Aoxing Pharmaceutical (AOXG) 10-K 5 Oct 16 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Jun. 30, 2016	Sep. 27, 2016	Dec. 31, 2015
Document and Entity Information:
Entity Registrant Name	AOXING PHARMACEUTICAL COMPANY, INC.
Document Type	10-K
Document Period End Date	Jun. 30, 2016
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 Public Float			$ 30,727,141
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	FY

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2016	Jun. 30, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 6,912,100	$ 5,371,545
Accounts receivable, net of allowance for doubtful accounts of $1,940,354 and $1,364,330, respectively	11,200,418	5,854,055
Inventories, net	2,841,690	3,240,026
Prepaid expenses and other current assets	5,912,555	6,630,407
TOTAL CURRENT ASSETS	26,866,763	21,096,033
LONG-TERM ASSETS:
Property and equipment, net of accumulated depreciation	25,603,734	28,651,717
Deferred income tax	1,878,595	2,711,610
Other intangible assets, net	1,878,299	484,857
Investment in joint venture	4,200	96,475
TOTAL LONG-TERM ASSETS	29,364,828	31,944,659
TOTAL ASSETS	56,231,591	53,040,692
CURRENT LIABILITIES:
Short-term borrowings	11,070,966	12,484,356
Accounts payable	2,709,819	3,625,139
Notes payable	0	1,631,641
Loan payable - bank	14,372,630	16,316,408
Current portion of loan payable - related parties	13,317	5,793
Current portion of loan payable - others	15,048
Accrued expenses and other current liabilities	9,633,750	7,176,325
TOTAL CURRENT LIABILITIES	37,815,530	41,239,662
LONG-TERM LIABILITIES:
Loan payable - related parties		8,158
Loan payable - others	0	1,361,199
Deferred income	340,089	368,751
TOTAL LONG-TERM LIABILITIES	340,089	1,738,108
Stockholder's Equity
Common stock, par value $0.001, 100,000,000 shares authorized, 76,209,195 and 69,839,259 shares issued and outstanding on June 30, 2016 and June 30, 2015, respectively	76,209	69,839
Additional paid in capital	73,629,751	66,457,250
Accumulated deficit	(56,293,745)	(58,354,968)
Accumulated other comprehensive income	1,723,740	3,066,026
TOTAL SHAREHOLDERS' EQUITY OF THE COMPANY	19,135,955	11,238,147
NON-CONTROLLING INTEREST IN SUBSIDIARIES	(1,059,983)	(1,175,225)
TOTAL EQUITY	18,075,972	10,062,922
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 56,231,591	$ 53,040,692

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Revenue
SALES	$ 32,329,525	$ 25,481,199
COST OF SALES	7,775,524	5,688,863
GROSS PROFIT	24,554,001	19,792,336
OPERATING EXPENSES:
Research and development	3,143,233	337,067
General and administrative	3,066,634	2,753,535
Selling expenses	11,613,220	7,457,758
Depreciation and amortization	502,862	548,319
TOTAL OPERATING EXPENSES	18,325,949	11,096,679
INCOME FROM OPERATIONS	6,228,051	8,695,657
OTHER INCOME (EXPENSE):
Interest expense, net of interest income	(3,456,638)	(5,768,094)
Equity in loss of joint venture, net	(87,500)	(93,352)
Subsidy income	201,912	279,893
TOTAL OTHER EXPENSE	(3,342,226)	(5,581,553)
INCOME BEFORE INCOME TAXES	2,885,825	3,114,104
Income taxes/(benefits)	642,245	(2,704,369)
NET INCOME	2,243,580	5,818,473
Net income attributable to non-controlling interest in subsidiaries	182,356	323,760
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY	2,061,224	5,494,713
OTHER COMPREHENSIVE INCOME (LOSS) :
Foreign currency translation adjustment	(1,342,286)	91,359
COMPREHENSIVE INCOME	718,938	5,586,072
Other comprehensive income (loss) attributable to non-controlling interest	(67,114)	4,568
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY	$ 786,052	$ 5,581,504
EARNINGS PER SHARE: Basic	$ 0.03	$ 0.09
EARNINGS PER SHARE: Diluted	$ 0.03	$ 0.09
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic	73,695,338	63,107,104
WEIGHTED AVERAGE SHARES OUTSTANDING: Diluted	75,467,672	63,167,104

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Preferred Stock	Additional Paid in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Total Shareholders' Equity	Non Controlling Interest	Total
Balance at Jun. 30, 2014	$ 49,875		$ 58,315,446	$ (63,849,681)	$ 2,979,235	$ (2,505,125)	$ (1,503,553)	$ (4,008,678)
Balance - Shares at Jun. 30, 2014	49,874,822
Common stock issued for services	$ 360		81,490			81,850		81,850
Common stock issued for services - shares	360,000
Common stock issued for debt conversion	$ 12,864		5,562,544			5,575,408		5,575,408
Common stock issued for debt conversion - shares	12,863,690
Common stock issued	$ 6,740		2,406,948			2,413,688		2,413,688
Common stock issued - shares	6,740,747
Amortization for stock options			22,822			22,822		22,822
Amortization for management equity compensation			68,000			68,000		68,000
Common stock issued for independent directors
Common stock issued for independent directors - shares
Translation adjustments					86,791	86,791	4,568	91,359
NET INCOME				5,494,713		5,494,713	323,760	5,818,473
Balance at Jun. 30, 2015	$ 69,839		66,457,250	(58,354,968)	3,066,026	11,238,147	(1,175,225)	10,062,922
Balance - Shares at Jun. 30, 2015	69,839,259
Common stock issued for services	$ 1,910		1,560,690			1,562,600		1,562,600
Common stock issued for services - shares	1,910,000
Common stock issued for debt conversion	$ 2,047		2,659,047			2,661,094		2,661,094
Common stock issued for debt conversion - shares	2,046,995
Common stock issued	$ 2,353		2,736,647			2,739,000		2,739,000
Common stock issued - shares	2,352,941
Amortization for stock options			33,196			33,196		33,196
Amortization for management equity compensation			80,381			80,381		80,381
Common stock issued for independent directors	$ 60		102,540			102,600		102,600
Common stock issued for independent directors - shares	60,000
Translation adjustments					(1,342,286)	(1,342,286)	(67,114)	(1,409,400)
NET INCOME				2,061,224		2,061,224	182,356	2,243,580
Balance at Jun. 30, 2016	$ 76,209		$ 73,629,751	$ (56,293,744)	$ 1,723,740	$ 19,135,955	$ (1,059,983)	$ 18,075,972
Balance - Shares at Jun. 30, 2016	76,209,195

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
OPERATING ACTIVITIES:
NET INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY	$ 2,061,224	$ 5,494,713
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,026,016	666,293
Deferred income tax expense (benefit)	642,245	(2,704,369)
Inventory markdown reversal		(7,861)
Provision for doubtful accounts	703,980	(204,597)
Common stock issued for services	288,777	169,822
Equity in loss of joint venture, net	87,500	93,352
Net loss attributable to non-controlling interests	182,356	323,760
Changes in operating assets and liabilities:
Change in accounts receivable	(6,691,735)	(1,735,368)
Change in inventories	151,210	(1,023,777)
Change in prepaid expenses and other current assets	138,770	(4,102,425)
Change in accounts payable	(2,207,075)	1,351,651
Change in accrued expenses and other current liabilities	3,081,742	4,704,545
NET CASH GENERATED FROM (USED IN) OPERATING ACTIVITIES	(534,990)	3,025,739
INVESTING ACTIVITIES:
Acquisition of property and equipment	(117,862)	(2,705,298)
NET CASH USED IN INVESTING ACTIVITIES	(117,862)	(2,705,298)
FINANCING ACTIVITIES:
Proceeds from (repayment of) bank loans	(697,281)	13,018,270
Short-term borrowings	(437,170)	1,029,387
Repayment of other borrowings		(10,186,796)
Loans from/(to) related party	1,341,936	(3,611,480)
Sale of common stock	2,739,000	2,423,503
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,946,485	2,672,884
EFFECT OF EXCHANGE RATE ON CASH	(753,078)	48,560
INCREASE IN CASH	1,540,555	3,041,885
CASH - BEGINNING OF PERIOD	5,371,545	2,329,660
CASH - END OF PERIOD	6,912,100	5,371,545
Supplemental disclosures of cash flow information:
Cash paid for interest	2,388,106	3,113,976
Cash paid for income taxes
Supplemental Disclosures of non-cash activities:
Debt extinguishment using stock	$ 2,662,597	$ 4,866,288

1 Business Description

1 Business Description	12 Months Ended
	Jun. 30, 2016
Notes
1 Business Description	1 BUSINESS DESCRIPTION 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 June 30, 2016, the Company had one operating subsidiary: Hebei Aoxing Pharmaceutical Co., Inc. (“Hebei”), which is organized under the laws of the People’s Republic of China (“PRC”). As of June 30, 2016, the Company owned 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 CFDA 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 90% 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. On March 10, 2010, the joint venture obtained a business license from the City Industry & Commercial Administrative Bureau. The Company accounts for its investment in the Joint Venture under the equity method of accounting.

2 Significant Accounting Polici

2 Significant Accounting Policies	12 Months Ended
	Jun. 30, 2016
Notes
2 Significant Accounting Policies	2 SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Company’s functional currency is the Chinese Renminbi (RMB). However, the accompanying consolidated financial statements have been translated and presented in United States Dollars (USD). 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, valuation allowance of deferred tax assets, impairment assessment of goodwill, 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. Cash and cash equivalents The Company maintains cash and cash equivalents with financial institutions in the PRC which are not insured or otherwise protected. Should any of these institutions holding the Company’s cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. Accounts Receivable Accounts receivables represent customer accounts receivables. The allowance for doubtful accounts is based on a combination of current sales, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Such allowances, if any, would be recorded in the period the impairment is identified. The balances of allowance for doubtful accounts are $1,940,354 and $1,364,330 at June 30, 2016 and 2015 respectively. The Company recorded bad debt expense of $576,024 for the year ended June 30, 2016 and bad debt written back of $204,597 for the year ended June 30, 2015, respectively. Inventories, net Inventories are stated at the lower of cost, determined using the weighted average cost method, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. The Company wrote-off $118,846 of obsolete inventory during the year ended June 30, 2016. The Company charged $108,601 against the allowance for obsolete inventory during the year ended June 30, 2015. For the years ended June 30, 2016 and 2015, the Company’s allowance for obsolete inventory is $584,674 and $633,948, respectively. Property and equipment Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight line method for financial reporting purposes. Construction in progress is stated at cost, which includes the cost of construction, acquisition of plant and equipment and other direct costs attributable to the construction. Construction in progress is not depreciated until such time as the assets are completed and put into operational use. No capitalized interest is incurred during the period of construction. All land in the PRC is owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specified period of time. Thus, all of the Company’s land purchases in the PRC are considered to be leasehold land and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreements on a straight-line basis, which is 50 years and they will expire in 2053. Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized. Estimated useful lives are as follows: Right to use land 50 years Building and building improvements 35 years Machinery and equipment 10 years Furniture and office equipment 5 years Automobiles 8 years Intangible assets Definite lived intangible assets include drug permits recorded at cost less accumulated amortization and any recognized impairment loss. The drug permits were acquired in 2008 when the Company purchased LRT and are amortized over their estimated useful life of 15 years on a straight-line basis. In addition, the Company acquired the intellectual properties relating to Lorcaserin Hydrochloride, Caffeine tablets and Caffeine buccal tablets, and Buprenorphine/naloxone through issuance of the Company’s common stock. An intangible asset that is subject to amortization shall be reviewed for impairment in accordance with the Impairment or Disposal of Long-Lived Assets ASC 360-10. In accordance with Accounting Standards Codification (“ASC”) Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, the Company performs an intangible asset impairment test for its definite-lived intangibles whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The intangible assets balance as of June 30, 2016 and June 30, 2015 were $1,878,299 and $484,857 respectively. Revenue Recognition In accordance with the ASC Topic 605, “ Revenue Recognition The Company derives revenues from the sale of pharmaceutical products. The Company recognizes its revenues net of value-added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. The Company recognizes revenue from the sale of products upon customers’ receipt of the shipment at the customers’ facility or upon when the transfer of title and risk of loss has transferred to the customer. The Company has distributor arrangements with certain parties for sale of its pharmaceutical products. The distributor agreements do not provide chargeback, price protection, or stock rotation rights. Research and Development Research and development is charged to expense as incurred. Share-Based Compensation Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period. The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award. Impairment of long lived assets In accordance with the provisions of ASC Topic 360-10-5, “ Impairment or Disposal of Long-Lived Assets,” Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “ Income Taxes ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. Non-controlling interest Non-controlling interests in our subsidiaries are recorded in accordance with the provisions of ASC Topic 810, “ Consolidation Under ASC 810-10-45-21, losses attributable to the parent and the non-controlling interest in a subsidiary may exceed their interests in the subsidiary’s equity. The excess, and any further losses attributable to the parent and the non-controlling interest, shall be attributed to those interests. That is, the non-controlling interest shall continue to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance Currency translation Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (”RMB”) while the reporting currency is the United States Dollars (“USD”). Revenue and expense accounts are translated at the average rates during the period, and balance sheet items are translated at year-end rates. Translation adjustments arising from the use of differing exchange rates from period to period are included as a separate component of shareholders’ equity. Gains and losses from foreign currency transactions are recognized in current operations. 2016 2015 Year ended RMB: US$ exchange rate 6.6453 6.1288 Average yearly RMB: US$ exchange rate 6.4385 6.1452 The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. Fair value of financial instruments The Company has adopted ASC Topic 820, ” Fair Value Measurement and Disclosure” 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. As of June 30, 2016, 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 that are considered Level 2 financial instruments measured at fair value on a non-recurring basis as of June 30, 2016. As of June 30, 2016, the Company does not have any level 3 financial instruments. The Company uses the discounted cash flow approach when determining fair values of its non-recurring fair value measurements when required. We determine the fair value of our goodwill for purposes of comparing to the carrying value on at least an annual basis. Our goodwill would be adjusted to fair value if it is deemed to be impaired. Certain unobservable units for these assets are offered quotes, lack of marketability, long-term revenue growth rates and discounts rates. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. In general, a change in the long-term growth rate of our Hebei Aoxing business unit could negatively affect the fair value of our goodwill. Comprehensive income ASC Topic 220, “Comprehensive Income”, Earnings per share Basic earnings per common share are computed on the basis of the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed on the basis of the weighted average number of common shares and dilutive securities (such as warrants and convertible preferred stock) outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation. Statement of cash flows In accordance with the provisions of Accounting Standards Codification on “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet. Segment reporting ASC Topic 280, “Segment Reporting” Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”) in August 2015. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09. 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 adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Further to ASU 2014-09 and ASU 2015-14, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”) in March 2016, ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”) in April 2016, and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), respectively. The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, including indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-10 clarifies guideline related to identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. The updates in ASU 2016-10 include targeted improvements based on input the FASB received from the Transition Resource Group for Revenue Recognition and other stakeholders. It seeks to proactively address areas in which diversity in practice potentially could arise, as well as to reduce the cost and complexity of applying certain aspects of the guidance both at implementation and on an ongoing basis. ASU 2016-12 addresses narrow-scope improvements to the guidance on collectibility, non-cash consideration, and completed contracts at transition. Additionally, the amendments in this ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10 and ASU 2016-12 are the same as ASU 2014-09. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08, ASU 2016-10 and ASU 2016-12 on our financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11”). The amendments in this update require an entity to measure inventory within the scope of ASU 2015-11 (the amendments in ASU 2015-11 do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost) 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 costs of completion, disposal, and transportation. Subsequent measurement is uncharged for inventory measured using last-in, first-out or the retail inventory method. The amendments in ASU 2015-11 more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of ASU No. 2015-11 to have a material impact on our financial statements. 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 November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We do not expect the adoption of ASU 2015-17 to have a material impact on our financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this update eliminate the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public entities. For public business entities, the amendments in ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except for the early application guidance discussed in ASU 2016-01, early adoption of the amendments in this update is not permitted. We do not expect the adoption of ASU 2016-01 to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The main difference between Topic 842 and Topic 840 is the recognition of lease assets and lease liabilities for those leases classified as operating leases under Topic 840. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early application of the amendments in ASU 2016-02 is permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, requiring the recognition of the income tax effects of stock awards in the income statement when the awards are settled and allowing the Company to repurchase more of an employee's shares than allowed under current guidance, without triggering liability accounting. This ASU also addresses simplifications related to statement of cash flows classification and accounting for forfeitures. This ASU is effective for the Company beginning in the first quarter of 2017 and allows for early adoption. The Company is currently evaluating the impact this ASU will have on its Consolidated Financial Statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements. These ASUs are effective for the Company beginning in the first quarter of 2018, allow for early adoption in the first quarter of 2017 and may be applied using either a full retrospective approach or a modified retrospective approach. The Company is currently evaluating the method of adoption and the impact these ASUs will have on its Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Gross versus Net), clarifying the principal versus agent guidance in the new revenue recognition standard, by revising the indicators to focus on evidence that the company is a principal. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, reducing the complexity when applying the guidance for identifying performance obligations and clarifying how to determine whether revenue related to a performance obligation for an intellectual property license is recognized over time or at a point in time. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, clarifying certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition.

3 Going Concern

3 Going Concern	12 Months Ended
	Jun. 30, 2016
Notes
3 Going Concern	3 GOING CONCERN We have incurred operating losses in the past and had an accumulated deficit of $56.3 56,293,745million as of June 30, 2016. In addition, we had negative working capital of $10.9 10,900,000million as of June 30, 2016, although this is a significant improvement from the negative working capital of $20.1 million as of June 30, 2015. Currently and historically, the Company has managed to operate the business with negative net working capital. The Company’s negative working capital is primarily due to our accumulated deficit, which we funded by short-term bank loans. 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 products in the near term and the sales from several new products in future years will produce substantial positive cash flow. Management of the Company believes that the Company's large negative working capital will continue to improve during fiscal year 2017. 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. 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 2,352,941 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. The Company will receive a total of $3,316,234.68 if the warrants are exercised. In November 2015, the Company converted $2.66 million high interest bearing debt into 2,046,995 shares of common stock.

4 Inventories, Net

4 Inventories, Net	12 Months Ended
	Jun. 30, 2016
Notes
4 Inventories, Net	4 INVENTORIES, NET Inventories consist of the following: June 30, 2016 2015 Work in process $ 568,876 $ 383,950 Raw materials 805,024 676,590 Finished goods 1,467,790 2,179,486 $ 2,841,690 $ 3,240,026 The allowance for obsolete inventory as of June 30, 2016 and 2015 was $584,674 and $465,828, respectively.

5 Property and Equipment, Net

5 Property and Equipment, Net	12 Months Ended
	Jun. 30, 2016
Notes
5 Property and Equipment, Net	5 PROPERTY AND EQUIPMENT, NET Property, plant and equipment, net, consisted of the following: June 30, 2016 2015 Right to use land $ 7,526,481 $ 8,160,781 Building and building improvements 20,289,583 19,388,880 Machinery and equipment 3,983,597 6,882,678 Furniture and office equipment 608,484 650,851 Automobiles 116,317 126,120 Construction in progress 486,731 460,113 33,011,193 35,669,423 Accumulated depreciation and amortization 7,407,459 7,017,706 $ 25,603,734 $ 28,651,717 Depreciation expense for the years ended June 30, 2016 and 2015 were $508,775 and $634,344, respectively.

6 Equity-method Investment in J

6 Equity-method Investment in Joint Venture	12 Months Ended
	Jun. 30, 2016
Notes
6 Equity-method Investment in Joint Venture	6 EQUITY-METHOD INVESTMENT IN JOINT VENTURE The Company accounts for its investment in API (see Note 1) under the equity method of accounting. Summarized unaudited financial information for our investment in API, assuming a 100% ownership interest, is as follows: June 30, 2016 2015 Current assets $ 9,602 $ 11,767 Noncurrent assets 654,213 758,649 Current liabilities 710,148 640,416 Noncurrent liabilities - - Equity (46,333) 130,000 Revenues General and administrative expenses 166,229 183,044 Net loss $ (166,229 ) $ (183,044 ) The Company recorded a loss on investment of $84,500 and $93,352 for the years ended June 30, 2016 and 2015 respectively for its 51% (50% control right) share of API.

7 Short-term Borrowing

7 Short-term Borrowing	12 Months Ended
	Jun. 30, 2016
Notes
7 Short-term Borrowing	7 SHORT-TERM BORROWING Short-term borrowing consists of the following: June 30, 2016 2015 Shijiazhuang Finance Bureau (a) $ 75,241 $ 81,582 Shijiazhuang Construction Investment Group Co., Ltd (b) 4,815,426 5,058,086 Mr. Li Hui (c) - 2,304 Hebei Henghui Investment Management Co., Ltd (d) 2,117,283 3,263,282 TianJin Heng Xing Mirco Finance Bureau (e) 3,762,052 4,079,102 Xinle SASAC Office (f) 300,964 - Total $ 11,070,966 $ 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%. $1,860,234 was due on October 25, 2015 and was extended to October 23, 2016. $3,100,391 was due on July 12, 2015 and was extended to October 25, 2015 and then further extended to October 25, 2016. The notes were secured by certain registered trademarks and renewal certificates relating to Aoxing’s Zhongtong’an 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 has been extended to October 20, 2016. (e) A short term loan from TianJin Heng Xing Mirco Finance Bureau. The note bears an annual interest rate of 20.04%, and was extended to November 18, 2016. (f) A short term loan from Xinle State-Owned Assets Supervision and Administration Commission. This loan bears an annual interest rate of 9.6%. The term was from January 25, 2016 to June 25, 2016 and was extended to March 31, 2017.

8 Loan Payable - Bank

8 Loan Payable - Bank	12 Months Ended
	Jun. 30, 2016
Notes
8 Loan Payable - Bank	8 LOAN PAYABLE – BANK Loan payable – bank consist of the following loans collateralized by assets of the company: June 30, 2016 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 September 15, 2016 $ 4,514,462 $ 4,894,922 Bank Note in the amount of 27 million RMB with Postal Savings Bank bearing an annual interest rate of 7.08%, made on July 22, 2014 for one year maturing on July 21, 2015 and was extended to April 6, 2017. 3,859,865 4,894,922 Bank Note in the amount of 20 million RMB with China Merchant Bank bearing an annual floating rate of 5.98%, initially made on December 27, 2013, renewed on January 13, 2015 for one year maturing on April 4, 2017. 2,991,584 3,263,282 Bank Note in the amount of 19.9 million RMB with China Everbright Bank bearing 5.655% interest per annum made on January 16, 2015 for one year maturing on January 15, 2016 and was extended to February 24, 2017. 3,006,719 3,263,282 $ 14,372,630 $ 16,316,408

9 Loan Payable - Other

9 Loan Payable - Other	12 Months Ended
	Jun. 30, 2016
Notes
9 Loan Payable - Other	9 LOAN PAYABLE – OTHER Loan payable – other consist of loans from unrelated third-parties, bearing interest at an average rate of 10.0% per annum as of June 30, 2016 and June 30, 2015.

10 Loan Payable - Related Parti

10 Loan Payable - Related Parties	12 Months Ended
	Jun. 30, 2016
Notes
10 Loan Payable - Related Parties	10 LOAN PAYABLE – RELATED PARTIES Loan payable – related parties bears interest at an average rate of 10.0% per annum as of June 30, 2016 and June 30, 2015.

11 Notes Payable - Related Part

11 Notes Payable - Related Parties	12 Months Ended
	Jun. 30, 2016
Notes
11 Notes Payable - Related Parties	11 NOTES PAYABLE Notes payable represents notes payable to the third party banks. It was $0 and $1,631,641 as of June 30, 2016 and 2015, respectively.

12 Deferred Income

12 Deferred Income	12 Months Ended
	Jun. 30, 2016
Notes
12 Deferred Income	12 DEFERRED INCOME The balance of deferred income is the result of government grants received for the improvement of the production line of the Zhongtong’an product. As the project was, this government grants were transferred from construction in progress (CIP) to building and building improvements. The government grants, which is recorded as deferred income, are recognized as subsidy income on a systematic basis (straight-line method) over the useful life of the fixed asset, which is 35 years in this case.

13 Accrued Expenses and Other C

13 Accrued Expenses and Other Current Liabilities	12 Months Ended
	Jun. 30, 2016
Notes
13 Accrued Expenses and Other Current Liabilities	1 3 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and taxes consist of the following: June 30, 2016 2015 Accrued salaries and benefits $ 1,168,653 $ 1,616,963 Accrued interest 2,602,674 2,073,073 Accrued taxes 2,619,533 1,281,704 Accrued marketing fee 569,082 442,460 Accrued office expenses 779,040 166,720 Deposit payable 588,905 572,105 Due to employee 43,316 46,967 Advance from customers 413,848 291,005 Other accounts payable 572,013 241,512 Other accrued expenses and current liabilities 276,686 443,816 $ 9,633,750 $ 7,176,325

14 Stock Options

14 Stock Options	12 Months Ended
	Jun. 30, 2016
Notes
14 Stock Options	1 4 STOCK OPTIONS On January 1, 2015, the Company issued a total of 300,000 common stock purchase options to management. This stock compensation grant was valued at $74,691 and the Company recorded $22,822 stock option compensation expense for the year ended June 30, 2015. The unrecognized compensation expense for the Company as of June 30, 2015 and 2016 were $51,869 and $18,673 respectively. The Company calculated the estimated fair value of the options of the grant date using the Black-Scholes Option Pricing Model with the following assumptions: For the year ended June 30, 2016 Estimated dividends None Expected volatility 101.63 % Risk-free interest rate 1.65 % Expected term (years) 5 The model requires the input of subjective assumptions including the expected stock price volatility and the expected dividend yield. The Company uses historical experience of employee turnover and future expectation to estimate forfeiture rate. For expected volatilities, the Company has made reference to historical volatilities of the Company’s stock. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield in effect at the time of grant. 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 vested on June 23, 2016 when they were approved by the shareholders of the Company. The Company calculated the estimated fair value of the options of the grant date using the Black-Scholes Option Pricing Model with the following assumptions: For the year ended June 30, 2016 Estimated dividends None Expected volatility 117.21 % Risk-free interest rate 2.92 % Expected term (years) 5 A summary of option activity as of June 30, 2016 and 2015, and changes during the years then ended is as followings: Weighted-avg. Aggregate Weighted-avg. remaining intrinsic Shares Exercise Price Term (yr.) Value On June 30, 2013 132,000 $ 2.00 1.1 $ 0 Granted: - $ - - - Exercised: - - - - Forfeited: - - - - On June 30, 2014 132,000 $ 2.00 0.1 $ 0 Granted: 300,000 $ 0.33 5.0 - Exercised: - - - - Forfeited: (132,000 ) - - - On June 30, 2015 300,000 $ 0.33 4.5 $ 426,000 Granted: 890,000 - - Exercised: - - - Forfeited: 300,000 - - On June 30, 2016 590,000 $ 0.33 4.0 $ 426,000

15 Issuance of Common Stock

15 Issuance of Common Stock	12 Months Ended
	Jun. 30, 2016
Notes
15 Issuance of Common Stock	1 5 ISSUANCE OF COMMON STOCK On September 5, 2014, the Company issued 11,862,278 shares of common stock in satisfaction of $4.6 million in debt. The shares were valued at $0.39 per share, which exceeded the six month average share price as well as the market price at time of issuance. Paid in capital was increased by $4,614,426 as a result of the exchange. On December 23, 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, which exceeded the market price on October 4, 2014, when the contract of sale was made. On February 3, 2015, the Company issued 300,000 shares of common stock to management at $0.33 per share. The shares are equally vested on January 1, 2016, January 1, 2017 and January 1, 2018. The Company recorded $30,250 stock compensation expense for the year ended June 30, 2015 and the unrecognized compensation expense was $68,750. On February 3, 2015, the Company issued 40,000 shares of common stock to independent directors at $0.39 per shares for services rendered by them. On February 3, 2015, the Company issued 1,704,915 shares of its common stock to six investors, each of whom is either an employee or a consultant to the Company. The average purchase price for the shares was $0.32 per share. On March 12, 2015, the Company issued 480,000 shares of its common stock to a creditor at $0.5 per share to offset a loan payable. On April 8 2015, the company sold 508,000 shares of common stock to officers and employees of the Company at a price of $1.36 per share, which exceeded the market price at time of issuance. On April 8 2015, the Company also issued 521,412 shares of common stock at a price of $1.36 per share to a creditor in satisfaction of $709,120 debt. 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 issued 2,352,941 shares of common stock and 1,764,706 common stock purchases warrants pursuant to a securities purchase agreement dated as of September 24, 2015. The purchaser was an institutional investor. Each warrant will permit the holder to purchase one share of common stock from the Company for a price of $1.74 per share. The 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 warrant, 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 warrants sold to the institutional investor. 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 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 year ended June 30, 2016 Investor Stock price 0.64 Exercise price 1.74 Expected life in years 4.2 Annualized Volatility 140.71% Annual Rate of Quarterly Dividends 1.65 Discount Rate - Bond Equivalent Yield 1.01 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 year ended June 30, 2016 was $0.49 per share. No warrants were exercised, cancelled or expired during the period ended June 30, 2016. 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. 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 relating to the formulation of Lorcaserin Hydrochloride for $0.66 per each stock, (b) issued 500,000 shares of common stock and paid $77,000 to acquire certain technology relating to the formulation of caffeine tablets for $0.66 per each stock, and (c) issued 500,000 shares of common stock and paid $77,000 to acquire certain technology relating to the formulation of Buprenorphine/ Naloxone for $0.71 per each stock. The share price was determined by the Company’s stock price at the issuance date. 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 for $0.66 per each stock based on the Company’s stock price at the issuance date.

16 Taxes

16 Taxes	12 Months Ended
	Jun. 30, 2016
Notes
16 Taxes	1 6 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: Year Ended June 30, 2016 2015 Tax at U.S. Statutory rate $ 1,010,039 $ 1,089,936 Tax rate difference between China and U.S. (1,271,231) (1,046,086) Change in Valuation Allowance 233,892 (1,031,621) Net operating loss expired - 955,983 Stock and option compensation 27,300 31,788 Impairment loss on goodwill - Effective tax rate $ - $ - The provisions of income taxes (credit) are summarized as follows: Year Ended June 30, 2016 2015 Current $ (190,770 ) $ - Deferred - U.S. (483,789 ) (229,859 ) Deferred – China 1,082,912 (1,442,889 ) Valuation allowance - U.S. 483,789 229,859 Valuation allowance – China (249,897 ) (1,261,480 ) Total $ 642,245 $ (2,704,369 ) The tax effects of temporary differences that give rise to the Company’s net deferred tax asset as of June 30, 2016 and 2014 are as follows: Year Ended June 30, 2016 2015 Net operating loss carryforward - China $ 213,060 $ 1,342,696 Net operating loss carryforward - US 2,418,909 1,935,121 Allowance for doubtful accounts 447,294 823,190 Accrued salary payable 139,330 338,390 Uninvoiced expenses 782,360 - Others 309,264 469,944 4,310,217 4,909,341 Less: valuation allowance- U.S. (2,418,909) (1,935,121) valuation allowance- China. (12,713) (262,610) Deferred tax assets $ 1,878,595 $ 2,711,610 The Company’s net operating loss was as follows Fiscal year to be expired Amount of net operating loss FY 2017 $ 8,490,144 FY 2018 2,350,563 FY 2019 7,896,369 FY 2020 1,322,799 FY 2021 1,382,254 21,442,129 As of June 30, 2015, the Company has recognized deferred tax assets of $1,878,595. The Company’s loss carry forwards for the past 5 years produced a significant amount of the deferred tax assets and the realization of tax loss carry forwards are deemed to be probable. Therefore, the Company determined it was appropriate under US GAAP to recognize the deferred tax assets during the Fiscal 2016. For the year ended June 30, 2016 and 2015, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2016 and 2015, the Company did not have any significant unrecognized uncertain tax positions.

17 Concentrations

17 Concentrations	12 Months Ended
	Jun. 30, 2016
Notes
17 Concentrations	1 7 CONCENTRATIONS Sales to two major customers were 13% and 5% of total sales for the year ended June 30, 2016. Sales to two major customers were 7% and 5% of total sales for the year ended June 30, 2015. Sales of one major product represented approximately 85% and 95% of total sales for the years ended June 30, 2016 and 2015, respectively. Two major customers accounted for 8% and 7% of outstanding accounts receivable as of June 30, 2016. Two major customers accounted for 4% and 0.1% of outstanding accounts receivable as of June 30, 2015.

18 Subsequent Events

18 Subsequent Events	12 Months Ended
	Jun. 30, 2016
Notes
18 Subsequent Events	18 SUBSEQUENT EVENTS In accordance with ASC 855 “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, we have evaluated all events or transactions that occurred after June 30, 2016 up through the date we issued the consolidated financial statements and has determined that there was no other material event that occurred after the date of the balance sheets included in this report.

2 Significant Accounting Poli24

2 Significant Accounting Policies: Basis of Presentation (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Basis of Presentation	Basis of presentation The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. The Company’s functional currency is the Chinese Renminbi (RMB). However, the accompanying consolidated financial statements have been translated and presented in United States Dollars (USD).

2 Significant Accounting Poli25

2 Significant Accounting Policies: Use of Estimates in The Preparation of Financial Statements (Policies)	12 Months Ended
	Jun. 30, 2016
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, valuation allowance of deferred tax assets, impairment assessment of goodwill, 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 Significant Accounting Poli26

2 Significant Accounting Policies: Cash and Cash Equivalents (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Cash and Cash Equivalents	Cash and cash equivalents The Company maintains cash and cash equivalents with financial institutions in the PRC which are not insured or otherwise protected. Should any of these institutions holding the Company’s cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less.

2 Significant Accounting Poli27

2 Significant Accounting Policies: Accounts Receivable (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Accounts Receivable	Accounts Receivable Accounts receivables represent customer accounts receivables. The allowance for doubtful accounts is based on a combination of current sales, historical charge-offs and specific accounts identified as high risk. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all reasonable efforts to collect the amounts due have been exhausted. Such allowances, if any, would be recorded in the period the impairment is identified. The balances of allowance for doubtful accounts are $1,940,354 and $1,364,330 at June 30, 2016 and 2015 respectively. The Company recorded bad debt expense of $576,024 for the year ended June 30, 2016 and bad debt written back of $204,597 for the year ended June 30, 2015, respectively.

2 Significant Accounting Poli28

2 Significant Accounting Policies: Inventories, Net (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Inventories, Net	Inventories, net Inventories are stated at the lower of cost, determined using the weighted average cost method, and net realizable value. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose. The Company wrote-off $118,846 of obsolete inventory during the year ended June 30, 2016. The Company charged $108,601 against the allowance for obsolete inventory during the year ended June 30, 2015. For the years ended June 30, 2016 and 2015, the Company’s allowance for obsolete inventory is $584,674 and $633,948, respectively.

2 Significant Accounting Poli29

2 Significant Accounting Policies: Property and Equipment (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Property and Equipment	Property and equipment Property and equipment are recorded at cost. Depreciation is provided in amounts sufficient to amortize the cost of the related assets over their useful lives using the straight line method for financial reporting purposes. Construction in progress is stated at cost, which includes the cost of construction, acquisition of plant and equipment and other direct costs attributable to the construction. Construction in progress is not depreciated until such time as the assets are completed and put into operational use. No capitalized interest is incurred during the period of construction. All land in the PRC is owned by the PRC government. The government in the PRC, according to the relevant PRC law, may sell the right to use the land for a specified period of time. Thus, all of the Company’s land purchases in the PRC are considered to be leasehold land and are stated at cost less accumulated amortization and any recognized impairment loss. Amortization is provided over the term of the land use right agreements on a straight-line basis, which is 50 years and they will expire in 2053. Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized. Estimated useful lives are as follows: Right to use land 50 years Building and building improvements 35 years Machinery and equipment 10 years Furniture and office equipment 5 years Automobiles 8 years

2 Significant Accounting Poli30

2 Significant Accounting Policies: Intangible Assets (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Intangible Assets	Intangible assets Definite lived intangible assets include drug permits recorded at cost less accumulated amortization and any recognized impairment loss. The drug permits were acquired in 2008 when the Company purchased LRT and are amortized over their estimated useful life of 15 years on a straight-line basis. In addition, the Company acquired the intellectual properties relating to Lorcaserin Hydrochloride, Caffeine tablets and Caffeine buccal tablets, and Buprenorphine/naloxone through issuance of the Company’s common stock. An intangible asset that is subject to amortization shall be reviewed for impairment in accordance with the Impairment or Disposal of Long-Lived Assets ASC 360-10. In accordance with Accounting Standards Codification (“ASC”) Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, the Company performs an intangible asset impairment test for its definite-lived intangibles whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. The intangible assets balance as of June 30, 2016 and June 30, 2015 were $1,878,299 and $484,857 respectively.

2 Significant Accounting Poli31

2 Significant Accounting Policies: Revenue Recognition (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Revenue Recognition	Revenue Recognition In accordance with the ASC Topic 605, “ Revenue Recognition The Company derives revenues from the sale of pharmaceutical products. The Company recognizes its revenues net of value-added taxes (“VAT”). The Company is subject to VAT which is levied on the majority of the products at the rate 17% on the invoiced value of sales. Output VAT is borne by customers in addition to the invoiced value of sales and input VAT is borne by the Company in addition to the invoiced value of purchases to the extent not refunded for export sales. The Company recognizes revenue from the sale of products upon customers’ receipt of the shipment at the customers’ facility or upon when the transfer of title and risk of loss has transferred to the customer. The Company has distributor arrangements with certain parties for sale of its pharmaceutical products. The distributor agreements do not provide chargeback, price protection, or stock rotation rights.

2 Significant Accounting Poli32

2 Significant Accounting Policies: Research and Development (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Research and Development	Research and Development Research and development is charged to expense as incurred.

2 Significant Accounting Poli33

2 Significant Accounting Policies: Share-based Compensation (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Share-based Compensation	Share-Based Compensation Share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period. The Company’s policy is to recognize compensation cost for awards with only service conditions and a graded vesting schedule on a straight-line basis over the requisite service period for the entire award.

2 Significant Accounting Poli34

2 Significant Accounting Policies: Impairment of Long Lived Assets (Policies)	12 Months Ended
	Jun. 30, 2016
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,”

2 Significant Accounting Poli35

2 Significant Accounting Policies: Income Taxes (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Income Taxes	Income taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “ Income Taxes ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

2 Significant Accounting Poli36

2 Significant Accounting Policies: Non-controlling Interest (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Non-controlling Interest	Non-controlling interest Non-controlling interests in our subsidiaries are recorded in accordance with the provisions of ASC Topic 810, “ Consolidation Under ASC 810-10-45-21, losses attributable to the parent and the non-controlling interest in a subsidiary may exceed their interests in the subsidiary’s equity. The excess, and any further losses attributable to the parent and the non-controlling interest, shall be attributed to those interests. That is, the non-controlling interest shall continue to be attributed its share of losses even if that attribution results in a deficit non-controlling interest balance

2 Significant Accounting Poli37

2 Significant Accounting Policies: Currency Translation (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Currency Translation	Currency translation Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (”RMB”) while the reporting currency is the United States Dollars (“USD”). Revenue and expense accounts are translated at the average rates during the period, and balance sheet items are translated at year-end rates. Translation adjustments arising from the use of differing exchange rates from period to period are included as a separate component of shareholders’ equity. Gains and losses from foreign currency transactions are recognized in current operations. 2016 2015 Year ended RMB: US$ exchange rate 6.6453 6.1288 Average yearly RMB: US$ exchange rate 6.4385 6.1452 The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation.

2 Significant Accounting Poli38

2 Significant Accounting Policies: Fair Value Measurement (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Fair Value Measurement	Fair value of financial instruments The Company has adopted ASC Topic 820, ” Fair Value Measurement and Disclosure” 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. As of June 30, 2016, 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 that are considered Level 2 financial instruments measured at fair value on a non-recurring basis as of June 30, 2016. As of June 30, 2016, the Company does not have any level 3 financial instruments. The Company uses the discounted cash flow approach when determining fair values of its non-recurring fair value measurements when required. We determine the fair value of our goodwill for purposes of comparing to the carrying value on at least an annual basis. Our goodwill would be adjusted to fair value if it is deemed to be impaired. Certain unobservable units for these assets are offered quotes, lack of marketability, long-term revenue growth rates and discounts rates. For Level 3 measurements, significant increases or decreases in long-term growth rates or discount rates in isolation or in combination could result in a significantly lower or higher fair value measurement. In general, a change in the long-term growth rate of our Hebei Aoxing business unit could negatively affect the fair value of our goodwill.

2 Significant Accounting Poli39

2 Significant Accounting Policies: Comprehensive Income (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Comprehensive Income	Comprehensive income ASC Topic 220, “Comprehensive Income”,

2 Significant Accounting Poli40

2 Significant Accounting Policies: Earnings Per Share (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Earnings Per Share	Earnings per share Basic earnings per common share are computed on the basis of the weighted average number of common shares outstanding during the period. Diluted earnings per share are computed on the basis of the weighted average number of common shares and dilutive securities (such as warrants and convertible preferred stock) outstanding. Dilutive securities having an anti-dilutive effect on diluted earnings per share are excluded from the calculation.

2 Significant Accounting Poli41

2 Significant Accounting Policies: Statement of Cash Flows (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Statement of Cash Flows	Statement of cash flows In accordance with the provisions of Accounting Standards Codification on “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheet.

2 Significant Accounting Poli42

2 Significant Accounting Policies: Segment Reporting (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Segment Reporting	Segment reporting ASC Topic 280, “Segment Reporting”

2 Significant Accounting Poli43

2 Significant Accounting Policies: Recent Accounting Pronouncements (Policies)	12 Months Ended
	Jun. 30, 2016
Policies
Recent Accounting Pronouncements	Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”) in August 2015. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09. 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 adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. Further to ASU 2014-09 and ASU 2015-14, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” (“ASU 2016-08”) in March 2016, ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”) in April 2016, and ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”), respectively. The amendments in ASU 2016-08 clarify the implementation guidance on principal versus agent considerations, including indicators to assist an entity in determining whether it controls a specified good or service before it is transferred to the customers. ASU 2016-10 clarifies guideline related to identifying performance obligations and licensing implementation guidance contained in the new revenue recognition standard. The updates in ASU 2016-10 include targeted improvements based on input the FASB received from the Transition Resource Group for Revenue Recognition and other stakeholders. It seeks to proactively address areas in which diversity in practice potentially could arise, as well as to reduce the cost and complexity of applying certain aspects of the guidance both at implementation and on an ongoing basis. ASU 2016-12 addresses narrow-scope improvements to the guidance on collectibility, non-cash consideration, and completed contracts at transition. Additionally, the amendments in this ASU provide a practical expedient for contract modifications at transition and an accounting policy election related to the presentation of sales taxes and other similar taxes collected from customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10 and ASU 2016-12 are the same as ASU 2014-09. We are currently in the process of evaluating the impact of the adoption of ASU 2014-09, ASU 2016-08, ASU 2016-10 and ASU 2016-12 on our financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11”). The amendments in this update require an entity to measure inventory within the scope of ASU 2015-11 (the amendments in ASU 2015-11 do not apply to inventory that is measured using last-in, first-out or the retail inventory method. The amendments apply to all other inventory, which includes inventory that is measured using first-in, first-out or average cost) 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 costs of completion, disposal, and transportation. Subsequent measurement is uncharged for inventory measured using last-in, first-out or the retail inventory method. The amendments in ASU 2015-11 more closely align the measurement of inventory in U.S. GAAP with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The amendments in ASU 2015-11 should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. We do not expect the adoption of ASU No. 2015-11 to have a material impact on our financial statements. 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 November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We do not expect the adoption of ASU 2015-17 to have a material impact on our financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under equity method of accounting or those that result in consolidation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition the amendments in this update eliminate the requirement for to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public entities. For public business entities, the amendments in ASU 2016-01 are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Except for the early application guidance discussed in ASU 2016-01, early adoption of the amendments in this update is not permitted. We do not expect the adoption of ASU 2016-01 to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The main difference between Topic 842 and Topic 840 is the recognition of lease assets and lease liabilities for those leases classified as operating leases under Topic 840. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early application of the amendments in ASU 2016-02 is permitted. We are currently in the process of evaluating the impact of the adoption of ASU 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, requiring the recognition of the income tax effects of stock awards in the income statement when the awards are settled and allowing the Company to repurchase more of an employee's shares than allowed under current guidance, without triggering liability accounting. This ASU also addresses simplifications related to statement of cash flows classification and accounting for forfeitures. This ASU is effective for the Company beginning in the first quarter of 2017 and allows for early adoption. The Company is currently evaluating the impact this ASU will have on its Consolidated Financial Statements. In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of ASU 2016-13 on our financial statements. These ASUs are effective for the Company beginning in the first quarter of 2018, allow for early adoption in the first quarter of 2017 and may be applied using either a full retrospective approach or a modified retrospective approach. The Company is currently evaluating the method of adoption and the impact these ASUs will have on its Consolidated Financial Statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Gross versus Net), clarifying the principal versus agent guidance in the new revenue recognition standard, by revising the indicators to focus on evidence that the company is a principal. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, reducing the complexity when applying the guidance for identifying performance obligations and clarifying how to determine whether revenue related to a performance obligation for an intellectual property license is recognized over time or at a point in time. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, clarifying certain core recognition principles including collectability, sales tax presentation, noncash consideration, contract modifications and completed contracts at transition.

2 Significant Accounting Poli44

2 Significant Accounting Policies: Property and Equipment: Schedule of Property, Plant and Equipment - Estimated Useful Lives (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Property, Plant and Equipment - Estimated Useful Lives	Right to use land 50 years Building and building improvements 35 years Machinery and equipment 10 years Furniture and office equipment 5 years Automobiles 8 years

2 Significant Accounting Poli45

2 Significant Accounting Policies: Currency Translation: Schedule of Currency Translation (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Currency Translation	2016 2015 Year ended RMB: US$ exchange rate 6.6453 6.1288 Average yearly RMB: US$ exchange rate 6.4385 6.1452

4 Inventories, Net_ Schedule of

4 Inventories, Net: Schedule of Inventory, Current (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Inventory, Current	June 30, 2016 2015 Work in process $ 568,876 $ 383,950 Raw materials 805,024 676,590 Finished goods 1,467,790 2,179,486 $ 2,841,690 $ 3,240,026

5 Property and Equipment, Net_

5 Property and Equipment, Net: Property, Plant and Equipment (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Property, Plant and Equipment	June 30, 2016 2015 Right to use land $ 7,526,481 $ 8,160,781 Building and building improvements 20,289,583 19,388,880 Machinery and equipment 3,983,597 6,882,678 Furniture and office equipment 608,484 650,851 Automobiles 116,317 126,120 Construction in progress 486,731 460,113 33,011,193 35,669,423 Accumulated depreciation and amortization 7,407,459 7,017,706 $ 25,603,734 $ 28,651,717

6 Equity-method Investment in48

6 Equity-method Investment in Joint Venture: Schedule of Equity Method Investments (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Equity Method Investments	June 30, 2016 2015 Current assets $ 9,602 $ 11,767 Noncurrent assets 654,213 758,649 Current liabilities 710,148 640,416 Noncurrent liabilities - - Equity (46,333) 130,000 Revenues General and administrative expenses 166,229 183,044 Net loss $ (166,229 ) $ (183,044 )

7 Short-term Borrowing_ Schedul

7 Short-term Borrowing: Schedule of Short Term Debt (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Short Term Debt	June 30, 2016 2015 Shijiazhuang Finance Bureau (a) $ 75,241 $ 81,582 Shijiazhuang Construction Investment Group Co., Ltd (b) 4,815,426 5,058,086 Mr. Li Hui (c) - 2,304 Hebei Henghui Investment Management Co., Ltd (d) 2,117,283 3,263,282 TianJin Heng Xing Mirco Finance Bureau (e) 3,762,052 4,079,102 Xinle SASAC Office (f) 300,964 - Total $ 11,070,966 $ 12,484,356

8 Loan Payable - Bank_ Schedule

8 Loan Payable - Bank: Schedule of Long-term Debt Instruments (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Long-term Debt Instruments	June 30, 2016 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 September 15, 2016 $ 4,514,462 $ 4,894,922 Bank Note in the amount of 27 million RMB with Postal Savings Bank bearing an annual interest rate of 7.08%, made on July 22, 2014 for one year maturing on July 21, 2015 and was extended to April 6, 2017. 3,859,865 4,894,922 Bank Note in the amount of 20 million RMB with China Merchant Bank bearing an annual floating rate of 5.98%, initially made on December 27, 2013, renewed on January 13, 2015 for one year maturing on April 4, 2017. 2,991,584 3,263,282 Bank Note in the amount of 19.9 million RMB with China Everbright Bank bearing 5.655% interest per annum made on January 16, 2015 for one year maturing on January 15, 2016 and was extended to February 24, 2017. 3,006,719 3,263,282 $ 14,372,630 $ 16,316,408

13 Accrued Expenses and Other51

13 Accrued Expenses and Other Current Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Accounts Payable and Accrued Liabilities	June 30, 2016 2015 Accrued salaries and benefits $ 1,168,653 $ 1,616,963 Accrued interest 2,602,674 2,073,073 Accrued taxes 2,619,533 1,281,704 Accrued marketing fee 569,082 442,460 Accrued office expenses 779,040 166,720 Deposit payable 588,905 572,105 Due to employee 43,316 46,967 Advance from customers 413,848 291,005 Other accounts payable 572,013 241,512 Other accrued expenses and current liabilities 276,686 443,816 $ 9,633,750 $ 7,176,325

14 Stock Options_ Schedule of S

14 Stock Options: Schedule of Share-based Compensation, Stock Options, Activity (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Share-based Compensation, Stock Options, Activity	Weighted-avg. Aggregate Weighted-avg. remaining intrinsic Shares Exercise Price Term (yr.) Value On June 30, 2013 132,000 $ 2.00 1.1 $ 0 Granted: - $ - - - Exercised: - - - - Forfeited: - - - - On June 30, 2014 132,000 $ 2.00 0.1 $ 0 Granted: 300,000 $ 0.33 5.0 - Exercised: - - - - Forfeited: (132,000 ) - - - On June 30, 2015 300,000 $ 0.33 4.5 $ 426,000 Granted: 890,000 - - Exercised: - - - Forfeited: 300,000 - - On June 30, 2016 590,000 $ 0.33 4.0 $ 426,000

15 Issuance of Common Stock_ As

15 Issuance of Common Stock: Assumptions Used Textblock (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Assumptions Used Textblock	For the year ended June 30, 2016 Investor Stock price 0.64 Exercise price 1.74 Expected life in years 4.2 Annualized Volatility 140.71% Annual Rate of Quarterly Dividends 1.65 Discount Rate - Bond Equivalent Yield 1.01

16 Taxes_ Schedule of Effective

16 Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Effective Income Tax Rate Reconciliation	Year Ended June 30, 2016 2015 Tax at U.S. Statutory rate $ 1,010,039 $ 1,089,936 Tax rate difference between China and U.S. (1,271,231) (1,046,086) Change in Valuation Allowance 233,892 (1,031,621) Net operating loss expired - 955,983 Stock and option compensation 27,300 31,788 Impairment loss on goodwill - Effective tax rate $ - $ -

16 Taxes_ Schedule of Component

16 Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Components of Income Tax Expense (Benefit)	Year Ended June 30, 2016 2015 Current $ (190,770 ) $ - Deferred - U.S. (483,789 ) (229,859 ) Deferred – China 1,082,912 (1,442,889 ) Valuation allowance - U.S. 483,789 229,859 Valuation allowance – China (249,897 ) (1,261,480 ) Total $ 642,245 $ (2,704,369 )

16 Taxes_ Schedule of Deferred

16 Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Schedule of Deferred Tax Assets and Liabilities	Year Ended June 30, 2016 2015 Net operating loss carryforward - China $ 213,060 $ 1,342,696 Net operating loss carryforward - US 2,418,909 1,935,121 Allowance for doubtful accounts 447,294 823,190 Accrued salary payable 139,330 338,390 Uninvoiced expenses 782,360 - Others 309,264 469,944 4,310,217 4,909,341 Less: valuation allowance- U.S. (2,418,909) (1,935,121) valuation allowance- China. (12,713) (262,610) Deferred tax assets $ 1,878,595 $ 2,711,610

16 Taxes_ Summary of Operating

16 Taxes: Summary of Operating Loss Carryforwards (Tables)	12 Months Ended
	Jun. 30, 2016
Tables/Schedules
Summary of Operating Loss Carryforwards	Fiscal year to be expired Amount of net operating loss FY 2017 $ 8,490,144 FY 2018 2,350,563 FY 2019 7,896,369 FY 2020 1,322,799 FY 2021 1,382,254 21,442,129

2 Significant Accounting Poli58

2 Significant Accounting Policies: Accounts Receivable (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Allowance for doubtful accounts	$ 1,940,354	$ 1,364,330
Allowance for Doubtful Accounts Receivable, Write-offs	$ 576,024	$ 204,597

2 Significant Accounting Poli59

2 Significant Accounting Policies: Inventories, Net (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Inventory Valuation Reserves	$ 584,674	$ 465,828
Obsolete Inventory
Inventory Write-down	108,601
Inventory Valuation Reserves	$ 584,674	$ 633,948

2 Significant Accounting Poli60

2 Significant Accounting Policies: Property and Equipment: Schedule of Property, Plant and Equipment - Estimated Useful Lives (Details)	12 Months Ended
	Jun. 30, 2016
Right to use land
Property, Plant and Equipment, Useful Life	50 years
Building and Building Improvements
Property, Plant and Equipment, Useful Life	35 years
Machinery and Equipment
Property, Plant and Equipment, Useful Life	10 years
Furniture and Fixtures
Property, Plant and Equipment, Useful Life	5 years
Automobiles
Property, Plant and Equipment, Useful Life	8 years

2 Significant Accounting Poli61

2 Significant Accounting Policies: Intangible Assets (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Intangible Assets, Current	$ 1,878,299	$ 484,857

2 Significant Accounting Poli62

2 Significant Accounting Policies: Currency Translation: Schedule of Currency Translation (Details)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Year ended RMB: US$ exchange rate	6.6453	6.1288
Average yearly RMB: US$ exchange rate	6.4385	6.1452

3 Going Concern (Details)

3 Going Concern (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Accumulated deficit	$ 56,293,745	$ 58,354,968
Working Capital Deficit	$ 10,900,000

4 Inventories, Net_ Schedule 64

4 Inventories, Net: Schedule of Inventory, Current (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Inventory, Work in Process, Gross	$ 568,876	$ 383,950
Inventory, Raw Materials, Gross	805,024	676,590
Inventory, Finished Goods, Gross	1,467,790	2,179,486
Inventories, net	$ 2,841,690	$ 3,240,026

4 Inventories, Net (Details)

4 Inventories, Net (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Inventory Valuation Reserves	$ 584,674	$ 465,828

5 Property and Equipment, Net66

5 Property and Equipment, Net: Property, Plant and Equipment (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Property, Plant and Equipment, Gross	$ 33,011,193	$ 35,669,423
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	7,407,459	7,017,706
Property and equipment, net of accumulated depreciation	25,603,734	28,651,717
Right to use land
Property, Plant and Equipment, Gross	7,526,481	8,160,781
Building
Property, Plant and Equipment, Gross	20,289,583	19,388,880
Machinery and Equipment
Property, Plant and Equipment, Gross	3,983,597	6,882,678
Furniture and Fixtures
Property, Plant and Equipment, Gross	608,484	650,851
Automobiles
Property, Plant and Equipment, Gross	116,317	126,120
Construction in Progress
Property, Plant and Equipment, Gross	$ 486,731	$ 460,113

5 Property and Equipment, Net (

5 Property and Equipment, Net (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Depreciation, Nonproduction	$ 508,775	$ 634,344

6 Equity-method Investment in68

6 Equity-method Investment in Joint Venture: Schedule of Equity Method Investments (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Equity Method Investment, Summarized Financial Information, Current Assets	$ 9,602	$ 11,767
Equity Method Investment, Summarized Financial Information, Noncurrent Assets	654,213	758,649
Equity Method Investment, Summarized Financial Information, Current Liabilities	710,148	640,416
Equity Method Investment Summarized Financial Information, Equity	(46,333)	130,000
Equity Method Investment, Summarized Financial Information, Cost of Sales	166,229	183,044
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss)	$ (166,229)	$ (183,044)

6 Equity-method Investment in69

6 Equity-method Investment in Joint Venture (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Equity Method Investment, Summarized Financial Information, Net Income (Loss)	$ 84,500	$ 93,352

7 Short-term Borrowing_ Sched70

7 Short-term Borrowing: Schedule of Short Term Debt (Details) - USD ($)		Jun. 30, 2016	Jun. 30, 2015
Short-term borrowings		$ 11,070,966	$ 12,484,356
Shijiazhuang Finance Bureau
Short-term borrowings	[1]	75,241	81,582
Shijiazhuang Construction Investment Group Co., Ltd
Short-term borrowings	[2]	4,815,426	5,058,086
Mr. Li Hui
Short-term borrowings	[3]		2,304
Hebei Henghui Investment Management Co., Ltd.
Short-term borrowings	[4]	2,117,283	3,263,282
TianJin Heng Xing Mirco Finance Bureau
Short-term borrowings	[5]	3,762,052	$ 4,079,102
XinleSASACOfficeMember
Short-term borrowings	[6]	$ 300,964
[1]	A non-interest bearing note payable to Shijiazhuang Finance Bureau, an agency of a local government, due on demand.
[2]	A one-year term loan from Shijiazhuang Construction Investment Group, disbursed through China Construction Bank. The notes bear an annual interest rate of 12%. $1,860,234 was due on October 25, 2015 and was extended to October 23, 2016. $3,100,391 was due on July 12, 2015 and extended to October 25, 2015 and then further extended to October 25, 2016. The notes were secured by certain registered trademarks and renewal certificates relating to Aoxing’s Zhongtongan capsule.
[3]	The balance of $2,304 as at June 30, 2015 represents unpaid portion of interest which was already repaid in fiscal 2016.
[4]	A six-month term loan from Hebei Henghui Investment Management Co., Ltd. The note bears an annual interest rate of 10% and has been extended to October 20, 2016.
[5]	A short term loan from TianJin Heng Xing Mirco Finance Bureau. The note bears an annual interest rate of 20.04%, and was extended to November 18, 2016.
[6]	A short term loan from Xinle State-Owned Assets Supervision and Administration Commission. This loan bears an annual interest rate of 9.6%. The term is from January 25, 2016 to June 25, 2016 and was extended to March 19, 2017.

8 Loan Payable - Bank_ Schedu71

8 Loan Payable - Bank: Schedule of Long-term Debt Instruments (Details) - USD ($)		Jun. 30, 2016	Jun. 30, 2015
LoansPayableToBankCurrent		$ 14,372,630	$ 16,316,408
ShijiazhuangHuirongRuralCooperativeBankMember
LoansPayableToBankCurrent	[1]	4,514,462	4,894,922
Postal Savings Bank
LoansPayableToBankCurrent	[2]	3,859,865	4,894,922
China Merchant Bank
LoansPayableToBankCurrent	[3]	2,991,584	3,263,282
China Everbright Bank
LoansPayableToBankCurrent	[4]	$ 3,006,719	$ 3,263,282
[1]	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 September 15, 2016
[2]	Bank Note in the amount of 27 million RMB with Postal Savings Bank bearing an 7.08% interest per annum, made on July 22, 2014 for one year maturing on July 21, 2015 and was extended to April 6, 2017.
[3]	Bank Note in the amount of 20 million RMB with China Merchant Bank bearing an annual floating rate of 5.98%, initially made on December 27, 2013, renewed on January 13, 2015 for one year maturing on April 4, 2017
[4]	Bank Note in the amount of 19.9 million RMB with China Everbright Bank bearing 5.655% interest per annum, made on January 16, 2015 for one year maturing on January 15, 2016 and was extended to February 24, 2017.

9 Loan Payable - Other (Details

9 Loan Payable - Other (Details)	Jun. 30, 2016	Jun. 30, 2015
Details
Accounts Payable, Interest-bearing, Interest Rate	10.00%	10.00%

10 Loan Payable - Related Par73

10 Loan Payable - Related Parties (Details)	Jun. 30, 2016	Jun. 30, 2015
Details
Accounts Payable Related Parties Interest Bearing Interest Rate	10.00%	10.00%

11 Notes Payable - Related Pa74

11 Notes Payable - Related Parties (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Notes payable	$ 0	$ 1,631,641

13 Accrued Expenses and Other75

13 Accrued Expenses and Other Current Liabilities: Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Details
Accrued Salaries, Current	$ 1,168,653	$ 1,616,963
Accrued interest	2,602,674	2,073,073
Accrued Income Taxes, Current	2,619,533	1,281,704
Deposit Liability, Current	588,905	572,105
Other Employee-related Liabilities, Current	43,316	46,967
Customer Advances, Current	413,848	291,005
Accounts Payable, Other, Current	572,013	241,512
Other Accrued Liabilities, Current	276,686	443,816
Accrued expenses and other current liabilities	$ 9,633,750	$ 7,176,325

14 Stock Options (Details)

14 Stock Options (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Unrecognized Compensation Expense	$ 51,869	$ 18,673
Common Stock
Common stock issued for services - shares	1,910,000	360,000
Common Stock | Option 1 - January 1, 2015
Common stock issued for services - shares	300,000
Additional Paid in Capital | Option 1 - January 1, 2015
Common stock issued for services - shares	74,691
Allocated Share-based Compensation Expense	$ 22,822

14 Stock Options_ Schedule of77

14 Stock Options: Schedule of Share-based Compensation, Stock Options, Activity (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2013
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	590,000	300,000	132,000	132,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 0.33	$ 0.33	$ 2	$ 2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	4 years	4 years 6 months	1 month 6 days	1 year 1 month 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 426,000	$ 426,000	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	890,000	300,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 0.33
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares	300,000	(132,000)

15 Issuance of Common Stock (De

15 Issuance of Common Stock (Details) - Common Stock - shares	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Common stock issued for debt conversion - shares	2,046,995	12,863,690
Common stock issued - shares	2,352,941	6,740,747
Common stock issued for services - shares	1,910,000	360,000
Option1September52014Member
Common stock issued for debt conversion - shares		11,862,278
Option2December232014Member
Common stock issued - shares		4,527,832
Option3February32015Member
Common stock issued for services - shares		300,000
Option 4 - February 3, 2015
Common stock issued for services - shares		40,000
Option5February32015Member
Common stock issued - shares		1,704,915
Option6March122015Member
Common stock issued for debt conversion - shares		480,000
Option 7 - April 8, 2015
Common stock issued - shares		508,000
Option8April82015Member
Common stock issued for debt conversion - shares		521,412
Option9September102015Member
Common stock issued for services - shares	60,000
Option10September302015Member
Common stock issued - shares	2,352,941
Common stock warrants issued during period	1,764,706

15 Issuance of Common Stock_ 79

15 Issuance of Common Stock: Assumptions Used Textblock (Details)	12 Months Ended
	Jun. 30, 2016$ / shares
Details
Fair Value Assumptions, Stock Price	$ 0.64
Fair Value Assumptions, Exercise Price	$ 1.74
Fair Value Assumptions, Expected Term	4 years 2 months 12 days
Fair Value Assumptions, Expected Volatility Rate	140.71%
Fair Value Assumptions, Weighted Average Expected Dividend	$ 1.65
Fair Value Assumptions, Risk Free Interest Rate	1.01%

16 Taxes_ Schedule of Effecti80

16 Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ 1,010,039	$ 1,089,936
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount	(1,271,231)	(1,046,086)
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	233,892	(1,031,621)
Effective Income Tax Rate Reconciliation, Net operating loss expired		955,983
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Amount	$ 27,300	$ 31,788

16 Taxes_ Schedule of Compone81

16 Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Current Income Tax Expense (Benefit)	$ (190,770)
Deferred Federal Income Tax Expense (Benefit)	(483,789)	$ (229,859)
Deferred Foreign Income Tax Expense (Benefit)	1,082,912	(1,442,889)
Deferred Taxes, Business Combination, Valuation Allowance, Available to Reduce Income Tax Expense	483,789	229,859
Deferred Taxes Business Combination Valuation Allowance Available To Reduce Income Tax Expense China	(249,897)	(1,261,480)
Deferred income tax expense (benefit)	$ 642,245	$ (2,704,369)

16 Taxes_ Schedule of Deferre82

16 Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Jun. 30, 2016	Jun. 30, 2015
Deferred Tax Assets, Operating Loss Carryforwards, Foreign	$ 213,060	$ 1,342,696
Deferred Tax Assets, Operating Loss Carryforwards, Domestic	2,418,909	1,935,121
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Allowance for Doubtful Accounts	447,294	823,190
Deferred Tax Assets, Tax Deferred Expense, Other	139,330	338,390
Deferred Tax Assets, Other	309,264	469,944
Deferred Tax Assets, Gross	4,310,217	4,909,341
Deferred income tax	1,878,595	2,711,610
U.S.
Deferred Tax Assets, Valuation Allowance	(2,418,909)	(1,935,121)
China
Deferred Tax Assets, Valuation Allowance	$ (12,713)	$ (262,610)

16 Taxes_ Summary of Operatin83

16 Taxes: Summary of Operating Loss Carryforwards (Details)	Jun. 30, 2016USD ($)
Operating Loss Carryforwards	$ 21,442,129
FY 2,017
Operating Loss Carryforwards	8,490,144
FY 2,018
Operating Loss Carryforwards	2,350,563
FY 2,019
Operating Loss Carryforwards	7,896,369
FY 2,020
Operating Loss Carryforwards	1,322,799
FY 2,021
Operating Loss Carryforwards	$ 1,382,254

17 Concentrations (Details)

17 Concentrations (Details)	12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Details
Concentration Risk, Customer	Sales to two major customers were 13% and 5% of total sales for the year ended June 30, 2016.	Sales to two major customers were 7% and 5% of total sales for the year ended June 30, 2015.
Concentration Risk, Service Provided	Sales of one major product represented approximately 85% and 95% of total sales for the years ended June 30, 2016 and 2015, respectively.
Concentration Risk, Other Risk	Two major customers accounted for 8% and 7% of outstanding accounts receivable as of June 30, 2016.	Two major customers accounted for 4% and 0.1% of outstanding accounts receivable as of June 30, 2015.