patent related to a proprietary formula used in the production of humid acid. The fair value of the related intangible asset was determined
to be the respective cost of RMB
On July 2, 2010, the Company acquired Gufeng and
its wholly owned subsidiary Tianjuyuan. The fair value on the acquired technology patent was estimated to be RMB
| June 30, | Foreign Currency | June 30, | ||||||||||
| 2022 | Adjustment | 2023 | ||||||||||
| Technology know-how | $ | ( | ) | $ | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||
| Total technology know-how, net | $ | $ | ||||||||||
F-19
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
CUSTOMER RELATIONSHIP
On July 2, 2010, the Company acquired Gufeng and
its wholly owned subsidiary Tianjuyuan. The fair value on the acquired customer relationships was estimated to be RMB
| June 30, | Foreign Currency | June 30, | ||||||||||
| 2022 | Adjustment | 2023 | ||||||||||
| Customer relationships | $ | ( | ) | $ | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||
| Total customer relationships, net | $ | $ | ||||||||||
NON-COMPETE AGREEMENT
On July 2, 2010, the Company acquired Gufeng and
its wholly owned subsidiary Tianjuyuan. The fair value on the acquired non-compete agreement was estimated to be RMB
| June 30, | Foreign Currency | June 30, | ||||||||||
| 2022 | Adjustment | 2023 | ||||||||||
| Non-compete agreement | $ | ( | ) | $ | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||||
| Total non-compete agreement, net | $ | $ | ||||||||||
TRADEMARKS
On July 2, 2010, the Company acquired Gufeng and
its wholly owned subsidiary Tianjuyuan. The preliminary fair value on the acquired trademarks and brand names was estimated to be RMB
| June 30, | Foreign Currency | June 30, | ||||||||||
| 2022 | Adjustment | 2023 | ||||||||||
| Trademarks | $ | ( |
) | $ | ||||||||
| Less: accumulated amortization | ( |
) | ( |
) | ||||||||
| Total trademarks, net | $ | ( |
) | $ | ||||||||
AMORTIZATION EXPENSE
| Years Ending June 30, | Expense ($) | |||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
DIGITAL ASSETS
On March 13, 2023, the Company established Antaeus
Tech Inc. (“Antaeus”) in the State of Delaware. In April 2023, Antaeus started to purchase digital assets mining machines
and to mine bitcoin in West Texas. As of June 30, 2023, the company held digital assets with amount of $
NOTE 7 – OTHER NON-CURRENT ASSETS
Other non-current assets mainly include advance
payments related to rent the land use for the Company. As of June 30, 2023, the balance of other non-current assets was $
F-20
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
| Years ending June 30, | ||||
| 2024 | $ | |||
| 2025 | $ | |||
| 2026 | $ | |||
| 2027 | $ | |||
NOTE 8 – ACCRUED EXPENSES AND OTHER PAYABLES
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Payroll and welfare payable | ||||||||
| Accrued expenses | ||||||||
| Other payables | ||||||||
| Other levy payable | ||||||||
| Total | $ | $ | ||||||
NOTE 9 – AMOUNT DUE TO RELATED PARTIES
At the end of December 2015, Yuxing entered into
a sales agreement with the Company’s affiliate, 900LH.com Food Co., Ltd. (“900LH.com”, previously announced as Xi’an
Gem Grain Co., Ltd) pursuant to which Yuxing is to supply various vegetables to 900LH.com for its incoming seasonal sales at the holidays
and year ends (the “Sales Agreement”). The contingent contracted value of the Sales Agreement is RMB
The amount due from 900LH.com to Yuxing was $
As of June 30, 2023, and June 30, 2022, the amount
due to related parties was $
As of June 30, 2023, the Company’s subsidiary,
Jinong, owed 900LH.com. $
On July 1, 2022, Jinong renewed the office rental
agreement with Kingtone Information Technology Co., Ltd. (“Kingtone Information”), of which Mr. Zhuoyu Li, Chairman and CEO
of the Company, served as Chairman. Pursuant to the rental agreement, Jinong rented
NOTE 10 – LOAN PAYABLES
| No. | Payee | Loan period per agreement | Interest Rate |
June 30, 2023 |
||||||||||
| 1 | Beijing Bank -Pinggu Branch | % | ||||||||||||
| 2 | Huaxia Bank -HuaiRou Branch | % | ||||||||||||
| 3 | Pinggu New Village Bank | % | ||||||||||||
| 4 | Industrial Bank Co. Ltd | % | ||||||||||||
| 5 | Xian Bank | % | ||||||||||||
| Total | $ | |||||||||||||
The interest expense from short-term loans was
$
F-21
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 11 – TAXES PAYABLE
Enterprise Income Tax
Effective January 1, 2008, the Enterprise Income
Tax (“EIT”) law of the PRC replaced the tax laws for Domestic Enterprises (“DEs”) and Foreign Invested Enterprises
(“FIEs”). The EIT rate of
Value-Added Tax
All the Company’s fertilizer products that
are produced and sold in the PRC were subject to a Chinese Value-Added Tax (VAT) of
On April 28, 2017, the PRC State of Administration
of Taxation (SAT) released Notice 2017 #37, “Notice on Policy of Reduced Value Added Tax Rate,” under which, effective
July 1, 2017, all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax
(VAT) of
On April 4, 2018, the PRC State of Administration
of Taxation (SAT) released Notice 2018 #32, “Notice on Adjustment of VAT Tax Rate,” under which, effective May 1, 2018,
all the Company’s fertilizer products that are produced and sold in the PRC are subject to a Chinese Value-Added Tax (VAT) of
On March 20, 2019, the PRC State of Administration
of Taxation (SAT) released Notice 2019 #39, “Announcement on Policies Concerning Deepening the Reform of Value Added Tax,”
under which, Effective April 1, 2019, all the Company’s fertilizer products that are produced and sold in the PRC are subject to
a Chinese Value-Added Tax (VAT) of
F-22
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Income Taxes and Related Payables
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| VAT provision | $ | ( | ) | $ | ( | ) | ||
| Income tax payable | ( | ) | ( | ) | ||||
| Other levies | ||||||||
| Repatriation tax | ||||||||
| Total | $ | $ | ||||||
| Years Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Current tax – foreign | $ | ( | ) | $ | ( | ) | ||
| Total | $ | ( | ) | $ | ( | ) | ||
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Deferred tax assets | ||||||||
| Deferred Tax Benefit | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total deferred tax assets | $ | |||||||
The change in valuation allowance for the year
ended June 30, 2023 was a decrease of $
The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors.
As of June 30, 2023, based on the weight of available
evidence, including cumulative losses in recent years and expectations of future taxable income, the Company determined that it was more
likely than not that its deferred tax assets would be realized with the total amount of $
U.S. Tax Cuts and Jobs Act and Provisional Estimates
F-23
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Tax Rate Reconciliation
Our effective tax rates were approximately
June 30, 2023
| China 15% - 25% | United States 21% | Total | ||||||||||||||||||||||
| Pretax loss | $ | ( | ) | ( | ) | $ | ( | ) | ||||||||||||||||
| Expected income tax expense (benefit) | ( | ) | % | ( | ) | % | ( | ) | ||||||||||||||||
| High-tech income benefits on Jinong | ||||||||||||||||||||||||
| Loss from subsidiaries in which no benefit is recognized | ( | )% | ||||||||||||||||||||||
| Change in valuation allowance on deferred tax asset from US tax benefit | ( | )% | ||||||||||||||||||||||
| Actual tax expense | $ | ( | ) | % | $ | % | $ | ( | ) | % | ||||||||||||||
June 30, 2022
| China 15% - 25% | United States 21% | Total | ||||||||||||||||||||||
| Pretax loss | $ | ( | ) | ( | ) | $ | ( | ) | ||||||||||||||||
| Expected income tax expense (benefit) | ( | ) | % | ( | ) | % | ( | ) | ||||||||||||||||
| High-tech income benefits on Jinong | ( | )% | ||||||||||||||||||||||
| Loss from subsidiaries in which no benefit is recognized | ( | )% | ||||||||||||||||||||||
| Change in valuation allowance on deferred tax asset from US tax benefit | ( | ) | % | ( | )% | ( | ) | |||||||||||||||||
| Actual tax expense | $ | ( | ) | % | $ | % | $ | ( | ) | % | ||||||||||||||
F-24
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 12 – STOCKHOLDERS’ EQUITY
Common Stock
On August 2, 2022, the Company completed the issuance
of
On November 25, 2022, the Company issued
As of June 30, 2023, and June 30, 2022, there
were
Preferred Stock
Under the Company’s Articles of Incorporation,
the Board has the authority, without further action by stockholders, to designate up to
As of June 30, 2023, the Company has
NOTE 13 – STOCK OPTIONS
There were no issuances of stock options during the years ended June 30, 2023 and 2022.
NOTE 14 – CONCENTRATIONS AND LITIGATION
Market Concentration
All the Company’s revenue-generating operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the PRC’s economy.
The Company’s operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among other things, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by, among other things, changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation.
F-25
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
Vendor and Customer Concentration
There are
There are
Litigation
On June 5, 2020, an individual filed suit pro se (as in, representing oneself without an attorney) in the Southern District of Florida federal court alleging violations of the Securities Exchange Act. The Company believes the action is without merit and vigorously opposed it. The company moved to dismiss the litigation and for attorney’s fees from the plaintiff. On November 2, 2020, the case was transferred to the United States District Court for The Southern District Of New York. On September 30, 2021, the Southern District of New York federal court presiding over the case dismissed all claims against the company, its executives, and its independent directors. The dismissal was without prejudice and the plaintiff can appeal or amend within 30 days, or by October 29, 2021. The plaintiff amended the complaint on Oct 30, 2021. On August 30, 2022, the Southern District of New York federal court presiding over the case issued an order granting motions to dismiss all claims in the amended complaint against the Company, its executives, and its independent directors. On September 6, 2022, the plaintiff filed a notice of civil appeal to the U.S. Court of Appeals, Second Circuit. The appeal has now been fully briefed and the Company expects a decision to issue sometime in the coming year.
There are no other actions, suits, proceedings, inquiries or investigations before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
NOTE 15 – SEGMENT REPORTING
As of June 30, 2023, the Company was organized
into
| Years Ended June 30, | ||||||||
| 2023 | 2022 | |||||||
| Revenues from unaffiliated customers: | ||||||||
| Jinong | $ | $ | ||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Consolidated | $ | $ | ||||||
| Operating income (expense): | ||||||||
| Jinong | $ | ( | ) | $ | ( | ) | ||
| Gufeng | ( | ) | ( | ) | ||||
| Yuxing | ||||||||
| Antaeus | ( | ) | ||||||
| Reconciling item (1) | ||||||||
| Reconciling item (2) | ( | ) | ( | ) | ||||
| Consolidated | $ | ( | ) | $ | ( | ) | ||
F-26
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
| Net income (loss): | ||||||||
| Jinong | $ | ( | ) | ( | ) | |||
| Gufeng | ( | ) | ( | ) | ||||
| Yuxing | ||||||||
| Antaeus | ( | ) | ||||||
| Reconciling item (1) | ||||||||
| Reconciling item (2) | ( | ) | ||||||
| Reconciling item (3) | $ | $ | ||||||
| Consolidated | $ | ( | ) | $ | ( | ) | ||
| Depreciation and Amortization: | ||||||||
| Jinong | $ | $ | ||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Consolidated | $ | $ | ||||||
| Interest expense: | ||||||||
| Jinong | ||||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Consolidated | $ | $ | ||||||
| Capital Expenditure: | ||||||||
| Jinong | $ | $ | ||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Consolidated | $ | $ | ||||||
| As of | ||||||||
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| Identifiable assets: | ||||||||
| Jinong | $ | $ | ||||||
| Gufeng | ||||||||
| Yuxing | ||||||||
| Antaeus | ||||||||
| Reconciling item (1) | ( | ) | ||||||
| Reconciling item (2) | ||||||||
| Consolidated | $ | $ | ||||||
| (1) |
| (2) |
| (3) |
Total revenues from exported products currently
accounted for less than
F-27
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 16 – COMMITMENTS AND CONTINGENCIES
We are subject to various claims and contingencies related to lawsuits, certain taxes and environmental matters, as wells commitments under contractual and other commercial obligations. We recognize liabilities for commitments and contingencies when a loss is probable and estimable.
On July 1, 2020, Jinong signed an office rental
agreement with Kingtone Information Technology Co., Ltd. (“Kingtone Information”), of which Mr. Zhuoyu Li, Chairman and CEO
of the Company, served as its Chairman. Pursuant to the rental agreement, Jinong rented
On April 2, 2023, Antaeus signed a one-year rental
agreement for an office in Austin, Texas for approximately
Accordingly, the Company recorded an aggregate
of $
| Years ending June 30, | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
NOTE 17 – VARIABLE INTEREST ENTITIES
In accordance with accounting standards regarding consolidation of variable interest entities, VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which a company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes.
Green Nevada through one of its subsidiaries, Jinong, entered into a series of agreements (the “VIE Agreements”) with Yuxing for it to qualify as a VIE, effective June 16, 2013.
The Company has concluded, based on the contractual arrangements, that Yuxing is a VIE and that the Company’s wholly owned subsidiary, Jinong, absorbs most of the risk of loss from the activities of Yuxing, thereby enabling the Company, through Jinong, to receive a majority of Yuxing expected residual returns.
On June 30, 2016 and January 1, 2017, the Company, through its wholly owned subsidiary Jinong, entered into strategic acquisition agreements and into a series of contractual agreements to qualify as VIEs with the shareholders of the sales VIE Companies.
Jinong, the sales VIE Companies, and the shareholders of the sales VIE Companies also entered into a series of contractual agreements for the sales VIE Companies to qualify as VIEs (the “VIE Agreements”).
F-28
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
On November 30, 2017, the Company, through its wholly owned subsidiary Jinong, exited the VIE agreements with the shareholders of Zhenbai.
On June 2, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Xindeguo, Xinyulei and Xiangrong.
On December 1, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Lishijie.
On December 31, 2021, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Fengnong.
On March 31, 2022, the Company, through its wholly owned subsidiary Jinong, discontinued the strategic acquisition agreements and the series of contractual agreements with the shareholders of Jinyangguang and Wangtian.
As a result of these contractual arrangements,
with Yuxing and the sales VIE Companies the Company is entitled to substantially all the economic benefits of Yuxing and the VIE Companies.
| June 30, | June 30, | |||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Other current assets | ||||||||
| Related party receivable | ||||||||
| Advances to suppliers | ||||||||
| Total Current Assets | ||||||||
| Plant, Property and Equipment, Net | ||||||||
| Other assets | ||||||||
| Intangible Assets, Net | ||||||||
| - | ||||||||
| Total Assets | $ | $ | ||||||
| - | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | - | |||||||
| Current Liabilities | - | |||||||
| Accounts payable | $ | $ | ||||||
| Customer deposits | ||||||||
| Accrued expenses and other payables | ||||||||
| Amount due to related parties | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | $ | |||||||
| Stockholders’ equity | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
| Years Ended June 30, |
||||||||
| 2023 | 2022 | |||||||
| Revenue | $ | $ | ||||||
| Expenses | ||||||||
| Net income | $ | $ | ||||||
F-29
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
NOTE 18 – RESTRICTED NET ASSETS
The Company’s operations are primarily conducted through its PRC subsidiaries, which can only pay dividends out of their retained earnings determined in accordance with the accounting standards and regulations in the PRC and after it has met the PRC requirements for appropriation to statutory reserves. In addition, the Company’s businesses and assets are primarily denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. These currency exchange control procedures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiaries to transfer their net assets to the Parent Company through loans, advances or cash dividends.
The Company’s PRC subsidiaries net assets
as of June 30, 2023 and 2022 exceeded
Parent Company Financial Statements
PARENT COMPANY FINANCIAL INFORMATION OF CHINA GREEN AGRICULTURE, INC.
| As of June 30, | ||||||||
| 2023 | 2022 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Long-term equity investment | ||||||||
| Total long-term assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Amount due to related parties | ||||||||
| Other payables and accrued expenses | ||||||||
| Total Current Liabilities | ||||||||
| Stockholders’ Equity | ||||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive (loss) | ( | ) | ( | ) | ||||
| Retained earnings | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
F-30
CHINA GREEN AGRICULTURE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2023
| Year ended June 30, |
||||||||
| 2023 | 2022 | |||||||
| Revenue | $ | $ | ||||||
| General and administrative expenses | ||||||||
| Interest income | ||||||||
| Provision for tax | ( |
) | ||||||
| Equity investment in subsidiaries | ( |
) | ( |
) | ||||
| Net income | $ | ( |
) | $ | ( |
) | ||
| Year Ended June 30, |
||||||||
| 2023 | 2022 | |||||||
| Net cash used in operating activities | $ | ( |
) | $ | ( |
) | ||
| Net cash provided by investing activities | ||||||||
| Net cash provided by financing activities | ||||||||
| Cash and cash equivalents, beginning balance | ||||||||
| Cash and cash equivalents, ending balance | $ | $ | ||||||
Notes to Condensed Parent Company Financial Information
As of June 30, 2023, and 2022, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except as separately disclosed in the Consolidated Financial Statements, if any. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted.
NOTE 19 – SUBSEQUENT EVENTS
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30, 2023 to the date these consolidated financial statements were available to be issued and has determined that there were below significant subsequent events or transactions that would require recognition or disclosure in the consolidated financial statements.
On August 10, 2023, our Board of Directors adopted the Company’s 2023 Equity Incentive Plan. The 2023 Plan gives us the ability to grant stock options, stock appreciation rights (SARs), restricted stock and other stock-based awards (collectively, “Awards”) to employees or consultants of our company or of any subsidiary of our company and to non-employee members of our advisory board or our Board of Directors or the board of directors of any of our subsidiaries. Our Board of Directors believes that adoption of the Incentive Plan is in the best interests of our company and our stockholders because the ability to grant stock options and make other stock-based awards under the Incentive Plan is an important factor in attracting, stimulating and retaining qualified and distinguished personnel with proven ability and vision to serve as employees, officers, consultants or members of the Board of Directors or advisory board of our company and our subsidiaries, and to chart our course towards continued growth and financial success. Therefore, our Board of Directors believes the Incentive Plan will be a key component of our compensation program.
As of November 2, 2023,
F-31