Aoxing Pharmaceutical (AOXG) 10-Q 8 Feb 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2015	Feb. 05, 2016
Document and Entity Information:
Entity Registrant Name	AOXING PHARMACEUTICAL COMPANY, INC.
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
Trading Symbol	axn
Amendment Flag	false
Entity Central Index Key	1,060,426
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding		76,209,195
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Jun. 30, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 6,435,362	$ 5,371,545
Accounts receivable, net	6,578,492	5,764,738
Notes receivable, net	23,103	89,317
Inventories, net	3,900,849	3,240,026
Prepaid expenses and other current assets	8,193,479	6,630,407
TOTAL CURRENT ASSETS	25,131,285	21,096,033
LONG-TERM ASSETS:
Property and equipment, net of accumulated depreciation	26,647,887	28,651,717
Deferred income tax	1,319,524	2,711,610
Other intangible assets, net	427,554	484,857
Investment in joint venture	53,210	96,475
TOTAL LONG-TERM ASSETS	28,448,175	31,944,659
TOTAL ASSETS	53,579,460	53,040,692
CURRENT LIABILITIES:
Short-term borrowings	11,038,551	12,484,356
Accounts payable	2,348,225	3,625,139
Notes payable		1,631,641
Loan payable - bank	14,939,856	16,316,408
Current portion of loan payable - related parties	13,494	5,793
Current portion of loan payable - others	15,402
Accrued expenses and other current liabilities	7,154,105	7,176,325
TOTAL CURRENT LIABILITIES	35,509,633	41,239,662
LONG-TERM LIABILITIES:
Loan payable - related parties		8,158
Loan payable - others		1,361,199
Deferred income	348,083	368,751
TOTAL LONG-TERM LIABILITIES	348,083	1,738,108
Stockholder's Equity
Common stock, par value $0.001, 100,000,000 shares authorized, 72,252,200 and 69,839,259 shares issued and outstanding on September 30, 2015 and June 30, 2015	74,299	69,839
Additional paid in capital	71,998,484	66,457,250
Accumulated deficit	(55,018,398)	(58,354,968)
Accumulated other comprehensive income	1,713,633	3,066,026
TOTAL SHAREHOLDERS' EQUITY OF THE COMPANY	18,768,018	11,238,147
NONCONTROLLING INTEREST IN SUBSIDIARIES	(1,046,274)	(1,175,225)
TOTAL EQUITY	17,721,744	10,062,922
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 53,579,460	$ 53,040,692

CONSOLIDATED BALANCE SHEETS PAR

CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares	Dec. 31, 2015	Jun. 30, 2015
CONSOLIDATED BALANCE SHEETS PARENTHETICAL
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	72,252,200	69,839,259
Common stock shares outstanding	72,252,200	69,839,259

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
Revenue
SALES	$ 8,195,839	$ 6,430,701	$ 16,940,661	$ 10,955,783
COST OF SALES	1,726,592	1,624,853	3,484,671	3,012,386
GROSS PROFIT	6,469,246	4,805,849	13,455,990	7,983,397
OPERATING EXPENSES:
Research and development expense	830,105	95,597	1,207,411	203,147
General and administrative expenses	511,127	821,008	1,455,485	1,332,495
Selling expenses	1,589,866	1,775,924	3,984,212	2,978,433
Depreciation and amortization	128,126	140,801	259,656	280,076
TOTAL OPERATING EXPENSES	3,059,224	2,833,331	6,906,764	4,794,151
INCOME FROM OPERATIONS	3,410,023	1,972,518	6,549,225	3,189,246
OTHER INCOME (EXPENSE):
Interest expense, net of interest income	(979,906)	(1,628,120)	(1,908,936)	(2,821,280)
Gain on foreign currency transactions	24,753		83,345
Equity in loss of joint venture, net	(14,474)	(22,018)	(38,765)	(47,989)
Subsidy income	157,266	279,573	205,027	279,573
TOTAL OTHER EXPENSE	(812,362)	(1,370,565)	(1,659,329)	(2,589,696)
INCOME BEFORE INCOME TAXES	2,597,661	601,952	4,889,897	599,550
Income tax expense	409,393		1,353,196
NET INCOME	2,188,268	601,952	3,536,700	599,550
Net income attributed to non-controlling interest in subsidiaries	119,633	34,784	200,129	40,251
INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY	2,068,635	567,169	3,336,571	559,298
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustment	(753,581)	7,900	(1,423,572)	21,708
COMPREHENSIVE PROFIT	1,315,054	575,068	1,912,999	581,007
Other comprehensive income (loss) attributable to non-controlling interest	(37,679)	395	(71,179)	1,085
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$ 1,352,733	$ 574,673	$ 1,984,178	$ 579,922
EARNINGS PER SHARE: Basic	$ 0.03	$ 0.01	$ 0.05	$ 0.01
EARNINGS PER SHARE: Diluted	$ 0.03	$ 0.01	$ 0.05	$ 0.01
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic	73,097,698	57,614,546	71,475,000	57,614,546
WEIGHTED AVERAGE SHARES OUTSTANDING: Diluted	73,177,698	57,674,546	71,555,000	57,674,546

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
OPERATING ACTIVITIES:
INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY	$ 3,336,571	$ 559,298
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	528,874	547,550
Deferred income tax	1,269,851
Inventory markdown		83,528
Bad debts written back/(written off)	2,074	(126,471)
Common stock issued for services	145,600	4,800
Equity in loss of joint venture, net of tax	38,765	47,989
Net loss attributable to non-controlling interests	200,129	40,251
Changes in operating assets and liabilities:
Change in accounts receivable	(1,103,518)	(507,188)
Change in inventories	(862,624)	230,587
Change in prepaid expenses and other current assets	(1,981,785)	(1,157,381)
Change in accounts payable	(2,676,621)	(796,885)
Change in accrued expenses and other current liabilities	387,829	4,441,384
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(714,855)	3,367,461
INVESTING ACTIVITIES:
Acquisition of property and equipment	(90,507)	(2,937,622)
NET CASH USED IN INVESTING ACTIVITIES	(90,507)	(2,937,622)
FINANCING ACTIVITIES:
Proceeds from/(Repayment of) bank loan	(473,140)	6,501,697
Repayment of short-term borrowings	(763,982)	(2,060,095)
Repayment of other borrowings		(10,175,156)
Proceeds from/(Repayment of) loans from related party	1,362,643	(1,534,190)
Sale of common stock	2,739,000	5,816,451
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,864,521	(1,451,294)
EFFECT OF EXCHANGE RATE ON CASH	(995,342)	31,263
INCREASE (DECREASE) IN CASH	1,063,817	(990,192)
CASH - BEGINNING OF PERIOD	5,371,545	2,329,660
CASH - END OF PERIOD	6,435,362	1,339,469
Supplemental disclosures of cash flow information:
Cash paid for interest	$ 2,113,180	$ 2,167,325
Cash paid for income taxes
Debt extinguishment using stock	$ 2,662,597

1. Basis of Presentation

1. Basis of Presentation	6 Months Ended
	Dec. 31, 2015
Notes
1. Basis of Presentation	1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and pursuant to the requirements for reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. However, the information included in these interim financial statements reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full year. The consolidated balance sheet as of June 30, 2015 was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year 2015. These interim financial statements should be read in conjunction with that report. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed on October 13, 2015.

2. Business Description and Sig

2. Business Description and Significant Accounting Policies	6 Months Ended
	Dec. 31, 2015
Notes
2. Business Description and Significant Accounting Policies	2. BUSINESS DESCRIPTION AND SIGNIFICANT ACCOUNTING POLICIES Aoxing Pharmaceutical Co., Inc. (“the Company” or “Aoxing Pharma”) is a specialty pharmaceutical company specializing in research, development, manufacturing and distribution of a variety of narcotic, pain-management, and addiction treatment pharmaceutical products. As of December 31, 2015, the Company had one operating subsidiary: Hebei Aoxing Pharmaceutical Co., Inc. (“Hebei” or “Hebei Aoxing”), which is organized under the laws of the People’s Republic of China (“PRC”). The Company owns 95% of the issued and outstanding common stock of Hebei. Since 2002, Hebei has been engaged in developing narcotic, pain management, and addiction treatment pharmaceutical products, building its facilities and obtaining the requisite licenses from the Chinese Government. Headquartered in Shijiazhuang City, the pharmaceutical capital of China, outside of Beijing, Hebei now has China's largest and the most advanced manufacturing facility for highly regulated narcotic medicines, addressing a very under-served and fast-growing market in China. Its facility is one of the few GMP facilities licensed for manufacturing narcotics medicines. The Company is working closely with the Chinese government and SFDA to assure the strictly regulated availability to medical professionals throughout China of its narcotic drugs and pain medicines. In April, 2008, Hebei completed the acquisition of 100% of the registered capital of Lerentang (“LRT”). LRT was engaged in the manufacture and distribution of Chinese traditional medicines focusing on pain management related therapeutics within China. By 2011 the manufacturing operations of LRT had been completely integrated into Hebei. Currently over 80% of the Company’s revenues derive from one herbal extraction, obtained from the acquisition of LRT, which is used to alleviate oral/dental and bone pain. Investment in Joint Venture (“JV”) On April 26, 2010, Aoxing Pharma and Johnson Matthey Plc (“JM”) entered into an agreement to establish a joint venture focused on research, development, manufacturing and marketing of active pharmaceutical ingredients for narcotics and neurological drugs for the China market. The joint venture represents a significant new opportunity for both companies to expand their business in the rapidly growing pharmaceutical market in China. Under the terms of the agreement, Macfarlan Smith Ltd, a wholly owned subsidiary of Johnson Matthey Plc, headquartered in the United Kingdom, will contribute technology expertise and capital to the joint venture. Hebei will contribute capital, fixed assets and related active pharmaceutical ingredients manufacturing licenses. The joint venture company is called Hebei Aoxing API Pharmaceutical Company, Ltd. (“API”). Hebei Aoxing has a 51% stake in API, while Macfarlan Smith (Hong Kong) Ltd (a wholly owned subsidiary of JM) holds 49%. Each company has equal representation on the board of directors that will oversee a management team responsible for corporate strategies and operations. The new joint venture is located on the Hebei campus in Xinle City, 200 kilometers southwest of Beijing. The Company accounts for its investment in the Joint Venture under the equity method of accounting. Use of estimates in the preparation of financial statements The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates reflected in the consolidated financial statements include, but are not limited to, the recoverability of the carrying amount and estimated useful lives of long-lived assets, allowance for accounts receivable, realizable values for inventories, fair value of purchase option derivative liability and warranty liability, valuation allowance of deferred tax assets, purchase price allocation of its acquisitions and share-based compensation expenses. Management makes these estimates using the best information available at the time the estimates are made; however, actual results when ultimately realized could differ significantly from those estimates. Impairment of long lived assets In accordance with the provisions of ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets,” all long-lived assets such as property, plant and equipment, land use rights and intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or company of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value. Fair value of financial instruments The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The carrying amount of cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable and accrued expenses are reasonable estimates of their fair value because of the short term nature of these items and classified within Level 1 of the fair value hierarchy. As of December 31, 2015, the Company does not have any assets or liabilities that are measured on a recurring basis at fair value. The Company’s short-term borrowings, loans payable, related party notes payable and unrelated party notes payable are considered Level 2 financial instruments measured at fair value on a non-recurring basis as of December 31, 2015. The carrying amount of the common stock warrants is recorded at fair value and is determined using the Black-Scholes option pricing model based on the Company's stock price at the measurement date, exercise price of the warrant, risk-free rate and historical volatility, and is classified as a Level 3 of the fair value hierarchy. Recent accounting pronouncements In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Currently, the Company is evaluating the impact of our pending adoption of ASU 2014-09 and ASU 2015-14 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in year 2018. In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory”, that requires inventory not measured using either the last in, first out (LIFO) or the retail inventory method to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and will be applied prospectively. Early adoption is permitted. The Company is evaluating the impact that this standard will have on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest -Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that ASU 2015-03 will have on its consolidated financial statements and related disclosures

3. Going Concern

3. Going Concern	6 Months Ended
	Dec. 31, 2015
Notes
3. Going Concern	3. GOING CONCERN We have incurred operating losses in the past and had an accumulated deficit of $55.1 million as of December 31, 2015. In addition, we had negative working capital of $10.4 million 10,400,000 The Company is able to operate with negative net working capital because of loans from banks and related parties. The Company believes future positive operating cash flows, continued support from related parties, and the ability to continue to roll over short-term debt, taken together, provide adequate resources to fund ongoing operations in the foreseeable future. The Company may also seek equity financing to replace both short-term and long-term debts. The Company believes that the increased market demand for its main product in the near term and the sales from several new products in future years will produce substantial positive cash flow. If the Company’s short-term cash flows decrease significantly and the Company is unable to pay its short-term liabilities, the Company’s business, financial condition and results of operations could be materially affected. Management of the Company believes that the Company's large negative working capital will improve gradually during fiscal year 2016. Management expects the improvement to come from improved operating results, by extending short term into longer term loans, and by selling equity and converting debt to equity. Management anticipates that these improvements will enable the Company to reduce current high interest expenses and fund on-going operations. Currently, there are no firm commitments for debt or equity financing. The management of the Company has taken a number of actions and will continue to address this situation in order to restore the Company to a sound financial position going forward. In September 2015, the Company sold 22,941 shares of common stock and 1,764,706 common stock purchase warrants to an institutional investor and also issued warrants to purchase 141,176 shares of common stock to the placement agent and its affiliates. The company received a net proceed of $2,739,000. Each warrant will permit the holder to purchase one share of common stock from the Company at $1.74 per share.

4. Inventories, Net

4. Inventories, Net	6 Months Ended
	Dec. 31, 2015
Notes
4. Inventories, Net	4. INVENTORIES, NET Inventories consist of the following: December 31, June 30, 2015 2015 Work in process $ 1,415,794 $ 383,950 Raw materials 634,050 676,590 Finished goods 1,851,005 2,179,486 $ 3,900,849 $ 3,240,026 The allowance for obsolete inventory as of December 31, 2015 and June 30, 2015 was $598,416 and $465,828, respectively.

5. Equity Method Investments an

5. Equity Method Investments and Joint Ventures Disclosure	6 Months Ended
	Dec. 31, 2015
Notes
5. Equity Method Investments and Joint Ventures Disclosure	5. EQUITY-METHOD INVESTMENT IN JOINT VENTURE The Company account for its investment in API (see Note 2), under the equity method of accounting. Summarized financial information for our investment in API assuming a 100% ownership interest is as follows: For Six Months For the Year Ended Ended December 31, 2015 June 30, 2015 Current assets $ 9,682 $ 11,767 Noncurrent assets 692,822 758,649 Current liabilities $ 654,020 $ 640,416 Noncurrent liabilities - - Equity $ 48,484 $ 130,000 Revenue - General and administrative expenses $ 76,011 $ 183,044 Net loss $ (76,011) $ (183,044)

6. Accrued Expenses and Other C

6. Accrued Expenses and Other Current Liabilities	6 Months Ended
	Dec. 31, 2015
Notes
6. Accrued Expenses and Other Current Liabilities	6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and taxes consist of the following: December 31, June 30, 2015 2015 Accrued salaries and benefits $ 847,950 $ 1,616,963 Accrued interest 1,461,201 2,073,073 Accrued taxes 2,018,912 1,281,704 Deposit payable 619,794 572,105 Due to employee 44,334 46,967 Advance from customers 481,384 291,005 Other accounts payable 395,491 241,512 Other accrued expenses and current liabilities 1,285,039 1,052,996 $ 7,154,105 $ 7,176,325

7. Short-term Borrowing

7. Short-term Borrowing	6 Months Ended
	Dec. 31, 2015
Notes
7. Short-term Borrowing	7. SHORT-TERM BORROWING Short-term borrowing consists of the following: December 31, June 30, 2015 2015 Shijiazhuang Finance Bureau (a) $ 77,010 $ 81,582 Shijiazhuang Construction Investment Group Co., Ltd (b) 4,928,612 5,058,086 Mr. Li Hui (c) - 2,304 Hebei Henghui Investment Management Co., Ltd (d) 2,182,451 3,263,282 TianJin Heng Xing Mirco Finance Bureau (e) 3,850,478 4,079,102 Total $ 11,038,551 $ 12,484,356 (a) A non-interest bearing note payable to Shijiazhuang Finance Bureau, an agency of a local government, due on demand. (b) A one-year loan from Shijiazhuang Construction Investment Group, disbursed through China Construction Bank. The notes bear an annual interest rate of 12%. $1,848,230 was due on October 25, 2015 and was extended to April 24, 2016. $3,080,382 was due on July 12, 2015 and was extended to October 25, 2015 and then further extended to April 26, 2016. The notes were secured by certain registered trademarks and renewal certificates relating to Aoxing’s Zhongtongan capsule. (c) The balance of $2,304 as at June 30, 2015 represents unpaid portion of interest which was already repaid in fiscal 2016. (d) A six-month term loan from Hebei Henghui Investment Management Co., Ltd. The note bears an annual interest rate of 10% and will be due on April 16, 2016. (e) A short term loan from TianJin Heng Xing Mirco Finance Bureau. The note bears an annual interest rate of 20.04%, and is payable on March 17, 2016.

8. Debt Disclosure

8. Debt Disclosure	6 Months Ended
	Dec. 31, 2015
Notes
8. Debt Disclosure	8. LOAN PAYABLE - BANK Loan payable – bank consist of the following loans collateralized by assets of the company: December 31, June 30, 2015 2015 Bank Note in the amount of 30 million RMB with Shijiazhuang Huirong Rural Cooperative Bank bearing an annual interest rate of 10% made on September 23, 2014. The note matured on November 22, 2014 and was extended to March 16, 2016 $ 4,620,574 $ 4,894,922 Bank Note in the amount of 27 million RMB with Postal Savings Bank bearing an annual interest rate of 7.8%, made on July 22, 2014 for one year maturing on July 21, 2015 and was extended to December 21, 2016. 4,158,516 4,894,922 Bank Note in the amount of 20 million RMB with China Merchant Bank bearing an annual floating rate of 7.0%, initially made on December 27, 2013, renewed on January 13, 2015 for one year maturing on January 12, 2016. 3,080,383 3,263,282 Bank Note in the amount of 20 million RMB with China Everbright Bank bearing 7.84% interest per annum made on January 16, 2015 for one year maturing on January 15, 2016 and was extended to January 15, 2017. 3,080,313 3,263,282 $ 14,939,856 $ 16,316,408 We are in negotiations with China Merchant Bank regarding renewal of the loan that matured on January 12, 2016. To date, the bank has not declared a default on the loan.

9. Loan Payable - Related Parti

9. Loan Payable - Related Parties	6 Months Ended
	Dec. 31, 2015
Notes
9. Loan Payable - Related Parties	9. LOAN PAYABLE – RELATED PARTIES Loan payable – related parties consists of loans from shareholders, officers, and other related parties, bearing interest at an average rate of 10.0% per annum as of December 31, 2015 and June 30, 2015. Loans will mature as follows: December 31, June 30, 2015 2015 Within one year $ 13,494 $ 5,793 1 – 2 years - 8,158 2 – 3 years - - Total 13,494 13,951 Less current portion (13,494) (5,793) $ - $ 8,158

10. Long-term Debt

10. Long-term Debt	6 Months Ended
	Dec. 31, 2015
Notes
10. Long-term Debt	10. LOAN PAYABLE – OTHER Loan payable – other consist of loans from unrelated third-parties, bearing interest at an average rate of 10% per annum as of December 31, 2015 and June 30, 2015. Loans will mature as following: December 31, June 30, 2015 2015 Within one year $ 15,402 $ - 1 – 2 years - 1,361,199 2 – 3 years - - 3 – 4 years - - Total 15,402 1,361,199 Less current portion (15,402) - $ - $ 1,361,199 On November 4, 2015, the Company reached agreement with the creditors to convert the debt into shares of common stock. The conversion was completed on November 23, 2015, which caused the balances of other loan payable declined significantly thereafter.

11. Issuance of Common Stock an

11. Issuance of Common Stock and Warrants	6 Months Ended
	Dec. 31, 2015
Notes
11. Issuance of Common Stock and Warrants	1 1. Issuance of Common Stock AND WARRANTS During the period ended September 30, 2014, the Company issued 11,862,278 shares of common stock in satisfaction of $4.6 million in debt at $0.39 per share. Paid in capital was increased by $4,614,426 as a result of the exchange. On November 5, 2014 the Company sold to 22 of its employees a total of 4,527,832 shares of common stock for a total of $1,177,236 or $0.26 per share. On September 10, 2015, the Company issued 60,000 shares of common stock to independent directors at $2.01 per share for services rendered by them. On September 30, 2015 the Company completed a registered direct public offering of 2,352,941 shares of common stock and 1,764,706 common stock purchases warrants (the "public warrants" pursuant to a securities purchase agreement dated as of September 24, 2015. The purchaser was an institutional investor. Each public warrant will permit the holder to purchase one share of common stock from the Company for a price of $1.74 per share. The public warrants will be exercisable from March 31, 2016 until March 31, 2021. Cashless exercise of the warrants is permitted only if there is no effective registration statement permitting resale of the common shares underlying the warrants. The proceeds from the offerings were $2,739,000, net of issuance costs of $261,000 paid to the placement agent. The warrants were classified as equity at the date of issuance. They contained no provision that would require liability classification, and can be exercised on a cashless basis. Accordingly, they were classified as equity at the date of issuance. The proceeds were allocated between common stock and warrants, based on relative fair value. The issuance cost was recorded as a reduction of additional paid in capital. In connection with the aforesaid sale, the Company issued to the placement agent and its affiliates warrants to purchase 141,176 shares of common stock. The warrants issued to the placement agent and its affiliates are substantially identical to the public warrants. The fair value of these warrants, which amounted to $175,150, was classified as equity at the date of issuance and recorded as an offset to the proceeds from the issuance of the shares and public warrants. The fair value of the warrants issued was estimated by using the Black-Scholes-Merton Option Pricing Model with the following assumptions: For the six months ended December 31, 2015 Investor Stock price 0.67 Exercise price 1.74 Expected life in years 4.7 Annualized Volatility 116.72% Annual Rate of Quarterly Dividends 1.65 Discount Rate - Bond Equivalent Yield 1.37 The Company applied its best judgment to estimate key assumptions in determining the fair value of the warrants on the date of issuance. The Company used historical data to estimate stock volatilities. The risk-free rates are consistent with the terms of the warrants and are based on the United States Treasury yield curve in effect at the time of issuance. The weighted average fair value of warrants granted for the period ended September 30, 2015 was $1.24 per share. No warrants were exercised, cancelled or expired during the period ended December 31, 2015. On November 4, 2015, the Company reached agreement with three of its creditors to convert $2.66 million high interest bearing debt into 2,046,995 shares of common stock. The shares were valued at $1.30 per share and will be restricted under Rule 144.

12. Taxes

12. Taxes	6 Months Ended
	Dec. 31, 2015
Notes
12. Taxes	12. TAXES The Company’s Chinese subsidiaries are governed by the Income Tax Law of the People’s Republic of China concerning private-run enterprises, which are generally subject to tax at a statutory rate of 25% on income reported in the statutory financial statements after appropriate tax adjustments. The reconciliation of income tax at the U.S. statutory rate to the Company’s effective tax rate is as follows: For the six months ended December 31, 2015 2014 Tax at U.S. Statutory rate $ 1,711,464 $ 209,842 Tax rate difference between China and U.S. (1,509,717) ( 2,949,659 Change in Valuation Allowance (248,584) 2,739,853 Net operating loss expired - - Stock and option compensation 46,838 - Effective tax rate $ - $ - The provisions of income taxes (credit) are summarized as follows: For the six months ended December 31, 2015 2014 Current $ - $ 209,842 Deferred - U.S. - (38,113) Deferred - China 1,601,781 ( 2,911,582 Valuation allowance - U.S. - 38,113 Valuation allowance - China. (248,584) 2,701,740 Total $ 1,353,196 $ - The tax effects of temporary differences that give rise to the Company’s net deferred tax asset as of December 31, 2015 and June 30, 2015 are as follows: December 31, 2015 June 30, 2015 Net operating loss carryforward - China $ 561,834 $ 1,342,696 Net operating loss carryforward - US 1,889,794 1,935,121 Allowance for doubtful accounts 488,157 823,190 Others 282,545 808,334 3,222,330 4,909,341 Less: valuation allowance- U.S. (1,889,794) (1,935,121) Valuation allowance- China. (13,012) (262,610) Deferred tax assets $ 1,319,524 $ 2,711,610

13. Concentrations

13. Concentrations	6 Months Ended
	Dec. 31, 2015
Notes
13. Concentrations	1 3. CONCENTRATIONS Sales to two major customers accounted for 8% and 7% of total sales for the three months ended December 31, 2015. Sales to two major customers accounted for 8% and 7% of total sales for the three months ended December 31, 2014. As of December 31, 2015 two major customers accounted for 7% and 6% of Company’s accounts receivable balance. As of December 31, 2014, two major customers accounted for 8% and 6% of Company’s accounts receivable balance. Sales of two major products represented approximately 82% and 12% of total sales for the three months ended December 31, 2015. Sales of two major products represented approximately 96% and 1% of total sales for the three months ended December 31, 2014.

14. Subsequent Events

14. Subsequent Events	6 Months Ended
	Dec. 31, 2015
Notes
14. Subsequent Events	1 4. SUBSEQUENT EVENTS On January 5, 2016 the Board of Directors approved three technology acquisition agreements made by the Company during December 2015. Pursuant to the agreements, the Company (a) issued 800,000 shares of common stock and paid $123,000 to acquire technology relation to the formulation of Lorcaserin Hydrochloride, (b) issued 500,000 shares of common stock and paid $77,000 to acquire certain technology relating to the formulation of caffeine tablets, and (c) issued 500,000 shares of common stock and paid $77,000 to acquire certain technology relating to the formulation of Buprenorphine/Naloxone. On January 5, 2016, the Board of Directors granted options for a total of 590,000 shares of common stock to 25 employees of the Company. The options are exercisable at a price of $.64 per share, which was the closing price for the common stock on January 4, 2016. Each option has a term of five years. The options will not vest until they have been approved by the shareholders of the Company. On January 5, 2016 the Board of Directors approved two consulting agreements pursuant to which a total of 110,000 shares of common stock were issued in exchange for media and investor relations consulting services. In accordance with ASC 855, “Subsequent Events”, the Company has evaluated subsequent events that have occurred through the date of issuance of these financial statements and has determined that, except for the matters described above, there was no material event that occurred after the date of the balance sheets included in this report.

2. Business Description and S20

2. Business Description and Significant Accounting Policies: Investment in Joint Venture ("JV") (Policies)	6 Months Ended
	Dec. 31, 2015
Policies
Investment in Joint Venture ("JV")	Investment in Joint Venture (“JV”) On April 26, 2010, Aoxing Pharma and Johnson Matthey Plc (“JM”) entered into an agreement to establish a joint venture focused on research, development, manufacturing and marketing of active pharmaceutical ingredients for narcotics and neurological drugs for the China market. The joint venture represents a significant new opportunity for both companies to expand their business in the rapidly growing pharmaceutical market in China. Under the terms of the agreement, Macfarlan Smith Ltd, a wholly owned subsidiary of Johnson Matthey Plc, headquartered in the United Kingdom, will contribute technology expertise and capital to the joint venture. Hebei will contribute capital, fixed assets and related active pharmaceutical ingredients manufacturing licenses. The joint venture company is called Hebei Aoxing API Pharmaceutical Company, Ltd. (“API”). Hebei Aoxing has a 51% stake in API, while Macfarlan Smith (Hong Kong) Ltd (a wholly owned subsidiary of JM) holds 49%. Each company has equal representation on the board of directors that will oversee a management team responsible for corporate strategies and operations. The new joint venture is located on the Hebei campus in Xinle City, 200 kilometers southwest of Beijing. The Company accounts for its investment in the Joint Venture under the equity method of accounting.

2. Business Description and S21

2. Business Description and Significant Accounting Policies: Use of Estimates in The Preparation of Financial Statements (Policies)	6 Months Ended
	Dec. 31, 2015
Policies
Use of Estimates in The Preparation of Financial Statements	Use of estimates in the preparation of financial statements The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates reflected in the consolidated financial statements include, but are not limited to, the recoverability of the carrying amount and estimated useful lives of long-lived assets, allowance for accounts receivable, realizable values for inventories, fair value of purchase option derivative liability and warranty liability, valuation allowance of deferred tax assets, purchase price allocation of its acquisitions and share-based compensation expenses. Management makes these estimates using the best information available at the time the estimates are made; however, actual results when ultimately realized could differ significantly from those estimates.

2. Business Description and S22

2. Business Description and Significant Accounting Policies: Impairment of Long Lived Assets (Policies)	6 Months Ended
	Dec. 31, 2015
Policies
Impairment of Long Lived Assets	Impairment of long lived assets In accordance with the provisions of ASC Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets,” all long-lived assets such as property, plant and equipment, land use rights and intangible assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or company of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

2. Business Description and S23

2. Business Description and Significant Accounting Policies: Fair Value Measurement (Policies)	6 Months Ended
	Dec. 31, 2015
Policies
Fair Value Measurement	Fair value of financial instruments The Company has adopted ASC Topic 820, Fair Value Measurement and Disclosure, which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. It does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. It establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The carrying amount of cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable and accrued expenses are reasonable estimates of their fair value because of the short term nature of these items and classified within Level 1 of the fair value hierarchy. As of December 31, 2015, the Company does not have any assets or liabilities that are measured on a recurring basis at fair value. The Company’s short-term borrowings, loans payable, related party notes payable and unrelated party notes payable are considered Level 2 financial instruments measured at fair value on a non-recurring basis as of December 31, 2015. The carrying amount of the common stock warrants is recorded at fair value and is determined using the Black-Scholes option pricing model based on the Company's stock price at the measurement date, exercise price of the warrant, risk-free rate and historical volatility, and is classified as a Level 3 of the fair value hierarchy.

2. Business Description and S24

2. Business Description and Significant Accounting Policies: Recent Accounting Pronouncements (Policies)	6 Months Ended
	Dec. 31, 2015
Policies
Recent Accounting Pronouncements	Recent accounting pronouncements In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Currently, the Company is evaluating the impact of our pending adoption of ASU 2014-09 and ASU 2015-14 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard in year 2018. In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory”, that requires inventory not measured using either the last in, first out (LIFO) or the retail inventory method to be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. The new standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, and will be applied prospectively. Early adoption is permitted. The Company is evaluating the impact that this standard will have on its consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, "Interest -Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts, instead of being presented as an asset. ASU 2015-03 is effective for the Company on January 1, 2016. Once adopted, entities are required to apply the new guidance retrospectively to all prior periods presented. The retrospective application represents a change in accounting principle. Early adoption is permitted for financial statements that have not been previously issued. The Company is currently evaluating the effect that ASU 2015-03 will have on its consolidated financial statements and related disclosures

4. Inventories, Net_ Schedule o

4. Inventories, Net: Schedule of Inventories (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Inventories	Inventories consist of the following: December 31, June 30, 2015 2015 Work in process $ 1,415,794 $ 383,950 Raw materials 634,050 676,590 Finished goods 1,851,005 2,179,486 $ 3,900,849 $ 3,240,026

5. Equity Method Investments 26

5. Equity Method Investments and Joint Ventures Disclosure: Equity Method Investments (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Equity Method Investments	For Six Months For the Year Ended Ended December 31, 2015 June 30, 2015 Current assets $ 9,682 $ 11,767 Noncurrent assets 692,822 758,649 Current liabilities $ 654,020 $ 640,416 Noncurrent liabilities - - Equity $ 48,484 $ 130,000 Revenue - General and administrative expenses $ 76,011 $ 183,044 Net loss $ (76,011) $ (183,044)

6. Accrued Expenses and Other27

6. Accrued Expenses and Other Current Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Accounts Payable and Accrued Liabilities	December 31, June 30, 2015 2015 Accrued salaries and benefits $ 847,950 $ 1,616,963 Accrued interest 1,461,201 2,073,073 Accrued taxes 2,018,912 1,281,704 Deposit payable 619,794 572,105 Due to employee 44,334 46,967 Advance from customers 481,384 291,005 Other accounts payable 395,491 241,512 Other accrued expenses and current liabilities 1,285,039 1,052,996 $ 7,154,105 $ 7,176,325

7. Short-term Borrowing_ Schedu

7. Short-term Borrowing: Schedule of Short-term borrowing (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Short-term borrowing	Short-term borrowing consists of the following: December 31, June 30, 2015 2015 Shijiazhuang Finance Bureau (a) $ 77,010 $ 81,582 Shijiazhuang Construction Investment Group Co., Ltd (b) 4,928,612 5,058,086 Mr. Li Hui (c) - 2,304 Hebei Henghui Investment Management Co., Ltd (d) 2,182,451 3,263,282 TianJin Heng Xing Mirco Finance Bureau (e) 3,850,478 4,079,102 Total $ 11,038,551 $ 12,484,356

8. Debt Disclosure_ Schedule of

8. Debt Disclosure: Schedule of Long-term Debt Instruments (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Long-term Debt Instruments	December 31, June 30, 2015 2015 Bank Note in the amount of 30 million RMB with Shijiazhuang Huirong Rural Cooperative Bank bearing an annual interest rate of 10% made on September 23, 2014. The note matured on November 22, 2014 and was extended to March 16, 2016 $ 4,620,574 $ 4,894,922 Bank Note in the amount of 27 million RMB with Postal Savings Bank bearing an annual interest rate of 7.8%, made on July 22, 2014 for one year maturing on July 21, 2015 and was extended to December 21, 2016. 4,158,516 4,894,922 Bank Note in the amount of 20 million RMB with China Merchant Bank bearing an annual floating rate of 7.0%, initially made on December 27, 2013, renewed on January 13, 2015 for one year maturing on January 12, 2016. 3,080,383 3,263,282 Bank Note in the amount of 20 million RMB with China Everbright Bank bearing 7.84% interest per annum made on January 16, 2015 for one year maturing on January 15, 2016 and was extended to January 15, 2017. 3,080,313 3,263,282 $ 14,939,856 $ 16,316,408

9. Loan Payable - Related Par30

9. Loan Payable - Related Parties: Schedule of Related Party Transactions (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Related Party Transactions	December 31, June 30, 2015 2015 Within one year $ 13,494 $ 5,793 1 – 2 years - 8,158 2 – 3 years - - Total 13,494 13,951 Less current portion (13,494) (5,793) $ - $ 8,158

10. Long-term Debt_ Schedule of

10. Long-term Debt: Schedule of Debt (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Debt	December 31, June 30, 2015 2015 Within one year $ 15,402 $ - 1 – 2 years - 1,361,199 2 – 3 years - - 3 – 4 years - - Total 15,402 1,361,199 Less current portion (15,402) - $ - $ 1,361,199

11. Issuance of Common Stock 32

11. Issuance of Common Stock and Warrants: Assumptions Used Textblock (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Assumptions Used Textblock	For the six months ended December 31, 2015 Investor Stock price 0.67 Exercise price 1.74 Expected life in years 4.7 Annualized Volatility 116.72% Annual Rate of Quarterly Dividends 1.65 Discount Rate - Bond Equivalent Yield 1.37

12. Taxes_ Schedule of Effectiv

12. Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Effective Income Tax Rate Reconciliation	For the six months ended December 31, 2015 2014 Tax at U.S. Statutory rate $ 1,711,464 $ 209,842 Tax rate difference between China and U.S. (1,509,717) ( 2,949,659 Change in Valuation Allowance (248,584) 2,739,853 Net operating loss expired - - Stock and option compensation 46,838 - Effective tax rate $ - $ -

12. Taxes_ Schedule of Componen

12. Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	The provisions of income taxes (credit) are summarized as follows: For the six months ended December 31, 2015 2014 Current $ - $ 209,842 Deferred - U.S. - (38,113) Deferred - China 1,601,781 ( 2,911,582 Valuation allowance - U.S. - 38,113 Valuation allowance - China. (248,584) 2,701,740 Total $ 1,353,196 $ -

12. Taxes_ Schedule of Deferred

12. Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)	6 Months Ended
	Dec. 31, 2015
Tables/Schedules
Schedule of Deferred Tax Assets and Liabilities	December 31, 2015 June 30, 2015 Net operating loss carryforward - China $ 561,834 $ 1,342,696 Net operating loss carryforward - US 1,889,794 1,935,121 Allowance for doubtful accounts 488,157 823,190 Others 282,545 808,334 3,222,330 4,909,341 Less: valuation allowance- U.S. (1,889,794) (1,935,121) Valuation allowance- China. (13,012) (262,610) Deferred tax assets $ 1,319,524 $ 2,711,610

2. Business Description and S36

2. Business Description and Significant Accounting Policies (Details)	6 Months Ended
	Dec. 31, 2015
Details
Noncontrolling Interest, Ownership Percentage by Parent	95.00%
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	100.00%

3. Going Concern (Details)

3. Going Concern (Details) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Details
Working Capital Deficit	$ 10,400,000
Sale of common stock	$ 2,739,000	$ 5,816,451

4. Inventories, Net_ Schedule38

4. Inventories, Net: Schedule of Inventories (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Details
Inventory, Work in Process, Gross	$ 1,415,794	$ 383,950
Inventory, Raw Materials, Gross	634,050	676,590
Inventory, Finished Goods, Gross	1,851,005	2,179,486
Inventories, net	$ 3,900,849	$ 3,240,026

4. Inventories, Net (Details)

4. Inventories, Net (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Details
Allowance for Obsolete Inventory	$ 598,416	$ 465,828

5. Equity Method Investments 40

5. Equity Method Investments and Joint Ventures Disclosure: Equity Method Investments (Details) - USD ($)	6 Months Ended	12 Months Ended
	Dec. 31, 2015	Jun. 30, 2015
Details
Equity Method Investment, Summarized Financial Information, Current Assets	$ 9,682	$ 11,767
Equity Method Investment, Summarized Financial Information, Noncurrent Assets	692,822	758,649
Equity Method Investment, Summarized Financial Information, Current Liabilities	654,020	640,416
Equity Method Investment Summarized Financial Information, Equity	48,484	130,000
Equity Method Investment, Summarized Financial Information, Cost of Sales	76,011	183,044
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss)	$ (76,011)	$ (183,044)

6. Accrued Expenses and Other41

6. Accrued Expenses and Other Current Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Details
Accrued Salaries, Current	$ 847,950	$ 1,616,963
Accrued interest	1,461,201	2,073,073
Accrued Income Taxes, Current	2,018,912	1,281,704
Deposit Liability, Current	619,794	572,105
Other Employee Related Liabilities, Current	44,334	46,967
Customer Advances, Current	481,384	291,005
Accounts Payable, Other, Current	395,491	241,512
Other Accrued Liabilities, Current	1,285,039	1,052,996
Accrued expenses and other current liabilities	$ 7,154,105	$ 7,176,325

7. Short-term Borrowing_ Sche42

7. Short-term Borrowing: Schedule of Short-term borrowing (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Short-term borrowings	$ 11,038,551	$ 12,484,356
ShijiazhuangFinanceBureauMember
Short-term borrowings	77,010	81,582
ShijiazhuangConstructionInvestmentGroupCoLtdMember
Short-term borrowings	4,928,612	5,058,086
MrLiHuiMember
Short-term borrowings		2,304
HebeiHenghuiInvestmentManagementCoLtdMember
Short-term borrowings	2,182,451	3,263,282
TianjinHengXingMircoFinanceBureauMember
Short-term borrowings	$ 3,850,478	$ 4,079,102

8. Debt Disclosure_ Schedule 43

8. Debt Disclosure: Schedule of Long-term Debt Instruments (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Loan payable - bank	$ 14,939,856	$ 16,316,408
ShijiazhuangHuirongRuralCooperativeBankMember
Loan payable - bank	4,620,574	4,894,922
PostalSavingsBankMember
Loan payable - bank	4,158,516	4,894,922
ChinaMerchantBankMember
Loan payable - bank	3,080,383	3,263,282
ChinaEverbrightBankMember
Loan payable - bank	$ 3,080,313	$ 3,263,282

9. Loan Payable - Related Par44

9. Loan Payable - Related Parties (Details)	Dec. 31, 2015	Jun. 30, 2015
Details
Accounts Payable Related Parties Interest Bearing Interest Rate	10.00%	10.00%

9. Loan Payable - Related Par45

9. Loan Payable - Related Parties: Schedule of Related Party Transactions (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Details
Current portion of loan payable - related parties	$ 13,494	$ 5,793
Loan payable - related parties		8,158
Due to Related Parties	13,494	13,951
Current portion of loan payable - related parties	$ (13,494)	$ (5,793)

10. Long-term Debt (Details)

10. Long-term Debt (Details)	Dec. 31, 2015	Jun. 30, 2015
Details
Accounts Payable, Interest-bearing, Interest Rate	10.00%	10.00%

10. Long-term Debt_ Schedule 47

10. Long-term Debt: Schedule of Debt (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Details
Current portion of loan payable - others	$ 15,402
Loan payable - others		$ 1,361,199
Current portion of loan payable - others	$ (15,402)

11. Issuance of Common Stock 48

11. Issuance of Common Stock and Warrants: Assumptions Used Textblock (Details)	6 Months Ended
	Dec. 31, 2015$ / shares
Details
Fair Value Assumptions, Stock Price	$ 0.67
Fair Value Assumptions, Exercise Price	$ 1.74
Fair Value Assumptions, Expected Term	4 years 8 months 12 days
Fair Value Assumptions, Expected Volatility Rate	116.72%
Fair Value Assumptions, Weighted Average Expected Dividend	$ 1.65
Fair Value Assumptions, Risk Free Interest Rate	1.37%

12. Taxes_ Schedule of Effect49

12. Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ 1,711,464	$ 209,842
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount	(1,509,717)	(2,949,659)
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	(248,584)	$ 2,739,853
Stock Option Compensation	$ 46,838

12. Taxes_ Schedule of Compon50

12. Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014
Current Income Tax Expense (Benefit)			$ 209,842
Deferred Federal Income Tax Expense (Benefit)			(38,113)
Deferred Foreign Income Tax Expense (Benefit)		$ 1,601,781	(2,911,582)
Income tax expense	$ 409,393	1,353,196
USMember
Deferred Taxes, Business Combination, Valuation Allowance, Available to Reduce Income Tax Expense			38,113
ChinaMember
Deferred Taxes, Business Combination, Valuation Allowance, Available to Reduce Income Tax Expense		$ (248,584)	$ 2,701,740

12. Taxes_ Schedule of Deferr51

12. Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	$ 561,834	$ 1,342,696
Deferred Tax Assets, Operating Loss Carryforwards, Domestic	1,889,794	1,935,121
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts	488,157	823,190
Deferred Tax Assets, Other	282,545	808,334
Deferred Tax Assets, Gross	3,222,330	4,909,341
Deferred income tax	1,319,524	2,711,610
USMember
Deferred Tax Assets, Valuation Allowance	(1,889,794)	(1,935,121)
ChinaMember
Deferred Tax Assets, Valuation Allowance	$ (13,012)	$ (262,610)

13. Concentrations (Details)

13. Concentrations (Details)	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Details
Concentration Risk, Customer	two major customers accounted for 8% and 7% of total sales	two major customers accounted for 8% and 7% of total sales
Concentration Risk, Other Risk	two major customers accounted for 7% and 6% of Company’s accounts receivable balance.	two major customers accounted for 8% and 6% of Company’s accounts receivable balance.
Concentration Risk, Product	two major products represented approximately 82% and 12% of total sales	two major products represented approximately 96% and 1% of total sales