Financial Performance - The company generated revenues of $401,814 for the year ended June 30, 2019, from its specialty tea product distribution and retail business, which commenced in November 2018[334]. - The cost of revenues for the same period was $236,661, resulting in a gross profit margin of 41%[335]. - The net income for the year ended June 30, 2019, was $27,555,442, a significant change of $110,444,777 from a net loss of $82,889,335 in 2018[338]. - For the year ended June 30, 2018, the net loss was $82,889,335, an increase of 192% from the net loss of $28,427,244 for the year ended June 30, 2017[344]. - The company generated revenues primarily from sales of tea products, beverages, and light meals in its eight tea shop chains during the year ended June 30, 2019[352]. Expenses and Costs - General and administrative expenses increased by $1,313,054, or 148%, from $889,107 in 2018 to $2,202,161 in 2019, primarily due to increased employee salaries and professional consulting services[336]. - The net cash used in operating activities for the year ended June 30, 2019 was $1,057,109, primarily due to a net loss of $932,863 from continuing operations[362]. - The company had net cash used in investing activities of $4,437,844 for the year ended June 30, 2019, primarily due to investments in financial products and acquisition of equipment[365]. Financing Activities - The company raised approximately $4.6 million through a registered direct offering of 2,845,000 ordinary shares and warrants in May 2019[331]. - Net cash provided by financing activities for the year ended June 30, 2019 was $9,493,641, mainly from proceeds of $5,500,000 raised in private placements[369]. Asset Management - The company had cash of $4,668,745 and short-term investments of $4,078,244 as of June 30, 2019, compared to cash of $961,280 in the previous year[360]. - The total future minimum lease payment under non-cancelable operating leases is $1,556,950, with $438,639 due within one year[375]. Subsidiary and Business Operations - The company disposed of its wholly owned subsidiary Elite for a cash purchase price of $1,750,000 on April 13, 2019[327]. - The company opened two flagship retail stores and acquired six general retail stores, totaling eight stores in operation by June 30, 2019[334]. - The company has entered into VIE agreements with Hunan MYT to gain exclusive control over its management and operations[326]. Market and Regulatory Environment - The company anticipates future success will depend on its ability to increase revenues and maintain profitability amid challenges in a rapidly evolving industry[332]. - The company is subject to PRC regulations that restrict funding to its PRC subsidiaries, which can only be provided through loans or capital contributions, creating uncertainty in financial support[377]. - The company's operating activities and major assets and liabilities are predominantly denominated in RMB, exposing it to foreign currency exchange rate risk[378]. - The unification of exchange rates by the PRC government does not guarantee the convertibility of RMB into foreign currencies, impacting the company's international transactions[381]. Risk Management - The company has not experienced material risks from changes in market interest rates and has not utilized derivative financial instruments for interest rate risk management during the fiscal year ended June 30, 2019[379]. - The company did not have any unrecognized uncertain tax positions or liabilities as of June 30, 2019[358]. - The company has not entered into any financial guarantees or derivative contracts that are not reflected in its consolidated financial statements[373]. - All foreign exchange transactions are conducted through the People's Bank of China (PBOC) or authorized financial institutions, requiring approval for foreign currency payments[381].
Bit Brother (BETS) - 2019 Q4 - Annual Report