Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2016 | May. 23, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | China Ginseng Holdings Inc | |
Entity Central Index Key | 1,338,460 | |
Document Type | 10-Q | |
Trading Symbol | CSNG | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 44,397,297 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
CURRENT ASSETS | ||
Cash | $ 61,890 | $ 10,016 |
Accounts receivable, net | 542,770 | 579,752 |
Advances to third parties | 552,323 | 93,254 |
Inventory | 586,966 | 285,981 |
Due from related parties | 26,289 | 7,703 |
Prepaid expenses | 1,466 | 1,549 |
Total Current Assets | 1,771,704 | 978,255 |
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $567,153 and $525,199 at March 31,2016 and June 30, 2015, respectively | 1,251,423 | 1,398,425 |
OTHER ASSET | ||
Deposit on equipment | 5,646,442 | 5,967,480 |
Total Assets | 8,669,569 | 8,344,160 |
CURRENT LIABILITIES | ||
Loan payable- equipment purchase | 5,645,090 | 5,966,052 |
Loan payable- building purchase | 1,197,920 | 1,308,558 |
Loans payable- other | 3,124,239 | 3,997,629 |
Notes payable - related parties | 1,650,292 | $ 1,593,996 |
Convertible debenture | 1,600,000 | |
Accounts payable | 2,244,996 | $ 951,068 |
Accrued expenses | 4,371,269 | 2,486,436 |
Taxes payable | 66,873 | 71,034 |
Payable to farmers | 832,248 | 879,567 |
Payments received in advance | 186,038 | 247,663 |
Total Current Liabilities | 20,918,965 | 17,502,003 |
OTHER LIABILITIES | ||
Liabilities of discontinued operations | 486,120 | 513,760 |
Total Liabilities | $ 21,405,085 | $ 18,015,763 |
COMMITMENTS AND CONTINGENCIES (NOTE O) | ||
STOCKHOLDERS' DEFICIT | ||
Common Stock, $0.001 par value; 50,000,000 shares authorized; 44,397,297 shares issued and outstanding at March 31,2016 and 44,397,297 at June 30, 2015, respectively | $ 44,398 | $ 44,398 |
Additional paid-in capital | 7,826,365 | 7,738,746 |
Accumulated deficit | (21,222,105) | (18,073,829) |
Accumulated other comprehensive income | 615,826 | 619,082 |
Total Stockholders' Deficit | (12,735,516) | (9,671,603) |
Total Liabilities and Stockholders' Deficit | $ 8,669,569 | $ 8,344,160 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Property and equipment accumulated depreciation (in dollars) | $ 567,153 | $ 525,199 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 50,000,000 | 50,000,000 |
Common stock, issued | 44,397,297 | 44,397,297 |
Common stock, outstanding | 44,397,297 | 44,397,297 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||||
REVENUES | $ 253,619 | $ 15,148 | $ 315,365 | $ 167,362 |
COSTS AND EXPENSES | ||||
Cost of goods sold | 220,580 | 60 | 251,341 | 115,878 |
Selling, general and administrative expenses | 58,817 | 381,055 | 1,664,593 | 1,198,082 |
Bad debt expense (recovered) | (117,885) | (22) | (161,263) | (42,272) |
Depreciation and amortization | 14,743 | 21,342 | 67,789 | 67,276 |
Total Costs and Expenses | 176,255 | 402,435 | 1,822,460 | 1,338,964 |
OTHER EXPENSE | ||||
Foreign Exchange | (2,014) | 87,045 | ||
Interest expense | 699,695 | 182,346 | 1,554,136 | 715,578 |
Net Other Expense | 697,681 | 182,346 | 1,641,181 | 715,578 |
LOSS BEFORE INCOME TAXES | $ (620,317) | $ (569,633) | $ (3,148,276) | $ (1,887,180) |
PROVISION FOR INCOME TAXES | ||||
NET LOSS | $ (620,317) | $ (569,633) | $ (3,148,276) | $ (1,887,180) |
OTHER COMPREHENSIVE INCOME (LOSS) | ||||
Translation Adjustment | (169,633) | 18,374 | (3,256) | 167,547 |
COMPREHENSIVE LOSS | $ (789,950) | $ (551,259) | $ (3,151,532) | $ (1,719,633) |
NET LOSS PER COMMON SHARE (Basic and diluted) (in dollars per share) | $ (0.02) | $ (0.01) | $ (0.07) | $ (0.04) |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - Basic and diluted (in shares) | 45,397,297 | 44,397,297 | 45,397,297 | 44,397,297 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (3,148,276) | $ (1,887,180) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 67,789 | 67,276 |
Imputed interest | 72,629 | 75,132 |
Changes in assets and liabilities: | ||
Decrease in accounts receivable | 5,854 | 60,319 |
Increase in inventory | (320,054) | $ (176,704) |
Increase in advances to third party | $ (461,332) | |
Increase in prepaid expense | $ (127) | |
Increase in due from related parties | $ (18,772) | (16,991) |
Increase in accounts payable | 1,164,550 | 1,017,127 |
Decrease in taxes payable | (343) | (2,270) |
Increase (decrease) in receivables in advance | (48,810) | 452 |
Increase in accrued expenses | 1,795,898 | 441,324 |
Net cash provided by (used in) operating activities | (890,867) | (421,642) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | (9,277) | (7,881) |
Net cash provided by (used in) investing activities | $ (9,277) | (7,881) |
Cash Flows from Financing Activities: | ||
Proceeds from loans | 3,424 | |
Proceeds from loans payable to related parties | $ 91,345 | $ 271,424 |
Proceeds from Series A Convertible Debenture | 1,600,000 | |
Repayments of Loans Payable | (738,971) | |
Net cash provided by (used in) financing activities | 952,374 | $ 274,848 |
Effect of exchange rate on cash | (356) | 167,259 |
Increase in cash | 51,874 | 12,584 |
Cash at beginning of period | 10,016 | 24,782 |
Cash at end of period | $ 61,890 | $ 37,366 |
PRESENTATION, NATURE OF BUSINES
PRESENTATION, NATURE OF BUSINESS, AND GOING CONCERN | 9 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
PRESENTATION, NATURE OF BUSINESS, AND GOING CONCERN | NOTE A - PRESENTATION, NATURE OF BUSINESS, AND GOING CONCERN Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the Companys annual report on Form 10-K for the year ended June 30, 2015. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the consolidated financial statements not misleading have been included. Results for the three and nine months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending June 30, 2016. Nature of Business China Ginseng Holdings, Inc. and Subsidiaries (the Company), was incorporated under the laws of Nevada on June 24, 2004. On November 24, 2004, the Company acquired 55% of Yanbian Huaxing Ginseng Industry Co. Limited (Yanbian Huaxing), which is located in China and, is in the business of farming, processing, distribution, and marketing of Asian Ginseng products. In August 2005, the Company acquired the remaining 45% of Yanbian Huaxing. From 2010, the Company ceased to sell ginseng in the market. The harvest of ginseng is primarily self-used as raw material in the production of ginseng beverage. Yanbian Huaxing controls, through 20 year leases granted by the Chinese Government, approximately 1,500 hectares (3,705 acres) of land exclusively used to grow ginseng. The Company had no operations prior to November 24, 2004. These leases expire through 2024. During the year ended June 30, 2014, the Forestry Bureau governing one of the farms withdrew approximating 700 hectares (1,730 acres) of land leased and notified the Company that this lease is no longer recognized. As a result, the Company is prevented from developing and planting ginseng in undeveloped areas of the farm. On August 24, 2005, the Company acquired Jilin Ganzhi Ginseng Produce Co. Limited, whose principal business is the manufacture of ginseng drinks. On October 19, 2005, the Company incorporated a new company, Jilin Huamei Beverage Co. Limited (Jilin Huamei), which operates as a sales department for the Companys canned ginseng juice and wine, which are produced by other subsidiaries of the Company. On March 31, 2008 the Company acquired Tonghua Linyuan Grape Planting Co. Limited (Tonghua Linyuan) whose principal activity was the growing, cultivation and harvesting of a grape vineyard. The Company produced wine and grape juice using the grapes planted on the land Tonghua Linyuan leased, but in June 2012, the Company decided to abandon the growing and harvesting of grapes due to the poor quality of grape harvests which were not suitable for the production of wine or grape juice. Accordingly, the Company has abandoned the vineyard and also decided not to renew its leases with the Chinese Government. On June 30, 2013, the Company sold the assets and liabilities of Tonghua Linyuan to a third party. (see Note N.) On March 2, 2012, the Company approved the incorporation of a new subsidiary, Hong Kong Huaxia International Industrial Co., Limited (Hong Kong Huaxia) in Hong Kong in order to sell health and specialized local products such as cosmetics and health supplements. Hong Kong Huaxia was incorporated in Hong Kong on March 18, 2012, and began operations in April 2012. Hong Kong Huaxia has registered 880,000,000 shares of 1 HKD par value per share stock in Hong Kong. None of the $113,443,000 (880,000,000 HKD) registered capital of Hong Kong Huaxia has been funded as of March 31, 2016. On September 27, 2013, the Company established a new wholly owned subsidiary of Hong Kong Huaxia, Jilin Huaxia Ginseng Co., Ltd (Jilin Huaxia) in order to open an online store through Taobao Marketplace, the biggest online Business to Consumer and Consumer to Consumer platform in Asia, a subsidiary company of Alibaba Group. Hong Kong Huaxia registered capital of $6,000,000 in Jilin Huaxia, none of which was funded at March 31, 2016. Substantially all of the Companys operations are in the Peoples Republic of China and Hong Kong. Consolidated Financial Statements The consolidated financial statements include the accounts and activities of China Ginseng Holdings, Inc. and its wholly-owned subsidiaries, Yanbian Huaxing Ginseng Co. Limited, Jilin Huamei Beverage Co. Limited, Jilin Ganzhi Ginseng Products Co. Limited, Mudanjiang Huaxing Ginseng Co..Limited and Hong Kong Huaxia International Industrial, Co. Limited and its subsidiary Jilin Huaxia. All intercompany transactions have been eliminated in consolidation. Reclassifications Certain reclassifications have been made to the consolidated financial statements for the three and nine months ended March 31, 2015 to make then comparable to the presentation for the three and nine months ended March 31, 2016. Uncertainty in Income Taxes The Companys policy is to recognize interest related to income tax matters as interest expense. The Companys policy is to recognize penalties related to income tax matters as selling, general and administrative expenses. The Company's income tax returns are subject to examination by the IRS and State tax authorities, generally for three years after they are filed. Going Concern As indicated in the accompanying financial statements, the Company had net losses of $3,148,276 and $1,887,180 for the nine months ended March 31, 2016 and 2015, respectively, and an accumulated deficit of $21,222,105 as of March 31, 2016 and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. Managements plans include the raising of capital through the debt and equity markets to fund future operations and the generating of revenue through its businesses. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and positive cash flows from operations. These matters raise substantial doubt about the Companys ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE B - PROPERTY AND EQUIPMENT Property and equipment is comprised of the following at: March 31, June 30, 2016 2015 Buildings and improvements $ 1,387,535 $ 1,472,128 Machinery and equipment 354,963 393,100 Motor vehicles 23,830 30,501 Office equipment 52,248 27,895 1,818,576 1,923,624 Less accumulated depreciation (567,153 ) (525,199 ) $ 1,251,423 $ 1,398,425 Substantially all of the property and equipment is located in China. Total depreciation was $67,789 and $67,276 for the nine months ended March 31, 2016 and 2015, respectively. |
DEPOSIT FOR EQUIPMENT PURCHASE
DEPOSIT FOR EQUIPMENT PURCHASE | 9 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
DEPOSIT FOR EQUIPMENT PURCHASE | NOTE C -DEPOSIT FOR EQUIPMENT PURCHASE In November of 2013, the Company made a deposit of RMB 36,474,054 ($5,645,090) with a supplier for the purchase of equipment for its ginseng farms. Prior to delivery of the equipment, the Company determined that this equipment was not best suited for its farms and cancelled the purchase. The deposit remains on hand with the supplier. The Company and supplier are negotiating for the delivery of different equipment for the Companys new eye care centers or the return of the deposit. |
INVENTORY
INVENTORY | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE D - INVENTORY Inventory is comprised of the following at: March 31, June 30, 2016 2015 Raw materials $ 449,625 $ 126,006 Finished goods 133,179 67,787 Packaging supplies - 87,789 Operating supplies 4,162 4,399 $ 586,966 $ 285,981 |
GINSENG CROPS
GINSENG CROPS | 9 Months Ended |
Mar. 31, 2016 | |
Agriculture [Abstract] | |
GINSENG CROPS | NOTE E GINSENG CROPS The Companys business, prior to June 30, 2009, was primarily to harvest and sell fresh and dried ginseng. The growth period takes approximately 5 to 6 years before harvest can commence and up to 8 years for improved harvest and seedling yields. The Company is changing its business model to utilize the harvested ginseng to manufacture ginseng juice and other ginseng beverages. It commenced the juice operation in August 2011. The land to plant ginseng needs to be rotated. The Company tracks the costs expended each year by planting area. The Chinese government owns all of the land in China. Currently, the Company has obtained leases from the Chinese government for approximately 800 hectares of land (approximately 1,975 acres) to grow ginseng, which were awarded in April and May 2005. These rights are valid for 20 years and the management of the Company believes that the leases will be renewed. However, there are no assurances that the Chinese government will continue to renew these leases in the future. The planting of new ginseng is dependent upon the Companys cash flow and its ability to raise working capital. The Company has planted approximately 287,984 square meters (28.80 hectares or 71.16 acres) of land. The Company has no plan to expand ginseng planting at the moment. The Company can purchase raw ginseng from farmers, or the open market directly. |
AGREEMENTS WITH FARMERS
AGREEMENTS WITH FARMERS | 9 Months Ended |
Mar. 31, 2016 | |
Agreements With Farmers [Abstract] | |
AGREEMENTS WITH FARMERS | NOTE F - AGREEMENTS WITH FARMERS The Company has executed agreements with a number of local farmers to grow, cultivate and harvest Ginseng utilizing the Companys land grants. The farming contracts commenced in January 2008 and ended in 2013. In connection with these agreements, the Company (1) leases sections of the Ginseng land grants to the farmers at approximately $1.50 (10 RMB) per square meter per year, (2) provides the seeds and fertilizer to the farmers and clears the land of large debris, (3) pays the farmers a management fee of approximately $0.50 (4.00 RMB) per square meter per year and (4) the farmers are required to produce 2kg of Ginseng for each square meter that they manage. The costs of the seeds and fertilizers provided to the farmers are capitalized and included in the Ginseng Crop inventory. The Company pays the farmers market price for their Ginseng. If the harvest is below 2kg per square meter, the difference will be deducted from the total payment for Ginseng purchased. If the harvest produces more that 2kg per square meter, the Company pays approximately $3.00 for every extra kilo. The Company records these agreements on a net basis by individual farmers. The Company has also recorded a payable to the farmers for the net management fee due to the farmers. The liability at March 31, 2016 and June 30, 2015 was $832,248 and $879,567 respectively. |
LOAN PAYABLE TO FINANCIAL INSTI
LOAN PAYABLE TO FINANCIAL INSTITUTION | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOAN PAYABLE TO FINANCIAL INSTITUTION | NOTE G - LOAN PAYABLE TO FINANCIAL INSTITUTION In 2002, the Companys subsidiary, Tonghua Linyuan, borrowed 2,000,000 RMB from Jian Qingshi Credit Corporation at an interest rate of 6.325% per annum with a maturity date of April 4, 2003. The loan is currently in default. In March 2008, the lender verbally agreed that no principal or interest need be paid until the Company is generating profits. Interest was paid on the loan through June 30, 2009 and has been accrued in subsequent periods. The loan is secured by the Companys inventory and equipment. The loan balance at March 31, 2016 and June 30, 2015 was $309,540 and $327,139, respectively. The loan balance is included in Liabilities of Discontinued Operations on the accompanying consolidated Balance Sheets. |
LOAN PAYABLE - BUILDING PURCHAS
LOAN PAYABLE - BUILDING PURCHASE | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOAN PAYABLE - BUILDING PURCHASE | NOTE H - LOAN PAYABLE - BUILDING PURCHASE On March 2, 2011, the Company entered into an agreement with Meihekou Hang Yilk Tax Warehousing Logistics, an auctioneer, to purchase office and warehouse facilities. The purchase price was $1,385,980 (RMB 9,000,000). On June 24, 2011, the Company made a payment of $76,990 (RMB 500,000) leaving a balance of $1,308,981 (RMB 8,500,000). On September 10, 2011, the Company paid 8,000,000 RMB through the proceeds of a loan with Meihekou City Rural Credit Union. The remaining 500,000 RMB was paid as follows: (a) $15,400 (RMB 100,000) in December 2010 and (b) $61,599 (RMB 400,000) in June 2011. The loan from Meihekou City Rural Credit Union was due on August 12, 2012. The interest rate is a floating rate adjusted upwards by 90%. At June 30, 2015, the Central Bank Rate was 4.85% applying the adjustment factor yields a rate of 18.43%. The loan is secured by the building. On August 30, 2012, the loan was renegotiated extending the maturity date to August 29, 2014 with principal payments of 1,000,000 RMB (USD $153,998) in September 2012; 1,000,000 RMB (USD $153,998) on August 29, 2013; 1,000,000 RMB (USD $153,998) on December 20, 2013 and 5,000,000 RMB (USD $769,988) on August 29, 2014. None of these payments were made by the Company and the note is thus in default. |
LOAN PAYABLE - EQUIPMENT PURCHA
LOAN PAYABLE - EQUIPMENT PURCHASE | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOAN PAYABLE - EQUIPMENT PURCHASE | NOTE I - LOAN PAYABLE - EQUIPMENT PURCHASE On October 29, 2013, the Company borrowed $5,616,923 (RMB 36,474,054) in order to fund the acquisition of machinery and equipment by the Company. The loan was due on February 28, 2014, and the Company was to pay $211,606 (RMB 1,300,000) in interest over the life of the loan. The loan is secured by the assets of Jilin Huaxia. On July 1, 2015, the loan term was extended to December 31, 2015. On January 3, 2016, the creditor agreed to negotiate with the Company for a new term on the loan. The Company is still in negotiation with creditor currently. |
NOTE PAYABLE - OTHER
NOTE PAYABLE - OTHER | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE - OTHER | NOTE J - LOANS PAYABLE - OTHER The Company has loans with various individuals and finance companies totaling $3,124,239 at March 31, 2016 and $3,997,629 at June 30, 2015. These loans are payable on demand and bear interest at 3% per month. |
CONVERTIBLE DEBENTURE
CONVERTIBLE DEBENTURE | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURE | NOTE K- CONVERTIBLE DEBENTURE On July 21, 2015, the Company closed a private placement to sell a Series A Convertible Debenture for a price of $1,600,000. The Series A Convertible Debenture is repayable at July 20, 2018 and is convertible into 4,000,000 shares of the Companys common stock at a price of $0.40 per share. During the period that the conversion right exists, the Company covenants that it will reserve, from its authorized and unissued common stock, shares equal to 110% of the number of shares of common stock upon the full conversion of the Series A Convertible Debenture. At the conversion price of $.40 per share, this will be 4,400,000 shares. When combined with the current shares issued and outstanding of 44,397,297, the total of issued, outstanding and reserved shares is 48,797,297. As the authorized shares are 50,000,000, the Company will breach the covenant if it issues 1,202,703 shares absent an increase to the number of authorized shares. The Series A Convertible Debenture carries no interest and matures in 36 months. The Series A Convertible Debenture also has a prepayment clause pursuant to which the Company may repurchase all or a portion of the outstanding Convertible Debenture in cash for 100% of the face value on ten business days notice at any time after the twelve month anniversary of the closing; provided that the Investor shall have the right to convert the Convertible Debenture within five business days after written notice of such prepayment. The funds received from the convertible debenture were used to pay down accounts payable, to provide advances to third parties to support the Companys future operations and to increase the Companys cash available to fund future operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE L - RELATED PARTY TRANSACTIONS The Company had been financing its operations from loans from individuals, principally residents of China, who are deemed to be related parties because of their ownership interest in the Company (shareholders). The individuals have loaned the Company funds which are interest free, have no specific repayment date, and are unsecured. The funds received are evidenced by receipt of cash acknowledgments. At March 31, 2016 and June 30, 2015, funds borrowed to fund the current operations of the Company were $1,650,292 and $1,593,996, respectively. The Company has imputed an interest charge of $72,629 and $75,132 which has been recorded in the financial statements for the nine months ended March 31, 2016 and 2015, respectively. At March 31, 2016 and June 30, 2015, the Company had receivables from related parties amounting to $26,289 and $7,703, respectively. |
PROVISION FOR INCOME TAXES
PROVISION FOR INCOME TAXES | 9 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
PROVISION FOR INCOME TAXES | NOTE M - PROVISION FOR INCOME TAXES Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting bases and income tax bases of the Companys assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Companys tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets consist of the following at: March 31, June 30, 2016 2015 - $ - Net operating losses $ 4,159,027 $ 3,371,958 Valuation allowance (4,159,027 ) (3,371,958 ) Deferred tax asset $ - $ - The deferred tax asset is the result of an inventory provision and related reserve. Under Chinese tax laws, the Company is not entitled to a deduction for the provision until the inventory is completely discarded. Accordingly, the liability has been recorded as an offset by a deferred tax asset representing a timing difference. The Company has a net operating loss carry forward as follows: March 31, June 30, 2016 2015 International (China) $ 11,204,424 $ 9,290,901 United States 5,431,684 4,196,931 $ 16,636,108 $ 13,487,832 The operating losses are available to offset future taxable income. The China net operating loss carryforwards can only be carried forward for five years and commenced expiring in 2013. The Company does not file a consolidated tax return in China. Therefore, the profitability of the individual Chinese companies will determine the utilization of the carryforward losses. The U.S. carryforward losses are available to offset future taxable income for the succeeding 20 years and commence expiring in 2027. At March 31, 2016, the Company determined that it had approximately $540,000 in penalties related to past due information returns from 2005 through 2015, which is included in accrued expense and selling, general and administrative expenses. The Company plans to seek abatement with the Internal Revenue Service relating to these amounts, the outcome of which is uncertain. The components of income before taxes are as follows: For the Nine Months 2016 2015 International (China) $ (1,913,523 ) $ (1,012,948 ) United States (1,234,753 ) (874,232 ) $ (3,148,276 ) $ (1,887,180 ) A reconciliation of the Companys effective tax rate as a percentage of income before taxes and federal statutory rate for the nine months ended March 31, 2016 and 2015, respectively, are as follows: For the Nine Months 2016 2015 Federal statutory rate (34.0 )% (34.0 )% State income taxes, net of federal benefit 3.3 3.3 Valuation allowance 30.7 30.7 Earnings taxed at other than US statutory rate - - Effective tax rate - % - % |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Mar. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE N - DISCONTINUED OPERATIONS On June 30, 2013, the Company discontinued its grape production operations. The Company sold the assets and liabilities of Tonghua Linyuan, and closed Tonghua Linyuan. The Company has retained $486,120 and $513,760 in contingent liabilities of Tonghua Linyuan at March 31, 2016 and June 30, 2015, respectively. These liabilities are included in Liabilities of Discontinued Operations on the consolidated Balance Sheet. These liabilities consisted of a loan payable to a financial institution of $309,540 and accounts payable and accrued expenses of $176,580 at March 31, 2016 and a loan payable to a financial institution of $327,139 and accounts payable and accrued expenses of $186,321 at June 30, 2015. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE O - COMMITMENTS AND CONTINGENCIES The Company has employment agreements with various individuals in China. The following summarizes the contractual commitments under these agreements: March 31, Commitment 2017 $ 33,909 The Company has one year leases for its corporate offices in China aggregating RMB 220,190 per year (USD 33,909) expiring May 21, 2016. The lease is renewable each year. The Chinese government owns all the land in China. Currently, the Company has grants from the Chinese government for approximately 800 hectares of land (1,975 acres) to grow Ginseng. These grants are for 20 years. There is no assurance that the Chinese government will continue to renew these grants in the future. The Company has a lease to refrigerate and store fresh Ginseng, which operates on a month to month basis until terminated by the parties. The annual lease fee approximates $15,500 per year. |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENTS | NOTE P - OPERATING SEGMENTS The Company currently has two operating segments, (1) the cultivation and harvest of Ginseng for the production of Ginseng beverages and (2) the retail sales of cosmetics and health supplements. The Companys reportable business segments are strategic business units that offer different products. Each segment is managed separately because they require different production techniques and market to different classes of customers. Nine months ended March 31, 2016: Parent Ginseng Cosmetics/ Total Revenues $ - $ 248,972 $ 66,393 $ 315,365 Net loss (1,234,753 ) (1,906,304 ) (7,219 ) (3,148,276 ) Total assets 421,704 8,165,785 82,080 8,669,569 Other significant items: Depreciation and amortization 1,299 65,680 810 67,789 Interest expense 173,898 1,378,763 1,475 1,554,136 Expenditures for fixed assets 9,277 - 9,277 Three Months Ended March 31, 2016 Parent Ginseng Cosmetics / Total Revenues $ - $ 210,690 $ 42,929 $ 253,619 Net Loss (119,235 ) (486,057 ) (13,011 ) (618,303 ) Total Assets 421,704 8,165,785 82,080 8,669,569 Other Significant Items: Depreciation and amortization 430 14,049 264 14,743 Interest expense 42,256 655,305 120 697,681 Expenditures for fixed assets - 1,380 - 1,380 Nine months ended March 31, 2015: Parent Ginseng Cosmetics/ Total Revenues $ - $ - $ 167,362 $ 167,362 Net loss (874,232 ) (996,982 ) (15,966 ) (1,887,180 ) Total assets 19,830 8,653,904 248,400 8,922,134 Other significant items: Depreciation and amortization 961 65,716 599 67,276 Interest expense 39,585 674,969 1,024 715,578 Expenditures for fixed assets 5,439 2,442 - 7,881 Three Months Ended March 31, 2015 Parent Ginseng Cosmetics / Total Revenues $ - $ - $ 15,148 $ 15,148 Net (Loss) Income (410,539 ) (160,721 ) 1,627 (569,633 ) Other Significant Items: Depreciation and amortization 319 20,823 200 21,342 Interest expense 14,241 168,105 182,346 Expenditures for fixed assets 4,400 2 - 4,402 |
PRESENTATION, NATURE OF BUSIN22
PRESENTATION, NATURE OF BUSINESS, AND GOING CONCERN (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the Companys annual report on Form 10-K for the year ended June 30, 2015. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary in order to make the consolidated financial statements not misleading have been included. Results for the three and nine months ended March 31, 2016, are not necessarily indicative of the results that may be expected for the year ending June 30, 2016. |
Nature of Business | Nature of Business China Ginseng Holdings, Inc. and Subsidiaries (the Company), was incorporated under the laws of Nevada on June 24, 2004. On November 24, 2004, the Company acquired 55% of Yanbian Huaxing Ginseng Industry Co. Limited (Yanbian Huaxing), which is located in China and, is in the business of farming, processing, distribution, and marketing of Asian Ginseng products. In August 2005, the Company acquired the remaining 45% of Yanbian Huaxing. From 2010, the Company ceased to sell ginseng in the market. The harvest of ginseng is primarily self-used as raw material in the production of ginseng beverage. Yanbian Huaxing controls, through 20 year leases granted by the Chinese Government, approximately 1,500 hectares (3,705 acres) of land exclusively used to grow ginseng. The Company had no operations prior to November 24, 2004. These leases expire through 2024. During the year ended June 30, 2014, the Forestry Bureau governing one of the farms withdrew approximating 700 hectares (1,730 acres) of land leased and notified the Company that this lease is no longer recognized. As a result, the Company is prevented from developing and planting ginseng in undeveloped areas of the farm. On August 24, 2005, the Company acquired Jilin Ganzhi Ginseng Produce Co. Limited, whose principal business is the manufacture of ginseng drinks. On October 19, 2005, the Company incorporated a new company, Jilin Huamei Beverage Co. Limited (Jilin Huamei), which operates as a sales department for the Companys canned ginseng juice and wine, which are produced by other subsidiaries of the Company. On March 31, 2008 the Company acquired Tonghua Linyuan Grape Planting Co. Limited (Tonghua Linyuan) whose principal activity was the growing, cultivation and harvesting of a grape vineyard. The Company produced wine and grape juice using the grapes planted on the land Tonghua Linyuan leased, but in June 2012, the Company decided to abandon the growing and harvesting of grapes due to the poor quality of grape harvests which were not suitable for the production of wine or grape juice. Accordingly, the Company has abandoned the vineyard and also decided not to renew its leases with the Chinese Government. On June 30, 2013, the Company sold the assets and liabilities of Tonghua Linyuan to a third party. (See Note N.) On March 2, 2012, the Company approved the incorporation of a new subsidiary, Hong Kong Huaxia International Industrial Co., Limited (Hong Kong Huaxia) in Hong Kong in order to sell health and specialized local products such as cosmetics and health supplements. Hong Kong Huaxia was incorporated in Hong Kong on March 18, 2012, and began operations in April 2012. Hong Kong Huaxia has registered 880,000,000 shares of 1 HKD par value per share stock in Hong Kong. None of the $113,443,000 (880,000,000 HKD) registered capital of Hong Kong Huaxia has been funded as of March 31, 2016. On September 27, 2013, the Company established a new wholly owned subsidiary of Hong Kong Huaxia, Jilin Huaxia Ginseng Co., Ltd (Jilin Huaxia) in order to open an online store through Taobao Marketplace, the biggest online Business to Consumer and Consumer to Consumer platform in Asia, a subsidiary company of Alibaba Group. Hong Kong Huaxia registered capital of $6,000,000 in Jilin Huaxia, none of which was funded at March 31, 2016. Substantially all of the Companys operations are in the Peoples Republic of China and Hong Kong. |
Consolidated Financial Statements | Consolidated Financial Statements The consolidated financial statements include the accounts and activities of China Ginseng Holdings, Inc. and its wholly-owned subsidiaries, Yanbian Huaxing Ginseng Co. Limited, Jilin Huamei Beverage Co. Limited, Jilin Ganzhi Ginseng Products Co. Limited, Mudanjiang Huaxing Ginseng Co..Limited and Hong Kong Huaxia International Industrial, Co. Limited and its subsidiary Jilin Huaxia. All intercompany transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications Certain reclassifications have been made to the consolidated financial statements for the three and nine months ended March 31, 2015 to make then comparable to the presentation for the three and nine months ended March 31, 2016. |
Uncertainty in Income Taxes | Uncertainty in Income Taxes The Companys policy is to recognize interest related to income tax matters as interest expense. The Companys policy is to recognize penalties related to income tax matters as selling, general and administrative expenses. The Company's income tax returns are subject to examination by the IRS and State tax authorities, generally for three years after they are filed. |
Going Concern | Going Concern As indicated in the accompanying financial statements, the Company had net losses of $3,148,276 and $1,887,180 for the nine months ended March 31, 2016 and 2015, respectively, and an accumulated deficit of $21,222,105 as of March 31, 2016 and there are existing uncertain conditions the Company foresees relating to its ability to obtain working capital and operate successfully. Managements plans include the raising of capital through the debt and equity markets to fund future operations and the generating of revenue through its businesses. Failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations. Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and positive cash flows from operations. These matters raise substantial doubt about the Companys ability to continue as a going concern. However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment is comprised of the following at: March 31, June 30, 2016 2015 Buildings and improvements $ 1,387,535 $ 1,472,128 Machinery and equipment 354,963 393,100 Motor vehicles 23,830 30,501 Office equipment 52,248 27,895 1,818,576 1,923,624 Less accumulated depreciation (567,153 ) (525,199 ) $ 1,251,423 $ 1,398,425 |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory is comprised of the following at: March 31, June 30, 2016 2015 Raw materials $ 449,625 $ 126,006 Finished goods 133,179 67,787 Packaging supplies - 87,789 Operating supplies 4,162 4,399 $ 586,966 $ 285,981 |
PROVISION FOR INCOME TAXES (Tab
PROVISION FOR INCOME TAXES (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | Deferred tax assets consist of the following at: March 31, June 30, 2016 2015 - $ - Net operating losses $ 4,159,027 $ 3,371,958 Valuation allowance (4,159,027 ) (3,371,958 ) Deferred tax asset $ - $ - |
Schedule of net operating loss carry forward | The Company has a net operating loss carry forward as follows: March 31, June 30, 2016 2015 International (China) $ 11,204,424 $ 9,290,901 United States 5,431,684 4,196,931 $ 16,636,108 $ 13,487,832 |
Schedule of components of income before taxes | The components of income before taxes are as follows: For the Nine Months 2016 2015 International (China) $ (1,913,523 ) $ (1,012,948 ) United States (1,234,753 ) (874,232 ) $ (3,148,276 ) $ (1,887,180 ) |
Schedule of effective tax rate reconciliation as a percentage of income before taxes and federal statutory rate | A reconciliation of the Companys effective tax rate as a percentage of income before taxes and federal statutory rate for the nine months ended March 31, 2016 and 2015, respectively, are as follows: For the Nine Months 2016 2015 Federal statutory rate (34.0 )% (34.0 )% State income taxes, net of federal benefit 3.3 3.3 Valuation allowance 30.7 30.7 Earnings taxed at other than US statutory rate - - Effective tax rate - % - % |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual commitments | The Company has employment agreements with various individuals in China. The following summarizes the contractual commitments under these agreements: March 31, Commitment 2017 $ 33,909 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of business segments | The Companys reportable business segments are strategic business units that offer different products. Each segment is managed separately because they require different production techniques and market to different classes of customers. Nine months ended March 31, 2016: Parent Ginseng Cosmetics/ Total Revenues $ - $ 248,972 $ 66,393 $ 315,365 Net loss (1,234,753 ) (1,906,304 ) (7,219 ) (3,148,276 ) Total assets 421,704 8,165,785 82,080 8,669,569 Other significant items: Depreciation and amortization 1,299 65,680 810 67,789 Interest expense 173,898 1,378,763 1,475 1,554,136 Expenditures for fixed assets 9,277 - 9,277 Three Months Ended March 31, 2016 Parent Ginseng Cosmetics / Total Revenues $ - $ 210,690 $ 42,929 $ 253,619 Net Loss (119,235 ) (486,057 ) (13,011 ) (618,303 ) Total Assets 421,704 8,165,785 82,080 8,669,569 Other Significant Items: Depreciation and amortization 430 14,049 264 14,743 Interest expense 42,256 655,305 120 697,681 Expenditures for fixed assets - 1,380 - 1,380 Nine months ended March 31, 2015: Parent Ginseng Cosmetics/ Total Revenues $ - $ - $ 167,362 $ 167,362 Net loss (874,232 ) (996,982 ) (15,966 ) (1,887,180 ) Total assets 19,830 8,653,904 248,400 8,922,134 Other significant items: Depreciation and amortization 961 65,716 599 67,276 Interest expense 39,585 674,969 1,024 715,578 Expenditures for fixed assets 5,439 2,442 - 7,881 Three Months Ended March 31, 2015 Parent Ginseng Cosmetics / Total Revenues $ - $ - $ 15,148 $ 15,148 Net (Loss) Income (410,539 ) (160,721 ) 1,627 (569,633 ) Other Significant Items: Depreciation and amortization 319 20,823 200 21,342 Interest expense 14,241 168,105 182,346 Expenditures for fixed assets 4,400 2 - 4,402 |
PRESENTATION, NATURE OF BUSIN28
PRESENTATION, NATURE OF BUSINESS, AND GOING CONCERN (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2016USD ($)ahashares | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($)ahashares | Mar. 31, 2015USD ($) | Jun. 30, 2014aha | Mar. 31, 2016HKD / shares | Jun. 30, 2015USD ($)shares | Sep. 27, 2014USD ($) | Aug. 31, 2005 | Nov. 24, 2004 | |
Business Acquisition [Line Items] | ||||||||||
Land used to grow ginseng (hectare) | ha | 28.80 | 28.80 | ||||||||
Land used to grow ginseng (acres) | a | 71.16 | 71.16 | ||||||||
Registered shares | shares | 50,000,000 | 50,000,000 | 50,000,000 | |||||||
Net loss | $ | $ (620,317) | $ (569,633) | $ (3,148,276) | $ (1,887,180) | ||||||
Accumulated deficit | $ | 21,222,105 | 21,222,105 | $ 18,073,829 | |||||||
Yanbian Huaxing [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Percentage of ownership acquired by company | 55.00% | |||||||||
Remaining percentage acquired by company | 45.00% | |||||||||
Land used to grow ginseng (hectare) | ha | 700 | |||||||||
Land used to grow ginseng (acres) | a | 1,730 | |||||||||
Operating leases description | The Company had no operations prior to November 24, 2004. | |||||||||
Description of leases expiration period | These leases expire through 2024. | |||||||||
Hong Kong Huaxia [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Registered capital | $ | $ 113,443,000 | $ 113,443,000 | $ 6,000,000 | |||||||
Registered shares | shares | 880,000,000 | 880,000,000 | ||||||||
Hong Kong Huaxia [Member] | HKD [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Registered stock, par value (in dollars per share) | HKD / shares | HKD 1 | |||||||||
Chinese Government [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Land used to grow ginseng (hectare) | ha | 800 | 800 | ||||||||
Land used to grow ginseng (acres) | a | 1,975 | 1,975 | ||||||||
Grant period of lease | 20 years | |||||||||
Chinese Government [Member] | Yanbian Huaxing [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Land used to grow ginseng (hectare) | ha | 1,500 | 1,500 | ||||||||
Land used to grow ginseng (acres) | a | 3,750 | 3,750 | ||||||||
Grant period of lease | 20 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,818,576 | $ 1,923,624 |
Less accumulated depreciation | (567,153) | (525,199) |
Property and equipment, net | 1,251,423 | 1,398,425 |
Buildings And Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,387,535 | 1,472,128 |
Machinery And Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 354,963 | 393,100 |
Motor Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 23,830 | 30,501 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 52,248 | $ 27,895 |
PROPERTY AND EQUIPMENT (Detai30
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 67,789 | $ 67,276 |
DEPOSIT FOR EQUIPMENT PURCHASE
DEPOSIT FOR EQUIPMENT PURCHASE (Details Narrative) | Nov. 30, 2013USD ($) |
Deposit assets | $ 5,645,090 |
CNY [Member] | |
Deposit assets | $ 36,474,054 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 449,625 | $ 126,006 |
Finished goods | $ 133,179 | 67,787 |
Packaging supplies | 87,789 | |
Operating supplies | $ 4,162 | 4,399 |
Inventory, net | $ 586,966 | $ 285,981 |
GINSENG CROPS (Details Narrativ
GINSENG CROPS (Details Narrative) | 9 Months Ended |
Mar. 31, 2016m²aha | |
Growth period before harvest | 5 to 6 years |
Period for improved harvest and seedling yields | 8 years |
Land used to grow ginseng (hectare) | ha | 28.80 |
Land used to grow ginseng (acres) | a | 71.16 |
Land planted (in square meters) | m² | 287,984 |
Chinese Government [Member] | |
Land used to grow ginseng (hectare) | ha | 800 |
Land used to grow ginseng (acres) | a | 1,975 |
Grant period of lease | 20 years |
AGREEMENTS WITH FARMERS (Detail
AGREEMENTS WITH FARMERS (Details Narrative) | 72 Months Ended | ||
Dec. 31, 2013kg | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($) | |
Price for leases of ginseng land | 1.50 | ||
Management fee paid to farmers | 0.50 | ||
Production of crop per square meter required in kg's | kg | 2 | ||
Description of payment condition of the harvested crop to the farmers | If the harvest is below 2kg per square meter, the difference will be deducted from the total payment for Ginseng purchased. If the harvest produces more that 2kg per square meter, the Company pays approximately $3.00 for every extra kilo. | ||
Price per kilo for extra kilo production | 3 | ||
Long-term payable as a management fee due to the farmers | $ | $ 832,248 | $ 879,567 | |
CNY [Member] | |||
Price for leases of ginseng land | 10 | ||
Management fee paid to farmers | 4 |
LOAN PAYABLE TO FINANCIAL INS35
LOAN PAYABLE TO FINANCIAL INSTITUTION (Details Narrative) | Oct. 29, 2013 | Sep. 10, 2011 | Mar. 31, 2016USD ($) | Jun. 30, 2002CNY (¥) | Jun. 30, 2015USD ($) |
Interest rate on loan | 3.00% | 6.325% | |||
Term of loan | Feb. 28, 2014 | Aug. 12, 2012 | Apr. 4, 2003 | ||
Description of interest payment terms | Interest was paid on the loan through June 30, 2009 and has been accrued in subsequent periods. | ||||
Description of the collateral | The loan is secured by the assets of Jilin Huaxia. | The loan is secured by the building. | The loan is secured by the Companys inventory and equipment. | ||
Loan payable to financial institution | $ | $ 309,540 | $ 327,139 | |||
CNY [Member] | |||||
Loans Payable | ¥ | ¥ 2,000,000 |
LOAN PAYABLE - BUILDING PURCH36
LOAN PAYABLE - BUILDING PURCHASE (Details Narrative) | Oct. 29, 2013 | Sep. 10, 2011CNY (¥) | Jun. 30, 2011USD ($) | Jun. 30, 2011CNY (¥) | Dec. 31, 2010USD ($) | Dec. 31, 2010CNY (¥) | Mar. 31, 2016USD ($) | Mar. 31, 2016CNY (¥) | Jun. 30, 2002 | Jun. 30, 2015 | Jun. 24, 2011USD ($) | Jun. 24, 2011CNY (¥) | Mar. 02, 2011USD ($) | Mar. 02, 2011CNY (¥) |
Purchase price of office and warehouse facilities | $ | $ 1,385,980 | |||||||||||||
Amount paid for office and warehouse facilities | $ | $ 76,990 | |||||||||||||
Unpaid amount for office and warehouse facilities | $ | $ 1,308,981 | |||||||||||||
Loan maturity date | Feb. 28, 2014 | Aug. 12, 2012 | Aug. 12, 2012 | Apr. 4, 2003 | ||||||||||
Floating interest rate adjusted upwards description | The floating rate was 18.43%. | The floating rate was 18.43%. | ||||||||||||
Description of the collateral | The loan is secured by the assets of Jilin Huaxia. | The loan is secured by the building. | The loan is secured by the Companys inventory and equipment. | The loan is secured by the Companys inventory and equipment. | ||||||||||
Central bank rate | 18.43% | |||||||||||||
Office and warehouse facilities purchase price paid | $ | $ 61,599 | $ 15,400 | ||||||||||||
Office and warehouse loan to be repay in September 2012 | $ | $ 153,998 | |||||||||||||
Office and warehouse loan to be repay on August 29, 2013 | $ | 153,998 | |||||||||||||
Office and warehouse loan to be repay on December 20, 2013 | $ | 153,998 | |||||||||||||
Office and warehouse loan to be repay on August 29, 2014 | $ | $ 769,988 | |||||||||||||
CNY [Member] | ||||||||||||||
Purchase price of office and warehouse facilities | ¥ 9,000,000 | |||||||||||||
Amount paid for office and warehouse facilities | ¥ 8,000,000 | ¥ 500,000 | ||||||||||||
Unpaid amount for office and warehouse facilities | ¥ 8,500,000 | |||||||||||||
Remaining loan of office and warehouse facilities | ¥ 500,000 | |||||||||||||
Office and warehouse facilities purchase price paid | ¥ 400,000 | ¥ 100,000 | ||||||||||||
Office and warehouse loan to be repay in September 2012 | ¥ 1,000,000 | |||||||||||||
Office and warehouse loan to be repay on August 29, 2013 | 1,000,000 | |||||||||||||
Office and warehouse loan to be repay on December 20, 2013 | 1,000,000 | |||||||||||||
Office and warehouse loan to be repay on August 29, 2014 | ¥ 5,000,000 |
LOAN PAYABLE - EQUIPMENT PURC37
LOAN PAYABLE - EQUIPMENT PURCHASE (Details Narrative) | Oct. 29, 2013USD ($) | Oct. 29, 2013CNY (¥) | Sep. 10, 2011 | Mar. 31, 2016 | Jun. 30, 2002 |
Payments to acquire machinery and equipment | $ | $ 5,616,923 | ||||
Loan maturity date | Feb. 28, 2014 | Feb. 28, 2014 | Aug. 12, 2012 | Apr. 4, 2003 | |
Interest paid for loan | $ | $ 211,606 | ||||
Description of the collateral | The loan is secured by the assets of Jilin Huaxia. | The loan is secured by the assets of Jilin Huaxia. | The loan is secured by the building. | The loan is secured by the Companys inventory and equipment. | |
CNY [Member] | |||||
Payments to acquire machinery and equipment | ¥ | ¥ 36,474,054 | ||||
Interest paid for loan | ¥ | ¥ 1,300,000 |
NOTE PAYABLE - OTHER (Details N
NOTE PAYABLE - OTHER (Details Narrative) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2002 |
Debt Disclosure [Abstract] | |||
Loan payable - other | $ 3,124,239 | $ 3,997,629 | |
Interest rate | 3.00% | 6.325% |
CONVERTIBLE DEBENTURE (Details
CONVERTIBLE DEBENTURE (Details Narrative) | Jul. 21, 2015USD ($)Number$ / shares | Mar. 31, 2016shares | Jun. 30, 2015shares | Mar. 31, 2015HKD / sharesshares |
Common stock, authorized | 50,000,000 | 50,000,000 | ||
Common stock, issued | 44,397,297 | 44,397,297 | ||
Common stock, outstanding | 44,397,297 | 44,397,297 | ||
Series A Convertible Debt [Member] | ||||
Conversion price (in dollars per share) | HKD / shares | HKD 0.40 | |||
Common stock, authorized | 50,000,000 | |||
Common stock, issued | 44,397,297 | |||
Common stock, outstanding | 44,397,297 | |||
Common stock, total of issued, outstanding and reserved shares | 48,797,297 | |||
Increase in number of authorized shares | 1,202,703 | |||
Shares issued on conversion | 4,400,000 | |||
Common stock conversion | The Series A Convertible Debenture is repayable at July 20, 2018 and is convertible into 4,000,000 shares of the Companys common stock at a price of $0.40 per share. During the period that the conversion right exists, the Company covenants that it will reserve, from its authorized and unissued common stock, shares equal to 110% of the number of shares of common stock upon the full conversion of the Series A Convertible Debenture. At the conversion price of $.40 per share, this will be 4,400,000 shares. | |||
Private Placement [Member] | Series A Convertible Debt [Member] | ||||
Debt face amount | $ | $ 1,600,000 | |||
Number of shares issued for debt conversion | Number | 4,000,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 0.40 | |||
Debt maturity term | 36 months |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |||
Notes payable - related parties | $ 1,650,292 | $ 1,593,996 | |
Imputed interest | 72,629 | $ 75,132 | |
Receivables from related parties | $ 26,289 | $ 7,703 |
PROVISION FOR INCOME TAXES (Det
PROVISION FOR INCOME TAXES (Details) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Income Tax Disclosure [Abstract] | ||
Timing difference related to inventory provisions | ||
Net operating losses | $ 4,159,027 | $ 3,371,958 |
Valuation allowance | $ (4,159,027) | $ (3,371,958) |
Deferred tax asset |
PROVISION FOR INCOME TAXES (D42
PROVISION FOR INCOME TAXES (Details 1) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Net operating loss carry forward | $ 16,636,108 | $ 13,487,832 |
China [Member] | ||
Net operating loss carry forward | 11,204,424 | 9,290,901 |
United States [Member] | ||
Net operating loss carry forward | $ 5,431,684 | $ 4,196,931 |
PROVISION FOR INCOME TAXES (D43
PROVISION FOR INCOME TAXES (Details 2) - USD ($) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income before taxes | $ (3,148,276) | $ (1,887,180) |
China [Member] | ||
Income before taxes | (1,913,523) | (1,012,948) |
United States [Member] | ||
Income before taxes | $ (1,234,753) | $ (874,232) |
PROVISION FOR INCOME TAXES (D44
PROVISION FOR INCOME TAXES (Details 3) | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | (34.00%) | (34.00%) |
State income taxes, net of federal benefit | 3.30% | 3.30% |
Valuation allowance | 30.70% | 30.70% |
Earnings taxed at other than US statutory rate | ||
Effective tax rate |
PROVISION FOR INCOME TAXES (D45
PROVISION FOR INCOME TAXES (Details Narrative) | 9 Months Ended |
Mar. 31, 2016USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Penalties related to past due information returns from 2005 through 2015 | $ 540,000 |
Foreign Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Period to carry forward net operating losses | 5 years |
Operating loss expiration date | Jun. 30, 2013 |
Domestic Tax Authority [Member] | |
Operating Loss Carryforwards [Line Items] | |
Period to carry forward net operating losses | 20 years |
Operating loss expiration date | Jun. 30, 2027 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details Narrative) - USD ($) | Mar. 31, 2016 | Jun. 30, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Contingent liabilities | $ 486,120 | $ 513,760 |
Tonghua Linyuan [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Contingent liabilities | 486,120 | 513,760 |
Loan payable | 309,540 | 327,139 |
Accounts payable and accrued expenses | $ 176,580 | $ 186,321 |
COMMITMENTS AND CONTINGENCIES47
COMMITMENTS AND CONTINGENCIES (Details) | Mar. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 33,909 |
COMMITMENTS AND CONTINGENCIES48
COMMITMENTS AND CONTINGENCIES (Details Narrative) - 9 months ended Mar. 31, 2016 | USD ($)aha | CNY (¥)aha |
Land used to grow ginseng (hectare) | ha | 28.80 | 28.80 |
Land used to grow ginseng (acres) | a | 71.16 | 71.16 |
Chinese Government [Member] | ||
Land used to grow ginseng (hectare) | ha | 800 | 800 |
Land used to grow ginseng (acres) | a | 1,975 | 1,975 |
Grant period of lease | 20 years | |
Refrigeration And Storage [Member] | ||
Annual lease fee | $ | $ 15,500 | |
Corporate Offices [Member] | ||
Expiration of leases | May 21, 2016 | |
Term of Lease | 1 year | |
Commitments for the leases | $ | $ 33,909 | |
Corporate Offices [Member] | CNY [Member] | ||
Commitments for the leases | ¥ | ¥ 220,190 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | |
Summary of segments reporting information | |||||
Revenues | $ 253,619 | $ 15,148 | $ 315,365 | $ 167,362 | |
Net (loss) Income | (620,317) | (569,633) | (3,148,276) | (1,887,180) | |
Total assets | 8,669,569 | 8,922,134 | 8,669,569 | 8,922,134 | $ 8,344,160 |
Other significant items: | |||||
Depreciation and amortization | 14,743 | 21,342 | 67,789 | 67,276 | |
Interest expense | 699,695 | 182,346 | 1,554,136 | 715,578 | |
Expenditures for fixed assets | $ 1,380 | $ 4,402 | $ 9,277 | $ 7,881 | |
Parent Company [Member] | |||||
Summary of segments reporting information | |||||
Revenues | |||||
Net (loss) Income | $ (119,235) | $ (410,539) | $ (1,234,753) | $ (874,232) | |
Total assets | 421,704 | 19,830 | 421,704 | 19,830 | |
Other significant items: | |||||
Depreciation and amortization | 430 | 319 | 1,299 | 961 | |
Interest expense | $ 42,256 | 14,241 | 173,898 | 39,585 | |
Expenditures for fixed assets | $ 4,400 | $ 5,439 | |||
Ginseng [Member] | |||||
Summary of segments reporting information | |||||
Revenues | $ 210,690 | 248,972 | |||
Net (loss) Income | (486,057) | $ (160,721) | (1,906,304) | $ (996,982) | |
Total assets | 8,165,785 | 8,653,904 | 8,165,785 | 8,653,904 | |
Other significant items: | |||||
Depreciation and amortization | 14,049 | 20,823 | 65,680 | 65,716 | |
Interest expense | 655,305 | 168,105 | 1,378,763 | 674,969 | |
Expenditures for fixed assets | 1,380 | 2 | 9,277 | 2,442 | |
Cosmetics/Supplements [Member] | |||||
Summary of segments reporting information | |||||
Revenues | 42,929 | 15,148 | 66,393 | 167,362 | |
Net (loss) Income | (13,011) | 1,627 | (7,219) | (15,966) | |
Total assets | 82,080 | 248,400 | 82,080 | 248,400 | |
Other significant items: | |||||
Depreciation and amortization | 264 | $ 200 | 810 | 599 | |
Interest expense | $ 120 | $ 1,475 | $ 1,024 | ||
Expenditures for fixed assets |
OPERATING SEGMENTS (Details Nar
OPERATING SEGMENTS (Details Narrative) | 9 Months Ended |
Mar. 31, 2016Number | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |