Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 15, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Yew Bio-Pharm Group, Inc. | |
Entity Central Index Key | 1,548,240 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 51,500,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
CURRENT ASSETS: | ||
Cash | $ 171,483 | $ 487,940 |
Accounts receivable | $ 1,654,609 | 922,564 |
Accounts receivable - related party | 340,132 | |
Inventories | $ 7,791,129 | $ 1,443,078 |
Due from related parties | 47,601 | |
Prepaid expenses - related party | 369,232 | $ 5,787 |
Prepaid expenses and other assets | 277,699 | $ 16,791 |
VAT recoverables | 1,072,052 | |
Total Current Assets | 11,383,805 | $ 3,216,292 |
LONG-TERM ASSETS: | ||
Long-term inventories, net | 11,392,307 | 10,663,545 |
Property and equipment, net | 725,122 | 856,250 |
Land use rights and yew forest assets, net | 19,726,404 | 20,305,821 |
Total Long-term Assets | 31,843,833 | 31,825,616 |
Total Assets | 43,227,638 | $ 35,041,908 |
CURRENT LIABILITIES: | ||
Accounts payable | 739,691 | |
Accounts payable - related party | 1,480,698 | |
Accrued expenses and other payables | 175,227 | $ 84,722 |
Advances from customers | 160,072 | |
Taxes payable | 48,600 | $ 10,547 |
Due to related parties | 697,521 | $ 45,040 |
Short-term borrowings | 1,642,360 | |
Total Current Liabilities | 4,944,169 | $ 140,309 |
Total Liabilities | 4,944,169 | 140,309 |
SHAREHOLDERS' EQUITY: | ||
Common stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 and 52,125,000 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively) | 51,875 | 52,125 |
Additional paid-in capital | 9,362,216 | 8,557,656 |
Retained earnings | 23,848,364 | 20,444,667 |
Statutory reserves | 3,594,628 | 3,100,766 |
Accumulated other comprehensive income - foreign currency translation adjustment | 1,426,386 | 2,746,385 |
Total Shareholders' Equity | 38,283,469 | 34,901,599 |
Total Liabilities and Shareholders' Equity | $ 43,227,638 | $ 35,041,908 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Consolidated Balance Sheets [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 140,000,000 | 140,000,000 |
Common stock, shares issued | 51,875,000 | 52,125,000 |
Common stock, shares outstanding | 51,875,000 | 52,125,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES: | ||||
Revenues | $ 1,997,998 | $ 1,135,825 | $ 5,437,593 | $ 4,530,078 |
Revenues - related party | 2,999,203 | 565,099 | 6,868,985 | 1,302,390 |
Total Revenues | 4,997,201 | 1,700,924 | 12,306,578 | 5,832,468 |
COST OF REVENUES: | ||||
Cost of revenues | 1,900,418 | 236,793 | 3,807,777 | 1,005,865 |
Cost of revenues - related party | 1,677,625 | 57,004 | 3,228,355 | 240,601 |
Total Cost of Revenues | 3,578,043 | 293,797 | 7,036,132 | 1,246,466 |
GROSS PROFIT | 1,419,158 | 1,407,127 | 5,270,446 | 4,586,002 |
OPERATING EXPENSES: | ||||
Selling | 10,013 | 6,973 | 23,776 | 9,394 |
General and administrative | 474,560 | 506,566 | 1,417,338 | 892,563 |
Total Operating Expenses | 484,573 | 513,539 | 1,441,114 | 901,957 |
INCOME FROM OPERATIONS | 934,585 | 893,588 | 3,829,332 | 3,684,045 |
OTHER INCOME (EXPENSES): | ||||
Interest income (expense) | $ (33,496) | $ (255) | (51,917) | $ 36 |
Government grant | 135,322 | |||
Other income (expense) | $ 36,496 | $ (617) | 32,023 | $ 1,347 |
Total Other Income (Expenses) | 3,000 | (872) | 115,428 | 1,383 |
INCOME BEFORE INCOME TAXES | 937,585 | $ 892,716 | 3,944,760 | $ 3,685,428 |
PROVISION FOR INCOME TAXES | (4,071) | (47,200) | ||
NET INCOME | 933,514 | $ 892,716 | 3,897,560 | $ 3,685,428 |
COMPREHENSIVE INCOME (LOSS): | ||||
NET INCOME | 933,514 | 892,716 | 3,897,560 | 3,685,428 |
OTHER COMPREHENSIVE INCOME (LOSS): | ||||
Foreign currency translation adjustment | (1,701,546) | 10,560 | (1,319,999) | (211,926) |
COMPREHENSIVE INCOME (LOSS) | $ (768,032) | $ 903,276 | $ 2,577,561 | $ 3,473,502 |
NET INCOME PER COMMON SHARE: | ||||
Basic | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.07 |
Diluted | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.06 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic | 52,158,967 | 51,639,946 | 52,136,447 | 50,552,656 |
Diluted | 52,189,711 | 51,759,743 | 55,518,924 | 63,026,963 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 3,897,560 | $ 3,685,428 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation | 112,837 | 132,355 |
Stock-based compensation | 800,954 | 5,657 |
Stock issued for professional services | 3,356 | 321,387 |
Amortization of land use rights and yew forest assets | 1,108,773 | 384,467 |
Gain on disposal of property and equipment | (32,083) | (1,509) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (783,741) | (1,189,571) |
Accounts receivable - related party | 339,740 | 375,596 |
Prepaid expenses and other current assets | (269,309) | (34,532) |
Prepaid expenses - related party | (375,030) | $ 21,030 |
Due from related parties | (13,383) | |
VAT recoverables | (1,105,672) | |
Inventories | $ (5,191,187) | $ (205,265) |
Accounts payable | 15,974 | |
Accrued expenses and other payables | $ 95,379 | $ (9,992) |
Advances from customers | 165,092 | |
Taxes payable | 39,506 | $ (5,857) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ (1,207,208) | 3,495,168 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from disposal of property and equipment | 5,000 | |
Purchase of property and equipment | $ (7,913) | (3,390) |
Payment for land use rights and yew forest assets | (1,362,205) | (4,503,084) |
NET CASH USED IN INVESTING ACTIVITIES | (1,370,118) | $ (4,501,474) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from short-term borrowings | 1,642,360 | |
Proceeds from related party advances | 658,255 | $ 610 |
Repayments for related party advances | (5,656) | (25,674) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 2,294,959 | (25,064) |
EFFECT OF EXCHANGE RATE ON CASH | (34,090) | (8,123) |
NET DECREASE IN CASH | (316,457) | (1,039,493) |
CASH - Beginning of period | 487,940 | 1,159,611 |
CASH - End of period | 171,483 | $ 120,118 |
Cash paid for: | ||
Interest | $ 47,017 | |
Income taxes | ||
Non-cash investing and financing activities | ||
Reclassification of yew forest assets to inventories | $ 190,817 | $ 828,908 |
Organization and Principal Acti
Organization and Principal Activities | 9 Months Ended |
Sep. 30, 2015 | |
Organization and Principal Activities [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated balance sheet as of December 31, 2014 was derived from the audited consolidated financial statements of Yew Bio-Pharm Group, Inc. (individually “YBP” and collectively with its subsidiaries and operating variable interest entity, the “Company”). The accompanying unaudited interim consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2014. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the financial position as of September 30, 2015, and the results of operations and cash flows for the interim periods have been presented. The preparation of consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company continually evaluates its estimates, including those related to bad debts, inventories, income taxes, and the valuation of equity transactions. The Company bases its estimates on historical experience and on various other assumptions that it believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Details of the Company’s subsidiaries, variable interest entity (“VIE”) and VIE’s subsidiary are as follows: Name Domicile and Date of Incorporation Registered Capital Effective Ownership Principal Activities Heilongjiang Jinshangjing Bio-Technology Development Co., Limited (“JSJ”) PRC US$100,000 100% Holding company Yew Bio-Pharm Holdings Limited (“Yew Bio-Pharm (HK)”) Hong Kong HK$10,000 100% Holding company of JSJ Harbin Yew Science and Technology Development Co., Ltd. (“HDS”) PRC RMB45,000,000 Contractual arrangements Sales of yew tree components for use in pharmaceutical industry; sales of yew tree seedlings and potted yew trees; manufacture of yew tree wood handicrafts; and sales of wood ear mushroom Harbin Yew Food Co., Ltd ("HYF") PRC RMB100,000 (1) 100% Sales of wood ear mushroom (1) Harbin Yew Food Co. Ltd is wholly owned by HDS and did not pay the registered capital as of September 30, 2015. |
Principles of Consolidation
Principles of Consolidation | 9 Months Ended |
Sep. 30, 2015 | |
Principles of Consolidation [Abstract] | |
PRINCIPLES OF CONSOLIDATION | NOTE 2 – PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the financial statements of YBP, its subsidiaries, operating VIE in which the Company is the primary beneficiary, and VIE’s subsidiary. All significant intercompany balances and transactions have been eliminated on consolidation. Pursuant to a restructuring plan intended to ensure compliance with applicable PRC laws and regulations (the “Second Restructure”), on November 5, 2010, JSJ entered into a series of contractual arrangements (the “Contractual Arrangements”) with HDS and/or Zhiguo Wang, his wife Guifang Qi and Xingming Han (collectively with Mr. Wang and Madame Qi, the “HDS Shareholders”), as described below: ● Exclusive Business Cooperation Agreement ● Exclusive Option Agreement . ● Equity Interest Pledge Agreement ● Power of Attorney . To the extent that the Contractual Arrangements are enforceable under PRC law, as from time to time interpreted by relevant state agencies, they constitute the valid and binding obligations of each of the parties to each such agreement. The Company believes that HDS is considered a VIE under ASC 810 “Consolidation”, because the equity investors in HDS no longer have the characteristics of a controlling financial interest, and the Company, through JSJ, is the primary beneficiary of HDS and controls HDS’ operations. Accordingly, HDS has been consolidated as a deemed subsidiary into YBP as a reporting company under ASC 810. As required by ASC 810-10, the Company performs a qualitative assessment to determine whether the Company is the primary beneficiary of HDS which is identified as a VIE of the Company. A quality assessment begins with an understanding of the nature of the risks in the entity as well as the nature of the entity’s activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and the parties involved in the design of the entity. The Company’s assessment on the involvement with HDS reveals that the Company has the absolute power to direct the most significant activities that impact the economic performance of HDS. JSJ is obligated to absorb a majority of the risk of loss from HDS activities and entitles JSJ to receive a majority of HDS’ expected residual returns. In addition, HDS’ shareholders have pledged their equity interest in HDS to JSJ, irrevocably granted JSJ an exclusive option to purchase, to the extent permitted under PRC Law, all or part of the equity interests in HDS and agreed to entrust all the rights to exercise their voting power to the person(s) appointed by JSJ. Under the accounting guidance, the Company is deemed to be the primary beneficiary of HDS and the results of HDS are consolidated in the Company’s consolidated financial statements for financial reporting purposes. Accordingly, as a VIE, HDS’ sales are included in the Company’s total sales, its income from operations is consolidated with the Company’s and the Company’s net income includes all of HDS’ net income. The Company does not have any non-controlling interest and, accordingly, did not subtract any net income in calculating the net income attributable to the Company. Because of the Contractual Arrangements, YBP has a pecuniary interest in HDS that requires consolidation of HDS’ financial statements with those of the Company. Additionally, pursuant to ASC 805, as YBP and HDS are under the common control of the HDS Shareholders, the Second Restructure was accounted for in a manner similar to a pooling of interests. As a result, the Company’s historical amounts in the accompanying consolidated financial statements give retrospective effect to the Second Restructure, whereby the assets and liabilities of the Company are reflected at the historical carrying values and their operations are presented as if they were consolidated for all periods presented, with the results of the Company being consolidated from the date of the Second Transfer Agreement. The accounts of HDS are consolidated in the accompanying financial statements. As of September 30, 2015, the Company agreed to waive all management fees to be payable by HDS and the Company expects to waive such management fees in the near future due to a need of working capital in HDS to expand HDS’ operations. On November 4, 2014, HDS established a new subsidiary, Harbin Yew Food Co., Ltd. (HYF), to develop and cultivate wood ear mushroom. The Company plans to operate three production lines, including wood ear mushroom polysaccharide, powder, tea and other packaged wood ear mushroom products. The move marks the Company’s entrance into the organic food and functional beverage market. HYF did not have any operation as of September 30, 2015. The Company is principally engaged in (1) processing and selling yew raw materials or yew extracts used in the manufacture of traditional Chinese medicine (“TCM”); (2) growing and selling yew tree seedlings and mature trees, including potted miniature yew trees; (3) manufacturing and selling furniture and handicrafts made of yew tree timber; (4) selling wood ear mushroom as finished goods; and (5) the others, mainly consisting of the transactions such as sale of yew candles in the third quarter of 2015. The Company is located in Harbin, Heilongjiang Province, China. YBP has no direct or indirect legal or equity ownership interest in HDS. However, through the Contractual Arrangements, the stockholders of HDS have assigned all their rights as stockholders, including voting rights and disposition rights of their equity interests in HDS to JSJ, our indirect, wholly-owned subsidiary. YBP is deemed to be the primary beneficiary of HDS and the financial statements of HDS are consolidated in the Company’s consolidated financial statements. At September 30, 2015 and December 31, 2014, the carrying amount and classification of the assets and liabilities in the Company’s balance sheets that relate to the Company’s VIE and VIE’s subsidiary are as follows: September 30, December 31, Assets Cash $ 144,864 $ 446,554 Accounts receivable 1,614,549 922,564 Accounts receivable – related party - 340,132 Inventories (current and long-term), net 18,534,780 12,106,623 Prepaid expenses and other assets 267,638 5,363 Prepaid expenses - related party 369,232 6,600 Due from related parties 47,601 - VAT recoverables 1,072,052 - Property and equipment, net 689,918 814,676 Land use rights and yew forest assets, net 19,726,404 20,305,822 Total assets of VIE and VIE’s subsidiary $ 42,467,038 $ 34,948,334 Liabilities Accounts payable $ 739,691 $ - Accounts payable – related party 1,480,698 - Accrued expenses and other payables 151,198 54,265 Advances from customers 160,072 - Due to VIE holding companies 1,137,619 1,417,851 Short-term borrowings 1,642,360 - Taxes payable 46,058 8,104 Due to related parties 1,684 2,958 Total liabilities of VIE and VIE’s subsidiary $ 5,359,380 $ 1,483,178 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories [Abstract] | |
INVENTORIES | NOTE 3 – INVENTORIES Inventories consisted of raw materials, work-in-progress, finished goods, yew seedlings and other trees, which consist of larix, spruce and poplar trees. The Company classifies its inventories based on its historical and anticipated levels of sales; any inventory in excess of its normal operating cycle of one year is classified as long-term on the Company’s consolidated balance sheets. As of September 30, 2015 and December 31, 2014, inventories consisted of the following: September 30, 2015 December 31, 2014 Current Long-term Total Current Long-term Total Raw materials $ 24,597 $ 2,710,268 $ 2,734,865 $ 120,478 $ 2,798,489 $ 2,918,967 Work-in-process - - - - 256,227 256,227 Finished goods 5,397,410 719,733 6,117,143 - 805,438 805,438 Yew seedlings and other trees 2,369,122 8,044,246 10,413,368 1,322,600 6,889,573 8,212,173 Total 7,791,129 11,474,247 19,265,376 1,443,078 10,749,727 12,192,805 Reserve for impairment - handicrafts - (81,940 ) (81,940 ) - (86,182 ) (86,182 ) Inventories, net $ 7,791,129 $ 11,392,307 $ 19,183,436 $ 1,443,078 $ 10,663,545 $ 12,106,623 See Note 9 for inventories purchased from related parties. |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Taxes [Abstract] | |
TAXES | NOTE 4 – TAXES (a) Federal Income Tax and Enterprise Income Taxes The Company is registered in the State of Nevada and is subject to the United States federal income tax at a tax rate of 34%. No provision for income taxes in the U.S. has been made as the Company had no U.S. taxable income as of September 30, 2015 and December 31, 2014. The Company’s subsidiary, VIE and its subsidiary, JSJ, HDS, and HYF, respectively, incorporated in the PRC, are subject to PRC’s Enterprise Income Tax. Pursuant to the PRC Income Tax Laws, Enterprise Income Taxes (“EIT”) is generally imposed at 25%. However, HDS has been named as a leading enterprise in the agricultural industry and awarded with a tax exemption through December 31, 2058 with an exception of handicrafts, wood ear mushroom and yew candles sold. JSJ is a holding company and subject to regular corporate income tax rate of 25%, and has no operation profit for tax liabilities. HYF did not have any operation since its establishment. Income before income tax expenses of $942,485 and $892,716 for the three months ended September 30, 2015 and 2014, respectively, and $3,949,660 and $3,685,428 for the nine months ended September 30, 2015 and 2014, respectively, were attributed to subsidiaries and VIE with operations in China. JSJ and HYF recorded no income tax expense for the three and nine months ended September 30, 2015 and 2014 due to the fact that JSJ has been incurring net losses and HYF did not have any operation since its establishment. HDS recorded income tax expense of $4,071 and $47,200 for the three and nine months ended September 30, 2015, respectively. HDS recorded no income tax expense for the three and nine months ended September 30, 2014 due to the fact that HDS was granted a tax exemption and had loss carry-forwards from previous periods to offset income tax liability generated for handicrafts. The combined effects of the income tax expense exemptions and tax reductions available to the Company for the three and nine months ended September 30, 2015 and 2014 are as follows: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Tax exemption effect $ 317,419 $ 319,070 $ 1,185,109 $ 1,044,203 Tax reduction due to loss carry-forward - 2,761 2,363 5,344 Loss not subject to income tax (326 ) (595 ) (1,070 ) (2,254 ) Basic net income per share effect $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) Diluted net income per share effect $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) The table below summarizes the difference between the U.S. statutory federal tax rate and the Company’s effective tax rate for the three months and nine months ended September 30, 2015 and 2014: Three Months Ended Nine Months Ended 2015 2014 2015 2014 U.S. federal income tax rate 34 % 34 % 34 % 34 % Foreign income not recognized in the U.S. (34 %) (34 %) (34 %) (34 %) PRC EIT rate 25 % 25 % 25 % 25 % PRC tax exemption and reduction (25 %) (25 %) (24 %) (25 %) Total provision for income taxes - - 1 % - The deferred income tax assets or liabilities calculated pursuant to the EIT are not material due to the fact that the Company has been granted EIT exemption with respect to its yew raw materials and yew tree segments. The Company incurred net operating losses for U.S. income tax purposes for the three and nine months ended September 30, 2015 and 2014. The net operating loss carry-forwards for U.S. income tax purposes amounted to $4,272,586 and $4,000,246 at September 30, 2015 and December 31, 2014, respectively, which may be available to reduce future years’ taxable income. These carry forwards will expire, if not utilized, through 2035. Management believes that the realization of the benefits arising from this loss appear to be uncertain due to the Company’s limited operating history and continuing losses for United States income tax purposes. Accordingly, the Company has provided a 100% valuation allowance on the deferred tax asset to reduce the asset to zero at September 30, 2015 and December 31, 2014. The valuation allowance at September 30, 2015 and December 31, 2014 was $1,452,679 and $1,360,084, respectively. The net change in the valuation allowance was an increase of $294,477 and an increase of $34,953 during the three months ended September 30, 2015 and 2014, respectively. The net change in the valuation allowance was an increase of $92,595 and an increase of $72,867 during the nine months ended September 30, 2015 and 2014, respectively. Management reviews this valuation allowance periodically and makes adjustments as necessary. Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for income tax and financial reporting purposes. Temporary differences, which give rise to a net deferred tax asset for the Company as of September 30, 2015 and December 31, 2014, are as follows: September 30, December 31, U.S. tax benefit of net operating loss carry forward $ 1,452,679 $ 1,360,084 Valuation allowance (1,452,679 ) (1,360,084 ) Net deferred tax assets $ - $ - For U.S. income tax purposes, the Company has cumulative undistributed earnings of foreign subsidiary and VIE of approximately $29.6 million and $24.7 million as of September 30, 2015 and December 31, 2014, respectively, which are included in consolidated retained earnings and will continue to be indefinitely reinvested in overseas operations. Accordingly, no provision has been made for U.S. deferred taxes related to future repatriation of these earnings, nor is it practicable to estimate the amount of income taxes that would have to be provided if we concluded that such earnings will be remitted to the U.S. in the future. (b) Value Added Taxes (“VAT”) The applicable VAT tax rate is 13% for agricultural products and 17% for handicrafts sold in the PRC. In accordance with VAT regulations in the PRC, the Company is exempt from paying VAT on its yew raw materials and yew trees sales as an agricultural corps cultivating company up to December 31, 2016. VAT payable in the PRC is charged on an aggregated basis at the applicable rate on the full price collected for the goods sold or taxable services provided and less any deductible VAT already paid by the taxpayer on purchases of goods in the same fiscal year. In the third quarter of 2015, the Company started to sell yew candles to outside mainland China, in which case VAT regulations in the PRC allows an exemption of VAT output and at the same time, all the VAT input would be refunded. As of September 30, 2015 and December 31, 2014, VAT recoverables were $1,072,052 and zero, respectively. |
Short-Term Borrowings
Short-Term Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
Short-Term Borrowings [Abstract] | |
SHORT-TERM BORROWINGS | NOTE 5 – SHORT-TERM BORROWINGS On April 23, 2015, HDS entered into a loan agreement with Harbin Rongtong Branch of Bank of Communications (“BOCOM”) in the amount of RMB10,000,000 (approximately $1,630,000), payable on April 22, 2016. The loan carries an interest rate of 6.955% per annum and is payable quarterly on the 20th of the last month of each quarter. Heilongjiang Zishan Technology Co., Ltd (“ZTC”), a related party controlled by Mr. Wang and his wife Madame Qi, collateralized its buildings and land use rights with BOCOM to secure the loan. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY (a) Common Stock On July 22, 2014, the Company entered into a Service Provider Agreement (the “SPA”) with a service provider to commence service on July 22, 2014 for a period of three years. Pursuant to the SPA, the Company agreed to issue to the service provider 1,250,000 shares of its Rule 144 restricted common stock for the service period. The shares are payable in 875,000 shares of its restricted common stock on or before July 22, 2014 for the first year of service under the SPA and 375,000 shares of its restricted common stock to be issued on or before July 22, 2015, for the second and third year of service under the SPA. For the nine months ended September 30, 2015, a total of $65,856 was expensed under the SPA. (b) Stock Options On July 18, 2014, the Company’s board of directors in lieu of an established compensation committee granted options pursuant to the Corporation’s 2012 Equity Incentive Plan to two directors and one of its employees (the “Optionees I”). Within the stock option agreement, each of the Optionees I was issued 200,000 shares of common stock of the Company at an exercise price of $0.20 per share. The option has a term of four years starting from August 1, 2014, the vesting commencement date, and expires on August 1, 2018. The options vest over a three-year time period from August 1, 2014, and 30%, 35%, and 35% of the total shares granted shall vest and become exercisable 12, 24, and 36 months after the initial vesting commencement date. On November 18, 2014, the Company’s board of directors in lieu of an established compensation committee granted options pursuant to the Corporation’s 2012 Equity Incentive Plan to the Company’s employees (the “Optionees II”). Within the stock option agreement, each of the Optionees II was issued shares of common stock of the Company at an exercise price of $0.23 per share. There are three types of term for the subject stock options granted. (1) The option has a term of four years starting from November 18, 2014, the vesting commencement date, and expires on November 18, 2018. The options vest over a three-year time period from November 18, 2014, and 30%, 35%, and 35% of the total shares granted shall vest and become exercisable 12, 24, and 36 months after the initial vesting commencement date. (2) The option has a term of two years starting from November 18, 2014, the vesting commencement date, and expires on November 18, 2016. The options vest over a one-year time period from November 18, 2014, and 100% of the total shares granted shall vest and become exercisable 12 months after the initial vesting commencement date. (3) The option has a term of three years starting from November 18, 2014, the vesting commencement date, and expires on November 18, 2017. The options vest over a two-year time period, and 50% and the remaining 50% of the total shares shall vest and become exercisable 12 and 24 months respectively after the initial vesting commencement date. Stock option activities for the nine months ended September 30, 2015 and 2014 are summarized in the following table. Nine Months Ended Nine Months Ended Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Balance at beginning of period 27,205,512 0.26 22,805,512 0.22 Issued - - 600,000 0.20 Exercised - - - - Forfeited 400,000 0.23 - - Balance at end of period 26,805,512 0.22 23,405,512 0.22 Option exercisable at end of period 22,985,512 0.22 22,805,512 0.22 The following table summarizes the shares of the Company's common stock issuable upon exercise of options outstanding at September 30, 2015: Stock Options Outstanding Stock Options Exercisable Range of Exercise Price Number Outstanding at September 30, 2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at September 30, 2015 Weighted Average Exercise Price $ 0.20-0.23 26,805,512 2.25 $ 0.22 22,985,512 $ 0.22 As of September 30, 2015, the Company's outstanding stock options and exercisable stock options had no intrinsic value, based upon the Company's closing stock price of $0.13. Stock option expense recognized during the nine months ended September 30, 2015 amounted to $800,954. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 7 – EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted net income per share for the three and nine months ended September 30, 2015 and 2014: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income available to common stockholders for basic and diluted net income per share of common stock $ 933,514 $ 892,716 $ 3,897,560 $ 3,685,428 Weighted average common stock outstanding – basic 52,158,967 51,639,946 52,136,447 50,552,656 Effect of dilutive securities: Non-vested restricted common stock 30,744 119,797 136,895 75,824 Stock options issued to directors/officers/employees - - 3,245,582 12,398,483 Weighted average common stock outstanding – diluted 52,189,711 51,759,743 55,518,924 63,026,963 Net income per common share – basic $ 0.02 $ 0.02 $ 0.07 $ 0.07 Net income per common share – diluted $ 0.02 $ 0.02 $ 0.07 $ 0.06 |
Concentrations of Credit Risk a
Concentrations of Credit Risk and Major Customers | 9 Months Ended |
Sep. 30, 2015 | |
Concentrations of Credit Risk and Major Customers [Abstract] | |
CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS | NOTE 8 – CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS Customers For the three and nine months ended September 30, 2015 and 2014, customers accounting for 10% or more of the Company’s revenue were as follows: Three Months Ended Nine Months Ended Customer 2015 2014 2015 2014 A 40 % 33 % 56 % 22 % B 38 % * % 28 % * % C * % * % * % 19 % * Less than 10% For the three and nine months ended September 30, 2014, the three largest customers accounted for 33% and 41% of the Company's total sales, respectively. The Company did not have any receivable balance due from these customers as of September 30, 2014. Suppliers For the three and nine months ended September 30, 2015 and 2014, suppliers accounting for 10% or more of the Company’s purchase were as follows: Three Months Ended Nine Months Ended Supplier 2015 2014 2015 2014 A 67 % * % 52 % 41.2 % B 15 % * % 17 % 28.2 % C 10 % 100 % 16 % 16.8 % For the three and nine months ended September 30, 2015, three largest suppliers accounted for 92% and 85% of the Company’s purchases, respectively, and accounted for 98% of the Company’s payable balance as of September 30, 2015. For the three and nine months ended September 30, 2014, the three largest suppliers accounted for 100% and 86.2% of the Company’s total purchases, respectively, and the Company did not have any payable balance due to these suppliers as of September 30, 2014. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 – RELATED PARTY TRANSACTIONS In addition to several of the Company’s officers and directors, the Company conducted transactions with the following related parties: Company Ownership Heilongjiang Zishan Technology Stock Co., Ltd. (“ZTC”) 18% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., 39% owned by Zhiguo Wang, Chairman and Chief Executive Officer, 31% owned by Guifang Qi, the wife of Mr. Wang and director of the Company, and 12% owned by third parties. Heilongjiang Yew Pharmaceutical Co., Ltd. (“Yew Pharmaceutical”) 95% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 5% owned by Madame Qi. Shanghai Kairun Bio-Pharmaceutical Co., Ltd. (“Kairun”) 60% owned by Heilongjiang Zishan Technology Co., Ltd., 20% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 20% owned by Mr. Wang. Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd. (“HEFS”) 63% owned by Mr. Wang, 34% owned by Madame Qi, and 3% owned by third parties. Hongdoushan Bio-Pharmaceutical Co., Ltd. (“HBP”) 30% owned by Mr. Wang, 19% owned by Madame Qi and 51% owned by HEFS. Transactions with Yew Pharmaceutical On January 9, 2010, the Company entered into a Cooperation and Development Agreement (the “Development Agreement”) with Yew Pharmaceutical. Pursuant to the Development Agreement, for a period of ten years expiring on January 9, 2020, the Company shall supply cultivated yew raw materials to Yew Pharmaceutical that will be used by Yew Pharmaceutical to make traditional Chinese medicines and other pharmaceutical products, at price of RMB1,000,000 (approximately $158,000) per metric ton. In addition, the Company entered into a series of wood ear mushroom selling agreements with Yew Pharmaceutical, pursuant to which the Company sells wood ear mushroom collected from local peasants to Yew Pharmaceuticals for manufacturing of wood ear mushroom products. For the three months ended September 30, 2015 and 2014, sales to Yew Pharmaceutical under the above agreements amounted to $2,999,203 and $565,099, respectively. For the nine months ended September 30, 2015 and 2014, sales to Yew Pharmaceutical under the above agreements amounted to $6,868,985 and $1,302,390, respectively. On September 30, 2015 and December 31, 2014, the Company had zero and $340,132 accounts receivable from Yew Pharmaceutical, respectively. During the three months ended September 30, 2015, the Company entered into a series of agreements with Yew Pharmaceutical to purchase yew candles and pine needle extract. For the three months ended September 30, 2015, purchase of inventories from Yew Pharmaceutical amounted to $5,466,865, with $3,516,529 inventory balance remained as of the end of the reporting period. As of September 30, 2015, the Company had $1,480,698 accounts payable to Yew Pharmaceutical. Operating Leases On March 25, 2005, the Company entered into an Agreement for the Lease of Seedling Land with ZTC (the “ZTC Lease”). Pursuant to the ZTC Lease, the Company leased 361 mu of land from ZTC for a period of 30 years, expiring on March 24, 2035. Annual payments under the ZTC Lease are RMB162,450 (approximately $26,000). The payment for the first five years of the ZTC Lease was due prior to December 31, 2010 and beginning in 2011, the Company was required to make full payment for the land use rights in advance for each subsequent five-year period. For the three months ended September 30, 2015 and 2014, rent expense related to the ZTC Lease amounted to $6,489 and $6,590, respectively. For the nine months ended September 30, 2015 and 2014, rent expense related to the ZTC Lease amounted to $19,777 and $19,810, respectively. At September 30, 2015 and December 31, 2014, prepaid rent to ZTC amounted to $115,053 and $6,600, which was included in prepaid expenses – related parties on the accompanying unaudited consolidated balance sheets. On January 1, 2010, the Company entered into a lease for office space with Mr. Wang (the “Office Lease”). Pursuant to the Office Lease, annual payments of RMB15,000 (approximately $2,000) are due for each of the term. The term of the Office Lease is 15 years and expires on December 31, 2025. For the three months ended September 30, 2015 and 2014, rent expense related to the Office Lease amounted to $599 and $609, respectively. For the nine months ended September 30, 2015 and 2014, rent expense related to the Office Lease amounted to $1,826 and $1,829, respectively. On July 1, 2012, the Company entered into a lease for office space with Mr. Wang (the “JSJ Lease”). Pursuant to the JSJ Lease, JSJ leases approximately 30 square meter of office space from Mr. Wang in Harbin. Rent under the JSJ Lease is RMB10,000 (approximately $1,600) annually. The term of the JSJ Lease is three years and expires on June 30, 2015. On July 1, 2015, the Company and Mr. Wang renewed the JSJ Lease. The renewed lease expires on June 30, 2018. For the three months ended September 30, 2015 and 2014, rent expense related to the JSJ Lease amounted to $399 and $406, respectively. For the nine months ended September 30, 2015 and 2014, rent expense related to the JSJ Lease amounted to $1,217 and $1,219, respectively. On September 30, 2015 and December 31, 2014, the total prepaid rent for the above operating leases with related parties amounted to $115,053 and $5,787, respectively, which was included in prepaid expenses-related party on the accompanying unaudited consolidated balance sheets. Due to Related Parties The Company’s officers, directors and other related parties, from time to time, provided advances to the Company for working capital purpose. These advances are usually short-term in nature, non-interest bearing, unsecured and payable on demand. Due to Zhiguo Wang and other shareholders, excluding the borrowings from Madame Qi as disclosed below, amounted to $44,621 and $45,040 at September 30, 2015 and December 31, 2014, respectively. On May 15, 2015, the Company borrowed $648,000 from Madame Qi through the issuance of a subordinated promissory note. The note bears 2% interest per annum and shall be payable on or before November 15, 2015 (“Due Date”). Interest payment shall be made with principal on Due Date. On September 28, 2015, Madame Qi and the Company agreed to extend the Due Date to January 31, 2016, with the remaining terms of the note unchanged. As of September 30, 2015, the total borrowings including the interest were $652,900. Due from Related Parties During the nine months ended September 30, 2015, the Company transferred a LandRover car, with a net book value of RMB22,348 (approximately $3,500), to HBP for a consideration of RMB220,000 (approximately $35,000). As of September 30, 2015, HBP did not pay the consideration to the Company. For the nine months ended September 30, 2015, Mr. Wang received advance payments of RMB101,200 (approximately $16,000) from the Company for traveling expenditures and made full repayment in October, 2015. As of September 30, 2015, due from related parties resulted from the above transactions, net of amount due to Mr. Wang aforementioned, totaled $47,601. Prepaid Expenses – Related Parties During the nine months ended September 30, 2015, the Company made a payment of RMB1,615,000 (approximately $254,000) to ZTC for future purchase of yew seedlings. The seedlings have been delivered to the Company in October of 2015. As of September 30, 2015, prepaid expenses for the seedlings amounted to $254,179. Research and Development Agreement The Company entered into a Technology Development Service Agreement dated January 1, 2010 (the “Technology Agreement”) with Kairun. The term of the Technology Agreement was two years. Under the Technology Agreement, Kairun provides the Company with testing and technologies regarding utilization of yew trees to extract taxol and develop higher concentration of taxol in the yew trees the Company grow and cultivate. For these services, the Company agreed to pay Kairun RMB200,000 (approximately $32,000) after the technologies developed by Kairun are tested and approved by the Company. The Company will retain all intellectual property rights in connection with the technologies developed by Kairun. Kairun may not provide similar services to any other party without the Company’s prior written consent. In February 2012, the Company entered into a supplemental agreement with Kairun, extending the term of the Technology Agreement indefinitely until project results specified in the original Technology Agreement have been achieved. Kairun is owned directly and indirectly primarily by Mr. Wang and Madame Qi. As of September 30, 2015, Kairun has not yet completed the services provided for in the Technology Agreement and, therefore, no payment was made to Kairun. |
Government Grant
Government Grant | 9 Months Ended |
Sep. 30, 2015 | |
Government Grant [Abstract] | |
Government Grant | NOTE 10 – GOVERNEMNT GRANT On March 18, 2015, the Company filed an application to Finance Bureau of Wuchang city for government grant used to support general planting and cultivation of yew trees. The grant of RMB827,200, or $135,322, was issued and received by the Company in April 2015. |
Statutory Reserves
Statutory Reserves | 9 Months Ended |
Sep. 30, 2015 | |
Statutory Reserves [Abstract] | |
STATUTORY RESERVES | NOTE 11 – STATUTORY RESERVES The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriation to the statutory surplus reserve is required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the board of directors. The statutory surplus 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 converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. For the three months ended September 30, 2015 and 2014, the Company appropriated to the statutory surplus reserve in the amount of $128,459 and $128,732, respectively. For the nine months ended September 30, 2015 and 2014, the Company appropriated to the statutory surplus reserve in the amount of $493,732 and $419,818, respectively. The accumulated balance of the statutory reserve of the Company as of September 30, 2015 and December 31, 2014 was $3,594,628 and $3,100,766, respectively. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
SEGMENT INFORMATION | NOTE 12 – SEGMENT INFORMATION ASC 280 requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. For the three and nine months ended September 30, 2015, the Company operated in five reportable business segments: (1) the TCM raw materials segment, consisting of the production and sale of yew raw materials or yew tree extracts used in the manufacture of TCM; (2) the yew tree segment, consisting of the growth and sale of yew tree seedlings and mature trees, including potted miniature yew trees; (3) the handicrafts segment, consisting of the manufacture and sale of handicrafts and furniture made of yew timber; (4) the wood ear mushroom segment, consisting of the sale of wood ear mushroom; and (5) the others, mainly consisting of the transactions such as sale of yew candles in the third quarter of 2015. The Company’s reportable segments are strategic business units that offer different products. They are managed separately based on the fundamental differences in their operations. All of the Company’s operations except the sales of yew tree extracts are conducted in the PRC. The Company operated in the TCM segment, yew tree segment, and handicrafts segment for the three and nine months ended September 30, 2014. The wood ear mushroom segment was established in the fourth quarter of 2014 and the others include transactions occurred in the third quarter of 2015. Information with respect to these reportable business segments for the three and nine months ended September 30, 2015 and 2014 was as follows: Three Months Ended, Nine Months Ended, 2015 2014 2015 2014 Revenues: TCM raw materials $ 2,845,904 $ 1,161,838 $ 7,712,224 $ 3,356,622 Yew trees 96,275 514,130 1,139,946 2,350,874 Handicrafts 15,417 24,956 110,131 124,972 Wood ear mushroom 134,962 - 1,439,634 - Others 1,904,643 - 1,904,643 - $ 4,997,201 $ 1,700,924 $ 12,306,578 $ 5,832,468 Cost of revenues: TCM raw materials $ 1,586,981 $ 170,950 $ 3,582,502 $ 612,843 Yew trees 18,460 117,515 326,996 547,636 Handicrafts 8,000 5,332 23,118 85,987 Wood ear mushroom 124,547 - 1,263,461 - Others 1,840,055 - 1,840,055 - $ 3,578,043 $ 293,797 $ 7,036,132 $ 1,246,466 Depreciation and amortization: TCM raw materials $ 643 $ 124,839 $ 269,009 $ 366,726 Yew trees 143,096 11,964 152,686 45,212 Handicrafts 6,926 6,266 21,109 21,189 Wood ear mushroom - - - - Others 31,061 26,213 63,072 83,695 $ 181,726 $ 169,282 $ 505,876 $ 516,822 Net income (loss): TCM raw materials $ 1,258,923 $ 990,888 $ 4,129,722 $ 2,743,780 Yew trees 77,815 396,615 812,950 1,803,237 Handicrafts 7,417 19,641 87,013 39,002 Wood ear mushroom 10,415 - 176,173 - Others (421,056 ) (514,428 ) (1,308,298 ) (900,591 ) $ 933,514 $ 892,716 $ 3,897,560 $ 3,685,428 September 30, 2015 TCM raw materials Yew Handicrafts Wood ear Others Total Identifiable long-lived assets, net $ 19,412,943 $ 841,352 $ 38,518 $ - $ 158,713 $ 20,451,526 December 31, 2014 TCM raw materials Yew Handicrafts Wood ear Others Total Identifiable long-lived assets, net $ 19,973,775 $ 915,551 $ 63,319 $ - $ 209,246 $ 21,162,071 The Company does not allocate any selling, general and administrative expenses, other income/expenses to its reportable segments because these activities are managed at corporate level. In addition, the specified amounts for interest expense and income tax expense are not included in the measurement of segment profit or loss reviewed by the chief operating decision maker and these specified amounts are not regularly provided to the chief operating decision maker. Therefore, the Company has not disclosed interest expense and income tax expense for each reportable segment. Asset information by reportable segment is not reported to or reviewed by the chief operating decision maker and, therefore, the Company has not disclosed asset information for each reportable segment. The Company’s operations are located in the PRC. All revenues are derived from customers in the PRC. All of the Company’s operating assets are located in the PRC. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | NOTE 13 – RECENT ACCOUNTING PRONOUNCEMENTS In February 2015, the FASB issued ASU 2015-02, “ Consolidation (Topic 810): Amendments to the Consolidation Analysis” In July 2015, The FASB issued ASU 2015-11, “ Simplifying the Measurement of Inventory In August 2015, the FASB issued ASU 2015-14, “ Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date |
Organization and Principal Ac19
Organization and Principal Activities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Organization and Principal Activities [Abstract] | |
Schedule of Company's subsidiaries and variable interest entities | Name Domicile and Date of Incorporation Registered Capital Effective Ownership Principal Activities Heilongjiang Jinshangjing Bio-Technology Development Co., Limited (“JSJ”) PRC US$100,000 100% Holding company Yew Bio-Pharm Holdings Limited (“Yew Bio-Pharm (HK)”) Hong Kong HK$10,000 100% Holding company of JSJ Harbin Yew Science and Technology Development Co., Ltd. (“HDS”) PRC RMB45,000,000 Contractual arrangements Sales of yew tree components for use in pharmaceutical industry; sales of yew tree seedlings and potted yew trees; manufacture of yew tree wood handicrafts; and sales of wood ear mushroom Harbin Yew Food Co., Ltd ("HYF") PRC RMB100,000 (1) 100% Sales of wood ear mushroom (1) Harbin Yew Food Co. Ltd is wholly owned by HDS and did not pay the registered capital as of September 30, 2015. |
Principles of Consolidation (Ta
Principles of Consolidation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Principles of Consolidation [Abstract] | |
Schedule of carrying amount of assets and liabilities related to variable interest entity | September 30, December 31, Assets Cash $ 144,864 $ 446,554 Accounts receivable 1,614,549 922,564 Accounts receivable – related party - 340,132 Inventories (current and long-term), net 18,534,780 12,106,623 Prepaid expenses and other assets 267,638 5,363 Prepaid expenses - related party 369,232 6,600 Due from related parties 47,601 - VAT recoverables 1,072,052 - Property and equipment, net 689,918 814,676 Land use rights and yew forest assets, net 19,726,404 20,305,822 Total assets of VIE and VIE’s subsidiary $ 42,467,038 $ 34,948,334 Liabilities Accounts payable $ 739,691 $ - Accounts payable – related party 1,480,698 - Accrued expenses and other payables 151,198 54,265 Advances from customers 160,072 - Due to VIE holding companies 1,137,619 1,417,851 Short-term borrowings 1,642,360 - Taxes payable 46,058 8,104 Due to related parties 1,684 2,958 Total liabilities of VIE and VIE’s subsidiary $ 5,359,380 $ 1,483,178 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories [Abstract] | |
Schedule of inventories | September 30, 2015 December 31, 2014 Current Long-term Total Current Long-term Total Raw materials $ 24,597 $ 2,710,268 $ 2,734,865 $ 120,478 $ 2,798,489 $ 2,918,967 Work-in-process - - - - 256,227 256,227 Finished goods 5,397,410 719,733 6,117,143 - 805,438 805,438 Yew seedlings and other trees 2,369,122 8,044,246 10,413,368 1,322,600 6,889,573 8,212,173 Total 7,791,129 11,474,247 19,265,376 1,443,078 10,749,727 12,192,805 Reserve for impairment - handicrafts - (81,940 ) (81,940 ) - (86,182 ) (86,182 ) Inventories, net $ 7,791,129 $ 11,392,307 $ 19,183,436 $ 1,443,078 $ 10,663,545 $ 12,106,623 |
Taxes (Tables)
Taxes (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Taxes [Abstract] | |
Effects of income tax expense exemptions and tax reductions | Three Months Ended Nine Months Ended 2015 2014 2015 2014 Tax exemption effect $ 317,419 $ 319,070 $ 1,185,109 $ 1,044,203 Tax reduction due to loss carry-forward - 2,761 2,363 5,344 Loss not subject to income tax (326 ) (595 ) (1,070 ) (2,254 ) Basic net income per share effect $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) Diluted net income per share effect $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) |
Summary of difference between U.S. statutory federal tax rate and Company's effective tax rate | Three Months Ended Nine Months Ended 2015 2014 2015 2014 U.S. federal income tax rate 34 % 34 % 34 % 34 % Foreign income not recognized in the U.S. (34 %) (34 %) (34 %) (34 %) PRC EIT rate 25 % 25 % 25 % 25 % PRC tax exemption and reduction (25 %) (25 %) (24 %) (25 %) Total provision for income taxes - - 1 % - |
Summary of net deferred tax assets | September 30, December 31, U.S. tax benefit of net operating loss carry forward $ 1,452,679 $ 1,360,084 Valuation allowance (1,452,679 ) (1,360,084 ) Net deferred tax assets $ - $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity [Abstract] | |
Summary of stock option activities | Nine Months Ended Nine Months Ended Number of Stock Options Weighted Average Exercise Price Number of Stock Options Weighted Average Exercise Price Balance at beginning of period 27,205,512 0.26 22,805,512 0.22 Issued - - 600,000 0.20 Exercised - - - - Forfeited 400,000 0.23 - - Balance at end of period 26,805,512 0.22 23,405,512 0.22 Option exercisable at end of period 22,985,512 0.22 22,805,512 0.22 |
Summary of common stock issuable upon exercise of options outstanding | Stock Options Outstanding Stock Options Exercisable Range of Exercise Price Number Outstanding at September 30, 2015 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable at September 30, 2015 Weighted Average Exercise Price $ 0.20-0.23 26,805,512 2.25 $ 0.22 22,985,512 $ 0.22 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted net income per share | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net income available to common stockholders for basic and diluted net income per share of common stock $ 933,514 $ 892,716 $ 3,897,560 $ 3,685,428 Weighted average common stock outstanding – basic 52,158,967 51,639,946 52,136,447 50,552,656 Effect of dilutive securities: Non-vested restricted common stock 30,744 119,797 136,895 75,824 Stock options issued to directors/officers/employees - - 3,245,582 12,398,483 Weighted average common stock outstanding – diluted 52,189,711 51,759,743 55,518,924 63,026,963 Net income per common share – basic $ 0.02 $ 0.02 $ 0.07 $ 0.07 Net income per common share – diluted $ 0.02 $ 0.02 $ 0.07 $ 0.06 |
Concentrations of Credit Risk25
Concentrations of Credit Risk and Major Customers (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Customer [Member] | |
Concentration Risk [Line Items] | |
Summary of major customers and suppliers | Three Months Ended Nine Months Ended Customer 2015 2014 2015 2014 A 40 % 33 % 56 % 22 % B 38 % * % 28 % * % C * % * % * % 19 % |
Supplier [Member] | |
Concentration Risk [Line Items] | |
Summary of major customers and suppliers | Three Months Ended Nine Months Ended Supplier 2015 2014 2015 2014 A 67 % * % 52 % 41.2 % B 15 % * % 17 % 28.2 % C 10 % 100 % 16 % 16.8 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Company's transactions with the related parties | Company Ownership Heilongjiang Zishan Technology Stock Co., Ltd. (“ZTC”) 18% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., 39% owned by Zhiguo Wang, Chairman and Chief Executive Officer, 31% owned by Guifang Qi, the wife of Mr. Wang and director of the Company, and 12% owned by third parties. Heilongjiang Yew Pharmaceutical Co., Ltd. (“Yew Pharmaceutical”) 95% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 5% owned by Madame Qi. Shanghai Kairun Bio-Pharmaceutical Co., Ltd. (“Kairun”) 60% owned by Heilongjiang Zishan Technology Co., Ltd., 20% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 20% owned by Mr. Wang. Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd. (“HEFS”) 63% owned by Mr. Wang, 34% owned by Madame Qi, and 3% owned by third parties. Hongdoushan Bio-Pharmaceutical Co., Ltd. (“HBP”) 30% owned by Mr. Wang, 19% owned by Madame Qi and 51% owned by HEFS. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Information [Abstract] | |
Summary of reportable business segments | Three Months Ended, Nine Months Ended, 2015 2014 2015 2014 Revenues: TCM raw materials $ 2,845,904 $ 1,161,838 $ 7,712,224 $ 3,356,622 Yew trees 96,275 514,130 1,139,946 2,350,874 Handicrafts 15,417 24,956 110,131 124,972 Wood ear mushroom 134,962 - 1,439,634 - Others 1,904,643 - 1,904,643 - $ 4,997,201 $ 1,700,924 $ 12,306,578 $ 5,832,468 Cost of revenues: TCM raw materials $ 1,586,981 $ 170,950 $ 3,582,502 $ 612,843 Yew trees 18,460 117,515 326,996 547,636 Handicrafts 8,000 5,332 23,118 85,987 Wood ear mushroom 124,547 - 1,263,461 - Others 1,840,055 - 1,840,055 - $ 3,578,043 $ 293,797 $ 7,036,132 $ 1,246,466 Depreciation and amortization: TCM raw materials $ 643 $ 124,839 $ 269,009 $ 366,726 Yew trees 143,096 11,964 152,686 45,212 Handicrafts 6,926 6,266 21,109 21,189 Wood ear mushroom - - - - Others 31,061 26,213 63,072 83,695 $ 181,726 $ 169,282 $ 505,876 $ 516,822 Net income (loss): TCM raw materials $ 1,258,923 $ 990,888 $ 4,129,722 $ 2,743,780 Yew trees 77,815 396,615 812,950 1,803,237 Handicrafts 7,417 19,641 87,013 39,002 Wood ear mushroom 10,415 - 176,173 - Others (421,056 ) (514,428 ) (1,308,298 ) (900,591 ) $ 933,514 $ 892,716 $ 3,897,560 $ 3,685,428 |
Summary of identifiable long-lived assets, net | September 30, 2015 TCM raw materials Yew Handicrafts Wood ear Others Total Identifiable long-lived assets, net $ 19,412,943 $ 841,352 $ 38,518 $ - $ 158,713 $ 20,451,526 December 31, 2014 TCM raw materials Yew Handicrafts Wood ear Others Total Identifiable long-lived assets, net $ 19,973,775 $ 915,551 $ 63,319 $ - $ 209,246 $ 21,162,071 |
Organization and Principal Ac28
Organization and Principal Activities (Details) - 9 months ended Sep. 30, 2015 | USD ($) | CNY (¥) | HKD | |
Heilongjiang Jinshangjing Bio-Technology Development Co., Limited ("JSJ") [Member] | ||||
Schedule of Company's subsidiaries and variable interest entities | ||||
Domicile and Date of Incorporation | PRC October 29, 2009 | |||
Registered Capital | $ | $ 100,000 | |||
Effective ownership, percentage | 100.00% | |||
Principal Activities | Holding company | |||
Yew Bio-Pharm Holdings Limited ("Yew Bio-Pharm (HK)") [Member] | ||||
Schedule of Company's subsidiaries and variable interest entities | ||||
Domicile and Date of Incorporation | Hong Kong November 29, 2010 | |||
Registered Capital | HKD | HKD 10,000 | |||
Effective ownership, percentage | 100.00% | |||
Principal Activities | Holding company of JSJ | |||
Harbin Yew Science and Technology Development Co., Ltd. ("HDS") [Member] | ||||
Schedule of Company's subsidiaries and variable interest entities | ||||
Domicile and Date of Incorporation | PRC August 22, 1996 | |||
Registered Capital | ¥ 45,000,000 | |||
Effective ownership, percentage | ||||
Effective Ownership | Contractual arrangements | |||
Principal Activities | Sales of yew tree components for use in pharmaceutical industry; sales of yew tree seedlings and potted yew trees; manufacture of yew tree wood handicrafts; and sales of wood ear mushroom | |||
Harbin Yew Food Co., Ltd ("HYF") [Member] | ||||
Schedule of Company's subsidiaries and variable interest entities | ||||
Domicile and Date of Incorporation | PRC November 4, 2014 | |||
Registered Capital | [1] | ¥ 100,000 | ||
Effective ownership, percentage | 100.00% | |||
Principal Activities | Sales of wood ear mushroom | |||
[1] | Harbin Yew Food Co. Ltd is wholly owned by HDS and did not pay the registered capital as of September 30, 2015. |
Principles of Consolidation (De
Principles of Consolidation (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | $ 42,467,038 | $ 34,948,334 |
Total liabilities of VIE and VIE's subsidiary | 5,359,380 | 1,483,178 |
Cash [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 144,864 | 446,554 |
Accounts receivable [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | $ 1,614,549 | 922,564 |
Accounts receivable - related party [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 340,132 | |
Inventories (current and long-term), net [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | $ 18,534,780 | 12,106,623 |
Prepaid expenses and other assets [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 267,638 | 5,363 |
Prepaid expenses - related party [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 369,232 | $ 6,600 |
Due from related parties [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 47,601 | |
VAT recoverables [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 1,072,052 | |
Property and equipment, net [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 689,918 | $ 814,676 |
Land use rights and yew forest assets, net [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total assets of VIE and VIE's subsidiary | 19,726,404 | $ 20,305,822 |
Accounts Payable [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 739,691 | |
Accounts payable - related party [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 1,480,698 | |
Accrued expenses and other payables [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 151,198 | $ 54,265 |
Advances from customers [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 160,072 | |
Due to VIE holding companies [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 1,137,619 | $ 1,417,851 |
Short-term borrowings [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 1,642,360 | |
Taxes payable [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | 46,058 | $ 8,104 |
Due to related parties [Member] | ||
Schedule of carrying amount of assets and liabilities related to variable interest entity | ||
Total liabilities of VIE and VIE's subsidiary | $ 1,684 | $ 2,958 |
Principles of Consolidation (30
Principles of Consolidation (Details Textual) | 9 Months Ended |
Sep. 30, 2015CNY (¥) | |
Principles of Consolidation (Textual) | |
Monthly consulting service fee as percentage of net income of HDS paid to JSJ | 100.00% |
HDS obligation within 30 days after the end of each month | Within 30 days after the end of each month, HDS shall (a) deliver to JSJ the management accounts and operating statistics of HDS for such month, including the net income of HDS during such month (the "Monthly Net Income"), and (b) pay 80% of such Monthly Net Income to JSJ (each such payment, a "Monthly Payment"). |
HDS obligation within 90 days after the end of each month | Within ninety (90) days after the end of each fiscal year, HDS shall (a) deliver to JSJ financial statements of HDS for such fiscal year, which shall be audited and certified by an independent certified public accountant approved by JSJ, and (b) pay an amount to JSJ equal to the shortfall, if any, of the aggregate net income of HDS for such fiscal year, as shown in such audited financial statements, as compared to the aggregate amount of the Monthly Payments paid by HDS to JSJ in such fiscal year. HDS also granted an irrevocable and exclusive option to JSJ to purchase any and all of the assets of HDS, to the extent permitted under PRC law, at the lowest price permitted by PRC law. |
Additional monthly payment to JSJ as percentage of net income of HDS | 80.00% |
Business Cooperation Agreement term | 10 years |
Business Cooperation Agreement expiration date | Nov. 5, 2020 |
Notice period for JSJ to termination of contract | 30 days |
HDS Shareholder's equity interests | ¥ 10 |
Execution of any major contract is limited under Option Agreement | Over RMB 500,000 |
Exclusive Option Agreement term | 10 years |
Exclusive Option Agreement commencing date | Nov. 5, 2020 |
Description of notice period for remedies for any breach in terms agreement | Within 20 days after the giving of notice of breach. |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of inventories | ||
Current portion | $ 7,791,129 | $ 1,443,078 |
Long-term portion | 11,392,307 | 10,663,545 |
Total | 19,183,436 | 12,106,623 |
Raw materials [Member] | ||
Schedule of inventories | ||
Current portion | 24,597 | 120,478 |
Long-term portion | 2,710,268 | 2,798,489 |
Total | $ 2,734,865 | $ 2,918,967 |
Work-in-process [Member] | ||
Schedule of inventories | ||
Current portion | ||
Long-term portion | $ 256,227 | |
Total | $ 256,227 | |
Finished goods [Member] | ||
Schedule of inventories | ||
Current portion | $ 5,397,410 | |
Long-term portion | 719,733 | $ 805,438 |
Total | 6,117,143 | 805,438 |
Yew seedlings and other trees [Member] | ||
Schedule of inventories | ||
Current portion | 2,369,122 | 1,322,600 |
Long-term portion | 8,044,246 | 6,889,573 |
Total | 10,413,368 | 8,212,173 |
Total [Member] | ||
Schedule of inventories | ||
Current portion | 7,791,129 | 1,443,078 |
Long-term portion | 11,474,247 | 10,749,727 |
Total | $ 19,265,376 | $ 12,192,805 |
Reserve for impairment - handicrafts [Member] | ||
Schedule of inventories | ||
Current portion | ||
Long-term portion | $ (81,940) | $ (86,182) |
Total | $ (81,940) | $ (86,182) |
Taxes (Details)
Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Effects of income tax expense exemptions and tax reductions | ||||
Tax exemption effect | $ 317,419 | $ 319,070 | $ 1,185,109 | $ 1,044,203 |
Tax reduction due to loss carry-forward | 2,761 | 2,363 | 5,344 | |
Loss not subject to income tax | $ (326) | $ (595) | $ (1,070) | $ (2,254) |
Basic net income per share effect | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Diluted net income per share effect | $ (0.01) | $ (0.01) | $ (0.02) | $ (0.02) |
Taxes (Details 1)
Taxes (Details 1) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of difference between U.S. statutory federal tax rate and Company's effective tax rate | ||||
U.S. federal income tax rate | 34.00% | 34.00% | 34.00% | 34.00% |
Foreign income not recognized in the U.S. | (34.00%) | (34.00%) | (34.00%) | (34.00%) |
PRC EIT rate | 25.00% | 25.00% | 25.00% | 25.00% |
PRC tax exemption and reduction | (25.00%) | (25.00%) | (24.00%) | (25.00%) |
Total provision for income taxes | 1.00% |
Taxes (Details 2)
Taxes (Details 2) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Summary of deferred tax assets and liabilities | ||
U.S. tax benefit of net operating loss carry forward | $ 1,452,679 | $ 1,360,084 |
Valuation allowance | $ (1,452,679) | $ (1,360,084) |
Net deferred tax assets |
Taxes (Details Textual)
Taxes (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Taxes (Textual) | |||||
Income before income tax expense | $ 937,585 | $ 892,716 | $ 3,944,760 | $ 3,685,428 | |
Net operating loss carry forwards | $ 4,272,586 | $ 4,272,586 | $ 4,000,246 | ||
Operating loss carry forwards expires | Through 2,035 | ||||
Valuation allowance, percentage | 100.00% | 100.00% | |||
Valuation allowance | $ 1,452,679 | $ 1,452,679 | 1,360,084 | ||
Net change in valuation allowance | 294,477 | $ 34,953 | 92,595 | $ 72,867 | |
Cumulative undistributed earnings of foreign subsidiary and VIE | $ 29,600,000 | $ 29,600,000 | $ 24,700,000 | ||
Value added tax for agricultural products | 13.00% | ||||
Value added tax for handicrafts | 17.00% | ||||
Description of Value added tax exemption date | Up to December 31, 2016 | ||||
U.S. federal income tax rate | 34.00% | 34.00% | 34.00% | 34.00% | |
PRC EIT rate | 25.00% | 25.00% | 25.00% | 25.00% | |
Income tax expense | $ 4,071 | $ 47,200 | |||
VAT recoverables | $ 1,072,052 | $ 1,072,052 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) | 1 Months Ended | |||
Apr. 23, 2015USD ($) | Sep. 30, 2015USD ($) | Apr. 23, 2015CNY (¥) | Dec. 31, 2014USD ($) | |
Short Term Borrowings (Textual) | ||||
Short-term borrowings | $ 1,630,000 | $ 1,642,360 | ¥ 10,000,000 | |
Percentage of loan interest rate | 6.955% | 2.00% | 6.955% | |
Loan payable maturity date | Apr. 22, 2016 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Summary of shares of Company's common stock issuable upon exercise of options outstanding | ||
Beginning balance, Number of stock option | 27,205,512 | 22,805,512 |
Granted, Number of stock options | 600,000 | |
Exercised, Number of stock options | ||
Forfeited, Number of stock options | 400,000 | |
Ending balance, Number of stock option | 26,805,512 | 23,405,512 |
Exercisable, Number of stock option | 22,985,512 | 22,805,512 |
Beginning balance, Weighted average exercise price | $ 0.26 | $ 0.22 |
Granted, Weighted average exercise price | $ 0.20 | |
Exercised, Weighted average exercise price | ||
Forfeited, Weighted average exercise price | $ 0.23 | |
Ending balance, Weighted average exercise price | 0.22 | $ 0.22 |
Exercisable, Weighted average exercise price | $ 0.22 | $ 0.22 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | 9 Months Ended | |||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | |
Summary of number of shares of the company's common stock subject to each Founder's Option | ||||
Stock Options Outstanding | 26,805,512 | 27,205,512 | 23,405,512 | 22,805,512 |
Weighted Average Remaining Contractual Life (Years) | 2 years 3 months | |||
Stock Options Outstanding, Weighted Average Exercise Price | $ 0.22 | $ 0.26 | $ 0.22 | $ 0.22 |
Stock Options Exercisable | 22,985,512 | 22,805,512 | ||
Stock Options Exercisable, Weighted Average Exercise Price | $ 0.22 | $ 0.22 | ||
Minimum [Member] | ||||
Summary of number of shares of the company's common stock subject to each Founder's Option | ||||
Range of exercise price | 0.20 | |||
Maximum [Member] | ||||
Summary of number of shares of the company's common stock subject to each Founder's Option | ||||
Range of exercise price | $ 0.23 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Aug. 24, 2015 | Jul. 22, 2014 | Jul. 18, 2014 | Nov. 18, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Stockholders Equity (Textual) | ||||||
Aggregate intrinsic value | $ 0 | |||||
Closing stock price | $ 0.13 | |||||
Stock-based compensation | $ 800,954 | $ 5,657 | ||||
2012 Equity Incentive Plan [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Exercise price of per share | $ 0.23 | |||||
Service Provider Agreement [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Restricted common stock for the service period | 1,250,000 | |||||
Total restricted shares award, value | 65,856 | |||||
Consulting Agreement [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Issuance of common stock for services value | $ 187,500 | |||||
Cancellation of shares | 1,250,000 | |||||
Reissue of common stock | 625,000 | |||||
Compensation expense | $ 62,500 | |||||
Time Period One [Member] | Service Provider Agreement [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Restricted common stock for the service period | 875,000 | |||||
Time Period Two [Member] | Service Provider Agreement [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Restricted common stock for the service period | 375,000 | |||||
Option [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Options was issued shares of common stock of the Company | 200,000 | |||||
Exercise price of per share | $ 0.20 | |||||
Option, Expiration period | 4 years | |||||
Option, Expiration date | Aug. 1, 2018 | |||||
Options vesting period | 3 years | |||||
Option [Member] | Time Period One [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option vested, Percentage | 30.00% | |||||
Option vested, date | 12 months | |||||
Option [Member] | Time Period Two [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option vested, Percentage | 35.00% | |||||
Option vested, date | 24 months | |||||
Option [Member] | Time Period Three [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option vested, Percentage | 35.00% | |||||
Option vested, date | 36 months | |||||
Option One [Member] | 2012 Equity Incentive Plan [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option, Expiration period | 4 years | |||||
Option, Expiration date | Nov. 18, 2018 | |||||
Stock options vesting period description | The options vest over a three-year time period from November 18, 2014, and 30%, 35%, and 35% of the total shares granted shall vest and become exercisable 12, 24, and 36 months after the initial vesting commencement date. | |||||
Employee Stock Option Two [Member] | 2012 Equity Incentive Plan [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option, Expiration period | 2 years | |||||
Option, Expiration date | Nov. 18, 2018 | |||||
Stock options vesting period description | The option has a term of two years starting from November 18, 2014, the vesting commencement date, and expires on November 18, 2016. The options vest over a one-year time period from November 18, 2014, and 100% of the total shares granted shall vest and become exercisable 12 months after the initial vesting commencement date. | |||||
Employee Stock Option Three [Member] | 2012 Equity Incentive Plan [Member] | ||||||
Stockholders Equity (Textual) | ||||||
Option, Expiration period | 3 years | |||||
Option, Expiration date | Nov. 18, 2017 | |||||
Stock options vesting period description | The option has a term of three years starting from November 18, 2014, the vesting commencement date, and expires on November 18, 2017. The options vest over a two-year time period, and 50% and the remaining 50% of the total shares shall vest and become exercisable 12 and 24 months respectively after the initial vesting commencement date. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reconciliation of basic and diluted net income per share | ||||
Net income available to common stockholders for basic and diluted net income per share of common stock | $ 933,514 | $ 892,716 | $ 3,897,560 | $ 3,685,428 |
Weighted average common stock outstanding - basic | 52,158,967 | 51,639,946 | 52,136,447 | 50,552,656 |
Effect of dilutive securities: | ||||
Non-vested restricted common stock | 30,744 | 119,797 | 136,895 | 75,824 |
Stock options issued to directors/officers/employees | 3,245,582 | 12,398,483 | ||
Weighted average common stock outstanding - diluted | 52,189,711 | 51,759,743 | 55,518,924 | 63,026,963 |
Net income per common share - basic | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.07 |
Net income per common share - diluted | $ 0.02 | $ 0.02 | $ 0.07 | $ 0.06 |
Concentrations of Credit Risk41
Concentrations of Credit Risk and Major Customers (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
A (Yew Pharmaceutical, a related party) [Member] | |||||||
Summary of major customer | |||||||
Percentage of revenue from major customers | 40.00% | 33.00% | 56.00% | 22.00% | |||
B [Member] | |||||||
Summary of major customer | |||||||
Percentage of revenue from major customers | 38.00% | [1] | 28.00% | [1] | |||
C [Member] | |||||||
Summary of major customer | |||||||
Percentage of revenue from major customers | [1] | 19.00% | |||||
[1] | Less than 10% |
Concentrations of Credit Risk42
Concentrations of Credit Risk and Major Customers (Details 1) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
A (Yew Pharmaceutical, a related party) [Member] | |||||
Summary of major suppliers | |||||
Percentage of revenue from major suppliers | 67.00% | [1] | 52.00% | 41.20% | |
Supplier B [Member] | |||||
Summary of major suppliers | |||||
Percentage of revenue from major suppliers | 15.00% | [1] | 17.00% | 28.20% | |
Supplier C [Member] | |||||
Summary of major suppliers | |||||
Percentage of revenue from major suppliers | 10.00% | 100.00% | 16.00% | 16.80% | |
[1] | Less than 10% |
Concentrations of Credit Risk43
Concentrations of Credit Risk and Major Customers (Details Textual) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015Supplier | Sep. 30, 2014USD ($) | |
Revenue [Member] | ||||
Concentrations of Credit Risk and Major Customers (Textual) | ||||
Concentration risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Purchase [Member] | ||||
Concentrations of Credit Risk and Major Customers (Textual) | ||||
Concentration risk, Percentage | 10.00% | 10.00% | 10.00% | 10.00% |
Percentage Of Accounts Receivable Accounted By Largest Suppliers | 92.00% | 100.00% | 85.00% | 86.20% |
Accounts payable to supplier | $ | $ 0 | |||
Number of largest suppliers accounted in accounts receivable | 3 | |||
Accounts Receivable [Member] | ||||
Concentrations of Credit Risk and Major Customers (Textual) | ||||
Concentration risk, Percentage | 78.00% | 33.00% | 84.00% | 41.00% |
Accounts Receivable [Member] | Related Party [Member] | ||||
Concentrations of Credit Risk and Major Customers (Textual) | ||||
Concentration risk, Percentage | 0.00% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details) | 9 Months Ended |
Sep. 30, 2015 | |
Heilongjiang Zishan Technology Stock Co., Ltd. ("ZTC") [Member] | |
Company's transactions with the related parties | |
Ownership, description | 18% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., 39% owned by Zhiguo Wang, Chairman and Chief Executive Officer, 31% owned by Guifang Qi, the wife of Mr. Wang and Director of the Company, and 12% owned by third parties. |
Heilongjiang Yew Pharmaceuticals, Co., Ltd. ("Yew Pharmaceutical") [Member] | |
Company's transactions with the related parties | |
Ownership, description | 95% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 5% owned by Madame Qi. |
Shanghai Kairun Bio-Pharmaceutical Co., Ltd. ("Kairun") [Member] | |
Company's transactions with the related parties | |
Ownership, description | 60% owned by Heilongjiang Zishan Technology Co., Ltd., 20% owned by Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd., and 20% owned by Mr. Wang. |
Heilongjiang Hongdoushan Ecology Forest Stock Co., Ltd. ("HEFS") [Member] | |
Company's transactions with the related parties | |
Ownership, description | 63% owned by Mr. Wang, 34% owned by Madame Qi, and 3% owned by third parties. |
Hongdoushan Bio-Pharmaceutical Co., Ltd. ("HBP") [Member] | |
Company's transactions with the related parties | |
Ownership, description | 30% owned by Mr. Wang, 19% owned by Madame Qi and 51% owned by HEFS. |
Related Party Transactions (D45
Related Party Transactions (Details Textual) | Feb. 01, 2015 | Jul. 01, 2012USD ($)m² | Jul. 01, 2012CNY (¥)m² | Jan. 09, 2010USD ($) | Jan. 09, 2010CNY (¥) | Jan. 01, 2010USD ($) | Jan. 01, 2010CNY (¥) | Mar. 25, 2005USD ($)a | Mar. 25, 2005CNY (¥)a | Apr. 23, 2015 | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015CNY (¥) | May. 15, 2015USD ($) | Dec. 31, 2014USD ($) |
Related Party Transactions (Textual) | |||||||||||||||||
Accounts receivable, related parties, current | $ 340,132 | ||||||||||||||||
Prepaid rent - related party | $ 115,053 | $ 115,053 | 5,787 | ||||||||||||||
Due to related parties | $ 697,521 | $ 697,521 | $ 648,000 | $ 45,040 | |||||||||||||
Percentage of loan interest rate | 6.955% | 2.00% | 2.00% | 2.00% | |||||||||||||
Total borrowing Interest | $ 652,900 | ||||||||||||||||
Accounts payable - related party | $ 1,480,698 | 1,480,698 | |||||||||||||||
Due date | Apr. 22, 2016 | ||||||||||||||||
Due from related parties | 47,601 | 47,601 | |||||||||||||||
Agreement of Seedling Land with ZTC [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration date | Mar. 24, 2035 | Mar. 24, 2035 | |||||||||||||||
Agreement expiration period | 30 years | 30 years | |||||||||||||||
Annual payments under operating lease | $ 26,000 | ¥ 162,450 | |||||||||||||||
Subsequent period for which company required to make full payment for land use rights in advance | 5 years | 5 years | |||||||||||||||
Prepaid rent - related party | 115,053 | 115,053 | $ 6,600 | ||||||||||||||
Operating Leases, rent expense | 6,489 | $ 6,590 | 19,777 | $ 19,810 | |||||||||||||
Leased Area | a | 361 | 361 | |||||||||||||||
Prepaid Expenses - Related Parties | 254,000 | 254,000 | ¥ 1,615,000 | ||||||||||||||
Office Lease [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration date | Dec. 31, 2025 | Dec. 31, 2025 | |||||||||||||||
Agreement expiration period | 15 years | 15 years | |||||||||||||||
Annual payments under operating lease | $ 2,000 | ¥ 15,000 | |||||||||||||||
Operating Leases, rent expense | $ 599 | 609 | $ 1,826 | 1,829 | |||||||||||||
JSJ Lease [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration date | Jun. 30, 2015 | Jun. 30, 2015 | |||||||||||||||
Agreement expiration period | 3 years | 3 years | |||||||||||||||
Annual payments under operating lease | $ 1,600 | ¥ 10,000 | |||||||||||||||
Prepaid rent - related party | |||||||||||||||||
Operating Leases, rent expense | $ 399 | 406 | $ 1,217 | 1,219 | |||||||||||||
Leased Area | m² | 30 | 30 | |||||||||||||||
Warehouse Lease [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration date | Jan. 31, 2016 | ||||||||||||||||
Land Rover [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Due to related parties | 34,625,000 | 34,625,000 | |||||||||||||||
Due from related parties | 35,000 | 35,000 | 220,000 | ||||||||||||||
Net book value of asset | 3,500 | 3,500 | 22,348 | ||||||||||||||
Mr Wang [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Due from related parties | 16,000 | 16,000 | ¥ 101,200 | ||||||||||||||
Yew Pharmaceutical [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration date | Jan. 9, 2020 | Jan. 9, 2020 | |||||||||||||||
Cultivation price per metric ton | $ 158,000 | ¥ 1,000,000 | |||||||||||||||
Sales | 2,999,203 | $ 565,099 | 6,868,985 | $ 1,302,390 | |||||||||||||
Agreement expiration period | 10 years | 10 years | |||||||||||||||
Accounts payable - related party | 1,480,698 | 1,480,698 | |||||||||||||||
Purchase of inventories | $ 5,466,865 | $ 3,516,529 | |||||||||||||||
Kairun [Member] | Technology Agreement [Member] | |||||||||||||||||
Related Party Transactions (Textual) | |||||||||||||||||
Agreement expiration period | 2 years | 2 years | |||||||||||||||
Payment made under agreement | $ 32,000 | ¥ 200,000 |
Government Grant (Details)
Government Grant (Details) - 1 months ended Apr. 30, 2015 | USD ($) | CNY (¥) |
Government Grant (Textual) | ||
Granted value | $ 135,322 | ¥ 827,200 |
Statutory Reserves (Details)
Statutory Reserves (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Statutory Reserves (Textual) | |||||
Appropriation of statutory surplus reserve, Description | Appropriation to the statutory surplus reserve is required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities' registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. | ||||
Statutory surplus reserve fund, Description | The statutory surplus 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 converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital. | ||||
Maximum percentage balance required of registered capital in reserve for business expansion | 50.00% | ||||
Appropriated to statutory surplus reserve | $ 128,459 | $ 128,732 | $ 493,732 | $ 419,818 | |
Accumulated balance of the statutory reserve | $ 3,594,628 | $ 3,594,628 | $ 3,100,766 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Summary of reportable business segments | |||||
Total Revenues | $ 4,997,201 | $ 1,700,924 | $ 12,306,578 | $ 5,832,468 | |
Total Cost of Revenues | 3,578,043 | 293,797 | 7,036,132 | 1,246,466 | |
Depreciation and amortization | 181,726 | 169,282 | 505,876 | 516,822 | |
Net income (loss) | 933,514 | 892,716 | 3,897,560 | 3,685,428 | |
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | 20,451,526 | 20,451,526 | $ 21,162,071 | ||
TCM raw materials [Member] | |||||
Summary of reportable business segments | |||||
Total Revenues | 2,845,904 | 1,161,838 | 7,712,224 | 3,356,622 | |
Total Cost of Revenues | 1,586,981 | 170,950 | 3,582,502 | 612,843 | |
Depreciation and amortization | 643 | 124,839 | 269,009 | 366,726 | |
Net income (loss) | 1,258,923 | 990,888 | 4,129,722 | 2,743,780 | |
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | 19,412,943 | 19,412,943 | 19,973,775 | ||
Yew trees [Member] | |||||
Summary of reportable business segments | |||||
Total Revenues | 96,275 | 514,130 | 1,139,946 | 2,350,874 | |
Total Cost of Revenues | 18,460 | 117,515 | 326,996 | 547,636 | |
Depreciation and amortization | 143,096 | 11,964 | 152,686 | 45,212 | |
Net income (loss) | 77,815 | 396,615 | 812,950 | 1,803,237 | |
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | 841,352 | 841,352 | 915,551 | ||
Handicrafts [Member] | |||||
Summary of reportable business segments | |||||
Total Revenues | 15,417 | 24,956 | 110,131 | 124,972 | |
Total Cost of Revenues | 8,000 | 5,332 | 23,118 | 85,987 | |
Depreciation and amortization | 6,926 | 6,266 | 21,109 | 21,189 | |
Net income (loss) | 7,417 | $ 19,641 | 87,013 | $ 39,002 | |
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | 38,518 | 38,518 | $ 63,319 | ||
Wood ear mushroom [Member] | |||||
Summary of reportable business segments | |||||
Total Revenues | 134,962 | 1,439,634 | |||
Total Cost of Revenues | $ 124,547 | $ 1,263,461 | |||
Depreciation and amortization | |||||
Net income (loss) | $ 10,415 | $ 176,173 | |||
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | |||||
Others [Member] | |||||
Summary of reportable business segments | |||||
Total Revenues | $ 1,904,643 | $ 1,904,643 | |||
Total Cost of Revenues | 1,840,055 | 1,840,055 | |||
Depreciation and amortization | 31,061 | $ 26,213 | 63,072 | $ 83,695 | |
Net income (loss) | (421,056) | $ (514,428) | (1,308,298) | $ (900,591) | |
Segment reporting information, Additional information | |||||
Identifiable long-lived assets, net | $ 158,713 | $ 158,713 | $ 209,246 |
Segment Information (Details Te
Segment Information (Details Textual) | 9 Months Ended |
Sep. 30, 2015Supplier | |
Egment Information (Textual) | |
Number of business segments | 5 |