Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Jun. 30, 2014 | Dec. 09, 2014 | Dec. 31, 2013 |
Document and Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'TIANYIN PHARMACEUTICAL CO., INC. | ' | ' |
Entity Central Index Key | '0001362718 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 29,432,791 | ' |
Entity Public Float | ' | ' | $16 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $16,120,041 | $26,827,008 |
Restricted cash | 994,017 | 4,536,000 |
Accounts receivable, net of allowance for doubtful accounts of $102,401 and $102,149 at June 30, 2014 and 2013, respectively | 9,074,576 | 10,112,718 |
Inventory | 3,841,712 | 6,036,014 |
Loan receivable | 1,981,280 | ' |
Deferred tax assets | 1,180,510 | ' |
Other current assets | 376,504 | 313,320 |
Total current assets | 33,568,640 | 47,825,060 |
Property and equipment, net | 45,378,356 | 40,603,232 |
Intangibles, net | 27,699,733 | 21,505,012 |
Goodwill | 211,120 | 210,600 |
Total assets | 106,857,849 | 110,143,904 |
Current liabilities: | ' | ' |
Accounts payable and accrued expenses | 1,592,459 | 1,352,560 |
Accounts payable - construction related | 2,238,927 | 2,723,290 |
Short-term bank loans | 4,547,200 | 5,929,200 |
Income tax payable | 35,832 | 701,311 |
Other taxes payable | 179,610 | 740,800 |
Other current liabilities | 522,995 | 449,062 |
Total current liabilities | 9,117,023 | 11,896,223 |
Total liabilities | 9,117,023 | 11,896,223 |
Stockholders' equity: | ' | ' |
Preferred stock, $0.001 par value, 25,000,000 shares authorized, no shares issued and outstanding at June 30, 2014 and 2013 | ' | ' |
Common stock, $0.001 par value, 50,000,000 shares authorized, 29,546,276 shares issued, 29,432,791 shares outstanding at June 30, 2014 and 29,496,276 shares issued, 29,382,791 shares outstanding at June 30, 2013 | 29,546 | 29,496 |
Additional paid-in capital | 30,189,802 | 30,134,852 |
Treasury stock, 113,485 shares at cost | -135,925 | -135,925 |
Statutory reserve | 6,976,412 | 6,847,315 |
Retained earnings | 50,193,258 | 50,967,308 |
Accumulated other comprehensive income | 10,423,712 | 10,178,358 |
Total stockholders' equity | 97,676,805 | 98,021,404 |
Noncontrolling interest | 64,021 | 226,277 |
Total equity | 97,740,826 | 98,247,681 |
Total liabilities and equity | $106,857,849 | $110,143,904 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Balance Sheets [Abstract] | ' | ' |
Allowance for doubtful accounts | $102,401 | $102,149 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ' | ' |
Preferred stock, shares outstanding | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 29,546,276 | 29,496,276 |
Common stock, shares outstanding | 29,432,791 | 29,382,791 |
Treasury stock, shares | 113,485 | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Statements Of Operations [Abstract] | ' | ' |
Sales | $46,555,021 | $67,500,476 |
Cost of sales | 30,674,098 | 41,496,812 |
Gross profit | 15,880,923 | 26,003,664 |
Operating expenses | ' | ' |
Selling expenses | 7,800,507 | 11,442,664 |
General and administrative expenses | 4,449,587 | 4,351,592 |
Research and development | 946,300 | 894,995 |
Total operating expenses | 13,196,394 | 16,689,251 |
Income from operations | 2,684,529 | 9,314,413 |
Other income (expenses): | ' | ' |
Interest income | 165,533 | 162,563 |
Interest expense | -392,010 | -437,897 |
Other expense | -3,070,795 | ' |
Total other income (expenses) | -3,297,272 | -275,334 |
Income (loss) before provision for income tax | -612,743 | 9,039,079 |
Provision for income tax | 195,325 | 2,423,906 |
Net income (loss) | -808,068 | 6,615,173 |
Less: Net income (loss) attributable to noncontrolling interest | -163,115 | -56,978 |
Net income attributable to Tianyin Pharmaceutical Co., Inc. | ($644,952) | $6,672,151 |
Basic and diluted earnings per share | $0.03 | $0.23 |
Weighted average number of common shares outstanding: | ' | ' |
Basic and diluted | 29,400,599 | 29,345,668 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Statements Of Comprehensive Income [Abstract] | ' | ' |
Net income (loss) | ($808,068) | $6,615,173 |
Other comprehensive income | ' | ' |
Foreign currency translation adjustment | 246,213 | 2,083,061 |
Total other comprehensive income | 246,213 | 2,083,061 |
Total Comprehensive income (loss) | -561,855 | 8,698,234 |
Less: Comprehensive income (loss) attributable to the noncontrolling interest | -162,256 | -51,749 |
Comprehensive income (loss) attributable to Tianyin Pharmaceutical Co., Inc. | ($399,599) | $8,749,983 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net Income (loss) | ($808,068) | $6,615,173 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 2,587,565 | 2,435,138 |
Deferred tax assets | -1,180,510 | ' |
Provision for inventory obsolescence and markdown | 1,527,483 | 159,123 |
Provision for bad debts | ' | -14,004 |
Share-based payment | 55,000 | 30,000 |
Changes in current assets and current liabilities: | ' | ' |
Accounts receivable | 1,065,075 | 1,400,397 |
Inventory | 685,804 | -201,972 |
Advance payments | ' | 645,923 |
Other current assets | -62,525 | 130,893 |
Accounts payable and accrued expenses | 236,997 | -264,388 |
Accounts payable - construction related | -491,994 | 1,935,150 |
Income tax payable | -668,443 | -119,146 |
Other taxes payable | -564,060 | 225,356 |
Other current liabilities | 72,959 | -27,787 |
Net cash provided by operating activities | 2,455,283 | 12,949,856 |
Cash flows from investing activities: | ' | ' |
Addition to property and equipment | ' | -1,704,154 |
Addition of Construction in progress | -6,450,737 | -13,274,213 |
Additions to intangible assets - land use right | -6,973,301 | -886,611 |
Loans receivable | -1,984,940 | ' |
Acquisition of subsidiary | ' | -207,285 |
Net cash used in investing activities | -15,408,978 | -16,072,263 |
Cash flows from financing activities: | ' | ' |
Trade notes payable | ' | -4,703,775 |
Restricted cash | 3,559,747 | -908,865 |
Proceeds from short-term bank loans | 4,555,600 | 10,300,470 |
Repayments of short-term bank loans | -5,954,820 | -10,523,700 |
Net cash provided by (used in) financing activities | 2,160,527 | -5,835,870 |
Effect of foreign currency translation on cash | 86,201 | 632,990 |
Net decrease in cash and cash equivalents | -10,706,967 | -8,325,287 |
Cash and cash equivalents - beginning of year | 26,827,008 | 35,152,295 |
Cash and cash equivalents - ending of year | 16,120,041 | 26,827,008 |
Supplemental cash flow disclosure | ' | ' |
Cash paid for interest | 391,942 | 437,605 |
Income tax paid | $2,421,477 | $2,543,053 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock | Treasury Stock [Member] | Preferred Stock [Member] | Additional Paid in Capital | Statutory Reserve | Retained Earnings | Accumulated other Comprehensive Income | Total Shareholder's Equity | Noncontrolling Interest |
Beginning Balance at Jun. 30, 2012 | $89,519,447 | $29,446 | ($135,925) | ' | $30,104,902 | $6,120,143 | $45,022,329 | $8,100,526 | $89,241,421 | $278,026 |
Beginning Balance, Shares at Jun. 30, 2012 | ' | 29,446,276 | ' | 0 | ' | ' | ' | ' | ' | ' |
Net income | 6,615,173 | ' | ' | ' | ' | ' | 6,672,151 | ' | 6,672,151 | -56,978 |
Other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | 2,083,061 | ' | ' | ' | ' | ' | ' | 2,077,832 | 2,077,832 | 5,229 |
Comprehensive income | 8,698,234 | ' | ' | ' | ' | ' | ' | ' | 8,749,983 | -51,749 |
Common shares issued | 30,000 | 50 | ' | ' | 29,950 | ' | ' | ' | 30,000 | ' |
Common shares issued, Shares | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory reserve | ' | ' | ' | ' | ' | 727,172 | -727,172 | ' | ' | ' |
Ending Balance at Jun. 30, 2013 | 98,247,681 | 29,496 | -135,925 | 0 | 30,134,852 | 6,847,315 | 50,967,308 | 10,178,358 | 98,021,404 | 226,277 |
Ending Balance, Shares at Jun. 30, 2013 | ' | 29,496,276 | ' | 0 | ' | ' | ' | ' | ' | ' |
Net income | -808,068 | ' | ' | ' | ' | ' | -644,953 | ' | -644,953 | -163,115 |
Other comprehensive income: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | 246,213 | ' | ' | ' | ' | ' | ' | 245,354 | 245,354 | 859 |
Comprehensive income | -561,855 | ' | ' | ' | ' | ' | ' | ' | -399,599 | -162,256 |
Common shares issued, Shares | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares issued for services | 55,000 | 50 | ' | ' | 54,950 | ' | ' | ' | 55,000 | ' |
Common shares issued for services, Shares | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory reserve | ' | ' | ' | ' | ' | 129,097 | -129,097 | ' | ' | ' |
Ending Balance at Jun. 30, 2014 | $97,740,826 | $29,546 | ($135,925) | ' | $30,189,802 | $6,976,412 | $50,193,258 | $10,423,712 | $97,676,805 | $64,021 |
Ending Balance, Shares at Jun. 30, 2014 | ' | 29,546,276 | ' | 0 | ' | ' | ' | ' | ' | ' |
Organization_and_Nature_of_Bus
Organization and Nature of Business | 12 Months Ended |
Jun. 30, 2014 | |
Organization and Nature Of Business [Abstract] | ' |
ORGANIZATION AND NATURE OF BUSINESS | ' |
Note 1 – Organization and Nature of Business | |
Tianyin Pharmaceutical Co., Inc. (the “Company” or “Tianyin”) was established under the laws of Delaware on August 20, 2002. The Company’s primary business is to research, manufacture, and sell pharmaceutical products through its subsidiaries in China. The accompanying consolidated financial statements include the financial statements of Tianyin Pharmaceutical Co., Inc. and its subsidiaries. The Company’s operating subsidiaries include Chengdu Tianyin Pharmaceutical., Tianyin Medicine Trading (TMT), Hengshuo Pharmaceutical (HSP) and Jiangchuan Pharmaceutical (JCM). | |
In order to facilitate the relocation of Chengdu Tianyin’s business operation to Qionglai County and to secure land use rights for the relocation of manufacturing facilities as Qionglai Facility (QLF), Chengdu Tianyin needs to establish its presence at Qionglai County during the process of construction, while all operating subsidiaries of Chengdu Tianyin are registered outside of Qionglai. Therefore, the Company decided to acquire a pharmaceutical distribution company and registered it at Qionglai County as a subsidiary of Chengdu Tianyin. On August 29, 2012, Chengdu Tianyin entered into a Share Transfer Agreement (the "Agreement") with the two existing shareholders of Sichuan Hengshuo Pharmaceutical Co., Ltd (“Sichuan Hengshuo” or “HSP”). The share transfer was completed on November 30, 2012 by which Chengdu Tianyin acquired 100% ownership of HSP, a PRC company for a total consideration of $210,600 (RMB 1.3 million). As of June 30, 2014, the financial results of HSP are consolidated into the consolidated financial statements presented herein. The purchase price of $210,600 was assigned to goodwill as the net assets and operations of HSP were minimum at the date of acquisition (See Note 6). |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | |||||
Note 2 – Summary of Significant Accounting Policies | ||||||
Basis of Presentation and Consolidation | ||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America. The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. | ||||||
Certain prior year amounts were reclassified to conform with current year presentation. | ||||||
Use of Estimates | ||||||
The preparation of financial statements in accordance with accounting principles generally accepted 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation reserves for accounts receivable, inventory, estimated useful life and residual value of property, plant and equipment, recognition and measurement of deferred income tax and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results could differ from those estimates. | ||||||
Cash and Cash Equivalents | ||||||
The Company considers all highly liquid instruments with original maturities of three months or less to be “cash equivalents”. | ||||||
Restricted Cash | ||||||
Restricted cash consists of cash equivalents used as collateral to secure short-term notes payable. | ||||||
Accounts Receivable | ||||||
Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to our customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. | ||||||
We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary | ||||||
Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that we should abandon such efforts. | ||||||
The Company has not experienced any significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties being experienced by its major customers. | ||||||
Inventory | ||||||
Inventories consist of raw materials, packaging materials (which include ingredients and supplies) and finished goods. Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required that could negatively impact the Company’s gross margin and operating results. Inventory markdown allowance of $79,748 and zero were recorded at June 30, 2014 and 2013. Obsolete inventory of $1,447,735 and $159,123 were written-off in the year ended June 30, 2014 and 2013, respectively. | ||||||
Property and Equipment | ||||||
Property and equipment are stated at cost. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets as follows: | ||||||
Vehicles | 5 to 10 years | |||||
Furniture, machinery and equipment | 5 to 10 years | |||||
Buildings and improvements | 10 to 50 years | |||||
Construction in progress primarily represents the renovation costs of plant, machinery and equipment and stated at cost less any accumulated impairment loss. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. | ||||||
Cost of repairs and maintenance is expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of operations. | ||||||
Impairment of Long-lived Assets | ||||||
In accordance with ASC Topic 360-10-35 “Accounting for the Impairment or Disposal of Long-Lived Assets,”, long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. The Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions, which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total of the expected future undiscounted cash flows is less than the total carrying value of the assets, a loss is recognized for the difference between the fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. | ||||||
Intangible Assets | ||||||
Intangible assets comprised of approved drugs and rights to use land. Intangible asset is carried at cost, less related accumulated amortization. Approved drugs are separated into two groups: Traditional Chinese Medicine (TCM) and Non Traditional Chinese Medicine (NTCM). TCM which has an indefinite life are not being amortized and are subject to impairment test at least annually to determine if the carrying value of the asset is impaired. NTCM drugs are amortized on a straight-line basis over their estimated useful life of 10 years. | ||||||
Rights to use land with a finite useful life is being amortized on a straight line basis over its estimated useful life of 48 years. | ||||||
Goodwill | ||||||
The Company accounts for business acquisitions in accordance with ASC 805-10, which may result in the recognition of goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method. | ||||||
Goodwill is not subject to amortization but will be subject to periodic evaluation for impairment. Goodwill is stated in the consolidated balance sheet at cost less accumulated impairment loss, if any. The Company reviews its goodwill for impairment annually or more frequently if indicators of impairment exist. The Company adopted an accounting standard update, commonly referred to as the step zero approach that allows it to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. For reporting units in which the qualitative assessment concludes it is more likely than not that the fair value is more than its carrying value, the amended guidance eliminates the requirement to perform further goodwill impairment test. For those reporting units where a significant change or event occurs, and where potential impairment indicators exist, the Company continues to utilize a two-step quantitative assessment to testing goodwill for impairment. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others (a) a significant decline in expected future cash flows; (b) a sustained, significant decline in stock price and market capitalization; (c) a significant adverse change in legal factors or in the business climate; (d) unanticipated competition; (e) the testing for recoverability of a significant asset group within a reporting unit; and (f) slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the consolidated financial statements. The goodwill test impairment consists of two steps. First, the identification of potential impairment is performed by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Second, if there is impairment identified in the first step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of goodwill. The Company has assessed its goodwill for impairment for the periods presented. There are no impairment charges related to goodwill for any of the fiscal periods presented. | ||||||
Impairment of Intangible Assets | ||||||
The Company applies the provisions of ASC Topic 350 which addresses how goodwill and other acquired intangible assets should be accounted for in financial statements. In this regard, the Company tests these intangible assets for impairment annually or more frequently if indicators of potential impairment are present. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. | ||||||
The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended June 30, 2014, the Company applied a benchmark borrowing interest rate of 7.0% as the discount rate and recorded the impairment loss of $-0- related to intangible assets for the years ended June 30, 2014 and 2013, respectively. | ||||||
Revenue Recognition | ||||||
The Company derives its revenues primarily from sale of pharmaceutical products. In accordance with ASC Topic 605 “Revenue Recognition”, revenue should not be recognized until it is realized or realizable and earned. Revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. In this regard, the Company’s revenue is recognized when merchandise is received by customers or shipped by the Company pursuant to contractual terms of sales, title and risk of loss passes to the customers, sales amounts are fixed and determinable and the collectability is reasonably assured. | ||||||
Shipping and Handling Costs | ||||||
Shipping and handling costs billed to customers in related sales transactions are included in sales revenues and shipping expenses incurred by the Company are reported as a component of selling expenses. The shipping and handling expenses of $615,925 and $1,307,921 for the year ended June 30, 2014 and 2013, respectively, are reported in the Consolidated Statements of Operations as a component of selling expenses. | ||||||
Research and Development | ||||||
Research and development costs are expensed when incurred. Research and development costs for the years ended June 30, 2014 and 2013 were $949,300 and $894,995, respectively. | ||||||
Income Taxes | ||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||||
A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. | ||||||
Value Added Taxes | ||||||
Under the Provisional Regulations of the PRC on Value Added Tax, the Company is responsible for collecting value added taxes on sales of products and to pay value added taxes on purchases of raw materials, which is then remitted to the central government. Sales and cost of sales are reported on a net basis excluding value added taxes. | ||||||
Fair Value of Financial Instruments | ||||||
The Company’s financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, short-term debt and other financial instruments associated with the issuance of the common stock. The carrying values of cash equivalents, accounts receivable, notes receivable, and accounts payable approximate their fair value because of the short maturity of these instruments. The carrying amounts of the Company’s bank borrowings under its credit facility approximate fair value because the interest rates are reset periodically to reflect current market rates. | ||||||
The Company adopted ASC 820-10, “Fair Value Measurements.” ASC 820-10, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. | ||||||
As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||||
Level 1: Observable inputs such as quoted prices in active markets; | ||||||
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | ||||||
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||||
We have no financial assets or liabilities measured at fair value on a recurring basis | ||||||
Foreign Currency Translation and Transactions | ||||||
The Company has evaluated the determination of its functional currency based on the guidance in ASC Topic, “Foreign Currency Matters,” which provides that an entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash. | ||||||
On its own, the Company raises financing in the U.S. Dollar, pays its own operating expenses primarily in the U.S. Dollar, paid dividends to its shareholders of common stock and expects to receive any dividends that may be declared by its subsidiaries in U.S. dollars. | ||||||
Therefore, it has been determined that the Company’s functional currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5. | ||||||
The Company uses the United States dollar (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, being the primary currency of the economic environment in which their operations are conducted. Assets and liabilities of a subsidiary with functional currency other than U.S. Dollar are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income. | ||||||
The exchange rates used to translate amounts in RMB into US Dollars for the purposes of preparing the condensed combined financial statements were as follows: | ||||||
June 30, | June 30, | |||||
2014 | 2013 | |||||
Balance sheet items, except for shareholders’ equity items | RMB 1: US$0.1624 | RMB 1: US$0.16200 | ||||
Amounts included in the statements of operations, comprehensive income, and cash flows for the years then ended | RMB 1: US$0.1627 | RMB 1: US$0. 15945 | ||||
Shareholders’ equity items | Historical rate | Historical rate | ||||
Comprehensive Income | ||||||
The Company has adopted ASC Topic 220-10, Reporting Comprehensive Income, which establishes rules for the reporting and display of comprehensive income, its components and accumulated balances. ASC 220-10 defines comprehensive income to include all changes in equity, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on available-for-sale marketable securities, except those resulting from investments by stockholders and distributions to stockholders. Comprehensive income includes net income and the foreign currency translation gain, net of tax. | ||||||
Share-Based Payment | ||||||
The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the fair value of the award on the date of grant is calculated in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. | ||||||
Earnings Per Share | ||||||
In accordance with ASC 260, “Computation of Earnings Per Share” and EITF No. 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128” (“EITF No. 03-6”), basic earnings per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. The Company’s Series A redeemable convertible preferred shares are participating securities. Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the convertible preferred shares (using the if-converted method) and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). | ||||||
Recent Accounting Pronouncements | ||||||
In April 2014, the FASB issued amendments to ASC Topic 205 “Presentation of Financial Statements” and ASC Topic 360 “Property, Plant and Equipment”. The amendments change the current requirements for reporting discontinued operations in Subtopic 205-20. It requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability section, respectively, of the statement of financial position. This topic is effective for public entities for reporting periods beginning after December 15, 2014. An entity should not apply the amendments to a component classified as held for sale before the effective date even if the component of an entity is disposed of after the effective date. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued. The Company does not believe the adoption of the amendments to ASC 205 and ASC 360 will have a material effect on its consolidated financial statements. | ||||||
There are no other new accounting pronouncements adopted or enacted during the year ended June 30, 2014 that had, or are expected to have, a material impact on the Company’s financial statements. |
Inventory
Inventory | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Inventory [Abstract] | ' | |||||||||
INVENTORY | ' | |||||||||
Note 3 – Inventory | ||||||||||
Inventory at June 30, 2014 and 2013 consists of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Raw materials | $ | 690,355 | $ | 748,296 | ||||||
Packaging supplies | 387,599 | 369,143 | ||||||||
Work in process | 1,088,880 | 1,871,093 | ||||||||
Finished goods | 1,674,878 | 3,047,482 | ||||||||
Total | $ | 3,841,712 | $ | 6,036,014 |
Property_and_Equipment
Property and Equipment | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Property and Equipment [Abstract] | ' | |||||||||
PROPERTY AND EQUIPMENT | ' | |||||||||
Note 4 – Property and Equipment | ||||||||||
Property and equipment at June 30, 2014 and 2013 consists of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Buildings | $ | 15,188,962 | $ | 15,151,551 | ||||||
Machinery and equipment | 14,588,168 | 14,552,237 | ||||||||
Office equipment and furniture | 102,236 | 101,984 | ||||||||
Vehicles | 69,508 | 69,337 | ||||||||
Subtotal | 29,948,874 | 29,875,109 | ||||||||
Less: Accumulated depreciation | 7,127,561 | 5,350,377 | ||||||||
22,821,313 | 24,524,732 | |||||||||
Add: Construction in progress | 22,557,043 | 16,078,500 | ||||||||
Total | $ | 45,378,356 | $ | 40,603,232 | ||||||
Depreciation expense for the fiscal years ended June 30, 2014 and 2013 was $1,767,232 and $1,631,191, respectively. |
Intangible_Assets
Intangible Assets | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Intangible Assets and Goodwill [Abstract] | ' | |||||||||
INTANGIBLE ASSETS | ' | |||||||||
Note 5 – Intangible Assets | ||||||||||
Intangible assets at June 30, 2014 and 2013 consist of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Rights to use land | $ | 14,770,400 | $ | 7,790,720 | ||||||
Approved drugs | 17,060,652 | 17,018,631 | ||||||||
Intangible assets | 31,831,052 | 24,809,351 | ||||||||
Less: accumulated amortization | 4,131,319 | 3,304,339 | ||||||||
Total | $ | 27,699,733 | $ | 21,505,012 | ||||||
Amortization expense for the fiscal years ended June 30, 2014 and 2013 was $820,333 and $803,947, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows: |
Goodwill
Goodwill | 12 Months Ended |
Jun. 30, 2014 | |
Intangible Assets and Goodwill [Abstract] | ' |
GOODWILL | ' |
Note 6 – Goodwill | |
On November 30, 2012, Chengdu Tianyin completed its acquisition of 100% equity interest in Sichuan Hengshuo for RMB 1.3 million, equivalent to $210,600. Goodwill, which is equal to the excess of cost over the fair value of assets acquired, has been recorded in conjunction with the acquisition. Goodwill is accounted for in accordance with ASC 350. The purchase price of $210,600 was assigned to goodwill as the net assets and operations of HSP were minimum at the date of acquisition. |
Loan_Receivable
Loan Receivable | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Loan Receivables [Abstract] | ' | |||||
LOAN RECEIVABLE | ' | |||||
Note 7 – LOAN RECEIVABLE | ||||||
Loan receivable consists of following: | ||||||
Loan to an individual and guaranteed by a third party, collateralized by third party's machinery and equipment, bear interest at 50% above the bank standard rate and due on September 16, 2014. The loan was fully collected in September 19, 2014 | $ | 812,000 | ||||
Loan to an unrelated company, bear interest at 50% above the bank standard rate and due on September 8, 2014. The loan was collateralized by the machinery and equipment of the company. The loan was fully collected in September 15, 2014. | 1,169,280 | |||||
Total | $ | 1,981,280 |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Accounts Payable and Accrued Expenses [Abstract] | ' | |||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ' | |||||||||
Note 8 – Accounts Payable and Accrued Expenses | ||||||||||
Accounts payable and accrued expenses consist of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Accounts payable | $ | 1,476,830 | $ | 1,206,760 | ||||||
Accrued expenses | 115,629 | 145,800 | ||||||||
Total | $ | 1,592,459 | $ | 1,352,560 |
Accounts_Payable_Construction_
Accounts Payable - Construction Related | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Accounts Payable and Accrued Expenses [Abstract] | ' | |||||||||
ACCOUNTS PAYABLE - CONSTRUCTION RELATED | ' | |||||||||
Note 9 – Accounts Payable – Construction Related | ||||||||||
Accounts payable – construction related consist of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Construction in progress payable | $ | 2,238,927 | $ | 1,822,500 | ||||||
Land use rights payable | - | 900,790 | ||||||||
Total | $ | 2,238,927 | $ | 2,723,790 |
ShortTerm_Bank_Loans
Short-Term Bank Loans | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Short-Term Bank Loans [Abstract] | ' | |||||||||
SHORT-TERM BANK LOANS | ' | |||||||||
Note 10 – Short-Term Bank Loans | ||||||||||
Short-term bank loans consist of the following: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
On September 19, 2012, the Company obtained a loan from China Huaxia Bank, the principal balance was paid in full on September 27, 2013. The interest is calculated using an annual fixed interest rate of 7.257% and paid monthly. The loan was guaranteed by a third party and the Company’s CEO, Dr. Jiang. | - | $ | 1,620,000 | |||||||
On June 21, 2013, the Company obtained a loan from China CITIC Bank, which matures on December 21, 2013. The interest is calculated using an annual fixed interest rate of 6.44% and paid monthly. The loan was secured by the Company’s certificates of deposit, which included in the restricted cash on the Company’s balance sheet. The loan was paid in full in December 2013. | - | $ | 4,309,200 | |||||||
On October 30, 2013, the Company obtained a loan from China CITIC Bank, which matures on October 30, 2014. The interest is calculated using an annual fixed interest rate of 7.20% and paid monthly. The loan was guaranteed by the Company’s CEO, Dr. Jiang. | $ | 4,547,200 | - | |||||||
Total short-term bank loans | $ | 4,547,200 | $ | 5,929,200 |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Income Taxes [Abstract] | ' | |||||||||
INCOME TAXES | ' | |||||||||
Note 11 – Income Taxes | ||||||||||
The Company's subsidiary, Raygere, is incorporated in the British Virgin Islands. Under the corporate tax laws of British Virgin Islands, it is not subject to tax on income or capital gain. | ||||||||||
The operating subsidiaries, Chengdu Tianyin, Tianyin Medicine Trading (TMT), HSP and JCM are all subject to 25% income tax rate. The tax write- offs and loss profit credit could only be applied to the individual subsidiaries of TPI. | ||||||||||
In July 2006, the FASB issued ASC 740 that clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The Company did not recognize any benefits in the financial statements for the fiscal year ended June 30, 2014 and 2013. | ||||||||||
The comparison of income tax expense at the U.S. statutory rate of 35% in 2014 and 2013, to the Company’s effective tax is as follows: | ||||||||||
Fiscal Years ended | ||||||||||
June 30, | ||||||||||
2014 | 2013 | |||||||||
U.S. Statutory rate of 35% | $ | (214,460 | ) | $ | 3,163,678 | |||||
Tax rate difference between China and U.S. | 76,080 | (903,778 | ) | |||||||
Change in valuation allowance | 333,705 | 164,007 | ||||||||
Effective tax | $ | 195,325 | $ | 2,423,907 | ||||||
The provisions for income taxes are summarized as follows: | ||||||||||
Fiscal Years ended | ||||||||||
June 30, | ||||||||||
2014 | 2013 | |||||||||
Current | $ | 1,375,835 | $ | 2,423,907 | ||||||
Deferred | (1,678,222 | ) | (164,007 | ) | ||||||
Valuation allowance | 497,712 | 164,007 | ||||||||
Total | $ | 195,325 | $ | 2,423,907 | ||||||
The tax effects of temporary differences that give rise to the Company’s net deferred tax asset as of June 30, 2014 and 2013 are as follows: | ||||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Net operating loss carryforward | $ | 1,607,835 | $ | 164,007 | ||||||
Inventory markdown | 19,937 | - | ||||||||
Accrued expenses | 31,420 | - | ||||||||
Others | 19,030 | - | ||||||||
1,678,222 | 164,007 | |||||||||
Less valuation allowance | (497,712 | ) | (164,007 | ) | ||||||
Deferred tax assets | 1,180,510 | - |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Jun. 30, 2014 | |
Stockholders' Equity [Abstract] | ' |
Stockholders' Equity | ' |
Note 12 – Stockholders’ Equity | |
The Company issued 50,000 shares of common stock incentive to the Company’s Chief Financial Officer each year during the year ended June 30, 2014 and 2013, respectively. These shares were valued at $55,000 and $30,000 for the shares issued during the year ended June 30, 2014 and 2013, respectively, and recorded in the statement of operations as compensation expense. |
Statuary_Reserve
Statuary Reserve | 12 Months Ended |
Jun. 30, 2014 | |
Statuary Reserve [Abstract] | ' |
Statuary Reserve | ' |
Note 13 – Statuary Reserve | |
In accordance with the Companies Law of PRC, the Company is required to transfer 10% of its profit after tax, as determined in accordance with accounting standards and regulations of the PRC, to the statutory surplus reserve. The statutory surplus reserve is non-distributable. The Company transferred $129,097 and $727,172 to statutory reserve during the year ended June 30, 2014 and 2013. |
Employee_Welfare_Plan
Employee Welfare Plan | 12 Months Ended |
Jun. 30, 2014 | |
Employee Welfare Plan [Abstract] | ' |
EMPLOYEE WELFARE PLAN | ' |
Note 14 – Employee Welfare Plan | |
The Company has established an employee welfare plan in accordance with Chinese laws and regulations. Full-time employees of the Group in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits was $942,452 and $867,175 for the fiscal years ended June 30, 2014 and 2013, respectively. |
Risk_Factors
Risk Factors | 12 Months Ended |
Jun. 30, 2014 | |
Risk Factors [Abstract] | ' |
RISK FACTORS | ' |
Note 15 – Risk Factors | |
The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. The Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. |
Risk_of_Concentrations_and_Cre
Risk of Concentrations and Credit Risk | 12 Months Ended |
Jun. 30, 2014 | |
Risk of Concentrations and Credit Risk [Abstract] | ' |
RISK OF CONCENTRATIONS AND CREDIT RISK | ' |
Note 16 – Risk of Concentrations and Credit Risk | |
Concentrations | |
For the years ended June 30, 2014 and 2013, no single customer accounted for more than 10% of the Company’s sales. In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) contributes 47% or $22 million of total annual sales of fiscal year 2014 compared with GMOL’s contribution of 39% of total annual sales or $26.1 million from fiscal year 2013. No other products achieve more than 10% contribution for both fiscal years. | |
For the fiscal years ended June 30, 2014, two major vendors accounted for approximately 25% or $3.9 million and 13% or $2.0 million, respectively, of the Company’s total inventory purchases. For the fiscal years ended June 30, 2013, three major vendors accounted for approximately 18% or $4.0 million, 14% or $3.2 million and 14% or $3.1 million, respectively, of the Company’s total inventory purchases. | |
Credit Risk | |
Financial instruments, which potentially subject the Company to credit risk consist principally of cash on deposit with financial institutions. Management believes that the financial institutions that hold the Company’s cash and cash equivalents are financially sound and minimal credit risk exists with respect to these investments. | |
Other_Expenses
Other Expenses | 12 Months Ended |
Jun. 30, 2014 | |
Other Expense [Abstract] | ' |
Other Expenses | ' |
Note 17 – Other Expenses | |
Other expenses represented penalty fees charged by CFDA resulting from their inspection in 2014. |
Subsequent_Event
Subsequent Event | 12 Months Ended |
Jun. 30, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENT | ' |
Note 18 - SUBSEQUENT EVENT | |
On September 30, 2014, the Company’s subsidiary, Chengdu Tianyin, acquired the remaining 13% of the JCM for RMB 15 million (approximately $2.4 million). Total payment of RMB 15 million was made on October 8, 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||
Basis of Presentation and Consolidation | ' | |||||
Basis of Presentation and Consolidation | ||||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America. The consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. | ||||||
Certain prior year amounts were reclassified to conform with current year presentation. | ||||||
Use of Estimates | ' | |||||
Use of Estimates | ||||||
The preparation of financial statements in accordance with accounting principles generally accepted 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation reserves for accounts receivable, inventory, estimated useful life and residual value of property, plant and equipment, recognition and measurement of deferred income tax and valuation allowance for deferred tax assets. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results could differ from those estimates. | ||||||
Cash and Cash Equivalents | ' | |||||
Cash and Cash Equivalents | ||||||
The Company considers all highly liquid instruments with original maturities of three months or less to be “cash equivalents”. | ||||||
Restricted Cash | ' | |||||
Restricted Cash | ||||||
Restricted cash consists of cash equivalents used as collateral to secure short-term notes payable. | ||||||
Accounts Receivable | ' | |||||
Accounts Receivable | ||||||
Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amount. We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to our customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. | ||||||
We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary | ||||||
Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that we should abandon such efforts. | ||||||
The Company has not experienced any significant difficulty in collecting its accounts receivable in the past and is not aware of any financial difficulties being experienced by its major customers. | ||||||
Inventory | ' | |||||
Inventory | ||||||
Inventories consist of raw materials, packaging materials (which include ingredients and supplies) and finished goods. Inventory is stated at the lower of cost or market. Cost is determined using the weighted-average cost method. Provisions are made for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. Management continually evaluates the recoverability based on assumptions about customer demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory reserves or write-downs may be required that could negatively impact the Company’s gross margin and operating results. Inventory markdown allowance of $79,748 and zero were recorded at June 30, 2014 and 2013. Obsolete inventory of $1,447,735 and $159,123 were written-off in the year ended June 30, 2014 and 2013, respectively. | ||||||
Property and Equipment | ' | |||||
Property and Equipment | ||||||
Property and equipment are stated at cost. Depreciation is calculated based on the straight-line method over the estimated useful lives of the assets as follows: | ||||||
Vehicles | 5 to 10 years | |||||
Furniture, machinery and equipment | 5 to 10 years | |||||
Buildings and improvements | 10 to 50 years | |||||
Construction in progress primarily represents the renovation costs of plant, machinery and equipment and stated at cost less any accumulated impairment loss. Costs incurred are capitalized and transferred to property and equipment upon completion, at which time depreciation commences. | ||||||
Cost of repairs and maintenance is expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of operations. | ||||||
Impairment of Long-lived Assets | ' | |||||
Impairment of Long-lived Assets | ||||||
In accordance with ASC Topic 360-10-35 “Accounting for the Impairment or Disposal of Long-Lived Assets,”, long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, or it is reasonably possible that these assets could become impaired as a result of technological or other industrial changes. The determination of recoverability of assets to be held and used is made by comparing the carrying amount of an asset to future undiscounted cash flows to be generated by the assets. The Company reviews the recoverability of its long-lived assets on a periodic basis in order to identify business conditions, which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to recover the carrying value of its long-lived assets from expected future undiscounted cash flows. If the total of the expected future undiscounted cash flows is less than the total carrying value of the assets, a loss is recognized for the difference between the fair value (computed based upon the expected future discounted cash flows) and the carrying value of the assets. | ||||||
Intangible Assets | ' | |||||
Intangible Assets | ||||||
Intangible assets comprised of approved drugs and rights to use land. Intangible asset is carried at cost, less related accumulated amortization. Approved drugs are separated into two groups: Traditional Chinese Medicine (TCM) and Non Traditional Chinese Medicine (NTCM). TCM which has an indefinite life are not being amortized and are subject to impairment test at least annually to determine if the carrying value of the asset is impaired. NTCM drugs are amortized on a straight-line basis over their estimated useful life of 10 years. | ||||||
Rights to use land with a finite useful life is being amortized on a straight line basis over its estimated useful life of 48 years. | ||||||
Goodwill | ' | |||||
Goodwill | ||||||
The Company accounts for business acquisitions in accordance with ASC 805-10, which may result in the recognition of goodwill. Goodwill represents the excess of the purchase price over the fair value of net assets acquired in business combinations accounted for under the purchase method. | ||||||
Goodwill is not subject to amortization but will be subject to periodic evaluation for impairment. Goodwill is stated in the consolidated balance sheet at cost less accumulated impairment loss, if any. The Company reviews its goodwill for impairment annually or more frequently if indicators of impairment exist. The Company adopted an accounting standard update, commonly referred to as the step zero approach that allows it to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. For reporting units in which the qualitative assessment concludes it is more likely than not that the fair value is more than its carrying value, the amended guidance eliminates the requirement to perform further goodwill impairment test. For those reporting units where a significant change or event occurs, and where potential impairment indicators exist, the Company continues to utilize a two-step quantitative assessment to testing goodwill for impairment. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others (a) a significant decline in expected future cash flows; (b) a sustained, significant decline in stock price and market capitalization; (c) a significant adverse change in legal factors or in the business climate; (d) unanticipated competition; (e) the testing for recoverability of a significant asset group within a reporting unit; and (f) slower growth rates. Any adverse change in these factors could have a significant impact on the recoverability of these assets and could have a material impact on the consolidated financial statements. The goodwill test impairment consists of two steps. First, the identification of potential impairment is performed by comparing the fair value of the reporting unit to its carrying amount, including goodwill. Second, if there is impairment identified in the first step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of goodwill. The Company has assessed its goodwill for impairment for the periods presented. There are no impairment charges related to goodwill for any of the fiscal periods presented. | ||||||
Impairment of Intangible Assets | ' | |||||
Impairment of Intangible Assets | ||||||
The Company applies the provisions of ASC Topic 350 which addresses how goodwill and other acquired intangible assets should be accounted for in financial statements. In this regard, the Company tests these intangible assets for impairment annually or more frequently if indicators of potential impairment are present. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. | ||||||
The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the year ended June 30, 2014, the Company applied a benchmark borrowing interest rate of 7.0% as the discount rate and recorded the impairment loss of $-0- related to intangible assets for the years ended June 30, 2014 and 2013, respectively. | ||||||
Revenue Recognition | ' | |||||
Revenue Recognition | ||||||
The Company derives its revenues primarily from sale of pharmaceutical products. In accordance with ASC Topic 605 “Revenue Recognition”, revenue should not be recognized until it is realized or realizable and earned. Revenues are considered to have been earned when the entity has substantially accomplished what it must do to be entitled to the benefits represented by the revenues. In this regard, the Company’s revenue is recognized when merchandise is received by customers or shipped by the Company pursuant to contractual terms of sales, title and risk of loss passes to the customers, sales amounts are fixed and determinable and the collectability is reasonably assured. | ||||||
Shipping and Handling Costs | ' | |||||
Shipping and Handling Costs | ||||||
Shipping and handling costs billed to customers in related sales transactions are included in sales revenues and shipping expenses incurred by the Company are reported as a component of selling expenses. The shipping and handling expenses of $615,925 and $1,307,921 for the year ended June 30, 2014 and 2013, respectively, are reported in the Consolidated Statements of Operations as a component of selling expenses. | ||||||
Research and Development | ' | |||||
Research and Development | ||||||
Research and development costs are expensed when incurred. Research and development costs for the years ended June 30, 2014 and 2013 were $949,300 and $894,995, respectively. | ||||||
Income Taxes | ' | |||||
Income Taxes | ||||||
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. | ||||||
A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized. | ||||||
Value Added Taxes | ' | |||||
Value Added Taxes | ||||||
Under the Provisional Regulations of the PRC on Value Added Tax, the Company is responsible for collecting value added taxes on sales of products and to pay value added taxes on purchases of raw materials, which is then remitted to the central government. Sales and cost of sales are reported on a net basis excluding value added taxes. | ||||||
Fair Value of Financial Instruments | ' | |||||
Fair Value of Financial Instruments | ||||||
The Company’s financial instruments include cash equivalents, accounts receivable, notes receivable, accounts payable, short-term debt and other financial instruments associated with the issuance of the common stock. The carrying values of cash equivalents, accounts receivable, notes receivable, and accounts payable approximate their fair value because of the short maturity of these instruments. The carrying amounts of the Company’s bank borrowings under its credit facility approximate fair value because the interest rates are reset periodically to reflect current market rates. | ||||||
The Company adopted ASC 820-10, “Fair Value Measurements.” ASC 820-10, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. ASC 820-10 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. | ||||||
As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820-10 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||||
Level 1: Observable inputs such as quoted prices in active markets; | ||||||
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | ||||||
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||||
We have no financial assets or liabilities measured at fair value on a recurring basis | ||||||
Foreign Currency Translation and Transactions | ' | |||||
Foreign Currency Translation and Transactions | ||||||
The Company has evaluated the determination of its functional currency based on the guidance in ASC Topic, “Foreign Currency Matters,” which provides that an entity’s functional currency is the currency of the primary economic environment in which the entity operates; normally, that is the currency of the environment in which an entity primarily generates and expends cash. | ||||||
On its own, the Company raises financing in the U.S. Dollar, pays its own operating expenses primarily in the U.S. Dollar, paid dividends to its shareholders of common stock and expects to receive any dividends that may be declared by its subsidiaries in U.S. dollars. | ||||||
Therefore, it has been determined that the Company’s functional currency is the U.S. dollar based on the expense and financing indicators, in accordance with the guidance in ASC 830-10-85-5. | ||||||
The Company uses the United States dollar (“U.S. Dollar” or “US$” or “$”) for financial reporting purposes. The subsidiaries within the Company maintain their books and records in their respective functional currency, being the primary currency of the economic environment in which their operations are conducted. Assets and liabilities of a subsidiary with functional currency other than U.S. Dollar are translated into U.S. Dollars using the applicable exchange rates prevailing at the balance sheet date. Items on the statements of income and comprehensive income and cash flows are translated at average exchange rates during the reporting period. Equity accounts are translated at historical rates. Adjustments resulting from the translation of the Company’s financial statements are recorded as accumulated other comprehensive income. | ||||||
The exchange rates used to translate amounts in RMB into US Dollars for the purposes of preparing the condensed combined financial statements were as follows: | ||||||
June 30, | June 30, | |||||
2014 | 2013 | |||||
Balance sheet items, except for shareholders’ equity items | RMB 1: US$0.1624 | RMB 1: US$0.16200 | ||||
Amounts included in the statements of operations, comprehensive income, and cash flows for the years then ended | RMB 1: US$0.1627 | RMB 1: US$0. 15945 | ||||
Shareholders’ equity items | Historical rate | Historical rate | ||||
Comprehensive Income | ' | |||||
Comprehensive Income | ||||||
The Company has adopted ASC Topic 220-10, Reporting Comprehensive Income, which establishes rules for the reporting and display of comprehensive income, its components and accumulated balances. ASC 220-10 defines comprehensive income to include all changes in equity, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on available-for-sale marketable securities, except those resulting from investments by stockholders and distributions to stockholders. Comprehensive income includes net income and the foreign currency translation gain, net of tax. | ||||||
Share-Based Payment | ' | |||||
Share-Based Payment | ||||||
The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, the fair value of the award on the date of grant is calculated in the same manner as employee awards, however, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. | ||||||
Earnings Per Share | ' | |||||
Earnings Per Share | ||||||
In accordance with ASC 260, “Computation of Earnings Per Share” and EITF No. 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128” (“EITF No. 03-6”), basic earnings per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. The Company’s Series A redeemable convertible preferred shares are participating securities. Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the year. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the convertible preferred shares (using the if-converted method) and ordinary shares issuable upon the exercise of outstanding share options (using the treasury stock method). | ||||||
Recent Accounting Pronouncements | ' | |||||
Recent Accounting Pronouncements | ||||||
In April 2014, the FASB issued amendments to ASC Topic 205 “Presentation of Financial Statements” and ASC Topic 360 “Property, Plant and Equipment”. The amendments change the current requirements for reporting discontinued operations in Subtopic 205-20. It requires an entity to present, for each comparative period, the assets and liabilities of a disposal group that includes a discontinued operation separately in the asset and liability section, respectively, of the statement of financial position. This topic is effective for public entities for reporting periods beginning after December 15, 2014. An entity should not apply the amendments to a component classified as held for sale before the effective date even if the component of an entity is disposed of after the effective date. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued. The Company does not believe the adoption of the amendments to ASC 205 and ASC 360 will have a material effect on its consolidated financial statements. | ||||||
There are no other new accounting pronouncements adopted or enacted during the year ended June 30, 2014 that had, or are expected to have, a material impact on the Company’s financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Summary of Significant Accounting Policies [Abstract] | ' | |||||
Schedule of property and equipment estimated useful lives | ' | |||||
Vehicles | 5 to 10 years | |||||
Furniture, machinery and equipment | 5 to 10 years | |||||
Buildings and improvements | 10 to 50 years | |||||
Schedule of exchange rates used to translate amounts for the purposes of preparing the condensed combined financial statements | ' | |||||
30-Jun-14 | 30-Jun-13 | |||||
Balance sheet items, except for shareholders’ equity items | RMB 1: US$0.1624 | RMB 1: US$0.16200 | ||||
Amounts included in the statements of operations, comprehensive income, and cash flows for the years then ended | RMB 1: US$0.1627 | RMB 1: US$0. 15945 | ||||
Shareholders’ equity items | Historical rate | Historical rate |
Inventory_Tables
Inventory (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Inventory [Abstract] | ' | |||||||||
Schedule of inventory | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Raw materials | $ | 690,355 | $ | 748,296 | ||||||
Packaging supplies | 387,599 | 369,143 | ||||||||
Work in process | 1,088,880 | 1,871,093 | ||||||||
Finished goods | 1,674,878 | 3,047,482 | ||||||||
Total | $ | 3,841,712 | $ | 6,036,014 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Property and Equipment [Abstract] | ' | |||||||||
Schedule of property and equipment | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Buildings | $ | 15,188,962 | $ | 15,151,551 | ||||||
Machinery and equipment | 14,588,168 | 14,552,237 | ||||||||
Office equipment and furniture | 102,236 | 101,984 | ||||||||
Vehicles | 69,508 | 69,337 | ||||||||
Subtotal | 29,948,874 | 29,875,109 | ||||||||
Less: Accumulated depreciation | 7,127,561 | 5,350,377 | ||||||||
22,821,313 | 24,524,732 | |||||||||
Add: Construction in progress | 22,557,043 | 16,078,500 | ||||||||
Total | $ | 45,378,356 | $ | 40,603,232 |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Intangible Assets and Goodwill [Abstract] | ' | |||||||||
Schedule of intangible assets | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Rights to use land | $ | 14,770,400 | $ | 7,790,720 | ||||||
Approved drugs | 17,060,652 | 17,018,631 | ||||||||
Intangible assets | 31,831,052 | 24,809,351 | ||||||||
Less: accumulated amortization | 4,131,319 | 3,304,339 | ||||||||
Total | $ | 27,699,733 | $ | 21,505,012 |
Loan_Receivable_Tables
Loan Receivable (Tables) | 12 Months Ended | |||||
Jun. 30, 2014 | ||||||
Loan Receivables [Abstract] | ' | |||||
Schedule of Loan recievable | ' | |||||
Loan to an individual and guaranteed by a third party, collateralized by third party's machinery and equipment, bear interest at 50% above the bank standard rate and due on September 16, 2014. The loan was fully collected in September 19, 2014 | $ | 812,000 | ||||
Loan to an unrelated company, bear interest at 50% above the bank standard rate and due on September 8, 2014. The loan was collateralized by the machinery and equipment of the company. The loan was fully collected in September 15, 2014. | 1,169,280 | |||||
Total | $ | 1,981,280 |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Accounts Payable and Accrued Expenses [Abstract] | ' | |||||||||
Schedule of accounts payable and accrued expenses | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Accounts payable | $ | 1,476,830 | $ | 1,206,760 | ||||||
Accrued expenses | 115,629 | 145,800 | ||||||||
Total | $ | 1,592,459 | $ | 1,352,560 |
Accounts_Payable_Construction_1
Accounts Payable - Construction Related (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Accounts Payable and Accrued Expenses [Abstract] | ' | |||||||||
Schedule of accounts payable - construction related | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Construction in progress payable | $ | 2,238,927 | $ | 1,822,500 | ||||||
Land use rights payable | - | 900,790 | ||||||||
Total | $ | 2,238,927 | $ | 2,723,790 |
ShortTerm_Bank_Loans_Tables
Short-Term Bank Loans (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Short-Term Bank Loans [Abstract] | ' | |||||||||
Schedule of short-term bank loans | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
On September 19, 2012, the Company obtained a loan from China Huaxia Bank, the principal balance was paid in full on September 27, 2013. The interest is calculated using an annual fixed interest rate of 7.257% and paid monthly. The loan was guaranteed by a third party and the Company’s CEO, Dr. Jiang. | - | $ | 1,620,000 | |||||||
On June 21, 2013, the Company obtained a loan from China CITIC Bank, which matures on December 21, 2013. The interest is calculated using an annual fixed interest rate of 6.44% and paid monthly. The loan was secured by the Company’s certificates of deposit, which included in the restricted cash on the Company’s balance sheet. The loan was paid in full in December 2013. | - | $ | 4,309,200 | |||||||
On October 30, 2013, the Company obtained a loan from China CITIC Bank, which matures on October 30, 2014. The interest is calculated using an annual fixed interest rate of 7.20% and paid monthly. The loan was guaranteed by the Company’s CEO, Dr. Jiang. | $ | 4,547,200 | - | |||||||
Total short-term bank loans | $ | 4,547,200 | $ | 5,929,200 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||
Jun. 30, 2014 | ||||||||||
Income Taxes [Abstract] | ' | |||||||||
Summary of comparison of income tax expense | ' | |||||||||
Fiscal Years ended | ||||||||||
June 30, | ||||||||||
2014 | 2013 | |||||||||
U.S. Statutory rate of 35% | $ | (214,460 | ) | $ | 3,163,678 | |||||
Tax rate difference between China and U.S. | 76,080 | (903,778 | ) | |||||||
Change in valuation allowance | 333,705 | 164,007 | ||||||||
Effective tax | $ | 195,325 | $ | 2,423,907 | ||||||
Summary of provisions for income taxes | ' | |||||||||
Fiscal Years ended | ||||||||||
June 30, | ||||||||||
2014 | 2013 | |||||||||
Current | $ | 1,375,835 | $ | 2,423,907 | ||||||
Deferred | (1,678,222 | ) | (164,007 | ) | ||||||
Valuation allowance | 497,712 | 164,007 | ||||||||
Total | $ | 195,325 | $ | 2,423,907 | ||||||
Schedule of net deferred tax asset | ' | |||||||||
June 30, | June 30, | |||||||||
2014 | 2013 | |||||||||
Net operating loss carryforward | $ | 1,607,835 | $ | 164,007 | ||||||
Inventory markdown | 19,937 | - | ||||||||
Accrued expenses | 31,420 | - | ||||||||
Others | 19,030 | - | ||||||||
1,678,222 | 164,007 | |||||||||
Less valuation allowance | (497,712 | ) | (164,007 | ) | ||||||
Deferred tax assets | 1,180,510 | - |
Organization_and_Nature_of_Bus1
Organization and Nature of Business (Details) (Chengdu Tianyin Pharmaceutical Co., Ltd. [Member]) | 1 Months Ended | ||
Aug. 29, 2012 | Aug. 29, 2012 | Jun. 30, 2014 | |
USD ($) | CNY | USD ($) | |
shareholder | |||
Organization and Nature of Business (Textual) | ' | ' | ' |
Number of existing shareholders entered into share transfer agreement with the company | 2 | 2 | ' |
Ownership percentage owned | 100.00% | 100.00% | ' |
Total purchase consideration of acquired entity | $210,600 | 1,300,000 | ' |
Purchase price allocated to goodwill | ' | ' | $210,600 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Jun. 30, 2014 | |
Vehicles [Member] | ' |
Schedule of property and equipment estimated useful life | ' |
Estimated useful lives | '5 to 10 years |
Furniture, machinery and equipment [Member] | ' |
Schedule of property and equipment estimated useful life | ' |
Estimated useful lives | '5 to 10 years |
Buildings and improvements [Member] | ' |
Schedule of property and equipment estimated useful life | ' |
Estimated useful lives | '10 to 50 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 1) | 12 Months Ended | |||
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | |
USD ($) | CNY | USD ($) | CNY | |
Multiple Foreign Currency Exchange Rates [Abstract] | ' | ' | ' | ' |
Balance sheet items, except for shareholders' equity items | $0.16 | 1 | $0.16 | 1 |
Amounts included in the statements of operations, comprehensive income, and cash flows for the years then ended | $0.16 | 1 | $0.16 | 1 |
Shareholders' equity items | 'Historical rate | 'Historical rate | 'Historical rate | 'Historical rate |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details Textual) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Summary of Significant Accounting Policies (Textual) | ' | ' |
Maturity period description of highly liquid instruments | 'Three months or less | ' |
Estimated useful life of drugs | '10 years | ' |
Estimated useful life of rights to use land | '48 years | ' |
Research and development | $946,300 | $894,995 |
Borrowing interest rate | 7.00% | ' |
Impairment loss related to intangible assets | 0 | 0 |
Deferred tax assets | 0 | 0 |
Deferred tax liabilities | 0 | 0 |
Shipping and handling expenses | 615,925 | 1,307,921 |
Inventory markdown allowance | 79,748 | 0 |
Inventory Write-down | $1,527,483 | $159,123 |
Inventory_Details
Inventory (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Schedule of inventory | ' | ' |
Raw materials | $690,355 | $748,296 |
Packaging supplies | 387,599 | 369,143 |
Work in process | 1,088,880 | 1,871,093 |
Finished goods | 1,674,878 | 3,047,482 |
Total | $3,841,712 | $6,036,014 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Schedule of property and equipment | ' | ' |
Buildings | $15,188,962 | $15,151,551 |
Machinery and equipment | 14,588,168 | 14,552,237 |
Office equipment and furniture | 102,236 | 101,984 |
Vehicles | 69,508 | 69,337 |
Subtotal | 29,948,874 | 29,875,109 |
Less: Accumulated depreciation | 7,127,561 | 5,350,377 |
Property and equipment excluding construction in progress | 22,821,313 | 24,524,732 |
Add: Construction in progress | 22,557,043 | 16,078,500 |
Total | $45,378,356 | $40,603,232 |
Property_and_Equipment_Details1
Property and Equipment (Details Textual) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Property and Equipment (Textual) | ' | ' |
Depreciation expense | $1,767,232 | $1,631,191 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Schedule of intangible assets | ' | ' |
Rights to use land | $14,770,400 | $7,790,720 |
Approved drugs | 17,060,652 | 17,018,631 |
Intangible assets | 31,831,052 | 24,809,351 |
Less: accumulated amortization | 4,131,319 | 3,304,339 |
Total | $27,699,733 | $21,505,012 |
Intangible_Assets_Details_Text
Intangible Assets (Details Textual) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Intangible Assets (Textual) | ' | ' |
Amortization expense of intangible assets | $820,333 | $803,947 |
Goodwill_Details
Goodwill (Details) (Chengdu Tianyin Pharmaceutical Co., Ltd. [Member]) | 1 Months Ended | ||
Aug. 29, 2012 | Aug. 29, 2012 | Jun. 30, 2014 | |
USD ($) | CNY | USD ($) | |
Goodwill (Textual) | ' | ' | ' |
Ownership percentage owned | 100.00% | 100.00% | ' |
Total purchase consideration of acquired entity | $210,600 | 1,300,000 | ' |
Purchase price allocated to goodwill | ' | ' | $210,600 |
Loan_Receivable_Details
Loan Receivable (Details) (USD $) | Jun. 30, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Loan Receivable, Net | $1,981,280 |
Related to third party | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Loan Receivable, Net | 812,000 |
Unrelated company | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Loan Receivable, Net | $1,169,280 |
Loan_Receivable_Details_Textua
Loan Receivable (Details Textual) | 12 Months Ended |
Jun. 30, 2014 | |
Related to third party | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Loans and Leases Receivable, Description | 'Collateralized by third party's machinery and equipment, bear interest at 50% above the bank standard rate and due on September 16, 2014. The loan was fully collected in September 19, 2014 |
Bank bear interest rate | 50.00% |
Unrelated company | ' |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' |
Loans and Leases Receivable, Description | 'Bear interest at 50% above the bank standard rate and due on September 8, 2014. The loan was collateralized by the machinery and equipment of the company. The loan was fully collected in September 15, 2014. |
Bank bear interest rate | 50.00% |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Accounts payable and accrued expenses | ' | ' |
Accounts payable | $1,476,830 | $1,206,760 |
Accrued expenses | 115,629 | 145,800 |
Total | $1,592,459 | $1,352,560 |
Accounts_Payable_Construction_2
Accounts Payable - Construction Related (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Total | $2,238,927 | $2,723,790 |
Land use right payable [Member] | ' | ' |
Total | ' | 900,790 |
Construction in progress payable [Member] | ' | ' |
Total | $2,238,927 | $1,822,500 |
ShortTerm_Bank_Loans_Details
Short-Term Bank Loans (Details) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Schedule of short-term bank loans | ' | ' |
Total short-term bank loans | $4,547,200 | $5,929,200 |
Fixed interest rate of 7.257% [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Total short-term bank loans | ' | 1,620,000 |
Fixed interest rate of 6.44% [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Total short-term bank loans | ' | 4,309,200 |
Fixed interest rate of 7.20% [Member] | ' | ' |
Schedule of short-term bank loans | ' | ' |
Total short-term bank loans | $4,547,200 | ' |
ShortTerm_Bank_Loans_Details_T
Short-Term Bank Loans (Details Textual) | 1 Months Ended | 0 Months Ended | |
Sep. 19, 2012 | Jun. 21, 2013 | Oct. 30, 2013 | |
Fixed interest rate of 7.257% [Member] | Fixed interest rate of 6.44% [Member] | Fixed interest rate of 7.20% [Member] | |
Short-Term Bank Loans (Textual) | ' | ' | ' |
Annual fixed interest rate of short-term bank loans | 7.26% | 6.44% | 7.20% |
Maturity date | 27-Sep-13 | 21-Dec-13 | 30-Oct-14 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Taxes [Abstract] | ' | ' |
U.S. Statutory rate of 35% | ($214,460) | $3,163,678 |
Tax rate difference between China and U.S. | 76,080 | -903,778 |
Change in valuation allowance | 333,705 | 164,007 |
Effective tax | $195,325 | $2,423,906 |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Taxes [Abstract] | ' | ' |
Current | $1,375,835 | $2,423,907 |
Deferred | -1,678,222 | -164,007 |
Valuation allowance | 497,712 | 164,007 |
Total | $195,325 | $2,423,906 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Jun. 30, 2014 | Jun. 30, 2013 |
Income Taxes [Abstract] | ' | ' |
Net operating loss carryforward | $1,607,835 | $164,007 |
Inventory markdown | 19,937 | ' |
Accrued expenses | 31,420 | ' |
Others | 19,030 | ' |
Deferred tax assets, Gross | 1,678,222 | 164,007 |
Less valuation allowance | -497,712 | -164,007 |
Deferred tax assets | $1,180,510 | ' |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Income Taxes (Textual) | ' | ' |
Effective tax rates | 35.00% | 35.00% |
Chengdu Tianyin Medicine Trading Co., Ltd. [Member] | ' | ' |
Income Taxes (Textual) | ' | ' |
Effective tax rates | 25.00% | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Stockholders' Equity [Line Items] | ' | ' |
Share-based payment | $55,000 | $30,000 |
Common Stock [Member] | ' | ' |
Stockholders' Equity [Line Items] | ' | ' |
Common shares issued, Shares | 50,000 | 50,000 |
Statuary_Reserve_Details
Statuary Reserve (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Statuary Reserve (Textual) | ' | ' |
Percentage of statutory surplus reserve | 10.00% | ' |
Statutory reserve transferred | $129,097 | $727,172 |
Employee_Welfare_Plan_Details
Employee Welfare Plan (Details) (USD $) | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Employee Welfare Plan (Textual) | ' | ' |
Employer contribution in employee welfare plan | $942,452 | $867,175 |
Risk_of_Concentrations_and_Cre1
Risk of Concentrations and Credit Risk (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Vendor | Vendor | |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Number of vendor | 2 | 3 |
Sales [Member] | GMOL [Member] | ' | ' |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Concentration risk, percentage | 10.00% | 10.00% |
Sales [Member] | Customer [Member] | GMOL [Member] | ' | ' |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Concentration risk, percentage | 47.00% | 39.00% |
Major sales from customer | 22 | 26.1 |
Purchase One [Member] | Vendor One [Member] | ' | ' |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Concentration risk, percentage | 25.00% | 18.00% |
Total purchase from major vendors | 3.9 | 4 |
Purchaser Two [Member] | Vendor Two [Member] | ' | ' |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Concentration risk, percentage | 13.00% | 14.00% |
Total purchase from major vendors | 2 | 3.2 |
Purchaser Three [Member] | Vendor Three [Member] | ' | ' |
Risk of Concentrations and Credit Risk (Textual) | ' | ' |
Concentration risk, percentage | ' | 14.00% |
Total purchase from major vendors | ' | 3.1 |
Subsequent_Event_Details
Subsequent Event (Details) (Subsequent Event [Member], Chengdu Tianyin [Member]) | 0 Months Ended | 1 Months Ended | |
Oct. 08, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
CNY | USD ($) | CNY | |
Subsequent Event [Line Items] | ' | ' | ' |
Business acquisition, Percentage of interest | ' | 13.00% | 13.00% |
Business acquired the remaining, Value | ' | $2,400,000 | 15,000,000 |
Payments to acquire business | 15,000,000 | ' | ' |