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Ionix Technology, Inc. Announces Second Quarter 2020 Financial Results

/EIN News/ -- LAS VEGAS, NV, Feb. 14, 2020 (GLOBE NEWSWIRE) -- 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 December 31, 2019.

Second Quarter 2020 Financial Highlights:

  • The total revenues increased by $4,955,221 or 208% from the three months ended December 31, 2018 to the three months ended December 31, 2019.
     
  • Gross profit increased by 242% from the three months ended December 31, 2018 to the three months ended December 31, 2019.
     
  • During the three months ended December 31, 2019 and 2018, net income was $135,658 and $6,854, respectively.

“The financial results of the past four quarters fully demonstrated the benefits from our acquisition of Fangguan Electronics completed on December 27, 2018,” said Mr. Cheng Li, Chairman and CEO of Ionix Technology. “The solid operation results showed our successful integration after the acquisition. Also, our continuous investment in innovation helps Ionix Technology stay competitive in the photoelectric display industry.”

Mr. Li continued, “Currently, the epidemic of pneumonia caused by novel coronavirus is severe in China. With close attention continuously paid to the development of the Epidemic, we will diligently resume the operations and make proper arrangements for subsequent issues.”

Revenue

During the three months ended December 31, 2019 and 2018, total revenues were $7,332,968 and $2,377,747, respectively. The total revenues increased by $4,955,221 or 208% from the three months ended December 31, 2018 to the three months ended December 31, 2019.

Among the significant increase of $4,955,221 in total revenues for the three months ended December 31, 2019 compared to 2018, an increase of $5,770,431 can be directly attributed to the acquisition of Fangguan Electronics on December 27, 2018. The acquisition expanded 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 $815,210 related to the existing business (excluding Fangguan Electronics) for the three months ended December 31, 2019 compared to 2018. After Fangguan Electronics was acquired, all business of Fangguan Photoelectric was replaced by Fangguan Electronics, which caused total revenues to decrease by $1,041,165 for the three months ended December 31, 2019. In addition, the decreases were also the result of a decline in sales of portable power banks (the ever-primary produce of the Company before the acquisition) of $182,103 for the three months ended December 31, 2019, which is expected to be offset by increases in average sales prices as the Company increased emphasis on higher margin goods for these existing business (excluding Fangguan Electronics).

Cost of Revenue

During the three months ended December 31, 2019 and 2018, the total cost of revenues was $6,270,572 and $2,066,912, respectively. The total cost of revenues increased by $4,203,660 or 203% from the three months ended December 31, 2018 to the three months ended December 31, 2019.

Among the significant increase of $4,203,660 in total cost of revenues for the three months ended December 31, 2019 compared to 2018, an increase of $4,884,146 can be directly attributed to the acquisition of Fangguan Electronics on December 27, 2018.

The increase in total cost of revenues due to the acquisition of Fangguan Electronics was partially offset by the decreases of $680,485 related to the existing business (excluding Fangguan Electronics) for the three months ended December 31, 2019 compared to 2018. After Fangguan Electronics was acquired, all business of Fangguan Photoelectric was replaced by Fangguan Electronics, which caused total cost of revenues to decrease by $898,536 for the three months ended December 31, 2019. In addition, the decreases were also the result of a decline in cost of revenues of portable power banks (the ever-primary produce of the Company before the acquisition) of $64,934 for the three months ended December 31, 2019, which was in consistent with the decrease in sales of portable power banks.

Gross Profit

During the three months ended December 31, 2019 and 2018, the gross profit was $1,062,396 and $310,835, respectively. The gross profit increased by 242% from the three months ended December 31, 2018 to the three months ended December 31, 2019. Gross profit margin maintained at 14% during the three months ended December 31, 2019 as compared to 13% for the three months ended December 31, 2018.

The difference in gross profit margin can be attributed to the fact that the LCM manufactured and sold by Fangguan Electronics (which became a variable interest entity of the Company on December 27, 2018) holds a relatively higher gross profit margin than that of the existing business (excluding Fangguan Electronics) before the acquisition.

Selling, General and Administrative Expenses

During the three months ended December 31, 2019 and 2018, selling, general and administrative expenses were $497,197 and $232,179, 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 December 31, 2019 after Fangguan Electronics became a variable interest entity of the Company on December 27, 2018.

Research and Development Expenses

During the three months ended December 31, 2019 and 2018, research and development expenses were $284,028 and $0, respectively. All research and development expenses were incurred by Fangguan Electronics (a variable interest entity of the Company since December 27, 2018).

Net Income

During the three months ended December 31, 2019 and 2018, net income was $135,658 and $6,854, respectively.

The difference can be attributed to increase in gross profits netting off by the increase of expenses during the three months ended December 31, 2019.

Cash and Financial Position

As of December 31, 2019, the Company had cash and cash equivalents of $ 1,577,702, compared to $ 509,615 as of June 30, 2019.

The Company had a working capital of $ 1,869,711 as of December 31, 2019 compared to working capital of $717,977 as of June 30, 2019.

During the six months ended December 31, 2019, net cash provided by operating activities was $588,568 compared to net cash used in operating activities of $208,621 for the six months ended December 31, 2018. The change was mainly due to the increase of $662,927 in the net income, an increase of $492,727 resulting from adjustments to net income for non-cash items, offsetting by the increase of $358,465 in cash outflow from changes in operating assets and liabilities during the six months ended December 31, 2019 compared to the same period of 2018.

During the six months ended December 31, 2019, net cash used in investing activities was $190,675 compared to net cash provided by investing activities of $685,428 for the six months ended December 31, 2018. Cash used in the acquisition of the equipment increased by $188,512 from 2018 to 2019 due to acquisition of Fangguan Electronics. In addition, the Company also received cash of $687,591 in December 2018 for acquisition of Fangguan Electronics.

During the six months ended December 31, 2019, the Company was provided by $683,561 in cash by financing activities, which was primarily due to the proceeds received from issuance of convertible notes. During the six months ended December 31, 2018, the Company received $240,456 in cash for financing activities, which was primarily attributable to the proceeds from the related party loans offsetting by the decrease in notes receivable inflows.

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

IONIX TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS 
(Unaudited)
 
  December 31, 2019   June 30, 2019
ASSETS          
Current Assets:          
Cash and cash equivalents $ 1,577,702     $ 509,615  
Notes receivable   23,546       120,182  
Accounts receivable - non-related parties   5,180,639       3,639,030  
 - related parties   346,495       340,026  
Inventory   3,009,183       3,379,146  
Advances to suppliers - non-related parties   90,728       129,423  
 - related parties   146,157       269,498  
Prepaid expenses and other current assets   424,010       269,495  
Total Current Assets   10,798,460       8,656,415  
           
Property, plant and equipment, net   7,207,067        7,508,637  
Right-of-use assets – operating leases   22,676        -  
Intangible assets, net   1,460,062        1,496,399  
Deferred tax assets   24,901        54,361  
Total Assets $ 19,513,166     $ 17,715,812  
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities:          
Short-term bank loan $ 2,580,201     $  2,618,296  
Accounts payable    3,416,761        2,732,327  
Advance from customers   104,435       114,158  
Convertible notes payable, net of debt discount and loan cost   184,165        -  
Derivative liability   346,274        -  
Due to related parties   2,086,788       2,105,338  
Operating lease liabilities – current portion   3,254        -  
Accrued expenses and other current liabilities   206,871       368,319  
Total Current Liabilities   8,928,749       7,938,438  
           
Operating lease liabilities   16,556        -  
Total Liabilities   8,945,305       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,
114,003,000 shares issued and outstanding
  11,400       11,400  
Additional paid in capital   8,934,122       8,829,487  
Retained earnings   1,386,800       539,866  
Accumulated other comprehensive loss   (206,922 )     (45,840 )
Total Stockholders' Equity attributable to the Company   10,125,900       9,335,413  
Noncontrolling interest   441,961        441,961  
Total Stockholders’ Equity   10,567,861       9,777,374  
Total Liabilities and Stockholders’ Equity $ 19,513,166     $ 17,715,812  


IONIX TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
    For the Three Months Ended
    December 31,
    2019     2018  
             
Revenues     $ 7,332,968       $ 2,377,747  
             
Cost of Revenues       6,270,572         2,066,912  
             
 Gross profit       1,062,396         310,835  
             
Operating expenses            
 Selling, general and administrative expense       497,197         232,179  
 Research and development expense       284,028          -  
Total operating expenses       781,225         232,179  
             
Income from operations       281,171         78,656  
             
Other income (expense):            
 Interest expense, net of interest income       (200,370 )        -  
 Subsidy income        7,231          -  
 Change in fair value of derivative liability        115,563          -  
Total other expense       (77,576 )        -  
             
Income before income tax provision       203,595         78,656  
Income tax provision        67,937          71,802  
Net income       135,658         6,854  
             
Other comprehensive income (loss)            
 Foreign currency translation adjustment       255,703         (20,039 )
Comprehensive income (loss)   $   391,361     $   (13,185 )
             
             
Earnings Per Share - Basic and Diluted   $    0.00     $    0.00  
Weighted average number of common shares outstanding - Basic and Diluted       114,003,000         99,655,174  




IONIX TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
           
  For the Six Months Ended
  December 31,
  2019     2018  
CASH FLOWS FROM OPERATING ACTIVITIES          
Net income $ 846,934     $ 184,007  
Adjustments required to reconcile net income to net cash provided by (used in) operating activities:          
 Depreciation and amortization   399,080        -  
 Deferred taxes   28,879       (14,884 )
 Change in fair value of derivative liability   (131,452 )      -  
 Non-cash interest   181,336        -  
Changes in operating assets and liabilities:          
 Accounts receivable - non-related parties   (1,606,240 )     144,264  
 Accounts receivable - related parties   (11,500 )     (45,987 )
 Inventory   323,148       (294,434 )
 Advances to suppliers - non-related parties   37,082       355  
 Advances to suppliers - related parties   120,295       201,357  
 Prepaid expenses and other current assets   (161,718 )     3,925  
 Accounts payable - non-related parties   729,495       (257,973 )
 Accounts payable - related parties    -       (138,955 )
 Advance from customers   (8,120 )     (17,820 )
 Accrued expenses and other current liabilities   (158,651 )     27,524  
Net cash provided by (used in) operating activities   588,568       (208,621 )
           
CASH FLOWS FROM INVESTING ACTIVITIES          
 Acquisition of property, plant and equipment   (190,675 )     (2,163 )
 Cash received from acquisition    -        687,591  
Net cash provided by (used in) investing activities   (190,675 )     685,428  
           
CASH FLOWS FROM FINANCING ACTIVITIES          
 Notes receivable   95,582       (29,518 )
 Proceeds from issuance of convertible notes payable   585,190        -  
 Proceeds from loans from related parties   2,789       269,974  
Net cash provided by financing activities   683,561       240,456  
           
Effect of exchange rate changes on cash   (13,367 )     (3,851 )
           
Net increase in cash and cash equivalents   1,068,087       713,412  
           
Cash and cash equivalents, beginning of period   509,615       111,462  
           
Cash and cash equivalents, end of period $ 1,577,702     $ 824,874  
           
Supplemental disclosure of cash flow information          
 Cash paid for income tax $  102,167     $  141,749  
 Cash paid for interests $  68,967     $  -  
           
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  

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