UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of, May
Commission File Number
(Translation of registrant’s name into English)
People’s Republic of
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
EXPLANATORY NOTE
E-Home Household Service Holdings Limited (the “Company”) is furnishing this Form 6-K to provide the unaudited consolidated financial statements for the six months ended December 31, 2021 and 2020. This Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form F-3 (Registration Number 333-259464) to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
FORWARD-LOOKING INFORMATION
This Report on Form 6-K contains forward-looking statements and information relating to us that are based on the current beliefs, expectations, assumptions, estimates and projections of our management regarding our company and industry. When used in this report, the words “may”, “will”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others: significant legal and operational risks associated with having substantially all of our business operations in China, the Chinese government may exercise significant oversight and discretion over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and/or the value of the securities or could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless, trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB subsequently determines our audit work is performed by auditors that the PCAOB is unable to inspect or investigate completely, the effects of the global Covid-19 pandemic, changes in domestic and foreign laws, regulations and taxes, uncertainties related to China’s legal system and economic, political and social events in China, the volatility of the securities markets; and other risks including, but not limited to, those that we discussed or referred to in the Company’s disclosure documents filed with the U.S. Securities and Exchange Commission (the “SEC”) available on the SEC’s website at www.sec.gov, including the Company’s most recent Annual Report on Form 20-F as well as in our other reports filed or furnished from time to time with the SEC. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
All forward-looking statements included herein attributable to us or other parties or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligations to update these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.
1
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Unaudited Interim Consolidated Financial Statements as of December 31, 2021 and for the six months ended December 31, 2021 and 2020 | |
| 99.2 | Operating and Financial Review and Prospects in Connection with the Interim Consolidated Financial Statements for the six months ended December 31, 2021 | |
| 99.3 | Press Release dated May 6, 2022 | |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: May 10, 2022 | E-home Household Service Holdings Limited | |
| By: | /s/ Wenshan Xie | |
| Wenshan Xie | ||
| Chief Executive Officer | ||
3
Exhibit 99.1
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
AS OF DECEMBER 31, 2021 AND JUNE 30, 2021
AND
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 and 2020
F-1
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-2
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS, EXCEPT FOR NUMBER OF SHARES DATA)
As of | As of June 30, 2021 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepayment and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Long-term investment | ||||||||
| Operating lease - right-of-use assets, net | ||||||||
| Finance lease - right-of-use assets, net | ||||||||
| Long-term prepayments and other non-current assets | ||||||||
| Goodwill | ||||||||
| Deferred income tax assets | ||||||||
| Total Non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Advances from customers | ||||||||
| Taxes payable | ||||||||
| Current maturities of operating lease liabilities | ||||||||
| Current maturities of finance lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term portion of operating lease liabilities | ||||||||
| Long-term portion of finance lease liabilities | ||||||||
| Convertible note | ||||||||
| TOTAL LIABILITIES | ||||||||
| Commitments and contingencies | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Ordinary shares, $ | ||||||||
| Additional paid-in capital | ||||||||
| Statutory reserve | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income(loss) | ||||||||
| Total equity attributable to shareholders | ||||||||
| Non-controlling interest | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-3
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS)
(IN U.S. DOLLARS, EXCEPT SHARES DATA)
(UNAUDITED)
|
For the six months ended December 31, |
||||||||
| 2021 | 2020 | |||||||
| Revenue | ||||||||
| Installation and maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care | ||||||||
| Total revenue | ||||||||
| Cost of revenue | ||||||||
| Installation and maintenance | ||||||||
| Housekeeping | ||||||||
| Senior care | ||||||||
| Total cost of revenue | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Sales and marketing expenses | ||||||||
| General and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Income from operations | ||||||||
| Other income (expenses) | ||||||||
| Interest income | ||||||||
| Interest expenses | ( |
) | ( |
) | ||||
| Amortization of financing cost | ( |
) | - | |||||
| Foreign currency exchange (loss)/ gain, net | ( |
) | - | |||||
| Total other income (expenses), net | ||||||||
| Income before income taxes | ||||||||
| Income tax expense | ( |
) | ( |
) | ||||
| Net (loss) income | $ | ( |
) | $ | ||||
| Including: | ||||||||
| Net (loss) income attributable to the Company’s shareholders | ( |
) | ||||||
| Net loss attributable to minority interests | - | ( |
) | |||||
| Net (loss) income | $ | ( |
) | $ | ||||
| Other comprehensive income | ||||||||
| Foreign currency translation adjustment, net of nil tax | ||||||||
| Total comprehensive income | $ | $ | ||||||
| Net income per share—basic and diluted | ( |
) | ||||||
| Weighted average number of ordinary shares outstanding—basic and diluted | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-4
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 2021 and 2020
(IN U.S. DOLLARS, EXCEPT SHARES DATA)
(UNAUDITED)
| Number of Shares | Ordinary Shares | Additional paid-in capital | Statutory reserve | Retained Earnings | Accumulated other comprehensive
income (loss) | Equity attributable to the Company’s shareholders | Non-controlling interest | Total equity | ||||||||||||||||||||||||||||
| Balance at June 30, 2020 | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Net income | - | ( | ) | |||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Balance at June 30, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||||||||||||||
| Acquisition of former non-controlling interest in HAPPY | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Disposal of | - | - | ||||||||||||||||||||||||||||||||||
| Issuance of the convertible note | - | - | - | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
(UNAUDITED)
| For the six months ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash provided by operating activities | ||||||||
| Net income | $ | ( |
) | $ | ||||
| Deferred tax expense | ( |
) | ||||||
| Interest expense | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use assets | ||||||||
| Convertible note - Amortization of financing cost | ||||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivables, net | ( |
) | ||||||
| Inventories | ||||||||
| Prepayment and other current assets | ||||||||
| Long-term prepayments and other non-current assets | ( |
) | ||||||
| Accounts payable and accrued expenses | ( |
) | ||||||
| Taxes payable | ||||||||
| Cash provided by operating activities | ||||||||
| Investing Activities | ||||||||
| Purchases of equipment and vehicles | ( |
) | ||||||
| Long-term investment | ( |
) | ||||||
| Right-of-use-asset costs | ( |
) | ( |
) | ||||
| Consideration paid to former non-controlling shareholders of HAPPY | ( |
) | ||||||
| Refund for potential acquisitions | ||||||||
| Cash used in investing activities | ( |
) | ( |
) | ||||
| Financing Activities | ||||||||
| Proceeds from convertible note | - | |||||||
| Payment of convertible note issuance cost | ( |
) | ||||||
| Cash provided by financing activities | ||||||||
| Net increase in cash and cash equivalents | |
|||||||
| Effects of currency translation | |
|||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
F-6
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
E-Home Household Service Holdings Limited (the
“Company”) was incorporated as a limited company under the law of Cayman Islands on
Reorganization
In preparation of its initial public offering in the United States (“IPO”), the following transactions were undertaken to reorganize the legal structure of the Company. The reorganization involved (i) the incorporation of the Company in the Cayman Islands as a holding company; (ii) the establishment of E-Home Household Service Holdings Limited (“E-Home Hong Kong”) as a wholly-owned subsidiary in Hong Kong, PRC; (iii) the establishment of E-Home Household Service Technology Co., Ltd. (“WOFE”), as a wholly-owned subsidiary of E-Home Hong Kong in Fujian, PRC; (iv) the entry by WFOE into contractual arrangements with Pingtan Comprehensive Experimental Area E Home Service Co., Ltd. (“E-Home Pingtan”) and Fuzhou Bangchang Technology Co. Ltd. (“Fuzhou Bangchang”) and their shareholders. The Company, E-Home Hong Kong and WFOE are all holding companies and had not commenced operation until this reorganization was complete. A reorganization of the Company’s legal structure was completed in February 2019.
As all the entities involved in the process of the Reorganization are under common control before and after the Reorganization, the Reorganization is accounted for in a manner similar to a pooling-of-interest with the assets and liabilities of the parties to the Reorganization carried over at their historical amounts.
Dissolution of the Company’s variable interest entity structure
On October 18, 2021, E-Home WFOE entered into an equity transfer agreement with each of E-Home Pingtan and Fuzhou Bangchang and their respective shareholders, pursuant to which E-Home WFOE exercised the options to acquire all of the equity interests in each of E-Home Pingtan and Fuzhou Bangchang from their respective shareholders. Upon the registration of the equity transfers with the local governmental authorities as of October 27, 2021, the equity transfers were closed, the company’s VIE structure was dissolved and each of E-Home Pingtan and Fuzhou Bangchang became a wholly owned indirect subsidiary of the Company.
Equity transfer agreements
Acquisition of non-controlling interest in HAPPY
On August 10, 2021,
| In USD | ||||
| Purchase consideration | ||||
| Noncontrolling interests | ( | ) | ||
| Additional paid-in capital | ||||
F-7
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Disposal of
As of September 15, 2021,
| In USD | ||||
| Disposal consideration | ||||
| Net assets disposed, excluding intangible assets and the related deferred tax liabilities | ( | ) | ||
| Intangible assets, net | ||||
| Deferred tax liabilities | ||||
| Non-controlling interests | ||||
| Investment income | ||||
In September 2021, the Company made an investment in Fuzhou Fumao by RMB 6,000,000 with equity percentage of 20%.
Acquisition of
On June 9, 2021,
The Company’s major consolidated subsidiaries are as follows:
% of Ownership | ||||||||
The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 6-K and Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2021 and notes thereto and other pertinent information contained in our Form 20-F the Company has filed with the Securities and Exchange Commission (the “SEC”) on October 29, 2021. The results of operations for the six months ended December 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2022.
F-8
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of E-Home Household Service Holdings Limited and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.
Use of estimates
In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, prepayments, and other receivables, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, long-term investment and goodwill, and provision necessary for contingent liabilities. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, cash accounts, interest bearing savings accounts and time certificates of deposit with a maturity of three months or less when purchased. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.
Accounts receivable, net
Accounts receivable are recognized and carried
at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves
for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful
receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s
best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on management
of customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period
will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against accounts receivables
balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances
are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.
As of December 31, 2021 and June 30, 2021, the Company determined that all accounts receivable were collectible and thus the allowance
for doubtful accounts were $
Inventories
Inventories primarily include purchased accessories, appliances and E-watches for senior care services. Cost of inventories is based on purchase costs. Inventories are stated at the lower of cost or net realizable value. Net realizable value represents the anticipated selling price, net of distribution cost, less estimated costs to completion for work in progress. Inventories as of December 31, 2021 and June 30, 2021 consisted of the following:
December 31, 2021 | June 30, 2021 | |||||||
| E-watches | $ | $ | ||||||
| Total inventories, net | $ | $ | ||||||
F-9
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended December 31, 2021 and 2020, the Company recorded no impairment provision of inventories for lower of cost or net realizable value, respectively.
Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Depreciation is provided on the straight-line method based on the estimated useful lives of the assets as follows:
| Useful Lives | ||
| Office Equipment | ||
| Electronic Equipment | ||
| Motor Vehicles |
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterment which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses.
Intangible assets, net
Intangible assets consist of acquired software and senior care service
app developed by the Company. The Company has purchased software from third parties used for operation management and developed an app
for its senior care service. Software is initially recorded at cost and amortized on a straight-line basis over the estimated economic
useful lives of
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles—Goodwill and Other: Goodwill (“ASC 350-20”), which requires that goodwill to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20.
The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess.
The Company performed qualitative assessments for the goodwill. Based on the requirements of ASC 350-20, the Company evaluated all relevant factors including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance, and the share price of the Company. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of goodwill, and further impairment testing on goodwill was unnecessary as of December 31, 2021.
On disposal of a portion of reporting unit that constitutes a business, the attributable amount of goodwill is included in the determination of the amount of gain or loss recognized upon disposal. When the Group disposes of a business within the reporting unit, the amount of goodwill disposed is measured on the basis of the relative fair value of the business disposed and the portion of the reporting unit retained. This relative fair value approach is not used when the business to be disposed was not integrated into the reporting unit after its acquisition, in which case the current carrying amount of the acquired goodwill should be included in the carrying amount of the business to be disposed.
Impairment of long-lived assets other than goodwill
Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Long-lived assets with carrying values that are not expected to be recovered through future cash flows are written down to their estimated fair values. The carrying value of a long-lived asset is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset’s carrying value exceeds the sum of its undiscounted cash flows, a non-cash asset impairment charges equal to the excess of the asset’s carrying value over its estimated fair value is recorded. Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. We measure fair value using market price indicators or, in the absence of such data, appropriate valuation technique.
F-10
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Leases
Leases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria meets, the lease shall be classified as an operating lease.
For lessee, a lease is recognized as a right-of-use asset with a corresponding liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The right-of-use asset is calculated as the lease liability, increased by any initial direct costs and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The amendments in this ASU require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The Company adopted ASC 842 effective as of the beginning of the first period presented by using a modified retrospective transition approach in the accompanying financial statements of the Company. The adoption of this standard had a material impact on the Company’s financial position, with no material impact on the results of operations and cash flows (see Note 9 and Note 10).
Convertible note, net
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity components of the convertible senior notes have been reflected within additional paid-in capital in our audited consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense.
Fair Value of Financial Instruments
The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, time deposits, accounts receivable, prepaid expenses and other current assets, accounts payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments and market rates of interest.
ASC 820 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
| Level 1 – | Quoted prices in active markets for identical assets and liabilities. |
F-11
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| Level 2 – | Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| Level 3 – | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. |
The Company considers the carrying amount of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, and accounts payable to approximate the fair value of the respective assets and liabilities as of December 31, 2021 and June 30, 2021 owing to their short-term or immediate nature.
Revenue recognition
The Company adopted Accounting Standards Codification No. 606, Revenue from Contracts with Customers (ASC 606) beginning January 1, 2018 and elected to adopt ASC 606 under the modified retrospective method. This guidance was applied retrospectively to the most current period presented in the Company’s consolidated financial statements. The adoption of ASC 606 did not have a material impact on the consolidated financial statements of the Company.
The Company generates revenues primarily from installation & maintenance, housekeeping services and senior care services. The Company sells its services through a third-party service provider WeChat platform. The Company’s revenues are subject to value added tax (“VAT”). To record VAT payable, the Company uses the gross presentation method, which presents the taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates.
Installation& maintenance
Installation and maintenance services mainly consisting of the following services: technical home installation and repair, maintenance and other after sale services. Revenues from installation and maintenance services are recognized at a point in time once the service is transferred to the customer. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation based on its standalone selling price. The Company allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price. The Company, acting as principal, contracts with third-party service providers (i.e., service outlets), acting as agents. The Company is responsible for market development and providing the customer information to the service provider, directing the outlet to provide services and coordination with the customer, while the service provider provides the door-to-door service. The price of services is set by the Company and the service provider is only responsible for collection of payments. When the Company’s end customers place orders online for services, they pay either a required visit fee or the estimated full amount of service fee through third-party payment platforms, such as WeChat Pay and Alipay. The Company chooses the service provider by the proximity principle. If the customer is not satisfied with the chosen provider, the service provider can be re-selected. Regardless of the service provider’s performance, the Company is still liable to complete the orders. If the end customer fails to pay after satisfactory service is provided and the service provider is unable to collect payment from the end customer, the Company will communicate directly with the end customer. The service provider is not obligated to pay the Company. To minimize our risk, the service provider will remit payment of any outstanding receivables each month.
F-12
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Housekeeping services
Housekeeping services refer to services including housecleaning, nanny service, maternity matron and personnel staffing. Revenues from housekeeping are recognized at a point in time upon completion of services to the customer based on the relative selling price method.
Senior care services
Senior care services refer to services including BP, heart rate test, daily steps count, location and track record, call for help by Wechat or phone, and other care services rendered to senior customers through an E-watch, which is given to the customers when they pay the annual fees. The customers sign a contract for the services with the Company. The contract term is normally one year. The revenues from senior care services are allocated into the revenue from the E-watch sold and the revenue of the services provided. Revenues from the E-watch sold are recognized at a point in time once customers receive the E-watch and the revenues of the services provided are recognized over the service period.
Disaggregation of revenue from contracts with customers
The senior care services consist of the sale of E-watch and the care
services. The E-watch cannot be sold to the customers solely without the care services, and the care services should be rendered by the
E-watch. Consequently, the Company regards these operating activities as operating in
Cost of revenues
Cost of revenue consists of service fees paid to staff, outlets, suppliers and the cost of accessories sold.
Income taxes
Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any PRC tax paid by subsidiaries during the year is recorded. Deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as current or non-current based upon the classification of the related asset or liability in the financial statements. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax asset will not be realized.
Ordinary shares
The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the common shareholders’ equity. Cancellation of treasury stock is recorded as a reduction of ordinary shares, additional paid-in capital and retained earnings, as applicable. An excess of purchase price over par value is allocated to additional paid-in capital first with any remaining excess charged entirely to retained earnings.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
F-13
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There were no potentially dilutive ordinary shares during the six months ended December 31, 2021 and 2020.
Comprehensive income/(loss)
Comprehensive income/(loss) is defined as the change in equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive income or loss is reported in the consolidated statements of comprehensive income/(loss). Accumulated other comprehensive income/ (loss), as presented on the accompanying consolidated balance sheets, consists of accumulated foreign currency translation adjustments.
Foreign currency translation
The Company’s principal country of operations is the PRC. The financial position and results of its operations are determined using RMB, the local currency, as the functional currency. The consolidated financial statements are reported using U.S. Dollars. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments are included as a separate component of accumulated other comprehensive income (loss).
The value of RMB against U.S. Dollar may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s consolidated financial condition in terms of U.S. Dollar reporting. The following table outlines the currency exchange rates that were used in the consolidated financial statements:
| December
31, 2021 |
June
30, 2021 |
December
31, 2020 |
||||||||||
| Year-end spot rate | US$ | US$ | US$ | |||||||||
| Average rate | US$ | US$ | US$ | |||||||||
Segment reporting
Operating segments, and the amounts of each segment item reported in the consolidated financial statements, are identified from the financial information provided regularly to the Company’s most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Company’s various lines of business and geographical locations.
F-14
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Individually material operating segments are not aggregated for financial
reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and
services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the
services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they
share a majority of these criteria. The Company’s
Business combinations
The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings.
In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in “Others, net” in the consolidated statements of comprehensive (loss) income.
The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. There are no known commitments or contingencies as of December 31, 2021 and June 30, 2021.
Concentration of risks
Exchange rate risks
The Company’s Chinese subsidiaries may be exposed to significant
foreign currency risks from exchange rate fluctuations and the degree of volatility of foreign exchange rates between the U.S. Dollar
and the RMB. As of December 31, 2021 and June 30, 2021, the RMB denominated cash and cash equivalents amounted to $
F-15
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Currency convertibility risks
Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts.
Concentration of credit risks
Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents and accounts receivable, the balances of which stated on the consolidated balance sheets represented the Company’s maximum exposure. The Company places its cash and cash equivalents in good credit quality financial institutions in China.
Risks and uncertainties
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
Recent accounting pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This amends guidelines on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current U.S. GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current U.S. GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date of ASU 2016-13. The amendments in these ASUs are effective for the Company’s fiscal years, and interim periods within those fiscal years beginning April 1, 2022. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
In August 2017, the FASB amended the existing accounting guidance for hedge accounting. The amendments require expanded hedge accounting for both non-financial and financial risk components and refine the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
F-16
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends the FASB ASC and XBRL Taxonomy based on the Tax Cuts and Jobs Act, or the Act, that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 that was released by the SEC. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting statements, if recently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of comprehensive income (loss) and statements of cash flows.
NOTE 3 – BUSINESS COMBINATIONS
On June 9, 2021, the Company’s PRC
subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire
| In USD | ||||
| Purchase consideration | ||||
| Net assets acquired, excluding intangible assets and the related deferred tax liabilities | ||||
| Intangible assets, net | ||||
| Deferred tax liabilities | ||||
| Noncontrolling interests | ||||
| Goodwill | ||||
Goodwill, which is non-deductible for tax purposes, is primarily attributable to the synergies expected to be achieved from the acquisitions.
Neither the results of operations since the acquisition dates nor the pro forma results of operations of the acquirees were presented because the effects of these business combinations, both individually and in aggregate, were not significant to the Company’s consolidated results of operations.
The valuations used in the purchase price allocation described above were determined by the Company with the assistance of independent third-party valuation firm. The valuation reports considered generally accepted valuation methodologies such as the income, market and cost approaches. As the acquirees are all private companies, the fair value estimates of pre-existing equity interests and debt investment or noncontrolling interests are based on significant inputs considered by market participants which mainly include (a) discount rate, (b) projected terminal value based on future cash flows, (c) equity multiples or enterprise value multiples of companies in the same industries and (d) adjustment for lack of control or lack of marketability.
F-17
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 – ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following as of December 31, 2021 and June 30, 2021:
| December 31, 2021 | June 30, 2020 | |||||||
| Accounts receivable, gross | $ | $ | ||||||
| Less: allowance for doubtful accounts | ||||||||
| Accounts receivable, net | $ | $ | ||||||
The Company recorded no allowance for doubtful accounts as of December 31, 2021 and June 30, 2021. The Company gives its customers credit period of 30 days and continually assesses the recoverability of uncollected accounts receivable. As of December 31, 2021 and June 30, 2021, the balances of the Company’s accounts receivable were all due within 1 month. Management believes the balances of accounts receivable will be collected in full.
NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS
Prepayments and other current assets as of December 31, 2021 and June 30, 2021, consisted of the following:
| December 31, 2021 | June 30, 2021 | |||||||
| Deposits made for potential acquisitions* | $ | $ | ||||||
| Prepaid for marketing fee | ||||||||
| Performance deposits** | ||||||||
| Prepaid consulting services fee | ||||||||
| Prepaid office deposit*** | ||||||||
| Prepaid for the right of use for farmland**** | ||||||||
| Prepaid income tax expenses | ||||||||
| Prepaid office rental fee and other expenses | ||||||||
| Total prepayments, deposits and other current assets | $ | $ | ||||||
| * | On April 30, 2021, the Company entered into
On May 28, 2021, the Company entered into an agreement with Yuwin Group Limited (“Yuwin”) in which Yuwin will provide advisory service to acquire
On June 1, 2021, the Company entered into an equity transfer agreement with the shareholder of South Pacific Holding Group Limited (“South Pacific”) in which the Company will acquire |
| ** | In January 2020, E-Home Pingtan entered into three agreements with three new outlets for business cooperation purposes. These refundable performance deposits were mainly paid for the business introduction services in which the outlets promised to refer business and customers to E-Home Pingtan within |
| *** | On June 20, 2021, E-Home Pingtan entered into an agreement with an unaffiliated individual to purchase an office for $ |
| **** | On July 7, 2021, E-Home Pingtan entered into an agreement with an unaffiliated company and individual to purchase the right of use for farmland of |
F-18
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consisted of the following as of December 31, 2021 and June 30, 2021:
| December 31, 2021 | June 30, 2021 | |||||||
| Office Equipment | $ | $ | ||||||
| Electronic Equipment | ||||||||
| Motor Vehicles | ||||||||
| Total property, plant and equipment, at cost | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | $ | $ | ||||||
As of December 31, 2021 and June 30, 2021, there was not any pledged
property, plant or equipment. The Company recorded depreciation expense of $
NOTE 7 – INTANGIBLE ASSETS, NET
Intangible assets consisted of the following as of December 31, 2021 and June 30, 2021:
| December 31, 2021 | June 30, 2021 | |||||||
| Software | $ | $ | ||||||
| Senior care service App | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
As of December 31, 2021 and June 30, 2021, there were no any pledged
intangible assets to secure bank loans. The Company recorded amortization expense of $
Estimated future amortization expense is as follows as of December 31, 2021:
| Years ending December 31, | Amortization expense | ||||
| 2022 | $ | ||||
| 2023 | |||||
| 2024 | |||||
| Thereafter | |||||
| $ | |||||
F-19
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – LONG-TERM INVESTMENT
In September 2021, the Company made an investment
in Fuzhou Fumao by RMB
NOTE 9 – OPERATING LEASE RIGHT-OF-USE ASSETS, NET
Operating lease right -of-use assets, net were as follows as of December 31, 2021 and June 30, 2021:
| June 30, 2021 | Increase/ (Decrease) | Exchange rate translation | December 31, 2021 | |||||||||||||
| Shou Hill Valley Area | $ | $ | $ | $ | ||||||||||||
| Villas | ||||||||||||||||
| Base Station Tower | ||||||||||||||||
| Total right-of-use assets, at cost | ||||||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ( | ) | ||||||||||
| Right-of-use assets, net | $ | $ | ( | ) | $ | $ | ||||||||||
The Company recognized lease expense for the operating lease right
-of-use assets Shou Hill Valley Area and Villas over a
NOTE 10 – FINANCE LEASE RIGHT-OF-USE ASSETS, NET
Finance lease right -of-use assets, net were as follows as of December 31, 2021 and June 30, 2021:
| June 30, 2021 | Increase/ (Decrease) | Exchange rate translation | December 31, 2021 | |||||||||||||
| Company vehicles | $ | $ | $ | $ | ||||||||||||
| Total right-of-use assets, at cost | ||||||||||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Right-of-use assets, net | $ | $ | ( | ) | $ | $ | ||||||||||
The finance lease right-of-use asset is amortized over a
F-20
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS
Long-term prepayments and other current assets as of December 31, 2021 and June 30, 2021, consisted of the following:
| December 31, 2021 | June 30, 2021 | |||||||
| Deposits paid for lease assets | $ | $ | ||||||
| Deposits paid for land | ||||||||
| Total | $ | $ | ||||||
NOTE 12 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The following is a summary of accounts payable and accrued expenses as of December 31, 2021 and June 30, 2021:
| December 31, 2021 | June 30, 2021 | |||||||
| Payable to suppliers | $ | $ | ||||||
| Salary and welfare payables | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total | ||||||||
NOTE 13 – ADVANCES FROM CUSTOMERS
Advance from customers as of December 31, 2021 and June 30, 2021 consisted of the following:
| December 31, 2021 | June 30, 2021 | |||||||
| Senior care services | $ | $ | ||||||
| Housekeeping services | ||||||||
| Total | $ | $ | ||||||
E-Home received annual fees from senior care services customers and
recognized revenues over the contract period. The amounts advanced from customers from senior care services were $
F-21
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 – OPERATING LEASE LIABILITIES
Operating lease liabilities as of December 31, 2021 and June 30, 2021 consisted of the following:
| December 31, 2021 | June 30, 2021 | |||||||
| Villas* | $ | $ | ||||||
| Base Station Tower** | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Analyzed for reporting purposes as:
| December 31, 2021 | June 30, 2021 | |||||||
| Long-term portion of operating lease liabilities | $ | $ | ||||||
| Current maturities of operating lease liabilities | ||||||||
| Total | $ | $ | ||||||
The operating lease liabilities is the net present value of the remaining lease payments as of December 31, 2021 and June 30, 2021.
The discount rates used for the Villas and Base Station Tower were
The Company recorded no operating lease liability for the operating
lease of Shou Hill Valley Area as of December 31, 2021 and June 30, 2021, respectively, since the Company prepaid the total lease expense
of $
For the six months ended December 31, 2021 and 2020, the operating
lease costs were $
| * | The lease agreement of Villas was entered into on December 22, 2017, bears interest at about |
| ** | The lease agreement of Base Station Tower was entered into on November 25, 2019, bears interest at about |
Maturity analysis of operating lease liabilities as of December 31, 2021 is as follows:
| Operating lease payment | Villas | Base station tower | Total undiscounted cash flows | |||||||||
| Discount rate at commencement | % | % | ||||||||||
| One year | $ | $ | $ | |||||||||
| Two years | ||||||||||||
| Three years | ||||||||||||
| Four years | ||||||||||||
| Five years | ||||||||||||
| Beyond five years | ||||||||||||
| Total undiscounted cash flows | $ | $ | $ | |||||||||
| Total operating lease liabilities | ||||||||||||
| Difference between undiscounted cash flows and discounted cash flows | ||||||||||||
F-22
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Maturity analysis of operating lease liabilities as of June 30, 2021 is as follows:
| Operating lease payment | Villas | Base station tower | Total undiscounted cash flows | |||||||||
| Discount rate at commencement | % | % | ||||||||||
| One year | $ | $ | $ | |||||||||
| Two years | ||||||||||||
| Three years | ||||||||||||
| Four years | ||||||||||||
| Five years | ||||||||||||
| Beyond five years | ||||||||||||
| Total undiscounted cash flows | $ | $ | $ | |||||||||
| Total operating lease liabilities | ||||||||||||
| Difference between undiscounted cash flows and discounted cash flows | ||||||||||||
NOTE 15 – FINANCE LEASE LIABILITIES
Financing lease liabilities as of December 31, 2021 and June 30, 2021 consisted of the following:
| June 30, 2021 | Increase/ (Decrease) | Payment | Exchange rate translation | December 31, 2021 | ||||||||||||||||
| Company vehicles | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
| Add: unrecognized finance expense | ||||||||||||||||||||
| Total financing lease liabilities | $ | $ | $ | ( | ) | $ | $ | |||||||||||||
Analyzed for reporting purposes as:
| December 31, 2021 | June 30, 2021 | |||||||
| Long-term portion of finance lease liabilities | $ | $ | ||||||
| Current maturities of finance lease liabilities | ||||||||
| Total | $ | $ | ||||||
The lease agreement was entered into on September 11, 2017, bears interest
at about
Maturity analysis of financial lease liabilities as of December 31, 2021 is as follows:
| Financial lease payments | Company vehicles | |||
| Discount rate at commencement | % | |||
| One year | $ | |||
| Two years | ||||
| Three years | ||||
| Four years | ||||
| Five years | ||||
| Beyond five years | ||||
| Total undiscounted cash flows | $ | |||
| Total financing lease liabilities | ||||
| Difference between undiscounted cash flows and discounted cash flows | ||||
F-23
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Maturity analysis of financial lease liabilities as of June 30, 2021 is as follows:
| Financial lease payments | Company vehicles | |||
| Discount rate at commencement | % | |||
| One year | $ | |||
| Two years | ||||
| Three years | ||||
| Four years | ||||
| Five years | ||||
| Beyond five years | ||||
| Total undiscounted cash flows | $ | |||
| Total financing lease liabilities | ||||
| Difference between undiscounted cash flows and discounted cash flows | ||||
NOTE 16 – CONVERTIBLE NOTE
On December 20, 2021, E-Home Household Service Holdings
Limited (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional
investor (“Investor”) pursuant to which the Company issued an unsecured convertible promissory note with a two-year maturity
(the “Convertible Note”) to Investor. The Convertible Note has the original principal amount of $
Material Terms of the Convertible Note:
| ● | Interest accrues on the outstanding balance of the Convertible Note at |
| ● | Upon the occurrence of a Trigger Event, Investor may increase the outstanding
balance payable under the Convertible Note by |
| ● | Investor may convert all or any part of the outstanding balance of the Convertible Note, at any time after |
| ● | Joseph Stone Capital, LLC (“JSC”) acted as the exclusive placement agent in connection with the offering. The Company agreed to pay JSC a cash fee equal to |
| ● | Lender has the right at any time after the date that is six (6) months from the Purchase Price Date until the Outstanding Balance has been paid in full, at its election, to convert (“Conversion”) all or any portion of the Outstanding Balance into fully paid and non-assessable Ordinary Shares, par value $ |
F-24
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In accounting for the issuance of the Convertible Note, the Company
separated the Convertible Note into liability and equity components. The carrying amount of the equity component of the Convertible Note
and the warrants was $
Debt issuance costs related to
Net carrying amount of the liability component Convertible Note dated as of December 31, 2021 was as follows:
| Principal outstanding | Unamortized issuance cost |
Net carrying value |
||||||||||
| Convertible Note | $ | ( |
) | $ | ||||||||
Net carrying amount of the equity component of the Convertible Note as of December 31, 2021 was as follows:
| Amount allocated to conversion option | Issuance cost | Equity component, net | ||||||||||
| Convertible Note – equity portion | $ | $ | ||||||||||
Amortization of issuance cost, debt discount and interest cost for the six months ended December 31, 2021 were as follows:
| Issuance costs and debt discount | Convertible | Total | ||||||||||
| Convertible Note | $ | $ | ||||||||||
The effective interest rate to derive the liability
component fair value is
F-25
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 – TAXES
The Company is registered in the Cayman Islands. The Company generated substantially all of its income from its PRC operations for the six months ended December 31, 2021 and 2020.
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
Hong Kong
E-Home Hong Kong is not subject to tax on income or capital gain since there has no operations in Hong Kong for the six months ended December 31, 2021 and 2020.
PRC
Income Tax
On March 16, 2007, the National People’s Congress of PRC enacted
an Enterprise Income Tax Law (“EIT Law”), under which Foreign Investment Enterprises (“FIEs”) and domestic companies
would be subject to enterprise income tax (“EIT”) at a uniform rate of
The provision for income tax for the six months ended December 31, 2021 and 2020, consisted of the following:
| For six months ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Current income tax provision | $ | $ | ||||||
| Deferred income tax provision | ( | ) | ||||||
| Total | $ | $ | ||||||
The following table sets forth reconciliation between the statutory EIT rate and the effective tax for the six months ended December 31, 2021 and 2020, respectively:
| For six months ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Provision for income taxes at statutory tax rate in the PRC | $ | $ | ||||||
| Effect of expense for which no income tax is deductible | ||||||||
| Effective income tax expense | $ | $ | ||||||
The significant components of deferred tax assets were as follows:
| December 31, 2021 | June 30, 2021 | |||||||
| Deferred tax assets | ||||||||
| Senior care services fees advanced from customers | $ | |||||||
| Total | $ | |||||||
F-26
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Value Added Tax (“VAT”)
Business tax changed to VAT in China since May 1, 2016. The Company’s
revenue of installation is subject to a VAT rate of
According to the regulations (Fiscal and Tax [2016] 36), no VAT will be levied if an enterprise provides employee-based household services. E-Home Pingtan applied for the tax exemption in July 2017 and was approved by the State Administration of Taxation (China), so the VAT rate of installation, maintenance, after-sales and cleaning service is since July 2017.
Taxes payable
The Company’s taxes payable as of December 31, 2021 and June 30, 2021, consisted of the following:
| December 31, 2021 | June 30, 2021 | |||||||
| Income tax payable | $ | $ | ||||||
| VAT payable | ||||||||
| Other tax payables | ||||||||
| Total | $ | $ | ||||||
NOTE 17 – EQUITY
Ordinary Shares
At the reorganization event described in Note 1, the Company issued
Prior to the reorganization, the Company had $
The reorganization has been accounted for at historical cost and prepared
on the basis as if the reorganization had become effective as of the beginning of the first period presented in the accompanying financial
statements of the Company. On May 23, 2019, the Company split its
On May 18, 2021, the Company completed the closing of its initial public
offering of
On June 21, 2021, the Company granted
Statutory Reserve
Dividends
Dividends declared by the Company are based on the distributable profits as reported in its statutory financial statements reported in accordance with PRC GAAP, which may differ from the results of operations reflected in the consolidated financial statements prepared in accordance with US GAAP. The Company’s ability to pay dividends is primarily from cash received from its operating activities in PRC. For the six months ended December 31, 2021 and 2020, there was no Company dividend declared.
F-27
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18 – REVENUE
The Company disaggregated senior care services revenue into the sale of the E-watch and the care service. Sales of E-watches are recognized in revenue at a point in time while revenue from care service is recognized over a period of time. Deferred portion of care service is recorded as a liability (advances from customers) on the company’s balance sheet.
| For six months ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Installation and Maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care services | ||||||||
| E-watch | ||||||||
| Total | $ | $ | ||||||
NOTE 19 – SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the management for decision making. Management has identified three operating segments which are installation and maintenance, housekeeping and senior care services. Operations for senior care services began in August 2019. The Company started generating revenue from this new segment in August 2019. These operating segments are monitored and strategic decisions are made on the basis of segmental profit margins. Segment profit is defined as net sales reduced by cost of revenue and other related operating expenses. The results are shown as follows for the six months ended December 31, 2021 and 2020:
For the six months ended December 31, | ||||||||
| Revenue | 2021 | 2020 | ||||||
| Installation and maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care services | ||||||||
| Total | $ | $ | ||||||
For the six months ended December 31, | ||||||||
| Gross Profit | 2021 | 2020 | ||||||
| Installation and maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care services | ||||||||
| Total | $ | $ | ||||||
| Current Assets | December 31, 2021 | June 30, 2021 | ||||||
| Installation and maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care services | ||||||||
| Unallocated current assets | ||||||||
| Total | $ | $ | ||||||
| Non-current Assets | December 31, 2021 | June 30, 2021 | ||||||
| Installation and maintenance | $ | $ | ||||||
| Housekeeping | ||||||||
| Senior care services | ||||||||
| Unallocated non-current assets | ||||||||
| Total | $ | $ | ||||||
On account of the Company’s business model, assets, operating expense, profit or loss, liabilities and other material items could not be separated into each operating segment. As the Company’s long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented.
F-28
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20 – COMMITMENTS AND CONTINGENCIES
As of December 31, 2021, the Company had following lease commitments under non-cancelable agreements:
| Future Lease Payments | Operating Lease | Finance Lease | Capital Expenditure | Total | ||||||||||||
| January 2022 to December 2022 | $ | $ | * | $ | ||||||||||||
| January 2023 to December 2023 | ||||||||||||||||
| January 2024 to December 2024 | ||||||||||||||||
| January 2025 to December 2025 | ||||||||||||||||
| January 2026 to December 2026 | ||||||||||||||||
| Thereafter | ||||||||||||||||
| Total | $ | $ | $ | |||||||||||||
| * | On
June 20, 2021, E-Home Pingtan entered into an agreement with an unaffiliated individual to purchase an office for $ |
NOTE 21 – CUSTOMER AND SUPPLIER CONCENTRATION
Significant customers and suppliers are those
that account for greater than
The Company’s sales are made to customers
that are located primarily in China. For the six months ended December 31, 2021 and 2020, no individual customer or supplier accounted
for more than
NOTE 22 – RELATED PARTY BALANCES AND TRANSACTIONS
As of December 31, 2021 and June 30, 2021, the
Company had $
NOTE 23 – SUBSEQUENT EVENTS
Equity transfer agreements
On January 20, 2022, the Company and E-Home Pingtan entered into another
equity transfer agreement (the “LianBao Agreement”) with LianBao Appliance Service and its nine shareholders (the “Sellers”),
pursuant to which the Sellers will transfer
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2021 to the date these financial statements were issued, and has determined that, it does not have any material subsequent events to disclose in these financial statements.
F-29
Exhibit 99.2
OPERATING AND FINANCIAL REVIEW AND PROSPECTS IN CONNECTION WITH THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2021
The following discussion and analysis of our results of operations and financial condition should be read together with our unaudited condensed consolidated financial statements and the notes thereto and other financial information, which are included elsewhere in this Form 6-K. Our unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In addition, our unaudited financial statements and the financial information included in this Form 6-K reflect our organizational transactions and have been prepared as if our current corporate structure had been in place throughout the relevant periods.
This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those identified elsewhere in this report on Form 6-K, and those listed in our Annual Report on Form 20-F for the fiscal year ended June 30, 2021 filed with the Securities and Exchange Commission (the “2021 Form 20- F”) under “Item 3. Key Information-D. Risk Factors” or in other parts of the 2021 Form 20-F.
Unless otherwise indicated or the context requires otherwise, “we”, “us” or the “Company” in this prospectus are to E-Home Household Service Holdings Limited and its subsidiaries in the context of describing our business, operations and consolidated financial information.
Overview
We are a household service company based in Fuzhou, China. We provide integrated household services through our website and WeChat platform, “e家快服”, across 21 provinces in China. Currently, these services primarily include home appliance services and housekeeping services. For our home appliance services, we partner with individuals and service stores which provide the technicians to deliver the on-site services. We have partnerships with approximately 2,387 individuals and service stores providing these services in China. For our housekeeping services, we primarily partner with individual service providers who serve as independent contractors. We currently have more than 2,900 cleaners and nannies providing our housekeeping services. Our online platform integrates these offline service providers, which helps them to gain a larger customer base, and provides professional and reliable one-stop household services to our customers.
In July 2015, we successfully transitioned from an outsourcing after-market service provider of home appliances and building materials to an operator of home appliance services. In January 2018, we officially became an integrated household service provider after expanding our service portfolio from distribution, installation, repair and maintenance of home appliances to delivery, installation, repair and maintenance of home appliances, home-moving, house cleaning, nanny and maternity matron. We have also launched and are actively promoting our senior care services, but so far we have only generated a limited amount of revenue from these services. We plan to further expand our business to include smart community services, as well as sales of smart home supplementary merchandise. We currently have approximately 523 employees to support our operations.
Due to the impact of Chinese government’s strict quarantine measures and lockdown in many cities in China in 2021, our overall revenue decreased by 31.4% to approximately $34.08 million for the six months ended December 31, 2021, as compared to approximately $44.09 million for the six months ended December 31, 2020. Our revenue from installation and maintenance services decreased by 31.4% to approximately $21.98 million for the six months ended December 31, 2021, as compared to $32.06 million for the six months ended December 31, 2020. Our revenue from housekeeping services decreased by 16.8% to approximately $8.01 million for the six months ended December 31, 2021, as compared to $9.63 million for the six months ended December 31, 2020. We also generated approximately $4.09 million of revenue from our senior care services for the six months ended December 31, 2021, representing an increase of 70.1% as compared to $2.40 million for the six months ended December 31, 2020. For the six months ended December 31, 2020, we generated a net loss of $ approximately $0.61 million, representing a decrease in net income of approximately 106.8%.
The ongoing corona-virus pandemic has had a materially adverse effect on our industry and the markets in which we operate. All of our operating subsidiaries, employees and customers are located in China. While the outbreak of COVID-19 has come under control in China since the second quarter of 2020, there was a significant rise in COVID-19 cases, including the COVID-19 Delta and Omicron variant cases, in various cities in China since late 2021. As a result, many cities in China, especially Fujian Province, where we have business operations, had experienced lockdown or partial lockdown and our normal business activities were significantly curtailed. As compared with the second half of 2020, our business operations in the six months ended December 31, 2021, especially our home appliance installation and maintenance services and housekeeping services were more severely affected by the government’s strict quarantine and prevention measures.. The results of operations for the fiscal year 2022 and beyond are still uncertain. As the coronavirus continues to spread across countries, the extent to which the coronavirus impacts our operations and results in the long-term will depend on future developments and new information that may emerge regarding COVID-19 and the actions taken by governmental authorities and other entities to contain COVID-19 and/or mitigate its impact, almost all of which are beyond our control. This is a rapidly evolving situation, and we will continue to monitor and mitigate developments affecting our workforce, our customers, and the public at large to the extent we are able to do so.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors:
| ● | growth in the Chinese economy; |
| ● | industry demand; |
| ● | contract pricing and terms; |
| ● | competition in the home appliance services and in-home care and other household services industries; |
| ● | strategic acquisitions and investments; |
| ● | changes to government policies; |
| ● | market conditions and our market position; and |
| ● | our ability to broaden service offerings and diversify our customer base. |
Taxation
Cayman Islands
We are incorporated in the Cayman Islands. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is currently no estate duty, inheritance tax or gift tax. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.
Payments of dividends and capital in respect of the shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of our ordinary shares, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.
2
Hong Kong
Our subsidiary incorporated in Hong Kong is subject to Hong Kong profit tax at a rate of 16.5%. No Hong Kong profit tax has been levied as we did not have assessable profit that was earned in or derived from our Hong Kong subsidiary during the periods presented. Hong Kong does not impose a withholding tax on dividends.
PRC
Enterprise Income Tax
Generally, our PRC subsidiaries, which are considered PRC resident enterprises under PRC tax law, are subject to enterprise income tax on their worldwide taxable income as determined under PRC tax laws and accounting standards at a rate of 25%. If our holding company in the Cayman Islands or any of our subsidiaries outside the PRC is considered as a PRC resident enterprise for tax purposes, then our global income will be subject to PRC enterprise income tax at the rate of 25%. See “Risk Factors—Risks Related to Doing Business in China— We may be treated as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our global income.”
Value Added Tax
Our revenue from installation services is subject to a value added tax, or VAT, rate of 11% and our revenue from maintenance services and sales of goods was subject to a VAT rate of 17% prior to May 1, 2018, which was subsequently reduced to 16%.
According to PRC regulations, no VAT will be levied if an enterprise provides employee-based household services. E-Home Pingtan applied for the tax exemption in July 2017 and was approved by the PRC State Administration of Taxation, so the VAT rate for installation, maintenance, after-sales and cleaning service is 0% since July 2017.
Withholding Tax on Dividends
Dividends paid by E-Home Household Service Technology Co., Ltd. (“E-Home WFOE”) to our intermediary holding company in Hong Kong will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the PRC and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and Capital and receives approval from the relevant tax authority. If our Hong Kong subsidiary satisfies the requirements under the tax arrangement and receives approval from the relevant tax authority, then the dividends paid to the Hong Kong subsidiary would be subject to withholding tax at a reduced tax rate of 5%. See “Risk Factors—Risks Related to Doing Business in China—There are significant uncertainties under the PRC Enterprise Income Tax Law relating to the withholding tax liabilities of our PRC subsidiaries, and dividends payable by our PRC subsidiaries to our offshore subsidiaries may not qualify to enjoy certain treaty benefits.”
Our Reportable Segments
As of December 31, 2021, our operations are organized into three reportable segments: installation and maintenance, housekeeping, and senior care services. Operating segments are reported in a manner consistent with the internal reporting provided to management for decision making. These operating segments are monitored and strategic decisions are made on the basis of segmental profit margins.
Critical Accounting Policies
The preparation of consolidated financial statements in conformity with U.S. GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have identified the critical accounting policies and judgments addressed below. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.
3
Basis of consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of E-Home Household Service Holdings Limited and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.
Use of estimates
In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, prepayments, and other receivables, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets and provision necessary for contingent liabilities. Actual results could differ from those estimates.
Leases
Leases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria meets, the lease shall be classified as an operating lease.
For lessee, a lease is recognized as a right-of-use asset with a corresponding liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The right-of-use asset is calculated as the lease liability, increased by any initial direct costs and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The amendments in this ASU require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The Company adopted ASC 842 effective as of the beginning of the first period presented by using a modified retrospective transition approach in the accompanying financial statements of the Company. The adoption of this standard had a material impact on the Company’s financial position, with no material impact on the results of operations and cash flows.
4
Convertible note, net
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity components of the convertible senior notes have been reflected within additional paid-in capital in our audited consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense.
Revenue recognition
The Company adopted Accounting Standards Codification No. 606, Revenue from Contracts with Customers (ASC 606) beginning January 1, 2018 and elected to adopt ASC 606 under the modified retrospective method. This guidance was applied retrospectively to the most current period presented in the Company’s consolidated financial statements. The adoption of ASC 606 did not have a material impact on the consolidated financial statements of the Company.
The Company generates revenues primarily from installation & maintenance, housekeeping services and senior care services. The Company sells its services through a third-party service provider WeChat platform. The Company’s revenues are subject to value added tax (“VAT”). To record VAT payable, the Company uses the gross presentation method, which presents the taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates.
Installation& maintenance
Installation and maintenance services mainly consisting of the following services: technical home installation and repair, maintenance and other after sale services. Revenues from installation and maintenance services are recognized at a point in time once the service is transferred to the customer. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation based on its standalone selling price. The Company allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price. The Company, acting as principal, contracts with third-party service providers (i.e., service outlets), acting as agents. The Company is responsible for market development and providing the customer information to the service provider, directing the outlet to provide services and coordination with the customer, while the service provider provides the door-to-door service. The price of services is set by the Company and the service provider is only responsible for collection of payments. When the Company’s end customers place orders online for services, they pay either a required visit fee or the estimated full amount of service fee through third-party payment platforms, such as WeChat Pay and Alipay. The Company chooses the service provider by the proximity principle. If the customer is not satisfied with the chosen provider, the service provider can be re-selected. Regardless of the service provider’s performance, the Company is still liable to complete the orders. If the end customer fails to pay after satisfactory service is provided and the service provider is unable to collect payment from the end customer, the Company will communicate directly with the end customer. The service provider is not obligated to pay the Company. To minimize our risk, the service provider will remit payment of any outstanding receivables each month.
Housekeeping services
Housekeeping services refer to services including housecleaning, nanny service, maternity matron and personnel staffing. Revenues from housekeeping are recognized at a point in time upon completion of services to the customer based on the relative selling price method.
Senior care services
Senior care services refer to services including BP, heart rate test, daily steps count, location and track record, call for help by Wechat or phone, and other care services rendered to senior customers through an E-watch, which is given to the customers when they pay the annual fees. The customers sign a contract for the services with the Company. The contract term is normally one year. The revenues from senior care services are allocated into the revenue from the E-watch sold and the revenue of the services provided. Revenues from the E-watch sold are recognized at a point in time once customers receive the E-watch and the revenues of the services provided are recognized over the service period.
5
Disaggregation of revenue from contracts with customers
The senior care services consist of the sale of E-watch and the care services. The E-watch cannot be sold to the customers solely without the care services, and the care services should be rendered by the E-watch. Consequently, the Company regards these operating activities as operating in one material segment, being the revenue of senior care services.
Business combinations
The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings.
In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in “Others, net” in the consolidated statements of comprehensive (loss) income.
The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons.
Recent Accounting Pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This amends guidelines on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current U.S. GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current U.S. GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date of ASU 2016-13. The amendments in these ASUs are effective for the Company’s fiscal years, and interim periods within those fiscal years beginning April 1, 2022. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
6
In August 2017, the FASB amended the existing accounting guidance for hedge accounting. The amendments require expanded hedge accounting for both non-financial and financial risk components and refine the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends the FASB ASC and XBRL Taxonomy based on the Tax Cuts and Jobs Act, or the Act, that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 that was released by the SEC. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
The Company does not believe other recently issued but not yet effective accounting statements, if recently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of comprehensive income (loss) and statements of cash flows.
Results of Operations
Comparison of Six Months Ended December 31, 2021 and 2020
The following table shows key components of our results of operations during the six months ended December 31, 2021 and 2020, in dollars and as a percentage of our total revenue.
| Year Ended June 30, 2020 | Year Ended June 30, 2021 | |||||||||||||||
| Amount | % of Revenue | Amount | % of Revenue | |||||||||||||
| Revenue | ||||||||||||||||
| Installation and Maintenance | $ | 21,979,399 | 64.5 | $ | 32,055,964 | 72.7 | ||||||||||
| Housekeeping | 8,009,015 | 23.5 | 9,630,598 | 21.8 | ||||||||||||
| Senior care services | 4,091,068 | 12.0 | 2,404,491 | 5.5 | ||||||||||||
| Total revenue | 34,079,482 | 100.0 | 44,091,053 | 100.0 | ||||||||||||
| Total cost of revenue | 23,408,079 | 68.7 | 28,306,213 | 64.2 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing expenses | 4,357,836 | 12.8 | 3,027,223 | 6.9 | ||||||||||||
| General and administrative expenses | 5,602,754 | 16.4 | 919,089 | 2.1 | ||||||||||||
| Total operating expenses | 9,960,590 | 29.2 | 3,946,312 | 9.0 | ||||||||||||
| Income from operations | 710,813 | 2.1 | 11,838,528 | 26.9 | ||||||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 90,907 | 0.3 | 49,333 | 0.1 | ||||||||||||
| Interest expenses | (23,793 | ) | (0.1 | ) | (12,820 | ) | (0.0 | ) | ||||||||
| Amortization of financing cost | (20,322 | ) | (0.1 | ) | - | - | ||||||||||
| Foreign currency exchange loss | (6,920 | ) | (0.0 | ) | - | - | ||||||||||
| Total other income (expenses) | 39,872 | 0.1 | 36,513 | 0.1 | ||||||||||||
| Income before income taxes | 750,685 | 2.2 | 11,875,041 | 26.9 | ||||||||||||
| Income tax expense | (1,356,819 | ) | (4.0 | ) | (2,970,179 | ) | (6.7 | ) | ||||||||
| Net income | (606,134 | ) | (1.8 | ) | 8,904,862 | 20.2 | ||||||||||
| Net income attributable to minority interests | - | - | (1,262 | ) | - | |||||||||||
| Net income attributable to company shareholders | $ | (606,134 | ) | (1.8 | ) | $ | 8,906,124 | 20.2 | ||||||||
7
Revenue. We generate revenue from the provision of installation and maintenance services, the provision of housekeeping services and the provision of senior care services. Our total revenue was $34,079,482 for the six months ended December 31, 2021, compared to $44,091,053 for the six months ended December 31, 20201, representing a decrease of $10,011,571, or 22.7%. Such decrease was due to the decrease of $10,076,565 in revenue from installation and maintenance and the decrease of $1,621,583 in revenue from our housekeeping services, which we both began providing in the fiscal year ended June 30, 2018, offsetting by an increase of $1,686,577 in revenue from our senior care services, which we began providing in the fiscal year ended June 30, 2020.
Revenue from installation and maintenance services decreased by $10,076,565, or 31.4%, to $21,979,399 for the six months ended December 31, 2021 from $32,055,964 for the six months ended December 31, 2020. Installation and maintenance services accounted for 64.5% of our total revenue for the six months ended December 31, 2021, as compared to 72.7% for the six months ended December 31, 2020. Revenue from housekeeping services amounted to $8,009,015, or 23.5% of our total revenue for the six months ended December 31, 2021, representing a decrease of $1,621,583, or 16.8%, from $9,630,598 for the six months ended December 31, 2020. Such decreases were primarily due to the lockdown in many cities in China where we had operation as well as the termination of business cooperation with one of our outlets. During the six months ended December 31, 2021, we have partnerships with approximately 2,387 individuals and service stores providing these services in China, which decreased significantly comparing to the six months ended December 31, 2020. We believe our business is and will be continuously adversely affected by COVID-19 and the government’s strict quarantine and prevention measures.
For the six months ended December 31, 2021, we generated revenue from senior care services in an amount of $4,091,068, or 12.0% of our total revenue, which represents an increase of $1,686,577, or 70.1%, from revenue from senior care services of $2,404,491 for the six months ended December 31, 2020.
Cost of revenue. Our cost of revenue includes service fees paid to staff, outlets and suppliers for the services rendered and the cost of accessories sold. Our cost of revenue decreased by $4,898,134, or 17.3%, to $23,408,079 for the six months ended December 31, 2021 from $28,306,213 for the six months ended December 31, 2020. Such decrease was in line with our decreased revenue.
Sales and marketing expenses. Our sales and marketing expenses consist primarily of remuneration for staff involved in selling and marketing efforts, advertising cost, depreciation, travel and leasing expenses. Our sales and marketing expenses increased by $1,330,613, or 44.0%, to $4,357,836 for the six months ended December 31, 2021 from $3,027,223 for the six months ended December 31, 2020. Such increase was primarily due to the increased marketing costs, which were mainly caused by our efforts to increase our brand awareness for the six months ended December 31, 2021 after our initial public offering. As a percentage of revenue, sales and marketing expenses increased to 12.8% for the six months ended December 31, 2021 from 6.9% for the six months ended December 31, 2020.
General and administrative expenses. Our general and administrative expenses consist primarily of employee remuneration, professional fees, insurance, benefits, office leases, general office expenses and depreciation. Our general and administrative expenses increased by $4,683,665, or 509.6%, to $5,602,754 for the six months ended December 31, 2021 from $919,089 for the six months ended December 31, 2020. Such increase was due to the increasing costs for supporting our expanding business and the increased compliance costs as a result of becoming a public company after our initial public offering closed in May 2021. As a percentage of revenue, general and administrative expenses increased to 16.4% for the six months ended December 31, 2021 from 2.1% for the six months ended December 31, 2020.
8
Income from operations. As a result of the foregoing, we recorded income from operations of $710,813 for the six months ended December 31, 2021, representing a decrease of $11,127,715, or 94.0%, compared to $11,838,528 for the six months ended December 31, 2020.
Total other income (expenses). We had $39,872 in total other income for the six months ended December 31, 2021, as compared to $36,513 in total other income for the six months ended December 31, 2020. Total other income (expenses), net, for the six months ended December 31, 2021 consisted of interest income in the amount of $90,907, offset by interest expenses in the amount of $23,793, amortization of financing cost of the convertible note of $20,322 and foreign currency exchange loss of $6,920. Total other income (expenses), net, for the six months ended December 31, 2020 consisted of interest income in the amount of $49,333, offset by interest expenses in the amount of $12,820.
On December 20, 2021, the Company entered into a securities purchase agreement with an institutional investor pursuant to which the Company issued an unsecured convertible promissory note with a two-year maturity to the investor. The convertible note has the original principal amount of $5,275,000 including the original issue discount of $250,000 and investor’s legal and other transaction costs of $25,000.
Income tax expense. We recorded income tax expenses of $1,356,819 for the six months ended December 31, 2021, representing a decrease of $1,613,360, or 54.3%, as compared to $2,970,179 for the six months ended December 31, 2020. The decrease in the income tax expense mainly resulted from the decrease in the income before income taxes from our PRC subsidiaries. See also “—Taxation” above.
Net income. As a result of the cumulative effect of the factors described above, we generated a net loss of $606,134 for the six months ended December 31, 2021, representing a decrease in net income of $9,510,996, or 106.8%, from net income of $8,904,862 for the six months ended December 31, 2020.
Liquidity and Capital Resources
As of December 31, 2021 and June 30, 2021, we had cash and cash equivalents of $59,321,982 and $52,410,472, respectively. We finance our operations, working capital needs and strategic investments from cash generated through operations and through debt and equity financings.
We believe that our current levels of cash and cash flows from operations and equity financing will be sufficient to meet our anticipated cash needs for our operations and expansion plans for at least the next 12 months. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
The following table sets forth a summary of our cash flows for the periods presented:
For the Six Months Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Net cash provided by operating activities | $ | 1,784,209 | $ | 15,965,812 | ||||
| Net cash used in investing activities | (121,856 | ) | (244,859 | ) | ||||
| Net cash provided by financing activities | 4,607,080 | - | ||||||
| Net increase in cash and cash equivalents | 6,269,433 | 15,720,953 | ||||||
| Effect of currency translation | $ | 642,077 | $ | 2,777,922 | ||||
| Cash and cash equivalents at beginning of the period | 52,410,472 | 25,022,199 | ||||||
| Cash and cash equivalents at end of the period | 59,321,982 | 43,521,074 | ||||||
9
Operating Activities
Net cash provided by operating activities was $1,784,209 for the year ended June 30, 2021, as compared to $15,965,812 for the six months ended December 31, 2020. For the year ended June 30, 2021, net cash provided by operating activities consisted of the net loss of $606,134, deferred income tax expense in the amount of $187,553, interest expense in the amount of $23,793, depreciation and amortization in the amount of $40,411, amortization of right-of-use assets in the amount of $248,518, amortization of financing cost of the convertible note of $20,322, change in inventory in the amount of $213,049, change in prepayments, deposits and other current assets in the amount of $2,279,543, change in long-term prepayments and other non-current assets in the amount of $1,556,045, and change in tax payable in the amount of $235,060, offset by change in account receivables in the amount of $43,555 and accounts payable and accrued expenses in the amount of $2,370,396.
Net cash provided by operating activities was $15,965,812 for the six months ended December 31, 2020. For the six months ended December 31, 2020, net cash provided by operating activities consisted of the net income of $8,904,862, income tax expense in the amount of $2,970,179, prepayment and other current assets in the amount of $619,103, accounts payable and accrued expenses in the amount of $4,713,298, accounts receivables, net, in the amount of $271,831, and depreciation and amortization in the amount of $350,982, offset by taxes payable in the amount of $1,499,070 and long-term prepayments and other non-current assets in the amount of $378,193, were the primary drivers of the cash provided by operating activities.
Investing Activities
Net cash used in investing activities was $121,856 for the six months ended December 31, 2021. Net cash used in investing activities for the six months ended December 31, 2021 consisted of right-of-use-assets costs in the amount of $103,641, cash paid for equipment and vehicles in the amount of $22,680, long-term investment of $941,073, and cash paid to former non-controlling shareholders of our subsidiary, Fujian Happiness Yijia Family Service Co., Ltd. in acquisition of the non-controlling interest of $54,462, offset by refund of prepaid deposit for potential acquisition in the amount of $1,000,000.
Net cash used in investing activities was $244,859 for the six months ended December 31, 2020, as compared to $260,220 in net cash used in investing activities for the six months ended December 31, 2019. Net cash used in investing activities for the six months ended December 31, 2020 consisted entirely of capitalized leasehold costs in the amount of $244,859.
Financing Activities
Net cash provided by financing activities was $4,607,080 for the six months ended December 31, 2021, which consisted of proceed from the convertible note in the amount of $5,275,000, offset by issuance cost of the convertible note paid in cash in the amount of $667,920.
We did not have any financing activities for the six months ended December 31, 2020.
Capital Expenditures
We made capital expenditures of $121,856 and $244,859 for the six months ended December 31, 2021 and 2020, respectively. In these periods, our capital expenditures were mainly used for purchases of property and equipment, including office equipment, electronic equipment and motor vehicles, and the. We plan to continue to make capital expenditures to meet the needs that result from the expected growth of our business.
Holding Company Structure
E-Home Household Service Holdings Limited is a Cayman Islands holding company with no material operations of its own. We conduct our operations primarily through E-Home WFOE and its subsidiaries in China. As a result, our ability to pay dividends depends upon dividends paid by E-Home WFOE. If E-Home WFOE or our other PRC subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, E-Home WFOE is permitted to pay dividends to E-Home Household Service Holdings Limited only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, E-Home WFOE and its PRC subsidiaries are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of their registered capital. In addition, each may allocate a portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds at their discretion, and these entities may allocate a portion of their after-tax profits based on PRC accounting standards to a discretionary surplus fund at their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange. E-Home WFOE has not paid dividends and will not be able to pay dividends until it meets the requirements for statutory reserve funds.
10
Exhibit 99.3
E-Home Household Services Holdings Limited Announces Half-Year Results Ended December 31, 2021
Fuzhou, China, May 06, 2022 -- E-Home Household Service Holdings Limited (Nasdaq: EJH) (the "Company" or "E-Home"), a provider of integrated household services in China, today announced its financial results for the six months ended December 31, 2021.
Financial Highlight
| - | Total revenue was $34.08 million for the six months ended December 31, 2021. |
| - | Revenue from senior care services increased by 70.42% to $4.09 million for the six months ended December 31, 2021, from $2.40 million for the six months ended December 31, 2020. |
| - | Cash and cash equivalents were $59.32 million and $52.41 million as of December 31, 2021 and June 30, 2021, respectively. |
| For six months ended December 31 | |||||
| ($ millions, except per share data, differences due to rounding) | 2021 | 2020 | % Change | ||
| Total revenue | $34.08 | $44.09 | (22.70%) | ||
| Total cost of revenue | $23.41 | $28.31 | (17.31%) | ||
| Gross profit | $10.67 | $15.78 | (32.38%) | ||
| Net (loss) income | ($0.61) | $8.90 | (106.85%) | ||
| Net income (loss) per share – basic and diluted | ($0.02) | $0.32 | (106.25%) | ||
Mr. Wenshan Xie, Chairman and CEO of E-Home, commented: “The past half year has posed great challenges as COVID-19-caused country-wide lockdown adversely affected our business. In particular the pandemic outbreak during September and October 2021 in Putian and other cities of Fujian province, where most of our business are based, has greatly disturbed normal operation of our business. As a result, our total revenue was affected but still reached $34.08 million for the six months ended December 31, 2021.”
“Despite the environment causing earnings to be less than prior year, in the second half of 2021, our business remained to be stable. Compared to the second half of 2020 when Fujian province had few COVID-19 case that led to a ‘consumption haze’, our business contracted year-on-year in the second half of 2021. Whereas if compared to the first half of 2021, our total revenue for the six months ended December 31, 2021 actually increased by 9.40%, among which revenue from installation and maintenance increased by 13.88%, revenue from housekeeping services increased by 6.70%, and revenue from senior care services decreased by 8.82% as we decided to lower the price charged per customer to RMB699/year from the original price tag of RMB1,000/person in order to expand our market share and customer base.”
“We remain confident in our ability to improve earnings going forward as not only our fundamentals remain strong, we are also implementing our expansionary strategic plans in big health and metaverse segments in order to hedge against the uncertainties around the pandemic and China’s strategy on COVID-19 containment.”
“The outlook of E-Home is promising. In 2022, although the COVID-19 pandemic continues all over the country, our revenue for the first quarter 2022 is more than 80 million yuan, and remains on a stable trend. The pandemic in Fujian has also been dynamically contained. As long as new COVID cases in the province remain under control, the Company expects its business operation will also be back on track and deliver good performance in 2022.”
Financial Results for Half-Year Ended December 31, 2021
Revenue
Our total revenue was $34.08 million for the six months ended December 31, 2021, although down from the same period in 2020 but still represented an increase from the first half of 2021.
Such decrease was due to the decrease of $10.08 million in revenue from installation and maintenance and the decrease of $1.62 million in revenue from our housekeeping services, which we both began providing in the fiscal year ended June 30, 2018.
Such decreases were primarily due to the lockdown in many cities in China where we had operation as well as the termination of business cooperation with one of our outlets. During the six months ended December 31, 2021, we have partnerships with approximately 2,387 individuals and service stores providing these services in China, which decreased significantly comparing to the six months ended December 31, 2020. We believe our business is and will be continuously adversely affected by COVID-19 and the government’s strict quarantine and prevention measures.
The decreases were partially offset by an increase of $1.69 million in revenue from our senior care services, which we began providing in the fiscal year ended June 30, 2020. For the six months ended December 31, 2021, we generated revenue from senior care services in an amount of $4.09 million, which represents an increase of 70.42%, from revenue from senior care services of $2.40 million for the six months ended December 31, 2020.
Cost of revenue
Our cost of revenue decreased by $4.90 million, or 17.31%, to $23.41 million for the six months ended December 31, 2021 from $28.31 million for the six months ended December 31, 2020. Such decrease was in line with our decreased revenue.
Sales and marketing expenses
Our sales and marketing expenses increased by $1.33 million, or 43.89%, to $4.36 million for the six months ended December 31, 2021 from $3.03 million for the six months ended December 31, 2020. Such increase was primarily due to the increased marketing costs, which were mainly caused by our efforts to increase our brand awareness for the six months ended December 31, 2021 after our initial public offering.
General and administrative expenses
Our general and administrative expenses increased by 508.70%, to $5.60 million for the six months ended December 31, 2021 from $0.92 million for the six months ended December 31, 2020. Such increase was due to the increasing costs for supporting our expanding business and the increased compliance costs as a result of becoming a public company after our initial public offering closed in May 2021.
Income from operations
As a result of the foregoing, we recorded income from operations of $0.71 million for the six months ended December 31, 2021, representing a decrease of $11.13 million, or 94.00%, compared to $11.84 million for the six months ended December 31, 2020.
Net (loss) income
As a result of the cumulative effect of the factors described above, we generated a net loss of $0.61 million for the six months ended December 31, 2021, representing a decrease in net income of $9.51 million, or 106.85%, from net income of $8.90 million for the six months ended December 31, 2020.
Cash and cash equivalents
As of December 31, 2021 and June 30, 2021, we had cash and cash equivalents of $59.32 million and $52.41 million, respectively.
Net income (loss) per share – basic and diluted
Basic and diluted net loss per share was $0.02 for the six months ended December 31, 2021, compared to net income per share of $0.32 for the six months ended December 31, 2020.
Recent Development
On April 28, 2022, the E-Home announced that the Company officially launched its Digital Human as a Service (“DHaaS”) platform that debuted on April 22, 2022, leveraging frontend AI technologies for sales and customer-facing services.
On April 11, 2022, E-Home announced that the Company, via its controlled subsidiary E-Home Household Service Holdings Limited, has entered into a Memorandum of Understanding (“MoU”) to explore the acquisition of Zhongrun (Fujian) Pharmaceutical Co., Ltd. (“Zhongrun”), a leading medicine and personal care products operator in China.
On March 04, 2022, E-Home announced that the Company announced that its Board of Directors has authorized a share repurchase program under which the Company may within the next 9 months, repurchase up to $8 million of its outstanding ordinary shares in the open market in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
On March 03, 2022, E-Home announced that the Company will debut a Digital Human as a Service (“DHaaS”) leveraging frontend AI technologies following E-Home’s launch of metaverse initiatives.
On February 16, 2022, E-Home announced that the Company will enter the metaverse space with digitalized business transformation initiatives. The Company plans to launch future online marketing campaign via the creation of metaverse brand ambassadors and to provide 24/7 customer service as well as training for household services personnel in the virtual world containing immersive experiences in on-demand training video, networking with customers and intelligent household services.
On January 21, 2022, E-Home announced that the Company and its wholly-owned subsidiary E-Home (Pingtan) Home Service Co., Ltd. (“E-Home Pingtan”), have entered into an equity transfer agreement with Putian YouYou Cleaning Co., Ltd. and its individual shareholder to acquire 60% of the equity interests in YouYou from Wang Guoqing, who holds 100% of the equity interests of YouYou, a professional cleaning and property management company in China. On the same date, E-Home also announced that the Company and E-Home Pingtan have entered into another equity transfer agreement with Shenzhen Chinese Enterprises Industrial LianBao Appliance Service Co., Ltd. (“LianBao”) and its shareholders to acquire 40% of the equity interests in LianBao, a Chinese household appliance service firm. Both acquisitions have been closed thereafter.
On January 19, 2022, E-Home announced that the Company has set up a cleaning robot equipment leasing department in the cleaning service sector, highlighting to promote the growth of the Company’s cleaning service business.
On January 13, 2022, E-Home announced that the Company has launched a new set of preventive anti-virus disinfection and cleaning services for households and indoor public areas amid resurgence of the Covid-19 pandemic.
About E-Home Household Service Holdings Limited
Established in 2014, E-Home Household Service Holdings Limited is a Nasdaq-listed household service company based in Fuzhou, China. The Company, through its website and WeChat platform "e家快服", provides integrated household services, including 1) installation and maintenance of home appliances and smart homes; 2) Housekeeping, nanny, sister-in-law and cleaning services; 3) Internet elderly care + home-based elderly care; 4) Hospital care; 5) Nanny delivery platform.
After years of development, the Company has formed two main services and four auxiliary services targeting at individual consumers (ToC) and business clients (ToB). 1) The ToC business focuses on nanny, sister-in-law, home-based elderly care and cleaning, and family comprehensive service supplemented by other housekeeping services. At present, it has successfully connected with metaverse technology to realize metaverse-based customer service as well as training of domestic workers. The ToB business focuses on public cleaning and cleaning robotic equipment. Four auxiliary services include 1) docking and application of metaverse technology to housekeeping and cleaning industries; 2) online and offline sales of medicine and health food (including nannies and nursing workers); 3) training on nannies and nursing workers to engage in health care in physical stores; 4) human resources (flexible employment).
E-Home has become a modern enterprise of comprehensive service for family life. The Company always adheres to the business philosophy of "solving every issue of customers with heart", and to the code of conduct of "doing everything well with heart". The Company aims to set the benchmark of the household service industry. For more information, visit the Company's website at http://www.ej111.com/ir.html.
Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions are intended to identify such forward-looking statements. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to consider risk factors, including those described in the Company's filings with the SEC, that may affect the Company's future results. All forward-looking statements attributable to the Company and its subsidiaries or persons acting on their behalf are expressly qualified in their entirety by these risk factors.
For more information, please contact:
Chunming Xie
Investor Relations
Email: xcm@ej111.com
Phone: +86 15359908086
Janice Wang
EverGreen Consulting Inc.
Email: IR@changqingconsulting.com
Phone: +1 571-464-9470 (from U.S.)
+86 13811768559 (from China)
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN U.S. DOLLARS, EXCEPT FOR NUMBER OF SHARES DATA)
| As of December 31, 2021 (unaudited) |
As of June 30, 2021 |
|||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 59,321,982 | $ | 52,410,472 | ||||
| Accounts receivable, net | 881,529 | 826,683 | ||||||
| Inventory | 35,296 | 246,778 | ||||||
| Prepayment and other current assets | 12,111,020 | 12,282,665 | ||||||
| Total current assets | 72,349,827 | 65,766,598 | ||||||
| Non-current assets | ||||||||
| Property, plant and equipment, net | 295,274 | 303,488 | ||||||
| Intangible assets, net | 30,867 | 36,031 | ||||||
| Long-term investment | 941,073 | - | ||||||
| Operating lease - right-of-use assets, net | 4,174,588 | 4,262,736 | ||||||
| Finance lease - right-of-use assets, net | 1,270,449 | 1,346,728 | ||||||
| Long-term prepayments and other non-current assets | 392,114 | 1,934,955 | ||||||
| Goodwill | 31,369 | - | ||||||
| Deferred income tax assets | 524,536 | 704,262 | ||||||
| Total Non-current assets | 7,660,270 | 8,588,200 | ||||||
| TOTAL ASSETS | $ | 80,010,097 | $ | 74,354,798 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 5,583,473 | $ | 4,357,553 | ||||
| Advances from customers | 2,967,388 | 2,993,656 | ||||||
| Taxes payable | 239,185 | 2,220 | ||||||
| Current maturities of operating lease liabilities | 25,336 | 87,103 | ||||||
| Current maturities of finance lease liabilities | 61,362 | 59,098 | ||||||
| Total current liabilities | 8,876,744 | 7,499,630 | ||||||
| Long-term portion of operating lease liabilities | 2,187,674 | 2,147,252 | ||||||
| Long-term portion of finance lease liabilities | 417,474 | 442,670 | ||||||
| Convertible note | 3,502,650 | - | ||||||
| TOTAL LIABILITIES | 14,984,542 | 10,089,552 | ||||||
| Commitments and contingencies | - | - | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Ordinary shares, $0.0001 par value, 500,000,000 shares authorized; 33,581,556 and 33,581,556 shares issued and outstanding, respectively | 3,359 | 3,359 | ||||||
| Additional paid-in capital | 26,185,836 | 25,542,531 | ||||||
| Statutory reserve | 664,100 | 664,100 | ||||||
| Retained earnings | 36,198,148 | 36,804,282 | ||||||
| Accumulated other comprehensive income(loss) | 1,994,065 | 1,298,015 | ||||||
| Total equity attributable to shareholders | 65,045,508 | 64,312,287 | ||||||
| Non-controlling interest | (19,953 | ) | (47,041 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 65,025,555 | 64,265,246 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 80,010,097 | $ | 74,354,798 | ||||
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS)
(IN U.S. DOLLARS, EXCEPT SHARES DATA)
(UNAUDITED)
|
For the six months ended December 31, |
||||||||
| 2021 | 2020 | |||||||
| Revenue | ||||||||
| Installation and maintenance | $ | 21,979,399 | $ | 32,055,964 | ||||
| Housekeeping | 8,009,015 | 9,630,598 | ||||||
| Senior care | 4,091,068 | 2,404,491 | ||||||
| Total revenue | 34,079,482 | 44,091,053 | ||||||
| Cost of revenue | ||||||||
| Installation and maintenance | 14,693,065 | 19,837,880 | ||||||
| Housekeeping | 6,687,377 | 7,358,322 | ||||||
| Senior care | 2,027,637 | 1,110,011 | ||||||
| Total cost of revenue | 23,408,079 | 28,306,213 | ||||||
| Gross profit | 10,671,403 | 15,784,840 | ||||||
| Operating expenses | ||||||||
| Sales and marketing expenses | 4,357,836 | 3,027,223 | ||||||
| General and administrative expenses | 5,602,754 | 919,089 | ||||||
| Total operating expenses | 9,960,590 | 3,946,312 | ||||||
| Income from operations | 710,813 | 11,838,528 | ||||||
| Other income (expenses) | ||||||||
| Interest income | 90,907 | 49,333 | ||||||
| Interest expenses | (23,793 | ) | (12,820 | ) | ||||
| Amortization of financing cost | (20,322 | ) | - | |||||
| Foreign currency exchange (loss)/ gain, net | (6,920 | ) | - | |||||
| Total other income (expenses), net | 39,872 | 36,513 | ||||||
| Income before income taxes | 750,685 | 11,875,041 | ||||||
| Income tax expense | (1,356,819 | ) | (2,970,179 | ) | ||||
| Net (loss) income | $ | (606,134 | ) | $ | 8,904,862 | |||
| Including: | ||||||||
| Net (loss) income attributable to the Company’s shareholders | (606,134 | ) | 8,906,124 | |||||
| Net loss attributable to minority interests | - | (1,262 | ) | |||||
| Net (loss) income | $ | (606,134 | ) | $ | 8,904,862 | |||
| Other comprehensive income | ||||||||
| Foreign currency translation adjustment, net of nil tax | 696,050 | 3,080,618 | ||||||
| Total comprehensive income | $ | 89,916 | $ | 11,985,480 | ||||
| Net income per share—basic and diluted | (0.02 | ) | 0.32 | |||||
| Weighted average number of ordinary shares outstanding—basic and diluted | 33,581,556 | 28,000,000 | ||||||
E-HOME HOUSEHOLD SERVICE HOLDINGS LIMITED
CHINA SXT PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN U.S. DOLLARS)
(UNAUDITED)
| For the six months ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash provided by operating activities | ||||||||
| Net income | $ | (606,134 | ) | $ | 8,904,862 | |||
| Deferred tax expense | 187,553 | (349,219 | ) | |||||
| Interest expense | 23,793 | 12,820 | ||||||
| Depreciation and amortization | 40,411 | 13,229 | ||||||
| Amortization of right-of-use assets | 248,518 | 337,753 | ||||||
| Convertible note - Amortization of financing cost | 20,322 | - | ||||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivables, net | (43,555 | ) | 271,831 | |||||
| Inventories | 213,049 | - | ||||||
| Prepayment and other current assets | 2,279,543 | 619,103 | ||||||
| Long-term prepayments and other non-current assets | 1,556,045 | (378,193 | ) | |||||
| Accounts payable and accrued expenses | (2,370,396 | ) | 4,713,298 | |||||
| Taxes payable | 235,060 | 1,820,328 | ||||||
| Cash provided by operating activities | 1,784,209 | 15,965,812 | ||||||
| Investing Activities | ||||||||
| Purchases of equipment and vehicles | (22,680 | ) | - | |||||
| Long-term investment | (941,073 | ) | - | |||||
| Right-of-use-asset costs | (103,641 | ) | (244,859 | ) | ||||
| Consideration paid to former non-controlling shareholders of HAPPY | (54,462 | ) | - | |||||
| Refund for potential acquisitions | 1,000,000 | - | ||||||
| Cash used in investing activities | (121,856 | ) | (244,859 | ) | ||||
| Financing Activities | ||||||||
| Proceeds from convertible note | 5,275,000 | - | ||||||
| Payment of convertible note issuance cost | (667,920 | ) | - | |||||
| Cash provided by financing activities | 4,607,080 | - | ||||||
| Net increase in cash and cash equivalents | 6,269,433 | 15,720,953 | ||||||
| Effects of currency translation | 642,077 | 2,777,922 | ||||||
| Cash and cash equivalents at beginning of period | 52,410,472 | 25,022,199 | ||||||
| Cash and cash equivalents at end of period | $ | 59,321,982 | $ | 43,521,074 | ||||
| SUPPLEMENTAL DISCLOSURES | ||||||||
| Income taxes paid | $ | 616,604 | $ | 1,509,091 | ||||
| Interest paid | $ | 23,793 | $ | 12,820 | ||||
Document And Entity Information |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Document Information Line Items | |
| Entity Registrant Name | E-Home Household Service Holdings Limited |
| Document Type | 6-K |
| Current Fiscal Year End Date | --06-30 |
| Amendment Flag | false |
| Entity Central Index Key | 0001769768 |
| Document Period End Date | Dec. 31, 2021 |
| Document Fiscal Year Focus | 2022 |
| Document Fiscal Period Focus | Q2 |
| Entity File Number | 001-40375 |
| Entity Address, Address Line One | Floor 9, Building 14, HaixiBaiyue Town |
| Entity Address, Address Line Two | No. 14 Duyuan Road, Luozhou Town |
| Entity Address, Address Line Three | Cangshan District |
| Entity Address, City or Town | Fuzhou City |
| Entity Address, Postal Zip Code | 350001 |
| Entity Address, Country | CN |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Ordinary shares, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
| Ordinary shares, authorized | 500,000,000 | 500,000,000 |
| Ordinary shares, issued | 33,581,556 | 33,581,556 |
| Ordinary shares, outstanding | 33,581,556 | 33,581,556 |
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) |
Ordinary Shares |
Additional paid-in capital |
Statutory reserve |
Retained Earnings |
Accumulated other comprehensive income (loss) |
Equity attributable to the Company’s shareholders |
Non-controlling interest |
Total equity |
|---|---|---|---|---|---|---|---|---|
| Balance at Jun. 30, 2020 | $ 2,800 | $ 3,667,957 | $ 664,100 | $ 30,395,350 | $ (1,967,388) | $ 32,762,819 | $ (34,494) | $ 32,728,325 |
| Balance (in Shares) at Jun. 30, 2020 | 28,000,000 | |||||||
| Net income (loss) | 8,906,124 | 8,906,124 | (1,262) | 8,904,862 | ||||
| Foreign currency translation adjustment | 3,080,618 | 3,080,618 | 3,080,618 | |||||
| Balance at Dec. 31, 2020 | $ 2,800 | 3,667,957 | 664,100 | 39,301,474 | 1,113,230 | 44,749,561 | (35,756) | 44,713,805 |
| Balance (in Shares) at Dec. 31, 2020 | 28,000,000 | |||||||
| Balance at Jun. 30, 2021 | $ 3,359 | 25,542,531 | 664,100 | 36,804,282 | 1,298,015 | 64,312,287 | (47,041) | 64,265,246 |
| Balance (in Shares) at Jun. 30, 2021 | 33,581,556 | |||||||
| Net income (loss) | (606,134) | (606,134) | (606,134) | |||||
| Foreign currency translation adjustment | 696,050 | 696,050 | 696,050 | |||||
| Acquisition of former non-controlling interest in HAPPY | (481,447) | (481,447) | 14,558 | (466,889) | ||||
| Disposal of 47% ownership in Fuzhou Fumao | 12,530 | 12,530 | ||||||
| Issuance of the convertible note | 1,124,752 | 1,124,752 | 1,124,752 | |||||
| Balance at Dec. 31, 2021 | $ 3,358 | $ 26,185,836 | $ 664,100 | $ 36,198,148 | $ 1,994,065 | $ 65,045,508 | $ (19,953) | $ 65,025,555 |
| Balance (in Shares) at Dec. 31, 2021 | 33,581,556 |
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) (Parentheticals) |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Total equity | |
| Disposal of ownership, percentage | 47.00% |
Organization and Nature of Operations |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS
E-Home Household Service Holdings Limited (the “Company”) was incorporated as a limited company under the law of Cayman Islands on September 24, 2018. The Company does not conduct any substantive operations on its own but instead conducts its business operations through its subsidiaries. The Company and its subsidiaries are hereinafter collectively referred to as “the Company”. The Company is principally engaged in the operation of household services, e.g. installation and maintenance of home appliances, housekeeping and senior care in the People’s Republic of China (the “PRC”) through on-line APP platform or call center. As described below, the Company, through a series of transactions which is accounted for as a reorganization of entities under common control (the “Reorganization”), became the ultimate parent entity of its subsidiaries. Accordingly, these consolidated financial statements reflect the historical operations of the Company as if the current organization structure had been in existence throughout the periods presented.
Reorganization
In preparation of its initial public offering in the United States (“IPO”), the following transactions were undertaken to reorganize the legal structure of the Company. The reorganization involved (i) the incorporation of the Company in the Cayman Islands as a holding company; (ii) the establishment of E-Home Household Service Holdings Limited (“E-Home Hong Kong”) as a wholly-owned subsidiary in Hong Kong, PRC; (iii) the establishment of E-Home Household Service Technology Co., Ltd. (“WOFE”), as a wholly-owned subsidiary of E-Home Hong Kong in Fujian, PRC; (iv) the entry by WFOE into contractual arrangements with Pingtan Comprehensive Experimental Area E Home Service Co., Ltd. (“E-Home Pingtan”) and Fuzhou Bangchang Technology Co. Ltd. (“Fuzhou Bangchang”) and their shareholders. The Company, E-Home Hong Kong and WFOE are all holding companies and had not commenced operation until this reorganization was complete. A reorganization of the Company’s legal structure was completed in February 2019.
As all the entities involved in the process of the Reorganization are under common control before and after the Reorganization, the Reorganization is accounted for in a manner similar to a pooling-of-interest with the assets and liabilities of the parties to the Reorganization carried over at their historical amounts.
Dissolution of the Company’s variable interest entity structure
On October 18, 2021, E-Home WFOE entered into an equity transfer agreement with each of E-Home Pingtan and Fuzhou Bangchang and their respective shareholders, pursuant to which E-Home WFOE exercised the options to acquire all of the equity interests in each of E-Home Pingtan and Fuzhou Bangchang from their respective shareholders. Upon the registration of the equity transfers with the local governmental authorities as of October 27, 2021, the equity transfers were closed, the company’s VIE structure was dissolved and each of E-Home Pingtan and Fuzhou Bangchang became a wholly owned indirect subsidiary of the Company.
Equity transfer agreements
Acquisition of non-controlling interest in HAPPY
On August 10, 2021, the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire the remaining 33% equity interests of Fujian Happiness Yijia Family Service Co., Ltd. (“HAPPY”) in consideration of $466,889 (RMB 3,000,000), with $54,462 (RMB 350,000) paid in August 2021 and $412,427 (RMB 2,650,000) paid in March 2022. The transaction to acquire the remaining 33% equity interests of HAPPY was closed in August 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of HAPPY.
F-7 Disposal of 47% ownership in Fuzhou Fumao
As of September 15, 2021, E-Home Pingtan reduced its shareholding in Fuzhou Fumao Health Science and Technology Co., Ltd. (“Fuzhou Fumao”) from 67% to 20% by completing the registration of the transfer of 47% equity interests in Fuzhou Fumao to certain individuals in consideration of Nil (investment cost of Nil). The Company has no significant influence in Fuzhou Fumao’s operation.
In September 2021, the Company made an investment in Fuzhou Fumao by RMB 6,000,000 with equity percentage of 20%.
Acquisition of 100% interest in Jiajiale
On June 9, 2021, the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire 100% equity interests of Fuzhou Gulou Jiajiale Family Service Co. Ltd.(“Jiajiale”) in consideration of $31,369 (RMB 200,000), with $31,369 (RMB 200,000) paid in March 2022. The transaction to acquire 100% equity interests of Jiajiale was closed in December 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of Jiajiale.
The Company’s major consolidated subsidiaries are as follows:
The accompanying consolidated financial statements include the financial statements of the Company and its subsidiaries. |
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Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 6-K and Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2021 and notes thereto and other pertinent information contained in our Form 20-F the Company has filed with the Securities and Exchange Commission (the “SEC”) on October 29, 2021. The results of operations for the six months ended December 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2022.
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of E-Home Household Service Holdings Limited and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.
Use of estimates
In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, prepayments, and other receivables, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, long-term investment and goodwill, and provision necessary for contingent liabilities. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, cash accounts, interest bearing savings accounts and time certificates of deposit with a maturity of three months or less when purchased. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.
Accounts receivable, net
Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on management of customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2021 and June 30, 2021, the Company determined that all accounts receivable were collectible and thus the allowance for doubtful accounts were $0 and $0.
Inventories
Inventories primarily include purchased accessories, appliances and E-watches for senior care services. Cost of inventories is based on purchase costs. Inventories are stated at the lower of cost or net realizable value. Net realizable value represents the anticipated selling price, net of distribution cost, less estimated costs to completion for work in progress. Inventories as of December 31, 2021 and June 30, 2021 consisted of the following:
For the six months ended December 31, 2021 and 2020, the Company recorded no impairment provision of inventories for lower of cost or net realizable value, respectively.
Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Depreciation is provided on the straight-line method based on the estimated useful lives of the assets as follows:
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterment which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses.
Intangible assets, net
Intangible assets consist of acquired software and senior care service app developed by the Company. The Company has purchased software from third parties used for operation management and developed an app for its senior care service. Software is initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of five to ten years.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles—Goodwill and Other: Goodwill (“ASC 350-20”), which requires that goodwill to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20.
The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess.
The Company performed qualitative assessments for the goodwill. Based on the requirements of ASC 350-20, the Company evaluated all relevant factors including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance, and the share price of the Company. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of goodwill, and further impairment testing on goodwill was unnecessary as of December 31, 2021.
On disposal of a portion of reporting unit that constitutes a business, the attributable amount of goodwill is included in the determination of the amount of gain or loss recognized upon disposal. When the Group disposes of a business within the reporting unit, the amount of goodwill disposed is measured on the basis of the relative fair value of the business disposed and the portion of the reporting unit retained. This relative fair value approach is not used when the business to be disposed was not integrated into the reporting unit after its acquisition, in which case the current carrying amount of the acquired goodwill should be included in the carrying amount of the business to be disposed.
Impairment of long-lived assets other than goodwill
Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Long-lived assets with carrying values that are not expected to be recovered through future cash flows are written down to their estimated fair values. The carrying value of a long-lived asset is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset’s carrying value exceeds the sum of its undiscounted cash flows, a non-cash asset impairment charges equal to the excess of the asset’s carrying value over its estimated fair value is recorded. Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. We measure fair value using market price indicators or, in the absence of such data, appropriate valuation technique.
Leases
Leases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria meets, the lease shall be classified as an operating lease.
For lessee, a lease is recognized as a right-of-use asset with a corresponding liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The right-of-use asset is calculated as the lease liability, increased by any initial direct costs and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The amendments in this ASU require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The Company adopted ASC 842 effective as of the beginning of the first period presented by using a modified retrospective transition approach in the accompanying financial statements of the Company. The adoption of this standard had a material impact on the Company’s financial position, with no material impact on the results of operations and cash flows (see Note 9 and Note 10).
Convertible note, net
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity components of the convertible senior notes have been reflected within additional paid-in capital in our audited consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense.
Fair Value of Financial Instruments
The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, time deposits, accounts receivable, prepaid expenses and other current assets, accounts payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments and market rates of interest.
ASC 820 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
The Company considers the carrying amount of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, and accounts payable to approximate the fair value of the respective assets and liabilities as of December 31, 2021 and June 30, 2021 owing to their short-term or immediate nature.
Revenue recognition
The Company adopted Accounting Standards Codification No. 606, Revenue from Contracts with Customers (ASC 606) beginning January 1, 2018 and elected to adopt ASC 606 under the modified retrospective method. This guidance was applied retrospectively to the most current period presented in the Company’s consolidated financial statements. The adoption of ASC 606 did not have a material impact on the consolidated financial statements of the Company.
The Company generates revenues primarily from installation & maintenance, housekeeping services and senior care services. The Company sells its services through a third-party service provider WeChat platform. The Company’s revenues are subject to value added tax (“VAT”). To record VAT payable, the Company uses the gross presentation method, which presents the taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates.
Installation& maintenance
Installation and maintenance services mainly consisting of the following services: technical home installation and repair, maintenance and other after sale services. Revenues from installation and maintenance services are recognized at a point in time once the service is transferred to the customer. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation based on its standalone selling price. The Company allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price. The Company, acting as principal, contracts with third-party service providers (i.e., service outlets), acting as agents. The Company is responsible for market development and providing the customer information to the service provider, directing the outlet to provide services and coordination with the customer, while the service provider provides the door-to-door service. The price of services is set by the Company and the service provider is only responsible for collection of payments. When the Company’s end customers place orders online for services, they pay either a required visit fee or the estimated full amount of service fee through third-party payment platforms, such as WeChat Pay and Alipay. The Company chooses the service provider by the proximity principle. If the customer is not satisfied with the chosen provider, the service provider can be re-selected. Regardless of the service provider’s performance, the Company is still liable to complete the orders. If the end customer fails to pay after satisfactory service is provided and the service provider is unable to collect payment from the end customer, the Company will communicate directly with the end customer. The service provider is not obligated to pay the Company. To minimize our risk, the service provider will remit payment of any outstanding receivables each month.
Housekeeping services
Housekeeping services refer to services including housecleaning, nanny service, maternity matron and personnel staffing. Revenues from housekeeping are recognized at a point in time upon completion of services to the customer based on the relative selling price method.
Senior care services
Senior care services refer to services including BP, heart rate test, daily steps count, location and track record, call for help by Wechat or phone, and other care services rendered to senior customers through an E-watch, which is given to the customers when they pay the annual fees. The customers sign a contract for the services with the Company. The contract term is normally one year. The revenues from senior care services are allocated into the revenue from the E-watch sold and the revenue of the services provided. Revenues from the E-watch sold are recognized at a point in time once customers receive the E-watch and the revenues of the services provided are recognized over the service period.
Disaggregation of revenue from contracts with customers
The senior care services consist of the sale of E-watch and the care services. The E-watch cannot be sold to the customers solely without the care services, and the care services should be rendered by the E-watch. Consequently, the Company regards these operating activities as operating in one material segment, being the revenue of senior care services.
Cost of revenues
Cost of revenue consists of service fees paid to staff, outlets, suppliers and the cost of accessories sold.
Income taxes
Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any PRC tax paid by subsidiaries during the year is recorded. Deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as current or non-current based upon the classification of the related asset or liability in the financial statements. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax asset will not be realized.
Ordinary shares
The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the common shareholders’ equity. Cancellation of treasury stock is recorded as a reduction of ordinary shares, additional paid-in capital and retained earnings, as applicable. An excess of purchase price over par value is allocated to additional paid-in capital first with any remaining excess charged entirely to retained earnings.
Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There were no potentially dilutive ordinary shares during the six months ended December 31, 2021 and 2020.
Comprehensive income/(loss)
Comprehensive income/(loss) is defined as the change in equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive income or loss is reported in the consolidated statements of comprehensive income/(loss). Accumulated other comprehensive income/ (loss), as presented on the accompanying consolidated balance sheets, consists of accumulated foreign currency translation adjustments.
Foreign currency translation
The Company’s principal country of operations is the PRC. The financial position and results of its operations are determined using RMB, the local currency, as the functional currency. The consolidated financial statements are reported using U.S. Dollars. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments are included as a separate component of accumulated other comprehensive income (loss).
The value of RMB against U.S. Dollar may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s consolidated financial condition in terms of U.S. Dollar reporting. The following table outlines the currency exchange rates that were used in the consolidated financial statements:
Segment reporting
Operating segments, and the amounts of each segment item reported in the consolidated financial statements, are identified from the financial information provided regularly to the Company’s most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Company’s various lines of business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria. The Company’s three segments are installation & maintenance, housekeeping and senior care services. The Company launched senior care services and started generating revenue from this new segment in August 2019.
Business combinations
The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings.
In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in “Others, net” in the consolidated statements of comprehensive (loss) income.
The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. There are no known commitments or contingencies as of December 31, 2021 and June 30, 2021.
Concentration of risks
Exchange rate risks
The Company’s Chinese subsidiaries may be exposed to significant foreign currency risks from exchange rate fluctuations and the degree of volatility of foreign exchange rates between the U.S. Dollar and the RMB. As of December 31, 2021 and June 30, 2021, the RMB denominated cash and cash equivalents amounted to $54,679,443 and $52,410,472, respectively.
Currency convertibility risks
Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts.
Concentration of credit risks
Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents and accounts receivable, the balances of which stated on the consolidated balance sheets represented the Company’s maximum exposure. The Company places its cash and cash equivalents in good credit quality financial institutions in China.
Risks and uncertainties
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
Recent accounting pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This amends guidelines on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current U.S. GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current U.S. GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date of ASU 2016-13. The amendments in these ASUs are effective for the Company’s fiscal years, and interim periods within those fiscal years beginning April 1, 2022. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
In August 2017, the FASB amended the existing accounting guidance for hedge accounting. The amendments require expanded hedge accounting for both non-financial and financial risk components and refine the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends the FASB ASC and XBRL Taxonomy based on the Tax Cuts and Jobs Act, or the Act, that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 that was released by the SEC. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting statements, if recently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of comprehensive income (loss) and statements of cash flows. |
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Business Combinations |
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| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
| BUSINESS COMBINATIONS | NOTE 3 – BUSINESS COMBINATIONS
On June 9, 2021, the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire 100% equity interests of Fuzhou Gulou Jiajiale Family Service Co. Ltd.(“Jiajiale”) in cash. The transaction to acquire 100% equity interests of Jiajiale was closed in December 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of Jiajiale. The purchase consideration in aggregate was RMB 200,000, among which RMB 200,000 was allocated to “goodwill” and Nil to net assets (based on preliminary assessment). The Company expects to achieve significant synergies from such acquisitions which it plans to complement its existing businesses. The acquired entities were considered insignificant, both individually and in aggregate. Results of the acquired entities’ operations have been included in the Company’s consolidated financial statements since the acquisition date.
Goodwill, which is non-deductible for tax purposes, is primarily attributable to the synergies expected to be achieved from the acquisitions.
Neither the results of operations since the acquisition dates nor the pro forma results of operations of the acquirees were presented because the effects of these business combinations, both individually and in aggregate, were not significant to the Company’s consolidated results of operations.
The valuations used in the purchase price allocation described above were determined by the Company with the assistance of independent third-party valuation firm. The valuation reports considered generally accepted valuation methodologies such as the income, market and cost approaches. As the acquirees are all private companies, the fair value estimates of pre-existing equity interests and debt investment or noncontrolling interests are based on significant inputs considered by market participants which mainly include (a) discount rate, (b) projected terminal value based on future cash flows, (c) equity multiples or enterprise value multiples of companies in the same industries and (d) adjustment for lack of control or lack of marketability. |
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Accounts Receivable, Net |
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||
| ACCOUNTS RECEIVABLE, NET | NOTE 4 – ACCOUNTS RECEIVABLE, NET
Accounts receivable consisted of the following as of December 31, 2021 and June 30, 2021:
The Company recorded no allowance for doubtful accounts as of December 31, 2021 and June 30, 2021. The Company gives its customers credit period of 30 days and continually assesses the recoverability of uncollected accounts receivable. As of December 31, 2021 and June 30, 2021, the balances of the Company’s accounts receivable were all due within 1 month. Management believes the balances of accounts receivable will be collected in full. |
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Prepayment and Other Current Assets |
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| PREPAYMENT AND OTHER CURRENT ASSETS | NOTE 5 – PREPAYMENT AND OTHER CURRENT ASSETS
Prepayments and other current assets as of December 31, 2021 and June 30, 2021, consisted of the following:
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Property, Plant and Equipment, Net |
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET
Property, plant and equipment consisted of the following as of December 31, 2021 and June 30, 2021:
As of December 31, 2021 and June 30, 2021, there was not any pledged property, plant or equipment. The Company recorded depreciation expense of $34,814 and $7,898 for the six months ended December 31, 2021 and 2020, respectively. For the six months ended December 31, 2021 and 2020, the Company recorded no impairment losses for property, plant and equipment. For the six months ended December 31, 2021 and 2020, the Company recorded no disposal of property, plant and equipment. |
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Intangible Assets, Net |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INTANGIBLE ASSETS, NET | NOTE 7 – INTANGIBLE ASSETS, NET
Intangible assets consisted of the following as of December 31, 2021 and June 30, 2021:
As of December 31, 2021 and June 30, 2021, there were no any pledged intangible assets to secure bank loans. The Company recorded amortization expense of $5,597 and $5,331 for the six months ended December 31, 2021 and 2020. For the six months ended December 31, 2021 and 2020, the Company recorded no impairment losses for intangible assets. For the six months ended December 31, 2021 and 2020, the Company recorded no disposal of intangible assets.
Estimated future amortization expense is as follows as of December 31, 2021:
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Long-Term Investment |
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| Debt Disclosure [Abstract] | |
| LONG-TERM INVESTMENT | NOTE 8 – LONG-TERM INVESTMENT
In September 2021, the Company made an investment in Fuzhou Fumao by RMB 6,000,000 with equity percentage of 20%. The Company has no significant influence in Fuzhou Fumao’s operation. As of December 31, 2021, the Company carried the investment at its cost in the amount of $941,073. |
Operating Lease Right-of-Use Assets, Net |
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| OPERATING LEASE RIGHT-OF-USE ASSETS, NET | NOTE 9 – OPERATING LEASE RIGHT-OF-USE ASSETS, NET
Operating lease right -of-use assets, net were as follows as of December 31, 2021 and June 30, 2021:
The Company recognized lease expense for the operating lease right -of-use assets Shou Hill Valley Area and Villas over a 20 years period. The Company recognized lease expense for the operating lease right -of-use assets Base Station Tower over a 10 years period. |
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Finance Lease Right-of-Use Assets, Net |
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| FINANCE LEASE RIGHT-OF-USE ASSETS, NET | NOTE 10 – FINANCE LEASE RIGHT-OF-USE ASSETS, NET
Finance lease right -of-use assets, net were as follows as of December 31, 2021 and June 30, 2021:
The finance lease right-of-use asset is amortized over a 10-year period. The amortization period is 10 years and the discount rate used is 4.9%. |
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Long-Term Prepayments and Other Non-Current Assets |
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| LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS | NOTE 11 – LONG-TERM PREPAYMENTS AND OTHER NON-CURRENT ASSETS
Long-term prepayments and other current assets as of December 31, 2021 and June 30, 2021, consisted of the following:
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Accounts Payable and Accrued Expenses |
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| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 12 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The following is a summary of accounts payable and accrued expenses as of December 31, 2021 and June 30, 2021:
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Advances from Customers |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
| Advances from Customers [Abstract] | |||||||||||||||||||||||||||||||||||||
| ADVANCES FROM CUSTOMERS | NOTE 13 – ADVANCES FROM CUSTOMERS
Advance from customers as of December 31, 2021 and June 30, 2021 consisted of the following:
E-Home received annual fees from senior care services customers and recognized revenues over the contract period. The amounts advanced from customers from senior care services were $2,098,143 and $2,817,048 as of December 31, 2021 and June 30, 2021, respectively, which will be recognized as senior care services revenue within 12 months. E-Home received advance from housekeeping services customers and recognized revenues when services are provided. The amounts advanced from customers from housekeeping services were $869,245 and $176,608 as of December 31, 2021 and June 30, 2021, respectively, which will be recognized as housekeeping services revenue within 12 months. |
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Operating Lease Liabilities |
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| Operating Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPERATING LEASE LIABILITIES | NOTE 14 – OPERATING LEASE LIABILITIES
Operating lease liabilities as of December 31, 2021 and June 30, 2021 consisted of the following:
Analyzed for reporting purposes as:
The operating lease liabilities is the net present value of the remaining lease payments as of December 31, 2021 and June 30, 2021.
The discount rates used for the Villas and Base Station Tower were 4.1239% and 3.1365%, respectively. The weighted average discount rate used for operating leases was 4.06%. The weighted average remaining lease terms for operating leases was 16.00 years. The incremental borrowing rate for the Company ranged from 3.7% to 4.8%.
The Company recorded no operating lease liability for the operating lease of Shou Hill Valley Area as of December 31, 2021 and June 30, 2021, respectively, since the Company prepaid the total lease expense of $2,321,945 (RMB 15,000,000) in December 2017.
For the six months ended December 31, 2021 and 2020, the operating lease costs were $155,155 and $248,824, respectively. For the six months ended December 31, 2021 and 2020, the short-term operating lease expense were $855,825 and $711,308, respectively.
Maturity analysis of operating lease liabilities as of December 31, 2021 is as follows:
Maturity analysis of operating lease liabilities as of June 30, 2021 is as follows:
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Finance Lease Liabilities |
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| Finance Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCE LEASE LIABILITIES | NOTE 15 – FINANCE LEASE LIABILITIES
Financing lease liabilities as of December 31, 2021 and June 30, 2021 consisted of the following:
Analyzed for reporting purposes as:
The lease agreement was entered into on September 11, 2017, bears interest at about 4.9% and will be matured on December 31, 2027. For the six months ended December 31, 2021 and 2020, the amortization expense of financial lease right-of-use assets were $93,363 and $88,929, respectively. For the six months ended December 31, 2021 and 2020, the interest expense for financial lease were $12,059 and $11,025, respectively.
Maturity analysis of financial lease liabilities as of December 31, 2021 is as follows:
Maturity analysis of financial lease liabilities as of June 30, 2021 is as follows:
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Convertible Note |
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| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONVERTIBLE NOTE | NOTE 16 – CONVERTIBLE NOTE
On December 20, 2021, E-Home Household Service Holdings Limited (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an institutional investor (“Investor”) pursuant to which the Company issued an unsecured convertible promissory note with a two-year maturity (the “Convertible Note”) to Investor. The Convertible Note has the original principal amount of $5,275,000.00 including the original issue discount of $250,000 and Investor’s legal and other transaction costs of $25,000. The Company anticipates using the proceeds for general working capital purposes.
Material Terms of the Convertible Note:
In accounting for the issuance of the Convertible Note, the Company separated the Convertible Note into liability and equity components. The carrying amount of the equity component of the Convertible Note and the warrants was $1,307,495 (equity component $1,095,390, warrants value $212,105). Equity component was determined by deducting the fair value of the liability component from the par value of the original Convertible Note. Warrants value was determined with the Black Scholes model. Equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense over the term of the Convertible Note.
Debt issuance costs related to the original Convertible Note comprised of commissions paid to third party placement agent, lawyers, and warrants value of $880,025. The Company allocated the total amount incurred to the liability and equity components of the original Convertible Note based on their relative values. Issuance costs attributable to the liability component were $697,282 and will be amortized to interest expense using the effective interest method over the contractual term. Issuance costs attributable to the equity component were $182,743 and netted with the equity component in stockholders’ equity of $1,095,390 and warrant value of $212,105.
Net carrying amount of the liability component Convertible Note dated as of December 31, 2021 was as follows:
Net carrying amount of the equity component of the Convertible Note as of December 31, 2021 was as follows:
Amortization of issuance cost, debt discount and interest cost for the six months ended December 31, 2021 were as follows:
The effective interest rate to derive the liability component fair value is 33.14% for the Convertible Note. |
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Taxes |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| TAXES | NOTE 16 – TAXES
The Company is registered in the Cayman Islands. The Company generated substantially all of its income from its PRC operations for the six months ended December 31, 2021 and 2020.
Cayman Islands
Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
Hong Kong
E-Home Hong Kong is not subject to tax on income or capital gain since there has no operations in Hong Kong for the six months ended December 31, 2021 and 2020.
PRC
Income Tax
On March 16, 2007, the National People’s Congress of PRC enacted an Enterprise Income Tax Law (“EIT Law”), under which Foreign Investment Enterprises (“FIEs”) and domestic companies would be subject to enterprise income tax (“EIT”) at a uniform rate of 25%. The EIT Law became effective on January 1, 2008. 25% tax rates apply to all the PRC operation subsidiaries in the Company.
The provision for income tax for the six months ended December 31, 2021 and 2020, consisted of the following:
The following table sets forth reconciliation between the statutory EIT rate and the effective tax for the six months ended December 31, 2021 and 2020, respectively:
The significant components of deferred tax assets were as follows:
Value Added Tax (“VAT”)
Business tax changed to VAT in China since May 1, 2016. The Company’s revenue of installation is subject to a VAT rate of 11%. The maintenance and accessories sales were subject to a VAT rate of 17% before May 1, 2018 and were reduced to 16% since then. The VAT rate was reduced to 13% since April 1, 2019.
According to the regulations (Fiscal and Tax [2016] 36), no VAT will be levied if an enterprise provides employee-based household services. E-Home Pingtan applied for the tax exemption in July 2017 and was approved by the State Administration of Taxation (China), so the VAT rate of installation, maintenance, after-sales and cleaning service is since July 2017.
Taxes payable
The Company’s taxes payable as of December 31, 2021 and June 30, 2021, consisted of the following:
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Equity |
6 Months Ended |
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Dec. 31, 2021 | |
| Stockholders' Equity Note [Abstract] | |
| EQUITY | NOTE 17 – EQUITY
Ordinary Shares
At the reorganization event described in Note 1, the Company issued 50,000 ordinary shares with par value of $1 to exchange for the ownership in E-Home Pingtan from the former shareholders to WFOE.
Prior to the reorganization, the Company had $3,620,757 and $3,885,586 in contributed ownership as of June 30, 2019 and 2018, respectively.
The reorganization has been accounted for at historical cost and prepared on the basis as if the reorganization had become effective as of the beginning of the first period presented in the accompanying financial statements of the Company. On May 23, 2019, the Company split its 50,000 ordinary shares into 500,000,000 ordinary shares. The authorized ordinary shares became 500,000,000 shares and the par value changed from US$1 to US$0.0001. As part of its reorganization and on May 23, 2019, the Company surrendered 472,000,000 ordinary shares. As a result, the Company has 28,000,000 ordinary shares issued and outstanding.
On May 18, 2021, the Company completed the closing of its initial public offering of 5,575,556 ordinary shares at a public offering price of $4.50 per ordinary share, including 20,000 ordinary shares issued upon the partial exercise of the over-allotment option by Joseph Stone Capital, LLC, who acted as the representative of underwriters for the initial public offering. The total gross proceed from the initial public offering was approximately $25.1 million before underwriting commissions and offering expenses. The total net proceed from the initial public offering was $21,661,293 (ordinary shares of $558 and additional paid-in capital of $21,660,735) after deducting the financing expenses directly related to the initial public offering.
On June 21, 2021, the Company granted 6,000 ordinary shares to three of its independent directors (2,000 shares for each director) as their compensations at a fair value of $213,840 (ordinary shares of $1 and additional paid-in capital of $213,839).
Statutory Reserve
The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The reserved amounts as determined pursuant to PRC statutory laws totaled $664,100 and $664,100 as of December 31, 2021 and June 30, 2021.
Dividends
Dividends declared by the Company are based on the distributable profits as reported in its statutory financial statements reported in accordance with PRC GAAP, which may differ from the results of operations reflected in the consolidated financial statements prepared in accordance with US GAAP. The Company’s ability to pay dividends is primarily from cash received from its operating activities in PRC. For the six months ended December 31, 2021 and 2020, there was no Company dividend declared. |
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| Revenue [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUE | NOTE 18 – REVENUE
The Company disaggregated senior care services revenue into the sale of the E-watch and the care service. Sales of E-watches are recognized in revenue at a point in time while revenue from care service is recognized over a period of time. Deferred portion of care service is recorded as a liability (advances from customers) on the company’s balance sheet.
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Segment Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT INFORMATION | NOTE 19 – SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the management for decision making. Management has identified three operating segments which are installation and maintenance, housekeeping and senior care services. Operations for senior care services began in August 2019. The Company started generating revenue from this new segment in August 2019. These operating segments are monitored and strategic decisions are made on the basis of segmental profit margins. Segment profit is defined as net sales reduced by cost of revenue and other related operating expenses. The results are shown as follows for the six months ended December 31, 2021 and 2020:
On account of the Company’s business model, assets, operating expense, profit or loss, liabilities and other material items could not be separated into each operating segment. As the Company’s long-lived assets and revenue are substantially located in and derived from the PRC, no geographical segments are presented. |
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Commitments and Contingencies |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | NOTE 20 – COMMITMENTS AND CONTINGENCIES
As of December 31, 2021, the Company had following lease commitments under non-cancelable agreements:
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Customer and Supplier Concentration |
6 Months Ended |
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Dec. 31, 2021 | |
| Customer and Supplier Concentration [Abstract] | |
| CUSTOMER AND SUPPLIER CONCENTRATION | NOTE 21 – CUSTOMER AND SUPPLIER CONCENTRATION
Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchase.
The Company’s sales are made to customers that are located primarily in China. For the six months ended December 31, 2021 and 2020, no individual customer or supplier accounted for more than 10% of the Company’s total revenues or purchase. As of December 31, 2021 and June 30, 2021, no individual customer or supplier accounted for more than 10% of the total outstanding accounts receivable or accounts payable balance. |
Related Party Balances and Transactions |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 22 – RELATED PARTY BALANCES AND TRANSACTIONS
As of December 31, 2021 and June 30, 2021, the Company had $1,402 and $30,925 payable to its major shareholder and CEO, Mr. Wenshan Xie for purchase of goods and services, respectively. These balances were included in accounts payable and accrued expenses presented on the Company’s balance sheet. |
Subsequent Events |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | NOTE 23 – SUBSEQUENT EVENTS
Equity transfer agreements
On January 20, 2022, the Company and E-Home Pingtan, the wholly-owned subsidiary of the Company in China, entered into an equity transfer agreement (the “YouYou Agreement”) with YouYou Cleaning and Mr. Guoqing Wang (“Mr. Wang”), the sole shareholder of YouYou Cleaning, pursuant to which Mr. Wang agreed to transfer 60% of the equity interests in YouYou Cleaning to E-Home Pingtan, in consideration for the sum of (i) RMB4 million (approximately $0.63 million) in cash and (ii) 2,702,826 ordinary shares of the Company valued at RMB32 million (approximately $5.03 million) with a per share issuance price equal to 120% of the average of the Nasdaq closing price of the ordinary shares of the Company for twenty consecutive trading days preceding January 11, 2022, which average is $1.55, and therefore, the per share issuance price should be $1.86. The acquisition was closed.
On January 20, 2022, the Company and E-Home Pingtan entered into another equity transfer agreement (the “LianBao Agreement”) with LianBao Appliance Service and its nine shareholders (the “Sellers”), pursuant to which the Sellers will transfer 40% of the equity interests in LianBao Appliance Service to E-Home Pingtan, in exchange for a total of 5,823,363 ordinary shares of the Company, as determined by the quotient of dividing the purchase price of RMB63.2 million (approximately $9.93 million) by a per share issuance price equal to 110% of the average of the Nasdaq closing price of the ordinary shares of Party C (Nasdaq: EJH) for twenty consecutive trading days preceding January 11, 2022, which average is $1.55, and therefore, the per share issuance price should be $1.705. The acquisition was closed.
In accordance with ASC 855-10, the Company has analyzed its operations subsequent to December 31, 2021 to the date these financial statements were issued, and has determined that, it does not have any material subsequent events to disclose in these financial statements. |
Accounting Policies, by Policy (Policies) |
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| Interim Financial Statements | Interim Financial Statements
These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and with the instructions to Form 6-K and Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2021 and notes thereto and other pertinent information contained in our Form 20-F the Company has filed with the Securities and Exchange Commission (the “SEC”) on October 29, 2021. The results of operations for the six months ended December 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year ending June 30, 2022.
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| Principles of Consolidation | Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of E-Home Household Service Holdings Limited and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.
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| Use of estimates | Use of estimates
In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable, prepayments, and other receivables, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, long-term investment and goodwill, and provision necessary for contingent liabilities. Actual results could differ from those estimates.
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| Cash and cash equivalents | Cash and cash equivalents
Cash and cash equivalents include cash on hand, cash accounts, interest bearing savings accounts and time certificates of deposit with a maturity of three months or less when purchased. The Company considers all highly liquid investment instruments with an original maturity of three months or less from the date of purchase to be cash equivalents. The Company maintains most of the bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs.
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| Accounts receivable, net | Accounts receivable, net
Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on management of customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. As of December 31, 2021 and June 30, 2021, the Company determined that all accounts receivable were collectible and thus the allowance for doubtful accounts were $0 and $0.
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| Inventories | Inventories
Inventories primarily include purchased accessories, appliances and E-watches for senior care services. Cost of inventories is based on purchase costs. Inventories are stated at the lower of cost or net realizable value. Net realizable value represents the anticipated selling price, net of distribution cost, less estimated costs to completion for work in progress. Inventories as of December 31, 2021 and June 30, 2021 consisted of the following:
For the six months ended December 31, 2021 and 2020, the Company recorded no impairment provision of inventories for lower of cost or net realizable value, respectively.
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| Property, plant and equipment, net | Property, plant and equipment, net
Property, plant and equipment are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Depreciation is provided on the straight-line method based on the estimated useful lives of the assets as follows:
Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterment which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses.
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| Intangible assets, net | Intangible assets, net
Intangible assets consist of acquired software and senior care service app developed by the Company. The Company has purchased software from third parties used for operation management and developed an app for its senior care service. Software is initially recorded at cost and amortized on a straight-line basis over the estimated economic useful lives of five to ten years.
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| Goodwill | Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. The Company assesses goodwill for impairment in accordance with ASC Subtopic 350-20, Intangibles—Goodwill and Other: Goodwill (“ASC 350-20”), which requires that goodwill to be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20.
The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the quantitative test in accordance with ASC 350-20. In the qualitative assessment, the Company considers primary factors such as industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations. If the Company believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount, the quantitative impairment test described above is required. Otherwise, no further testing is required. The quantitative impairment test compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess.
The Company performed qualitative assessments for the goodwill. Based on the requirements of ASC 350-20, the Company evaluated all relevant factors including, but not limited to, macroeconomic conditions, industry and market conditions, financial performance, and the share price of the Company. The Company weighed all factors in their entirety and concluded that it was not more-likely-than-not the fair value was less than the carrying amount of goodwill, and further impairment testing on goodwill was unnecessary as of December 31, 2021.
On disposal of a portion of reporting unit that constitutes a business, the attributable amount of goodwill is included in the determination of the amount of gain or loss recognized upon disposal. When the Group disposes of a business within the reporting unit, the amount of goodwill disposed is measured on the basis of the relative fair value of the business disposed and the portion of the reporting unit retained. This relative fair value approach is not used when the business to be disposed was not integrated into the reporting unit after its acquisition, in which case the current carrying amount of the acquired goodwill should be included in the carrying amount of the business to be disposed.
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| Impairment of long-lived assets other than goodwill | Impairment of long-lived assets other than goodwill
Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. Long-lived assets with carrying values that are not expected to be recovered through future cash flows are written down to their estimated fair values. The carrying value of a long-lived asset is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If the asset’s carrying value exceeds the sum of its undiscounted cash flows, a non-cash asset impairment charges equal to the excess of the asset’s carrying value over its estimated fair value is recorded. Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at a specified measurement date. We measure fair value using market price indicators or, in the absence of such data, appropriate valuation technique.
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| Leases | Leases
Leases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term. (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the criteria meets, the lease shall be classified as an operating lease.
For lessee, a lease is recognized as a right-of-use asset with a corresponding liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The right-of-use asset is calculated as the lease liability, increased by any initial direct costs and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). The amendments in this ASU require an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses will depend on classification as a finance or operating lease. The amendments also require certain quantitative and qualitative disclosures about leasing arrangements. The Company adopted ASC 842 effective as of the beginning of the first period presented by using a modified retrospective transition approach in the accompanying financial statements of the Company. The adoption of this standard had a material impact on the Company’s financial position, with no material impact on the results of operations and cash flows (see Note 9 and Note 10).
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| Convertible note, net | Convertible note, net
ASC 470, Debt, requires the liability and equity components of convertible debt instruments that may be settled in cash upon conversion to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. ASC 470-20 requires that the initial proceeds from the sale of these notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by the Company at such time. We measured the estimated fair value of the debt component of our convertible notes as of the issuance date based on our nonconvertible debt borrowing rate. The equity components of the convertible senior notes have been reflected within additional paid-in capital in our audited consolidated balance sheet, and the resulting debt discount is amortized over the period during which the convertible notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair value of a financial instrument is defined as the exchange price that would be received from an asset or paid to transfer a liability (as exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, time deposits, accounts receivable, prepaid expenses and other current assets, accounts payable, and other current liabilities, approximate their fair values because of the short maturity of these instruments and market rates of interest.
ASC 820 requires certain disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
The Company considers the carrying amount of its financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, and accounts payable to approximate the fair value of the respective assets and liabilities as of December 31, 2021 and June 30, 2021 owing to their short-term or immediate nature.
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| Revenue Recognition | Revenue recognition
The Company adopted Accounting Standards Codification No. 606, Revenue from Contracts with Customers (ASC 606) beginning January 1, 2018 and elected to adopt ASC 606 under the modified retrospective method. This guidance was applied retrospectively to the most current period presented in the Company’s consolidated financial statements. The adoption of ASC 606 did not have a material impact on the consolidated financial statements of the Company.
The Company generates revenues primarily from installation & maintenance, housekeeping services and senior care services. The Company sells its services through a third-party service provider WeChat platform. The Company’s revenues are subject to value added tax (“VAT”). To record VAT payable, the Company uses the gross presentation method, which presents the taxable services and the available input VAT amount (at the rate applicable to the supplier). Revenues are recorded net of VAT in accordance with the ASC 606. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates.
Installation& maintenance
Installation and maintenance services mainly consisting of the following services: technical home installation and repair, maintenance and other after sale services. Revenues from installation and maintenance services are recognized at a point in time once the service is transferred to the customer. For service arrangements that include multiple performance obligations, revenues are allocated to each performance obligation based on its standalone selling price. The Company allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement to all deliverables based on the relative selling price method, generally based on the best estimate of selling price. The Company, acting as principal, contracts with third-party service providers (i.e., service outlets), acting as agents. The Company is responsible for market development and providing the customer information to the service provider, directing the outlet to provide services and coordination with the customer, while the service provider provides the door-to-door service. The price of services is set by the Company and the service provider is only responsible for collection of payments. When the Company’s end customers place orders online for services, they pay either a required visit fee or the estimated full amount of service fee through third-party payment platforms, such as WeChat Pay and Alipay. The Company chooses the service provider by the proximity principle. If the customer is not satisfied with the chosen provider, the service provider can be re-selected. Regardless of the service provider’s performance, the Company is still liable to complete the orders. If the end customer fails to pay after satisfactory service is provided and the service provider is unable to collect payment from the end customer, the Company will communicate directly with the end customer. The service provider is not obligated to pay the Company. To minimize our risk, the service provider will remit payment of any outstanding receivables each month.
Housekeeping services
Housekeeping services refer to services including housecleaning, nanny service, maternity matron and personnel staffing. Revenues from housekeeping are recognized at a point in time upon completion of services to the customer based on the relative selling price method.
Senior care services
Senior care services refer to services including BP, heart rate test, daily steps count, location and track record, call for help by Wechat or phone, and other care services rendered to senior customers through an E-watch, which is given to the customers when they pay the annual fees. The customers sign a contract for the services with the Company. The contract term is normally one year. The revenues from senior care services are allocated into the revenue from the E-watch sold and the revenue of the services provided. Revenues from the E-watch sold are recognized at a point in time once customers receive the E-watch and the revenues of the services provided are recognized over the service period.
Disaggregation of revenue from contracts with customers
The senior care services consist of the sale of E-watch and the care services. The E-watch cannot be sold to the customers solely without the care services, and the care services should be rendered by the E-watch. Consequently, the Company regards these operating activities as operating in one material segment, being the revenue of senior care services.
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| Cost of revenues | Cost of revenues
Cost of revenue consists of service fees paid to staff, outlets, suppliers and the cost of accessories sold.
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| Income taxes | Income taxes
Income taxes are provided on an asset and liability approach for financial accounting and reporting of income taxes. Any PRC tax paid by subsidiaries during the year is recorded. Deferred income taxes are recognized for all significant temporary differences at enacted rates and classified as current or non-current based upon the classification of the related asset or liability in the financial statements. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all, the deferred tax asset will not be realized.
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| Ordinary shares | Ordinary shares
The Company accounts for repurchased ordinary shares under the cost method and includes such treasury stock as a component of the common shareholders’ equity. Cancellation of treasury stock is recorded as a reduction of ordinary shares, additional paid-in capital and retained earnings, as applicable. An excess of purchase price over par value is allocated to additional paid-in capital first with any remaining excess charged entirely to retained earnings.
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| Related parties | Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or significant influence, such as a family member or relative, shareholder, or a related corporation.
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| Earnings per share | Earnings per share
The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There were no potentially dilutive ordinary shares during the six months ended December 31, 2021 and 2020.
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| Comprehensive income/ (loss) | Comprehensive income/(loss)
Comprehensive income/(loss) is defined as the change in equity of the Company during a period arising from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. Comprehensive income or loss is reported in the consolidated statements of comprehensive income/(loss). Accumulated other comprehensive income/ (loss), as presented on the accompanying consolidated balance sheets, consists of accumulated foreign currency translation adjustments.
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| Foreign currency translation | Foreign currency translation
The Company’s principal country of operations is the PRC. The financial position and results of its operations are determined using RMB, the local currency, as the functional currency. The consolidated financial statements are reported using U.S. Dollars. The results of operations and the statement of cash flows denominated in foreign currency are translated at the average rate of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments are included as a separate component of accumulated other comprehensive income (loss).
The value of RMB against U.S. Dollar may fluctuate and is affected by, among other things, changes in the PRC’s political and economic conditions. Any significant revaluation of RMB may materially affect the Company’s consolidated financial condition in terms of U.S. Dollar reporting. The following table outlines the currency exchange rates that were used in the consolidated financial statements:
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| Segment reporting | Segment reporting
Operating segments, and the amounts of each segment item reported in the consolidated financial statements, are identified from the financial information provided regularly to the Company’s most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Company’s various lines of business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria. The Company’s three segments are installation & maintenance, housekeeping and senior care services. The Company launched senior care services and started generating revenue from this new segment in August 2019.
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| Business combinations | Business combinations
The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations. The purchase method of accounting requires that the consideration transferred to be allocated to the assets, including separately identifiable assets and liabilities the Company acquired, based on their estimated fair values. The consideration transferred in an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any noncontrolling interests. The excess of (i) the total of cost of acquisition, fair value of the noncontrolling interests and acquisition date fair value of any previously held equity interests in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree, is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in earnings.
In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in “Others, net” in the consolidated statements of comprehensive (loss) income.
The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons.
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| Commitments and contingencies | Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. There are no known commitments or contingencies as of December 31, 2021 and June 30, 2021.
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| Concentration of risks | Concentration of risks
Exchange rate risks
The Company’s Chinese subsidiaries may be exposed to significant foreign currency risks from exchange rate fluctuations and the degree of volatility of foreign exchange rates between the U.S. Dollar and the RMB. As of December 31, 2021 and June 30, 2021, the RMB denominated cash and cash equivalents amounted to $54,679,443 and $52,410,472, respectively.
Currency convertibility risks
Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts.
Concentration of credit risks
Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents and accounts receivable, the balances of which stated on the consolidated balance sheets represented the Company’s maximum exposure. The Company places its cash and cash equivalents in good credit quality financial institutions in China.
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| Risks and Uncertainties | Risks and uncertainties
The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results.
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| Recent Accounting Pronouncements | Recent accounting pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This amends guidelines on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current U.S. GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current U.S. GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date of ASU 2016-13. The amendments in these ASUs are effective for the Company’s fiscal years, and interim periods within those fiscal years beginning April 1, 2022. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
In August 2017, the FASB amended the existing accounting guidance for hedge accounting. The amendments require expanded hedge accounting for both non-financial and financial risk components and refine the measurement of hedge results to better reflect an entity’s hedging strategies. The new guidance also amends the presentation and disclosure requirements and changes how entities assess hedge effectiveness. The new guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2018 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition with a cumulative effect adjustment recorded to opening retained earnings as of the initial adoption date. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In March 2018, the FASB issued ASU 2018-05, “Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” which amends the FASB ASC and XBRL Taxonomy based on the Tax Cuts and Jobs Act, or the Act, that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 that was released by the SEC. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. These amendments take effect for public businesses for fiscal years beginning after December 15, 2017 and interim periods within those periods, and all other entities should apply these amendments for fiscal years beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The Company adopted the amendment on July 1, 2020 by using the modified retrospective method. The adoption had no impact on the Company’s statement of cash flows for six months ended December 31, 2021 and 2020.
In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. Among other changes, the new guidance removes from GAAP separation models for convertible debt that require the convertible debt to be separated into a debt and equity component, unless the conversion feature is required to be bifurcated and accounted for as a derivative or the debt is issued at a substantial premium. As a result, after adopting the guidance, entities will no longer separately present such embedded conversion features in equity, and will instead account for the convertible debt wholly as debt. The new guidance also requires use of the “if-converted” method when calculating the dilutive impact of convertible debt on earnings per share, which is consistent with the Company’s current accounting treatment under the current guidance. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted, but only at the beginning of the fiscal year. Early adoption is permitted. The Company does not expect to early adopt this guidance and is in the process of evaluating the impact of adoption of this guidance on the Company’s consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting statements, if recently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of comprehensive income (loss) and statements of cash flows. |
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Organization and Nature of Operations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of acquisition of non-controlling interest |
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| Schedule of disposal consideration |
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| Schedule of major consolidated subsidiaries |
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Significant Accounting Policies (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| Schedule of inventories |
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| Schedule of estimated useful lives of the assets |
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| Schedule of outlines the currency exchange rates |
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Business Combinations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of consolidated financial statements acquisition date |
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Accounts Receivable, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of accounts receivable |
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Prepayment and Other Current Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepayment And Other Current Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of prepayments, deposits and other current assets |
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Property, Plant and Equipment, Net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of property, plant and equipment, net |
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Intangible Assets, Net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of intangible assets, net |
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| Schedule of estimated future amortization expense |
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Operating Lease Right-of-Use Assets, Net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Lease Right-of-Use Assets, Net Table [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating lease right -of-use assets |
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Finance Lease Right-of-Use Assets, Net (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Finance Lease Right of Use Assets Table [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of finance lease right -of-use assets |
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Long-Term Prepayments and Other Non-Current Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
| Long-Term Prepayments and Other Non-Current Assets Table [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of long-term prepayments and other non-current assets |
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Accounts Payable and Accrued Expenses (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of accounts payable and accrued expenses |
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Advances from Customers (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||
| Advances from Customers Table [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of advance from customer |
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Operating Lease Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating lease liabilities |
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| Schedule of analyzed for reporting purposes |
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| Schedule of maturity analysis of operating lease liabilities |
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Finance Lease Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Finance Lease Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of financing lease liabilities |
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| Schedule of financing lease liabilities for reporting purposes |
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| Schedule of maturity analysis of financial lease liabilities |
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Convertible Note (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||
| Schedule of net carrying amount of the liability component convertible Note |
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| Schedule of net carrying amount of the equity component |
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| Schedule of amortization of issuance cost, debt discount and interest cost |
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Taxes (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of provision for income tax |
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| Schedule of statutory EIT rate and the effective tax |
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| Schedule of deferred tax asset |
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| Schedule of taxes payable |
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Revenue (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of revenue |
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of operating segments information |
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of future lease payments |
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Organization and Nature of Operations (Details) |
6 Months Ended | |||
|---|---|---|---|---|
Sep. 15, 2021 |
Aug. 10, 2021 |
Dec. 31, 2021 |
Aug. 31, 2021 |
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| Organization and Nature of Operations (Details) [Line Items] | ||||
| Incorporatation date | Sep. 24, 2018 | |||
| Equity interests | 33.00% | |||
| Disposal of ownership, percentage | 47.00% | |||
| Disposal of ownership, description | E-Home Pingtan reduced its shareholding in Fuzhou Fumao Health Science and Technology Co., Ltd. (“Fuzhou Fumao”) from 67% to 20% by completing the registration of the transfer of 47% equity interests in Fuzhou Fumao to certain individuals in consideration of Nil (investment cost of Nil). The Company has no significant influence in Fuzhou Fumao’s operation. In USD Disposal consideration - Net assets disposed, excluding intangible assets and the related deferred tax liabilities (38,102) Intangible assets, net - Deferred tax liabilities - Non-controlling interests 12,530 Investment income 25,572 - In September 2021, the Company made an investment in Fuzhou Fumao by RMB 6,000,000 with equity percentage of 20%. Acquisition of 100% interest in Jiajiale On June 9, 2021, the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire 100% equity interests of Fuzhou Gulou Jiajiale Family Service Co. Ltd.(“Jiajiale”) in consideration of $31,369 (RMB 200,000), with $31,369 (RMB 200,000) paid in March 2022. The transaction to acquire 100% equity interests of Jiajiale was closed in December 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of Jiajiale. The Company’s major consolidated subsidiaries are as follows: Name Date of Incorporation Place of Organization % of Ownership E-Home Household Service Holdings Limited October 16, 2018 Hong Kong 100%E-Home Household Service Technology Co., Ltd. December 5, 2018 PRC 100%Pingtan Comprehensive Experimental Area E Home Service Co., Ltd. April 1, 2014 PRC 100%Fuzhou Bangchang Technology Co. Ltd. March 15, 2007 PRC 100%Fuzhou Yongheng Xin Electric Co., Ltd. (“YHX”) October 12, 2004 PRC 100%Fujian Happiness Yijia Family Service Co., Ltd. January 19, 2015 PRC 100%Yaxing Human Resource Management (Pingtan)Co., Ltd. July 6, 2018 PRC 51%Fuzhou Gulou Jiajiale Family Service Co. Ltd. February 28, 2019 PRC 100%Yaxin Human Resource Management (Fuzhou) Co., Ltd. September 10, 2021 PRC 100% | |||
| Acquisition of interest percentage | 100.00% | |||
| E-Home Pingtan [Member] | ||||
| Organization and Nature of Operations (Details) [Line Items] | ||||
| Equity interests | 100.00% | |||
| Fujian Happiness Yijia [Member] | ||||
| Organization and Nature of Operations (Details) [Line Items] | ||||
| Acquisition of interest, description | the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire the remaining 33% equity interests of Fujian Happiness Yijia Family Service Co., Ltd. (“HAPPY”) in consideration of $466,889 (RMB 3,000,000), with $54,462 (RMB 350,000) paid in August 2021 and $412,427 (RMB 2,650,000) paid in March 2022. The transaction to acquire the remaining 33% equity interests of HAPPY was closed in August 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of HAPPY. In USD Purchase consideration 466,889 Noncontrolling interests (14,558) Additional paid-in capital 481,447 466,889 F-7Disposal of 47% ownership in Fuzhou Fumao As of September 15, 2021, E-Home Pingtan reduced its shareholding in Fuzhou Fumao Health Science and Technology Co., Ltd. (“Fuzhou Fumao”) from 67% to 20% by completing the registration of the transfer of 47% equity interests in Fuzhou Fumao to certain individuals in consideration of Nil (investment cost of Nil). The Company has no significant influence in Fuzhou Fumao’s operation. In USD Disposal consideration - Net assets disposed, excluding intangible assets and the related deferred tax liabilities (38,102) Intangible assets, net - Deferred tax liabilities - Non-controlling interests 12,530 Investment income 25,572 - In September 2021, the Company made an investment in Fuzhou Fumao by RMB 6,000,000 with equity percentage of 20%. Acquisition of 100% interest in Jiajiale On June 9, 2021, the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire 100% equity interests of Fuzhou Gulou Jiajiale Family Service Co. Ltd.(“Jiajiale”) in consideration of $31,369 (RMB 200,000), with $31,369 (RMB 200,000) paid in March 2022. The transaction to acquire 100% equity interests of Jiajiale was closed in December 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of Jiajiale. The Company’s major consolidated subsidiaries are as follows: Name Date of Incorporation Place of Organization % of Ownership E-Home Household Service Holdings Limited October 16, 2018 Hong Kong 100%E-Home Household Service Technology Co., Ltd. December 5, 2018 PRC 100%Pingtan Comprehensive Experimental Area E Home Service Co., Ltd. April 1, 2014 PRC 100%Fuzhou Bangchang Technology Co. Ltd. March 15, 2007 PRC 100%Fuzhou Yongheng Xin Electric Co., Ltd. (“YHX”) October 12, 2004 PRC 100%Fujian Happiness Yijia Family Service Co., Ltd. January 19, 2015 PRC 100%Yaxing Human Resource Management (Pingtan)Co., Ltd. July 6, 2018 PRC 51%Fuzhou Gulou Jiajiale Family Service Co. Ltd. February 28, 2019 PRC 100%Yaxin Human Resource Management (Fuzhou) Co., Ltd. September 10, 2021 PRC 100% | |||
| Fuzhou Gulou Jiajiale [Member] | ||||
| Organization and Nature of Operations (Details) [Line Items] | ||||
| Acquisition of interest, description | the Company’s PRC subsidiary, E-Home Pingtan entered into an equity transfer agreement to acquire 100% equity interests of Fuzhou Gulou Jiajiale Family Service Co. Ltd.(“Jiajiale”) in consideration of $31,369 (RMB 200,000), with $31,369 (RMB 200,000) paid in March 2022. The transaction to acquire 100% equity interests of Jiajiale was closed in December 2021 and after the acquisition, E-Home Pingtan owns 100% of the equity interest of Jiajiale.The Company’s major consolidated subsidiaries are as follows: Name Date of Incorporation Place of Organization % of Ownership E-Home Household Service Holdings Limited October 16, 2018 Hong Kong 100%E-Home Household Service Technology Co., Ltd. December 5, 2018 PRC 100%Pingtan Comprehensive Experimental Area E Home Service Co., Ltd. April 1, 2014 PRC 100%Fuzhou Bangchang Technology Co. Ltd. March 15, 2007 PRC 100%Fuzhou Yongheng Xin Electric Co., Ltd. (“YHX”) October 12, 2004 PRC 100%Fujian Happiness Yijia Family Service Co., Ltd. January 19, 2015 PRC 100%Yaxing Human Resource Management (Pingtan)Co., Ltd. July 6, 2018 PRC 51%Fuzhou Gulou Jiajiale Family Service Co. Ltd. February 28, 2019 PRC 100%Yaxin Human Resource Management (Fuzhou) Co., Ltd. September 10, 2021 PRC 100% |
Organization and Nature of Operations (Details) - Schedule of acquisition of non-controlling interest |
Dec. 31, 2021
USD ($)
|
|---|---|
| Schedule of acquisition of non-controlling interest [Abstract] | |
| Purchase consideration | $ 466,889 |
| Noncontrolling interests | (14,558) |
| Additional paid-in capital | 481,447 |
| Total | $ 466,889 |
Organization and Nature of Operations (Details) - Schedule of disposal consideration |
Dec. 31, 2021
USD ($)
|
|---|---|
| Schedule of disposal consideration [Abstract] | |
| Disposal consideration | |
| Net assets disposed, excluding intangible assets and the related deferred tax liabilities | (38,102) |
| Intangible assets, net | |
| Deferred tax liabilities | |
| Non-controlling interests | 12,530 |
| Investment income | 25,572 |
| Total |
Significant Accounting Policies (Details) |
6 Months Ended | |
|---|---|---|
|
Dec. 31, 2021
USD ($)
|
Jun. 30, 2021
USD ($)
|
|
| Significant Accounting Policies (Details) [Line Items] | ||
| Allowance for doubtful accounts | $ 0 | $ 0 |
| Material segment | 1 | |
| Number of segments | 3 | |
| Cash equivalents | $ 54,679,443 | $ 52,410,472 |
| Minimum [Member] | ||
| Significant Accounting Policies (Details) [Line Items] | ||
| Estimated useful lives | 5 years | |
| Maximum [Member] | ||
| Significant Accounting Policies (Details) [Line Items] | ||
| Estimated useful lives | 10 years |
Significant Accounting Policies (Details) - Schedule of inventories - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Inventory [Line Items] | ||
| Total inventories, net | $ 35,296 | $ 246,778 |
| E-watches [Member] | ||
| Inventory [Line Items] | ||
| Total inventories, net | $ 35,296 | $ 246,778 |
Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Office Equipment [Member] | |
| Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
| Useful Lives | 5 years |
| Electronic Equipment [Member] | |
| Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
| Useful Lives | 5 years |
| Motor Vehicles [Member] | |
| Significant Accounting Policies (Details) - Schedule of estimated useful lives of the assets [Line Items] | |
| Useful Lives | 10 years |
Significant Accounting Policies (Details) - Schedule of outlines the currency exchange rates |
Dec. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|---|
| Schedule of outlines the currency exchange rates [Abstract] | |||
| Year-end spot rate | 1= 6.3757 RMB | 1= 6.4601 RMB | 1=6.5249 RMB |
| Average rate | 1= 6.4266 RMB | 1= 6.6076 RMB | 1=6.7470 RMB |
Business Combinations (Details) |
6 Months Ended |
|---|---|
|
Dec. 31, 2021
CNY (¥)
| |
| Business Combinations (Details) [Line Items] | |
| Equity method investment, ownership percentage transfer | 100.00% |
| Purchase consideration (in Yuan Renminbi) | ¥ 200,000 |
| Long term prepayments (in Yuan Renminbi) | ¥ 200,000 |
| Jiajiale [Member] | |
| Business Combinations (Details) [Line Items] | |
| Equity method investment, ownership percentage transfer | 100.00% |
| Business Combination [Member] | Fuzhou Gulou Jiajiale Family Service Co. Ltd. [Member] | |
| Business Combinations (Details) [Line Items] | |
| Equity interest, percentage | 100.00% |
Business Combinations (Details) - Schedule of consolidated financial statements acquisition date |
Dec. 31, 2021
USD ($)
|
|---|---|
| Schedule of consolidated financial statements acquisition date [Abstract] | |
| Purchase consideration | $ 31,369 |
| Net assets acquired, excluding intangible assets and the related deferred tax liabilities | |
| Intangible assets, net | |
| Deferred tax liabilities | |
| Noncontrolling interests | |
| Goodwill | 31,369 |
| Total | $ 31,369 |
Accounts Receivable, Net (Details) - Schedule of accounts receivable - Accounts Receivable [Member] - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2020 |
|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Accounts receivable, gross | $ 881,529 | $ 826,683 |
| Less: allowance for doubtful accounts | ||
| Accounts receivable, net | $ 881,529 | $ 826,683 |
Prepayment and Other Current Assets (Details) |
1 Months Ended | 6 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jul. 31, 2021
USD ($)
|
Jul. 31, 2021
CNY (¥)
|
Jun. 30, 2021
USD ($)
a
|
Jun. 30, 2021
CNY (¥)
|
Jun. 21, 2021
USD ($)
|
Jun. 21, 2021
CNY (¥)
|
Apr. 30, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
Jul. 07, 2021
USD ($)
|
Jul. 07, 2021
CNY (¥)
|
Jun. 01, 2021
USD ($)
|
May 28, 2021 |
|
| Prepayment and Other Current Assets (Details) [Line Items] | ||||||||||||
| Number of agreements | 2 | |||||||||||
| Prepaid deposit for acquisitions | $ 1,000,000 | $ 1,800,000 | ||||||||||
| Business combination term | 3 years | |||||||||||
| Received refund of performance deposit | $ 756,704 | |||||||||||
| Purchase of office | $ 4,705,365 | ¥ 30,000,000 | ||||||||||
| Prepaid expense | $ 1,568,455 | ¥ 10,000,000 | $ 1,882,146 | ¥ 12,000,000 | ||||||||
| Farmland acers (in Acres) | a | 74 | |||||||||||
| Right of use for farmland | $ 1,346,728 | $ 1,270,449 | $ 2,343,750 | ¥ 15,000,000 | ||||||||
| Fujian Ruiquan Care Services Co., Ltd. [Member] | ||||||||||||
| Prepayment and Other Current Assets (Details) [Line Items] | ||||||||||||
| Ownership percentage | 55.00% | |||||||||||
| South Pacific [Member] | ||||||||||||
| Prepayment and Other Current Assets (Details) [Line Items] | ||||||||||||
| Prepaid deposit for acquisitions | $ 600,000 | |||||||||||
| Ownership percentage | 30.00% | |||||||||||
Prepayment and Other Current Assets (Details) - Schedule of prepayments, deposits and other current assets - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Schedule of prepayments, deposits and other current assets [Abstract] | ||||||||||
| Deposits made for potential acquisitions | [1] | $ 2,400,000 | $ 3,400,000 | |||||||
| Prepaid for marketing fee | 2,627,440 | 2,333,358 | ||||||||
| Performance deposits | [2] | 2,195,837 | 2,167,149 | |||||||
| Prepaid consulting services fee | 820,000 | 2,110,000 | ||||||||
| Prepaid office deposit | [3] | 1,882,146 | 1,931,107 | |||||||
| Prepaid for the right of use for farmland | [4] | 1,568,455 | ||||||||
| Prepaid income tax expenses | 315,015 | |||||||||
| Prepaid office rental fee and other expenses | 93,529 | 26,006 | ||||||||
| Total prepayments, deposits and other current assets | $ 12,111,020 | $ 12,282,665 | ||||||||
| ||||||||||
Property, Plant and Equipment, Net (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | $ 34,814 | $ 7,898 |
Property, Plant and Equipment, Net (Details) - Schedule of property, plant and equipment, net - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment, at cost | $ 429,650 | $ 401,474 |
| Less: accumulated depreciation | (134,376) | (97,986) |
| Property, plant and equipment, net | 295,274 | 303,488 |
| Office Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment, at cost | 31,183 | 10,665 |
| Electronic Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment, at cost | 78,321 | 74,845 |
| Motor Vehicles [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant and equipment, at cost | $ 320,146 | $ 315,964 |
Intangible Assets, Net (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Amortization expenses of intangible assets | $ 5,597 | $ 5,331 |
Intangible Assets, Net (Details) - Schedule of intangible assets, net - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Less: accumulated amortization | $ (34,917) | $ (28,893) |
| Intangible assets, net | 30,867 | 36,031 |
| Software [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets, gross | 18,730 | 18,485 |
| Senior care service App [Member] | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible assets, gross | $ 47,054 | $ 46,439 |
Intangible Assets, Net (Details) - Schedule of estimated future amortization expense |
Dec. 31, 2021
USD ($)
|
|---|---|
| Schedule of estimated future amortization expense [Abstract] | |
| 2022 | $ 11,194 |
| 2023 | 11,194 |
| 2024 | 8,479 |
| Thereafter | |
| Total | $ 30,867 |
Long-Term Investment (Details) - Fuzhou Fumao [Member] |
1 Months Ended | |
|---|---|---|
|
Sep. 30, 2021
CNY (¥)
|
Dec. 31, 2021
USD ($)
|
|
| Long-Term Investment (Details) [Line Items] | ||
| Investment amount | ¥ | ¥ 6,000,000 | |
| Equity percentage | 20.00% | |
| Carried investment cost | $ | $ 941,073 |
Operating Lease Right-of-Use Assets, Net (Details) |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Operating Lease Right-of-Use Assets, Net (Details) [Line Items] | |
| Number of operating leases right-of-use assets | 10 years |
| Shou Hill Valley Area [Member] | |
| Operating Lease Right-of-Use Assets, Net (Details) [Line Items] | |
| Number of operating leases right-of-use assets | 20 years |
Finance Lease Right-of-Use Assets, Net (Details) |
6 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Finance Lease Right of Use Assets (Textual) | |
| Term of right of use asset of financial lease | 10 years |
| Amortization period | 10 years |
| Percentage discount rate | 4.90% |
Long-Term Prepayments and Other Non-Current Assets (Details) - Schedule of long-term prepayments and other non-current assets - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Schedule of long-term prepayments and other non-current assets [Abstract] | ||
| Deposits paid for lease assets | $ 392,114 | $ 386,991 |
| Deposits paid for land | 1,547,964 | |
| Total | $ 392,114 | $ 1,934,955 |
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable and accrued expenses - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Schedule of accounts payable and accrued expenses [Abstract] | ||
| Payable to suppliers | $ 3,446,400 | $ 3,657,700 |
| Salary and welfare payables | 1,434,479 | 614,355 |
| Accrued expenses and other current liabilities | 702,594 | 85,498 |
| Total | $ 5,583,473 | $ 4,357,553 |
Advances from Customers (Details) - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Senior Care Services [Member] | ||
| Advances from Customers (Details) [Line Items] | ||
| Advances from customers | $ 2,098,143 | $ 2,817,048 |
| Housekeeping Services [Member] | ||
| Advances from Customers (Details) [Line Items] | ||
| Advances from customers | $ 869,245 | $ 176,608 |
Advances from Customers (Details) - Schedule of advance from customer - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Advances from Customers (Details) - Schedule of advance from customer [Line Items] | ||
| Advance from customers total | $ 2,967,388 | $ 2,993,656 |
| Senior care services [Member] | ||
| Advances from Customers (Details) - Schedule of advance from customer [Line Items] | ||
| Advance from customers total | 2,098,143 | 2,817,048 |
| Housekeeping services [Member] | ||
| Advances from Customers (Details) - Schedule of advance from customer [Line Items] | ||
| Advance from customers total | $ 869,245 | $ 176,608 |
Operating Lease Liabilities (Details) - Schedule of operating lease liabilities - USD ($) |
6 Months Ended | |||||
|---|---|---|---|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2021 |
|||||
| Operating Lease Liabilities (Details) - Schedule of operating lease liabilities [Line Items] | ||||||
| Total operating lease liabilities | $ 2,213,010 | $ 2,234,355 | ||||
| Villas [Member] | ||||||
| Operating Lease Liabilities (Details) - Schedule of operating lease liabilities [Line Items] | ||||||
| Operating lease liabilities | [1] | 2,018,072 | 1,951,867 | |||
| Base Station Tower [Member] | ||||||
| Operating Lease Liabilities (Details) - Schedule of operating lease liabilities [Line Items] | ||||||
| Operating lease liabilities | [2] | $ 194,938 | $ 282,488 | |||
| ||||||
Operating Lease Liabilities (Details) - Schedule of analyzed for reporting purposes - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Schedule of analyzed for reporting purposes [Abstract] | ||
| Long-term portion of operating lease liabilities | $ 2,187,674 | $ 2,147,252 |
| Current maturities of operating lease liabilities | 25,336 | 87,103 |
| Total | $ 2,213,010 | $ 2,234,355 |
Finance Lease Liabilities (Details) - USD ($) |
6 Months Ended | ||
|---|---|---|---|
Sep. 11, 2017 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Finance Lease Liabilities [Abstract] | |||
| Rate of financial lease liability interest | 4.90% | ||
| Amortization expense of financial lease right-of-use assets | $ 93,363 | $ 88,929 | |
| Interest expense for financial lease | $ 12,059 | $ 11,025 | |
Finance Lease Liabilities (Details) - Schedule of financing lease liabilities for reporting purposes - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Schedule of financing lease liabilities for reporting purposes [Abstract] | ||
| Long-term portion of finance lease liabilities | $ 417,474 | $ 442,670 |
| Current maturities of finance lease liabilities | 61,362 | 59,098 |
| Total | $ 478,836 | $ 501,768 |
Finance Lease Liabilities (Details) - Schedule of maturity analysis of financial lease liabilities - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2021 |
|
| Schedule of maturity analysis of financial lease liabilities [Abstract] | ||
| Discount rate at commencement | 4.90% | 4.90% |
| One year | $ 83,459 | $ 82,369 |
| Two years | 83,459 | 82,369 |
| Three years | 83,459 | 82,369 |
| Four years | 83,459 | 82,369 |
| Five years | 83,459 | 82,369 |
| Beyond five years | 146,053 | 185,330 |
| Total undiscounted cash flows | 563,348 | 597,175 |
| Total financing lease liabilities | 478,836 | 501,768 |
| Difference between undiscounted cash flows and discounted cash flows | $ 84,512 | $ 95,407 |
Convertible Note (Details) - Schedule of net carrying amount of the liability component convertible Note |
Dec. 31, 2021
USD ($)
|
|---|---|
| Principal outstanding [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the liability component convertible Note [Line Items] | |
| Convertible Note | $ 5,275,000 |
| Unamortized issuance cost [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the liability component convertible Note [Line Items] | |
| Convertible Note | (1,772,350) |
| Net carrying value [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the liability component convertible Note [Line Items] | |
| Convertible Note | $ 3,502,650 |
Convertible Note (Details) - Schedule of net carrying amount of the equity component |
Dec. 31, 2021
USD ($)
|
|---|---|
| Amount allocated to conversion option [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the equity component [Line Items] | |
| Convertible Note – equity portion | $ 1,095,390 |
| Issuance cost [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the equity component [Line Items] | |
| Convertible Note – equity portion | 182,743 |
| Equity component, net [Member] | |
| Convertible Note (Details) - Schedule of net carrying amount of the equity component [Line Items] | |
| Convertible Note – equity portion | $ 912,647 |
Convertible Note (Details) - Schedule of amortization of issuance cost, debt discount and interest cost |
Dec. 31, 2021
USD ($)
|
|---|---|
| Debt Conversion [Line Items] | |
| Convertible Note | $ 32,056 |
| Issuance costs and debt discount [Member] | |
| Debt Conversion [Line Items] | |
| Convertible Note | 20,322 |
| Convertible note interest [Member] | |
| Debt Conversion [Line Items] | |
| Convertible Note | $ 11,734 |
Taxes (Details) |
1 Months Ended | 6 Months Ended | |||
|---|---|---|---|---|---|
May 01, 2016 |
Jan. 01, 2008 |
Jul. 31, 2017 |
Mar. 16, 2007 |
Dec. 31, 2021 |
|
| Taxes (Details) [Line Items] | |||||
| VAT percentage | 11.00% | ||||
| Value added tax, description | The maintenance and accessories sales were subject to a VAT rate of 17% before May 1, 2018 and were reduced to 16% since then. The VAT rate was reduced to 13% since April 1, 2019. | ||||
| After sales and cleaning service | |||||
| EIT [Member] | |||||
| Taxes (Details) [Line Items] | |||||
| Percentage of uniform rate | 25.00% | ||||
| Effective tax rate | 25.00% | ||||
Taxes (Details) - Schedule of provision for income tax - USD ($) |
6 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Schedule of provision for income tax [Abstract] | ||
| Current income tax provision | $ 1,169,266 | $ 3,319,398 |
| Deferred income tax provision | 187,553 | (349,219) |
| Total | $ 1,356,819 | $ 2,970,179 |
Taxes (Details) - Schedule of statutory EIT rate and the effective tax - USD ($) |
6 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Schedule of statutory EIT rate and the effective tax [Abstract] | ||
| Provision for income taxes at statutory tax rate in the PRC | $ 1,334,938 | $ 2,968,760 |
| Effect of expense for which no income tax is deductible | 21,881 | 1,419 |
| Effective income tax expense | $ 1,356,819 | $ 2,970,179 |
Taxes (Details) - Schedule of deferred tax asset - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Schedule of deferred tax asset [Abstract] | ||
| Deferred tax assets | ||
| Senior care services fees advanced from customers | 524,536 | 704,262 |
| Total | $ 524,536 | $ 704,262 |
Taxes (Details) - Schedule of taxes payable - USD ($) |
6 Months Ended | 12 Months Ended |
|---|---|---|
Dec. 31, 2021 |
Jun. 30, 2021 |
|
| Schedule of taxes payable [Abstract] | ||
| Income tax payable | $ 237,885 | |
| VAT payable | 332 | |
| Other tax payables | 1,300 | 1,888 |
| Total | $ 239,185 | $ 2,220 |
Revenue (Details) - Schedule of revenue - USD ($) |
6 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Disaggregation of Revenue [Line Items] | ||
| Total | $ 34,079,482 | $ 44,091,053 |
| Installation and Maintenance [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | 21,979,399 | 32,055,964 |
| Housekeeping [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | 8,009,015 | 9,630,598 |
| Senior care services [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | 3,040,664 | 1,828,317 |
| E-watch [Member] | ||
| Disaggregation of Revenue [Line Items] | ||
| Total | $ 1,050,404 | $ 576,174 |
Commitments and Contingencies (Details) |
Jun. 30, 2021
USD ($)
|
Jun. 30, 2021
CNY (¥)
|
Jun. 20, 2021
USD ($)
|
Jun. 20, 2021
CNY (¥)
|
|---|---|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||||
| Purchase of a company | $ 4,705,365 | ¥ 30,000,000 | ||
| Company prepaid | $ 1,882,146 | ¥ 12,000,000 |
Customer and Supplier Concentration (Details) |
6 Months Ended | 12 Months Ended | |
|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Jun. 30, 2021 |
|
| Customer and Supplier Concentration (Details) [Line Items] | |||
| Concentration risk, percentage | 10.00% | ||
| Accounts Receivable [Member] | |||
| Customer and Supplier Concentration (Details) [Line Items] | |||
| Concentration risk, percentage | 10.00% | 10.00% | |
| Revenue [Member] | |||
| Customer and Supplier Concentration (Details) [Line Items] | |||
| Concentration risk, percentage | 10.00% | 10.00% | |
Related Party Balances and Transactions (Details) - USD ($) |
Dec. 31, 2021 |
Jun. 30, 2021 |
|---|---|---|
| Related Party Transactions [Abstract] | ||
| Amount payable | $ 1,402 | $ 30,925 |
Subsequent Events (Details) - 1 months ended Jan. 20, 2022 - Subsequent Event [Member] $ / shares in Units, $ in Thousands, ¥ in Millions |
USD ($)
$ / shares
shares
|
CNY (¥)
shares
|
|---|---|---|
| Subsequent Events (Details) [Line Items] | ||
| Subsequent event, description | On January 20, 2022, the Company and E-Home Pingtan, the wholly-owned subsidiary of the Company in China, entered into an equity transfer agreement (the “YouYou Agreement”) with YouYou Cleaning and Mr. Guoqing Wang (“Mr. Wang”), the sole shareholder of YouYou Cleaning, pursuant to which Mr. Wang agreed to transfer 60% of the equity interests in YouYou Cleaning to E-Home Pingtan, in consideration for the sum of (i) RMB4 million (approximately $0.63 million) in cash and (ii) 2,702,826 ordinary shares of the Company valued at RMB32 million (approximately $5.03 million) with a per share issuance price equal to 120% of the average of the Nasdaq closing price of the ordinary shares of the Company for twenty consecutive trading days preceding January 11, 2022, which average is $1.55, and therefore, the per share issuance price should be $1.86. | On January 20, 2022, the Company and E-Home Pingtan, the wholly-owned subsidiary of the Company in China, entered into an equity transfer agreement (the “YouYou Agreement”) with YouYou Cleaning and Mr. Guoqing Wang (“Mr. Wang”), the sole shareholder of YouYou Cleaning, pursuant to which Mr. Wang agreed to transfer 60% of the equity interests in YouYou Cleaning to E-Home Pingtan, in consideration for the sum of (i) RMB4 million (approximately $0.63 million) in cash and (ii) 2,702,826 ordinary shares of the Company valued at RMB32 million (approximately $5.03 million) with a per share issuance price equal to 120% of the average of the Nasdaq closing price of the ordinary shares of the Company for twenty consecutive trading days preceding January 11, 2022, which average is $1.55, and therefore, the per share issuance price should be $1.86. |
| Equity interests percentage | 40.00% | |
| Ordinary shares (in Shares) | shares | 5,823,363 | 5,823,363 |
| Dividing purchase price | $ 9,930 | ¥ 63.2 |
| Issuance price equal percentage | 110.00% | 110.00% |
| Average price per share (in Dollars per share) | $ 1.55 | |
| Average closing price (in Dollars per share) | $ 1.705 | |
| Mr. Wang [Member] | ||
| Subsequent Events (Details) [Line Items] | ||
| Equity interests percentage | 60.00% |