8-K

2020-05-20

NITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 18, 2020

 

IONIX TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

Nevada 000- 54485 45-0713638

(State or Other Jurisdiction (Commission File (I.R.S. Employer

of Incorporation) Number)  Identification Number)

 

Rm 608, Block B, Times Square, No. 50 People Road, Zhongshan District,

Dalian City, Liaoning Province, China 116001

(Address of principal executive offices, including zip code)

 

+86-411-88079120

(Registrant’s telephone number, including area code)

Not Applicable

 

 

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act:      None

 

 

Securities registered pursuant to Section 12(g) of the Act:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

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


 

 

Item 7.01 Regulation FD Disclosure

 

Attached hereto as Exhibit 99.1 is a press release we issued on May 18, 2020, announcing third quarter 2020 financial results.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit Number Description

 

文本框: 99.1                                                     Press Release issued by Ionix Technology, Inc. on May 18, 2020, announcing third quarter 2020 financial results.

 

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 hereunto duly authorized.

 

文本框: 99.1                                                     Press Release issued by Ionix Technology, Inc. on May 18, 2020, announcing third quarter 2020 financial results.

 

Ionix Technology, Inc.

 

Date: May 18, 2020 By /s/ Cheng Li

Cheng Li

Duly Authorized officer, Chief Executive Officer


 

 

Exhibit 99.1

 

 

Ionix Technology, Inc. Announces Third Quarter 2020 Financial Results

 

LAS VEGAS, NV, May 18, 2020 -- Ionix Technology, Inc. (OTCQB: IINX), ("Ionix Technology", "IINX" or "the Company"), a business aggregator in photoelectric display and smart energy fields, announced its financial results for the three months ended March 31, 2020.

 

Third Quarter 2020 Financial Highlights:

 

·        Total revenues were $2,752,170 and $2,894,802 respectively for the three months ended March 31, 2020 and 2019.

 

·        Gross profit was $245,652 and $623,422, respectively for the three months ended March 31, 2020 and 2019.

 

·        During the three months ended March 31, 2020 and 2019 net income (loss) was $(636,222) and $21,064, respectively.

 

“From early February to the end of March, we closed all factories to limit the spread of COVID-19. The shutdown of business affected the operational and financial performance of IINX for the third quarter of 2020,” said Mr. Cheng Li, Chairman and CEO of Ionix Technology. “However, since restarting operations near the end of March, the Company’s financial performances have been recovering continuously as transportations returned to normal, all of the supply chains were restored and all of our factories resumed operations.”

 

Mr. Li continued, “While the near-term market environment will likely continue to be challenging, we believe we are well-positioned to navigate current conditions based on our continuous investment in research and development of industry-leading emerging technologies, our durable business model and our talented team. We will continue to operate at the highest efficiency and remain committed to working diligently on behalf of our investors.”

 

Revenue

 

During the three months ended March 31, 2020 and 2019, total revenues were $2,752,170 and $2,894,802, respectively. The total revenues decreased by $142,632 or 5% from the three months ended March 31, 2019 to the three months ended March 31, 2020.

 

During the three months ended March 31, 2020, COVID-19 affected the operational and financial performance of the Company as the PRC imposed a national economic shutdown to limit the spread of COVID-19 from early February to mid-March. At the same time the Company temporarily closed all of its factories while transportations in or out of them were suspended, and experienced an unprecedented “supplier chain break”. Since the restart of operations near the end of March, the Company’s financial performances have been recovering continuously as transportations have returned to normal, the supply chain wasrestored and all of its factories resumed working.


 

 

During the nine months ended March 31, 2020 and 2019, total revenues were $17,585,468 and $7,841,437, respectively. The total revenues increased by $9,744,031 or 124% from the nine months ended March 31, 2019 to the nine months ended March 31, 2020.

 

Among the significant increase of $9,744,031 in total revenues for the nine months ended March 31, 2020, $11,581,460 was the revenue from Fangguan Electronics which was acquired on December 27, 2018. The acquisition expanded the Company’s operations in the fields of LCM in the PRC and significantly increased the volume of goods (LCD, etc.) being sold.

 

The increase in total revenues due to acquisition of Fangguan Electronics was partially offset by the decreases of $1,837,429 related to the other business (excluding Fangguan Electronics) for the nine months ended March 31, 2020 compared to 2019. After Fangguan Electronics was acquired, all business of Fangguan Photoelectric was replaced by Fangguan Electronics, which caused total revenues to decrease by $2,407,535 respectively for the nine months ended March 31, 2020.

 

Cost of Revenue

 

 

During the three months ended March 31, 2020 and 2019, the total cost of revenues was $2,506,518 and $2,271,380, respectively. The total cost of revenues increased by $235,138 or 10% from the three months ended March 31, 2019 to the three months ended March 31, 2020.

 

During the nine months ended March 31, 2020 and 2019, the total cost of revenues was $14,850,194 and $6,618,015 respectively. The total cost of revenues increased by $8,232,179 or 124% from the nine months ended March 31, 2019 to the nine months ended March 31, 2020.

 

Among the significant increase of $8,232,179 in total cost of revenues for the nine months ended March 31, 2020 compared to 2019, the $9,991,514 increase can be directly attributed to the acquisition of Fangguan Electronics on December 27, 2018.

 

The increase in total cost of revenues due to acquisition of Fangguan Electronics was partially offset by the decreases of $1,759,335 related to the other business (excluding Fangguan Electronics) for the nine months ended March 31, 2020 compared to 2019. After Fangguan Electronics was acquired, all business of Fangguan Photoelectric was replaced by Fangguan Electronics, which caused total cost of revenues to decrease by $2,076,990 for the nine months ended March 31, 2020.


 

 

Gross Profit

 

 

During the three months ended March 31, 2020 and 2019, the gross profit was $245,652 and $623,422, respectively. Gross profit margin was at 9% during the three months ended March 31, 2020 as compared to 22% for the three months ended March 31, 2019.

 

The decrease in both gross profit and gross profit margin can be attributed to the fact that starting from second fiscal quarter, the Company adopted the new business strategy to have low gross profits and increase sales volume.

 

Selling, General and Administrative Expenses

 

During the three months ended March 31, 2020 and 2019, selling, general and administrative expenses were $499,616 and $392,367, respectively.

 

The difference can be attributed to the depreciation and amortization expenses, payroll expenses, professional fees and other expenses incurred during the three months ended March 31, 2020 after Fangguan Electronics became a variable interest entity of the Company on December 27, 2018.

 

Research and Development Expenses

 

During the three months ended March 31, 2020 and 2019, research and development expenses were $139,029 and $158,562, respectively. Net Income (Loss)

 

During the three months ended March 31, 2020 and 2019 net income (loss) was $(636,222) and $21,064, respectively.

 

The change can be attributed to the decrease in gross profits and the increase of expenses during the three months ended March 31, 2020. Cash and Financial Position

 

As of March 31, 2020, the Company had cash and cash equivalents of $1,834,763, compared to $509,615 as of June 30, 2019.

 

The Company had a working capital of $1,828,672 as of March 31, 2020 compared to working capital of $717,977 as of June 30, 2019.

 

During the nine months ended March 31, 2020, net cash provided by operating activities was $641,370 compared to net cash used in operating activities of $900,588 for the nine months ended March 31, 2019. The change was mainly due to the increase of $5,641 in the net income, an increase of $766,310 resulting from adjustments to net income for non-cash items, and a decrease of $770,007 in cash outflow from changes in operating assets and liabilities in the nine months ended March 31, 2020 compared to same period in 2019.


 

 

During the nine months ended March 31, 2020, net cash used in investing activities was $71,895 compared to net cash provided by investing activities of $649,216 for the nine months ended March 31, 2019. Cash used in the acquisition of the equipment increased by $155,235 in the nine months ended March 31, 2020 compared to same period in 2019 due to acquisition of Fangguan Electronics. In addition, the Company also received cash of $687,591 in December 2018 due to the acquisition of Fangguan Electronics.

 

During the nine months ended March 31, 2020, cash provided by financing activities was $787,503, which was primarily due to the proceeds received from issuance of convertible notes. During the nine months ended March 31, 2019, the Company received $588,062 in cash for financing activities, which was primarily attributable to the proceeds from the related party loans offsetting by the return of capital to non-controlling interests.

 

About Ionix Technology, Inc.

 

Ionix Technology, Inc. is a holding company that is principally engaged in the photoelectric display and smart energy industries. The company has five operating subsidiaries: Changchun Fangguan Electronics Technology Co., Ltd, a company which has been focusing on R&D, manufacturing and marketing LCM and LCD. Changchun Fangguan Photoelectric Display Technology Co., Ltd, a company which specializes in developing, designing, and selling TN and STN LCD, STN, CSTN, and TFT LCD modules as well as other related products; Shenzhen Baileqi Electronic Technology Co., Ltd, a company which specializes in LCD slicing, filling, researching and designing, and selling of LCD Modules (LCM) and PCBs; Lisite Science Technology (Shenzhen) Co., Ltd., a company engaged in the marketing and selling of intelligent electronic devices; and Dalian Shizhe New Energy Technology Co., Ltd., a company engaged in the new energy support service, and operating the photovoltaic power generation, electric vehicles and charging piles with corresponding operation and maintenance and three dimensional parking. Currently, IINX has embarked on the layout of industrialization and marketization of front end materials and back end modules of liquid crystal displays and applications of flexible folding display technology by taking Fangguan Electronics as production bases, to seize the market share of OLED high technology.

 

To learn more, please visit our website: www.theiinx.com

 

 

Safe Harbor Statement

 

This news release contains "forward-looking statements" as that term is defined in the United States Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended. Statements in this press release that are not purely historical are forward-looking statements, including beliefs, plans, expectations or intentions regarding the future, and results of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors, such as the inherent uncertainties associated with new business opportunities and development stage companies. Ionix Technology assumes no obligation to update the forward-looking statements. Although Ionix Technology believes that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that they will prove to be accurate. Investors should refer to the risk factors disclosure outlined in Ionix Technology's annual report on Form 10-K for the most recent fiscal year, quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the

U.S. Securities and Exchange Commission.


 

 

IR Contact:

Dragon Gate Investment Partners LLC Tel: +1(646)-801-2803

Email: iinx@dgipl.com

 

(financial tables follow; please see 10-Q filed with SEC May 15, 2020 for notes to financial statements which are an integral part of the financial statements)


 

 

IONIX TECHNOLOGY, INC. CONSOLIDATED BALANCE SHEETS


(Unaudited)


March 31, 2020


June 30, 2019

ASSETS

Current Assets:




Cash and cash equivalents (Note 3   at VIE)

$ 1,834,763


$ 509,615

Notes receivable (Note 3 at VIE)

23,721


120,182

Accounts receivable - non-related   parties (Note 3 at VIE)

3,494,207


3,639,030

- related parties

420,906


340,026

Inventory (Note 3 at VIE)

3,045,127


3,379,146

Advances to suppliers - non-related   parties (Note 3 at VIE)

354,820


129,423

- related parties

264,797


269,498

Prepaid expenses and other current   assets (Note 3 at VIE)

593,122


269,495

Total Current Assets (Note 3 at VIE)

10,031,463


8,656,415





Property, plant and equipment, net   (Note 3 at VIE)

6,812,910


7,508,637

Right-of-use assets – operating leases

20,825


-

Intangible assets, net (Note 3 at VIE)

1,430,449


1,496,399

Deferred tax assets (Note 3 at VIE)

                        51,460


                        54,361

Total Assets (Note 3 at VIE)

$ 18,347,107


$ 17,715,812





LIABILITIES AND STOCKHOLDERS’ EQUITY




Current Liabilities:




Short-term bank loan (Note 3 at VIE)

$ 2,540,543


$ 2,618,296

Accounts payable (Note 3 at VIE)

2,569,420


2,732,327

Advance from customers (Note 3 at VIE)

59,165


114,158

Convertible notes payable, net of   debt discount and loan cost

347,427


-

Derivative liability

446,852


-

Due to related parties (Note 3 at VIE)

2,032,723


2,105,338

Operating lease liabilities –   current portion

7,646


-

Accrued expenses and other current   liabilities (Note 3 at VIE)

199,015


368,319

Total Current Liabilities (Note 3 at VIE)

8,202,791


7,938,438





Operating lease liabilities

12,462


-

Total Liabilities (Note 3 at VIE)

8,215,253


7,938,438





COMMITMENT AND CONTINGENCIES








Stockholders’ Equity:




Preferred stock, $.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding

 

500


 

500

Common stock, $.0001 par value, 195,000,000 shares authorized, 114,193,057 and 114,003,000 shares issued and outstanding as of March 31, 2020 and June 30, 2019, respectively

 

11,419


 

11,400

Additional paid in capital

9,299,825


8,829,487

Retained earnings

750,578


539,866

Accumulated other comprehensive loss

(372,429)


(45,840)

Total Stockholders' Equity attributable to the Company

9,689,893


9,335,413

Noncontrolling interest

441,961


441,961

Total Stockholders’ Equity

10,131,854


9,777,374

Total Liabilities and Stockholders’ Equity

$ 18,347,107


$ 17,715,812


 

 

IONIX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 


For the Three Months Ended March 31,


For the Nine Months Ended March 31,


2020 2019


2020 2019

 

Revenues (See Note 2 and Note 9 for related party amounts)

 

$ 2,752,170

 

$ 2,894,802


 

$ 17,585,468

 

$ 7,841,437







Cost of Revenues (See Note 9 for related party amounts)

 

2,506,518

 

2,271,380


 

14,850,194

 

6,618,015







Gross profit

                      245,652

                      623,422


                   2,735,274

                   1,223,422

 

Operating expenses                                                                                                                                                                                                                                             

Selling, general and administrative expense

499,616

392,367

1,378,241

686,132

Research and development expense

139,029

158,562

645,880

158,562

Total operating expenses

638,645

550,929

2,024,121

844,694






Income (loss) from operations

(392,993)

72,493

711,153

378,728






Other income (expense):





Interest expense, net of interest income

(213,267)

(34,412)

(470,500)

(34,412)

Subsidy income

-

-

50,018

-

Change in fair value of derivative liability

(44,850)

-

86,602

-

Loss on extinguishment of debt

(15,074)

-

(15,074)

-

Total other expense

(273,191)

(34,412)

(348,954)

(34,412)






Income (loss) before income tax provision

(666,184)

38,081

362,199

344,316






Income tax provision (benefit)

(29,962)

17,017

151,487

139,245

Net income (loss)

(636,222)

21,064

210,712

205,071






Other comprehensive income (loss)





Foreign currency translation adjustment

(165,507)

56,484

(326,589)

28,523

Comprehensive income (loss)

$ (801,729)

$ 77,548

$ (115,877)

$ 233,594

 

Earnings (Loss) Per Share - Basic

$ (0.01)

$ 0.00

$ 0.00

$ 0.00

Weighted average number of common shares outstanding - Basic

 

114,104,735

 

114,003,000

 

114,036,665

 

104,148,985






Earnings (Loss) Per Share - Diluted

$ (0.01)

$ 0.00

$ 0.00

$ 0.00

Weighted average number of common shares outstanding - Diluted

 

113,913,240

 

114,003,000

 

114,036,665

 

104,148,985


IX TECHNOLOGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

For the Nine Months Ended

March 31,

2020 2019

 

CASH FLOWS FROM OPERATING ACTIVITIES


Net income

$ 210,712


$ 205,071

Adjustments required to reconcile net income to net cash provided by (used in) operating activities:




Depreciation and amortization

580,625


184,172

Deferred taxes

1,306


(15,732)

Stock compensation for advisory services

79,891


-

Change in fair value of derivative liability

(86,602)


-

Loss on extinguishment of debt

15,074


-

Non-cash interest

351,474


-

Gain on disposal of property and equipment

(7,018)


-

Changes in operating assets and liabilities:




Accounts receivable - non-related parties

37,312


593,935

Accounts receivable - related parties

(92,348)


(22,607)

Inventory

237,193


(774,776)

Advances to suppliers - non-related parties

(232,695)


13,826

Advances to suppliers - related parties

(3,352)


(114,802)

Prepaid expenses and other current assets

(150,496)


(75,559)

Accounts payable - non-related parties

(83,000)


(645,258)

Accounts payable - related parties

-


(198,782)

Advance from customers

(52,380)


(61,014)

Accrued expenses and other current liabilities

(164,326)


10,938

Net cash provided by (used in)   operating activities

                      641,370


                     (900,588)

 

CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                                                                                                     

 

 

Acquisition of property, plant and equipment

(193,610)

(38,375)

Proceeds received from sale of equipment

121,715

-

Cash received from acquisition

-

687,591

Net cash provided by (used in)   investing activities

(71,895)

649,216

 

文本框: Notes receivable 94,292 54,451 Proceeds from issuance of convertible notes payable 722,190 - Return of capital to non-controlling interests - (58,155) Proceeds from (repayment of) loans from related parties                        (28,979)                       591,766 Net cash provided by financing activities                       787,503                       588,062 Effect of exchange rate changes on cash (31,830) 46,668 Net increase in cash and cash equivalents 1,325,148 383,358 Cash and cash equivalents, beginning of period 509,615 111,462 Cash and cash equivalents, end of period $                 1,834,763 $                    494,820 Supplemental disclosure of cash flow information Cash paid for income tax $                    154,538 $                    144,124 Cash paid for interests $                    102,457 $                      35,250 Non-cash investing and financing activities Issuance of 15,000,000 shares of common stock in exchange for 95.14% ownership rights of a variable interest entity $                                - $                 8,651,896 Issuance of common stock for advisory services $                    262,500 $                                - Issuance of 40,057 shares of common stock for conversion of convertible notes $                      60,365 $                                -

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                                                                                     

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

 


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