American Nano Silicon (ANNO) 10-Q 22 Jun 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2015	May. 28, 2015
Document and Entity Information
Entity Registrant Name	American Nano Silicon Technologies, Inc.
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Entity Central Index Key	1,415,917
Current Fiscal Year End Date	--09-30
Entity Common Stock, Shares Outstanding		46,917,445
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Incorporation, State Country Name	California
Entity Incorporation, Date of Incorporation	Sep. 6, 1996

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2015	Sep. 30, 2014
Current assets:
Cash and cash equivalents	$ 55,068	$ 97,233
Accounts receivable, net	234,533	577,303
Inventory, net of reserve	361,227	397,094
Advance Payments	125,131	137,575
Prepaid expense and other receivables	123,447	136,235
Prepaid value-added tax	108,101	70,168
Total current assets	1,007,507	1,415,608
Property, plant and equipment, net	19,913,526	20,545,631
Other assets:
Land use rights, net	976,546	986,449
Total other assets	976,546	986,449
Total Assets	21,897,579	22,947,688
Current liabilities:
Accounts payable	418,132	234,686
Short term loans	11,463,891	10,096,451
Taxes payable	114,763	114,435
Due to related parties-current portion	3,563,897	3,165,014
Long term loans-current portion	6,200,554	1,508,465
Accrued expenses and other payables	1,437,223	1,136,888
Total current liabilities	23,198,460	16,255,939
Long-term liabilities
Long term loans		4,766,471
Total Long Term Liabilities		4,766,471
Total liabilities	23,198,460	21,022,410
Stockholders' (Deficiency) Equity
Common stock, $0.0001 par value, 200,000,000 shares authorized; 46,917,445 shares issued and outstanding as of March 31, 2015 and September 30, 2014, respectively	4,692	4,692
Additional paid-in-capital	14,772,979	14,640,456
Accumulated other comprehensive income	2,296,550	2,297,685
Accumulated deficit	(18,375,102)	(15,017,555)
Total Stockholders' (Deficiency) Equity	(1,300,881)	1,925,278
Total Liabilities and Stockholders' (Deficiency) Equity	$ 21,897,579	$ 22,947,688

CONSOLIDATED BALANCE SHEETS PAR

CONSOLIDATED BALANCE SHEETS PARENTHETICAL - $ / shares	Mar. 31, 2015	Sep. 30, 2014
CONSOLIDATED BALANCE SHEETS PARENTHETICAL
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	200,000,000	200,000,000
Common stock shares issued	46,917,445	46,917,445
Common stock shares outstanding	46,917,445	46,917,445

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Revenues
Revenues	$ 145,971	$ 244,654	$ 936,110	$ 590,524
Cost of Goods Sold	590,899	643,743	1,719,732	1,393,703
Gross Loss	(444,928)	(399,089)	(783,622)	(803,179)
Operating Expenses
Research and development expense		81,664		98,147
Selling, general and administrative	279,864	313,941	544,347	558,609
Total operating expense	279,864	395,605	544,347	656,756
Loss from operations	(724,792)	(794,694)	(1,327,969)	(1,459,935)
Other Income (Expense)
Interest expense - related party	(101,250)	(53,887)	(164,666)	(268,776)
Interest expense, net	(1,159,287)	(819,879)	(1,919,313)	(1,185,214)
Other income	47,474	1,555	54,401	3,532
Total other income(expense)	(1,213,063)	(872,211)	(2,029,578)	(1,450,458)
Loss Before Income Taxes	(1,937,855)	(1,666,905)	(3,357,547)	(2,910,393)
Provision for Income Taxes		43		141
Net Loss	(1,937,855)	(1,666,948)	(3,357,547)	(2,910,534)
Other Comprehensive Loss
Foreign currency translation adjustment	(6,398)	(49,480)	(1,135)	(1,612)
Comprehensive Loss	$ (1,944,253)	$ (1,716,428)	$ (3,358,682)	$ (2,912,146)
Loss per common share
Loss per common share - Basic and diluted	$ (0.04)	$ (0.04)	$ (0.07)	$ (0.06)
Weighted average number of common shares
Weighted average number of common shares - Basic and diluted	46,917,445	46,917,445	46,917,445	46,917,445

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net Loss	$ (3,357,547)	$ (2,910,534)
Adjustments to reconcile net loss to net cash used in operating activities:
Inventory markdown	54,098
Depreciation and amortization	777,131	743,359
Imputed interest expense for non interest bearing related party loans	132,522	124,222
Changes in operating assets and liabilities:
Change in accounts receivable	344,014	77,602
Change in inventory	(16,885)	(21,390)
Change in advances to suppliers	12,909	121,044
Change in prepaid expense and other receivables	13,248	(7,403)
Change in prepaid value-added tax	(37,587)	(9,303)
Change in accounts payable	182,149	(95,913)
Change in taxes payable	(86)	(18,691)
Change in accrued expenses and other payables	295,638	(128,114)
Cash used in operating activities	(1,600,396)	(2,125,121)
Cash flows from investing activities:
Additions to property and equipment	(58,952)	(270,415)
Cash used in investing activities	(58,952)	(270,415)
Cash Flows From Financing Activities
Proceeds (repayment) of related parties loans, net	386,477	(3,245,907)
Proceeds from short term loans, net	1,327,632	2,125,023
Repayment of long term loans, net	(96,495)	3,751,455
Cash provided by financing activities	1,617,614	2,630,571
Effect of exchange rate changes on cash and cash equivalents	(431)	(1,867)
Increase(decrease) in cash and cash equivalents	(42,165)	233,168
Cash and Cash Equivalents - Beginning of the period	97,233	75,901
Cash and Cash Equivalents - End of the period	55,068	309,069
During the period, cash was paid for the following:
Interest expense	$ 1,605,471	1,299,232
Income tax		$ 141

Note 1 - Organization and Basis

Note 1 - Organization and Basis of Presentation	6 Months Ended
	Mar. 31, 2015
Notes
Note 1 - Organization and Basis of Presentation	Note 1 – Organization and Nature of Business American Nano-Silicon Technologies, Inc. (the “Company” or “ANNO”) was incorporated in the State of California on September 6, 1996. Since 2006, the Company has been primarily engaged in the business of manufacturing and distributing refined consumer chemical products through its subsidiaries, Nanchong Chunfei Nano-Silicon Technologies Co., Ltd. (“Nanchong Chunfei”), Sichuan Chunfei Refined Chemicals Co., Ltd. (“Chunfei Chemicals”), and Sichuan Hedi Veterinary Medicines Co., Ltd. (“Hedi Medicines”). On May 28, 2013, the Company assigned 10% of the equity in Chunfei Chemicals to each of Mr. Fachun Pu, Mr. Qiwei Zhang and Mr. Jianbo Liu, and assigned 5% of the equity in Hedi Medicines to Mr. Fachun Pu, and the assignees paid to the Company cash equal to the registered equity amount. At the same time, Messrs Pu, Zhang and Liu agreed to hold those equity interests solely for the benefit of the Company, to pay over to the Company any distributions or dividends they receive, to vote their interests as directed by the Company, and to resell the interests to the Company at its option for cash equal to the registered equity amount.

Note 2 - Summary of Significant

Note 2 - Summary of Significant Accounting Policies	6 Months Ended
	Mar. 31, 2015
Notes
Note 2 - Summary of Significant Accounting Policies	Note 2 – Summary of Significant Accounting Policies Basis Of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2015 and the results of operations and cash flows for the six month periods ended March 31, 2015 and 2014. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the six months ended March 31, 2015 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending September 30, 2015. The balance sheet at September 30, 2014 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended September 30, 2014 as included in our Annual Report on Form 10-K. Reclassifications Certain amounts of prior period were reclassified for presentation purposes. Fair Value of Financial Instruments The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions. The carrying amounts reported in the balance sheets for cash, accounts receivable, inventory, taxes payable, due to related parties, prepaid expenses, other receivables, advance to suppliers, short-term loan, accounts payable, other payables and accrued expenses approximate their fair market value based on the short-term nature of these instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to the Company. The Company did not identify any assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 820. Taxation Income Taxes The Company accounts for income tax under the provisions of ASC 740-10-25, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances will also be established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Uncertain Tax Positions During the course of business, there are certain transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. Value Added Tax Value added tax is imposed on goods sold in or imported in the PRC. Value added tax payable in the People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of value added tax included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year. Earnings (Loss) Per Share Earnings per share are calculated in accordance with the FASB ASC 260, “Earnings per share.” Basic earnings per share are based upon the weighted average number of common shares outstanding, but excluding shares issued as compensation that have not yet vested. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised, and that all unvested shares have vested. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of accounts receivable, advances to suppliers and other receivables arising from its normal business activities. The Company does not require collateral or other security to support these receivables. The company routinely assesses the financial strength of its debtors and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts. Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of operations of the Company are determined using the local currency, Renminbi (“RMB”), as the functional currency. Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period. Equity accounts are translated in the historical exchange rate when the transactions took place. Asset and liability accounts at March 31, 2015 and September 30, 2014 were translated at 6.1312 RMB to $1.00 and at 6.1534 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of income and cash flows for the six months ended March 31, 2015 and 2014 were 6.1463 RMB and 6.1237 RMB to $1.00, respectively. RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated Other Comprehensive Income". Gain or loss from translation adjustments is included in the statement of operations.

Note 3 - Going Concern

Note 3 - Going Concern	6 Months Ended
	Mar. 31, 2015
Notes
Note 3 - Going Concern	Note 3 – Going Concern As shown in the accompanying financial statements, the Company’s current liabilities exceed its current assets by $22.2 million as of March 31, 2015. The current cash and inventory level will not be sufficient to support the Company’s operations and repayments of the loans. In addition, the Company has suffered negative gross profit and negative cash flows from its operations for the past two years. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company will need additional funds to meet its operating and financing obligations until sufficient cash flows are generated from anticipated production to sustain operations and to fund future development and financing obligations. We expect, but provide no assurance, that affiliate companies owned by the Company’s largest shareholder and president, Mr. Pu Fachun, will continue to provide necessary funding for the Company’s normal operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 4 - Inventory

Note 4 - Inventory	6 Months Ended
	Mar. 31, 2015
Notes
Note 4 - Inventory	Note 4 – Inventory The inventory as of March 31, 2015 and September 30, 2014 consisted of the following: March 31 , 2015 September 30, 201 4 Raw materials $ 88,297 $ 125,338 Packing supplies 79,484 70,126 Work in process 89,525 75,199 Finished goods 103,921 126,431 Total $ 361,227 $ 397,094

Note 5 - Related Party Transact

Note 5 - Related Party Transactions	6 Months Ended
	Mar. 31, 2015
Notes
Note 5 - Related Party Transactions	Note 5 – Related Party Transactions The Company periodically borrows money from its shareholders to finance the operations. These loans are all due on demand. The details of loans from related parties are as follows: March 31 , 2015 September 30, 201 4 Short term: Sichuan Chunfei Real Estate $ 670,050 $ 1,212,670 Sichuan Chunfei Daily Chemical 1,750,556 755,759 Sichuan Shubei Feed Co. Ltd. 63,120 62,891 Zhang, Qiwei, a shareholder 34,251 - Pu Fachun, Chief Executive Officer 1,045,920 1,133,694 Total $ 3,563,897 $ 3,165,014 Sichuan Chunfei Daily Chemicals Co. Ltd (“Daily Chemical”) and Sichuan Chunfei Real Estate (“Chunfei Real Estate”) are owned by Mr. Pu Fachun. Sichuan Shubei Feed Co. Ltd. is owned by Mr. Pu Xidi, son of Mr. Pu Fachun. The Company recorded imputed interest at 6% per annum and recorded $69,035 and $132,522 for non-interest bearing related party loans for the three and six months ended March 31, 2015, respectively. The Company recorded imputed interest at 6% per annum and recorded $42,551 and $124,222 for non-interest bearing related party loans for the three and six months ended March 31, 2014, respectively. Interest expense for interest-bearing related party loans was $32,215 and $32,144 for the three and six months ended March 31, 2015, respectively. Interest expense for interest-bearing related party loans was $11,336 and $144,554 for the three and six months ended March 31, 2014, respectively. The following table summarized related party loans with interest and non interest as of March 31, 2015: Non interest bearing Bearing interest from 1%-2.3% per month Short term loan $ 2,944,117 $ 619,780 Long term loan - - $ 2,944,117 $ 619,780

Note 6 - Short Term Loans and L

Note 6 - Short Term Loans and Long Term Loans	6 Months Ended
	Mar. 31, 2015
Notes
Note 6 - Short Term Loans and Long Term Loans	Note 6 – Short Term Loans and Long Term Loans The short term loans as of March 31, 2015 and September 30, 2014 consisted of the following: March 31, 2015 September 30, 2014 a) Loan payable to Nanchong City Bureau of Finance due on demand, fixed interest rate of 0.465% per month $ - $ 650,047 b) Loan payable to Nanchong Commercial Bank, due on March 7, 2015, at a fixed interest rate of 6.9% per annum, guaranteed by a third party - 812,559 c) Loan payable to Nanchong Commercial Bank, due on July 23, 2015, at a fixed interest rate of 6.9% per annum, guaranteed by a third party 815,500 812,559 d) Loan payable to Nanchong Commercial Bank, due on March 23, 2016, at a fixed interest rate of 6.1525% per annum, guaranteed by a third party 815,500 - e) Loan payable to Bank of Communications due on July 27, 2015, at an interest rate of 7.8% per annum and guaranteed by a third party and Mr. Pu, Chairman and CEO of the Company 815,500 812,559 f) Individual loans from unrelated parties, which are due on demand and bearing a weighted average interest rate of 2.68% per month 9,017,391 7,008,727 Total Short Term Loans $ 11,463,891 $ 10,09 6,451 a) Individual loans from unrelated parties bearing a weighted average interest rate of 2.73% per month 1,370,654* 1,462,094 b) Individual loans from various investors, bearing interest of 12% per annum and due on July 1, 2015, as extended 100,000 100,000 c) Loan payable to Jialing Rural Credit Cooperative Union due on December 19, 2015 at an interest rate of 10.764% per annum, secured by Chunfei Chemical’s real property and Chunfei Real Estate’s real property 4,729,900 4,712,842 Less: current portion of long term loans (6,200,554) (1,508,465) Total Long Term Loans $ - $ 4,766, 471 *Loans in the amount of $19,371 will be due on August 12, 2015. Loans in the amount of $1,351,283 are due on demand. The Company pledged its land use right and its building and equipment to a third party to secure the bank loans. The Company recorded interest expense of $1,159,287 and $1,919,313 for the three and six months ended March 31, 2015, respectively. The Company recorded interest expense of $819,879 and $1,185,214 for the three and six months ended March 31, 2014, respectively.

Note 7 - Income Taxes

Note 7 - Income Taxes	6 Months Ended
	Mar. 31, 2015
Notes
Note 7 - Income Taxes	Note 7 – Income Taxes The Company’s subsidiaries are governed by the Income Tax Law of the People’s Republic of China. Their income is taxed at the 25% statutory rate. Hedi Medicine has been taxed at a flat rate of 260 RMB per quarter since calendar 2012. The following table reconciles the U.S. statutory rates to the Company’s effective tax rate for the six months ended March 31, 2015 and 2014: Six months Ended March 31 2015 2014 US statutory income tax rate 35 % 35% Non-taxable item in US 0 % 0% Change in valuation allowance - US -35 % -35% China income tax statutory rate 25 % 25% Change in valuation allowance - China -25 % -25% Effective rate - - As of March 31, 2015, net operating loss carry forwards for United States and China income tax purposes amounted to $2.5 million and $20 million, which may be available to reduce future years' taxable income. These carry forwards will expire, if not utilized, beginning in 2028 through 2034 for U.S tax purpose and 2019 to 2020 for China income tax purposes. Management believes that the realization of the benefits arising from the losses recognized in the US is uncertain due to the Company's business operations being primarily conducted in China and foreign income not being recognized in the United States for federal income tax purposes. It is also uncertain that the China business operations will generate taxable income in the future. Accordingly, the Company has provided a 100% valuation allowance as of the balance sheet dates, for the temporary differences related to the loss carry-forwards. $2,500,000 $20,000,000 The following table reconciles the changes in deferred tax asset for the six months ended March 31, 2015 and 2014: March 31 , 2015 March 31 , 2014 United States: Deferred tax asset-beginning $ 872,859 $ 855,293 Addition: loss carry-forward 7,815 10,651 Valuation allowance-beginning (872,859 ) (855,293) Addition: valuation allowance (7,815 ) (10,651) Deferred tax asset net $ - $ - March 31 , 2015 March 31 , 2014 China: Deferred tax asset -beginning $ 3,663,881 $ 2,084,623 Addition: loss carry-forward 833,805 719,990 Valuation allowance-beginning (3,663,881 ) (2,084,623) Addition: valuation allowance (833,805 ) (719,990) Deferred tax asset- net $ - $ - The Company’s open tax years for its federal and state income tax returns are for the tax years after 2011. These tax returns are subject to examination by the tax authorities.

Note 8 - Concentration

Note 8 - Concentration	6 Months Ended
	Mar. 31, 2015
Notes
Note 8 - Concentration	Note 8 – Concentration For the three months ended March 31, 2015, two customers accounted for 69% and 21% of total sales, respectively. For the six months ended March 31, 2015, two customers accounted for 44% and 44% of total sales, respectively. For the six months ended March 31, 2014, two customers accounted for 73% and 10% of total sales. For the three months ended March 31, 2014, one customer accounted for 80% of total sales.

Note 9 - Commitment and Conting

Note 9 - Commitment and Contingencies	6 Months Ended
	Mar. 31, 2015
Notes
Note 9 - Commitment and Contingencies	Note 9 – Commitment and Contingencies LITIGATION During the 2013 fiscal year, Jian Zhou, a shareholder, commenced a legal action against American Nano Silicon Technologies, Inc. in the PRC. Mr. Zhou alleges that he is entitled to 857,142 shares of American Nano common stock in connection with the acquisition of Nanchong Chunfei by American Nano in 2007. In response to the allegation, American Nano has asserted that all of the shares to which Mr. Zhou was entitled were issued to him. The trial court has dismissed Mr. Zhou’s claim, and he has appealed the dismissal to the court of appeals.

Note 10 - Subsequent Events

Note 10 - Subsequent Events	6 Months Ended
	Mar. 31, 2015
Notes
Note 10 - Subsequent Events	NOTE 1 0 –SUBSEQUENT EVENTS The Company has evaluated subsequent events for purposes of recognition or disclosure through the date these financial statements were issued, and has determined that there was no material event that occurred subsequent to March 31, 2015 which would require adjustments to or disclosure in the financial statements.

Note 2 - Summary of Significa16

Note 2 - Summary of Significant Accounting Policies: Basis of Accounting (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Basis of Accounting	Basis Of Presentation and Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of March 31, 2015 and the results of operations and cash flows for the six month periods ended March 31, 2015 and 2014. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the six months ended March 31, 2015 are not necessarily indicative of the results to be expected for any subsequent periods or for the entire year ending September 30, 2015. The balance sheet at September 30, 2014 has been derived from the audited financial statements at that date. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended September 30, 2014 as included in our Annual Report on Form 10-K.

Note 2 - Summary of Significa17

Note 2 - Summary of Significant Accounting Policies: Reclassifications (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Reclassifications	Reclassifications Certain amounts of prior period were reclassified for presentation purposes.

Note 2 - Summary of Significa18

Note 2 - Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company adopted the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2- Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3- Inputs are unobservable inputs which reflect the reporting entity’s own assumptions. The carrying amounts reported in the balance sheets for cash, accounts receivable, inventory, taxes payable, due to related parties, prepaid expenses, other receivables, advance to suppliers, short-term loan, accounts payable, other payables and accrued expenses approximate their fair market value based on the short-term nature of these instruments. The carrying value of the long-term debt approximates fair value based on market rates and terms currently available to the Company. The Company did not identify any assets or liabilities that are required to be presented on the consolidated balance sheet at fair value in accordance with ASC 820.

Note 2 - Summary of Significa19

Note 2 - Summary of Significant Accounting Policies: Income Taxes (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Income Taxes	Income Taxes The Company accounts for income tax under the provisions of ASC 740-10-25, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Deferred income taxes are recognized for all significant temporary differences between tax and financial statements bases of assets and liabilities. Valuation allowances will also be established against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

Note 2 - Summary of Significa20

Note 2 - Summary of Significant Accounting Policies: Uncertain Tax Positions (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Uncertain Tax Positions	Uncertain Tax Positions During the course of business, there are certain transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes may be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of a tax audit or changes in the tax law. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

Note 2 - Summary of Significa21

Note 2 - Summary of Significant Accounting Policies: Value Added Tax (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Value Added Tax	Value Added Tax Value added tax is imposed on goods sold in or imported in the PRC. Value added tax payable in the People’s Republic of China is charged on an aggregated basis at a rate of 13% or 17% (depending on the type of goods involved) on the full price collected for the goods sold or, in the case of taxable services provided, at a rate of 17% on the charges for the taxable services provided, but excluding, in respect of both goods and services, any amount paid in respect of value added tax included in the price or charges, and less any deductible value added tax already paid by the taxpayer on purchases of goods and services in the same financial year.

Note 2 - Summary of Significa22

Note 2 - Summary of Significant Accounting Policies: Earnings (loss) Per Share (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Earnings (loss) Per Share	Earnings (Loss) Per Share Earnings per share are calculated in accordance with the FASB ASC 260, “Earnings per share.” Basic earnings per share are based upon the weighted average number of common shares outstanding, but excluding shares issued as compensation that have not yet vested. Diluted earnings per share are based on the assumption that all dilutive convertible shares and stock options were converted or exercised, and that all unvested shares have vested. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Note 2 - Summary of Significa23

Note 2 - Summary of Significant Accounting Policies: Concentration of Credit Risk (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of accounts receivable, advances to suppliers and other receivables arising from its normal business activities. The Company does not require collateral or other security to support these receivables. The company routinely assesses the financial strength of its debtors and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts.

Note 2 - Summary of Significa24

Note 2 - Summary of Significant Accounting Policies: Foreign Currency Translation (Policies)	6 Months Ended
	Mar. 31, 2015
Policies
Foreign Currency Translation	Foreign Currency Translation The Company’s principal country of operations is the PRC. The financial position and results of operations of the Company are determined using the local currency, Renminbi (“RMB”), as the functional currency. Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period. Equity accounts are translated in the historical exchange rate when the transactions took place. Asset and liability accounts at March 31, 2015 and September 30, 2014 were translated at 6.1312 RMB to $1.00 and at 6.1534 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of income and cash flows for the six months ended March 31, 2015 and 2014 were 6.1463 RMB and 6.1237 RMB to $1.00, respectively. RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated Other Comprehensive Income". Gain or loss from translation adjustments is included in the statement of operations.

Note 4 - Inventory_ Schedule of

Note 4 - Inventory: Schedule of Inventory, Current (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of Inventory, Current	March 31 , 2015 September 30, 201 4 Raw materials $ 88,297 $ 125,338 Packing supplies 79,484 70,126 Work in process 89,525 75,199 Finished goods 103,921 126,431 Total $ 361,227 $ 397,094

Note 5 - Related Party Transa26

Note 5 - Related Party Transactions: Schedule of Related Party Transactions (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of Related Party Transactions	March 31 , 2015 September 30, 201 4 Short term: Sichuan Chunfei Real Estate $ 670,050 $ 1,212,670 Sichuan Chunfei Daily Chemical 1,750,556 755,759 Sichuan Shubei Feed Co. Ltd. 63,120 62,891 Zhang, Qiwei, a shareholder 34,251 - Pu Fachun, Chief Executive Officer 1,045,920 1,133,694 Total $ 3,563,897 $ 3,165,014

Note 5 - Related Party Transa27

Note 5 - Related Party Transactions: Schedule of related party loans with interest and non interest (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of related party loans with interest and non interest	Non interest bearing Bearing interest from 1%-2.3% per month Short term loan $ 2,944,117 $ 619,780 Long term loan - - $ 2,944,117 $ 619,780

Note 6 - Short Term Loans and28

Note 6 - Short Term Loans and Long Term Loans: Schedule of Debt (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of Debt	March 31, 2015 September 30, 2014 a) Loan payable to Nanchong City Bureau of Finance due on demand, fixed interest rate of 0.465% per month $ - $ 650,047 b) Loan payable to Nanchong Commercial Bank, due on March 7, 2015, at a fixed interest rate of 6.9% per annum, guaranteed by a third party - 812,559 c) Loan payable to Nanchong Commercial Bank, due on July 23, 2015, at a fixed interest rate of 6.9% per annum, guaranteed by a third party 815,500 812,559 d) Loan payable to Nanchong Commercial Bank, due on March 23, 2016, at a fixed interest rate of 6.1525% per annum, guaranteed by a third party 815,500 - e) Loan payable to Bank of Communications due on July 27, 2015, at an interest rate of 7.8% per annum and guaranteed by a third party and Mr. Pu, Chairman and CEO of the Company 815,500 812,559 f) Individual loans from unrelated parties, which are due on demand and bearing a weighted average interest rate of 2.68% per month 9,017,391 7,008,727 Total Short Term Loans $ 11,463,891 $ 10,09 6,451 a) Individual loans from unrelated parties bearing a weighted average interest rate of 2.73% per month 1,370,654* 1,462,094 b) Individual loans from various investors, bearing interest of 12% per annum and due on July 1, 2015, as extended 100,000 100,000 c) Loan payable to Jialing Rural Credit Cooperative Union due on December 19, 2015 at an interest rate of 10.764% per annum, secured by Chunfei Chemical’s real property and Chunfei Real Estate’s real property 4,729,900 4,712,842 Less: current portion of long term loans (6,200,554) (1,508,465) Total Long Term Loans $ - $ 4,766, 471

Note 7 - Income Taxes_ Schedule

Note 7 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of Effective Income Tax Rate Reconciliation	Six months Ended March 31 2015 2014 US statutory income tax rate 35 % 35% Non-taxable item in US 0 % 0% Change in valuation allowance - US -35 % -35% China income tax statutory rate 25 % 25% Change in valuation allowance - China -25 % -25% Effective rate - -

Note 7 - Income Taxes_ Schedu30

Note 7 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)	6 Months Ended
	Mar. 31, 2015
Tables/Schedules
Schedule of Deferred Tax Assets and Liabilities	March 31 , 2015 March 31 , 2014 United States: Deferred tax asset-beginning $ 872,859 $ 855,293 Addition: loss carry-forward 7,815 10,651 Valuation allowance-beginning (872,859 ) (855,293) Addition: valuation allowance (7,815 ) (10,651) Deferred tax asset net $ - $ - March 31 , 2015 March 31 , 2014 China: Deferred tax asset -beginning $ 3,663,881 $ 2,084,623 Addition: loss carry-forward 833,805 719,990 Valuation allowance-beginning (3,663,881 ) (2,084,623) Addition: valuation allowance (833,805 ) (719,990) Deferred tax asset- net $ - $ -

Note 1 - Organization and Bas31

Note 1 - Organization and Basis of Presentation (Details)	6 Months Ended
	Mar. 31, 2015
Details
Entity Incorporation, State Country Name	California
Entity Incorporation, Date of Incorporation	Sep. 6, 1996

Note 2 - Summary of Significa32

Note 2 - Summary of Significant Accounting Policies: Foreign Currency Translation (Details)	Mar. 31, 2015	Sep. 30, 2014	Mar. 31, 2014
Foreign Currency Translation	6.1312	6.1534
Statements of Income and Cash Flow
Foreign Currency Translation	6.1463		6.1237

Note 4 - Inventory_ Schedule 33

Note 4 - Inventory: Schedule of Inventory, Current (Details) - USD ($)	Mar. 31, 2015	Sep. 30, 2014
Details
Inventory, Raw Materials, Gross	$ 88,297	$ 125,338
Packing Supplies	79,484	70,126
Inventory, Work in Process, Gross	89,525	75,199
Inventory, Finished Goods, Gross	103,921	126,431
Inventory, net of reserve	$ 361,227	$ 397,094

Note 5 - Related Party Transa34

Note 5 - Related Party Transactions: Schedule of Related Party Transactions (Details) - USD ($)	Mar. 31, 2015	Sep. 30, 2014
Due to related parties-current portion	$ 3,563,897	$ 3,165,014
Sichuan Chunfei Real Estate
Due to related parties-current portion	670,050	1,212,670
Sichuan Chunfei Daily Chemical
Due to related parties-current portion	1,750,556	755,759
Sichuan Shubei Feed Co Ltd
Due to related parties-current portion	63,120	62,891
Zhang, Qiwei, a shareholder
Due to related parties-current portion	34,251
Pu Fachun
Due to related parties-current portion	$ 1,045,920	$ 1,133,694

Note 5 - Related Party Transa35

Note 5 - Related Party Transactions (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Imputed interest expense for non interest bearing related party loans	$ 69,035	$ 42,551	$ 132,522	$ 124,222
Interest expense - related party	101,250	53,887	164,666	268,776
Interest bearing
Interest expense - related party	$ 32,215	$ 11,336	$ 32,144	$ 144,554

Note 5 - Related Party Transa36

Note 5 - Related Party Transactions: Schedule of related party loans with interest and non interest (Details) - USD ($)	Mar. 31, 2015	Sep. 30, 2014
Due to related parties-current portion	$ 3,563,897	$ 3,165,014
Non interest bearing
Short term loan	2,944,117
Due to related parties-current portion	2,944,117
Interest bearing
Short term loan	619,780
Due to related parties-current portion	$ 619,780

Note 6 - Short Term Loans and37

Note 6 - Short Term Loans and Long Term Loans: Schedule of Debt (Details) - USD ($)	Mar. 31, 2015	Sep. 30, 2014
Short term loans	$ 11,463,891	$ 10,096,451
Long-term Debt, Excluding Current Maturities		4,766,471
Long-term Debt, Current Maturities	(6,200,554)	(1,508,465)
Short Term Loan A
Short term loans		650,047
Short Term Loan B
Short term loans		812,559
Short Term Loan C
Short term loans	815,500	812,559
Short Term Loan D
Short term loans	815,500
Short Term Loan E
Short term loans	815,500	812,559
Short Term Loan F
Short term loans	9,017,391	7,008,727
Long Term Loan A
Long-term Debt, Excluding Current Maturities	1,370,654	1,462,094
Long Term Loan B
Long-term Debt, Excluding Current Maturities	100,000	100,000
Long Term Loan C
Long-term Debt, Excluding Current Maturities	$ 4,729,900	$ 4,712,842

Note 6 - Short Term Loans and38

Note 6 - Short Term Loans and Long Term Loans (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Interest Expense, Other	$ 1,159,287	$ 819,879	$ 1,919,313	$ 1,185,214

Note 7 - Income Taxes_ Schedu39

Note 7 - Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details)	6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
UnitedStates
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	35.00%	35.00%
Non-taxable item	0.00%	0.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	(35.00%)	(35.00%)
China
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	25.00%	25.00%
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	(25.00%)	(25.00%)

Note 7 - Income Taxes (Details)

Note 7 - Income Taxes (Details)	Mar. 31, 2015USD ($)
UnitedStates
Operating Loss Carryforwards	$ 2,500,000
China
Operating Loss Carryforwards	$ 20,000,000

Note 7 - Income Taxes_ Schedu41

Note 7 - Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
UnitedStates
Deferred Tax Assets, Net, Current	$ 872,859	$ 855,293
Deferred Tax Assets, Operating Loss Carryforwards	7,815	10,651
Deferred Tax Assets, Valuation Allowance, Current	(872,859)	(855,293)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	(7,815)	(10,651)
CHINA
Deferred Tax Assets, Net, Current	3,663,881	2,084,623
Deferred Tax Assets, Operating Loss Carryforwards	833,805	719,990
Deferred Tax Assets, Valuation Allowance, Current	(3,663,881)	(2,084,623)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ (833,805)	$ (719,990)

Note 8 - Concentration (Details

Note 8 - Concentration (Details)	3 Months Ended		6 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 31, 2014
Details
Concentration Risk, Customer	two customers accounted for 69% and 21% of total sales	one customer accounted for 80% of total sales	two customers accounted for 44% and 44% of total sales	two customers accounted for 73% and 10% of total sales