Tianyin Pharmaceutical 10-Q 31 Dec 14 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Sep. 30, 2014	Dec. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	TIANYIN PHARMACEUTICAL CO., INC.
Entity Central Index Key	1362718
Amendment Flag	FALSE
Current Fiscal Year End Date	-21
Document Type	10-Q
Document Period End Date	30-Sep-14
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		29,432,791

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2014	Jun. 30, 2014
Current assets:
Cash and cash equivalents	$15,599,314	$16,120,041
Restricted cash	489,841	994,017
Accounts receivable, net of allowance for doubtful accounts of $102,401 at September 30, 2014 and June 30, 2014	4,138,462	9,074,576
Inventory	5,616,924	3,841,712
Loan receivable		1,981,280
Deferred tax assets	996,207	1,180,510
Prepaid R&D expenses - current portion	3,518,667
Other current assets	376,503	376,504
Total current assets	30,735,918	33,568,640
Property and equipment, net	46,825,853	45,378,356
Intangibles, net	27,495,028	27,699,733
Prepaid R&D expenses	1,935,267
Goodwill	211,120	211,120
Total assets	107,203,186	106,857,849
Current liabilities:
Accounts payable and accrued expenses	1,921,918	1,592,459
Accounts payable - construction related	1,507,082	2,238,927
Short-term bank loans	4,547,200	4,547,200
Due for acquisition of non-controlling interests	2,436,000
Income tax payable	71,328	35,832
Other taxes payable	9,072	179,610
Other current liabilities	427,510	522,995
Total current liabilities	10,920,110	9,117,023
Total liabilities	10,920,110	9,117,023
Stockholders' equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized, no shares issued and outstanding at September 30, 2014 and June 30, 2014
Common stock, $0.001 par value, 50,000,000 shares authorized, 29,546,276 shares issued, 29,432,791 shares outstanding at September 30, 2014 and June 30, 2014	29,546	29,546
Additional paid-in capital	27,809,515	30,189,802
Treasury stock, 113,485 shares at cost	-135,925	-135,925
Statutory reserve	7,114,169	6,976,412
Retained earnings	51,041,326	50,193,258
Accumulated other comprehensive income	10,424,445	10,423,712
Total stockholders'equity	96,283,076	97,676,805
Noncontrolling interest		64,021
Total equity	96,283,076	97,740,826
Total liabilities and equity	$107,203,186	$106,857,849

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Balance Sheets [Abstract]
Allowance for doubtful accounts	$102,401	$102,401
Treasury stock, shares	113,485	113,485
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	29,546,276
Common stock, shares outstanding	29,432,791	29,432,791

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statements Of Operations [Abstract]
Sales	$9,733,381	$14,748,548
Cost of sales	4,655,463	8,755,033
Gross profit	5,077,918	5,993,515
Operating expenses
Selling expenses	1,628,848	2,539,244
General and administrative expenses	936,056	1,028,766
Research and development	1,092,643	251,314
Total operating expenses	3,657,547	3,819,324
Income from operations	1,420,371	2,174,191
Other income (expenses):
Interest income	817	22,310
Interest expense	-88,838	-102,901
Total other income (expenses)	-88,021	-80,591
Income before provision for income taxes	1,332,350	2,093,600
Provision for income taxes	354,828	634,108
Net income	977,522	1,459,492
Less: Net income (loss) attributable to noncontrolling interest	-8,303	-55,631
Net income attributable to Tianyin Pharmaceutical Co., Inc.	$985,825	$1,515,123
Basic and diluted earnings per share	$0.03	$0.05
Weighted average number of common shares outstanding:
Basic and diluted	29,432,791	29,382,791

Consolidated_Statements_of_Com

Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statements Of Comprehensive Income [Abstract]
Net income (loss)	$977,522	$1,459,492
Other comprehensive income (loss)
Foreign currency translation adjustment	728	612,662
Total other comprehensive income (loss)	728	612,662
Total Comprehensive income (loss)	978,250	2,072,154
Less: comprehensive income (loss) attributable to noncontrolling interest	-8,308	-54,474
Comprehensive income (loss) attributable to Tianyin Pharmaceutical Co., Inc.	$986,558	$2,126,628

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities:
Net Income	$977,522	$1,459,492
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	643,900	647,294
Deferred tax assets	184,303
Changes in current assets and current liabilities:
Accounts receivable	4,933,075	285,687
Inventory	-1,774,119	397,873
Prepaid R&D expenses	-5,450,575
Other current assets		313,900
Accounts payable and accrued expenses	329,256	41,043
Accounts payable - construction related	-731,394	-2,728,333
Income tax and other taxes payable	-134,958	-193,381
Other current liabilities	-95,427	22,011
Net cash provided by (used in) operating activities	-1,118,417	245,586
Cash flows from investing activities:
Addition of Contruction in process	-1,885,926
Collection of loans receivable	1,980,060
Net cash provided by investing activities	94,134
Cash flows from financing activities:
Changes in restricted cash	503,866
Repayment of short-term bank loans		-1,623,000
Net cash provided by (used in) financing activities	503,866	-1,623,000
Effect of foreign currency translation on cash	-310	159,558
Net decrease in cash and cash equivalents	-520,727	-1,217,856
Cash and cash equivalents - beginning of period	16,120,041	26,827,008
Cash and cash equivalents - end of period	15,599,314	25,609,152
Supplemental disclosures of cash activities
Cash paid for interest	83,617	102,862
Cash paid for income taxes	$135,052	$702,609

Organization_and_Nature_of_Bus

Organization and Nature of Business	3 Months Ended
	Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
	Tianyin Pharmaceutical (the “Company” or “TPI”), was established under the laws of Delaware. The Company’s primary business is to research, manufacture and sell pharmaceutical products in China through its wholly owned subsidiaries.
	The following chart describes the Company’s current corporate structure:

Basis_of_Presentation_and_Cons

Basis of Presentation and Consolidation	3 Months Ended
	Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND CONSOLIDATION	NOTE 2 – BASIS OF PRESENTATION AND CONSOLIDATION
	The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.
	These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company’s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended June 30, 2014.
	In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from September 30, 2014 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.
	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 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 a component of accumulated other comprehensive income.

Acquisition_Of_NonControling_I

Acquisition Of Non-Controling Interest	3 Months Ended
	Sep. 30, 2014
Acquisition of Non-Controling Interest [Abstract]
ACQUISITION OF NON-CONTROLING INTEREST	NOTE 3 – ACQUISITION OF NON-CONTROLING INTEREST
	On September 30, 2014, the Company’s subsidiary, Chengdu Tianyin, acquired the remaining 13% of Sichuan Jiangchuan Pharmaceutical Co. Ltd (“JCM”) for RMB 15 million (approximately $2.4 million) from an unrelated individual. Total payment of RMB 15 million was made on October 8, 2014. JCM became a wholly owned subsidiary of Chengdu Tianyin on September 30, 2014.

Inventory

Inventory	3 Months Ended
	Sep. 30, 2014
Inventory [Abstract]
INVENTORY	NOTE 4 – INVENTORY
	Inventory as of September 30, 2014 and June 30, 2013 consists of the following:
		September 30,		June 30,
		2014		2014
	Raw materials	$	1,467,933	$	690,355
	Packaging supplies		483,334		387,599
	Work in process		1,088,359		1,088,880
	Finished goods		2,577,298		1,674,878
		$	5,616,924	$	3,841,712

Prepaid_RD_Expense

Prepaid R&D Expense	3 Months Ended
	Sep. 30, 2014
Prepaid R&D Expense [Abstract]
PREPAID R&D EXPENSE	NOTE 5 – PREPAID R&D EXPENSE
	In July 2014, the Company’s subsidiary, Chengdu Tianyin, entered into a research and development agreement with a pharmaceutical research company, Kang Lu Biomedical Co. (KL). Pursuing to the agreement, KL will provide research and development expanding formulation varieties from Gingko Mihuan Oral Liquid (GMOL) to Capsule formulation. The total contract price is RMB 65 million (approximately $10.5 million). The first payment of RMB39 million (approximately $6.3 million) was paid in July 2014. The project is expected to be completed before August 2017. The total contract price will be amortized over three year period of the agreement on a straight line basis.

ShortTerm_Bank_Loans

Short-Term Bank Loans	3 Months Ended
	Sep. 30, 2014
Short-Term Bank Loans [Abstract]
SHORT-TERM BANK LOANS	NOTE 6 – SHORT-TERM BANK LOANS
	Short-term bank loans consist of the following:
		September 30,		June 30,
		2014		2014
	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 and a third party. The loan was extended in October, 2014 and will be due in January 30, 2015.	$	4,547,200	$	4,547,200
	Total short-term bank loans	$	4,547,200	$	4,547,200

Income_Taxes

Income Taxes	3 Months Ended
	Sep. 30, 2014
Income Taxes [Abstract]
INCOME TAXES	NOTE 7 – 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 in China 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 for the three months ended September 30, 2014.
	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:
		Three months ended
		September 30,
		2014			2013
	U.S. Statutory rate	$	466,322		$	732,760
	Tax rate difference between China and U.S.		(133,184	)		(208,899	)
	Change in valuation allowance		21,690			110,247
	Effective tax	$	354,828		$	634,108
	The provisions for income taxes are summarized as follows:
		Three months ended
		September 30,
		2014			2013
	Current	$	170,525		$	634,108
	Deferred		162,613			-
	Valuation allowance		21,690			-
	Total	$	354,828		$	634,108

Risk_Factors

Risk Factors	3 Months Ended
	Sep. 30, 2014
Risk Factors [Abstract]
RISK FACTORS	NOTE 8 – 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 adversely influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC’s economy. Specifically, the Company's business may be negatively 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	3 Months Ended
	Sep. 30, 2014
Risk of Concentrations and Credit Risk [Abstract]
RISK OF CONCENTRATIONS AND CREDIT RISK	NOTE 9 – RISK OF CONCENTRATIONS AND CREDIT RISK
	Concentrations
	For the quarters ended September 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) represented 58% or $5.6 million (23% increase year over year) of total sales for the three months ended September 30, 2014 of compared with 35% or $5.1 million of total sales for the three months ended September 30, 2013.
	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.

Basis_of_Presentation_and_Cons1

Basis of Presentation and Consolidation (Policies)	3 Months Ended
	Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND CONSOLIDATION	The unaudited consolidated financial statements include the accounts of TPI and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with US GAAP applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission. Accordingly, they do not include all of the information and disclosures required by US GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.
	These interim unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2014, included in the Company’s annual report on Form 10-K filed with the U.S. Securities Exchange Commission on December 9, 2014, as not all disclosures required by US GAAP for annual financial statements are presented. The interim consolidated financial statements follow the same accounting policies and methods of computations as the audited consolidated financial statements for the year ended June 30, 2014.
	In preparing the accompanying unaudited consolidated financial statements, we evaluated the period from September 30, 2014 through the date the financial statements were issued for material subsequent events requiring recognition or disclosure. No such events were identified for this period.
	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 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 a component of accumulated other comprehensive income.

Inventory_Tables

Inventory (Tables)	3 Months Ended
	Sep. 30, 2014
Inventory [Abstract]
Schedule of inventory		September 30,		June 30,
		2014		2014
	Raw materials	$	1,467,933	$	690,355
	Packaging supplies		483,334		387,599
	Work in process		1,088,359		1,088,880
	Finished goods		2,577,298		1,674,878
		$	5,616,924	$	3,841,712

ShortTerm_Bank_Loans_Tables

Short-Term Bank Loans (Tables)	3 Months Ended
	Sep. 30, 2014
Short-Term Bank Loans [Abstract]
Schedule of short-term bank loans		September 30,		June 30,
		2014		2014
	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 and a third party. The loan was extended in October, 2014 and will be due in January 30, 2015.	$	4,547,200	$	4,547,200
	Total short-term bank loans	$	4,547,200	$	4,547,200

Income_Taxes_Tables

Income Taxes (Tables)	3 Months Ended
	Sep. 30, 2014
Income Taxes [Abstract]
Summary of comparison of income tax expense		Three months ended September 30,
		2014			2013
	U.S. Statutory rate	$	466,322		$	732,760
	Tax rate difference between China and U.S.		(133,184	)		(208,899	)
	Change in valuation allowance		21,690			110,247
	Effective tax	$	354,828		$	634,108
Summary of provisions for income taxes
		Three months ended September 30,
		2014			2013
	Current	$	170,525		$	634,108
	Deferred		162,613			-
	Valuation allowance		21,690			-
	Total	$	354,828		$	634,108

Acquisition_Of_NonControling_I1

Acquisition Of Non-Controling Interest (Details) (JCM [Member])	3 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2014
	USD ($)	CNY
Business Acquisition [Line Items]
Percentage of Non controling interest in subsidairy company	13.00%	13.00%
Payment to acquire subsidiary company	$2.40	15

Inventory_Details

Inventory (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Schedule of inventory
Raw materials	$1,467,933	$690,355
Packaging supplies	483,334	387,599
Work in process	1,088,359	1,088,880
Finished goods	2,577,298	1,674,878
Total	$5,616,924	$3,841,712

Prepaid_RD_Expense_Details

Prepaid R&D Expense (Details) (KL [Member])	1 Months Ended
In Millions, unless otherwise specified	Jul. 31, 2014	Jul. 31, 2014
	USD ($)	CNY
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Contract price for research and development	$10.50	65
Initial payment for research and development	$6.30	39
Project completion date	before August 2017.	before August 2017.

ShortTerm_Bank_Loans_Details

Short-Term Bank Loans (Details) (USD $)	Sep. 30, 2014	Jun. 30, 2014
Schedule of short-term bank loans
Total short-term bank loans	$4,547,200	$4,547,200
Fixed interest rate of 7.2% [Member]
Schedule of short-term bank loans
Total short-term bank loans	$4,547,200	$4,547,200

ShortTerm_Bank_Loans_Details_T

Short-Term Bank Loans (Details Textual) (Fixed interest rate of 7.2% [Member])	0 Months Ended
	Oct. 30, 2013
Fixed interest rate of 7.2% [Member]
Short-Term Bank Loans (Textual)
Annual fixed interest rate of short-term bank loans	7.20%
Maturity date	30-Oct-14

Income_Taxes_Details

Income Taxes (Details) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes [Abstract]
U.S. Statutory rate	$466,322	$732,760
Tax rate difference between China and U.S.	-133,184	-208,899
Change in valuation allowance	21,690	110,247
Effective tax	$354,828	$634,108

Income_Taxes_Details_1

Income Taxes (Details 1) (USD $)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes [Abstract]
Current	$170,525	$634,108
Deferred	162,613
Valuation allowance	21,690	110,247
Total	$354,828	$634,108

Income_Taxes_Details_Textual

Income Taxes (Details Textual)	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes (Textual)
Effective tax rates	35.00%	35.00%
Chengdu Tianyin Pharmaceutical Co., Ltd. [Member]
Income Taxes (Textual)
Effective tax rates	25.00%
Chengdu Tianyin Medicine Trading Co., Ltd. [Member]
Income Taxes (Textual)
Effective tax rates	25.00%
HSP [Member]
Income Taxes (Textual)
Effective tax rates	25.00%
JCM [Member]
Income Taxes (Textual)
Effective tax rates	25.00%

Risk_of_Concentrations_and_Cre1

Risk of Concentrations and Credit Risk (Details) (USD $)	3 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2014	Sep. 30, 2013
Risk of Concentrations and Credit Risk (Textual)
Concentration risk,description	In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) represented 58% or $5.6 million (23% increase year over year) of total sales for the three months ended September 30, 2014 of compared with 35% of or $5.1 million of total sales for the three months ended September 30, 2013.
GMOL [Member]
Risk of Concentrations and Credit Risk (Textual)
Concentration risk, percentage	58.00%	35.00%
Sales revenue, goods, net	$5.60	$5.10
Sales [Member] | GMOL [Member]
Risk of Concentrations and Credit Risk (Textual)
Concentration risk, percentage	10.00%	10.00%