10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended March 31, 2021

or

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

For the Transition Period from                to               .

Commission File Number 000-54485

IONIX TECHNOLOGY, INC.

(Exact Name of Registrant as Specified in Its Charter)

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

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

(Address of Principal Executive Offices) (Zip Code)

+86-411-88079120

(Registrant’s Telephone Number, Including Area Code)

__Not applicable_

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

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

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

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  ¨
Non-accelerated filer    x	Smaller reporting company  x
Emerging growth company  ¨

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of May 15, 2021, there were 164,041,058 shares of common stock issued and outstanding, par value $0.0001 per share.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

IONIX TECHNOLOGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2021			June 30, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	542,092		$	1,285,373
Notes receivable		99,327			125,798
Accounts receivable		3,253,702			3,273,141
Inventory		4,193,668			3,263,850
Advances to suppliers - non-related parties		921,417			540,259
- related parties		426,852			357,577
Prepaid expenses and other current assets		476,407			320,296
Total Current Assets		9,913,465			9,166,294
Property, plant and equipment, net		6,793,595			6,573,937
Intangible assets, net		1,491,089			1,424,404
Long-term prepaid expenses		512,906			-
Deferred tax assets		49,257			20,743
Total Assets	$	18,760,312		$	17,185,378
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term bank loan	$	1,217,415		$	2,034,735
Accounts payable		2,650,376			2,637,792
Advance from customers		351,225			43,077
Promissory notes payable, net of debt discount and loan cost		571,093			-
Convertible notes payable, net of debt discount and loan cost		-			514,390
Derivative liability		-			276,266
Due to related parties		2,879,635			1,716,919
Accrued expenses and other current liabilities		78,536			359,577
Total Current Liabilities		7,748,280			7,582,756
Total Liabilities		7,748,280			7,582,756
COMMITMENT AND CONTINGENCIES
Stockholders’ Equity:
Preferred stock, $.0001 par value, 5,000,000 shares authorized,   5,000,000 shares issued and outstanding		500			500
Common stock, $.0001 par value, 195,000,000 shares authorized, 164,041,058 and 114,174,265 shares issued and outstanding as of March 31, 2021 and June 30, 2020 respectively		16,404			11,417
Additional paid in capital		10,786,792			9,243,557
Retained earnings (accumulated deficit)		(741,820	)		262,198
Accumulated other comprehensive income (loss)		488,563			(357,011	)
Total Stockholders' Equity attributable to the Company		10,550,439			9,160,661
Noncontrolling interest		461,593			441,961
Total Stockholders’ Equity		11,012,032			9,602,622
Total Liabilities and Stockholders’ Equity	$	18,760,312		$	17,185,378

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

F-1

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended						For the Nine Months Ended
	March 31,						March 31,
	2021			2020			2021			2020
Revenues (See Note 3 and Note 11 for related party amounts)	$	3,160,746		$	2,752,170		$	9,102,094		$	17,585,468
Cost of Revenues (See Note 11 for related party amounts)		2,802,497			2,506,518			8,071,941			14,850,194
Gross profit		358,249			245,652			1,030,153			2,735,274
Operating expenses
Selling, general and administrative expense		327,372			499,616			985,273			1,378,241
Research and development expense		147,871			139,029			425,111			645,880
Total operating expenses		475,243			638,645			1,410,384			2,024,121
Income (loss) from operations		(116,994	)		(392,993	)		(380,231	)		711,153
Other income (expense):
Interest expense, net of interest income		(42,441	)		(213,267	)		(262,174	)		(470,500	)
Subsidy income		45,790			-			59,876			50,018
Change in fair value of derivative liability		-			(44,850	)		(647,632	)		86,602
Gain (loss) on extinguishment of debt		-			(15,074	)		202,588			(15,074	)
Total other income (expense)		3,349			(273,191	)		(647,342	)		(348,954	)
Income (loss) before income tax expense (benefit)		(113,645	)		(666,184	)		(1,027,573	)		362,199
Income tax expense (benefit)		1,949			(29,962	)		(23,555	)		151,487
Net income (loss)		(115,594	)		(636,222	)		(1,004,018	)		210,712
Other comprehensive income (loss)
Foreign currency translation adjustment		(29,945	)		(165,507	)		865,206			(326,589	)
Comprehensive loss		(145,539	)		(801,729	)		(138,812	)		(115,877	)
Less: Comprehensive income attributable to noncontrolling interest		19,632			-			19,632			-
Comprehensive loss attributable to common stockholders of the Company	$	(165,171	)	$	(801,729	)	$	(158,444	)	$	(115,877	)
Earnings (Loss) Per Share - Basic and Diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	0.00
Weighted average number of common shares outstanding - Basic and Diluted		161,911,380			114,104,735			134,708,314			114,036,665

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

F-2

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Preferred Stock				Common Stock				Additional			Retained Earnings			Accumulated Other
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital			(Accumulated Deficit)			Comprehensive Income (loss)			Non-controlling interest		Total
Balance at June 30, 2020		5,000,000	$	500		114,174,265	$	11,417	$	9,243,557		$	262,198		$	(357,011	)	$	441,961	$	9,602,622
Issuance of common stock for conversion of convertible notes		-		-		2,326,652		233		390,768			-			-			-		391,001
Net loss		-		-		-		-		-			(532,306	)		-			-		(532,306	)
Foreign currency translation adjustment		-		-		-		-		-			-			430,281			-		430,281
Balance at September 30, 2020		5,000,000		500		116,500,917		11,650		9,634,325			(270,108	)		73,270			441,961		9,891,598
Issuance of common stock for conversion of convertible notes		-		-		7,143,978		714		455,429			-			-			-		456,143
Issuance of common stock for exercise of warrants		-		-		1,500,000		150		66,878			-			-			-		67,028
Issuance of common stock as commitment shares for promissory note		-		-		1,567,164		157		67,903			-			-			-		68,060
Issuance of common stock for private placement		-		-		28,869,999		2,887		430,113			-			-			-		433,000
Settlement of warrants in relation to extinguishment of debt		-		-		-		-		(59,163	)		-			-			-		(59,163	)
Net loss		-		-		-		-		-			(356,118	)		-			-		(356,118	)
Foreign currency translation adjustment		-		-		-		-		-			-			464,870			-		464,870
Balance at December 31, 2020		5,000,000		500		155,582,058		15,558		10,595,485			(626,226	)		538,140			441,961		10,965,418
Issuance of common stock as commitment shares for promissory note		-		-		1,459,000		146		87,007			-			-			-		87,153
Issuance of common stock for private placement		-		-		7,000,000		700		104,300			-			-			-		105,000
Net loss		-		-		-		-		-			(115,594	)		-			-		(115,594	)
Foreign currency translation adjustment		-		-		-		-		-			-			(49,577	)		19,632		(29,945	)
Balance at March 31, 2021		5,000,000	$	500		164,041,058	$	16,404	$	10,786,792		$	(741,820	)	$	488,563		$	461,593	$	11,012,032

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

F-3

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (continued)

(Unaudited)

	Preferred Stock				Common Stock				Additional					Accumulated Other
	Number of Shares		Amount		Number of Shares		Amount		Paid-in Capital		Retained Earnings			Comprehensive Income (loss)			Non-controlling interest		Total
Balance at June 30, 2019		5,000,000	$	500		114,003,000	$	11,400	$	8,829,487	$	539,866		$	(45,840	)	$	441,961	$	9,777,374
Stock warrants issued with convertible notes		-		-		-		-		20,022		-			-			-		20,022
Net income		-		-		-		-		-		711,276			-			-		711,276
Foreign currency translation adjustment		-		-		-		-		-		-			(416,785	)		-		(416,785	)
Balance at September 30, 2019		5,000,000		500		114,003,000		11,400		8,849,509		1,251,142			(462,625	)		441,961		10,091,887
Stock warrants issued with convertible notes		-		-		-		-		84,613		-			-			-		84,613
Net income		-		-		-		-		-		135,658			-			-		135,658
Foreign currency translation adjustment		-		-		-		-		-		-			255,703			-		255,703
Balance at December 31, 2019		5,000,000		500		114,003,000		11,400		8,934,122		1,386,800			(206,922	)		441,961		10,567,861
Issuance of common stock for advisory services		-		-		150,000		15		262,485		-			-			-		262,500
Issuance of common stock for conversion of convertible notes		-		-		40,057		4		60,361		-			-			-		60,365
Stock warrants issued with convertible notes		-		-		-		-		42,857		-			-			-		42,857
Net loss		-		-		-		-		-		(636,222	)		-			-		(636,222	)
Foreign currency translation adjustment		-		-		-		-		-		-			(165,507	)		-		(165,507	)
Balance at March 31, 2020		5,000,000	$	500		114,193,057	$	11,419	$	9,299,825	$	750,578		$	(372,429	)	$	441,961	$	10,131,854

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

F-4

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	March 31,
	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(1,004,018	)	$	210,712
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		512,375			580,625
Deferred taxes		(25,908	)		1,306
Stock compensation for advisory services		-			79,891
Change in fair value of derivative liability		647,632			(86,602	)
Loss (gain) on extinguishment of debt		(202,588	)		15,074
Non-cash interest		177,205			351,474
Gain on disposal of property and equipment		-			(7,018	)
Changes in operating assets and liabilities:
Accounts receivable - non-related parties		262,424			37,312
Accounts receivable - related parties		-			(92,348	)
Inventory		(652,185	)		237,193
Advances to suppliers - non-related parties		(326,742	)		(232,695	)
Advances to suppliers - related parties		(40,072	)		(3,352	)
Prepaid expenses and other current assets		(620,374	)		(150,496	)
Accounts payable		(184,288	)		(83,000	)
Advance from customers		293,468			(52,380	)
Accrued expenses and other current liabilities		(248,380	)		(164,326	)
Net cash provided by (used in) operating activities		(1,411,451	)		641,370
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment		(190,190	)		(193,610	)
Acquisition of intangible assets		(2,334	)		-
Proceeds received from sale of equipment		-			121,715
Net cash used in investing activities		(192,524	)		(71,895	)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes receivable		34,852			94,292
Proceeds from bank loans		1,405,792			-
Repayment of bank loans		(2,344,185	)		-
Proceeds from issuance of convertible notes payable		-			722,190
Proceeds from issuance of promissory notes		687,500			-
Proceeds from issuance of common stock for private placement		538,000			-
Repayment of convertible notes payable		(555,747	)		-
Proceeds from (repayment of) loans from related parties		1,021,130			(28,979	)
Net cash provided by financing activities		787,342			787,503
Effect of exchange rate changes on cash		73,352			(31,830	)
Net increase (decrease) in cash and cash equivalents		(743,281	)		1,325,148
Cash and cash equivalents, beginning of period		1,285,373			509,615
Cash and cash equivalents, end of period	$	542,092		$	1,834,763
Supplemental disclosure of cash flow information
Cash paid for income tax	$	10,751		$	154,538
Cash paid for interests	$	66,820		$	102,457
Non-cash investing and financing activities
Issuance of common stock for conversion of convertible notes	$	847,144		$	60,365
Issuance of 1,500,000 shares of common stock for exercise of warrants	$	67,028		$	-
Issuance of 3,026,164 shares of common stock as commitment shares for promissory note	$	155,213		$	-
Issuance of common stock for advisory services	$	-		$	262,500

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

F-5

IONIX TECHNOLOGY, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021

(Unaudited)

NOTE 1 - NATURE OF OPERATIONS

Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. By and through its wholly owned subsidiaries and an entity controlled through VIE agreements in China, the Company sells the high-end intelligent electronic equipment, which includes the portable power banks for electronic devices, LCM and LCD screens and provides IT and solution-oriented services in China.

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

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

Acquisition

On December 27, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jialin Liang and Xuemei Jiang, each of whom are shareholders (the “Shareholders”) of Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”). Pursuant to the terms of the Purchase Agreement, the Shareholders, who together own 95.14% of the ownership rights in Fangguan Electronics, agreed to execute and deliver the Business Operation Agreement, the Equity Interest Pledge Agreement, the Equity Interest Purchase Agreement, the Exclusive Technical Support Service Agreement (the “Services Agreement”) and the Power of Attorney, all together dated December 27, 2018 are referred to the “VIE Agreements”, to the Company in exchange for the issuance of an aggregate of 15,000,000 shares of the Company’s common stock, par value $.0001 per share, thereby causing Fangguan Electronics to become the Company’s variable interest entity. Together with VIE agreements, the Shareholders also agreed to convert shareholder loan of RMB 30 million (approximately $4.4 million) to capital and make cash contribution of RMB 9.7 million (approximately $1.4 million) to capital. The entirety of the transaction will hereafter be referred to as the “Transaction”. As a result of the Transaction, the Company is able to exert effective control over Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics. Fangguan Electronics manufactures and sells Liquid Crystal Module (" LCM") and LCD screens in China based in Changchun City, Jilin Province, People’s Republic of China. (See Note 4).

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

NOTE 2 - GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had an accumulated deficit of $741,820 as of March 31, 2021. The Company incurred loss from operation and did not generate sufficient cash flow from its operating activities for the nine months ended March 31, 2021. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

F-6

NOTE 3 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2021 and the results of operations and cash flows for the periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2021 or for any subsequent periods. The balance sheet at June 30, 2020 has been derived from the audited consolidated financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2020 as included in our Annual Report on Form 10-K as filed with the SEC on September 28, 2020.

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation.

Noncontrolling Interests

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

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 4, therefore no income or loss is allocated to NCI.

Use of Estimates

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

Cash and cash equivalents

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

F-7

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and June 30, 2020, the Company has accounts receivable balance from non-related party of $3,253,702 and $3,273,141, net of allowance for doubtful accounts of $150,406 and $139,609, respectively. No bad debt expense was recorded during the three and nine months ended March 31, 2021 and 2020.

Inventories

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

Advances to suppliers

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

Property, plant and equipment

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

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

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

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

Intangible assets

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

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

Land use right	50 years
Computer software	2-5 years

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

F-8

Impairment of long-lived assets

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

Revenue recognition

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

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

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

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

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

· recognize revenue as the performance obligation is satisfied.

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

The following tables disaggregate our revenue by major source for the three and nine months ended March 31, 2021 and 2020, respectively:

	For the Nine Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	9,100,076	$	14,518,376
Sales of LCM and LCD screens - Related parties		-		718,194
Sales of portable power banks		-		1,719,127
Service contracts		2,018		629,771
Total	$	9,102,094	$	17,585,468

	For the Three Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	3,160,474	$	2,487,465
Sales of LCM and LCD screens - Related parties		-		73,802
Sales of portable power banks		-		181,033
Service contracts		272		9,870
Total	$	3,160,746	$	2,752,170

All the operating entities of the Company are domiciled in the PRC. All the Company’s revenues are derived in the PRC during the three and nine months ended March 31, 2021 and 2020.

Cost of revenues

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

F-9

Related parties and transactions

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

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

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

Income taxes

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

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

As of March 31, 2021 and June 30, 2020, the Company did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

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

Leases

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

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

The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months as of March 31, 2021 (See Note 6).

Earnings (losses) per share

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

F-10

During the nine months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 1,096,705 and 899,753 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 68,750 and 842,313 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

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

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

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

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

	March 31, 2021		June 30, 2020
Balance sheet items, except for equity accounts		6.5713		7.0795

	Nine Months Ended March 31,
	2021		2020
Items in statements of comprehensive income (loss) and cash flows		6.8254		6.9799

Fair Value of Financial Instruments

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

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

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

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

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

F-11

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

The Company has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 14).

Convertible Instruments

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

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

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

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

Common Stock Purchase Warrants

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

Recent accounting pronouncements

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

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

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The guidance is effective for public entities for Calendar years beginning after December 15, 2020 and interim periods within those Calendar years and all other entities for Calendar years beginning after December 15, 2021 and interim periods within those Calendar years, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU on the Company’s consolidated financial statements.

F-12

COVID-19

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

From late January 2020 to the middle of March 2020, the Company had to temporarily suspend our manufacturing activities due to government restrictions. During the temporary business closure period, our employees had very limited access to our manufacturing facilities and the shipping companies were not available and as a result, the Company experienced difficulty delivering our products to the customers on a timely basis. In addition, due to the COVID-19 outbreak, some of the customers or suppliers may experience financial distress, delay or default on their payments, reduce the scale of their business, or suffer disruptions in their business due to the outbreak.

As of the date of this filing, the COVID-19 coronavirus outbreak in China appears to have slowed down and most provinces and cities have resumed business activities under the guidance and support of the government. However, there is still significant uncertainty regarding the possibility of a second wave of infections, and the breadth and duration of business disruptions related to COVID-19, which could continue to have material impact to the Company’s operations. Moreover, the COVID-19 resurgence which occurred early May 2021 would cause one and off traffic restrictions and lockdowns and put numerous business negotiations and sales contracts signing on hold. It would also have adverse impacts on our supply chains. Currently we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future business continuity plans or whether material resource constraints in implementing these plans. Up to the date of this report, the assessment is still in progress.

F-13

NOTE 4 - VARIABLE INTEREST ENTITY

The VIE contractual arrangements

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

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

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

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

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

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

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

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

Assets of Fangguan Electronics that are collateralized or pledged are not restricted to settle its own obligations. The creditors of Fangguan Electronics do not have recourse to the primary beneficiary’s general credit.

Risks associated with the VIE structure

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

· revoke the business and operating licenses of the Company’s PRC subsidiary and its VIE;

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

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

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

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

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

F-14

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

	Balance as of March 31, 2021		Balance as of June 30, 2020
Cash and cash equivalents	$	326,885	$	1,266,426
Notes receivable		99,327		125,798
Accounts receivable - non-related parties		3,092,630		3,069,629
Inventory		3,648,512		2,639,839
Advances to suppliers - non-related parties		737,284		530,670
Prepaid expenses and other current assets		62,442		58,103
Total Current Assets		7,967,080		7,690,465
Property, plant and equipment, net		6,788,886		6,568,874
Intangible assets, net		1,491,089		1,424,404
Deferred tax assets		49,257		20,743
Total Assets	$	16,296,312	$	15,704,486
Short-term bank loan	$	1,217,415	$	2,034,735
Accounts payable		2,650,376		2,637,792
Advance from customers		16,648		27,501
Due to related parties		2,221,473		1,407,145
Accrued expenses and other current liabilities		29,076		61,856
Total Current Liabilities		6,134,988		6,169,029
Total Liabilities	$	6,134,988	$	6,169,029

F-15

NOTE 5 - INVENTORIES

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

	March 31, 2021		June 30, 2020
Raw materials	$	1,068,375	$	666,981
Work-in-process		1,128,040		500,331
Finished goods		1,997,253		2,096,538
Total Inventories	$	4,193,668	$	3,263,850

The Company recorded no inventory markdown for the three and nine months ended March 31, 2021 and 2020. 

NOTE 6 - OPERATING LEASE

For the nine months ended March 31, 2021, the Company had two real estate operating leases for office, warehouses and manufacturing facilities under the terms of one year.

Lisite Science Technology (Shenzhen) Co., Ltd ("Lisite Science") leases office and warehouse space from Shenzhen Keenest Technology Co., Ltd. (“Keenest”), a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 11).

Shenzhen Baileqi Electronic Technology Co., Ltd. ("Baileqi Electronic") leases office and warehouse space from Shenzhen Baileqi Science and Technology Co., Ltd. (“Shenzhen Baileqi S&T”), a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). (See Note 11).

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

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET

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

	March 31, 2021			June 30, 2020
Buildings	$	4,987,484		$	4,601,685
Machinery and equipment		3,207,568			2,822,686
Office equipment		73,317			67,091
Automobiles		106,492			98,848
Subtotal		8,374,861			7,590,310
Less: Accumulated depreciation		(1,581,266	)		(1,016,373	)
Property, plant and equipment, net	$	6,793,595		$	6,573,937

Depreciation expense related to property, plant and equipment was $468,186 and $558,789 for the nine months ended March 31, 2021 and 2020, respectively.

Depreciation expense related to property, plant and equipment was $167,245 and $174,381 for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021 and June 30, 2020, buildings were pledged as collateral for bank loans (See Note 9).

F-16

NOTE 8 – INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	March 31, 2021			June 30, 2020
Land use right	$	1,554,011		$	1,442,456
Computer software		29,399			25,039
Subtotal		1,583,410			1,467,495
Less: Accumulated amortization		(92,321	)		(43,091	)
Intangible assets, net	$	1,491,089		$	1,424,404

Amortization expense related to intangible assets was $44,189 and $21,836 for the nine months ended March 31, 2021 and 2020, respectively.

Amortization expense related to intangible assets was $10,063 and $7,164 for the three months ended March 31, 2021 and 2020, respectively.

Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31, 2021 and June 30, 2020, land use right was pledged as collateral for bank loans (See Note 9).

NOTE 9 – SHORT-TERM BANK LOAN

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

		March 31, 2021		June 30, 2020
Loan payable to Industrial Bank, due November 2020	(1)	$	-	$	1,836,288
Loan payable to Industrial Bank, due May 2021	(2)		166,290		154,353
Loan payable to Industrial Bank, due June 2021	(2)		47,504		44,094
Loan payable to Industrial Bank, due August 2021	(3)		547,090		-
Loan payable to Industrial Bank, due June 2021	(4)		456,531		-
Total		$	1,217,415	$	2,034,735

(1) On November 19, 2019, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.7 million (RMB 18 million) for a year until November 18, 2020 with annual interest rate of 5.22%. The borrowing was collateralized by the Company’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On May 20, 2020, Fangguan Electronics partially repaid this bank loan of approximately US$760,000 (RMB5,000,000). On August 28, 2020 and September 21, 2020, Fangguan Electronics further partially repaid this bank loan of approximately US$457,000 (RMB3,000,000) and US$760,000 (RMB5,000,000) respectively. On November 18, 2020, Fangguan Electronics repaid the remaining balance in full of this bank loan of approximately US$760,000 (RMB5,000,000).

(2) During May and Jun 2020, Fangguan Electronics issued two one-year commercial acceptance bills with amounts of approximately US$166,000 (RMB1,092,743) and US$48,000 (RMB312,161) and maturity dates at May 21, 2021 and June 11, 2021 respectively. On May 22, 2020 and June 16, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.85% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the aforementioned RMB18 million loan under the same bank.

(3) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$547,000 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$457,000 (RMB3,000,000) in full upon maturity.

(4) During December 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at June 4, 2021. On December 7, 2020, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank.

F-17

NOTE 10 - STOCKHOLDERS' EQUITY

Stock Issued for Conversion of Convertible Debt

During the nine months ended March 31, 2021, the Company issued a total of 9,470,630 shares of common stock for the conversion of debt in the principal amount of $273,200 together with all accrued and unpaid interest, according to the conditions of the convertible notes. All these conversions resulted in a total loss on extinguishment of debt of $256,639 for the nine months ended March 31, 2021. The remaining principal balance due under convertible notes after these conversions and other debt settlements (See Note 14) is zero.

Stock Issued for Exercise of Warrants

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full, according to the conditions of the convertible note dated as September 11, 2019. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31, 2021. (See Note 14)

Stock Issued for Private Placement

In December 2020, the Company issued a total of 28,869,999 shares of common stock to nine individual subscribers for an aggregate purchase price of $433,000 at $0.015 per share, according to the conditions of the subscription agreements signed between the Company and subscribers.

On January 13, 2021, the Company issued a total of 7,000,000 shares of common stock to one individual subscriber for purchase price of $105,000 at $0.015 per share, according to the conditions of the subscription agreement signed by both parties.

Stock Issued as Commitment Shares for Promissory Note

On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted.

On December 31, 2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 15) 

On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted.

On March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 15)

F-18

NOTE 11 - RELATED PARTY TRANSACTIONS AND BALANCES

Purchase from related party

During the nine months ended March 31, 2020, the Company purchased $1,642,532 and $37,495 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.3% and 0.7% respectively of the Company’s outstanding common stock. The amounts of $1,642,532 and $37,495 were included in the cost of revenue for the nine months ended March 31, 2020.

During the three months ended March 31, 2020, the Company purchased $177,995 and $0 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.3% and 0.7% respectively of the Company’s outstanding common stock. The amounts of $177,995 and $0 were included in the cost of revenue for the three months ended March 31, 2020. 

Advances to suppliers - related parties

Lisite Science made advances of $426,852 and $357,577 to Keenest for future purchases as of March 31, 2021 and June 30, 2020, respectively.

Sales to related party

During the nine months ended March 31, 2021 and 2020, Baileqi Electronic sold materials of $0 and $718,194 respectively to Shenzhen Baileqi S&T.

During the three months ended March 31, 2021 and 2020, Baileqi Electronic sold materials of $0 and $73,802 respectively to Shenzhen Baileqi S&T.

Lease from related party

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 6).

Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). (See Note 6).

Due to related parties

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

		March 31, 2021		June 30, 2020
Ben Wong	(1)	$	143,792	$	143,792
Yubao Liu	(2)		398,866		102,938
Xin Sui	(3)		2,016		2,016
Baozhen Deng	(4)		5,601		9,437
Shenzhen Baileqi S&T	(5)		23,937		-
Jialin Liang	(6)(11)		1,676,679		901,460
Xuemei Jiang	(7)(10)		544,793		505,685
Shikui Zhang	(8)		51,800		28,528
Changyong Yang	(9)		32,151		23,063
		$	2,879,635	$	1,716,919

F-19

(1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(3) Xin Sui is a member of the board of directors of Welly Surplus.

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

(5) Shenzhen Baileqi S&T is a company owned by Baozhen Deng, a stockholder of the Company.

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

(7) Xuemei Jiang is a stockholder of the Company and the vice president and director of Fangguan Electronics.

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

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

(10) The liability was assumed from the acquisition of Fangguan Electronics.

(11) The Company assumed liability of approximately $5.8 million (RMB39,581,883) from Jialin Liang during the acquisition of Fangguan Electronics. During the year ended June 30, 2019, approximately $4.4 million (RMB30,000,000) liability assumed was forgiven and converted to capital.

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

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

On September 23, 2020, Jialin Liang entered into a short-term loan agreement with Bank of Communications to borrow an individual loan of approximately US$457,000 (RMB 3 million) for one year with annual interest rate of 3.85%. The borrowing was guaranteed by Fangguan Electronics. Pursuant to the loan agreement, the proceed from the bank loan could only be used in the operation of Fangguan Electronics. On September 23, 2020, Jialin Liang advanced all of the proceeds from this bank loan to Fangguan Electronics. In March 2021, Jialin Liang further advanced approximately $249,000 (RMB 1,636,080) to Fangguan Electronics for operational needs.

During the nine months ended March 31, 2020, Yubao Liu was refunded $46,225 by Welly Surplus and Well Best after netting off his advances to Well Best. Baileqi Electronic refunded $5,303 to Baozhu Deng and Baozhen Deng advanced $2,706 to Baileqi Electronic. Shizhe New Energy refunded $625 and $1,869 to Liang Zhang and Zijian Yang respectively. Shikui Zhang advanced $21,732 to Shizhe New Energy.

F-20

NOTE 12 – CONCENTRATION

Major customers

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,047,553		12	%	$	24,960		1	%
Customer B		2,009,817		11	%		376,704		10	%
Total	$	4,057,370		23	%	$	401,664		11	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of total accounts  receivable
Customer A	$	315,541		11	%	$	24,960		1	%
Customer B		748,422		27	%		376,704		10	%
Total	$	1,063,963		38	%	$	401,664		11	%

Primarily all customers are located in the PRC.

F-21

Major suppliers

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A – related party	$	1,642,532		12	%	$	-		-	%
Supplier B		2,582,034		19	%		-		-	%
Total	$	4,224,566		31	%	$	-		-	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	413,924		18	%	$	-		-	%
Total	$	413,924		18	%	$	-		-	%

All suppliers of the Company are located in the PRC.

F-22

NOTE 13 - INCOME TAXES

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

United States of America

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

For the three and nine months ended March 31, 2021 and 2020, the Company did not generate income in United States of America and no provision for income tax was made. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three-year period after the returns are filed.  In unusual circumstances, the period may be longer.  Tax returns for the years ended June 30, 2016 and after were still open to audit as of March 31, 2021.

Hong Kong

The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the three and nine months ended March 31, 2021 and 2020, there is no assessable income chargeable to profit tax in Hong Kong.

The PRC

The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2019 to 2021.

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

	For the Nine Months Ended March 31,
	2021			2020
Tax (benefit) at U.S. statutory rate	$	(215,790	)	$	76,062
Tax rate difference between foreign operations and U.S.		26,511			(88,730	)
Change in valuation allowance		155,922			168,429
Permanent difference		9,802			(4,274	)
Effective tax (benefit)	$	(23,555	)	$	151,487

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

	For the Nine Months Ended March 31,
	2021			2020
Current	$	2,353		$	150,181
Deferred		(25,908	)		1,306
Total	$	(23,555	)	$	151,487

F-23

As of March 31, 2021, the Company has approximately $3,778,000 net operating loss carryforwards available in the U.S., Hong Kong and China to reduce future taxable income which will begin to expire from 2035. It is more likely than not that the deferred tax assets resulted from net operating loss carryforward cannot be utilized in the future because there will not be significant future earnings from the entities which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets resulted from net operating loss carryforward as of March 31, 2021.

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

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

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

For purposes of the inclusion of GILTI, the Company determined that the Company did not have tax liabilities resulting from GILTI for the three and nine months ended March 31, 2021 and 2020 due to net operating loss carryforwards available in the U.S. Therefore, there was no accrual of GILTI liability as of March 31, 2021 and June 30, 2020.

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

F-24

NOTE 14 - CONVERTIBLE DEBT

Convertible notes

Convertible notes payable balance was zero as of March 31, 2021.

As of June 30, 2020, convertible notes payable consists of:

		Note Balance		Debt discount			Carrying Value
Power Up Lending Group Ltd	(1)	$	39,000	$	(1,953	)	$	37,047
Firstfire Global Opportunities Fund LLC	(2)		165,000		(32,909	)		132,091
Power Up Lending Group Ltd	(3)		53,000		(13,995	)		39,005
Crown Bridge Partners	(4)		51,384		(15,095	)		36,289
Morningview Financial LLC	(5)		165,000		(64,416	)		100,584
BHP Capital NY	(6)		91,789		-			91,789
Labrys Fund, LP	(7)		146,850		(69,265	)		77,585
Total		$	712,023	$	(197,633	)	$	514,390

(1) On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

During the nine months ended March 31, 2021, Power Up Lending Group Ltd elected to convert $39,000 of the principal amount together with $4,916 of accrued and unpaid interest of the convertible notes into 264,970 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $32,778. (See Note 10)

The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021.

(2) On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Firstfire Global Opportunities Fund LLC elected to convert $68,850 of the principal amount of the convertible notes into 4,125,000 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $67,512 (See Note 10).

After the foregoing conversions, on November 12, 2020, the Company paid Firstfire Global Opportunities Fund LLC, the holder of the Company’s convertible debt an aggregate of $130,500 in order to terminate their convertible note dated September 11, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 13, 2020. The debt settlement resulted in a gain on extinguishment of debt of $94,928.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(3) On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On September 16, 2020, the Company entered into a Note Settlement Agreement with Power Up Lending Group Ltd., the holder of the Company’s convertible debt. The Note Settlement Agreement terminated their convertible note dated November 4, 2019, including all accrued and unpaid interest, after the Company paid an aggregate of $75,000 on September 16, 2020. The debt settlement resulted in a gain on extinguishment of debt of $15,346.

F-25

(4) On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019. The conversion resulted in a loss on extinguishment of debt of $22,424. (See Note 10)

After the foregoing conversions, on December 7, 2020, the Company paid Crown Bridge Partners, LLC, the holder of the Company’s convertible debt an aggregate of $82,500 in order to terminate their convertible note dated November 12, 2019, including all accrued and unpaid interest. Among the total, payment of $60,000 was made by Yubao Liu on behalf of the Company while the remaining payment of $22,500 was made directly by the Company. The note holder confirmed this full settlement on December 10, 2020. The debt settlement resulted in a gain on extinguishment of debt of $206,377.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(5) On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On September 24, 2020, Morningview Financial, LLC elected to convert $15,000 of the principal amount of the convertible notes into 568,182 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $5,907. (See Note 10)

After the foregoing conversions, on November 12, 2020, the Company paid Morningview Financial, LLC, the holder of the Company’s convertible debt an aggregate of $175,000 in order to terminate their convertible note dated November 20, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 14, 2020. The debt settlement resulted in a gain on extinguishment of debt of $209,604.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31 ,2021.

(6) On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On April 14, 2020, the Company entered into an Amendment to Securities Purchase Agreement with BHP Capital NY, Inc dated on December 3, 2019. The Company agreed to pay off this note holder in 6 installments of $23,186.79 each, with an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The repayment resulted in a loss on extinguishment of debt of $4,703, which was included in other income and expense in the consolidated statement of comprehensive income (loss) for the year ended June 30, 2020.

In May and June 2020, the Company paid two installments totaling $46,373 (including principal of $45,325 and interest of $1,048) and note payable balance decreased to $91,789 as of June 30, 2020. During the period from July to September 2020, the Company continued to pay 4 installments of an aggregate amount of $92,748 (including principal of $91,789 and interest of $959).

As of the date of this report, the Company has made total six installments payment of an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The note payable balance decreased to zero as of March 31, 2021.

F-26

(7) On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Labrys Fund, LP elected to convert $146,850 of the principal amount together with all accrued and unpaid interest of the convertible notes into 4,012,478 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $128,018. The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021. (See Note 10)

All convertible notes aforementioned

For the nine months ended March 31, 2021 and 2020, the Company recorded the amortization of debt discount of $138,399 and $351,474 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

For the three months ended March 31, 2021 and 2020, the Company recorded the amortization of debt discount of $0 and $170,138 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

Derivative liability

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

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

The change of derivative liabilities is as follows:

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

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

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

Warrants

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

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31, 2021. After this exercise, FirstFire Global Opportunities Fund, LLC is not entitled to any warrant to purchase shares. (See Note 10)

F-27

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

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

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

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

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

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

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

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

The details of the outstanding warrants are as follows:

	Number of shares			Weighted Average Exercise Price		Remaining Contractual Term (years)
Outstanding at July 1, 2020		229,166		$	2.68		4.2 to 4.53
Granted		-			-		-
Exercised or settled		(160,416	)		2.63		4.05 to 4.16
Cancelled or expired		-			-		-
Outstanding at March 31, 2021		68,750		$	2.80		3.78

F-28

NOTE 15 – PROMISSORY NOTE

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

In connection with the issuance of promissory note, on December 31, 2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 10)

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

In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 10)

For the three and nine months ended March 31, 2021, the Company recorded the amortization of debt discount of $37,532 and $38,806 for the self-amortization promissory notes issued, which was included in other income and expense in the consolidated statement of comprehensive income (loss).

NOTE 16 – SEGMENT INFORMATION

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

Although all of the Company’s revenue is generated from Mainland China, the Company is organizationally structured along business segments. The accounting policies of each operating segments are same and are described in Note 3, “Summary of Significant Accounting Policies”.

F-29

The following tables provide the business segment information for the three and nine months ended March 31, 2021 and 2020.

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

	For the Nine Months Ended March 31, 2020
	Smart energy		Photoelectric display		Service contracts		Unallocated items			Total
Revenues	$	1,719,127	$	15,236,570	$	629,771	$	-		$	17,585,468
Cost of Revenues		1,642,532		12,786,020		421,642		-			14,850,194
Gross profit		76,595		2,450,550		208,129		-			2,735,274
Operating expenses		10,094		1,491,200		25,326		497,501			2,024,121
Income (loss) from operations		66,501		959,350		182,803		(497,501	)		711,153
Net income (loss)	$	59,915	$	779,838	$	165,603	$	(794,644	)	$	210,712

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

	For the Three Months Ended March 31, 2020
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	181,033		$	2,561,267		$	9,870		$	-		$	2,752,170
Cost of Revenues		177,995			2,256,426			72,097			-			2,506,518
Gross profit (loss)		3,038			304,841			(62,227	)		-			245,652
Operating expenses		3,960			377,641			8,109			248,935			638,645
Loss from operations		(922	)		(72,800	)		(70,336	)		(248,935	)		(392,993	)
Net income (loss)	$	347		$	(83,297	)	$	(64,462	)	$	(488,810	)	$	(636,222	)

F-30

NOTE 17 - SUBSEQUENT EVENTS

On May 6, 2021, our Board of Directors (the “Board”) approved the following actions which are also taken by written consent in lieu of a meeting by the holders of a majority of the voting power of our outstanding capital stock as of the same date:

(1) An increase in the total number of authorized stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation;

(2) To effect, at the discretion of the Company’s Board, a reverse stock split of all outstanding shares of the Company’s Common Stock, at a ratio of not less than 1-for-2 and not greater than 1-for-10, such ratio to be determined by the Company’s Board at any time before April 30, 2022, without further approval or authorization of our stockholders (the “Reverse Stock Split”) and related amendment to our Articles of Incorporation.

END NOTES TO FINANCIAL STATEMENTS

F-31

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

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

Results of Operation for the Three and Nine months Ended March 31, 2021 and 2020

Calendar year 2020 was challenging and disruptive for the world, with the COVID-19 pandemic adding to the headwind of an already challenging global economy. Almost no industry was unaffected by the pandemic. The unprecedentedly adverse global operating environment had a major impact on our business and reversed the Company's continuous growth. 

The operations of the Company during the nine months ended March 31, 2021 experienced some minor delays and were adversely affected by the COVID-19 travel restrictions and lockdowns implemented nationwide. Decreases in revenue and operating profits during the nine months ended March 31, 2021 were a result of the unprecedented adverse market condition caused by the outbreak of COVID-19 pandemic since January 2020.

During the nine months ended March 31, 2021, the significant decrease in sales revenue is mainly attributable to the adverse impact of COVID-19 in various ways, from the continuous weakening demand in the PRC consumer market and continuous competition from other brands against the goods which the Company has been trading coupled with the unfavorable and ongoing adverse trading environment and the disruptions caused by COVID-19, limitation of marketing efforts, disruptions of product delivery to the Company’s customers due to certain customers 's reducing their budgets or delaying their procurement plans, leading to a decrease in the new orders placed with the Company. The Company believes that such effect is temporary and will not have major impact on the long-term performance of the Company.

During the nine months ended March 31, 2021, the gross profit decreases were mainly attributable to: (1) the drop in production volume of the Company as a result of the adverse impact of the COVID-19; (2) in certain areas in Northeast of China, the PRC government, as a preventive measure in response to the COVID-19, had implemented the movement control order which involved prohibition of movement of people which adversely affected the Company’s supply chain in raw materials. And the poor market sentiment has led to the significant drop in demand and selling prices of the Company’s products, while the prices of glass, which is the raw material for the Company's production, have increased substantially due to tightened supply of glass from the supply chain reform in the PRC; and (3) in addition to the economic contraction caused by prolonged outbreak of COVID-19, the fact that Changchun City where Fangguan Electronics was located had endured dozens of blizzards in November and December 2020, also led to the slow-down of the businesses of the Company.

The significant decrease in net income from the nine months ended March 31, 2020 to the nine months ended March 31, 2021 is primarily attributed to: (1) a decrease in the Company’s revenue by approximately 48% resulting from the disruption of the Company’s business operations caused by the COVID-19; (2) a decrease in the Company's gross profit margin from 16% for the nine months ended March 31, 2020 to approximately 11% for the nine months ended March 31, 2021 resulting from the drop in sales price and increase in raw material price, mainly as a result of the reduction in operation efficiency during the outbreak of COVID-19; (3) a significant increase in non-recurring other expenses such as change in fair value of derivative liability; and offset by (4) a decrease in the Company’s operating expenses by approximately 30% resulting from cost saving measures including but not limited to reduction in salary, rent and R&D expenditures. Excluding the aforementioned non-recurring change in fair value of derivative liability, the reduction in net profit for the nine months ended March 31, 2021 as compared with the corresponding period of last year would be narrowed down from approximately $1.2 million to approximately $0.6 million instead.  

32

Nevertheless the Company survived and thrived against all odds: besides carrying out a more stringent cost control through the Company’s persistent effort in cost reduction, the Company implemented the workplace safety measures as per government guidelines, including work from home arrangements whenever appropriate, and protected the client relationships by maintaining communication and working with them to deal with the delaying or canceling orders. With the gradual stabilization of the domestic photoelectric display industry, the Company would anticipate a steady increase in the sales of LCM and LCD.

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

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

During the Spring of calendar year 2021, the anticipated recovery in the economy of PRC realized gradually while the negative impact of COVID-19 remains. The Company maintains optimistic cautious and is paying close attention to the evolving development of, and the disruption to business and economic activities caused by the COVID-19 outbreak and evaluates its impact on the financial position, cash flows and operating results of the Company. Given the dynamic nature of the COVID-19 outbreak, it is not practicable to provide a reasonable estimate of its impacts on the Company’s financial position, cash flows and operating results at the present.

Revenues

During the three and nine months ended March 31, 2021, COVID-19 continued to affect the operational and financial performance of the Company. However, the gradual recovery of revenue that was ever expected previously already realized.

During the three months ended March 31, 2021 and 2020, total revenues were $3,160,746 and $2,752,170 respectively. The total revenues increased by $408,576 or 15% from the three months ended March 31, 2020 to the three months ended March 31, 2021.

During the nine months ended March 31, 2021 and 2020, total revenues were $9,102,094 and $17,585,468 respectively. The total revenues decreased by $8,483,374 or 48% from the nine months ended March 31, 2020 to the nine months ended March 31, 2021.

Among the decrease of $8,483,374 in total revenues for the nine months ended March 31, 2021, $5,199,704 decrease was due to the revenue decrease from Fangguan Electronics which was acquired on December 27, 2018. In addition, the decrease in total revenues during the nine months ended March 31, 2021 was partially attributed to the decreases of $2,346,880 in service contract and smart energy segments as compared with the nine months ended March 31, 2020. The decrease during the nine months ended March 31, 2021 can be directly attributed to the fact that the continuous outbreak of COVID-19 induced the numerous shutdowns and suspensions of commercial activities in certain cities and provinces which have caused the significantly adverse effects on the business of the Company during calendar year of 2020.

Among the increase of $408,576 in total revenues for the three months ended March 31, 2021, revenue from Fangguan Electronics increased by $824,073, offset by the decrease of $190,631 in service contract and smart energy segments. The increase during the three months ended March 31, 2021 can be attributed to the gradual recovery of the Company's business following the economic rebound in the spring of the calendar year of 2021.

The decrease in smart energy revenue for the three and nine months ended March 31, 2021 as compared with 2020 was due to the fact that the global economy is on track to contract in calendar year of 2020 as a result of the COVID-19 pandemic and the overseas enterprises ceased placing orders from our major customers in smart energy segment. Then our business was hit by the chain reaction. As for the service contract business, mainly due to COVID-19, all old contracts were completed while new contracts have not been signed.

Cost of Revenue

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

During the three months ended March 31, 2021 and 2020, the total cost of revenues was $2,802,497 and $2,506,518 respectively. The total cost of revenues increased by $295,979 or 12% from the three months ended March 31, 2020 to the three months ended March 31, 2021.

During the nine months ended March 31, 2021 and 2020, the total cost of revenues was $8,071,941 and $14,850,194 respectively. The total cost of revenues decreased by $6,778,253 or 46% from the nine months ended March 31, 2020 to the nine months ended March 31, 2021.

Among the increase of $295,979 in total cost of revenues for the three months ended March 31, 2021, $710,723 increase came from Fangguan Electronics, offset by the decrease of $250,115 in total cost of revenues from service contract and smart energy segments. Among the decrease of $6,778,253 in total cost of revenues for the nine months ended March 31, 2021, $4,070,831 decrease came from Fangguan Electronics and $2,054,015 decrease came from service contract and smart energy segments.

The fluctuation in cost of revenues can be directly attributed to the fluctuation of revenues.

33

Gross Profit

During the three months ended March 31, 2021 and 2020, the gross profit was $358,249 and $245,652, respectively.

The gross profit increased by 46% from the three months ended March 31, 2020 to the three months ended March 31, 2021, which is primarily attributed to the gradual recovery of revenue following the rebound of economy in the spring of the calendar year of 2021. Our gross profit margin maintained at 11% during the three months ended March 31, 2021 as compared to 9% for the three months ended March 31, 2020.

During the nine months ended March 31, 2021 and 2020, the gross profit was $1,030,153 and $2,735,274, respectively.

The gross profit decreased by 62% from the nine months ended March 31, 2020 to the nine months ended March 31, 2021. Our gross profit margin maintained at 11% during the nine months ended March 31, 2021 as compared to 16% for the nine months ended March 31, 2020. The decrease in the Company's gross profit margin is attributed to the drop in sales price and increase in raw material price in calendar year of 2020, mainly as a result of the reduction in operation efficiency during the outbreak of COVID-19.

Selling, General and Administrative Expenses

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

During the three months ended March 31, 2021 and 2020, selling, general and administrative expenses were $327,372 and $499,616, respectively.

During the nine months ended March 31, 2021 and 2020, selling, general and administrative expenses were $985,273 and $1,378,241, respectively.

The decrease in selling, general and administrative expenses can be attributed to the stricter cost control during the three and nine months ended March 31, 2021.

Research and Development Expenses

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

During the three months ended March 31, 2021 and 2020, research and development expenses were $147,871 and $139,029, respectively. During the nine months ended March 31, 2021 and 2020, research and development expenses were $425,111 and $645,880 respectively. All research and development expenses were incurred by Fangguan Electronics (a variable interest entity of the Company since December 27, 2018).

The decrease in research and development expenses during the nine months ended March 31, 2021 can be attributed to the decrease of materials expenditures during the period.

34

Other Incomes (Expenses)

Other expenses consisted of interest expense, net of interest income. Other incomes consisted primarily of subsidy income and gain on extinguishment of debt, net of loss on extinguishment of debt. Change in fair value of derivative liability was an expense for the nine months ended March 31, 2021 and an income for the nine months ended March 31, 2020.

During the three months ended March 31, 2021 and 2020, other incomes (expenses) were $3,349 and $(273,191) respectively. The other income (expense) increased by $276,540 or 101% from the three months ended March 31, 2020 to the three months ended March 31, 2021.

During the nine months ended March 31, 2021 and 2020, other incomes (expenses) were $(647,342) and $(348,954) respectively. The other income (expense) decreased by $298,388 or 86% from the nine months ended March 31, 2020 to the nine months ended March 31, 2021.

The difference of interest expense was mainly due to the decrease of debt discount as the convertible notes either approached the maturity date or were settled during the nine months ended March 31, 2021 as compared with the same period of 2020.

The subsidy income was from Fangguan Electronics and Baileqi Electronic which received government subsidies during the three and nine months ended March 31, 2021 and 2020.

The change in fair value of derivative liability can be attributed to the fact that stock price of the Company were more volatile during the nine months ended March 31, 2021 as compared with same period of 2020.

The gain on extinguishment of debt of $202,588 during the nine months ended March 31, 2021 can be primarily attributed to the gain of $459,227 from settlement of four convertible notes (including warrants and all accrued and unpaid interests), offset by loss of $256,639 from the conversion of convertible notes to 9,470,630 common shares in the principal amount of $273,200 for the nine months ended March 31, 2021. The loss on extinguishment of debt can be attributed to the conversion of convertible notes in the principal amount of $34,000 during the three and nine months ended March 31, 2020.

Net Income (Loss)

During the three months ended March 31, 2021 and 2020, our net income (loss) was $(115,594) and $(636,222) respectively. The total net loss decreased by $520,628 or 82% from the three months ended March 31, 2020 to the three months ended March 31, 2021.

During the nine months ended March 31, 2021 and 2020, our net income (loss) was $(1,004,018) and $210,712, respectively. The total net income (loss) decreased by $1,214,730 or 576% from the nine months ended March 31, 2020 to the nine months ended March 31, 2021.

The significant decrease in net income from the nine months ended March 31, 2020 to the nine months ended March 31, 2021 is primarily attributed to: (1) a decrease in the Company’s revenue by approximately 48% resulting from the disruption of the Company’s business operations caused by the COVID-19; (2) a decrease in the Company's gross profit margin from 16% for the nine months ended March 31, 2020 to approximately 11% for the nine months ended March 31, 2021 resulting from the drop in sales price and increase in raw material price, mainly as a result of the reduction in operation efficiency during the outbreak of COVID-19; (3) a significant increase in non-recurring other expenses such as change in fair value of derivative liability; and offset by (4) a decrease in the Company’s operating expenses by approximately 30% resulting from cost saving measures including but not limited to reduction in salary, rent and R&D expenditures. Excluding the aforementioned non-recurring change in fair value of derivative liability, the reduction in net profit for the nine months ended March 31, 2021 as compared with the corresponding period of last year would be narrowed down from approximately $1.2 million to approximately $0.6 million instead.

The significant decrease in net loss from the three months ended March 31, 2020 to the three months ended March 31, 2021 is primarily attributed to the gradual recovery of revenue following the rebound of economy in the spring of calendar year of 2021.

35

Liquidity and Capital Resource

Cash Flow from Operating Activities

During the nine months ended March 31, 2021, net cash used in operating activities was $1,411,451 compared to the cash provided by operating activities of $641,370 for the nine months ended March 31, 2020. The change was mainly due to a decrease of $1,214,730 in net income and an increase of $1,012,057 in cash outflow from changes in operating assets and liabilities in the nine months ended March 31, 2021 compared to the same period in 2020.

Cash Flow from Investing Activities

During the nine months ended March 31, 2021, net cash used in investing activities was $192,524 compared to net cash used in investing activities of $71,895 for the same period in 2020. The change was primarily due to the fact that there were proceeds from sale of equipment of $121,715 during the nine months ended March 31, 2020 while no sales of fixed assets or intangible assets during the same period in 2021.

Cash Flow from Financing Activities

During the nine months ended March 31, 2021, cash provided by financing activities was $787,342 compared to net cash provided by financing activities of $787,503 for the same period in 2020. The change was immaterial during the nine months ended March 31, 2021 compared to same period of 2020.

As of March 31, 2021, we have a working capital of $2,165,185.

Our total current liabilities as of March 31, 2021 were $7,748,280 and mainly consisted of $1,217,415 for short-term bank loans, $2,650,376 in accounts payable, the amount due to related parties of $2,879,635, advance from customers of $351,225 and the self-amortized promissory notes of $571,093. The Company’s major shareholder is committed to providing for our minimum working capital needs for the next 12 months, and we do not expect the previous related party loan be payable for the next 12 months. However, we do not have a formal agreement that states any of these facts. The remaining balance of our current liabilities relates to audit and consulting fees and such payments are due on demand and we expect to settle such amounts on a timely basis based upon shareholder loans to be granted to us in the next 12 months.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had an accumulated deficit of $741,820 as of March 31, 2021. The Company incurred loss from operation and did not generate sufficient cash flow from its operating activities for the nine months ended March 31, 2021. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

Future Financings

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

Off-Balance Sheet Arrangements

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

36

Critical Accounting Policies

Our critical accounting policies are disclosed Note 3 to the consolidated financial statements.

Recently Issued Accounting Pronouncements

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

Contractual Obligations

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2021.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting subsequent to the fiscal year ended June 30, 2020, which were identified in connection with our management’s evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

Limitations of the Effectiveness of Disclosure Controls and Internal Controls

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

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

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

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

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest. 

Item 1A. Risk Factors.

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

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

(a) Recent Sales of Unregistered Equity Securities 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

39

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

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

Item 3. Defaults Upon Senior Securities. 

None.

Item 4. Mine Safety Disclosures.

N/A.

Item 5. Other Information.

None.

40

Item 6. Exhibits.

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

41

10.08	Compilation of Labrys Securities Purchase Agreement, Self-Amortization Promissory Note and Other Agreements (Filed herewith)	File with SEC on January 5, 2021 as part of our Current Report on Form 8-K
21.1	List of Subsidiaries	Filed herewith.
31.01	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed herewith.
31.02	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
32.02	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.
101.INS*	XBRL Instance Document	Filed herewith.
101.SCH*	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document	Filed herewith.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith.

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

42

SIGNATURES

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

	Ionix Technology, Inc.
Date: May 17, 2021	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief Executive Officer and Director
	(Principal Executive Officer)

Date: May 17, 2021	By:	/s/ Yue Kou
	Name:	Yue Kou
	Title:	Chief Financial Officer
	(Principal Financial and Principal Accounting Officer)

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

	Ionix Technology, Inc.
Date: May 17, 2021	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief Executive Officer, Director
	(Principal Executive Officer)

Date: May 17, 2021	By:	/s/ Yue Kou
	Name:	Yue Kou
	Title:	Chief Financial Officer (Principal
	Financial and Principal Accounting Officer)

43

Date: May 17, 2021	By:	/s/ Yang Yan
	Name:	Yang Yan
	Title:	President and Treasurer

Date: May 17, 2021	By:	/s/ Yubao Liu
	Name:	Yubao Liu
	Title:	Director

Date: May 17, 2021	By:	/s/ Jialin Liang
	Name:	Jialin Liang
	Title:	Director

Date: May 17, 2021	By:	/s/ Xuemei Jiang
	Name:	Xuemei Jiang
	Title:	Director

Date: May 17, 2021	By:	/s/ Yongping Wang
	Name:	Yongping Wang
	Title:	Independent Director

Date: May 17, 2021	By:	/s/ Yongsheng Fu
	Name:	Yongsheng Fu
	Title:	Independent Director

Date: May 17, 2021	By:	/s/ Zhenyu Wang
	Name:	Zhenyu Wang
	Title:	Independent Director

Date: May 17, 2021	By:	/s/ Xiaolin Wei
	Name:	Xiaolin Wei
	Title:	Independent Director

Date: May 17, 2021	By:	/s/ Liyan Wang
	Name:	LiyanWang
	Title:	Independent Director

44

EX-21.1

Exhibit 21.1

LIST OF SUBSIDIARIES OF IONIX TECHNOLOGY, INC.

(As of May 17, 2021)

1.Well Best International Investment Limited.

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

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

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

3.Shenzhen Baileqi Electronic Technology Co., Ltd.

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

4.Welly Surplus International Limited.

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

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

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

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

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

7.Shijirun (Yixing) Technology, Ltd.

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

8.Changchun Fangguan Electronics Technology Co., Ltd

On December 27, 2018, the Company ( through Changchun Fangguan Photoelectric Display Technology Co., Ltd.) entered into VIE agreements with two shareholders of Changchun Fangguan Electronics Technology Co., Ltd.to control 95.14% of the ownership rights and receive 100% of the net profit or net losses derived from the business operations of Changchun Fangguan Electronics.

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

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

EX-31.01

EXHIBIT 31.01

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

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

I, Cheng Li, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the period ended March 31, 2021;

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

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

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

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

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

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

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

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

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

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

	Ionix Technology, Inc.
Date: May 17, 2021	By:	/s/ Cheng Li
	Name:	Cheng Li
	Title:	Chief (Principal) Executive Officer

EX-31.02

EXHIBIT 31.012

CERTIFICATION OF

PRINCIPAL ACCOUNTING OFFICER

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

I, Yue Kou, certify that:

1.      I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the period ended March 31, 2021;

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

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

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

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

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

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

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

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

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

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

	Ionix Technology, Inc.
Date: May 17, 2021	By:	/s/ Yue Kou
	Name:  Yue Kou Title:   Chief (Principal) Accounting and Financial Officer

EX-32.01

EXHIBIT 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Cheng Li, the Chief Executive Officer of Ionix Technology, Inc., certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of the Registrant for the period ended March 31,2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and  results of operations of the Registrant.

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

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

	Ionix Technology, Inc.
Date: May 17, 2021
	By:	/s/ Cheng Li
	Name:  Cheng Li Title:    Chief (Principal) Executive Officer

EX-32.02

EXHIBIT 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Yue Kou, the Chief Accounting and Financial Officer of Ionix Technology, Inc., certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of the Registrant for the period ended March 31, 2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and  results of operations of the Registrant.

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

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

Date: May 17, 2021	Ionix Technology, Inc.
	By:	/s/  Yue Kou
	Name:  Yue Kou Title:    Chief (Principal) Accounting and Financial Officer

XML

Cover - shares	9 Months Ended
	Mar. 31, 2021	May 15, 2021
Cover [Abstract]
Entity Registrant Name	IONIX TECHNOLOGY, INC.
Entity Central Index Key	0001528308
Document Type	10-Q
Document Period End Date	Mar. 31, 2021
Amendment Flag	false
Entity File Number	000-54485
Current Fiscal Year End Date	--06-30
Entity Incorporation, State or Country Code	NV
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	IINX
Entity Reporting Status Current	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		164,041,058
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Current Assets:
Cash and cash equivalents	$ 542,092	$ 1,285,373
Notes receivable	99,327	125,798
Accounts receivable	3,253,702	3,273,141
Inventory	4,193,668	3,263,850
Advances to suppliers - non-related parties	921,417	540,259
Advances to suppliers - related parties	426,852	357,577
Prepaid expenses and other current assets	476,407	320,296
Total Current Assets	9,913,465	9,166,294
Property, plant and equipment, net	6,793,595	6,573,937
Intangible assets, net	1,491,089	1,424,404
Long-term prepaid expenses	512,906
Deferred tax assets	49,257	20,743
Total Assets	18,760,312	17,185,378
Current Liabilities:
Short-term bank loan	1,217,415	2,034,735
Accounts payable	2,650,376	2,637,792
Advance from customers	351,225	43,077
Promissory notes payable, net of debt discount and loan cost	571,093
Convertible notes payable, net of debt discount and loan cost		514,390
Derivative liability		276,266
Due to related parties	2,879,635	1,716,919
Accrued expenses and other current liabilities	78,536	359,577
Total Current Liabilities	7,748,280	7,582,756
Total Liabilities	7,748,280	7,582,756
COMMITMENT AND CONTINGENCIES
Stockholders' Equity:
Preferred stock, $.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding	500	500
Common stock, $.0001 par value, 195,000,000 shares authorized, 164,041,058 and 114,174,265 shares issued and outstanding as of March 31, 2021 and June 30, 2020 respectively	16,404	11,417
Additional paid in capital	10,786,792	9,243,557
Retained earnings (accumulated deficit)	(741,820)	262,198
Accumulated other comprehensive income (loss)	488,563	(357,011)
Total Stockholders' Equity attributable to the Company	10,550,439	9,160,661
Noncontrolling interest	461,593	441,961
Total Stockholders' Equity	11,012,032	9,602,622
Total Liabilities and Stockholders' Equity	$ 18,760,312	$ 17,185,378

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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2021	Jun. 30, 2020
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized	5,000,000	5,000,000
Preferred stock, issued	5,000,000	5,000,000
Preferred stock, outstanding	5,000,000	5,000,000
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, authorized	195,000,000	195,000,000
Common stock, issued	164,041,058	114,174,265
Common stock, outstanding	164,041,058	114,174,265

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
Revenues (See Note 3 and Note 11 for related party amounts)	$ 3,160,746	$ 2,752,170	$ 9,102,094	$ 17,585,468
Cost of Revenues (See Note 11 for related party amounts)	2,802,497	2,506,518	8,071,941	14,850,194
Gross profit	358,249	245,652	1,030,153	2,735,274
Operating expenses
Selling, general and administrative expense	327,372	499,616	985,273	1,378,241
Research and development expense	147,871	139,029	425,111	645,880
Total operating expenses	475,243	638,645	1,410,384	2,024,121
Income (loss) from operations	(116,994)	(392,993)	(380,231)	711,153
Other income (expense):
Interest expense, net of interest income	(42,441)	(213,267)	(262,174)	(470,500)
Subsidy income	45,790		59,876	50,018
Change in fair value of derivative liability		(44,850)	(647,632)	86,602
Gain (loss) on extinguishment of debt		(15,074)	202,588	(15,074)
Total other income (expense)	3,349	(273,191)	(647,342)	(348,954)
Income (loss) before income tax expense (benefit)	(113,645)	(666,184)	(1,027,573)	362,199
Income tax expense (benefit)	1,949	(29,962)	(23,555)	151,487
Net income (loss)	(115,594)	(636,222)	(1,004,018)	210,712
Other comprehensive income (loss)
Foreign currency translation adjustment	(29,945)	(165,507)	865,206	(326,589)
Comprehensive loss	(145,539)	(801,729)	(138,812)	(115,877)
Less: Comprehensive income attributable to noncontrolling interest	19,632		19,632
Comprehensive loss attributable to common stockholders of the Company	$ (165,171)	$ (801,729)	$ (158,444)	$ (115,877)
Earnings (Loss) Per Share - Basic and Diluted (in dollars per share)	$ 0.00	$ (0.01)	$ (0.01)	$ 0.00
Weighted average number of common shares outstanding - Basic and Diluted (in shares)	161,911,380	114,104,735	134,708,314	114,036,665

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]	Accumulated Other Comprehensive Income (loss) [Member]	Non-controlling interest [Member]	Total
Balance at beginning at Jun. 30, 2019	$ 500	$ 11,400	$ 8,829,487	$ 539,866	$ (45,840)	$ 441,961	$ 9,777,374
Balance at beginning (in shares) at Jun. 30, 2019	5,000,000	114,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock warrants issued with convertible notes			20,022				20,022
Net income (loss)				711,276			711,276
Foreign currency translation adjustment					(416,785)		(416,785)
Balance at end at Sep. 30, 2019	$ 500	$ 11,400	8,849,509	1,251,142	(462,625)	441,961	10,091,887
Balance at end (in shares) at Sep. 30, 2019	5,000,000	114,003,000
Balance at beginning at Jun. 30, 2019	$ 500	$ 11,400	8,829,487	539,866	(45,840)	441,961	9,777,374
Balance at beginning (in shares) at Jun. 30, 2019	5,000,000	114,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)							210,712
Foreign currency translation adjustment							(326,589)
Balance at end at Mar. 31, 2020	$ 500	$ 11,419	9,299,825	750,578	(372,429)	441,961	10,131,854
Balance at end (in shares) at Mar. 31, 2020	5,000,000	114,193,057
Balance at beginning at Sep. 30, 2019	$ 500	$ 11,400	8,849,509	1,251,142	(462,625)	441,961	10,091,887
Balance at beginning (in shares) at Sep. 30, 2019	5,000,000	114,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock warrants issued with convertible notes			84,613				84,613
Net income (loss)				135,658			135,658
Foreign currency translation adjustment					255,703		255,703
Balance at end at Dec. 31, 2019	$ 500	$ 11,400	8,934,122	1,386,800	(206,922)	441,961	10,567,861
Balance at end (in shares) at Dec. 31, 2019	5,000,000	114,003,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for advisory services		$ 15	262,485				262,500
Issuance of common stock for advisory services (in shares)		150,000
Issuance of common stock for conversion of convertible notes		$ 4	60,361				60,365
Issuance of common stock for conversion of convertible notes (in shares)		40,057
Stock warrants issued with convertible notes			42,857				42,857
Net income (loss)				(636,222)			(636,222)
Foreign currency translation adjustment					(165,507)		(165,507)
Balance at end at Mar. 31, 2020	$ 500	$ 11,419	9,299,825	750,578	(372,429)	441,961	10,131,854
Balance at end (in shares) at Mar. 31, 2020	5,000,000	114,193,057
Balance at beginning at Jun. 30, 2020	$ 500	$ 11,417	9,243,557	262,198	(357,011)	441,961	9,602,622
Balance at beginning (in shares) at Jun. 30, 2020	5,000,000	114,174,265
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for conversion of convertible notes		$ 233	390,768				391,001
Issuance of common stock for conversion of convertible notes (in shares)		2,326,652
Net income (loss)				(532,306)			(532,306)
Foreign currency translation adjustment					430,281		430,281
Balance at end at Sep. 30, 2020	$ 500	$ 11,650	9,634,325	(270,108)	73,270	441,961	9,891,598
Balance at end (in shares) at Sep. 30, 2020	5,000,000	116,500,917
Balance at beginning at Jun. 30, 2020	$ 500	$ 11,417	9,243,557	262,198	(357,011)	441,961	9,602,622
Balance at beginning (in shares) at Jun. 30, 2020	5,000,000	114,174,265
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)							(1,004,018)
Foreign currency translation adjustment							865,206
Balance at end at Mar. 31, 2021	$ 500	$ 16,404	10,786,792	(741,820)	488,563	461,593	11,012,032
Balance at end (in shares) at Mar. 31, 2021	5,000,000	164,041,058
Balance at beginning at Sep. 30, 2020	$ 500	$ 11,650	9,634,325	(270,108)	73,270	441,961	9,891,598
Balance at beginning (in shares) at Sep. 30, 2020	5,000,000	116,500,917
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock for conversion of convertible notes		$ 714	455,429				456,143
Issuance of common stock for conversion of convertible notes (in shares)		7,143,978
Issuance of common stock for exercise of warrants		$ 150	66,878				67,028
Issuance of common stock for exercise of warrants (in shares)		1,500,000
Issuance of common stock as commitment shares for promissory note		$ 157	67,903				68,060
Issuance of common stock as commitment shares for promissory note (in shares)		1,567,164
Issuance of common stock for private placement		$ 2,887	430,113				433,000
Issuance of common stock for private placement (in shares)		28,869,999
Settlement of warrants in relation to extinguishment of debt			(59,163)				(59,163)
Net income (loss)				(356,118)			(356,118)
Foreign currency translation adjustment					464,870		464,870
Balance at end at Dec. 31, 2020	$ 500	$ 15,558	10,595,485	(626,226)	538,140	441,961	10,965,418
Balance at end (in shares) at Dec. 31, 2020	5,000,000	155,582,058
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock as commitment shares for promissory note		$ 146	87,007				87,153
Issuance of common stock as commitment shares for promissory note (in shares)		1,459,000
Issuance of common stock for private placement		$ 700	104,300				105,000
Issuance of common stock for private placement (in shares)		7,000,000
Net income (loss)				(115,594)			(115,594)
Foreign currency translation adjustment					(49,577)	19,632	(29,945)
Balance at end at Mar. 31, 2021	$ 500	$ 16,404	$ 10,786,792	$ (741,820)	$ 488,563	$ 461,593	$ 11,012,032
Balance at end (in shares) at Mar. 31, 2021	5,000,000	164,041,058

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (1,004,018)	$ 210,712
Adjustments required to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	512,375	580,625
Deferred taxes	(25,908)	1,306
Stock compensation for advisory services		79,891
Change in fair value of derivative liability	647,632	(86,602)
Loss (gain) on extinguishment of debt	(202,588)	15,074
Non-cash interest	177,205	351,474
Gain on disposal of property and equipment		(7,018)
Changes in operating assets and liabilities:
Accounts receivable - non-related parties	262,424	37,312
Accounts receivable - related parties		(92,348)
Inventory	(652,185)	237,193
Advances to suppliers - non-related parties	(326,742)	(232,695)
Advances to suppliers - related parties	(40,072)	(3,352)
Prepaid expenses and other current assets	(620,374)	(150,496)
Accounts payable	(184,288)	(83,000)
Advance from customers	293,468	(52,380)
Accrued expenses and other current liabilities	(248,380)	(164,326)
Net cash provided by (used in) operating activities	(1,411,451)	641,370
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment	(190,190)	(193,610)
Acquisition of intangible assets	(2,334)
Proceeds received from sale of equipment		121,715
Net cash used in investing activities	(192,524)	(71,895)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes receivable	34,852	94,292
Proceeds from bank loans	1,405,792
Repayment of bank loans	(2,344,185)
Proceeds from issuance of convertible notes payable		722,190
Proceeds from issuance of promissory notes	687,500
Proceeds from issuance of common stock for private placement	538,000
Repayment of convertible notes payable	(555,747)
Proceeds from (repayment of) loans from related parties	1,021,130	(28,979)
Net cash provided by financing activities	787,342	787,503
Effect of exchange rate changes on cash	73,352	(31,830)
Net increase (decrease) in cash and cash equivalents	(743,281)	1,325,148
Cash and cash equivalents, beginning of period	1,285,373	509,615
Cash and cash equivalents, end of period	542,092	1,834,763
Supplemental disclosure of cash flow information
Cash paid for income tax	10,751	154,538
Cash paid for interests	66,820	102,457
Non-cash investing and financing activities
Issuance of common stock for conversion of convertible notes	847,144	60,365
Issuance of 1,500,000 shares of common stock for exercise of warrants	67,028
Issuance of 3,026,164 shares of common stock as commitment shares for promissory note	155,213
Issuance of common stock for advisory services		$ 262,500

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical)	9 Months Ended
	Mar. 31, 2021 shares
Statement of Cash Flows [Abstract]
Issuance of shares of common stock for exercise of warrants	1,500,000
Issuance of shares of common stock as commitment shares for promissory note	3,026,164

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NATURE OF OPERATIONS

9 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF OPERATIONS

NOTE 1 - NATURE OF OPERATIONS

Ionix Technology, Inc. (the “Company” or “Ionix”), formerly known as Cambridge Projects Inc., is a Nevada corporation that was formed on March 11, 2011. By and through its wholly owned subsidiaries and an entity controlled through VIE agreements in China, the Company sells the high-end intelligent electronic equipment, which includes the portable power banks for electronic devices, LCM and LCD screens and provides IT and solution-oriented services in China.

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

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

Acquisition

On December 27, 2018, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) with Jialin Liang and Xuemei Jiang, each of whom are shareholders (the “Shareholders”) of Changchun Fangguan Electronics Technology Co., Ltd. (“Fangguan Electronics”). Pursuant to the terms of the Purchase Agreement, the Shareholders, who together own 95.14% of the ownership rights in Fangguan Electronics, agreed to execute and deliver the Business Operation Agreement, the Equity Interest Pledge Agreement, the Equity Interest Purchase Agreement, the Exclusive Technical Support Service Agreement (the “Services Agreement”) and the Power of Attorney, all together dated December 27, 2018 are referred to the “VIE Agreements”, to the Company in exchange for the issuance of an aggregate of 15,000,000 shares of the Company’s common stock, par value $.0001 per share, thereby causing Fangguan Electronics to become the Company’s variable interest entity. Together with VIE agreements, the Shareholders also agreed to convert shareholder loan of RMB 30 million (approximately $4.4 million) to capital and make cash contribution of RMB 9.7 million (approximately $1.4 million) to capital. The entirety of the transaction will hereafter be referred to as the “Transaction”. As a result of the Transaction, the Company is able to exert effective control over Fangguan Electronics and receive 100% of the net profits or net losses derived from the business operations of Fangguan Electronics. Fangguan Electronics manufactures and sells Liquid Crystal Module (" LCM") and LCD screens in China based in Changchun City, Jilin Province, People’s Republic of China. (See Note 4).

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

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GOING CONCERN

9 Months Ended

Mar. 31, 2021

Going Concern [Abstract]

GOING CONCERN

NOTE 2 - GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had an accumulated deficit of $741,820 as of March 31, 2021. The Company incurred loss from operation and did not generate sufficient cash flow from its operating activities for the nine months ended March 31, 2021. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2021 and the results of operations and cash flows for the periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2021 or for any subsequent periods. The balance sheet at June 30, 2020 has been derived from the audited consolidated financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2020 as included in our Annual Report on Form 10-K as filed with the SEC on September 28, 2020.

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation.

Noncontrolling Interests

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

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 4, therefore no income or loss is allocated to NCI.

Use of Estimates

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

Cash and cash equivalents

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

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and June 30, 2020, the Company has accounts receivable balance from non-related party of $3,253,702 and $3,273,141, net of allowance for doubtful accounts of $150,406 and $139,609, respectively. No bad debt expense was recorded during the three and nine months ended March 31, 2021 and 2020.

Inventories

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

Advances to suppliers

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

Property, plant and equipment

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

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

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

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

Intangible assets

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

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

Land use right	50 years
Computer software	2-5 years

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

Impairment of long-lived assets

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

Revenue recognition

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

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

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

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

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

· recognize revenue as the performance obligation is satisfied.

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

The following tables disaggregate our revenue by major source for the three and nine months ended March 31, 2021 and 2020, respectively:

	For the Nine Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	9,100,076	$	14,518,376
Sales of LCM and LCD screens - Related parties		-		718,194
Sales of portable power banks		-		1,719,127
Service contracts		2,018		629,771
Total	$	9,102,094	$	17,585,468

	For the Three Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	3,160,474	$	2,487,465
Sales of LCM and LCD screens - Related parties		-		73,802
Sales of portable power banks		-		181,033
Service contracts		272		9,870
Total	$	3,160,746	$	2,752,170

All the operating entities of the Company are domiciled in the PRC. All the Company’s revenues are derived in the PRC during the three and nine months ended March 31, 2021 and 2020.

Cost of revenues

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

Related parties and transactions

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

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

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

Income taxes

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

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

As of March 31, 2021 and June 30, 2020, the Company did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

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

Leases

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

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

The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months as of March 31, 2021 (See Note 6).

Earnings (losses) per share

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

During the nine months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 1,096,705 and 899,753 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 68,750 and 842,313 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

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

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

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

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

	March 31, 2021		June 30, 2020
Balance sheet items, except for equity accounts		6.5713		7.0795

	Nine Months Ended March 31,
	2021		2020
Items in statements of comprehensive income (loss) and cash flows		6.8254		6.9799

Fair Value of Financial Instruments

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

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

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

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

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

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

The Company has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 14).

Convertible Instruments

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

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

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

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

Common Stock Purchase Warrants

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

Risk factor

Due to the outbreak of the Coronavirus Disease 2019 (COVID-19) in the PRC, the Company’s operational and financial performance, has been affected by the epidemic during the nine months ended March 31, 2021. The Company has been keeping continuous attention on the situation of the COVID-19, assessing and reacting actively to its impacts on the financial position and operating results of the Company as below:

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, our financial condition and results of operations were adversely affected. Since the restarting of our operation near the end of March 2020, our financial performances had been recovering slowly but continuously. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns and prolonged the economic contraction nationwide and disrupted our business operation.

· During the outbreak of COVID-19 in China, the Chinese government responded with the package of support including tax-cut and financial assistance, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future operating results or near-and-long-term financial condition. Up to the date of this report, the assessment is still in progress.

· Since we restored our operation near the end of March 2020, even COVID-19 resurgence occurred in October 2020, we are of the view that COVID-19 would be under control in near future. We assessed that 1) COVID-19-related impacts on our cost of capital or access to capital and funding sources and our sources or uses of cash have been insignificant; 2) There is no material uncertainty about our ongoing ability to meet the covenants of our credit agreements; 3) No material liquidity deficiency has been identified and we do not expect to disclose or incur any material COVID-19-related contingencies;4) COVID-19-related impacts on the assets on our balance sheet or our ability to timely account for those assets have been insignificant; and 5) The possibilities for COVID-19 to trigger any material impairments, increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on our financial statements are low. Looking forward, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on issues mentioned above.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, COVID-19-related circumstances such as remote work arrangements adversely affected our ability to maintain operations. Since the lifting of the national shutdown order near the end of March 2020, our operations including financial reporting systems, internal control over financial reporting and disclosure controls and procedures have already resumed. Currently we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future business continuity plans or whether material resource constraints in implementing these plans. Up to the date of this report, the assessment is still in progress.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, the demands for our products or services were severely affected. Since the restarting of our operation near the end of March 2020, the demands had been rebounding slowly but continuously. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns and put numerous business negotiations and sales contracts signing on hold. Notwithstanding the difficulty at the present, we are capable to take the blows on the product demands and are optimistic about an eventual recovery in demand to pre-pandemic levels.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, our supply chain or the methods used to distribute our products or services were severely affected. Since the lift of the national shutdown order near the end of March 2020, all of our supply chains or the methods had returned to normal gradually. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns then inevitably made the adverse impacts on our supply chains. And COVID-19 highlights the need to transform our current supply chain models. We shall take the actions to respond to business disruption and supply chain challenges from the global spread of COVID-19 and looks ahead to the longer-term solution of digital supply networks.

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VARIABLE INTEREST ENTITY

9 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

VARIABLE INTEREST ENTITY

NOTE 4 - VARIABLE INTEREST ENTITY

The VIE contractual arrangements

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

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

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

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

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

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

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

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

Assets of Fangguan Electronics that are collateralized or pledged are not restricted to settle its own obligations. The creditors of Fangguan Electronics do not have recourse to the primary beneficiary’s general credit.

Risks associated with the VIE structure

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

· revoke the business and operating licenses of the Company’s PRC subsidiary and its VIE;

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

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

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

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

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

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

	Balance as of March 31, 2021		Balance as of June 30, 2020
Cash and cash equivalents	$	326,885	$	1,266,426
Notes receivable		99,327		125,798
Accounts receivable - non-related parties		3,092,630		3,069,629
Inventory		3,648,512		2,639,839
Advances to suppliers - non-related parties		737,284		530,670
Prepaid expenses and other current assets		62,442		58,103
Total Current Assets		7,967,080		7,690,465
Property, plant and equipment, net		6,788,886		6,568,874
Intangible assets, net		1,491,089		1,424,404
Deferred tax assets		49,257		20,743
Total Assets	$	16,296,312	$	15,704,486
Short-term bank loan	$	1,217,415	$	2,034,735
Accounts payable		2,650,376		2,637,792
Advance from customers		16,648		27,501
Due to related parties		2,221,473		1,407,145
Accrued expenses and other current liabilities		29,076		61,856
Total Current Liabilities		6,134,988		6,169,029
Total Liabilities	$	6,134,988	$	6,169,029

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INVENTORIES

9 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 5 - INVENTORIES

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

	March 31, 2021		June 30, 2020
Raw materials	$	1,068,375	$	666,981
Work-in-process		1,128,040		500,331
Finished goods		1,997,253		2,096,538
Total Inventories	$	4,193,668	$	3,263,850

The Company recorded no inventory markdown for the three and nine months ended March 31, 2021 and 2020. 

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OPERATING LEASE

9 Months Ended

Mar. 31, 2021

Operating Lease, Lease Income [Abstract]

OPERATING LEASE

NOTE 6 - OPERATING LEASE

For the nine months ended March 31, 2021, the Company had two real estate operating leases for office, warehouses and manufacturing facilities under the terms of one year.

Lisite Science Technology (Shenzhen) Co., Ltd ("Lisite Science") leases office and warehouse space from Shenzhen Keenest Technology Co., Ltd. (“Keenest”), a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 11).

Shenzhen Baileqi Electronic Technology Co., Ltd. ("Baileqi Electronic") leases office and warehouse space from Shenzhen Baileqi Science and Technology Co., Ltd. (“Shenzhen Baileqi S&T”), a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). (See Note 11).

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

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PROPERTY, PLANT AND EQUIPMENT, NET

9 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT, NET

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

	March 31, 2021			June 30, 2020
Buildings	$	4,987,484		$	4,601,685
Machinery and equipment		3,207,568			2,822,686
Office equipment		73,317			67,091
Automobiles		106,492			98,848
Subtotal		8,374,861			7,590,310
Less: Accumulated depreciation		(1,581,266	)		(1,016,373	)
Property, plant and equipment, net	$	6,793,595		$	6,573,937

Depreciation expense related to property, plant and equipment was $468,186 and $558,789 for the nine months ended March 31, 2021 and 2020, respectively.

Depreciation expense related to property, plant and equipment was $167,245 and $174,381 for the three months ended March 31, 2021 and 2020, respectively.

As of March 31, 2021 and June 30, 2020, buildings were pledged as collateral for bank loans (See Note 9).

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INTANGIBLE ASSETS, NET

9 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

NOTE 8 – INTANGIBLE ASSETS, NET

Intangible assets consist of the following:

	March 31, 2021			June 30, 2020
Land use right	$	1,554,011		$	1,442,456
Computer software		29,399			25,039
Subtotal		1,583,410			1,467,495
Less: Accumulated amortization		(92,321	)		(43,091	)
Intangible assets, net	$	1,491,089		$	1,424,404

Amortization expense related to intangible assets was $44,189 and $21,836 for the nine months ended March 31, 2021 and 2020, respectively.

Amortization expense related to intangible assets was $10,063 and $7,164 for the three months ended March 31, 2021 and 2020, respectively.

Fangguan Electronics acquired the land use right from the local government in August 2012 which expires on August 15, 2062. As of March 31, 2021 and June 30, 2020, land use right was pledged as collateral for bank loans (See Note 9).

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SHORT-TERM BANK LOAN

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

SHORT-TERM BANK LOAN

NOTE 9 – SHORT-TERM BANK LOAN

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

		March 31, 2021		June 30, 2020
Loan payable to Industrial Bank, due November 2020	(1)	$	-	$	1,836,288
Loan payable to Industrial Bank, due May 2021	(2)		166,290		154,353
Loan payable to Industrial Bank, due June 2021	(2)		47,504		44,094
Loan payable to Industrial Bank, due August 2021	(3)		547,090		-
Loan payable to Industrial Bank, due June 2021	(4)		456,531		-
Total		$	1,217,415	$	2,034,735

(1) On November 19, 2019, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.7 million (RMB 18 million) for a year until November 18, 2020 with annual interest rate of 5.22%. The borrowing was collateralized by the Company’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On May 20, 2020, Fangguan Electronics partially repaid this bank loan of approximately US$760,000 (RMB5,000,000). On August 28, 2020 and September 21, 2020, Fangguan Electronics further partially repaid this bank loan of approximately US$457,000 (RMB3,000,000) and US$760,000 (RMB5,000,000) respectively. On November 18, 2020, Fangguan Electronics repaid the remaining balance in full of this bank loan of approximately US$760,000 (RMB5,000,000).

(2) During May and Jun 2020, Fangguan Electronics issued two one-year commercial acceptance bills with amounts of approximately US$166,000 (RMB1,092,743) and US$48,000 (RMB312,161) and maturity dates at May 21, 2021 and June 11, 2021 respectively. On May 22, 2020 and June 16, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.85% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the aforementioned RMB18 million loan under the same bank.

(3) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$547,000 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$457,000 (RMB3,000,000) in full upon maturity.

(4) During December 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at June 4, 2021. On December 7, 2020, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank.

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STOCKHOLDERS' EQUITY

9 Months Ended

Mar. 31, 2021

Stockholders' Equity:

STOCKHOLDERS' EQUITY

NOTE 10 - STOCKHOLDERS' EQUITY

Stock Issued for Conversion of Convertible Debt

During the nine months ended March 31, 2021, the Company issued a total of 9,470,630 shares of common stock for the conversion of debt in the principal amount of $273,200 together with all accrued and unpaid interest, according to the conditions of the convertible notes. All these conversions resulted in a total loss on extinguishment of debt of $256,639 for the nine months ended March 31, 2021. The remaining principal balance due under convertible notes after these conversions and other debt settlements (See Note 14) is zero.

Stock Issued for Exercise of Warrants

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full, according to the conditions of the convertible note dated as September 11, 2019. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31, 2021. (See Note 14)

Stock Issued for Private Placement

In December 2020, the Company issued a total of 28,869,999 shares of common stock to nine individual subscribers for an aggregate purchase price of $433,000 at $0.015 per share, according to the conditions of the subscription agreements signed between the Company and subscribers.

On January 13, 2021, the Company issued a total of 7,000,000 shares of common stock to one individual subscriber for purchase price of $105,000 at $0.015 per share, according to the conditions of the subscription agreement signed by both parties.

Stock Issued as Commitment Shares for Promissory Note

On December 21, 2020, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $300,000. The promissory note is due on or before December 21, 2021 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 7,052,239 shares of its common stock for issuance if any debt is converted.

On December 31, 2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 15) 

On March 10, 2021, the Company issued a self-amortization promissory note to Labrys Fund, L.P in the aggregate principal amount of $500,000. The promissory note is due on or before March 10, 2022 and bears an interest rate of five percent (5%) per annum. The note is not convertible unless in default, as defined in the agreement. The Company agreed to reserve 6,562,500 shares of its common stock for issuance if any debt is converted.

On March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 15)

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RELATED PARTY TRANSACTIONS AND BALANCES

9 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS AND BALANCES

NOTE 11 - RELATED PARTY TRANSACTIONS AND BALANCES

Purchase from related party

During the nine months ended March 31, 2020, the Company purchased $1,642,532 and $37,495 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.3% and 0.7% respectively of the Company’s outstanding common stock. The amounts of $1,642,532 and $37,495 were included in the cost of revenue for the nine months ended March 31, 2020.

During the three months ended March 31, 2020, the Company purchased $177,995 and $0 from Keenest and Shenzhen Baileqi S&T which were owned by the Company’s stockholders who own approximately 1.3% and 0.7% respectively of the Company’s outstanding common stock. The amounts of $177,995 and $0 were included in the cost of revenue for the three months ended March 31, 2020. 

Advances to suppliers - related parties

Lisite Science made advances of $426,852 and $357,577 to Keenest for future purchases as of March 31, 2021 and June 30, 2020, respectively.

Sales to related party

During the nine months ended March 31, 2021 and 2020, Baileqi Electronic sold materials of $0 and $718,194 respectively to Shenzhen Baileqi S&T.

During the three months ended March 31, 2021 and 2020, Baileqi Electronic sold materials of $0 and $73,802 respectively to Shenzhen Baileqi S&T.

Lease from related party

Lisite Science leases office and warehouse space from Keenest, a related party, with annual rent of approximately $1,500 (RMB10,000) for one year until July 20, 2020. On July 20, 2020, Lisite Science further extended the lease with Keenest for one more year until July 20, 2021 with annual rent of approximately $1,500 (RMB10,000). (See Note 6).

Baileqi Electronic leases office and warehouse space from Shenzhen Baileqi S&T, a related party, with monthly rent of approximately $2,500 (RMB17,525) and the lease period is from June 1, 2019 to May 31, 2020. On June 5, 2020, Baileqi Electronic further extended the lease with Shenzhen Baileqi S&T for one more year until May 31, 2021 with monthly rent of approximately $2,500 (RMB17,525). (See Note 6).

Due to related parties

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

		March 31, 2021		June 30, 2020
Ben Wong	(1)	$	143,792	$	143,792
Yubao Liu	(2)		398,866		102,938
Xin Sui	(3)		2,016		2,016
Baozhen Deng	(4)		5,601		9,437
Shenzhen Baileqi S&T	(5)		23,937		-
Jialin Liang	(6)(11)		1,676,679		901,460
Xuemei Jiang	(7)(10)		544,793		505,685
Shikui Zhang	(8)		51,800		28,528
Changyong Yang	(9)		32,151		23,063
		$	2,879,635	$	1,716,919

(1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(3) Xin Sui is a member of the board of directors of Welly Surplus.

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

(5) Shenzhen Baileqi S&T is a company owned by Baozhen Deng, a stockholder of the Company.

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

(7) Xuemei Jiang is a stockholder of the Company and the vice president and director of Fangguan Electronics.

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

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

(10) The liability was assumed from the acquisition of Fangguan Electronics.

(11) The Company assumed liability of approximately $5.8 million (RMB39,581,883) from Jialin Liang during the acquisition of Fangguan Electronics. During the year ended June 30, 2019, approximately $4.4 million (RMB30,000,000) liability assumed was forgiven and converted to capital.

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

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

On September 23, 2020, Jialin Liang entered into a short-term loan agreement with Bank of Communications to borrow an individual loan of approximately US$457,000 (RMB 3 million) for one year with annual interest rate of 3.85%. The borrowing was guaranteed by Fangguan Electronics. Pursuant to the loan agreement, the proceed from the bank loan could only be used in the operation of Fangguan Electronics. On September 23, 2020, Jialin Liang advanced all of the proceeds from this bank loan to Fangguan Electronics. In March 2021, Jialin Liang further advanced approximately $249,000 (RMB 1,636,080) to Fangguan Electronics for operational needs.

During the nine months ended March 31, 2020, Yubao Liu was refunded $46,225 by Welly Surplus and Well Best after netting off his advances to Well Best. Baileqi Electronic refunded $5,303 to Baozhu Deng and Baozhen Deng advanced $2,706 to Baileqi Electronic. Shizhe New Energy refunded $625 and $1,869 to Liang Zhang and Zijian Yang respectively. Shikui Zhang advanced $21,732 to Shizhe New Energy.

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CONCENTRATION

9 Months Ended

Mar. 31, 2021

Risks and Uncertainties [Abstract]

CONCENTRATION

NOTE 12 – CONCENTRATION

Major customers

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,047,553		12	%	$	24,960		1	%
Customer B		2,009,817		11	%		376,704		10	%
Total	$	4,057,370		23	%	$	401,664		11	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of total accounts  receivable
Customer A	$	315,541		11	%	$	24,960		1	%
Customer B		748,422		27	%		376,704		10	%
Total	$	1,063,963		38	%	$	401,664		11	%

Primarily all customers are located in the PRC.

Major suppliers

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A – related party	$	1,642,532		12	%	$	-		-	%
Supplier B		2,582,034		19	%		-		-	%
Total	$	4,224,566		31	%	$	-		-	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	413,924		18	%	$	-		-	%
Total	$	413,924		18	%	$	-		-	%

All suppliers of the Company are located in the PRC.

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INCOME TAXES

9 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 13 - INCOME TAXES

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

United States of America

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

For the three and nine months ended March 31, 2021 and 2020, the Company did not generate income in United States of America and no provision for income tax was made. Under normal circumstances, the Internal Revenue Service is authorized to audit income tax returns during a three-year period after the returns are filed.  In unusual circumstances, the period may be longer.  Tax returns for the years ended June 30, 2016 and after were still open to audit as of March 31, 2021.

Hong Kong

The Company’s subsidiaries, Well Best and Welly Surplus, are registered in Hong Kong and subject to income tax rate of 16.5%. For the three and nine months ended March 31, 2021 and 2020, there is no assessable income chargeable to profit tax in Hong Kong.

The PRC

The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%. Fangguan Electronics has renewed the high-tech enterprise certificate which granted it the tax rate of 15% for the three whole calendar years of 2019 to 2021.

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

	For the Nine Months Ended March 31,
	2021			2020
Tax (benefit) at U.S. statutory rate	$	(215,790	)	$	76,062
Tax rate difference between foreign operations and U.S.		26,511			(88,730	)
Change in valuation allowance		155,922			168,429
Permanent difference		9,802			(4,274	)
Effective tax (benefit)	$	(23,555	)	$	151,487

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

	For the Nine Months Ended March 31,
	2021			2020
Current	$	2,353		$	150,181
Deferred		(25,908	)		1,306
Total	$	(23,555	)	$	151,487

As of March 31, 2021, the Company has approximately $3,778,000 net operating loss carryforwards available in the U.S., Hong Kong and China to reduce future taxable income which will begin to expire from 2035. It is more likely than not that the deferred tax assets resulted from net operating loss carryforward cannot be utilized in the future because there will not be significant future earnings from the entities which generated the net operating loss. Therefore, the Company recorded a full valuation allowance on its deferred tax assets resulted from net operating loss carryforward as of March 31, 2021.

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

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

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

For purposes of the inclusion of GILTI, the Company determined that the Company did not have tax liabilities resulting from GILTI for the three and nine months ended March 31, 2021 and 2020 due to net operating loss carryforwards available in the U.S. Therefore, there was no accrual of GILTI liability as of March 31, 2021 and June 30, 2020.

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

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CONVERTIBLE DEBT

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

CONVERTIBLE DEBT

NOTE 14 - CONVERTIBLE DEBT

Convertible notes

Convertible notes payable balance was zero as of March 31, 2021.

As of June 30, 2020, convertible notes payable consists of:

		Note Balance		Debt discount			Carrying Value
Power Up Lending Group Ltd	(1)	$	39,000	$	(1,953	)	$	37,047
Firstfire Global Opportunities Fund LLC	(2)		165,000		(32,909	)		132,091
Power Up Lending Group Ltd	(3)		53,000		(13,995	)		39,005
Crown Bridge Partners	(4)		51,384		(15,095	)		36,289
Morningview Financial LLC	(5)		165,000		(64,416	)		100,584
BHP Capital NY	(6)		91,789		-			91,789
Labrys Fund, LP	(7)		146,850		(69,265	)		77,585
Total		$	712,023	$	(197,633	)	$	514,390

(1) On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

During the nine months ended March 31, 2021, Power Up Lending Group Ltd elected to convert $39,000 of the principal amount together with $4,916 of accrued and unpaid interest of the convertible notes into 264,970 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $32,778. (See Note 10)

The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021.

(2) On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Firstfire Global Opportunities Fund LLC elected to convert $68,850 of the principal amount of the convertible notes into 4,125,000 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $67,512 (See Note 10).

After the foregoing conversions, on November 12, 2020, the Company paid Firstfire Global Opportunities Fund LLC, the holder of the Company’s convertible debt an aggregate of $130,500 in order to terminate their convertible note dated September 11, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 13, 2020. The debt settlement resulted in a gain on extinguishment of debt of $94,928.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(3) On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On September 16, 2020, the Company entered into a Note Settlement Agreement with Power Up Lending Group Ltd., the holder of the Company’s convertible debt. The Note Settlement Agreement terminated their convertible note dated November 4, 2019, including all accrued and unpaid interest, after the Company paid an aggregate of $75,000 on September 16, 2020. The debt settlement resulted in a gain on extinguishment of debt of $15,346.

(4) On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019. The conversion resulted in a loss on extinguishment of debt of $22,424. (See Note 10)

After the foregoing conversions, on December 7, 2020, the Company paid Crown Bridge Partners, LLC, the holder of the Company’s convertible debt an aggregate of $82,500 in order to terminate their convertible note dated November 12, 2019, including all accrued and unpaid interest. Among the total, payment of $60,000 was made by Yubao Liu on behalf of the Company while the remaining payment of $22,500 was made directly by the Company. The note holder confirmed this full settlement on December 10, 2020. The debt settlement resulted in a gain on extinguishment of debt of $206,377.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(5) On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On September 24, 2020, Morningview Financial, LLC elected to convert $15,000 of the principal amount of the convertible notes into 568,182 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $5,907. (See Note 10)

After the foregoing conversions, on November 12, 2020, the Company paid Morningview Financial, LLC, the holder of the Company’s convertible debt an aggregate of $175,000 in order to terminate their convertible note dated November 20, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 14, 2020. The debt settlement resulted in a gain on extinguishment of debt of $209,604.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31 ,2021.

(6) On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On April 14, 2020, the Company entered into an Amendment to Securities Purchase Agreement with BHP Capital NY, Inc dated on December 3, 2019. The Company agreed to pay off this note holder in 6 installments of $23,186.79 each, with an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The repayment resulted in a loss on extinguishment of debt of $4,703, which was included in other income and expense in the consolidated statement of comprehensive income (loss) for the year ended June 30, 2020.

In May and June 2020, the Company paid two installments totaling $46,373 (including principal of $45,325 and interest of $1,048) and note payable balance decreased to $91,789 as of June 30, 2020. During the period from July to September 2020, the Company continued to pay 4 installments of an aggregate amount of $92,748 (including principal of $91,789 and interest of $959).

As of the date of this report, the Company has made total six installments payment of an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The note payable balance decreased to zero as of March 31, 2021.

(7) On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Labrys Fund, LP elected to convert $146,850 of the principal amount together with all accrued and unpaid interest of the convertible notes into 4,012,478 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $128,018. The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021. (See Note 10)

All convertible notes aforementioned

For the nine months ended March 31, 2021 and 2020, the Company recorded the amortization of debt discount of $138,399 and $351,474 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

For the three months ended March 31, 2021 and 2020, the Company recorded the amortization of debt discount of $0 and $170,138 for the convertible notes issued, which were included in other income and expense in the consolidated statement of comprehensive income (loss).

Derivative liability

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

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

The change of derivative liabilities is as follows:

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

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

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

Warrants

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

On December 21, 2020, the Company issued a total of 1,500,000 shares of common stock to FirstFire Global Opportunities Fund, LLC for the exercise of warrants in full. The exercise of warrants resulted in a loss of $67,028 for the nine months ended March 31, 2021. After this exercise, FirstFire Global Opportunities Fund, LLC is not entitled to any warrant to purchase shares. (See Note 10)

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

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

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

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

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

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

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

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

The details of the outstanding warrants are as follows:

	Number of  shares			Weighted Average  Exercise Price		Remaining  Contractual Term (years)
Outstanding at July 1, 2020		229,166		$	2.68		4.2 to 4.53
Granted		-			-		-
Exercised or settled		(160,416	)		2.63		4.05 to 4.16
Cancelled or expired		-			-		-
Outstanding at March 31, 2021		68,750		$	2.80		3.78

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PROMISSORY NOTE

9 Months Ended

Mar. 31, 2021

Unified income tax rate

PROMISSORY NOTE

NOTE 15 – PROMISSORY NOTE

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

In connection with the issuance of promissory note, on December 31, 2020, the Company issued 447,762 shares of common stock (the “First Commitment Shares”) and 1,119,402 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $68,060 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 10)

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

In connection with the issuance of promissory note, on March 10, 2021, the Company issued 417,000 shares of common stock (the “First Commitment Shares”) and 1,042,000 shares of common stock (the “Second Commitment Shares”) related to the promissory note as a commitment fee. The Second Commitment Shares must be returned to the Company’s treasury if the promissory note is fully repaid and satisfied on or prior to the maturity date. The Company recorded the First Commitment Shares as debt discount valued at $87,153 based on the quoted market price at issue date and amortized over the term of the promissory note. The Company recorded the Second Commitment Shares at par for the nine months ended March 31, 2021. (See Note 10)

For the three and nine months ended March 31, 2021, the Company recorded the amortization of debt discount of $37,532 and $38,806 for the self-amortization promissory notes issued, which was included in other income and expense in the consolidated statement of comprehensive income (loss).

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SEGMENT INFORMATION

9 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENT INFORMATION

NOTE 16 – SEGMENT INFORMATION

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

Although all of the Company’s revenue is generated from Mainland China, the Company is organizationally structured along business segments. The accounting policies of each operating segments are same and are described in Note 3, “Summary of Significant Accounting Policies”.

The following tables provide the business segment information for the three and nine months ended March 31, 2021 and 2020.

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

	For the Nine Months Ended March 31, 2020
	Smart energy		Photoelectric display		Service contracts		Unallocated items			Total
Revenues	$	1,719,127	$	15,236,570	$	629,771	$	-		$	17,585,468
Cost of Revenues		1,642,532		12,786,020		421,642		-			14,850,194
Gross profit		76,595		2,450,550		208,129		-			2,735,274
Operating expenses		10,094		1,491,200		25,326		497,501			2,024,121
Income (loss) from operations		66,501		959,350		182,803		(497,501	)		711,153
Net income (loss)	$	59,915	$	779,838	$	165,603	$	(794,644	)	$	210,712

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

	For the Three Months Ended March 31, 2020
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	181,033		$	2,561,267		$	9,870		$	-		$	2,752,170
Cost of Revenues		177,995			2,256,426			72,097			-			2,506,518
Gross profit (loss)		3,038			304,841			(62,227	)		-			245,652
Operating expenses		3,960			377,641			8,109			248,935			638,645
Loss from operations		(922	)		(72,800	)		(70,336	)		(248,935	)		(392,993	)
Net income (loss)	$	347		$	(83,297	)	$	(64,462	)	$	(488,810	)	$	(636,222	)

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SUBSEQUENT EVENTS

9 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 17 - SUBSEQUENT EVENTS

On May 6, 2021, our Board of Directors (the “Board”) approved the following actions which are also taken by written consent in lieu of a meeting by the holders of a majority of the voting power of our outstanding capital stock as of the same date:

(1) An increase in the total number of authorized stock of the Company from 200,000,000 to 400,000,000 shares consisting of: (i) 395,000,000 shares of common stock, par value $0.0001 per share (“Common Stock”); and (ii) 5,000,000 shares of preferred stock par value $0.0001 per share (“Preferred Stock”) (the “Authorized Share Increase”) and related Certificate of Amendment to Articles of Incorporation;

(2) To effect, at the discretion of the Company’s Board, a reverse stock split of all outstanding shares of the Company’s Common Stock, at a ratio of not less than 1-for-2 and not greater than 1-for-10, such ratio to be determined by the Company’s Board at any time before April 30, 2022, without further approval or authorization of our stockholders (the “Reverse Stock Split”) and related amendment to our Articles of Incorporation.

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

9 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2021 and the results of operations and cash flows for the periods ended March 31, 2021 and 2020. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three and nine months ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire year ending June 30, 2021 or for any subsequent periods. The balance sheet at June 30, 2020 has been derived from the audited consolidated financial statements at that date.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission's rules and regulations. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended June 30, 2020 as included in our Annual Report on Form 10-K as filed with the SEC on September 28, 2020.

Basis of consolidation

Basis of consolidation

The consolidated financial statements include the accounts of Ionix, its wholly owned subsidiaries and an entity which the Company controls 95.14% and receives 100% of net income or net loss through VIE agreements. All significant inter-company balances and transactions have been eliminated upon consolidation.

Noncontrolling Interests

Noncontrolling Interests

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

The net income (loss) attributed to NCIs was separately designated in the accompanying statements of comprehensive income (loss). Losses attributable to NCIs in a subsidiary may exceed an NCI’s interests in the subsidiary’s equity. The excess attributable to NCIs is attributed to those interests. NCIs shall continue to be attributed their share of losses even if that attribution results in a deficit NCI balance. The primary beneficiary receives 100% of the income and losses of the VIE as disclosed in Note 4, therefore no income or loss is allocated to NCI.

Use of Estimates

Use of Estimates

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

Cash and cash equivalents

Cash and cash equivalents

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

Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from shipment. Credit is extended based on evaluation of a customer's financial condition, the customer’s credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of each period, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions may be taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and June 30, 2020, the Company has accounts receivable balance from non-related party of $3,253,702 and $3,273,141, net of allowance for doubtful accounts of $150,406 and $139,609, respectively. No bad debt expense was recorded during the three and nine months ended March 31, 2021 and 2020.

Inventories

Inventories

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

Advances to suppliers

Advances to suppliers

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

Property, plant and equipment

Property, plant and equipment

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

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

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

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

Intangible assets

Intangible assets

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

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

Land use right	50 years
Computer software	2-5 years

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

Impairment of long-lived assets

Impairment of long-lived assets

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

Revenue recognition

Revenue recognition

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

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

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

· identify the contract with a customer;

· identify the performance obligations in the contract;

· determine the transaction price;

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

· recognize revenue as the performance obligation is satisfied.

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

The following tables disaggregate our revenue by major source for the three and nine months ended March 31, 2021 and 2020, respectively:

	For the Nine Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	9,100,076	$	14,518,376
Sales of LCM and LCD screens - Related parties		-		718,194
Sales of portable power banks		-		1,719,127
Service contracts		2,018		629,771
Total	$	9,102,094	$	17,585,468

	For the Three Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	3,160,474	$	2,487,465
Sales of LCM and LCD screens - Related parties		-		73,802
Sales of portable power banks		-		181,033
Service contracts		272		9,870
Total	$	3,160,746	$	2,752,170

All the operating entities of the Company are domiciled in the PRC. All the Company’s revenues are derived in the PRC during the three and nine months ended March 31, 2021 and 2020.

Cost of revenues

Cost of revenues

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

Related parties and transactions

Related parties and transactions

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

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

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

Income taxes

Income taxes

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

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

As of March 31, 2021 and June 30, 2020, the Company did not have any significant unrecognized uncertain tax positions.

Comprehensive income (loss)

Comprehensive income (loss)

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

Leases

Leases

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

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

The new standard has no material effect on our consolidated financial statements as the Company does not have a lease with a term longer than 12 months as of March 31, 2021 (See Note 6).

Earnings (losses) per share

Earnings (losses) per share

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

During the nine months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 1,096,705 and 899,753 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

During the three months ended March 31, 2021 and 2020, the Company had outstanding convertible notes and warrants which represent 68,750 and 842,313 shares of commons stock respectively. These shares of common stock were excluded from the computation of diluted earnings per share since their effect would have been antidilutive.

Foreign currencies translation

Foreign currencies translation

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

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

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

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

	March 31, 2021		June 30, 2020
Balance sheet items, except for equity accounts		6.5713		7.0795

	Nine Months Ended March 31,
	2021		2020
Items in statements of comprehensive income (loss) and cash flows		6.8254		6.9799

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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

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

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

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

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

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

The Company has the derivative liabilities measured at fair value on a recurring basis which are valued at level 3 measurement (See Note 14).

Convertible Instruments

Convertible Instruments

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

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

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

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

Common Stock Purchase Warrants

Common Stock Purchase Warrants

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

Recent accounting pronouncements

Recent accounting pronouncements

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

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

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The guidance is effective for public entities for Calendar years beginning after December 15, 2020 and interim periods within those Calendar years and all other entities for Calendar years beginning after December 15, 2021 and interim periods within those Calendar years, with early adoption permitted. The Company is currently evaluating the effect of adopting this ASU on the Company’s consolidated financial statements.

Risk factor

Risk factor

Due to the outbreak of the Coronavirus Disease 2019 (COVID-19) in the PRC, the Company’s operational and financial performance, has been affected by the epidemic during the nine months ended March 31, 2021. The Company has been keeping continuous attention on the situation of the COVID-19, assessing and reacting actively to its impacts on the financial position and operating results of the Company as below:

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, our financial condition and results of operations were adversely affected. Since the restarting of our operation near the end of March 2020, our financial performances had been recovering slowly but continuously. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns and prolonged the economic contraction nationwide and disrupted our business operation.

· During the outbreak of COVID-19 in China, the Chinese government responded with the package of support including tax-cut and financial assistance, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future operating results or near-and-long-term financial condition. Up to the date of this report, the assessment is still in progress.

· Since we restored our operation near the end of March 2020, even COVID-19 resurgence occurred in October 2020, we are of the view that COVID-19 would be under control in near future. We assessed that 1) COVID-19-related impacts on our cost of capital or access to capital and funding sources and our sources or uses of cash have been insignificant; 2) There is no material uncertainty about our ongoing ability to meet the covenants of our credit agreements; 3) No material liquidity deficiency has been identified and we do not expect to disclose or incur any material COVID-19-related contingencies;4) COVID-19-related impacts on the assets on our balance sheet or our ability to timely account for those assets have been insignificant; and 5) The possibilities for COVID-19 to trigger any material impairments, increases in allowances for credit losses, restructuring charges, other expenses, or changes in accounting judgments that have had or are reasonably likely to have a material impact on our financial statements are low. Looking forward, we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on issues mentioned above.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, COVID-19-related circumstances such as remote work arrangements adversely affected our ability to maintain operations. Since the lifting of the national shutdown order near the end of March 2020, our operations including financial reporting systems, internal control over financial reporting and disclosure controls and procedures have already resumed. Currently we keep our continuous attention on the situation of the COVID-19, assess and react actively to its impacts on our future business continuity plans or whether material resource constraints in implementing these plans. Up to the date of this report, the assessment is still in progress.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, the demands for our products or services were severely affected. Since the restarting of our operation near the end of March 2020, the demands had been rebounding slowly but continuously. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns and put numerous business negotiations and sales contracts signing on hold. Notwithstanding the difficulty at the present, we are capable to take the blows on the product demands and are optimistic about an eventual recovery in demand to pre-pandemic levels.

· During PRC national economic shutdown that was imposed to limit the spread of COVID-19 from early February to mid-March of 2020, our supply chain or the methods used to distribute our products or services were severely affected. Since the lift of the national shutdown order near the end of March 2020, all of our supply chains or the methods had returned to normal gradually. However, COVID-19 resurgence which occurred in October 2020 had caused one and off traffic restrictions and lockdowns then inevitably made the adverse impacts on our supply chains. And COVID-19 highlights the need to transform our current supply chain models. We shall take the actions to respond to business disruption and supply chain challenges from the global spread of COVID-19 and looks ahead to the longer-term solution of digital supply networks.

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

9 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Schedule of estimated useful life of the assets

The estimated useful life of the assets is as follows:

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

Schedule of estimated useful lives of the intangible assets

The estimated useful lives of the intangible assets are as follows:

Land use right	50 years
Computer software	2-5 years

Schedule of disaggregates our revenue by major source

The following tables disaggregate our revenue by major source for the three and nine months ended March 31, 2021 and 2020, respectively:

	For the Nine Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	9,100,076	$	14,518,376
Sales of LCM and LCD screens - Related parties		-		718,194
Sales of portable power banks		-		1,719,127
Service contracts		2,018		629,771
Total	$	9,102,094	$	17,585,468

	For the Three Months Ended March 31,
	2021		2020
Sales of LCM and LCD screens - Non-related parties	$	3,160,474	$	2,487,465
Sales of LCM and LCD screens - Related parties		-		73,802
Sales of portable power banks		-		181,033
Service contracts		272		9,870
Total	$	3,160,746	$	2,752,170

Schedule of exchange rates

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

	March 31, 2021		June 30, 2020
Balance sheet items, except for equity accounts		6.5713		7.0795

	Nine Months Ended March 31,
	2021		2020
Items in statements of comprehensive income (loss) and cash flows		6.8254		6.9799

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VARIABLE INTEREST ENTITY (Tables)

9 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Schedule of consolidated financial statements

The following financial statement amounts and balances of its VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances:

	Balance as of March 31, 2021		Balance as of June 30, 2020
Cash and cash equivalents	$	326,885	$	1,266,426
Notes receivable		99,327		125,798
Accounts receivable - non-related parties		3,092,630		3,069,629
Inventory		3,648,512		2,639,839
Advances to suppliers - non-related parties		737,284		530,670
Prepaid expenses and other current assets		62,442		58,103
Total Current Assets		7,967,080		7,690,465
Property, plant and equipment, net		6,788,886		6,568,874
Intangible assets, net		1,491,089		1,424,404
Deferred tax assets		49,257		20,743
Total Assets	$	16,296,312	$	15,704,486
Short-term bank loan	$	1,217,415	$	2,034,735
Accounts payable		2,650,376		2,637,792
Advance from customers		16,648		27,501
Due to related parties		2,221,473		1,407,145
Accrued expenses and other current liabilities		29,076		61,856
Total Current Liabilities		6,134,988		6,169,029
Total Liabilities	$	6,134,988	$	6,169,029

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INVENTORIES (Tables)

9 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of inventories

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

	March 31, 2021		June 30, 2020
Raw materials	$	1,068,375	$	666,981
Work-in-process		1,128,040		500,331
Finished goods		1,997,253		2,096,538
Total Inventories	$	4,193,668	$	3,263,850

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PROPERTY, PLANT AND EQUIPMENT, NET (Tables)

9 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of property, plant and equipment

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

	March 31, 2021			June 30, 2020
Buildings	$	4,987,484		$	4,601,685
Machinery and equipment		3,207,568			2,822,686
Office equipment		73,317			67,091
Automobiles		106,492			98,848
Subtotal		8,374,861			7,590,310
Less: Accumulated depreciation		(1,581,266	)		(1,016,373	)
Property, plant and equipment, net	$	6,793,595		$	6,573,937

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INTANGIBLE ASSETS, NET (Tables)

9 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets

Intangible assets consist of the following:

	March 31, 2021			June 30, 2020
Land use right	$	1,554,011		$	1,442,456
Computer software		29,399			25,039
Subtotal		1,583,410			1,467,495
Less: Accumulated amortization		(92,321	)		(43,091	)
Intangible assets, net	$	1,491,089		$	1,424,404

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SHORT-TERM BANK LOAN (Tables)

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schdeule of short-term bank loans

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

		March 31, 2021		June 30, 2020
Loan payable to Industrial Bank, due November 2020	(1)	$	-	$	1,836,288
Loan payable to Industrial Bank, due May 2021	(2)		166,290		154,353
Loan payable to Industrial Bank, due June 2021	(2)		47,504		44,094
Loan payable to Industrial Bank, due August 2021	(3)		547,090		-
Loan payable to Industrial Bank, due June 2021	(4)		456,531		-
Total		$	1,217,415	$	2,034,735

(1) On November 19, 2019, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.7 million (RMB 18 million) for a year until November 18, 2020 with annual interest rate of 5.22%. The borrowing was collateralized by the Company’s buildings and land use right. In addition, the borrowing was guaranteed by the Company’s shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On May 20, 2020, Fangguan Electronics partially repaid this bank loan of approximately US$760,000 (RMB5,000,000). On August 28, 2020 and September 21, 2020, Fangguan Electronics further partially repaid this bank loan of approximately US$457,000 (RMB3,000,000) and US$760,000 (RMB5,000,000) respectively. On November 18, 2020, Fangguan Electronics repaid the remaining balance in full of this bank loan of approximately US$760,000 (RMB5,000,000).

(2) During May and Jun 2020, Fangguan Electronics issued two one-year commercial acceptance bills with amounts of approximately US$166,000 (RMB1,092,743) and US$48,000 (RMB312,161) and maturity dates at May 21, 2021 and June 11, 2021 respectively. On May 22, 2020 and June 16, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.85% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the aforementioned RMB18 million loan under the same bank.

(3) During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$547,000 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$457,000 (RMB3,000,000) in full upon maturity.

(4) During December 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at June 4, 2021. On December 7, 2020, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank.

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RELATED PARTY TRANSACTIONS AND BALANCES (Tables)

9 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of due to related parties

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

		March 31, 2021		June 30, 2020
Ben Wong	(1)	$	143,792	$	143,792
Yubao Liu	(2)		398,866		102,938
Xin Sui	(3)		2,016		2,016
Baozhen Deng	(4)		5,601		9,437
Shenzhen Baileqi S&T	(5)		23,937		-
Jialin Liang	(6)(11)		1,676,679		901,460
Xuemei Jiang	(7)(10)		544,793		505,685
Shikui Zhang	(8)		51,800		28,528
Changyong Yang	(9)		32,151		23,063
		$	2,879,635	$	1,716,919

(1) Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(2) Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc.

(3) Xin Sui is a member of the board of directors of Welly Surplus.

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

(5) Shenzhen Baileqi S&T is a company owned by Baozhen Deng, a stockholder of the Company.

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

(7) Xuemei Jiang is a stockholder of the Company and the vice president and director of Fangguan Electronics.

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

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

(10) The liability was assumed from the acquisition of Fangguan Electronics.

(11) The Company assumed liability of approximately $5.8 million (RMB39,581,883) from Jialin Liang during the acquisition of Fangguan Electronics. During the year ended June 30, 2019, approximately $4.4 million (RMB30,000,000) liability assumed was forgiven and converted to capital.

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CONCENTRATION (Tables)

9 Months Ended

Mar. 31, 2021

Risks and Uncertainties [Abstract]

Schedule of concentration risk

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of  total accounts  receivable
Customer A	$	2,047,553		12	%	$	24,960		1	%
Customer B		2,009,817		11	%		376,704		10	%
Total	$	4,057,370		23	%	$	401,664		11	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Revenue		Percentage of  total revenue			Accounts  receivable		Percentage of total accounts  receivable
Customer A	$	315,541		11	%	$	24,960		1	%
Customer B		748,422		27	%		376,704		10	%
Total	$	1,063,963		38	%	$	401,664		11	%

Schedule of major suppliers

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

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

	For the Nine Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A – related party	$	1,642,532		12	%	$	-		-	%
Supplier B		2,582,034		19	%		-		-	%
Total	$	4,224,566		31	%	$	-		-	%

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

	For the Three Months Ended   March 31, 2020					As of March 31, 2020
	Purchase		Percentage of  total purchase			Accounts  payable		Percentage of  total accounts  payable
Supplier A	$	413,924		18	%	$	-		-	%
Total	$	413,924		18	%	$	-		-	%

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INCOME TAXES (Tables)

9 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of reconciliation of income tax expense

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

	For the Nine Months Ended March 31,
	2021			2020
Tax (benefit) at U.S. statutory rate	$	(215,790	)	$	76,062
Tax rate difference between foreign operations and U.S.		26,511			(88,730	)
Change in valuation allowance		155,922			168,429
Permanent difference		9,802			(4,274	)
Effective tax (benefit)	$	(23,555	)	$	151,487

Schedule of provisions for income taxes

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

	For the Nine Months Ended March 31,
	2021			2020
Current	$	2,353		$	150,181
Deferred		(25,908	)		1,306
Total	$	(23,555	)	$	151,487

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CONVERTIBLE DEBT (Tables)

9 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of convertible notes payable

As of June 30, 2020, convertible notes payable consists of:

		Note Balance		Debt discount			Carrying Value
Power Up Lending Group Ltd	(1)	$	39,000	$	(1,953	)	$	37,047
Firstfire Global Opportunities Fund LLC	(2)		165,000		(32,909	)		132,091
Power Up Lending Group Ltd	(3)		53,000		(13,995	)		39,005
Crown Bridge Partners	(4)		51,384		(15,095	)		36,289
Morningview Financial LLC	(5)		165,000		(64,416	)		100,584
BHP Capital NY	(6)		91,789		-			91,789
Labrys Fund, LP	(7)		146,850		(69,265	)		77,585
Total		$	712,023	$	(197,633	)	$	514,390

(1) On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

During the nine months ended March 31, 2021, Power Up Lending Group Ltd elected to convert $39,000 of the principal amount together with $4,916 of accrued and unpaid interest of the convertible notes into 264,970 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $32,778. (See Note 10)

The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021.

(2) On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the “OID”), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Firstfire Global Opportunities Fund LLC elected to convert $68,850 of the principal amount of the convertible notes into 4,125,000 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $67,512 (See Note 10).

After the foregoing conversions, on November 12, 2020, the Company paid Firstfire Global Opportunities Fund LLC, the holder of the Company’s convertible debt an aggregate of $130,500 in order to terminate their convertible note dated September 11, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 13, 2020. The debt settlement resulted in a gain on extinguishment of debt of $94,928.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(3) On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On September 16, 2020, the Company entered into a Note Settlement Agreement with Power Up Lending Group Ltd., the holder of the Company’s convertible debt. The Note Settlement Agreement terminated their convertible note dated November 4, 2019, including all accrued and unpaid interest, after the Company paid an aggregate of $75,000 on September 16, 2020. The debt settlement resulted in a gain on extinguishment of debt of $15,346.

(4) On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019. The conversion resulted in a loss on extinguishment of debt of $22,424. (See Note 10)

After the foregoing conversions, on December 7, 2020, the Company paid Crown Bridge Partners, LLC, the holder of the Company’s convertible debt an aggregate of $82,500 in order to terminate their convertible note dated November 12, 2019, including all accrued and unpaid interest. Among the total, payment of $60,000 was made by Yubao Liu on behalf of the Company while the remaining payment of $22,500 was made directly by the Company. The note holder confirmed this full settlement on December 10, 2020. The debt settlement resulted in a gain on extinguishment of debt of $206,377.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

(5) On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.

On September 24, 2020, Morningview Financial, LLC elected to convert $15,000 of the principal amount of the convertible notes into 568,182 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $5,907. (See Note 10)

After the foregoing conversions, on November 12, 2020, the Company paid Morningview Financial, LLC, the holder of the Company’s convertible debt an aggregate of $175,000 in order to terminate their convertible note dated November 20, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 14, 2020. The debt settlement resulted in a gain on extinguishment of debt of $209,604.

The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31 ,2021.

(6) On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

On April 14, 2020, the Company entered into an Amendment to Securities Purchase Agreement with BHP Capital NY, Inc dated on December 3, 2019. The Company agreed to pay off this note holder in 6 installments of $23,186.79 each, with an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The repayment resulted in a loss on extinguishment of debt of $4,703, which was included in other income and expense in the consolidated statement of comprehensive income (loss) for the year ended June 30, 2020.

In May and June 2020, the Company paid two installments totaling $46,373 (including principal of $45,325 and interest of $1,048) and note payable balance decreased to $91,789 as of June 30, 2020. During the period from July to September 2020, the Company continued to pay 4 installments of an aggregate amount of $92,748 (including principal of $91,789 and interest of $959).

As of the date of this report, the Company has made total six installments payment of an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The note payable balance decreased to zero as of March 31, 2021.

(7) On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.

During the nine months ended March 31, 2021, Labrys Fund, LP elected to convert $146,850 of the principal amount together with all accrued and unpaid interest of the convertible notes into 4,012,478 shares of the Company’s common stock. The conversion resulted in a loss on extinguishment of debt of $128,018. The remaining principal balance due under this convertible note after all conversions is zero as of March 31, 2021. (See Note 10)

Schedule of change of derivative liabilities

The change of derivative liabilities is as follows:

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

Schedule for estimated fair value of the derivative instruments using the Black-Scholes option pricing model

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

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

Schedule for estimated fair value of the warrants using the Black-Scholes option pricing model

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

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

Schedule of outstanding warrants

The details of the outstanding warrants are as follows:

	Number of  shares			Weighted Average  Exercise Price		Remaining  Contractual Term (years)
Outstanding at July 1, 2020		229,166		$	2.68		4.2 to 4.53
Granted		-			-		-
Exercised or settled		(160,416	)		2.63		4.05 to 4.16
Cancelled or expired		-			-		-
Outstanding at March 31, 2021		68,750		$	2.80		3.78

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SEGMENT INFORMATION (Tables)

9 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schdeule of business segment information

The following tables provide the business segment information for the three and nine months ended March 31, 2021 and 2020.

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

	For the Nine Months Ended March 31, 2020
	Smart energy		Photoelectric display		Service contracts		Unallocated items			Total
Revenues	$	1,719,127	$	15,236,570	$	629,771	$	-		$	17,585,468
Cost of Revenues		1,642,532		12,786,020		421,642		-			14,850,194
Gross profit		76,595		2,450,550		208,129		-			2,735,274
Operating expenses		10,094		1,491,200		25,326		497,501			2,024,121
Income (loss) from operations		66,501		959,350		182,803		(497,501	)		711,153
Net income (loss)	$	59,915	$	779,838	$	165,603	$	(794,644	)	$	210,712

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

	For the Three Months Ended March 31, 2020
	Smart energy			Photoelectric display			Service contracts			Unallocated items			Total
Revenues	$	181,033		$	2,561,267		$	9,870		$	-		$	2,752,170
Cost of Revenues		177,995			2,256,426			72,097			-			2,506,518
Gross profit (loss)		3,038			304,841			(62,227	)		-			245,652
Operating expenses		3,960			377,641			8,109			248,935			638,645
Loss from operations		(922	)		(72,800	)		(70,336	)		(248,935	)		(392,993	)
Net income (loss)	$	347		$	(83,297	)	$	(64,462	)	$	(488,810	)	$	(636,222	)

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NATURE OF OPERATIONS (Details Narrative)	Dec. 27, 2018 USD ($) $ / shares shares	Mar. 31, 2021	Dec. 27, 2018 CNY (¥)
Percentage of voting interests acquired		95.14%
Share Purchase Agreement [Member] | Fangguan Electronics Two Share Holders [Member]
Percentage of voting interests acquired	95.14%		95.14%
Number of shares issue | shares	15,000,000
Number of shares issue, par value (in dollars per share) | $ / shares	$ 0.0001
Description of ownership right acquire	The ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronis.
Shareholder loan | $	$ 4,400,000
Cash | $	$ 1,400,000
Share Purchase Agreement [Member] | Fangguan Electronics Two Share Holders [Member] | RMB
Shareholder loan | ¥			¥ 30,000,000
Cash | ¥			¥ 9,700,000

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GOING CONCERN (Details Narrative) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Going Concern [Abstract]
Accumulated deficit	$ (741,820)	$ 262,198

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Mar. 31, 2021
Land Use Rights [Member]
Estimated useful life of intangible assets	50 years
Minimum [Member] | Computer Software [Member]
Estimated useful life of intangible assets	2 years
Maximum [Member] | Computer Software [Member]
Estimated useful life of intangible assets	5 years
Buildings [Member] | Minimum [Member]
Estimated useful life of tangible assets	10 years
Buildings [Member] | Maximum [Member]
Estimated useful life of tangible assets	20 years
Machinery and Equipment [Member] | Minimum [Member]
Estimated useful life of tangible assets	5 years
Machinery and Equipment [Member] | Maximum [Member]
Estimated useful life of tangible assets	10 years
Office Equipment [Member] | Minimum [Member]
Estimated useful life of tangible assets	3 years
Office Equipment [Member] | Maximum [Member]
Estimated useful life of tangible assets	5 years
Automobiles [Member]
Estimated useful life of tangible assets	5 years

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Total Revenues	$ 3,160,746	$ 2,752,170	$ 9,102,094	$ 17,585,468
Non-Related Parties [Member]
Total Revenues	3,160,474	2,487,465	9,100,076	14,518,376
Related parties [Member]
Total Revenues		73,802		718,194
Portable Power Banks [Member]
Total Revenues		181,033		1,719,127
Service [Member]
Total Revenues	$ 272	$ 9,870	$ 2,018	$ 629,771

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2)	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020
Statements of Comprehensive Income (Loss) and Cash Flows [Member]
Exchange rate	6.8254		6.9799
Balance Sheet [Member]
Exchange rate	6.5713	7.0795

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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Percentage of voting interests acquired	95.14%		95.14%
Percentage of recieve net income or net loss			100.00%
Outstanding warrants	899,753	899,753	899,753	899,753
Outstanding convertible notes	$ 68,750	$ 842,313	$ 1,096,705	$ 1,096,705
Bad debt expense			0	$ 0
Non-Related Parties [Member]
Account receivable	3,253,702		3,253,702		$ 3,273,141
Net of allowance for doubtful accounts	$ 150,406		$ 150,406		$ 139,609
Minimum [Member]
Lease term	12 months		12 months
Land Use Rights [Member]
Estimated useful life of intangible assets			50 years

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VARIABLE INTEREST ENTITY (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019
Cash and cash equivalents	$ 542,092	$ 1,285,373	$ 1,834,763	$ 509,615
Notes receivable	99,327	125,798
Inventory	4,193,668	3,263,850
Advances to suppliers - non-related parties	921,417	540,259
Prepaid expenses and other current assets	476,407	320,296
Total Current Assets	9,913,465	9,166,294
Property, plant and equipment, net	6,793,595	6,573,937
Intangible assets, net	1,491,089	1,424,404
Total Assets	18,760,312	17,185,378
Short-term bank loan	1,217,415	2,034,735
Accounts payable	2,650,376	2,637,792
Advance from customers	351,225	43,077
Due to related parties	2,879,635	1,716,919
Accrued expenses and other current liabilities	78,536	359,577
Total Current Liabilities	7,748,280	7,582,756
Total Liabilities	7,748,280	7,582,756
Variable Interest Entities [Member]
Cash and cash equivalents	326,885	1,266,426
Notes receivable	99,327	125,798
Accounts receivable - non-related parties	3,092,630	3,069,629
Inventory	3,648,512	2,639,839
Advances to suppliers - non-related parties	737,284	530,670
Prepaid expenses and other current assets	62,442	58,103
Total Current Assets	7,967,080	7,690,465
Property, plant and equipment, net	6,788,886	6,568,874
Intangible assets, net	1,491,089	1,424,404
Deferred tax assets	49,257	20,743
Total Assets	16,296,312	15,704,486
Short-term bank loan	1,217,415	2,034,735
Accounts payable	2,650,376	2,637,792
Advance from customers	16,648	27,501
Due to related parties	2,221,473	1,407,145
Accrued expenses and other current liabilities	29,076	61,856
Total Current Liabilities	6,134,988	6,169,029
Total Liabilities	$ 6,134,988	$ 6,169,029

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VARIABLE INTEREST ENTITY (Details Narrative) - shares	Dec. 27, 2018	Mar. 31, 2021
Percentage of voting interests acquired		95.14%
Share Purchase Agreement [Member] | Changchun Fangguan Electronics Technology Co Ltd Two Share Holders [Member]
Percentage of voting interests acquired	95.14%
Number of shares issue	15,000,000
Description of ownership right acquire	The ownership rights and receive 100% of the net profit or net losses derived from the business operations of Fangguan Electronis.

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INVENTORIES (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 1,068,375	$ 666,981
Work-in-process	1,128,040	500,331
Finished goods	1,997,253	2,096,538
Total Inventories	$ 4,193,668	$ 3,263,850

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OPERATING LEASE (Details Narrative)					9 Months Ended
	Jul. 20, 2020 USD ($)	Jul. 20, 2020 CNY (¥)	Jun. 05, 2020 USD ($)	Jun. 05, 2020 CNY (¥)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 CNY (¥)
Lease term					12 months or shorter.	12 months or shorter.
Shenzhen Baileqi Science And Technology Co Ltd [Member] | Office and Warehouse [Member]
Monthly rent | $			$ 2,500		$ 2,500
Lease term			One more year until May 31, 2021	One more year until May 31, 2021	June 1, 2019 to May 31, 2020	June 1, 2019 to May 31, 2020
Shenzhen Baileqi Science And Technology Co Ltd [Member] | Office and Warehouse [Member] | RMB
Monthly rent | ¥				¥ 17,525		¥ 17,525
Shenzhen Keenest Technology Co. Ltd. [Member] | Office and Warehouse [Member]
Monthly rent | $	$ 1,500				$ 1,500
Lease term	One more year until July 20, 2021	One more year until July 20, 2021			One year until July 20, 2020	One year until July 20, 2020
Shenzhen Keenest Technology Co. Ltd. [Member] | Office and Warehouse [Member] | RMB
Monthly rent | ¥		¥ 10,000				¥ 10,000

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PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Subtotal	$ 8,374,861	$ 7,590,310
Less: Accumulated depreciation	(1,581,266)	(1,016,373)
Property, plant and equipment, net	6,793,595	6,573,937
Buildings [Member]
Subtotal	4,987,484	4,601,685
Machinery and Equipment [Member]
Subtotal	3,207,568	2,822,686
Office Equipment [Member]
Subtotal	73,317	67,091
Automobiles [Member]
Subtotal	$ 106,492	$ 98,848

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PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 167,245	$ 174,381	$ 468,186	$ 558,789

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INTANGIBLE ASSETS, NET (Details) - USD ($)	Mar. 31, 2021	Jun. 30, 2020
Subtotal	$ 1,583,410	$ 1,467,495
Less: Accumulated amortization	(92,321)	(43,091)
Intangible assets, net	1,491,089	1,424,404
Land Use Rights [Member]
Subtotal	1,554,011	1,442,456
Computer Software [Member]
Subtotal	$ 29,399	$ 25,039

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INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 10,063	$ 7,164	$ 44,189	$ 21,836

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SHORT-TERM BANK LOAN (Details) - USD ($)		Mar. 31, 2021	Jun. 30, 2020
Total		$ 1,217,415	$ 2,034,735
Loan Payable to Industrial Bank, due November 2020 [Member]
Total	[1]		1,836,288
Loan Payable to Industrial Bank, due May 2021 [Member]
Total	[2]	166,290	154,353
Loan Payable to Industrial Bank, due June 2021 [Member]
Total	[2]	47,504	44,094
Loan Payable to Industrial Bank, due August 2021 [Member]
Total	[3]	547,090
Loan Payable to Industrial Bank, due June 2021 [Member]
Total	[4]	$ 456,531

[1] On November 19, 2019, Fangguan Electronics entered into a short-term loan agreement with Industrial Bank to borrow approximately US$2.7 million (RMB 18 million) for a year until November 18, 2020 with annual interest rate of 5.22%. The borrowing was collateralized by the Company's buildings and land use right. In addition, the borrowing was guaranteed by the Company's shareholder and CEO of Fangguan Electronics, Mr. Jialin Liang, and his wife Ms. Dongjiao Su. On May 20, 2020, Fangguan Electronics partially repaid this bank loan of approximately US$760,000 (RMB5,000,000). On August 28, 2020 and September 21, 2020, Fangguan Electronics further partially repaid this bank loan of approximately US$457,000 (RMB3,000,000) and US$760,000 (RMB5,000,000) respectively. On November 18, 2020, Fangguan Electronics repaid the remaining balance in full of this bank loan of approximately US$760,000 (RMB5,000,000).

[2] During May and Jun 2020, Fangguan Electronics issued two one-year commercial acceptance bills with amounts of approximately US$166,000 (RMB1,092,743) and US$48,000 (RMB312,161) and maturity dates at May 21, 2021 and June 11, 2021 respectively. On May 22, 2020 and June 16, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.85% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the aforementioned RMB18 million loan under the same bank.

[3] During August 2020, Fangguan Electronics issued a one-year commercial acceptance bill with amount of approximately US$547,000 (RMB3,595,096) and maturity date at August 6, 2021. During September 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at March 9, 2021. On August 11, 2020 and September 10, 2020, the two commercial acceptance bills were discounted with Industrial Bank at an interest rate of 3.80% and the balance of the two commercial acceptance bills converted to bank loans with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank. In March 2021, Fangguan Electronics repaid the commercial acceptance bill of approximately US$457,000 (RMB3,000,000) in full upon maturity.

[4] During December 2020, Fangguan Electronics issued a six-month commercial acceptance bill with amount of approximately US$457,000 (RMB3,000,000) and maturity date at June 4, 2021. On December 7, 2020, the commercial acceptance bill was discounted with Industrial Bank at an interest rate of 3.85% and the balance of the commercial acceptance bill converted to bank loan with Industrial Bank based on a mutual agreement from both parties. This loan was also secured by the same collateral as the above RMB18 million loan under the same bank.

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SHORT-TERM BANK LOAN (Details Narrative) - Fangguan Electronics [Member]														1 Months Ended				9 Months Ended
	Nov. 18, 2020 USD ($)	Nov. 18, 2020 CNY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 CNY (¥)	Sep. 21, 2020 USD ($)	Sep. 21, 2020 CNY (¥)	Aug. 31, 2020 USD ($)	Aug. 31, 2020 CNY (¥)	Aug. 28, 2020 USD ($)	Aug. 28, 2020 CNY (¥)	May 20, 2020 USD ($)	May 20, 2020 CNY (¥)	Nov. 19, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 CNY (¥)	May 31, 2020 USD ($)	May 31, 2020 CNY (¥)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 CNY (¥)	Dec. 07, 2020 CNY (¥)	Nov. 19, 2019 CNY (¥)
Commercial Bills [Member]
Interest rate				3.80%				3.80%							3.85%		3.85%
Debt term			6 months	6 months			1 year	1 year						1 year	1 year	1 year	1 year
Debt maturity date			Mar. 09, 2021	Mar. 09, 2021			Aug. 06, 2021	Aug. 06, 2021						Jun. 11, 2021	Jun. 11, 2021	May 21, 2021	May 21, 2021
Proceeds from issuance of commercial bills | $			$ 457,000				$ 547,000							$ 48,000		$ 166,000
RMB | Commercial Bills [Member]
Proceeds from issuance of commercial bills				¥ 3,000,000				¥ 3,595,096							¥ 312,161		¥ 1,092,743
Loan secured amount				¥ 18,000,000				¥ 18,000,000							¥ 18,000,000		¥ 18,000,000
Short-Term Loan Agreement [Member] | Industrial Bank [Member]
Borrowed amount | $													$ 2,700,000
Interest rate													5.22%								5.22%
Debt maturity date													Nov. 18, 2020
Description of collateral													The borrowing was collateralized by the Company’s buildings and land use right.
Repayment of bank loan | $	$ 760,000				$ 760,000				$ 457,000		$ 760,000
Short-Term Loan Agreement [Member] | Industrial Bank [Member] | Commercial Bills [Member]
Interest rate																		3.85%	3.85%
Debt term																		6 months	6 months
Debt maturity date																		Jun. 04, 2021	Jun. 04, 2021
Proceeds from issuance of commercial bills | $																		$ 457,000
Short-Term Loan Agreement [Member] | Industrial Bank [Member] | RMB
Borrowed amount																					¥ 18,000,000
Repayment of bank loan		¥ 5,000,000				¥ 5,000,000				¥ 3,000,000		¥ 5,000,000
Short-Term Loan Agreement [Member] | Industrial Bank [Member] | RMB | Commercial Bills [Member]
Proceeds from issuance of commercial bills																			¥ 3,000,000
Loan secured amount																				¥ 18,000,000

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STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)						1 Months Ended	3 Months Ended			9 Months Ended
	Mar. 10, 2021	Jan. 13, 2021	Dec. 31, 2020	Dec. 21, 2020	Mar. 10, 2020	Dec. 31, 2020	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Loss on extinguishment of debt									$ (15,074)	$ 202,588	$ (15,074)
Value of shares issued								$ 67,028
Common Stock [Member]
Number of shares issued (in shares)								1,500,000
Value of shares issued								$ 150
Subscription Agreements [Member] | Nine Individual Subscribers [Member] | Private Placement [Member] | Common Stock [Member]
Number of shares issued (in shares)						28,869,999
Value of shares issued						$ 433,000
Share price			$ 0.015			$ 0.015		$ 0.015
Subscription Agreements [Member] | One Individual Subscribers [Member] | Private Placement [Member] | Common Stock [Member]
Number of shares issued (in shares)		7,000,000
Value of shares issued		$ 105,000
Share price		$ 0.015
Convertible Debt [Member]
Number of shares issued upon debt conversion										9,470,630
Value of shares issued upon debt conversion										$ 273,200
Loss on extinguishment of debt										256,639
Convertible Debt [Member] | Firstfire Global Opportunities Fund LLC [Member]
Debt issuance date				Sep. 11, 2019
Number of shares issued upon debt conversion				1,500,000
Exercise of warrants										$ 67,028
Promissory Note [Member] | Labrys Fund, L.P [Member]
Principal amount	$ 500,000			$ 300,000
Debt maturity date	Mar. 10, 2022			Dec. 21, 2021
Interest rate	5.00%			5.00%
Number of shares reserve for issuance	6,562,500			7,052,239
Promissory Note [Member] | Labrys Fund, L.P [Member] | Common Stock (First Commitment Shares) [Member]
Number of shares issued (in shares)	417,000		447,762
Debt discount amount	$ 87,153		$ 68,060			$ 68,060		$ 68,060
Promissory Note [Member] | Labrys Fund, L.P [Member] | Common Stock (Second Commitment Shares) [Member]
Number of shares issued (in shares)			1,119,402		1,042,000

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RELATED PARTY TRANSACTIONS AND BALANCES (Details) - USD ($)		Mar. 31, 2021	Jun. 30, 2020
Due to related parties		$ 2,879,635	$ 1,716,919
Ben Wong [Member]
Due to related parties	[1]	143,792	143,792
Yubao Liu [Member]
Due to related parties	[2]	398,866	102,938
Xin Sui [Member]
Due to related parties	[3]	2,016	2,016
Baozhen Deng [Member]
Due to related parties	[4]	5,601	9,437
Jialin Liang [Member]
Due to related parties	[5],[6]	1,676,679	901,460
Xuemei Jiang [Member]
Due to related parties	[7],[8]	544,793	505,685
Shikui Zhang [Member]
Due to related parties	[9]	51,800	28,528
Changyong Yang [Member]
Due to related parties	[10]	32,151	23,063
Shenzhen Baileqi S&T [Member]
Due to related parties	[11]	$ 23,937

[1] Ben Wong was the controlling shareholder of Shinning Glory until April 20, 2017, which holds majority shares in Ionix Technology, Inc.

[2] Yubao Liu is the controlling shareholder of Shinning Glory since April 20, 2017, which holds majority shares in Ionix Technology, Inc.

[3] Xin Sui is a member of the board of directors of Welly Surplus.

[4] Baozhen Deng is a stockholder of the Company, who owns approximately 0.8% of the Company's outstanding common stock, and the owner of Shenzhen Baileqi S&T

[5] Jialin Liang is a stockholder of the Company and the president, CEO, and director of Fangguan Electronics.

[6] The Company assumed liability of approximately $5.8 million (RMB39,581,883) from Jialin Liang during the acquisition of Fangguan Electronics. During the year ended June 30, 2019, approximately $4.4 million (RMB30,000,000) liability assumed was forgiven and converted to capital.

[7] The liability was assumed from the acquisition of Fangguan Electronics.

[8] Xuemei Jiang is a stockholder of the Company and the vice president and director of Fangguan Electronics.

[9] Shikui Zhang is a stockholder of the Company and serves as the legal representative and general manager of Shizhe New Energy since May 2019.

[10] Changyong Yang is a stockholder of the Company, who owns approximately 1.4% of the Company's outstanding common stock, and the owner of Keenest.

[11] Shenzhen Baileqi S&T is a company owned by Baozhen Deng, a stockholder of the Company.

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RELATED PARTY TRANSACTIONS AND BALANCES (Details Narrative)				3 Months Ended		9 Months Ended			12 Months Ended
	Sep. 23, 2020 USD ($)	Jul. 20, 2020 USD ($)	Jun. 05, 2020 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2021 USD ($)	Mar. 31, 2021 CNY (¥)	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)
Related Party Transaction [Line Items]
Revenue from related party				$ 3,160,746	$ 2,752,170	$ 9,102,094		$ 17,585,468
Shenzhen Baileqi S & T [Member]
Related Party Transaction [Line Items]
Ownership percentage					0.70%			0.70%
Keenest [Member]
Related Party Transaction [Line Items]
Ownership percentage					1.30%			1.30%
Jialin Liang [Member]
Related Party Transaction [Line Items]
Advances from related parties	$ 457,000			249,000
Interest rate	3.85%
Jialin Liang [Member] | Fangguan Electronics [Member]
Related Party Transaction [Line Items]
Due to related parties				5,800,000		5,800,000				$ 4,400,000
RMB | Jialin Liang [Member]
Related Party Transaction [Line Items]
Advances from related parties	$ 3,000,000			1,636,080
RMB | Jialin Liang [Member] | Fangguan Electronics [Member]
Related Party Transaction [Line Items]
Due to related parties				39,581,883		39,581,883				$ 30,000,000
Keenest [Member]
Related Party Transaction [Line Items]
Purchases from related party					$ 177,995			$ 1,642,532
Cost of revenue - purchases related party					177,995			1,642,532
Advances from related parties						426,852			$ 357,577
Shenzhen Baileqi S & T [Member]
Related Party Transaction [Line Items]
Purchases from related party					0			37,495
Cost of revenue - purchases related party					0			37,495
Revenue from related party				$ 73,802	$ 0	0		$ 718,194
Lisite Science [Member] | Office and Warehouse Space [Member]
Related Party Transaction [Line Items]
Annual rent						$ 1,500
Lease renewal term						One year until July 20, 2020.	One year until July 20, 2020.
Lisite Science [Member] | Office and Warehouse Space [Member] | RMB
Related Party Transaction [Line Items]
Annual rent		$ 10,000
Lisite Science [Member] | Office and Warehouse Space [Member]
Related Party Transaction [Line Items]
Annual rent		$ 1,500
Lease renewal term		One more year until July 20, 2021
Lisite Science [Member] | Office and Warehouse Space [Member] | RMB
Related Party Transaction [Line Items]
Annual rent | ¥							¥ 10,000
Baileqi Electronic [Member] | Baozhu Deng [Member]
Related Party Transaction [Line Items]
Advances from related parties						$ 23,937
Payment to releted party						$ 3,836
Baileqi Electronic [Member] | Office and Warehouse Space [Member]
Related Party Transaction [Line Items]
Lease renewal term			One more year until May 31, 2021			June 1, 2019 to May 31, 2020.	June 1, 2019 to May 31, 2020.
Monthly rent			$ 2,500			$ 2,500
Baileqi Electronic [Member] | Office and Warehouse Space [Member] | RMB
Related Party Transaction [Line Items]
Monthly rent							¥ 17,525		$ 17,525
Shikui Zhang [Member] | Dalian Shizhe New Energy Technology Co., Ltd. [Member]
Related Party Transaction [Line Items]
Advances from related parties						23,000
Changyong Yang [Member] | Shenzhen Keenest Technology Co. Ltd. [Member] | Ownership [Member]
Related Party Transaction [Line Items]
Ownership percentage					1.30%			1.30%
Changyong Yang [Member] | Lisite Science [Member]
Related Party Transaction [Line Items]
Advances from related parties						9,000
Yubao Liu [Member] | Well Best [Member]
Related Party Transaction [Line Items]
Advances from related parties						$ 295,928
Baozhu Deng [Member] | Baileqi Electronic [Member]
Related Party Transaction [Line Items]
Payment to releted party								$ 5,303
Baozhen Deng [Member] | Shenzhen Baileqi Science And Technology Co Ltd [Member] | Ownership [Member]
Related Party Transaction [Line Items]
Ownership percentage					0.70%			0.70%
Baozhen Deng [Member] | Liang Zhang [Member]
Related Party Transaction [Line Items]
Payment to releted party								$ 625
Baozhen Deng [Member] | Baileqi Electronic [Member]
Related Party Transaction [Line Items]
Payment to releted party								2,706
Shizhe New Energy [Member] | Zijian Yang [Member]
Related Party Transaction [Line Items]
Payment to releted party								1,869
Shizhe New Energy [Member] | Shikui Zhang [Member]
Related Party Transaction [Line Items]
Advances from related parties								$ 21,732

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CONCENTRATION (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020	Dec. 31, 2019
Revenues	$ 3,160,746	$ 2,752,170	$ 9,102,094	$ 17,585,468
Accounts receivable	3,253,702		3,253,702		$ 3,273,141
Accounts payable	2,650,376		2,650,376		$ 2,637,792
Revenue [Member]
Revenues	$ 1,538,843	$ 1,063,963	$ 3,969,064	$ 4,057,370
Concentration risk percentage	48.00%	38.00%	43.00%	23.00%
Revenue [Member] | Customer A [Member]
Revenues	$ 612,781	$ 315,541	$ 1,666,368	$ 2,047,553
Concentration risk percentage	19.00%	12.00%	18.00%	12.00%
Revenue [Member] | Customer B [Member]
Revenues	$ 484,802	$ 748,422	$ 1,352,195	$ 2,009,817
Concentration risk percentage	15.00%	11.00%	15.00%	11.00%
Revenue [Member] | Customer C [Member]
Revenues	$ 441,260		$ 950,501
Concentration risk percentage	14.00%		10.00%
Accounts Receivable [Member]
Accounts receivable	$ 413,920	$ 401,664	$ 413,920	$ 401,664
Concentration risk percentage	12.00%	11.00%	12.00%	11.00%
Accounts Receivable [Member] | Customer A [Member]
Accounts receivable	$ 229,336	$ 24,960	$ 229,336	$ 24,960
Concentration risk percentage	7.00%	1.00%	70.00%	1.00%
Accounts Receivable [Member] | Customer B [Member]
Accounts receivable		$ 376,704		$ 376,704
Concentration risk percentage		10.00%		10.00%
Accounts Receivable [Member] | Customer C [Member]
Accounts receivable	$ 184,584		$ 184,584
Concentration risk percentage	5.00%		50.00%
Purchases [Member]
Total Purchase	$ 776,135	$ 413,924	$ 1,944,875	$ 4,224,566
Concentration risk percentage	25.00%	18.00%	24.00%	31.00%
Purchases [Member] | Supplier A [Member]
Total Purchase	$ 404,404	$ 413,924	$ 1,148,322	$ 1,642,532
Concentration risk percentage	13.00%	18.00%	14.00%	12.00%
Purchases [Member] | Supplier B [Member]
Total Purchase	$ 371,731		$ 796,553	$ 2,582,034
Concentration risk percentage	12.00%		10.00%	19.00%
Accounts Payable [Member]
Accounts payable	$ 429,269		$ 429,269
Concentration risk percentage	2.00%		16.00%
Accounts Payable [Member] | Supplier A [Member]
Accounts payable	$ 65,123		$ 65,123
Concentration risk percentage	2.00%		2.00%
Accounts Payable [Member] | Supplier B [Member]
Accounts payable	$ 364,146		$ 364,146
Concentration risk percentage			14.00%

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INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Tax (benefit) at U.S. statutory rate			$ (215,790)	$ 76,062
Tax rate difference between foreign operations and U.S.			26,511	(88,730)
Change in valuation allowance			155,922	168,429
Permanent difference			9,802	(4,274)
Effective tax (benefit)	$ 1,949	$ (29,962)	$ (23,555)	$ 151,487

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INCOME TAXES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Current			$ 2,353	$ 150,181
Deferred			(25,908)	1,306
Total	$ 1,949	$ (29,962)	$ (23,555)	$ 151,487

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INCOME TAXES (Details Narrative) - USD ($)		9 Months Ended
	Dec. 22, 2017	Mar. 31, 2021
Previously corporate tax rate	34.00%
Corporate tax rate	21.00%
Valuation allowancealuation allowance tax rate	100.00%
Description of territorial tax		Earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits.
Operating loss carryforwards		$ 3,778,000
Expiration year		2035
CHINA
Description of income tax rate on foreign subsidiary		The Company’s subsidiaries in China are subject to a unified income tax rate of 25%. Fangguan Electronics was certified as high-tech enterprises for three calendar years from 2016 to 2019 and is taxed at a unified income tax rate of 15%.
Foreign income tax rate		25.00%
Unified income tax rate		15.00%
Renewed unified income tax rate		15.00%
Inland Revenue, Hong Kong [Member]
Foreign income tax rate		16.50%

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CONVERTIBLE DEBT (Details) - USD ($)		Mar. 31, 2021	Jun. 30, 2020
Carrying Value			$ 514,390
Convertible Debt [Member]
Note Balance			712,023
Debt discount			(197,633)
Carrying Value			514,390
Convertible Debt [Member] | Power Up Lending Group Ltd [Member]
Note Balance	[1]		39,000
Debt discount	[1]		(1,953)
Carrying Value	[1]		37,047
Convertible Debt [Member] | Firstfire Global Opportunities Fund LLC [Member]
Note Balance	[2]		165,000
Debt discount	[2]		(32,909)
Carrying Value	[2]		132,091
Convertible Debt [Member] | Power Up Lending Group Ltd [Member]
Note Balance	[3]		53,000
Debt discount	[3]		(13,995)
Carrying Value	[3]		39,005
Convertible Debt [Member] | Crown Bridge Partners [Member]
Note Balance	[4]		51,384
Debt discount	[4]		(15,095)
Carrying Value	[4]		36,289
Convertible Debt [Member] | Morningview Financial LLC [Member]
Note Balance	[5]		165,000
Debt discount	[5]		(64,416)
Carrying Value	[5]		100,584
Convertible Debt [Member] | BHP Capital NY [Member]
Note Balance	[6]		91,789
Debt discount	[6]
Carrying Value	[6]		91,789
Convertible Debt [Member] | Labrys Fund, L.P [Member]
Note Balance	[7]		146,850
Debt discount	[7]		(69,265)
Carrying Value	[7]		$ 77,585

[1] On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

[2] On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the "OID"), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. During the nine months ended March 31, 2021, Firstfire Global Opportunities Fund LLC elected to convert $68,850 of the principal amount of the convertible notes into 4,125,000 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $67,512 (See Note 10). After the foregoing conversions, on November 12, 2020, the Company paid Firstfire Global Opportunities Fund LLC, the holder of the Company's convertible debt an aggregate of $130,500 in order to terminate their convertible note dated September 11, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 13, 2020. The debt settlement resulted in a gain on extinguishment of debt of $94,928. The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

[3] On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. On September 16, 2020, the Company entered into a Note Settlement Agreement with Power Up Lending Group Ltd., the holder of the Company's convertible debt. The Note Settlement Agreement terminated their convertible note dated November 4, 2019, including all accrued and unpaid interest, after the Company paid an aggregate of $75,000 on September 16, 2020. The debt settlement resulted in a gain on extinguishment of debt of $15,346.

[4] On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company's common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019. The conversion resulted in a loss on extinguishment of debt of $22,424. (See Note 10).After the foregoing conversions, on December 7, 2020, the Company paid Crown Bridge Partners, LLC, the holder of the Company's convertible debt an aggregate of $82,500 in order to terminate their convertible note dated November 12, 2019, including all accrued and unpaid interest. Among the total, payment of $60,000 was made by Yubao Liu on behalf of the Company while the remaining payment of $22,500 was made directly by the Company. The note holder confirmed this full settlement on December 10, 2020. The debt settlement resulted in a gain on extinguishment of debt of $206,377. The remaining principal balance due under this convertible note after all conversions and settlement is zero as of December 31, 2020.

[5] On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. On September 24, 2020, Morningview Financial, LLC elected to convert $15,000 of the principal amount of the convertible notes into 568,182 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $5,907. (See Note 10). After the foregoing conversions, on November 12, 2020, the Company paid Morningview Financial, LLC, the holder of the Company's convertible debt an aggregate of $175,000 in order to terminate their convertible note dated November 20, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 14, 2020. The debt settlement resulted in a gain on extinguishment of debt of $209,604.The remaining principal balance due under this convertible note after all conversions and settlement is zero as of December 31, 2020.

[6] On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company's common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. On April 14, 2020, the Company entered into an Amendment to Securities Purchase Agreement with BHP Capital NY, Inc dated on December 3, 2019. The Company agreed to pay off this note holder in 6 installments of $23,186.79 each, with an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The repayment resulted in a loss on extinguishment of debt of $4,703, which was included in other income and expense in the consolidated statement of comprehensive income (loss) for the year ended June 30, 2020. In May and June 2020, the Company paid two installments totaling $46,373 (including principal of $45,325 and interest of $1,048) and note payable balance decreased to $91,789 as of June 30, 2020. During the period from July to September 2020, the Company continued to pay 4 installments of an aggregate amount of $92,748 (including principal of $91,789 and interest of $959). As of the date of this report, the Company has made total six installments payment of an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The note payable balance decreased to zero as of December 31, 2020.

[7] On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. During the six months ended December 31, 2020, Labrys Fund, LP elected to convert $146,850 of the principal amount together with all accrued and unpaid interest of the convertible notes into 4,012,478 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $128,018. The remaining principal balance due under this convertible note after all conversions is zero as of December 31, 2020. (See Note 10)

XML

CONVERTIBLE DEBT (Details 1)	9 Months Ended
	Mar. 31, 2021 USD ($)
Debt Disclosure [Abstract]
Balance at July 1, 2020	$ 276,266
Converted	(357,868)
Debt settlement	(566,030)
Change in fair value recognized in operations	647,632
Balance at December 31, 2020

XML

CONVERTIBLE DEBT (Details 2)	9 Months Ended
	Mar. 31, 2021
Estimated Dividends [Member]
Debt instrument measurement input	0
Expected Volatility [Member] | Minimum [Member]
Debt instrument measurement input	78.55
Expected Volatility [Member] | Maximum [Member]
Debt instrument measurement input	253.30
Risk Free Interest Rate [Member] | Minimum [Member]
Debt instrument measurement input	0.61
Risk Free Interest Rate [Member] | Maximum [Member]
Debt instrument measurement input	0.93
Expected Term [Member] | Minimum [Member]
Debt instrument maturity terms	0 months
Expected Term [Member] | Maximum [Member]
Debt instrument maturity terms	6 months

XML

CONVERTIBLE DEBT (Details 3)	Mar. 31, 2021
Estimated Dividends [Member]
Warrant measurement input	0
Expected Volatility [Member] | Minimum [Member]
Warrant measurement input	56.23
Expected Volatility [Member] | Maximum [Member]
Warrant measurement input	71.08
Risk Free Interest Rate [Member] | Minimum [Member]
Warrant measurement input	1.73
Risk Free Interest Rate [Member] | Maximum [Member]
Warrant measurement input	1.92
Expected Term [Member]
Warrant maturity terms	5 years

XML

CONVERTIBLE DEBT (Details 4)	9 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of shares
Outstanding at ending | shares	899,753
Warrant [Member]
Number of shares
Outstanding at beginning | shares	229,166
Granted | shares
Exercised or settled | shares	(160,416)
Cancelled or expired | shares
Outstanding at ending | shares	68,750
Weighted Average Exercise Price
Outstanding at beginning	$ 2.68
Granted
Exercised or settled	2.63
Cancelled or expired
Outstanding at ending	$ 2.8
Remaining Contractual Term (years)
Outstanding at ending	3 years 9 months 11 days
Warrant [Member] | Minimum [Member]
Weighted Average Exercise Price
Outstanding at ending	$ 2.40
Remaining Contractual Term (years)
Outstanding at beginning	4 years 2 months 12 days
Exercised or settled	4 years 18 days
Warrant [Member] | Maximum [Member]
Weighted Average Exercise Price
Outstanding at ending	$ 2.80
Remaining Contractual Term (years)
Outstanding at beginning	4 years 6 months 11 days
Exercised or settled	4 years 1 month 28 days

XML

CONVERTIBLE DEBT (Details Narrative) - USD ($)																			1 Months Ended			3 Months Ended			9 Months Ended		12 Months Ended
		Dec. 07, 2020	Nov. 12, 2020	Nov. 12, 2020	Oct. 16, 2020	Apr. 14, 2020	Jan. 13, 2020	Jan. 10, 2020	Dec. 13, 2019	Dec. 03, 2019	Nov. 22, 2019	Nov. 20, 2019	Nov. 15, 2019	Nov. 12, 2019	Nov. 04, 2019	Sep. 18, 2019	Sep. 11, 2019	Jul. 25, 2019	Nov. 30, 2020	Jun. 30, 2020	May 31, 2020	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Jun. 30, 2020
Proceeds from issuance of debt																									$ 687,500
Loss on extinguishment of debt																								$ (15,074)	$ 202,588	$ (15,074)
Warrant outstanding																						899,753		899,753	899,753	899,753
Value of shares issued																							$ 67,028
Warrant [Member]
Exercise price																				$ 2.68		$ 2.8			$ 2.8		$ 2.68
Warrant outstanding																				229,166		68,750			68,750		229,166
Warrant [Member] | Minimum [Member]
Exercise price																						$ 2.40			$ 2.40
Warrant [Member] | Maximum [Member]
Exercise price																						$ 2.80			$ 2.80
Additional Paid-in Capital [Member]
Value of shares issued																							$ 66,878
Additional Paid-in Capital [Member] | Warrant [Member]
Warrant outstanding																						147,492			147,492
Convertible Note [Member]
Loss on extinguishment of debt																									$ 256,639
Number of shares issued for conversion of convertible debt																									9,470,630
Value of shares issued for conversion of convertible debt																									$ 273,200
Convertible Note [Member]
Principal amount																				$ 712,023							$ 712,023
Amortization of debt discount																									$ 24,185	$ 160,023
Firstfire Global Opportunities Fund LLC [Member] | Convertible Promissory Note [Member] | Warrant [Member]
Number of common stock issued																									68,750
Exercise price																						$ 2.40			$ 2.40
Warrant maturity terms																						5 years			5 years
Warrant maturity date																						Sep. 11, 2024			Sep. 11, 2024
Firstfire Global Opportunities Fund LLC [Member] | Convertible Note [Member]
Principal amount	[1]																			165,000							165,000
BHP Capital NY [Member] | Convertible Note [Member]
Principal amount	[2]																			91,789							91,789
Power Up Lending Group Ltd [Member]
Loss on extinguishment of debt																									$ 32,778
Number of common stock issued																									264,970
Accrued and unpaid interest																									$ 4,916
Remaining principal balance amount																						$ 0			0
Value of shares issued for conversion of convertible debt																									39,000
Power Up Lending Group Ltd [Member] | Convertible Note [Member]
Principal amount	[3]																			39,000							39,000
Power Up Lending Group Ltd [Member] | Convertible Note [Member]
Principal amount	[4]																			53,000							53,000
Morningview Financial LLC [Member] | Convertible Promissory Note [Member] | Warrant [Member]
Principal amount																						$ 165,000			$ 165,000
Number of common stock issued																									68,750
Exercise price																						$ 2.80			$ 2.80
Warrant maturity terms																						5 years			5 years
Warrant maturity date																						Nov. 20, 2024			Nov. 20, 2024
Morningview Financial LLC [Member] | Convertible Note Due on November 20, 2020 [Member]
Loss on extinguishment of debt																									$ 5,907
Number of shares issued for conversion of convertible debt																									15,000
Value of shares issued for conversion of convertible debt																									$ 568,182
Morningview Financial LLC [Member] | Convertible Note [Member]
Principal amount	[5]																			165,000							165,000
Labrys Fund, L.P [Member] | Convertible Note [Member]
Principal amount	[6]																			146,850							146,850
Number of common stock issued																									68,750
Exercise price																						$ 2.80			$ 2.80
Warrant maturity terms																						5 years			5 years
Warrant maturity date																						Jan. 10, 2025			Jan. 10, 2025
Crown Bridge Partners [Member] | Convertible Promissory Note [Member] | Warrant [Member]
Principal amount																						$ 55,000			$ 55,000
Number of common stock issued																									22,916
Exercise price																						$ 2.80			$ 2.80
Warrant maturity terms																						5 years			5 years
Warrant maturity date																						Nov. 12, 2024			Nov. 12, 2024
Crown Bridge Partners [Member] | Convertible Note [Member]
Principal amount	[7]																			51,384							$ 51,384
Securities Purchase Agreement [Member] | Convertible Note [Member]
Amortization of debt discount																									$ 138,399	$ 351,474
Securities Purchase Agreement [Member] | Firstfire Global Opportunities Fund LLC [Member]
Loss on extinguishment of debt				$ 94,928
Debt issuance date				Sep. 11, 2019
Securities Purchase Agreement [Member] | Firstfire Global Opportunities Fund LLC [Member] | Convertible Note [Member]
Principal amount																	$ 165,000
Proceeds from issuance of debt																$ 143,500
Description of conversion feature																	Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.
Original issue discount																$ 15,000
Loss on extinguishment of debt																									$ 67,512
Number of shares issued for conversion of convertible debt																									4,125,000
Value of shares issued for conversion of convertible debt																									$ 68,850
Securities Purchase Agreement [Member] | BHP Capital NY [Member] | Convertible Note Due on December 3, 2019 [Member]
Principal amount										$ 102,900
Proceeds from issuance of debt									$ 95,500
Interest rate										5.00%
Maturity date										Dec. 03, 2020
Description of conversion feature										The convertible note can be converted into shares of the Company’s common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.
Original issue discount									$ 4,900
Description of installment payment terms																											Six installments
Debt instrument aggregate periodic payment																											$ 139,121
Debt instrument periodic payment principal																											137,114
Debt instrument periodic payment interest																											$ 2,007
Securities Purchase Agreement [Member] | Power Up Lending Group Ltd [Member] | Convertible Note Due on July 25, 2020 [Member]
Principal amount																		$ 103,000
Interest rate																		6.00%
Maturity date																		Jul. 25, 2020
Description of conversion feature																		The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.
Securities Purchase Agreement [Member] | Crown Bridge Partners, LLC [Member]
Principal amount														$ 165,000
Proceeds from issuance of debt														156,750
Loss on extinguishment of debt														94,928
Securities Purchase Agreement [Member] | Crown Bridge Partners, LLC [Member] | Convertible Note [Member]
Debt issuance date																									Nov. 12, 2019
Remaining principal balance amount																						$ 82,500			$ 82,500
Securities Purchase Agreement [Member] | Crown Bridge Partners, LLC [Member] | Convertible Note Due on November 12, 2020 [Member]
Principal amount														$ 55,000
Proceeds from issuance of debt													$ 50,750
Interest rate														5.00%
Maturity date														Nov. 12, 2020
Description of conversion feature														The convertible note can be converted into shares of the Company’s common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.
Original issue discount													$ 2,750
Securities Purchase Agreement [Member] | Power Up Lending Group Ltd [Member] | Convertible Note Due on November 4, 2020 [Member]
Principal amount															$ 53,000
Proceeds from issuance of debt														$ 47,350
Interest rate															6.00%
Maturity date															Nov. 04, 2020
Description of conversion feature															The convertible note can be converted into shares of the Company’s common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.
Securities Purchase Agreement [Member] | Morningview Financial LLC [Member] | Convertible Note [Member]
Principal amount			$ 175,000	$ 175,000
Loss on extinguishment of debt			$ 209,604
Debt issuance date			Nov. 20, 2019																Nov. 20, 2019
Remaining principal balance amount																			$ 175,000
Securities Purchase Agreement [Member] | Morningview Financial LLC [Member] | Convertible Note Due on November 20, 2020 [Member]
Principal amount												$ 165,000
Proceeds from issuance of debt											$ 153,250
Interest rate												5.00%
Maturity date												Nov. 20, 2020
Description of conversion feature												Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.
Original issue discount											$ 8,250
Securities Purchase Agreement [Member] | Crown Bridge Partners [Member] | Convertible Note [Member]
Principal amount		$ 82,500
Loss on extinguishment of debt		$ 206,377			$ 22,424
Debt issuance date		Nov. 12, 2019
Remaining principal balance amount		$ 22,500
Number of shares issued (in shares)					500,000
Value of shares issued					$ 3,500
Securities Purchase Agreement [Member] | Crown Bridge Partners [Member] | Convertible Note [Member] | Yubao Liu [Member]
Remaining principal balance amount		$ 60,000
Amendment to Securities Purchase Agreement [Member] | BHP Capital NY [Member] | Convertible Note Due on December 3, 2019 [Member]
Loss on extinguishment of debt						$ 4,703														$ 91,789	$ 91,789
Description of installment payment terms						6 installments of $23,186.79 each														Two installments	Two installments				4 installments
Debt instrument aggregate periodic payment						$ 139,121														$ 46,373	$ 46,373				$ 92,748
Debt instrument periodic payment principal						137,114														45,325	45,325				91,789
Debt instrument periodic payment interest						$ 2,007														$ 1,048	$ 1,048				862,959
Convertible Promissory Note [Member] | Labrys Fund, L.P [Member] | Convertible Note Due on January 10, 2021 [Member]
Principal amount								$ 146,850
Proceeds from issuance of debt							$ 137,000
Interest rate								5.00%
Maturity date								Jan. 10, 2021
Description of conversion feature								The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion.
Original issue discount							$ 7,350
Loss on extinguishment of debt																									128,018
Accrued and unpaid interest																									4,495
Remaining principal balance amount																						$ 0			$ 0
Number of shares issued for conversion of convertible debt																									4,012,478
Value of shares issued for conversion of convertible debt																									$ 146,850

[1] On September 11, 2019, the Company entered into a Securities Purchase Agreement with Firstfire Global Opportunities Fund LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $143,500 in cash on September 18, 2019 after deducting an original issue discount in the amount of $15,000 (the "OID"), legal fees and other costs. The convertible note bears interest rate at 5% per annum and payable in one year. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. During the nine months ended March 31, 2021, Firstfire Global Opportunities Fund LLC elected to convert $68,850 of the principal amount of the convertible notes into 4,125,000 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $67,512 (See Note 10). After the foregoing conversions, on November 12, 2020, the Company paid Firstfire Global Opportunities Fund LLC, the holder of the Company's convertible debt an aggregate of $130,500 in order to terminate their convertible note dated September 11, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 13, 2020. The debt settlement resulted in a gain on extinguishment of debt of $94,928. The remaining principal balance due under this convertible note after all conversions and settlement is zero as of March 31, 2021.

[2] On December 3, 2019, the Company entered into a Securities Purchase Agreement with BHP Capital NY, Inc to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $102,900 and received $95,500 in cash on December 13, 2019 after deducting and OID in the amount of $4,900, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on December 3, 2020. The convertible note can be converted into shares of the Company's common stock at 75% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. On April 14, 2020, the Company entered into an Amendment to Securities Purchase Agreement with BHP Capital NY, Inc dated on December 3, 2019. The Company agreed to pay off this note holder in 6 installments of $23,186.79 each, with an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The repayment resulted in a loss on extinguishment of debt of $4,703, which was included in other income and expense in the consolidated statement of comprehensive income (loss) for the year ended June 30, 2020. In May and June 2020, the Company paid two installments totaling $46,373 (including principal of $45,325 and interest of $1,048) and note payable balance decreased to $91,789 as of June 30, 2020. During the period from July to September 2020, the Company continued to pay 4 installments of an aggregate amount of $92,748 (including principal of $91,789 and interest of $959). As of the date of this report, the Company has made total six installments payment of an aggregate amount of $139,121 (including principal of $137,114 and interest of $2,007). The note payable balance decreased to zero as of December 31, 2020.

[3] On July 25, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $103,000 and received $94,840 in cash on August 1, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on July 25, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date.

[4] On November 4, 2019, the Company entered into a Securities Purchase Agreement with Power Up Lending Group Ltd to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $53,000 and received $47,350 in cash on November 12, 2019 after deducting legal fees and other costs. The convertible note bears interest rate at 6% per annum and due on November 4, 2020. The convertible note can be converted into shares of the Company's common stock at 65% of the average of the two lowest trading prices during the fifteen trading day prior to the conversion date. On September 16, 2020, the Company entered into a Note Settlement Agreement with Power Up Lending Group Ltd., the holder of the Company's convertible debt. The Note Settlement Agreement terminated their convertible note dated November 4, 2019, including all accrued and unpaid interest, after the Company paid an aggregate of $75,000 on September 16, 2020. The debt settlement resulted in a gain on extinguishment of debt of $15,346.

[5] On November 20, 2019, the Company entered into a Securities Purchase Agreement with Morningview Financial, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $165,000 and received $153,250 in cash on November 22, 2019 after deducting an OID in the amount of $8,250, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 20, 2020. Conversion price shall be equal to the lower of (i) $2.00 or (ii) 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion. On September 24, 2020, Morningview Financial, LLC elected to convert $15,000 of the principal amount of the convertible notes into 568,182 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $5,907. (See Note 10). After the foregoing conversions, on November 12, 2020, the Company paid Morningview Financial, LLC, the holder of the Company's convertible debt an aggregate of $175,000 in order to terminate their convertible note dated November 20, 2019, including all accrued and unpaid interest. The payment was made by Yubao Liu on behalf of the Company and the note holder confirmed this full settlement on November 14, 2020. The debt settlement resulted in a gain on extinguishment of debt of $209,604.The remaining principal balance due under this convertible note after all conversions and settlement is zero as of December 31, 2020.

[6] On January 10, 2020, the Company entered into a convertible promissory note with Labrys Fund, LP to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount of $146,850 and received $137,000 in cash on January 13, 2020 after deducting an OID in the amount of $7,350, legal fees and other costs. The note is due on January 10, 2021 and bears interest at 5% per annum. The conversion price shall be equal to 75% multiplied by the lesser of the lowest closing bid price or lowest traded price of the Common Stock during the twenty (20) consecutive trading day period immediately preceding the date of the respective conversion. During the six months ended December 31, 2020, Labrys Fund, LP elected to convert $146,850 of the principal amount together with all accrued and unpaid interest of the convertible notes into 4,012,478 shares of the Company's common stock. The conversion resulted in a loss on extinguishment of debt of $128,018. The remaining principal balance due under this convertible note after all conversions is zero as of December 31, 2020. (See Note 10)

[7] On November 12, 2019, the Company entered into a Securities Purchase Agreement with Crown Bridge Partners, LLC to issue and sell, upon the terms and conditions set forth in the agreement a convertible note of the Company, in the aggregate principal amount sum up to $165,000 with a purchase price sum up to $156,750. During November 2019, First Tranche of the agreement was executed in the principal amount of $55,000 and the Company received $50,750 in cash on November 15, 2019 after deducting an OID in the amount of $2,750, legal fees and other costs. The convertible note bears interest rate at 5% per annum and due on November 12, 2020. The convertible note can be converted into shares of the Company's common stock at 75% multiplied by the lowest traded price of the common stock during the twenty consecutive trading day period immediately preceding the date of the respective conversion.On October 16, 2020, the Company issued a total of 500,000 shares of common stock to Crown Bridge Partners, LLC for the conversion of debt in the principal amount of $3,500 according to the conditions of the convertible note dated as November 12, 2019. The conversion resulted in a loss on extinguishment of debt of $22,424. (See Note 10).After the foregoing conversions, on December 7, 2020, the Company paid Crown Bridge Partners, LLC, the holder of the Company's convertible debt an aggregate of $82,500 in order to terminate their convertible note dated November 12, 2019, including all accrued and unpaid interest. Among the total, payment of $60,000 was made by Yubao Liu on behalf of the Company while the remaining payment of $22,500 was made directly by the Company. The note holder confirmed this full settlement on December 10, 2020. The debt settlement resulted in a gain on extinguishment of debt of $206,377. The remaining principal balance due under this convertible note after all conversions and settlement is zero as of December 31, 2020.

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PROMISSORY NOTE (Details Narrative) - USD ($)					1 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended
	Mar. 10, 2021	Mar. 10, 2021	Dec. 31, 2020	Dec. 21, 2020	Mar. 19, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Cash received after deducting original issue discount											$ 722,190
Value of shares issued							$ 456,143	$ 391,001	$ 60,365
Promissory Note [Member] | Labrys Fund, L.P [Member]
Principal amount	$ 500,000	$ 500,000		$ 300,000
Interest rate	5.00%	5.00%		5.00%
Due date		Mar. 10, 2022		Dec. 21, 2021
Number of shares reserve for issuance		6,562,500		7,052,239
Cash received after deducting original issue discount					$ 434,000							$ 253,500
Original issue discount					50,000							30,000
Legal fees					2,500							3,000
Other costs					13,500							13,500
Promissory note amortization schedule payment amount					$ 58,333							$ 35,000
Description of amortization period of promissory note					at each month beginning July 9, 2021 through March 10, 2022							At each month end beginning April 23, 2021 through December 21, 2021.
Amortization of debt discount						$ 37,532				$ 38,806
Promissory Note [Member] | Labrys Fund, L.P [Member] | Common Stock (First Commitment Shares) [Member]
Number of shares issued	417,000		447,762
Value of shares issued	$ 87,153		$ 68,060
Promissory Note [Member] | Labrys Fund, L.P [Member] | Common Stock (Second Commitment Shares) [Member]
Number of shares issued	1,042,000		1,119,402

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SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended						9 Months Ended
	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2021	Mar. 31, 2020
Revenues	$ 3,160,746			$ 2,752,170			$ 9,102,094	$ 17,585,468
Cost of Revenues	2,802,497			2,506,518			8,071,941	14,850,194
Gross profit	358,249			245,652			1,030,153	2,735,274
Operating expenses	475,243			638,645			1,410,384	2,024,121
Loss from operations	(116,994)			(392,993)			(380,231)	711,153
Net loss	(115,594)	$ (356,118)	$ (532,306)	(636,222)	$ 135,658	$ 711,276	(1,004,018)	210,712
Smart Energy [Member]
Revenues				181,033				1,719,127
Cost of Revenues				177,995				1,642,532
Gross profit				3,038				76,595
Operating expenses	2,842			3,960			8,374	10,094
Loss from operations	(2,842)			(922)			(8,374)	66,501
Net loss	(2,841)			347			(8,213)	59,915
Photoelectric Display [Member]
Revenues	3,160,474			2,561,267			9,100,076	15,236,570
Cost of Revenues	2,802,520			2,256,426			8,061,782	12,786,020
Gross profit	357,954			304,841			1,038,294	2,450,550
Operating expenses	428,842			377,641			1,202,101	1,491,200
Loss from operations	(70,888)			(72,800)			(163,807)	959,350
Net loss	(26,820)			(83,297)			(147,074)	779,838
Service Contracts [Member]
Revenues	272			9,870			2,018	629,771
Cost of Revenues	(23)			72,097			10,159	421,642
Gross profit	295			(62,227)			(8,141)	208,129
Operating expenses	5,893			8,109			23,641	25,326
Loss from operations	(5,598)			(70,336)			(31,782)	182,803
Net loss	(5,598)			(64,462)			(31,781)	165,603
Unallocated Items [Member]
Revenues
Cost of Revenues
Gross profit
Operating expenses	37,666			248,935			176,268	497,501
Loss from operations	(37,666)			(248,935)			(176,268)	(497,501)
Net loss	$ (80,335)			$ (488,810)			$ (816,950)	$ (794,644)

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SUBSEQUENT EVENTS (Details Narrative) - $ / shares	May 06, 2021	Mar. 31, 2021	Jun. 30, 2020
Common stock, par value (in dollars per share)		$ 0.0001	$ 0.0001
Common stock, authorized		195,000,000	195,000,000
Preferred stock, par value (in dollars per share)		$ 0.0001	$ 0.0001
Preferred stock, authorized		5,000,000	5,000,000
Total number of authorized stock		200,000,000
Subsequent Event [Member]
Common stock, par value (in dollars per share)	$ 0.0001
Common stock, authorized	395,000,000
Preferred stock, par value (in dollars per share)	$ 0.0001
Preferred stock, authorized	5,000,000
Reverse Stock Split	A reverse stock split of all outstanding shares of the Company’s Common Stock, at a ratio of not less than 1-for-2 and not greater than 1-for-10, such ratio to be determined by the Company’s Board at any time before April 30, 2022
Subsequent Event [Member] | Maximum [Member]
Total number of authorized stock	400,000,000