China Modern Agricultural Information 10-K 2012 FY Annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2012

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________ to ___________________________

Commission file number 333-164488

CHINA MODERN AGRICULTURAL INFORMATION, INC.

( Exact name of registrant as specified in its charter)

Nevada	27-2776002
State or other jurisdiction of Incorporation or organization	(I.R.S. Employer Identification No.)

No.A09, Wuzhou Sun Town Limin Avenue, Limin Development District Harbin, Heilongjiang, China	N/A
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (86) 0451-84800733

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Name of each exchange on which registered
Common Stock	Over the Counter
$0.001 par value	Bulletin Board

Securities registered pursuant to Section 12(b) of the Exchange Act: None.

Securities registered pursuant to Section 12(g) of the Exchange Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.        Yes o    No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes o     No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer (Do not check if a smaller reporting company)	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x

The aggregate market value of the Company’s common stock held by non-affiliates computed by reference to the closing bid price of the Company’s common stock, as of the last business day of the registrant’s most recently completed fiscal quarter: $17,209,612.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 53,100,000 shares of common stock, par value $0.001 per share, issued and outstanding as of September 26, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

	PART I	Page
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	14
ITEM 1B.	UNRESOLVED STAFF COMMENTS	14
ITEM 2.	PROPERTIES	15
ITEM 3.	LEGAL PROCEEDINGS	15
ITEM 4.	MINE SAFETY DISCLOSURE	15
	PART II
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	15
ITEM 6.	SELECTED FINANCIAL DATA	16
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	22
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	23
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	24
ITEM 9A.	CONTROLS AND PROCEDURES	24
ITEM 9B.	OTHER INFORMATION	24
	PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	25
ITEM 11.	EXECUTIVE COMPENSATION	27
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	30
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	30
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	31
	PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	32
SIGNATURES		33

 Forward-Looking Statements

Certain statements in this Annual Report on Form 10-K constitute “forward-looking statements” made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 that are based on current expectations, estimates, forecasts and assumptions and are subject to risks and uncertainties. Words such as “anticipate,” “assume,” “believe,” “estimate,” “expect,” “goal,” “intend,” “plan,” “project,” “seek,” “target,” and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements speak only as of the date on which they are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions relating to certain factors that could cause actual results to differ materially from those anticipated in such statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

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Item 1.  Business

In this Annual Report on Form 10-K, references to “we,” “our,” “us,” “the Company,” refer to China Modern Agriculture Information, Inc. and its subsidiaries and variable interest entities on a consolidated basis.

In addition, unless the context otherwise requires and for the purposes of this report only

●   “Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

●   “Jiasheng Consulting” refers to Jiasheng Consulting Managerial Co., Ltd., a PRC company;

●   “Operating Company or Operating Companies” refers to Value Development Holding, Value Development Group, Jiasheng Consulting, Zhongxian Information, Xinhua Cattle, and Yulong Cattle.

●   “PRC,” “China,” and “Chinese,” refer to the People’s Republic of China;

●   “Renminbi” and “RMB” refer to the legal currency of China;

●   “SEC” refers to the United States Securities and Exchange Commission;

●   “Securities Act” refers to the Securities Act of 1933, as amended;

●   “Yulong Cattle” refers to Shangzhi Yulong Cattle Co., Ltd., a PRC company;

●   “U.S. dollars,” “dollars” and “$” refer to the legal currency of the United States;

●   “Value Development Holding” refers to Value Development Holding Limited., a British Virgin Islands company;

●   “Value Development Group” refers to Value Development Group Limited, a Hong Kong company;

●   “Xinhua Cattle” refers to Heilongjiang Xinhua Cattle Industry Co., Ltd., a PRC company;

●   “Zhongxian Information” refers to Heilongjiang Zhongxian Information Co., Ltd., a PRC company;

We are a leading producer and distributor of raw fresh milk in China. We have three operating entities with an aggregate fresh milk production capacity of approximately 149 tons (approximately 4,731 gallons) per day. We also have 39 exclusive individual partners with an aggregate fresh milk production capacity of approximately 245 tons per day.

Corporate History

We were incorporated on December 22, 2008 under the laws of the State of Nevada.  We were formerly known as Trade Link Wholesalers Inc. (“Trade Link”). On April 4, 2011, the Board of Directors of Trade Link filed an amendment to the Certificate of Incorporation with the State of Nevada and changed our name from Trade Link to China Modern Agricultural Information, Inc.

On January 28, 2011, we entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among (i) Value Development, a British Virgin Islands company, (ii) Value Development’s shareholders, (iii) us, and (iv) our former principal stockholders.  Pursuant to the terms of the Exchange Agreement, Value Development’s shareholders transferred to us all of the shares of Value Development in exchange for the issuance of 35,998,000 shares of our common stock (the “Securities Exchange”). The shares issued to Value Development’s shareholder in the Securities Exchange constituted approximately 87.80% of our issued and outstanding shares of common stock as of and immediately after the consummation of the Securities Exchange. As a result of the Securities Exchange, Value Development became our wholly owned subsidiary and Value Development’s former principal stockholder became our principal stockholders.

Value Development Holdings was incorporated under the laws of British Virgin Islands on June 24, 2010 to serve as an investment holding company. Value Development Holdings owns 100% of the equity interest of Value Development Group, a company incorporated under the laws of Hong Kong on September 17, 2010. Value Development Group owns 100% of the equity interest of Harbin Jiasheng Consulting Managerial Co., Ltd., a company incorporated under the laws of China on September 15, 2010.

On December 21, 2010, Jiasheng Consulting entered into a series of contractual agreements with Zhongxian Information, Co., Ltd., a company incorporated under the laws of the PRC, and its shareholders, in which Jiasheng Consulting effectively assumed management of the business activities of Zhongxian Information and its 99% owned subsidiary Heilongjiang Xinhua Cattle, and has the right to appoint all executives and senior management and the members of the board of directors of Zhongxian Information. Zhongxian Information was founded on January 21 2005, and is headquartered in the Limin Development Zone, Harbin, Heilongjiang Province, with registered capital of 10 million RMB or $1,206,800. The contractual arrangements are comprised of a series of agreements, including an Exclusive Business Cooperation Agreement, Exclusive Option Agreement, and an Equity Interest Pledge Agreement, through which Jiasheng Consulting has the right to provide exclusive complete business support and technical and consulting service to Zhongxian Information. Additionally, Zhongxian Information’s shareholders have pledged their rights, titles and equity interest in Zhongxian Information as security for Jiasheng Consulting to collect consulting and services fees provided to Zhongxian Information through an Equity Pledge Agreement. In order to further reinforce Jiasheng Consulting’s rights to control and operate Zhongxian Information, the shareholders of Zhongxian Information have granted Jiasheng Consulting the exclusive right and option to acquire all of their equity interests in Zhongxian Information through an Exclusive Option Agreement.

Zhongxian Information was incorporated in China in January 2005 with registered capital of 10 million Renminbi or $1,206,800.  In February 2006, Zhongxian Information acquired 99% of the registered capital of Xinhua Cattle, which was incorporated in China in December 2005 with registered capital of three million RMB or $371,580.

On November 23, 2011, Zhongxian Information acquired 100% of the equity interest of Yulong Cattle in exchange for (i) issuance of 9,000,000 shares of our common stock, and (ii) cash payment of $4,396,000, to Yulong Cattle’s former shareholders. Yulong Cattle was incorporated on December 4, 2007 under the laws of the PRC. Yulong Cattle, located in Harbin, Heilongjiang, northeast of China, is a livestock company that engages in cow breeding and fresh milk distribution, and primarily generates its revenue from the sale of fresh milk.  

2

Our current corporate structure is set forth below:

3

Change in Business Model

In addition to selling fresh milk to Chinese manufacturing and distribution companies of dairy products, we started to stream revenue from making commission from the local farmers on their monthly milk sales. Since June 2011, we started to sell our milk cows to local farmer in exchange for monthly payments from the local farmers on their monthly milk sales. The monthly payments represent the monthly installments, including interest, for the purchase price of milk cows sold or a mix of the purchase price and commissions for our assistance in arranging for the sale of the milk.

Sale of Milk Cows

In June 2011, we sold 2,000 milk cows to six local farmers with the purchase price being paid in installments over a five-year period with a minimum payment of 20% of the sales price annually. No down payment was made by the farmers for these sales in June 2011. In August 2011, through initial negotiation and subsequent modification of sales terms, we sold 5,635 milk cows to 20 local farmers with a 10% down payment with monthly installments plus interest at 7% on any remaining principal payment over a period of the remaining useful life of the cows sold. In September 2011, we also sold 3,787 milk cows to 13 local farmers with monthly installments over a period of the remaining useful life of the cows sold with no down payment. We also charge interest at a rate of 7% annually on the outstanding principal amount.

The receivable related to the sales of cows is included in notes receivable in the accompanying consolidated balance sheets as of June 30, 2012 and June 30, 2011.  In addition to monthly installments for the purchase price of the cows sold, these local farmers who bought our cows in August and September 2011 also pay commissions to us each month for our assistance in arranging for the sale of their milk. Pursuant to the agreements with these local farmers entered in August and September 2011, we are also entitled to 30% of the monthly milk sales generated by the cows sold. The 30% monthly payments represent the monthly installments, including interest, for the purchase price of cows sold and commissions for our assistance in arranging for the sale of the milk. We also entered into agreements with local farmers for a 30% commission of their monthly milk sales generated by the cows sold in June 2011. There were no other sales of milk cows to local farmers under these agreements during the year ended June 30, 2012.

By June 30, 2012, we had 14,067 cows, among which, 9,357 cows continue to be fed by local farmers, 400 cows are fed by our variable interest entity Xinhua Cattle, and 4,310 cows are fed by Yulong Cattle.

Starting with the quarter ended September 30, 2011, the food costs for feeding cows increased significantly. The food costs paid to the farmers for feeding cows per month increased from RMB 200 or $32 to RMB 280 or $44, RMB 280 or $44 to RMB 350 or $55, RMB 300 or $47 to RMB 380 or $ 60 and RMB 450 or $ 71 to RMB 540 or $ 85for baby cows, pre-adult cows, young cows and milk cows respectively. This was the main reason we disposed of a large number of our cows and rented the grassland.

Products

Zhongxian Information’s products include (1) raw milk; and (2) processing and sale of green organic fertilizer.

Zhongxian Information has formed a livestock business system which integrates raw milk production and organic fertilizer production for direct sale to suppliers.

Our farmland is located in the Heilongjiang province which has a humid continental climate. This climate is ideal for the growth of grass, which in turn is essential in the grazing and feeding of our cattle that aids in our breeding of cows and calves, raw milk production and organic fertilizer production.

Raw Milk

We exclusively use Holstein cows for our milk production. Holstein cows are well-regarded for their abundant milk production and high quality milk. Currently, Zhongxian Information’s cows maintain a milking period of 305 days, producing milk that contains approximately 3.5% fat. Each adult cow is capable of producing 6500-7500 kg annually. Beijing Meilinong Technology Development Co, Ltd is our only milk cow supplier in fiscal 2012.

We maintain strict quality control and testing procedures to ensure our milk products are of a high quality. The milk production and quality controls ensure that the milk produced is high in nutrients and active biological substances.

Cow Feeders

Pursuant to a series entrust feeding agreements with local farmers, Xinhua Cattle outsources 90% of its cows to local farmers for the purposes of aiding in our milk production. Pursuant to these agreements, we pay for the fostering fees and feed costs. In return, the local farmers provide us with the raw milk produced by the cows.

Pursuant to these entrust feeding agreements, we entrust our cattle to local farmers to assist in a more efficient means to produce raw milk, as well as manure, used in our production of organic fertilizer. In that regard, we pay a monthly fee to local farmers that correlate to the number of calves, cattle and cows that are placed in their care. Pursuant to the agreements, local farmers are responsible for the feeding and raising of the cattle as well as the raw milk production. Additionally, these local farmers ensure that each cow produces a minimum of 20 kg of milk daily.

These agreements provide for a monthly fee of 30 RMB or $4.7 per calf, 50 RMB or $7.9 per adult cattle, 80 RMB or $12.6 for young cattle and 180 RMB for cows to be paid to the local farmers. We are responsible for reimbursing the local farmers for the feeding costs. These agreements provide that the monthly feeding costs are determined as follows: 200 RMB or $32 per calf, 280 RMB or $44 per adult cattle, 300 RMB or $47 per young cattle, and 450 RMB or $71 per cow.

Local farmers are responsible for the production of milk and are required to timely deliver the milk production daily. All of the raw milk produced by the cattle is owned by us.

4

Additionally, the local farmers are contractually obligated to conduct periodic breeding for the young cattle and cows, at our expense. The breeding is overseen by veterinarians of our choosing. All calves produced by our entrusted cows are our property, and all calve births are overseen by veterinarians of our choosing.

All cow waste produced by our entrusted cattle is owned by us. The local farmers are obligated to collect the waste and provide it to us for further processing, and eventual sale as organic fertilizer. 

Raw Milk Customers

Mengniu Dairy Co. Ltd.

Mengniu Dairy Co. Ltd. (“Mengniu”) has been a purchaser of our raw milk products since 2006. Our current and previous contractual arrangement provides for the purchase of our milk at the base price of RMB 1.85 or $0.29/kilogram. However, the base price is based on the standard of our raw milk, namely, fat percentage of  3.1%, protein percentage of 2.95%, and the Level One microorganism quality (less than 0.5 million / ml). Mengniu has signed a two year contractual commitment to continue to purchase raw milk products from us until December 30, 2012.

5

Mengniu accounted for 3% of all milk sales for the year ended June 30, 2012 and 48% of all milk sales for the year ended June 30, 2011.

Feihe Dairy Co., Ltd. Longjiang Branch

Feihe Dairy Co., Ltd. Longjiang Branch (“Feihe Dairy”) has been a purchaser of our raw milk products since 2006. Our current and previous contractual arrangement provides for the purchase of our milk at the base price of RMB 1.85 or $0.29/kilogram. However, the base price is based on the standard of our raw milk, namely, fat percentage of  3.1%, protein percentage of 2.95%, and the Level One microorganism quality (less than 0.5 million / ml). Feihe Dairy has signed a two year contractual commitment to continue to purchase raw milk products from us until December 15, 2012.

Feihe Dairy accounted for 2% of all our milk sales for the year ended June 30, 2012 and 48% of all our milk sales for the year ended June 30, 2011. 

6

Organic Fertilizer

As a by-product of our milk and beef businesses, we use the resulting manure as a source of additional revenue. In that regard we combine the raw material, the manure, with inoculating complex microbial agents. Once we combine the manure with the microbial agents, we then ferment the product using biological and chemical processes and microbial fermentation technology, which produces the organic fertilizer.

Our fertilizer product is unique, in that it decomposes slowly, maintains long fertilizing effect and slow nutrient loss. It can effectively promote the proliferation of useful microorganisms and enhance soil fertility, resulting in more abundant crop growth.

The sale of organic fertilizer only makes up a very small amount of our total revenue.We secured USD $49,229 in revenue from our organic fertilizer sales in the year ending June 30, 2012 and USD $210,771 in revenue from our organic fertilizer sales in the year ending on June 30, 2011. Jianfa Bio-Organic Fertilizer Plant was the sole customer for our organic fertilizer products from 2006 to June 2011. Since July 2011, we have been selling our organic fertilizer products to Heilongjiang Soyang Bio Energy Development Ltd.

Farmland

We operate on 16,666,750 square meters of leased grassland. Xinhua is the only company utilizing this leased grassland and they currently have 400 cows grazing this leased grassland.

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Research and Development

We had no expenses on research and development activities Company during the fiscal years 2012 and 2011.

Intellectual Property

We regard the protection of our copyrights, service marks, trademarks, trade secrets and other intellectual property rights as critical to our future success. We rely on contractual restrictions to protect our proprietary rights in products and services. We cannot assure you that these contractual arrangements or the other steps taken by us to protect our intellectual property will prove sufficient to prevent misappropriation of our technology or to deter independent third-party development of similar technologies.

Trademarks

Through Zhongxian Information, we have registered the following trademark with the Trademark Office, State Administration for Industry and Commerce in the PRC:

No.	Registration No.	Trademark	Registrant	Item Category	Expiration Date
1	5980762	MANCUNXIANG	Zhongxian Information	Category No. 30 (Staple food):  Coffee, tea, cocoa, sugar, rice, tapioca, sago, artificial coffee; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder, salt, mustard; vinegar, sauces (condiments); spices; ice.	December 13, 2019
2	4705072	ZHONGXIAN PROPERTY	Zhongxian Information	Category No. 31 (Natural agricultural products): Agricultural, horticultural and forestry products and grains not included in other classes; live animals; fresh fruits and vegetables; seeds, natural plants and flowers; foodstuffs for animals, malt.	March 6, 2018
3	4705070	ZHONGXIAN INFORMATION	Zhongxian Information	Category No. 38 (Communication services): Telecommunications.	January 6, 2019
4	4705071	ZHONGXIAN TECHNOLOGY	Zhongxian Information	Category No. 42 (Scientific and technological services): Scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software.	January 6, 2019

We plan to file for extension with the Trademark Office of the above trademark before the expiration date.

8

Copyright

The Company currently does not own any copyrights.  Copyright of Zhongxian Agricultural Economy Network Services System V1.0 and Zhongxian Agricultural Capital Information Services System V1.0 were previously contributed to the Company by its shareholders and have now been reverted back to such shareholders.

Domain Names

Zhongxian Information owns the domain name www.hljzhongxian.com with a registration number of Hei ICP Bei 10200342.

Government Regulation

We are subject to inspection of the Livestock and Veterinary Bureau each quarter for our breeder farms. We have never been penalized by the bureau.

China Regulations

This section sets forth a summary of the most significant Chinese regulations or requirements that may affect our business activities operated in China or our shareholders’ right to receive dividends and other distributions of profits from the PRC subsidiaries.

9

Foreign Investment in PRC Operating Companies

The Foreign Investment Industrial Catalogue jointly issued by the MOFCOM and the National Development and Reform Commission or the NDRC in 2007 classified various industries/business into three different categories: (i) encouraged for foreign investment; (ii) restricted to foreign investment; and (iii) prohibited from foreign investment. For any industry/business not covered by any of these three categories, they will be deemed industries/business permitted to have foreign investment. Except for those expressly provided restrictions, encouraged and permitted industries/business are usually 100% open to foreign investment and ownership. With regard to those industries/business restricted to or prohibited from foreign investment, there is always a limitation on foreign investment and ownership. The PRC Subsidiary’s business does not fall under the industry categories that are restricted to, or prohibited from foreign investment and is not subject to limitation on foreign investment and ownership.

Regulation of Foreign Currency Exchange

Foreign currency exchange in the PRC is governed by a series of regulations, including the Foreign Currency Administrative Rules (1996), as amended, and the Administrative Regulations Regarding Settlement, Sale and Payment of Foreign Exchange (1996), as amended. Under these regulations, the Renminbi is freely convertible for trade and service-related foreign exchange transactions, but not for direct investment, loans or investments in securities outside the PRC without the prior approval of SAFE. Pursuant to the Administrative Regulations Regarding Settlement, Sale and Payment of Foreign Exchange (1996), FIEs may purchase foreign exchange without the approval of SAFE for trade and service-related foreign exchange transactions by providing commercial documents evidencing these transactions. They may also retain foreign exchange, subject to a cap approved by SAFE, to satisfy foreign exchange liabilities or to pay dividends. However, the relevant Chinese government authorities may limit or eliminate the ability of FIEs to purchase and retain foreign currencies in the future. In addition, foreign exchange transactions for direct investment, loan and investment in securities outside the PRC are still subject to limitations and require approvals from SAFE.

Regulation of FIEs’ Dividend Distribution

The principal laws and regulations in the PRC governing distribution of dividends by FIEs include:

(i)   The Sino-foreign Equity Joint Venture Law (1979), as amended, and the Regulations for the Implementation of the Sino-foreign Equity Joint Venture Law (1983), as amended;

(ii)   The Sino-foreign Cooperative Enterprise Law (1988), as amended, and the Detailed Rules for the Implementation of the Sino-foreign Cooperative Enterprise Law (1995), as amended;

(iii)   The Foreign Investment Enterprise Law (1986), as amended, and the Regulations of Implementation of the Foreign Investment Enterprise Law (1990), as amended.

Under these regulations, FIEs in the PRC may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, foreign-invested enterprises in the PRC are required to set aside at least 10% of their respective accumulated profits each year, if any, to fund certain reserve funds unless such reserve funds have reached 50% of their respective registered capital. These reserves are not distributable as cash dividends. The board of directors of a FIE has the discretion to allocate a portion of its after-tax profits to staff welfare and bonus funds, which may not be distributed to equity owners except in the event of liquidation.

10

Regulation of a Foreign Currency’s Conversion into RMB and Investment by FIEs

On August 29, 2008, SAFE issued a Notice of the General Affairs Department of the State Administration of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the Administration of Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises or Notice 142, to further regulate the foreign exchange of FIEs. According to the Notice 142, FIEs shall obtain verification report from a local accounting firm before converting its registered capital of foreign currency into Renminbi, and the converted Renminbi shall be used for the business within its permitted business scope. The Notice 142 explicitly prohibits FIEs from using RMB converted from foreign capital to make equity investments in the PRC, unless the domestic equity investment is within the approved business scope of the FIE and has been approved by SAFE in advance.

Regulation of Foreign Exchange in Certain Onshore and Offshore Transactions

In October 2005, SAFE issued the Notice on Issues Relating to the Administration of Foreign Exchange in Fund-raising and Return Investment Activities of Domestic Residents Conducted via Offshore Special Purpose Companies, or SAFE Notice 75, which became effective as of November 1, 2005, and was further supplemented by two implementation notices issued by SAFE on November 24, 2005 and May 29, 2007, respectively. SAFE Notice 75 states that PRC residents, whether natural or legal persons, must register with the relevant local SAFE branch prior to establishing or taking control of an offshore entity established for the purpose of overseas equity financing involving onshore assets or equity interests held by them. The term “PRC legal person residents” as used in SAFE Notice 75 refers to those entities with legal person status or other economic organizations established within the territory of the PRC. The term “PRC natural person residents” as used in SAFE Notice 75 includes all PRC citizens and all other natural persons, including foreigners, who habitually reside in the PRC for economic benefit. SAFE implementation notice of November 24, 2005 further clarifies that the term “PRC natural person residents” as used under SAFE Notice 75 refers to those “PRC natural person residents” defined under the relevant PRC tax laws and those natural persons who hold any interests in domestic entities that are classified as “domestic-funding” interests.

PRC residents are required to complete amended registrations with the local SAFE branch upon: (i) injection of equity interests or assets of an onshore enterprise to the offshore entity, or (ii) subsequent overseas equity financing by such offshore entity. PRC residents are also required to complete amended registrations or filing with the local SAFE branch within 30 days of any material change in the shareholding or capital of the offshore entity, such as changes in share capital, share transfers and long-term equity or debt investments and these changes do not relate to return investment activities. PRC residents who have already organized or gained control of offshore entities that have made onshore investments in the PRC before SAFE Notice 75 was promulgated must register their shareholdings in the offshore entities with the local SAFE branch on or before March 31, 2006.

Under SAFE Notice 75, PRC residents are further required to repatriate into the PRC all of their dividends, profits or capital gains obtained from their shareholdings in the offshore entity within 180 days of their receipt of such dividends, profits or capital gains. The registration and filing procedures under SAFE Notice 75 are prerequisites for other approval and registration procedures necessary for capital inflow from the offshore entity, such as inbound investments or shareholders loans, or capital outflow to the offshore entity, such as the payment of profits or dividends, liquidating distributions, equity sale proceeds, or the return of funds upon a capital reduction.

11

Government Regulations Relating to Taxation

On March 16, 2007, the National People’s Congress or NPC, approved and promulgated the PRC Enterprise Income Tax Law, which we refer to as the New EIT Law. The New EIT Law took effect on January 1, 2008. Under the New EIT Law, FIEs and domestic companies are subject to a uniform tax rate of 25%. The New EIT Law provides a five-year transition period starting from its effective date for those enterprises which were established before the promulgation date of the New EIT Law and which were entitled to a preferential lower tax rate under the then-effective tax laws or regulations.

On December 26, 2007, the State Council issued a Notice on Implementing Transitional Measures for Enterprise Income Tax, or the Notice, providing that the enterprises that have been approved to enjoy a low tax rate prior to the promulgation of the New EIT Law will be eligible for a five-year transition period since 1 January, 2008, during which time the tax rate will be increased step by step to the 25% unified tax rate set out in the New EIT Law. From 1 January, 2008, for the enterprises whose applicable tax rate was 15% before the promulgation of the New EIT Law , the tax rate will be increased to 18% for year 2008, 20% for year 2009, 22% for year 2010, 24% for year 2011, 25% for year 2012. For the enterprises whose applicable tax rate was 24%, the tax rate will be changed to 25% from January 1, 2008.

The New EIT Law provides that an income tax rate of 20% may be applicable to dividends payable to non-PRC investors that are “non-resident enterprises”. Non-resident enterprises refer to enterprises which do not have an establishment or place of business in the PRC, or which have such establishment or place of business in the PRC but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within the PRC. The income tax for non-resident enterprises shall be subject to withholding at the income source, with the payor acting as the obligatory withholder under the New EIT Law, and therefor such income taxes generally called withholding tax in practice. The State Council of the PRC has reduced the withholding tax rate from 20% to 10% through the Implementation Rules of the New EIT Law. It is currently unclear in what circumstances a source will be considered as located within the PRC. We are a U.S. holding company and substantially all of our income is derived from dividends we receive from our subsidiaries located in the PRC. Thus, if we are considered as a “non-resident enterprise” under the New EIT Law and the dividends paid to us by our subsidiary in the PRC are considered income sourced within the PRC, such dividends may be subject to a 10% withholding tax.

Such income tax may be exempted or reduced by the State Council of the PRC or pursuant to a tax treaty between the PRC and the jurisdictions in which our non-PRC shareholders reside. For example, the 10% withholding tax is reduced to 5% pursuant to the Double Tax Avoidance Agreement Between Hong Kong and Mainland China if the beneficial owner in Hong Kong owns more than 25% of the registered capital in a company in the PRC.

The new tax law provides only a framework of the enterprise tax provisions, leaving many details on the definitions of numerous terms as well as the interpretation and specific applications of various provisions unclear and unspecified. Any increase in the combined company’s tax rate in the future could have a material adverse effect on its financial conditions and results of operations.

Regulations of Overseas Investments and Listings

On August 8, 2006, six PRC regulatory agencies, including MOFCOM, CSRC, SASAC, SAT, SAIC and SAFE, jointly amended and released the M&A Rules, which became effective on September 8, 2006. This regulation, among other things, includes provisions that purport to require that an offshore SPV formed for purposes of overseas listing of equity interest in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain the approval of CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.

On September 21, 2006, CSRC published on its official website procedures regarding its approval of overseas listings by SPVs. CSRC approval procedures require the filing of a number of documents with CSRC and it would take several months to complete the approval process. The application of the M&A Rules with respect to overseas listings of SPVs remains unclear with no consensus currently existing among the leading PRC law firms regarding the scope of the applicability of CSRC approval requirement. 

12

Regulations on Work Safety

On June 29, 2002, the Work Safety Law (“WSL”) of the PRC was adopted by the Standing Committee of the 9th National People’s Congress and came into effect on November 1, 2002, as amended on August 27, 2009. The WSL provides general work safety requirements for entities engaging in manufacturing and business activities within the PRC. Additionally, Regulation on Work Safety Licenses (“RWSL”), as adopted by the State Council on January 7, 2004 effective on January 13, 2004, requires enterprises engaging in the manufacture of dangerous chemicals to obtain a work safety license with a term of three years. If a work safety license needs to be extended, the enterprise must go through extension procedures with authorities three months prior to its expiration. In addition, on May 17, 2004, the Measures for Implementation of Work Safety Licenses of Dangerous Chemicals Production was promulgated as implementing measures to the Regulation on Work Safety Licenses which provides that entities producing dangerous chemicals are required to obtain work safety licenses pursuant to specific requirements. Without work safety licenses, no entity may engage in the formal manufacture of dangerous chemicals.

The Regulations on the Safety Administration of Dangerous Chemicals (“RSADC”) was promulgated by the State Council on January 26, 2002, effective as of March 15, 2002. It sets forth general requirements for manufacturing and the storage of dangerous chemicals in China. The RSADC requires that companies manufacturing dangerous chemicals establish and strengthen their internal regulations and rules on safety control and fulfill the national standards and other relevant provisions of the State. In addition, according to the RSADC, companies that manufacture, store, transport or use dangerous chemicals shall be required to obtain corresponding approvals or licenses with the State Administration of Work Safety and its local branches and other proper authorities. Companies that manufacture or store dangerous chemicals without approval or registration with the proper authorities can be shut down, ordered to stop manufacturing or ordered to destroy the dangerous chemicals. Such companies can also be subject to fines. If criminal law is violated, the persons chiefly liable, along with other personnel directly responsible for such impropriety, shall be subject to relevant criminal liability.

Regulations on Environmental Protection

According to the Prevention and Control of Water Pollution Law, as adopted by the Standing Committee of the 10th National People’s Congress on February 28, 2008 and effective on June 1, 2008, China adopted a licensing system for pollutant discharge. Companies directly or indirectly responsible for discharge of industrial waste water or medical sewage to waters shall be required to obtain a pollutant discharge license. All companies are prohibited from discharging wastewater and sewage to waters without or in violation of the terms of the pollutant discharge license.

The Regulations on the Administration of Construction Projects Environmental Protection (“RACPEP”), as adopted by the State Council on November 18, 1998 and effective on November 29, 1998, governs construction projects and the impact such projects will have on the environment. Pursuant to the RACPEP, the governing body is responsible for supervising the implementation of a three tiered system that includes (i) reviewing and approving a construction project, (ii) overseeing the construction project and (iii) to inspect the finished construction project and ensure that all harmful pollutants are disposed of correctly. Manufacturing companies are required to apply for inspection with environment protection authorities upon completion of a construction project.

13

Food Safety Law of the People’s Republic of China

The Food Safety Law of the People’s Republic of China (the “Food Safety Law”) as adopted at the 7th Session of the Standing Committee of the 11th National People’s Congress of the People’s Republic of China and effective on June 1, 2009, governs the food safety in food production and business operation activities. Pursuant to the Food Safety Law, food producers must establish an internal inspection and record system for raw materials and predelivery products, and food distributors must also establish internal systems to record and inspect food products procured from suppliers. In addition, any food addictives that are not in the approved government catalog must not be used and no food products can be sold inspection-free.

Regulations on the Implementation of the Food Safety Law of the People’s Republic of China

The Regulations on the Implementation of the Food Safety Law of the People’s Republic of China (the “Regulations”) as adopted at the 73rd Standing Committee Meeting of the State Council on July 8, 2009 and effective on July 20, 2009, are promulgated in accordance with the Food Safety Law. The Regulations require that the local People’s Government at or above the country level shall perform the responsibility specified in the Food Safety Law, improve the ability for supervision and administration of food safety, ensure supervision and administration of food safety; establish and improve the coordination mechanism between food safety regulatory authorities, integrate and improve the food safety information network, and realize the sharing of food safety and food inspection information and other technical resources.

Law of the People’s Republic of China on Quality and Safety of Agricultural Products

The Law of the People’s Republic of China on Quality and Safety of Agricultural Products was adopted at the 21st Meeting of the Standing Committee of the Tenth National People’s Congress on April 29, 2006. This Law was enacted in order to ensure the quality and safety of agricultural products, maintain the health of the general public, and promote the development agriculture and rural economy. Pursuant to this Law, agricultural products distribution enterprises shall establish a sound system of inspection and acceptance for their purchases. In addition, agricultural products that fail to pass the inspection based on the quality and safety standards of agricultural products cannot be marketed.

Compliance with Environmental Laws

We strive to meet the requirements provided in environmental protection regulations, and regulations related to facility safety and quality control, throughout the design, maintenance and growth of our operation facilities and manufacturing process.

Employees

We currently have approximately 135employees of which Heilongjiang Zhongxian has 20 employees, Xinhua has 49 employees and Yulong has 66 employees and all of our employees are full-time employees.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 1B.  Unresolved Staff Comments

Not applicable.

14

Item 2. Properties

Farmland

On October 9, 2011, we entered into an operating lease agreement with a municipality of Heilongjiang Province to lease 16,666,750 square meters of grassland which is effective from October 9, 2011 to October 8, 2021. The total payment of U.S.$4,686,000 for the rent was fully paid on October 14, 2011. Pursuant to the lease agreement, we have the right to occupy, use and transfer during the lease term.

Office Space

We utilize office space from an unrelated third party and have a verbal agreement with theparty to continue to use the office at no cost. We also lease another office space at no cost from an unrelated third party.

All land in China is government owned and cannot be sold to any individual or company. We obtained a “land use right” to use a track of land of 250,000 square meters at no cost for a period from December 2, 2005 to December 1, 2015. This land is used to allow our cows to graze.

Item 3. Legal Proceedings

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. To our knowledge, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of our executive officers or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or any of our companies or our companies’ subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4. Mine Safety Disclosures

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities

Market Information

Our common stock has been quoted on the OTC Bulletin Board since July 8, 2010 and is currently quoted on the under the symbol “CMCI”. There has been a very limited public market for our common stock.  There can be no assurance that a liquid market for our securities will ever develop.

The following table sets forth the high and low bid quotations for our common stock as reported on the OTC Bulletin Board for the periods indicated. 

	High Bid*($)		Low Bid* ($)
2012
Fourth quarter	$	0.57		0.31
Third quarter	$	0.76		0.35
Second quarter	$	0.76		0.17
First quarter	$	1.05		0.20
2011
Fourth quarter (from April 25, 2011)	$	1.60		0.75
Third quarter	$	N/A		N/A
Second quarter	$	N/A		N/A
First quarter	$	N/A		N/A

* The quotations of the closing prices reflect inter-dealer prices, without retail mark-up, markdown or commission.

Holders

As of September 26, 2012, there are 785 holders of record of the Company's common stock. 

Dividends

The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company's business.

15

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholders as of June 30, 2012.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Plan category
Plans approved by our stockholders:		-		-		-
Plans not approved by stockholders:
2009 Stock Incentive Plan (1)		0		-		0

(1) Remaining available for issuance under the China Modern Agricultural Information, Inc. 2012 Stock Incentive Plan. As of September 26, 2012, there were no shares of common stock remaining available for issuance under the China Modern Agricultural Information, Inc. 2012 Stock Incentive Plan. For a description of the China Modern Agricultural Information, Inc. 2012 Stock Incentive Plan please see “Note 13 Stock Incentive Plan” to the consolidated financial statements in this Annual Report, as filed with the SEC.

Item 6. Selected Financial Data

Smaller reporting companies are not required to provide the information required by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations and financial condition of the Company for the years ended June 30, 2012 and 2011. Such discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Annual Report.

We are a leading producer and distributor of raw fresh milk in China. We have three operating entities with an aggregate fresh milk production capacity of approximately 149 tons (approximately 4,731 gallons) per day. We also have 39 exclusive individual partners with an aggregate fresh milk production capacity of approximately 245 tons per day.

Change in Business Model

In addition to selling fresh milk to Chinese manufacturing and distribution companies of dairy products, we started to stream revenue from making commission from the local farmers on their monthly milk sales. Since June 2011, we started to sell our milk cows to local farmer in exchange for monthly payments from the local farmers on their monthly milk sales. The monthly payments represent the monthly installments, including interest, for the purchase price of milk cows sold or a mix of the purchase price and commissions for our assistance in arranging for the sale of the milk.

16

Sale of Milk Cows

In June 2011, we sold 2,000 milk cows to six local farmers with the purchase price being paid in installments over a five-year period with a minimum payment of 20% of the sales price annually. No down payment was made by the farmers for these sales in June 2011. In August 2011, through initial negotiation and subsequent modification of sales terms, we sold 5,635 milk cows to 20 local farmers with a 10% down payment with monthly installments plus interest at 7% on any remaining principal payment over a period of the remaining useful life of the cows sold. In September 2011, we also sold 3,787 milk cows to 13 local farmers with monthly installments payable over a period of the remaining useful life of the cows sold with no down payment. We also charge interest at a rate of 7% per annum on the outstanding principal. The receivable related to the sales of cows is included in notes receivable in the accompanying consolidated balance sheets as of June 30, 2012 and June 30, 2011.  In addition to monthly installments for the purchase price of the cows sold, these local farmers who bought our cows in August and September 2011 also pay commissions to us each month for our assistance in arranging for the sale of their milk. Pursuant to the agreements with these local farmers entered in August and September 2011, we are also entitled to 30% of the monthly milk sales generated by the cows sold. The 30% monthly payments represent the monthly installments, including interest, for the purchase price of cows sold and commissions for our assistance in arranging for the sale of the milk. We also entered into agreements with local farmers for a 30% commission of their monthly milk sales generated by the cows sold in June 2011. No sales of milk cows to the local farmers under these agreements occurred during the year ended June 30, 2012.  

By June 30, 2012, we had 14,067 cows, among which, 9,357 cows continue to be fed by local farmers, 400 cows are fed by our variable interest entity Xinhua Cattle, and 4,310 cows are fed by our variable interest entity Yulong Cattle.

Starting with the quarter ended September 30, 2011, the food costs for feeding cows increased significantly. The food costs paid to the farmers for feeding cows per month increased from RMB 200 or $32 to RMB 280 or $44, RMB 280 or $44 to RMB 350 or $55, RMB 300 or $47 to RMB 380 or $60 and RMB 450 or $71 to RMB 540 or $85 for baby cows, pre-adult cows, young cows and milk cows respectively. This was the main reason we disposed of a large number of our cows and rented the grassland.

Stock Incentive Plan

On March 16, 2012, the Board of Directors adopted the China Modern Agricultural Information, Inc. Stock Incentive Plan (the “Plan”).  The purpose of the Plan is to attract, motivate and retain top-quality directors, officers, employees, consultants, advisers and independent contractors, provide substantial incentives, to act in the best interests of the stockholders of the Company and to reward extraordinary effort.  The awards under the Plan may be in the form of stock options, restricted stock, restricted stock units or performance share units.  The total number of shares of Stock reserved for distribution under the Plan is 3,000,000.  There are currently no shares available to be issued.

On April 16, 2012, we granted 3,000,000 shares of restricted stock under the Plan to our employees and the shares were issued on April 27, 2012.  The shares, with a fair value of $1,200,000 at the grant date, were fully vested on May 20, 2012 and the fair value of the shares was charged to operations for the year ended June 30, 2012.

17

Factors Affecting our Results of Operations

Our operating results are primarily affected by the following present factors:

Dairy Industry Growth. We believe the market for dairy products in China for the long term will be growing rapidly, driven by China’s economic growth, improved living quality and increased penetration of infant formula. We believe the demand of raw fresh milk will be increasing rapidly driven by the above factors.

Production Capacity. Our revenue largely depends on our production capacity. The production capacity in this industry is determined by variety, aging and number of adult cows. Accordingly, we acquired Yulong Cattle in November 2011 which increased our number of the cows by 3,800 and improved our production capacity by approximately 90 tons per day.

Raw Material Supply and Prices. The per unit costs of fresh raw milk are affected by the price volatility of raw material and feeding expenses in the China markets. For instance, the total food costs and feeding expenses paid to farmers increased by 17% in the quarter ended September 30, 2011 and stayed stable to June 30, 2012. In response to the increased costs, we leased the 16,666,750 square meters grassland in October 2011, and we believe we can start to produce hay, one of the major raw materials on the leased grassland, in the near future.

Results of Operations

The following tables present certain consolidated statements of income and other comprehensive income of operations information. Financial information is presented for the12 months ended June 30, 2012 and 2011 respectively (all information is presented in U.S. dollars).

Comparison of Twelve Month Periods Ended June 30, 2012 and 2011

The following table sets forth certain information regarding our results of operations for the twelve months ended June 30, 2012 and 2011.

		For the 12 months ended June 30,
							Change
		2012			2011		Amount			%
Revenue		$	29,822,284		$	25,021,612	$	4,800,672			19
Cost of goods sold		$	10,696,821		$	11,931,849	$	(1,235,028	)		(10	)
Gross profit		$	19,125,463		$	13,089,763	$	6,035,700			46
Operating expenses		$	2,292,568		$	1,397,561	$	895,007			64
Operating income/(loss)		$	16,832,895		$	11,692,202	$	5,140,693			44
Other income and expenses		$	6,786,855		$	158,201	$	6,628,654			4190
Income before income tax		$	23,619,750		$	11,850,403	$	11,769,347			99
Provision for income tax		$	6,064,917		$	2,866,622	$	3,198,295			112
Net income before noncontrolling interests		$	17,554,833		$	8,983,781	$	8,571,052			95
Noncontrolling interests		$	145,750		$	130,597	$	15,153			12
Net income attributable to controlling interests		$	17,409,083		$	8,853,184	$	8,555,899			97
Foreign currency translation adjustment		$	570.593		$	892,351	$	(321,758	)		(36	)
Total comprehensive income		$	17,979,676		$	9,745,535	$	8,234,141			84

18

Revenues

The revenue was primarily generated from sales of natural milk and natural milk sales commission from farmers to which we sold cows. We had total revenues of $29,822,284 for the year ended June 30, 2012, an increase of $4,800,672 or 19%, compared to $25,021,612 for the year ended June 30, 2011. Although the changing of our business operating activities lead to the decrease in revenue of Xinhua, the successful acquisition of Yulong in November 2011 led to an increase in total revenue. For the twelve months ended June 30, 2012 and 2011, our revenue stream comprised sales of natural milk and sales commission from farmers. The following table shows the different revenue sources:

	For the 12 months ended June 30,
					Change
	2012		2011		Amount			%
Sales of natural milk		19,812,585		24,898,813		(5,086,228	)		(20	)
Sales commission		10,009,699		122,799		9,886,900			8051
Total revenue		29,822,284		25,021,612		4,800,672			19

For the twelve months ended June 30, 2012, our revenue generated from natural milk selling was $19,812,585 which represented a decrease of $5,086,228 or 20% compared to $24,898,813 for the twelve months ended June 30, 2011, despite the factor that the milk sales of Yulong Cattle for the post-acquisition period from November 24, 2011 to June 30, 2012 was included in our revenue for the twelve months ended June 30, 2012.  The main reason for the decrease was due to the decrease in the number of our milk cows. The following table sets forth certain information regarding the number of milk cows and the revenue per cow:

	For the 12 months ended June 30,
					Change
	2012		2011		Amount			%
Sales of natural milk		19,812,585		24,898,813		(5,086,228	)		(20	)
Average number of milk cows		4,629		9,560		(4,931	)		(52	)
Revenue from per milk cow		4,280		2,604		1,676			64

19

As we disposed of a large number of milk cows to local farmers in June, August and September of 2011, the average number of milk cows for the year ended June 30, 2012 decreased from 9560 to 4629 compared to the year ended June 30, 2011. In contrast to the decrease in number of milk cows, the revenue per milk cow increased to $4,280for the twelve months ended June 30, 2012 from $2,604 for the twelve months ended June 30, 2011, an increase of $1,676 or 64%. Three reasons caused the increase in revenue from milk cow. First, the sales price was increased from RMB 1.95 or approximately $ 0.31 per kg for the twelve months ended June 30, 2011 to RMB 3.35 or approximately $0.53 per kg, an increase of approximately RMB 1.40 or $ 0.22 or 72%. Second, we disposed of inferior domestic cows and kept superior imported Holstein cows which are still fed by Xinhua Cattle.  Third, the addition of the milk cows owned by Yulong Cattle and the sale of our previously owned milk cows brought down the average age of our milk cows mix.  The decrease in sales of natural milk was partially offset by sales commission from the local farmers of $10,009,699 for the twelve months ended June 30, 2012 and has become one of our main revenue streams.

Gross profit

Our cost of goods sold consists of feeding food, feeding expenses and other direct production overhead which includes labor costs, depreciation and water & electricity, etc. Our operating activities changed since the quarter ended September 30, 2011 which resulted in reduced direct costs especially in feeding food costs because the milk production and distribution are now entirely the responsibility of the local farmers. The change in our operating activities to the new program has resulted in a marked improvement in our margins.  For the twelve months ended June 30, 2012, our cost of goods sold was reduced to $10,696,821 which represented a decrease of $1,235,028 or 10% compared to $11,931,849 for the twelve months ended June 30, 2011.The decrease was primarily due to the decrease in the number of adult cows. The following table sets forth certain information regarding the number of milk cows and the cost per cow:

	For the 12 months ended June 30,
					Change
	2012		2011		Amount			%
Cost of goods sold		10,696,821		11,931,849		(1,235,028	)		(10	)
Average number of milk cows		4,629		9,560		-4,931			52
Cost per milk cow		2,311		1,248		1,063			85

The increase in cost per milk cow for the twelve months ended June 30, 2012 continued to be primarily caused by the reasons below:

o Increase in the price of raw materials and feeding expenses

o The fixed costs allocated to a small number of adult cows caused the increase in unit cost;

o We changed the cost allocation method that more costs were allocated to adult cows;

o Not only did the food costs and feeding expenses increase, but also the auxiliary production costs increased as well, e.g, medicine, salary, etc;

o The acquisition of Yulong Cattle caused the increase in unit cost due to the lower gross profit margin of Yulong Cattle.

Gross profit margin

Our gross profit margin increased to 64% for the twelve months ended June 30, 2012 from 52% for the twelve months ended June 30, 2011, primarily due to the change of our operating activities where the new revenue stream reduced direct costs, especially in feeding food costs because the milk production and distribution are entirely the responsibility of the local farmers. However, the gross profit margin from natural milk sales decreased from 52% to 46% due to the increase in raw materials and feeding expenses, although the sales price has significantly increased. We believe that the price of the raw materials will keep increasing in the future and that is one of the reasons we disposed of a large number of adult cows.

20

Operating expenses

Our operating expenses increased to $2,292,568 for the twelve months ended June 30, 2012 from $1,397,561 for the twelve months ended June 30, 2011. It increased by $895,007 or 64%. The main operating expenses consist of human resources, depreciation, professional service fees for filings required by U.S. securities laws, consulting expenses to a Chinese financial advisory company, business taxes and expenses for stock option plan, etc. Due to the new revenue stream introduced, we incurred $619,307 and $6,754 in business tax for the twelve months ended June 30, 2012 and 2011, respectively. We classified it as a selling expense which is included in operating expenses. This is the main reason for the increase in operating expenses during the twelve months ended June 30, 2012. In addition, on April 16, 2012, we granted 3,000,000 shares of restricted stock under the Plan to our employees and the shares were issued on April 27, 2012.  The shares, with a fair value of $1,200,000 at the grant date, were fully vested on May 20, 2012 and the fair value of the shares was charged to operations for the year ended June 30, 2012.

Operating income

As a result of the foregoing, we had operating income of $16,832,895 for the twelve month period ended June 30, 2012, representing an increase of $5,140,693, as compared to an operating income of $11,692,202 for the twelve month period ended June 30, 2011.

Non-operating income

Non operating income consists of a bargain purchase gain from the acquisition of Yulong Cattle and other non operating income.  For the twelve months ended June 30, 2012, the bargain purchase gain was $5,721,596. The other non operating income consists primarily of interest income of $652,992 charged on the outstanding notes receivable from the farmers. For the twelve months ended June 30, 2012, we also have a non operating gain of $254,934 from the disposal of biological properties and a governmental subsidy of $110,320.

Net Income

Our 99% owned subsidiary, Xinhua Cattle and 100% owned subsidiary, Yulong Cattle are entitled to a tax exemption for the full Enterprise Income Tax in China due to a government tax preferential policy for the dairy farming industry. Heilongjiang Zhongxian Information is subject to an Enterprise Income Tax of 25% and files its own tax returns. The provision for income taxes was $6,064,917 including the income taxes on the bargain purchase gain and $2,866,622 for the twelve months ended June 30, 2012 and 2011, respectively. Net income was $17,554,833 and $8,983,781 for the twelve months ended June 30, 2012 and 2011, respectively which represented an increase in $8,571,052 or 95%. As we own 99% of Xinhua Cattle’s shares, non-controlling interests attributed to the minority interest shareholder was $145,750 and $130,597 for the twelve months ended June 30, 2012 and 2011, respectively. Our net income attributable to the Company was $17,409,083 representing $0.37 per share and $8,853,184 representing $0.23 per share for the twelve months ended June 30, 2012 and 2011, respectively.

Foreign Currency Translation Adjustment

Our reporting currency is the U.S. dollar. Our local currency, Renminbi, is our functional currency. All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date.  Equity accounts have been translated at their historical exchange rates when the capital transactions occurred.  Statements of income and other comprehensive income amounts have been translated using the average exchange rate for the periods presented.  Adjustments resulting from the translation of our consolidated financial statements are recorded as other comprehensive income (loss).  Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the twelve months ended June 30, 2012 and 2011, foreign currency translation adjustments of $570,593 and $892,351 have been reported as other comprehensive income in the consolidated statements of income and other comprehensive income.

21

Liquidity and Capital Resources

As of June 30, 2012 and June 30, 2011, we have no bank debt but amounts owed to shareholders for $241,612 and $230,356, respectively. The amounts due to our shareholders is for the professional services incurred for listing in U.S stock market which was paid from our shareholders’ personal bank accounts because of the restriction of official bank transfers abroad by the Bank of China. At the same time, we had $16,941,737 and $5,525,180 in cash at June 30, 2012 and 2011 as well as net working capital totaling $23,384,004 and $8,216,425, respectively.

During the twelve months ended June 30, 2012, our operating activities provided $15,433,905 in net cash, compared to $12,835,678 during the twelve months ended June 30, 2011.  The net cash provided in the twelve months ended June 30, 2012 was much lower than our net income primarily due to the payment of $4,387,275 for the upfront payment of the grassland lease.

Over the long term, our expectation is that we will utilize our capital resources as well as any additional investments that we secure in order to expand our operating activities.  At the present time, however, we are able to operate profitably without significant additional investment.  Moreover, our observation of the equity markets indicates that we would be unlikely to obtain financing on favorable terms at this time.  Accordingly, our near term plan is to continue the program that we initiated during the past year, utilizing the resources available to us.

Critical Accounting Policies and Estimates

Basis of Accounting and Presentation

The unaudited interim consolidated financial statements of the Company as of June 30, 2012 and for the twelve months ended June 30, 2012 and 2011, have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the SEC which apply to interim financial statements.  Accordingly, they do not include all of the information and footnotes normally required by accounting principles generally accepted in the United States of America for annual financial statements.  The interim consolidated financial information should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Form 10-K for the fiscal year ended June 30, 2012, previously filed with the SEC.  In the opinion of management, the interim information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the periods presented.

Revenue Recognition

The Company’s primary sources of revenues are derived from (a) sale of fresh milk to Chinese manufacturing and distribution companies of dairy products and (b) commissions from local farmers on their monthly milk sales.  The Company’s revenue recognition policies comply with SEC Staff Accounting Bulletin (“SAB”) 104.  Revenues from sales of goods are recognized when the goods are delivered and the title is transferred, the risks and rewards of ownership have been transferred to the customer, the price is fixed and determinable and collection of the related receivable is reasonably assured.

Milk sales revenue is recognized when the title to the goods has been passed to customers, which is the date when the goods are delivered to designated locations and accepted by the customers and the previously discussed requirements are met.  Fresh milk is delivered to our customers on a daily basis.  The customers’ acceptance occurs upon inspection of quality and measurement of quantity at the time of delivery.  The Company does not provide the customer with the right of return.  Sales commission revenue is recognized on a monthly basis based on monthly sales reports received.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Smaller reporting companies are not required to provide the information required by this item.

22

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CHINA MODERN AGRICULTURAL

INFORMATION, INC. AND

SUBSIDIARIES

Consolidated Financial Statements for the

Years Ended June 30, 2012 and 2011

23 

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011

CONTENTS		PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1		F-1
CONSOLIDATED FINANCIAL STATEMENTS:
	Consolidated Balance Sheets	F-2
	Consolidated Statements of Income and Other Comprehensive Income	F-4
	Consolidated Statements of Changes in Stockholders’ Equity	F-6
	Consolidated Statements of Cash Flows	F-7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS		F-9 to F-40

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

To the Board of Directors and Stockholders

China Modern Agricultural Information, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of China Modern Agricultural Information, Inc. and Subsidiaries as of June 30, 2012 and 2011, and the related consolidated statements of income and other comprehensive income, changes in stockholders’ equity and cash flows for each of the two years in the period ended June 30, 2012.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Modern Agricultural Information, Inc. and Subsidiaries as of June 30, 2012 and 2011, and the consolidated results of their operations and their cash flows for the years ended June 30, 2012 and 2011 in conformity with accounting principles generally accepted in the United States of America.

/s/ Wei, Wei & Co., LLP

New York, New York

September 28, 2012

F-1

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2012 AND 2011 (IN U.S. $)

ASSETS	June 30, 2012			June 30, 2011
Current assets
Cash	$	16,941,737		$	5,525,180
Accounts receivable		3,497,609			2,506,548
Inventories		309,603			90,017
Prepaid expenses		333,560			238,238
Prepaid land lease, current portion		474,300			-
Interest receivable		490,928			-
Notes receivable, current portion		1,787,798			210,674
Total current assets		23,835,535			8,570,657
Property, plant and equipment		4,498,504			1,884,944
Less: accumulated depreciation		(668,862	)		(430,096	)
Property, plant and equipment, net		3,829,642			1,454,848
Other assets
Notes receivable		7,651,579			1,127,707
Prepaid land lease		3,912,975			-
Loan receivable		-			2,165,800
Biological assets, net		20,013,240			17,204,616
Total other assets		31,577,794			20,498,123
TOTAL ASSETS	$	59,242,971		$	30,523,628

See accompanying notes to the consolidated financial statements.

F-2

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2012 AND 2011 (IN U.S. $)

LIABILITIES AND STOCKHOLDERS’ EQUITY	June 30, 2012		June 30, 2011
Current liabilities
Accrued expenses and other payables	$	209,919	$	123,876
Stockholder loans		241,612		230,356
Total current liabilities		451,531		354,232
Deferred income taxes		13,320,062		7,080,292
Total liabilities		13,771,593		7,434,524
Stockholders’ equity
Common stock, $0.001 par value; 75,000,000 shares authorized; 53,100,000 and 41,100,000 shares issued and outstanding at June 30, 2012 and 2011		53,100		41,100
Additional paid-in capital		5,851,170		1,603,170
Retained earnings		36,406,040		19,477,303
Statutory reserve fund		670,357		190,011
Other comprehensive income		2,069,285		1,498,692
Sub-total		45,049,952		22,810,276
Noncontrolling interests		421,426		278,828
Total stockholders’ equity		45,471,378		23,089,104
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	59,242,971	$	30,523,628

See accompanying notes to the consolidated financial statements.

F-3

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011 (IN U.S. $)

	2012			2011
Revenues
Milk sales	$	19,812,585		$	24,898,813
Sales commission		10,009,699			122,799
Total revenues		29,822,284			25,021,612
Cost of goods sold		(10,696,821	)		(11,931,849	)
Gross profit		19,125,463			13,089,763
Operating expenses
Selling and marketing		(619,307	)		(48,892	)
General and administrative		(1,673,261	)		(1,348,669	)
Total operating expenses		(2,292,568	)		(1,397,561	)
Operating income		16,832,895			11,692,202
Other income and expenses
Bargain purchase gain		5,721,596			-
Interest income on notes receivable		652,992			-
Gain on disposal of biological assets		254,934			142,562
Government subsidies		110,320			-
Other non-operating income		47,013			15,639
Total other income		6,786,855			158,201
Income before income taxes		23,619,750			11,850,403
Provision for income taxes		6,064,917			2,866,622
Net income before noncontrolling interests		17,554,833			8,983,781
Noncontrolling interests		(145,750	)		(130,597	)
Net income attributable to common stockholders		17,409,083			8,853,184

See accompanying notes to the consolidated financial statements.

F-4

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

AND OTHER COMPREHENSIVE INCOME (continued)

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011 (IN U.S. $)

	2012		2011
Other comprehensive income
Foreign currency translation adjustment		570,593		892,351
Total comprehensive income	$	17,979,676	$	9,745,535
Earnings per common share, basic and diluted	$	0.37	$	0.23
Weighted average shares outstanding, basic and diluted		47,058,904		38,038,022

See accompanying notes to the consolidated financial statements.

F-5

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011 (IN U.S. $)

	Common Stock		Additional Paid-in Capital			Retained Earnings			Statutory Reserve Fund		Noncontrolling Interests			Other Comprehensive Income		Total
Balance, June 30, 2010	$	35,998	$	1,170,802		$	10,624,119		$	190,011	$	164,455		$	606,341	$	12,791,726
Reorganization for reverse merger		4,035		(4,035	)		-			-		-			-		-
Stock-based compensation		1,067		436,403			-			-		-			-		437,470
Net income		-		-			8,853,184			-		130,597			-		8,983,781
VIE distribution		-		-			-			-		(16,224	)		-		(16,224	)
Other comprehensive income		-		-			-			-		-			892,351		892,351
Balance, June 30, 2011		41,100		1,603,170			19,477,303			190,011		278,828			1,498,692		23,089,104
Issuance of common stock for acquisition		9,000		3,051,000			-			-		-			-		3,060,000
Stock-based compensation		3,000		1,197,000			-			-		-			-		1,200,000
Net income		-		-			17,409,083			-		145,750			-		17,554,833
VIE distribution		-		-			-			-		(3,152	)		-		(3,152	)
Appropriation of statutory reserves		-		-			(480,346	)		480,346		-			-		-
Other comprehensive income		-		-			-			-		-			570,593		570,593
Balance, June 30, 2012	$	53,100	$	5,851,170		$	36,406,040		$	670,357	$	421,426		$	2,069,285	$	45,471,378

See accompanying notes to the consolidated financial statements.

F-6

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011 (IN U.S. $)

	2012			2011
Cash flows from operating activities
Net income before noncontrolling interests	$	17,554,833		$	8,983,781
Adjustment to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation		1,200,548			1,479,677
Deferred income taxes		6,064,917			2,866,622
Value of stock issued for expenses of reverse merger		-			437,470
Stock-based compensation		1,200,000			-
Bargain purchase gain		(5,721,596	)		-
Gain from sale of biological assets		(254,934	)		(142,562	)
Change in operating assets and liabilities
(Increase) in accounts receivable		(146,431	)		(1,148,100	)
Decrease in inventories		498,969			22,203
(Increase) decrease in prepaid expenses		(69,398	)		380,422
(Increase) in prepaid land lease		(4,387,275	)		-
(Increase) in interest receivable		(490,928	)		-
(Decrease) in accounts payable		(42,954	)		(2,235	)
Increase (decrease) in accrued expenses and other payables		28,154			(41,600	)
Net cash provided by operating activities		15,433,905			12,835,678
Cash flows from investing activities
Acquisition of Yulong Cattle, net of cash acquired		9,442			-
Loan receivable-Yulong Cattle		-			(2,165,800	)
Collection of notes receivable		1,560,880			-
Proceeds from sales of biological assets		1,275,030			-
Purchase of property, plant and equipment		(33,704	)		(26,071	)
(Increase) in biological assets		(7,318,067	)		(8,039,525	)
Net cash (used in) investing activities		(4,506,419	)		(10,231,396	)
Cash flows from financing activities
VIE distribution		(3,152	)		(16,224	)
Proceeds from stockholder loans		485,567			1,112,002
Repayment of stockholder loans		(477,597	)		(2,252,358	)
Net cash provided by (used in) financing activities		4,818			(1,156,580	)

See accompanying notes to the consolidated financial statements.

F-7

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

FOR THE YEARS ENDED JUNE 30, 2012 AND 2011 (IN U.S. $)

	2012		2011
Effect of exchange rate changes on cash		484,253		1,117,817
Net increase in cash		11,416,557		2,565,519
Cash, beginning of year		5,525,180		2,959,661
Cash, end of year	$	16,941,737	$	5,525,180
Supplemental disclosure of cash flow information
Cash paid for income taxes	$	-	$	-
Cash paid for interest	$	-	$	-
Supplemental disclosure of non-cash investing and  financing activities
Fair value of stock issued in exchange for consulting and legal services	$	-	$	437,470
Notes receivable from sale of biological assets	$	9,410,342	$	1,338,381

	2012
Acquisition of Yulong Cattle
Net working capital other than cash	$	(716,733	)
Property, plant and equipment		2,528,279
Biological assets		6,960,608
Total net assets acquired other than cash		8,772,154
Bargain purchase gain		5,721,596
Issuance of 9,000,000 shares of common stock for purchase		3,060,000
Cash received upon acquisition of Yulong Cattle	$	9,442

See accompanying notes to the consolidated financial statements.

F-8

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

1.            ORGANIZATION

China Modern Agricultural Information, Inc. (the “Company”), formerly known as Trade Link Wholesalers, Inc. (“Trade Link”), was incorporated on December 22, 2008 under the laws of the State of Nevada.  On April 4, 2011, the Board of Directors of Trade Link filed an amendment to the Certificate of Incorporation with the State of Nevada to effect the name change from Trade Link to China Modern Agricultural Information, Inc.

On January 28, 2011, Trade Link entered into a Share Exchange Agreement (the “Exchange Agreement”) by and among (i) Value Development Holdings, Ltd., a British Virgin Islands company, (“Value Development”) (ii) Value Development’s stockholders, (iii) Trade Link, and (iv) Trade Link’s principal stockholders.  Pursuant to the terms of the Exchange Agreement, Value Development and the Value Development stockholders transferred to Trade Link all of the shares of Value Development in exchange for the issuance of 35,998,000 shares of Trade Link’s common stock as set forth in the Exchange Agreement, so that the Value Development stockholders own 87.80% of Trade Link’s outstanding shares (the “Share Exchange”).

On January 28, 2011, Value Development completed the acquisition of Harbin Jiasheng Consulting Managerial Co. Ltd. (“Jiasheng Consulting” or “WFOE”), a holding company.  Jiasheng Consulting has entered into Variable Interest Entity (“VIE”) agreements with Mr. Liu Zhengxin, the Company’s Chief HR Officer, and Mr. Wang Youliang, the Company’s Chief Executive Officer, as well as with Heilongjiang Zhongxian Information Co., Ltd. (“Zhongxian Information”).  Mr. Liu Zhengxin holds a 62% equity interest in Zhongxian Information and Mr. Wang Youliang holds a 38% equity interest in Zhongxian Information.  Pursuant to a VIE agreement signed by Mr. Liu Zhengxin and Mr. Wang Youliang, Jiasheng Consulting now controls all management responsibilities of Zhongxian Information.  The contractual arrangements are comprised of a series of agreements, including a shareholder voting rights proxy agreement, exclusive consulting and service agreement, exclusive call option agreement and equity pledge agreement, through which Jiasheng Consulting has the right to provide exclusive and complete business support and technical and consulting services to Zhongxian Information for an annual fee in the amount of Zhongxian Information’s yearly net profits after tax.  Additionally, Zhongxian Information’s stockholders have pledged their rights, titles and equity interest in Zhongxian Information as security for the collection of consulting and services fees provided through an Equity Pledge Agreement.

F-9

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

1.            ORGANIZATION (continued)

In order to further reinforce Jiasheng Consulting’s rights to control and operate Zhongxian Information, the stockholders of Zhongxian Information have granted Jiasheng Consulting the exclusive right and option to acquire all of their equity interests in Zhongxian Information through an Exclusive Option Agreement.

At the closing of the Share Exchange, Trade Link cancelled 5,500,000 shares of its common stock held by its principal stockholders.

The share exchange transaction constituted a reverse takeover transaction.  Accordingly, reverse takeover accounting has been adopted for the preparation of the consolidated financial statements.  As a result, the consolidated financial statements are issued under the name of China Modern Agricultural Information, Inc. (the legal acquirer), but are a continuation of the consolidated financial statements of Value Development and its subsidiaries (the accounting acquirer).  Before and after the Share Exchange, Value Development, Value Development Group Limited (a wholly-owned subsidiary of Value Development), Jiasheng Consulting, and Zhongxian Information and Zhongxian Information’s 99% owned subsidiary, Heilongjiang Xinhua Cattle Industry Co., Ltd. (“Xinhua Cattle”) are under common control.  Therefore, the reorganization was effectively a legal recapitalization accounted for as transactions between entities under common control at the carry over basis, in a manner similar to pooling-of-interests accounting.  The effect of the reorganization was applied retroactively to the prior year’s consolidated financial statements as if the current structure existed since inception of the periods presented.

Zhongxian Information and Xinhua Cattle are engaged in acquisition, breeding and rearing of dairy cows, and production and sale of fresh milk to manufacturing and distribution companies.  Zhongxian Information was established in China in January 2005 with registered capital of 10 million Renminbi (“RMB”).  In February 2006, it acquired 99% of the registered capital of Xinhua Cattle, which was established in China in December 2005 with registered capital of three million RMB.  Xinhua Cattle had no significant activities and its cost approximated the fair value at the date of acquisition.

On November 23, 2011, Zhongxian Information acquired 100% of the equity interest of Yulong Cattle Industry Co., Ltd. (“Yulong Cattle”) from Yulong Cattle’s original stockholders for consideration of 9,000,000 shares of the Company’s common stock and cash consideration amounting to $4,396,000.  Yulong Cattle was a privately held company in China engaged in the acquisition, breeding and rearing of dairy cows, and production and sale of fresh milk to manufacturing and distribution companies.

F-10

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

1.            ORGANIZATION (continued)

As a result of the entry into the foregoing agreements, the Company has a corporate structure which is set forth below:

 

F-11

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Change of Reporting Entity and Basis of Accounting and Presentation

The reverse acquisition described in Note 1 was treated as recapitalization of the Company. As such, China Modern Agricultural Information, Inc. is the continuing entity for financial reporting purposes.  Securities and Exchange Commission (“SEC”) Manual Item 2.6.5.4 “Reverse Acquisitions” requires that “in a reverse acquisition, the historical shareholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset to paid-in capital.”  Therefore, the consolidated financial statements have been prepared as if Value Development and its subsidiaries had always been the reporting company and then on the reverse acquisition date, had changed its name and reorganized its equity.

Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements the financial statements of its VIEs.  ASC 810 requires a VIE to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns.  VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoy the rewards normally associated with ownership of the entities, and therefore the company is the primary beneficiary of the entities.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the financial statements of China Modern Agricultural Information, Inc. and its subsidiaries, Value Development, Value Development Group Limited, Jiasheng Consulting, and its VIE, Zhongxian Information and Zhongxian Information’s 99% owned subsidiary, Xinhua Cattle and Zhongxian Information’s newly acquired 100% owned subsidiary, Yulong Cattle from November 23, 2011, the date of acquisition.  The Company is the primary beneficiary of the VIE and its subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.

F-12

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Change of Reporting Entity and Basis of Accounting and Presentation (continued)

Zhongxian Information and its subsidiaries (collectively, the “Chinese VIEs”) have no assets that are collateral for or restricted solely to settle their obligations.  The creditors of the Chinese VIEs do not have recourse to the Company’s general credit.  Because Value Development, Value Development Group Limited, Jiasheng Consulting are established for the sole purpose of holding ownership interest and do not have any operations, the financial statement amounts and balances are those of Chinese VIEs.

Under ASC 810, an enterprise has a controlling financial interest in a VIE, and must consolidate that VIE, if the enterprise has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affected the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE.  The enterprise’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de facto agents, has the unilateral ability to exercise those rights.

The Chinese VIEs’ actual stockholders do not hold any kick-out rights that will affect the consolidation determination.

Foreign Currency Translations

All Company assets are located in People’s Republic of China (“PRC”).  The functional currency for the majority of the Company’s operations is the RMB.  The Company uses the United States dollar (“US Dollar” or “US$” or “$”) for financial reporting purposes.  The consolidated financial statements of the Company have been translated into US dollars in accordance with FASB ASC 830, “Foreign Currency Matters.” All asset and liability accounts have been translated using the exchange rate in effect at the balance sheet date.  Equity accounts have been translated at their historical exchange rates when the capital transactions occurred.  Statements of income and other comprehensive income amounts have been translated using the average exchange rate for the periods presented.  Adjustments resulting from the translation of the Company’s consolidated financial statements are recorded as other comprehensive income (loss).

F-13

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currency Translations (continued)

The exchange rates used to translate amounts in RMB into US dollars for preparing the consolidated financial statements are as follows:

	June 30, 2012		June 30, 2011
Balance sheet items, except for stockholders’ equity, as of year end		0.1581		0.1547
Amounts included in the statements of income, statements of changes in stockholders’ equity and statements of cash flows for the year		0.1576		0.1507

Foreign currency translation adjustments of $570,593 and $892,351 for the years ended June 30, 2012 and 2011, respectively, have been reported as other comprehensive income in the consolidated statements of income and other comprehensive income.

Although government regulations now allow convertibility of the RMB for current account transactions, significant restrictions still remain.  Hence, such translations should not be construed as representations that the RMB could be converted into US dollars at that rate or any other rate.

The value of RMB against the US dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions.  Any significant revaluation of the RMB may materially affect the Company’s consolidated financial condition in terms of US dollar reporting.

F-14

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

The Company’s primary sources of revenues are derived from (a) sale of fresh milk to Chinese manufacturing and distribution companies of dairy products and (b) commission from local farmers on their monthly milk sales.  The Company’s revenue recognition policies comply with FASB ASC 605, “Revenue Recognition.”  Revenues from sales of goods are recognized when the goods are delivered and the title is transferred, the risks and rewards of ownership have been transferred to the customer, the price is fixed and determinable and collection of the related receivable is reasonably assured.

Milk sales revenue is recognized when the title to the goods has been passed to customers, which is the date when the goods are delivered to designated locations and accepted by the customers and the previously discussed requirements are met.  Fresh milk is delivered to its customers on a daily basis.  The customers’ acceptance occurs upon inspection of quality and measurement of quantity at the time of delivery.  The Company does not provide the customer with the right of return.  Sales commission revenue is recognized on a monthly basis based on monthly sales reports received.

Vulnerability Due to Operations in PRC

The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC.  Although the PRC government has been pursuing economic reform policies for more than twenty years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions.  There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective.

F-15

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Vulnerability Due to Operations in PRC (continued)

The Company believes that Jiasheng Consulting’s contractual agreements with Zhongxian Information are in compliance with PRC law and are legally enforceable.  The stockholders of Zhongxian Information are also the senior management of the Company and therefore the Company believes that they have no current interest in seeking to act contrary to the contractual arrangements.  However, Zhongxian Information and its stockholders may fail to take certain actions required for the Company’s business or to follow the Company’s instructions despite their contractual obligations to do so.  Furthermore, if Zhongxian Information or its stockholders do not act in the best interests of the Company under the contractual arrangements or any dispute relating to these contractual arrangements remains unresolved, the Company will have to enforce its rights under these contractual arrangements through the operations of PRC law and courts and therefore will be subject to uncertainties in the PRC legal system. All of these contractual arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC.  Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures.  As a result, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements, which may make it difficult to exert effective control over Zhongxian Information, and its ability to conduct the Company’s business may be adversely affected.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

F-16

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

Financial instruments include accounts receivable, interest receivable, notes receivable, loans receivable, accrued expenses and other payables and stockholder loans.  As of June 30, 2012 and 2011, the carrying values of accounts receivable, interest receivable, accrued expenses and other payables and stockholders loans approximated their fair values due to the short maturity of these financial instruments.  The carrying values of notes receivable and loans receivable are valued at their net realizable value which approximates the fair value.

Bargain Purchase Gain

In accordance with FASB ASC 805 “Business Combinations” (“ASC 805”),the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree were recognized at the acquisition date and measured at their fair values as of that date.  The fair values of the identifiable net assets of Yulong Cattle exceeded the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, and accordingly, that excess was recognized as a bargain purchase gain in the accompanying consolidated statements of income and other comprehensive income.

Advertising Cost

Advertising costs are charged to operations when incurred.  No advertising costs were incurred for the year ended June 30, 2012.  Advertising costs were $24,323 for the year ended June 30, 2011.

Cash and Cash Equivalents

The Company considers all demand and time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.

F-17

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts Receivable

Accounts receivable is stated at cost, net of an allowance for doubtful accounts, if required.  Receivables outstanding longer than the payment terms are considered past due.  The Company maintains an allowance for doubtful accounts for estimated losses when necessary resulting from the failure of customers to make required payments.  The Company reviews the accounts receivable on a periodic basis and makes allowances where there is doubt as to the collectability of individual balances.  In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customer’s payment history, its current credit-worthiness and current economic trends.  The Company considers all accounts receivable at June 30, 2012 and 2011, to be fully collectible and, therefore, did not provide for an allowance for doubtful accounts.  For the years presented, the Company did not write off any accounts receivable as bad debts.

Inventories

Inventories, comprised principally of livestock feed, are valued at the lower of cost or market value.  The value of inventories is determined using the weighted average cost method.

The Company estimates an inventory allowance for excessive or unusable inventories.  Inventory amounts are reported net of such allowances, if any.  There was no allowance for excessive or unusable inventories as of June 30, 2012 and 2011.

Prepaid Expenses

Prepaid expenses as of June 30, 2012 and 2011 mainly represent the prepayments of approximately $310,000 and $240,000 for consulting services, respectively.

Prepaid Land Lease

Prepaid land lease represents the prepayment of $4,387,275 for grassland rental (see Note 8).

F-18

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Loan Receivable

Loan receivable at June 30, 2011 represents a non-interest bearing loan to Yulong Cattle.  The loan was converted to a non-interest bearing security deposit upon the execution of the letter of intent in July 2011, and was subsequently applied against the acquisition purchase price in November 2011 (see Note 4).

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation.  Cost includes the price paid to acquire or construct the asset, including capitalized interest during the construction period, and any expenditures that substantially increase the assets value or extend the useful life of an existing asset.  Depreciation is computed using the straight-line method over the estimated useful lives of the assets.  Major repairs and betterments that significantly extend original useful lives or improve productivity are capitalized and depreciated over the periods benefited.  Maintenance and repairs are generally expensed as incurred.

The estimated useful lives for property, plant and equipment categories are as follows:

Machinery and equipment	3 to 10 years
Automobile	4 and 10 years
Building and building improvements	20 and 10 years

Impairment of Long-lived Assets

The Company utilizes FASB ASC 360, “Property, Plant and Equipment” (“ASC 360”), which addresses the financial accounting and reporting for the recognition and measurement of impairment losses for long-lived assets.  In accordance with ASC 360, long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  The Company may recognize an impairment of a long-lived asset in the event the net book value of such asset exceeds the future undiscounted cash flows attributable to the asset.  No impairment of long-lived assets was recognized for the years ended June 30, 2012 and 2011.

F-19

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Biological Assets

Biological assets consist of dairy cows for milking purposes.

Immature Biological Assets

Immature biological assets are recorded at cost, including acquisition costs, transportation costs, insurance expenses, and feeding costs, incurred in raising the cows.  Once the cow is able to produce milk, the cost of the immature biological asset is transferred to mature biological assets using the weighted average cost method.

Mature Biological Assets

Mature biological assets are recorded at their original purchase price or weighted average immature biological assets transfer cost.  Depreciation is provided over the estimated useful life of eight years using the straight-line method.  The estimated residual value is 10%.  Feeding and management costs incurred on mature biological assets are included as cost of goods sold.  When biological assets, including male cows, are retired or otherwise disposed of in the normal course of business, the cost and accumulated depreciation will be removed from the accounts and any resulting gain or loss will be included in the results of operations for the respective period.  For the years ended June 30, 2012 and 2011, losses of $108,792 and $54,202, respectively, are included in the cost of goods sold in the accompanying consolidated statements of income and other comprehensive income.

During the year ended June 30, 2012, the Company sold 9,622 (mature biological assets) and 816 (immature biological assets) of its cows.  The related gain of $254,934 is included in other non-operating income in the accompanying statements of income and other comprehensive income.  $1,275,030 of the $10,806,536 sales price was paid in full at the time of sale.  The remaining sales price is included in notes receivable in the accompanying consolidated balance sheets (see Note 7).

During the year ended June 30, 2011, the Company sold 2,000 of its cows (mature biological assets) and the related gain of $142,562 is included in other non-operating income in the accompanying statements of income and other comprehensive income. The related sales price is included in notes receivable in the accompanying consolidated balance sheets (see Note 7).

F-20

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Biological Assets (continued)

Mature Biological Assets (continued)

The Company reviews the carrying value of its biological assets for impairment at least annually or whenever events and circumstances indicate that their carrying value may not be recoverable from the estimated future cash flows expected to result from their use and eventual disposition.  In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss will be recognized equal to an amount by which the carrying value exceeds the fair value of the asset.  The factors considered by management in performing this assessment include current health status and production capacity.  There were no impairment losses recorded during the years ended June 30, 2012 and 2011.

Government Subsidies

Government subsidies are primarily comprised of financial support from the local government to Yulong Cattle for modern livestock production development. The subsidy was for purchase of high quality baby cows and construction of cowhouses used in large-scale livestock farms.  Government subsidies amounted to $110,320 and $0 for the years ended June 30, 2012 and 2011, respectively.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”), which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes.  The differences relate principally to the undistributed earnings of the Company’s subsidiary under PRC law.  Deferred tax assets and liabilities represent the future tax consequence for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled.  Deferred taxes are also recognized for operating losses that are available to offset future taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Zhongxian Information is subject to the tax rate at 25% for the earnings when distributed by Xinhua Cattle and Yulong Cattle. At June 30, 2012 and 2011, undistributed earnings allocated to Zhongxian Information were approximately $48,500,000 and $29,360,000, respectively.

F-21

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes (continued)

ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions.  As of June 30, 2012 and 2011, the Company does not have a liability for any uncertain tax positions.

The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows:

United States

The Company is subject to United States tax at graduated rates from 15% to 35%.  No provision for income tax in the United States has been made as the Company had no U.S. taxable income for the years ended June 30, 2012 and 2011.

BVI

Value Development is incorporated in BVI and is governed by the income tax laws of BVI. According to current BVI income tax law, the applicable income tax rate for the Company is 0%.

Hong Kong

Value Development Group Limited is incorporated in Hong Kong.  Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non Hong Kong source income.

F-22

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes (continued)

PRC

Xinhua Cattle and Yulong Cattle are entitled to a tax exemption for the full Enterprise Income Tax in China due to a government tax preferential policy for the dairy farming industry.  Zhongxian Information is subject to an Enterprise Income Tax at 25% and files its own tax returns.  Consolidated tax returns are not permitted in China.

Net Income (Loss) Per Share

The Company computes net income (loss) per common share in accordance with FASB ASC 260, “Earnings Per Share” (“ASC 260”) and SEC SAB 98.  Under the provisions of ASC 260 and SAB 98, basic net income (loss) per common share is computed by dividing the amount available to common shareholders by the weighted average number of shares of common stock outstanding during the period.  Diluted income per common share is computed by dividing the amount available to common shareholders by the weighted average number of shares of common stock outstanding plus the effect of any dilutive shares outstanding during the period.  Accordingly, the number of weighted average shares outstanding as well as the amount of net income per share are presented for basic and diluted per share calculations for all periods reflected in the accompanying consolidated statements of income and other comprehensive income. There were no diluted shares outstanding during the years ended June 30, 2012 and 2011.

Statutory Reserve Fund

Pursuant to corporate law of the PRC, the Company’s Chinese VIEs and subsidiaries are required to transfer 10% of their net income, as determined under PRC accounting rules and regulations, to a statutory reserve fund until such reserve balance reaches 50% of the its registered capital.  The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or used to increase registered capital, provided that the remaining reserve balance after such use is not less than 25% of the registered capital.

F-23

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

2.            SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Reclassifications

Certain accounts in the prior year’s financial statements have been reclassified for comparative purposes to conform to the presentation in the current year’s financial statements.  These reclassifications had no effect on previously reported earnings.

3.            RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”).  The amendments in this ASU require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position.  An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented.  The Company does not expect that the adoption of ASU 2011-11 will have a significant, if any, impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, “Testing Goodwill for Impairment” (“ASU 2011-08”) that permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the required annual goodwill impairment test. The ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011; however, early adoption is permitted. The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial statements.

In June 2011, FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”) that improves the comparability, consistency, and transparency of financial reporting and increases the prominence of items reported in other comprehensive income (loss) by eliminating the option to present components of other comprehensive income (loss) as part of the statement of changes in stockholders’ equity.

F-24

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

3.            RECENTLY ISSUED ACCOUNTING STANDARDS (continued)

ASU 2011-05 requires that all changes in other comprehensive income (loss) items be presented either in a single continuous statement of comprehensive income (loss) or in two separate but consecutive statements. In both methods, the entity is required to present on the face of the financial statements reclassification adjustments for items that are reclassified from other comprehensive income (loss) to net income (loss) in the statement(s) where the component of net income (loss) and the components of other comprehensive income (loss) are presented. ASU No. 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted.  The adoption of this standard will not have a material effect on the Company’s consolidated financial statements.

In May 2011, FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S.GAAP and IFRSs” (“ASU 2011-04”) that provides clarification about the application of existing fair value measurements and disclosure requirements and expands certain other disclosure requirements.  ASU 2011-04 amends U.S. GAAP to provide common fair value measurements and disclosure requirements with International Financial Reporting Standards.  The amendments in this ASU are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted.  The Company does not believe that the adoption of this standard will have a material impact on the Company’s consolidated financial statements.

In December 2010, FASB issued ASU No. 2010-29, “Disclosure of Supplementary Pro Forma Information for Business Combinations” (“ASU 2010-29”).  ASU 2010-29 specifies that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only.  ASU 2010-29 is effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

F-25

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

3.            RECENTLY ISSUED ACCOUNTING STANDARDS (continued)

In December 2010, FASB issued ASU No. 2010-28, “When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts” (“ASU 2010-28”).  ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. This eliminates an entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more likely than not impaired. ASU 2010-28 is effective for fiscal and interim periods beginning after December 15, 2010. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

4.            BUSINESS COMBINATION

On November 23, 2011, Zhongxian Information acquired 100% of the equity of Yulong Cattle for consideration of 9,000,000 shares of the Company’s common stock valued at $3,060,000 and cash consideration of RMB28,000,000 (US$4,396,000), of which RMB14,000,000 (US$2,186,800) was paid by a security deposit pursuant to a letter of intent with respect to the acquisition dated July 11, 2011, as amended on September 26, 2011.

The acquisition was accounted for under the purchase method of accounting in accordance with ASC 805.  Under the purchase method, the total purchase price is allocated to the net tangible and intangible assets of Yulong Cattle based on their estimated fair values.  Management has made the allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed that existed as of the date of completion of the acquisition as follows:

Cash consideration	$	4,396,000
Fair value of 9,000,000 shares of common stock issued		3,060,000
Total consideration transferred	$	7,456,000

F-26

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

4.            BUSINESS COMBINATION (continued)

Cash	$	4,405,442
Net working capital other than cash		(716,733	)
Property, plant and equipment		2,528,279
Biological assets		6,960,608
Total net assets acquired		13,177,596
Bargain purchase gain		(5,721,596	)
Total consideration transferred	$	7,456,000

The nonrecurring bargain purchase gain of $5,721,596 is included in other income in the consolidated statements of income and other comprehensive income for the year ended June 30, 2012.  In accordance with ASC 805, the Company had two independent valuations of Yulong Cattle to verify that the bargain purchase gain was reasonable.  The bargain purchase gain arose mainly due to higher share market price in July 2011 when the letter of intent was signed.

In accordance with SEC Regulation S-X Rule 3-05, Yulong Cattle was a significant subsidiary as of the acquisition date, and the conditions set by SEC Regulation S-X Rule 1-02(w) exceeded 40 percent, but none exceeded 50 percent.  The separate audited financial statements of Yulong Cattle for the years ended June 30, 2011 and 2010 and the unaudited interim financial statements for three months period ended September 30, 2011 and 2010 were presented in the Form 8-K/A filed on February 3, 2012.

The results of operations of Yulong Cattle for the period from November 23, 2011 to June 30, 2012 have been included in the consolidated financial statements for the year ended June 30, 2012.  Revenues of $11,136,732 and net income of $4,803,459 for Yulong Cattle are included in accompanying consolidated statements of income and other comprehensive income for the year ended June 30, 2012.

Pro Forma Results of Operations

The following unaudited pro forma results of operations, excluding the bargain purchase gain and related income tax effect, for the years ended June 30, 2012 and 2011 have been prepared as though the acquisition of Yulong Cattle had occurred as of July 1, 2010.

F-27

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

4.            BUSINESS COMBINATION (continued)

Pro Forma Results of Operations (continued)

This unaudited pro forma financial information is not indicative of the results of operations that the Company would have attained had the acquisition of Yulong Cattle occurred at the beginning of the periods presented, nor is the pro forma financial information indicative of the results of operations that may occur in the future.

	2012			2011
	(Unaudited)			(Unaudited)
Revenues	$	35,223,946		$	35,421,926
Cost of goods sold		(13,668,477	)		(17,721,355	)
Gross profit		21,555,469			17,700,571
Operating expenses		(2,390,148	)		(1,779,333	)
Non-operating income		1,057,872			323,327
Income before income taxes		20,223,193			16,244,565
Provision for income taxes		5,160,517			3,873,118
Net income before noncontrolling interests		15,062,676			12,371,447
Noncontrolling interests		(145,750	)		(130,597	)
Net income attributable to controlling interest	$	14,916,926		$	12,240,850
Net income per Share, basic and diluted	$	0.29		$	0.26
Weighted average shares outstanding, basic and diluted		50,643,956			47,038,021

F-28

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

5.            PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30 are summarized as follows:

	2012			2011
Machinery and equipment	$	404,397		$	81,171
Automobile		102,378			37,098
Building and building improvements		3,991,729			1,766,675
		4,498,504			1,884,944
Less: accumulated depreciation		(668,862	)		(430,096	)
Property, plant and equipment, net	$	3,829,642		$	1,454,848

Depreciation expense charged to operations for the years ended June 30, 2012 and 2011 was $228,179 and $103,598, respectively.

6.            BIOLOGICAL ASSETS

Biological assets at June 30 consist of the following:

	2012			2011
Immature biological assets	$	11,273,302		$	8,243,869
Mature biological assets		9,818,825			11,698,941
		21,092,127			19,942,810
Less: accumulated depreciation		(1,078,887	)		(2,738,194	)
Biological assets, net	$	20,013,240		$	17,204,616

Depreciation expense for the years ended June 30, 2012 and 2011 was $972,369 and $1,376,079, respectively, all of which was included in cost of goods sold in the consolidated statements of income and other comprehensive income.

F-29

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

7.            NOTES RECEIVABLE

Notes receivable are related to the sales of cows (mature biological assets) to local farmers.  Xinhua Cattle sold 3,787, 5,635, and 2,000 of its cows to local farmers in September 2011, August 2011, and June 2011, respectively. The cost and accumulated depreciation were removed from the accounts and a gain was recognized.

According to the agreements signed with the local farmers in June 2011, the sales price will be collected over five years, with a minimum payment of 20% of the sales price to be paid per year.  The related receivable is recorded at its present value at a discount rate of 12%, which is commensurate with interest rates for notes with similar risk. The Company also entered into agreements with these local farmers for a 30% commission of their monthly milk sales generated by the cows sold in exchange for the Company’s assistance in arranging for the sale of the milk.  Pursuant to the agreements signed in August and September 2011, the sales price will be collected in monthly installments plus interest at 7% on any outstanding balance, over the remaining useful lives of the cows, which range from three to eight years. Local farmers are required to pay 30% of monthly milk sales generated from the cows sold to the farmers. The required 30% monthly payments are to be applied first to the monthly installment for the cows sold and the balances as commission income for the Company’s assistance in arranging for the sale of the milk.  During the year ended June 30, 2012, the Company received principal and interest payments of $1,728,852 and commission income of $7,887,260 under these two agreements.

The receivable related to the sales of cows is included in notes receivable in the consolidated balance sheets as of June 30, 2012 and 2011. The related commission receivable of $1,074,507 and $126,059 at June 30, 2012 and 2011, respectively, is included in accounts receivable in the consolidated balance sheets.  Commission income of $10,009,699 and $122,799 is included in revenues in the consolidated statements of income and other comprehensive income for the years ended June 30, 2012 and 2011, respectively.

F-30

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

7.            NOTES RECEIVABLE (continued)

Notes receivable at June 30 consists of the following:

	2012			2011
Notes receivable	$	9,804,645		$	1,856,400
Less: discount for interest		(365,268	)		(518,019	)
		9,439,377			1,338,381
Less: current portion		(1,787,798	)		(210,674	)
Non-current portion	$	7,651,579		$	1,127,707

Future maturities of notes receivable as of June 30, 2012 are as follows:

Year Ending June 30,	Annual Amount
2013	$	1,787,798
2014		1,816,734
2015		1,774,725
2016		1,600,433
2017		1,020,233
Thereafter		1,439,454
	$	9,439,377

The Company considers these notes to be fully collectible and, therefore, did not provide an allowance for doubtful accounts.  The Company will continue to review the receivable on a periodic basis and where there is doubt as to the collectibility of individual balances, it will provide an allowance, if necessary.

F-31

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

8.             LEASES

The Company leased one of its offices from an unrelated third party at a monthly rental of approximately $1,100 under an operating lease, which expired in May 2010.  The Company had a verbal agreement with the landlord to continue to use the office at no cost until September 30, 2011.  On September 12, 2011, the Company entered into a lease agreement with the landlord to continue the operating lease with a monthly rental of $2,354, expiring on September 30, 2012.  The lease requires the Company to prepay the one year rental.  The related prepayments of approximately $7,100 at June 30, 2012 will be expensed during the year ended June 30, 2013.

The Company also leases another office at no cost from an unrelated third party.  On September 1, 2010, the Company entered into an operating lease agreement expiring on August 31, 2015.  The lease agreement does not provide for payment of rent.

All land in China is government owned and cannot be sold to any individual or company.  The Company obtained a “land use right” to use a track of land of 250,000 square meters at no cost for the period from December 2, 2005 to December 1, 2015.

On October 9, 2011, the Company entered into an operating lease, effective from October 9, 2011 to October 8, 2021, with a municipality of Heilongjiang to lease 16,666,750 square meters of land.  The lease required the Company to prepay the ten year rental of RMB30,000,000 (US$4,686,000).  The related prepayment of $4,387,275 is included in the prepaid land lease in the consolidated balance sheets as of June 30, 2012.  The lease provides for renewal options.  Pursuant to the lease, the Company has the right to occupy, use, and transfer the land leased during the lease term.

Prepaid land lease at June 30, 2012 consists of the following:

Prepaid land lease	$	4,387,275
Less: current portion		(474,300	)
Non-current portion	$	3,912,975

F-32

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

9.            RELATED PARTY TRANSACTIONS

The Company obtained demand loans from two of its stockholders which are non-interest bearing.  The loans of $241,612 and $230,356 as of June 30, 2012 and 2011, respectively, are reflected as stockholder loans in the consolidated balance sheets.

10.          FAIR VALUE MEASUREMENTS

FASB ASC 820, “Fair Value Measurements and Disclosures,” (“ASC 820”), specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs).  In accordance with ASC 820, the following summarizes the fair value hierarchy:

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

ASC 820 requires the use of observable market data, when available, in making fair value measurements.  When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.  The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis.

F-33

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

11.          INCOME TAXES

The provision for income taxes consisted of the following for the years ended June 30:

	2012		2011
Current	$	-	$	-
Deferred		6,064,917		2,866,622
	$	6,064,917	$	2,866,622

The following table reconciles the effective income tax rates with the statutory rates for the years ended June 30:

	2012			2011
As calculated at the statutory rate		25.00	%		25.00	%
Other		0.68	%		(0.81	%)
Effective income tax rate		25.68	%		24.19	%

Deferred tax assets and liabilities are recognized for expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using enacted tax rates in effects for the year in which the differences are expected to reverse.

The laws of China permit the carry forward of net operating losses for a period of five years.  Undistributed earnings from Xinhua Cattle and Yulong Cattle are not taxable until such earnings are actually distributed.

F-34

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

11.          INCOME TAXES (continued)

Deferred tax assets (liabilities) at June 30 are comprised of the following:

	2012			2011
Net operating loss carryforwards	$	242,370		$	260,264
Bargain purchase gain		(1,430,399	)		-
Undistributed earnings of subsidiaries under PRC law		(12,132,033	)		(7,340,556	)
Net deferred tax (liabilities)	$	(13,320,062	)	$	(7,080,292	)

At June 30, 2012 and 2011, Zhongxian Information had an unused operating loss carry-forward of approximately $969,000 and $1,040,000, respectively, expiring in various years through 2016.

The Company’s tax filings are subject to examination by the tax authorities.  The tax years 2006 to 2011 remain open to examination by tax authorities in the PRC.

F-35

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

12.          CONCENTRATION OF CREDIT RISK

Substantially all of the Company’s bank accounts are located in The People’s Republic of China and are not covered by protection similar to that provided by the FDIC on funds held in United States banks.

Five customers for the sale of milk accounted for approximately 91% of milk sales for the year ended June 30, 2012 and two customers for the sale of milk accounted for approximately 96% of milk sales for the year ended June 30, 2011.  The same five customers also accounted for approximately 69% of accounts receivable at June 30, 2012 and three customers accounted for approximately 95% of accounts receivable at June 30, 2011.

Thirty nine farmers accounted for the notes receivable at June 30, 2012 and six farmers accounted for the notes receivable at June 30, 2011.

 13.         STOCK INCENTIVE PLAN

On March 16, 2012, the Board of Directors adopted the China Modern Agricultural Information, Inc. Stock Incentive Plan (the “Plan”).  The purpose of the Plan is to attract, motivate and retain top-quality directors, officers, employees, consultants, advisers and independent contractors, provide substantial incentives, to act in the best interests of the stockholders of the Company and to reward extraordinary effort.  The awards under the Plan may be in the form of stock options, restricted stock, restricted stock units or performance share units.  The total number of shares of Stock reserved for distribution under the Plan is 3,000,000.  There are currently no shares available to be issued.

On April 16, 2012, the Company granted 3,000,000 shares of restricted stock under the Plan to its employees and the shares were issued on April 26, 2012.  The shares, with a fair value of $1,200,000 at the grant date, were fully vested on May 20, 2012 and the fair value of the shares was charged to operations for the year ended June 30, 2012.

F-36

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

 14.         PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

The following condensed financial information of the Company includes the US parent only balance sheets as of June 30, 2012 and 2011, and the US parent company only statements of operations, and cash flows for the years ended June 30, 2012 and 2011:

Condensed Balance Sheets

ASSETS	2012		2011
Other receivable from VIE	$	3,060,000	$	-
Investment in subsidiaries and VIEs		41,989,952		22,810,276
TOTAL ASSETS	$	45,049,952	$	22,810,276
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accrued expenses and other payables	$	-	$	-
Total liabilities		-		-
Stockholders’ equity
Common stock, $0.001 par value; 75,000,000 shares authorized; 53,100,000 shares and 41,100,000 shares issued and outstanding at June 30, 2012 and 2011, respectively		53,100		41,100
Additional paid-in capital		5,851,170		1,603,170
Retained earnings		39,145,682		21,166,006
Total stockholders’ equity		45,049,952		22,810,276
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	45,049,952	$	22,810,276

F-37

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

 14.         PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)

Condensed Statements of Operations

	2012		2011
Revenues
Share of earnings from investment in subsidiaries and VIEs	$	18,609,083	$	9,290,654
Operating expenses
General and administrative		1,200,000		437,470
Net income	$	17,409,083	$	8,853,184

Condensed Statements of Cash Flows

	2012			2011
Cash flows from operating activities
Net income	$	17,409,083		$	8,853,184
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Share of earnings from investment in subsidiaries and VIEs		(18,609,083	)		(9,290,654	)
Value of stock issued for professional services		-			437,470
Stock-based compensation		1,200,000			-
Net cash provided by (used in) operating activities		-			-
Net increase in cash		-			-
Cash, beginning of year		-			-
Cash, end of year	$	-		$	-

F-38

CHINA MODERN AGRICULTURAL INFORMATION, INC.

AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2011

 14.         PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)

Basis of Presentation

The Company records its investment in its subsidiaries and VIEs under the equity method of accounting.  Such investment is presented as “Investment in subsidiaries and VIEs” on the condensed balance sheets and shares of the subsidiaries and VIEs’ profits is presented as “Share of earnings from investment in subsidiaries and VIEs” in the condensed statements of operations.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted.  The parent only financial information has been derived from the Company’s consolidated financial statements and should be read in conjunction with the Company’s consolidated financial statements.

There were no cash transactions in the US parent company during the years ended June 30, 2012 and 2011.  The only transactions the US parent company entered into were (1) the issuance of 9,000,000 shares of its common stock, valued at $3,060,000, for the acquisition of Yulong Cattle as part of the purchase price in 2012; (2) the issuance of 3,000,000 of shares of its common stock to employees pursuant to the Stock Incentive Plan in 2012.  The fair value of the stock of $1,200,000 has been included in general and administrative expenses in the condensed statements of operations for the year ended June 30, 2012; and (3) the issuance of 1,067,000 shares of its common stock for legal and consulting services rendered in 2011.  The fair value of the stock issued in 2011 was $437,470 and has been included in general and administrative expenses in the condensed statements of operations for the year ended June 30, 2011.

Restricted Net Assets

Under PRC laws and regulations, the Company’s PRC subsidiaries and VIEs are restricted in their ability to transfer certain of its net assets to the Company in the form of dividend payments, loans or advances.  The restricted net assets of the Company’s PRC subsidiaries and the VIEs amounted to $41,989,952 and $22,810,276 as of June 30, 2012 and 2011.

F-39

 14.         PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (continued)

The Company’s operations and revenues are conducted and generated in PRC, and all of the Company’s revenues being earned and currency received are denominated in RMB.  RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to PRC foreign exchange control regulations that restrict the Company’s ability to convert RMB into US Dollars.

Schedule I of Article 5-04 of Regulation S-X requires the condensed financial information of the parent company shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party.  The condensed parent company only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company’s PRC subsidiaries and VIEs exceed 25% of the consolidated net assets of the Company.

F-40

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officers as appropriate, to allow timely decisions regarding required disclosures. Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of disclosure controls and procedures as of June 30, 2012, pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, the President and Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms due to a material weakness related to a lack of accounting personnel with sufficient experience in maintaining books and records and preparing financial statements in accordance with U.S. GAAP.

Management's Annual Report on Internal Control Over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Our internal control system was designed to, in general, provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  

Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2012.  The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our management has determined that as of June 30, 2012, our internal control over financial reporting was not effective due to a material weakness related to a lack of accounting personnel with sufficient experience in maintaining books and records and preparing financial statements in accordance with U.S. GAAP.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the fourth fiscal quarter of the year ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

24

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Set forth below is information regarding our directors and executive officers.

Name	Age	Position
Liu Enjia	65	Chairman of the Board of Directors
Wang Youliang	44	Chief Executive Officer, Director
Shan Yanqin	65	Director
Liu Yanyan	38	Chief Financial Officer
Qin Libei	60	Chief Operating Officer
Liu Zhengxin	39	Chief Human Resource Officer

A brief description of the background and business experience of our sole executive officer and director for the past five years is as follows:

Mr. Liu Enjia

Mr. Liu Enjia is the Chairman of the Company. In 1985, Mr. Liu Enjia served as the Chairman of the Board for Hong Kong Yunli Development (Heilongjiang) Co. Thereafter, in 1991, Mr. Liu Enjia served as the Chairman and President of Hong Kong Yunli Group. Mr. Liu Enjia has also served as faculty member and lecturer at numerous Chinese universities. In 1994, he was a guest lecturer and Visiting Professor at the Social Development Institute at Peking University. Also, in 1994, he served as a Visiting Professor at Shenzhen University. In 1995, he was a guest researcher with the State Economic System Reform Committee. Also in 1995, Mr. Liu Enjia served as consultant for the Heilongjiang Provincial Government System, as well as the Honorary President of Chamber of Commerce of the Heilongjiang Province.

In 1996, at the National Agricultural Conference, Mr. Liu Enjia proposed the business model for agricultural enterprise, which was published in the People’s Forum. Mr. Liu Enjia also established the “Zhongxian Agriculture” theory and the harmonious ecological agricultural practice model which has been implemented in the Heilongjiang Province, winning high praise from State leaders and the State Council.

Mr. Liu Enjia is a dedicated researcher of China’s economic behavior and reform. To that end, he currently serves as the Director of China’s Economic Behavior Research Center. Mr. Liu Enjia is credited with advancing the “Zhongxian” model and business commercialization theory, which brought about entrusted operations in state-owned enterprises, attracting the eye of the international community.

We believe that Mr. Liu Enjia is qualified to serve on our Board of Directors because he brings a broad base of knowledge and experience in agriculture industry.

Mr. Wang Youliang

Mr. Youliang is the Chief Executive Officer and a Director of the Company. From 1991 to 1997, Mr. Youliang was a staff member of the Tonghua Branch of China Construction Bank. Thereafter, from 1997 to 2006, he was the founder and President of Tonghua Hongyuan Trading Co., Ltd. From 2006 to 2008, Mr Youliang served as the CMO of Yunnan Nanyao Jiaoxiong Pharmaceutical Co., Ltd. From 2008 to 2010 he served as the Vice President of Guofa Venture Investment Co., Ltd. Currently, Mr. Youliang is the General Manager, Chief Executive Officer and Director of Heilongjiang Zhongxian Information Co., Ltd.  Mr. Youliang graduated from Jilin University with a degree in Finance.

We believe that Mr. Wang Youliang is qualified to serve on our Board of Directors because he brings a broad base of knowledge and experience in business administration and management.

Ms. Shan Yanqin

Ms. Shan Yangin serves as a Director. While working with Harbin Thermodynamic Company from 1990-2000, she served as the office director and manager of the company. Thereafter, from 2000-2005, Ms. Yangin was the founder and Vice President of Daqing Sunlight Terrestrial Heat Tubing Sales Co., Ltd. From 2005 to the present, Ms. Yangin serves as a Director for Heilongjiang Zhongxian Information Co., Ltd.  Ms. Shan Yangin graduated from the Harbin University of Commerce with a Business Administration degree.

We believe that Ms. Shan Yanqin is qualified to serve on our Board of Directors because she brings a broad base of knowledge and experience in business administration and management.

25

Ms. Liu Yanyan

Ms. Liu Yanyan serves as the Chief Financial Officer of the company. Ms. Yanyan has over a decade of experience in accounting and financial management. From 1995-2000 she served as a staff member of the Harbin Decorative Advertisement Design Corporation. Thereafter, she served as a staff member of Baixin Shoes Co., Ltd from 2000-2001. More recently, from 2002 to May 2010, Ms. Yanyan was a member of Harbin Caiyun Tradings Company.  Ms. Liu Yanyan graduated from the Heilongjiang College of Commerce with an accounting degree.

Mr. Qin Libei

Mr. Qin Libei serves as the Chief Operating Officer of the company. Mr. Libei has significant experience in the agricultural and livestock field. From 1981 to 1986, he was the Chief Secretary of Heilongjiang Bureau of Animal Husbandry. From 1986 to 1990 he was the Deputy Chief of Heilongjiang Livestock Breeding Guidance Station. Then, from 1991 to 1994, he served as the Deputy Chief of Heilongjiang Grassland Fodder Center experiment station. Additionally, from 1995 to 2000 he served as the Chairman of Heilongjiang Grassland Fodder Development Co., Ltd. and President of Heilongjiang Caiyuan Information Co. Ltd. More recently, from 2001 to 2010 Mr. Libei was a researcher with the Heilognjiang Grassland Fodder Center experimentation station. Currently, Mr. Libei also serves as the Chief Operating Officer for Heilongjiang Zhongxian Information Co., Ltd..  Mr. Libei graduated from Heilongjiang University with a degree in Economics and Management.

Mr. Liu Zhengxin

Mr. Lin Zhengxin serves as the Chief Human Resource Officer of the company. From 1992 to 1993, Mr. Zhengxin was a sales representative with Yunli Development (Heilongjiang) Co., Ltd. Then, from 1993 to 2005, he serves as sales director for Yunli Development (Heilongjiang) Co., Ltd. More recently, from 2005 to 2010, Mr. Zhengxin was the Assistant President of Heilongjiang Zhongxian Information Co. Ltd. From 2008 to the present, Mr. Zhengxin also serves as the CHO for Heilongjiang Zhongxian Information Co. Ltd..  Mr. Zhengxin holds an accounting degree from Heilongjiang Institute of Economic Management, and a minor in Human Resource Management.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board of Directors.

Mr. Liu Enjia, Mr. Wang Youliang, and Ms. Shan Yanqin were appointed to serve on our board of directors immediately after the closing of the share exchange on January 28, 2011 and will remain in office until the next annual meeting of our stockholders (or until a successor has been duly elected and qualified) or until they are removed in accordance with our bylaws. There are no agreements or understandings among Mr. Liu Enjia, Mr. Wang Youliang, Ms. Shan Yanqin, Ms. Liu Yanyan, Mr. Qin Libei, and Mr. Liu Zhengxin and any other person pursuant to which Mr. Liu Enjia, Mr. Wang Youliang, Ms. Shan Yanqin, Ms. Liu Yanyan, Mr. Qin Libei, and Mr. Liu Zhengxin were selected as a director or executive officer.

Family Relationships

Mr. Liu Enjia and Mr. Liu Zhengxin are father and son. There are no other family relationships between our director and executive officers.

26

Involvement in Legal Proceedings

To our knowledge, there have been no material legal proceedings that would require disclosure under the federal securities laws that are material to an evaluation of the ability of our director or executive officer.

Potential Conflicts of Interest

We are not aware of any current or potential conflicts of interest with our directors or executive officers.

Board Committees

We have not formed an Audit Committee, Compensation Committee or Nominating and Corporate Governance Committee as of the filing of this Annual Report. Our Board of Directors performs the principal functions of an Audit Committee. We currently do not have an audit committee financial expert on our Board of Directors.  We believe that an audit committee financial expert is not required because the cost of hiring an audit committee financial expert to act as one of our directors and to be a member of an Audit Committee outweighs the benefits of having an audit committee financial expert at this time.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, officers and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and are required to furnish us with copies of these reports. Based solely on our review of the reports filed with the SEC, we believe that all persons subject to Section 16(a) of the Exchange Act timely filed all required reports in fiscal year 2012, except that reports were not filed by the following persons:

Name	Number of Late Reports		Transactions Not Timely Reported		Known Failures  to File a  Required  Form
Liu Enjia		1		0		1
Shan Yanqin		1		0		1
Liu Yanyan		1		0		1
Qin Libei		1		0		1

Code of Ethics

We have not adopted a Code of Ethics that is applicable to our Chief Executive Officer and chief financial and principal accounting officer. We are in the process of formulating a code of ethics and intend to adopt one in the future.

Item 11. Executive Compensation

The following table sets forth the compensation paid or accrued by us to our President, Chief Executive Officer, Chief Financial Officer and each of our other officers for the year ended June 30, 2012.

Name and Principal Position	Fiscal Year	Salary (USD $)		Bonus (USD $)	Option Awards (USD $)	All Other Compensation (USD $)		Total (USD $)
Wang Youliang	2012		11,347	-	-		-	11,347
Chief Executive Officer	2011		11,347	-	-		-	11,347
Liu Yanyan	2012		8,510					8,510
Chief Financial Officer	2011		8,510	-	-		-	8,510
Qin Libei	2012		7,565					7,565
Chief Operating Officer	2011		7,565	-	-		-	7,565
Liu Zhengxin	2012		5,673					5,673
Chief Human Resource Officer	2011		5,673	-	-		-	5,673

27

Narrative Disclosure to Summary Compensation Table

Mr. Wang Youliang

For the years ended June 30, 2012 and 2011, Mr. Wang Youliang received annual compensation of RMB 72, 000, or USD $11,347.  

We entered into an Employment Agreement with Wang Youliang (the “Youliang Agreement”). Pursuant to the Youliang Agreement, Mr. Youliang will serve as our Chief Executive Officer. The initial term of Youliang Agreement ends in 2014.  The Youliang Agreement provides that Mr. Youliang’s initial base salary during the term shall be RMB 72,000, or USD $11,347per annum. Youliang’s salary shall be paid on monthly basis, payable at the 30th day of each following month. If the Company unilaterally terminates the employment within the term of the agreement, the Company shall, on the termination date, make a lump-sum salary payment of the immediately preceding month to Mr. Youliang plus compensation equal to three (3) months of Mr. Youliang’s salary.

The agreement provides that it will automatically terminate upon either the expiration of the term of the Youliang Agreement, or the occurrence of events authorizing such termination or the dissolution of the Company. The Youliang Agreement may also be terminated upon the occurrence of either a serious violation of company policy by Mr. Youliang or by any major damages to the Company resulting from Mr. Youliang’s failure to duly perform his duties.

Ms. Liu Yanyan

For the year ended June 30, 2012 and  2011, Ms. Liu Yanyan received annual compensation of RMB 54,000, or USD $8,510.

We entered into an Employment Agreement with Liu Yanyan (the “Yanyan Agreement”). Pursuant to the Yanyan Agreement, Ms. Yanyan will serve as our Chief Financial Officer. The initial term of Yanyan Agreement ends in 2014.  The Yanyan Agreement provides that Ms. Yanyan’s initial base salary during the term shall be RMB 54,000, or $8,510 per annum. Yanyan’s salary shall be paid on monthly basis, payable at the 30th day of each following month. If the Company unilaterally terminates Ms. Yanyan within the term of the agreement, the Company shall, on the termination date, make a lump-sum salary payment of the immediately preceding month to Ms. Yanyan plus compensation equal to three (3) months of Ms. Yanyan’s salary.

The agreement provides that it will automatically terminate upon either the expiration of the term of the Yanyan Agreement, or the occurrence of events authorizing such termination or the dissolution of the Company. The Yanyan Agreement may also be terminated upon the occurrence of either a serious violation of the company policy by Ms. Yanyan or by any major damages to the Company resulting from Ms. Yanyan’s failure to duly perform her duties.

28

Mr. Qin Libei

For the year ended June 30, 2012 and 2011, Mr. Qin Libei received annual compensation of RMB 48,000, or USD $7,565. 

We entered into an Employment Agreement with Qin Libei (the “Libei Agreement”). Pursuant to the Libei Agreement, Mr. Libei will serve as our Chief Operating Officer. The initial term of Libei Agreement ends in 2014.  The Libei Agreement provides that Mr. Libei’s initial base salary during the term shall be 48,000 RMB, or USD,$7,565 per annum. Libei’s salary shall be paid on monthly basis, payable at the 30th day of each following month. If the Company unilaterally terminates Mr. Libei within the term of the agreement, the Company shall, on the termination date, make a lump-sum salary payment of the immediately preceding month to Mr. Libei plus compensation equal to three (3) months of Mr. Libei’s salary.

The agreement provides that it will automatically terminate upon either the expiration of the term of the Libei Agreement, or the occurrence of events authorizing such termination or the dissolution of the Company. The Libei Agreement may also be terminated upon the occurrence of either a serious violation of the company policy by Mr. Libei or by any major damages to the Company resulting from Mr. Libei’s failure to duly perform his duties.

Mr. Liu Zhengxin

For the year ended June 30, 2012 and 2011, Mr. Liu Zhengxin received annual compensation of RMB 36,000, or USD $5,673.

We entered into an Employment Agreement with Liu Zhengxin (the “Zhengxin Agreement”). Pursuant to the Zhengxin Agreement, Ms. Zhengxin will serve as our Chief HR Officer. The initial term of Zhengxin Agreement ends in 2014. The Zhengxin Agreement provides that Ms. Zhengxin’s initial base salary during the term shall be 36,000 RMB, or USD $5,573 per annum. Zhengxin’s salary shall be paid on monthly basis, payable at the 30th day of each following month. If the Company unilaterally terminates Ms. Zhengxin within the term of the agreement, the Company shall, on the termination date, make a lump-sum salary payment of the immediately preceding month to Ms. Zhengxin plus compensation equal to three (3) months of Ms. Zhengxin’s salary.

The agreement provides that it will automatically terminate upon either the expiration of the term of the Zhengxin Agreement, or the occurrence of events authorizing such termination or the dissolution of the Company. The Zhengxin Agreement may also be terminated upon the occurrence of either a serious violation of the company policy by Ms Zhengxin or by any major damages to the Company resulting from Ms. Zhengxin’s failure to duly perform his duties.

Outstanding Equity Awards at Fiscal Year-End Table

None.

29

Director Compensation

The members of our board of directors are not compensated for serving on the board.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND   RELATED STOCKHOLDER MATTERS

The following table shows the number of our securities beneficially owned by our named executive officers, our director, our executive officers and directors as a group, and each person known to us to own more than 5% of our outstanding shares of common stock as of September 26, 2012. Except as otherwise indicated, all shares are owned directly and the shareholders possess sole voting and investment power with respect to the shares listed below. As of September 26, 2012, 53,100,000 shares of our common stock were issued and outstanding. Unless otherwise stated, the business address of the person listed below is c/o No.A09, Wuzhou Sun Town Limin Avenue, Limin Development District Harbin, Heilongjiang, China.

Name and Address	Amount and Nature of Beneficial Ownership (1)	Percentage of Class (2)
Zhengxin Liu,   Chief Human Resource Officer	13,197,857	24.85%
Youliang Wang,   Chief Executive Officer	4,049,775	7.63%
All officers and directors as group (1)	17,246,642	32.48%

(1)

A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through such as exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.

(2)

For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of September 26, 2012.  For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of September 26, 2012 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.  The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership.

ITEM 13. CERTAIN RELATIONSHIPS, AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The Company obtained demand loans from two affiliated parties which are non-interest bearing.  The loans of $241,612 and $230,356 as of June 30, 2012 and 2011, respectively, are reflected as stockholder loans in the consolidated balance sheets. The following sets forth the name of such stockholders, the aggregate amount of principal loaned during 2012, and the amount of principal paid during 2012.

Name of Related Party	Affiliation	Aggregate Amount of Principal Loaned	The Amount of Principal Paid
Liu Zhenxing	Officer and Stockholders	$0	$0
Liu Enjia	Director	$487,567	$477,597

Director Independence

Mr. Liu Enjia, Mr. Wang Youliang, and Ms. Shan Yanqin, the members of our Board of Directors, are not independent using the definition of independence under the rules of the SEC.

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Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table shows the aggregate fees billed for professional services provided to us by Wei, Wei & Co., LLP for 2012 and 2011:

	2012		2011
Audit Fees	$	90,000	$	80,000
Audit-Related Fees		-		-
Tax Fees		6,000		-
All Other Fees		-		-
Total	$	96,000	$	80,000

For the fiscal years ended June 30, 2012 and 2011, the aggregate fees billed for professional services rendered for the audit and review of our financial statements were approximately $90,000 and $80,000, respectively.

There were no fees for other audit related services for the years ended June 30, 2012 and 2011.

For our fiscal years ended June 30, 2012 and 2011, the aggregate fees billed for professional services rendered for tax compliance, tax advice, and tax planning were approximately $6,000 and $0, respectively. 

All Other Fees

We did not incur any other fees related to services rendered by our independent registered public accounting firm for the fiscal years ended June 30, 2012 and 2011.

The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our Audit Committee or (ii) entered into pursuant to pre-approval policies and procedures established by the Audit Committee, provided that the policies and procedures are detailed as to the particular  service,  the  Audit Committee is informed of each service, and such policies and procedures do not include delegation of the Audit Committee’s responsibilities to management.

We do not have an Audit Committee.  Our Board of Directors pre-approves all services provided by our independent registered public accounting firm. All of the above services and fees during 2012 and 2011 were reviewed and approved by our Board of Directors either before or after the respective services were rendered. 

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PART IV

Item 15.  EXHIBITS

(a)     Exhibits

Exhibit Number	Description
2.1	Share Exchange Agreement between Trade Link Wholesalers, Inc. and Value Development Holdings Limited, dated January 28, 2011, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
2.2	Letter of Intent dated as of July 10, 2011, by and between Heilongjiang Zhongxian Information Co., Ltd. and Harbin JinShangjing Technology Investment Co., Ltd. (English Translation), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on July 14, 2011.
2.3	Letter of Intent, dated as of July 10, 2011, by and between Heilongjiang Zhongxian Information Co., Ltd. and Harbin JinShangjing Technology Investment Co., Ltd. (Englis Translation), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on September 30, 2011.
2.4	Equity Transfer Agreement, dated as of November 23, 2011, among China Modern Agricultural Information, Inc., Heilongjiang Zhongxian Information Co., Ltd., Shangzhi Yulong Co., Ltd., and Shangzhi Yulong Shareholders, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on November 30, 2011.
10.1	Exclusive Consulting and Service Agreement between Harbin Jiasheng Consulting Managerial Co., Ltd. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.2	Shareholders Voting Right Proxy Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.3	Exclusive Call Options Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.4	Equity Pledge Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.14	Form Employment Agreement, incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
16.1	Letter from Ronald R. Chadwick, P.C., incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
31.1*	Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification Pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+	Certification Pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101. INS**	XBRL Instance Document.
101. SCH**	XBRL Taxonomy Extension Schema Document
101. CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101. LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101. PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.
101. DEF**	XBRL Taxonomy Extension Definition Linkbase Document.

*	Filed herewith
+	Furnished herewith

**  Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA MODERN AGRICULTURAL INFORMATION, INC.
Dated: October 11, 2012	By:	/s/ Wang Youliang
		Wang Youliang
		Chief Executive Officer (Principal Executive Officer)

Dated: October 11, 2012	By:	/s/ Liu Yanyan
		Liu Yanyan
		Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ Liu Enjia		October 11, 2012
Liu Enjia	Chairman of the Board of Directors
/s/Wang Youliang	Chief Executive Officer and	October 11, 2012
Wang Youliang	Director
/s/ Shan Yanqin
Shan Yanqin	Director	October 11, 2012
/s/ Liu Yanyan
Liu Yanyan	Chief Financial Officer	October 11, 2012

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Exhibit Index

2.1	Share Exchange Agreement between Trade Link Wholesalers, Inc. and Value Development Holdings Limited, dated January 28, 2011, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
2.2	Letter of Intent dated as of July 10, 2011, by and between Heilongjiang Zhongxian Information Co., Ltd. and Harbin JinShangjing Technology Investment Co., Ltd. (English Translation), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on July 14, 2011.
2.3	Letter of Intent, dated as of July 10, 2011, by and between Heilongjiang Zhongxian Information Co., Ltd. and Harbin JinShangjing Technology Investment Co., Ltd. (Englis Translation), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on September 30, 2011.
2.4	Equity Transfer Agreement, dated as of November 23, 2011, among China Modern Agricultural Information, Inc., Heilongjiang Zhongxian Information Co., Ltd., Shangzhi Yulong Co., Ltd., and Shangzhi Yulong Shareholders, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on November 30, 2011.
10.1	Exclusive Consulting and Service Agreement between Harbin Jiasheng Consulting Managerial Co., Ltd. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.2	Shareholders Voting Right Proxy Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.3	Exclusive Call Options Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.4	Equity Pledge Agreement between Mr. Wang Youliang, Mr. Liu Zhengxin, Harbin Jiasheng Consultation & Management Co., LTD. and Heilongjiang Zhongxian Information Co., LTD., dated December 21, 2010, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
10.14	Form Employment Agreement, incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
16.1	Letter from Ronald R. Chadwick, P.C., incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on February 3, 2011, as amended.
31.1*	Certifications of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certifications of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification Pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2+	Certification Pursuant to 18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101. INS**	XBRL Instance Document.
101. SCH**	XBRL Taxonomy Extension Schema Document
101. CAL**	XBRL Taxonomy Extension Calculation Linkbase Document.
101. LAB**	XBRL Taxonomy Extension Label Linkbase Document.
101. PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.
101. DEF**	XBRL Taxonomy Extension Definition Linkbase Document.

*	Filed herewith
+	Furnished herewith

**  Furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise not subject to liability under these sections.  

34