| RELATED PARTY BALANCES AND TRANSACTIONS |
Note 19. RELATED PARTY BALANCES AND TRANSACTIONS
Set forth below are transactions with related persons
for the years ended June 30, 2025 and 2024.
Due from Related Party
As of June 30, 2025 and 2024,
the outstanding amounts due from related parties consist of the following:
| | |
June 30, | | |
June 30, | |
| | |
2025 | | |
2024 | |
| Zhejiang Jinbang Fuel Energy Co., Ltd (1) | |
$ | 388,496 | | |
$ | 382,949 | |
| Shanghai Baoyin Industrial Co., Ltd (2) | |
| 1,084,793 | | |
| 1,066,003 | |
| LSM Trading Ltd (3) | |
| - | | |
| 570,000 | |
| Rich Trading Co. Ltd (4) | |
| - | | |
| 103,424 | |
| Less: allowance for credit losses | |
| (1,473,289 | ) | |
| (2,122,376 | ) |
| Total | |
| - | | |
| - | |
Movements of allowance for
credit losses were as follows:
| | |
June 30, | | |
June 30, | |
| | |
2025 | | |
2024 | |
| Beginning balance | |
$ | 2,122,376 | | |
$ | 2,126,385 | |
| Less: Write-off | |
| (675,063 | ) | |
| - | |
| Exchange rate effect | |
| 25,976 | | |
| (4,009 | ) |
| Ending balance | |
$ | 1,473,289 | | |
$ | 2,122,376 | |
| (1) | As of June 30, 2025 and 2024, the Company advanced $388,496 and $382,949 to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing and due on demand. The Company provided credit losses of $388,496 and $382,949 for the balance of the receivable as of June 30, 2025 and 2024. The amount of the allowance changed as a result of changes in exchange rates. |
| (2) | As of June 30, 2025, and 2024, the Company advanced $1,084,793 and $1,066,003 to Shanghai Baoyin Industrial Co., Ltd. which is 30% owned by Qinggang Wang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable. |
| (3) | As of June 30, 2025 and 2024, the Company advanced nil and $570,000 to LSM Trading Ltd, which is 40% owned by the Company. The advance is non-interest bearing and due on demand. The Company evaluated the collection possibility and decided to provide full credit losses for the balance of the receivable. The advance was fully written off in fiscal 2025. |
| (4) | On November 16, 2021, the Company entered into a project cooperation agreement with Rich Trading Co. Ltd USA (“Rich Trading”) for the trading of computer equipment. Rich Trading’s bank account was controlled by now-terminated members of the Company’s management and was, at the time, an undisclosed related party. According to the agreement, the Company was to invest $4.5 million in the trading business operated by Rich Trading and the Company would be entitled to 90% of profits generated by the trading business. The Company advanced $3,303,424 for this project, of which $3,200,000 has been returned to the Company. The Company filed a complaint to recover the remainder of the funds advanced. The Company provided an allowance of $103,424 for the balance of the receivable as of June 30, 2024. The advance was fully written off in fiscal 2025. |
Due to related parties
As of June
30, 2025 and 2024, the Company owed $26,373 and $25,997 to Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, respectively.
These payments were made on behalf of the Company for the daily business operational activities.
As of June
30, 2025 and 2024, the Company owed $497,857 and $199,034 Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which
is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. These payments were made on behalf of the Company
for the daily business operational activities.
The balance of due to related parties was interest-free,
unsecured, and due upon demand.
|