Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2014 | Aug. 18, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TIANYIN PHARMACEUTICAL CO., INC. | |
Entity Central Index Key | 1,362,718 | |
Amendment Flag | true | |
Current Fiscal Year End Date | --06-30 | |
Amendment Description | We are filing this amendment (“Amended Report”) to Quarterly Report on Form 10-Q for the period ended December 31, 2014 (“Original Report”) of Tianyin Pharmaceutical Co., Inc. (the “Company” or “TPI”) to correct an error in classifying certain assets of the Company due to the contribution of those assets to a joint venture pursuant to an agreement entered into by an operating subsidiary of the Company on October 29, 2014 and subsequent transfers of the controlling stake of the joint venture by the operating subsidiary in April and May 2015 pursuant to certain share transfer agreements entered into in November 2014 and May 2015 respectively, which would have resulted in the Company classifying and recognizing those assets as “Assets Held for Sale” in the unaudited consolidated financial statements included in the Original Report. This Amended Report is being filed to amend the disclosures affected by the corrected classification of the assets contributed to the joint venture and to include disclosures of the joint venture and share transfers. This Amended Report speaks as of the filing date of the Original Report, and it may not reflect events occurring after the filing of the Original Report on March 13, 2015, nor does it modify or update those disclosures presented therein, except with regard to the modifications described in this Explanatory Note. Accordingly, this Amended Report should be read in conjunction with the Original Report and our other reports filed with the Securities and Exchange Commission subsequent to the filing of our Original Report, including any amendments to those filings. | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2014 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 29,432,791 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Dec. 31, 2014 | Jun. 30, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 11,619,292 | $ 16,120,041 |
Restricted cash | 419,139 | 994,017 |
Accounts receivable, net of allowance for doubtful accounts of $102,590 and $102,401 at December 31, 2014 and June 30, 2014, respectively | 2,273,805 | 9,074,576 |
Inventory | $ 6,266,299 | 3,841,712 |
Loan receivable | 1,981,280 | |
Deferred tax assets | $ 994,918 | $ 1,180,510 |
Prepaid Research and Development expenses - current portion | 3,525,167 | |
Other current assets | 885,284 | $ 587,384 |
Total current assets | 25,983,904 | 33,779,520 |
Property and equipment, net | 20,104,121 | 45,378,356 |
Intangibles, net | 12,854,610 | $ 27,699,733 |
Prepaid Research Development expenses | 1,057,550 | |
Goodwill | 211,510 | $ 211,120 |
Assets held for sale | 40,872,697 | |
Total assets | 101,084,392 | $ 107,068,729 |
Current liabilities: | ||
Accounts payable and accrued expenses | 298,349 | 1,592,459 |
Accounts payable - construction related | 821,377 | 2,238,927 |
Short-term bank loans | $ 2,928,600 | 4,547,200 |
Income tax payable | 35,832 | |
Other taxes payable | $ 61,792 | 390,490 |
Other current liabilities | 391,104 | 522,995 |
Total current liabilities | 4,501,222 | 9,327,903 |
Total liabilities | $ 4,501,222 | $ 9,327,903 |
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 25,000,000 shares authorized, no shares issued and outstanding at December 31, 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 December 31, 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 | 7,148,893 | 6,976,412 |
Retained earnings | 51,132,786 | 50,193,258 |
Accumulated other comprehensive income | 10,598,355 | 10,423,712 |
Total stockholders' equity | $ 96,583,170 | 97,676,805 |
Noncontrolling interest | 64,021 | |
Total equity | $ 96,583,170 | 97,740,826 |
Total liabilities and equity | $ 101,084,392 | $ 107,068,729 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Dec. 31, 2014 | Jun. 30, 2014 |
Balance Sheets [Abstract] | ||
Allowance for doubtful accounts | $ 102,590 | $ 102,401 |
Treasury stock, shares | 113,485 | 113,485 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
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 Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statements Of Operations [Abstract] | ||||
Sales | $ 6,691,740 | $ 13,923,166 | $ 16,425,121 | $ 28,671,714 |
Cost of sales | 3,041,483 | 7,705,869 | 7,696,946 | 16,460,902 |
Gross profit | 3,650,257 | 6,217,297 | 8,728,175 | 12,210,812 |
Operating expenses | ||||
Selling expenses | 1,216,952 | 2,428,675 | 2,845,800 | 4,967,919 |
General and administrative expenses | 1,253,361 | 1,082,395 | 2,189,417 | 2,111,161 |
Research and development | 914,607 | 252,014 | 2,007,250 | 503,328 |
Total operating expenses | 3,384,920 | 3,763,084 | 7,042,467 | 7,582,408 |
Income from operations | 265,337 | 2,454,213 | 1,685,708 | 4,628,404 |
Other income (expenses): | ||||
Interest income | 13,002 | 86,424 | 13,819 | 108,734 |
Interest expense | (69,819) | (119,821) | (158,657) | (222,722) |
Total other income (expenses) | (56,817) | (33,397) | (144,838) | (113,988) |
Income before provision for income taxes | 208,520 | 2,420,816 | 1,540,870 | 4,514,416 |
Provision for income taxes | 82,336 | 727,757 | 437,164 | 1,361,865 |
Net income | $ 126,184 | 1,693,059 | 1,103,706 | 3,152,551 |
Less: Net income (loss) attributable to noncontrolling interest | (50,549) | (8,303) | (106,180) | |
Net income attributable to Tianyin Pharmaceutical Co., Inc. | $ 126,184 | $ 1,743,608 | $ 1,112,009 | $ 3,258,731 |
Basic and diluted earnings per share | $ 0 | $ 0.06 | $ 0.04 | $ 0.11 |
Weighted average number of common shares outstanding: | ||||
Basic and diluted | 29,432,791 | 29,382,791 | 29,432,791 | 29,382,791 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statements Of Comprehensive Income [Abstract] | ||||
Net income | $ 126,184 | $ 1,693,059 | $ 1,103,706 | $ 3,152,551 |
Other comprehensive income | ||||
Foreign currency translation adjustment | 173,910 | 435,429 | 174,638 | 1,048,091 |
Total other comprehensive income | 173,910 | 435,429 | 174,638 | 1,048,091 |
Total Comprehensive income | $ 300,094 | 2,128,488 | 1,278,344 | 4,200,642 |
Less: Comprehensive income (loss) attributable to the noncontrolling interest | (49,912) | (8,308) | (104,386) | |
Comprehensive income attributable to Tianyin Pharmaceutical Co., Inc. | $ 300,094 | $ 2,178,400 | $ 1,286,652 | $ 4,305,028 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | ||
Net Income | $ 1,103,706 | $ 3,152,551 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,285,722 | $ 1,297,519 |
Deferred tax assets | 185,592 | |
Changes in current assets and current liabilities: | ||
Accounts receivable | 6,813,344 | $ (563,334) |
Inventory | (2,416,004) | $ 61,748 |
Prepaid Research and Development expenses | (4,579,900) | |
Other current assets | (296,633) | $ 314,887 |
Accounts payable and accrued expenses | (1,296,255) | 99,102 |
Accounts payable - construction related | (1,420,812) | (2,736,906) |
Income tax and other taxes payable | (365,093) | (259,470) |
Other current liabilities | (132,776) | 18,527 |
Net cash provided by (used in) operating activities | (1,119,109) | 1,384,624 |
Cash flows from investing activities: | ||
Addition of Contruction in process | (1,903,684) | $ (367,234) |
Proceeds from loans receivable | 1,983,720 | |
Acquisition of non-controlling interests | (2,436,000) | |
Net cash used in investing activities | (2,355,964) | $ (367,234) |
Cash flows from financing activities: | ||
Changes in restricted cash | 576,360 | 4,558,680 |
Repayment of short-term bank loans | (1,626,000) | (1,400,166) |
Net cash provided by (used in) financing activities | (1,049,640) | 3,158,514 |
Effect of foreign currency translation on cash | 23,964 | 304,207 |
Net increase (decrease) in cash and cash equivalents | (4,500,749) | 4,480,111 |
Cash and cash equivalents - beginning of period | 16,120,041 | 26,827,008 |
Cash and cash equivalents - end of period | 11,619,292 | 31,307,119 |
Supplemental disclosures of cash activities | ||
Cash paid for interest | 150,808 | 222,645 |
Cash paid for income taxes | $ 306,992 | $ 1,340,918 |
Organization and Nature of Busi
Organization and Nature of Business | 6 Months Ended |
Dec. 31, 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. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 6 Months Ended |
Dec. 31, 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 December 31, 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. Certain amounts for prior periods have been reclassified to conform to the current period presentation. |
Acquisition Of Non-Controlling
Acquisition Of Non-Controlling Interest | 6 Months Ended |
Dec. 31, 2014 | |
Acquisition of Non-Controlling Interest [Abstract] | |
ACQUISITION OF NON-CONTROLLING INTEREST | NOTE 3 – ACQUISITION OF NON-CONTROLLING 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. |
Inventory
Inventory | 6 Months Ended |
Dec. 31, 2014 | |
Inventory [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY Inventory as of December 31, 2014 and June 30, 2014 consists of the following: December 31, June 30, Raw materials $ 2,450,113 $ 690,355 Packaging supplies 1,006,334 387,599 Work in process 972,615 1,088,880 Finished goods 1,837,237 1,674,878 $ 6,266,299 $ 3,841,712 |
Prepaid Research and Developmen
Prepaid Research and Development Expense | 6 Months Ended |
Dec. 31, 2014 | |
Prepaid Research and Development Expense [Abstract] | |
PREPAID RESEARCH AND DEVELOPMENT EXPENSE | NOTE 5 – PREPAID RESEARCH AND DEVELOPMENT 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). KL is a reputable TCM research company that specializes in the product development and CFDA application process for mTCM extracts and healthcare products. Persuant 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 RMB 39 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 the term of the agreement which is a period of three years on a straight line basis. |
Short-Term Bank Loans
Short-Term Bank Loans | 6 Months Ended |
Dec. 31, 2014 | |
Short-Term Bank Loans [Abstract] | |
SHORT-TERM BANK LOANS | NOTE 6 – SHORT-TERM BANK LOANS Short-term bank loans consist of the following: December 31, 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. Loan principal of $1,618,600 was repaid in October 2014, and the remaining loan principal of $2,928,600 is in default and currently being discussed with the bank for loan renewal till July 2015. $ 2,928,600 $ 4,547,200 On October 28, 2013, the Company obtained a loan with ability to borrow RMB 12 million (approximately $2 million) from China CITC Bank, which matures on October 30, 2014. The loan was guaranteed by the Company’s CEO and a third party. The loan was extended on October 30, 2014 with extended maturity date of January 30, 2015. The loan balance for both periods are zero. - - Total short-term bank loans $ 2,928,600 $ 4,547,200 |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 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 six months ended December 31, 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: Six months ended 2014 2013 U.S. Statutory rate $ 539,305 $ 1,580,046 Tax rate difference between China and U.S. (152,005 ) (450,750 ) Change in valuation allowance 49,864 232,569 Effective tax $ 437,164 $ 1,361,865 The provisions for income taxes are summarized as follows: Six months ended 2014 2013 Current $ 251,571 $ 1,361,865 Deferred 135,729 - Valuation allowance 49,864 - Total $ 437,164 $ 1,361,865 |
Risk Factors
Risk Factors | 6 Months Ended |
Dec. 31, 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 Cred
Risk of Concentrations and Credit Risk | 6 Months Ended |
Dec. 31, 2014 | |
Risk of Concentrations and Credit Risk [Abstract] | |
RISK OF CONCENTRATIONS AND CREDIT RISK | NOTE 9 – RISK OF CONCENTRATIONS AND CREDIT RISK Concentrations In terms of individual product sales, our major product Gingko Mihuan Oral Liquid (GMOL) represented 59% or $9.6 million of total sales for the six months ended December 31, 2014, as compared to 40% or $11.4 million of total sales for the six months ended December 31, 2013. For the quarter ended December 31, 2014, GMOL sales represented 60% or $4.0 million as compared to 45% or $6.3 million for the quarter ended December 31, 2013. For the six months ended December 31, 2014, one single customer accounted for 23% of the Company’s total sales compared with no customer with more than 10% of the Company’s sales for the six months ended December 31, 2013. Purchases from one vendor accounted for 54% of the Company’s total purchases for the six months ended December 31, 2014 as compared to four vendors accounted for 18%, 14%, 12% and 11% respectively of the Company’s total purchases for the six months ended December 31, 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. Due to the state ownership of China’s majority of financial institutions, the policies that regulate the banking industry also presents a unique risk that impacts all industrial segments in China. The traditional industries such as pharmaceutical manufacturing without exception may also be affected in terms of capital expenditure for GMP certification, raw material purchases and etc. |
Joint Venture
Joint Venture | 6 Months Ended |
Dec. 31, 2014 | |
Joint Venture [Abstract] | |
Joint Venture | NOTE 10 – Joint Venture Cooperation Framework Agreement On October 29, 2014, Shandong Buchang Pharmaceutical Co., Ltd. (“Shandong Buchang”), Chengdu Tianyin Pharmaceutical Co., Ltd. (“Chengdu Tianyin”), which is the Company’s indirect wholly-owned subsidiary, Grandway Group Holdings Ltd. (“Grandway Group”), which is the Company’s indirect wholly-owned subsidiary and Guoqing Jiang (“Jiang”), the Company’s Chairman and CEO, (each, a “Party”, and collectively “Parties) entered into a Cooperation Framework Agreement Regarding Chengdu Tianyin Pharmaceutical Co., Inc. (“Cooperation Framework Agreement”). Pursuant to the Cooperation Framework Agreement, the Parties agreed to establish a joint venture, Qionglai Tianyin Pharmaceutical Co., Ltd. (“Qionglai Tianyin”), with the total registered capital of RMB 200,000,000 (approximately US$32.3 million), with Chengdu Tianyin owning 95% and Shandong Buchang owning 5%. Shandong Buchang’s capital investment in Qionglai Tianyin took the form of RMB 10 million (approximately US$1.6 million), which was remitted on January 26, 2015, and Chengdu Tianyin’s capital investment in Qionglai Tianyin took the form of its buildings, land use rights, machineries and equipment of its plant located at Longquan and Qionglai, all of its patents and trademarks, and its portfolio drugs (the “Assets”). Pursuant to the Cooperation Framework Agreement, after the establishment of Qionglai Tianyin, Shandong Buchang or a third party approved by Shandong Buchang shall enter into an agreement with Qionglai Tianyin to appoint Shandong Buchang or the third party as the exclusive distributor within China regarding all medicines transferred excluding Mycophenolate Mofetil Capsules (CFDA No. H20080819), whose exclusive distributor remains to be Chengdu Tianyin. Following the execution of the Cooperation Framework Agreement, registration documents to establish Qionglai Tianyin was filed on November 3, 2014 and approved on January 27, 2015. Stock Pledge Agreement In November 2014, Chengdu Tianyin and Shandong Buchang entered into a Stock Pledge Agreement, pursuant to which the parties agreed that Chengdu Tianyin shall pledge its 95% stake of Qionglai Tianyin to Shandong Buchang as its down payment to Shandong Buchang and guarantee of performance of Chengdu Tianyin, Grandway Group and Dr. Guoqing Jiang under the Cooperation Framework Agreement. Share Transfer Agreements In November 2014, Shandong Buchang, Chengdu Tianyin, Qionglai Tianyin and Grandway Group entered into a Share Transfer Agreement Regarding Qionglai Tianyin Pharmaceutical Co., Ltd. (“Share Transfer Agreement”). Pursuant to the Share Transfer Agreement, after Chengdu Tianyin has completed the transfer of the Assets into Qionglai Tianyin, Chengdu Tianyin shall transfer 72% of Qionglai Tianyin’s stock to Shandong Buchang at the total price of RMB 144,000,000 (approximately US$23.2 million) which shall be paid in installments. Accounting Treatment Since management has made the decision to contribute certain assets described above to Qionglai Tianyin and 72% ownership of Qionglai Tianyin will be transferred to Shandong Buchang, the assets which will be contributed to Qionglai Tianyin are classified as Assets Held for Sale on balance sheet at December 31, 2014. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
RELATED-PARTY TRANSACTIONS | NOTE 11 – RELATED-PARTY TRANSACTIONS On October 30, 2013, the Company obtained two loans from China CITIC Bank, for RMB 28 million (approximately $4.5 million) and RMB12 million (approximately $ 1.9 million), respectively, which matured on October 30, 2014. On October 30, 2014, the maturity dates of both loans were extended to January 30, 2015. Both loans were guaranteed by the Company’s CEO, Guoqing Jiang and third parties. (see note 6) On October 29, 2014, Chengdu Tianyin, the Company’s indirect wholly-owned subsidiary, Grandway Group, the Company’s indirect wholly-owned subsidiary, Guoqing Jiang, the Company’s Chairman and CEO, and Shandong Buchang entered into certain Cooperation Framework Agreement, pursuant to which a joint venture, Qionglai Tianyin, was established. (see note 10) Under the Cooperation Framework Agreement, Dr. Jiang agreed to undertake joint and several liabilities with Chengdu Tianyin and Grandway Group to Shandong Buchang and Qionglai Tianyin for breaches of the agreement. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Dec. 31, 2014 | |
Inventory [Abstract] | |
Schedule of inventory | December 31, June 30, Raw materials $ 2,450,113 $ 690,355 Packaging supplies 1,006,334 387,599 Work in process 972,615 1,088,880 Finished goods 1,837,237 1,674,878 $ 6,266,299 $ 3,841,712 |
Short-Term Bank Loans (Tables)
Short-Term Bank Loans (Tables) | 6 Months Ended |
Dec. 31, 2014 | |
Short-Term Bank Loans [Abstract] | |
Schedule of short-term bank loans | December 31, 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. Loan principal of $1,618,600 was repaid in October 2014, and the remaining loan principal of $2,928,600 is in default and currently being discussed with the bank for loan renewal till July 2015. $ 2,928,600 $ 4,547,200 On October 28, 2013, the Company obtained a loan with ability to borrow RMB 12 million (approximately $2 million) from China CITC Bank, which matures on October 30, 2014. The loan was guaranteed by the Company’s CEO and a third party. The loan was extended on October 30, 2014 with extended maturity date of January 30, 2015. The loan balance for both periods are zero. - - Total short-term bank loans $ 2,928,600 $ 4,547,200 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2014 | |
Income Taxes [Abstract] | |
Summary of comparison of income tax expense | Six months ended 2014 2013 U.S. Statutory rate $ 539,305 $ 1,580,046 Tax rate difference between China and U.S. (152,005 ) (450,750 ) Change in valuation allowance 49,864 232,569 Effective tax $ 437,164 $ 1,361,865 |
Summary of provisions for income taxes | Six months ended 2014 2013 Current $ 251,571 $ 1,361,865 Deferred 135,729 - Valuation allowance 49,864 - Total $ 437,164 $ 1,361,865 |
Acquisition Of Non-Controllin21
Acquisition Of Non-Controlling Interest (Details) - JCM [Member] ¥ in Millions, $ in Millions | Oct. 08, 2014USD ($) | Oct. 08, 2014CNY (¥) | Sep. 30, 2014 |
Business Acquisition [Line Items] | |||
Percentage of Non controlling interest in subsidiary company | 13.00% | ||
Payment to acquire subsidiary company | $ 2.4 | ¥ 15 |
Inventory (Details)
Inventory (Details) - USD ($) | Dec. 31, 2014 | Jun. 30, 2014 |
Schedule of inventory | ||
Raw materials | $ 2,450,113 | $ 690,355 |
Packaging supplies | 1,006,334 | 387,599 |
Work in process | 972,615 | 1,088,880 |
Finished goods | 1,837,237 | 1,674,878 |
Total | $ 6,266,299 | $ 3,841,712 |
Prepaid Research and Developm23
Prepaid Research and Development Expense (Details) - 1 months ended Jul. 31, 2014 - KL [Member] ¥ in Millions, $ in Millions | USD ($) | CNY (¥) |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | ||
Contract price for research and development | $ 10.5 | ¥ 65 |
Initial payment for research and development | $ 6.3 | ¥ 39 |
Short-Term Bank Loans (Details)
Short-Term Bank Loans (Details) - USD ($) | Dec. 31, 2014 | Jun. 30, 2014 |
Schedule of short-term bank loans | ||
Total short-term bank loans | $ 2,928,600 | $ 4,547,200 |
China CITC Bank [Member] | Short-Term Bank Loan [Member] | ||
Schedule of short-term bank loans | ||
Total short-term bank loans | $ 2,928,600 | $ 4,547,200 |
China CITC Bank [Member] | Short-Term Bank Loan One [Member] | ||
Schedule of short-term bank loans | ||
Total short-term bank loans |
Short-Term Bank Loans (Details
Short-Term Bank Loans (Details Textual) - Oct. 30, 2013 - China CITC Bank [Member] ¥ in Millions | USD ($) | CNY (¥) |
Short-term Debt [Member] | ||
Short-Term Bank Loans (Textual) | ||
Annual fixed interest rate of short-term bank loans | 7.20% | |
Maturity date | Oct. 30, 2014 | Oct. 30, 2014 |
Loan principal amount repaid | $ 1,618,600 | |
Remaining loan principal | $ 2,928,600 | |
Terms of the remaining loan | The remaining loan principal of $2,928,600 is in default and currently being discussed with the bank for loan renewal till July 2015. | The remaining loan principal of $2,928,600 is in default and currently being discussed with the bank for loan renewal till July 2015. |
Short-Term Bank Loan One [Member] | ||
Short-Term Bank Loans (Textual) | ||
Maturity date | Oct. 30, 2014 | Oct. 30, 2014 |
Loan principal amount repaid | $ 2,000,000 | ¥ 12 |
Terms of the remaining loan | The loan was extended on October 30, 2014 with extended maturity date of January 30, 2015. The loan balance for both periods are zero. | The loan was extended on October 30, 2014 with extended maturity date of January 30, 2015. The loan balance for both periods are zero. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | ||||
U.S. Statutory rate | $ 539,305 | $ 1,580,046 | ||
Tax rate difference between China and U.S. | (152,005) | (450,750) | ||
Change in valuation allowance | 49,864 | 232,569 | ||
Effective tax | $ 82,336 | $ 727,757 | $ 437,164 | $ 1,361,865 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Abstract] | ||||
Current | $ 251,571 | $ 1,361,865 | ||
Deferred | 135,729 | |||
Valuation allowance | 49,864 | $ 232,569 | ||
Total | $ 82,336 | $ 727,757 | $ 437,164 | $ 1,361,865 |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes (Textual) | ||
Effective tax rates | 35.00% | 35.00% |
Operating subsidiaries in China [Member] | ||
Income Taxes (Textual) | ||
Effective tax rates | 25.00% |
Risk of Concentrations and Cr29
Risk of Concentrations and Credit Risk (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Vendor I [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Percentage of materials purchased from vendors | 54.00% | 18.00% | ||
Vendor II [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Percentage of materials purchased from vendors | 14.00% | |||
Vendor III [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Percentage of materials purchased from vendors | 12.00% | |||
Vendor IV [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Percentage of materials purchased from vendors | 11.00% | |||
No Customer [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Concentration risk, percentage | 10.00% | |||
Customer One [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Concentration risk, percentage | 23.00% | |||
Sales [Member] | GMOL [Member] | ||||
Risk of Concentrations and Credit Risk (Textual) | ||||
Concentration risk, percentage | 60.00% | 45.00% | 59.00% | 40.00% |
Sales revenue, goods, net | $ 4 | $ 6.3 | $ 9.6 | $ 11.4 |
Joint Venture (Details)
Joint Venture (Details) $ in Millions | Oct. 29, 2014USD ($) | Nov. 30, 2014USD ($) | Nov. 30, 2014CNY (¥) | Dec. 31, 2014 | Oct. 29, 2014CNY (¥) |
Chengdu Tianyin [Member] | |||||
Joint Venture (Textual) | |||||
Percentage of ownership | 95.00% | 95.00% | 95.00% | ||
Total registered capital | $ 32.3 | ¥ 200,000,000 | |||
Shandong Buchang [Member] | |||||
Joint Venture (Textual) | |||||
Percentage of ownership | 5.00% | 95.00% | 95.00% | 72.00% | |
Total registered capital | $ 1.6 | ¥ 10,000,000 | |||
Sale of stock description | Chengdu Tianyin has completed the transfer of the Assets into Qionglai Tianyin, Chengdu Tianyin shall transfer 72% of Qionglai Tianyin's stock to Shandong Buchang. | Chengdu Tianyin has completed the transfer of the Assets into Qionglai Tianyin, Chengdu Tianyin shall transfer 72% of Qionglai Tianyin's stock to Shandong Buchang. | |||
Purchase price consideration | $ 23.2 | ¥ 144,000,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - Oct. 30, 2013 ¥ in Millions, $ in Millions | USD ($) | CNY (¥) |
Loan One [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 4.5 | ¥ 28 |
Maturity date | Jan. 30, 2015 | |
Loan Two [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 1.9 | ¥ 12 |
Maturity date | Jan. 30, 2015 |